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Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2023

The following is a summary of DTE Energy's Other income:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In millions)
Allowance for equity funds used during construction	$	8	$	6	$	26	$	20
Contract services	5		7		18		21


Investment income(a)	—		—		9		—
Equity earnings (losses) of equity method investees	3		—		7		(15)
Other	(3)		3		10		9
	$	13	$	16	$	70	$	35

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(a)Investment losses are recorded separately to Other expenses on the Consolidated Statements of Operations.

The following is a summary of DTE Electric's Other income:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In millions)
Allowance for equity funds used during construction	$	8	$	6	$	25	$	18
Contract services	6		7		18		21
Investment income(a)	—		—		6		—

Other	2		2		7		7
	$	16	$	15	$	56	$	46

_______________________________________

(a)Investment losses are recorded separately to Other expenses on the Consolidated Statements of Operations.

Schedule of Effective Income Tax Rate Reconciliation

The tables below summarize how the Registrants' effective income tax rates have varied from the statutory federal income tax rate:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
DTE Energy
Statutory federal income tax rate	21.0	%	21.0	%	21.0	%	21.0	%
Increase (decrease) due to:
State and local income taxes, net of federal benefit	4.8		4.4		4.5		4.5
Production tax credits	(7.8)		(9.1)		(6.4)		(9.4)
TCJA amortization	(4.9)		(13.6)		(4.2)		(14.8)
Investment tax credits	(3.8)		—		(2.6)		(0.1)
Enactment of West Virginia income tax legislation, net of federal benefit	—		—		(0.6)		—
Other	(3.0)		(1.2)		(1.9)		(1.2)
Effective income tax rate	6.3	%	1.5	%	9.8	%	—	%


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
DTE Electric
Statutory federal income tax rate	21.0	%	21.0	%	21.0	%	21.0	%
Increase (decrease) due to:
State and local income taxes, net of federal benefit	5.7		5.7		5.7		5.7
Production tax credits	(11.1)		(9.5)		(9.4)		(9.2)
TCJA amortization	(6.9)		(14.6)		(5.9)		(15.0)
Other	(1.9)		(0.9)		(2.2)		(0.9)
Effective income tax rate	6.8	%	1.7	%	9.2	%	1.6	%

Schedule of Financing Receivables Classified by Internal Grade of Credit Risk

The following represents the Registrants' financing receivables by year of origination, classified by internal grade of credit risk, including current year-to-date gross write-offs, if any. The related credit quality indicators and risk ratings utilized to develop the internal grades have been updated through September 30, 2023.


	DTE Energy								DTE Electric
	Year of Origination
	2023		2022		2021 and Prior		Total		2023 and Prior
	(In millions)
Notes receivable
Internal grade 1	$	14	$	—	$	6	$	20	$	16
Internal grade 2	19		85		17		121		—

Total notes receivable(a)	$	33	$	85	$	23	$	141	$	16


Net investment in leases
Internal grade 1	$	—	$	—	$	37	$	37	$	—
Internal grade 2	—		65		185		250		—
Total net investment in leases(a)	$	—	$	65	$	222	$	287	$	—

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(a)For DTE Energy and DTE Electric, the current portion is included in Current Assets — Other on the respective Consolidated Statements of Financial Position. For DTE Electric, the noncurrent portion is included in Other Assets — Other.

Schedule of Roll-Forward of Activity for Financing Receivables Credit Loss Reserves

The following tables present a roll-forward of the activity for the Registrants' financing receivables credit loss reserves:


	DTE Energy				DTE Electric
	Trade accounts receivable		Other receivables			Total		Trade and other accounts receivable
	(In millions)
Beginning reserve balance, January 1, 2023	$	78	$	1		$	79	$	49
Current period provision	44		—			44		28

Write-offs charged against allowance	(78)		—			(78)		(51)
Recoveries of amounts previously written off	31		—			31		20
Ending reserve balance, September 30, 2023	$	75	$	1		$	76	$	46


	DTE Energy				DTE Electric
	Trade accounts receivable		Other receivables			Total		Trade and other accounts receivable
	(In millions)
Beginning reserve balance, January 1, 2022	$	89	$	3		$	92	$	54
Current period provision	49		—			49		33

Write-offs charged against allowance	(105)		(2)			(107)		(66)
Recoveries of amounts previously written off	45		—			45		28
Ending reserve balance, December 31, 2022	$	78	$	1		$	79	$	49

Schedule of Uncollectible Expense

Uncollectible expense for the Registrants is primarily comprised of the current period provision for allowance for doubtful accounts and is summarized as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In millions)
DTE Energy	$	10	$	12	$	45	$	46
DTE Electric	$	11	$	12	$	28	$	28