UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

In the Matter of

CMS Energy Corporation, a corporation.

File No. 991-0046

AGREEMENT CONTAINING CONSENT ORDER

The Federal Trade Commission ("Commission"), having initiated an investigation of the proposed acquisition by CMS Energy Corporation ("CMS") of the voting securities of Panhandle Eastern Pipe Line Company, Panhandle Storage Company and Trunkline LNG Company, and it now appearing that CMS, hereinafter sometimes referred to as "proposed respondent," is willing to enter into an agreement containing an order to maintain access to the intrastate gas distribution system of its subsidiary, Consumers Energy Company, and providing for other relief:

IT IS HEREBY AGREED by and between proposed respondent, by its duly authorized officers and attorneys, and counsel for the Commission that:

1. Proposed respondent CMS is a corporation organized, existing and doing business under and by virtue of the laws of the State of Michigan, with its office and principal place of business located at 330 Town Center Drive, Dearborn, Michigan 48126.

2. Proposed respondent admits all the jurisdictional facts set forth in the draft of Complaint here attached.

3. Proposed respondent waives:

a. any further procedural steps;
 
b. the requirement that the Commission's decision contain a statement of findings of fact and conclusions of law;
 
c. all rights to seek judicial review or otherwise to challenge or contest the validity of the order entered pursuant to this agreement; and
 
d. any claim under the Equal Access to Justice Act.

4. Proposed respondent shall submit, within thirty (30) days of the date this agreement is signed by proposed respondent, an initial report, pursuant to  2.33 of the Commission's Rules, signed by the proposed respondent setting forth in detail the manner in which the proposed respondent will comply with Paragraph II of the order when and if entered. Such report will not become part of the public record unless and until the accompanying agreement and order are accepted by the Commission for public comment.

5. This agreement shall not become part of the public record of the proceeding unless and until it is accepted by the Commission. If this agreement is accepted by the Commission it, together with the draft of Complaint contemplated thereby, will be placed on the public record for a period of sixty (60) days and information in respect thereto publicly released. The Commission thereafter may either withdraw its acceptance of this agreement and so notify the proposed respondent, in which event it will take such action as it may consider appropriate, or issue and serve its complaint (in such form as the circumstances may require) and decision, in disposition of the proceeding.

6. This agreement is for settlement purposes only and does not constitute an admission by proposed respondent that the law has been violated as alleged in the draft of Complaint here attached, or that the facts as alleged in the draft of Complaint, other than jurisdictional facts, are true.

7. This agreement contemplates that, if it is accepted by the Commission, and if such acceptance is not subsequently withdrawn by the Commission pursuant to the provisions of  2.34 of the Commission's Rules, the Commission may, without further notice to the proposed respondent, (1) issue its complaint corresponding in form and substance with the draft of Complaint here attached and its decision containing the following order in disposition of the proceeding, and (2) make information public with respect thereto. When so entered, the order shall have the same force and effect and may be altered, modified or set aside in the same manner and within the same time provided by statute for other orders. The order shall become final upon service. Delivery by the U.S. Postal Service of the complaint and decision containing the agreed-to order to proposed respondent's address as stated in this agreement shall constitute service. Proposed respondent waives any right it may have to any other manner of service. The Complaint may be used in construing the terms of the order, and no agreement, understanding, representation, or interpretation not contained in the order or the agreement may be used to vary or contradict the terms of the order.

8. By signing this agreement containing consent order, proposed respondent represents that it can accomplish the full relief contemplated by this agreement.

9. Proposed respondent has read the draft of Complaint and order contemplated hereby. Proposed respondent understands that once the order has been issued, it will be required to file one or more compliance reports showing that it has fully complied with the order. Proposed respondent further understands that it may be liable for civil penalties in the amount provided by law for each violation of the order after it becomes final. Proposed respondent agrees to comply with the terms of the proposed order by no later than April 30, 1999.

ORDER

I.

IT IS ORDERED that, as used in this order, the following definitions shall apply:

A."Respondent" or "CMS" means CMS Energy Corporation, its directors, officers, employees, agents, representatives, predecessors, successors, and assigns; its joint ventures, subsidiaries, divisions, groups and affiliates controlled by CMS, including but not limited to Consumers Energy Company, a wholly-owned subsidiary of CMS Energy Corporation, and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.

B. "Adjusted Designated Capacity" means Designated Capacity less the amount by which capacity is reduced for maintenance or force majeure.

C. "Amount Confirmed" means the Amount Nominated that Consumers Energy Company matches to corresponding recipients (i.e. customers, brokers, marketers, or storage accounts) at an Interconnection Point.

D. "Amount Nominated" means the amount of natural gas that a shipper proposes to deliver to Consumers Energy Company at an Interconnection Point.

E. "Available Interconnection Capacity" means the amount of natural gas that Consumers Energy Company is ready, willing, and able to receive at an Interconnection Point.

F. "Commission" means the Federal Trade Commission.

G. "Consumers Energy System" means the natural gas transmission system of Consumers Energy Company.

H. "Designated Capacity" means the capacity for each Interconnection Point as stated in Exhibit A.

I. "Interconnection Point" means the eight interconnection points listed in Exhibit A, as points where Consumers Energy Company receives gas into its system.

