10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-2198

The Detroit Edison Company, a Michigan corporation, meets the conditions set forth in General Instruction I (1) (a) and (b) of Form 10-K and is, therefore, filing this form with the reduced disclosure format.

THE DETROIT EDISON COMPANY

(Exact name of registrant as specified in its charter)

Michigan	38-0478650
(State or other jurisdiction of incorporation or	(I.R.S. Employer
organization)	Identification No.)
One Energy Plaza, Detroit, Michigan	48226-1279
(Address of principal executive offices)	(Zip Code)

313-235-4000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
None

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer o	Non-accelerated filer þ	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

All of the registrant’s 138,632,324 outstanding shares of common stock, par value $10 per share, are owned by DTE Energy Company.

DOCUMENTS INCORPORATED BY REFERENCE

None

The Detroit Edison Company
Annual Report on Form 10-K
Year Ended December 31, 2010

Table of Contents

	Page
Definitions	1
Forward-Looking Statements	3
Part I
Items 1. 1A., 1B. &2. Business, Risk Factors, Unresolved Staff Comments and Properties	5
Item 3. Legal Proceedings	13
Part II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	14
Item 6. Selected Financial Data	14
Item 7. Management’s Narrative Analysis of Results of Operations	15
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	17
Item 8. Financial Statements and Supplementary Data	18
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	63
Item 9A. Controls and Procedures	63
Item 9B. Other Information	63
Part III
Item 10. Directors, Executive Officers and Corporate Governance	63
Item 11. Executive Compensation	63
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	63
Item 13. Certain Relationships and Related Transactions, and Director Independence	63
Item 14. Principal Accountant Fees and Services	63
Part IV
Item 15. Exhibits and Financial Statement Schedules	64
Signatures	72
EX-4.273
EX-12.39
EX-23.24
EX-23.25
EX-31.61
EX-31.62
EX-32.61
EX-32.62

Definitions

ASC	Accounting Standards Codification
ASU	Accounting Standards Update
CIM	A Choice Incentive Mechanism authorized by the MPSC that allows Detroit Edison to recover or refund non-fuel revenues lost or gained as a result of fluctuations in electric Customer Choice sales.
Customer Choice	Michigan legislation giving customers the option to choose alternative suppliers for electricity.
Detroit Edison	The Detroit Edison Company ( a direct wholly owned subsidiary of DTE Energy) and subsidiary companies
DTE Energy	DTE Energy Company, directly or indirectly the parent of Detroit Edison, Michigan Consolidated Gas Company and numerous non-utility subsidiaries
EPA	United States Environmental Protection Agency
FASB	Financial Accounting Standards Board
FERC	Federal Energy Regulatory Commission
FTRs	Financial transmission rights are financial instruments that entitle the holder to receive payments related to costs incurred for congestion on the transmission grid.
HCERA	Health Care and Education Reconciliation Act of 2010
MISO	Midwest Independent System Operator is an Independent System Operator and the Regional Transmission Organization serving the Midwest United States and Manitoba, Canada.
MDNRE	Michigan Department of Natural Resources and Environment
MPSC	Michigan Public Service Commission
NRC	United States Nuclear Regulatory Commission
PPACA	Patient Protection and Affordable Care Act of 2010
PSCR	A Power Supply Cost Recovery mechanism authorized by the MPSC that allows Detroit Edison to recover through rates its fuel, fuel-related and purchased power costs.
RDM	A Revenue Decoupling Mechanism authorized by the MPSC that is designed to minimize the impact on revenues of changes in average customer usage of electricity
Securitization	Detroit Edison financed specific stranded costs at lower interest rates through the sale of rate reduction bonds by a wholly-owned special purpose entity, The Detroit Edison Securitization Funding LLC.
VIE	Variable Interest Entity

1

Units of Measurement
kWh	Kilowatthour of electricity
MW	Megawatt of electricity
MWh	Megawatthour of electricity

2

Forward-Looking Statements

Certain information presented herein includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations and business of Detroit Edison. Forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause actual future results to be materially different from those contemplated, projected, estimated or budgeted. Many factors may impact forward-looking statements including, but not limited to, the following:

• economic conditions resulting in changes in demand, customer conservation and increased thefts of electricity;

• changes in the economic and financial viability of our customers, suppliers, and trading counterparties, and the continued ability of such parties to perform their obligations to the Company;

• economic climate and population changes in the geographic areas where we do business;

• high levels of uncollectible accounts receivable;

• access to capital markets and capital market conditions and the results of other financing efforts which can be affected by credit agency ratings;

• instability in capital markets which could impact availability of short and long-term financing;

• the timing and extent of changes in interest rates;

• the level of borrowings;

• the potential for losses on investments, including nuclear decommissioning and benefit plan assets and the related increases in future expense and contributions;

• the potential for increased costs or delays in completion of significant construction projects;

• the effects of weather and other natural phenomena on operations and sales to customers, and purchases from suppliers;

• environmental issues, laws, regulations, and the increasing costs of remediation and compliance, including actual and potential new federal and state requirements that include or could include carbon and more stringent emission controls, a renewable portfolio standard, energy efficiency mandates, a carbon tax or cap and trade structure and ash landfill regulations;

• nuclear regulations and operations associated with nuclear facilities;

• impact of electric utility restructuring in Michigan, including legislative amendments and Customer Choice programs;

• employee relations and the impact of collective bargaining agreements;

• unplanned outages;

• changes in the cost and availability of coal and other raw materials and purchased power;

• cost reduction efforts and the maximization of plant and distribution system performance;

• the effects of competition;

• impact of regulation by the FERC, MPSC, NRC and other applicable governmental proceedings and regulations, including any associated impact on rate structures;

• changes in and application of federal, state and local tax laws and their interpretations, including the Internal Revenue Code, regulations, rulings, court proceedings and audits;

• the amount and timing of cost recovery allowed as a result of regulatory proceedings, related appeals or new legislation;

• the cost of protecting assets against, or damage due to, terrorism or cyber attacks;

3

• the availability, cost, coverage and terms of insurance and stability of insurance providers;

• changes in and application of accounting standards and financial reporting regulations;

• changes in federal or state laws and their interpretation with respect to regulation, energy policy and other business issues; and

• binding arbitration, litigation and related appeals.

New factors emerge from time to time. We cannot predict what factors may arise or how such factors may cause our results to differ materially from those contained in any forward-looking statement. Any forward-looking statements refer only as of the date on which such statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.

4

Part I

Items 1. and 2. Business and Properties

General

Detroit Edison is a Michigan corporation organized in 1903 and is a wholly-owned subsidiary of DTE Energy. Detroit Edison is a public utility subject to regulation by the MPSC and the FERC. Detroit Edison is engaged in the generation, purchase, distribution and sale of electricity to approximately 2.1 million customers in southeastern Michigan.

References in this report to “we,” “us,” “our” or “Company” are to Detroit Edison.

Our generating plants are regulated by numerous federal and state governmental agencies, including, but not limited to, the MPSC, the FERC, the NRC, the EPA and the MDNRE. Electricity is generated from our several fossil plants, a hydroelectric pumped storage plant and a nuclear plant, and is purchased from electricity generators, suppliers and wholesalers.

The electricity we produce and purchase is sold to three major classes of customers: residential, commercial and industrial, principally throughout southeastern Michigan.

Revenue by Service

(in Millions)	2010		2009		2008
Residential	$	2,052	$	1,820	$	1,726
Commercial		1,629		1,702		1,753
Industrial		688		730		894
Other		479		299		289
Subtotal		4,848		4,551		4,662
Interconnection sales(1)		145		163		212
Total Revenue	$	4,993	$	4,714	$	4,874

(1) Represents power that is not distributed by Detroit Edison.

Weather, economic factors, competition and electricity prices affect sales levels to customers. Our peak load and highest total system sales generally occur during the third quarter of the year, driven by air conditioning and other cooling-related demands. Our operations are not dependent upon a limited number of customers, and the loss of any one or a few customers would not have a material adverse effect on Detroit Edison.

Fuel Supply and Purchased Power

Our power is generated from a variety of fuels and is supplemented with purchased power. We expect to have an adequate supply of fuel and purchased power to meet our obligation to serve customers. Our generating capability is heavily dependent upon the availability of coal. Coal is purchased from various sources in different geographic areas under agreements that vary in both pricing and terms. We expect to obtain the majority of our coal requirements through long-term contracts, with the balance to be obtained through short-term agreements and spot purchases. We have long-term and short-term contracts for a total purchase of approximately 30 million tons of low-sulfur western coal to be delivered from 2011 through 2013 and approximately 5 million tons of Appalachian coal to be delivered from 2011 through 2012. All of these contracts have pricing schedules. We have approximately 98% of our 2011 expected coal requirements under contract. Given the geographic diversity of supply, we believe we can meet our expected generation requirements. We lease a fleet of rail cars and have our expected western rail requirements under contract for the next five years. All of our eastern coal rail requirements are under contract through 2012 and approximately 50% of this requirement is under contract in 2013. Our expected vessel transportation requirements for delivery of purchased coal to our generating facilities are under contract through 2014.

Detroit Edison participates in the energy market through MISO. We offer our generation in the market on a day-ahead, real-time and FTR basis and bid for power in the market to serve our load. We are a net purchaser of power that supplements our generation capability to meet customer demand during peak cycles.

5

In 2008, a renewable portfolio standard was established for Michigan electric providers targeting 10% of electricity sold to retail customers from renewable energy by 2015. Detroit Edison has approximately 251 MW of renewable energy under contract at December 31, 2010 representing approximately 4% of electricity sold to retail customers. Approximately 40 MW is in commercial operation at December 31, 2010 with an additional 211 MW expected in commercial operation in 2011 or early 2012.

Properties

Detroit Edison owns generating plants and facilities that are located in the State of Michigan. Substantially all of our property is subject to the lien of a mortgage.

Generating plants owned and in service as of December 31, 2010 are as follows:

		Summer Net
	Location by	Rated
	Michigan	Capability(1)
Plant Name	County	(MW)		(%)		Year in Service
Fossil-fueled Steam-Electric
Belle River(2)	St. Clair		1,044		9.5	1984 and 1985
Conners Creek	Wayne		239		2.1	1951
Greenwood	St. Clair		785		7.1	1979
Harbor Beach	Huron		94		0.9	1968
Marysville	St. Clair		84		0.8	1943 and 1947
Monroe(3)	Monroe		3,027		27.6	1971, 1973 and 1974
River Rouge	Wayne		523		4.8	1957 and 1958
St. Clair(4)	St. Clair		1,368		12.5	1953, 1954, 1959, 1961 and 1969
Trenton Channel	Wayne		698		6.4	1949 and 1968
			7,862		71.7
Oil or Gas-fueled Peaking Units	Various		1,101		10.0	1966-1971, 1981 and 1999
Nuclear-fueled Steam-Electric Fermi 2(5)	Monroe		1,087		9.9	1988
Hydroelectric Pumped Storage Ludington(6)	Mason		917		8.4	1973
			10,967		100.0

(1)	Summer net rated capabilities of generating plants in service are based on periodic load tests and are changed depending on operating experience, the physical condition of units, environmental control limitations and customer requirements for steam, which otherwise would be used for electric generation.
(2)	The Belle River capability represents Detroit Edison’s entitlement to 81% of the capacity and energy of the plant. See Note 7 of the Notes to the Consolidated Financial Statements in Item 8 of this Report.
(3)	The Monroe power plant provided 38% of Detroit Edison’s total 2010 power generation.
(4)	Excludes one oil-fueled unit (250 MW) in cold standby status.
(5)	Fermi 2 has a design electrical rating (net) of 1,150 MW.
(6)	Represents Detroit Edison’s 49% interest in Ludington with a total capability of 1,872 MW. See Note 7 of the Notes to the Consolidated Financial Statements in Item 8 of this Report.

Detroit Edison owns and operates 674 distribution substations with a capacity of approximately 33,585,000 kilovolt-amperes (kVA) and approximately 412,100 line transformers with a capacity of approximately 23,849,000 kVA.

Circuit miles of electric distribution lines owned and in service as of December 31, 2010:

	Circuit Miles
Operating Voltage-Kilovolts (kV)	Overhead		Underground
4.8 kV to 13.2 kV		28,345	13,916
24 kV		181	696
40 kV		2,278	381
120 kV		54	13
		30,858	15,006

6

There are numerous interconnections that allow the interchange of electricity between Detroit Edison and electricity providers external to our service area. These interconnections are generally owned and operated by ITC Transmission, an unrelated company, and connect to neighboring energy companies.

Regulation

Detroit Edison’s business is subject to the regulatory jurisdiction of various agencies, including, but not limited to, the MPSC, the FERC and the NRC. The MPSC 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. Detroit Edison’s MPSC-approved rates charged to customers have historically been designed to allow for the recovery of costs, plus an authorized rate of return on our investments. The FERC regulates Detroit Edison with respect to financing authorization and wholesale electric activities. The NRC has regulatory jurisdiction over all phases of the operation, construction, licensing and decommissioning of Detroit Edison’s nuclear plant operations. We are subject to the requirements of other regulatory agencies with respect to safety, the environment and health.

See Note 4, 8, 10 and 16 of the Notes to Consolidated Financial Statements in Item 8 of this Report.

Energy Assistance Programs

Energy assistance programs, funded by the federal government and the State of Michigan, remain critical to Detroit Edison’s ability to control its uncollectible accounts receivable and collections expenses. Detroit Edison’s uncollectible accounts receivable expense is directly affected by the level of government funded assistance its qualifying customers receive. We work continuously with the State of Michigan and others to determine whether the share of funding allocated to our customers is representative of the number of low-income individuals in our service territory.

Strategy and Competition

We strive to be the preferred supplier of electrical generation in southeast Michigan. We can accomplish this goal by working with our customers, communities and regulatory agencies to be a reliable, low-cost supplier of electricity. To ensure generation and network reliability we continue to make capital investments in our generating plants and distribution system, which will improve plant availability, operating efficiencies and environmental compliance in areas that have a positive impact on reliability with the goal of high customer satisfaction.

Our distribution operations focus on improving reliability, restoration time and the quality of customer service. We seek to lower our operating costs by improving operating efficiencies. Revenues from year to year will vary due to weather conditions, economic factors, regulatory events and other risk factors as discussed in the “Risk Factors” in Item 1A. of this Report. We are minimizing the impacts of changes in average customer usage through regulatory mechanisms which decouple our revenue levels from sales volumes.

The electric Customer Choice program in Michigan allows all of our electric customers to purchase their electricity from alternative electric suppliers of generation services, subject to limits. Customers choosing to purchase power from alternative electric suppliers represented approximately 10% of retail sales in 2010 and 3% of retail sales in 2009 and 2008. Customers participating in the electric Customer Choice program consist primarily of industrial and commercial customers whose MPSC-authorized full service rates exceed their cost of service. MPSC rate orders and 2008 energy legislation enacted by the State of Michigan are adjusting the pricing disparity over five years and have placed a 10% cap on the total potential Customer Choice related migration, mitigating some of the unfavorable effects of electric Customer Choice on our financial performance. In addition, we have a Choice Incentive Mechanism, which is an over/under recovery mechanism that measures non-fuel revenues lost or gained as a result of fluctuations in electric Customer Choice sales. If annual electric Customer Choice sales exceed the baseline amount from Detroit Edison’s most recent rate case, 90 percent of its lost non-fuel revenues associated with sales above that level may be recovered from full service customers. If annual electric Customer Choice sales decrease below the baseline, the Company must refund 90 percent of its increase in non-fuel revenues associated with sales below that level to full service customers. We expect that in 2011 customers choosing to purchase power from alternative electric suppliers will represent approximately 10% of retail sales.

7

Competition in the regulated electric distribution business is primarily from the on-site generation of industrial customers and from distributed generation applications by industrial and commercial customers. We do not expect significant competition for distribution to any group of customers in the near term.

ENVIRONMENTAL MATTERS

We are subject to extensive environmental regulation. Additional costs may result as the effects of various substances on the environment are studied and governmental regulations are developed and implemented. Actual costs to comply could vary substantially. We expect to continue recovering environmental costs through rates charged to our customers. The following table summarizes our estimated significant future environmental expenditures based upon current regulations:

(in Millions)
Air	$	2,100
Water		55
MGP sites		4
Other sites		21
Estimated total future expenditures through 2020	$	2,180
Estimated 2011 expenditures	$	239
Estimated 2012 expenditures	$	276

Air — Detroit Edison is subject to the EPA ozone transport and acid rain regulations that limit power plant emissions of sulfur dioxide and nitrogen oxides. Since 2005, the EPA and the State of Michigan have issued additional emission reduction regulations relating to ozone, fine particulate, regional haze and mercury air pollution. The new rules will lead to additional controls on fossil-fueled power plants to reduce nitrogen oxide, sulfur dioxide and mercury emissions. Further, additional rulemakings are expected over the next few years which could require additional controls for sulfur dioxide, nitrogen oxides and hazardous air pollutants. It is not possible to quantify the impact of those expected rulemakings at this time.

In July 2009, DTE Energy received a Notice of Violation/Finding of Violation (NOV/FOV) from the EPA alleging, among other things, that five Detroit Edison power plants violated New Source Performance standards, Prevention of Significant Deterioration requirements, and operating permit requirements under the Clean Air Act. An additional NOV/FOV was received in June 2010 related to a recent project and outage at Unit 2 of the Monroe Power Plant.

On August 5, 2010, the United States Department of Justice, at the request of the EPA, brought a civil suit in the U.S. District Court for the Eastern District of Michigan against DTE Energy and Detroit Edison, related to the June 2010 NOV/FOV and the outage work performed at Unit 2 of the Monroe Power Plant, but not relating to the July 2009 NOV/FOV. Among other relief, the EPA requested the court to require Detroit Edison to install and operate the best available control technology at Unit 2 of the Monroe Power Plant. Further, the EPA requested the court to issue a preliminary injunction to require Detroit Edison to (i) begin the process of obtaining the necessary permits for the Monroe Unit 2 modification and (ii) offset the pollution from Monroe Unit 2 through emissions reductions from Detroit Edison’s fleet of coal-fired power plants until the new control equipment is operating. In January 2011, the EPA’s motion for preliminary injunction was denied and the liability phase of the civil suit has been scheduled for trial in May 2011.

DTE Energy and Detroit Edison believe that the plants identified by the EPA, including Unit 2 of the Monroe Power Plant, have complied with all applicable federal environmental regulations. Depending upon the outcome of discussions with the EPA regarding the NOV/FOV and the result of the civil action, the Company could also be required to install additional pollution control equipment at some or all of the power plants in question, implement early retirement of facilities where control equipment is not economical, engage in supplemental environmental programs, and/or pay fines. The Company cannot predict the financial impact or outcome of this matter, or the timing of its resolution.

Water — In response to an EPA regulation, Detroit Edison is required to examine alternatives for reducing the environmental impacts of the cooling water intake structures at several of its facilities. Based on the results of completed studies and expected future studies, Detroit Edison may be required to install additional control technologies to reduce the impacts of the water intakes. Initially, it was estimated that Detroit Edison could incur up to approximately $55 million in additional capital expenditures over the four to six years subsequent to 2008 to comply with these requirements. However, a January 2007 circuit court decision remanded back to the EPA several

8

provisions of the federal regulation that has resulted in a delay in compliance dates. The decision also raised the possibility that Detroit Edison may have to install cooling towers at some facilities at a cost substantially greater than was initially estimated for other mitigative technologies. In 2008, the Supreme Court agreed to review the remanded cost-benefit analysis provision of the rule and in April 2009 upheld the EPA’s use of this provision in determining best technology available for reducing environmental impacts. Concurrently, the EPA continues to develop a revised rule, a draft of which is expected to be published in the first quarter of 2011, with a final rule scheduled for mid-2012. The EPA has also issued an information collection request to begin a review of steam electric effluent guidelines. It is not possible at this time to quantify the impacts of these developing requirements.

Manufactured Gas Plant (MGP) and Other Sites — Prior to the construction of major interstate natural gas pipelines, gas for heating and other uses was manufactured locally from processes involving coal, coke or oil. The facilities, which produced gas, have been designated as MGP sites. Detroit Edison owns, or previously owned, three former MGP sites. In addition to the MGP sites, we are also in the process of cleaning up other sites where contamination is present as a result of historical and ongoing utility operations. These other sites include an engineered ash storage facility, electrical distribution substations, and underground and aboveground storage tank locations. Cleanup activities associated with these sites will be conducted over the next several years.

Landfill— Detroit Edison owns and operates a permitted engineered ash storage facility at the Monroe Power Plant to dispose of fly ash from the coal fired power plant. Detroit Edison performed an engineering analysis in 2009 and identified the need for embankment side slope repairs and reconstruction.

The EPA has published proposed rules to regulate coal ash under the authority of the Resources Conservation and Recovery Act (RCRA). The proposed rule published on June 21, 2010 contains two primary regulatory options to regulate coal ash residue. The EPA is currently considering either, to designate coal ash as a “Hazardous Waste” as defined by RCRA or to regulate coal ash as non-hazardous waste under RCRA. However, agencies and legislatures have urged the EPA to regulate coal ash as a non-hazardous waste. If the EPA were to designate coal ash as a hazardous waste, the agency could apply some, or all, of the disposal and reuse standards that have been applied to other existing hazardous wastes. Some of the regulatory actions currently being contemplated could have a significant impact on our operations and financial position and the rates we charge our customers. It is not possible to quantify the impact of those expected rulemakings at this time.

Global Climate Change

Climate regulation and/or legislation is being proposed and discussed within the U.S. Congress and the EPA. Despite passage of a greenhouse gas cap and trade bill by the U.S. House in June 2009, the Senate has been unable to pass a similar climate bill. A greenhouse gas cap and trade program is not expected to be included in energy or climate bills to be considered by the 112^th Congress. Meanwhile, the EPA is beginning to implement regulatory actions under the Clean Air Act to address emission of greenhouse gases. The EPA regulation of greenhouse gases (GHGs) begins in 2011 requiring the best available control technology (BACT) for major sources or modifications to existing major sources that cause significant increases in GHG emissions. The impact of this rule is uncertain until BACT is better defined by the permitting agencies. Pending or future legislation or other regulatory actions could have a material impact on our operations and financial position and the rates we charge our customers. Impacts include expenditures for environmental equipment beyond what is currently planned, financing costs related to additional capital expenditures, the purchase of emission offsets from market sources and the retirement of facilities where control equipment is not economical. We would seek to recover these incremental costs through increased rates charged to our utility customers. Increased costs for energy produced from traditional sources could also increase the economic viability of energy produced from renewable and/or nuclear sources and energy efficiency initiatives and the development of market-based trading of carbon offsets providing business opportunities for Detroit Edison. It is not possible to quantify these impacts on Detroit Edison or its customers at this time.

See Notes 10 and 16 of the Notes to Consolidated Financial Statements in Item 8 of this Report.

9

EMPLOYEES

We had approximately 4,700 employees as of December 31, 2010, of which approximately 2,700 were represented by unions. The majority of our union employees are under contracts that expire in August 2012 and June 2013.

Item 1A. Risk Factors

There are various risks associated with the operations of Detroit Edison. To provide a framework to understand the operating environment, we are providing a brief explanation of the more significant risks associated with our business. Although we have tried to identify and discuss key risk factors, others could emerge in the future. Each of the following risks could affect our performance.

Regional and national economic conditions can have an unfavorable impact on us. Our business follows the economic cycles of the customers we serve. We provide services to the domestic automotive and steel industries which have undergone considerable financial distress, exacerbating the decline in regional economic conditions. Should national or regional economic conditions further decline, reduced volumes of electricity and collections of accounts receivable could result in decreased earnings and cash flow.

We are exposed to credit risk of counterparties with whom we do business. Adverse economic conditions affecting, or financial difficulties of, counterparties with whom we do business could impair the ability of these counterparties to pay for our services or fulfill their contractual obligations, or cause them to delay such payments or obligations. We depend on these counterparties to remit payments on a timely basis. Any delay or default in payment could adversely affect our cash flows, financial position, or results of operations.

We are subject to rate regulation. Our electric rates are set by the MPSC and the FERC and cannot be changed without regulatory authorization. We may be negatively impacted by new regulations or interpretations by the MPSC, the FERC or other regulatory bodies. Our ability to recover costs may be impacted by the time lag between the incurrence of costs and the recovery of the costs in customers’ rates. Our regulators also may decide to disallow recovery of certain costs in customers’ rates if they determine that those costs do not meet the standards for recovery under our governing laws and regulations. The State of Michigan elected a new governor and legislature in November 2010 and we cannot predict whether the resulting changes in political conditions will affect the regulations or interpretations affecting Detroit Edison. New legislation, regulations or interpretations could change how our business operates, impact our ability to recover costs through rate increases or require us to incur additional expenses.

We may be required to refund amounts we collect under self-implemented rates. Michigan law allows utilities to self-implement rate changes six months after a rate filing, subject to certain limitations. However, if the final rate case order provides for lower rates than we have self-implemented, we must refund the difference, with interest. We have self-implemented rates in the past and have been ordered to make refunds to customers. Our financial performance may be negatively affected if the MPSC sets lower rates in future rate cases than those we have self-implemented, thereby requiring us to issue refunds. We cannot predict what rates an MPSC order will adopt in future rate cases.

Michigan’s electric Customer Choice program could negatively impact our financial performance. The electric Customer Choice program, as originally contemplated in Michigan, anticipated an eventual transition to a totally deregulated and competitive environment where customers would be charged market-based rates for their electricity. The State of Michigan currently experiences a hybrid market, where the MPSC continues to regulate electric rates for our customers, while alternative electric suppliers charge market-based rates. In addition, such regulated electric rates for certain groups of our customers exceed the cost of service to those customers. Due to distorted pricing mechanisms during the initial implementation period of electric Customer Choice, many commercial customers chose alternative electric suppliers. MPSC rate orders and 2008 energy legislation enacted by the State of Michigan are phasing out the pricing disparity over five years and have placed a cap on the total potential Customer Choice related migration. However, even with the electric Customer Choice-related relief received in recent Detroit Edison rate orders and the legislated 10 percent cap on participation in the electric Customer Choice program, there continues to be financial risk associated with the electric Customer Choice program. Electric Customer Choice migration is sensitive to market price and full service electric price changes.

10

Environmental laws and liability may be costly. We are subject to numerous environmental regulations. These regulations govern air emissions, water quality, wastewater discharge and disposal of solid and hazardous waste. Compliance with these regulations can significantly increase capital spending, operating expenses and plant down times. These laws and regulations require us to seek a variety of environmental licenses, permits, inspections and other regulatory approvals. We could be required to install expensive pollution control measures or limit or cease activities based on these regulations. Additionally, we may become a responsible party for environmental cleanup at sites identified by a regulatory body. We cannot predict with certainty the amount and timing of future expenditures related to environmental matters because of the difficulty of estimating clean up costs. There is also uncertainty in quantifying liabilities under environmental laws that impose joint and several liability on potentially responsible parties.

We may also incur liabilities as a result of potential future requirements to address climate change issues. Proposals for voluntary initiatives and mandatory controls are being discussed both in the United States and worldwide to reduce greenhouse gases such as carbon dioxide, a by-product of burning fossil fuels. If increased regulation of greenhouse gas emissions are implemented, the operations of our fossil-fuel generation assets may be significantly impacted. Since there can be no assurances that environmental costs may be recovered through the regulatory process, our financial performance may be negatively impacted as a result of environmental matters.

Adverse changes in our credit ratings may negatively affect us. Regional and national economic conditions, increased scrutiny of the energy industry and regulatory changes, as well as changes in our economic performance, could result in credit agencies reexamining our credit rating. While credit ratings reflect the opinions of the credit agencies issuing such ratings and may not necessarily reflect actual performance, a downgrade in our credit rating below investment grade could restrict or discontinue our ability to access capital markets and could result in an increase in our borrowing costs, a reduced level of capital expenditures and could impact future earnings and cash flows. In addition, a reduction in credit rating may require us to post collateral related to various physical or financially settled contracts for the purchase of energy-related commodities, products and services, which could impact our liquidity.

Our ability to access capital markets is important. Our ability to access capital markets is important to operate our businesses. In the past, turmoil in credit markets has constrained, and may again in the future constrain, our ability as well as the ability of our subsidiaries to issue new debt, including commercial paper, and refinance existing debt at reasonable interest rates. In addition, the level of borrowing by other energy companies and the market as a whole could limit our access to capital markets. We have substantial amounts of credit facilities that expire in 2012 and 2013. We intend to seek to renew the facilities on or before the expiration dates. However, we cannot predict the outcome of these efforts, which could result in a decrease in amounts available and/or an increase in our borrowing costs and negatively impact our financial performance.

Poor investment performance of pension and other postretirement benefit plan holdings and other factors impacting benefit plan costs could unfavorably impact our liquidity and results of operations. Detroit Edison participates in various plans that provide pension and other postretirement benefits for DTE Energy and its affiliates. Our costs of providing non-contributory defined benefit pension plans and other postretirement benefit plans are dependent upon a number of factors, such as the rates of return on plan assets, the level of interest rates used to measure the required minimum funding levels of the plans, future government regulation, and our required or voluntary contributions made to the plans. The performance of the debt and equity markets affects the value of assets that are held in trust to satisfy future obligations under our plans. We have significant benefit obligations and hold significant assets in trust to satisfy these obligations. These assets are subject to market fluctuations and will yield uncertain returns, which may fall below our projected return rates. A decline in the market value of the pension and postretirement benefit plan assets will increase the funding requirements under our pension and postretirement benefit plans if the actual asset returns do not recover these declines in the foreseeable future. Additionally, our pension and postretirement benefit plan liabilities are sensitive to changes in interest rates. As interest rates decrease, the liabilities increase, potentially increasing benefit expense and funding requirements. Also, if future increases in pension and postretirement benefit costs as a result of reduced plan assets are not recoverable from Detroit Edison customers, the results of operations and financial position of our company could be negatively affected. Without sustained growth in the plan investments over time to increase the value of our plan assets, we could be required to fund our plans

11

with significant amounts of cash. Such cash funding obligations could have a material impact on our cash flows, financial position, or results of operations.

