DTE Electric and DTE Gas are subject to the regulatory jurisdiction of the MPSC, which issues orders pertaining to rates, recovery of certain costs, including the costs of generating facilities and regulatory assets, conditions of service, accounting, and operating-related matters. The MPSC has authorized a return on equity of 9.9% for both DTE Electric and DTE Gas, subject to changes from any pending or future rate case filings. DTE Electric is also regulated by the FERC with respect to financing authorization, wholesale electric market activities, certain affiliate transactions, the acquisition and disposition of certain generation and other facilities, and, in conjunction with the NERC, compliance with mandatory reliability standards. Regulation results in differences in the application of generally accepted accounting principles between regulated and non-regulated businesses.

The Registrants are unable to predict the outcome of any unresolved regulatory matters discussed herein. Resolution of these matters is dependent upon future MPSC and FERC orders and appeals, which may materially impact the Consolidated Financial Statements of the Registrants.

DTE Electric and DTE Gas are required to record Regulatory assets and liabilities for certain transactions that would have been treated as revenue or expense in non-regulated businesses. Continued applicability of regulatory accounting treatment requires that rates be designed to recover specific costs of providing regulated services and be charged to and collected from customers. Future regulatory changes could result in the discontinuance of this accounting treatment for Regulatory assets and liabilities for some or all of the Registrants' businesses and may require the write-off of the portion of any Regulatory asset or liability that was no longer probable of recovery through regulated rates. Management believes that currently available facts support the continued use of Regulatory assets and liabilities and that all Regulatory assets and liabilities are recoverable or refundable in the current regulatory environment.


	DTE Energy				DTE Electric
	2023		2022		2023		2022
Assets	(In millions)
Recoverable undepreciated costs on retiring plants	$	2,736	$	594	$	2,736	$	594
Recoverable pension and other postretirement costs
Pension	1,421		1,362		1,045		997
Other postretirement costs	163		172		67		60
Fermi 2 asset retirement obligation	952		972		952		972
Removal costs asset	223		19		223		19
Enhanced tree trimming program deferred costs	157		90		157		90
Recoverable Michigan income taxes	133		148		110		121
Energy Waste Reduction incentive	90		88		72		71
Recoverable income taxes related to AFUDC equity	89		76		80		68
Accrued PSCR/GCR revenue	55		450		55		421
Deferred environmental costs	46		46		—		—
Unamortized loss on reacquired debt	41		45		31		34
Customer360 deferred costs	38		42		38		42
Advanced distribution management system costs	18		14		18		14
Deferred pension costs	16		63		10		41




Nuclear performance evaluation and review committee tracker	6		26		6		26

Other	133		129		95		70
	6,317		4,336		5,695		3,640
Less amount included in Current Assets	(108)		(450)		(99)		(421)
	$	6,209	$	3,886	$	5,596	$	3,219

Securitized regulatory assets	$	758	$	206	$	758	$	206


	DTE Energy				DTE Electric
	2023		2022		2023		2022
Liabilities	(In millions)
Refundable federal income taxes	$	1,823	$	1,908	$	1,463	$	1,534
Removal costs liability	342		371		—		—
Negative other postretirement offset	210		191		142		128
Non-service pension and other postretirement costs	199		154		84		73
Accrued GCR refund	21		—		—		—
Renewable energy	7		21		7		21










Other	72		62		63		55
	2,674		2,707		1,759		1,811
Less amount included in Current Liabilities	(71)		(34)		(49)		(33)
	$	2,603	$	2,673	$	1,710	$	1,778

As noted below, certain Regulatory assets for which costs have been incurred have been included (or are expected to be included, for costs incurred subsequent to the most recently approved rate case) in DTE Electric's or DTE Gas' rate base, thereby providing a return on invested costs (except as noted). Certain other Regulatory assets are not included in rate base but accrue recoverable carrying charges until surcharges to collect the assets are billed. Certain Regulatory assets do not result from cash expenditures and therefore do not represent investments included in rate base or have offsetting liabilities that reduce rate base.

•Recoverable undepreciated costs on retiring plants — Current year balance reflects undepreciated costs at the Belle River and Monroe power plants that will be retired in future periods. These costs were approved for recovery as a result of DTE Electric's Integrated Resource Plan settlement agreement in 2023. Refer to the "Integrated Resource Plan" section below for additional details. The prior year balance reflects the undepreciated costs of the St. Clair and Trenton Channel power plants, which were approved for securitization and recovery by the MPSC and reclassified to 'Securitized regulatory assets' in 2023. Refer to the "2023 Securitization Filing" section below for additional information.

