Short-Term Credit Arrangements and Borrowings

12 Months Ended

Dec. 31, 2021

Short-Term Credit Arrangements and Borrowings

SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS

DTE Energy, DTE Electric, and DTE Gas have unsecured revolving credit agreements that can be used for general corporate borrowings, but are intended to provide liquidity support for each of the companies’ commercial paper programs. Borrowings under the revolvers are available at prevailing short-term interest rates. DTE Energy also has other facilities to support letter of credit issuance.

In December 2021, DTE Energy entered into a $400 million unsecured term loan to raise additional liquidity, with terms consistent with the unsecured revolving credit agreements. No amount has been drawn as of December 31, 2021 and the loan will expire in June 2022.

The unsecured revolving credit agreements have historically required DTE Energy, DTE Electric, and DTE Gas to maintain a total funded debt to capitalization ratio of no more than 0.65 to 1. In June 2021, DTE Energy amended its total funded debt to capitalization ratio requirement to no more than 0.70 to 1 starting with the third quarter of 2021 and ending December 2022. The amendment was a result of temporary balance sheet impacts resulting from the separation of DT Midstream on July 1, 2021. In the agreements, "total funded debt" means all indebtedness of each respective company and their consolidated subsidiaries, including finance 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 DTE Gas short-term debt. "Capitalization" means the sum of (a) total funded debt plus (b) "consolidated net worth," which is equal to consolidated total equity of each respective company and their 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 December 31, 2021, the total funded debt to total capitalization ratios for DTE Energy, DTE Electric, and DTE Gas were 0.66 to 1, 0.51 to 1, and 0.48 to 1, respectively, and were in compliance with this financial covenant.

The availability under the facilities in place at December 31, 2021 is shown in the following table:


	DTE Energy		DTE Electric		DTE Gas		Total
	(In millions)
Unsecured revolving credit facility, expiring April 2025(a)	$	1,500	$	500	$	300	$	2,300
Unsecured term loan, expiring June 2022	400		—		—		400
Unsecured Canadian revolving credit facility, expiring May 2023	87		—		—		87
Unsecured letter of credit facility, expiring February 2023	150		—		—		150
Unsecured letter of credit facility, expiring July 2023	70		—		—		70
Unsecured letter of credit facility(b)	50		—		—		50


	2,257		500		300		3,057
Amounts outstanding at December 31, 2021
Revolver borrowings	75		—		—		75
Commercial paper issuances	320		153		210		683
Letters of credit	258		—		—		258

	653		153		210		1,016
Net availability at December 31, 2021	$	1,604	$	347	$	90	$	2,041

_______________________________________

(a)Total availability of $102 million expires in April 2024, including $67 million at DTE Energy, $22 million at DTE Electric, and $13 million at DTE Gas. All other availability expires in April 2025.

(b)Uncommitted letter of credit facility with automatic renewal provision for each July and therefore no expiration.

For DTE Energy, the weighted average interest rate for short-term borrowings was 0.3% and 1.1% at December 31, 2021 and 2020, respectively. For DTE Electric, the weighted average interest rate for short-term borrowings was 0.2% at December 31, 2021. There were no short-term borrowings outstanding as of December 31, 2020.

In conjunction with maintaining certain exchange-traded risk management positions, DTE Energy may be required to post collateral with its clearing agents. DTE Energy has demand financing agreements with its clearing agents, including an agreement for up to $50 million with an indefinite term and an agreement for up to $150 million currently contracted through 2022 and subject to renewal. The $50 million agreement, as amended, also allows for up to $50 million of additional margin financing provided that DTE Energy posts a letter of credit for the incremental amount. Both agreements allow the right of setoff with posted collateral. At December 31, 2021, the capacity under these facilities was $250 million. The amount outstanding under these agreements was $103 million and $49 million at December 31, 2021 and 2020, respectively, and was fully offset by the posted collateral.

Dividend Restrictions

Certain of DTE Energy’s credit facilities contain a provision requiring DTE Energy to maintain a total funded debt to capitalization ratio, as defined in the agreements, of no more than 0.65 to 1, which has the effect of limiting the amount of dividends DTE Energy can pay in order to maintain compliance with this provision. As noted above, the total funded debt to capitalization ratio has been temporarily increased to 0.70 to 1 through December 2022. At December 31, 2021, the effect of this provision was a restriction on dividend payments to no more than $1.4 billion of DTE Energy's Retained earnings of $3.4 billion. There are no other effective limitations with respect to DTE Energy’s ability to pay dividends.