XML 40 R18.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Significant Accounting Policies | 12 Months Ended
--- | ---
Dec. 31, 2023
Accounting Policies [Abstract] |
Significant Accounting Policies | SIGNIFICANT ACCOUNTING POLICIES Other Income Other income for the Registrants is recognized for non-operating income such as equity earnings of equity method investees, allowance for equity funds used during construction, contract services, and certain investment income, primarily from trading securities held in DTE Energy's rabbi trust. For 2021, the DTE Vantage segment also recognized Other income in connection with the sale of membership interests in reduced emissions fuel facilities to investors. The following is a summary of DTE Energy's Other income:
| 2023 |  | 2022 |  | 2021
| (In millions)
Allowance for equity funds used during construction | $ | 42 |  |  | $ | 29 |  |  | $ | 27 |
Contract services | 26 |  |  | 28 |  |  | 27 |
Investment income(a) | 17 |  |  | 3 |  |  | 14 |
Equity earnings (losses) of equity method investees | 3 |  |  | (14) |  |  | 38 |
Income from REF entities | — |  |  | — |  |  | 141 |
Other | 14 |  |  | 12 |  |  | 7 |
| $ | 102 |  |  | $ | 58 |  |  | $ | 254 |
_______________________________________ (a)Investment losses are recorded separately to Other expenses on the Consolidated Statements of Operations. The following is a summary of DTE Electric's Other income:
| 2023 |  | 2022 |  | 2021
| (In millions)
Allowance for equity funds used during construction | $ | 40 |  |  | $ | 26 |  |  | $ | 25 |
Contract services | 25 |  |  | 27 |  |  | 27 |
Investment income(a) | 11 |  |  | 3 |  |  | 10 |
Other | 11 |  |  | 9 |  |  | 9 |
| $ | 87 |  |  | $ | 65 |  |  | $ | 71 |
_______________________________________ (a)Investment losses are recorded separately to Other expenses on the Consolidated Statements of Operations. For information on equity earnings of equity method investees by segment, see Note 22 to the Consolidated Financial Statements, "Segment and Related Information." Accounting for ISO Transactions DTE Electric participates in the energy market through MISO. MISO requires that DTE Electric submit hourly day-ahead, real-time, and FTR bids and offers for energy at locations across the MISO region. DTE Electric accounts for MISO transactions on a net hourly basis in each of the day-ahead, real-time, and FTR markets. In any single hour, transactions in each of the MISO energy markets are netted based on MWh to determine if DTE Electric is in a net sale or purchase position. Net purchases are recorded in Fuel, purchased power, and gas — utility and net sales are recorded in Operating Revenues — Utility operations on the Registrants' Consolidated Statements of Operations. The Energy Trading segment participates in the energy markets through various ISOs and RTOs. These markets require that Energy Trading submits hourly day-ahead, real-time bids and offers for energy at locations across each region. Energy Trading submits bids in the annual and monthly auction revenue rights and FTR auctions to the RTOs. Energy Trading accounts for these transactions on a net hourly basis for the day-ahead, real-time, and FTR markets. These transactions are related to trading contracts which, if derivatives, are presented on a net basis in Operating Revenues — Non-utility operations, and if non-derivatives, the realized gains and losses for sales are recorded in Operating Revenues — Non-utility operations and purchases are recorded in Fuel, purchased power, gas, and other — non-utility in the DTE Energy Consolidated Statements of Operations. DTE Electric and Energy Trading record accruals for future net purchases adjustments based on historical experience and reconcile accruals to actual costs when invoices are received from MISO and other ISOs and RTOs. Derivatives Energy Trading classifies derivative transactions as revenue or expense based on the intent of the transaction (buy or sell). Revenues are recorded on a gross or net basis within the income statement depending upon whether it represents a non-trading activity or trading activity, respectively. Cash flows associated with derivative instruments, including related gains and losses, are presented as Operating Activities within the Registrants' Consolidated Statements of Cash Flows. For additional information, refer to Note 13 to the Consolidated Financial Statements, "Financial and Other Derivative Instruments". Changes in Accumulated Other Comprehensive Income (Loss) Comprehensive income (loss) is the change in common shareholders’ equity during a period from transactions and events from non-owner sources, including Net Income. The amounts recorded to Accumulated other comprehensive income (loss) for DTE Energy include changes in benefit obligations, consisting of deferred actuarial losses and prior service costs, unrealized gains and losses from derivatives accounted for as cash flow hedges, and foreign currency translation adjustments, if any. DTE Energy releases income tax effects from accumulated other comprehensive income when the circumstances upon which they are premised cease to exist. Changes in Accumulated other comprehensive income (loss) are presented in DTE Energy's Consolidated Statements of Changes in Equity and DTE Electric's Consolidated Statements of Changes in Shareholder's Equity, if any. For the years ended December 31, 2023 and 2022, reclassifications out of Accumulated other comprehensive income (loss) were not material. The following table summarizes the changes in DTE Energy's Accumulated other comprehensive income (loss) by component(a) for the years ended December 31, 2023 and 2022:
| Net Unrealized Gain (Loss) on Derivatives |  |  |  | Benefit Obligations(b) |  | Foreign Currency Translation |  | Total