J. "MPSC" means the Michigan Public Service Commission.

K. "Recorded Throughput" means the data obtained electronically by Consumers Energy Company from its Supervisory Control And Data Acquisition system units located at each Interconnection Point.

II.

IT IS FURTHER ORDERED that:

A. Respondent shall provide information on an electronic bulletin board showing for each Interconnection Point: (i) the Designated Capacity; (ii) the Adjusted Designated Capacity, identifying the cause of the adjustment and the planned date the adjustment is expected to end; (iii) the Available Interconnection Capacity; (iv) no later than the second business day of each month (a) the Amounts Nominated and (b) the Amounts Confirmed; and (v) the Recorded Throughput for the previous month.

B. If Respondent declines any shipper's nomination of gas into the Consumers Energy System at any Interconnection Point because Available Interconnection Capacity is less than Adjusted Designated Capacity, Respondent shall afford the shipper two alternatives: (i) if the shipper is able to nominate its shipments to another pipeline interconnection point into the Consumers Energy System at no additional cost to the shipper, Respondent will accept the gas at such other pipeline interconnection point; (ii) if the shipper provides a certification in the form set forth in Exhibit B hereto stating that the shipper is unable to nominate its shipments to another pipeline interconnection point into the Consumers Energy System at no additional cost to the shipper, then Respondent shall provide gas from its own supply of gas and without interruption on the Consumers Energy System for the shipper's account equal to the volume of gas nominated by the shipper that could not be transferred through any of the Interconnection Points by reason of the Available Interconnection Capacity being less than Adjusted Designated Capacity.

C. If the shipper exercises the option set out in Paragraph II.B. (ii), Respondent may require the shipper to return to Respondent the volume of gas Respondent had provided on the shipper's behalf, but no earlier than the end of the calendar month following the month in which Available Interconnection Capacity was less than the Adjusted Designated Capacity. Respondent shall give shipper the option to return the gas at any pipeline interconnection point into the Consumers Energy System. Respondent shall not charge an unauthorized gas usage charge to any shipper who replaces the gas by the end of the calendar month following the month in which the shipper's Amount Confirmed was less than the shipper's Amount Nominated because the Available Interconnection Capacity was less than the Adjusted Designated Capacity.

D. If Respondent declines a shipper's nomination of gas that the shipper is obligated to return to Respondent under Paragraph II.C. because the Available Interconnection Capacity is less than Adjusted Designated Capacity, Respondent shall again afford the shipper options (i) and (ii) in Paragraph II.B., including the provision in Paragraph II.C. regarding suspension of the unauthorized gas usage charge.

E. Respondent shall amend the tariffs it has filed with the MPSC to incorporate its obligations under Paragraph II. of this order. Respondent shall incorporate its obligations under Paragraph II. into any of its contracts with shippers.

F. The purpose of this Paragraph II. of this order is to prevent the substantial lessening of competition from the acquisition, as alleged in the Complaint.

III.

IT IS FURTHER ORDERED that:

Ninety (90) days from the date this order becomes final, annually for the next nine (9) years on the anniversary of the date this order becomes final, and at other times as the Commission may require, Respondent shall file a verified written report with the Commission setting forth in detail the manner and form in which it has complied and is complying with Paragraph II. of this order.

IV.

IT IS FURTHER ORDERED that:

A. Respondent shall notify the Commission at least thirty (30) days before any proposed change in the corporate Respondent such as dissolution, assignment, sale resulting in the emergence of a successor corporation, or the creation or dissolution of subsidiaries or any other change in the corporation that may affect compliance obligations arising out of the order.

B. Upon consummation of the acquisition, Respondent shall cause the merged entity to be bound by the terms of this order.

V.

IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance with this order, upon written request, Respondent shall permit any duly authorized representative of the Commission:

A. Access, during office hours and in the presence of counsel, to all facilities and access to inspect and copy all books, ledgers, accounts, correspondence, memoranda and other records and documents in the possession or under the control of Respondent relating to any matters contained in this order; and
 
B. Upon five days' notice to Respondent and without restraint or interference from it, to interview officers, directors, or employees of Respondent.

VI.

IT IS FURTHER ORDERED that this order shall terminate ten (10) years from the date this order becomes final.

Signed this ___ day of February, 1999.

CMS ENERGY CORPORATION FEDERAL TRADE COMMISSION
William T. McCormick, Jr.
Chairman and CEO

Rodger A. Kershner
Senior Vice President and
General Counsel

C. Benjamin Crisman, Jr.
Gary A. MacDonald
Bernadette Lajoie
Skadden, Arps, Slate,
Meagher & Flom LLP
Counsel for CMS Energy Corporation

Frank Lipson
Mark Menna
Constance Salemi
Stephen Sockwell
Attorneys
Bureau of Competition

Phillip L. Broyles
Assistant Director
Bureau of Competition

William J. Baer
Director
Bureau of Competition