10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the Quarterly Period ended September 30, 2008

Commission file number 1-2198

The Detroit Edison Company meets the conditions set forth in General Instruction H (1) (a) and (b) of Form 10-Q 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 (State or other jurisdiction of incorporation or organization)	38-0478650 (I.R.S. Employer Identification No.)
2000 2nd Avenue, Detroit, Michigan (Address of principal executive offices)	48226-1279 (Zip Code)

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

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 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 are owned by DTE Energy Company.

The Detroit Edison Company
Quarterly Report on Form 10-Q
Quarter Ended September 30, 2008

Table Of Contents

	Page
Definitions		1
Forward-Looking Statements		2
Part I — Financial Information
Item 1. Financial Statements
Consolidated Statements of Financial Position (Unaudited)		10
Consolidated Statements of Operations (Unaudited)		12
Consolidated Statements of Cash Flows (Unaudited)		13
Consolidated Statements of Changes in Shareholders’ Equity and Comprehensive Income (Unaudited)		14
Notes to Consolidated Financial Statements (Unaudited)		15
Item 2. Management’s Narrative Analysis of Results of Operations		3
Item 4. Controls and Procedures		9
Part II — Other Information
Item 1. Legal Proceedings		30
Item 1A. Risk Factors		30
Item 6. Exhibits		31
Signature		32
EXHIBIT 4.259
EXHIBIT 4.260
EX-12.31
EXHIBIT 31.43
EXHIBIT 31.44
EXHIBIT 32.43
EXHIBIT 32.44

Definitions

CTA	Costs to achieve, consisting of project management, consultant support and employee severance, related to the Performance Excellence Process
Customer Choice	Statewide initiatives giving customers in Michigan the option to choose alternative suppliers for electricity.
Detroit Edison	The Detroit Edison Company (a direct wholly owned subsidiary of DTE Energy Company) and subsidiary companies
DTE Energy	DTE Energy Company, the parent of Detroit Edison and directly or indirectly the parent company of numerous non-utility subsidiaries
EPA	United States Environmental Protection Agency
FERC	Federal Energy Regulatory Commission
MDEQ	Michigan Department of Environmental Quality
MISO	Midwest Independent System Operator, a Regional Transmission Organization
MPSC	Michigan Public Service Commission
NRC	Nuclear Regulatory Commission
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 expenses.
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.
SFAS	Statement of Financial Accounting Standards
Stranded costs	Costs incurred by utilities in order to serve customers in a regulated environment that absent special regulatory approval would not otherwise be recoverable if customers switch to alternative energy suppliers.
Units of Measurement
kWh	Kilowatthour of electricity
MW	Megawatt of electricity
MWh	Megawatthour of electricity

1

Forward-Looking Statements

Certain information presented herein includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve certain risks and uncertainties that may cause actual future results to differ materially from those presently contemplated, projected, estimated or budgeted. Many factors may impact forward-looking statements including, but not limited to, the following:

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

• economic climate and population growth or decline in the geographic areas where we do business;

• environmental issues, laws, regulations, and the cost of remediation and compliance, including potential new federal and state requirements that could include carbon and more stringent mercury emission controls, a renewable portfolio standard and energy efficiency mandates;

• 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;

• 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 or the potential for loss on cash equivalents and investments;

• the timing and extent of changes in interest rates;

• the level of borrowings;

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

• 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 ability to recover costs through rate increases;

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

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

• 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;

• amounts of uncollectible accounts receivable;

• binding arbitration, litigation and related appeals; and

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

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.

2

Part I — Item 2.

The Detroit Edison Company

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 H(2) (a) of Form 10-Q.

Factors Impacting Income

Net income increased by $52 million in the third quarter of 2008 and increased by $44 million for the nine-month period ended September 30, 2008. These increases were primarily due to lower expenses for operation and maintenance, depreciation and amortization, and taxes other than income, partially offset by lower gross margins.

	Three Months Ended						Nine Months Ended
	September 30						September 30
(in Millions)	2008			2007			2008			2007
Operating Revenues	$	1,440		$	1,403		$	3,766		$	3,707
Fuel and Purchased Power		586			518			1,403			1,274
Gross Margin		854			885			2,363			2,433
Operation and Maintenance		292			386			1,019			1,114
Depreciation and Amortization		193			203			563			583
Taxes Other Than Income		54			63			176			204
Other Asset (Gains), Losses and Reserves, Net		(1	)		6			(1	)		12
Operating Income		316			227			606			520
Other (Income) and Deductions		67			70			212			213
Income Tax Provision		90			50			143			100
Net Income	$	159		$	107		$	251		$	207
Operating Income as a Percentage of Operating Revenues		22	%		16	%		16	%		14	%

Gross margin decreased $31 million in the third quarter of 2008 and $70 million in the nine-month period ended September 30, 2008. The 2008 decreases were due to the absence of the favorable impact of a May 2007 MPSC order related to the 2005 PSCR reconciliation and the unfavorable impacts of weather and service territory performance. The decreases were partially offset by higher rates attributable to the April 2008 expiration of a rate reduction related to the MPSC show cause proceeding and higher margins due to customers returning from the electric Customer Choice program. Revenues include a component for the cost of power sold that is recoverable through the PSCR mechanism. See Note 5 of the Notes to Consolidated Financial Statements.

The following table details changes in various gross margin components relative to the comparable prior period:

Increase (Decrease) in Gross Margin Components Compared to Prior Year

(in Millions)	Three Months			Nine Months
Weather related impacts	$	(13	)	$	(32	)
Return of customers from electric Customer Choice		6			20
Service territory performance		(17	)		(24	)
Refundable pension cost		(6	)		(20	)
2005 PSCR reconciliation order in 2007		—			(34	)
April 2008 expiration of show-cause rate decrease		18			30
Other, net		(19	)		(10	)
Decrease in gross margin	$	(31	)	$	(70	)

3

	Three Months Ended						Nine Months Ended
Power Generated and Purchased	September 30						September 30
(in Thousands of MWh)	2008			2007			2008			2007
Power Plant Generation
Fossil		10,566			11,055			31,153			31,729
Nuclear		2,405			2,352			7,156			7,195
		12,971			13,407			38,309			38,924
Purchased Power		2,486			2,765			5,725			5,885
System Output		15,457			16,172			44,034			44,809
Less Line Loss and Internal Use		(1,056	)		(1,160	)		(2,623	)		(2,568	)
Net System Output		14,401			15,012			41,411			42,241
Average Unit Cost ($/MWh)
Generation (1)	$	19.32		$	16.93		$	17.98		$	15.72
Purchased Power	$	88.43		$	69.61		$	73.23		$	68.03
Overall Average Unit Cost	$	30.43		$	25.94		$	25.16		$	22.59

(1) Represents fuel costs associated with power plants.

	Three Months Ended				Nine Months Ended
	September 30				September 30
(in Thousands of MWh)	2008		2007		2008		2007
Electric Sales
Residential		4,595		4,836		11,955		12,340
Commercial		5,072		5,166		14,347		14,345
Industrial		3,327		3,278		10,074		9,974
Wholesale		700		718		2,123		2,170
Other		89		93		285		292
		13,783		14,091		38,784		39,121
Interconnections sales (1)		618		921		2,627		3,120
Total Electric Sales		14,401		15,012		41,411		42,241
Electric Deliveries
Retail and Wholesale		13,783		14,091		38,784		39,121
Electric Customer Choice		329		389		1,011		1,163
Electric Customer Choice — Self Generators (2)		—		180		70		447
Total Electric Sales and Deliveries		14,112		14,660		39,865		40,731

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

Operation and maintenance expense decreased $94 million in the third quarter of 2008 and $95 million in the nine-month period ended September 30, 2008. The decrease for the third quarter was primarily due to lower storm expenses of $13 million, $26 million of information systems implementation costs, lower benefits expense of $12 million, lower corporate support expenses of $15 million, lower fossil generation outage expenses of $10 million and $12 million attributable to continuous improvement initiatives. The decrease in the nine-month period was due primarily to $60 million of information systems implementation costs, lower benefit expenses of $35 million, lower corporate support expenses of $25 million, lower fossil generation outage expenses of $10 million, partially offset by higher uncollectible expenses of $31 million.

Depreciation and amortization expense decreased $10 million in the third quarter of 2008 and $20 million in the nine-month period ended September 30, 2008 due primarily to decreased amortization of regulatory assets.

4

Taxes other than income decreased $9 million in the third quarter of 2008 and $28 million in the nine-month period ended September 30, 2008 due the Michigan Single Business Tax (SBT) expense in 2007, which was replaced with the Michigan Business Tax (MBT) in 2008. The MBT is accounted for in the Income Tax provision.

Other asset (gains), losses and reserves, net decreased $7 million and $13 million in the third quarter and nine-month period ended September 30, 2008 due to $6 million and $12 million reserve adjustments in the 2007 comparable periods, for a loan guaranty related to our former ownership of a steam heating business now owned by Thermal Ventures II, LP (Thermal).

Outlook - We will move forward in our efforts to continue to improve the operating performance and cash flow of Detroit Edison. We continue to resolve outstanding regulatory issues by pursuing regulatory and/or legislative solutions. Many of these issues and problems have been addressed by the legislation passed by the Michigan House of Representatives and Michigan Senate and signed by the Governor of Michigan, discussed below. Looking forward, additional issues, such as volatility in prices for coal and other commodities, health care costs and higher levels of capital spending, will result in us taking meaningful action to address our costs while continuing to provide quality customer service. We will continue to seek opportunities to improve productivity, remove waste and decrease our costs while improving customer satisfaction.

Long term, we will be required to invest an estimated $2.4 billion on emission controls through 2018. We intend to seek recovery of these investments in future rate cases.

Additionally, our service territory may require additional generation capacity. A new base-load generating plant has not been built within the State of Michigan in over 20 years. Should our regulatory environment be conducive to such a significant capital expenditure, we may build, upgrade or co-invest in a base-load coal facility or a new nuclear plant.

On September 18, 2008, Detroit Edison submitted a Combined License Application with the NRC for construction and operation of a possible 1,500 megawatt nuclear power plant at the site of the company’s existing Fermi 2 nuclear plant. We have not decided on construction of a new base-load nuclear plant; however by completing the license application before the end of 2008, we may qualify for financial incentives under the Federal Energy Policy Act of 2005. In addition, Detroit Edison is also moving ahead with plans for renewable energy resources and an aggressive energy efficiency program.

The following variables, either individually or in combination, could impact our future results:

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

• Our ability to reduce costs and maximize plant and distribution system performance;

• Variations in market prices of power, coal and gas;

• Economic conditions within Michigan and corresponding impacts on demand for electricity;

• Collectibility of accounts receivable;

• Weather, including the severity and frequency of storms;

• The level of customer participation in the electric Customer Choice program;

• Any potential new federal and state environmental, renewable energy and energy efficiency requirements;

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

• Instability in capital markets which could impact availability of short and long-term financing or the potential for loss on cash equivalents and investments.

5

Impact of Legislation

On September 18, 2008, the Michigan House of Representatives and Michigan Senate passed a package of bills to establish a comprehensive, sustainable, long-term energy plan for Michigan. The Governor of Michigan signed the bills on October 6, 2008.

The package of bills includes:

• 2008 Public Act (PA) 286 that reforms Michigan’s utility regulatory framework, including the electric Customer Choice program,

• 2008 PA 295 that establishes a renewable portfolio / energy optimization standard and provides a funding mechanism, and

• 2008 PA 287 that provides for an income tax credit for the purchase of energy efficient appliances and a credit to offset a portion of the renewable charge.

2008 PA 286 makes the following changes in the regulatory framework for Michigan utilities.

• Electric Customer Choice reform — The bill establishes a 10 percent limit on participation in the electric Customer Choice program. In general, customers representing 10 percent of a utility’s load may receive electric generation from an electric supplier that is not a utility. After that threshold is met, the remaining customers will remain on full, bundled utility service. As of September 30, 2008, approximately 3 percent of Detroit Edison’s load was on the electric Customer Choice program. The bill also allows continuation of prior MPSC policies for customers to return to full utility service.

• Cost-of-service based electric rates (deskewing) — The bill requires the MPSC to set rates based on cost-of-service for all customer classes, eliminating over a five-year period the current subsidy by businesses of residential customer rates. This provision does not change total revenue for Detroit Edison. It lowers rates for most commercial and industrial customers and increases rates for residential and certain other industrial customers to match the actual cost of service for each customer class. Rate changes will be phased in over five years, with a 2.5% annual cap. Rates for schools and other qualified educational institutions will be set at their cost of service sooner.

• File and use ratemaking — The bill establishes a 12 month deadline for the MPSC to complete a rate case and allows a utility to self-implement rate changes six months after a rate filing, subject to certain limitations. If the final rate case order leads to lower rates than the utility had self-implemented, the utility will refund, with interest, the difference. In addition, utility rate cases may be based on a forward test year. The bill also has provisions designed to help the MPSC obtain increased funding for additional staff.

• Certificate of Need process for major capital investments — The bill establishes a certificate of need process for capital projects costing more than $500 million. The process requires the MPSC to review for prudence, prior to construction, proposed investments in new generating assets, acquisitions of existing power plants, major upgrades of power plants, and long-term power purchase agreements. The bill increases the certainty for utilities to recover the cost of projects approved by the MPSC and provides for the utilities to recover interest expense during construction.

• M&A approval — The bill grants the MPSC the authority to review and approve proposed utility mergers and acquisitions in Michigan and sets out evaluation criteria.

6

2008 PA 295 establishes a renewable energy and energy optimization (energy efficiency, energy conservation or load management) program in Michigan and provides for a separate funding surcharge to pay the cost of those programs.

Renewable Energy Standard

• The bill requires electric providers to source 10% of electricity sold to retail customers from renewable energy resources by 2015.

• Qualifying renewable energy resources would include wind, biomass, solar, hydro, and geothermal, among others.

• Detroit Edison will be required to have a renewable energy capacity portfolio of 300MW by December 31, 2013 and 600MW by December 31, 2015.

• The MPSC will establish a per meter surcharge to fund the renewable energy requirements. The recovery mechanism starts prior to actual construction in order to smooth the rate impact for customers.

• Within 60 days after the passage of the new law, the MPSC is to issue a temporary order implementing this act.

• Within 90 days following the issuance of a temporary order, the utilities will file a Renewable Portfolio Standard (RPS) plan with the MPSC.

• The bill allows for the lowering of compliance if RPS costs exceed the surcharge/cost cap or if other specified factors adversely affect the availability of renewable energy.

• The bill specifies that a utility can build or have others build and later sell to the utility up to 50 percent of the generation required to meet the RPS. The other 50 percent would be contracted through long-term power purchase agreements.

• The bill also provides for a net metering program to be established by Commission order for on-site customer-owned renewable generation up to 1% of an electric utility’s load.

Energy Optimization Standard

• Requires utilities to create electric and natural gas energy optimization plans for each customer class and includes funding surcharges as well as the potential for incentives for exceeding performance goals.

• For electric sales, the program targets 0.3 percent annual savings in 2009, ramping up to 1 percent annual savings by 2012. Savings percentages are based on prior year retail sales.

7

• For natural gas sales, the targeted annual savings start at 0.1 percent in 2009 and ramp up to 0.75 percent by 2012.

• The MPSC will allow utilities to capitalize certain costs of their energy optimization program. The costs which can be capitalized include equipment, materials and installation costs.

• Incentives are potentially available for exceeding annual program targets. The financial incentive could be the lesser of 25% of the net cost reductions to our customers or 15% of total program spend, subject to MPSC approval.

• The bill would also allow a natural gas utility that spends at least 0.5 percent of its revenues on energy efficiency programs to implement a symmetrical decoupling true-up mechanism that adjusts for sales volumes that are above or below the level reflected in its gas distribution rates.

• By March 2016, the MPSC may suspend the program if it determines the program is no longer cost-effective.

Impact of Financial Markets

As part of the normal course of business, Detroit Edison routinely enters into physical or financially settled contracts for the purchase and sale of electricity, coal and other energy-related goods and services. Certain of these contracts contain provisions which allow the counterparties to request that we post cash or letters of credit in the event that the credit rating of Detroit Edison is downgraded below investment grade. The amount of such collateral which could be requested fluctuates based upon commodity prices and the provisions and maturities of the underlying transactions.

Recent distress in the financial markets has had an adverse impact on financial market activities, including extreme volatility in security prices and severely diminished liquidity and credit availability. We have assessed the implications of these factors on our current business and determined that there has not been a significant impact to our financial position and results of operations during the first nine months of 2008.

We have experienced difficulties in accessing the commercial paper markets for short-term financing needs and an extended period of distress in the capital markets could have a negative impact on our liquidity in future periods. Short-term borrowings principally in the form of commercial paper, and inter-company borrowings from our parent, DTE Energy, provide us with the liquidity needed on a daily basis. Our commercial paper program is supported by our unsecured credit facilities. Beginning in late September, access to the commercial paper markets has been sharply reduced and, as a result, we have drawn against our unsecured credit lines to supplement other sources of funds to meet our short-term liquidity needs. We continue to access the long-term bond markets as evidenced by our issuance of $250 million of five-year senior notes in October 2008. See Note 1 of the Notes to Consolidated Financial Statements.

