Overview Key strengths Key risks Monopolistic, vertically integrated electric utility and gas distribution utility operations. Lack of operating diversity that depends on Michigan regulators to sustain its credit quality. Favorable regulatory construct in Michigan. Energy transition risks due to dependence on natural gas and coal-fired generation (about 75% of utility electricity generated or purchased in 2023), mitigated by a plan to retire coal in 2025. Large customer base of 1.9 million electric and 1.8 million gas customers. Negative discretionary cash flow, reflecting robust capital spending, which indicates external funding needs. Largely contracted nature of independent power producer operations through the near term. Susceptibility to adverse weather events, including winter storms and convective storms. Exposure to cyclical commercial and industrial customers,
