Commission File Number | Exact Name of Registrant as Specified in its Charter, State of Incorporation, Address of Principal Executive Offices and Telephone Number | IRS Employer Identification No. |
1-11607 | DTE Energy Company (a Michigan corporation) One Energy Plaza Detroit, Michigan 48226-1279 313-235-4000 | 38-3217752 |
1-2198 | The Detroit Edison Company (a Michigan corporation) One Energy Plaza Detroit, Michigan 48226-1279 313-235-4000 | 38-0478650 |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
99.1 | Summary of Detroit Edison’s Application for Accounting Authority U-17068 dated August 1, 2012. |
Exhibit Number | Description |
99.1 | Summary of Detroit Edison’s Application for Accounting Authority U-17068 dated August 1, 2012. |
• | In its order issued January 11, 2010 in Case No. U-15768 the MPSC adopted a pilot RDM applicable to Detroit Edison’s retail electric utility business. Detroit Edison terminated the pilot RDM effective October 2011. |
• | Detroit Edison accrued a regulatory liability of approximately $127 million, plus interest, during the period the pilot RDM was in effect (February 2010 – October 2011). |
• | On April 10, 2012, the Michigan Court of Appeals issued a decision relating to an appeal of the January 2010 MPSC order in which the Court determined, among other things, that the MPSC had no statutory authority to implement the RDM for electric providers, reversing the MPSC’s decision to authorize an RDM for Detroit Edison. |
• | Absent the requested accounting authority in this application, Detroit Edison will be required, under generally accepted accounting principles, to reverse the accrued RDM regulatory liability and recognize the $127 million as pre-tax income. |
• | Based on Detroit Edison’s internal financial planning analysis, absent unforeseen developments and the accounting authority requested in this application, Detroit Edison believes that rate relief will be required beginning in January 2014 in order to maintain an adequate shareholder return on rate base. This required revenue deficiency for 2014 is expected to equate to at least $127 million. |
• | Detroit Edison is proposing to defer the gain arising from the reversal of the RDM regulatory liability by establishing a new regulatory liability which will be amortized to income in 2014, taking the place of what would otherwise be a required base rate increase. |
• | It is currently anticipated that with this accounting treatment, along with other cost saving measures, Detroit Edison will not need to increase base rates until 2015. |
• | However, Detroit Edison reserves the right to file for an increase in retail electric rates prior to 2015 in the event of changed economic circumstances or unforeseen events. If Detroit Edison’s base rates are increased prior to January 1, 2015, either through a self-implemented rate increase or pursuant to a Commission order, the Company will immediately cease amortizing the refund obligation to income and refund to customers the remaining unamortized balance of the new regulatory liability. |
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