Our benefit plans have not experienced any direct significant impact on liquidity or counterparty risk due to the turmoil in the financial markets. As a result of losses experienced in the financial markets, our benefit plan assets are expected to have a negative return for 2008, which would create increased benefit costs in future years and may result in higher contributions in future years than originally planned.

While the impact of continued market volatility and turmoil in the credit markets cannot be predicted, we believe we have sufficient operating flexibility, cash resources and funding sources to maintain adequate amounts of liquidity and to meet our future operating cash and capital expenditure needs.

8

Part I — Item 4.

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 the Company’s Chief Executive Officer and Chief Financial Officer, 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 September 30, 2008, which is the end of the period covered by this report. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that such 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 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, 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) 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 September 30, 2008 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

9

Part I — Item 1.

The Detroit Edison Company

Consolidated Statements of Financial Position (Unaudited)

	September 30			December 31
(in Millions)	2008			2007
ASSETS
Current Assets
Cash and cash equivalents	$	93		$	47
Restricted cash		34			135
Accounts receivable (less allowance for doubtful accounts of $119 and $93, respectively)
Customer		754			727
Affiliates		4			3
Other		109			90
Accrued power supply cost recovery revenue		78			75
Inventories
Fuel		175			150
Materials and supplies		171			165
Prepaid property taxes		86			45
Other		11			15
		1,515			1,452
Investments
Nuclear decommissioning trust funds		756			824
Other		101			111
		857			935
Property
Property, plant and equipment		14,764			14,372
Accumulated depreciation		(5,826	)		(5,640	)
		8,938			8,732
Other Assets
Regulatory assets		2,529			2,511
Securitized regulatory assets		1,035			1,124
Intangible assets		18			9
Other		83			122
		3,665			3,766
Total Assets	$	14,975		$	14,885

10

The Detroit Edison Company
Consolidated Statements of Financial Position (Unaudited)

	September 30		December 31
(in Millions, Except Shares)	2008		2007
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Accounts payable — affiliates	$	129	$	138
Accounts payable other		307		396
Accrued interest		73		77
Dividends payable		—		76
Accrued vacations		56		52
Short-term borrowings — affiliates		8		277
Short-term borrowings other		373		406
Current portion of long-term debt, including capital leases		153		174
Other		298		243
		1,397		1,839
Long-Term Debt (net of current portion)
Mortgage bonds, notes and other		3,792		3,473
Securitization bonds		933		1,065
Capital lease obligations		35		42
		4,760		4,580
Other Liabilities
Deferred income taxes		1,867		1,825
Regulatory liabilities		574		583
Asset retirement obligations		1,192		1,160
Unamortized investment tax credit		87		95
Nuclear decommissioning		122		134
Accrued pension liability — affiliates		389		374
Accrued postretirement liability — affiliates		827		816
Other		184		176
		5,242		5,163
Commitments and Contingencies (Notes 4 and 6)
Shareholder’s Equity
Common stock, $10 par value, 400,000,000 shares authorized, and 138,632,324 shares issued and outstanding		2,946		2,771
Retained earnings		627		528
Accumulated other comprehensive income		3		4
		3,576		3,303
Total Liabilities and Shareholder’s Equity	$	14,975	$	14,885

11

The Detroit Edison Company

Consolidated Statements of Operations (Unaudited)

	Three Months Ended						Nine Months Ended
	September 30						September 30
(in Millions)	2008			2007			2008			2007
Operating Revenues	$	1,440		$	1,403		$	3,766		$	3,707
Operating Expenses
Fuel and purchased power		586			518			1,403			1,274
Operation and maintenance		292			386			1,019			1,114
Depreciation and amortization		193			203			563			583
Taxes other than income		54			63			176			204
Asset (gains) and reserves, net		(1	)		6			(1	)		12
		1,124			1,176			3,160			3,187
Operating Income		316			227			606			520
Other (Income) and Deductions
Interest expense		73			73			220			222
Interest income		(1	)		(2	)		(3	)		(5	)
Other income		(16	)		(8	)		(39	)		(26	)
Other expenses		11			7			34			22
		67			70			212			213
Income Before Income Taxes		249			157			394			307
Income Tax Provision		90			50			143			100
Net Income	$	159		$	107		$	251		$	207

12

The Detroit Edison Company

Consolidated Statements of Cash Flows (Unaudited)

	Nine Months Ended
	September 30
(in Millions)	2008			2007
Operating Activities
Net Income	$	251		$	207
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		563			583
Deferred income taxes		70			(191	)
Asset (gains) and reserves, net		(1	)		12
Changes in assets and liabilities, exclusive of changes shown separately		(33	)		367
Net cash from operating activities		850			978
Investing Activities
Plant and equipment expenditures		(651	)		(598	)
Restricted cash for debt redemptions		101			45
Proceeds from sale of nuclear decommissioning trust fund assets		180			227
Investment in nuclear decommissioning trust funds		(202	)		(254	)
Notes receivable from affiliates		—			(139	)
Other investments		(33	)		(16	)
Net cash used for investing activities		(605	)		(735	)
Financing Activities
Issuance of long-term debt		566			—
Redemption of long-term debt		(166	)		(132	)
Repurchase of long-term debt		(238	)		—
Short-term borrowings other		(33	)		(37	)
Short-term borrowings — affiliates		(268	)		—
Capital contribution by parent company		175			175
Dividends on common stock		(228	)		(228	)
Other		(7	)		(5	)
Net cash used for financing activities		(199	)		(227	)
Net Increase in Cash and Cash Equivalents		46			16
Cash and Cash Equivalents at Beginning of the Period		47			27
Cash and Cash Equivalents at End of the Period	$	93		$	43

13

The Detroit Edison Company

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

(Unaudited)

										Accumulated
					Additional					Other
	Common Stock				Paid In		Retained			Comprehensive
(Dollars in Millions, shares in thousands)	Shares		Amount		Capital		Earnings			Income			Total
Balance, December 31, 2007		138,632	$	1,386	$	1,385	$	528		$	4		$	3,303
Net income		—		—		—		251			—			251
Capital contribution by parent company		—		—		175		—			—			175
Dividends declared on common stock		—		—		—		(152	)		—			(152	)
Net change in unrealized losses on investments, net of tax		—		—		—		—			(1	)		(1	)
Balance, September 30, 2008		138,632	$	1,386	$	1,560	$	627		$	3		$	3,576

The following table displays other comprehensive income for the nine-month periods ended September 30:

(in Millions)	2008			2007
Net income	$	251		$	207
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on investments:
Amounts reclassified to income, net of taxes of $- and $1		(1	)		2
Comprehensive income	$	250		$	209

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The Detroit Edison Company

Notes to Consolidated Financial Statements (Unaudited)

NOTE 1 — GENERAL

These Consolidated Financial Statements should be read in conjunction with the Notes to Consolidated Financial Statements included in the 2007 Annual Report on Form 10-K.

The accompanying Consolidated Financial Statements are prepared using accounting principles generally accepted in the United States of America. These accounting principles require us 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 our estimates.

The Consolidated Financial Statements are unaudited, but include all adjustments necessary for a fair presentation of such financial statements. All adjustments are of a normal recurring nature, except as otherwise disclosed in these Consolidated Financial Statements and Notes to Consolidated Financial Statements. Financial results for this interim period are not necessarily indicative of results that may be expected for any other interim period or for the fiscal year ending December 31, 2008.

Certain prior year amounts have been reclassified to reflect current year classification.

Asset Retirement Obligations

The Company records asset retirement obligations in accordance with SFAS No. 143, Accounting for Asset Retirement Obligations and FIN 47, Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB Statement No. 143. 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 the 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.

Timing differences arise in the expense recognition of legal asset retirement costs that the Company is currently recovering in rates. The Company defers such differences under SFAS No. 71, Accounting for the Effects of Certain Types of Regulation.

A reconciliation of the asset retirement obligations for the nine months ended September 30, 2008 follows:

(in Millions)
Asset retirement obligations at January 1, 2008	$	1,170
Accretion		58
Liabilities settled		(8	)
Revision in estimated cash flows		(10	)
Asset retirement obligations at September 30, 2008		1,210
Less amount included in current liabilities		(18	)
	$	1,192

Approximately $1 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 power plant.

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Retirement Benefits and Trusteed Assets

Detroit Edison participates in various plans that provide pension and other postretirement benefits for DTE Energy and its affiliates. Detroit Edison is allocated net periodic benefit costs for its share of the amounts of the combined plans. In 2008, the sponsor of the pension plan was changed from Detroit Edison to DTE Energy Corporate Services, LLC. As a result, Detroit Edison’s accrued pension liability of $389 million at September 30, 2008 is reflected as an amount due to affiliate. The following details the components of net periodic benefit costs for qualified and non-qualified pension benefits and other postretirement benefits:

(in Millions)	Pension Benefits						Other Postretirement Benefits
Three Months Ended September 30	2008			2007			2008			2007
Service cost	$	11		$	13		$	12		$	13
Interest cost		38			36			23			21
Expected return on plan assets		(41	)		(36	)		(14	)		(13	)
Amortization of:
Net actuarial loss		6			12			7			13
Prior service cost		2			2			—			1
Net transition liability		—			—			1			2
Special termination benefits		—			3			—			—
Net periodic benefit cost	$	16		$	30		$	29		$	37

(in Millions)	Pension Benefits						Other Postretirement Benefits
Nine Months Ended September 30	2008			2007			2008			2007
Service cost	$	34		$	38		$	36		$	36
Interest cost		112			104			70			67
Expected return on plan assets		(123	)		(111	)		(43	)		(40	)
Amortization of:
Net actuarial loss		19			34			21			38
Prior service cost		5			5			1			3
Net transition liability		—			—			2			5
Special termination benefits		—			8			—			2
Net periodic benefit cost	$	47		$	78		$	87		$	111

Special Termination Benefits in the above table represents costs associated with the Company’s Performance Excellence Process.

The Company expects to contribute $150 million for qualified pension plans during its fiscal year 2008. No contributions have been made to the plans for the three- and nine- month periods ended September 30, 2008.

The Company expects to contribute $5 million for non-qualified pension plans during its fiscal year 2008. No contributions have been made to the plans for the three- and nine- month periods ended September 30, 2008.

The Company expects to contribute $76 million for postretirement medical and life insurance benefit plans during its fiscal year 2008. No contributions have been made to the plans for the three- and nine- month periods ended September 30, 2008.

Income Taxes

The Company’s effective income tax rate for the three months ended September 30, 2008 was 36% as compared to 32% for the three months ended September 30, 2007, and for the nine months ended September 30, 2008 was 36% as compared to 33% for the nine months ended September 30, 2007. The increase in effective tax rate was primarily attributable to higher state income taxes related to the Michigan Business Tax which was effective January 1, 2008. Unrecognized tax benefits at September 30, 2008 and at December 31, 2007, if recognized, would not materially impact our effective tax rate. We do not anticipate any significant changes in the unrecognized tax benefits during the next twelve months.

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Short-Term Credit Arrangements and Borrowings

Detroit Edison has a $206 million, five-year unsecured revolving credit facility expiring in October 2009 and a $69 million, five-year unsecured credit facility expiring in 2010. The five-year credit facilities are with a syndicate of banks and may be utilized for general corporate borrowings, but are intended to provide liquidity support for our commercial paper program. Borrowings under the facilities are available at prevailing short-term interest rates. In addition, Detroit Edison has a separate $100 million short-term unsecured bank loan facility expiring in July 2009 with covenants identical to those specified under our back-up credit facilities. The agreements require us to maintain a debt to total capitalization ratio of no more than 0.65 to 1. Detroit Edison is currently in compliance with its covenants. At September 30, 2008, Detroit Edison had outstanding commercial paper and borrowings of $373 million. At October 31, 2008, amounts outstanding totaled $180 million.

Stock-Based Compensation

Our parent company, DTE Energy, follows SFAS No. 123(R), Share-Based Payment, using the modified prospective transition method. The Company received an allocation of costs associated with stock compensation and the related impact of cumulative accounting adjustments. The allocation for the three months ended September 30, 2008 and 2007 for stock-based compensation expense was approximately $3 million and $3 million, respectively, while such allocation was $13 million and $14 million for the nine months ended September 30, 2008 and 2007, respectively.

Consolidated Statements of Cash Flows

The following provides detail of the changes in assets and liabilities that are reported in the Consolidated Statements of Cash Flows, and supplementary cash information:

	Nine Months Ended
	September 30
(in Millions)	2008			2007
Changes in Assets and Liabilities, Exclusive of Changes Shown Separately
Accounts receivable, net	$	(48	)	$	(103	)
Inventories		(31	)		(25	)
Pension liability — affiliates		59			36
Accounts payable		(46	)		329
Accrued PSCR refund		22			2
Income taxes payable		(10	)		173
General taxes		(11	)		32
Postretirement liability — affiliates		12			9
Other assets		(14	)		(303	)
Other liabilities		34			217
	$	(33	)	$	367
Supplementary Cash Information
Cash paid for interest (net of interest capitalized)	$	224		$	235
Cash paid for income taxes	$	2		$	112

Asset (gains) and reserves, net

The 2007 third quarter and nine-month period ended September 30, 2007 included $6 million and $12 million reserve adjustments , respectively, for a loan guaranty related to our former ownership of a steam heating business now owned by Thermal Ventures II, LP (Thermal).

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NOTE 2 — NEW ACCOUNTING PRONOUNCEMENTS

Fair Value Accounting

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. It emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Fair value measurement should be determined based on the assumptions that market participants would use in pricing an asset or liability. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Effective January 1, 2008, the Company adopted SFAS No. 157. As permitted by FASB Staff Position FAS No. 157-2, the Company has elected to defer the effective date of SFAS No. 157 as it pertains to non-financial assets and liabilities to January 1, 2009. See also Note 3.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115. This Statement permits an entity to choose to measure many financial instruments and certain other items at fair value. The fair value option established by SFAS No. 159 permits all entities to choose to measure eligible items at fair value at specified election dates. An entity will report in earnings unrealized gains and losses on items, for which the fair value option has been elected, at each subsequent reporting date. The fair value option: (a) may be applied instrument by instrument, with a few exceptions, such as investments otherwise accounted for by the equity method; (b) is irrevocable (unless a new election date occurs); and (c) is applied only to entire instruments and not to portions of instruments. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. At January 1, 2008, the Company elected not to use the fair value option for financial assets and liabilities held at that date.

In October 2008, the FASB issued FASB Staff Position (FSP) 157-3, Determining the Fair Value of a Financial Asset in a Market That is Not Active. The FSP clarifies the application of SFAS No. 157, Fair Value Measurements, in an inactive market, and provides an illustrative example to demonstrate how the fair value of a financial asset is determined when the market for that financial asset is inactive. The FSP was effective upon issuance, including prior periods for which financial statements have not been issued. The adoption of the FSP did not have a material impact on the Company’s consolidated financial statements.

Business Combinations

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations, to improve the relevance, representational faithfulness and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. To accomplish this, SFAS No. 141(R) requires the acquiring entity in a business combination to recognize all the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information needed to evaluate and understand the nature and financial effect of the business combination. SFAS No. 141(R) is applied prospectively to business combinations entered into by the Company after January 1, 2009, with earlier adoption prohibited. The Company will apply the requirements of SFAS No. 141 (R) to business combinations consummated after January 1, 2009.

GAAP Hierarchy

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. This statement identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements under GAAP. SFAS 162 is effective 60 days following the approval of the Public Company Accounting Oversight Board amendments to AU section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. The Company will adopt SFAS No. 162 once effective. The adoption is not expected to have a material impact on its consolidated financial statements.

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Useful Life of Intangible Assets

In May 2008, the FASB issued FSP 142-3, Determination of the Useful Life of Intangible Assets. This FSP amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets. For a recognized intangible asset, an entity shall disclose information that enables users to assess the extent to which the expected future cash flows associated with the asset are affected by the entity’s intent and/or ability to renew or extend the arrangement. This FSP is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2008. The FSP will not have a material impact on the Company’s consolidated financial statements.

Disclosures about Derivative Instruments and Guarantees

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133. This Statement requires enhanced disclosures about an entity’s derivative and hedging activities. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. Comparative disclosures for earlier periods at initial adoption are encouraged but not required. The Company will adopt SFAS No. 161 on January 1, 2009.

