XML 45 R25.htm IDEA: XBRL DOCUMENT
v3.22.4

Regulatory Matters | 12 Months Ended
--- | ---
Dec. 31, 2022
Regulatory Assets and Liabilities Disclosure [Abstract] |
Regulatory Matters | REGULATORY MATTERS Regulation DTE Electric and DTE Gas are subject to the regulatory jurisdiction of the MPSC, which issues orders pertaining to rates, recovery of certain costs, including the costs of generating facilities and regulatory assets, conditions of service, accounting, and operating-related matters. DTE Electric is also regulated by the FERC with respect to financing authorization, wholesale electric market activities, certain affiliate transactions, the acquisition and disposition of certain generation and other facilities, and, in conjunction with the NERC, compliance with mandatory reliability standards. Regulation results in differences in the application of generally accepted accounting principles between regulated and non-regulated businesses. The Registrants are unable to predict the outcome of any unresolved regulatory matters discussed herein. Resolution of these matters is dependent upon future MPSC and FERC orders and appeals, which may materially impact the Consolidated Financial Statements of the Registrants. Regulatory Assets and Liabilities DTE Electric and DTE Gas are required to record Regulatory assets and liabilities for certain transactions that would have been treated as revenue or expense in non-regulated businesses. Continued applicability of regulatory accounting treatment requires that rates be designed to recover specific costs of providing regulated services and be charged to and collected from customers. Future regulatory changes could result in the discontinuance of this accounting treatment for Regulatory assets and liabilities for some or all of the Registrants' businesses and may require the write-off of the portion of any Regulatory asset or liability that was no longer probable of recovery through regulated rates. Management believes that currently available facts support the continued use of Regulatory assets and liabilities and that all Regulatory assets and liabilities are recoverable or refundable in the current regulatory environment. The following are balances and a brief description of the Registrants' Regulatory assets and liabilities at December 31:
| DTE Energy |  | DTE Electric
| 2022 |  | 2021 |  | 2022 |  | 2021
Assets | (In millions)
Recoverable pension and other postretirement costs |  |  |  |  |  |  |
Pension | $ | 1,362 |  |  | $ | 1,372 |  |  | $ | 997 |  |  | $ | 1,056 |
Other postretirement costs | 172 |  |  | 53 |  |  | 60 |  |  | 27 |
Fermi 2 asset retirement obligation | 972 |  |  | 613 |  |  | 972 |  |  | 613 |
Recoverable undepreciated costs on retired plants | 594 |  |  | 667 |  |  | 594 |  |  | 667 |
Accrued PSCR/GCR revenue | 450 |  |  | 160 |  |  | 421 |  |  | 142 |
Recoverable Michigan income taxes | 148 |  |  | 163 |  |  | 121 |  |  | 133 |
Enhanced tree trimming program deferred costs | 90 |  |  | 189 |  |  | 90 |  |  | 189 |
Energy Waste Reduction incentive | 88 |  |  | 79 |  |  | 71 |  |  | 63 |
Recoverable income taxes related to AFUDC equity | 76 |  |  | 68 |  |  | 68 |  |  | 61 |
Deferred pension costs | 63 |  |  | 16 |  |  | 41 |  |  | — |
Deferred environmental costs | 46 |  |  | 51 |  |  | — |  |  | — |
Unamortized loss on reacquired debt | 45 |  |  | 51 |  |  | 34 |  |  | 38 |
Customer360 deferred costs | 42 |  |  | 46 |  |  | 42 |  |  | 46 |
Non-service pension and other postretirement costs | 32 |  |  | 25 |  |  | — |  |  | — |
Nuclear performance evaluation and review committee tracker | 26 |  |  | 39 |  |  | 26 |  |  | 39 |
Removal costs asset | 19 |  |  | — |  |  | 19 |  |  | — |
Advanced distribution management system costs | 14 |  |  | 9 |  |  | 14 |  |  | 9 |
Other recoverable income taxes | 14 |  |  | 16 |  |  | 14 |  |  | 16 |
Transitional Reconciliation Mechanism | 13 |  |  | 8 |  |  | 13 |  |  | 8 |
Energy Waste Reduction | 8 |  |  | 20 |  |  | — |  |  | — |
Other | 62 |  |  | 32 |  |  | 43 |  |  | 29 |
| 4,336 |  |  | 3,677 |  |  | 3,640 |  |  | 3,136 |
Less amount included in Current Assets | (450) |  |  | (195) |  |  | (421) |  |  | (168) |
| $ | 3,886 |  |  | $ | 3,482 |  |  | $ | 3,219 |  |  | $ | 2,968 |
Securitized regulatory assets | $ | 206 |  |  | $ | — |  |  | $ | 206 |  |  | $ | — |
| DTE Energy |  | DTE Electric
| 2022 |  | 2021 |  | 2022 |  | 2021
Liabilities | (In millions)
Refundable federal income taxes | $ | 1,908 |  |  | $ | 2,117 |  |  | $ | 1,534 |  |  | $ | 1,729 |
Removal costs liability | 371 |  |  | 679 |  |  | — |  |  | 283 |
Negative other postretirement offset | 191 |  |  | 150 |  |  | 128 |  |  | 106 |
Non-service pension and other postretirement costs | 154 |  |  | 110 |  |  | 73 |  |  | 54 |
Renewable energy | 21 |  |  | 13 |  |  | 21 |  |  | 13 |
