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Regulatory Matters | 12 Months Ended
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Dec. 31, 2024
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. The MPSC has authorized a return on equity of 9.9% for DTE Electric and 9.8% for DTE Gas, subject to changes from any pending or future rate case filings. 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
| 2024 |  | 2023 |  | 2024 |  | 2023
Assets | (In millions)
Recoverable undepreciated costs on retiring plants | $ | 2,986 |  |  | $ | 2,736 |  |  | $ | 2,986 |  |  | $ | 2,736 |
Recoverable pension and other postretirement costs |  |  |  |  |  |  |
Pension | 1,315 |  |  | 1,421 |  |  | 971 |  |  | 1,045 |
Other postretirement costs | 91 |  |  | 163 |  |  | — |  |  | 67 |
Fermi 2 asset retirement obligation | 951 |  |  | 952 |  |  | 951 |  |  | 952 |
Removal costs asset | 501 |  |  | 223 |  |  | 501 |  |  | 223 |
Enhanced tree trimming program deferred costs | 211 |  |  | 157 |  |  | 211 |  |  | 157 |
Recoverable Michigan income taxes | 119 |  |  | 133 |  |  | 99 |  |  | 110 |
Recoverable income taxes related to AFUDC equity | 116 |  |  | 89 |  |  | 107 |  |  | 80 |
Energy Waste Reduction incentive | 102 |  |  | 90 |  |  | 82 |  |  | 72 |
Renewable ITC offset | 89 |  |  | — |  |  | 89 |  |  | — |
Deferred environmental costs | 43 |  |  | 46 |  |  | — |  |  | — |
Unamortized loss on reacquired debt | 38 |  |  | 41 |  |  | 29 |  |  | 31 |
Customer360 deferred costs | 34 |  |  | 38 |  |  | 34 |  |  | 38 |
Ludington contract dispute costs | 31 |  |  | 10 |  |  | 31 |  |  | 10 |
Accrued PSCR/GCR revenue | — |  |  | 55 |  |  | — |  |  | 55 |
Other | 194 |  |  | 163 |  |  | 135 |  |  | 119 |
| 6,821 |  |  | 6,317 |  |  | 6,226 |  |  | 5,695 |
Less amount included in Current Assets | (50) |  |  | (108) |  |  | (39) |  |  | (99) |
| $ | 6,771 |  |  | $ | 6,209 |  |  | $ | 6,187 |  |  | $ | 5,596 |
Securitized regulatory assets | $ | 690 |  |  | $ | 758 |  |  | $ | 690 |  |  | $ | 758 |
| DTE Energy |  | DTE Electric
| 2024 |  | 2023 |  | 2024 |  | 2023
Liabilities | (In millions)
Refundable federal income taxes | $ | 1,733 |  |  | $ | 1,823 |  |  | $ | 1,389 |  |  | $ | 1,463 |
Removal costs liability | 506 |  |  | 342 |  |  | — |  |  | — |
Non-service pension and other postretirement costs | 255 |  |  | 199 |  |  | 94 |  |  | 84 |
Negative other postretirement offset | 214 |  |  | 210 |  |  | 139 |  |  | 142 |
Accrued PSCR/GCR refund | 136 |  |  | 21 |  |  | 111 |  |  | — |
Renewable energy | 90 |  |  | 7 |  |  | 90 |  |  | 7 |
Other | 103 |  |  | 72 |  |  | 86 |  |  | 63 |
| 3,037 |  |  | 2,674 |  |  | 1,909 |  |  | 1,759 |
Less amount included in Current Liabilities | (181) |  |  | (71) |  |  | (156) |  |  | (49) |
| $ | 2,856 |  |  | $ | 2,603 |  |  | $ | 1,753 |  |  | $ | 1,710 |
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 undepreciated costs on retiring plants — Undepreciated costs at the Belle River and Monroe power plants that will be retired in future periods. These costs were approved for recovery as a result of DTE Electric's Integrated Resource Plan settlement agreement in 2023. The Belle River power plant will be retired in 2025-2026 and the Monroe power plant will be retired in 2032. Amounts will be recovered in the future through securitization and amortization. •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 (credits). DTE Electric and DTE Gas record the impact of actuarial gains or losses and prior service costs as Regulatory assets or Regulatory liabilities since the traditional rate setting process allows for the recovery of pension and other postretirement costs. The asset and liability will reverse as the deferred items are amortized and recognized as components of net periodic benefit costs (credits). Refer to Note 19 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) •Removal costs asset — Receivable for the recovery of asset removal expenditures in excess of amounts collected from customers. •Enhanced tree trimming program deferred costs — The MPSC approved the deferral of costs for a tree trimming surge through 2025, aimed at reducing the number and duration of customer interruptions. •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. •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. •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) •Renewable ITC offset — DTE Electric's accounting policy for ITCs is to use the deferral method where the ITC benefit is deferred and amortized to net income over the book life of the related property. For an ITC that is sold, this regulatory asset is used to adjust net income to reflect the benefit over a period shorter than the book life, as approved by the MPSC.