In September 2008, the FASB issued FSP No. 133-1 and FIN 45-4, Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161. This FSP is intended to improve disclosures about credit derivatives by requiring more information about the potential adverse effects of changes in credit risk on the financial position, financial performance, and cash flows of the sellers of credit derivatives. This FSP also requires additional disclosures about the current status of the payment/performance risk of a guarantee. The provisions of the FSP that amend SFAS No. 133 and FIN 45 are effective for reporting periods ending after November 15, 2008. The FSP also clarifies that the disclosures required by SFAS No. 161 should be provided for any reporting period (annual or interim) beginning after November 15, 2008. The Company is still assessing the impact of these pronouncements on our disclosures, and will begin providing any additional required disclosures related to SFAS No. 133 and FIN 45 for the year ending December 31, 2008. Disclosures necessary under SFAS No. 161 will be made beginning with the quarter ending March 31, 2009.

Noncontrolling Interests in Consolidated Financial Statements

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements — an Amendment of ARB No. 51. This Statement establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS No. 160 is effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2008. Earlier adoption is prohibited. This Statement shall be applied prospectively as of the beginning of the fiscal year in which this Statement is initially applied, except for the presentation and disclosure requirements. The presentation and disclosure requirements shall be applied retrospectively for all periods presented. The Company will adopt SFAS No. 160 as of January 1, 2009 and the adoption will not have a material impact on the Company’s consolidated financial statements.

Offsetting Amounts Related to Certain Contracts

In April 2007, the FASB issued FSP FIN 39-1, Amendment of FASB Interpretation No. 39. This FSP permits the Company to offset the fair value of derivative instruments with cash collateral received or paid for those derivative instruments executed with the same counterparty under a master netting arrangement. As a result, the Company is permitted to record one net asset or liability that represents the total net exposure of all derivative positions under a master netting arrangement. The decision to offset derivative positions under master netting arrangements remains an accounting policy choice. The guidance in this FSP is effective for fiscal years beginning after November 15, 2007. It is applied retrospectively by adjusting the financial statements for all periods presented. The Company adopted FSP FIN 39-1 as of January 1, 2008. At adoption, the Company chose to offset the collateral amounts against the fair value of derivative assets and liabilities, reducing both the Company’s total assets and total liabilities.

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NOTE 3 — FAIR VALUE

Effective January 1, 2008, the Company adopted SFAS No. 157. This Statement defines fair value, establishes a framework for measuring fair value and expands the disclosures about fair value measurements. The Company has elected to defer the effective date of SFAS No. 157 as it pertains to non-financial assets and liabilities to January 1, 2009.

SFAS No. 157 defines fair value 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 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 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 is immaterial for the third quarter and nine months ended September 30, 2008. The Company believes it uses valuation techniques that maximize the use of observable market-based inputs and minimize the use of unobservable inputs.

SFAS No. 157 establishes a fair value hierarchy, 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. SFAS No. 157 requires that assets and liabilities 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 by SFAS No. 157 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 September 30, 2008:

								Net Balance at
(in Millions)	Level 1		Level 2			Level 3		September 30, 2008
Assets:
Nuclear decommissioning trusts	$	469	$	287		$	—	$	756
Employee benefit trust investments		—		56			—		56
Derivative assets		—		—			3		3
Total	$	469	$	343		$	3	$	815
Liabilities:
Deferred compensation	$	—	$	(1	)	$	—	$	(1	)
Derivative liabilities		—		(15	)		—		(15	)
Total	$	—	$	(16	)	$	—	$	(16	)
Net Assets at September 30, 2008	$	469	$	327		$	3	$	799

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The following table presents the fair value reconciliation of Level 3 derivative assets and liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2008:

(in Millions)	Derivatives
Liability balance as of January 1, 2008 (1)	$	4
Changes in fair value recorded in income		2
Changes in fair value recorded in other comprehensive income		—
Purchases, issuances and settlements		(3	)
Transfers in/out of Level 3		—
Liability balance as of September 30, 2008	$	3
The amount of total gains (losses) included in net income attributed to the change in unrealized gains (losses) related to assets and liabilities held at September 30, 2008	$	3

(1) Balance as of January 1, 2008 includes a cumulative effect adjustment which represents an increase to beginning retained earnings related to Level 3 derivatives upon adoption of SFAS No. 157.

Net gains of $2 million related to Level 3 derivative assets and liabilities are reported in Operating Revenues for the nine months ended September 30, 2008 consistent with the Company’s accounting policy. Net losses of $15 million related to Level 1 and Level 2 derivative assets and liabilities, and the impact of netting, are also reported in Operating Revenues for the nine months ended September 30, 2008. Transfers in and/or out of Level 3 represent existing assets or liabilities that were either previously categorized as a higher level 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.

Nuclear Decommissioning Trusts

The trust fund investments have been established to satisfy Detroit Edison’s nuclear decommissioning obligations. The nuclear decommissioning trust fund investments hold debt and equity securities directly and indirectly through commingled funds and institutional mutual funds. The commingled funds and institutional mutual funds which hold exchange-traded equity or debt securities are valued using quoted prices in actively traded markets. Non-exchange traded fixed income securities are valued based upon quotations available from brokers or pricing services.

Employee Benefit Trust Investments

The employee benefit trust investments are invested in commingled funds and institutional mutual funds holding equity or fixed income securities. The commingled funds and institutional mutual funds which hold exchange-traded equity securities are valued using quoted prices in actively traded markets. Non-exchange-traded fixed income securities are valued based upon quotations available from brokers or pricing services.

Deferred Compensation Liabilities

Deferred compensation plans allow eligible participants to defer a portion of their compensation. The participant is able to designate the investment of the deferred compensation to investments available under the 401(k) plan offered by the Company, although the Company does not actually purchase the investments. The deferred compensation liability is determined based upon the fair values of the mutual funds and equity securities designated in each participant’s account.

21

Derivative Assets and Liabilities

Derivative assets and liabilities are comprised of physical and financial derivative contracts, including forwards, options and financial transmission rights. 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. Other derivatives contracts are valued based upon a variety of inputs including commodity market prices, interest rates, credit ratings, default rates, market-based seasonality and basis differential factors. Mathematical valuation models are used for derivatives for which external market data is not readily observable.

NOTE 4 — RESTRUCTURING

Restructuring — Performance Excellence Process

In 2005, the Company initiated a company-wide review of its operations called the Performance Excellence Process and began a series of focused improvement initiatives. This process continued as of September 30, 2008.

The Company incurred costs to achieve (CTA) restructuring expense for employee severance and other costs. Other costs include project management and consultant support. Pursuant to MPSC authorization, beginning in the third quarter of 2006, Detroit Edison deferred approximately $102 million of CTA in 2006. During 2007, Detroit Edison deferred CTA costs of $54 million. Detroit Edison began amortizing deferred 2006 costs in 2007 and 2007 deferred costs in 2008 as the recovery of these costs was provided for by the MPSC. Amortization of prior year deferred CTA costs was $4 million and $3 million for the three months ended September 30, 2008 and 2007, respectively, and $12 million and $8 million for the nine months ended September 30, 2008 and 2007, respectively. Detroit Edison deferred approximately $9 million and $18 million of CTA for the three months ended September 30, 2008 and 2007, respectively, and approximately $20 million and $39 million of CTA for the nine months ended September 30, 2008 and 2007, respectively. See Note 5.

Amounts expensed are recorded in Operation and maintenance on the Consolidated Statements of Operations. Deferred amounts are recorded in the Regulatory assets line on the Consolidated Statements of Financial Position. Costs incurred for the three- and nine- month periods ended September 30, 2008 and 2007 are as follows:

Three Months Ended September 30	Employee Severance Costs(1)				Other Costs				Total Cost
(in Millions)	2008		2007		2008		2007		2008		2007
Costs incurred		—		3		9		16		9		19
Less amounts deferred or capitalized		—		3		9		16		9		19
Amount expensed	$	—	$	—	$	—	$	—	$	—	$	—

Nine Months Ended September 30	Employee Severance Costs(1)				Other Costs				Total Cost
(in Millions)	2008		2007		2008		2007		2008		2007
Costs incurred		—		14		21		30		21		44
Less amounts deferred or capitalized		—		14		21		30		21		44
Amount expensed	$	—	$	—	$	—	$	—	$	—	$	—

(1) Includes corporate allocations.

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NOTE 5 — REGULATORY MATTERS

Regulation

Detroit Edison is subject to the regulatory jurisdiction of the MPSC, which issues orders pertaining to rates and recovery of certain costs. These costs include the costs of generating facilities, 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.

MPSC Show-Cause Order

In March 2006, the MPSC issued an order directing Detroit Edison to show cause by June 1, 2006 why its rates should not be reduced in 2007. Subsequently, Detroit Edison filed its response to this order and the MPSC issued an order approving a settlement agreement in this proceeding on August 31, 2006. The order provided for an annualized rate reduction of $53 million for 2006, effective September 5, 2006. Beginning January 1, 2007, and continuing until April 13, 2008, one year from the filing of the general rate case on April 13, 2007, rates were reduced by an additional $26 million, for a total reduction of $79 million annually. The revenue reduction is net of the recovery of the amortization of the costs associated with the implementation of the Performance Excellence Process. The settlement agreement provided for some level of realignment of the existing rate structure by allocating a larger percentage share of the rate reduction to the commercial and industrial customer classes than to the residential customer classes.

As part of the settlement agreement, a Choice Incentive Mechanism (CIM) was established with a base level of electric choice sales set at 3,400 GWh. The CIM prescribes regulatory treatment of changes in non-fuel revenue attributed to increases or decreases in electric Customer Choice sales. If electric Customer Choice sales exceed 3,600 GWh, Detroit Edison will be able to recover 90% of its reduction in non-fuel revenue from full service customers, up to $71 million. If electric Customer Choice sales fall below 3,200 GWh, Detroit Edison will credit 100% of the increase in non-fuel revenue to the unrecovered regulatory asset balance. In March 2008, Detroit Edison filed a reconciliation of its CIM for the year 2007. Detroit Edison’s annual Electric Choice sales for 2007 were 2,239 GWh which was below the base level of sales of 3,200 GWh. Accordingly, the Company used the resulting additional non-fuel revenue to reduce unrecovered regulatory asset balances related to the Regulatory Asset Recovery Surcharge (RARS) mechanism. This reconciliation did not result in any rate increase.

2007 Electric Rate Case Filing

Pursuant to the February 2006 MPSC order in Detroit Edison’s rate restructuring case and the August 2006 MPSC order in the settlement of the show cause case, Detroit Edison filed a general rate case on April 13, 2007 based on a 2006 historical test year. The filing with the MPSC requested a $123 million, or 2.9%, average increase in Detroit Edison’s annual revenue requirement for 2008.

The requested $123 million increase in revenues is required to recover significant environmental compliance costs and inflationary increases, partially offset by net savings associated with the Performance Excellence Process. The filing was based on a return on equity of 11.25% on an expected 50% capital and 50% debt capital structure by the end of 2008.

In addition, Detroit Edison’s filing made, among other requests, the following proposals:

• Make progress toward correcting the existing rate structure to more accurately reflect the actual cost of providing service to business customers;

• Equalize distribution rates between Detroit Edison full service and Customer Choice customers;

• Re-establish with modification the CIM originally established in the Detroit Edison 2006 show cause filing. The CIM reconciles changes related to customers moving between Detroit Edison full service and electric Customer Choice;

• Terminate the Pension Equalization Mechanism;

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• Establish an emission allowance pre-purchase plan to ensure that adequate emission allowances will be available for environmental compliance; and

• Establish a methodology for recovery of the costs associated with preparation of an application for a new nuclear generation facility.

Also in the filing, in connection with Michigan’s 21st Century Energy Plan, Detroit Edison reinstated a long-term integrated resource planning (IRP) process with the purpose of developing the least overall cost plan to serve customers’ generation needs over the next 20 years. Based on the IRP, new base load capacity may be required for Detroit Edison. To protect tax credits available under federal law, Detroit Edison determined it would be prudent to initiate the application process for a new nuclear unit. Detroit Edison has not made a decision to build a new nuclear unit; however, it has elected to preserve its option to build at some point in the future by beginning the complex nuclear licensing process in 2007. Additionally, beginning the licensing process at the present time positions Detroit Edison to potentially take advantage of tax incentives derived from provisions in the 2005 Federal Energy Policy Act, which will benefit customers. To qualify for these tax credits, a combined operating license application for construction and operation of an advanced nuclear generating plant must be filed with the Nuclear Regulatory Commission (NRC) no later than December 31, 2008. Detroit Edison filed the combined operating license application with the NRC on September 18, 2008. Formal NRC review and approval is expected to take 3- 4 years and is estimated to cost an additional $57 million. Costs of $20 million related to preparing the combined licensing application have been deferred and included in Other assets as of September 30, 2008.

On August 31, 2007, Detroit Edison filed a supplement to its April 2007 rate case filing. A July 2007 decision by the State of Michigan Court of Appeals remanded back to the MPSC the November 2004 order in a prior Detroit Edison rate case that denied recovery of merger control premium costs. The supplemental filing addressed recovery of approximately $61 million related to the merger control premium. The filing also included the impact of the July 2007 enactment of the MBT and other adjustments. The net impact of the supplemental filing resulted in an approximately $76 million average increase in Detroit Edison’s annual revenue requirement for 2008.

On February 20, 2008, Detroit Edison filed an update to its April 2007 rate case filing. The update reflected the use of 2009 as the projected test year and included a revised 2009 load forecast; 2009 revised estimates on environmental and advanced metering infrastructure capital expenditures; and adjustments to the calculation of the MBT. The update also included the August 2007 supplemental filing adjustments for the merger control premium, the new MBT and environmental operating and maintenance adjustments. The net impact of the updated filing resulted in an approximately $85 million average increase in Detroit Edison’s annual revenue requirement for 2009. The total filing requested a $284 million increase in Detroit Edison’s annual revenue for 2009. An MPSC order related to this filing is expected by early 2009.

Regulatory Accounting Treatment for Performance Excellence Process

In May 2006, Detroit Edison filed applications with the MPSC to allow deferral of costs associated with the implementation of the Performance Excellence Process, a Company-wide cost-savings and performance improvement program. Detroit Edison sought MPSC authorization to defer and amortize Performance Excellence Process implementation costs for accounting purposes to match the expected savings from the Performance Excellence Process program with the related CTA.

The Performance Excellence Process continued as of September 30, 2008. In September 2006, the MPSC issued an order approving a settlement agreement that allows Detroit Edison, commencing in 2006, to defer the incremental CTA, subject to the MPSC establishing a recovery mechanism. Further, the order provided for Detroit Edison to amortize the CTA deferrals over a 10-year period beginning with the year subsequent to the year the CTA was deferred. See Note 4 for additional information on amounts deferred and amortized in 2006 and 2007 and for the three and nine months ended September 30, 2008 and 2007.

Accounting for Costs Related to Enterprise Business Systems (EBS)

In July 2004, Detroit Edison filed an accounting application with the MPSC requesting authority to capitalize and amortize costs related to EBS, consisting of computer equipment, software and development costs, as well as related

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training, maintenance and overhead costs. In April 2005, the MPSC approved a settlement agreement providing for the deferral of up to $60 million of certain EBS costs, which would otherwise be expensed, as a regulatory asset for future rate recovery starting January 1, 2006. At September 30, 2008, approximately $26 million of EBS costs have been deferred as a regulatory asset. In addition, EBS costs recorded as plant assets are being amortized over a 15-year period, pursuant to MPSC authorization.

Fermi 2 Enhanced Security Costs Settlement

The Customer Choice and Electricity Reliability Act, as amended in 2003, allows for the recovery of reasonable and prudent costs of new and enhanced security measures required by state or federal law, including providing for reasonable security from an act of terrorism. In December 2006, Detroit Edison filed an application with the MPSC for recovery of $11.4 million of Fermi 2 Enhanced Security Costs (ESC), discounted back to September 11, 2001 plus carrying costs from that date. In April 2007, the MPSC approved a settlement agreement that authorizes Detroit Edison to recover Fermi 2 ESC incurred during the period of September 11, 2001 through December 31, 2005. The settlement defined Detroit Edison’s ESC, discounted back to September 11, 2001, as $9.1 million plus carrying charges. A total of $13 million, including carrying charges, has been deferred as a regulatory asset. Detroit Edison is authorized to incorporate into its rates an enhanced security factor over a period not to exceed five years. Amortization expense related to this regulatory asset was approximately $1 million and $3 million for the three and nine-month periods ended September 30, 2008. Amortization of this regulatory asset was approximately $1 million and $2 million for the three- and nine-months ended September 30, 2007.