•Recoverable pension and other postretirement costs — Accounting standards for pension and other postretirement benefit costs require, among other things, the recognition in Other comprehensive income of the actuarial gains or losses and the prior service costs that arise during the period but are not immediately recognized as components of net periodic benefit costs. DTE Electric and DTE Gas record the impact of actuarial gains or losses and prior service costs as Regulatory assets since the traditional rate setting process allows for the recovery of pension and other postretirement costs. The asset will reverse as the deferred items are amortized and recognized as components of net periodic benefit costs. Refer to Note 20 to the Consolidated Financial Statements, "Retirement Benefits and Trusteed Assets," for additional information regarding the changes in pension and other postretirement costs for the period and the impact on Regulatory assets.(a)

•Fermi 2 asset retirement obligation — Obligation for Fermi 2 decommissioning costs. The asset captures the timing differences between expense recognition and current recovery in rates and will reverse over the remaining life of the related plant.(a)

•Recoverable Michigan income taxes — The State of Michigan enacted a corporate income tax resulting in the establishment of state deferred tax liabilities for DTE Energy's utilities. Offsetting Regulatory assets were also recorded as the impacts of the deferred tax liabilities will be reflected in rates as the related taxable temporary differences reverse and flow through current income tax expense.

•Energy Waste Reduction incentive — DTE Electric and DTE Gas operate MPSC approved energy waste reduction programs designed to reduce overall energy usage by their customers. The utilities are eligible to earn an incentive by exceeding statutory savings targets. The utilities have consistently exceeded the savings targets and recognize the incentive as a Regulatory asset in the period earned.(a)

•Recoverable income taxes related to AFUDC equity — Accounting standards for income taxes require recognition of a deferred tax liability for the equity component of AFUDC. A Regulatory asset is required for the future increase in taxes payable related to the equity component of AFUDC that will be recovered from customers through future rates over the remaining life of the related plant.

•Accrued PSCR/GCR revenue — Receivable for the temporary under-recovery of and carrying costs on fuel and purchased power costs incurred by DTE Electric which are recoverable through the PSCR mechanism and temporary under-recovery of and carrying costs on gas costs incurred by DTE Gas which are recoverable through the GCR mechanism.

•Deferred environmental costs — The MPSC approved the deferral of investigation and remediation costs associated with DTE Gas' former MGP sites. Amortization of deferred costs is over a ten-year period beginning in the year after costs were incurred, with recovery (net of any insurance proceeds) through base rate filings.(a)

•Customer360 deferred costs — The MPSC approved the deferral and amortization of certain costs associated with implementing Customer360, an integrated software application that enables improved interface among customer service, billing, meter reading, credit and collections, device management, account management, and retail access. Amortization of deferred costs over a 15-year amortization period began after the billing system was put into operation during the second quarter of 2017. The deferred costs are recorded as Regulatory Assets at DTE Electric and DTE Gas receives an intercompany charge for their proportionate share of amortization expense.

•Advanced distribution management system — Program comprised of new hardware and software designed to improve the monitoring and safe operation of the electrical system, including emergency response. The program includes various upgrades for which costs are being separately deferred and amortized over respective 15-year periods, with recovery through base filings.

•Deferred pension costs — Effective upon the DTE Gas rate case settlement approved in August 2020 and DTE Electric rate order in November 2022, net pension costs previously recognized in earnings are no longer included as an addition to authorized rates and are being deferred as Regulatory assets. The Regulatory assets will reverse to the extent net pension costs are negative in future years and the net deferred amounts will be reviewed in future rate cases. Refer to Note 20 to the Consolidated Financial Statements, "Retirement Benefits and Trusteed Assets," for additional information regarding net pension costs.

•Nuclear performance evaluation and review committee tracker — Deferral and amortization of certain costs associated with oversight and review of DTE Electric's nuclear power generation program, including safety and regulatory compliance, nuclear leadership, nuclear facilities, and operational and financial performance, pursuant to MPSC authorization. Deferrals are amortized over a five-year period with recovery through base rate filings.

•Securitized regulatory assets — Costs approved for securitization and recovery by the MPSC. For both periods presented, amounts include the undepreciated cost of the River Rouge power plant and tree trim surge costs. Securitization bond surcharges began in 2022 to recover the tree trimming costs over a period not to exceed 5 years and River Rouge costs over a period not to exceed 14 years. For the current year, amounts also include the undepreciated costs of the St. Clair and Trenton Channel power plants. Securitization bond surcharges began in 2023 to recover costs over a period not to exceed 15 years. Refer to the "2023 Securitization Filing" section below for additional information.