(a) •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. •Ludington contract dispute costs — The MPSC approved the deferral of costs incurred for repairing or replacing defective work performed by a third party related to the overhaul and upgrade of the Ludington Hydroelectric Pumped Storage Plant while the dispute is in litigation. These costs will be offset by any potential future proceeds received related to the litigation. Upon resolution of the dispute, DTE Electric will have the opportunity to seek recovery through the regulatory process for any remaining costs. Refer to the Ludington Plant Contract Dispute section of Note 17 to the Consolidated Financial Statements, “Commitments and Contingencies,” for additional information regarding the complaint and ongoing legal proceedings. •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. •Securitized regulatory assets — Costs approved for securitization and recovery by the MPSC. Amounts include the undepreciated cost of the River Rouge power plant and tree trim surge costs. Securitization bond surcharges began in 2022 to 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. Amounts also include the undepreciated costs of the St. Clair and Trenton Channel power plants. Securitization bond surcharges began in 2023 to recover costs over a period not to exceed 15 years. ________________________________________________ (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. •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, and 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. •Negative other postretirement offset — DTE Electric and DTE Gas' negative other postretirement costs have historically not been included as a reduction to their authorized rates; therefore, DTE Electric and DTE Gas have accrued a Regulatory liability to eliminate the impact on earnings of the negative other postretirement expense accrual. The Regulatory liabilities may reverse to the extent DTE Electric and DTE Gas' other postretirement expense is positive in future years. As a result of MPSC orders, the Regulatory liability balances as of December 31, 2022 began to be amortized over a 7-year period for both DTE Electric and DTE Gas. •Accrued PSCR/GCR refund — Liability for the temporary over-recovery of and a return on power supply costs and transmission costs incurred by DTE Electric which are recoverable through the PSCR mechanism and temporary over-recovery of and a return on gas costs primarily incurred by DTE Gas which are recoverable through the GCR mechanism. •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. 2024 Gas Rate Case Filing DTE Gas filed a rate case with the MPSC on January 8, 2024 requesting an increase in base rates of $266 million based on a projected twelve-month period ending September 30, 2025, and an increase in return on equity from 9.9% to 10.25%. The request reflected a net increase to customer rates of only $160 million, as an existing IRM surcharge of $106 million would be rolled into the new base rates. The requested increase was primarily due to increased investments in plant related to system reliability and pipeline safety and inflationary impacts on operating costs, partially offset by higher sales. On November 7, 2024, the MPSC issued an order approving an annual revenue increase of $114 million for services rendered on or after November 21, 2024 and a return on equity of 9.8%. 2024 Electric Rate Case Filing DTE Electric filed a rate case with the MPSC on March 28, 2024 requesting an increase in base rates of $456 million based on a projected twelve-month period ending December 31, 2025, and an increase in return on equity from 9.9% to 10.5%. The requested increase in base rates was primarily due to the capital investments required to support continued reliability improvements and the ongoing transition to cleaner energy. The requested increase in base rates was also due to the increased cost of debt resulting from market dynamics and increasing operating and maintenance expenses. On January 23, 2025, the MPSC issued an order approving an annual revenue increase of $217 million for services rendered on or after February 6, 2025 and a return on equity of 9.9%. The MPSC order also disallowed $12 million of capital expenditures previously recorded, primarily related to various IT projects. The disallowance was included in Asset (gains) losses and impairments, net on the Consolidated Statements of Operations for the year ended December 31, 2024.

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- 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
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