Energy Waste Reduction | 11 |  |  | 27 |  |  | 11 |  |  | 27 |
Incremental tree trim surge | 4 |  |  | 90 |  |  | 4 |  |  | 90 |
COVID-19 voluntary refund | — |  |  | 30 |  |  | — |  |  | 30 |
Other | 47 |  |  | 46 |  |  | 40 |  |  | 43 |
| 2,707 |  |  | 3,262 |  |  | 1,811 |  |  | 2,375 |
Less amount included in Current Liabilities | (34) |  |  | (156) |  |  | (33) |  |  | (154) |
| $ | 2,673 |  |  | $ | 3,106 |  |  | $ | 1,778 |  |  | $ | 2,221 |
As noted below, certain Regulatory assets for which costs have been incurred have been included (or are expected to be included, for costs incurred subsequent to the most recently approved rate case) in DTE Electric's or DTE Gas' rate base, thereby providing a return on invested costs (except as noted). Certain other Regulatory assets are not included in rate base but accrue recoverable carrying charges until surcharges to collect the assets are billed. Certain Regulatory assets do not result from cash expenditures and therefore do not represent investments included in rate base or have offsetting liabilities that reduce rate base. ASSETS •Recoverable pension and other postretirement costs — Accounting standards for pension and other postretirement benefit costs require, among other things, the recognition in Other comprehensive income of the actuarial gains or losses and the prior service costs that arise during the period but are not immediately recognized as components of net periodic benefit costs. DTE Electric and DTE Gas record the impact of actuarial gains or losses and prior service costs as Regulatory assets since the traditional rate setting process allows for the recovery of pension and other postretirement costs. The asset will reverse as the deferred items are amortized and recognized as components of net periodic benefit costs. Refer to Note 20 to the Consolidated Financial Statements, "Retirement Benefits and Trusteed Assets," for additional information regarding the changes in pension and other postretirement costs for the period and the impact on Regulatory assets.(a) •Fermi 2 asset retirement obligation — Obligation for Fermi 2 decommissioning costs. The asset captures the timing differences between expense recognition and current recovery in rates and will reverse over the remaining life of the related plant.(a) •Recoverable undepreciated costs on retired plants — Deferral of undepreciated costs associated with the St. Clair and Trenton Channel coal-fired power plants, which were retired in 2022. The prior year balance also includes the $73 million undepreciated cost of the River Rouge power plant, which was approved for securitization and recovery by the MPSC in 2021 and reclassified to 'Securitized regulatory assets' in 2022. Refer to the "2021 Securitization Filing" section below for additional information. Remaining undepreciated costs associated with the St. Clair and Trenton Channel power plants are expected to be recovered through a future securitization filing. •Accrued PSCR/GCR revenue — Receivable for the temporary under-recovery of and carrying costs on fuel and purchased power costs incurred by DTE Electric which are recoverable through the PSCR mechanism and temporary under-recovery of and carrying costs on gas costs incurred by DTE Gas which are recoverable through the GCR mechanism. •Recoverable Michigan income taxes — The State of Michigan enacted a corporate income tax resulting in the establishment of state deferred tax liabilities for DTE Energy's utilities. Offsetting Regulatory assets were also recorded as the impacts of the deferred tax liabilities will be reflected in rates as the related taxable temporary differences reverse and flow through current income tax expense. •Enhanced tree trimming program deferred costs — The MPSC approved the deferral of costs for a tree trimming surge through 2024, aimed at reducing the number and duration of customer interruptions. The prior year balance includes $157 million of costs that were approved for securitization and recovery by the MPSC in 2021 and reclassified to 'Securitized regulatory assets' in 2022. Refer to the "2021 Securitization Filing" section below for additional information. Additional tree trim surge costs are expected to be recovered through a future securitization filing. •Energy Waste Reduction incentive — DTE Electric and DTE Gas operate MPSC approved energy waste reduction programs designed to reduce overall energy usage by their customers. The utilities are eligible to earn an incentive by exceeding statutory savings targets. The utilities have consistently exceeded the savings targets and recognize the incentive as a Regulatory asset in the period earned.