Weather significantly affects operations. Deviations from normal hot and cold weather conditions affect our earnings and cash flow. Mild temperatures can result in decreased utilization of our assets, lowering income and cash flow. Ice storms, tornadoes, or high winds can damage the electric distribution system infrastructure and require us to perform emergency repairs and incur material unplanned expenses. The expenses of storm restoration efforts may not be fully recoverable through the regulatory process.

Operation of a nuclear facility subjects us to risk. Ownership of an operating nuclear generating plant subjects us to significant additional risks. These risks include, among others, plant security, environmental regulation and remediation, and operational factors that can significantly impact the performance and cost of operating a nuclear facility. While we maintain insurance for various nuclear-related risks, there can be no assurances that such insurance will be sufficient to cover our costs in the event of an accident or business interruption at our nuclear generating plant, which may affect our financial performance.

Construction and capital improvements to our power facilities subject us to risk. We are managing ongoing and planning future significant construction and capital improvement projects at multiple power generation and distribution facilities. Many factors that could cause delay or increased prices for these complex projects are beyond our control, including the cost of materials and labor, subcontractor performance, timing and issuance of necessary permits, construction disputes and weather conditions. Failure to complete these projects on schedule and on budget for any reason could adversely affect our financial performance and operations at the affected facilities.

The supply and/or price of energy commodities and/or related services may impact our financial results. We are dependent on coal for much of our electrical generating capacity. Price fluctuations, fuel supply disruptions and increases in transportation costs could have a negative impact on the amounts we charge our customers for electricity. We have hedging strategies and regulatory recovery mechanisms in place to mitigate negative fluctuations in commodity supply prices, but there can be no assurances that our financial performance will not be negatively impacted by price fluctuations.

The supply and/or price of other industrial raw and finished inputs and/or related services may impact our financial results. We are dependent on supplies of certain commodities, such as copper and limestone, among others, and industrial materials and services in order to maintain day-to-day operations and maintenance of our facilities. Price fluctuations or supply interruptions for these commodities and other items could have a negative impact on the amounts we charge our customers for our products.

Unplanned power plant outages may be costly. Unforeseen maintenance may be required to safely produce electricity or comply with environmental regulations. As a result of unforeseen maintenance, we may be required to make spot market purchases of electricity that exceed our costs of generation. Our financial performance may be negatively affected if we are unable to recover such increased costs.

Renewable portfolio standards and energy efficiency programs may affect our business. We are subject to Michigan and potential future federal legislation and regulation requiring us to secure sources of renewable energy. Under the current Michigan legislation we will be required in the future to provide a specified percentage of our power from Michigan renewable energy sources. We are developing a strategy for complying with the existing state legislation, but we do not know what requirements may be added by federal legislation. We are actively engaged in developing renewable energy projects and identifying third party projects in which we can invest. We cannot predict the financial impact or costs associated with these future projects.

We are also required by Michigan legislation to implement energy efficiency measures and provide energy efficiency customer awareness and education programs. These requirements necessitate expenditures and implementation of these programs creates the risk of reducing our revenues as customers decrease their energy usage. We do not know how these programs will impact our business and future operating results.

Threats of terrorism or cyber attacks could affect our business. We may be threatened by problems such as computer viruses or terrorism that may disrupt our operations and could harm our operating results. Our industry requires the continued operation of sophisticated information technology systems and network infrastructure.

12

Despite our implementation of security measures, all of our technology systems are vulnerable to disability or failures due to hacking, viruses, acts of war or terrorism and other causes. If our information technology systems were to fail and we were unable to recover in a timely way, we might be unable to fulfill critical business functions, which could have a material adverse effect on our business, operating results, and financial condition.

In addition, our generation plants and electrical distribution facilities in particular may be targets of terrorist activities that could disrupt our ability to produce or distribute some portion of our energy products. We have increased security as a result of past events and we may be required by our regulators or by the future terrorist threat environment to make investments in security that we cannot currently predict.

We may not be fully covered by insurance. We have a comprehensive insurance program in place to provide coverage for various types of risks, including catastrophic damage as a result of acts of God, terrorism or a combination of other significant unforeseen events that could impact our operations. Economic losses might not be covered in full by insurance or our insurers may be unable to meet contractual obligations.

Failure to maintain the security of personally identifiable information could adversely affect us. In connection with our business we collect and retain personally identifiable information of our customers and employees. Our customers and employees expect that we will adequately protect their personal information, and the United States regulatory environment surrounding information security and privacy is increasingly demanding. A significant theft, loss or fraudulent use of customer, employee or Detroit Edison data by cybercrime or otherwise could adversely impact our reputation and could result in significant costs, fines and litigation.

A work interruption may adversely affect us. Unions represent approximately 2,700 of our employees. A union choosing to strike would have an impact on our business. We are unable to predict the effect a work stoppage would have on our costs of operation and financial performance.

Failure to retain and attract key executive officers and other skilled professional and technical employees could have an adverse effect on our operations. Our business is dependent on our ability to recruit, retain, and motivate employees. Competition for skilled employees in some areas is high and the inability to retain and attract these employees could adversely affect our business and future operating results.

Item 1B. Unresolved Staff Comments

None.

Item 3. Legal Proceedings

We are involved in certain legal, regulatory, administrative and environmental proceedings before various courts, arbitration panels and governmental agencies concerning matters arising in the ordinary course of business. These proceedings include certain contract disputes, environmental reviews and investigations, audits, inquiries from various regulators, and pending judicial matters. We cannot predict the final disposition of such proceedings. We regularly review legal matters and record provisions for claims that are considered probable of loss. The resolution of pending proceedings is not expected to have a material effect on our operations or financial statements in the periods they are resolved.

In February 2008, DTE Energy was named as one of approximately 24 defendant oil, power and coal companies in a lawsuit filed in a United States District Court. DTE Energy was served with process in March 2008. The plaintiffs, the Native Village of Kivalina and City of Kivalina, which are home to approximately 400 people in Alaska, claim that the defendants’ business activities have contributed to global warming and, as a result, higher temperatures are damaging the local economy and leaving the island more vulnerable to storm activity in the fall and winter. As a result, the plaintiffs are seeking damages of up to $400 million for relocation costs associated with moving the village to a safer location, as well as unspecified attorney’s fees and expenses. On October 15, 2009, the U.S. District Court granted defendants’ motions dismissing all of plaintiffs’ federal claims in the case on two independent grounds: (1) the court lacks subject matter jurisdiction to hear the claims because of the political question doctrine; and (2) plaintiffs lack standing to bring their claims. The court also dismissed plaintiffs’ state law claims because the court lacked supplemental jurisdiction over them after it dismissed the federal claims; the

13

dismissal of the state law claims was without prejudice. The plaintiffs have appealed to the U.S. Court of Appeals for the Ninth Circuit.

In July 2009, DTE Energy received a Notice of Violation/Finding of Violation (NOV/FOV) from the EPA alleging, among other things, that five of Detroit Edison’s power plants violated New Source Performance standards, Prevention of Significant Deterioration requirements, and operating permit requirements under the Clean Air Act. In June 2010, the EPA issued a NOV/FOV making similar allegations related to a recent project and outage at Unit 2 of the Monroe Power Plant.

On August 5, 2010, the United States Department of Justice, at the request of the EPA, brought a civil suit in the U.S. District Court for the Eastern District of Michigan against DTE Energy and Detroit Edison, related to the June 2010 NOV/FOV and the outage work performed at Unit 2 of the Monroe Power Plant, but not relating to the July 2009 NOV/FOV. Among other relief, the EPA requested the court to require Detroit Edison to install and operate the best available control technology at Unit 2 of the Monroe Power Plant. Further, the EPA requested the court to issue a preliminary injunction to require Detroit Edison to (i) begin the process of obtaining the necessary permits for the Monroe Unit 2 modification and (ii) offset the pollution from Monroe Unit 2 through emissions reductions from Detroit Edison’s fleet of coal-fired power plants until the new control equipment is operating. In January 2011, the EPA’s motion for preliminary injunction was denied and the liability phase of the civil suit has been scheduled for trial in May 2011.

DTE Energy and Detroit Edison believe that the plants identified by the EPA, including Unit 2 of the Monroe Power Plant, have complied with all applicable federal environmental regulations. Depending upon the outcome of discussions with the EPA regarding the NOV/FOV and the result of the civil action, Detroit Edison could also be required to install additional pollution control equipment at some or all of the power plants in question, implement early retirement of facilities where control equipment is not economical, engage in supplemental environmental programs, and/or pay fines. DTE Energy and Detroit Edison cannot predict the financial impact or outcome of this matter, or the timing of its resolution.

For additional discussion on legal matters, see Notes 10 and 16 of the Notes to Consolidated Financial Statements in Item 8 of this Report.

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

All of the 138,632,324 issued and outstanding shares of common stock of Detroit Edison, par value $10 per share, are owned by DTE Energy, and constitute 100% of the voting securities of Detroit Edison. Therefore, no market exists for our common stock.

We paid cash dividends on our common stock of $305 million in 2010, 2009, and 2008.

Item 6. Selected Financial Data

Omitted per General Instruction I (2) (a) of Form 10-K for wholly owned subsidiaries (reduced disclosure format).

14

Item 7. Management’s Narrative Analysis of Results of Operations

The Management’s Narrative Analysis of Results of Operations discussion for Detroit Edison is presented in accordance with General Instruction I (2) (a) of Form 10-K for wholly-owned subsidiaries (reduced disclosure format).

(in Millions)	2010			2009			2008
Operating Revenues	$	4,993		$	4,714		$	4,874
Fuel and Purchased Power		1,580			1,491			1,778
Gross Margin		3,413			3,223			3,096
Operation and Maintenance		1,305			1,277			1,322
Depreciation and Amortization		849			844			743
Taxes Other Than Income		237			205			232
Asset (Gains) Losses, Reserves and Impairments, Net		(6	)		(2	)		(1	)
Operating Income		1,028			899			800
Other (Income) and Deductions		317			295			283
Income Tax Provision		270			228			186
Net Income	$	441		$	376		$	331

Gross margin increased $190 million in 2010 and increased $127 million in 2009. Revenues associated with certain tracking mechanisms and surcharges are offset by related expenses elsewhere in the Consolidated Statement of Operations. The following table details changes in various gross margin components relative to the comparable prior period:

(in Millions)	2010			2009
Weather, net of RDM	$	84		$	(66	)
Energy optimization and renewable surcharge/regulatory offset		(10	)		54
Securitization bond and tax surcharge rate increase		40			62
2010 rate order, surcharges and other		76			77
Increase in gross margin	$	190		$	127

(in Thousands of MWh)	2010		2009		2008
Electric Sales
Residential		15,726		14,625		15,492
Commercial		16,570		18,200		18,920
Industrial		10,195		9,922		13,086
Other		3,210		3,229		3,218
		45,701		45,976		50,716
Interconnection sales (1)		4,876		5,156		3,583
Total Electric Sales		50,577		51,132		54,299
Electric Deliveries
Retail and Wholesale		45,701		45,976		50,716
Electric Customer Choice, including self generators (2)		5,005		1,477		1,457
Total Electric Sales and Deliveries		50,706		47,453		52,173

(1)	Represents power that is not distributed by Detroit Edison
(2)	Includes deliveries for self generators who have purchased power from alternative energy suppliers to supplement their power requirements

15

(in Thousands of MWh)	2010					2009					2008
Power Generated and Purchased
Power Plant Generation
Fossil		39,433		73	%		40,595		74	%		41,254		71	%
Nuclear		7,738		14			7,406		14			9,613		17
		47,171		87			48,001		88			50,867		88
Purchased Power		6,638		13			6,495		12			6,877		12
System Output		53,809		100	%		54,496		100	%		57,744		100	%
Less Line Loss and Internal Use		(3,232	)				(3,364	)				(3,445	)
Net System Output		50,577					51,132					54,299
Average Unit Cost ($/MWh)
Generation (1)	$	18.94				$	18.20				$	17.93
Purchased Power	$	42.38				$	37.74				$	69.50
Overall Average Unit Cost	$	21.83				$	20.53				$	24.07

(1) Represents fuel costs associated with power plants.

Operation and maintenance expense increased $28 million in 2010 and decreased $45 million in 2009. The increase in 2010 is primarily due to higher restoration and line clearance expenses of $40 million, higher energy optimization and renewable energy expenses of $18 million, higher legal expenses of $15 million, partially offset by reduced uncollectible expenses of $20 million, lower generation expenses of $18 million and lower employee benefit-related expenses of $6 million. The decrease in 2009 was primarily due to $71 million from continuous improvement initiatives and other cost reductions resulting in lower contract labor and outside services expense, information technology and other staff expenses, $14 million of lower employee benefit-related expenses, lower restoration and line clearance expenses of $12 million, $9 million of reduced uncollectible expenses and $6 million of reduced maintenance activities, partially offset by higher pension and health care costs of $54 million and $14 million of energy optimization and renewable energy expenses.

Depreciation and amortization expense increased $5 million in 2010 and $101 million in 2009 due primarily to a higher depreciable base and increased amortization of regulatory assets.

Taxes other than income were higher by $32 million in 2010 due primarily to a $30 million reduction in property tax expense in 2009 due to refunds received in settlement of appeals of assessments for prior years.

Outlook —We continue to move forward in our efforts to improve the operating performance and cash flow of Detroit Edison. The 2010 MPSC order provided for an uncollectible expense tracking mechanism which financially assists in mitigating the impacts of economic conditions in our service territory and a revenue decoupling mechanism that addresses changes in average customer usage due to general economic conditions, weather and conservation. These and other tracking mechanisms and surcharges are expected to result in lower earnings volatility. We expect that our planned significant environmental and renewable expenditures will result in earnings growth. Looking forward, we face additional challenges, such as higher levels of capital spending, volatility in prices for coal and other commodities, increased transportation costs, investment returns and changes in discount rate assumptions in benefit plans and health care costs, lower levels of wholesale sales due to contract expirations, and uncertainty of legislative or regulatory actions regarding climate change. We expect to continue our continuous improvement efforts to improve productivity and decrease our costs while improving customer satisfaction with consideration of customer rate affordability.

16

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Commodity Price Risk

We have commodity price risk arising from market price fluctuations. We have risks in conjunction with the anticipated purchases of coal, uranium, electricity, and base metals to meet our service obligations. However, we do not bear significant exposure to earnings risk as such changes are included in the PSCR regulatory rate-recovery mechanism. We are exposed to short-term cash flow or liquidity risk as a result of the time differential between actual cash settlements and regulatory rate recovery.

Credit Risk

Bankruptcies

We purchase and sell electricity from and to numerous companies operating in the steel, automotive, energy, retail and other industries. Certain of our customers have filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. We regularly review contingent matters relating to these customers and our purchase and sale contracts and we record provisions for amounts considered at risk of probable loss. We believe our accrued amounts are adequate for probable loss. The final resolution of these matters may have a material effect on our consolidated financial statements.

Other

We have a tracking mechanism to mitigate a significant amount of losses related to uncollectible accounts receivable. This mechanism is subject to the jurisdiction of the MPSC and is periodically reviewed. See Note 10 of the Notes to Consolidated Financial Statements in Item 8 of this Report.

We engage in business with customers that are non-investment grade. We closely monitor the credit ratings of these customers and, when deemed necessary, we request collateral or guarantees from such customers to secure their obligations.

Interest Rate Risk

Detroit Edison is subject to interest rate risk in connection with the issuance of debt securities. Our exposure to interest rate risk arises primarily from changes in U.S. Treasury rates, commercial paper rates and London Inter-Bank Offered Rates (LIBOR). We estimate that if interest rates were 10% higher or lower, the fair value of long-term debt at December 31, 2010 would decrease $186 million and increase $202 million, respectively.

17

Item 8. Financial Statements and Supplementary Data

	Page
Controls and Procedures		19
Consolidated Financial Statements
Reports of Independent Registered Public Accounting Firms		20
Consolidated Statements of Operations		22
Consolidated Statements of Cash Flows		23
Consolidated Statements of Financial Position		24
Consolidated Statements of Changes in Shareholder’s Equity and Comprehensive Income		26
Notes to Consolidated Financial Statements		27
Financial Statement Schedule
Schedule II — Valuation and Qualifying Accounts		71

18

Controls and Procedures

(a) Evaluation of disclosure controls and procedures

Management of the Company carried out an evaluation, under the supervision and with the participation of Detroit Edison’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2010, which is the end of the period covered by this report. Based on this evaluation, the Company’s CEO and CFO have concluded that such disclosure controls and procedures are effective in providing reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to the Company’s management, including its CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Due to the inherent limitations in the effectiveness of any disclosure controls and procedures, management cannot provide absolute assurance that the objectives of its disclosure controls and procedures will be attained.

(b) Management’s report on internal control over financial reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Internal control over financial reporting is a process designed by, or under the supervision of, our CEO and CFO, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management of the Company has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2010. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on this assessment, management concluded that, as of December 31, 2010, the Company’s internal control over financial reporting was effective based on those criteria.

This annual report does not include an audit report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to audit by the Company’s independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

(c) Changes in internal control over financial reporting

There have been no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2010 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

19

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholder of The Detroit Edison Company:

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of The Detroit Edison Company and its subsidiaries at December 31, 2010 and 2009, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule for the years ended December 31, 2010 and 2009 listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Detroit, Michigan
February 18, 2011

20

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholder of The Detroit Edison Company:

We have audited the consolidated statements of operations, cash flows, and changes in shareholder’s equity and comprehensive income of The Detroit Edison Company and subsidiaries (the “Company”) for the year ended December 31, 2008. Our audit also included the 2008 information in the financial statement schedule listed in accompanying index. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the results of operations and cash flows of The Detroit Edison Company and subsidiaries for the year ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such 2008 financial statement schedule, when considered in relation to the basic consolidated financial statements of the Company taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ Deloitte & Touche LLP

Detroit, Michigan
February 27, 2009

21

The Detroit Edison Company

Consolidated Statements of Operations

	Year Ended December 31
(in Millions)	2010			2009			2008
Operating Revenues	$	4,993		$	4,714		$	4,874
Operating Expenses
Fuel and purchased power		1,580			1,491			1,778
Operation and maintenance		1,305			1,277			1,322
Depreciation and amortization		849			844			743
Taxes other than income		237			205			232
Asset (gains) losses and reserves, net		(6	)		(2	)		(1	)
		3,965			3,815			4,074
Operating Income		1,028			899			800
Other (Income) and Deductions
Interest expense		313			325			293
Interest income		(1	)		(2	)		(6	)
Other income		(39	)		(39	)		(51	)
Other expenses		44			11			47
		317			295			283
Income Before Income Taxes		711			604			517
Income Tax Provision		270			228			186
Net Income	$	441		$	376		$	331

See Notes to Consolidated Financial Statements

22

The Detroit Edison Company

Consolidated Statements of Cash Flows

	Year Ended December 31
(in Millions)	2010			2009			2008
Operating Activities
Net income	$	441		$	376		$	331
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		849			844			743
Deferred income taxes		322			15			91
Asset (gains) losses and reserves, net		(6	)		(2	)		(2	)
Changes in assets and liabilities, exclusive of changes shown separately (Note 18)		(253	)		(39	)		118
Net cash from operating activities		1,353			1,194			1,281
Investing Activities
Plant and equipment expenditures		(864	)		(793	)		(943	)
Restricted cash		(25	)		5			50
Notes receivable from affiliate		(21	)		(42	)		(41	)
Proceeds from sale of nuclear decommissioning trust fund assets		377			295			232
Investment in nuclear decommissioning trust funds		(410	)		(315	)		(255	)
Other investments		(60	)		(46	)		(54	)
Net cash used for investing activities		(1,003	)		(896	)		(1,011	)
Financing Activities
Issuance of long-term debt		614			129			862
Redemption of long-term debt		(652	)		(278	)		(166	)
Repurchase of long-term debt		—			—			(238	)
Short-term borrowings, net		—			(75	)		(331	)
Short-term borrowings from affiliate		—			—			(277	)
Capital contribution by parent company		—			250			175
Dividends on common stock		(305	)		(305	)		(305	)
Other		(11	)		(15	)		(7	)
Net cash used for financing activities		(354	)		(294	)		(287	)
Net Increase (Decrease) in Cash and Cash Equivalents		(4	)		4			(17	)
Cash and Cash Equivalents at Beginning of the Period		34			30			47
Cash and Cash Equivalents at End of the Period	$	30		$	34		$	30

See Notes to Consolidated Financial Statements

23

The Detroit Edison Company

Consolidated Statements of Financial Position

	December 31
(in Millions)	2010			2009
ASSETS
Current Assets
Cash and cash equivalents	$	30		$	34
Restricted cash (Note 2)		104			79
Accounts receivable (less allowance for doubtful accounts of $93 and $118, respectively)
Customer		690			696
Affiliates		8			3
Other		204			108
Inventories
Fuel		224			135
Materials and supplies		170			173
Notes receivable
Affiliates		97			65
Other		—			3
Other		109			79
		1,636			1,375
Investments
Nuclear decommissioning trust funds		939			817
Other		118			104
		1,057			921
Property
Property, plant and equipment		16,068			15,451
Less accumulated depreciation and amortization		(6,418	)		(6,133	)
		9,650			9,318
Other Assets
Regulatory assets		3,277			3,333
Securitized regulatory assets		729			870
Intangible assets		25			9
Notes receivable — affiliates		6			17
Other		142			118
		4,179			4,347
Total Assets	$	16,522		$	15,961

See Notes to Consolidated Financial Statements

24

The Detroit Edison Company

Consolidated Statements of Financial Position

	December 31
(in Millions, Except Shares)	2010			2009
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Accounts payable
Affiliates	$	50		$	74
Other		349			251
Accrued interest		81			83
Current portion long-term debt, including capital leases		308			660
Regulatory liabilities		60			27
Other		279			234
		1,127			1,329
Long-Term Debt (net of current portion)
Mortgage bonds, notes and other		4,046			3,579
Securitization bonds		643			793
Capital lease obligations		20			25
		4,709			4,397
Other Liabilities
Deferred income taxes		2,235			1,871
Regulatory liabilities		714			711
Asset retirement obligations		1,354			1,285
Unamortized investment tax credit		67			75
Nuclear decommissioning		149			136
Accrued pension liability — affiliates		960			987
Accrued postretirement liability — affiliates		1,060			1,058
Other		138			239
		6,677			6,362
Commitments and Contingencies (Notes 10 and 16)
Shareholder’s Equity
Common stock, $10 par value, 400,000,000 shares authorized, and 138,632,324 shares issued and outstanding		3,196			3,196
Retained earnings		829			693
Accumulated other comprehensive income (loss)		(16	)		(16	)
		4,009			3,873
Total Liabilities and Shareholder’s Equity	$	16,522		$	15,961

See Notes to Consolidated Financial Statements

25

The Detroit Edison Company

Consolidated Statements of Changes in Shareholder’s Equity and Comprehensive income

										Accumulated
					Additional					Other
	Common Stock				Paid in		Retained			Comprehensive
(Dollars in Millions, Shares in Thousands)	Shares		Amount		Capital		Earnings			Income (Loss)			Total
Balance, December 31, 2007		138,632	$	1,386	$	1,385	$	528		$	4		$	3,303
Net income		—		—		—		331			—			331
Implementation of ASC 715 (SFAS No. 158) measurement date provision, net of tax		—		—		—		(9	)		—			(9	)
Dividends declared on common stock		—		—		—		(228	)		—			(228	)
Net change in unrealized gains on investments, net of tax		—		—		—		—			(2	)		(2	)
Benefit obligations, net of tax		—		—		—		—			(14	)		(14	)
Capital contribution by parent company		—		—		175		—			—			175
Balance, December 31, 2008		138,632		1,386		1,560		622			(12	)		3,556
Net income		—		—		—		376			—			376
Dividends declared on common stock		—		—		—		(305	)		—			(305	)
Net change in unrealized gains on investments, net of tax		—		—		—		—			(2	)		(2	)
Benefit obligations, net of tax		—		—		—		—			(2	)		(2	)
Capital contribution by parent company		—		—		250		—			—			250
Balance, December 31, 2009		138,632		1,386		1,810		693			(16	)		3,873
Net income		—		—		—		441			—			441
Dividends declared on common stock		—		—		—		(305	)		—			(305	)
Balance, December 31, 2010		138,632	$	1,386	$	1,810	$	829		$	(16	)	$	4,009

The following table displays comprehensive income:

(in Millions)	2010		2009			2008
Net income	$	441	$	376		$	331
Other comprehensive income:
Net change in unrealized gain (losses) on investments, net of tax of $—, $(1) and $(1)		—		(2	)		(2	)
Benefit obligations, net of tax of $—, $(1) and $(7)		—		(2	)		(14	)
Comprehensive income	$	441	$	372		$	315

See Notes to Consolidated Financial Statements

26

The Detroit Edison Company

Notes to Consolidated Financial Statements

NOTE 1 — BASIS OF PRESENTATION

Corporate Structure

Detroit Edison is an electric utility engaged in the generation, purchase, distribution and sale of electricity to approximately 2.1 million customers in southeast Michigan. Detroit Edison is regulated by the MPSC and the FERC. In addition, we are regulated by other federal and state regulatory agencies including the NRC, the EPA and the MDNRE.

References in this report to “we,” “us,” “our” or “Company” are to Detroit Edison and its subsidiaries, collectively.

Basis of Presentation

The accompanying Consolidated Financial Statements are prepared using accounting principles generally accepted in the United States of America. These accounting principles require management to use estimates and assumptions that impact reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results may differ from the Company’s estimates.

Certain prior year balances were reclassified to match the current year’s financial statement presentation.

Principles of Consolidation — Variable Interest Entity (VIE)

The Company consolidates all majority owned subsidiaries and investments in entities in which it has controlling influence. Non-majority owned investments are accounted for using the equity method when the Company is able to influence the operating policies of the investee. Non-majority owned investments include investments in limited liability companies, partnerships or joint ventures. When the Company does not influence the operating policies of an investee, the cost method is used. These consolidated financial statements also reflect the Company’s proportionate interests in certain jointly owned utility plant. The Company eliminates all intercompany balances and transactions.

Effective January 1, 2010, the Company adopted the provisions of ASU 2009-17, Amendments to FASB Interpretation 46(R). ASU 2009-17 changed the methodology for determining the primary beneficiary of a VIE from a quantitative risk and rewards-based model to a qualitative determination. There is no grandfathering of previous consolidation conclusions. As a result, the Company re-evaluated all prior VIE and primary beneficiary determinations. The requirements of ASU 2009-17 were adopted on a prospective basis.

The Company evaluates whether an entity is a VIE whenever reconsideration events occur. The Company consolidates VIEs for which it is the primary beneficiary. If the Company is not the primary beneficiary and an ownership interest is held, the VIE is accounted for under the equity method of accounting. When assessing the determination of the primary beneficiary, the Company considers all relevant facts and circumstances, including: the power, through voting or similar rights, to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb the expected losses and/or the right to receive the expected returns of the VIE. The Company performs ongoing reassessments of all VIEs to determine if the primary beneficiary status has changed.

The Company has variable interests in VIEs through certain of its long-term purchase contracts. As of December 31, 2010, the carrying amount of assets and liabilities in the Consolidated Statement of Financial Position that relate to its variable interests under long-term purchase contracts are predominately related to working capital accounts and generally represent the amounts owed by the Company for the deliveries associated with the current billing cycle under the contracts. The Company has not provided any form of financial support associated with these long-term contracts. There is no significant potential exposure to loss as a result of its variable interests through these long-term purchase contracts.

In 2001, Detroit Edison financed a regulatory asset related to Fermi 2 and certain other regulatory assets through the sale of rate reduction bonds by a wholly-owned special purpose entity, Securitization. Detroit Edison performs

27

servicing activities including billing and collecting surcharge revenue for Securitization. Under ASU 2009-17, this entity is now a VIE, and continues to be consolidated as the Company is the primary beneficiary. The maximum risk exposure related to Securitization is reflected on the Company’s Consolidated Statements of Financial Position.

The following table summarizes the major balance sheet items at December 31, 2010 restricted for Securitization that are either (1) assets that can be used only to settle their obligations or (2) liabilities for which creditors do not have recourse to the general credit of the primary beneficiary.

	December 31,
(in Millions)	2010
ASSETS
Restricted cash	$	104
Accounts receivable		42
Securitized regulatory assets		729
Other assets		13
	$	888
LIABILITIES
Accounts payable and accrued current liabilities	$	17
Other current liabilities		62
Current portion long-term debt, including capital leases		150
Securitization bonds		643
Other long term liabilities		6
	$	878

As of December 31, 2010, Detroit Edison had $6 million in Notes receivable and at December 31, 2009, had a bank loan guarantee of $11 million related to non-consolidated VIEs.

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES

Revenues

Revenues from the sale and delivery of electricity are recognized as services are provided. The Company records revenues for electric provided but unbilled at the end of each month. Rates for Detroit Edison include provisions to adjust billings for fluctuations in fuel and purchased power costs and certain other costs. Revenues are adjusted for differences between actual costs and the amounts billed in current rates. Under or over recovered revenues related to these cost tracking mechanisms are recorded on the Consolidated Statement of Financial Position and are recovered or returned to customers through adjustments to the billing factors. See Note 10 for further discussion of cost recovery mechanisms.

Detroit Edison has a CIM, which is an over/under recovery mechanism that measures non-fuel revenues lost or gained as a result of fluctuations in electric Customer Choice sales. If annual electric Customer Choice sales exceed the baseline amount from Detroit Edison’s most recent rate case, 90 percent of its lost non-fuel revenues associated with sales above that level may be recovered from full-service customers. If annual electric Customer Choice sales decrease below the baseline, the Company must refund 90 percent of its increase in non-fuel revenues associated with sales below that level to full service customers.

Detroit Edison has an RDM that is designed to minimize the impact on revenues of changes in average customer usage of electricity. The January 2010 MPSC order in Detroit Edison’s 2009 rate case provided for, among other items, the implementation of a pilot RDM effective February 1, 2010. The RDM enables Detroit Edison to recover or refund the change in revenue resulting from the difference between actual average sales per customer compared to the base level of average sales per customer established in the MPSC order. The RDM addresses changes in customer usage due to general economic conditions and conservation, but does not shield Detroit Edison from the impacts of lost customers. In addition, the pilot RDM materially shields Detroit Edison from the impact of weather on customer usage. The RDM is subject to review by the MPSC after the initial one-year pilot program.

