Organization and Basis of Presentation

12 Months Ended

Dec. 31, 2011

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

ORGANIZATION AND BASIS OF PRESENTATION

Corporate Structure

DTE Energy owns the following businesses:

• Detroit Edison, an electric utility engaged in the generation, purchase, distribution and sale of electricity to approximately 2.1 million customers in southeastern Michigan;

• MichCon, a natural gas utility engaged in the purchase, storage, transportation, distribution and sale of natural gas to approximately 1.2 million customers throughout Michigan and the sale of storage and transportation capacity; and

• Other businesses involved in 1) natural gas pipelines, gathering and storage; 2) unconventional gas and oil project development and production; 3) power and industrial projects; and 4) energy marketing and trading operations.

Detroit Edison and MichCon are regulated by the MPSC. Certain activities of Detroit Edison and MichCon, as well as various other aspects of businesses under DTE Energy are regulated by the FERC. In addition, the Company is regulated by other federal and state regulatory agencies including the NRC, the EPA and the MDEQ.

References in this Report to “Company” or “DTE” are to DTE Energy and its subsidiaries, collectively.

Basis of Presentation

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

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

Principles of Consolidation

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

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

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

Legal entities within the Company’s Power and Industrial Projects segment enter into long-term contractual arrangements with customers to supply energy-related products or services. The entities are generally designed to pass-through the commodity risk associated with these contracts to the customers, with the Company retaining operational and customer default risk. These entities generally are VIEs. In addition, the Company has interests in certain VIEs that we share control of all significant activities for those entities with our partners, and therefore are accounted for under the equity method.

The Company has variable interests in VIEs through certain of its long-term purchase contracts. As of December 31, 2011, the carrying amount of assets and liabilities in the Consolidated Statement of Financial Position that relate to its variable interests under long-term purchase contracts are predominately related to working capital accounts and generally represent the amounts owed by the Company for the deliveries associated with the current billing cycle under the contracts. The Company has not provided any form of financial support associated with these long-term contracts. There is no significant potential exposure to loss as a result of its variable interests through these long-term purchase contracts.

In 2001, Detroit Edison financed a regulatory asset related to Fermi 2 and certain other regulatory assets through the sale of rate reduction bonds by a wholly-owned special purpose entity, Securitization. Detroit Edison performs servicing activities including billing and collecting surcharge revenue for Securitization. This entity is a VIE, and is consolidated by the Company.

DTE Energy had interests in various unconsolidated trusts that were formed for the purpose of issuing preferred securities and lending the gross proceeds to the Company. DTE Energy reviewed these interests and determined they were VIEs, but the Company was not the primary beneficiary as it did not have variable interests in the trusts and therefore, the trusts were not consolidated by the Company. See Note 15.

The maximum risk exposure for consolidated VIEs is reflected on the Company’s Consolidated Statements of Financial Position. For non-consolidated VIEs, the maximum risk exposure is generally limited to its investment and amounts which it has guaranteed.

The following table summarizes the major balance sheet items for consolidated VIEs as of December 31, 2011and December 31, 2010. Amounts at December 31, 2011 for consolidated VIEs that are either (1) assets that can be used only to settle obligations of the VIE or (2) liabilities for which creditors do not have recourse to the general credit of the primary beneficiary are segregated in the restricted amounts column. VIEs, in which the Company holds a majority voting interest and is the primary beneficiary, that meet the definition of a business and whose assets can be used for purposes other than the settlement of the VIE’s obligations have been excluded from the table below.

	December 31, 2011
	Securitization		Other		Total		Restricted Amounts
	(In millions)
ASSETS
Cash and cash equivalents	$	—	$	25	$	25	$	—
Restricted cash	107		7		114		114
Accounts receivable	34		17		51		36
Inventories	—		183		183		—
Other current assets	—		1		1		—
Property, plant and equipment	—		73		73		23
Securitized regulatory assets	577		—		577		577
Other assets	10		6		16		16
	$	728	$	312	$	1,040	$	766
LIABILITIES
Accounts payable and accrued current liabilities	$	14	$	24	$	38	$	14
Current portion long-term debt, including capital leases	164		7		171		171
Other current liabilities	55		—		55		55
Mortgage bonds, notes and other	—		30		30		30
Securitization bonds	479		—		479		479
Capital lease obligations	—		14		14		14
Other long term liabilities	7		2		9		8
	$	719	$	77	$	796	$	771

	December 31, 2010
	Securitization		Other		Total		Restricted Amounts
	(In millions)
ASSETS
Cash and cash equivalents	$	—	$	4	$	4	$	—
Restricted cash	104		8		112		112
Accounts receivable	42		8		50		44
Inventories	—		99		99		—
Other current assets	—		1		1		—
Property, plant and equipment	—		54		54		38
Securitized regulatory assets	729		—		729		729
Other assets	13		9		22		21
	$	888	$	183	$	1,071	$	944
LIABILITIES
Accounts payable and accrued current liabilities	$	17	$	27	$	44	$	18
Current portion long-term debt, including capital leases	150		7		157		157
Other current liabilities	62		6		68		66
Mortgage bonds, notes and other	—		35		35		35
Securitization bonds	643		—		643		643
Capital lease obligations	—		23		23		23
Other long term liabilities	6		7		13		12
	$	878	$	105	$	983	$	954

Amounts for non-consolidated VIEs as of December 31, 2011 and December 31, 2010 are as follows:

	December 31, 2011		December 31, 2010
	(In millions)
Other investments	$	117	$	98
Notes receivable	7		6
Trust preferred — linked securities	—		289