(a) •Recoverable income taxes related to AFUDC equity — Accounting standards for income taxes require recognition of a deferred tax liability for the equity component of AFUDC. A Regulatory asset is required for the future increase in taxes payable related to the equity component of AFUDC that will be recovered from customers through future rates over the remaining life of the related plant. •Deferred pension costs — Effective upon the DTE Gas rate case settlement approved in August 2020 and DTE Electric rate order in November 2022, net pension costs previously recognized in earnings are no longer included as an addition to authorized rates and are being deferred as Regulatory assets. The Regulatory assets will reverse to the extent net pension costs are negative in future years and the net deferred amounts will be reviewed in future rate cases. Refer to Note 20 to the Consolidated Financial Statements, "Retirement Benefits and Trusteed Assets," for additional information regarding net pension costs. •Deferred environmental costs — The MPSC approved the deferral of investigation and remediation costs associated with DTE Gas' former MGP sites. Amortization of deferred costs is over a ten-year period beginning in the year after costs were incurred, with recovery (net of any insurance proceeds) through base rate filings.(a) •Unamortized loss on reacquired debt — The unamortized discount, premium, and expense related to debt redeemed with a refinancing are deferred, amortized, and recovered over the life of the replacement issue. •Customer360 deferred costs — The MPSC approved the deferral and amortization of certain costs associated with implementing Customer360, an integrated software application that enables improved interface among customer service, billing, meter reading, credit and collections, device management, account management, and retail access. Amortization of deferred costs over a 15-year amortization period began after the billing system was put into operation during the second quarter of 2017. The deferred costs are recorded as Regulatory Assets at DTE Electric and DTE Gas receives an intercompany charge for their proportionate share of amortization expense. •Non-service pension and other postretirement costs — Upon adoption of ASU 2017-07 on January 1, 2018, certain non-service pension and other postretirement costs are no longer capitalized into Property, Plant & Equipment. Such costs may be recorded to Regulatory assets for ratemaking purposes and recovered as amortization expense based on the composite depreciation rate for plant-in-service. •Nuclear performance evaluation and review committee tracker — Deferral and amortization of certain costs associated with oversight and review of DTE Electric's nuclear power generation program, including safety and regulatory compliance, nuclear leadership, nuclear facilities, and operational and financial performance, pursuant to MPSC authorization. Deferrals are amortized over a five-year period with recovery through base rate filings. •Removal costs asset — Receivable for the recovery of asset removal expenditures in excess of amounts collected from customers.(a) •Advanced distribution management system — Program comprised of new hardware and software designed to improve the monitoring and safe operation of the electrical system, including emergency response. The program includes various upgrades for which costs are being separately deferred and amortized over respective 15 year periods, with recovery through base filings. •Other recoverable income taxes — Income tax receivable from DTE Electric's customers representing the difference in property-related deferred income taxes and amounts previously reflected in DTE Electric's rates. This asset will reverse over the remaining life of the related plant. •Transitional Reconciliation Mechanism — The MPSC approved the recovery of the deferred net incremental revenue requirement associated with the transition of PLD customers to DTE Electric's distribution system effective July 1, 2014. Annual reconciliations are filed and surcharges are implemented to recover approved amounts. •Energy Waste Reduction — Receivable for the under-recovery of energy waste reduction costs incurred by DTE Gas which are recoverable through a surcharge.(a) •Securitized regulatory assets — Remaining undepreciated cost of the River Rouge power plant and tree trim surge costs that were approved for securitization and recovery in the MPSC's June 2021 order. Securitization bond surcharges will recover the tree trimming costs over a period not to exceed 5 years and River Rouge costs over a period not to exceed 14 years. Refer to the "2021 Securitization Filing" section below for additional information. ________________________________________________ (a)Regulatory assets not earning a return or accruing carrying charges. LIABILITIES •Refundable federal income taxes — In December 2017, the TCJA was enacted and reduced the corporate income tax rate, effective January 1, 2018. DTE Electric and DTE Gas remeasured deferred taxes, resulting in a reduction to deferred tax liabilities, to reflect the impact of the TCJA on the cumulative temporary differences expected to reverse after the effective date. Regulatory liabilities were also recorded to offset the impact of the deferred tax remeasurement reflected in rates. •Removal costs liability — The amounts collected from customers to fund future asset removal activities in excess of removal costs incurred. •Negative other postretirement offset — DTE Electric and DTE Gas' negative other postretirement costs are not included as a reduction to their authorized rates; therefore, DTE Electric and DTE Gas are accruing a Regulatory liability to eliminate the impact on earnings of the negative other postretirement expense accrual. The Regulatory liabilities will reverse to the extent DTE Electric and DTE Gas' other postretirement expense is positive in future years. •Non-service pension and other postretirement costs — Upon adoption of ASU 2017-07 on January 1, 2018, certain non-service pension and other postretirement cost activity is no longer credited to Property, Plant & Equipment. Such costs may be recorded to Regulatory liabilities for ratemaking purposes and refunded through credits to amortization expense based on the composite depreciation rate for plant-in-service. •Renewable energy — Amounts collected in excess of renewable energy expenditures, including subscription revenue related to MIGreenPower, DTE Electric's voluntary renewable program providing customers the option to source their energy usage from renewables. •Energy Waste Reduction — Amounts collected in rates in excess of energy waste reduction costs incurred by DTE Electric. •Incremental tree trim surge — One-time voluntary refund approved in the fourth quarter 2021 to be administered by investing in tree trimming, incremental to the enhanced tree trimming program, without seeking future cost recovery. The liability is being relieved based on incremental tree trim expenses incurred during 2022 and final expenses expected to be incurred in 2023. •COVID-19 voluntary refund — One-time refund obligation owed to DTE Electric customers due to certain sales increases driven by the COVID-19 pandemic. Amortization of the liability was completed in 2022 and was used to offset the cost of service related to new plant. 2021 Securitization Filing On June 23, 2021 the MPSC issued a financing order authorizing DTE Electric to issue Securitization bonds for qualified costs of up to $236 million, including $73 million for the net book value of the River Rouge generation plant, $157 million for tree trimming surge program costs, and $6 million for other qualified costs. The financing order further authorized customer charges for the timely recovery of the debt service costs on the Securitization bonds and other ongoing qualified costs. On March 17, 2022, DTE Electric closed on the issuance of Securitization bonds of $236 million. Refer to Note 14 to the Consolidated Financial Statements, “Long-Term Debt,” for additional information regarding the terms of the bonds and use of proceeds. Upon closing the transaction, DTE Electric recognized Securitized regulatory assets of $230 million, which were reclassified from existing Regulatory assets for the net book value of the River Rouge plant and tree trimming surge program. Debt service costs relating to tree trimming will be recovered over a period not to exceed 5 years, while amounts relating to River Rouge will be recovered over a period not to exceed 14 years. 2022 Electric Rate Case Filing DTE Electric filed a rate case with the MPSC on January 21, 2022 requesting an increase in base rates of $388 million based on a projected twelve-month period ending October 31, 2023. The requested increase in base rates was primarily due to an increase in net plant resulting from generation and distribution investments, as well as related increases to depreciation and property tax expenses. The rate filing also requested an increase in return on equity from 9.9% to 10.25% and included projected changes in sales. On November 18, 2022, the MPSC issued an order authorizing an annual revenue increase of $31 million for services rendered on or after November 25, 2022 and a return on equity of 9.9%. The order also disallowed certain capital expenditures previously recorded, for which $8 million has been recorded to Asset (gains) losses and impairments, net within the Consolidated Statements of Operations for the year ended December 31, 2022. The annual revenue increase of $31 million granted in the order included a higher residential sales forecast adopted by the MPSC compared to the DTE Electric projections in the rate case filing. DTE Electric believes the MPSC forecast did not provide sufficient consideration for recent downward trends in residential sales as the temporary increases from the COVID-19 pandemic began diminishing in 2022. Accordingly, DTE Electric filed a petition for rehearing on December 16, 2022 requesting the MPSC to reconsider and adopt an alternate residential sales forecast that more accurately reflects changing trends in customer usage and is consistent with previously authorized forecast methodologies. On February 2, 2023, DTE Electric received an order from the MPSC that denied the rehearing request. DTE Electric is seeking additional rate relief in its 2023 rate case filing that will include projected changes in sales. Refer to the "2023 Electric Rate Case Filing" section below for additional details. Ludington Accounting Application During April 2022, DTE Electric and Consumers Energy Company (“Consumers”) filed a complaint against Toshiba America Energy Systems (“TAES”) and its parent corporation for unsatisfactory performance relating to the overhaul and upgrade of the Ludington Hydroelectric Pumped Storage Plant (“Ludington”). Refer to the Ludington Plant Contract Dispute section of Note 18 to the Consolidated Financial Statements, “Commitments and Contingencies,” for additional information regarding the complaint and ongoing legal proceedings. DTE Electric and Consumers, joint owners of Ludington, believe that certain costs must be incurred in the near term for repairing and/or replacing defective work performed by TAES in order to ensure the continued safe and reliable operation of the plant. In November 2022, DTE Electric and Consumers filed an accounting application with the MPSC for authority to defer these costs as a regulatory asset. DTE Electric and Consumers are seeking the regulatory asset for their respective 49% and 51% shares of these costs, to be offset by any potential litigation proceeds. The parties are also seeking that appropriate recovery and ratemaking treatment may be granted in a future rate case or other proceeding. A response in this filing is currently expected in the first quarter 2023. 2022 DTE Gas Voluntary Refund Application On November 4, 2022, DTE Gas filed an application with the MPSC requesting approval of a one-time voluntary refund to its utility customers not to exceed $20 million, as well as authorization to implement accounting procedures consistent with the refund. The requested refund was due to 2022 financial results, that due to unforeseen circumstances, were expected to exceed those that were initially anticipated. DTE Gas expects the refund will be made in the form of incurring costs that benefit its customers and are incremental to those included in current rates. If such costs are not incurred, the refund will be administered through a bill credit. On December 9, 2022, the MPSC issued an order approving the application and directed DTE Gas to file documentation by December 27, 2022 substantiating the final amount of the customer refund. DTE Gas complied with this request and submitted a letter to the MPSC substantiating a refund amount of $5 million. On December 28, 2022, the MPSC confirmed that DTE Gas complied with the requirement set forth in the December 9th order. Accordingly, DTE Gas recognized a regulatory liability of $5 million and has until February 28, 2023 to confirm the proposed method of the refund. 2023 Electric Rate Case Filing DTE Electric filed a rate case with the MPSC on February 10, 2023 requesting an increase in base rates of $622 million based on a projected twelve-month period ending November 30, 2024, and an increase in return on equity from 9.9% to 10.25%. The requested increase in base rates is primarily due to increased investments in plant involving generation and the electric distribution system, as well as related increases to depreciation and property tax expenses. These investments will support DTE Energy's goals to reduce carbon emissions and improve power reliability. The requested increase in base rates is also due to a projected sales decline from the level included in current rates and inflationary impacts on operating and interest costs. A final MPSC order in this case is expected in December 2023.

X
- References No definition available. + Details
Name: | us-gaap_RegulatoryAssetsAndLiabilitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for detailed information about regulatory assets and liabilities, including current and noncurrent assets created when regulatory agencies permit the deferral of costs to the balance sheet that would otherwise be required to appear on the company's income statement and would be charged against current expenses or revenues, as well as current and noncurrent liabilities created when regulatory agencies permit. + References No definition available. + Details
Name: | us-gaap_ScheduleOfRegulatoryAssetsAndLiabilitiesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration