EXIBIT 8.1
SKADDEN, ARPS, SLATE, MEAGHER & FLOM, LLP
FOUR TIMES SQUARE
NEW YORK, NY 10036
(212) 735-3000
November 8, 2001
Consumers Energy Company
212 West Michigan Avenue
Jackson, MI 49201
Morgan Stanley & Co. Incorporated
on behalf of itself and as Representative of the Underwriters
1585 Broadway
New York, NY 10036
Re: Consumers Funding LLC
---------------------
Ladies and Gentlemen:
In connection with the Registration Statement No.
333-47938 on Form S-3 relating to Consumers Funding LLC (the "Issuer") (as
amended from time to time, the "Registration Statement") filed by the
Issuer with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Securities Act"), which was
declared effective by the SEC on October 24, 2001, you have requested our
opinion regarding certain descriptions of tax consequences contained in the
form of prospectus (the "Prospectus") and in the form of prospectus
supplement (the "Prospectus Supplement") each of which is included in the
Registration Statement. Capitalized terms not otherwise defined herein have
the respective meanings assigned to such terms in the Registration
Statement.
We have acted as special federal income tax counsel to
the Issuer, in connection with (a) the sale to the Issuer of Consumers'
Securitization Property, which is the property right created by Michigan's
Customer Choice Act representing the irrevocable right of Consumers Energy
Company ("Consumers") or its assignee to receive through Securitization
Charges amounts sufficient to recover a portion of its Qualified Costs and
(b) the Issuer's issuance of Securitization Bonds (the "Securitization
Bonds") which are supported by the Securitization Property and which are
offered and sold pursuant to the Registration Statement (such offered
Securitization Bonds, the "Offered Bonds"). The Offered Bonds are being
issued under the Indenture dated as of November 8, 2001 substantially in
the form filed as an exhibit to the Registration Statement (the
"Indenture") between the Issuer and The Bank of New York, as trustee (the
"Trustee"), as well as under the Series Supplement dated as of November 8,
2001 (the "Series Supplement") between the Issuer and the Trustee.
In connection with our engagement, we have examined and relied
upon the forms of the Revised and Restated Certificate of Formation of the
Issuer and the Amended and Restated Limited Liability Company Agreement of
the Issuer included as exhibits to the Registration Statement.
Furthermore, we are familiar with the proceedings taken to date
with respect to the authorization, issuance and sale of the Securitization
Bonds and have examined originals or counterparts, or certified or other
copies identified to our satisfaction as being true copies of the
Registration Statement (including all amendments thereto), such
certificates, instruments, documents and other corporate records of each of
the Issuer and Consumers and matters of fact and law as we deem necessary
for the purposes of the opinion expressed below.
In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
certified or photostatic copies and the authenticity of the originals of
such latter documents. As to any facts material to the opinions expressed
herein which were not independently established or verified, we have relied
upon statements, represen tations, and certifications of officers and other
representatives of the Issuer, Consumers, the Underwriters, and others.
In rendering our opinion, we have also considered and relied upon
the Internal Revenue Code of 1986, as amended, administrative rulings,
judicial decisions, Treasury regulations, and such other authorities as we
have deemed appropriate, all as in effect as of the date hereof. In
particular, we have relied on the private letter ruling addressed to
Consumers dated November 15, 2000 with respect to the issuance of the
Securitization Bonds. The statutory provisions, regulations and
interpretations upon which our opinion is based are subject to changes, and
such changes could apply retroactively. In addition, there can be no
assurance that positions con trary to those stated in our opinion may not
be taken by the Internal Revenue Service.
We express no opinions as to the laws of any jurisdiction other
than the federal income tax laws of the United States of America to the
extent specifically referred to herein.
Based upon and subject to the foregoing, we are of the following
opinions:
1. the Issuer will not be subject to United States federal
income tax as an entity separate from Consumers;
2. The Securitization Bonds will constitute debt of Consumers
for federal income tax purposes; and
3. the statements in the Prospectus under the heading "Material
Income Tax Consequences for the Securitization Bonds-Material
Federal Income Tax Consequences" subject to the
qualifications set forth therein, to the extent they apply to
holders of the Offered Bonds that are not U.S. persons
(within the meaning of the Code), accurately describe the
material federal income tax consequences to such holders
under existing law and the as sumptions stated therein.
Furthermore, subject to the qualifications and assumptions set forth
therein, we hereby adopt and confirm to you our opinion as set forth under
the heading "Introduction-Tax Status" in the Prospectus Supplement and
under the headings "Payments of Interest and Principal-Material Income Tax
Considerations" and "Material Income Tax Consequences for the
Securitization Bonds-Material Federal Income Tax Consequences" in the
Prospectus.
The above-referenced description of federal income tax
consequences applies only to the issuance of the Offered Bonds under the
Indenture and the Series Supplement. Accord ingly, this description of
federal income tax consequences may not be applicable to the issuance of
any other series of bonds by the Issuer pursuant to the Registration
Statement.
We consent to the filing of this opinion as an exhibit to
the Registration Statement and to the references to Skadden, Arps, Slate,
Meagher & Flom LLP under the heading "Intro duction-Tax Status" in the
Prospectus Supplement and under the headings "Payments of Interest and
Principal-Material Income Tax Considerations," "Various Legal Matters
Relating to the Securitization Bonds" and "Material Income Tax Consequences
for the Securitization Bonds-Material Federal Income Tax Consequences" in
the Prospectus. We express no opinion with respect to the matters addressed
in this opinion other than as set forth above. Further, this opinion is
expressed as of the date hereof, and we disclaim any undertaking to advise
you of any subsequent changes of the facts stated or assumed herein or any
subsequent changes in applicable law.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom LLP