| (In millions)
Balance, December 31, 2021 | $ | (11) |  |  |  |  | $ | (101) |  |  | $ | — |  |  | $ | (112) |
Other comprehensive income before reclassifications | 5 |  |  |  |  | — |  |  | — |  |  | 5 |
Amounts reclassified from Accumulated other comprehensive loss | 2 |  |  |  |  | 43 |  |  | — |  |  | 45 |
Net current period Other comprehensive income | 7 |  |  |  |  | 43 |  |  | — |  |  | 50 |
Balance, December 31, 2022 | $ | (4) |  |  |  |  | $ | (58) |  |  | $ | — |  |  | $ | (62) |
Other comprehensive income (loss) before reclassifications | (14) |  |  |  |  | 3 |  |  | 2 |  |  | (9) |
Amounts reclassified from Accumulated other comprehensive loss | 1 |  |  |  |  | 3 |  |  | — |  |  | 4 |
Net current period Other comprehensive income (loss) | (13) |  |  |  |  | 6 |  |  | 2 |  |  | (5) |
Balance, December 31, 2023 | $ | (17) |  |  |  |  | $ | (52) |  |  | $ | 2 |  |  | $ | (67) |
______________________________________ (a)All amounts are net of tax, except for Foreign currency translation. (b)Benefit obligations activity includes changes in actuarial (gain) loss and prior service cost in DTE Energy's pension and other postretirement benefit plans. Refer to Note 20 to the Consolidated Financial Statements, "Retirement Benefits and Trusteed Assets", for details regarding this activity. For 2022, the change in benefit obligations due to actuarial (gain) loss increased from prior years, primarily due to higher discount rates and other plan changes. Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents include cash on hand, cash in banks, and temporary investments purchased with remaining maturities of three months or less. Restricted cash includes funds held in separate bank accounts and principally consists of amounts at DTE Securitization I and DTE Securitization II to pay for debt service and other qualified costs. Restricted cash also consists of funds held to satisfy contractual obligations related to a large construction project at DTE Vantage. Restricted cash designated for payments within one year is classified as a Current Asset. Financing Receivables Financing receivables are primarily composed of trade receivables, notes receivable, and unbilled revenue. The Registrants' financing receivables are stated at net realizable value. DTE Energy had unbilled revenues of $882 million and $1.2 billion at December 31, 2023 and 2022, respectively, including $311 million and $290 million of DTE Electric unbilled revenues, respectively, included in Customer Accounts receivable. The Registrants monitor the credit quality of their financing receivables on a regular basis by reviewing credit quality indicators and monitoring for trigger events, such as a credit rating downgrade or bankruptcy. Credit quality indicators include, but are not limited to, ratings by credit agencies where available, collection history, collateral, counterparty financial statements and other internal metrics. Utilizing such data, the Registrants have determined three internal grades of credit quality. Internal grade 1 includes financing receivables for counterparties where credit rating agencies have ranked the counterparty as investment grade. To the extent credit ratings are not available, the Registrants utilize other credit quality indicators to determine the level of risk associated with the financing receivable. Internal grade 1 may include financing receivables for counterparties for which credit rating agencies have ranked the counterparty as below investment grade; however, due to favorable information on other credit quality indicators, the Registrants have determined the risk level to be similar to that of an investment grade counterparty. Internal grade 2 includes financing receivables for counterparties with limited credit information and those with a higher risk profile based upon credit quality indicators. Internal grade 3 reflects financing receivables for which the counterparties have the greatest level of risk, including those in bankruptcy status. The following represents the Registrants' financing receivables by year of origination, classified by internal grade of credit risk, including current year-to-date gross write-offs, if any. The related credit quality indicators and risk ratings utilized to develop the internal grades have been updated through December 31, 2023.