Accounting for ISO Transactions

Detroit Edison participates in the energy market through MISO. MISO requires that we submit hourly day-ahead, real time and FTR bids and offers for energy at locations across the MISO region. Detroit Edison accounts for MISO

28

transactions on a net hourly basis in each of the day-ahead, real-time and FTR markets and net transactions across all MISO energy market locations. In any single hour, Detroit Edison records net purchases in Fuel and purchased power and net sales in Operating revenues on the Consolidated Statements of Operations. Detroit Edison records net sale billing adjustments when invoices are received. Detroit Edison records expense accruals for future net purchases adjustments based on historical experience, and reconciles accruals to actual expenses when invoices are received from MISO.

Comprehensive Income

Comprehensive income is the change in Common shareholder’s equity during a period from transactions and events from non-owner sources, including net income. Amounts recorded to Other comprehensive loss for the year ended December 31, 2010 included immaterial amounts for changes in benefit obligations and unrealized gains and losses on available for sale securities.

						Accumulated
						Other
	Benefit					Comprehensive
(in Millions)	Obligations			Other		Loss
Beginning balances	$	(16	)	$	—	$	(16	)
Current period change		—			—		—
Ending balance	$	(16	)	$	—	$	(16	)

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 consists of funds held to satisfy requirements of certain debt agreements, related to Securitization bonds. Restricted cash designated for interest and principal payments within one year is classified as a current asset.

Receivables

Accounts receivable are primarily composed of trade receivables and unbilled revenue. Our accounts receivable are stated at net realizable value.

The allowance for doubtful accounts is calculated using the aging approach that utilizes rates developed in reserve studies. Detroit Edison establishes an allowance for uncollectible accounts based on historical losses and management’s assessment of existing 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. We 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, generally one year after service has been terminated.

Unbilled revenues of $236 million and $269 million are included in customer accounts receivable at December 31, 2010 and 2009, respectively.

Notes Receivable

Notes receivable, or financing receivables, are primarily comprised of capital lease receivables and loans and are included in Other current assets and Notes receivable on the Company’s Consolidated Statements of Financial Position.

Notes receivable are typically considered delinquent when payment is not received for periods ranging from 60 to 120 days. The Company ceases accruing interest (nonaccrual status), considers a note receivable impaired, and establishes an allowance for credit loss when it is probable that all principal and interest amounts due will not be collected in accordance with the contractual terms of the note receivable. Cash payments received on nonaccrual status notes receivable, that do not bring the account contractually current, are first applied to contractually owed past due interest, with any remainder applied to principle. Accrual of interest is generally resumed when the note receivable becomes contractually current.

29

In determining the allowance for credit losses for notes receivable, we consider the historical payment experience and other factors that are expected to have a specific impact on the counterparty’s ability to pay. In addition, the Company monitors the credit ratings of the counterparties from which we have notes receivable.

Inventories

The Company generally values inventory at average cost.

Property, Retirement and Maintenance, and Depreciation, Depletion and Amortization

Property is stated at cost and includes construction-related labor, materials, overheads and an allowance for funds used during construction (AFUDC). The cost of properties retired, less salvage value is charged to accumulated depreciation. Expenditures for maintenance and repairs are charged to expense when incurred, except for Fermi 2.

The Company bases depreciation provisions for utility property on straight-line rates approved by the MPSC.

The Company credits depreciation and amortization expense when we establish regulatory assets for plant-related costs such as depreciation or plant-related financing costs. The Company charges depreciation and amortization expense when we amortize these regulatory assets. The Company credits interest expense to reflect the accretion income on certain regulatory assets.

Approximately $3 million and $13 million of expenses related to Fermi 2 refueling outages were accrued at December 31, 2010 and December 31, 2009, respectively. Amounts are accrued on a pro-rata basis over an 18-month period that coincides with scheduled refueling outages at Fermi 2. This accrual of outage costs matches the regulatory recovery of these costs in rates set by the MPSC.

See Note 6.

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 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.

Intangible Assets

The Company has certain intangible assets relating to emission allowances and renewable energy credits. Emission allowances and renewable energy credits are charged to expense as the allowances and credits are consumed in the operation of the business. The Company’s intangible assets related to emission allowances were $9 million at December 31, 2010 and 2009. The Company’s intangible assets related to renewable energy credits were $17 million at December 31, 2010. The Company had no renewable energy credits at December 31, 2009.

Excise and Sales Taxes

The Company records 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 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. In accordance with MPSC regulations, the unamortized discount, premium and expense related to debt redeemed with a refinancing are amortized over the life of the replacement issue.

Investments in Debt and Equity Securities

The Company generally classifies investments in debt and equity securities as either trading or available-for-sale and has recorded such investments at market value with unrealized gains or losses included in earnings or in other

30

comprehensive income or loss, respectively. 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 Company’s equity investments are reviewed for impairment each reporting period. If the assessment indicates that the impairment is other than temporary, a loss is recognized resulting in the equity investment being written down to its estimated fair value. See Note 4.

Stock-Based Compensation

The Company received an allocation of costs from DTE Energy associated with stock-based compensation. Our allocation for 2010, 2009 and 2008 for stock-based compensation expense was approximately $23 million, $24 million and $15 million, respectively.

Government Grants

Grants are recognized when there is reasonable assurance that the grant will be received and that any conditions associated with the grant will be met. When grants are received related to Property, Plant and Equipment, the Company reduces the basis of the assets on the Consolidated Statements of Financial Position, resulting in lower depreciation expense over the life of the associated asset. Grants received related to expenses are reflected as a reduction of the associated expense in the period in which the expense is incurred.

Other Accounting Policies

See the following notes for other accounting policies impacting our financial statements:

Note		Title
	3	New Accounting Pronouncements
	4	Fair Value
	5	Financial and Other Derivative Instruments
	10	Regulatory Matters
	11	Income Taxes
	17	Retirement Benefits and Trusteed Assets

NOTE 3 — NEW ACCOUNTING PRONOUNCEMENTS

Variable Interest Entity

In June 2009, the FASB issued ASU 2009-17, Amendments to FASB Interpretation 46(R). This standard amends the consolidation guidance that applies to VIEs and affects the overall consolidation analysis under ASC 810-10, Consolidation. The amendments to the consolidation guidance affect all entities and enterprises currently within the scope of ASC 810-10, as well as qualifying special purpose entities that are currently outside the scope of ASC 810-10. Accordingly, the Company reconsidered its previous ASC 810-10 conclusions, including (1) whether an entity is a VIE, (2) whether the enterprise is the VIE’s primary beneficiary, and (3) what type of financial statement disclosures are required. ASU 2009-17 is effective as of the beginning of the first fiscal year that begins after November 15, 2009. The Company adopted the standard as of January 1, 2010. See Note 1.

Fair Value Measurements and Disclosures

In January 2010, the FASB issued ASU 2010-06, Improving Disclosures about Fair Value Measurements. ASU 2010-06 requires details of transfers in and out of Level 1 and 2 fair value measurements and the gross presentation of activity within the Level 3 fair value measurement roll forward. The new disclosures are required of all entities that are required to provide disclosures about recurring and nonrecurring fair value measurements. The Company adopted ASU 2010-06 effective January 1, 2010, except for the gross presentation of the Level 3 fair value measurement roll forward which is effective for annual reporting periods beginning after December 15, 2010 and for interim reporting periods within those years.

NOTE 4 — FAIR VALUE

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in a principal or most advantageous market. Fair value is a market-based measurement that is determined based on inputs, which refer broadly to assumptions that

31

market participants use in pricing assets or liabilities. These inputs can be readily observable, market corroborated or generally unobservable inputs. The Company makes certain assumptions it believes that market participants would use in pricing assets or liabilities, including assumptions about risk, and the risks inherent in the inputs to valuation techniques. Credit risk of the Company and its counterparties is incorporated in the valuation of assets and liabilities through the use of credit reserves, the impact of which was immaterial at December 31, 2010 and December 31, 2009. The Company believes it uses valuation techniques that maximize the use of observable market-based inputs and minimize the use of unobservable inputs.

A fair value hierarchy has been established, which prioritizes the inputs to valuation techniques used to measure fair value in three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. All assets and liabilities are required to be classified in their entirety based on the lowest level of input that is significant to the fair value measurement in its entirety. Assessing the significance of a particular input may require judgment considering factors specific to the asset or liability, and may affect the valuation of the asset or liability and its placement within the fair value hierarchy. The Company classifies fair value balances based on the fair value hierarchy defined as follows:

• Level 1 — Consists of unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date.

• Level 2 — Consists of inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.

• Level 3 — Consists of unobservable inputs for assets or liabilities whose fair value is estimated based on internally developed models or methodologies using inputs that are generally less readily observable and supported by little, if any, market activity at the measurement date. Unobservable inputs are developed based on the best available information and subject to cost-benefit constraints.

The following table presents assets and liabilities measured and recorded at fair value on a recurring basis as of December 31, 2010:

								Net Balance at
(in Millions)	Level 1		Level 2			Level 3		December 31, 2010
Assets:
Nuclear decommissioning trusts	$	599	$	340		$	—	$	939
Other investments		52		55			—		107
Derivative assets — FTRs		—		—			2		2
Total	$	651	$	395		$	2	$	1,048
Liabilities:
Derivative liabilities — Emissions		—		(3	)		—		(3	)
Total	$	—	$	(3	)	$	—	$	(3	)
Net Assets at December 31, 2010	$	651	$	392		$	2	$	1,045

								Net Balance at
(in Millions)	Level 1		Level 2			Level 3		December 31, 2010
Assets:
Current	$	—	$	—		$	2	$	2
Noncurrent(1)		651		395			—		1,046
Total Assets	$	651	$	395		$	2	$	1,048
Liabilities:
Current	$	—	$	(3	)	$	—	$	(3	)
Noncurrent		—		—			—		—
Total Liabilities	$	—	$	(3	)	$	—	$	(3	)
Net Assets at December 31, 2010	$	651	$	392		$	2	$	1,045

32

The following table presents assets and liabilities measured and recorded at fair value on a recurring basis as of December 31, 2009:

								Net Balance at
(in Millions)	Level 1		Level 2			Level 3		December 31, 2009
Assets:
Cash equivalents	$	15	$	—		$	—	$	15
Nuclear decommissioning trusts		549		268			—		817
Other investments		40		57			—		97
Derivative assets		—		—			2		2
Total	$	604	$	325		$	2	$	931
Liabilities:
Derivative liabilities		—		(8	)		—		(8	)
Total	$	—	$	(8	)	$	—	$	(8	)
Net Assets at December 31, 2009	$	604	$	317		$	2	$	923

(1) Includes $107 million of other investments that are included in the Consolidated Statements of Financial Position in Other Investments at December 31, 2010.

The following table presents the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis for the years ended December 31, 2010 and 2009:

	Year Ended
	December 31
(in Millions)	2010			2009
Asset balance as of January 1	$	2			4
Change in fair value recorded in regulatory assets/liabilities		6			—
Purchases, issuances and settlements		(6	)		—
Transfers in/out of Level 3		—			(2	)
Asset balance as of December 31	$	2		$	2
The amount of total gains (losses) included in regulatory assets and liabilities attributed to the change in unrealized gains (losses) related to regulatory assets and liabilities held at December 31, 2010 and 2009	$	2		$	2

Transfers in/out of Level 3 represent existing assets or liabilities that were either previously categorized as a higher level and for which the inputs to the model became unobservable or assets and liabilities that were previously classified as Level 3 for which the lowest significant input became observable during the period. Transfers in/out of Level 3 are reflected as if they had occurred at the beginning of the period. No significant transfers between Levels 1, 2 or 3 occurred in the year ended December 31, 2010. Transfers out of Level 3 in 2009 reflect increased reliance on broker quotes for certain transactions.

Cash Equivalents

Cash equivalents include investments with maturities of three months or less when purchased. The cash equivalents shown in the fair value table are comprised of investments in money market funds. The fair values of the shares of these funds are based on observable market prices and, therefore, have been categorized as Level 1 in the fair value hierarchy.

Nuclear Decommissioning Trusts and Other Investments

The nuclear decommissioning trusts and other investments hold debt and equity securities directly and indirectly through commingled funds and institutional mutual funds. Exchange-traded debt and equity securities held directly are valued using quoted market prices in actively traded markets. The commingled funds and institutional mutual funds which hold exchange-traded equity or debt securities are valued based on the underlying securities, using quoted prices in actively traded markets. Non-exchange-traded fixed income securities are valued based upon quotations available from brokers or pricing services. A primary price source is identified by asset type, class or issue for each security. The trustees monitor prices supplied by pricing services and may use a supplemental price

33

source or change the primary price source of a given security if the trustees determine that another price source is considered to be preferable. Detroit Edison has obtained an understanding of how these prices are derived, including the nature and observability of the inputs used in deriving such prices. Additionally, Detroit Edison selectively corroborates the fair values of securities by comparison of market-based price sources.

Derivative Assets and Liabilities

Derivative assets and liabilities are comprised of physical and financial derivative contracts, including futures, forwards, options and swaps that are both exchange-traded and over-the-counter traded contracts. Various inputs are used to value derivatives depending on the type of contract and availability of market data. Exchange-traded derivative contracts are valued using quoted prices in active markets. The Company considers the following criteria in determining whether a market is considered active: frequency in which pricing information is updated, variability in pricing between sources or over time and the availability of public information. Other derivative contracts are valued based upon a variety of inputs including commodity market prices, broker quotes, interest rates, credit ratings, default rates, market-based seasonality and basis differential factors. The Company monitors the prices that are supplied by brokers and pricing services and may use a supplemental price source or change the primary price source of an index if prices become unavailable or another price source is determined to be more representative of fair value. The Company has obtained an understanding of how these prices are derived. Additionally, the Company selectively corroborates the fair value of its transactions by comparison of market-based price sources. Mathematical valuation models are used for derivatives for which external market data is not readily observable, such as contracts which extend beyond the actively traded reporting period.

Fair Value of Financial Instruments

The fair value of long-term debt is determined by using quoted market prices when available and a discounted cash flow analysis based upon estimated current borrowing rates when quoted market prices are not available. The table below shows the fair value and the carrying value for long-term debt securities. Certain other financial instruments, such as notes payable, customer deposits and notes receivable are not shown as carrying value approximates fair value. See Note 5 for further fair value information on financial and derivative instruments.

	December 31, 2010		December 31, 2009
	Fair Value	Carrying Value	Fair Value	Carrying Value
Long-Term Debt	$5.3 billion	$5.0 billion	$5.2 billion	$5.0 billion

Nuclear Decommissioning Trust Funds

Detroit Edison has a legal obligation to decommission its nuclear power plants following the expiration of their operating licenses. This obligation is reflected as an asset retirement obligation on the Consolidated Statements of Financial Position. See Note 9 for additional information.

The NRC has jurisdiction over the decommissioning of nuclear power plants and requires decommissioning funding based upon a formula. The MPSC and FERC regulate the recovery of costs of decommissioning nuclear power plants and both require the use of external trust funds to finance the decommissioning of Fermi 2. Rates approved by the MPSC provide for the recovery of decommissioning costs of Fermi 2 and the disposal of low-level radioactive waste. Detroit Edison is continuing to fund FERC jurisdictional amounts for decommissioning even though explicit provisions are not included in FERC rates. The Company believes the MPSC and FERC collections will be adequate to fund the estimated cost of decommissioning using the NRC formula. The decommissioning assets, anticipated earnings thereon and future revenues from decommissioning collections will be used to decommission Fermi 2. The Company expects the liabilities to be reduced to zero at the conclusion of the decommissioning activities. If amounts remain in the trust funds for Fermi 2 following the completion of the decommissioning activities, those amounts will be disbursed based on rulings by the MPSC and FERC. The decommissioning of Fermi 1 is funded by Detroit Edison. Contributions to the Fermi 1 trust are discretionary.

34

The following table summarizes the fair value of the nuclear decommissioning trust fund assets:

	December 31		December 31
(in Millions)	2010		2009
Fermi 2	$	910	$	790
Fermi 1		3		3
Low level radioactive waste		26		24
Total	$	939	$	817

At December 31, 2010, investments in the nuclear decommissioning trust funds consisted of approximately 61% in publicly traded equity securities, 38% in fixed debt instruments and 1% in cash equivalents. At December 31, 2009, investments in the nuclear decommissioning trust funds consisted of approximately 51% in publicly traded equity securities, 48% in fixed debt instruments and 1% in cash equivalents. The debt securities at both December 31, 2010 and December 31, 2009 had an average maturity of approximately 6 and 5 years, respectively.

The costs of securities sold are determined on the basis of specific identification. The following table sets forth the gains and losses and proceeds from the sale of securities by the nuclear decommissioning trust funds:

	Year Ended
	December 31
(in Millions)	2010			2009			2008
Realized gains	$	192		$	37		$	34
Realized losses	$	(83	)	$	(55	)	$	(49	)
Proceeds from sales of securities	$	377		$	295		$	232

Realized gains and losses from the sale of securities for the Fermi 2 trust and the low level radioactive waste funds are recorded to the Regulatory asset and Nuclear decommissioning liability. The following table sets forth the fair value and unrealized gains for the nuclear decommissioning trust funds:

	Fair		Unrealized
(in Millions)	Value		Gains
As of December 31, 2010
Equity securities	$	572	$	77
Debt securities		361		11
Cash and cash equivalents		6		—
	$	939	$	88
As of December 31, 2009
Equity securities	$	420	$	135
Debt securities		388		17
Cash and cash equivalents		9		—
	$	817	$	152

Securities held in the nuclear decommissioning trust funds are classified as available-for-sale. As Detroit Edison does not have the ability to hold impaired investments for a period of time sufficient to allow for the anticipated recovery of market value, all unrealized losses are considered to be other than temporary impairments.

Impairment charges for unrealized losses incurred by the Fermi 2 trust are recognized as a Regulatory asset. Detroit Edison recognized $26 million and $48 million of unrealized losses as Regulatory assets at December 31, 2010 and 2009, respectively. Since the decommissioning of Fermi 1 is funded by Detroit Edison rather than through a regulatory recovery mechanism, there is no corresponding regulatory asset treatment. Therefore, impairment charges for unrealized losses incurred by the Fermi 1 trust are recognized in earnings immediately. There were no impairment charges in 2010, 2009 and 2008 for Fermi 1.

35

Other Available-For-Sale Securities

The following table summarizes the fair value of the Company’s investment in available-for-sale debt and equity securities, excluding nuclear decommissioning trust fund assets:

	December 31, 2010				December 31, 2009
(in Millions)	Fair Value		Carrying value		Fair Value		Carrying Value
Cash equivalents	$	125	$	125	$	105	$	105
Equity securities		4		4		4		4

As of December 31, 2010, these securities are comprised primarily of money-market and equity securities. Gains (losses) related to trading securities held at December 31, 2010, 2009 and 2008 were $7 million, $8 million and $(14) million, respectively.

NOTE 5 — FINANCIAL AND OTHER DERIVATIVE INSTRUMENTS

The Company recognizes all derivatives at their fair value on the Consolidated Statements of Financial Position unless they qualify for certain scope exceptions, including the normal purchases and normal sales exception. Further, derivatives that qualify and are designated for hedge accounting are classified as either hedges of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge), or as hedges of the fair value of a recognized asset or liability or of an unrecognized firm commitment (fair value hedge). For cash flow hedges, the portion of the derivative gain or loss that is effective in offsetting the change in the value of the underlying exposure is deferred in Accumulated other comprehensive income and later reclassified into earnings when the underlying transaction occurs. For fair value hedges, changes in fair values for the derivative are recognized in earnings each period. Gains and losses from the ineffective portion of any hedge are recognized in earnings immediately. For derivatives that do not qualify or are not designated for hedge accounting, changes in fair value are recognized in earnings each period.

Detroit Edison’s primary market risk exposure is associated with commodity prices, credit and interest rates. The Company has risk management policies to monitor and manage market risks. The Company uses derivative instruments to manage some of the exposure. Detroit Edison generates, purchases, distributes and sells electricity. Detroit Edison uses forward energy and capacity contracts to manage changes in the price of electricity and fuel. Substantially all of these contracts meet the normal purchases and sales exemption and are therefore accounted for under the accrual method. Other derivative contracts are recoverable through the PSCR mechanism when settled. This results in the deferral of unrealized gains and losses as Regulatory assets or liabilities, until realized.

The following represents the fair value of derivative instruments as of December 31, 2010 and 2009:

	Year Ended
	December 31
(in Millions)	2010			2009
FTRs — Other current assets	$	2		$	2
Emissions — Other current liabilities		(3	)		(5	)
Emissions — Other non-current liabilities		—			(3	)
Total derivatives not designated as hedging instrument	$	(1	)	$	(6	)

The effect of derivative instruments recoverable through the PSCR mechanism when realized on the Consolidated Statements of Financial Position are $1 million in losses related to Emissions recognized in Regulatory assets and $6 million in gains related to FTRs recognized in Regulatory liabilities for the year ended December 31, 2010, and $14 million and $2 million in losses related to Emissions recognized in Regulatory assets and Regulatory liabilities, respectively, for the year ended December 31, 2009.

36

The following represents the cumulative gross volume of derivative contracts outstanding as of December 31, 2010:

Commodity	Number of Units
Emissions (Tons)		1,750
FTRs (MW)		53,753

NOTE 6 — PROPERTY, PLANT AND EQUIPMENT

Summary of property by classification as of December 31:

(in Millions)	2010			2009
Property, Plant and Equipment
Generation	$	9,268		$	8,833
Distribution		6,800			6,618
Total		16,068			15,451
Less Accumulated Depreciation and Amortization
Generation		(3,850	)		(3,890	)
Distribution		(2,568	)		(2,243	)
Total		(6,418	)		(6,133	)
Net Property, Plant and Equipment	$	9,650		$	9,318

AFUDC capitalized during 2010 and 2009 was approximately $10 million and $12 million, respectively.

The composite depreciation rate for Detroit Edison was 3.3% in 2010, 2009 and 2008.

The average estimated useful life for our generation and distribution property was 40 years and 37 years, respectively, at December 31, 2010.

Capitalized software costs are classified as Property, plant and equipment and the related amortization is included in Accumulated depreciation on the Consolidated Statements of Financial Position. The Company capitalizes the costs associated with computer software it develops or obtains for use in its business. The Company amortizes capitalized software costs on a straight-line basis over the expected period of benefit, ranging from 5 to 15 years.

Capitalized software costs amortization expense was $55 million in 2010, $55 million in 2009, and $45 million in 2008. The gross carrying amount and accumulated amortization of capitalized software costs at December 31, 2010 were $479 million and $175 million, respectively. The gross carrying amount and accumulated amortization of capitalized software costs at December 31, 2009 were $488 million and $161 million, respectively. Amortization expense of capitalized software costs is estimated to be approximately $55 million annually for 2011 through 2015.

Gross property under capital leases was $121 million at December 31, 2010 and December 31, 2009. Accumulated amortization of property under capital leases was $96 million and $88 million at December 31, 2010 and December 31, 2009, respectively.

NOTE 7 — JOINTLY OWNED UTILITY PLANT

Detroit Edison has joint ownership interest in two power plants, Belle River and Ludington Hydroelectric Pumped Storage. Detroit Edison’s share of direct expenses of the jointly owned plants are included in Fuel and purchased power and Operation and maintenance expenses in the Consolidated Statements of Operations. Ownership information of the two utility plants as of December 31, 2010 was as follows:

37

				Ludington
				Hydroelectric
	Belle River			Pumped Storage
In-service date		1984-1985			1973
Total plant capacity	1,270		MW	1,872		MW
Ownership interest			*		49	%
Investment (in millions)	$	1,635		$	199
Accumulated depreciation (in millions)	$	923		$	117

* Detroit Edison’s ownership interest is 63% in Unit No. 1, 81% of the facilities applicable to Belle River used jointly by the Belle River and St. Clair Power Plants and 75% in common facilities used at Unit No. 2.

Belle River

The Michigan Public Power Agency (MPPA) has an ownership interest in Belle River Unit No. 1 and other related facilities. The MPPA is entitled to 19% of the total capacity and energy of the plant and is responsible for the same percentage of the plant’s operation, maintenance and capital improvement costs.

Ludington Hydroelectric Pumped Storage

Consumers Energy Company has an ownership interest in the Ludington Hydroelectric Pumped Storage Plant. Consumers Energy is entitled to 51% of the total capacity and energy of the plant and is responsible for the same percentage of the plant’s operation, maintenance and capital improvement costs.

NOTE 8 — ASSET RETIREMENT OBLIGATIONS

The Company has a legal retirement obligation for the decommissioning costs for its Fermi 1 and Fermi 2 nuclear plants. The Company has conditional retirement obligations for disposal of asbestos at certain of its power plants. To a lesser extent, the Company has conditional retirement obligations at certain service centers and disposal costs for PCB contained within transformers and circuit breakers. The Company recognizes such obligations as liabilities at fair market value when they are incurred, which generally is at the time the associated assets are placed in service. Fair value is measured using expected future cash outflows discounted at our credit-adjusted risk-free rate. The Company defers timing differences that arise in the expense recognition of legal asset retirement costs that are currently recovered in rates.

No liability has been recorded with respect to lead-based paint, as the quantities of lead-based paint in the Company’s facilities are unknown. In addition, there is no incremental cost to demolitions of lead-based paint facilities vs. non-lead-based paint facilities and no regulations currently exist requiring any type of special disposal of items containing lead-based paint.

The Ludington Hydroelectric Power Plant (a jointly owned plant) has an indeterminate life and no legal obligation currently exists to decommission the plant at some future date. Substations, manholes and certain other distribution assets within Detroit Edison have an indeterminate life. Therefore, no liability has been recorded for these assets.

A reconciliation of the asset retirement obligations for 2010 follows:

(in Millions)
Asset retirement obligations at January 1, 2010	$	1,300
Accretion		84
Liabilities incurred		10
Liabilities settled		(6	)
Revision in estimated cash flows		(22	)
Asset retirement obligations at December 31, 2010		1,366
Less amount included in current liabilities		(12	)
	$	1,354

Detroit Edison has a legal obligation to decommission its nuclear power plants following the expiration of their operating licenses. This obligation is reflected as an asset retirement obligation on the Consolidated Statements of Financial Position. In 2010, Detroit Edison filed a rate case with the MPSC proposing a reduction to the nuclear

38

decommissioning surcharge under the assumption that it would request an extension of the Fermi 2 license for an additional 20 years beyond the term of the existing license which expires in 2025. This proposed extension of the license, including the associated impact on spent nuclear fuel, resulted in a revision in estimated cash flows for the Fermi 2 asset retirement obligation of approximately $22 million. It is estimated that the cost of decommissioning Fermi 2 is $1.3 billion in 2010 dollars and $10 billion in 2045 dollars, using a 6% inflation rate. In 2001, Detroit Edison began the decommissioning of Fermi 1, with the goal of removing the radioactive material and terminating the Fermi 1 license. The decommissioning of Fermi 1 is expected to be completed by 2012. Approximately $1.3 billion of the asset retirement obligations represent nuclear decommissioning liabilities that are funded through a surcharge to electric customers over the life of the Fermi 2 nuclear plant.

The NRC has jurisdiction over the decommissioning of nuclear power plants and requires minimum decommissioning funding based upon a formula. The MPSC and FERC regulate the recovery of costs of decommissioning nuclear power plants and both require the use of external trust funds to finance the decommissioning of Fermi 2. Rates approved by the MPSC provide for the recovery of decommissioning costs of Fermi 2 and the disposal of low-level radioactive waste. Detroit Edison is continuing to fund FERC jurisdictional amounts for decommissioning even though explicit provisions are not included in FERC rates. The Company believes the MPSC and FERC collections will be adequate to fund the estimated cost of decommissioning. The decommissioning assets, anticipated earnings thereon and future revenues from decommissioning collections will be used to decommission Fermi 2. The Company expects the liabilities to be reduced to zero at the conclusion of the decommissioning activities. If amounts remain in the trust funds for Fermi 2 following the completion of the decommissioning activities, those amounts will be disbursed based on rulings by the MPSC and FERC.

A portion of the funds recovered through the Fermi 2 decommissioning surcharge and deposited in external trust accounts is designated for the removal of non-radioactive assets and the clean-up of the Fermi site. This removal and clean-up is not considered a legal liability. Therefore, it is not included in the asset retirement obligation, but is reflected as the nuclear decommissioning liability. The decommissioning of Fermi 1 is funded by Detroit Edison. Contributions to the Fermi 1 trust are discretionary. See Note 4 for additional discussion of Nuclear Decommissioning Trust Fund Assets.

NOTE 9 — RESTRUCTURING

Performance Excellence Process

In 2005, the Company initiated a company-wide review of its operations called the Performance Excellence Process. The Company incurred costs to achieve (CTA) restructuring expense for employee severance, early retirement programs and other costs which include project management and consultant support. In September 2006, the MPSC issued an order approving a settlement agreement that allowed Detroit Edison, commencing in 2006, to defer the incremental CTA. Further, the order provided for Detroit Edison to amortize the CTA deferrals over a ten-year period beginning with the year subsequent to the year the CTA was deferred. Detroit Edison deferred approximately $24 million of CTA in 2008 as a regulatory asset and capitalized $2 million. The recovery of these costs was provided for by the MPSC in the order approving the settlement in the show cause proceeding and in the December 23, 2008 MPSC rate order. Detroit Edison amortized prior year deferred CTA costs of $18 million in 2010, $18 million in 2009 and $16 million in 2008. Amounts expensed are recorded in Operation and maintenance expense on the Consolidated Statements of Operations. Deferred amounts are recorded in Regulatory assets on the Consolidated Statements of Financial Position.

NOTE 10 — REGULATORY MATTERS

Regulation

Detroit Edison is 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. Detroit Edison is also regulated by the FERC with respect to financing authorization and wholesale electric activities. Regulation results in differences in the application of generally accepted accounting principles between regulated and non-regulated businesses.

39

Regulatory Assets and Liabilities

Detroit Edison is 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 or changes in the competitive environment could result in the discontinuance of this accounting treatment for regulatory assets and liabilities for some or all of our 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 rate environment.