Reconciliation of Regulatory Asset Recovery Surcharge (RARS)

In December 2006, Detroit Edison filed a reconciliation of costs underlying its existing RARS. This true-up filing was made to maximize the remaining time for recovery of significant cost increases prior to expiration of the RARS 5-year recovery limit under PA 141. Detroit Edison requested a reconciliation of the regulatory asset surcharge to ensure proper recovery by the end of the 5-year period of: (1) Clean Air Act Expenditures, (2) Capital in Excess of Base Depreciation, (3) MISO Costs and (4) the regulatory liability for the 1997 Storm Charge. In July 2007, the MPSC approved a negotiated RARS deficiency settlement that resulted in a $10 million write-down of RARS-related costs in 2007. As discussed above, the CIM in the MPSC Show-Cause Order will reduce the regulatory asset. Detroit Edison had no CIM reductions for the three months ended September 30, 2008 due to the expiration of the CIM in April 2008. Approximately $20 million was credited to the unrecovered regulatory asset balance during the three months ended September 30, 2007. Approximately $11 million and $27 million was credited to the unrecovered regulatory asset balance during the nine months ended September 30, 2008 and 2007, respectively.

Power Supply Costs Recovery Proceedings

2005 Plan Year - In March 2006, Detroit Edison filed its 2005 PSCR reconciliation that sought approval for recovery of an under-recovery of approximately $144 million at December 31, 2005 from its commercial and industrial customers. The filing included a motion for entry of an order to implement immediately a reconciliation surcharge of 4.96 mills per kWh on the bills of its commercial and industrial customers. The under-collected PSCR expense allocated to residential customers could not be recovered due to the PA 141 rate cap for residential customers, which expired January 1, 2006. In addition to the 2005 PSCR plan year reconciliation, the filing included a reconciliation for the Pension Equalization Mechanism (PEM) for the periods from November 24, 2004 through December 31, 2004 and from January 1, 2005 through December 31, 2005. The PEM reconciliation seeks to allocate and refund approximately $12 million to customers based on their contributions to pension expense during the subject periods. In September 2006, the MPSC ordered the Company to roll the entire 2004 PSCR over-collection amount to its 2005 PSCR Reconciliation. An order was issued on May 22, 2007 approving a 2005 PSCR under-collection amount of $94 million and the recovery of this amount through a surcharge for 12 months beginning in June 2007. In addition, the order approved Detroit Edison’s proposed PEM reconciliation that was refunded to customers on a bills-rendered basis during June 2007. The 2005 under-collection surcharge was terminated in May 2008. The surcharge will be reconciled in the Company’s 2008 PSCR reconciliation.

2006 Plan Year — In March 2007, Detroit Edison filed its 2006 PSCR reconciliation that sought approval for recovery of an under-collection of approximately $51 million. Included in the 2006 PSCR reconciliation filing was the Company’s PEM reconciliation that reflects a $21 million over-collection which is subject to refund to

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customers. An MPSC order was issued on April 22, 2008 approving the 2006 PSCR under-collection amount of $51 million and the recovery of this amount as part of the 2007 PSCR factor. In addition, the order approved Detroit Edison’s PEM reconciliation and authorized the Company to refund the $22 million over-recovery, including interest, to customers in May 2008. The 2006 PEM refund was included in May 2008 customer bills. The refund will be reconciled in the Company’s 2008 PEM reconciliation.

2007 Plan Year — In September 2006, Detroit Edison filed its 2007 PSCR plan case seeking approval of a levelized PSCR factor of 6.98 mills per kWh above the amount included in base rates for all PSCR customers. The Company’s PSCR plan filing included $130 million for the recovery of its projected 2006 PSCR under-collection, bringing the total requested PSCR factor to 9.73 mills/kWh. The Company’s application included a request for an early hearing and temporary order granting such ratemaking authority. The Company’s 2007 PSCR plan included fuel and power supply costs, including NOx and SO₂ emission allowance costs, transmission costs and MISO costs. The Company filed supplemental testimony and briefs in December 2006 supporting its updated request to include approximately $81 million for the recovery of its projected 2006 PSCR under-collection. The MPSC issued a temporary order in December 2006 approving the Company’s request. In addition, Detroit Edison was granted the authority to include all PSCR over/(under) collections in future PSCR plans, thereby reducing the time between refund or recovery of PSCR reconciliation amounts. The Company began to collect its 2007 power supply costs, including the 2006 rollover amount, through a PSCR factor of 8.69 mills/kWh on January 1, 2007. The Company reduced the PSCR factor to 6.69 mills/kWh on July 1, 2007 based on the updated 2007 plan year projections and increased the PSCR factor to 8.69 mills/kWh on December 1, 2007. In August 2007, the MPSC approved Detroit Edison’s 2007 PSCR plan case and authorized the Company to charge a maximum power supply cost recovery factor of 8.69 mills/kWh in 2007. The Company filed its 2007 PSCR reconciliation case in March 2008. The filing requests recovery of a $44 million PSCR under-collection through its 2008 PSCR plan. Included in the 2007 PSCR reconciliation filing was the Company’s 2007 PEM reconciliation that reflects a $21 million over-collection, including interest and prior year refunds. The Company expects an order in this proceeding in the second quarter of 2009.

2008 Plan Year — In September 2007, Detroit Edison filed its 2008 PSCR plan case seeking approval of a levelized PSCR factor of 9.23 mills/kWh above the amount included in base rates for all PSCR customers. The Company is supporting a total 2008 power supply expense forecast of $1.3 billion that includes $1 million for the recovery of its projected 2007 PSCR under-collection. Also included in the filing was a request for approval of the Company’s emission compliance strategy which included pre-purchases of emission allowances as well as a request for pre-approval of a contract for capacity and energy associated with a renewable wind energy project. On January 31, 2008, Detroit Edison filed a revised PSCR plan case seeking approval of a levelized PSCR factor of 11.22 mills/kWh above the amount included in base rates for all PSCR customers. The revised filing supports a 2008 power supply expense forecast of $1.4 billion and includes $43 million for the recovery of a projected 2007 PSCR under-collection. In March 2008, the MPSC ordered that Detroit Edison shall not self-implement the 11.22 mills/kWh power supply cost recovery factor proposed in its January 2008 filing. Detroit Edison filed a renewed motion for a temporary order to implement the 11.22 mills/kWh factor in June 2008. On July 29, 2008, the MPSC issued a temporary order approving Detroit Edison’s request to increase the PSCR factor to 11.22 mills/kWh. The Company expects a final MPSC order in this proceeding in the fourth quarter of 2008.

2009 Plan Year - In September 2008, Detroit Edison filed its 2009 PSCR plan case seeking approval of a levelized PSCR factor of 17.67 mills/kWh above the amount included in base rates for residential customers and a levelized PSCR factor of 17.29 mills/kWh above the amount included in base rates for commercial and industrial customers. The Company is supporting a total power supply expense forecast of $1.73 billion. The plan also includes approximately $69 million for the recovery of its projected 2008 PSCR undercollection from all customers and approximately $12 million for the refund of its 2005 PSCR Reconciliation surcharge overcollection to commercial and industrial customers only. 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 renewable (wind) energy project. The Company’s PSCR Plan will allow the Company to recover its reasonably and prudently incurred power supply expense including; fuel costs, purchased and net interchange power costs, NOx and SO2 emission allowance costs, transmission costs and MISO costs.

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Other

In July 2007, the State of Michigan Court of Appeals published its decision with respect to an appeal by Detroit Edison and others of certain provisions of a November 2004 MPSC order, including reversing the MPSC’s denial of recovery of merger control premium costs. In its published decision, the Court of Appeals held that Detroit Edison is entitled to recover its allocated share of the merger control premium and remanded this matter to the MPSC for further proceedings to establish the precise amount and timing of this recovery. Detroit Edison has filed a supplement to its April 2007 rate case to address the recovery of the merger control premium costs. Other parties filed requests for leave to appeal to the Michigan Supreme Court from the Court of Appeals decision and in September 2008, the Michigan Supreme Court granted the requests to address the merger control premium as well as the recovery of transmission costs through the PSCR. The Company is unable to predict the financial or other outcome of any legal or regulatory proceeding at this time.

The Company is unable to predict the outcome of the 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 6 — SHAREHOLDER’S EQUITY

In March 2008, DTE Energy made a capital contribution of $175 million to the Company.

NOTE 7 — LONG-TERM DEBT

Detroit Edison converted $238 million of tax-exempt bonds from an auction rate mode to a weekly rate mode in March 2008 due to a loss of liquidity in the auction rate markets. Detroit Edison then repurchased these bonds and held them until such time as it could either redeem and reissue the bonds or remarket the bonds in a longer-term mode. Approximately $187 million of these bonds have been redeemed and reissued and $51 million have been remarketed in a fixed rate mode to maturity.

Debt Issuances

In 2008, the Company has issued the following long-term debt:

(in Millions)
Month Issued	Type	Interest Rate			Maturity		Amount
April	Tax-Exempt Revenue Bonds (2) (3)	Variable				2036	$	69
May	Tax-Exempt Revenue Bonds (2) (3)	Variable				2029		118
May	Tax-Exempt Revenue Bonds (2) (4)		5.30	%		2030		51
June	Senior Notes (1)		5.60	%		2018		300
July	Tax-Exempt Revenue Bonds (2) (5)	Variable				2020		32
October	Senior Notes (1)		6.40	%		2013		250
							$	820

(1)	Proceeds were used to pay down short-term debt and for general corporate purposes.
(2)	Detroit Edison Tax-Exempt Revenue Bonds are issued by a public body that loans the proceeds to Detroit Edison on terms substantially mirroring the Revenue Bonds.
(3)	Proceeds were used to refinance auction rate Tax-Exempt Revenue Bonds.
(4)	These Tax-Exempt Revenue Bonds were converted from an auction rate mode and remarketed in a fixed rate mode to maturity.
(5)	Proceeds were used to refinance Tax-Exempt Revenue Bonds that matured July 2008.

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Debt Retirements and Redemptions

In 2008, the following debt has been retired, through optional redemption or payment at maturity:

(in Millions)
Month Retired	Type	Interest Rate			Maturity		Amount
April	Tax-Exempt Revenue Bonds (1)	Variable				2036	$	69
May	Tax-Exempt Revenue Bonds (1)	Variable				2029		118
July	Tax-Exempt Revenue Bonds (2)		7.00	%		2008		32
							$	219

(1)	These Tax-Exempt Revenue Bonds were converted from auction rate mode, then repurchased and reissued in a weekly rate mode.
(2)	These Tax-Exempt Revenue Bonds were redeemed with the proceeds from the issuance of new Detroit Edison Tax-Exempt Revenue Bonds.

NOTE 8 — COMMITMENTS AND CONTINGENCIES

Environmental

Air — Detroit Edison is subject to EPA ozone transport and acid rain regulations that limit power plant emissions of sulfur dioxide and nitrogen oxides. In March 2005, the EPA 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 $1.1 billion through 2007. The Company estimates Detroit Edison future capital expenditures at up to $282 million in 2008 and up to $2.4 billion of additional capital expenditures through 2018 to satisfy both the existing and proposed new control requirements.

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 the studies to be conducted over the next several years, 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 over the 4 to 6 years subsequent to 2007 in additional capital expenditures to comply with these requirements. However, a recent court decision remanded back to the EPA several provisions of the federal regulation that may result 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.

Contaminated Sites — Detroit Edison conducted remedial investigations at contaminated sites, including three former manufactured gas plant (MGP) sites, the area surrounding an ash landfill and several underground and aboveground storage tank locations. Liabilities accrued for remediation of these sites were approximately $12 million at September 30, 2008 and $15 million at December 31, 2007. The costs to remediate are expected to be incurred over the next several years.

Labor Contracts

There are several bargaining units for the Company’s represented employees. In September 2008, approximately 500 employees ratified a new four-year contract. The contracts of the remaining represented employees expire in 2010.

Purchase Commitments

Detroit Edison has an Energy Purchase Agreement to purchase steam and electricity from the Greater Detroit Resource Recovery Authority (GDRRA). Under the Agreement, Detroit Edison will purchase steam through 2008 and electricity through June 2024. In 1996, a charge to income was recorded that included a reserve for steam purchase commitments in excess of replacement costs from 1997 through 2008. The reserve for steam purchase

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commitments totals $5 million as of September 30, 2008 and is being amortized to Fuel, purchased power and gas expense with non-cash accretion expense being recorded through 2008. The Company estimates steam and electric purchase commitments from 2008 through 2024 will not exceed $343 million. In 2003, the Company sold the steam heating business of Detroit Edison to Thermal Ventures II, LP. Under the terms of the sale, Detroit Edison remains contractually obligated to buy steam from GDRRA through December 2008. Also, the Company guaranteed bank loans of $13 million that Thermal Ventures II, LP may use for capital improvements to the steam heating system and during 2007 recorded a liability of $13 million related to the bank loan guarantee.

As of September 30, 2008, 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 $1.4 billion from 2008 through 2024. The Company also estimates that 2008 capital expenditures will be approximately $1 billion. The Company has made certain commitments in connection with expected capital expenditures.

Bankruptcies

The Company transacts with numerous companies operating in the steel, automotive, energy, retail, financial and other industries. Certain of the Company’s 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. Management believes the Company’s previously accrued amounts are adequate for probable losses. The final resolution of these matters is not expected to have a material effect on the Company’s consolidated financial statements.

Other Contingencies

The Company is involved in certain 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 it can estimate and which 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 periods they are resolved.

See Note 5 for a discussion of contingencies related to regulatory matters.

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Part II

Item 1. — 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 period they are resolved.

We are aware of attempts by an environmental organization known as the Waterkeeper Alliance to initiate a criminal action in Canada against the Company for alleged violations of the Canadian Fisheries Act. Fines under the relevant Canadian statute could potentially be significant. To date, the Company has not been properly served process in this matter. Nevertheless, as a result of a recent decision by a Canadian court, a trial schedule has been initiated. The Company believes the claims of the Waterkeeper Alliance in this matter are without legal merit and has appealed the court’s decision. Detroit Edison is not able to predict or assess the outcome of this action at this time.

Item 1A. — Risk Factors

There are various risks associated with the operations of DTE Energy’s utility and non-utility businesses. Our 2007 Form 10-K includes a detailed discussion of our risk factors. The information presented below amends and restates a certain risk factor and should be read in conjunction with the risk factors and information disclosed in our 2007 Form 10-K. Additional risks and uncertainties not currently known to the Company, or that are currently deemed to be immaterial, also may materially adversely affect the Company’s business, financial condition and/or future operating results.

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 recent energy legislation enacted by the State of Michigan are phasing out the pricing disparity and have placed a cap on the total potential Customer Choice related migration. Recent higher wholesale electric prices have also resulted in some former electric Customer Choice customers migrating back to Detroit Edison for electric generation service. 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 bundled electric service price increases.

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Item 6. — Exhibits

Exhibit
Number	Description
Exhibits filed herewith:
4-259	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, providing for General and Refunding Mortgage Bonds, 2008 Series J.
4-260	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 Mellon Trust Company, N.A. providing for 2008 Series J 6.40% Senior Notes due 2013.
12-31	Computation of Ratio of Earnings to Fixed Charges
31-43	Chief Executive Officer Section 302 Form 10-Q Certification
31-44	Chief Financial Officer Section 302 Form 10-Q Certification
Exhibits furnished herewith:
32-43	Chief Executive Officer Section 906 Form 10-Q Certification
32-44	Chief Financial Officer Section 906 Form 10-Q Certification

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SIGNATURE

Pursuant to the requirements 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: November 14, 2008	/s/ PETER B. OLEKSIAK
	Peter B. Oleksiak
	Vice President and Controller and Chief Accounting Officer

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EX-4.259

Exhibit 4-259

INDENTURE

DATED AS OF OCTOBER 1, 2008

THE DETROIT EDISON COMPANY
(2000 2nd Avenue, Detroit, Michigan 48226)

TO

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
(Successor to J.P. Morgan Trust Company, National Association)
(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,
2008 SERIES J

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 2008 Series J		10
Further Assurance		10
Authorization of Supplemental Indenture		11
Consideration for Supplemental Indenture		11
PART I. CREATION OF THREE HUNDRED FIFTY-THIRD SERIES OF BONDS, GENERAL AND REFUNDING MORTGAGE BONDS, 2008 SERIES J		11
Sec. 1. Terms of Bonds of 2008 Series J		11
Sec. 2. Release		13
Sec. 3. Redemption of Bonds of 2008 Series J		14
Sec. 4. Redemption of Bonds of 2008 Series J in Event of Acceleration of Notes		14
Sec. 5. Form of Bonds of 2008 Series J		15
Form of Trustee’s Certificate		16
Form of Reverse of Bond		16
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 June 1, 2008		24
Recording and Filing of Supplemental Indenture Dated as of July 1, 2008		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		26
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 October, in the year 2008, between THE DETROIT EDISON COMPANY, a corporation organized and existing under the laws of the State of Michigan and a public utility, having its corporate offices at 2000 2nd Avenue, Detroit, Michigan 48226 (hereinafter called the “Company”), party of the first part, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (successor to J.P. Morgan Trust Company, National Association), a trust company organized and existing under the laws of the United States, having a corporate trust 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 and July 1, 2008 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,

3

	the terms and rates of optional redemption (if redeemable), the forms of registered bonds without coupons of any series and any other provisions and 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 Twelve billion nine hundred eighty-one million three hundred fifty-two thousand dollars ($12,981,352,000) 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,

