Leases

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Leases

LEASES

Lessor

During the first quarter 2024, DTE Energy completed construction of and began operating certain energy infrastructure assets under a long-term agreement with a large industrial customer. DTE Energy began leasing these assets to the customer for a 20-year term ending in 2044. DTE Energy has accounted for this arrangement as a finance lease, recognizing a net investment of $119 million as of March 31, 2024. Under the long-term agreement, additional energy infrastructure assets remain under construction and are expected to be completed through the remainder of 2024. The assets will be subsequently leased to the customer and increase the net investment in finance leases accordingly.

The components of DTE Energy’s net investment in finance leases for remaining periods were as follows:

	DTE Energy
	March 31, 2024
	(In millions)
2024	$	36
2025	48
2026	47
2027	47
2028	47
2029 and Thereafter	584
Total minimum future lease receipts	809
Residual value of leased pipeline	17
Less unearned income	421
Net investment in finance lease	405
Less current portion	11
	$	394

Interest income recognized under finance leases was $8 million and $7 million for the three months ended March 31, 2024 and 2023, respectively.

DTE Energy’s lease income associated with operating leases, included in Operating Revenues — Non-utility operations in the Consolidated Statements of Operations, was as follows:

	Three Months Ended March 31,
	2024		2023
	(In millions)
Fixed payments	$	4	$	4
Variable payments	10		11
	$	14	$	15

Leases

LEASES

Lessor

During the first quarter 2024, DTE Energy completed construction of and began operating certain energy infrastructure assets under a long-term agreement with a large industrial customer. DTE Energy began leasing these assets to the customer for a 20-year term ending in 2044. DTE Energy has accounted for this arrangement as a finance lease, recognizing a net investment of $119 million as of March 31, 2024. Under the long-term agreement, additional energy infrastructure assets remain under construction and are expected to be completed through the remainder of 2024. The assets will be subsequently leased to the customer and increase the net investment in finance leases accordingly.

The components of DTE Energy’s net investment in finance leases for remaining periods were as follows:

	DTE Energy
	March 31, 2024
	(In millions)
2024	$	36
2025	48
2026	47
2027	47
2028	47
2029 and Thereafter	584
Total minimum future lease receipts	809
Residual value of leased pipeline	17
Less unearned income	421
Net investment in finance lease	405
Less current portion	11
	$	394

Interest income recognized under finance leases was $8 million and $7 million for the three months ended March 31, 2024 and 2023, respectively.

DTE Energy’s lease income associated with operating leases, included in Operating Revenues — Non-utility operations in the Consolidated Statements of Operations, was as follows:

	Three Months Ended March 31,
	2024		2023
	(In millions)
Fixed payments	$	4	$	4
Variable payments	10		11
	$	14	$	15