| DTE Energy |  | DTE Electric
| Year of origination
| 2023 |  | 2022 |  | 2021 and prior |  | Total |  | 2023 and prior
| (In millions)
Notes receivable |  |  |  |  |  |  |  |  |
Internal grade 1 | $ | 19 |  |  | $ | — |  |  | $ | 4 |  |  | $ | 23 |  |  | $ | 18 |
Internal grade 2 | 23 |  |  | 112 |  |  | 17 |  |  | 152 |  |  | 1 |
Total notes receivable(a) | $ | 42 |  |  | $ | 112 |  |  | $ | 21 |  |  | $ | 175 |  |  | $ | 19 |
Net investment in leases |  |  |  |  |  |  |  |  |
Internal grade 1 | $ | — |  |  | $ | — |  |  | $ | 37 |  |  | $ | 37 |  |  | $ | — |
Internal grade 2 | — |  |  | 66 |  |  | 184 |  |  | 250 |  |  | — |
Total net investment in leases(a) | $ | — |  |  | $ | 66 |  |  | $ | 221 |  |  | $ | 287 |  |  | $ | — |
_______________________________________ (a)For DTE Energy and DTE Electric, the current portion is included in Current Assets — Other on the respective Consolidated Statements of Financial Position. For DTE Electric, the noncurrent portion is included in Other Assets — Other. The allowance for doubtful accounts on accounts receivable for the utility entities is generally calculated using an aging approach that utilizes rates developed in reserve studies. DTE Electric and DTE Gas establish an allowance for uncollectible accounts based on historical losses and management's assessment of existing and future economic conditions, customer trends and other factors. Customer accounts are generally considered delinquent if the amount billed is not received by the due date, which is typically in 21 days, however, factors such as assistance programs may delay aggressive action. DTE Electric and DTE Gas generally assess late payment fees on trade receivables based on past-due terms with customers. Customer accounts are written off when collection efforts have been exhausted. The time period for write-off is 150 days after service has been terminated. The customer allowance for doubtful accounts for non-utility businesses and other receivables for both utility and non-utility businesses is generally calculated based on specific review of probable future collections based on receivable balances generally in excess of 30 days. Existing and future economic conditions, customer trends and other factors are also considered. Receivables are written off on a specific identification basis and determined based upon the specific circumstances of the associated receivable. Notes receivable for DTE Energy are primarily comprised of finance lease receivables and loans that are included in Notes Receivable and Other current assets on DTE Energy's Consolidated Statements of Financial Position. Notes receivable for DTE Electric are primarily comprised of loans. The Registrants establish an allowance for credit loss for principal and interest amounts due that are estimated to be uncollectible in accordance with the contractual terms of the note receivable. In determining the allowance for credit losses for notes receivable, the Registrants consider the historical payment experience and other factors that are expected to have a specific impact on the counterparty's ability to pay including existing and future economic conditions. Notes receivable are typically considered delinquent when payment is not received for periods ranging from 60 to 120 days. If amounts are no longer probable of collection, the Registrants may consider the note receivable impaired, adjust the allowance, and cease accruing interest (nonaccrual status). Cash payments received on nonaccrual status notes receivable, that do not bring the account contractually current, are first applied to the contractually owed past due interest, with any remainder applied to principal. Accrual of interest is generally resumed when the note receivable becomes contractually current. The following tables present a roll-forward of the activity for the Registrants' financing receivables credit loss reserves:
| DTE Energy |  | DTE Electric
| Trade accounts receivable |  | Other receivables |  |  |  |  |  | Total |  | Trade and other accounts receivable
| (In millions)
Balance at December 31, 2020 | $ | 101 |  |  | $ | 3 |  |  |  |  |  |  | $ | 104 |  |  | $ | 57 |
Current period provision | 53 |  |  | 1 |  |  |  |  |  |  | 54 |  |  | 36 |
Write-offs charged against allowance | (126) |  |  | (1) |  |  |  |  |  |  | (127) |  |  | (77) |
Recoveries of amounts previously written off | 61 |  |  | — |  |  |  |  |  |  | 61 |  |  | 38 |
Balance at December 31, 2021 | $ | 89 |  |  | $ | 3 |  |  |  |  |  |  | $ | 92 |  |  | $ | 54 |
Current period provision | 49 |  |  | — |  |  |  |  |  |  | 49 |  |  | 33 |
Write-offs charged against allowance | (105) |  |  | (2) |  |  |  |  |  |  | (107) |  |  | (66) |
Recoveries of amounts previously written off | 45 |  |  | — |  |  |  |  |  |  | 45 |  |  | 28 |
Balance at December 31, 2022 | $ | 78 |  |  | $ | 1 |  |  |  |  |  |  | $ | 79 |  |  | $ | 49 |
Current period provision | 52 |  |  | — |  |  |  |  |  |  | 52 |  |  | 36 |
