Short-Term Credit Arrangements and Borrowings

9 Months Ended

Sep. 30, 2012

Short-term Debt [Abstract]

SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS

SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS

DTE Energy and its wholly owned subsidiaries, Detroit Edison and MichCon, have unsecured revolving credit agreements with a syndicate of 20 banks that may be used for general corporate borrowings, but are intended to provide liquidity support for each of the companies’ commercial paper programs. No one bank provides more than 8.5% of the commitment in any facility. Borrowings under the facilities are available at prevailing short-term interest rates. Additionally, DTE Energy has other facilities to support letter of credit issuance.

The agreements require the Company to maintain a total funded debt to capitalization ratio of no more than 0.65 to 1. In the agreements, “total funded debt” means all indebtedness of the Company and its consolidated subsidiaries, including capital lease obligations, hedge agreements and guarantees of third parties’ debt, but excluding contingent obligations, nonrecourse and junior subordinated debt and certain equity-linked securities and, except for calculations at the end of the second quarter, certain MichCon short-term debt. “Capitalization” means the sum of (a) total funded debt plus (b) “consolidated net worth,” which is equal to consolidated total stockholders’ equity of the Company and its consolidated subsidiaries (excluding pension effects under certain FASB statements), as determined in accordance with accounting principles generally accepted in the United States of America. At September 30, 2012, the total funded debt to total capitalization ratios for DTE Energy, Detroit Edison and MichCon are 0.48 to 1, 0.52 to 1 and 0.45 to 1, respectively, and are in compliance with this financial covenant. The availability under these combined facilities at September 30, 2012 is shown in the following table (in millions):

	DTE Energy		Detroit Edison		MichCon		Total
Unsecured letter of credit facility, expiring in May 2013	$	50	$	—	$	—	$	50
Unsecured letter of credit facility, expiring in August 2015	125		—		—		125
Unsecured revolving credit facility, expiring October 2016	1,100		300		400		1,800
Total credit facilities at September 30, 2012	$	1,275	$	300	$	400	$	1,975
Amounts outstanding at September 30, 2012:
Commercial paper issuances	—		—		98		98
Letters of credit	188		—		—		188
	188		—		98		286
Net availability at September 30, 2012	$	1,087	$	300	$	302	$	1,689

The Company has other outstanding letters of credit which are not included in the above described facilities totaling approximately $91 million which are used for various corporate purposes.

In conjunction with maintaining certain exchange traded risk management positions, the Company may be required to post cash collateral with its clearing agent. The Company has a demand financing agreement for up to $100 million with its clearing agent. The agreement, as amended, also allows for up to $50 million of additional margin financing provided that the Company posts a letter of credit for the incremental amount. At September 30, 2012, a $40 million letter of credit was in place, raising the capacity under this facility to $140 million. The $40 million letter of credit is included in the table above. The amount outstanding under this agreement was $71 million and $56 million at September 30, 2012 and December 31, 2011, respectively.