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Significant Accounting Policies | 3 Months Ended
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Mar. 31, 2024
Accounting Policies [Abstract] |
Significant Accounting Policies | SIGNIFICANT ACCOUNTING POLICIES Other Income The following is a summary of DTE Energy's Other income:
|  |  | Three Months Ended March 31,
|  |  |  |  | 2024 |  | 2023
|  |  |  |  | (In millions)
Allowance for equity funds used during construction |  |  |  |  | $ | 18 |  |  | $ | 9 |
Contract services |  |  |  |  | 7 |  |  | 6 |
Investment income(a) |  |  |  |  | 6 |  |  | 5 |
Equity earnings (losses) of equity method investees |  |  |  |  | (8) |  |  | 4 |
Other |  |  |  |  | 4 |  |  | 2 |
|  |  |  |  | $ | 27 |  |  | $ | 26 |
_______________________________________ (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:
|  |  | Three Months Ended March 31,
|  |  |  |  | 2024 |  | 2023
|  |  |  |  | (In millions)
Allowance for equity funds used during construction |  |  |  |  | $ | 18 |  |  | $ | 9 |
Contract services |  |  |  |  | 6 |  |  | 6 |
Investment income(a) |  |  |  |  | 5 |  |  | 3 |
Other |  |  |  |  | 3 |  |  | 2 |
|  |  |  |  | $ | 32 |  |  | $ | 20 |
_______________________________________ (a)Investment losses are recorded separately to Other expenses on the Consolidated Statements of Operations. 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 three months ended March 31, 2024 and 2023, reclassifications out of Accumulated other comprehensive income (loss) were not material. Income Taxes Tax rates are affected by estimated annual permanent items, production and investment tax credits, regulatory adjustments, and discrete items that may occur in any given period, but are not consistent from period to period. The tables below summarize how the Registrants' effective income tax rates have varied from the statutory federal income tax rate:
|  |  | Three Months Ended March 31,
|  |  |  |  | 2024 |  | 2023
DTE Energy |  |  |  |  |  |  |
Statutory federal income tax rate |  |  |  |  | 21.0 | % |  | 21.0 | %
Increase (decrease) due to: |  |  |  |  |  |  |
State and local income taxes, net of federal benefit |  |  |  |  | 4.1 |  |  | 4.4 |
Production tax credits |  |  |  |  | (8.7) |  |  | (6.2) |
TCJA regulatory liability amortization |  |  |  |  | (4.9) |  |  | (4.1) |
Investment tax credits |  |  |  |  | (3.1) |  |  | (2.3) |
AFUDC equity |  |  |  |  | (1.2) |  |  | (0.3) |
Enactment of West Virginia income tax legislation, net of federal benefit |  |  |  |  | — |  |  | (1.2) |
Other |  |  |  |  | (1.0) |  |  | (1.2) |
Effective income tax rate |  |  |  |  | 6.2 | % |  | 10.1 | %
|  |  | Three Months Ended March 31,
|  |  |  |  | 2024 |  | 2023
DTE Electric |  |  |  |  |  |  |
Statutory federal income tax rate |  |  |  |  | 21.0 | % |  | 21.0 | %
Increase (decrease) due to: |  |  |  |  |  |  |
State and local income taxes, net of federal benefit |  |  |  |  | 5.3 |  |  | 5.6 |
Production tax credits |  |  |  |  | (10.2) |  |  | (7.1) |
TCJA regulatory liability amortization |  |  |  |  | (5.1) |  |  | (4.5) |
AFUDC equity |  |  |  |  | (1.5) |  |  | (0.3) |
Other |  |  |  |  | 0.1 |  |  | (0.5) |
Effective income tax rate |  |  |  |  | 9.6 | % |  | 14.2 | %
DTE Electric had income tax receivables with DTE Energy of $7 million at March 31, 2024, including $5 million related to federal taxes and $2 million related to state taxes, and $7 million at December 31, 2023 related to federal taxes. Amounts are included in Accounts Receivable — Affiliates on the DTE Electric Consolidated Statements of Financial Position. Unrecognized Compensation Costs As of March 31, 2024, DTE Energy had $95 million of total unrecognized compensation cost related to non-vested stock incentive plan arrangements. That cost is expected to be recognized over a weighted-average period of 2.0 years. Allocated Stock-Based Compensation DTE Electric received an allocation of costs from DTE Energy associated with stock-based compensation of $8 million and $10 million for the three months ended March 31, 2024 and 2023, respectively. Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents include cash on hand, cash in banks, and temporary investments purchased with 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. 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 March 31, 2024.
| DTE Energy |  | DTE Electric
| Year of Origination
| 2024 |  | 2023 |  | 2022 and Prior |  | Total |  | 2024 and Prior
| (In millions)
Notes receivable |  |  |  |  |  |  |  |  |
Internal grade 1 | $ | — |  |  | $ | 15 |  |  | $ | 4 |  |  | $ | 19 |  |  | $ | 15 |
Internal grade 2 | 364 |  |  | 8 |  |  | 26 |  |  | 398 |  |  | 1 |
Total notes receivable(a) | $ | 364 |  |  | $ | 23 |  |  | $ | 30 |  |  | $ | 417 |  |  | $ | 16 |
Net investment in leases |  |  |  |  |  |  |  |  |
Internal grade 1 | $ | — |  |  | $ | — |  |  | $ | 36 |  |  | $ | 36 |  |  | $ | — |
Internal grade 2 | 122 |  |  | — |  |  | 247 |  |  | 369 |  |  | — |
Total net investment in leases(a) | $ | 122 |  |  | $ | — |  |  | $ | 283 |  |  | $ | 405 |  |  | $ | — |
_______________________________________ (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)
Beginning reserve balance, January 1, 2024 | $ | 62 |  |  | $ | 1 |  |  |  |  |  |  | $ | 63 |  |  | $ | 41 |
Current period provision | 20 |  |  | — |  |  |  |  |  |  | 20 |  |  | 9 |
Write-offs charged against allowance | (26) |  |  | — |  |  |  |  |  |  | (26) |  |  | (18) |
Recoveries of amounts previously written off | 12 |  |  | — |  |  |  |  |  |  | 12 |  |  | 8 |
Ending reserve balance, March 31, 2024 | $ | 68 |  |  | $ | 1 |  |  |  |  |  |  | $ | 69 |  |  | $ | 40 |
| DTE Energy |  | DTE Electric
| Trade accounts receivable |  | Other receivables |  |  |  |  |  | Total |  | Trade and other accounts receivable
| (In millions)
Beginning reserve balance, January 1, 2023 | $ | 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 |
Ending reserve balance, 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:
|  |  | Three Months Ended March 31,
|  |  |  |  | 2024 |  | 2023
|  |  |  |  | (In millions)
DTE Energy |  |  |  |  | $ | 21 |  |  | $ | 22 |
DTE Electric |  |  |  |  | $ | 10 |  |  | $ | 8 |
There are no material amounts of past due financing receivables for the Registrants as of March 31, 2024.

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- 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
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