The following are balances and a brief description of the regulatory assets and liabilities at December 31:

(in Millions)	2010			2009
Assets
Recoverable pension and postretirement costs:
Pension	$	1,329		$	1,261
Postretirement costs		472			515
Asset retirement obligation		336			415
Recoverable income taxes related to securitized regulatory assets		400			476
Deferred income taxes — Michigan Business Tax		319			343
Costs to achieve Performance Excellence Process		118			136
Choice incentive mechanism		105			—
Other recoverable income taxes		85			89
Unamortized loss on reacquired debt		35			38
Accrued PSCR revenue		52			—
Enterprise Business Systems costs		21			24
Recoverable restoration expense		19			—
Electric Customer Choice implementation costs		—			18
Other		44			18
		3,335			3,333
Less amount included in current assets		(58	)		—
	$	3,277		$	3,333
Securitized regulatory assets	$	729		$	870
Liabilities
Asset removal costs	$	132		$	157
Deferred income taxes — Michigan Business Tax		362			367
Renewable energy		125			32
Refundable self implemented rates		27			27
Refundable revenue decoupling		47			—
Refundable costs under PA 141		33			27
Refundable restoration expense		15			15
Accrued PSCR refund		—			14
Fermi 2 refueling outage		3			13
Pension equalization mechanism		—			75
Other		30			11
		774			738
Less amount included in current liabilities		(60	)		(27	)
	$	714		$	711

As noted below, 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 Detroit Edison’s rate base, thereby providing a return on invested costs. 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.

40

ASSETS

• Recoverable pension and postretirement costs — In 2007, the Company adopted ASC 715 (SFAS No. 158) which required, 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 that are not immediately recognized as components of net periodic benefit costs. The Company records the charge related to the additional liability as a regulatory asset since the traditional rate setting process allows for the recovery of pension and postretirement costs. The asset will reverse as the deferred items are recognized as benefit expenses in net income. (1)

• Asset retirement obligation — This obligation is primarily 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. (1)

• Recoverable income taxes related to securitized regulatory assets — Receivable for the recovery of income taxes to be paid on the non-bypassable securitization bond surcharge. A non-bypassable securitization tax surcharge recovers the income tax over a fourteen-year period ending 2015.

• Deferred income taxes — Michigan Business Tax (MBT) — In July 2007, the MBT was enacted by the State of Michigan. State deferred tax liabilities were established for the Company’s utilities, and offsetting regulatory assets were 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. (1)

• Cost to achieve Performance Excellence Process (PEP) — The MPSC authorized the deferral of costs to implement the PEP. These costs consist of employee severance, project management and consultant support. These costs will be amortized over a ten-year period beginning with the year subsequent to the year the costs were deferred.

• Choice incentive mechanism — Receivable for non-fuel revenues lost as a result of fluctuations in electric Customer Choice sales.

• Other recoverable income taxes — Income taxes receivable from Detroit Edison’s customers representing the difference in property-related deferred income taxes and amounts previously reflected in Detroit Edison’s rates. This asset will reverse over the remaining life of the related plant. (1)

• 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.

• Accrued PSCR revenue — Receivable for the temporary under-recovery of and a return on fuel and purchased power costs incurred by Detroit Edison which are recoverable through the PSCR mechanism.

• Enterprise Business Systems (EBS) costs — The MPSC approved the deferral and amortization over 10 years beginning in January 2009 of EBS costs that would otherwise be expensed.

• Recoverable restoration expense — Receivable for the MPSC approved restoration expenses tracking mechanism that tracks the difference between actual restoration expense and the amount provided for in base rates, recognized pursuant to MPSC authorization.

• Electric Customer Choice implementation costs — PA 141 permits, after MPSC authorization, the recovery of and a return on costs incurred associated with the implementation of the electric Customer Choice program.

• Securitized regulatory assets — The net book balance of the Fermi 2 nuclear plant was written off in 1998 and an equivalent regulatory asset was established. In 2001, the Fermi 2 regulatory asset and certain other regulatory assets were securitized pursuant to PA 142 and an MPSC order. A non-bypassable securitization bond surcharge recovers the securitized regulatory asset over a fourteen-year period ending in 2015.

(1) Regulatory assets not earning a return.

41

LIABILITIES

• Asset removal costs — The amount collected from customers for the funding of future asset removal activities.

• Deferred income taxes — Michigan Business Tax — In July 2007, the MBT was enacted by the State of Michigan. State deferred tax assets were established for the Company’s utilities, and offsetting regulatory liabilities were recorded as the impacts of the deferred tax assets will be reflected in rates.

• Renewable energy — Amounts collected in rates in excess of renewable energy expenditures.

• Refundable self implemented rates — Amounts refundable to customers for base rates implemented in excess of amounts provided for in January 2010 Detroit Edison MPSC order.

• Refundable revenue decoupling — Amounts refundable to Detroit Edison customers for the change in revenue resulting from the difference between actual average sales per customer compared to the base level of average sales per customer established by the MPSC.

• Refundable costs under PA 141 — Detroit Edison’s 2007 CIM reconciliation and allocation resulted in the elimination of Regulatory Asset Recovery Surcharge (RARS) balances for commercial and industrial customers. RARS revenues received that exceed the regulatory asset balances are required to be refunded to the affected classes.

• Refundable restoration expense — Amounts refundable for the MPSC approved restoration expenses tracking mechanism that tracks the difference between actual restoration expense and the amount provided for in base rates, recognized pursuant to the MPSC authorization.

• Accrued PSCR refund — Liability for the temporary over-recovery of and a return on power supply costs and transmission costs incurred by Detroit Edison which are recoverable through the PSCR mechanism.

• Fermi 2 refueling outage — Accrued liability for refueling outage at Fermi 2 pursuant to MPSC authorization.

• Pension equalization mechanism — Pension expense refundable to customers representing the difference created from volatility in the pension obligation and amounts recognized pursuant to MPSC authorization.

2010 Electric Rate Case Filing

Detroit Edison filed a rate case on October 29, 2010 based on a projected twelve-month period ending March 31, 2012. The filing with the MPSC requested a $443 million increase in base rates that is required to recover higher costs associated with environmental compliance, operation and maintenance of the Company’s electric distribution system and generation plants, inflation, the capital costs of plant additions, the reduction in territory sales, the impact from the expiration of certain wholesale for resale contracts and the increased migration of customers to the electric Customer Choice program. Detroit Edison also proposed certain adjustments which could reduce the net impact on the required increase in rates by approximately $190 million. These adjustments relate to electric Customer Choice migration, pension and other postretirement benefits expenses and the Nuclear Decommissioning surcharge.

2009 Electric Rate Case Filing

On January 11, 2010, the MPSC issued an order in Detroit Edison’s January 26, 2009 rate case filing. The MPSC approved an annual revenue increase of $217 million or a 4.8% increase in Detroit Edison’s annual revenue requirement for 2010. Included in the approved increase in revenues was a return on equity of 11% on an expected 49% equity and 51% debt capital structure. In addition, the order provided for continued application of adjustment mechanisms for electric Customer Choice sales and expenses associated with restoration costs (storm and non-storm) and line clearance expenses and implementation of RDM and UETM mechanisms.

Since the final rate relief ordered was less than the Company’s self-implemented rate increase of $280 million effective on July 26, 2009, the MPSC ordered refunds for the period the self-implemented rates were in effect. On December 21, 2010, the MPSC issued an order authorizing this refund to be applied as credits to customer bills

42

during the January 2011 billing period. Detroit Edison has a refund liability of approximately $27 million, including interest, at December 31, 2010 representing the refund due customers.

2009 Detroit Edison Depreciation Filing

In 2007, the MPSC ordered Michigan utilities to file depreciation studies using the current method, an approach that considers the time value of money and an inflation adjusted method proposed by the Company that removes excess escalation. In compliance with the MPSC order, Detroit Edison filed its ordered depreciation studies in November 2009. The various required depreciation studies indicate composite depreciation rates from 3.05% to 3.54%. The Company has proposed no change to its current composite depreciation rate of 3.33%. An MPSC order is expected in the second quarter of 2011.

Renewable Energy Plan

In March 2009, Detroit Edison filed its Renewable Energy Plan with the MPSC as required under Michigan Public Act 295 of 2008. The Renewable Energy Plan application requests authority to recover approximately $35 million of additional revenue in 2009. The proposed revenue increase is necessary in order to properly implement Detroit Edison’s 20-year renewable energy plan, to deliver cleaner, renewable electric generation to its customers, to further diversify Detroit Edison’s and the State of Michigan’s sources of electric supply, and to address the state and national goals of increasing energy independence. An MPSC order was issued in June 2009 approving the renewable energy plan and customer surcharges. The Renewable Energy Plan surcharges became effective in September 2009. In August 2010, Detroit Edison filed its reconciliation for the 2009 plan year indicating that the 2009 actual renewable plan revenues and costs approximated the related surcharge revenues and costs of the filed plan. An MPSC order is expected in the third quarter of 2011.

Energy Optimization (EO) Plans

In March 2009, Detroit Edison filed an EO Plan with the MPSC as required under Michigan Public Act 295 of 2008. The EO Plan application is designed to help each customer class reduce their electric usage by: (1) building customer awareness of energy efficiency options and (2) offering a diverse set of programs and participation options that result in energy savings for each customer class. In March 2010, Detroit Edison filed an amended EO Plan with the MPSC. Detroit Edison’s amended EO Plan application proposed the recovery of EO expenditures for the period 2010-2015 of $406 million and further requested approval of surcharges to recover these costs, including a financial incentive mechanism. The MPSC approved the amended EO Plan and the surcharge and tariff sheets reflecting the exclusion of the financial incentive mechanism. The disposition of the financial incentive mechanism is expected to be addressed in the EO reconciliation cases. In April 2010, Detroit Edison filed a reconciliation for the 2009 plan year. The Detroit Edison reconciliation included $3.2 million in overrecovery, net of $3 million in incentives. On February 8, 2011, the MPSC issued an order approving the 2009 EO reconciliation filing, including financial incentives.

Detroit Edison Restoration Expense Tracker Mechanism (RETM) and Line Clearance Tracker (LCT) Reconciliation

In March 2010, Detroit Edison filed an application with the MPSC for approval of the reconciliation of its 2009 RETM and LCT. The Company’s 2009 restoration and line clearance expenses are less than the amount provided in rates. Accordingly, Detroit Edison has proposed a refund in the amount of approximately $16 million, including interest. An MPSC order is expected in the second quarter of 2011.

Detroit Edison Uncollectible Expense True-Up Mechanism (UETM)

In March 2010, Detroit Edison filed an application with the MPSC for approval of its UETM for 2009 requesting recovery of approximately $4.5 million consisting of costs related to 2009 uncollectible expense and associated carrying charges. In August 2010, the MPSC determined that the UETM was effective with its January 2010 order in Detroit Edison’s rate case and dismissed the request for UETM expenses for 2009.

43

Detroit Edison Regulatory Asset Recovery Surcharge (RARS) Reconciliation

In April 2010, Detroit Edison filed an application with the MPSC for approval of the final reconciliation of its RARS. On January 20, 2011, the MPSC issued an order authorizing a refund of approximately $28 million, including interest, to be applied as credits to customer bills during the February 2011 billing period.

Power Supply Cost Recovery Proceedings

The PSCR process is designed to allow Detroit Edison to recover all of its power supply costs if incurred under reasonable and prudent policies and practices. Detroit Edison’s power supply costs include fuel costs, purchased and net interchange power costs, nitrogen oxide and sulfur dioxide emission allowances costs, urea costs, transmission costs and MISO costs. The MPSC reviews these costs, policies and practices for prudence in annual plan and reconciliation filings.

The following table summarizes Detroit Edison’s PSCR reconciliation filing currently pending with the MPSC:

		Net Over-recovery,	PSCR Cost of
PSCR Year	Date Filed	including interest	Power Sold
2009	March 2010	$15.6 million	$1.1 billion

2010 Plan Year — In September 2009, Detroit Edison submitted its 2010 PSCR plan case seeking approval of a levelized PSCR factor of 5.64 mills/kWh below the amount included in base rates for all PSCR customers. The filing supports a 2010 power supply expense forecast of $1.2 billion. Also included in the filing is a request for approval of the Company’s expense associated with the use of urea in the selective catalytic reduction units at Monroe power plant as well as a request for approval of a contract for capacity and energy associated with a wind energy project. The Company has also requested authority to recover transfer prices for renewable energy, coke oven gas expense and other potential expenses.

2011 Plan Year — In September 2010, Detroit Edison filed its 2011 PSCR plan case seeking approval of a levelized PSCR factor of 2.98 mills/kWh below the amount included in base rates for all PSCR customers. The filing supports a total power supply expense forecast of $1.2 billion. The plan also includes approximately $36 million for the recovery of its projected 2010 PSCR under-recovery.

Other

The Company is unable to predict the outcome of the unresolved regulatory matters discussed herein. Resolution of these matters is dependent upon future MPSC orders and appeals, which may materially impact the financial position, results of operations and cash flows of the Company.

NOTE 11 — INCOME TAXES

Income Tax Summary

We are part of the consolidated federal income tax return of DTE Energy. The federal income tax expense for Detroit Edison is determined on an individual company basis with no allocation of tax benefits or expenses from other affiliates of DTE Energy. We had an income tax receivable of $152 million at December 31, 2010 and $75 million at December 31, 2009 due from DTE Energy.

44

Total income tax expense varied from the statutory federal income tax rate for the following reasons:

(Dollars in Millions)	2010			2009			2008
Income tax expense at 35% statutory rate	$	249		$	211		$	181
Investment tax credits		(6	)		(6	)		(6	)
Depreciation		3			3			3
Employee Stock Ownership Plan dividends		(3	)		(4	)		(2	)
Medicare Part D subsidy		—			(5	)		(4	)
Domestic production activities deduction		(6	)		(5	)		(2	)
State and other income taxes, net of federal benefit		40			36			19
Other, net		(7	)		(2	)		(3	)
Total	$	270		$	228		$	186
Effective income tax rate		38.0	%		37.7	%		36.0	%

Components of income tax expense (benefits) were as follows:

(in Millions)	2010			2009		2008
Current income taxes Federal	$	(89	)	$	168	$	66
State and other income tax expense		37			45		30
Total current income taxes		(52	)		213		96
Deferred income taxes Federal		297			4		91
State and other income tax expense		25			11		(1	)
Total deferred income taxes		322			15		90
Total	$	270		$	228	$	186

Deferred tax assets and liabilities are recognized for the estimated future tax effect of temporary differences between the tax basis of assets or liabilities and the reported amounts in the financial statements. Deferred tax assets and liabilities are classified as current or noncurrent according to the classification of the related assets or liabilities. Deferred tax assets and liabilities not related to assets or liabilities are classified according to the expected reversal date of the temporary differences. Consistent with rate making treatment, deferred taxes are offset in the table below for temporary differences which have related regulatory assets and liabilities.

Deferred tax assets (liabilities) were comprised of the following at December 31:

(in Millions)	2010			2009
Property, plant and equipment	$	(1,819	)	$	(1,409	)
Securitized regulatory assets		(396	)		(474	)
Pension and benefits		57			103
Other comprehensive income		10			9
Other, net		(112	)		(76	)
	$	(2,260	)	$	(1,847	)

(in Millions)	2010			2009
Deferred income tax liabilities	$	(3,175	)	$	(2,832	)
Deferred income tax assets		915			985
	$	(2,260	)	$	(1,847	)
Current deferred income tax asset (included in Current Assets — Other)	$	—		$	24
Current deferred income tax liability (included in Current Liabilities — Other)		(25	)		—
Long -term deferred income tax liabilities		(2,235	)		(1,871	)
	$	(2,260	)	$	(1,847	)

The above table excludes deferred tax liabilities associated with unamortized investment tax credits that are shown separately on the Consolidated Statements of Financial Position. Investment tax credits are deferred and amortized to income over the average life of the related property.

45

Uncertain Tax Positions

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(in Millions)	2010			2009			2008
Balance at January 1	$	96		$	70		$	7
Additions for tax positions of current years		6			10			72
Additions for tax positions of prior years		1			24			(9	)
Reductions for tax positions of prior years		—			(8	)		—
Settlements		(85	)		—			—
Balance at December 31	$	18		$	96		$	70

Unrecognized tax benefits at December 31, 2010, if recognized, would favorably impact our effective tax rate by $3 million.

The Company recognizes interest and penalties pertaining to income taxes in Interest expense and Other expenses, respectively, on its Consolidated Statements of Operations. Accrued interest pertaining to income taxes totaled $1 million and $6 million at December 31, 2010 and December 31, 2009, respectively. The Company had no accrued penalties pertaining to income taxes. The Company recognized $1 million for interest expense related to income taxes during 2010 and $5 million for interest expense related to income taxes during 2009.

In 2009, DTE Energy and its subsidiaries settled a federal tax audit for the 2004 through 2006 tax years. The resulting change to unrecognized tax benefits was not significant. In 2010, DTE Energy and its subsidiaries settled a federal tax audit for the 2007 and 2008 tax years, which resulted in the recognition of $85 million of unrecognized tax benefits by Detroit Edison. The Company’s U.S. federal income tax returns for years 2009 and subsequent years remain subject to examination by the IRS. The Company’s Michigan Business Tax for the year 2008 and subsequent years is subject to examination by the State of Michigan. The Company also files tax returns in numerous state and local jurisdictions with varying statutes of limitation.

Michigan Business Tax

In July 2007, the Michigan Business Tax (MBT) was enacted by the State of Michigan to replace the Michigan Single Business Tax (MSBT) effective January 1, 2008. The MBT is comprised of an apportioned modified gross receipts tax of 0.8 percent and an apportioned business income tax of 4.95 percent. The MBT provides credits for Michigan business investment, compensation, and research and development. Legislation was also enacted, in 2007, by the State of Michigan creating a deduction for businesses that realize an increase in their deferred tax liability due to the enactment of the MBT. The MBT is accounted for as an income tax.

The MBT consolidated deferred tax liability balance is $354 million as of December 31, 2010 and is reported net of the related federal tax benefit. The MBT deferred tax asset balance is $362 million as of December 31, 2010 and is reported net of the related federal deferred tax liability. The regulated asset balance is $319 million and the regulated liability balance is $362 million as of December 31, 2010 and is further discussed in Note 10.

NOTE 12 — LONG-TERM DEBT

Our long-term debt outstanding and weighted average interest rates(1) of debt outstanding at December 31 were:

(in Millions)	2010			2009
Taxable Debt, Principally Secured
5.5% due 2011 to 2038	$	2,915		$	2,829
Tax- Exempt Revenue Bonds (2)
5.5% due 2011 to 2038		1,283			1,263
		4,198			4,092
Less amount due within one year		(152	)		(513	)
	$	4,046		$	3,579

46

(in Millions)	2010			2009
Securitization Bonds
6.5% due 2010 to 2015	$	793		$	933
Less amount due within one year		(150	)		(140	)
	$	643		$	793

(1)	Weighted average interest rates as of December 31, 2010 are shown below the description of each category of debt.
(2)	Tax-Exempt Revenue Bonds are issued by a public body that loans the proceeds to Detroit Edison on terms substantially mirroring the Revenue Bonds.

Debt Issuances

In 2010, the Company issued the following long-term debt:

(in Millions)

Month Issued	Type	Interest Rate			Maturity		Amount
August	Senior Notes(1)		3.45	%		2020	$	300
September	Senior Notes(1)(2)		4.89	%		2020		300
December	Tax-Exempt Revenue Bonds(3)		5.00	%		2030		20
							$	620

(1)	Proceeds were used to repay a portion of Detroit Edison’s $500 million 6.125% Senior Notes due October 1, 2010 and for general corporate purposes.
(2)	These bonds were priced in March 2010 in a private placement transaction which was closed and funded in September 2010.
(3)	Proceeds were used to finance the acquisition and construction of improvements to certain electrical generating facilities and pollution control equipment at Detroit Edison’s Monroe Power Plant.

Debt Retirements and Redemptions

In 2010, the following debt was retired:

(in Millions)

Month Retired	Type	Interest Rate			Maturity		Amount
September	Senior Notes(1)		6.125	%		2010	$	500

(1) These Senior Notes, maturing October 1, 2010, were optionally redeemed on September 30, 2010.

The following table shows the scheduled debt maturities, excluding any unamortized discount or premium on debt:

											2016 &
(in Millions)	2011		2012		2013		2014		2015		thereafter		Total
Amount to mature	$	302	$	467	$	440	$	470	$	315	$	3,003	$	4,997

Default Provisions

Substantially all of the net properties of Detroit Edison are subject to the lien of its mortgage. Should Detroit Edison fail to timely pay its indebtedness under this mortgage, such failure may create cross defaults in the indebtedness of DTE Energy.

47

NOTE 13 — PREFERRED AND PREFERENCE SECURITIES

At December 31, 2010, Detroit Edison had approximately 6.75 million shares of preferred stock with a par value of $100 per share and 30 million shares of preference stock with a par value of $1 per share authorized, with no shares issued.

NOTE 14 — SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS

In August 2010, Detroit Edison entered into an amended and restated $212 million two-year unsecured revolving credit agreement and a new $63 million three-year unsecured revolving credit agreement with a syndicate of 23 banks that may be used for general corporate borrowings, but are intended to provide liquidity support for the Company’s commercial paper program. No one bank provides more than 8.25% of the commitment in any facility. Borrowings under the facilities are available at prevailing short-term interest rates.

The above agreements require the Company to maintain a total funded debt to capitalization ratio of no more than 0.65 to 1. In the agreements, “total funded debt” means all indebtedness of the Company and its consolidated subsidiaries, including capital lease obligations, hedge agreements and guarantees of third parties’ debt, but excluding contingent obligations and nonrecourse and junior subordinated debt. “Capitalization” means the sum of (a) total funded debt plus (b) “consolidated net worth,” which is equal to consolidated total stockholders’ equity of the Company and its consolidated subsidiaries (excluding pension effects under certain FASB statements), as determined in accordance with accounting principles generally accepted in the United States of America. At December 31, 2010, the total funded debt to total capitalization ratio for Detroit Edison was 0.52 to 1. Should Detroit Edison have delinquent obligations of at least $50 million to any creditor, such delinquency will be considered a default under its credit agreements. Detroit Edison had no outstanding short-term borrowings at December 31, 2010 and 2009.

NOTE 15 — CAPITAL AND OPERATING LEASES

Lessee — The Company leases various assets under capital and operating leases, including coal cars, computers, vehicles and other equipment. The lease arrangements expire at various dates through 2023.

Future minimum lease payments under non-cancelable leases at December 31, 2010 were:

	Capital		Operating
(in Millions)	Leases		Leases
2011	$	7	$	25
2012		5		23
2013		5		19
2014		5		15
2015		5		13
Thereafter		3		64
Total minimum lease payments		30	$	159
Less imputed interest		4
Present value of net minimum lease payments		26
Less current portion		6
Non-current portion	$	20

Rental expense for operating leases was $44 million in 2010, $48 million in 2009, and $39 million in 2008.

NOTE 16 — COMMITMENTS AND CONTINGENCIES

Environmental

Air — Detroit Edison is subject to the EPA ozone transport and acid rain regulations that limit power plant emissions of sulfur dioxide and nitrogen oxides. Since 2005, the EPA and the State of Michigan have issued additional emission reduction regulations relating to ozone, fine particulate, regional haze and mercury air pollution. The new rules will lead to additional controls on fossil-fueled power plants to reduce nitrogen oxide, sulfur dioxide and mercury emissions. To comply with these requirements, Detroit Edison has spent approximately $1.5 billion

48

through 2010. The Company estimates Detroit Edison will make capital expenditures of over $230 million in 2011 and up to $2.1 billion of additional capital expenditures through 2020 based on current regulations. Further, additional rulemakings are expected over the next few years which could require additional controls for sulfur dioxide, nitrogen oxides and hazardous air pollutants. It is not possible to quantify the impact of those expected rulemakings at this time.

In July 2009, DTE Energy received a Notice of Violation/Finding of Violation (NOV/FOV) from the EPA alleging, among other things, that five of Detroit Edison’s power plants violated New Source Performance standards, Prevention of Significant Deterioration requirements, and operating permit requirements under the Clean Air Act. In June 2010, the EPA issued a NOV/FOV making similar allegations related to a recent project and outage at Unit 2 of the Monroe Power Plant.

On August 5, 2010, the United States Department of Justice, at the request of the EPA, brought a civil suit in the U.S. District Court for the Eastern District of Michigan against DTE Energy and Detroit Edison, related to the June 2010 NOV/FOV and the outage work performed at Unit 2 of the Monroe Power Plant, but not relating to the July 2009 NOV/FOV. Among other relief, the EPA is requesting the court to require Detroit Edison to install and operate the best available control technology at Unit 2 of the Monroe Power Plant. Further, the EPA is requesting the court to issue a preliminary injunction to require Detroit Edison to (i) begin the process of obtaining the necessary permits for the Monroe Unit 2 modification and (ii) offset the pollution from Monroe Unit 2 through emissions reductions from Detroit Edison’s fleet of coal-fired power plants until the new control equipment is operating. In January 2011, the EPA’s motion for preliminary injunction was denied and the liability phase of the civil suit has been scheduled for trial in May 2011.

Detroit Edison believes that the plants identified by the EPA, including Unit 2 of the Monroe Power Plant, have complied with all applicable federal environmental regulations. Depending upon the outcome of discussions with the EPA regarding the NOV/FOV and the result of the civil action, Detroit Edison could also be required to install additional pollution control equipment at some or all of the power plants in question, implement early retirement of facilities where control equipment is not economical, engage in supplemental environmental programs, and/or pay fines. Detroit Edison cannot predict the financial impact or outcome of this matter, or the timing of its resolution.

Water — In response to an EPA regulation, Detroit Edison is required to examine alternatives for reducing the environmental impacts of the cooling water intake structures at several of its facilities. Based on the results of completed studies and expected future studies, Detroit Edison may be required to install additional control technologies to reduce the impacts of the water intakes. Initially, it was estimated that Detroit Edison could incur up to approximately $55 million in additional capital expenditures over the four to six years subsequent to 2008 to comply with these requirements. However, a January 2007 circuit court decision remanded back to the EPA several provisions of the federal regulation that has resulted in a delay in compliance dates. The decision also raised the possibility that Detroit Edison may have to install cooling towers at some facilities at a cost substantially greater than was initially estimated for other mitigative technologies. In 2008, the Supreme Court agreed to review the remanded cost-benefit analysis provision of the rule and in April 2009 upheld the EPA’s use of this provision in determining best technology available for reducing environmental impacts. Concurrently, the EPA continues to develop a revised rule, a draft of which is expected to be published in the first quarter of 2011, with a final rule scheduled for mid-2012. The EPA has also issued an information collection request to begin a review of steam electric effluent guidelines. It is not possible at this time to quantify the impacts of these developing requirements.

Manufactured Gas Plant (MGP) and Other Sites — Prior to the construction of major interstate natural gas pipelines, gas for heating and other uses was manufactured locally from processes involving coal, coke or oil. The facilities, which produced gas, have been designated as MGP sites. Detroit Edison owns, or previously owned, three former MGP sites. In addition to the MGP sites, we are also in the process of cleaning up other sites where contamination is present as a result of historical and ongoing utility operations. These other sites include an engineered ash storage facility, electrical distribution substations, and underground and aboveground storage tank locations. Cleanup activities associated with these sites will be conducted over the next several years.

Landfill — Detroit Edison owns and operates a permitted engineered ash storage facility at the Monroe Power Plant to dispose of fly ash from the coal fired power plant. Detroit Edison performed an engineering analysis in 2009 and identified the need for embankment side slope repairs and reconstruction.

The EPA has published proposed rules to regulate coal ash under the authority of the Resources Conservation and Recovery Act (RCRA). The proposed rule published on June 21, 2010 contains two primary regulatory options to regulate coal ash residue. The EPA is currently considering either designating coal ash as a “Hazardous Waste” as defined by RCRA or regulating coal ash as non-hazardous waste under RCRA. Agencies and legislatures have urged

49

the EPA to regulate coal ash as a non-hazardous waste. If the EPA designates coal ash as a hazardous waste, the agency could apply some, or all, of the disposal and reuse standards that have been applied to other existing hazardous wastes to disposal and reuse of coal ash. Some of the regulatory actions currently being contemplated could have a significant impact on our operations and financial position and the rates we charge our customers. It is not possible to quantify the impact of those expected rulemakings at this time.

Nuclear Operations

Property Insurance

Detroit Edison maintains property insurance policies specifically for the Fermi 2 plant. These policies cover such items as replacement power and property damage. The Nuclear Electric Insurance Limited (NEIL) is the primary supplier of the insurance policies.

Detroit Edison maintains a policy for extra expenses, including replacement power costs necessitated by Fermi 2’s unavailability due to an insured event. This policy has a 12-week waiting period and provides an aggregate $490 million of coverage over a three-year period.

Detroit Edison has $500 million in primary coverage and $2.25 billion of excess coverage for stabilization, decontamination, debris removal, repair and/or replacement of property and decommissioning. The combined coverage limit for total property damage is $2.75 billion.

In 2007, the Terrorism Risk Insurance Extension Act of 2005 (TRIA) was extended through December 31, 2014. A major change in the extension is the inclusion of “domestic” acts of terrorism in the definition of covered or “certified” acts. For multiple terrorism losses caused by acts of terrorism not covered under the TRIA occurring within one year after the first loss from terrorism, the NEIL policies would make available to all insured entities up to $3.2 billion, plus any amounts recovered from reinsurance, government indemnity, or other sources to cover losses.

Under the NEIL policies, Detroit Edison could be liable for maximum assessments of up to approximately $28 million per event if the loss associated with any one event at any nuclear plant in the United States should exceed the accumulated funds available to NEIL.

Public Liability Insurance

As of January 1, 2011, as required by federal law, Detroit Edison maintains $375 million of public liability insurance for a nuclear incident. For liabilities arising from a terrorist act outside the scope of TRIA, the policy is subject to one industry aggregate limit of $300 million. Further, under the Price-Anderson Amendments Act of 2005, deferred premium charges up to $117.5 million could be levied against each licensed nuclear facility, but not more than $17.5 million per year per facility. Thus, deferred premium charges could be levied against all owners of licensed nuclear facilities in the event of a nuclear incident at any of these facilities.

Nuclear Fuel Disposal Costs

In accordance with the Federal Nuclear Waste Policy Act of 1982, Detroit Edison has a contract with the U.S. Department of Energy (DOE) for the future storage and disposal of spent nuclear fuel from Fermi 2. Detroit Edison is obligated to pay the DOE a fee of 1 mill per kWh of Fermi 2 electricity generated and sold. The fee is accounted as a component of nuclear fuel expense. Delays have occurred in the DOE’s program for the acceptance and disposal of spent nuclear fuel at a permanent repository and the proposed fiscal year 2011 federal budget recommends termination of funding for completion of the government’s long-term storage facility. Detroit Edison is a party in the litigation against the DOE for both past and future costs associated with the DOE’s failure to accept spent nuclear fuel under the timetable set forth in the Federal Nuclear Waste Policy Act of 1982. Detroit Edison currently employs a spent nuclear fuel storage strategy utilizing a fuel pool. In 2011, the Company expects to begin loading spent nuclear fuel into an on-site dry cask storage facility which is expected to provide sufficient storage capability for the life of the plant as defined by the original operating license. Issues relating to long-term waste disposal policy and to the disposition of funds contributed by Detroit Edison ratepayers to the federal waste fund await future governmental action.

50

Guarantees

In certain limited circumstances, the Company enters into contractual guarantees. The Company may guarantee another entity’s obligation in the event it fails to perform. The Company may provide guarantees in certain indemnification agreements. Finally, the Company may provide indirect guarantees for the indebtedness of others.

In connection with the November 2010 sale of the steam heating business by Thermal Ventures II, L.P. an $11 million bank term loan was repaid and the guarantee by Detroit Edison was released. In addition, Detroit Edison made a new $6 million secured senior term loan to the new entity. The Company has reserved the entire amount of the term loan.

Labor Contracts

There are several bargaining units for the Company’s approximately 2,700 represented employees. In the 2010 third quarter, a new three-year agreement was ratified covering approximately 2,400 represented employees. The remaining represented employees are under a contract that expires in August 2012.

Purchase Commitments

As of December 31, 2010, the Company was party to numerous long-term purchase commitments relating to a variety of goods and services required for the Company’s business. These agreements primarily consist of fuel supply commitments. The Company estimates that these commitments will be approximately $2.6 billion from 2011 through 2026 as detailed in the following table. Certain of these commitments are with variable interest entities where the Company determined it was not the primary beneficiary as it does not have significant exposure to losses.

(in Millions)
2011	$	633
2012		441
2013		222
2014		194
2015		136
2016 - 2026		976
	$	2,602

The Company also estimates that 2011 capital expenditures will be approximately $1 billion. The Company has made certain commitments in connection with expected capital expenditures.

Bankruptcies

The Company purchases and sells electricity from and to numerous companies operating in the steel, automotive, energy, retail and other industries. Certain of its customers have filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. The Company regularly reviews contingent matters relating to these customers and its purchase and sale contracts and records provisions for amounts considered at risk of probable loss. The Company believes its accrued amounts are adequate for probable loss. The final resolution of these matters may have a material effect on its consolidated financial statements.

Other Contingencies

The Company is involved in certain other legal, regulatory, administrative and environmental proceedings before various courts, arbitration panels and governmental agencies concerning claims arising in the ordinary course of business. These proceedings include certain contract disputes, additional environmental reviews and investigations, audits, inquiries from various regulators, and pending judicial matters. The Company cannot predict the final disposition of such proceedings. The Company regularly reviews legal matters and records provisions for claims that are considered probable of loss. The resolution of these pending proceedings is not expected to have a material effect on the Company’s operations or financial statements in the period they are resolved.

See Note 10 for a discussion of contingencies related to Regulatory Matters.

51

NOTE 17 — RETIREMENT BENEFITS AND TRUSTEED ASSETS

Measurement Date

In 2008, we changed the measurement date of our pension and postretirement benefit plans from November 30 to December 31. As a result, the Company recognized an adjustment of $15 million ($9 million after-tax) to retained earnings, which represents approximately one month of pension and other postretirement benefit costs for the period from December 1, 2007 to December 31, 2008.

Pension Plan Benefits

Detroit Edison participates in various plans that provide pension and other postretirement benefits for DTE Energy and its affiliates. The plans are sponsored by DTE Energy Corporate Services, LLC (LLC), a subsidiary of DTE Energy. Detroit Edison is allocated net periodic benefit costs for its share of the amounts of the combined plans.

The Company’s policy is to fund pension costs by contributing amounts consistent with the Pension Protection Act of 2006 provisions and additional amounts when it deems appropriate. The Company contributed $200 million to its pension plans in 2010, including a contribution of DTE Energy stock of $100 million) consisting of approximately 2.2 million shares value at an average price of $44.97 per share). In January 2011, the Company contributed $200 million to its pension plans.

Net pension cost includes the following components:

(in Millions)	2010			2009			2008
Service cost	$	52		$	43		$	45
Interest cost		153			158			148
Expected return on plan assets		(171	)		(165	)		(163	)
Amortization of:
Net actuarial loss		70			38			27
Prior service cost		5			7			5
Net pension cost	$	109		$	81		$	62

(in Millions)	2010			2009
Other changes in plan assets and benefit obligations recognized in other comprehensive income and regulatory assets
Net actuarial loss	$	145		$	177
Amortization of net actuarial loss		(70	)		(38	)
Amortization of prior service cost		(5	)		(7	)
Total recognized in other comprehensive income and regulatory assets	$	70		$	132
Total recognized in net periodic pension cost, other comprehensive income and regulatory assets	$	178		$	213
Estimated amounts to be amortized from accumulated other comprehensive income and regulatory assets into net periodic benefit cost during next fiscal year
Net actuarial loss	$	93		$	70
Prior service cost		4			5

52

The following table reconciles the obligations, assets and funded status of the plan as well as the amount recognized as prepaid pension cost or pension liability in the Consolidated Statements of Financial Position at December 31.

(in Millions)	2010			2009
Accumulated benefit obligation, end of year	$	2,697		$	2,490
Change in projected benefit obligation
Projected benefit obligation, beginning of year	$	2,677		$	2,368
Service cost		52			43
Interest cost		153			158
Actuarial loss		180			264
Benefits paid		(163	)		(156	)
Projected benefit obligation, end of year	$	2,899		$	2,677
Change in plan assets
Plan assets at fair value, beginning of year	$	1,687		$	1,387
Actual return on plan assets		207			252
Company contributions		205			204
Benefits paid		(163	)		(156	)
Plan assets at fair value, end of year	$	1,936		$	1,687
Funded status of the plan	$	(963	)	$	(990	)
Amount recorded as:
Current liabilities	$	(3	)	$	(3	)
Noncurrent liabilities		(960	)		(987	)
	$	(963	)	$	(990	)
Amounts recognized in regulatory assets (see Note 10)
Net actuarial loss	$	1,314		$	1,241
Prior service cost		15			20
	$	1,329		$	1,261

Assumptions used in determining the projected benefit obligation and net pension costs are listed below:

	2010			2009			2008
Projected benefit obligation
Discount rate		5.50	%		5.90	%		6.90	%
Rate of compensation increase		4.00	%		4.00	%		4.00	%
Net pension costs
Discount rate		5.90	%		6.90	%		6.50	%
Rate of compensation increase		4.00	%		4.00	%		4.00	%
Expected long-term rate of return on plan assets		8.75	%		8.75	%		8.75	%

The Company employs a formal process in determining the long-term rate of return for various asset classes. Management reviews historic financial market risks and returns and long-term historic relationships between the asset classes of equities, fixed income and other assets, consistent with the widely accepted capital market principle that asset classes with higher volatility generate a greater return over the long-term. Current market factors such as inflation, interest rates, asset class risks and asset class returns are evaluated and considered before long-term capital market assumptions are determined. The long-term portfolio return is also established employing a consistent formal process, with due consideration of diversification, active investment management and rebalancing. Peer data is reviewed to check for reasonableness. The long-term portfolio return is also established employing a consistent formal process, with due consideration of diversification, active investment and rebalancing. As a result of this process, the Company is lowering its long-term rate of return assumptions for its pension plans to 8.50% for 2011. The Company believes this rate is a reasonable assumption for the long-term rate of return on its plan assets for 2011 given its investment strategy.

53

At December 31, 2010, the benefits related to the Company’s qualified and nonqualified pension plans expected to be paid in each of the next five years and in the aggregate for the five fiscal years thereafter are as follows:

(in Millions)
2011	$	165
2012		172
2013		179
2014		183
2015		189
2016 - 2020		1,045
Total	$	1,933

The Company employs a total return investment approach whereby a mix of equities, fixed income and other investments are used to maximize the long-term return on plan assets consistent with prudent levels of risk, with consideration given to the liquidity needs of the plan. The intent of this strategy is to minimize plan expenses over the long-term. Risk tolerance is established through consideration of future plan cash flows, plan funded status, and corporate financial considerations. The investment portfolio contains a diversified blend of equity, fixed income and other investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks, growth and value investment styles, and large and small market capitalizations. Fixed income securities generally include corporate bonds of companies from diversified industries, mortgage-backed securities, and U.S. Treasuries. Other assets such as private equity and hedge funds are used to enhance long-term returns while improving portfolio diversification. Derivatives may be utilized in a risk controlled manner, to potentially increase the portfolio beyond the market value of invested assets and reduce portfolio investment risk. Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset/liability studies, and quarterly investment portfolio reviews.

Target allocations for plan assets as of December 31, 2010 are listed below:

U.S. Large Cap Equity Securities	22	%
U.S. Small Cap and Mid Cap Equity Securities	5
Non U.S. Equity Securities	20
Fixed Income Securities	25
Hedge Funds and Similar Investments	20
Private Equity and Other	8
	100	%

Fair Value Measurements at December 31, 2010(a)

							Balance at
(in Millions)	Level 1		Level 2		Level 3		December 31, 2010
Asset Category:
Short-term investments (b)	$	—	$	23	$	—	$	23
Equity securities
U.S. Large Cap(c)		461		26		—		487
U.S. Small/Mid Cap(d)		123		5		—		128
Non U.S(e)		194		151		—		345
Fixed income securities(f)		42		409		—		451
Other types of investments
Hedge Funds and Similar Investments(g)		128		50		206		384
Private Equity and Other(h)		—		—		118		118
Total	$	948	$	664	$	324	$	1,936

54

Fair Value Measurements at December 31, 2009(a)

							Balance at
(in Millions)	Level 1		Level 2		Level 3		December 31, 2009
Asset Category:
Short-term investments (b)	$	—	$	42	$	—	$	42
Equity securities
U.S. Large Cap(c)		436		20		—		456
U.S. Small/Mid Cap(d)		101		2		—		103
Non U.S(e)		153		79		—		232
Fixed income securities(f)		31		397		—		428
Other types of investments
Hedge Funds and Similar Investments(g)		—		—		320		320
Private Equity and Other(h)		—		—		106		106
Total	$	721	$	540	$	426	$	1,687

(a)	See Note 4 — Fair Value for a description of levels within the fair value hierarchy.
(b)	This category predominantly represents certain short-term fixed income securities and money market investments that are managed in separate accounts or commingled funds. Pricing for investments in this category are obtained from quoted prices in actively traded markets or valuations from brokers or pricing services.
(c)	This category comprises both actively and not actively managed portfolios that track the S&P 500 low cost equity index funds. Investments in this category are exchange-traded securities whereby unadjusted quote prices can be obtained. Exchange-traded securities held in a commingled fund are classified as Level 2 assets.
(d)	This category represents portfolios of small and medium capitalization domestic equities. Investments in this category are exchange-traded securities whereby unadjusted quote prices can be obtained. Exchange-traded securities held in a commingled fund are classified as Level 2 assets.
(e)	This category primarily consists of portfolios of non-U.S. developed and emerging market equities. Investments in this category are exchange-traded securities whereby unadjusted quote prices can be obtained. Exchange-traded securities held in a commingled fund are classified as Level 2 assets.
(f)	This category includes corporate bonds from diversified industries, U.S. Treasuries, and mortgage backed securities. Pricing for investments in this category is obtained from quoted prices in actively traded markets and quotations from broker or pricing services. Non-exchange traded securities and exchange-traded securities held in commingled funds are classified as Level 2 assets.
(g)	This category includes a diversified group of funds and strategies that attempt to capture financial market inefficiencies. In 2009, pricing for investments in this category was based on limited observable inputs as there was little, if any, publicly available pricing. Valuations for assets in this category may be based on relevant publicly-traded securities, derivatives, and privately-traded securities. In 2010, pricing for investments in this category included quoted prices in active markets and quotations from broker or pricing services. Non-exchanged traded securities held in commingled funds are classified as Level 2 assets.
(h)	This category includes a diversified group of funds and strategies that primarily invests in private equity partnerships. Pricing for investments in this category is based on limited observable inputs as there is little, if any, publicly available pricing. Valuations for assets in this category may be based on discounted cash flow analyses, relative publicly-traded comparables and comparable transactions.

The pension trust holds debt and equity securities directly and indirectly through commingled funds and institutional mutual funds. Exchange-traded debt and equity securities held directly are valued using quoted market prices in actively traded markets. The commingled funds and institutional mutual funds which hold exchange-traded equity or debt securities are valued based on underlying securities, using quoted prices in actively traded markets. Non-exchange traded fixed income securities are valued by the trustee based upon quotations available from brokers or pricing services. A primary price source is identified by asset type, class or issue for each security. The trustees monitor prices supplied by pricing services and may use a supplemental price source or change the primary price source of a given security if the trustees challenge an assigned price and determine that another price source is considered to be preferable. Detroit Edison has obtained an understanding of how these prices are derived, including the nature and observability of the inputs used in deriving such prices. Additionally, Detroit Edison selectively corroborates the fair values of securities by comparison of market-based price sources.

55

Fair Value Measurements Using Significant Unobservable Inputs (Level 3):

	Hedge Funds
	and Similar			Private Equity
(in Millions)	Investments			and Other			Total
Beginning Balance at January 1, 2010	$	320		$	106		$	426
Total realized/unrealized gains (losses)		34			16			50
Purchases, sales and settlements		(148	)		(4	)		(152	)
Ending Balance at December 31, 2010	$	206		$	118		$	324
The amount of total gains (losses) for the period attributable to the change in unrealized gains or losses related to assets still held at the end of the period	$	20		$	9		$	29

	Hedge Funds
	and Similar			Private Equity
(in Millions)	Investments			and Other			Total
Beginning Balance at January 1, 2009	$	310		$	105		$	415
Total realized/unrealized gains (losses)		20			(7	)		13
Purchases, sales and settlements		(10	)		8			(2	)
Ending Balance at December 31, 2009	$	320		$	106		$	426
The amount of total gains (losses) for the period attributable to the change in unrealized gains or losses related to assets still held at the end of the period	$	23		$	(7	)	$	16

The Company also sponsors defined contribution retirement savings plans. Participation in one of these plans is available to substantially all represented and non-represented employees. The Company matches employee contributions up to certain predefined limits based upon eligible compensation, the employee’s contribution rate and, in some cases, years of credit service. The cost of these plans was $17 million, $16 million, and $16 million in each of the years ended 2010, 2009, and 2008, respectively.

Other Postretirement Benefits

The Company participates in plans sponsored by LLC that provide certain postretirement health care and life insurance benefits for employees who are eligible for these benefits. The Company’s policy is to fund certain trusts to meet our postretirement benefit obligations. Separate qualified Voluntary Employees Beneficiary Association (VEBA) trusts exist for represented and non-represented employees. The Company contributed $90 million to its postretirement medical and life insurance benefit plans during 2010.

In January 2011, the Company contributed $36 million to its other postretirement benefit plans. At the discretion of management, the Company may make up to an additional $90 million contribution to its VEBA trusts through the remainder of 2011.

Net postretirement cost includes the following components:

(in Millions)	2010			2009			2008
Service cost	$	47		$	45		$	48
Interest cost		95			102			94
Expected return on plan assets		(52	)		(42	)		(58	)
Amortization of:
Net loss		38			53			27
Prior service costs		2			2			2
Net transition obligation		2			2			2
Net postretirement cost	$	132		$	162		$	115

56

(in Millions)	2010			2009
Other changes in plan assets and APBO recognized in regulatory assets
Net actuarial loss (gain)	$	62		$	(38	)
Amortization of net actuarial loss		(38	)		(52	)
Prior service cost (credit)		(63	)		—
Amortization of prior service credit		(2	)		(2	)
Amortization of transition (asset)		(2	)		(2	)
Total recognized in regulatory assets	$	(43	)	$	(94	)
Total recognized in net periodic pension cost and regulatory assets	$	89		$	68

Estimated amounts to be amortized from regulatory assets into net periodic benefit cost during next fiscal year

	2010			2009
Net actuarial loss	$	42		$	38
Prior service cost (credit)		(16	)		2
Net transition obligation		2			2

The following table reconciles the obligations, assets and funded status of the plans including amounts recorded as accrued postretirement cost in the Consolidated Statements of Financial Position at December 31:

(in Millions)	2010			2009
Change in accumulated post retirement benefit obligation
Accumulated postretirement benefit obligation, beginning of year	$	1,650		$	1,553
Service cost		47			45
Interest cost		95			102
Plan amendments		(62	)		—
Actuarial loss		86			21
Medicare Part D subsidy		5			4
Benefits paid		(79	)		(75	)
Accumulated postretirement benefit obligation, end of year	$	1,742		$	1,650
Change in plan assets
Plan assets at fair value, beginning of year	$	593		$	478
Actual return on plan assets		76			99
Company contributions		90			90
Benefits paid		(77	)		(75	)
Plan assets at fair value, end of year	$	682		$	592
Funded status, end of year	$	(1,060	)	$	(1,058	)
Amount recorded as:
Non-current liabilities	$	(1,060	)	$	(1,058	)
Amounts recognized in regulatory assets (see Note 10)
Net actuarial loss	$	534		$	510
Prior service cost		(66	)		(2	)
Net transition obligation		4			7
	$	472		$	515

57

Assumptions used in determining the projected benefit obligation and net benefit costs are listed below:

	2010			2009			2008
Projected Benefit Obligation
Discount rate		5.50	%		5.90	%		6.90	%
Net Benefit Costs
Discount rate		5.90	%		6.90	%		6.50	%
Expected long-term rate of return on Plan assets		8.75	%		8.75	%		8.75	%
Health care trend rate pre-65		7.00	%		7.00	%		7.00	%
Health care trend rate post-65		7.00	%		7.00	%		6.00	%
Ultimate health care trend rate		5.00	%		5.00	%		5.00	%
Year in which ultimate reached		2016			2016			2011

A one-percentage-point increase in health care cost trend rates would have increased the total service cost and interest cost components of benefit costs by $25 million and increased the accumulated benefit obligation by $242 million at December 31, 2010. A one-percentage-point decrease in the health care cost trend rates would have decreased the total service and interest cost components of benefit costs by $20 million and would have decreased the accumulated benefit obligation by $204 million at December 31, 2010.

At December 31, 2010, the benefits expected to be paid, including prescription drug benefits, in each of the next five years and in the aggregate for the five fiscal years thereafter are as follows:

(in Millions)
2011	$	81
2012		85
2013		102
2014		107
2015		113
2016-2020		658
	$	1,146

The process used in determining the long-term rate of return for assets and the investment approach for the other postretirement benefits plans is similar to those previously described for the pension plans.

Target allocations for plan assets as of December 31, 2010 are listed below:

U.S. Equity Securities	25	%
Non U.S. Equity Securities	20
Fixed Income Securities	25
Hedge Funds and Similar Investments	20
Private Equity and Other	10
	100	%

Fair Value Measurements at December 31, 2010(a)

							Balance at
(in Millions)	Level 1		Level 2		Level 3		December 31, 2010
Asset Category:
Short-term investments(b)	$	—	$	5	$	—	$	5
Equity securities
U.S. Large Cap(c)		83		41		—		124
U.S. Small/Mid Cap(d)		40		39		—		79
Non U.S(e)		52		81		—		133
Fixed income securities(f)		3		167		—		170
Other types of investments
Hedge Funds and Similar Investments(g)		51		32		52		135
Private Equity and Other(h)		—		—		36		36
Total	$	229	$	365	$	88	$	682

58

Fair Value Measurements at December 31, 2009(a)

							Balance at
(in Millions)	Level 1		Level 2		Level 3		December 31, 2009
Asset Category:
Short-term investments(b)	$	—	$	12	$	—	$	12
Equity securities
U.S. Large Cap(c)		102		55		—		157
U.S. Small/Mid Cap(d)		32		34		—		66
Non U.S(e)		50		47		—		97
Fixed income securities(f)		5		160		—		165
Other types of investments
Hedge Funds and Similar Investments(g)		—		—		63		63
Private Equity and Other(h)		—		—		32		32
Total	$	189	$	308	$	95	$	592

(a)	See Note 4 — Fair Value for a description of levels within the fair value hierarchy.
(b)	This category predominantly represents certain short-term fixed income securities and money market investments that are managed in separate accounts or commingled funds. Pricing for investments in this category are obtained from quoted prices in actively traded markets or valuations from brokers or pricing services.
(c)	This category comprises both actively and not actively managed portfolios that track the S&P 500 low cost equity index funds. Investments in this category are exchange-traded securities whereby unadjusted quote prices can be obtained. Exchange-traded securities held in a commingled fund are classified as Level 2 assets.
(d)	This category represents portfolios of small and medium capitalization domestic equities. Investments in this category are exchange-traded securities whereby unadjusted quote prices can be obtained. Exchange-traded securities held in a commingled fund are classified as Level 2 assets.
(e)	This category primarily consists of portfolios of non-U.S. developed and emerging market equities. Investments in this category are exchange-traded securities whereby unadjusted quote prices can be obtained. Exchange-traded securities held in a commingled fund are classified as Level 2 assets.
(f)	This category includes corporate bonds from diversified industries, U.S. Treasuries, and mortgage backed securities. Pricing for investments in this category is obtained from quoted prices in actively traded markets and quotations from broker or pricing services. Non-exchange traded securities and exchange-traded securities held in commingled funds are classified as Level 2 assets.
(g)	This category includes a diversified group of funds and strategies that attempt to capture financial market inefficiencies. In 2009, pricing for investments in this category was based on limited observable inputs as there was little, if any, publicly available pricing. Valuations for assets in this category may be based on relevant publicly-traded securities, derivatives, and privately-traded securities. In 2010, pricing for investments in this category included quoted prices in active markets and quotations from broker or pricing services. Non-exchanged traded securities held in commingled funds are classified as Level 2 assets.
(h)	This category includes a diversified group of funds and strategies that primarily invests in private equity partnerships. Pricing for investments in this category is based on limited observable inputs as there is little, if any, publicly available pricing. Valuations for assets in this category may be based on discounted cash flow analyses, relative publicly-traded comparables and comparable transactions.

The VEBA trusts hold debt and equity securities directly and indirectly through commingled funds and institutional mutual funds. Exchange-traded debt and equity securities held directly are valued using quoted market prices in actively traded markets. The commingled funds and institutional mutual funds which hold exchange-traded equity or debt securities are valued based on underlying securities, using quoted prices in actively traded markets. Non-exchange traded fixed income securities are valued by the trustee based upon quotations available from brokers or pricing services. A primary price source is identified by asset type, class or issue for each security. The trustees monitor prices supplied by pricing services and may use a supplemental price source or change the primary price source of a given security if the trustees challenge an assigned price and determine that another price source is considered to be preferable. Detroit Edison has obtained an understanding of how these prices are derived, including

59

the nature and observability of the inputs used in deriving such prices. Additionally, Detroit Edison selectively corroborates the fair values of securities by comparison of market-based price sources.

Fair Value Measurements Using Significant Unobservable Inputs (Level 3):

	HedgeFunds Similar			Private Equity and
(in Millions)	Investments			Other			Total
Beginning Balance at January 1, 2010	$	63		$	32		$	95
Total realized/unrealized gains (losses)		7			6			13
Purchases, sales and settlements		(18	)		(2	)		(20	)
Ending Balance at December 31, 2010	$	52		$	36		$	88
The amount of total gains (losses) for the period attributable to the change in unrealized gains or losses related to assets still held at the end of the period	$	4		$	5		$	9

	HedgeFunds Similar		Private Equity and
(in Millions)	Investments		Other		Total
Beginning Balance at January 1, 2009	$	52	$	26	$	78
Total realized/unrealized gains (losses)		4		3		7
Purchases, sales and settlements		7		3		10
Ending Balance at December 31, 2009	$	63	$	32	$	95
The amount of total gains (losses) for the period attributable to the change in unrealized gains or losses related to assets still held at the end of the period	$	4	$	2	$	6

Healthcare Legislation

In March 2010, the PPACA and the HCERA were enacted into law (collectively, the “Act”). The Act is a comprehensive health care reform bill. A provision of the PPACA repeals the current rule permitting deduction of the portion of the drug coverage expense that is offset by the Medicare Part D subsidy, effective for taxable years beginning after December 31, 2012.

Detroit Edison’s retiree healthcare plan includes the provision of postretirement prescription drug coverage (“coverage”) which is included in the calculation of the recorded other postemployment benefit (OPEB) obligation. Because the Company’s coverage meets certain criteria, Detroit Edison is eligible to receive the Medicare Part D subsidy. With the enactment of the Act, the subsidy will continue to not be subject to tax, but an equal amount of prescription drug coverage expenditures will not be deductible. Income tax accounting rules require the impact of a change in tax law be recognized in continuing operations in the Consolidated Statements of Operations in the period that the tax law change is enacted.

This change in tax law required a remeasurement of the Deferred Tax Asset related to the OPEB obligation and the Deferred Tax Liability related to the OPEB Regulatory Asset. The net impact of the remeasurement is $18 million and has been deferred as a Regulatory Asset as the traditional rate setting process allows for the recovery of income tax costs.

In December 2003, the Medicare Act was signed into law which provides for a non-taxable federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least “actuarially equivalent” to the benefit established by law. The effects of the subsidy reduced net periodic postretirement benefit costs by $5 million in 2010, $17 million in 2009 and $11 million in 2008. At December 31, 2010, the gross amount of federal subsidies expected to be received in each of the next two years is estimated to be $5 million in 2011 and $6 million in 2012.

60

NOTE 18 — SUPPLEMENTAL CASH FLOW INFORMATION

A detailed analysis of the changes in assets and liabilities that are reported in the Consolidated Statements of Cash Flows follows:

(in Millions)	2010			2009			2008
Changes in Assets and Liabilities, Exclusive of Changes Shown Separately
Accounts receivable, net	$	—		$	16		$	72
Inventories		(71	)		30			(24	)
Recoverable pension and postretirement costs		(26	)		(13	)		(852	)
Accrued pension liability — affiliates		(27	)		9			598
Accounts payable		47			(56	)		(82	)
Income taxes payable		(77	)		(109	)		(29	)
Accrued postretirement liability — affiliates		3			(17	)		259
Other assets		(131	)		(5	)		58
Other liabilities		29			106			118
	$	(253	)	$	(39	)	$	118

Supplementary cash and non-cash information for the years ended December 31 were as follows:

(in Millions)	2010		2009		2008
Cash Paid For
Interest (excluding interest capitalized)	$	315	$	328	$	290
Income taxes		28		319		24

61

NOTE 19 — RELATED PARTY TRANSACTIONS

The Company has agreements with affiliated companies to sell energy for resale, purchase power, provide fuel supply services, and provide power plant operation and maintenance services. The Company has agreements with certain DTE Energy affiliates where we charge them for their use of the shared capital assets of the Company. A shared services company accumulates various corporate support services expenses and charges various subsidiaries of DTE Energy, including Detroit Edison.

The following is a summary of transactions with affiliated companies:

(in Millions)	2010		2009		2008
Revenues
Energy sales	$	1	$	1	$	—
Other services		7		4		6
Shared capital assets		29		28		23
Costs
Fuel and power purchases		4		3		5
Other services and interest		2		3		7
Corporate expenses (net)		294		313		388
Other
Dividends declared		305		305		228
Dividends paid		305		305		305
Capital contribution		—		250		175

	December 31,
(in Millions)	2010		2009
Assets
Accounts receivable	$	8	$	3
Notes receivable		103		82
Liabilities & Equity
Accounts payable		50		74
Other liabilities
Accrued pension liability		960		987
Accrued postretirement liability		1,060		1,058

Our accounts receivable from affiliated companies and accounts payable to affiliated companies are payable upon demand and are generally settled in cash within a monthly business cycle.

NOTE 20 — SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

	First		Second		Third		Fourth
(in Millions)	Quarter		Quarter		Quarter		Quarter		Year
2010
Operating Revenues	$	1,146	$	1,208	$	1,444	$	1,195	$	4,993
Operating Income		226		221		351		230		1,028
Net Income		91		87		165		98		441
2009
Operating Revenues		1,118		1,108		1,289		1,199		4,714
Operating Income		214		189		318		178		899
Net Income		78		79		149		70		376

62

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

See Item 8. Financial Statements and Supplementary Data for management’s evaluation of disclosure controls and procedures, its report on internal control over financial reporting, and its conclusion on changes in internal control over financial reporting.

Item 9B. Other Information

None.

Part III

Item 10. Directors, Executive Officers and Corporate Governance

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13. Certain Relationships and Related Transactions, and Director Independence

All omitted per General Instruction I (2) (c) of Form 10-K for wholly owned subsidiaries (reduced disclosure format).

Item 14. Principal Accountant Fees and Services

For the years ended December 31, 2010 and December 31, 2009 professional services were performed by PricewaterhouseCoopers LLP (PwC). The following table presents fees for professional services rendered by PwC for the audit of Detroit Edison’s annual financial statements for the years ended December 31, 2010 and December 31, 2009, respectively, and fees billed for other services rendered by PwC during those periods.

	2010		2009
Audit fees (1)	$	1,217,885	$	1,231,865
Audit-related fees (2)		37,000		37,400
All other fees (3)		410,498		100,000
Total	$	1,665,383	$	1,369,265

(1)	Represents the aggregate fees for the audits of Detroit Edison’s annual financial statements included in the Annual Reports on Form 10-K and for the reviews of the financial statements included in the Quarterly Reports on Form 10-Q.
(2)	Represents the aggregate fees billed for audit-related services for various attest services.
(3)	Represents consulting services for the purpose of providing advice and recommendations.

The above listed fees were pre-approved by the DTE Energy audit committee. Prior to engagement, the DTE Energy audit committee pre-approves these services by category of service. The DTE Energy audit committee may delegate to the chair of the audit committee, or to one or more other designated members of the audit committee, the authority to grant pre-approvals of all permitted services or classes of these permitted services to be provided by the independent auditor up to but not exceeding a pre-defined limit. The decision of the designated member to pre-approve a permitted service will be reported to the DTE Energy audit committee at the next scheduled meeting.

63

Part IV

Item 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this Annual Report on Form 10-K.

     (1) Consolidated financial statements. See “Item 8 — Financial Statements and Supplementary Data.”

     (2) Financial statement schedule. See “Item 8 — Financial Statements and Supplementary Data.”

     (3) Exhibits.

(i)  Exhibits filed herewith.

4-273	Supplemental Indenture, dated as of December 1, 2010 to the Mortgage and Deed of Trust dated as of October 1, 1924 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee. (2010 Series CT)
12-39	Computation of Ratio of Earnings to Fixed Charges.
23-24	Consent of PricewaterhouseCoopers LLP.
23-25	Consent of Deloitte & Touche LLP.
31-61	Chief Executive Officer Section 302 Form 10-K Certification of Periodic Report.
31-62	Chief Financial Officer Section 302 Form 10-K Certification of Periodic Report.

(ii)  Exhibits incorporated herein by reference.

3(a)	Restated Articles of Incorporation of The Detroit Edison Company, as filed December 10, 1991. (Exhibit 3-13 to Form 10-Q for the quarter ended June 30, 1999).
3(b)	Bylaws of The Detroit Edison Company, as amended through September 22, 1999. (Exhibit 3-14 to Form 10-Q for the quarter ended September 30, 1999).
4(a)	Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit B-1 to Registration Statement on Form A-2 (File No. 2-1630)) and indentures supplemental thereto, dated as of dates indicated below, and filed as exhibits to the filings set forth below:
	Supplemental Indenture, dated as of December 1, 1940, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit B-14 to Registration Statement on Form A-2 (File No. 2-4609)). (amendment)
	Supplemental Indenture, dated as of September 1, 1947, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit B-20 to Registration Statement on Form S-1 (File No. 2-7136)). (amendment)
	Supplemental Indenture, dated as of March 1, 1950, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit B-22 to Registration Statement on Form S-1 (File No. 2-8290)). (amendment)
	Supplemental Indenture, dated as of November 15, 1951, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit B-23 to Registration Statement on Form S-1 (File No. 2-9226)). (amendment)
	Supplemental Indenture, dated as of August 15, 1957, to the Mortgage and Deed of Trust, dated as

64

of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 3-B-30 to Form 8-K dated September 11, 1957). (amendment)

Supplemental Indenture, dated as of December 1, 1966, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 2-B-32 to Registration Statement on Form S-9 (File No. 2-25664)). (amendment)

Supplemental Indenture, dated as of February 15, 1990, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-212 to Form 10-K for the year ended December 31, 2000). (1990 Series B, C, E and F) Supplemental Indenture, dated as of May 1, 1991, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-178 to Form 10-K for the year ended December 31, 1996). (1991 Series BP and CP)

Supplemental Indenture, dated as of May 15, 1991, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-179 to Form 10-K for the year ended December 31, 1996). (1991 Series DP)

Supplemental Indenture, dated as of February 29, 1992, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-187 to Form 10-Q for the quarter ended March 31, 1998). (1992 Series AP)

Supplemental Indenture, dated as of April 26, 1993, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-215 to Form 10-K for the year ended December 31, 2000). (amendment)

Supplemental Indenture, dated as of August 1, 1999, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-204 to Form 10-Q for the quarter ended September 30, 1999). (1999 Series AP, BP and CP)

Supplemental Indenture, dated as of August 1, 2000, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-210 to Form 10-Q for the quarter ended September 30, 2000). (2000 Series BP)

Supplemental Indenture, dated as of August 15, 2001, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-227 to Form 10-Q for the quarter ended September 30, 2001). (2001 Series CP)

65

Supplemental Indenture, dated as of September 17, 2002, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4.1 to Registration Statement on Form S-3 (File No. 333-100000)). (amendment and successor trustee)

Supplemental Indenture, dated as of October 15, 2002, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-230 to Form 10-Q for the quarter ended September 30, 2002). (2002 Series A and B)

Supplemental Indenture, dated as of December 1, 2002, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-232 to Form 10-K for the year ended December 31, 2002). (2002 Series C and D)

Supplemental Indenture, dated as of August 1, 2003, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-235 to Form 10-Q for the quarter ended September 30, 2003). (2003 Series A)

Supplemental Indenture, dated as of March 15, 2004, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-238 to Form 10-Q for the quarter ended March 31, 2004). (2004 Series A and B)

Supplemental Indenture, dated as of July 1, 2004, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-240 to Form 10-Q for the quarter ended June 30, 2004). (2004 Series D)

Supplemental Indenture, dated as of April 1, 2005, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between Detroit Edison and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4.3 to Registration Statement on Form S-4 (File No. 333-123926)). (2005 Series AR and BR)

Supplemental Indenture, dated as of September 15, 2005, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4.2 to Form 8-K dated September 29, 2005). (2005 Series C)

Supplemental Indenture, dated as of September 30, 2005, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between Detroit Edison and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-248 to Form 10-Q for the quarter ended September 30, 2005). (2005 Series E)

Supplemental Indenture, dated as of May 15, 2006, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-250 to Form 10-Q for the quarter ended June 30, 2006). (2006 Series A)

Supplemental Indenture, dated as of December 1, 2007, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4.2 to Form 8-K dated December 18, 2007). (2007 Series A)

Supplemental Indenture, dated as of May 1, 2008 to Mortgage and Deed of Trust dated as of October 1, 1924 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-253 to Form 10-Q for the quarter ended June 30, 2008). (2008 Series ET)

66

	Supplemental Indenture, dated as of June 1, 2008 to Mortgage and Deed of Trust dated as of October 1, 1924 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-255 to Form 10-Q for the quarter ended June 30, 2008). (2008 Series G)
	Supplemental Indenture, dated as of July 1, 2008 to Mortgage and Deed of Trust dated as of October 1, 1924 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-257 to Form 10-Q for the quarter ended June 30, 2008). (2008 Series KT)
	Supplemental Indenture, dated as of October 1, 2008 to Mortgage and Deed of Trust dated as of October 1, 1924 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-259 to Form 10-Q for the quarter ended September 30, 2008). (2008 Series J)
	Supplemental Indenture, dated as of December 1, 2008 to Mortgage and Deed of Trust dated as of October 1, 1924 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee, providing for General and Refunding Mortgage Bonds. (Exhibit 4-261 to Form 10-K for the year ended December 31, 2008). (2008 Series LT)
	Supplemental Indenture, dated as of March 15, 2009 to Mortgage and Deed of Trust dated as of October 1, 1924 between The Detroit Edison Company and The Bank of New York Mellon Trust Company N.A., as successor trustee (Exhibit 4-263 to Form 10-Q for the quarter ended March 31, 2009). (2009 Series BT)
	Supplemental Indenture, dated as of November 1, 2009 to the Mortgage and Deed of Trust dated as of October 1, 1924 between The Detroit Edison Company and The Bank of New York Mellon Trust Company N.A., as successor trustee. (Exhibit 4-267 to Form 10-K for the year ended December 31, 2009). (2009 Series CT)
	Supplemental Indenture, dated as of August 1, 2010, to the Mortgage and Deed of Trust, dated as of October 1, 1924, by and between the Company and The Bank of New York Mellon Trust Company, N.A. as successor trustee. (Exhibit 4-269 to Form 10-Q for the quarter ended September 30, 2010). (2010 Series B)
	Supplemental Indenture, dated as of September 1, 2010, to the Mortgage and Deed of Trust, dated as of October 1, 1924, by and between the Company and The Bank of New York Mellon Trust Company, N.A. as successor trustee. (Exhibit 4-271 to Form 10-Q for the quarter ended September 30, 2010). (2010 Series A)
4(b)	Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-152 to Registration Statement on Form S-3 (File No. 33-50325)).
	Tenth Supplemental Indenture, dated as of October 23, 2002, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-231 to Form 10-Q for the quarter ended September 30, 2002). (5.20% Senior Notes due 2012 and 6.35% Senior Notes due 2032)
	Eleventh Supplemental Indenture, dated as of December 1, 2002, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-233 to Form 10-Q for the quarter ended March 31, 2003). (5.45% Senior Notes due 2032 and 5.25% Senior Notes due 2032)
	Twelfth Supplemental Indenture, dated as of August 1, 2003, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-236 to Form 10-Q for the quarter ended September 30, 2003). (5 1/2% Senior Notes due 2030)

67

Thirteenth Supplemental Indenture, dated as of April 1, 2004, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-237 to Form 10-Q for the quarter ended March 31, 2004). (4.875% Senior Notes Due 2029 and 4.65% Senior Notes due 2028)

Fourteenth Supplemental Indenture, dated as of July 15, 2004, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-239 to Form 10-Q for the quarter ended June 30, 2004). (2004 Series D 5.40% Senior Notes due 2014)

Sixteenth Supplemental Indenture, dated as of April 1, 2005, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4.1 to Registration Statement on Form S-4 (File No. 333-123926)). (2005 Series AR 4.80% Senior Notes due 2015 and 2005 Series BR 5.45% Senior Notes due 2035)

Eighteenth Supplemental Indenture, dated as of September 15, 2005, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4.1 to Form 8-K dated September 29, 2005). (2005 Series C 5.19% Senior Notes due October 1, 2023)

Nineteenth Supplemental Indenture, dated as of September 30, 2005, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-247 to Form 10-Q for the quarter ended September 30, 2005). (2005 Series E 5.70% Senior Notes due 2037)

Twentieth Supplemental Indenture, dated as of May 15, 2006, to the Collateral Trust Indenture dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-249 to Form 10-Q for the quarter ended June 30, 2006). (2006 Series A Senior Notes due 2036)

Twenty-Second Supplemental Indenture, dated as of December 1, 2007, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Trust Company, N.A., as successor trustee (Exhibit 4.1 to Form 8-K dated December 18, 2007). (2007 Series A Senior Notes due 2038)

Twenty-Fourth Supplemental Indenture, dated as of May 1, 2008, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Trust Company, N.A., as successor trustee (Exhibit 4-254 to Form 10-Q for the quarter ended June 30, 2008). (2008 Series ET Variable Rate Senior Notes due 2029)

Amendment dated June 1, 2009 to the Twenty-fourth Supplemental Indenture, dated as of May 1, 2008 to the Collateral Trust Indenture, dated as of June 30, 1993 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A. as successor trustee (2008 Series ET Variable Rate Senior Notes due 2029) (Exhibit 4-265 to Form 10-Q for the quarter ended June 30, 2009)

Twenty-Fifth Supplemental Indenture, dated as of June 1, 2008, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Trust Company, N.A., as successor trustee (Exhibit 4-256 to Form 10-Q for the quarter ended June 30, 2008). (2008 Series G 5.60% Senior Notes due 2018)

Twenty-Sixth Supplemental Indenture, dated as of July 1, 2008, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Trust Company, N.A., as successor trustee (Exhibit 4-258 to Form 10-Q for the quarter ended June 30, 2008). (2008 Series KT Variable Rate Senior Notes due 2020)

Amendment dated June 1, 2009 to the Twenty-sixth Supplemental Indenture, dated as of July 1, 2008 to the Collateral Trust Indenture, dated as of June 30, 1993 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (2008 Series KT Variable Rate Senior Notes due 2020) (Exhibit 4-266 to Form 10-Q for the quarter ended June 30, 2009)

68

	Twenty-Seventh Supplemental Indenture, dated as of October 1, 2008, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Trust Company, N.A., as successor trustee (Exhibit 4-260 to Form 10-Q for the quarter ended September 30, 2008). (2008 Series J 6.40% Senior Notes due 2013)
	Twenty-Eighth Supplemental Indenture, dated as of December 1, 2008 to the Collateral Trust Indenture, dated as of June 30, 1993 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A. (Exhibit 4-262 to Detroit Edison’s Form 10-K for the year ended December 31, 2008). (2008 Series LT 6.75% Senior Notes due 2038)
	Twenty-Ninth Supplemental Indenture, dated as of March 15, 2009, to the Collateral Trust Indenture, dated as of June 30, 1993 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-264 to Detroit Edison’s Form 10-Q for the quarter ended March 31, 2009). (2009 Series BT 6.00% Senior Notes due 2036)
	Thirtieth Supplemental Indenture, dated as of November 1, 2009 to the Collateral Trust Indenture, dated as of June 30, 1993 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee. (Exhibit 4-268 to Form 10-K for the year ended December 31, 2009). (2009 Series CT Variable Rate Senior Notes due 2024).
	Thirty-First Supplemental Indenture, dated as of August 1, 2010 to the Collateral Trust Indenture, dated as of June 1, 1993 by and between the Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee. (Exhibit 4-270 to Form 10-Q for the quarter ended September 30, 2010.) (2010 Series B 3.45% Senior Notes due 2020)
	Thirty-Second Supplemental Indenture, dated as of September 1, 2010, by and between the Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee. (Exhibit 4-272 to Form 10-Q for the quarter ended September 30, 2010.) (2010 Series A 4.89% Senior Notes due 2020)
4(c)	Trust Agreement of Detroit Edison Trust I. (Exhibit 4.9 to Registration Statement on Form S-3 (File No. 333-100000)).
4(d)	Trust Agreement of Detroit Edison Trust II. (Exhibit 4.10 to Registration Statement on Form S-3 (File No. 333-100000)).
10(a)	Securitization Property Sales Agreement dated as of March 9, 2001, between The Detroit Edison Securitization Funding LLC and The Detroit Edison Company. (Exhibit 10-42 to Form 10-Q for the quarter ended March 31, 2001).
10(b)	Certain arrangements pertaining to the employment of Anthony F. Earley, Jr. with The Detroit Edison Company, dated April 25, 1994. (Exhibit 10-53 to Form 10-Q for the quarter ended March 31, 1994).
10(c)	Certain arrangements pertaining to the employment of Gerard M. Anderson with The Detroit Edison Company, dated October 6, 1993. (Exhibit 10-48 to Form 10-K for year ended December 31, 1993).
10(d)	Certain arrangements pertaining to the employment of David E. Meador with The Detroit Edison Company, dated January 14, 1997. (Exhibit 10-5 to Form 10-K for the year ended December 31, 1996).
10(e)	Amended and Restated Post-Employment Income Agreement, dated March 23, 1998, between The Detroit Edison Company and Anthony F. Earley, Jr. (Exhibit 10-21 to Form 10-Q for the quarter ended March 31, 1998).
10(f)	The Detroit Edison Company Supplemental Long-Term Disability Plan, dated January 27, 1997. (Exhibit 10-4 to Form 10-K for the year ended December 31, 1996).
10(g)	Form of Amended and Restated Detroit Edison Two-Year Credit Agreement, dated as of April 29, 2009 and amended and restated as of August 20, 2010, by and among The Detroit Edison Company the lenders party thereto, Barclays Bank plc, as Administrative Agent, and Citibank N.A., JPMorgan Chase Bank, N.A. and the Royal Bank of Scotland plc, as Co-Syndication Agents (Exhibit 10.1 to Detroit Edison Form 8-K filed on August 26, 2010).

69

10(h)	Form of Detroit Edison Three-Year Credit Agreement, dated as of August 20, 2010, by and among The Detroit Edison Company, the lenders party thereto, Barclays Bank plc, as Administrative Agent, and Citibank N.A., JPMorgan Chase Bank, N.A. and the Royal Bank of Scotland plc, as Co-Syndication Agents (Exhibit 10.2 to Detroit Edison Form 8-K filed on August 26, 2010).
99(a)	Belle River Participation Agreement, dated as of December 1, 1982, between The Detroit Edison Company and Michigan Public Power Agency. (Exhibit 28-5 to Registration Statement No. 2-81501).
99(b)	Belle River Transmission Ownership and Operating Agreement, dated as of December 1, 1982, between The Detroit Edison Company and Michigan Public Power Agency. (Exhibit 28-6 to Registration Statement No. 2-81501).
(iii)  Exhibits furnished herewith.
32-61	Chief Executive Officer Section 906 Form 10-K Certification of Periodic Report.
32-62	Chief Financial Officer Section 906 Form 10-K Certification of Periodic Report.

70

The Detroit Edison Company
Schedule II — Valuation and Qualifying Accounts

	Year Ended December 31
(in Millions)	2010			2009			2008
Allowance for Doubtful Accounts (shown as deduction from Accounts Receivable in the Consolidated Statements of Financial Position)
Balance at Beginning of Period	$	118		$	121		$	93
Additions:
Charged to costs and expenses		57			62			81
Charged to other accounts (1)		8			7			5
Deductions (2)		(90	)		(72	)		(58	)
Balance At End of Period	$	93		$	118		$	121

(1)	Collection of accounts previously written off.
(2)	Non-collectible accounts written off.

71

Signatures

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	THE DETROIT EDISON COMPANY (Registrant)
Date: February 18, 2011	By	/s/ GERARD M. ANDERSON
		Gerard M. Anderson
		Chairman of the Board and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

By	/s/ GERARD M. ANDERSON	By	/s/ PETER B. OLEKSIAK
	Gerard M. Anderson		Peter B. Oleksiak
	Chairman of the Board and		Vice President, Controller and
	Chief Executive Officer		Chief Accounting Officer
By	/s/ DAVID E. MEADOR	By	/s/ LISA A. MUSCHONG
	David E. Meador		Lisa A. Muschong
	Director, Executive Vice President and Chief		Director
	Financial Officer
By	/s/ BRUCE D. PETERSON
	Bruce D. Peterson
	Director

Date: February 18, 2011

72

EX-4.273

Exhibit 4-723

INDENTURE

DATED AS OF DECEMBER 1, 2010

THE DETROIT EDISON COMPANY
(One Energy Plaza, Detroit, Michigan 48226)

TO

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
(719 Griswold Street, Suite 930, Detroit, Michigan 48226)

AS TRUSTEE

SUPPLEMENTAL TO MORTGAGE AND DEED OF TRUST
DATED AS OF OCTOBER 1, 1924

PROVIDING FOR

(A) GENERAL AND REFUNDING MORTGAGE BONDS,
2010 SERIES CT

AND

(B) RECORDING AND FILING DATA

1

TABLE OF CONTENTS*

	PAGE
PARTIES		3
RECITALS		3
Original Indenture and Supplementals		3
Issue of Bonds Under Indenture		3
Bonds Heretofore Issued		4
Reason for Creation of New Series		10
Bonds to be 2010 Series CT		10
Further Assurance		11
Authorization of Supplemental Indenture		11
Consideration for Supplemental Indenture		11
PART I. CREATION OF THREE HUNDRED FIFTY-NINTH SERIES OF BONDS, GENERAL AND REFUNDING MORTGAGE BONDS, 2010 SERIES CT		11
Sec. 1. Terms of Bonds of 2010 Series CT		11
Sec. 2. Redemption of Bonds of 2010 Series CT		14
Sec. 3. Redemption of Bonds of 2010 Series CT in Event of Acceleration of MSF Bonds		14
Sec. 4. Form of Bonds of 2010 Series CT		15
Form of Trustee’s Certificate		19
PART II. RECORDING AND FILING DATA		19
Recording and Filing of Original Indenture		19
Recording and Filing of Supplemental Indentures		19
Recording and Filing of Supplemental Indenture Dated as of August 1, 2010		24
Recording and Filing of Supplemental Indenture Dated as of September 1, 2010		25
Recording of Certificates of Provision for Payment		25
PART III. THE TRUSTEE		26
Terms and Conditions of Acceptance of Trust by Trustee		26
PART IV. MISCELLANEOUS		26
Confirmation of Section 318(c) of Trust Indenture Act		26
Execution in Counterparts		27
EXECUTION		27
Testimonium		27
Execution by Company		28
Acknowledgment of Execution by Company		29
Execution by Trustee		30
Acknowledgment of Execution by Trustee		31
Affidavit as to Consideration and Good Faith		32

* This Table of Contents shall not have any bearing upon the interpretation of any of the terms or provisions of this Indenture.

2

PARTIES.	SUPPLEMENTAL INDENTURE, dated as of the 1st day of December, in the year 2010, between THE DETROIT EDISON COMPANY, a corporation organized and existing under the laws of the State of Michigan and a public utility (hereinafter called the “Company”), party of the first part, and The Bank of New York Mellon Trust Company, N.A., a trust company organized and existing under the laws of the United States, having a corporate trust agency office at 719 Griswold Street, Suite 930, Detroit, Michigan 48226, as successor Trustee under the Mortgage and Deed of Trust hereinafter mentioned (hereinafter called the “Trustee”), party of the second part.
ORIGINAL INDENTURE AND SUPPLEMENTALS.	WHEREAS, the Company has heretofore executed and delivered its Mortgage and Deed of Trust (hereinafter referred to as the “Original Indenture”), dated as of October 1, 1924, to the Trustee, for the security of all bonds of the Company outstanding thereunder, and pursuant to the terms and provisions of the Original Indenture, indentures dated as of, respectively, June 1, 1925, August 1, 1927, February 1, 1931, June 1, 1931, October 1, 1932, September 25, 1935, September 1, 1936, November 1, 1936, February 1, 1940, December 1, 1940, September 1, 1947, March 1, 1950, November 15, 1951, January 15, 1953, May 1, 1953, March 15, 1954, May 15, 1955, August 15, 1957, June 1, 1959, December 1, 1966, October 1, 1968, December 1, 1969, July 1, 1970, December 15, 1970, June 15, 1971, November 15, 1971, January 15, 1973, May 1, 1974, October 1, 1974, January 15, 1975, November 1, 1975, December 15, 1975, February 1, 1976, June 15, 1976, July 15, 1976, February 15, 1977, March 1, 1977, June 15, 1977, July 1, 1977, October 1, 1977, June 1, 1978, October 15, 1978, March 15, 1979, July 1, 1979, September 1, 1979, September 15, 1979, January 1, 1980, April 1, 1980, August 15, 1980, August 1, 1981, November 1, 1981, June 30, 1982, August 15, 1982, June 1, 1983, October 1, 1984, May 1, 1985, May 15, 1985, October 15, 1985, April 1, 1986, August 15, 1986, November 30, 1986, January 31, 1987, April 1, 1987, August 15, 1987, November 30, 1987, June 15, 1989, July 15, 1989, December 1, 1989, February 15, 1990, November 1, 1990, April 1, 1991, May 1, 1991, May 15, 1991, September 1, 1991, November 1, 1991, January 15, 1992, February 29, 1992, April 15, 1992, July 15, 1992, July 31, 1992, November 30, 1992, December 15, 1992, January 1, 1993, March 1, 1993, March 15, 1993, April 1, 1993, April 26, 1993, May 31, 1993, June 30, 1993, June 30, 1993, September 15, 1993, March 1, 1994, June 15, 1994, August 15, 1994, December 1, 1994, August 1, 1995, August 1, 1999, August 15, 1999, January 1, 2000, April 15, 2000, August 1, 2000, March 15, 2001, May 1, 2001, August 15, 2001, September 15, 2001, September 17, 2002, October 15, 2002, December 1, 2002, August 1, 2003, March 15, 2004, July 1, 2004, February 1, 2005, April 1, 2005, August 1, 2005, September 15, 2005, September 30, 2005, May 15, 2006, December 1, 2006, December 1, 2007, April 1, 2008, May 1, 2008, June 1, 2008, July 1, 2008, October 1, 2008, December 1, 2008, March 15, 2009, November 1, 2009, August 1, 2010 and September 1, 2010 supplemental to the Original Indenture, have heretofore been entered into between the Company and the Trustee (the Original Indenture and all indentures supplemental thereto together being hereinafter sometimes referred to as the “Indenture”); and
ISSUE OF BONDS UNDER INDENTURE.	WHEREAS, the Indenture provides that said bonds shall be issuable in one or more series, and makes provision that the rates of interest and dates for the payment thereof, the date of maturity or dates of maturity, if of serial maturity, the terms and rates of optional redemption (if redeemable), the forms of registered bonds without coupons of any series and any other provisions and

3

	agreements in respect thereof, in the Indenture provided and permitted, as the Board of Directors may determine, may be expressed in a supplemental indenture to be made by the Company to the Trustee thereunder; and
BONDS HERETOFORE ISSUED.	WHEREAS, bonds in the principal amount of Fourteen billion fourteen million eight hundred fifty-two thousand dollars ($14,014,852,000) have heretofore been issued under the Indenture as follows, viz:

(1)	Bonds of Series A	— Principal Amount $26,016,000,
(2)	Bonds of Series B	— Principal Amount $23,000,000,
(3)	Bonds of Series C	— Principal Amount $20,000,000,
(4)	Bonds of Series D	— Principal Amount $50,000,000,
(5)	Bonds of Series E	— Principal Amount $15,000,000,
(6)	Bonds of Series F	— Principal Amount $49,000,000,
(7)	Bonds of Series G	— Principal Amount $35,000,000,
(8)	Bonds of Series H	— Principal Amount $50,000,000,
(9)	Bonds of Series I	— Principal Amount $60,000,000,
(10)	Bonds of Series J	— Principal Amount $35,000,000,
(11)	Bonds of Series K	— Principal Amount $40,000,000,
(12)	Bonds of Series L	— Principal Amount $24,000,000,
(13)	Bonds of Series M	— Principal Amount $40,000,000,
(14)	Bonds of Series N	— Principal Amount $40,000,000,
(15)	Bonds of Series O	— Principal Amount $60,000,000,
(16)	Bonds of Series P	— Principal Amount $70,000,000,
(17)	Bonds of Series Q	— Principal Amount $40,000,000,
(18)	Bonds of Series W	— Principal Amount $50,000,000,
(19)	Bonds of Series AA	— Principal Amount $100,000,000,
(20)	Bonds of Series BB	— Principal Amount $50,000,000,
(21)	Bonds of Series CC	— Principal Amount $50,000,000,
(22)	Bonds of Series UU	— Principal Amount $100,000,000,
(23-31)	Bonds of Series DDP Nos. 1-9	— Principal Amount $14,305,000,

4

(32-45)	Bonds of Series FFR Nos. 1-14	— Principal Amount $45,600,000,
(46-67)	Bonds of Series GGP Nos. 1-22	— Principal Amount $42,300,000,
(68)	Bonds of Series HH	— Principal Amount $50,000,000,
(69-90)	Bonds of Series IIP Nos. 1-22	— Principal Amount $3,750,000,
(91-98)	Bonds of Series JJP Nos. 1-8	— Principal Amount $6,850,000,
(99-107)	Bonds of Series KKP Nos. 1-9	— Principal Amount $34,890,000,
(108-122)	Bonds of Series LLP Nos. 1-15	— Principal Amount $8,850,000,
(123-143)	Bonds of Series NNP Nos. 1-21	— Principal Amount $47,950,000,
(144-161)	Bonds of Series OOP Nos. 1-18	— Principal Amount $18,880,000,
(162-180)	Bonds of Series QQP Nos. 1-19	— Principal Amount $13,650,000,
(181-195)	Bonds of Series TTP Nos. 1-15	— Principal Amount $3,800,000,
(196)	Bonds of 1980 Series A	— Principal Amount $50,000,000,
(197-221)	Bonds of 1980 Series CP Nos. 1-25	— Principal Amount $35,000,000,
(222-232)	Bonds of 1980 Series DP Nos. 1-11	— Principal Amount $10,750,000,
(233-248)	Bonds of 1981 Series AP Nos. 1-16	— Principal Amount $124,000,000,
(249)	Bonds of 1985 Series A	— Principal Amount $35,000,000,
(250)	Bonds of 1985 Series B	— Principal Amount $50,000,000,
(251)	Bonds of Series PP	— Principal Amount $70,000,000,
(252)	Bonds of Series RR	— Principal Amount $70,000,000,
(253)	Bonds of Series EE	— Principal Amount $50,000,000,
(254-255)	Bonds of Series MMP and MMP No. 2	— Principal Amount $5,430,000,
(256)	Bonds of Series T	— Principal Amount $75,000,000,
(257)	Bonds of Series U	— Principal Amount $75,000,000,
(258)	Bonds of 1986 Series B	— Principal Amount $100,000,000,
(259)	Bonds of 1987 Series D	— Principal Amount $250,000,000,

5

(260)	Bonds of 1987 Series E	— Principal Amount $150,000,000,
(261)	Bonds of 1987 Series C	— Principal Amount $225,000,000,
(262)	Bonds of Series V	— Principal Amount $100,000,000,
(263)	Bonds of Series SS	— Principal Amount $150,000,000,
(264)	Bonds of 1980 Series B	— Principal Amount $100,000,000,
(265)	Bonds of 1986 Series C	— Principal Amount $200,000,000,
(266)	Bonds of 1986 Series A	— Principal Amount $200,000,000,
(267)	Bonds of 1987 Series B	— Principal Amount $175,000,000,
(268)	Bonds of Series X	— Principal Amount $100,000,000,
(269)	Bonds of 1987 Series F	— Principal Amount $200,000,000,
(270)	Bonds of 1987 Series A	— Principal Amount $300,000,000,
(271)	Bonds of Series Y	— Principal Amount $60,000,000,
(272)	Bonds of Series Z	— Principal Amount $100,000,000,
(273)	Bonds of 1989 Series A	— Principal Amount $300,000,000,
(274)	Bonds of 1984 Series AP	— Principal Amount $2,400,000,
(275)	Bonds of 1984 Series BP	— Principal Amount $7,750,000,
(276)	Bonds of Series R	— Principal Amount $100,000,000,
(277)	Bonds of Series S	— Principal Amount $150,000,000,
(278)	Bonds of 1993 Series D	— Principal Amount $100,000,000,
(279)	Bonds of 1992 Series E	— Principal Amount $50,000,000,
(280)	Bonds of 1993 Series B	— Principal Amount $50,000,000,
(281)	Bonds of 1989 Series BP	— Principal Amount $66,565,000,
(282)	Bonds of 1990 Series A	— Principal Amount $194,649,000,
(283)	Bonds of 1990 Series D	— Principal Amount $0,
(284)	Bonds of 1993 Series G	— Principal Amount $225,000,000,
(285)	Bonds of 1993 Series K	— Principal Amount $160,000,000,
(286)	Bonds of 1991 Series EP	— Principal Amount $41,480,000,

6

(287)	Bonds of 1993 Series H	— Principal Amount $50,000,000,
(288)	Bonds of 1999 Series D	— Principal Amount $40,000,000,
(289)	Bonds of 1991 Series FP	— Principal Amount $98,375,000,
(290)	Bonds of 1992 Series BP	— Principal Amount $20,975,000,
(291)	Bonds of 1992 Series D	— Principal Amount $300,000,000,
(292)	Bonds of 1992 Series CP	— Principal Amount $35,000,000,
(293)	Bonds of 1993 Series C	— Principal Amount $225,000,000,
(294)	Bonds of 1993 Series E	— Principal Amount $400,000,000,
(295)	Bonds of 1993 Series J	— Principal Amount $300,000,000,
(296-301)	Bonds of Series KKP Nos. 10-15	— Principal Amount $179,590,000,
(302)	Bonds of 1989 Series BP No. 2	— Principal Amount $36,000,000,
(303)	Bonds of 1993 Series FP	— Principal Amount $5,685,000,
(304)	Bonds of 1993 Series IP	— Principal Amount $5,825,000,
(305)	Bonds of 1994 Series AP	— Principal Amount $7,535,000,
(306)	Bonds of 1994 Series BP	— Principal Amount $12,935,000,
(307)	Bonds of 1994 Series DP	— Principal Amount $23,700,000,
(308)	Bonds of 1994 Series C	— Principal Amount $200,000,000,
(309)	Bonds of 2000 Series A	— Principal Amount $220,000,000,
(310)	Bonds of 2005 Series A	— Principal Amount $200,000,000,
(311)	Bonds of 1995 Series AP	— Principal Amount $97,000,000,
(312)	Bonds of 1995 Series BP	— Principal Amount $22,175,000,
(313)	Bonds of 2001 Series D	— Principal Amount $200,000,000,
(314)	Bonds of 2005 Series B	— Principal Amount $200,000,000,
(315)	Bonds of 2006 Series CT	— Principal Amount $68,500,000,
(316)	Bonds of 2005 Series DT	— Principal Amount $119,175,000,
(317)	Bonds of 1991 Series AP	— Principal Amount $32,375,000,
(318)	Bonds of 2008 Series DT	— Principal Amount $68,500,000,

7

(319)	Bonds of 1993 Series AP	— Principal Amount $65,000,000, and
(320)	Bonds of 2001 Series E	— Principal Amount $500,000,000,

	all of which have either been retired and cancelled, or no longer represent obligations of the Company, having matured or having been called for redemption and funds necessary to effect the payment, redemption and retirement thereof having been deposited with the Trustee as a special trust fund to be applied for such purpose;
(321)	Bonds of 1990 Series B in the principal amount of Two hundred fifty-six million nine hundred thirty-two thousand dollars ($256,932,000) of which One hundred ninety-nine million eight hundred thirty-six thousand dollars ($199,836,000) principal amount have heretofore been retired;
(322)	Bonds of 1990 Series C in the principal amount of Eighty-five million four hundred seventy-five thousand dollars ($85,475,000) of which Seventy-one million seven hundred ninety-nine thousand dollars ($71,799,000) principal amount have heretofore been retired;
(323)	INTENTIONALLY RESERVED FOR 1990 SERIES E;
(324)	INTENTIONALLY RESERVED FOR 1990 SERIES F;
(325)	Bonds of 1991 Series BP in the principal amount of Twenty-five million nine hundred ten thousand dollars ($25,910,000), all of which are outstanding at the date hereof;
(326)	Bonds of 1991 Series CP in the principal amount of Thirty-two million eight hundred thousand dollars ($32,800,000), all of which are outstanding at the date hereof;
(327)	Bonds of 1991 Series DP in the principal amount of Thirty-seven million six hundred thousand dollars ($37,600,000), all of which are outstanding at the date hereof;
(328)	Bonds of 1992 Series AP in the principal amount of Sixty-six million dollars ($66,000,000), all of which are outstanding at the date hereof;
(329)	Bonds of 1999 Series AP in the principal amount of One hundred eighteen million three hundred sixty thousand dollars ($118,360,000), all of which are outstanding at the date hereof;
(330)	Bonds of 1999 Series BP in the principal amount of Thirty-nine million seven hundred forty-five thousand dollars ($39,745,000), all of which are outstanding of the date hereof;
(331)	Bonds of 1999 Series CP in the principal amount of Sixty-six million five hundred sixty-five thousand dollars ($66,565,000), all of which are outstanding at the date hereof;
(332)	Bonds of 2000 Series B in the principal amount of Fifty million seven hundred forty-five thousand dollars ($50,745,000), all of which are outstanding at the date hereof;

8

(333)	Bonds of 2001 Series AP in the principal amount of Thirty-one million ($31,000,000), all of which are outstanding at the date hereof;
(334)	Bonds of 2001 Series BP in the principal amount of Eighty-two million three hundred fifty thousand ($82,350,000), all of which are outstanding at the date hereof;
(335)	Bonds of 2001 Series CP in the principal amount of One hundred thirty-nine million eight hundred fifty-five thousand dollars ($139,855,000), all of which are outstanding at the date hereof;
(336)	Bonds of 2002 Series A in the principal amount of Two hundred twenty-five million dollars ($225,000,000), all of which are outstanding at the date hereof;
(337)	Bonds of 2002 Series B in the principal amount of Two hundred twenty-five million dollars ($225,000,000), all of which are outstanding at the date hereof;
(338)	Bonds of 2002 Series C in the principal amount of Sixty-four million three hundred thousand dollars ($64,300,000), all of which are outstanding at the date hereof;
(339)	Bonds of 2002 Series D in the principal amount of Fifty-five million nine hundred seventy-five thousand dollars ($55,975,000), all of which are outstanding at the date hereof;
(340)	Bonds of 2003 Series A in the principal amount of Forty-nine million dollars ($49,000,000), all of which are outstanding at the date hereof;
(341)	Bonds of 2004 Series A in the principal amount of Thirty-six million dollars ($36,000,000), all of which are outstanding at the date hereof;
(342)	Bonds of 2004 Series B in the principal amount of Thirty-one million nine hundred eighty thousand dollars ($31,980,000), all of which are outstanding at the date hereof;
(343)	Bonds of 2004 Series D in the principal amount of Two hundred million dollars ($200,000,000), all of which are outstanding at the date hereof;
(344)	Bonds of 2005 Series AR in the principal amount of Two hundred million dollars ($200,000,000), all of which are outstanding at the date hereof;
(345)	Bonds of 2005 Series BR in the principal amount of Two hundred million dollars ($200,000,000), all of which are outstanding at the date hereof;
(346)	Bonds of 2005 Series C in the principal amount of One hundred million dollars ($100,000,000), all of which are outstanding at the date hereof;
(347)	Bonds of 2005 Series E in the principal amount of Two hundred fifty million dollars ($250,000,000), all of which are outstanding at the date hereof;
(348)	Bonds of 2006 Series A in the principal amount of Two hundred fifty million dollars ($250,000,000), all of which are outstanding at the date hereof;

9

(349)	Bonds of 2007 Series A in the principal amount of Fifty million dollars ($50,000,000), all of which are outstanding at the date hereof;
(350)	Bonds of 2008 Series ET in the principal amount of One hundred nineteen million one hundred seventy-five thousand dollars ($119,175,000), all of which are outstanding at the date hereof;
(351)	Bonds of 2008 Series G in the principal amount of Three hundred million dollars ($300,000,000), all of which are outstanding at the date hereof;
(352)	Bonds of 2008 Series KT in the principal amount of Thirty-two million three hundred seventy-five thousand dollars ($32,375,000), all of which are outstanding at the date hereof;
(353)	Bonds of 2008 Series J in the principal amount of Two hundred fifty million dollars ($250,000,000), all of which are outstanding at the date hereof;
(354)	Bonds of 2008 Series LT in the principal amount of Fifty million dollars ($50,000,000), all of which are outstanding at the date hereof;
(355)	Bonds of 2009 Series BT in the principal amount of Sixty-eight million five hundred thousand dollars ($68,500,000), all of which are outstanding at the date hereof;
(356)	Bonds of 2009 Series CT in the principal amount of Sixty-five million dollars ($65,000,000), all of which are outstanding at the date hereof;
(357)	Bonds of 2010 Series B in the principal amount of Three hundred million dollars ($300,000,000), all of which are outstanding at the date hereof; and
(358)	Bonds of 2010 Series A in the principal amount of Three hundred million dollars ($300,000,000), all of which are outstanding at the date hereof; and
	accordingly, the Company has issued and has presently outstanding Four billion one hundred eighty-four million seven thousand dollars ($4,184,007,000) aggregate principal amount of its General and Refunding Mortgage Bonds (the “Bonds”) at the date hereof.

REASON FOR CREATION OF NEW SERIES.

WHEREAS, the Company will enter into a Loan Agreement, dated as of December 1, 2010, with the Michigan Strategic Fund in connection with the issuance of the Limited Obligation Revenue Bonds (The Detroit Edison Company Recovery Zone Facilities Project). Collateralized Series 2010CT, and pursuant to such Loan Agreement the Company has agreed to issue its General and Refunding Mortgage Bonds under the Indenture in order further to secure the Company’s obligations under the Loan Agreement; and

BONDS TO BE 2010 SERIES CT.

WHEREAS, for such purpose the Company desires by this Supplemental Indenture to create a new series of bonds, to be designated “General and Refunding Mortgage Bonds, 2010 Series CT,” in the aggregate principal amount of Nineteen million eight hundred fifty-five thousand dollars ($19,855,000), to be authenticated and delivered pursuant to Section 8 of Article III of the Indenture; and

10

FURTHER ASSURANCE.	WHEREAS, the Original Indenture, by its terms, includes in the property subject to the lien thereof all of the estates and properties, real, personal and mixed, rights, privileges and franchises of every nature and kind and wheresoever situate, then or thereafter owned or possessed by or belonging to the Company or to which it was then or at any time thereafter might be entitled in law or in equity (saving and excepting, however, the property therein specifically excepted or released from the lien thereof), and the Company therein covenanted that it would, upon reasonable request, execute and deliver such further instruments as may be necessary or proper for the better assuring and confirming unto the Trustee all or any part of the trust estate, whether then or thereafter owned or acquired by the Company (saving and excepting, however, property specifically excepted or released from the lien thereof); and
AUTHORIZATION OF SUPPLEMENTAL INDENTURE.	WHEREAS, the Company in the exercise of the powers and authority conferred upon and reserved to it under and by virtue of the provisions of the Indenture, and pursuant to resolutions of its Board of Directors, has duly resolved and determined to make, execute and deliver to the Trustee a supplemental indenture in the form hereof for the purposes herein provided; and
	WHEREAS, all conditions and requirements necessary to make this Supplemental Indenture a valid and legally binding instrument in accordance with its terms have been done, performed and fulfilled, and the execution and delivery hereof have been in all respects duly authorized;
CONSIDERATION FOR SUPPLEMENTAL INDENTURE.	NOW, THEREFORE, THIS INDENTURE WITNESSETH: That The Detroit Edison Company, in consideration of the premises and of the covenants contained in the Indenture and of the sum of One Dollar ($1.00) and other good and valuable consideration to it duly paid by the Trustee at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, hereby covenants and agrees to and with the Trustee and its successors in the trusts under the Original Indenture and in said indentures supplemental thereto as follows:

PART I.

CREATION OF THREE HUNDRED FIFTY-NINTH
SERIES OF BONDS,
GENERAL AND REFUNDING MORTGAGE BONDS,
2010 SERIES CT

TERMS OF BONDS OF 2010 SERIES CT.

SECTION 1. The Company hereby creates the three hundred fifty-ninth series of bonds to be issued under and secured by the Original Indenture as amended to date and as further amended by this Supplemental Indenture, to be designated, and to be distinguished from the bonds of all other series, by the title “General and Refunding Mortgage Bonds, 2010 Series CT” (elsewhere herein referred to as the “bonds of 2010 Series CT”). The aggregate principal amount of bonds of 2010 Series CT shall be limited to Nineteen million eight hundred fifty-five thousand dollars ($19,855,000), except as provided in Sections 7 and 13 of Article II of the Original Indenture with respect to exchanges and replacements of bonds.

Each bond of 2010 Series CT is to be irrevocably assigned to, and registered in

11

the name of, The Bank of New York Mellon Trust Company, N.A., as trustee, or a successor trustee (said trustee or any successor trustee being hereinafter referred to as the “MSF Indenture Trustee”), under the Trust Indenture, dated as of December 1, 2010, as supplemented (the “MSF Indenture”), between the Michigan Strategic Fund and the MSF Indenture Trustee, to secure payment of the Michigan Strategic Fund Limited Obligation Revenue Bonds (The Detroit Edison Company Recovery Zone Facilities Project), Collateralized Series 2010CT (the “MSF Bonds”), issued by the MSF under the MSF Indenture, the proceeds of which are to be loaned to the Company pursuant to the provisions of the Loan Agreement dated as of December 1, 2010 (the “Loan Agreement”) in order to provide funds for financing of the acquisition, construction, furnishing and equipping of improvements to certain electrical generating facilities and pollution control equipment by the Company.

The bonds of 2010 Series CT shall be issued as registered bonds without coupons in denominations of a multiple of $5,000. The bonds of 2010 Series CT shall be issued in the aggregate principal amount of $19,855,000, shall mature on December 1, 2030 (subject to earlier redemption or release) and shall bear interest at the rate of interest established for the MSF Bonds from time to time in accordance with the MSF Indenture, payable on such dates as interest shall be payable on the MSF Bonds, until the principal thereof shall have become due and payable and thereafter until the Company’s obligation with respect to the payment of said principal shall have been discharged as provided in the Indenture. In addition to the payment of principal and interest as provided herein, in the event any premium (as provided for in the MSF Indenture) shall be required to be paid by the Company on the MSF Bonds, there shall be due and payable on the bonds of 2010 Series CT an additional amount equal to such premium which shall be paid by the Company in the amounts and on the dates required for the payment of any such amounts under the MSF Indenture.

The bonds of 2010 Series CT shall be payable as to principal, premium, if any, and interest as provided in the Indenture, but only to the extent and in the manner herein provided. The bonds of 2010 Series CT shall be payable, as to principal, premium, if any, and interest, at the office or agency of the Company in the Borough of Manhattan, the City and State of New York, in any coin or currency of the United States of America which at the time of payment is legal tender for public and private debts.

Except as provided herein, each bond of 2010 Series CT shall be dated the date of its authentication and interest shall be payable on the principal represented thereby from the next preceding date to which interest has been paid on bonds of 2010 Series CT, unless the bond is authenticated on a date to which interest has been paid, in which case interest shall be payable from the date of authentication, or unless the date of authentication is prior to the first date on which interest is payable on the MSF Bonds, in which case interest shall be payable from December 16, 2010.

The bonds of 2010 Series CT in definitive form shall be, at the election of the Company, fully engraved or shall be lithographed or printed in authorized denominations as aforesaid and numbered R-1 and upwards (with such further designation as may be appropriate and desirable to indicate by such designation the form, series and denomination of bonds of 2010 Series CT). Until bonds of 2010 Series CT in definitive form are ready for delivery, the

12

Company may execute, and upon its request in writing the Trustee shall authenticate and deliver in lieu thereof, bonds of 2010 Series CT in temporary form, as provided in Section 10 of Article II of the Indenture. Temporary bonds of 2010 Series CT, if any, may be printed and may be issued in authorized denominations in substantially the form of definitive bonds of 2010 Series CT, but without a recital of redemption prices and with such omissions, insertions and variations as may be appropriate for temporary bonds, all as may be determined by the Company.

Interest on any bond of 2010 Series CT that is payable on any interest payment date and is punctually paid or duly provided for shall be paid to the person in whose name that bond, or any previous bond to the extent evidencing the same debt as that evidenced by that bond, is registered at the close of business on the regular record date for such interest, which regular record date shall be the record date for the MSF Bonds with respect to such interest payment date. If the Company shall default in the payment of the interest due on any interest payment date on the principal represented by any bond of 2010 Series CT, such defaulted interest shall forthwith cease to be payable to the registered holder of that bond on the relevant regular record date by virtue of his having been such holder, and such defaulted interest may be paid to the registered holder of that bond (or any bond or bonds of 2010 Series CT issued upon transfer or exchange thereof) on the date of payment of such defaulted interest or, at the election of the Company, to the person in whose name that bond (or any bond or bonds of 2010 Series CT issued upon transfer or exchange thereof) is registered on a subsequent record date established by notice given by mail by or on behalf of the Company to the holders of bonds of 2010 Series CT not less than ten (10) days preceding such subsequent record date, which subsequent record date shall be at least five (5) days prior to the payment date of such defaulted interest.

Bonds of 2010 Series CT shall not be assignable or transferable except as may be set forth under Section 1102 of the MSF Indenture, or, subject to compliance with applicable law, as may be involved in the course of the exercise of rights and remedies consequent upon an Event of Default under the MSF Indenture. Any such transfer shall be made upon surrender thereof for cancellation at the office or agency of the Company in the Borough of Manhattan, the City and State of New York, together with a written instrument of transfer (if so required by the Company or by the Trustee) in form approved by the Company duly executed by the holder or by its duly authorized attorney. Bonds of 2010 Series CT shall in the same manner be exchangeable for a like aggregate principal amount of bonds of 2010 Series CT upon the terms and conditions specified herein and in Section 7 of Article II of the Indenture. The Company waives its rights under Section 7 of Article II of the Indenture not to make exchanges or transfers of bonds of 2010 Series CT during any period of ten (10) days next preceding any redemption date for such bonds.

Bonds of 2010 Series CT, in definitive and temporary form, may bear such legends as may be necessary to comply with any law or with any rules or regulations made pursuant thereto or as may be specified in the MSF Indenture.

Upon payment of the principal or premium, if any, or interest on the MSF Bonds, whether at maturity or prior to maturity by redemption or otherwise, or

13

	upon provision for the payment thereof having been made in accordance with Section 304 of the MSF Indenture, bonds of 2010 Series CT in a principal amount equal to the principal amount of such MSF Bonds, shall, to the extent of such payment of principal, premium or interest, be deemed fully paid and the obligation of the Company thereunder to make such payment shall forthwith cease and be discharged, and, in the case of the payment of principal and premium, if any, such bonds shall be surrendered for cancellation or presented for appropriate notation to the Trustee.
	In the event the Company desires to provide for the payment of bonds of 2010 Series CT, in lieu of defeasing such bonds in accordance with the Indenture, it shall either redeem an equal principal amount of MSF Bonds or take such action as shall be required by Section 304 of the MSF Indenture to defease an equal principal amount of MSF Bonds.
	Any amount payable by the Company in respect of principal of bonds of 2010 Series CT, whether at maturity or prior to maturity by redemption or upon acceleration or otherwise, in a circumstance where there has not been a corresponding payment of principal of MSF Bonds shall be applied simultaneously to the redemption or defeasance of an equal principal amount of MSF Bonds in accordance with the MSF Indenture. In the event the amount so paid is insufficient to provide for such redemption or defeasance, the Company shall pay such additional amount as shall be necessary to make up for the deficiency.
REDEMPTION OF BONDS OF 2010 SERIES CT.	SECTION 2. Bonds of 2010 Series CT shall be redeemed on the respective dates and in the respective principal amounts which correspond to the redemption dates for, and the principal amounts to be redeemed of, the MSF Bonds.
	In the event the Company elects to redeem any MSF Bonds prior to maturity in accordance with the provisions of the MSF Indenture, the Company shall give the Trustee notice of redemption of bonds of 2010 Series CT on the same date as it gives notice of redemption of MSF Bonds to the MSF Indenture Trustee.
REDEMPTION OF BONDS OF 2010 SERIES CT IN EVENT OF ACCELERATION OF MSF BONDS.	SECTION 3. In the event of an Event of Default under the MSF Indenture and the acceleration of all MSF Bonds, the bonds of 2010 Series CT shall be redeemable in whole upon receipt by the Trustee of a written demand (hereinafter called a “Redemption Demand”) from the MSF Indenture Trustee stating that there has occurred under the MSF Indenture both an Event of Default and a declaration of acceleration of payment of principal, accrued interest and premium, if any, on the MSF Bonds, specifying the last date to which interest on the MSF Bonds has been paid (such date being hereinafter referred to as the “Initial Interest Accrual Date”) and demanding redemption of the bonds of said series. The Trustee shall, within five (5) days after receiving such Redemption Demand, mail a copy thereof to the Company marked to indicate the date of its receipt by the Trustee. Promptly upon receipt by the Company of such copy of a Redemption Demand, the Company shall fix a date on which it will redeem the bonds of said series so demanded to be redeemed (hereinafter called the “Demand Redemption Date”). Notice of the date fixed as the Demand Redemption Date shall be mailed by the Company to the Trustee at least ten (10) days prior to such Demand Redemption Date. The date to be fixed by the Company as and for the Demand Redemption Date may be any date up to and including the earlier of (x) the 60th day after receipt by

14

	the Trustee of the Redemption Demand or (y) the maturity date of such bonds first occurring following the 20th day after the receipt by the Trustee of the Redemption Demand; provided, however, that if the Trustee shall not have received such notice fixing the Demand Redemption Date on or before the 10th day preceding the earlier of such dates, the Demand Redemption Date shall be deemed to be the earlier of such dates. The Trustee shall mail notice of the Demand Redemption Date (such notice being hereinafter called the “Demand Redemption Notice”) to the MSF Indenture Trustee not more than ten (10) nor less than five (5) days prior to the Demand Redemption Date.
	Each bond of 2010 Series CT shall be redeemed by the Company on the Demand Redemption Date therefor upon surrender thereof by the MSF Indenture Trustee to the Trustee at a redemption price equal to the principal amount thereof plus accrued interest thereon at the rate specified for such bond from the Initial Interest Accrual Date to the Demand Redemption Date plus an amount equal to the aggregate premium, if any, due and payable on such Demand Redemption Date on all MSF Bonds; provided, however, that in the event of a receipt by the Trustee of a notice that, pursuant to Section 704 of the MSF Indenture, the MSF Indenture Trustee has terminated proceedings to enforce any right under the MSF Indenture, then any Redemption Demand shall thereby be rescinded by the MSF Indenture Trustee, and no Demand Redemption Notice shall be given, or, if already given, shall be automatically annulled; but no such rescission or annulment shall extend to or affect any subsequent default or impair any right consequent thereon.
	Anything herein contained to the contrary notwithstanding, the Trustee is not authorized to take any action pursuant to a Redemption Demand and such Redemption Demand shall be of no force or effect, unless it is executed in the name of the MSF Indenture Trustee by its President or one of its Vice Presidents.
FORM OF BONDS OF	SECTION 4. The bonds of 2010 Series CT and the form of Trustee’s Certificate to be endorsed on such bonds shall be substantially in the following forms, respectively:
2010 SERIES CT.

THE DETROIT EDISON COMPANY
GENERAL AND REFUNDING MORTGAGE BOND
2010 SERIES CT

Notwithstanding any provisions hereof or in the Indenture, this bond is not assignable or transferable except as may be required to effect a transfer to any successor trustee under the Trust Indenture, dated as of December 1, 2010 between the Michigan Strategic Fund and The Bank of New York Mellon Trust Company, N.A., as MSF Indenture Trustee, or, subject to compliance with applicable law, as may be involved in the course of the exercise of rights and remedies consequent upon an Event of Default under said Trust Indenture.
$______________	No. R-___
THE DETROIT EDISON COMPANY (hereinafter called the “Company”), a corporation of the State of Michigan, for value received, hereby promises to pay to The Bank of New York Mellon Trust Company, N.A., as MSF Indenture Trustee, or registered assigns, at the Company’s office or agency in the Borough of Manhattan, the City and State of New York, the principal sum

15

of ______________________ Dollars ($__________) in lawful money of the United States of America on December 1, 2030 (subject to earlier redemption or release) and interest thereon at the rate of interest established for the MSF Bonds from time to time in accordance with the MSF Indenture, in like lawful money, from December 16, 2010, and after the first payment of interest on bonds of this Series has been made or otherwise provided for, from the most recent date to which interest has been paid or otherwise provided for, on such dates as interest shall be payable on the MSF Bonds, until the Company’s obligation with respect to payment of said principal shall have been discharged, all as provided, to the extent and in the manner specified in the Indenture hereinafter mentioned and in the supplemental indenture pursuant to which this bond has been issued. In addition to the payment of principal and interest on bonds of this Series, in the event any premium (as provided for in the MSF Indenture hereinafter referred to) shall be required to be paid by the Company on the MSF Bonds, there shall be due and payable on the bonds of this Series an additional amount equal to such premium which shall be paid by the Company in the amounts and on the dates required for the payment of any such amounts under the MSF Indenture.

Under a Trust Indenture, dated as of December 1, 2010 (hereinafter called the “MSF Indenture”), between the Michigan Strategic Fund and The Bank of New York Mellon Trust Company, N.A., as trustee (hereinafter called the “MSF Indenture Trustee”), the Michigan Strategic Fund has issued its Limited Obligation Revenue Bonds (The Detroit Edison Company Recovery Zone Facilities Project), Collateralized Series 2010CT (the “MSF Bonds”). This bond was originally issued to the Michigan Strategic Fund and simultaneously irrevocably assigned to the MSF Indenture Trustee so as to secure the Company’s obligations under the Loan Agreement. Payments of principal of, or premium (as provided for in the MSF Indenture), if any, or interest on, the MSF Bonds shall constitute like payments on this bond as further provided herein and in the supplemental indenture pursuant to which this bond has been issued.

This bond is one of an authorized issue of bonds of the Company, unlimited as to amount except as provided in the Indenture hereinafter mentioned or any indentures supplemental thereto, and is one of a series of General and Refunding Mortgage Bonds known as 2010 Series CT, limited to an aggregate principal amount of $19,855,000, except as otherwise provided in the Indenture hereinafter mentioned. This bond and all other bonds of said series are issued and to be issued under, and are all equally and ratably secured (except insofar as any sinking, amortization, improvement or analogous fund, established in accordance with the provisions of the Indenture hereinafter mentioned, may afford additional security for the bonds of any particular series and except as provided in Section 3 of Article VI of said Indenture) by an Indenture, dated as of October 1, 1924, duly executed by the Company to The Bank of New York Mellon Trust Company, N.A., as successor Trustee, to which Indenture and all indentures supplemental thereto (including the Supplemental Indenture dated as of December 1, 2010) reference is hereby made for a description of the properties and franchises mortgaged and conveyed, the nature and extent of the security, the terms and conditions upon which the bonds are issued and under which additional bonds may be issued, and the rights of the holders of the bonds and of the Trustee in respect of such security (which Indenture and all indentures supplemental thereto, including the Supplemental Indenture dated as of December 1, 2010, are hereinafter

16

collectively called the “Indenture”). As provided in the Indenture, said bonds may be for various principal sums and are issuable in series, which may mature at different times, may bear interest at different rates and may otherwise vary as in said Indenture provided. With the consent of the Company and to the extent permitted by and as provided in the Indenture, the rights and obligations of the Company and of the holders of the bonds and the terms and provisions of the Indenture, or of any indenture supplemental thereto, may be modified or altered in certain respects by affirmative vote of at least eighty-five percent (85%) in amount of the bonds then outstanding, and, if the rights of one or more, but less than all, series of bonds then outstanding are to be affected by the action proposed to be taken, then also by affirmative vote of at least eighty-five percent (85%) in amount of the series of bonds so to be affected (excluding in every instance bonds disqualified from voting by reason of the Company’s interest therein as specified in the Indenture); provided, however, that, without the consent of the holder hereof, no such modification or alteration shall, among other things, affect the terms of payment of the principal of or the interest on this bond, which in those respects is unconditional.

This bond is redeemable upon the terms and conditions set forth in the Indenture, including provision for redemption upon demand of the MSF Indenture Trustee following the occurrence of an Event of Default under the MSF Indenture and the acceleration of the principal of the MSF Bonds.

Under the Indenture, funds may be deposited with the Trustee (which shall have become available for payment), in advance of the redemption date of any of the bonds of 2010 Series CT (or portions thereof), in trust for the redemption of such bonds (or portions thereof) and the interest due or to become due thereon, and thereupon all obligations of the Company in respect of such bonds (or portions thereof) so to be redeemed and such interest shall cease and be discharged, and the holders thereof shall thereafter be restricted exclusively to such funds for any and all claims of whatsoever nature on their part under the Indenture or with respect to such bonds (or portions thereof) and interest.

In the event the Company desires to provide for the payment of bonds of 2010 Series CT, in lieu of defeasing such bonds in accordance with the Indenture, it shall either redeem an equal principal amount of MSF Bonds or take such action as shall be required by Section 304 of the MSF Indenture to defease an equal principal amount of MSF Bonds.

In case an event of default, as defined in the Indenture, shall occur, the principal of all the bonds issued thereunder may become or be declared due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture.

Any amount payable by the Company in respect of principal of bonds of 2010 Series CT, whether at maturity or prior to maturity by redemption or otherwise, in a circumstance where there has not been a corresponding payment of principal of MSF Bonds shall be applied simultaneously to the redemption or defeasance of an equal principal amount of MSF Bonds in accordance with the MSF Indenture.

Upon payment of the principal of, or premium, if any, or interest on, the MSF

17

Bonds, whether at maturity or prior to maturity by redemption or otherwise or upon provision for the payment thereof having been made in accordance with Section 304 of the MSF Indenture, bonds of 2010 Series CT in a principal amount equal to the principal amount of such MSF Bonds, and having both a corresponding maturity date and interest rate shall, to the extent of such payment of principal, premium or interest, be deemed fully paid and the obligation of the Company thereunder to make such payment shall forthwith cease and be discharged, and, in the case of the payment of principal and premium, if any, such bonds of said series shall be surrendered for cancellation or presented for appropriate notation to the Trustee.