•Refundable federal income taxes — In December 2017, the TCJA was enacted and reduced the corporate income tax rate, effective January 1, 2018. DTE Electric and DTE Gas remeasured deferred taxes, resulting in a reduction to deferred tax liabilities, to reflect the impact of the TCJA on the cumulative temporary differences expected to reverse after the effective date. Regulatory liabilities were also recorded to offset the impact of the deferred tax remeasurement reflected in rates.

•Negative other postretirement offset — DTE Electric and DTE Gas' negative other postretirement costs have historically not been included as a reduction to their authorized rates; therefore, DTE Electric and DTE Gas have accrued a Regulatory liability to eliminate the impact on earnings of the negative other postretirement expense accrual. The Regulatory liabilities may reverse to the extent DTE Electric and DTE Gas' other postretirement expense is positive in future years. As a result of the MPSC order in December 2023, DTE Electric may continue to defer negative expense for 2023 and future periods; however, the Regulatory liability as of December 31, 2022 will begin to be amortized over a 7-year period. Refer to the "2023 Electric Rate Case Filing" section below for additional information.

•Non-service pension and other postretirement costs — Upon adoption of ASU 2017-07 on January 1, 2018, certain non-service pension and other postretirement cost activity is no longer credited to Property, plant, and equipment. Such costs may be recorded to Regulatory liabilities for ratemaking purposes and refunded through credits to amortization expense based on the composite depreciation rate for plant-in-service.

•Renewable energy — Amounts collected in excess of renewable energy expenditures, including subscription revenue related to MIGreenPower, DTE Electric's voluntary renewable program providing customers the option to source their energy usage from renewables.

During April 2022, DTE Electric and Consumers Energy Company (“Consumers”) filed a complaint against Toshiba America Energy Systems (“TAES”) and its parent corporation for defective and non-conforming work relating to the overhaul and upgrade of the Ludington Hydroelectric Pumped Storage Plant (“Ludington”). Refer to the Ludington Plant Contract Dispute section of Note 18 to the Consolidated Financial Statements, “Commitments and Contingencies,” for additional information regarding the complaint and ongoing legal proceedings.

DTE Electric and Consumers, joint owners of Ludington, believe that certain costs must be incurred in the near term for repairing and/or replacing defective work performed by TAES in order to ensure the continued safe and reliable operation of the plant. In November 2022, DTE Electric and Consumers filed an accounting application with the MPSC for authority to defer these costs as a regulatory asset. DTE Electric and Consumers requested the regulatory asset for their respective 49% and 51% shares of these costs, to be offset by any potential litigation proceeds. The parties also requested that appropriate recovery and ratemaking treatment be granted in a future rate case or other proceeding. In May 2023, the MPSC approved the accounting application as requested. Costs incurred and deferred as regulatory assets will be reviewed in future rate proceedings for cost recovery.

DTE Electric filed a rate case with the MPSC on February 10, 2023 requesting an increase in base rates of $622 million based on a projected twelve-month period ending November 30, 2024, and an increase in return on equity from 9.9% to 10.25%. The requested increase in base rates was primarily due to increased investments in plant involving generation and the electric distribution system, as well as related increases to depreciation and property tax expenses, in order to support DTE Energy's goals to reduce carbon emissions and improve power reliability. The requested increase in base rates was also due to a projected sales decline from the level included in current rates and inflationary impacts on operating and interest costs.

On December 1, 2023, the MPSC issued an order approving an annual revenue increase of $368 million for services rendered on or after December 15, 2023 and a return on equity of 9.9%. The order also approved an Infrastructure Recovery Mechanism (IRM) surcharge to recover the cost of distribution investments incremental to those requested in base rates. The surcharge will be applied for a two-year period resulting in anticipated annual revenue increases of approximately $4 million and $25 million for the years ending December 31, 2024 and 2025, respectively.

Further, the MPSC order approved the continued deferral of negative other post-employment benefit (OPEB) expense as a regulatory liability for 2023 and future periods. As of December 31, 2022, DTE Electric had a Regulatory liability of $128 million for such OPEB deferrals, reflected as "Negative other postretirement offset" in the table of Regulatory assets and liabilities above. The MPSC order requires DTE Electric to amortize this balance over a 7-year period beginning December 15, 2023, which will reduce annual Operation and maintenance expense by approximately $18 million for each future period.

The MPSC order also disallowed $25 million of capital expenditures previously recorded, primarily related to various IT projects. The disallowance was included in Asset (gains) losses and impairments, net on the Consolidated Statements of Operations for the year ended December 31, 2023.

