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Asset Retirement Obligations
 12 Months Ended
Dec. 31, 2019
Asset Retirement Obligation Disclosure [Abstract]  
Asset Retirement Obligations ASSET RETIREMENT OBLIGATIONS
DTE Electric has a legal retirement obligation for the decommissioning costs for its Fermi 1 and Fermi 2 nuclear plants, dismantlement of facilities located on leased property, and various other operations. DTE Electric has conditional retirement obligations for asbestos and PCB removal at certain of its power plants and various distribution equipment. DTE Gas has conditional retirement obligations for gas pipelines, certain service centers, compressor and gate stations. The Registrants recognize 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 the Registrants' credit-adjusted risk-free rate. For its utility operations, the Registrants recognize in the Consolidated Statements of Operations removal costs in accordance with regulatory treatment. Any differences between costs recognized related to asset retirement and those reflected in rates are recognized as either a Regulatory asset or liability on the Consolidated Statements of Financial Position.
If a reasonable estimate of fair value cannot be made in the period in which the retirement obligation is incurred, such as for assets with indeterminate lives, the liability is recognized when a reasonable estimate of fair value can be made. Natural gas storage system and certain other distribution assets for DTE Gas and substations, manholes, and certain other distribution assets for DTE Electric have an indeterminate life. Therefore, no liability has been recorded for these assets.
Changes to asset retirement obligations for 2019, 2018, and 2017 were as follows:
 
2019
 
2018
 
2017
DTE Energy
(In millions)
Asset retirement obligations at January 1
$
2,469

 
$
2,320

 
$
2,197

Accretion
149

 
140

 
131

Liabilities incurred
20

 
27

 
2

Liabilities settled
(17
)
 
(16
)
 
(6
)
Revision in estimated cash flows
51

 
(2
)
 
(4
)
Asset retirement obligations at December 31
$
2,672

 
$
2,469

 
$
2,320


 
2019
 
2018
 
2017
DTE Electric
(In millions)
Asset retirement obligations at January 1
$
2,271

 
$
2,125

 
$
2,012

Accretion
138

 
129

 
120

Liabilities incurred
1

 
27

 
1

Liabilities settled
(14
)
 
(8
)
 
(2
)
Revision in estimated cash flows
51

 
(2
)
 
(6
)
Asset retirement obligations at December 31
$
2,447

 
$
2,271

 
$
2,125


Approximately $2.1 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 plant. The NRC has jurisdiction over the decommissioning of nuclear power plants and requires minimum decommissioning funding based upon a formula. The MPSC and FERC regulate the recovery of costs of decommissioning nuclear power plants and both require the use of external trust funds to finance the decommissioning of Fermi 2. Rates approved by the MPSC provide for the recovery of decommissioning costs of Fermi 2 and the disposal of low-level radioactive waste. DTE Electric believes the MPSC collections will be adequate to fund the estimated cost of decommissioning. The decommissioning assets, anticipated earnings thereon, and future revenues from decommissioning collections will be used to decommission Fermi 2. DTE Electric expects the liabilities to be reduced to zero at the conclusion of the decommissioning activities. If amounts remain in the trust funds for Fermi 2 following the completion of the decommissioning activities, those amounts will be disbursed based on rulings by the MPSC and FERC.
A portion of the funds recovered through the Fermi 2 decommissioning surcharge and deposited in external trust accounts is designated for the removal of non-radioactive assets and returning the site to greenfield. This removal and greenfielding is not considered a legal liability. Therefore, it is not included in the asset retirement obligation, but is reflected as the Nuclear decommissioning liability. The decommissioning of Fermi 1 is funded by DTE Electric. Contributions to the Fermi 1 trust are discretionary. For additional discussion of Nuclear decommissioning trust fund assets, see Note 13 to the Consolidated Financial Statements, "Fair Value."