This bond is not assignable or transferable except as set forth under Section 1102 of the MSF Indenture, or, subject to compliance with applicable law, as may be involved in the course of the exercise of rights and remedies consequent upon an Event of Default under the MSF Indenture. Any such transfer shall be made by the registered holder hereof, in person or by his attorney duly authorized in writing, on the books of the Company kept at its office or agency in the Borough of Manhattan, the City and State of New York, upon surrender and cancellation of this bond, and thereupon, a new registered bond of the same series of authorized denominations for a like aggregate principal amount will be issued to the transferee in exchange therefor, and this bond with others in like form may in like manner be exchanged for one or more new bonds of the same series of other authorized denominations, but of the same aggregate principal amount, all as provided and upon the terms and conditions set forth in the Indenture, and upon payment, in any event, of the charges prescribed in the Indenture.

No recourse shall be had for the payment of the principal of or the interest on this bond, or for any claim based hereon or otherwise in respect hereof or of the Indenture, or of any indenture supplemental thereto, against any incorporator, or against any past, present or future stockholder, director or officer, as such, of the Company, or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether for amounts unpaid on stock subscriptions or by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise howsoever; all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released by every holder or owner hereof, as more fully provided in the Indenture.

This bond shall not be valid or become obligatory for any purpose until The Bank of New York Mellon Trust Company, N.A., the Trustee under the Indenture, or its successor thereunder, shall have signed the form of certificate endorsed hereon.

IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY has caused this instrument to be executed by an authorized officer, with his or her manual or facsimile signatures, and its corporate seal, or a facsimile thereof, to be impressed or imprinted hereon and the same to be attested by its Corporate Secretary or Assistant Corporate Secretary by manual or facsimile signature.

Dated: _____________

THE DETROIT EDISON COMPANY

18

By:
	Name:
	Title:

[Corporate Seal]
Attest:
By:
	Name:
	Title:

[FORM OF TRUSTEE’S CERTIFICATE]

FORM OF TRUSTEE’S CERTIFICATE. This bond is one of the bonds, of the series designated therein, described in the within-mentioned Indenture.

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:
	Authorized Representative

PART II.

RECORDING AND FILING DATA

RECORDING AND FILING OF ORIGINAL INDENTURE.	The Original Indenture and indentures supplemental thereto have been recorded and/or filed and Certificates of Provision for Payment have been recorded as hereinafter set forth.
	The Original Indenture has been recorded as a real estate mortgage and filed as a chattel Mortgage in the offices of the respective Registers of Deeds of certain counties in the State of Michigan as set forth in the Supplemental Indenture dated as of September 1, 1947, has been recorded as a real estate mortgage in the office of the Register of Deeds of Genesee County, Michigan as set forth in the Supplemental Indenture dated as of May 1, 1974, has been filed in the Office of the Secretary of State of Michigan on November 16, 1951 and has been filed and recorded in the office of the Interstate Commerce Commission on December 8, 1969.
RECORDING AND FILING OF SUPPLEMENTAL INDENTURES.	Pursuant to the terms and provisions of the Original Indenture, indentures supplemental thereto heretofore entered into have been Recorded as a real estate mortgage and/or filed as a chattel mortgage or as a financing statement in the offices of the respective Registers of Deeds of certain counties in the State of Michigan, the Office of the Secretary of State of Michigan and the Office of the Interstate Commerce Commission or the Surface Transportation Board, as set forth in supplemental indentures as follows:

19

		Recorded and/or Filed
		as Set Forth in
Supplemental Indenture	Purpose of Supplemental	Supplemental
Dated as of	Indenture	Indenture Dated as of
June 1, 1925(a)(b)	Series B Bonds	February 1, 1940
August 1, 1927(a)(b)	Series C Bonds	February 1, 1940
February 1, 1931(a)(b)	Series D Bonds	February 1, 1940
June 1, 1931(a)(b)	Subject Properties	February 1, 1940
October 1, 1932(a)(b)	Series E Bonds	February 1, 1940
September 25, 1935(a)(b)	Series F Bonds	February 1, 1940
September 1, 1936(a)(b)	Series G Bonds	February 1, 1940
November 1, 1936(a)(b)	Subject Properties	February 1, 1940
February 1, 1940(a)(b)	Subject Properties	September 1, 1947
December 1, 1940(a)(b)	Series H Bonds and Additional Provisions	September 1, 1947
September 1, 1947(a)(b)(c)	Series I Bonds, Subject Properties and Additional Provisions	November 15, 1951
March 1, 1950(a)(b)(c)	Series J Bonds and Additional Provisions	November 15, 1951
November 15, 1951(a)(b)(c)	Series K Bonds, Additional Provisions and Subject Properties	January 15, 1953
January 15, 1953(a)(b)	Series L Bonds	May 1, 1953
May 1, 1953(a)	Series M Bonds and Subject Properties	March 15, 1954
March 15, 1954(a)(c)	Series N Bonds and Subject Properties	May 15, 1955
May 15, 1955(a)(c)	Series O Bonds and Subject Properties	August 15, 1957
August 15, 1957(a)(c)	Series P Bonds, Additional Provisions and Subject Properties	June 1, 1959
June 1, 1959(a)(c)	Series Q Bonds and Subject Properties	December 1, 1966
December 1, 1966(a)(c)	Series R Bonds, Additional Provisions and Subject Properties	October 1, 1968
October 1, 1968(a)(c)	Series S Bonds and Subject Properties	December 1, 1969
December 1, 1969(a)(c)	Series T Bonds and Subject Properties	July 1, 1970
July 1, 1970(c)	Series U Bonds and Subject Properties	December 15, 1970
December 15, 1970(c)	Series V Bonds and Series W Bonds	June 15, 1971
June 15, 1971(c)	Series X Bonds and Subject Properties	November 15, 1971
November 15, 1971(c)	Series Y Bonds and Subject Properties	January 15, 1973
January 15, 1973(c)	Series Z Bonds and Subject Properties	May 1, 1974

20

		Recorded and/or Filed
		as Set Forth in
Supplemental Indenture	Purpose of Supplemental	Supplemental
Dated as of	Indenture	Indenture Dated as of
May 1, 1974	Series AA Bonds and Subject Properties	October 1, 1974
October 1, 1974	Series BB Bonds and Subject Properties	January 15, 1975
January 15, 1975	Series CC Bonds and Subject Properties	November 1, 1975
November 1, 1975	Series DDP Nos. 1-9 Bonds and Subject Properties	December 15, 1975
December 15, 1975	Series EE Bonds and Subject Properties	February 1, 1976
February 1, 1976	Series FFR Nos. 1-13 Bonds	June 15, 1976
June 15, 1976	Series GGP Nos. 1-7 Bonds and Subject Properties	July 15, 1976
July 15, 1976	Series HH Bonds and Subject Properties	February 15, 1977
February 15, 1977	Series MMP Bonds and Subject Properties	March 1, 1977
March 1, 1977	Series IIP Nos. 1-7 Bonds, Series JJP Nos. 1-7 Bonds, Series KKP Nos. 1-7 Bonds and Series LLP Nos. 1-7 Bonds	June 15, 1977
June 15, 1977	Series FFR No. 14 Bonds and Subject Properties	July 1, 1977
July 1, 1977	Series NNP Nos. 1-7 Bonds and Subject Properties	October 1, 1977
October 1, 1977	Series GGP Nos. 8-22 Bonds and Series OOP Nos. 1-17 Bonds and Subject Properties	June 1, 1978
June 1, 1978	Series PP Bonds, Series QQP Nos. 1-9 Bonds and Subject Properties	October 15, 1978
October 15, 1978	Series RR Bonds and Subject Properties	March 15, 1979
March 15, 1979	Series SS Bonds and Subject Properties	July 1, 1979
July 1, 1979	Series IIP Nos. 8-22 Bonds, Series NNP Nos. 8-21 Bonds and Series TTP Nos. 1-15 Bonds and Subject Properties	September 1, 1979
September 1, 1979	Series JJP No. 8 Bonds, Series KKP No. 8 Bonds, Series LLP Nos. 8-15 Bonds, Series MMP No. 2 Bonds and Series OOP No. 18 Bonds and Subject Properties	September 15, 1979
September 15, 1979	Series UU Bonds	January 1, 1980

21

		Recorded and/or Filed
		as Set Forth in
Supplemental Indenture	Purpose of Supplemental	Supplemental
Dated as of	Indenture	Indenture Dated as of
January 1, 1980	1980 Series A Bonds and Subject Properties	April 1, 1980
April 1, 1980	1980 Series B Bonds	August 15, 1980
August 15, 1980	Series QQP Nos. 10-19 Bonds, 1980 Series CP Nos. 1-12 Bonds and 1980 Series DP No. 1-11 Bonds and Subject Properties	August 1, 1981
August 1, 1981	1980 Series CP Nos. 13-25 Bonds and Subject Properties	November 1, 1981
November 1, 1981	1981 Series AP Nos. 1-12 Bonds	June 30, 1982
June 30, 1982	Article XIV Reconfirmation	August 15, 1982
August 15, 1982	1981 Series AP Nos. 13-14 Bonds and Subject Properties	June 1, 1983
June 1, 1983	1981 Series AP Nos. 15-16 Bonds and Subject Properties	October 1, 1984
October 1, 1984	1984 Series AP Bonds and 1984 Series BP Bonds and Subject Properties	May 1, 1985
May 1, 1985	1985 Series A Bonds	May 15, 1985
May 15, 1985	1985 Series B Bonds and Subject Properties	October 15, 1985
October 15, 1985	Series KKP No. 9 Bonds and Subject Properties	April 1, 1986
April 1, 1986	1986 Series A Bonds and Subject Properties	August 15, 1986
August 15, 1986	1986 Series B Bonds and Subject Properties	November 30, 1986
November 30, 1986	1986 Series C Bonds	January 31, 1987
January 31, 1987	1987 Series A Bonds	April 1, 1987
April 1, 1987	1987 Series B Bonds and 1987 Series C Bonds	August 15, 1987
August 15, 1987	1987 Series D Bonds, 1987 Series E Bonds and Subject Properties	November 30, 1987
November 30, 1987	1987 Series F Bonds	June 15, 1989
June 15, 1989	1989 Series A Bonds	July 15, 1989
July 15, 1989	Series KKP No. 10 Bonds	December 1, 1989
December 1, 1989	Series KKP No. 11 Bonds and 1989 Series BP Bonds	February 15, 1990
February 15, 1990	1990 Series A Bonds, 1990 Series B Bonds, 1990 Series C Bonds, 1990 Series D Bonds, 1990 Series E Bonds and 1990 Series F Bonds	November 1, 1990
November 1, 1990	Series KKP No. 12 Bonds	April 1, 1991
April 1, 1991	1991 Series AP Bonds	May 1, 1991
May 1, 1991	1991 Series BP Bonds and 1991	May 15, 1991

22

		Recorded and/or Filed
		as Set Forth in
Supplemental Indenture	Purpose of Supplemental	Supplemental
Dated as of	Indenture	Indenture Dated as of
	Series CP Bonds
May 15, 1991	1991 Series DP Bonds	September 1, 1991
September 1, 1991	1991 Series EP Bonds	November 1, 1991
November 1, 1991	1991 Series FP Bonds	January 15, 1992
January 15, 1992	1992 Series BP Bonds	February 29, 1992 and April 15, 1992
February 29, 1992	1992 Series AP Bonds	April 15, 1992
April 15, 1992	Series KKP No. 13 Bonds	July 15, 1992
July 15, 1992	1992 Series CP Bonds	November 30, 1992
July 31, 1992	1992 Series D Bonds	November 30, 1992
November 30, 1992	1992 Series E Bonds and 1993 Series B Bonds	March 15, 1993
December 15, 1992	Series KKP No. 14 Bonds and 1989 Series BP No. 2 Bonds	March 15, 1993
January 1, 1993	1993 Series C Bonds	April 1, 1993
March 1, 1993	1993 Series E Bonds	June 30, 1993
March 15, 1993	1993 Series D Bonds	September 15, 1993
April 1, 1993	1993 Series FP Bonds and 1993 Series IP Bonds	September 15, 1993
April 26, 1993	1993 Series G Bonds and Amendment of Article II, Section 5	September 15, 1993
May 31, 1993	1993 Series J Bonds	September 15, 1993
June 30, 1993	1993 Series AP Bonds	(d)
June 30, 1993	1993 Series H Bonds	(d)
September 15, 1993	1993 Series K Bonds	March 1, 1994
March 1, 1994	1994 Series AP Bonds	June 15, 1994
June 15, 1994	1994 Series BP Bonds	December 1, 1994
August 15, 1994	1994 Series C Bonds	December 1, 1994
December 1, 1994	Series KKP No. 15 Bonds and 1994 Series DP Bonds	August 1, 1995
August 1, 1995	1995 Series AP Bonds and 1995 Series BP Bonds	August 1, 1999
August 1, 1999	1999 Series AP Bonds, 1999 Series BP Bonds and 1999 Series CP Bonds	(d)
August 15, 1999	1999 Series D Bonds	(d)
January 1, 2000	2000 Series A Bonds	(d)
April 15, 2000	Appointment of Successor Trustee	(d)
August 1, 2000	2000 Series BP Bonds	(d)
March 15, 2001	2001 Series AP Bonds	(d)
May 1, 2001	2001 Series BP Bonds	(d)
August 15, 2001	2001 Series CP Bonds	(d)
September 15, 2001	2001 Series D Bonds and 2001 Series E Bonds	(d)
September 17, 2002	Amendment of Article XIII,	(d)

23

		Recorded and/or Filed
		as Set Forth in
Supplemental Indenture	Purpose of Supplemental	Supplemental
Dated as of	Indenture	Indenture Dated as of
	Section 3 and Appointment of Successor Trustee
October 15, 2002	2002 Series A Bonds and 2002 Series B Bonds	(d)
December 1, 2002	2002 Series C Bonds and 2002 Series D Bonds	(d)
August 1, 2003	2003 Series A Bonds	(d)
March 15, 2004	2004 Series A Bonds and 2004 Series B Bonds	(d)
July 1, 2004	2004 Series D Bonds	(d)
February 1, 2005	2005 Series A Bonds and 2005 Series B Bonds	May 15, 2006
April 1, 2005	2005 Series AR Bonds and 2005 Series BR Bonds	May 15, 2006
August 1, 2005	2005 Series DT Bonds	May 15, 2006
September 15, 2005	2005 Series C Bonds	May 15, 2006
September 30, 2005	2005 Series E Bonds	May 15, 2006
May 15, 2006	2006 Series A Bonds	December 1, 2006
December 1, 2006	2006 Series CT Bonds	December 1, 2007
December 1, 2007	2007 Series A Bonds	April 1, 2008
April 1, 2008	2008 Series DT Bonds	May 1, 2008
May 1, 2008	2008 Series ET Bonds	July 1, 2008
June 1, 2008	2008 Series G Bonds	October 1, 2008
July 1, 2008	2008 Series KT Bonds	October 1, 2008
October 1, 2008	2008 Series J Bonds	December 1, 2008
December 1, 2008	2008 Series LT Bonds	March 15, 2009
March 15, 2009	2009 Series BT Bonds	November 1, 2009
November 1, 2009	2009 Series CT Bonds	August 1, 2010

(a)	See Supplemental Indenture dated as of July 1, 1970 for Interstate Commerce Commission filing and recordation information.
(b)	See Supplemental Indenture dated as of May 1, 1953 for Secretary of State of Michigan filing information.
(c)	See Supplemental Indenture dated as of May 1, 1974 for County of Genesee, Michigan recording and filing information.
(d)	Recording and filing information for this Supplemental Indenture has not been set forth in a subsequent Supplemental Indenture.

RECORDING AND FILING OF SUPPLEMENTAL INDENTURE DATED AS OF AUGUST 1, 2010. Further, pursuant to the terms and provisions of the Original Indenture, a Supplemental Indenture dated as of August 1, 2010 providing for the terms of bonds to be issued thereunder of 2010 Series B has heretofore been entered into between the Company and the Trustee and has been filed in the Office of the Secretary of State of Michigan as a financing statement on August 20, 2010 (Filing No. 2010112609-81), has been filed and recorded in the Office of the Surface Transportation Board on August 19, 2010 (Recordation No. 5485-YYYYY), and has been recorded as a real estate mortgage in the offices of the respective Register of Deeds of certain counties in the State of Michigan, as follows:

24

		Liber/
County	Recorded	Instrument no.	Page
Genesee	8/23/10	201008230061727	N/A
Huron	8/19/10	1331	292
Ingham	8/31/10	3394	683
Lapeer	8/19/10	2458	273
Lenawee	8/19/10	2409	343
Livingston	8/19/10	2010R-022721	N/A
Macomb	8/24/10	20383	299
Mason	8/19/10	2010R04386	N/A
Monroe	8/19/10	2010R15247	N/A
Oakland	8/19/10	42301	766
St. Clair	9/14/10	4069	662
Sanilac	8/19/10	1106	186
Tuscola	8/19/10	1203	1449
Washtenaw	8/19/10	4726	499
Wayne	8/30/10	48715	140

RECORDING AND FILING OF SUPPLEMENTAL INDENTURE DATED AS OF SEPTEMBER 1, 2010. Further, pursuant to the terms and provisions of the Original Indenture, a Supplemental Indenture dated as of September 1, 2010 providing for the terms of bonds to be issued thereunder of 2010 Series A has heretofore been entered into between the Company and the Trustee and has been filed in the Office of the Secretary of State of Michigan as a financing statement on September 16, 2010 (Filing No. 2010124361-6), has been filed and recorded in the Office of the Surface Transportation Board on September 16, 2010 (Recordation No. 5485-ZZZZZ), and has been recorded as a real estate mortgage in the offices of the respective Register of Deeds of certain counties in the State of Michigan, as follows:

		Liber/
County	Recorded	Instrument no.	Page
Genesee	9/29/10	201009290068704	N/A
Huron	9/15/10	1334	237
Ingham	9/16/10	3396	413
Lapeer	9/15/10	2461	958
Lenawee	9/15/10	2410	571
Livingston	9/15/10	2010R-025063	N/A
Macomb	9/17/10	20418	211
Mason	9/15/10	2010R04851	N/A
Monroe	9/16/10	2010R16967	N/A
Oakland	9/15/10	42369	700
St. Clair	10/22/10	4076	858
Sanilac	9/15/10	1108	313
Tuscola	9/15/10	1205	918
Washtenaw	9/15/10	4806	32
Wayne	9/15/10	48739	724

RECORDING OF CERTIFICATES OF PROVISION FOR PAYMENT. All the bonds of Series A which were issued under the Original Indenture dated as of October 1, 1924, and of Series B, Series C, Series D, Series E, Series F, Series G, Series H, Series I, Series J, Series K, Series L, Series M, Series N, Series O, Series P, Series Q, Series R, Series S, Series T, Series U, Series V,

25

	Series W, Series X, Series Y, Series Z, Series AA, Series BB, Series CC, Series DDP Nos. 1-9, Series EE, Series FFR Nos. 1-13, Series GGP Nos. 1-7, Series HH, Series MMP, Series IP Nos. 1-7, Series JJP Nos. 1-7, Series KKP Nos. 1-7, Series LLP Nos. 1-7, Series FFR No. 14, Series NNP Nos. 1-7, Series GGP Nos. 8-22, Series OOP Nos. 1-17, Series PP, Series QQP Nos. 1-9, Series RR, Series SS, Series IIP Nos. 8-22, Series NNP Nos. 8-21, Series TTP Nos. 1-15, Series JJP No. 8, Series KKP No. 8, Series LLP Nos. 8-15, Series MMP No. 2, Series OOP No. 18, Series UU, 1980 Series A, 1980 Series B, Series QQP Nos. 10-19, 1980 Series CP Nos. 1-12, 1980 Series DP Nos. 1-11, 1980 Series CP Nos. 13-25, 1981 Series AP Nos. 1-12, 1981 Series AP Nos. 13-14, 1981 Series AP Nos. 15-16, 1984 Series AP, 1984 Series BP, 1985 Series A, 1985 Series B, Series KKP No. 9, 1986 Series A, 1986 Series B, 1986 Series C, 1987 Series A, 1987 Series B, 1987 Series C, 1987 Series D, 1987 Series E, 1987 Series F, 1989 Series A, Series KKP No. 10, Series KKP No. 11, 1989 Series BP, 1990 Series A, 1990 Series D, 1991 Series EP, 1991 Series FP, 1992 Series BP, Series KKP No. 13, 1992 Series CP, 1992 Series D, Series KKP No. 14, 1989 Series BP No. 2, 1993 Series B, 1993 Series C, 1993, 1993 Series H, 1993 Series E, 1993 Series D, 1993 Series FP, 1993 Series IP, 1993 Series G, 1993 Series J, 1993 Series K, 1994 Series AP, 1994 Series BP, 1994 Series C, Series KKP No. 15, 1994 Series DP, 1995 Series AP, 1995 Series BP, 1999 Series D, 2000 Series A, 2001 Series D, 2005 Series A, and 2005 Series B, which were issued under Supplemental Indentures as described in the Recording and Filing of Supplemental Indentures section above, have matured or have been called for redemption and funds sufficient for such payment or redemption have been irrevocably deposited with the Trustee for that purpose; and Certificates of Provision for Payment have been recorded in the offices of the respective Registers of Deeds of certain counties in the State of Michigan, with respect to all bonds of Series A, B, C, D, E, F, G, H, K, L, M, O, W, BB, CC, DDP Nos. 1 and 2, FFR Nos. 1-3, GGP Nos. 1 and 2, IIP No. 1, JJP No. 1, KKP No. 1, LLP No. 1 and GGP No. 8.
	PART III.
	THE TRUSTEE.
TERMS AND CONDITIONS OF ACCEPTANCE OF TRUST BY TRUSTEE.	The Trustee hereby accepts the trust hereby declared and provided, and agrees to perform the same upon the terms and conditions in the Original Indenture, as amended to date and as supplemented by this Supplemental Indenture, and in this Supplemental Indenture set forth, and upon the following terms and conditions:
	The Trustee shall not be responsible in any manner whatsoever for and in respect of the validity or sufficiency of this Supplemental Indenture or the due execution hereof by the Company or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely.
	PART IV.
	MISCELLANEOUS.
CONFIRMATION OF SECTION 318(c) OF TRUST	Except to the extent specifically provided therein, no provision of this Supplemental Indenture or any future supplemental indenture is intended to modify, and the parties do hereby adopt and confirm, the provisions of Section

26

INDENTURE ACT.	318(c) of the Trust Indenture Act which amend and supersede provisions of the Indenture in effect prior to November 15, 1990.
EXECUTION IN COUNTERPARTS.	THIS SUPPLEMENTAL INDENTURE MAY BE SIMULTANEOUSLY EXECUTED IN ANY NUMBER OF COUNTERPARTS, EACH OF WHICH WHEN SO EXECUTED SHALL BE DEEMED TO BE AN ORIGINAL; BUT SUCH COUNTERPARTS SHALL TOGETHER CONSTITUTE BUT ONE AND THE SAME INSTRUMENT.
TESTIMONIUM.	IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY AND THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. HAVE CAUSED THESE PRESENTS TO BE SIGNED IN THEIR RESPECTIVE CORPORATE NAMES BY THEIR RESPECTIVE CHAIRMEN OF THE BOARD, PRESIDENTS, VICE PRESIDENTS, ASSISTANT VICE PRESIDENTS, TREASURERS OR ASSISTANT TREASURERS AND IMPRESSED WITH THEIR RESPECTIVE CORPORATE SEALS, ATTESTED BY THEIR RESPECTIVE SECRETARIES OR ASSISTANT SECRETARIES, ALL AS OF THE DAY AND YEAR FIRST ABOVE WRITTEN.

27

EXECUTION BY COMPANY.	THE DETROIT EDISON COMPANY
	By:	/s/ Donald J. Goshorn
(Corporate Seal)		Name:	Donald J. Goshorn
		Title:	Assistant Treasurer

Attest:
By:	/s/ Lisa A. Muschong
	Name:	Lisa A. Muschong
	Title:	Corporate Secretary
Signed, sealed and delivered by THE DETROIT EDISON COMPANY in the presence of
/s/ Anthony G. Morrow
Name:	Anthony G. Morrow
/s/ John Dermody
Name:	John Dermody

28

STATE OF MICHIGAN	)
	)	SS
COUNTY OF WAYNE	)

ACKNOWLEDG-MENT OF EXECUTION BY COMPANY. On this 14^th day of December, 2010, before me, the subscriber, a Notary Public within and for the County of Wayne, in the State of Michigan, acting in the County of Wayne, personally appeared Donald J. Goshorn, to me personally known, who, being by me duly sworn, did say that he does business at One Energy Plaza, Detroit, Michigan 48226 and is the Assistant Treasurer of THE DETROIT EDISON COMPANY, one of the corporations described in and which executed the foregoing instrument; that he knows the corporate seal of the said corporation and that the seal affixed to said instrument is the corporate seal of said corporation; and that said instrument was signe d and sealed in behalf of said corporation by authority of its Board of Directors and that he subscribed his name thereto by like authority; and said Donald J. Goshorn acknowledged said instrument to be the free act and deed of said corporation.

(Notarial Seal)	/s/ Stephanie V. Washio
	Stephanie V. Washio
	Notary Public, Wayne County, MI Acting in Wayne My Commission Expires: May 18, 2012

29

EXECUTION BY TRUSTEE.	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
	By:	/s/ Alexis M. Johnson
(Corporate Seal)		Name:	Alexis M. Johnson
		Title:	Authorized Officer

Attest:
By:	/s/ J. Michael Banas
	Name:	J. Michael Banas
	Title:	Vice President
Signed, sealed and delivered by THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. in the presence of
/s/ Daniel T. Richards
Name:	Daniel T. Richards
/s/ Kathleen Hier
Name:	Kathleen Hier

30

STATE OF MICHIGAN	)
	)	SS
COUNTY OF INGHAM	)

ACKNOWLEDG-MENT OF EXECUTION BY TRUSTEE. On this 15^th day of December, 2010, before me, the subscriber, a Notary Public within and for the County of Wayne, in the State of Michigan, acting in the County of Ingham, personally appeared Alexis M. Johnson, to me personally known, who, being by me duly sworn, did say that her business office is located at 719 Griswold Street, Suite 930, Detroit, Michigan 48226, and she is an Authorized Officer of THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., one of the corporations described in and which executed the foregoing instrument; that she knows the corporate seal of the said corporation and that the seal affixed to said instrument is the corporate seal of said corporation; and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors and that she subscribed her name thereto by like authority; and said Alexis M. Johnson acknowledged said instrument to be the free act and deed of said corporation.

(Notarial Seal)	/s/ Stephanie V. Washio
	Stephanie V. Washio
	Notary Public, Wayne County, MI Acting in Ingham My Commission Expires: May 18, 2012

31

STATE OF MICHIGAN	)
	)	SS
COUNTY OF WAYNE	)

AFFIDAVIT AS TO CONSIDERATION AND GOOD FAITH. Donald J. Goshorn, being duly sworn, says: that he is the Assistant Treasurer of THE DETROIT EDISON COMPANY, the Mortgagor named in the foregoing instrument, and that he has knowledge of the facts in regard to the making of said instrument and of the consideration therefor; that the consideration for said instrument was and is actual and adequate, and that the same was given in good faith for the purposes in such instrument set forth.

	/s/ Donald J. Goshorn
	Name:	Donald J. Goshorn
	Title:	Assistant Treasurer The Detroit Edison Company
	Sworn to before me this 14th day of December, 2010
(Notarial Seal)	/s/ Stephanie V. Washio
	Stephanie V. Washio
	Notary Public, Wayne County, MI Acting in Wayne My Commission Expires: May 18, 2012

32

This instrument was drafted by:
Daniel T. Richards, Esq.
One Energy Plaza
688 WCB
Detroit, Michigan 48226

When recorded return to:
Stephanie V. Washio
One Energy Plaza
688 WCB
Detroit, Michigan 48226

33

EX-12.39

Exhibit 12-39

THE DETROIT EDISON COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

	Twelve Months Ended December 31
(Millions of Dollars)	2010		2009		2008		2007		2006
Earnings:
Pretax earnings	$	707	$	604	$	517	$	466	$	482
Fixed charges		328		348		324		319		299
Net earnings	$	1,035	$	952	$	841	$	785	$	781
Fixed charges:
Interest expense	$	310	$	325	$	293	$	294	$	278
Adjustments		18		23		31		25		21
Fixed charges	$	328	$	348	$	324	$	319	$	299
Ratio of earnings to fixed charges		3.16		2.74		2.60		2.46		2.61

EX-23.24

Exhibit 23-24

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 333-161489-02) of The Detroit Edison Company of our report dated February 18, 2011 relating to the financial statements and financial statement schedule, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Detroit, Michigan
February 18, 2011

EX-23.25

Exhibit 23-25

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-161489-02 on Form S-3 of our report dated February 27, 2009, relating to the consolidated financial statements and financial statement schedule of The Detroit Edison Company and subsidiaries, appearing in this Annual Report on Form 10-K of The Detroit Edison Company for the year ended December 31, 2010.

/s/ Deloitte & Touche LLP

Detroit, Michigan
February 18, 2011

EX-31.61

Exhibit 31-61

FORM 10-K CERTIFICATION

I, Gerard M. Anderson, certify that:

1.	I have reviewed this Annual Report on Form 10-K of The Detroit Edison Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/S/ GERARD M. ANDERSON	Date: February 18, 2011
Gerard M. Anderson
Chairman of the Board and Chief Executive Officer of The Detroit Edison Company

EX-31.62

Exhibit 31-62

FORM 10-K CERTIFICATION

I, David E. Meador, certify that:

1.	I have reviewed this Annual Report on Form 10-K of The Detroit Edison Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15 (f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/S/ DAVID E. MEADOR	Date: February 18, 2011
David E. Meador
Executive Vice President and Chief Financial Officer of The Detroit Edison Company

EX-32.61

Exhibit 32-61

CERTIFICATION PURSUANT TO
18 U. S. C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of The Detroit Edison Company (the “Company”) for the year ended December 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gerard M. Anderson, certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

(1)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 18, 2011	/S/ GERARD M. ANDERSON
	Gerard M. Anderson
	Chairman of the Board and Chief Executive Officer of The Detroit Edison Company

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.62

Exhibit 32-62

CERTIFICATION PURSUANT TO
18 U. S. C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of The Detroit Edison Company (the “Company”) for the year ended December 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David E. Meador, certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

(1)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 18, 2011	/S/ DAVID E. MEADOR
	David E. Meador
	Executive Vice President and Chief Financial Officer of The Detroit Edison Company

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.