Short-Term Credit Arrangements and Borrowings

9 Months Ended

Sep. 30, 2022

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 June 2022, DTE Energy increased its $70 million letter of credit facility to $375 million and amended the maturity date from July 2023 to June 2023. The facility will support general corporate purposes and has terms consistent with the unsecured revolving credit agreements.

The unsecured revolving credit agreements currently require a total funded debt to capitalization ratio of no more than 0.70 to 1 for DTE Energy and 0.65 to 1 for DTE Electric and DTE Gas. 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 September 30, 2022, the total funded debt to total capitalization ratios for DTE Energy, DTE Electric, and DTE Gas were 0.68 to 1, 0.52 to 1, and 0.50 to 1, respectively, and were in compliance with this financial covenant.

The availability under these facilities as of September 30, 2022 is shown in the following table:


	DTE Energy		DTE Electric		DTE Gas		Total
	(In millions)
Unsecured revolving credit facility, expiring April 2026	$	1,500	$	500	$	300	$	2,300

Unsecured Canadian revolving credit facility, expiring May 2023	79		—		—		79
Unsecured letter of credit facility, expiring February 2023	150		—		—		150
Unsecured letter of credit facility, expiring June 2023	375		—		—		375
Unsecured letter of credit facility(a)	50		—		—		50
	2,154		500		300		2,954
Amounts outstanding at September 30, 2022
Revolver borrowings	79		—		—		79
Commercial paper issuances	326		459		130		915

Letters of credit	338		—		—		338
	743		459		130		1,332
Net availability at September 30, 2022	$	1,411	$	41	$	170	$	1,622

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

In October 2022, the unsecured revolving credit agreements were amended and the maturity date was extended from April 2026 to October 2027. The amendment increased the total availability of DTE Energy's unsecured revolving credit facility from $2.3 billion to $2.6 billion, including an increase from $500 million to $800 million at DTE Electric. Current financial covenants relating to total funded debt to capitalization ratios will remain through the maturity date, and the facility will continue to provide liquidity support for the Registrants' commercial paper programs.

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 agreements for up to $50 million and for up to $150 million. 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 September 30, 2022, the capacity under the facilities was $250 million. The amounts outstanding under the agreements were $191 million and $103 million at September 30, 2022 and December 31, 2021, respectively, and were fully offset by the posted collateral.