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(23-31)	Bonds of Series DDP Nos. 1-9	— Principal Amount $14,305,000,
(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,

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(258)	Bonds of 1986 Series B	— Principal Amount $100,000,000,
(259)	Bonds of 1987 Series D	— Principal Amount $250,000,000,
(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,

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(285)	Bonds of 1993 Series K	— Principal Amount $160,000,000,
(286)	Bonds of 1991 Series EP	— Principal Amount $41,480,000,
(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,

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(316)	Bonds of 2005 Series DT	— Principal Amount $119,175,000, and
(317)	Bonds of 1991 Series AP	— Principal Amount $32,375,000;

	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;
(318)	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 eighty million eight hundred four thousand dollars ($180,804,000) principal amount have heretofore been retired;
(319)	Bonds of 1990 Series C in the principal amount of Eighty-five million four hundred seventy-five thousand dollars ($85,475,000) of which Sixty-four million nine hundred sixty-one thousand dollars ($64,961,000) principal amount have heretofore been retired;
(320)	INTENTIONALLY RESERVED FOR 1990 SERIES E;
(321)	INTENTIONALLY RESERVED FOR 1990 SERIES F;
(322)	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;
(323)	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;
(324)	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;
(325)	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;
(326)	Bonds of 1993 Series AP in the principal amount of Sixty-five million dollars ($65,000,000), all of which are outstanding at the date hereof;
(327)	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;
(328)	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;
(329)	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;

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(330)	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;
(331)	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;
(332)	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;
(333)	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;
(334)	Bonds of 2001 Series E in the principal amount of Five hundred million dollars ($500,000,000), all of which are outstanding at the date hereof;
(335)	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;
(336)	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;
(337)	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;
(338)	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;
(339)	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;
(340)	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;
(341)	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;
(342)	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;
(343)	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;
(344)	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;

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(345)	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;
(346)	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;
(347)	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;
(348)	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;
(349)	Bonds of 2008 Series DT in the principal amount of Sixty-eight million five hundred thousand dollars ($68,500,000), 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; and
(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;
	accordingly, the Company has issued and has presently outstanding Three billion eight hundred nine million eight hundred seventy-seven thousand dollars ($3,809,877,000) 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 intends to issue a series of Notes under the Note Indenture herein referred to, and, pursuant to the Note Indenture, the Company has agreed to issue its General and Refunding Mortgage Bonds under the Indenture in order further to secure its obligations with respect to such Notes; and
BONDS TO BE 2008 SERIES J.	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, 2008 Series J,” in the aggregate principal amount of Two hundred fifty million dollars ($250,000,000), to be authenticated and delivered pursuant to Section 8 of Article III of the Indenture; and
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

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	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-THIRD SERIES OF BONDS, GENERAL AND REFUNDING MORTGAGE BONDS, 2008 SERIES J

TERMS OF BONDS OF 2008 SERIES J.

SECTION 1. The Company hereby creates the three hundred fifty-third 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, 2008 Series J” (elsewhere herein referred to as the “bonds of 2008 Series J”). The aggregate principal amount of bonds of 2008 Series J shall be limited to Two hundred fifty million dollars ($250,000,000), except as provided in Sections 7 and 13 of Article II of the Original Indenture with respect to exchanges and replacements of bonds, and except further that the Company may, without the consent of any holder of the bonds of 2008 Series J, “reopen” the bonds of 2008 Series J so as to increase the aggregate principal amount outstanding to equal the aggregate principal amount of Notes (as defined below) outstanding upon a “reopening” of the series, so long as any additional bonds of 2008 Series J have the same tenor and terms as the bonds of 2008 Series J established hereby.

Subject to the release provisions set forth below, each bond of 2008 Series J is to be irrevocably assigned to, and registered in the name of, The Bank of New York Mellon Trust Company, N.A., as trustee, or a successor trustee (said

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trustee or any successor trustee being hereinafter referred to as the “Note Indenture Trustee”), under the collateral trust indenture, dated as of June 30, 1993, as supplemented (the “Note Indenture”), between the Note Indenture Trustee and the Company, to secure payment of the Company’s 2008 Series J 6.40% Senior Notes due 2013 (for purposes of this Part I, the “Notes”).

The bonds of 2008 Series J shall be issued as registered bonds without coupons in denominations of a multiple of $1,000. The bonds of 2008 Series J shall be issued in the aggregate principal amount of $250,000,000, shall mature on October 1, 2013 (subject to earlier redemption or release) and shall bear interest at the rate of 6.40% per annum, payable semi-annually in arrears on April 1 and October 1 of each year (commencing April 1, 2009), 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.

The bonds of 2008 Series J 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 2008 Series J 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 2008 Series J shall be dated the date of its authentication and interest shall be payable on the principal represented thereby from the April 1 or October 1 next preceding the date thereof to which interest has been paid on bonds of 2008 Series J, 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 April 1, 2009 in which case interest shall be payable from October 10, 2008.

The bonds of 2008 Series J 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 2008 Series J). Until bonds of 2008 Series J in definitive form are ready for delivery, the Company may execute, and upon its request in writing the Trustee shall authenticate and deliver in lieu thereof, bonds of 2008 Series J in temporary form, as provided in Section 10 of Article II of the Indenture. Temporary bonds of 2008 Series J, if any, may be printed and may be issued in authorized denominations in substantially the form of definitive bonds of 2008 Series J, 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 2008 Series J 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

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	fifteenth calendar day (whether or not a business day) next preceding 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 2008 Series J, 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 2008 Series J 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 2008 Series J 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 2008 Series J 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 2008 Series J shall not be assignable or transferable except as may be set forth under Section 405 of the Note Indenture or in the supplemental note indenture relating to the Notes, 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 Note 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 2008 Series J shall in the same manner be exchangeable for a like aggregate principal amount of bonds of 2008 Series J 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 2008 Series J during any period of ten (10) days next preceding any redemption date for such bonds.
	Bonds of 2008 Series J, 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 Note Indenture.
	Upon payment of the principal or premium, if any, or interest on the Notes, whether at maturity or prior to maturity by redemption or otherwise, or upon provision for the payment thereof having been made in accordance with Article V of the Note Indenture, bonds of 2008 Series J in a principal amount equal to the principal amount of such Notes, 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.
RELEASE.	SECTION 2. From and after the Release Date (as defined in the Note Indenture), the bonds of 2008 Series J shall be deemed fully paid, satisfied and discharged and the obligation of the Company thereunder shall be terminated. On the Release Date, the bonds of 2008 Series J shall be surrendered to and

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	canceled by the Trustee. The Company covenants and agrees that, prior to the Release Date, it will not take any action that would cause the outstanding principal amount of the bonds of 2008 Series J to be less than the then-outstanding principal amount of the Notes.
REDEMPTION OF BONDS OF 2008 SERIES J.	SECTION 3. Bonds of 2008 Series J 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 Notes.
	In the event the Company elects to redeem any Notes prior to maturity in accordance with the provisions of the Note Indenture, the Company shall give the Trustee notice of redemption of bonds of 2008 Series J on the same date as it gives notice of redemption of Notes to the Note Indenture Trustee.
REDEMPTION OF BONDS OF 2008 SERIES J IN EVENT OF ACCELERATION OF NOTES.	SECTION 4. In the event of an Event of Default under the Note Indenture and the acceleration of all Notes, the bonds of 2008 Series J shall be redeemable in whole upon receipt by the Trustee of a written demand (hereinafter called a “Redemption Demand”) from the Note Indenture Trustee stating that there has occurred under the Note Indenture both an Event of Default and a declaration of acceleration of payment of principal, accrued interest and premium, if any, on the Notes, specifying the last date to which interest on the Notes 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 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 Note Indenture Trustee not more than ten (10) nor less than five (5) days prior to the Demand Redemption Date.
	Each bond of 2008 Series J shall be redeemed by the Company on the Demand Redemption Date therefor upon surrender thereof by the Note 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 Notes; provided, however, that in the event of a receipt by the Trustee of a notice that, pursuant to Section 602 of the Note Indenture, the Note Indenture Trustee has terminated proceedings to enforce any right under the Note Indenture, then any Redemption Demand shall

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	thereby be rescinded by the Note 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 Note Indenture Trustee by its President or one of its Vice Presidents.
FORM OF BONDS OF 2008 SERIES J.	SECTION 5. The bonds of 2008 Series J (including the reverse thereof) and the form of Trustee’s Certificate to be endorsed on such bonds shall be substantially in the following forms, respectively:
	THE DETROIT EDISON COMPANY GENERAL AND REFUNDING MORTGAGE BOND 2008 SERIES J
	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 Collateral Trust Indenture, dated as of June 30, 1993, as amended, and as further supplemented by the supplemental indenture thereto dated as of October 1, 2008, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as Note 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 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 Note 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 of                                           Dollars ($                                           ) in lawful money of the United States of America on October 1, 2013 (subject to earlier redemption or release) and interest thereon at the rate of 6.40% per annum, in like lawful money, from October 10, 2008, 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, semi-annually on April 1 and October 1 of each year (commencing April 1, 2009), 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.

Under a Collateral Trust Indenture, dated as of June 30, 1993, as amended and as further supplemented as of October 1, 2008 (hereinafter called the “Note Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (hereinafter called the “Note Indenture Trustee”), the Company has issued its 2008 Series J 6.40% Senior Notes due

15

2013 (the “Notes”). This bond was originally issued to the Note Indenture Trustee so as to secure the payment of the Notes. Payments of principal of, or premium, if any, or interest on, the Notes shall constitute like payments on this bond as further provided herein and in the supplemental indenture pursuant to which this bond has been issued.

Reference is hereby made to such further provisions of this bond set forth on the reverse hereof and such provisions shall for all purposes have the same effect as though set forth in this place.

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
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

	[FORM OF REVERSE OF BOND]
FORM OF REVERSE OF BOND	This bond is one of an authorized issue of bonds of the Company, unlimited as

16

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 2008 Series J, limited to an aggregate principal amount of $250,000,000, 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 October 1, 2008) 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 October 1, 2008, are hereinafter 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 prior to the Release Date upon the terms and conditions set forth in the Indenture, including provision for redemption upon demand of the Note Indenture Trustee following the occurrence of an Event of Default under the Note Indenture and the acceleration of the principal of the Notes.

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 2008 Series J (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

17

Indenture or with respect to such bonds (or portions thereof) and interest.

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.

Upon payment of the principal of, or premium, if any, or interest on, the Notes, whether at maturity or prior to maturity by redemption or otherwise or upon provision for the payment thereof having been made in accordance with Article V of the Note Indenture, bonds of 2008 Series J in a principal amount equal to the principal amount of such Notes, 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 405 of the Note Indenture or in the supplemental indenture relating to the Notes, 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 Note 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.

From and after the Release Date (as defined in the Note Indenture), the bonds of 2008 Series J shall be deemed fully paid, satisfied and discharged and the obligation of the Company thereunder shall be terminated. On the Release Date, the bonds of 2008 Series J shall be surrendered to and cancelled by the Trustee. The Company covenants and agrees that, prior to the Release Date, it will not take any action that would cause the outstanding principal amount of the bond of 2008 Series J to be less than the then outstanding principal amount of the Notes.

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

18

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.

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:

		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

19

		Recorded and/or Filed
		as Set Forth in
Supplemental Indenture	Purpose of Supplemental	Supplemental
Dated as of	Indenture	Indenture Dated as of
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
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

20

		Recorded and/or Filed
		as Set Forth in
Supplemental Indenture	Purpose of Supplemental	Supplemental
Dated as of	Indenture	Indenture Dated as of
February 15, 1977	Series MMP Bonds and Subject Properties	March 1, 1977
March 1, 1977	Series IIP Nos. 1-7 Bonds, Series	June 15, 1977
	JJP Nos. 1-7 Bonds, Series KKP
	Nos. 1-7 Bonds and Series LLP
	Nos. 1-7 Bonds
June 15, 1977	Series FFR No. 14 Bonds and	July 1, 1977
	Subject Properties
July 1, 1977	Series NNP Nos. 1-7 Bonds and	October 1, 1977
	Subject Properties
October 1, 1977	Series GGP Nos. 8-22 Bonds and	June 1, 1978
	Series OOP Nos. 1-17 Bonds and
	Subject Properties
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	March 15, 1979
	Properties
March 15, 1979	Series SS Bonds and Subject Properties	July 1, 1979
July 1, 1979	Series IIP Nos. 8-22 Bonds,	September 1, 1979
	Series NNP Nos. 8-21 Bonds and
	Series TTP Nos. 1-15 Bonds and
	Subject Properties
September 1, 1979	Series JJP No. 8 Bonds, Series	September 15, 1979
	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	Series UU Bonds	January 1, 1980
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

21

		Recorded and/or Filed
		as Set Forth in
Supplemental Indenture	Purpose of Supplemental	Supplemental
Dated as of	Indenture	Indenture Dated as of
October 1, 1984	1984 Series AP Bonds and 1984	May 1, 1985
	Series BP Bonds and Subject Properties
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	November 30, 1987
	E Bonds and Subject Properties
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	November 1, 1990
	B Bonds, 1990 Series C Bonds,
	1990 Series D Bonds, 1990 Series
	E Bonds and 1990 Series F Bonds
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
	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

22

		Recorded and/or Filed
		as Set Forth in
Supplemental Indenture	Purpose of Supplemental	Supplemental
Dated as of	Indenture	Indenture Dated as of
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	September 15, 1993
	Series IP Bonds
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, Section 3 and Appointment of Successor Trustee	(d)
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

23

		Recorded and/or Filed
		as Set Forth in
Supplemental Indenture	Purpose of Supplemental	Supplemental
Dated as of	Indenture	Indenture Dated as of
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

(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 JUNE 1, 2008. Further, pursuant to the terms and provisions of the Original Indenture, a Supplemental Indenture dated as of June 1, 2008 providing for the terms of bonds to be issued thereunder of 2008 Series G 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 June 12, 2008 (Filing No. 2008093593-4), has been filed and recorded in the Office of the Surface Transportation Board (Recordation No. 5485-SSSSS) on June 11, 2008, 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	6/13/08	200806130047816	N/A
Huron	6/12/08	1247	14
Ingham	6/12/08	3309	1205
Lapeer	6/12/08	2335	673
Lenawee	6/11/08	2366	896
Livingston	6/11/08	2008R018716	N/A
Macomb	6/12/08	19375	148
Mason	6/11/08	2008R03376	N/A
Monroe	6/11/08	2008R11950	N/A
Oakland	6/11/08	40385	186
St. Clair	6/11/08	3853	582

24

		Liber/
County	Recorded	Instrument no.	Page
Sanilac	6/11/08	1036	446
Tuscola	6/25/08	200800909496	N/A
		or 1152	975
Washtenaw	6/11/08	4685	866
Wayne	6/11/08	47285	832

RECORDING AND FILING OF SUPPLEMENTAL INDENTURE DATED AS OF JULY 1, 2008. Further, pursuant to the terms and provisions of the Original Indenture, a Supplemental Indenture dated as of July 1, 2008 providing for the terms of bonds to be issued thereunder of 2008 Series KT 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 July 3, 2008 (Filing No. 2008105821-4), has been filed and recorded in the Office of the Surface Transportation Board (Recordation No. 5485-TTTTT) on July 8, 2008, 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	7/07/08	200807070051942	N/A
Huron	7/03/08	1250	286
Ingham	7/07/08	3312	521
Lapeer	7/03/08	2338	972
Lenawee	7/03/08	2368	237
Livingston	7/03/08	2008R020847	N/A
Macomb	7/21/08	19421	808
Mason	7/03/08	2008R03743	N/A
Monroe	7/03/08	2008R13393	N/A
Oakland	7/08/08	40440	057
St. Clair	7/03/08	3859	691
Sanilac	7/03/08	1038	702
Tuscola	7/03/08	200800909796	N/A
		or 1153	510
Washtenaw	7/03/08	4689	542
Wayne	7/03/08	47330	1198

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, 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

25

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 INDENTURE ACT.	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 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

26

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.

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EXECUTION BY COMPANY.	THE DETROIT EDISON COMPANY
	By:	/s/Paul A. Stadnikia
(Corporate Seal)	Name:	Paul A. Stadnikia
	Title:	Assistant Treasurer

Attest:
By: Name:	/s/Sharon L. Sabat Sharon L. Sabat
Title:	Assistant Corporate Secretary
Signed, sealed and delivered by THE DETROIT EDISON COMPANY in the presence of
/s/Kathleen M. Hier
Name: Kathleen M. Hier
/s/John P. Demody, Jr
Name: John P. Dermody Jr.

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STATE OF MICHIGAN	)
	) SS
COUNTY OF WAYNE	)

ACKNOWLEDGMENT OF EXECUTION BY COMPANY.	On this 9th day of October 2008, before me, the subscriber, a Notary Public within and for the County of Wayne, in the State of Michigan, personally appeared Paul A. Stadnikia, to me personally known, who, being by me duly sworn, did say that he does business at 2000 2nd Avenue, 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 signed 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 Paul A. Stadnikia acknowledged said instrument to be the free act and deed of said corporation.
(Notarial Seal)	/s/Stephanie V. Washio
	Stephanie V. Washio, Notary Public
	County of Wayne, State of Michigan
	My Commission Expires: May 18, 2012

29

EXECUTION BY TRUSTEE.	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
	By:	/s/Joseph A. Brassard III
(Corporate Seal)	Name:	Joseph A. Brassard III
	Title:	Vice President

Attest:
By: Name: Title:	/s/Alexis M. Johnson Alexis M. Johnson Authorized Representative
Signed, sealed and delivered by THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. in the presence of
/s/Anthony G. Morrow
Name: Anthony G. Morrow
/s/Daniel T. Richards
Name: Daniel T. Richards

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STATE OF MICHIGAN	)
	) SS
COUNTY OF WAYNE	)

ACKNOWLEDGMENT OF EXECUTION BY TRUSTEE. On this 9th day of October 2008, before me, the subscriber, a Notary Public within and for the County of Wayne, in the State of Michigan, personally appeared Joseph A. Brassard III, to me personally known, who, being by me duly sworn, did say that his business office is located at 719 Griswold Street, Suite 930, Detroit, Michigan 48226, and he is an Vice President of THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., 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 signed 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 Joseph A. Brassard III acknowledged said instrument to be the free act and deed of said corporation.

(Notarial Seal)	/s/Stephanie V. Washio
	Stephanie V. Washio, Notary Public
	County of Wayne, State of Michigan
	My Commission Expires: May 18, 2012

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STATE OF MICHIGAN	)
	) SS
COUNTY OF WAYNE	)

AFFIDAVIT AS TO CONSIDERATION AND GOOD FAITH. Paul A. Stadnikia, 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/Paul A. Stadnikia

Name: Paul A. Stadnikia

Title: Assistant Treasurer

The Detroit Edison Company

Sworn to before me this 9th day of October 2008

(Notarial Seal)	/s/Stephanie V. Washio
	Stephanie V. Washio, Notary Public
	County of Wayne, State of Michigan
	My Commission Expires: May 18, 2012

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This instrument was drafted by:
Anthony G. Morrow, Esq.
2000 2nd Avenue
688 WCB
Detroit, Michigan 48226

When recorded return to:
Stephanie V. Washio
2000 2nd Avenue
688 WCB
Detroit, Michigan 48226

33

EX-4.260

Exhibit 4-260

THE DETROIT EDISON COMPANY
AND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
TRUSTEE

TWENTY-SEVENTH SUPPLEMENTAL INDENTURE

DATED AS OF OCTOBER 1, 2008

SUPPLEMENTING THE COLLATERAL TRUST INDENTURE
DATED AS OF JUNE 30, 1993
PROVIDING FOR
2008 SERIES J 6.40% SENIOR NOTES DUE 2013

     SUPPLEMENTAL INDENTURE, dated as of the 1st day of October 2008, between THE DETROIT EDISON COMPANY, a corporation organized and existing under the laws of the State of Michigan (the “Company”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized under the laws of the United States of America, having a corporate trust office in the City of Detroit, Michigan, as successor trustee (the “Trustee”);

     WHEREAS, the Company has heretofore executed and delivered to the Trustee a Collateral Trust Indenture dated as of June 30, 1993 (the “Original Indenture”), as supplemented, providing for the issuance by the Company from time to time of its debt securities; and

     WHEREAS, the Company now desires to provide for the issuance of an additional series of its senior debt securities pursuant to the Original Indenture; and

     WHEREAS, the Company intends hereby to designate a series of debt securities which shall have the benefit of the provisions of Article Four of the Original Indenture and the other related provisions of the Original Indenture relating to the grant of security, subject to the release provisions provided for herein, and which shall have the terms and variations from the provisions of the Original Indenture as set forth herein; and

     WHEREAS, the Company, in the exercise of the power and authority conferred upon and reserved to it under the provisions of the Original Indenture, including Section 1001 thereof, and pursuant to appropriate resolutions of the Board of Directors, has duly determined to make, execute and deliver to the Trustee this Twenty-Seventh Supplemental Indenture to the Original Indenture as permitted by Sections 201 and 301 of the Original Indenture in order to establish the form or terms of, and to provide for the creation and issue of, a series of its debt securities under the Original Indenture, which shall be known as the 2008 Series J 6.40% Senior Notes due 2013.

     WHEREAS, all things necessary to make such debt securities, when executed by the Company and authenticated and delivered by the Trustee or any Authenticating Agent and issued upon the terms and subject to the conditions hereinafter and in the Original Indenture set forth against payment therefor, the valid, binding and legal obligations of the Company and to make this Twenty-Seventh Supplemental Indenture a valid, binding and legal agreement of the Company, have been done;

     NOW, THEREFORE, THIS TWENTY-SEVENTH SUPPLEMENTAL INDENTURE WITNESSETH that, in order to establish the terms of a series of debt securities, and for and in consideration of the premises and of the covenants contained in the Original Indenture and in this Twenty-Seventh Supplemental Indenture and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is mutually covenanted and agreed as follows:

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ARTICLE ONE

DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION

     SECTION 1.01. Definitions. Each capitalized term that is used herein and is defined in the Original Indenture shall have the meaning specified in the Original Indenture unless such term is otherwise defined herein. The following terms shall have the respective meanings set forth below:

     “Business Day” means any day other than a day on which banking institutions in the State of New York or the State of Michigan are authorized or obligated pursuant to law or executive order to close.

     “Capitalization” means the total of all the following items appearing on, or included in, the consolidated balance sheet of the Company: (i) liabilities for indebtedness maturing more than 12 months from the date of determination; and (ii) common stock, common stock expense, accumulated other comprehensive income or loss, preferred stock, preference stock, premium on capital stock and retained earnings (however the foregoing may be designated), less, to the extent not otherwise deducted, the cost of shares of capital stock of the Company held in its treasury, if any. Subject to the foregoing, Capitalization shall be determined in accordance with generally accepted accounting principles and practices applicable to the type of business in which the Company is engaged and may be determined as of a date not more than 60 days prior to the happening of the event for which the determination is being made. In connection with such determination, the Company shall certify to the Trustee that it has, prior to making its final determination, consulted with the independent accountants regularly retained by the Company.

     “Debt” means any outstanding debt for money borrowed evidenced by notes, debentures, bonds or other securities, or guarantees of any debt.

     “Net Tangible Assets” means the amount shown as total assets on the consolidated balance sheet of the Company, less (i) intangible assets including, but without limitation, such items as goodwill, trademarks, trade names, patents, unamortized debt discount and expense and other regulatory assets carried as an asset on the Company’s consolidated balance sheet, and (ii) appropriate adjustments, if any, on account of minority interests. Net Tangible Assets shall be determined in accordance with generally accepted accounting principles and practices applicable to the type of business in which the Company is engaged and may be determined as of a date not more than 60 days prior to the happening of the event for which such determination is being made. In connection with such determination, the Company shall certify to the Trustee that it has, prior to making its final determination, consulted with the independent accountants regularly retained by the Company.

     “Operating Property” means (i) any interest in real property owned by the Company and (ii) any asset owned by the Company that is depreciable in accordance with generally accepted accounting principles, excluding, in either case, any interest of the Company as lessee under any lease (except for a lease that results from a Sale and Lease-Back Transaction) that has been or would be capitalized on the books of the lessee in accordance with generally accepted accounting principles.

2

     “Original Issue Date” means October 10, 2008.

     “Pledged Bonds” means the related series of Bonds and any other Mortgage Bonds issued to secure Securities subject to the release provisions provided herein or in any other supplemental indenture to the Original Indenture.

     “Release Date” means the date as of which all Mortgage Bonds, (i) other than the Pledged Bonds, including the related series of Bonds, and (ii) other than outstanding Mortgage Bonds (exclusive of Pledged Bonds) which do not in aggregate principal amount exceed the greater of 5% of the Net Tangible Assets of the Company or 5% of the Capitalization of the Company, have been retired through payment, redemption or otherwise, provided that no default or Event of Default has occurred and, at such time, is continuing under the Original Indenture.

     “Sale and Lease-Back Transaction” means any arrangement with any person providing for the leasing to the Company of any Operating Property (except for leases for a term, including any renewal or potential renewal, of not more than 48 months), which Operating Property has been or is to be sold or transferred by the Company to the person; provided, however, Sale and Lease-Back Transaction shall not include any arrangement first entered into prior to the date hereof and shall not include any transaction pursuant to which the Company sells Operating Property to, and thereafter purchases energy or services from, any entity, which transaction is ordered or authorized by any regulatory authority having jurisdiction over the Company or its operations or is entered into pursuant to any plan or program of industry restructuring ordered or authorized by any such regulatory authority.

     “Substitute Mortgage” means a mortgage indenture of the Company, other than the Mortgage, designated by the Company to the Trustee as a Substitute Mortgage pursuant to Section 4.03 hereof. The lien of the Substitute Mortgage shall have such priority, and be with respect to such property, as shall be specified by the Company in its sole discretion.

     “Substitute Mortgage Bonds” means any mortgage bonds issued by the Company under a Substitute Mortgage and delivered to the Trustee pursuant to Section 4.03 hereof or pursuant to the comparable provision of any other supplemental indenture relating to Securities subject to the release provisions.

     “Value” means, with respect to a Sale and Lease-Back Transaction, as of any particular time, the amount equal to the greater of (i) the net proceeds to the Company from the sale or transfer of the property leased pursuant to the Sale and Lease-Back Transaction or (ii) the net book value of the property, as determined by the Company in accordance with generally accepted accounting principles at the time of entering into the Sale and Lease-Back Transaction, in either case multiplied by a fraction, the numerator of which shall be equal to the number of full years of the term of the lease that is part of the Sale and Lease-Back Transaction remaining at the time of determination and the denominator of which shall be equal to the number of full years of the term, without regard, in any case, to any renewal or extension options contained in the lease.

     SECTION 1.02. Section References. Each reference to a particular section set forth in this Twenty-Seventh Supplemental Indenture shall, unless the context otherwise requires, refer to this Twenty-Seventh Supplemental Indenture.

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ARTICLE TWO

TITLE AND TERMS OF THE SECURITIES

     SECTION 2.01. Title of the Securities; Stated Maturity. This Twenty-Seventh Supplemental Indenture hereby establishes a series of Securities, which shall be known as the Company’s “2008 Series J 6.40% Senior Notes due 2013” (the “Notes”). For purposes of the Original Indenture, the Notes shall constitute a single series of Securities. The Stated Maturity on which the principal of the Notes shall be due and payable will be October 1, 2013.

     SECTION 2.02. Certain Variations from the Original Indenture.

     (a) The Notes shall have the benefit of the provisions of Article Four of the Original Indenture and shall have the benefit of, or be subject to, the other related provisions of the Original Indenture relating to the grant of security, including (for avoidance of doubt and not for purposes of limitation) the Granting Clause, the definitions of “Deliverable Mortgage Bonds,” “Deliverable Securities,” “Designated Mortgage Bonds,” “Grant,” “Mortgage,” “Mortgage Bonds,” “Mortgage Trustee,” “Previously Delivered Mortgage Bonds,” and “Trust Estate,” Section 301(20), Sections 301(a)(v), (ix), (x) and (xi), Sections 301(b)(ii) and (iii), Section 301(d), and Sections 601(4) and (8), subject, in each case, to the release provisions provided for in Section 4.02 herein. In addition, on and after the Release Date, unless Substitute Mortgage Bonds are issued to secure the Notes, the Notes shall have the benefit of the additional covenants set forth in Article Three hereof.

     (b) Section 503 of the Original Indenture shall apply to the Notes. The following shall be an additional condition to defeasance of the Notes under Section 503: the Company shall have delivered to the Trustee an Opinion of Counsel stating that (i) the Company has received from the Internal Revenue Service a letter ruling, or there has been published by the Internal Revenue Service a Revenue Ruling, or (ii) since the date of execution of this Twenty-Seventh Supplemental Indenture, there has been a change in the applicable U.S. Federal income tax law, in either case to the effect that, the Holders of such Outstanding Notes appertaining thereto will not recognize income, gain or loss for U.S. Federal income tax purposes as a result of such defeasance and will be subject to U.S. Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred, and, also, to the effect that, after the 123^rd day after the date of deposit, all money and other property as provided pursuant to Section 503 of the Original Indenture (including the proceeds thereof) deposited or caused to be deposited with the Trustee (or other qualifying trustee) pursuant to Section 503 of the Original Indenture to be held in trust will not be subject to any case or proceeding (whether voluntary or involuntary) in respect of the Company under any Federal or State bankruptcy, insolvency, reorganization or other similar law, or any decree or order for relief in respect of the Company issued in connection therewith.

     SECTION 2.03. Amount and Denominations; DTC

     (a) The aggregate principal amount of Notes that may be issued under this Twenty-Seventh Supplemental Indenture is limited to $250,000,000 (except as provided in Section 301(2) of the Original Indenture); provided that the Company may, without the consent of the Holders of the

4

Outstanding Notes, “reopen” the series of the Notes so as to increase the aggregate principal amount of the Notes Outstanding in compliance with the procedures set forth in the Original Indenture, including Section 301 and Section 303 thereof, so long as any such additional Notes have the same terms, conditions and CUSIP number (including, without limitation, rights to security and to receive accrued and unpaid interest) as the Notes then Outstanding. No additional Notes may be issued if an Event of Default has occurred with respect to the Notes. The Notes shall be issuable only in fully registered form and, as permitted by Section 301 and Section 302 of the Original Indenture, in denominations of $1,000 and integral multiples thereof. The Notes will initially be issued in global form (the “Global Securities”) under a book-entry system, registered in the name of The Depository Trust Company, as depository (“DTC”), or its nominee, which is hereby designated as “Depository” under the Indenture.

     (b) If (i) the Depository notifies the Company that it is unwilling or unable to continue as Depository for such Global Security or if at any time such Depository ceases to be a clearing agency registered under the Securities Exchange Act of 1934, and, in either such case, the Company does not appoint a successor Depository within 90 days thereafter, or (ii) there shall have occurred and be continuing an Event of Default or an event which, with the giving of notice or lapse of time, or both, would constitute an Event of Default, certificates for the Notes will be registered and delivered to the Holders of record. Upon receipt of a withdrawal request from the Company, the Depository will notify its participants of the receipt of a withdrawal request from the Company, notifying participants that they may utilize the Depository’s withdrawal procedures if they wish to withdraw their securities from the Depository. To the extent that the book-entry system is discontinued, or if the Company fails to appoint a successor Depository, certificates for the Notes will be registered and delivered to the Holders of record.

     SECTION 2.04. Certain Terms of the Notes.

     (a) The Notes shall bear interest at the rate of 6.40% per annum on the principal amount thereof from the date of original issuance, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, until the principal of the Notes becomes due and payable, and on any overdue principal and premium and (to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the same rate per annum during such overdue period. Interest on the Notes will be payable semi-annually in arrears on April 1 and October 1 of each year (each such date, an “Interest Payment Date”), commencing April 1, 2009. The amount of interest payable for any period shall be computed on the basis of a 360-day year and twelve 30-day months.

     (b) In the event that any Interest Payment Date, redemption date or other date of Maturity of the Notes is not a Business Day, then payment of the amount payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), in each case with the same force and effect as if made on such date. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date with respect to any Note will, as provided in the Original Indenture, be paid to the person in whose name the Note (or one or more Predecessor Securities, as defined in the Original Indenture) is registered at the close of business on the relevant record date for such interest installment, which shall be the fifteenth calendar day (whether or not a Business Day) prior to the relevant Interest Payment Date (the “Regular Record Date”). Any such interest installment not

5

punctually paid or duly provided for shall forthwith cease to be payable to the registered Holders on such Regular Record Date, and may either be paid to the person in whose name the Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date to be fixed by the Trustee for the payment of such defaulted interest, notice whereof shall be given to the registered Holders of the Notes not less than ten days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Original Indenture. The principal of, and premium, if any, and the interest on the Notes shall be payable at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, the City of New York, in any coin or currency of the United States of America that at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company by check mailed to the registered Holder at the close of business on the Regular Record Date at such address as shall appear in the Security Register. Notwithstanding the foregoing, so long as the Notes are Global Securities and are held in book-entry form through the facilities of the Depository, payments on the Notes will be made to the Depository or its nominee in accordance with arrangements then in effect between the Trustee and the Depository.

     (c) The Notes are not subject to repayment at the option of the Holders thereof and are not subject to any sinking fund. As provided in the form of Notes attached hereto as Exhibit A, the Notes are subject to optional redemption, as a whole or in part, by the Company prior to Stated Maturity of the principal thereof on the terms set forth therein. Except as modified in the form of Notes, redemptions shall be effected in accordance with Article Twelve of the Original Indenture.

     (d) The Notes shall have such other terms and provisions as are set forth in the form of Notes attached hereto as Exhibit A (which is incorporated by reference in and made a part of this Twenty-Seventh Supplemental Indenture as if set forth in full at this place).

     SECTION 2.06. Form of Notes. Attached hereto as Exhibit A is the form of the Notes. If the Company elects to have the Notes secured by Substitute Mortgage Bonds on and after the Release Date, the terms of the Notes shall be amended to make appropriate reference to the Substitute Mortgage and the Substitute Mortgage Bonds; provided, that the consent of Holders shall not be required in connection with such amendment.

ARTICLE THREE

ADDITIONAL COVENANTS

     SECTION 3.01. Limitations on Liens.

     (a) From and after the Release Date, unless Substitute Mortgage Bonds are issued to secure the Notes, so long as any Notes are outstanding, the Company may not issue, assume, guarantee (including any contingent obligation to purchase) or permit to exist any Debt that is secured by any mortgage, security interest, pledge or lien (“Lien”) of or upon any Operating Property owned by the Company, whether owned at the Release Date or subsequently acquired, without effectively securing the Notes (together with, if the Company shall so determine, any other

6

indebtedness of the Company ranking equally with the Notes) equally and ratably with the Debt (but only so long as the Debt is so secured).

     The foregoing restriction will not apply to:

     (i) Liens on any Operating Property existing at the time of its acquisition and not created in contemplation of the acquisition;

     (ii) Liens on Operating Property of a corporation existing at the time the corporation is merged into or consolidated with the Company, or at the time the corporation disposes of substantially all of its properties (or those of a division) to the Company, provided that the Lien is not extended to property owned by the Company immediately prior to the merger, consolidation or other disposition and is not created in contemplation of the merger, consolidation or other disposition;

     (iii) Liens on Operating Property to secure the cost of acquisition, construction, development or substantial repair, alteration or improvement of such property or to secure indebtedness incurred to provide funds for any of these purposes or for reimbursement of funds previously expended for any of these purposes, provided the Liens are created or assumed contemporaneously with, or within 18 months after, the acquisition or the completion of substantial repair or alteration, construction, development or substantial improvement or within 6 months thereafter pursuant to a commitment for financing arranged with a lender or investor within such 18-month period;

     (iv) Liens in favor of the United States or any state or any department, agency or instrumentality or political subdivision of the United States or any state, or for the benefit of holders of securities issued by any of these entities, to secure any Debt incurred for the purpose of financing all or any part of the purchase price or the cost of substantially repairing or altering, constructing, developing or substantially improving the Operating Property; or

     (v) Any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any Lien referred to in the exceptions listed above, provided, however, that the principal amount of Debt secured thereby and not otherwise authorized by those exceptions listed above shall not exceed the principal amount of Debt, plus any premium or fee payable in connection with any such extension, renewal or replacement, so secured at the time of such extension, renewal or replacement.

     (b) Notwithstanding the foregoing restrictions, the Company may issue, assume or guarantee Debt secured by a Lien which would otherwise be subject to the foregoing restrictions up to an aggregate amount which, together with all other of the Company’s secured Debt (not including secured Debt permitted under any of the foregoing exceptions) and the Value of Sale and Lease-Back Transactions existing at such time (other than Sale and Lease-Back Transactions the proceeds of which have been applied to the retirement of certain indebtedness, Sale and Lease-Back Transactions in which the property involved would have been permitted to be subjected to a Lien under any of the foregoing exceptions, and Sale and Lease-Back Transactions that are permitted by the first sentence of Section 3.02 below), does not exceed the greater of 10% of the Company’s Net Tangible Assets or 10% of the Company’s Capitalization. The foregoing

7

restrictions do not limit the Company’s ability to place Liens on (i) the capital stock of any of the Company’s subsidiaries or (ii) the assets of any of the Company’s subsidiaries.

     SECTION 3.02. Limitations on Sale and Lease-Back Transactions. So long as the Notes are outstanding from and after the Release Date, unless Substitute Mortgage Bonds are issued to secure the Notes, the Company may not enter into or permit to exist any Sale and Lease-Back Transaction with respect to any Operating Property (except for leases for a term, including any renewal or potential renewal, of not more than 48 months), if the purchaser’s commitment is obtained more than 18 months after the later of the completion of the acquisition, construction or development of the Operating Property or the placing in operation of the Operating Property or of the Operating Property as constructed or developed or substantially repaired, altered or improved. This restriction will not apply if (a) the Company would be entitled pursuant to Section 3.01(a) above to issue, assume, guarantee or permit to exist Debt secured by a Lien on the Operating Property without equally and ratably securing the Notes, (b) after giving effect to the Sale and Lease-Back Transaction, pursuant to Section 3.01(b) above, the Company could incur at least $1.00 of additional Debt secured by Liens (other than Liens permitted by clause (a)), or (c) the Company applies within 180 days an amount equal to, in the case of a sale or transfer for cash, the net proceeds (not less than the fair value of the Operating Property so leased), and, otherwise, an amount equal to the fair value (as determined by the Board of Directors of the Company) of the Operating Property so leased to the retirement of Notes or other Debt of the Company ranking equally with the Notes; provided, however, that any such retirement of Notes shall be in accordance with the terms and provisions of the Indenture and the Notes; provided, further, that the amount to be applied to such retirement of Notes or other Debt shall be reduced by an amount equal to the sum of (a) an amount equal to the redemption price with respect to Notes delivered within such one hundred eighty (180)-day period to the Trustee for retirement and cancellation and (b) the principal amount, plus any premium or fee paid in connection with any redemption in accordance with the terms of other Debt voluntarily retired by the Company within such one hundred eighty (180)-day period, excluding in each case retirements pursuant to mandatory sinking fund or prepayment provisions and payments at Stated Maturity.

     SECTION 3.03. Waiver. Section 1109 of the Original Indenture shall apply to the covenants set forth in Sections 3.01 and 3.02 above at any time such covenants are in effect.

ARTICLE FOUR

SECURITY AND RELEASE PROVISIONS

     SECTION 4.01. Security. Subject to Section 4.02 below, as provided in and pursuant to Article Four of the Original Indenture, the Notes will be secured as to payments of principal, interest and premium, if any, by a series of Mortgage Bonds (the “General and Refunding Mortgage Bonds, 2008 Series J”, the “Bonds,” the “Bonds of the related series” or the “related series of Bonds”) of the Company to be issued concurrently with the issuance of the Notes under and secured by a Mortgage and Deed of Trust, dated as of October 1, 1924, between the Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (the “Mortgage Trustee”), as amended and supplemented by various supplemental indentures, including the supplemental indenture, dated as of October 1, 2008, creating the Bonds (collectively, the “Mortgage”), pledged by the Company for the benefit of the Holders of the

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Notes to the Trustee under this Twenty-Seventh Supplemental Indenture. The Bonds shall be issued in an aggregate principal amount equal to the aggregate principal amount of the Notes.

     SECTION 4.02. Release. Until the Release Date and subject to Article Four of the Original Indenture, the Bonds of the related series issued and delivered to the Trustee shall serve as security for any and all obligations of the Company under all Notes from time to time Outstanding, including, but not limited to (1) the full and prompt payment of the principal and premium, if any, on the Notes when and as the same shall become due and payable in accordance with the terms and provisions of the Indenture or the Notes, either at the Stated Maturity thereof, upon acceleration of the maturity thereof, upon redemption, or otherwise, and (2) the full and prompt payment of any interest on the Notes when and as the same shall become due and payable in accordance with the terms and provisions of this Indenture or the Notes including, if and to the extent provided for in the Notes, interest on overdue installments of principal and (to the extent permitted by law) interest on overdue installments of interest.

     Each supplemental indenture to the Mortgage pursuant to which any Bonds are issued shall contain a provision to the effect that any payment by the Company hereunder of principal of or premium or interest on Notes which shall have been authenticated and delivered in connection with the issuance and delivery to the Trustee of such Bonds (other than by the application of the proceeds of a payment in respect of such Bonds) shall to the extent thereof, be deemed to satisfy and discharge the obligation of the Company, if any, to make a payment of principal, premium or interest, as the case may be, in respect of such Bonds which is then due.

     Notwithstanding anything in the Original Indenture to the contrary, from and after the Release Date, the obligation of the Company to make payment with respect to the principal of and premium, if any, and interest on the Bonds shall be deemed satisfied and discharged as provided in the supplemental indenture or indentures to the Mortgage creating such Bonds and the Bonds shall cease to secure in any manner Notes theretofore or subsequently issued; the Trustee shall thereupon surrender the Bonds to the Mortgage Trustee for cancellation and execute and deliver such proper instruments of release as may be required. From and after the Release Date, all Notes, whether theretofore or subsequently issued, shall be secured by Substitute Mortgage Bonds pursuant to Section 4.03 below, and any conditions to the issuance of Notes that refer or relate to Bonds or the Mortgage shall be inapplicable (except as such conditions shall be deemed to refer to Substitute Mortgage Bonds or a Substitute Mortgage pursuant to Section 4.03 below). From and after the Release Date, the Company shall not issue any additional Mortgage Bonds, including Pledged Bonds, under the Mortgage. Notice of the occurrence of the Release Date shall be given by the Trustee to the Holders of the Notes in the manner provided for in the Original Indenture not later than 30 days after the Company notifies the Trustee of the occurrence of the Release Date.

     In connection with the establishment of the occurrence of the Release Date, the Trustee shall be entitled to receive, may presume the correctness of, and shall be fully protected in relying upon, an Officers’ Certificate designating the Release Date and stating that the conditions to the occurrence of the Release Date have been satisfied.

     When the obligation of the Company to make payments with respect to the principal of, and premium, if any, and interest on all or any part of the Bonds shall be satisfied or deemed satisfied pursuant to the Original Indenture or pursuant to this Twenty-Seventh Supplemental Indenture,

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the Trustee shall, upon written request of the Company, deliver to the Company without charge therefor all of the Bonds so satisfied or deemed satisfied, together with such appropriate instruments of transfer or release as may be reasonably requested by the Company. All Bonds delivered to the Company in accordance with this Section shall be delivered by the Company to the Mortgage Trustee for cancellation.

     SECTION 4.03. Substitute Mortgage Bonds.

     (a) The Company shall notify the Trustee not less than 90 days prior to the Release Date (or such shorter period as the Company and the Trustee may agree) that the Company will deliver to the Trustee on the Release Date Substitute Mortgage Bonds in an aggregate principal amount equal to the aggregate principal amount of Notes and any other Securities subject to the release provisions Outstanding on the Release Date, in trust for the benefit of the Holders from time to time of the Notes and any other Securities subject to the release provisions issued under the Original Indenture, as supplemented, as security for any and all obligations of the Company under the Notes and any other Securities subject to the release provisions, including but not limited to, (1) the full and prompt payment of the principal of and premium, if any, on the Notes and any other Securities subject to the release provisions when and as the same shall become due and payable in accordance with the terms and provisions of the Original Indenture, as supplemented, or the Notes or such other Securities subject to the release provisions, either at the stated maturity thereof, upon acceleration of the maturity thereof or upon redemption, and (2) the full and prompt payment of any interest on the Notes and any other Securities subject to the release provisions when and as the same shall become due and payable in accordance with the terms and provisions of the Original Indenture, as supplemented, or the Notes or such other Securities subject to the release provisions.

     (b) The Company shall deliver such Substitute Mortgage Bonds described in Section 4.03(a) in separate series and issues corresponding to the series and issues of Notes and other Securities subject to the release provisions Outstanding on or prior to the Release Date, each series or issue of Substitute Mortgage Bonds having the same stated rate or rates of interest (or interest calculated in the same manner), Interest Payment Dates, stated maturity date and redemption provisions, and in the same aggregate principal amount, as the related series or issue of Notes or other Securities subject to the release provisions outstanding on the Release Date; it being expressly understood that each such series of Substitute Mortgage Bonds shall be held by the Trustee for the benefit of the Holders of the corresponding series of Securities from time to time Outstanding subject to such terms and conditions relating to surrender to the Company, transfer restrictions, voting, application of payments of principal and interest and other matters as shall be set forth in an indenture supplemental hereto specifically providing for the delivery to the Trustee of such Substitute Mortgage Bonds. Such Substitute Mortgage Bonds shall be issued under and secured by a Substitute Mortgage (A) on which the Company shall be the obligor; and (B) which shall be qualified, or shall meet the requirements for qualification, under the Trust Indenture Act for the issuance of Substitute Mortgage Bonds.

     (c) On or prior to the Release Date the Company shall have delivered to the Trustee:

(A) a supplemental indenture to the Original Indenture that provides among other things, that on the delivery of the Substitute Mortgage Bonds described in Section 4.03(b), the Company shall deliver to the Trustee in trust for the benefit of the Holders as described in

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Section 4.03(a) hereof, and the Trustee shall accept therefor, related series of Substitute Mortgage Bonds registered in the name of the Trustee and conforming to the requirements herein and therein specified;

(B) an Officer’s Certificate (1) stating that, to the knowledge of the signer, (a) no Event of Default has occurred and is continuing and (b) no event has occurred and is continuing which entitles the secured party under the Substitute Mortgage to accelerate the maturity of the indebtedness outstanding thereunder and (2) stating the aggregate principal amount of indebtedness issuable, and then proposed to be issued, under and secured by the lien of the Substitute Mortgage; and

(C) an Opinion of Counsel to the effect that such Substitute Mortgage Bonds have been duly issued under such Substitute Mortgage and constitute valid obligations, entitled to the benefit of the lien of the Substitute Mortgage equally and ratably with all other indebtedness then outstanding secured by such lien.

     (d) On or prior to the Release Date the Company shall provide an Officer’s Certificate stating that the Company has been advised in writing, within not more than 30 days prior to such substitution of the Substitute Mortgage Bonds for the Mortgage Bonds, by at least two credit rating agencies qualifying as “nationally recognized statistical rating organizations” (as defined by the Securities Exchange Act of 1934, as amended) then maintaining a securities rating on the Notes that the substitution of such Substitute Mortgage Bonds for the Mortgage Bonds will not result in a reduction of the securities rating assigned to the Notes by that credit rating agency immediately prior to the substitution or the suspension or withdrawal of its rating and the Company shall have provided the Trustee with written evidence of such advice.

     (e) In the event that the Company cannot obtain assurance of at least two credit rating agencies as described in Section 4.03(d) above, the Company will take such actions as are necessary to cause the Release Date not to occur.

     (f) Article Four and related provisions of the Original Indenture (except for any provisions relating to discharge of Bonds or amounts owing on Bonds on or after the Release Date) shall apply to Substitute Mortgage Bonds pledged to the Trustee hereunder and the provisions thereof shall be deemed to refer to the Substitute Mortgage and the Substitute Mortgage Bonds. Article Four and related provisions may be amended by the Company to have the Notes secured by Substitute Mortgage Bonds on and after the Release Date and make appropriate reference to the Substitute Mortgage and the Substitute Mortgage Bonds; provided, that the consent of Holders shall not be required in connection with such amendment.

     SECTION 4.04. Events of Default.

     (a) On and after the Release Date, Section 601(8) of the Original Indenture shall no longer apply to the Notes.

     For purposes of the Notes, Section 601(8) of the Original Indenture shall read, “the occurrence of an “event of default” as such term is defined in the Mortgage; or”.

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     (b) On and after the Release Date, the occurrence of a “default” (as defined in the Substitute Mortgage) shall constitute an Event of Default under Section 601 of the Original Indenture with respect to the Notes and the references in Section 601(4) of the Original Indenture and related provisions to “Mortgage Bonds” shall be deemed to refer to “Substitute Mortgage Bonds.”

     (c) In addition, failure by the Company to deliver Substitute Mortgage Bonds in accordance with the provisions of Section 4.03 of this Supplemental Indenture on or prior to the Release Date shall be an “Event of Default” with respect to the Notes as contemplated by Section 601(9) of the Original Indenture.

ARTICLE FIVE

MISCELLANEOUS PROVISIONS

     The Trustee makes no undertaking or representations in respect of, and shall not be responsible in any manner whatsoever for and in respect of, the validity or sufficiency of this Twenty-Seventh Supplemental Indenture or the proper authorization or the due execution hereof by the Company or for or in respect of the recitals and statements contained herein, all of which recitals and statements are made solely by the Company.

     Except as expressly amended hereby and by the supplemental indenture appointing the Trustee as successor trustee, the Original Indenture shall continue in full force and effect in accordance with the provisions thereof and the Original Indenture is in all respects hereby ratified and confirmed. This Twenty-Seventh Supplemental Indenture and all its provisions shall be deemed a part of the Original Indenture in the manner and to the extent herein and therein provided.

     This Twenty-Seventh Supplemental Indenture and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York.

     This Twenty-Seventh Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

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     IN WITNESS WHEREOF, the parties hereto have caused this Twenty-Seventh Supplemental Indenture to be duly executed and attested, all as of the day and year first above written.

THE DETROIT EDISON COMPANY
By:	/s/Paul A. Stadnikia
Name:	Paul A. Stadnikia
Title:	Assistant Treasurer

ATTEST:
By:	/s/Sharon L. Sabat
Name:	Sharon L. Sabat
Title:	Assistant Corporate Secretary

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THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:	/s/Joseph A. Brassard III
Name:	Joseph A. Brassard III
Title:	Vice President

ATTEST:
By:	/s/Alexis M. Johnson
Name:	Alexis M. Johnson
Title:	Authorized Officer

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EXHIBIT A

THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY (“DTC”), TO A NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL, INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

NO. R-___	$
CUSIP 250847 EE6

THE DETROIT EDISON COMPANY

2008 SERIES J 6.40% SENIOR NOTES DUE 2013

Principal Amount: $                                        

Authorized Denomination: $1,000

Regular Record Date: close of business on the 15th calendar day (whether or not a Business Day) prior to the relevant Interest Payment Date

Original Issue Date: October 10, 2008

Stated Maturity: October 1, 2013

Interest Payment Dates: April 1 and October 1 of each year, commencing April 1, 2009

Interest Rate: 6.40% per annum

     THE DETROIT EDISON COMPANY, a corporation duly organized and existing under the laws of the State of Michigan (the “Company”, which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co. or registered assigns, at the office or agency of the Company in the City of New York, New York, the principal sum of                                         dollars ($                     ) on October 1, 2013 (the “Stated Maturity”), in the coin or currency of the United States, and to pay interest thereon from the Original Issue Date shown above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, in arrears on each Interest Payment Date as specified above, commencing on April 1, 2009 and on the Stated Maturity at the

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rate per annum shown above (the “Interest Rate”) until the principal hereof is due and payable, and on any overdue principal and premium and on any overdue installment of interest. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered on the Regular Record Date as specified above next preceding such Interest Payment Date. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date to be fixed by the Trustee for the payment of such defaulted interest, notice whereof shall be given to Holders of Notes of this series not less than ten days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Notes of this series shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Indenture.

     Payments of interest on this Note will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for this Note shall be computed and paid on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal and premium, if any, and, to the extent lawful, on overdue installments of interest at the rate per annum borne by this Note. In the event that any Interest Payment Date, Redemption Date or Maturity Date is not a Business Day, then the required payment of principal, premium, if any, and interest will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), in each case with the same force and effect as if made on such date. “Business Day” means any day other than a day on which banking institutions in the State of New York or the State of Michigan are authorized or obligated pursuant to law or executive order to close.

     Payment of principal of, premium, if any, and interest on the Notes shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of principal of, premium, if any, and interest on Notes represented by a Global Security shall be made by wire transfer of immediately available funds to the Holder of such Global Security, provided that, in the case of payments of principal and premium, if any, such Global Security is first surrendered to the Paying Agent (as defined in the Indenture). If any of the Notes of this series are no longer represented by a Global Security, (i) payments of principal, premium, if any, and interest due at the Stated Maturity or earlier redemption of such Securities shall be made at the office of the Paying Agent upon surrender of such Securities to the Paying Agent, and (ii) payments of interest shall be made, at the option of the Company, subject to such surrender where applicable, by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

     UNTIL THE RELEASE DATE (AS DEFINED BELOW), THIS NOTE SHALL BE SECURED BY GENERAL AND REFUNDING MORTGAGE BONDS, 2008 SERIES J (THE “MORTGAGE BONDS”) ISSUED AND DELIVERED BY THE COMPANY TO THE TRUSTEE (AS DEFINED BELOW) UNDER THE COMPANY’S SUPPLEMENTAL INDENTURE DATED AS OF OCTOBER 1, 2008, SUPPLEMENTING THE MORTGAGE AND DEED OF TRUST DATED AS OF OCTOBER 1, 1924 BETWEEN THE COMPANY AND THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (THE “MORTGAGE TRUSTEE”), PLEDGED BY THE COMPANY FOR THE BENEFIT OF THE HOLDERS OF

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THE NOTES TO THE TRUSTEE UNDER THE INDENTURE (THE “MORTGAGE”). ON THE RELEASE DATE, THE NOTES SHALL CEASE TO BE SECURED BY SUCH MORTGAGE BONDS AND, SHALL BE SECURED BY SUBSTITUTE MORTGAGE BONDS UNDER A SUBSTITUTE MORTGAGE.

     This Note shall not be entitled to any benefit under the Indenture hereinafter referred to, be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by or on behalf of the Trustee.

     Unless the Certificate of Authentication hereon has been executed by the Trustee or a duly appointed Authentication Agent referred to herein, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

     This Note is one of a duly authorized series of Securities of the Company (herein sometimes referred to as the “Notes”), specified in the Indenture, all issued or to be issued in one or more series under and pursuant to a Collateral Trust Indenture dated as of June 30, 1993 (the “Original Indenture”) duly executed and delivered between the Company and The Bank of New York Mellon Trust Company, N.A., as successor Trustee (herein referred to as the “Trustee”), as supplemented through and including a Twenty-Seventh Supplemental Indenture dated as of October 1, 2008 (together with the Original Indenture, the “Indenture”) between the Company and the Trustee, to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the registered Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered.

     This Note is not subject to repayment at the option of the Holder hereof. Except as provided below, this Note is not redeemable by the Company prior to maturity and is not subject to any sinking fund.

     This Note will be redeemable at the option of the Company, in whole at any time or in part from time to time (any such date of optional redemption, an “Optional Redemption Date,” which shall be a “Redemption Date” for purposes of the Indenture), at an optional redemption price (which shall be a “Redemption Price” for purposes of the Indenture) equal to the greater of (i) 100% of the principal amount of this Note to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest of this Note to be redeemed (not including any portion of any payments of interest accrued to the Optional Redemption Date) until Stated Maturity, in each case discounted from their respective scheduled payment dates to such Optional Redemption Date on a semiannual basis (assuming a 360-day year consisting of 30-day months) at the Adjusted Treasury Rate (as defined below) plus 50 basis points, as determined by the Reference Treasury Dealer (as defined below), plus, in each case, accrued and unpaid interest thereon to the Redemption Date.

     Notwithstanding the foregoing, installments of interest on this Note that are due and payable on Interest Payment Dates falling on or prior to a Redemption Date will be payable on the Interest Payment Date to the registered Holders as of the close of business on the relevant Record Date.

     “Adjusted Treasury Rate” means, with respect to any Optional Redemption Date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated on the third Business Day preceding such Optional Redemption Date assuming a

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price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Optional Redemption Date.

     “Comparable Treasury Issue” means the United States Treasury security selected by the Reference Treasury Dealer as having a maturity comparable to the remaining term of this Note that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of this Note.

     “Comparable Treasury Price” means, with respect to any Optional Redemption Date, (i) the average of the Reference Treasury Dealer Quotations for such Optional Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than three such Reference Treasury Dealer Quotations, the average of all such quotations, or (iii) if only one Reference Treasury Dealer Quotation is received, such quotation.

     “Reference Treasury Dealer” means each of: (i) Barclays Capital Inc., Citigroup Global Markets Inc. and Greenwich Capital Markets, Inc. (or their respective affiliates which are Primary Treasury Dealers), and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. government securities dealer in the United States (a “Primary Treasury Dealer”), the Company will substitute therefor another Primary Treasury Dealer; and (ii) any other Primary Treasury Dealer(s) selected by the Trustee after consultation with the Company.

     “Reference Treasury Dealer Quotation” means, with respect to each Reference Treasury Dealer and any Optional Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Optional Redemption Date.

     Notice of any optional redemption will be mailed at least 30 days but not more than 60 days before the Optional Redemption Date to the Holder hereof at its registered address.

     If notice has been provided in accordance with the Indenture and funds for the redemption of this Note called for redemption have been made available on the Redemption Date, this Note will cease to bear interest on the date fixed for redemption. Thereafter, the only right of the Holder hereof will be to receive payment of the Redemption Price.

     The Company will notify the Trustee at least 60 days prior to giving notice of redemption (or such shorter period as is satisfactory to the Trustee) of the aggregate principal amount of Notes to be redeemed and the Redemption Date. If the Company elects to redeem all or a portion of the Notes, the redemption will be conditional upon receipt by the Paying Agent or the Trustee of monies sufficient to pay the Redemption Price. If the Notes are only partially redeemed by the Company, the Trustee shall select which Notes are to be redeemed in a manner it deems fair and appropriate in accordance with the terms of the Indenture.

     In the event of redemption of this Note in part only, a new Note or Notes of this series for the unredeemed portion hereof will be issued in the name of the registered Holder hereof upon the cancellation hereof.

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     In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of all of the Notes may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture.

     The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Note upon compliance by the Company with certain conditions set forth therein.

     The Indenture contains provisions permitting the Company and the Trustee, with the consent of the registered Holders of not less than a majority in aggregate principal amount of the outstanding Securities of each series affected at the time, as defined in the Indenture, to execute supplemental indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or of modifying in any manner the rights of the registered Holders of the Securities; provided, however, that no such supplemental indenture shall (i) extend the fixed maturity of any Securities of any series, or reduce the principal amount thereof, or reduce the rate of or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, without the consent of the registered Holder of each Security so affected or (ii) reduce the aforesaid percentage of Securities, the registered Holders of which are required to consent to any such supplemental indenture, without the consent of the registered Holders of each Security then outstanding and affected thereby. The Indenture also contains provisions permitting (i) the registered Holders of at least 66 2/3% in aggregate principal amount of the Securities of all series at the time outstanding affected thereby, on behalf of the registered Holders of the Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and (ii) the registered Holders of a majority in aggregate principal amount of the Securities of all series at the time outstanding affected thereby, on behalf of the registered Holders of the Securities of such series, to waive certain past defaults under the Indenture and their consequences. Any such consent or waiver by the registered Holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such registered Holder and upon all future registered Holders and owners of this Note and of any Note issued in exchange hereof or in place hereof (whether by registration of transfer or otherwise), irrespective of whether or not any notation of such consent or waiver is made upon this Note.

     No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the time and place and at the rate and in the coin or currency herein prescribed.

     Prior to the Release Date, the Notes of this series shall be secured by a series of Mortgage Bonds (the “Related Series of Bonds”), delivered by the Company to the Trustee for the benefit of the Holders of the Notes. Reference is made to the Mortgage and the Indenture for a description of the rights of the Trustee as Holder of the Related Series of Bonds, the property mortgaged and pledged under the Mortgage and the rights of the Company and of the Mortgage Trustee in respect thereof, the duties and immunities of the Mortgage Trustee and the terms and conditions upon which the Related Series of Bonds are secured and the circumstances under which additional Mortgage Bonds may be issued.

     FROM AND AFTER SUCH TIME AS ALL BONDS, OTHER THAN (1) PLEDGED BONDS, INCLUDING THE RELATED SERIES OF BONDS, AND (2) MORTGAGE BONDS

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(EXCLUSIVE OF PLEDGED BONDS) WHICH DO NOT IN AGGREGATE PRINCIPAL AMOUNT EXCEED THE GREATER OF FIVE PERCENT (5%) OF NET TANGIBLE ASSETS OR FIVE PERCENT (5%) OF CAPITALIZATION, HAVE BEEN RETIRED THROUGH PAYMENT, REDEMPTION OR OTHERWISE (INCLUDING THOSE MORTGAGE BONDS THE PAYMENT FOR WHICH HAS BEEN PROVIDED FOR IN ACCORDANCE WITH THE MORTGAGE) AT, BEFORE OR AFTER THE MATURITY THEREOF, PROVIDED THAT NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING (THE “RELEASE DATE”), THE RELATED SERIES OF BONDS SHALL CEASE TO SECURE THE NOTES IN ANY MANNER AND SHALL INSTEAD BE SECURED BY SUBSTITUTE MORTGAGE BONDS PURSUANT TO SECTION 4.03 OF THE TWENTY-SEVENTH SUPPLEMENTAL INDENTURE DATED AS OF OCTOBER 1, 2008 TO THE INDENTURE DESCRIBED ABOVE.

     As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and any interest on this Note are payable or at such other offices or agencies as the Company may designate, duly endorsed by or accompanied by a written instrument or instruments of transfer in form satisfactory to the Company and the Security Registrar or any transfer agent duly executed by the registered Holder hereof or his or her attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be made for any such transfer, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in relation thereto.

     Prior to due presentment for registration of transfer of this Note, the Company, the Trustee, any Paying Agent and any Note Registrar may deem and treat the registered Holder hereof as the absolute owner hereof (whether or not this Note shall be overdue and notwithstanding any notice of ownership or writing hereon made by anyone other than the Note Registrar) for the purpose of receiving payment of or on account of the principal hereof and interest due hereon and for all other purposes, and neither the Company nor the Trustee nor any Paying Agent nor any Security Registrar shall be affected by any notice to the contrary.

     The Notes of this series are issuable only in fully registered form without coupons in denominations of $1,000 and any integral multiple thereof. This Global Security is exchangeable for Notes in definitive form only under certain limited circumstances set forth in the Indenture. As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series of a different authorized denomination, as requested by the registered Holder surrendering the same.

     As set forth in, and subject to the provisions of, the Indenture, no Holder of any Note will have any right to institute any proceeding with respect to the Indenture or for any remedy thereunder, unless (i) such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to the Notes of this series, (ii) the Holders of not less than 25% in principal amount of the outstanding Notes of this series shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, (iii) the Trustee shall have failed to institute such proceeding within 60 days and (iv) the Trustee shall not have received from the Holders of a majority in principal amount of the outstanding

A-6

Notes of this series a direction inconsistent with such request within such 60-day period; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal of or any interest on this Note on or after the respective due dates expressed herein.

     All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

A-7

     IN WITNESS WHEREOF, the parties hereto have caused this Note to be duly executed and attested, all as of the day and year first above written.

THE DETROIT EDISON COMPANY

[Corporate Seal]

By:

Name:

Title:

ATTEST:

By:

Name:

Title:

A-8

CERTIFICATE OF AUTHENTICATION

     This is one of the Notes of the series of Notes described in the within mentioned Indenture.

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

Date:                    

A-9

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

(Please insert Social Security or Other Identifying Number of Assignee)

(Please print or type name and address, including zip code of assignee)

the within Note and all rights thereunder, hereby irrevocably constituting and appointing such person attorneys to transfer the within Note on the books of the Issuer, with full power of substitution in the premises.

Dated:                                         

     NOTICE: The signature of this assignment must correspond with the name as written upon the face of the within Note in every particular, without alteration or enlargement or any change whatever and NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agents Medallion Program (“STAMP”), the Stock Exchange, Inc. Medallion Signature Program (“MSP”). When assignment is made by a guardian, trustee, executor or administrator, an officer of a corporation, or anyone in a representative capacity, proof of his or her authority to act must accompany this Note.

A-10

EX-12.31

Exhibit 12-31

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

	Nine Months Ended
	September 30, 2008		Twelve Months Ended December 31
			2007		2006		2005		2004		2003
(Millions of Dollars)
Earnings:
Pretax earnings	$	394	$	466	$	482	$	426	$	214	$	397
Fixed charges		244		319		299		280		294		294
Net earnings		638	$	785	$	781	$	706	$	508	$	691
Fixed charges:
Interest expense	$	220	$	294	$	278	$	267	$	280	$	284
Adjustments		24		25		21		13		14		10
Fixed charges	$	244	$	319	$	299	$	280	$	294	$	294
Ratio of earnings to fixed charges		2.61		2.46		2.61		2.52		1.73		2.35

EX-31.43

Exhibit 31-43

SECTION 302 CERTIFICATION

I, Anthony F. Earley, Jr., certify that:

1.	I have reviewed this Form 10-Q for the quarterly period ended September 30, 2008 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/ ANTHONY F. EARLEY, JR.	Date: November 14, 2008
Anthony F. Earley, Jr.
Chairman and Chief Executive Officer of The Detroit Edison Company

EX-31.44

Exhibit 31-44

SECTION 302 CERTIFICATION

I, David E. Meador, certify that:

1.	I have reviewed this Form 10-Q for the quarterly period ended September 30, 2008 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: November 14, 2008
David E. Meador
Executive Vice President and Chief Financial Officer of The Detroit Edison Company

EX-32.43

Exhibit 32-43

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 Quarterly Report on Form 10-Q of The Detroit Edison Company (the “Company”) for the quarter ended September 30, 2008, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Anthony F. Earley, Jr., 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.

Dated: November 14, 2008	/s/ ANTHONY F. EARLEY, JR.
	Anthony F. Earley, Jr.
	Chairman 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-32.44

Exhibit 32-44

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 Quarterly Report on Form 10-Q of The Detroit Edison Company (the “Company”) for the quarter ended September 30, 2008, 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.

Dated: November 14, 2008	/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.