On April 3, 2023, DTE Electric filed an application with the MPSC requesting a financing order to approve the securitization of $496 million of qualified costs related to the net book value of the St. Clair and Trenton Channel generation plants. The filing requested recovery of these qualifying costs from DTE Electric's customers.

The MPSC issued a financing order on June 22, 2023 authorizing DTE Electric to proceed with the issuance of Securitization bonds for qualified costs up to $602 million, increased for the inclusion of deferred income taxes. These costs include up to $594 million for the net book value of the St. Clair and Trenton Channel plants and up to $8 million for other qualified costs. The financing order further authorized customer charges for the timely recovery of debt service costs on the Securitization bonds and other ongoing qualified costs.

On November 1, 2023, DTE Electric closed on the issuance of Securitization bonds of $602 million, including two separate tranches of $301 million. Refer to Note 14 to the Consolidated Financial Statements, "Long-Term Debt," for additional information regarding the terms of the bonds and use of proceeds. Upon closing the transaction, DTE Electric recognized Securitized regulatory assets of $594 million, which were reclassified from existing Regulatory assets for the net book value of the St. Clair and Trenton Channel plants. Debt service costs for the first tranche will be recovered over a period not to exceed 10 years and costs for the second tranche will be recovered over a period not to exceed 15 years.

In November 2022, DTE Electric filed an Integrated Resource Plan (IRP) with the MPSC, a comprehensive plan to meet the electricity needs of customers over the next 20 years. The IRP included details on planned coal plant retirements and replacement generation, including investments in renewables and battery storage, with a focus on providing increasingly clean, reliable, and affordable electricity to customers.

On July 12, 2023, DTE Energy announced that DTE Electric reached a settlement agreement with the various stakeholders involved in the IRP. The MPSC issued an order approving the settlement agreement on July 26, 2023. The agreement confirmed DTE Electric's plans to convert its Belle River facility from a coal-fired power plant to a natural gas peaking resource in 2025-2026, and to retire the Monroe power plant generation units 3 and 4 in 2028. DTE Electric also accelerated its planned retirement of Monroe generation units 1 and 2 from 2035 to 2032.

The settlement agreement approved the recovery of undepreciated plant costs that will be retired at Belle River and Monroe. As a result, approximately $2.7 billion of net Property, plant, and equipment was reclassified to a long-term regulatory asset during the third quarter 2023. Future capital expenditures will also be recovered, and the regulatory asset will be remeasured each reporting period for changes in expenditures, retirements, and depreciation.

DTE Electric will securitize $1.05 billion of the plant costs, including approximately $200 million for the estimated net book value of Belle River coal handling assets to be retired in 2025-2026. The remaining $845 million reflects the net book value of Monroe assets to be securitized upon the full retirement of the plant in 2032. Securitization will include the issuance of bonds for the respective plant costs and customer charges for the timely recovery of debt service costs. DTE Electric plans to reclassify amounts to Securitized regulatory assets upon completing the respective securitization financings. Terms of the securitization bonds and recovery periods for the debt service costs will also be determined at that time.

For the remaining net book value of Monroe plant assets, approximately $1.6 billion will be recovered through a regulatory asset with a return on equity of 9.0% and will be amortized over a 15-year period. Amortization will begin upon the issuance of an order in DTE Electric's next rate case. Until then, amounts will continue to be depreciated.

Pursuant to the IRP settlement agreement, DTE Electric has also committed to donate a total of $38 million, including $2 million each year from 2024 to 2027 to organizations providing various energy support to low-income customers. The remaining $30 million of donations will be made to organizations providing customers with bill assistance. The $30 million of donations may be made in varying annual amounts over the 15-year period of the Monroe regulatory asset discussed above, with a minimum amount of $1 million each year beginning in 2028. Organizations receiving donations will be determined at a later date in consultation with Michigan's Attorney General and MPSC staff, among others. Donations will not be recovered in rates and will be recorded as Other Expenses on the Consolidated Statements of Operations in future periods as the donations occur.

DTE Gas filed a rate case with the MPSC on January 8, 2024 requesting an increase in base rates of $266 million based on a projected twelve-month period ending September 30, 2025, and an increase in return on equity from 9.9% to 10.25%. The request reflects a net increase to customer rates of only $160 million, as an existing IRM surcharge of $106 million would be rolled into the new base rates. The requested increase is primarily due to increased investments in plant related to system reliability and pipeline safety and inflationary impacts on operating costs, partially offset by higher sales. A final MPSC order in this case is expected in November 2024.