Write-offs charged against allowance | (112) |  |  | — |  |  |  |  |  |  | (112) |  |  | (72) |
Recoveries of amounts previously written off | 44 |  |  | — |  |  |  |  |  |  | 44 |  |  | 28 |
Balance at December 31, 2023 | $ | 62 |  |  | $ | 1 |  |  |  |  |  |  | $ | 63 |  |  | $ | 41 |
Uncollectible expense for the Registrants is primarily comprised of the current period provision for allowance for doubtful accounts and is summarized as follows:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (In millions)
DTE Energy | $ | 55 |  |  | $ | 55 |  |  | $ | 55 |
DTE Electric | $ | 38 |  |  | $ | 35 |  |  | $ | 36 |
There are no material amounts of past due financing receivables for the Registrants as of December 31, 2023. Inventories Inventory related to utility and non-utility operations is valued at the lower of cost or net realizable value, where cost is generally valued using average cost. Inventory primarily includes fuel, gas, materials, and supplies. Other inventories include RECs, emission allowances, and other environmental products in the Energy Trading segment. DTE Gas' natural gas inventory of $73 million and $44 million as of December 31, 2023 and 2022, respectively, is determined using the last-in, first-out (LIFO) method. The replacement cost of gas in inventory exceeded the LIFO cost by $50 million and $152 million at December 31, 2023 and 2022, respectively. Property, Retirement and Maintenance, and Depreciation and Amortization Property is stated at cost and includes construction-related labor, materials, overheads, and AFUDC for utility property. The cost of utility properties retired is charged to accumulated depreciation. Expenditures for maintenance and repairs are charged to expense when incurred. Utility property at DTE Electric and DTE Gas is depreciated over its estimated useful life using straight-line rates approved by the MPSC. DTE Energy's non-utility property is depreciated over its estimated useful life using the straight-line method. Depreciation and amortization expense also includes the amortization of certain regulatory assets and liabilities for the Registrants. The cost of nuclear fuel is capitalized. The amortization of nuclear fuel is included within Fuel, purchased power, and gas — utility in the DTE Energy Consolidated Statements of Operations, and Fuel and purchased power in the DTE Electric Consolidated Statements of Operations, and is recorded using the units-of-production method. See Note 6 to the Consolidated Financial Statements, "Property, Plant, and Equipment." Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. If the carrying amount of the asset exceeds the expected undiscounted future cash flows generated by the asset, an impairment loss is recognized resulting in the asset being written down to its estimated fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less costs to sell. Goodwill DTE Energy has goodwill resulting from business combinations. For each reporting unit with goodwill, DTE Energy performs an impairment test annually or whenever events or circumstances indicate that the value of goodwill may be impaired. For the years ended December 31, 2023 and 2022, there were no impairments resulting from these tests and there were no other changes in the carrying amount of goodwill. Intangible Assets The Registrants have certain Intangible assets as shown below:
|  |  | December 31, 2023 |  | December 31, 2022
| Useful Lives |  | Gross Carrying Value |  | Accumulated Amortization |  | Net Carrying Value |  | Gross Carrying Value |  | Accumulated Amortization |  | Net Carrying Value
|  |  | (In millions)
Intangible assets subject to amortization |  |  |  |  |  |  |  |  |  |  |  |
Contract intangibles | 12 to 26 years |  | $ | 246 |  |  | $ | (103) |  |  | $ | 143 |  |  | $ | 246 |  |  | $ | (88) |  |  | $ | 158 |
Carbon offsets |  |  | 10 |  |  | — |  |  | 10 |  |  | 6 |  |  | — |  |  | 6 |
Renewable energy credits |  |  | 2 |  |  | — |  |  | 2 |  |  | 2 |  |  | — |  |  | 2 |
Other |  |  | 1 |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | — |
Intangible assets not subject to amortization(a) |  | 13 |  |  | — |  |  | 13 |  |  | 8 |  |  | — |  |  | 8 |
DTE Energy Long-term intangible assets |  | $ | 259 |  |  | $ | (103) |  |  | $ | 156 |  |  | $ | 254 |  |  | $ | (88) |  |  | $ | 166 |
______________________________________ (a)Amounts are charged to expense, using average cost, as they are consumed in the operation of the business. DTE Electric intangible assets include the Renewable energy credits above, which are included in Other Assets — Other on the DTE Electric Consolidated Statements of Financial Position. The following table summarizes DTE Energy's estimated contract intangible amortization expense expected to be recognized during each year through 2028:
| 2024 |  | 2025 |  | 2026 |  | 2027 |  | 2028
| (In millions)
