PROPERTY, PLANT, AND EQUIPMENT

The following is a summary of Property, plant, and equipment by classification as of December 31:



	2016			2015
Property, plant, and equipment	(In millions)
DTE Electric
Generation	$	11,990		$	11,767
Distribution	8,134			7,816
Other	1,970			1,808
Total DTE Electric	22,094			21,391
DTE Gas
Distribution	3,382			3,124
Storage	503			453
Transmission and other	925			890
Total DTE Gas	4,810			4,467
Non-utility and other	3,125			2,263
Total DTE Energy	30,029			28,121
Accumulated depreciation and amortization
DTE Electric
Generation	(4,364		)	(4,346		)
Distribution	(2,769		)	(2,707		)
Other	(588		)	(593		)
Total DTE Electric	(7,721		)	(7,646		)
DTE Gas
Distribution	(1,198		)	(1,163		)
Storage	(152		)	(147		)
Transmission and other	(370		)	(370		)
Total DTE Gas	(1,720		)	(1,680		)
Non-utility and other	(858		)	(761		)
Total DTE Energy	(10,299		)	(10,087		)
Net DTE Energy Property, plant, and equipment	$	19,730		$	18,034
Net DTE Electric Property, plant, and equipment	$	14,373		$	13,745

The following is a summary of the Registrants' AFUDC and interest capitalized for the years ended December 31:



	DTE Energy				DTE Electric
	2016		2015		2016		2015
	(In millions)
Allowance for debt funds used during construction and interest capitalized	$	10	$	13	$	8	$	11
Allowance for equity funds used during construction	21		21		18		20
Total	$	31	$	34	$	26	$	31

The composite depreciation rate for DTE Electric was approximately 3.5% in 2016 and 2015, and 3.4% in 2014. The composite depreciation rate for DTE Gas was 2.4%, 2.6%, and 2.4% in 2016, 2015, and 2014, respectively. The average estimated useful life for each major class of utility Property, plant, and equipment as of December 31, 2016 follows:

The estimated useful lives for DTE Electric's Other utility assets range from 4 to 62 years, while the estimated useful lives for DTE Gas' Transmission and other utility assets range from 5 to 70 years. The estimated useful lives for major classes of DTE Energy's non-utility assets and facilities range from 3 to 55 years.

The following is a summary of Depreciation and amortization expense for DTE Energy, including DTE Electric:



	2016		2015			2014
	(In millions)
Property, plant, and equipment	$	783	$	740		$	683
Regulatory assets and liabilities	193		150			159
Securitized regulatory assets^(a)	—		(38		)	303
	$	976	$	852		$	1,145

_______________________________________


(a)	Securitization surcharges ended in December 2014 with remaining over recovery refunded to customers in 2015. Securitization bonds were paid and Securitization regulatory assets amortization was completed in 2015. The $38 million credit represents the final adjustments to close out the Securitization program.

The following is a summary of Depreciation and amortization expense for DTE Electric:



	2016		2015			2014
	(In millions)
Property, plant, and equipment	$	582	$	545		$	489
Regulatory assets and liabilities	168		126			135
Securitized regulatory assets^(a)	—		(38		)	303
	$	750	$	633		$	927

_______________________________________


(a)	Securitization surcharges ended in December 2014 with remaining over recovery refunded to customers in 2015. Securitization bonds were paid and Securitization regulatory assets amortization was completed in 2015. The $38 million credit represents the final adjustments to close out the Securitization program.

Capitalized software costs are classified as Property, plant, and equipment and the related amortization is included in accumulated depreciation and amortization on the Registrants' Consolidated Financial Statements. The Registrants capitalize the costs associated with computer software developed or obtained for use in their businesses. The Registrants amortize capitalized software costs on a straight-line basis over the expected period of benefit, ranging from 3 to 15 years for DTE Energy and 4 to 15 years for DTE Electric.

The following balances for capitalized software relate to DTE Energy, including DTE Electric:



	Year Ended December 31,
	2016		2015		2014
	(In millions)
Amortization expense of capitalized software	$	89	$	98	$	77
Gross carrying value of capitalized software	$	715	$	770
Accumulated amortization of capitalized software	$	435	$	439

The following balances for capitalized software relate to DTE Electric:



	Year Ended December 31,
	2016		2015		2014
	(In millions)
Amortization expense of capitalized software	$	83	$	80	$	71
Gross carrying value of capitalized software	$	610	$	664
Accumulated amortization of capitalized software	$	365	$	369

Property under capital leases for the Registrants is as follows:



	DTE Energy				DTE Electric
	2016		2015		2016		2015
	(In millions)
Gross property under capital leases	$	44	$	48	$	18	$	22
Accumulated amortization of property under capital leases	$	32	$	26	$	6	$	1

Estimated Useful Lives in Years

Generation

Distribution

DTE Electric