Estimated amortization expense | $ | 16 |  |  | $ | 16 |  |  | $ | 14 |  |  | $ | 14 |  |  | $ | 14 |
DTE Energy amortizes contract intangible assets on a straight-line basis over the expected period of benefit. DTE Energy's Intangible assets amortization expense was $15 million in 2023 and $16 million in 2022 and 2021. Cloud Computing Arrangements The Registrants capitalize implementation costs incurred in a cloud computing arrangement that is a service contract consistent with capitalized implementation costs incurred to develop or obtain internal-use software. Capitalized costs are recorded in Other noncurrent assets on the Consolidated Statements of Financial Position and amortization of the costs is reflected in Operation and maintenance within the Consolidated Statements of Operations. Costs are amortized on a straight-line basis over the life of the contract. Contracts primarily involve the implementation or upgrade of cloud-based solutions for generation and distribution operations and customer service support. The following balances for cloud computing costs relate to DTE Energy:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (In millions)
Amortization expense of capitalized cloud computing costs | $ | 10 |  |  | $ | 4 |  |  | $ | 1 |
Gross value of capitalized cloud computing costs | $ | 56 |  |  | $ | 42 |  |  |
Accumulated amortization of capitalized cloud computing costs | $ | 15 |  |  | $ | 5 |  |  |
The following balances for cloud computing costs relate to DTE Electric:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (In millions)
Amortization expense of capitalized cloud computing costs | $ | 8 |  |  | $ | 3 |  |  | $ | 1 |
Gross value of capitalized cloud computing costs | $ | 44 |  |  | $ | 33 |  |  |
Accumulated amortization of capitalized cloud computing costs | $ | 12 |  |  | $ | 4 |  |  |
Excise and Sales Taxes The Registrants record the billing of excise and sales taxes as a receivable with an offsetting payable to the applicable taxing authority, with no net impact on the Registrants’ Consolidated Statements of Operations. Deferred Debt Costs The costs related to the issuance of long-term debt are deferred and amortized over the life of each debt issue. The deferred amounts are included as a direct deduction from the carrying amount of each debt issue in Mortgage bonds, notes, and other and Securitization bonds on the Registrants' Consolidated Statements of Financial Position and in Junior subordinated debentures on DTE Energy's Consolidated Statements of Financial Position. In accordance with MPSC regulations applicable to DTE Energy’s electric and gas utilities, the unamortized discount, premium, and expense related to utility debt redeemed with a refinancing are amortized over the life of the replacement issue. Discounts, premiums, and expense on early redemptions of debt associated with DTE Energy's non-utility operations are charged to earnings. Investments in Debt and Equity Securities The Registrants generally record investments in debt and equity securities at market value with unrealized gains or losses included in earnings. Changes in the fair value of Fermi 2 nuclear decommissioning investments are recorded as adjustments to Regulatory assets or liabilities, due to a recovery mechanism from customers. The Registrants' equity investments are reviewed for impairment each reporting period. If the assessment indicates that an impairment exists, a loss is recognized resulting in the equity investment being written down to its estimated fair value. See Note 12 of the Consolidated Financial Statements, "Fair Value." DTE Energy Foundation DTE Energy made a charitable contribution to the DTE Energy Foundation of $25 million for the year ended December 31, 2021. There were no contributions for the years ended December 31, 2023 and 2022. The DTE Energy Foundation is a non-consolidated not-for-profit private foundation, the purpose of which is to contribute to and assist charitable organizations. Other Accounting Policies See the following notes for other accounting policies impacting the Registrants’ Consolidated Financial Statements:
Note |  | Title
5 |  | Revenue
6 |  | Property, Plant, and Equipment
8 |  | Asset Retirement Obligations
9 |  | Regulatory Matters
10 |  | Income Taxes
12 |  | Fair Value
13 |  | Financial and Other Derivative Instruments
17 |  | Leases
20 |  | Retirement Benefits and Trusteed Assets
21 |  | Stock-Based Compensation
22 |  | Segment and Related Information
23 |  | Related Party Transactions

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

X
- Definition The entire disclosure for all significant accounting policies of the reporting entity. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147483426/235-10-50-1 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 235 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//235/tableOfContent + Details
Name: | us-gaap_SignificantAccountingPoliciesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration