TABLE OF CONTENTS


				Page
			~~Page~~
	Definitions		1
		Filing Format		54
		Forward-Looking Statements		54
PART I
Items 1. & 2.		Business and Properties		76
Item 1A.		Risk Factors		2018
Item 1B.		Unresolved Staff Comments		2524
Item 3.		Legal Proceedings		2524
Item 4.		Mine Safety Disclosures		2624
PART II
Item 5.		Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities		2725
Item 6.		Selected Financial Data		2926
Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		2927
Item 7A.		Quantitative and Qualitative Disclosures About Market Risk		5248
Item 8.		Financial Statements and Supplementary Data		5551
Item 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		~~140~~150
Item 9A.		Controls and Procedures		~~140~~150
Item 9B.		Other Information		~~140~~150
~~PART III~~Item 9 C .		Disclosure Regarding Foreign Jurisdictions that Prevent Inspections		150
PART III
Item 10.		Directors, Executive Officers, and Corporate Governance		~~140~~151
Item 11.		Executive Compensation		~~140~~151
Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		~~140~~151
Item 13.		Certain Relationships and Related Transactions, and Director Independence		~~140~~151
Item 14.		Principal Accountant Fees and Services		~~140~~151
PART IV
Item 15.		Exhibits and Financial Statement Schedules		~~142~~152
Item 16.		Form 10-K Summary		~~152~~161
		Signatures		~~154~~163

DEFINITIONS



~~AFUDC~~ACE			Affordable Clean Energy

AFUDC			Allowance for Funds Used During Construction

~~AGS~~AMT		Appalachia Gathering System is a midstream natural gas asset located in Pennsylvania and West Virginia. DTE Energy purchased 100% of AGS in October 2016, and this asset is part of DTE Energy's Gas Storage and Pipelines segment.	Alternative Minimum Tax

AMV			Applicable Market Value

~~ANPR~~ASU		~~Advanced Noticed of Proposed Rulemaking~~

~~ARO~~	~~Asset Retirement Obligation~~

~~ASU~~	Accounting Standards Update issued by the FASB

~~CCR~~CAD			Canadian Dollar (C$)

CARB			California Air Resources Board that administers California's Low Carbon Fuel Standard

Carbon emissions			Emissions of carbon containing compounds, including carbon dioxide and methane, that are identified as greenhouse gases

CARES Act			Coronavirus Aid, Relief, and Economic Security Act enacted in March 2020 to assist individuals and employers with the impacts of the COVID-19 pandemic, including certain tax relief provisions

CCR			Coal Combustion Residuals

CFTC			U.S. Commodity Futures Trading Commission

~~CON~~COVID-19		~~Certificate~~	Coronavirus disease of ~~Necessity~~2019

DOE			U.S. Department of Energy

DTE Electric			DTE Electric Company ~~(a direct~~(an indirect wholly-owned subsidiary of DTE Energy) and subsidiary companies

DTE Energy			DTE Energy Company, directly or indirectly the parent of DTE Electric, DTE Gas, and numerous non-utility subsidiaries

DTE Gas			DTE Gas Company (an indirect wholly-owned subsidiary of DTE Energy) and subsidiary companies

~~EGU~~DTE Sustainable Generation			DTE Sustainable Generation Holdings, LLC (an indirect wholly-owned subsidiary of DTE Energy) and subsidiary companies

DT Midstream			DT Midstream, Inc., formerly DTE Energy's natural gas pipeline, storage, and gathering non-utility business comprising the Gas Storage and Pipelines segment and certain DTE Energy holding company activity in the Corporate and Other segment, which separated from DTE Energy and became an independent public company on July 1, 2021

EGLE			Michigan Department of Environment, Great Lakes, and Energy, formerly known as Michigan Department of Environmental Quality

EGU			Electric Generating Unit

ELG			Effluent Limitations Guidelines

EPA			U.S. Environmental Protection Agency

Equity ~~Units~~units			DTE Energy's ~~2016 Equity Units~~2019 equity units issued in ~~October 2016,~~November 2019, which were used to finance the ~~October 1, 2016~~ Gas Storage and Pipelines ~~acquisition.~~acquisition on December 4, 2019

~~FASB~~ERCOT			Electric Reliability Council of Texas, the independent power market operator responsible for substantially all of the Texas power market.

EWR			Energy Waste Reduction program, which includes a mechanism authorized by the MPSC allowing DTE Electric and DTE Gas to recover through rates certain costs relating to energy waste reduction

FASB			Financial Accounting Standards Board

FERC			Federal Energy Regulatory Commission

~~FOV~~FGD			Flue Gas Desulfurization

FOV			Finding of Violation

DEFINITIONS


FTRs			Financial Transmission Rights are financial instruments that entitle the holder to receive payments related to costs incurred for congestion on the transmission ~~grid.~~grid

GCR			A Gas Cost Recovery mechanism authorized by the MPSC that allows DTE Gas to recover through rates its natural gas ~~costs.~~costs

GHGs			Greenhouse gases

~~IRM~~Green Bonds		~~Infrastructure Recovery Mechanism~~	A financing option to fund projects that have a positive environmental impact based upon a specified set of criteria. The proceeds are required to be used for eligible green expenditures

IRS			Internal Revenue Service

ISO			Independent System Operator

LIBOR			London Inter-Bank Offered Rates

LLC			DTE Energy Corporate Services, LLC, a subsidiary of DTE Energy

~~MDEQ~~MGP		~~Michigan Department of Environmental Quality~~

~~MGP~~	Manufactured Gas Plant

MISO			Midcontinent Independent System Operator, Inc.

MPSC			Michigan Public Service Commission

~~MTM~~	~~Mark-to-market~~




~~NAV~~MTM			Mark-to-market

NAV			Net Asset Value

NEIL			Nuclear Electric Insurance Limited

~~NEXUS~~Net zero			Collective efforts to reduce the carbon emissions of DTE Energy's utility operations and gas suppliers, as well as efforts to offset an amount equivalent to any remaining emissions. Progress towards this goal is estimated and may vary from the calculations of other utility businesses with similar targets

NEXUS			NEXUS Gas Transmission, LLC, a joint venture in which DTE Energy ~~owns~~previously owned a 50% partnership ~~interest.~~interest that separated with DT Midstream effective July 1, 2021

Non-utility			An entity that is not a public utility. Its conditions of service, prices of goods and services, and other operating related matters are not directly regulated by the ~~MPSC.~~MPSC

~~NOV~~	~~Notice of Violation~~

NO_xX			Nitrogen Oxides

~~NRC~~NPDES			National Pollutant Discharge Elimination System

NRC			U.S. Nuclear Regulatory Commission

PLD			City of Detroit's Public Lighting Department

Production tax credits			Tax credits as authorized under Sections 45K and 45 of the Internal Revenue Code that are designed to stimulate investment in and development of alternate fuel sources. The amount of a production tax credit can vary each year as determined by the ~~IRS.~~IRS

PSCR			A Power Supply Cost Recovery mechanism authorized by the MPSC that allows DTE Electric to recover through rates its fuel, fuel-related, and purchased power ~~costs.~~costs

~~RDM~~REC		~~A Revenue Decoupling Mechanism authorized by the MPSC that is designed to minimize the impact on revenues of changes in average customer usage.~~	Renewable Energy Credit

REF			Reduced Emissions Fuel

Registrants			DTE Energy and DTE Electric

Retail access			Michigan legislation provided customers the option of access to alternative suppliers for electricity and natural ~~gas.~~gas

~~RSN~~RPS			Renewable Portfolio Standard program, which includes a mechanism authorized by the MPSC allowing DTE Electric to recover through rates its renewable energy costs

RSN			Remarketable Senior Notes

RTO			Regional Transmission Organization

DEFINITIONS


SEC			Securities and Exchange Commission

~~Securitization~~SGG		~~DTE Electric financed specific stranded costs at lower interest rates through the sale of rate reduction bonds by a wholly-owned special purpose entity, The Detroit Edison Securitization Funding LLC.~~

~~SGG~~	Stonewall Gas Gathering is a midstream natural gas asset ~~located in West Virginia.~~that was previously owned 85% by DTE Energy ~~purchased 55% of SGG in October 2016,~~ and ~~this asset is part of DTE Energy's Gas Storage and Pipelines segment.~~separated with DT Midstream effective July 1, 2021

~~Shenango~~SIP		~~Shenango Incorporated is a coke battery plant located in Pittsburgh, PA, that was closed in January 2016 and is included in the Power and Industrial Projects segment.~~	State Implementation Plan

SO₂			Sulfur Dioxide

TCJA			Tax Cuts and Jobs Act of 2017, which reduced the corporate Federal income tax rate from 35% to 21%

~~TRIA~~TCJA rate reduction			Reduction in DTE Gas revenue related to Calculation C of the TCJA. DTE Gas' Calculation C case was approved by the MPSC in August 2019 to address all remaining issues relative to the TCJA, which is primarily the remeasurement of deferred taxes and how the amounts deferred as Regulatory liabilities flow to ratepayers

Topic 606			FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, as amended

Topic 842			FASB issued ASU No, 2016-02, Leases, as amended

TRIA			Terrorism Risk Insurance Program Reauthorization Act of 2015

TRM			A Transitional Reconciliation Mechanism authorized by the MPSC that allows DTE Electric to recover through rates the deferred net incremental revenue requirement associated with the transition of PLD customers to DTE Electric's distribution ~~system.~~system

~~VEBA~~USD			United States Dollar ($)

VEBA			Voluntary Employees Beneficiary Association

VIE			Variable Interest Entity



Units of Measurement

Bcf		Billion cubic feet of natural gas

~~BTU~~

BTU		British thermal unit, heat value (energy content) of fuel

~~kWh~~

kWh		Kilowatthour of electricity



MDth/d		Million dekatherms per day

MMBtu		One million BTU

MW

MW		Megawatt of electricity

MWh	~~Megawatthour~~	Megawatt-hour of electricity

~~THIS PAGE INTENTIONALLY LEFT BLANK~~

FILING FORMAT

This combined Form 10-K is separately filed by DTE Energy and DTE Electric. Information in this combined Form 10-K relating to each individual Registrant is filed by such Registrant on its own behalf. DTE Electric makes no representation regarding information relating to any other companies affiliated with DTE Energy other than its own subsidiaries. Neither DTE Energy, nor any of DTE Energy’s other subsidiaries (other than DTE Electric), has any obligation in respect of DTE Electric's debt securities, and holders of such debt securities should not consider the financial resources or results of operations of DTE Energy nor any of DTE Energy’s other subsidiaries (other than DTE Electric and its own subsidiaries (in relevant circumstances)) in making a decision with respect to DTE Electric's debt securities. Similarly, none of DTE Electric nor any other subsidiary of DTE Energy has any obligation inwith respect ofto debt securities of DTE Energy. This combined Form 10-K should be read in its entirety. No one section of this combined Form 10-K deals with all aspects of the subject matter of this combined Form 10-K.

FORWARD-LOOKING STATEMENTS

Certain information presented herein includes ~~“forward-looking statements”~~"forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, and businesses of the Registrants. Words such as ~~“anticipate,” “believe,” “expect,” “may,” “could,” “projected,” “aspiration,” “plans,”~~"anticipate," "believe," "expect," "may," "could," "projected," "aspiration," "plans," and ~~“goals”~~"goals" signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions, but rather are subject to numerous assumptions, risks, and uncertainties that may cause actual future results to be materially different from those contemplated, projected, estimated, or budgeted. Many factors may impact forward-looking statements of the Registrants including, but not limited to, the following:

•Risks related to the separation of DT Midstream, including that providing DT Midstream with transition services could adversely affect our business and that the transaction may not achieve some or all of the anticipated benefits;

•the duration and impact of the COVID-19 pandemic on the Registrants and customers;

•impact of regulation by the EPA, EGLE, the FERC, the MPSC, the NRC, and for DTE Energy, the CFTC and CARB, as well as other applicable governmental proceedings and regulations, including any associated impact on rate structures;

•the amount and timing of cost recovery allowed as a result of regulatory proceedings, related appeals, or new legislation, including legislative amendments and retail access programs;

•economic conditions and population changes in the Registrants' geographic area resulting in changes in demand, customer conservation, and thefts of electricity and, for DTE Energy, natural gas;

•the operational failure of electric or gas distribution systems or infrastructure;

•impact of volatility in prices in the international steel markets and in prices of environmental attributes generated from renewable natural gas investments on the operations of DTE Vantage (formerly Power and Industrial Projects);

•the risk of a major safety incident;

•environmental issues, laws, regulations, and the increasing costs of remediation and compliance, including actual and potential new federal and state requirements;

•the cost of protecting assets and customer data against, or damage due to, cyber ~~crime~~incidents and terrorism;

•health, safety, financial, environmental, and regulatory risks associated with ownership and operation of nuclear facilities;

~~volatility in the short-term natural gas storage markets impacting third-party storage revenues related to DTE Energy;~~

~~impact of volatility of prices in the oil and gas markets on DTE Energy's gas storage and pipelines operations;~~

~~impact of volatility in prices in the international steel markets on DTE Energy's power and industrial projects operations;~~

•volatility in commodity markets, deviations in weather, and related risks impacting the results of DTE Energy's energy trading operations;

•changes in the cost and availability of coal and other raw materials, purchased power, and natural gas;

•advances in technology that produce power, store power, or reduce power consumption;

•changes in the financial condition of ~~DTE Energy's~~ significant customers and strategic partners;

•the potential for losses on investments, including nuclear decommissioning and benefit plan assets and the related increases in future expense and contributions;

•access to capital markets and the results of other financing efforts which can be affected by credit agency ratings;

•instability in capital markets which could impact availability of short and long-term financing;

•impacts of inflation and the timing and extent of changes in interest rates;

•the level of borrowings;

•the potential for increased costs or delays in completion of significant capital projects;

•changes in, and application of, federal, state, and local tax laws and their interpretations, including the Internal Revenue Code, regulations, rulings, court proceedings, and audits;

•the effects of weather and other natural phenomena, including climate change, on operations and sales to customers, and purchases from suppliers;

•unplanned outages;

•employee relations and the impact of collective bargaining agreements;

~~the risk of a major safety incident at an electric distribution or generation facility and, for DTE Energy, a gas storage, transmission, or distribution facility;~~

•the availability, cost, coverage, and terms of insurance and stability of insurance providers;

•cost reduction efforts and the maximization of plant and distribution system performance;

•the effects of competition;

•changes in and application of accounting standards and financial reporting regulations;

•changes in federal or state laws and their interpretation with respect to regulation, energy policy, and other business issues;

•successful execution of new business development and future growth plans;

•contract disputes, binding arbitration, litigation, and related appeals;

•the ability of the electric and gas utilities to achieve net zero emissions goals; and

•the risks discussed in the Registrants' public filings with the Securities and Exchange Commission.

New factors emerge from time to time. The Registrants cannot predict what factors may arise or how such factors may cause results to differ materially from those contained in any forward-looking statement. Any forward-looking statements speak only as of the date on which such statements are made. The Registrants undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.

Part I

Items 1. and 2. Business and Properties

General

In 1995, DTE Energy incorporated in the State of Michigan. DTE Energy's utility operations consist primarily of DTE Electric and DTE Gas. DTE Energy also has ~~three~~two other segments that are engaged in a variety of energy-related businesses.

DTE Electric is a Michigan corporation organized in 1903 and is aan indirect wholly-owned subsidiary of DTE Energy. DTE Electric is a public utility engaged in the generation, purchase, distribution, and sale of electricity to approximately ~~2.2~~2.3 million customers in southeastern Michigan.

DTE Gas is a Michigan corporation organized in 1898 and is aan indirect wholly-owned subsidiary of DTE Energy. DTE Gas is a public utility engaged in the purchase, storage, transportation, distribution, and sale of natural gas to approximately 1.3 million customers throughout Michigan and the sale of storage and transportation capacity.

DTE Energy's other businesses ~~are~~include 1) DTE Vantage, formerly DTE Energy's Power and Industrial Projects segment, which is primarily involved in 1)renewable natural gas ~~pipelines, gathering,~~projects, providing industrial energy services, and ~~storage;~~reduced emissions fuel projects, and 2) ~~power and industrial projects; and 3)~~ energy marketing and trading operations.

On July 1, 2021, DTE Energy completed the separation of its natural gas pipeline, storage, and gathering non-utility business. Effective with the separation, DTE Energy retains no ownership in the new company, DT Midstream.

DTE Electric and DTE Gas are regulated by the MPSC. Certain activities of DTE Electric and DTE Gas, as well as various other aspects of businesses under DTE Energy, are regulated by the FERC. In addition, the Registrants are regulated by other federal and state regulatory agencies including the NRC, the EPA, ~~the MDEQ,~~EGLE, and for DTE Energy, the ~~CFTC.~~CFTC and CARB.

The Registrants' annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and all amendments to such reports are available free of charge through the ~~Investors - Reports and~~Investor Relations SEC Filings page of DTE Energy's website: www.dteenergy.com, as soon as reasonably practicable after they are filed with or furnished to the SEC.

The DTE Energy Code of Ethics and Standards of Behavior, Board of Directors’ Mission and Guidelines, Board Committee Charters, and Categorical Standards for Director Independence are also posted on the DTE Energy website. The information on DTE Energy’s website is not part of this report or any other report that DTE Energy files with, or furnishes to, the SEC.

Additionally, the public may read and copy any materials the Registrants file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.

Corporate Structure

DTE Energy sets strategic goals, allocates resources, and evaluates performance based on the following structure. For financial information by segment for the last three years, see Note 22 to the Consolidated Financial Statements, ~~in Item 8 of this Report,~~ "Segment and Related Information."

Electric

•The Electric segment consists principally of DTE Electric, which is engaged in the generation, purchase, distribution, and sale of electricity to approximately ~~2.2~~2.3 million residential, commercial, and industrial customers in southeastern Michigan.

Gas

•The Gas segment consists principally of DTE Gas, which is engaged in the purchase, storage, transportation, distribution, and sale of natural gas to approximately 1.3 million residential, commercial, and industrial customers throughout Michigan and the sale of storage and transportation capacity.

Non-utility Operations

~~Gas Storage and Pipelines consists of natural gas pipeline, gathering, transportation, and storage businesses.~~

~~Power and Industrial Projects~~•DTE Vantage is comprised primarily of projects that deliver energy and utility-type products and services to industrial, commercial, and institutional customers, produce reduced emissions fuel, and sell electricity and pipeline-quality gas from renewable energy projects.

•Energy Trading consists of energy marketing and trading operations.

Corporate and Other

•Corporate and Other includes various holding company activities, holds certain non-utility debt, and holds ~~energy-related investments.~~certain investments, including funds supporting regional development and economic growth.

Refer to Management’s Discussion and Analysis in Item 7 of this Report for an in-depth analysis of each segment’s financial results. A description of each business unit follows.

ELECTRIC

Description

DTE Energy's Electric segment consists principally of DTE Electric, an electric utility engaged in the generation, purchase, distribution, and sale of electricity to approximately ~~2.2~~2.3 million customers in southeastern Michigan. DTE Electric is regulated by numerous federal and state governmental agencies, including, but not limited to, the MPSC, the FERC, the NRC, the EPA, and ~~the MDEQ.~~EGLE. Electricity is generated from fossil-fuel plants, a hydroelectric pumped storage plant, a nuclear plant, wind and other renewable assets and is supplemented with purchased power. The electricity is sold, or distributed through the retail access program, to three major classes of customers: residential, commercial, and industrial, throughout southeastern Michigan.

~~Operating Revenues by Service~~

2017 2016 2015
(In millions)
Residential $ 2,310
$ 2,477
$ 2,186
Commercial 1,758
1,754
1,701
Industrial 667
654
645
Other^(a)
313
290
281
Subtotal 5,048
5,175
4,813
Interconnection sales^(b)
54
50
88
Electric segment Operating Revenues $ 5,102
$ 5,225
$ 4,901


~~(a)~~	~~Includes revenue associated with the under or over recoveries of tracking mechanisms and for 2015 deferred gain amortization of the previously reversed RDM liability.~~


~~(b)~~	~~Represents power that is not distributed by DTE Electric.~~

Weather, economic factors, competition, energy ~~efficiency~~waste reduction initiatives, and electricity prices affect sales levels to customers. DTE Electric's peak load and highest total system sales generally occur during the third quarter of the year, driven by air conditioning and other cooling-related demands. DTE Electric's operations are not dependent upon a limited number of customers, and the loss of any one or a few customers would not have a material adverse effect on the results of DTE Electric.

The Electric segment also consists of non-utility operations relating to renewable energy projects at DTE Sustainable Generation. These projects have been acquired in support of DTE Energy's renewable energy goals.

For a summary of Electric segment operating revenues by service, see Note 5 to the Consolidated Financial Statements, "Revenue."

Fuel Supply and Purchased Power

DTE Electric's power is generated from a variety of fuels and is supplemented with purchased power. DTE Electric expects to have an adequate supply of fuel and purchased power to meet its obligation to serve customers. DTE Electric's generating capability is ~~heavily~~ dependent upon the availability of ~~coal.~~ coal and natural gas.

Coal is purchased from various sources in different geographic areas under agreements that vary in both pricing and terms. DTE Electric expects to obtain the majority of its coal requirements through long-term contracts, with the balance to be obtained through short-term agreements and spot purchases. DTE Electric has long-term and short-term contracts for the purchase of approximately ~~26.7~~19 million tons of low-sulfur western coal and approximately 11.5 million tons of Appalachian coal to be delivered from ~~2018~~2022 to ~~2021.~~2023. All of these contracts have pricing schedules. DTE Electric has ~~approximately 94%~~100% of ~~the~~its expected coal requirements under contract for ~~2018 under contract. Given the geographic diversity of supply, DTE Electric believes it can meet its expected generation requirements.~~2022. DTE Electric leases a fleet of rail cars and has the expected western and eastern coal rail requirements under ~~contract through 2021. Contracts covering expected~~multi-year contracts. DTE Electric's 2022 rail transportation is covered under long-term agreements. DTE Electric expects to cover all of its 2022 vessel transportation requirements for delivery of purchased coal to electric generating facilities through existing agreements. DTE Electric's natural gas supply requirements are ~~under contract~~expected to be met through ~~2019.~~a combination of short and long-term agreements, agreements with local distribution companies, and spot market purchases. Natural gas purchase requirements for 2022 are expected to be approximately 52 Bcf. DTE Electric has contracts for firm gas transportation and storage capacity to ensure reliable and flexible gas supply to its power plants. Given the geographic diversity of supply, DTE Electric believes it can meet its expected generation requirements.

DTE Electric participates in the energy market through MISO. DTE Electric offers its generation in the market on a day-ahead and real-time basis and bids for power in the market to serve its load. DTE Electric is a net purchaser of power that supplements its generation capability to meet customer demand during peak cycles or during major plant outages.

Properties

DTE Electric owns generating facilities that are located in the State of Michigan. Substantially all of DTE Electric's property is subject to the lien of a mortgage.

Generating facilities owned and in service as of December 31, ~~2017~~2021 for the electric segment are shown in the following table:

Location by

Michigan

County

Net Generation Capacity^(a)

Location by
Michigan
County

Net Generation Capacity(a)

Facility

Year in Service

(MW)

Facility

Year in Service

(MW)

Fossil-fueled Steam-Electric

Belle River^(b)

St. Clair

1984 and 1985

1,034

Belle River(b)

St. Clair

1984 and 1985

1,034

Greenwood

St. Clair

1979

785

Greenwood

St. Clair

1979

785

Monroe^(c)

Monroe

1971, 1973, and 1974

3,066

Monroe(c)

Monroe

1971, 1973, and 1974

3,066

River Rouge

Wayne

1958

272

St. Clair

1953, 1954, 1961, and 1969

1,216

St. Clair

1953, 1954, 1961, and 1969

1,065

Trenton Channel

Wayne

1968

520

Trenton Channel

Wayne

1968

495

Dearborn

Wayne

2019

6,893

6,480

Natural gas and Oil-fueled Peaking Units

Various

1966-1971, 1981, 1999, 2002, and 2003

2,033

Natural gas and Oil-fueled Peaking Units

Various

1966-1971, 1981, 1999, 2002, and 2003

1,998

Nuclear-fueled Steam-Electric Fermi 2

Monroe

1988

1,141

Nuclear-fueled Steam-Electric Fermi 2

Monroe

1988

1,141

Hydroelectric Pumped Storage Ludington^(d)

Mason

1973

1,019

Hydroelectric Pumped Storage Ludington(d)

Mason

1973

1,088

Renewables^(e)

Renewables(e)

Wind

Brookfield Wind Park

Huron

2014

Echo Wind Park

Huron

2014

112

Gratiot Wind Park

Gratiot

2011 and 2012

102

Pinnebog Wind Park

Huron

2016

Thumb Wind Project

Huron and Sanilac

2012

110

450

Wind Utility

Various

2011-2021

1,164

Wind Non-Utility

Various

2019-2020

106

Solar

Various

2010-2021

Utility-Owned SolarCurrents

Various

2010-2016

Utility Scale Solar

Various

2017

1,336

11,602

12,043


~~(a)~~	Represents summer net rating for all units with the exception of renewable facilities. The summer net rating is based on operating experience, the physical condition of units, environmental control limitations, and customer requirements for steam, which would otherwise be used for electric generation. Wind and solar facilities reflect name plate capacity.


~~(b)~~	The Belle River capability represents DTE Electric’s entitlement to 81% of the capacity and energy of the plant. See Note 7 to the Consolidated Financial Statements in Item 8 of this Report, "Jointly-Owned Utility Plant."


~~(c)~~	~~The Monroe generating plant provided 40% of DTE Electric’s total 2017 power plant generation.~~


~~(d)~~	~~Represents DTE Electric’s 49% interest in Ludington with a total capability of 2,080 MW. See Note 7 to the Consolidated Financial Statements in Item 8 of this Report, "Jointly-Owned Utility Plant."~~


~~(e)~~	~~In addition to the owned renewable facilities described above, DTE Electric has long-term contracts for 489 MW of renewable power generated from wind, solar, and biomass facilities.~~

(a)Represents summer net rating for all units with the exception of renewable facilities. The summer net rating is based on operating experience, the physical condition of units, environmental control limitations, and customer requirements for steam, which would otherwise be used for electric generation. Wind and solar facilities reflect name plate capacity measured in alternating current.

(b)Represents DTE Electric's 81% interest in Belle River with a total capability of 1,270 MW. See Note 7 to the Consolidated Financial Statements, "Jointly-Owned Utility Plant."

(c)The Monroe generating plant provided 39% of DTE Electric’s total 2021 power plant generation.

(d)Represents DTE Electric’s 49% interest in Ludington with a total capability of 2,220 MW. See Note 7 to the Consolidated Financial Statements, "Jointly-Owned Utility Plant."

(e)In addition to the owned renewable facilities described above, DTE Electric has long-term contracts for 481 MW of renewable power generated from wind, solar, and biomass facilities. Of the 481 MW, currently 52 MW relate to power purchase agreements with DTE Sustainable Generation.

See "Capital Investments" in Management's Discussion and Analysis in Item 7 of this Report for information regarding plant retirements and future capital expenditures.

DTE Electric owns and operates ~~692~~698 distribution substations with a capacity of approximately ~~36,357,000~~36,987,000 kilovolt-amperes (kVA) and approximately ~~440,500~~449,800 line transformers with a capacity of approximately ~~31,777,000~~32,817,000 kVA.

Circuit miles of electric distribution lines owned and in service as of December 31, ~~2017~~2021 are shown in the following table:


	Circuit Miles			Circuit Miles
Operating Voltage-Kilovolts (kV)	Overhead	Underground	Operating Voltage-Kilovolts (kV)	Overhead	Underground
4.8 kV to 13.2 kV	28,479	15,122	4.8 kV to 13.2 kV	28,536	15,652
24 kV	182	689	24 kV	179	741
40 kV	2,301	378	40 kV	2,352	430
120 kV	61	8	120 kV	62	8
	31,023	16,197		31,129	16,831

There are numerous interconnections that allow the interchange of electricity between DTE Electric and electricity providers external to the DTE Electric service area. These interconnections are generally owned and operated by ITC Transmission, an unrelated company, and connect to neighboring energy companies.

Regulation

DTE Electric is subject to the regulatory jurisdiction of various agencies, including, but not limited to, the MPSC, the FERC, and the NRC. The MPSC 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. DTE Electric's MPSC-approved rates charged to customers have historically been designed to allow for the recovery of costs, plus an authorized rate of return on investments. The FERC regulates DTE Electric with respect to financing authorization, ~~and~~ wholesale electric ~~activities.~~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. The NRC has regulatory jurisdiction over all phases of the operation, construction, licensing, and decommissioning of DTE Electric's nuclear plant operations. DTE Electric is subject to the requirements of other regulatory agencies with respect to safety, the environment, and health.

See Notes 8, 9, 12, 18, and 1819 to the Consolidated Financial Statements, ~~in Item 8 of this Report,~~ "Asset Retirement Obligations," "Regulatory Matters," "Fair Value," ~~and~~ "Commitments and ~~Contingencies.~~Contingencies," and " Nuclear Operations."

Energy Assistance Programs

Energy assistance programs, funded by the federal government and the State of Michigan, remain critical to DTE Electric’s ability to control its uncollectible accounts receivable and collections expenses. DTE Electric’s uncollectible accounts receivable expense is directly affected by the level of government-funded assistance that qualifying customers receive. DTE Electric works continuously with the State of Michigan and others to determine whether the share of funding allocated to customers is representative of the number of low-income individuals in the service territory. DTE Electric also partners with federal, state, and local officials to attempt to increase the share of low-income funding allocated to customers.

Strategy and Competition

DTE Electric's electrical generation operations seek to provide the energy needs of customers in a ~~cost effective manner. With~~cost-effective manner and support DTE Energy's goal to reduce carbon emissions by 32% by 2023, 50% by 2028, and 80% by 2040 from 2005 carbon emissions levels, as well as net zero emissions by 2050. An increasing amount of high wind and other extreme weather events driven by climate change, coupled with increasing electric vehicle adoption, will drive a continued need for substantial grid investment over the long-term. In addition, with potential capacity constraints in the MISO region, there will be increased dependency on DTE Electric's generation to provide reliable service and price stability for customers. ~~This generation will require~~To maintain reliability and meet the carbon reduction goals in the near-term, DTE Electric plans to put in service a ~~large investment in DTE Electric's aging coal fleet, proposed~~ natural gas fueled combined cycle generation facility in 2022 and ~~renewables.~~will continue its energy waste reduction initiatives and transition away from coal-fired plants to renewable energy and other sources. To achieve long-term carbon reduction goals, DTE Electric is monitoring the viability of emerging technologies involving energy storage, carbon capture and sequestration, alternative fuels such as hydrogen, and advanced nuclear power.

DTE Electric's distribution operations focus is on distributing energy in a safe, cost effective, and reliable manner to customers. DTE Electric seeks to increase operational efficiencies to increase customer satisfaction at an affordable rate.

The electric retail access program in Michigan gives electric customers the option of retail access to alternative electric suppliers, subject to limits. Customers with retail access to alternative electric suppliers represented approximately 10% of retail sales in 2017, 2016, and 2015 and consisted primarily of industrial and commercial customers. MPSC rate orders and 2008 energyEnergy legislation enacted by the State of Michigan ~~have~~has placed a 10% cap on ~~the~~ total retail ~~access related migration, mitigating~~access. This cap mitigates some of the unfavorable effects of electric retail access on DTE Electric's financial performance and ~~full service~~full-service customer rates. ~~Energy legislation passed in 2016 retained the 10%~~Customers with retail access ~~cap with some revisions.~~to alternative electric suppliers consist primarily of industrial and commercial customers and represented approximately 10%, 8.5%, and 10% of retail sales in 2021, 2020, and 2019, respectively. DTE Electric expects that customers with retail access to alternative electric suppliers will represent approximately 10% of retail sales in ~~2018.~~2022.

Competition in the regulated electric distribution business is primarily from the on-site generation of industrial customers and from distributed generation applications by industrial and commercial customers. DTE Electric does not expect significant competition for distribution to any group of customers in the near term.

Revenues from year to year will vary due to weather conditions, economic factors, regulatory events, and other risk factors as discussed in the ~~“Risk Factors”~~"Risk Factors" in Item 1A. of this Report.

GAS

Description

DTE Energy's Gas segment consists principally of DTE Gas, a natural gas utility engaged in the purchase, storage, transportation, distribution, and sale of natural gas to approximately 1.3 million residential, commercial, and industrial customers throughout Michigan, and the sale of storage and transportation capacity.

~~Operating Revenues by Service~~

2017 2016 2015
(In millions)
Gas sales $ 1,002
$ 970
$ 1,019
End-user transportation 206
189
191
Intermediate transportation 49
50
59
Other 131
115
107
Gas segment Operating Revenues $ 1,388
$ 1,324
$ 1,376

~~Gas sales —~~ ~~Includes the sale and delivery of natural gas primarily to residential and small-volume commercial and industrial customers.~~

~~End-user transportation —~~ Gas delivery service provided primarily to large-volume commercial and industrial customers. Additionally, the service is provided to residential customers and small-volume commercial and industrial customers who have elected to participate in the gas retail access program. End-user transportation customers purchase natural gas directly from marketers, producers, or brokers and utilize DTE Gas' pipeline network to transport the gas to their facilities or homes.

~~Intermediate transportation —~~ Gas delivery service is provided to producers, brokers, and other gas companies that own the natural gas, but are not the ultimate consumers. Intermediate transportation customers use DTE Gas' high-pressure transportation system to transport the natural gas to storage fields, pipeline interconnections, or other locations.

~~Other —~~ ~~Includes revenues from natural gas storage, appliance maintenance, facility development, and other energy-related services.~~

DTE Gas' natural gas sales, end-user transportation, and intermediate transportation volumes, revenues, and Net Income are impacted by weather. Given the seasonal nature of the business, revenues and Net Income are concentrated in the first and fourth quarters of the calendar year. By the end of the first quarter, the heating season is largely over, and DTE Gas typically realizes substantially reduced revenues and earnings in the second quarter, and losses in the third quarter. The impacts of changes in annual average customer usage are minimized by the ~~RDM.~~Revenue Decoupling Mechanism authorized by the MPSC.

DTE Gas operations are not dependent upon a limited number of customers, and the loss of any one or a few customers would not have a material adverse effect on the results of DTE Gas.

For a summary of Gas segment operating revenues by service, see Note 5 to the Consolidated Financial Statements, "Revenue."

Natural Gas Supply

DTE Gas' gas distribution system has a planned maximum daily send-out capacity of 2.4 Bcf, with approximately ~~65%~~66% of the volume coming from underground storage for ~~2017.~~2021. Peak-use requirements are met through utilization of storage facilities, pipeline transportation capacity, and purchased gas supplies. Because of the geographic diversity of supply and its pipeline transportation and storage capacity, DTE Gas is able to reliably meet supply requirements. DTE Gas believes natural gas supply and pipeline capacity will be sufficiently available to meet market demands in the foreseeable future.

DTE Gas purchases natural gas supplies in the open market by contracting with producers and marketers and maintains a diversified portfolio of natural gas supply contracts. Supplier, producing region, quantity, and available transportation diversify DTE Gas' natural gas supply base. Natural gas supply is obtained from various sources in different geographic areas ~~(Gulf~~(Appalachian, Gulf Coast, Mid-Continent, Canada, and Michigan) under agreements that vary in both pricing and terms. Gas supply pricing is generally tied to the New York Mercantile Exchange and published price indices to approximate current market prices combined with MPSC-approved fixed price supplies with varying terms and volumes through ~~2020.~~2024.

DTE Gas is directly connected to interstate pipelines, providing access to most of the major natural gas supply producing regions in the Appalachian, Gulf Coast, Mid-Continent, and Canadian regions. The primary long-term transportation supply contracts at December 31, ~~2017~~2021 are listed below. ~~In addition, DTE Gas has contracted for 75 MDth/d of capacity on the NEXUS Pipeline, for a term of 15-years beginning with the anticipated third quarter 2018 in-service date.~~


				Availability (MDth/d)	Contract Expiration
	Availability (MDth/d)	Contract Expiration
Vector Pipeline L.P.			Vector Pipeline L.P.	20	2022
Great Lakes Gas Transmission L.P.	30	2022	Great Lakes Gas Transmission L.P.	30	2024
Viking Gas Transmission Company	21	2022	Viking Gas Transmission Company	21	2027
Vector Pipeline L.P.	20	2022
ANR Pipeline Company	204	2028	ANR Pipeline Company	129	2028
Panhandle Eastern Pipeline Company	125	2029	Panhandle Eastern Pipeline Company	125	2029
NEXUS Pipeline			NEXUS Pipeline	75	2033

Properties

DTE Gas owns distribution, storage, and transportation properties that are located in the State of Michigan. The distribution system includes approximately ~~19,500~~20,000 miles of distribution mains, approximately ~~1,216,000~~1,304,000 service pipelines, and approximately ~~1,262,000~~1,305,000 active ~~meters, and~~meters. DTE Gas also owns approximately 2,000 miles of transmission pipelines that deliver natural gas to the distribution districts and interconnect DTE Gas storage fields with the sources of supply and the market areas.

DTE Gas owns storage properties relating to four underground natural gas storage fields with an aggregate working gas storage capacity of approximately 139 Bcf. These facilities are important in providing reliable and cost-effective service to DTE Gas customers. In addition, DTE Gas sells storage services to third parties.

Most of DTE Gas' distribution and transportation property is located on property owned by others and used by DTE Gas through easements, permits, or licenses. Substantially all of DTE Gas' property is subject to the lien of a mortgage.

DTE Gas leases a portion of its pipeline system ~~to the Vector Pipeline Partnership (an affiliate)~~ through a ~~capital~~finance lease arrangement. See Note 17 to the Consolidated Financial Statements, ~~in Item 8 of the Report, "Capital and Operating Leases.~~"Leases."

Regulation

DTE Gas is subject to the regulatory jurisdiction of the MPSC, which issues orders pertaining to rates, recovery of certain costs, including the costs of regulatory assets, conditions of service, accounting, and operating-related matters. DTE Gas' MPSC-approved rates charged to customers have historically been designed to allow for the recovery of costs, plus an authorized rate of return on investments. DTE Gas operates natural gas storage and transportation facilities in Michigan as intrastate facilities regulated by the MPSC and provides intrastate storage and transportation services pursuant to a MPSC-approved tariff.

DTE Gas also provides interstate storage and transportation services in accordance with an Operating Statement on file with the FERC. The FERC's jurisdiction is limited and extends to the rates, non-discriminatory requirements, and the terms and conditions applicable to storage and transportation provided by DTE Gas in interstate markets. FERC granted DTE Gas authority to provide storage and related services in interstate commerce at market-based rates. DTE Gas provides transportation services in interstate commerce at cost-based rates approved by the MPSC and filed with the FERC.

DTE Gas is subject to the requirements of other regulatory agencies with respect to safety, the environment, and health.

See Notes 9 and 18 to the Consolidated Financial Statements, ~~in Item 8 of this Report,~~ "Regulatory Matters" and "Commitments and Contingencies."

Energy Assistance ~~Program~~Programs

Energy assistance programs, funded by the federal government and the State of Michigan, remain critical to DTE Gas' ability to control its uncollectible accounts receivable and collections expenses. DTE Gas' uncollectible accounts receivable expense is directly affected by the level of government-funded assistance its qualifying customers receive. DTE Gas works continuously with the State of Michigan and others to determine whether the share of funding allocated to customers is representative of the number of low-income individuals in the ~~gas~~ service territory. DTE Gas also partners with federal, state, and local officials to attempt to increase the share of low-income funding allocated to ~~DTE Gas~~ customers.

Strategy and Competition

DTE Gas' strategy is to ensure the safe, reliable, and cost effective delivery of natural gas service within its franchised markets in Michigan. In addition, DTE Gas is promoting the extension of its distribution system to underserved markets and the increased use of natural gas furnaces, water heaters, and appliances within its current customer base. DTE Gas continues to focus on the reduction of operating costs and the delivery of energy ~~efficiency~~waste reduction products and services to its customers, making natural gas service the preferred fuel and even more affordable for its customers.

Competition in the gas business primarily involves other natural gas transportation providers, as well as providers of alternative fuels and energy sources. The primary focus of competition for end-user transportation is cost and reliability. Some large commercial and industrial customers have the ability to switch to alternative fuel sources such as coal, electricity, oil, and steam. If these customers were to choose an alternative fuel source, they would not have a need for DTE Gas' end-user transportation service. DTE Gas competes against alternative fuel sources by providing competitive pricing and reliable service, supported by its storage capacity.

Having an extensive transportation pipeline system has enabled marketing of DTE Gas' storage and transportation services to gas producers, marketers, distribution companies, end-user customers, and other pipeline companies. The business operates in a central geographic location with connections to major Midwestern interstate pipelines that extend throughout the Midwest, eastern United States, and eastern Canada.

DTE Gas' storage capacity is used to store natural gas for delivery to its customers and is also sold to third parties under a variety of arrangements. Prices for storage arrangements for shorter periods are generally higher, but more volatile, than for longer periods. Prices are influenced primarily by market conditions, weather, and natural gas pricing.

~~GAS STORAGE AND PIPELINES~~

~~Description~~

Gas Storage and Pipelines owns natural gas storage fields, lateral and gathering pipeline systems, compression and surface facilities, and has ownership interests in interstate pipelines serving the Midwest, Ontario, and Northeast markets. The pipeline and storage assets are primarily supported by long-term, fixed-price revenue contracts.

~~Properties~~

~~Gas Storage and Pipelines holds the following properties:~~



~~Property Classification~~	~~% Owned~~	~~Description~~	~~Location~~
~~Pipelines~~
~~Appalachia Gathering System~~^(a)	~~100%~~	~~114-mile pipeline delivering Marcellus Shale gas to Texas Eastern Pipeline and Stonewall Gas Gathering system~~	~~PA and WV~~
~~Stonewall Gas Gathering~~^(a)	~~55%~~	~~68-mile pipeline connecting Appalachia Gathering System to Columbia Pipeline~~	WV
~~Bluestone Pipeline~~	~~100%~~	~~59-mile pipeline delivering Marcellus Shale gas to Millennium Pipeline and Tennessee Pipeline~~	~~PA and NY~~
~~Susquehanna gathering system~~	~~100%~~	~~Gathering system delivering Southwestern Energy's Marcellus Shale gas production to Bluestone Pipeline~~	PA
~~Vector Pipeline~~	~~40%~~	~~348-mile pipeline connecting Chicago, Michigan, and Ontario market centers~~	~~IL, IN, MI, and Ontario~~
~~Millennium Pipeline~~	~~26%~~	~~251-mile pipeline serving markets in the Northeast~~	NY
~~Michigan gathering systems~~	~~100%~~	~~Gathers production gas in northern Michigan~~	MI
~~Storage~~
~~Washington 10~~	~~100%~~	~~75 Bcf of storage capacity~~	MI
~~Washington 28~~	~~50%~~	~~16 Bcf of storage capacity~~	MI


~~(a)~~	In October 2016, DTE Energy closed on an acquisition of midstream natural gas assets that are part of the Gas Storage and Pipelines segment. See Note 4 to the Consolidated Financial Statements, "Acquisitions and Exit Activities," for additional information.

The assets of these businesses are well integrated with other DTE Energy operations. Pursuant to an operating agreement, DTE Gas provides physical operations, maintenance, and technical support for the Washington 10 and 28 storage facilities and for the Michigan gathering systems.

In addition, DTE Energy owns a 50% interest in the NEXUS Pipeline, a 255-mile pipeline to transport Utica and Marcellus shale gas to Ohio, Michigan, and Ontario market centers. A FERC application was filed in the fourth quarter of 2015 and was approved in August 2017. Construction has commenced with an anticipated third quarter 2018 in-service date.

~~In May 2017, DTE Energy filed a FERC application for approval of the Birdsboro Pipeline, a 14-mile lateral to serve a new power plant in Pennsylvania.~~ DTE Energy is ~~targeting~~also committed to a ~~2018 in-service date.~~

~~Regulation~~

goal of net zero carbon emissions by 2050 for its gas utility, for both internal operations and from suppliers. To achieve net zero, DTE Gas ~~Storage and Pipelines operates natural~~is working to source gas storage facilities in Michigan as intrastate facilities regulated by the MPSC, and provides intrastate storage and related services pursuant to an MPSC-approved tariff. Gas Storage and Pipelines also provides interstate services in accordance with an Operating Statement on file with the FERC. Vector and Millennium Pipelines provide interstate transportation services in accordance with their FERC-approved tariffs. In addition, Vector is subject to applicable laws, rules and regulations in Canada. NEXUS Pipeline, when operational, will also provide interstate transportation services in accordance with their FERC-approved tariffs. Gas Storage and Pipelines' gatheringlower methane intensity, reduce emissions through its main renewal and pipeline ~~assets are subject~~integrity programs, and if necessary, use carbon offsets to address any remaining emissions. DTE Energy is also committed to helping DTE Gas customers reduce their emissions by 35% by 2050 by increasing energy efficiency, pursuing advanced technologies such as hydrogen, and through the ~~rules~~CleanVision Natural Gas Balance program which provides customers the option to use carbon offsets and ~~regulations of the MPSC, Pennsylvania Public Utility Commission, the West Virginia Public Service Commission, and the New York Public Service Commission.~~renewable natural gas.

~~Strategy and Competition~~

Gas Storage and Pipelines expects to continue its steady growth plan by expanding existing assets, acquiring and/or developing new assets that are typically supported with long-term customer commitments. The focus will be on opportunities in the Midwest to Northeast region to supply natural gas to meet growing demand and displace less attractive supply from certain regions in North America. Much of the growth in demand for natural gas is expected to occur in the eastern Canada and the northeast U.S. regions. Gas Storage and Pipelines believes that the Vector, Millennium, and NEXUS Pipelines are well positioned to provide access routes and low-cost expansion options to these markets due to growth in production from the Marcellus/Utica Shales in Pennsylvania and West Virginia. Gas Storage and Pipelines has agreements with key Marcellus shale producers that support its Bluestone Pipeline, Susquehanna gathering, AGS, and SGG businesses. Gas Storage and Pipelines is evaluating new pipeline and storage investment opportunities that could include additional pipeline and gathering expansions, laterals, compression, and other Marcellus/Utica shale midstream development or partnering opportunities.

Gas Storage and Pipelines has competition from other pipelines and storage providers. Operations are dependent upon a limited number of customers, and the loss of any one or a few customers could have a material adverse effect on the results of Gas Storage and Pipelines.

~~POWER AND INDUSTRIAL PROJECTS~~DTE VANTAGE

Description

~~Power and Industrial Projects~~DTE Vantage is comprised primarily of projects that deliver energy and utility-type products and services to industrial, commercial, and institutional customers, produce reduced emissions fuel, and sell electricity and gas from renewable energy projects. This business segment provides services using project assets usually located on or near the customers' premises in the steel, automotive, pulp and paper, airport, chemical, and other industries as follows:

Renewable Energy

•Renewable Gas Recovery — DTE Vantage has ownership interests in, and operates, twenty-two gas recovery sites in eight states. The sites recover methane from landfills and agricultural businesses and convert the gas to generate electricity and replace fossil fuels in industrial and manufacturing operations. Certain sites also refine the methane to produce pipeline-quality gas, which can then be used as vehicle fuel and generate environmental attributes.

•Wholesale Power and Renewables — DTE Vantage holds ownership interests in, and operates, four renewable generating plants with a capacity of 139 MWs. The electric output is sold under long-term power purchase agreements.

Industrial Energy Services

•On-Site Energy — DTE Vantage provides power generation, steam production, chilled water production, wastewater treatment, and compressed air supply to industrial customers. DTE Vantage also provides utility-type services using project assets usually located on or near the customers' premises in the automotive, airport, chemical, and other industries.

•Steel and Petroleum Coke — ~~Power and Industrial Projects~~DTE Vantage produces metallurgical coke from a coke battery with a capacity of 1.0 million tons per year and has an investment in a second coke battery with a capacity of 1.2 million tons per year. ~~Power~~DTE Vantage also provided pulverized coal through the end of 2021 and ~~Industrial Projects also provides pulverized coal~~continues to supply metallurgical and petroleum coke to the steel, pulp and paper, and other industries.

The EPA has implemented regulatory actions under the Clean Air Act to address emissions of GHGs from the utility sector and other sectors of the economy. Among these actions, the EPA finalized performance standards for emissions of carbon dioxide from new and existing EGUs. The carbon standards for new sources are not expected to have a material impact on DTE Electric since DTE Electric has no plans to build new coal-fired generation, and any potential new gas generation will be able to comply with the applicable standards. In February 2016, the U.S. Supreme Court granted petitioners' requests for a stay of the carbon rules for existing EGUs (also known as the EPA Clean Power Plan) pending final review by the courts. The Clean Power Plan has no legal effect while the stay is in place. On March 28, 2017, a presidential executive order was issued on "Promoting Energy Independence and Economic Growth." The order instructs the EPA to review, and if appropriate, suspend, revise or rescind the Clean Power Plan rule. Additionally, federal agencies have been directed to conduct a review of all existing regulations that potentially burden the development and use of domestically produced energy resources. Following the issuance of this order, the federal government requested the U.S. Court of Appeals for the D.C. Circuit to hold all legal challenges in abeyance until the review of these regulations is completed. On October 10, 2017, the EPA proposed to rescind the Clean Power Plan and announced its intent to issue an ANPR seeking input as to whether it should replace the rule and, if so, what form it should take. It is not possible to determine the potential impact of the EPA's repeal and possible replacement of the Clean Power Plan on existing sources at this time.

Pending or future legislation or other regulatory actions could have a material impact on DTE Electric's operations and financial position and the rates charged to its customers. Impacts include expenditures for environmental equipment beyond what is currently planned, financing costs related to additional capital expenditures, the purchase of emission credits from market sources, higher costs of purchased power, and the retirement of facilities where control equipment is not economical. DTE Electric would seek to recover these incremental costs through increased rates charged to its utility customers, as authorized by the MPSC.

Increased costs for energy produced from traditional coal-based sources due to recent, pending, and future regulatory initiatives could also increase the economic viability of energy produced from renewable, natural gas fueled generation, and/or nuclear sources, energy ~~efficiency~~waste reduction initiatives, and the potential development of market-based trading of carbon instruments which could provide new business opportunities for DTE Energy's utility and non-utility segments. At the present time, it is not possible to quantify the financial impacts of these climate related regulatory initiatives on the Registrants or their customers.

See Items 1. and 2. Business and Properties and Note 18 to the Consolidated Financial Statements, ~~in Item 8 of this Report,~~ "Commitments and Contingencies," for further discussion of Environmental Matters.

~~OUTLOOK~~ENERGY TRADING

Description

Energy Trading focuses on physical and financial power, natural gas and environmental marketing and trading, structured transactions, enhancement of returns from its asset portfolio, and optimization of contracted natural gas pipeline transportation and storage positions. Energy Trading also provides natural gas, power, environmental and related services which may include the management of associated storage and transportation contracts on the customers’ behalf and the supply or purchase of environmental attributes to various customers. Energy Trading's customer base is predominantly utilities, local distribution companies, pipelines, producers and generators, and other marketing and trading companies. Energy Trading also provides commodity risk management services to the other businesses within DTE Energy.

Energy Trading enters into derivative financial instruments as part of its marketing and hedging activities. These financial instruments are generally accounted for under the MTM method, which results in the recognition in earnings of unrealized gains and losses from changes in the fair value of the derivatives. Energy Trading utilizes forwards, futures, swaps, and option contracts to mitigate risk associated with marketing and trading activity, as well as for proprietary trading within defined risk guidelines.

Significant portions of the Energy Trading portfolio are economically hedged. Most financial instruments, physical power and natural gas contracts, and certain environmental contracts are deemed derivatives; whereas, natural gas and environmental inventory, contracts for pipeline transportation, storage assets, and some environmental contracts are not derivatives. As a result, this segment will experience earnings volatility as derivatives are marked-to-market without revaluing the underlying non-derivative contracts and assets. The business’ strategy is to economically manage the price risk of these underlying non-derivative contracts and assets with futures, forwards, swaps, and options. This results in gains and losses that are recognized in different interim and annual accounting periods.

Regulation

Energy Trading has market-based rate authority from the FERC to sell power and blanket authority from the FERC to sell natural gas at market prices. Energy Trading is subject to FERC reporting requirements and market behavior rules. Energy Trading is also subject to the applicable laws, rules, and regulations related to the CFTC, U.S. Department of Homeland Security, and DOE. In addition, Energy Trading is subject to applicable laws, rules, and regulations in Canada.

Strategy and Competition

DTE Energy's strategy for the Energy Trading business is to deliver value-added services to DTE Energy customers. DTE Energy seeks to manage this business in a manner complementary to the growth of DTE Energy's other business segments. Energy Trading focuses on physical marketing and the optimization of its portfolio of energy assets. The segment competes with electric and gas marketers, financial institutions, traders, utilities, and other energy providers. The Energy Trading business is dependent upon the availability of capital and an investment grade credit rating. DTE Energy believes it has ample available capital capacity to support Energy Trading activities. DTE Energy monitors its use of capital closely to ensure that its commitments do not exceed capacity. A material credit restriction would negatively impact Energy Trading's financial performance. Competitors with greater access to capital, or at a lower cost, may have a competitive advantage. DTE Energy has risk management and credit processes to monitor and mitigate risk.

CORPORATE AND OTHER

Corporate and Other includes various holding company activities, holds certain non-utility debt, and holds certain investments, including funds supporting regional development and economic growth.

ENVIRONMENTAL MATTERS

The Registrants are subject to extensive environmental regulation and expect to continue recovering environmental costs related to utility operations through rates charged to customers. The following table summarizes DTE Energy's, including DTE Electric's, estimated significant future environmental expenditures based upon current regulations. Pending or future reconsideration of current regulations may impact the estimated expenditures summarized in the table below. Actual costs to comply could vary substantially. Additional costs may result as the effects of various substances on the environment are studied and governmental regulations are developed and implemented.


	DTE Electric		DTE Gas		Total
	(In millions)

Water	$	10	$	—	$	10
Contaminated and other sites	12		14		26
Coal combustion residuals and effluent limitations guidelines	417		—		417
Estimated total future expenditures through 2026	$	439	$	14	$	453
Estimated 2022 expenditures	$	81	$	8	$	89
Estimated 2023 expenditures	$	65	$	3	$	68

For additional information regarding environmental matters, refer to Notes 8, 9, and 18 to the Consolidated Financial Statements, "Asset Retirement Obligations," "Regulatory Matters," and "Commitments and Contingencies."

HUMAN CAPITAL MANAGEMENT

DTE Energy and its subsidiaries had approximately 10,300 employees as of December 31, 2021, of which approximately 5,200 were represented by unions. DTE Electric had approximately 4,700 employees as of December 31, 2021, of which approximately 2,700 were represented by unions. The workforce is comprised almost entirely of full-time employees.

DTE Energy and utilities across the country are managing the turnover of our workforce due to a significant number of retirements expected in the next ~~few~~ten years - a period that will be impacted by major transformation of our business through technology investments, changes to our electric generation portfolio, and upgrades to our distribution infrastructure.

Amidst this challenge, DTE Energy is building a ~~period~~culture of ~~rapid~~highly engaged employees with skills and expertise in science, technology, engineering, math, analytics, and skilled trades, which are in high demand and critical to our industry. To attract and retain the best talent, DTE Energy promotes the engagement of its employees through diversity, equity, and inclusion; health, safety, and well-being; and compensation and benefits.

DTE Energy also provides continuous learning to optimize employee performance and engagement. DTE Energy provides tuition reimbursement and an internal learning platform that includes free instructor-led and online courses, learning-focused events with expert guest speakers, and a comprehensive development program for new front-line leaders. DTE Energy also has a Talent Planning Committee that oversees talent and succession planning. These efforts have been critical in supporting employees transitioning to new roles as coal-fired plants are retired and replaced with new, cleaner generation.

Diversity, Equity, and Inclusion (DEI)

DTE Energy is committed to building a diverse, empowered, and engaged team that delivers safe, reliable service and energy to our customers. A diverse workforce and inclusive culture contribute to DTE Energy's success and sustainability by driving innovation and creating trusted relationships with employees, customers, suppliers, and community partners. By tapping into the talent, unique perspectives, and cultural and life experiences of every employee, DTE Energy can ensure its continued success.

As of December 31, 2021, DTE Energy’s workforce was comprised of 28% women and 29% minorities. DTE Energy measures DEI performance by its workforce representation of women, minorities, veterans, and employees with disabilities, as well as the following:

•Diversity of candidates, hires, high potential talent, and leadership promotions

•Employee engagement, including specific elements that measure a culture of inclusion

•Number of DEI related communications and events

•Supplier diversity spend

•Rankings and scores from DEI benchmarking surveys

•Formal training programs, including unconscious bias training for employees and leaders

Health, Safety, and Well-being

The health, safety, and well-being of people is DTE Energy's top priority - for employees, contractors, customers, and everyone in the communities that DTE Energy serves. DTE Energy's health, safety, and well-being culture is maintained and strengthened with the help of multiple safety and well-being committees spanning all levels of the company. Members include union representatives, DTE Energy executives, office workers, and field employees.

Safety

All workplace injuries and incidents that could have caused an injury are documented and thoroughly reviewed for potential preventive measures. DTE Energy directs its employees to be responsible for their own safety and the safety of everyone around them. DTE Energy also administers regular safety training. Hazardous work is identified and categorized according to risk and training is provided to mitigate risk of any serious injuries.

DTE Energy monitors its safety performance by reviewing the rate of safety incidents, as defined by the Office of Safety and Health Administration ("OSHA rate"), and the rate of Days Away, Restricted, or Transferred ("DART").

COVID-19 Response

During the first quarter 2020, the COVID-19 pandemic began impacting Michigan and the other service territories throughout the United States in which DTE Energy operates. DTE Energy took quick action to ensure the safety and well-being of its employees. DTE Energy successfully implemented work from home for over half of its employees and extensive new safety procedures to ensure plant and employee safety, including the use of personal protective equipment, contact tracing, and cleaning of facilities. To further support employees during the pandemic, DTE Energy enhanced communications around its employee assistance programs, established an occupational health call center, and provided clinical case management for cases related to COVID-19.

DTE Energy continues to actively monitor risks related to COVID-19 and proper application of our safety protocols. DTE Energy is also committed to providing consistent, transparent communication to employees around safe practices, quarantine, monitoring and testing protocols, vaccine availability, and plans for safely returning to office work.

Culture of Health and Well-being

DTE Energy aspires to become the healthiest and most supportive organization of well-being. DTE Energy is focused on supporting employees holistically, including physical health, emotional well-being, social connectivity, and financial security. Resources are provided to promote and support healthier lifestyles, including an on-site clinic, fitness centers, on-site and virtual well-being classes, and a team of well-being coordinators, registered dieticians and athletic trainers. DTE Energy offers a Healthy Living Program to complete both an annual physical with biometric screenings and a Health Risk Assessment to ensure employees have a relationship with a trusted physician and early detection of health conditions. Additionally, DTE Energy offers extensive well-being education and disease management programs.

DTE Energy monitors health and well-being performance across various metrics including an Employer Health Opportunity Assessment, completion of required well-being trainings, and measurement of collective health of the DTE family including medical trends and spend.

Compensation and Benefits

DTE Energy is committed to offering compensation that is competitive, market driven, and internally equitable. Approximately half of DTE Energy's employees are represented by labor unions through which pay is uniformly determined through collectively bargained agreements. For non-represented employees, DTE Energy's human resources professionals establish pay ranges for each job classification and work with hiring leaders to make competitive offers within the range to candidates based on objective factors like years of experience and strength of skills relevant to the job. Annually, DTE Energy conducts a review of compensation practices as part of its affirmative action program and makes adjustments as needed to ensure that pay is fair and equitable.

DTE Energy provides competitive, customizable benefits for all regular full-time and regular part-time employees. Innovative compensation and benefits initiatives at DTE Energy include:

•A 401(k) plan/Employee Stock Ownership Plan that is available to all regular full-time and regular part-time employees, including automatic enrollment of new hires, automatic annual escalation of employee 401(k) contributions up to 10% of pay, and 401(k) matching contributions

•Competitive health and welfare benefits

•Child bonding/parental leave of absence

•Additional vacation days available for employee purchase

•Competitive incentive plans, which are offered to all non-represented employees to create alignment of corporate and individual goals

Incentive Plans

DTE Energy has two primary types of incentives that reward individuals for performance. The incentives are designed to tie compensation to performance and encourage individuals to align their interests with those of the shareholders and customers of the Company.

•Annual incentive plans allow DTE Energy to reward individuals with annual cash bonuses for performance against pre-established objectives based on work performed in the prior year. Objectives are aligned with our core priorities and include metrics for employee engagement and safety, customer satisfaction, utility operating excellence, and financial metrics such as earnings per share and cash flows.

•Long-term incentive plans allow DTE Energy to grant individuals long-term equity incentives to encourage continued employment with DTE Energy, to accomplish pre-defined long-term performance objectives, and to create shareholder alignment. Metrics generally include total shareholder return relative to industry peers, utility return on equity, and balance sheet health.

For additional information on the metrics above, please see the "Annual and Long-term Incentives" section of DTE Energy's Proxy Statement.

Additionally, refer to DTE Energy’s 2021 Environmental, Social, Governance and Sustainability report for further information on metrics tracked for DEI, health and safety, and other components of DTE Energy’s human capital management, as well as the annual Culture of Health and Well-being report. These reports are available through the Environmental, Social, and Governance section of the Investor Relations page on DTE Energy’s website (www.dteenergy.com), and shall not be deemed incorporated by reference into this Form 10-K.

Item 1A. Risk Factors

There are various risks associated with the operations of the Registrants' utility businesses and DTE Energy's non-utility businesses. To provide a framework to understand the operating environment of the Registrants, below is a brief explanation of the more significant risks associated with their businesses. Although the Registrants have tried to identify and discuss key risk factors, others could emerge in the future. Each of the following risks could affect performance.

Regulatory, Legislative, and Legal Risks

The Registrants are subject to rate regulation. Electric and gas rates for the utilities are set by the MPSC and the FERC and cannot be changed without regulatory authorization. The Registrants may be negatively impacted by new regulations or interpretations by the MPSC, the FERC, or other regulatory bodies. The Registrants' ability to recover costs may be impacted by the time lag between the incurring of costs and the recovery of the costs in customers' rates. Regulators also may decide to disallow recovery of certain costs in customers' rates if they determine that those costs do not meet the standards for recovery under current governing laws and regulations. Regulators may also disagree with the Registrants' rate calculations under the various mechanisms that are intended to mitigate the risk to their utilities related to certain aspects of the business. If the Registrants cannot agree with regulators on an appropriate reconciliation of those mechanisms, it may impact the Registrants' ability to recover certain costs through customer rates. Regulators may also decide to eliminate these mechanisms in future rate cases, which may make it more difficult for the Registrants to recover their costs in the rates charged to customers. The Registrants cannot predict what rates the MPSC will authorize in future rate cases. New legislation, regulations, or interpretations could change how the business operates, impact the Registrants' ability to recover costs through rates or the timing of such recovery, or require the Registrants to incur additional expenses.

Changes to Michigan's electric retail access program could negatively impact the Registrants' financial performance. The State of Michigan currently experiences a hybrid market, where the MPSC continues to regulate electric rates for DTE Electric customers, while alternative electric suppliers charge market-based rates. MPSC rate orders, and energy legislation enacted by the State of Michigan, have placed a 10% cap on the total potential retail access migration. However, even with the legislated 10% cap on participation, there continues to be legislative and financial risk associated with the electric retail access program. Electric retail access migration is sensitive to market price and full service electric price changes. The Registrants are required under current regulation to provide full service to retail access customers that choose to return, potentially resulting in the need for additional generating capacity.

Environmental laws and liability may be costly. The Registrants are subject to, and affected by, numerous environmental regulations. These regulations govern air emissions, water quality, wastewater discharge, and disposal of solid and hazardous waste. Compliance with these regulations can significantly increase capital spending, operating expenses, and plant down times, and can negatively affect the affordability of the rates charged to customers.

Uncertainty around future environmental regulations creates difficulty planning long-term capital projects in the Registrants' generation fleet and, for DTE Energy's gas distribution businesses. These laws and regulations require the Registrants to seek a variety of environmental licenses, permits, inspections, and other regulatory approvals. The Registrants could be required to install expensive pollution control measures or limit or cease activities, including the retirement of certain generating plants, based on these regulations. Additionally, the Registrants may become a responsible party for environmental cleanup at sites identified by a regulatory body. The Registrants cannot predict with certainty the amount and timing of future expenditures related to environmental matters because of the difficulty of estimating cleanup costs. There is also uncertainty in quantifying liabilities under environmental laws that impose joint and several liability on potentially responsible parties.

The Registrants may also incur liabilities as a result of potential future requirements to address climate change issues. Proposals for voluntary initiatives and mandatory controls are being discussed both in the United States and worldwide to reduce GHGs such as carbon dioxide, a by-product of burning fossil fuels. If increased regulations of GHG emissions are implemented, or if existing deadlines for these regulations are accelerated, the operations of DTE Electric's fossil-fueled generation assets may be significantly impacted. Since there can be no assurances that environmental costs may be recovered through the regulatory process, the Registrants' financial performance may be negatively impacted as a result of environmental matters.

The Renewable Portfolio Standard and energy waste reduction may affect the Registrants' business and federal and state fuel standards may affect DTE Energy's non-utility investments. The Registrants are subject to existing Michigan, and potential future, federal legislation and regulation requiring them to secure sources of renewable energy. The Registrants have complied with the existing federal and state legislation, but do not know what requirements may be added by federal or state legislation in the future. In addition, the Registrants expect to comply with new Michigan legislation increasing the percentage of power required to be provided by renewable energy sources. The Registrants cannot predict the financial impact or costs associated with complying with potential future legislation and regulations. Compliance with these requirements can significantly increase capital expenditures and operating expenses and can negatively affect the affordability of the rates charged to customers.

In addition, the Registrants are also required by Michigan legislation to implement energy waste reduction measures and provide energy waste reduction customer awareness and education programs. These requirements necessitate expenditures, and implementation of these programs creates the risk of reducing the Registrants' revenues as customers decrease their energy usage. The Registrants cannot predict how these programs will impact their business and future operating results.

DTE Energy's non-utility renewable natural gas investments are also dependent on the federal Renewable Fuel Standard and California's Low Carbon Fuel Standard. Changes to these standards may affect DTE Energy's business and result in lower earnings.

DTE Energy's ability to utilize production tax credits may be limited. To reduce U.S. dependence on imported oil, the Internal Revenue Code provides production tax credits as an incentive for taxpayers to produce fuels and electricity from alternative sources. The Registrants generated production tax credits from renewable energy generation and DTE Energy generated production tax credits from renewable gas recovery, reduced emission fuel, and gas production operations. If the Registrants' production tax credits were disallowed in whole or in part as a result of an IRS audit or changes in tax law, there could be additional tax liabilities owed for previously recognized tax credits that could significantly impact the Registrants' earnings and cash flows.

Operational Risks

The Registrants' electric distribution system and DTE Energy's gas distribution system are subject to risks from their operation, which could reduce revenues, increase expenses, and have a material adverse effect on their business, financial position, and results of operations. The Registrants' electric distribution and DTE Energy’s gas distribution systems are subject to many operational risks. These operational systems and infrastructure have been in service for many years. Equipment, even when maintained in accordance with good utility practices, is subject to operational failure, including events that are beyond the Registrants' control, and could require significant operation and maintenance expense or capital expenditures to operate efficiently. Because the Registrants’ distribution systems are interconnected with those of third parties, the operation of the Registrants’ systems could be adversely affected by unexpected or uncontrollable events occurring on the systems of such third parties.

Construction and capital improvements to the Registrants' power facilities and DTE Energy's distribution systems subject them to risk. The Registrants are managing ongoing, and planning future, significant construction and capital improvement projects at the Registrants' multiple power generation and distribution facilities and at DTE Energy's gas distribution system. Many factors that could cause delays or increased prices for these complex projects are beyond the Registrants' control, including the cost of materials and labor, subcontractor performance, timing and issuance of necessary permits or approvals (including required certificates from regulatory agencies), construction disputes, impediments to acquiring rights-of-way or land rights on a timely basis and on acceptable terms, cost overruns, and weather conditions. Failure to complete these projects on schedule and on budget for any reason could adversely affect the Registrants' financial performance, operations, or expected investment returns at the affected facilities, businesses and development projects.

Operation of a nuclear facility subjects the Registrants to risk. Ownership of an operating nuclear generating plant subjects the Registrants to significant additional risks. These risks include, among others, plant security, environmental regulation and remediation, changes in federal nuclear regulation, increased capital expenditures to meet industry requirements, and operational factors that can significantly impact the performance and cost of operating a nuclear facility compared to other generation options. Insurance maintained by the Registrants for various nuclear-related risks may not be sufficient to cover the Registrants' costs in the event of an accident or business interruption at the nuclear generating plant, which may affect the Registrants' financial performance. In addition, the Registrants' nuclear decommissioning trust fund, to finance the decommissioning of the nuclear generating plant, may not be sufficient to fund the cost of decommissioning. A decline in market value of assets held in decommissioning trust funds due to poor investment performance or other factors may increase the funding requirements for these obligations. Any increase in funding requirements may have a material impact on the Registrants’ liquidity, financial position, or results of operations.

The supply and/or price of energy commodities and/or related services may impact the Registrants' financial results. The Registrants are dependent on coal for much of their electrical generating capacity as well as uranium for their nuclear operations. DTE Energy's access to natural gas supplies is critical to ensure reliability of service for utility gas customers. DTE Energy's non-utility businesses are also dependent upon supplies and prices of energy commodities and services. Price fluctuations, fuel supply disruptions, and changes in transportation costs, could have a negative impact on the amounts DTE Electric charges utility customers for electricity and DTE Gas charges utility customers for gas, and on the profitability of DTE Energy's non-utility businesses. The Registrants' hedging strategies and regulatory recovery mechanisms may be insufficient to mitigate the negative fluctuations in commodity supply prices at their utility or DTE Energy's non-utility businesses, and the Registrants' financial performance may therefore be negatively impacted by price fluctuations.

The price of energy also impacts the market for DTE Energy's non-utility businesses, particularly those that compete with utilities and alternative electric suppliers. The price of environmental attributes generated by DTE Energy's renewable natural gas investments, including those related to the federal Renewable Fuel Standard and California's Low Carbon Fuel Standard, may also impact the market and financial results for DTE Energy's non-utility businesses.

The supply and/or price of other industrial raw and finished inputs and/or related services may impact the Registrants' financial results. The Registrants are dependent on supplies of certain commodities, such as copper and limestone, among others, and industrial materials, and services in order to maintain day-to-day operations and maintenance of their facilities. Price fluctuations, or supply interruptions for these commodities and other items, could have a negative impact on the amounts charged to customers for the Registrants' utility products and, for DTE Energy, on the profitability of the non-utility businesses.

Weather, including extreme weather caused by climate change, significantly affects operations. At both utilities, deviations from normal hot and ~~for~~cold weather conditions affect the ~~energy industry.~~Registrants' earnings and cash flows. Mild temperatures can result in decreased utilization of the Registrants' assets, lowering income and cash flows. At DTE Electric, ice storms, floods, tornadoes, or high winds can damage the electric distribution system infrastructure and power generation facilities and require it to perform emergency repairs and incur material unplanned expenses. The expenses of storm restoration efforts may not be fully recoverable through the regulatory process. Prolonged and/or more frequent outages caused by extreme weather could also negatively impact DTE Energy's ~~strong utility base, combined with its integrated non-utility operations, position it well for long-term growth.~~

~~Looking forward,~~reputation and customer satisfaction or result in increased regulatory oversight, and related damages to customer assets could subject DTE Energy ~~will focus~~to litigation. DTE Gas can also experience higher than anticipated expenses from emergency repairs on its gas distribution infrastructure required as a result of weather-related issues.

Unplanned power plant outages may be costly. Unforeseen maintenance may be required to safely produce electricity or comply with environmental regulations. As a result of unforeseen maintenance, the Registrants may be required to make spot market purchases of electricity that exceed the costs of generation. The Registrants' financial performance may be negatively affected if unable to recover such increased costs.

A work interruption may adversely affect the Registrants. There are several ~~areas~~bargaining units for DTE Energy's approximately 5,200 and DTE Electric's approximately 2,700 represented employees. The majority of represented employees are under contracts that expire in 2027. A union choosing to strike would have an impact on the Registrants' businesses. The Registrants are ~~expected~~unable to ~~improve future performance:~~predict the effect a work stoppage would have on their costs of operations and financial performance.

DTE Energy may not achieve the net zero carbon emissions goals of its electric and gas ~~customer satisfaction;~~utilities. DTE Energy has announced the voluntary commitments of its electric and gas utilities to achieve net zero carbon emissions by 2050. Technology research and developments, innovations, and advancements are critical to DTE Energy's ability to achieve this commitment. Other factors that may impact DTE Energy's ability to achieve these net zero goals include our service territory size and capacity needs remaining in line with current expectations, the impacts on our business of future regulations or legislation, the price and availability of carbon offsets, adoption of alternative energy products by the public such as greater use of electric vehicles, greater standardization of emissions reporting, and our ability over time to transition our electric generating portfolio. DTE Energy's net zero goals require making assumptions that involve risks and uncertainties. Should one or more of these underlying assumptions prove incorrect, our actual results and ability to achieve net zero emissions by 2050 could differ materially from expectations. In addition, DTE Energy cannot predict the ultimate impact of achieving this objective, or the various implementation aspects on its reliability or its results of operations, financial condition, or liquidity.

Financial, Economic, and Market Risks

DTE Energy's non-utility businesses may not perform to its expectations. DTE Energy relies on non-utility businesses for a portion of earnings and will depend on the successful execution of new business development in its non-utilities to help achieve overall growth targets. DTE Energy also expects that the loss of earnings from ceasing the operations of its REF non-utility business will be offset by growth in renewable energy and industrial services projects over the long term; however, such opportunities may not materialize as anticipated. If DTE Energy's current and contemplated non-utility investments do not perform at expected levels, DTE Energy could experience diminished earnings and a corresponding decline in shareholder value.

Adverse changes in the Registrants' credit ratings may negatively affect them. Regional and national economic conditions, increased scrutiny of the energy industry and regulatory changes, as well as changes in the Registrants' economic performance, could result in credit agencies reexamining their credit ratings. While credit ratings reflect the opinions of the credit agencies issuing such ratings and may not necessarily reflect actual performance, a downgrade in the Registrants' credit ratings below investment grade could restrict or discontinue their ability to access capital markets and could result in an increase in their borrowing costs, a reduced level of capital expenditures, and could impact future earnings and cash flows. In addition, a reduction in the Registrants' credit ratings may require them to post collateral related to various physical or financially settled contracts for the purchase of energy-related commodities, products, and services, which could impact their liquidity.

Poor investment performance of pension and other postretirement benefit plan assets and other factors impacting benefit plan costs could unfavorably impact the Registrants' liquidity and results of operations. The Registrants' costs of providing non-contributory defined benefit pension plans and other postretirement benefit plans are dependent upon a number of factors, such as the rates of return on plan assets, the level of interest rates used to measure the required minimum funding levels of the plans, future government regulation, and the Registrants' required or voluntary contributions made to the plans. The performance of the debt and equity markets affects the value of assets that are held in trust to satisfy future obligations under the Registrants' plans. The Registrants have significant benefit obligations and hold significant assets in trust to satisfy these obligations. These assets are subject to market fluctuations and will yield uncertain returns, which may fall below the Registrants' projected return rates. A decline in the market value of the pension and other postretirement benefit plan assets will increase the funding needs under the pension and other postretirement benefit plans if the actual asset returns do not recover these declines in the foreseeable future. Additionally, the pension and other postretirement benefit plan liabilities are sensitive to changes in interest rates. If interest rates decrease, the liabilities increase, resulting in increasing benefit expense and funding needs. Also, if future increases in pension and other postretirement benefit costs as a result of reduced plan assets are not recoverable from the Registrants' utility customers, the results of operations and financial position of the Registrants could be negatively affected. Without sustained growth in the plan investments over time to increase the value of plan assets, the Registrants could be required to fund these plans with significant amounts of cash. Such cash funding obligations could have a material impact on the Registrants' cash flows, financial position, or results of operations.

The Registrants' ability to access capital markets is important. The Registrants' ability to access capital markets is important to operate their businesses and to fund capital investments. Turmoil in credit markets may constrain the Registrants' ability, as well as the ability of their subsidiaries, to issue new debt, including commercial paper, and refinance existing debt at reasonable interest rates. In addition, the level of borrowing by other energy companies and the market as a whole could limit the Registrants' access to capital markets. The Registrants' long-term revolving credit facilities do not expire until 2024 and 2025, but the Registrants regularly access capital markets to refinance existing debt or fund new projects at the Registrants' utilities and DTE Energy's non-utility businesses, and the Registrants cannot predict the pricing or demand for those future transactions.

Emerging technologies may have a material adverse effect on the Registrants. Advances in technology that produce power or reduce power consumption include cost-effective renewable energy technologies, distributed generation, energy waste reduction technologies, and energy storage devices. Such developments may impact the price of energy, may affect energy deliveries as customer-owned generation becomes more cost-effective, may require further improvements to our distribution systems to address changing load demands, and could make portions of our electric system power supply and/or distribution facilities obsolete prior to the end of their useful lives. Such technologies could also result in further declines in commodity prices or demand for delivered energy. Each of these factors could materially affect the Registrants’ results of operations, cash flows, or financial position.

DTE Energy's participation in energy trading markets subjects it to risk. Events in the energy trading industry have increased the level of scrutiny on the energy trading business and the energy industry as a whole. In certain situations, DTE Energy may be required to post collateral to support trading operations, which could be substantial. If access to liquidity to support trading activities is curtailed, DTE Energy could experience decreased earnings potential and cash flows. Energy trading activities take place in volatile markets and expose DTE Energy to risks related to commodity price movements, deviations in weather, and other related risks. DTE Energy's trading business routinely has speculative trading positions in the market, within strict policy guidelines DTE Energy sets, resulting from the management of DTE Energy's business portfolio. To the extent speculative trading positions exist, fluctuating commodity prices can improve or diminish DTE Energy's financial results and financial position. DTE Energy manages its exposure by establishing and enforcing strict risk limits and risk management procedures. During periods of extreme volatility, these risk limits and risk management procedures may not work as planned and cannot eliminate all risks associated with these activities.

Regional, national, and international economic conditions can have an unfavorable impact on the Registrants. The Registrants' utility and DTE Energy's non-utility businesses follow the economic cycles of the customers they serve and credit risk of counterparties they do business with. Should the financial conditions of some of DTE Energy's significant customers deteriorate as a result of regional, national or international economic conditions, reduced volumes of electricity and gas, and demand for energy services DTE Energy supplies, collections of accounts receivable, reductions in federal and state energy assistance funding, and potentially higher levels of lost gas or stolen gas and electricity could result in decreased earnings and cash flows.

If DTE Energy's goodwill or other intangible assets become impaired, it may be required to record a charge to earnings. DTE Energy annually reviews the carrying value of goodwill associated with acquisitions it has made for impairment. Goodwill and other intangible assets are also reviewed on a quarterly basis whenever events or circumstances indicate that the carrying value of these assets may not be recoverable. Factors that may be considered for purposes of this analysis include a decline in stock price and market capitalization, slower industry growth rates, or material changes with customers or contracts that could negatively impact future cash flows. DTE Energy cannot predict the timing, strength, or duration of such changes or any subsequent recovery. If the carrying value of any goodwill or other intangible assets are determined to be not recoverable, DTE Energy may take a non-cash impairment charge, which could materially impact DTE Energy's results of operations and financial position.

The Registrants may not be fully covered by insurance. The Registrants have a comprehensive insurance program in place to provide coverage for various types of risks, including catastrophic damage as a result of severe weather or other natural disasters, war, terrorism, cyber incidents, or a combination of other significant unforeseen events that could impact the Registrants' operations. Economic losses might not be covered in full by insurance, or the Registrants' insurers may be unable to meet contractual obligations.

Safety and Security Risks

The Registrants' businesses have safety risks. The Registrants' electric distribution system, ~~reliability;~~

~~new electric generation;~~

power plants, renewable energy equipment, and other facilities, and DTE Energy's gas distribution system, ~~renewal;~~gas infrastructure, and other facilities, could be involved in incidents that result in injury, death, or property loss to employees, customers, third parties, or the public. Although the Registrants have insurance coverage for many potential incidents, depending upon the nature and severity of any incident, they could experience financial loss, damage to their reputation, and negative consequences from regulatory agencies or other public authorities.

~~rate competitiveness~~Threats of cyber incidents, physical security, and ~~affordability;~~terrorism could affect the Registrants' business. Issues may threaten the Registrants such as cyber incidents, physical security, or terrorism that may disrupt the Registrants' operations, and could harm the Registrants' operating results.

Information security risks have increased in recent years as a result of the proliferation of new technologies and the increased sophistication and frequency of cyberattacks, and data security breaches. The Registrants' industry requires the continued operation of sophisticated information and control technology systems and network infrastructure. All of the Registrants' technology systems are vulnerable to disability or failures due to cyber incidents, physical security threats, acts of war or terrorism, and other causes, as well as loss of operational control of the Registrants' electric generation and distribution assets and, DTE Energy's gas distribution assets. The Registrants have experienced, and expect to continue to be subject to, cybersecurity threats and incidents. If the Registrants' information technology systems were to fail and they were unable to recover in a timely way, the Registrants may be unable to fulfill critical business functions, which could have a material adverse effect on the Registrants' business, operating results, and financial condition.

Suppliers, vendors, contractors, and information technology providers have access to systems that support the Registrants’ operations and maintain customer and employee data. A breach of these third-party systems could adversely affect the business as if it was a breach of our own system. Also, because the Registrants’ generation and distribution systems are part of an interconnected system, a disruption caused by a cyber incident at another utility, electric generator, system operator, or commodity supplier could also adversely affect the Registrants’ businesses, operating results, and financial condition.

In addition, the Registrants' generation plants and electrical distribution facilities may be targets of physical security threats or terrorist activities that could disrupt the Registrants' ability to produce or distribute some portion of their products. The Registrants have increased security as a result of past events and may be required by regulators or by the future threat environment to make investments in security that the Registrants cannot currently predict.

Failure to maintain the security of personally identifiable information could adversely affect the Registrants. In connection with the Registrants' businesses, they collect and retain personally identifiable information of their customers, shareholders, and employees. Customers, shareholders, and employees expect that the Registrants will adequately protect their personal information. The regulatory ~~stability~~environment surrounding information security and ~~investment recovery for~~privacy is increasingly demanding. A significant theft, loss, or fraudulent use of customer, shareholder, employee, or Registrant data by cybercrime or otherwise, could adversely impact the Registrants' reputation, and could result in significant costs, fines, and litigation.

General and Other Risks

The COVID-19 pandemic and resulting impact on business and economic conditions could negatively affect the Registrants' businesses and operations. The COVID-19 pandemic is currently impacting countries, communities, supply chains and markets. The continued spread of COVID-19 and efforts to contain the virus, such as quarantines, closures, or reduced operations of businesses, governmental agencies and other institutions, have resulted in disruptions in various public, commercial, and industrial activities and have caused employee absences which interfered with certain operation and maintenance of the Registrants' facilities. Travel bans and restrictions, quarantines, and shelter in place orders could also cause us to experience operational delays, delay the delivery of critical infrastructure and other supplies we source globally, or delay the connection of electric or gas service to new customers, and have reduced the use of electricity and gas ~~utilities;~~by certain customers in the commercial and industrial segments. Any of the foregoing circumstances could adversely affect customer demand or revenues, impact the ability of the Registrants' suppliers, vendors or contractors to perform, or cause other unpredictable events, which could adversely affect the Registrants' businesses, results of operations or financial condition. The continued spread of COVID-19 has also led to disruption and volatility in the financial markets, which could increase the Registrants' costs to fund capital requirements and impact the operating results of our energy trading operations. To the extent that the Registrants' access to the capital markets is adversely affected by COVID-19, the Registrants may need to consider alternative sources of funding for our operations and for working capital, any of which could increase the Registrants' cost of capital. The extent to which COVID-19 may continue to impact the Registrants' liquidity, financial condition, and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including new information concerning the severity of COVID-19 and its related variants, vaccine distribution and public acceptance, and other actions taken to contain it or treat its impact, and the extent to which normal economic and operating conditions can resume, among others. Our business continuity plans and insurance coverage may be insufficient to mitigate these adverse impacts to our business.

~~employee safety~~Failure to attract and ~~engagement;~~retain key executive officers and other skilled professional and technical employees could have an adverse effect on the Registrants’ operations. The Registrants' businesses are dependent on their ability to attract and retain skilled employees. Competition for skilled employees in some areas is high, and the inability to attract and retain these employees could adversely affect the Registrants' business and future operating results. In addition, the Registrants have an aging utility workforce, and the failure of a successful transfer of knowledge and expertise could negatively impact their operations.

~~cost structure optimization across~~

DTE Energy relies on cash flows from subsidiaries. DTE Energy is a holding company. Cash flows from the utility and non-utility subsidiaries are required to pay interest expenses and dividends on DTE Energy debt and securities. Should a major subsidiary not be able to pay dividends or transfer cash flows to DTE Energy, its ability to pay interest and dividends would be restricted.

The spin-off of DT Midstream (the "Spin-off") may not achieve its intended benefits and may present additional risk to DTE Energy. As a result of the Spin-off, DTE Energy faces new and unique risks, including having fewer assets, reduced financial resources and less diversification of revenue sources. The Spin-off may not achieve some or all ~~business segments;~~of its anticipated benefits and we face risks providing DT Midstream with transition services. Each of these factors may adversely impact DTE Energy's financial condition, results of operations, and cash flows.

~~cash, capital,~~In connection with the Spin-off, DTE received a legal opinion that the distribution of shares of DT Midstream to DTE Energy shareholders qualifies as tax-free under Section 355 of the U.S. Internal Revenue Code. However, if the IRS determined on audit that the distribution is taxable, both DTE Energy and ~~liquidity~~our shareholders could incur significant U.S. federal income tax liabilities.

Following the Spin-off, the management and directors of each of DTE Energy and DT Midstream own common stock in both companies, and Robert Skaggs, Jr., who is DT Midstream's Executive Chairman, also serves on DTE Energy's Board and may be required to ~~maintain~~recuse himself from deliberations relating to arrangements between DTE Energy and DT Midstream in the future. This ownership and directorship overlap could create, or ~~improve financial strength;~~appear to create, potential conflicts of interest when the management and directors of one company face decisions that could have different implications for themselves and the other company. Potential conflicts of interest may also arise out of commercial arrangements that DTE Energy and DT Midstream have or may enter into in the future.

~~investments that integrate assets~~

Item 1B. Unresolved Staff Comments

None.

Item 3. Legal Proceedings

For more information on legal proceedings and ~~leverage skills~~matters related to the Registrants, see Notes 9 and ~~expertise.~~18 to the Consolidated Financial Statements, "Regulatory Matters" and "Commitments and Contingencies," respectively.

For environmental proceedings in which the government is a party, the Registrants include disclosures if any sanctions of $1 million or greater are expected.

Item 4. Mine Safety Disclosures

Not applicable.

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

DTE Energy ~~will continue~~common stock is listed under the ticker symbol "DTE" on the New York Stock Exchange, which is the principal market for such stock.

At December 31, 2021, there were 193,747,509 shares of DTE Energy common stock outstanding. These shares were held by a total of 45,230 shareholders of record.

All of the 138,632,324 issued and outstanding shares of DTE Electric common stock, par value $10 per share, are indirectly-owned by DTE Energy, and constitute 100% of the voting securities of DTE Electric. Therefore, no market exists for DTE Electric's common stock.

For information on DTE Energy dividend restrictions, see Note 16 to ~~pursue opportunities~~the Consolidated Financial Statements, "Short-Term Credit Arrangements and Borrowings."

All of DTE Energy's equity compensation plans that provide for the annual awarding of stock-based compensation have been approved by shareholders. For additional detail, see Note 21 to ~~grow~~the Consolidated Financial Statements, "Stock-Based Compensation."

See the following table for information as of December 31, 2021:


	Number of Securities to be Issued Upon Exercise of Outstanding Options	Weighted-Average Exercise Price of Outstanding Options		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
Plans approved by shareholders	—	$	—	4,221,599

UNREGISTERED SALES OF DTE ENERGY EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of DTE Energy Equity Securities by the Issuer and Affiliated Purchasers

The following table provides information about DTE Energy's purchases of equity securities that are registered by DTE Energy pursuant to Section 12 of the Exchange Act of 1934 for the quarter ended December 31, 2021:


	Number of Shares Purchased(a)	Average Price Paid per Share(a)		Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Average Price Paid per Share	Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs
10/01/2021 — 10/31/2021	1,028	$	108.95	—	—	—
11/01/2021 — 11/30/2021	2,653	$	105.32	—	—	—
12/01/2021 — 12/31/2021	505	$	115.23	—	—	—
Total	4,186			—

(a)Represents shares of DTE Energy common stock withheld to satisfy income tax obligations upon the vesting of restricted stock based on the price in effect at the grant date.

COMPARISON OF CUMULATIVE FIVE YEAR TOTAL RETURN

Total Return to DTE Energy Shareholders

(Includes reinvestment of dividends)


	Annual Return Percentage Year Ended December 31,
Company/Index	2017	2018	2019	2020	2021
DTE Energy Company	14.59	4.19	21.36	(2.90)	19.42
S&P 500 Index	21.82	(4.39)	31.48	18.39	28.68
S&P 500 Multi-Utilities Index	12.09	1.77	24.36	(5.87)	17.67


	Indexed Returns Year Ended December 31,
	Base Period
Company/Index	2016	2017	2018	2019	2020	2021
DTE Energy Company	100.00	114.59	119.39	144.90	140.69	168.01
S&P 500 Index	100.00	121.82	116.47	153.14	181.29	233.29
S&P 500 Multi-Utilities Index	100.00	112.09	114.07	141.86	133.53	157.13

Item 6. Selected Financial Data

Information is no longer required as the Registrants have adopted the SEC amendment to Regulation S-K to eliminate Item 301, Selected Financial Data.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following combined discussion is separately filed by DTE Energy and DTE Electric. However, DTE Electric does not make any representations as to information related solely to DTE Energy or the subsidiaries of DTE Energy other than itself.

EXECUTIVE OVERVIEW

DTE Energy is a diversified energy company with 2021 Operating Revenues of approximately $15.0 billion and Total Assets of approximately $39.7 billion. DTE Energy is the parent company of DTE Electric and DTE Gas, regulated electric and natural gas utilities engaged primarily in the business of providing electricity and natural gas sales, distribution, and storage services throughout Michigan. DTE Energy also operates two energy-related non-utility segments with operations throughout the United States.

On July 1, 2021, DTE Energy completed the separation of its ~~businesses~~natural gas pipeline, storage and gathering non-utility business. Effective with the separation, DTE retains no ownership in the new company, DT Midstream, which was formerly comprised of DTE Energy’s Gas Storage and Pipelines segment and certain DTE Energy holding company activity within the Corporate and Other segment. Gas Storage and Pipelines is no longer a ~~disciplined manner if it can secure opportunities that meet its strategic,~~reportable segment of DTE Energy, and financial results of DT Midstream are presented as discontinued operations in the Consolidated Financial Statements. Refer to Note 4 to the Consolidated Financial Statements, “Dispositions and ~~risk criteria.~~

~~RESULTS OF OPERATIONS~~Impairments,” for additional information regarding the separation of DT Midstream and discontinued operations.

Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~includes~~below reflect DTE Energy’s continuing operations, unless noted otherwise. The following table summarizes DTE Energy's financial ~~information prepared~~results:


	Years Ended December 31,
	2021		2020		2019
	(In millions, except per share amounts)
Net Income Attributable to DTE Energy Company — Continuing operations	$	796	$	1,054	$	955
Diluted Earnings per Common Share — Continuing operations	$	4.10	$	5.45	$	5.15

The decrease in ~~accordance with GAAP, as well as the non-GAAP financial measures, Utility Margin and Non-utility Margin, discussed below, which~~2021 Net Income Attributable to DTE Energy ~~uses as measures~~Company was primarily due to lower earnings in the Corporate and Other segment, driven primarily by losses on the extinguishment of its operational performance. Generally, a non-GAAP financial measure is a numerical measure of financial performance, financial position or cash flows that excludes (or includes) amounts that are includeddebt incurred in ~~(or excluded from) the most directly comparable measure calculated and presented~~2021. The decrease was also due to lower earnings in ~~accordance with GAAP.~~

~~DTE Energy uses Utility Margin and Non-utility Margin, non-GAAP financial measures, to assess its performance by reportable segment.~~

Utility Margin includes electric and gas Operating Revenues net of Fuel, purchased power, and gas expenses. The utilities’ fuel, purchased power, and natural gas supply are passed through to customers, and therefore, result in changes to the utilities’ revenues that are comparable to changes in such expenses. As such, DTE Energy believes Utility Margin provides a meaningful basis for evaluating the utilities’ operations across periods, as it excludes the revenue effect of fluctuations in these expenses.

The Non-utility Margin relates to our Power and Industrial Projects and Energy Trading segments. For the Power and Industrial Projects segment, Non-utility Margin primarily includes Operating Revenues net of Fuel, purchased power, and gas expenses. Operating Revenues include sales of refined coal to third parties and the affiliated Electric utility, metallurgical coke and related by-products, petroleum coke, renewable natural gas, and electricity, as well as rental income and revenues from utility-type consulting, management, and operational services. For the Energy Trading segment, Non-utility Margin includes revenue and realized and unrealized gains and losses from physical and financial power and gas marketing, optimization, and trading activities, net of Purchased power and gas related to these activities. DTE Energy evaluates its operating performance of these non-utility businesses using the measure of Operating Revenues net of Fuel, purchased power, and gas expenses.

Utility Margin and Non-utility Margin are not measures calculated in accordance with GAAP and should be viewed as a supplement to and not a substitute for the results of operations presented in accordance with GAAP. Utility Margin and Non-utility Margin do not intend to represent operating income, the most comparable GAAP measure, as an indicator of operating performance and are not necessarily comparable to similarly titled measures reported by other companies.

The following sections provide a detailed discussion of the operating performance and future outlook of DTE Energy's segments. Segment information, described below, includes intercompany revenues and expenses, and other income and deductions that are eliminated in the Consolidated Financial Statements.

2017 2016 2015
(In millions)
Net Income (Loss) Attributable to DTE Energy by Segment:
Electric $ 606
$ 622
$ 542
Gas 146
138
132
Gas Storage and Pipelines 275
119
107
Power and Industrial Projects 138
95
16
Energy Trading 72
(45 ) (22 )
Corporate and Other (103 ) (61 ) (48 )
Net Income Attributable to DTE Energy Company $ 1,134
$ 868
$ 727

~~ELECTRIC~~

~~The Results of Operations discussion for DTE Electric is presented in a reduced disclosure format in accordance with General Instruction I (2) (a) of Form 10-K for wholly-owned subsidiaries.~~

~~The Electric segment consists principally of DTE Electric. Electric results are discussed below:~~

2017 2016 2015
(In millions)
Operating Revenues — Utility operations $ 5,102
$ 5,225
$ 4,901
Fuel and purchased power — utility 1,454
1,532
1,573
Utility Margin 3,648
3,693
3,328
Operation and maintenance 1,428
1,455
1,344
Depreciation and amortization 753
750
637
Taxes other than income 302
284
277
Operating Income 1,165
1,204
1,070
Other (Income) and Deductions 238
229
238
Income Tax Expense 321
353
290
Net Income Attributable to DTE Energy Company $ 606
$ 622
$ 542

~~See DTE Electric's Consolidated Statements of Operations in Item 8 of this Report for a complete view of its results.~~

~~Utility Margin~~ decreased $45 million in 2017 and increased $365 million in 2016. Revenues associated with certain mechanisms and surcharges are offset by related expenses elsewhere in the Registrants' Consolidated Statements of Operations.

~~The following table details changes in various Utility Margin components relative to the comparable prior period:~~

2017 2016
(In millions)
Implementation of new rates $ 124
$ 198
PSCR disallowance in 2017 and 2015, respectively (13 ) 19
Base sales (26 ) 20
Weather (109 ) 96
Securitization bond and tax surcharge —
40
Renewable energy program —
12
Amortization of refundable revenue decoupling/deferred gain in 2015 —
(63 )
Regulatory mechanisms and other (21 ) 43
Increase (decrease) in Utility Margin $ (45 ) $ 365

2017 2016 2015
(In thousands of MWh)
DTE Electric Sales
Residential 14,885
15,875
15,001
Commercial 17,283
17,521
17,192
Industrial 9,897
10,004
9,690
Other 258
264
291
42,323
43,664
42,174
Interconnection sales^(a)
2,623
2,334
4,108
Total DTE Electric Sales 44,946
45,998
46,282

DTE Electric Deliveries
Retail and wholesale 42,323
43,664
42,174
Electric retail access, including self generators^(b)
4,820
4,936
4,899
Total DTE Electric Sales and Deliveries 47,143
48,600
47,073


~~(a)~~	~~Represents power that is not distributed by DTE Electric.~~


~~(b)~~	~~Represents deliveries for self generators that have purchased power from alternative energy suppliers to supplement their power requirements.~~

~~DTE Electric sales decreased for residential, commercial, and industrial primarily due to favorable weather in 2016.~~

~~Operation and maintenance~~ ~~expense decreased $27 million in 2017 and increased $111 million in 2016. The decrease in 2017 was primarily due to decreased power plant generation expenses of $66 million,~~ partially offset by ~~increased storm restoration expenses of $27 million,~~higher earnings in the Electric, Gas, and increased line clearance expenses of $10 million. The decrease in power plant generation expenses includes an increase of $6 million of costs related to the 2016 fire at a generation facility, offset by $21 million of insurance proceeds received in 2017. DTE Vantage segments. The increase in ~~2016 was primarily due~~2020 Net Income Attributable to increased power plant generation expenses of $55 million related to outages, increased distribution operations expenses of $13 million, and $47 million of expenses related to the deferral of negative other postretirement costs pursuant to the order in DTE Electric's base rate case, received in December 2015. The increase in the power plant generation expenses included $19 million of costs related to a fire at a generation facility which were partially reimbursed by insurance proceeds in 2017.

~~Depreciation and amortization~~ expense increased $3 million in 2017 and increased $113 million in 2016. In 2017, the increase was due to $45 million of increased expense from an increased depreciable base, partially offset by a decrease of $29 million associated with the TRM, and a decrease of $13 million in amortization of regulatory assets. In 2016, $38 million of the increase was due to a higher depreciable base, $42 million was primarily due to the end of Securitization amortization in 2015, and an additional $42 million was associated with the TRM, offset by a $9 million decrease in nuclear decommissioning amortization.

~~Other (Income) and Deductions~~ ~~increased $9 million in 2017 and decreased $9 million in 2016. The increase in 2017~~Energy Company was primarily due to higher ~~interest expense of $10 million, lower interest income of $8 million related to a sales~~earnings in the Electric and ~~use tax settlement received in 2016,~~Corporate and ~~a $7 million contribution to the DTE Energy Foundation,~~Other segments, partially offset by ~~$12 million~~lower earnings in the Energy Trading segment.

STRATEGY

DTE Energy's strategy is to achieve long-term earnings growth with a strong balance sheet and an attractive dividend.

DTE Energy's utilities are investing capital to support a modern, reliable grid and cleaner, affordable energy through investments in base infrastructure and new generation. An increasing amount of ~~higher~~high wind and other extreme weather events driven by climate change, coupled with increasing electric vehicle adoption, will drive a continued need for substantial grid investment ~~earnings~~over the long-term.

DTE Energy is committed to reducing the carbon emissions of its electric utility operations by 32% by 2023, 50% by 2028, and a $3 million decrease in Low Income Self-Sufficiency Plan (LSP) contributions to not-for-profit organizations in 2016. The decrease in 2016 was primarily due to $13 million of higher investment earnings, $8 million of interest income related80% by 2040 from 2005 carbon emissions levels. DTE Energy is also committed to a ~~sales~~net zero carbon emissions goal by 2050 for its electric and gas utility operations. To achieve the carbon reduction goals at the electric utility, DTE Energy has begun to transition away from coal-powered sources and is replacing or offsetting the generation from these facilities with renewable energy and energy waste reduction initiatives. Refer to the "Capital Investments" section below for further discussion regarding DTE Energy's retirement of its aging coal-fired plants and transition to renewable energy and other sources. Over the long-term, DTE Energy is also monitoring the viability of emerging technologies involving energy storage, carbon capture and sequestration, alternative fuels such as hydrogen, and advanced nuclear power.

For gas utility operations, DTE Energy aims to cut carbon emissions across the entire value chain.To achieve net zero emissions by 2050 for both internal operations and from suppliers, DTE Energy is working to source gas with lower methane intensity, reduce emissions through its gas main renewal and pipeline integrity programs, and if necessary, use ~~tax settlement, offset~~carbon offsets to address any remaining emissions. DTE Energy is also committed to helping DTE Gas customers reduce their emissions by ~~$3 million of LSP contributions~~35% by 2050 by increasing energy efficiency, pursuing advanced technologies such as hydrogen, and through the CleanVision Natural Gas Balance program which provides customers the option to ~~not-for-profit organizations, $2 million AFUDC equity,~~use carbon offsets and ~~$6 million higher interest expense.~~renewable natural gas.

~~Outlook~~—DTE ~~Electric~~Energy expects that these initiatives at the electric and gas utilities will continue to ~~move forward in its efforts to achieve operational excellence, sustain strong cash flows, and earn its authorized return on equity. DTE Electric expects that planned~~provide significant opportunities for capital investments ~~will~~and result in earnings growth. DTE ~~Electric expects to continue~~Energy is focused on executing its efforts to improve productivity and decrease costs while improving customer satisfaction with consideration of customer rate affordability. Looking forward, additional factors may impact earnings such as weather, the outcome of regulatory proceedings, benefit plan design changes, investment returns and changes in discount rate assumptions in benefit plans ~~and health care costs, impact of 2016 Michigan energy legislation, uncertainty of legislative or regulatory actions regarding climate change, and effects of energy efficiency programs.~~

DTE Electric filed a rate case with the MPSC on April 19, 2017 requesting an increase in base rates of $231 million based on a projected twelve-month period ending October 31, 2018. The requested increase in base rates is primarily due to an increase in net plant resulting from infrastructure investments, environmental compliance, and reliability improvement projects. The rate filing also includes projected changes in sales, operation and maintenance expenses, and working capital. The rate filing also requests an increase in return on equity from 10.1% to 10.5%. On September 8, 2017, DTE Electric filed an application with the MPSC for a $125 million self-implemented base rate increase effective November 1, 2017. A final MPSC order in this case is expected by April 2018.

On January 19, 2018, DTE Electric filed information with the MPSC regarding the potential change in revenue requirements due to the TCJA effective January 1, 2018, and outlined our recommended method to flow the current and deferred tax benefits of those impacts to ratepayers.

~~GAS~~

~~The Gas segment consists principally of DTE Gas. Gas results are discussed below:~~

2017 2016 2015
(In millions)
Operating Revenues — Utility operations $ 1,388
$ 1,324
$ 1,376
Cost of gas — utility 443
454
526
Utility Margin 945
870
850
Operation and maintenance 451
411
430
Depreciation and amortization 123
106
104
Taxes other than income 65
64
62
Asset (gains) losses and impairments, net —
4
—
Operating Income 306
285
254
Other (Income) and Deductions 82
70
50
Income Tax Expense 78
77
72
Net Income Attributable to DTE Energy Company $ 146
$ 138
$ 132

~~Utility Margin~~ increased $75 million in 2017 and increased $20 million in 2016. Revenues associated with certain surcharges are offset by related expenses elsewhere in DTE Energy's Consolidated Statements of Operations.

~~The following table details changes in various Utility Margin components relative to the comparable prior period:~~

2017 2016
(In millions)
Implementation of new rates $ 80
$ 23
Revenue decoupling mechanism 4
(7 )
Home protection program 3
4
Midstream storage and transportation revenues (5 ) (2 )
Weather (6 ) (22 )
Infrastructure recovery mechanism —
12
Other (1 ) 12
Increase in Utility Margin $ 75
$ 20

2017 2016 2015
(In Bcf)
Gas Markets
Gas sales 119
116
122
End-user transportation 165
182
169
284
298
291
Intermediate transportation 260
214
289
Total Gas sales 544
512
580

~~Operation and maintenance~~ expense increased $40 million in 2017 and decreased $19 million in 2016. The increase in 2017 was primarily due to increased employee benefits expenses of $30 million, increased corporate expenses of $3 million, and increased gas operations expenses of $3 million. The decrease in 2016 was primarily due to decreased uncollectible expenses of $14 million and decreased transmission expenses of $8 million. The decreased uncollectible expenses and transmission expenses in 2016 were primarily the result of weather-related impacts of warmer weather in 2016. Additionally, DTE Gas took actions to reduce costs to partially offset the negative impacts to revenue and utility margin resulting from the warmer weather in 2016.

~~Depreciation and amortization~~ ~~expense increased $17 million in 2017 and increased $2 million in 2016. The increase in 2017 was primarily due to increased expense from an increased depreciable base and higher depreciation rates.~~

~~Other (Income) and Deductions~~ increased $12 million in 2017 and increased $20 million in 2016. The increase in 2017 was primarily due to increased contributions to the DTE Energy Foundation and other not-for-profit organizations of $7 million and higher interest expense of $5 million. The increase in 2016 was primarily due to contributions to the DTE Energy Foundation and other not-for-profit organizations.

~~Outlook —~~ ~~DTE Gas will continue to move forward in its efforts~~ to achieve operational excellence ~~sustain~~and customer satisfaction with a focus on customer affordability. DTE Energy's utilities operate in a constructive regulatory environment and have solid relationships with their regulators.

DTE Energy also has significant investments in non-utility businesses and expects growth opportunities in its DTE Vantage segment. DTE Energy employs disciplined investment criteria when assessing growth opportunities that leverage its assets, skills, and expertise, and provides diversity in earnings and geography. Specifically, DTE Energy invests in targeted markets with attractive competitive dynamics where meaningful scale is in alignment with its risk profile.

A key priority for DTE Energy is to maintain a strong balance sheet which facilitates access to capital markets and reasonably priced short-term and long-term financing. Near-term growth will be funded through internally generated cash flows and ~~earn its authorized return on~~the issuance of debt and equity. DTE ~~Gas expects~~Energy has an enterprise risk management program that, ~~planned~~among other things, is designed to monitor and manage exposure to earnings and cash flow volatility related to commodity price changes, interest rates, and counterparty credit risk.

CAPITAL INVESTMENTS

DTE Energy's utility businesses require significant ~~infrastructure~~ capital investments to maintain and improve the electric generation and electric and natural gas distribution infrastructure and to comply with environmental regulations and renewable energy requirements. Capital plans may be regularly updated as these requirements change.

DTE Electric's capital investments over the 2022-2026 period are estimated at $15 billion, comprised of $8 billion for distribution infrastructure, $4 billion for base infrastructure, and $3 billion for cleaner generation including renewables. DTE Electric has retired six coal-fired generation units at the Trenton Channel, River Rouge, and St. Clair facilities and has announced plans to retire its remaining eleven coal-fired generating units, including five units at Trenton Channel and St. Clair in 2022. The two units at the Belle River facility will ~~result~~cease the use of coal by 2028 and will be evaluated for conversion to cleaner energy resources. The four units at the Monroe facility are expected to be retired by 2040. Generation from the retired facilities will be replaced or offset with a combination of renewables, energy waste reduction, demand response, and natural gas fueled generation, including the Blue Water Energy Center which will commence operations in ~~earnings growth. Looking forward, additional factors may impact earnings such as weather,~~2022.

DTE Gas' capital investments over the ~~outcome~~2022-2026 period are estimated at $3.1 billion, comprised of ~~regulatory proceedings, benefit plan design changes,~~$1.5 billion for base infrastructure and ~~investment returns~~$1.6 billion for gas main renewal, meter move out, and ~~changes in discount rate assumptions in benefit plans~~pipeline integrity programs.

DTE Electric and ~~health care costs.~~ DTE Gas ~~expects~~plan to seek regulatory approval for capital expenditures consistent with ratemaking treatment.

DTE Energy's non-utility businesses' capital investments are primarily for expansion, growth, and ongoing maintenance in the DTE Vantage segment, including approximately $1 billion to $1.5 billion from 2022-2026 for renewable energy and industrial energy services projects.

ENVIRONMENTAL MATTERS

The Registrants are subject to extensive environmental regulations, including those to address climate change. Additional costs may result as the effects of various substances on the environment are studied and governmental regulations are developed and implemented. Actual costs to comply could vary substantially. The Registrants expect to continue ~~its efforts to improve productivity and decrease costs while improving customer satisfaction with consideration of customer rate affordability.~~

DTE Gas filed a rate case with the MPSC on November 22, 2017 requesting an increase in base rates of $85.1 million based on a projected twelve-month period ending September 30, 2019. The requested increase in base rates is primarily due to an increase in net plant. The rate filing also includes projected changes in sales, operations, maintenance expenses, and working capital. The rate filing also requests an increase in return on equity from 10.1% to 10.5%. A final MPSC order in this case is expected by September 2018.

On January 19, 2018, DTE Gas filed information with the MPSC regarding the potential change in revenue requirements due to the TCJA effective January 1, 2018, and outlined our recommended method to flow the current and deferred tax benefits of those impacts to ratepayers.

~~GAS STORAGE AND PIPELINES~~

~~The Gas Storage and Pipelines segment consists of the non-utility gas pipelines and storage businesses. Gas Storage and Pipelines results are discussed below:~~

2017 2016 2015
(In millions)
Operating Revenues — Non-utility operations $ 453
$ 302
$ 243
Cost of gas — Non-utility 30
6
—
Operation and maintenance 83
81
58
Depreciation and amortization 76
45
30
Taxes other than income 8
4
5
Asset (gains) losses and impairments, net 2
—
—
Operating Income 254
166
150
Other (Income) and Deductions (18 ) (31 ) (29 )
Income Tax Expense (Benefit) (30 ) 71
70
Net Income 302
126
109
Less: Net Income Attributable to Noncontrolling Interests 27
7
2
Net Income Attributable to DTE Energy Company $ 275
$ 119
$ 107

~~Operating Revenues — Non-utility operations~~ increased $151 million in 2017 and increased $59 million in 2016. The increase in both periods was primarily due to the acquisition of AGS and SGG in October 2016 and increased volumes on the Bluestone Pipeline and Susquehanna gathering systems.

~~Cost of gas — Non-utility~~ increased $24 million in 2017 and increased $6 million in 2016. The increase in both periods was primarily driven by the physical purchase of gas from AGS customers for resale to optimize available transportation capacity.

~~Operation and maintenance~~ ~~expense increased $2 million in 2017 and increased $23 million in 2016. The 2016 increase was primarily due to the transaction~~recovering environmental costs related to utility operations through rates charged to customers, as authorized by the ~~acquisition~~MPSC.

Increased costs for energy produced from traditional coal-based sources due to recent, pending, and future regulatory initiatives could also increase the economic viability of ~~AGS~~energy produced from renewable, natural gas fueled generation, and/or nuclear sources, energy waste reduction initiatives, and ~~SGG in 2016~~the potential development of market-based trading of carbon instruments which could provide new business opportunities for DTE Energy's utility and ~~increased activity~~non-utility segments. At the present time, it is not possible to quantify the financial impacts of these climate related regulatory initiatives on the ~~Susquehanna gathering system.~~

~~Depreciation and amortization~~ expense increased $31 million in 2017 and increased $15 million in 2016. The 2017 increase was primarily due to the acquisition of AGS and SGG in October 2016. The 2016 increase was due primarily to the acquisition of AGS and SGG and additional Bluestone and Susquehanna expansion projects placed in service.

~~Other (Income) and Deductions~~ decreased $13 million in 2017 and increased $2 million in 2016. The 2017 decrease was primarily due to a $16 million net loss on extinguishment of debt within the storage business, and contributions to the DTE Energy Foundation and other not-for-profit organizations, partially offset by increased earnings from pipeline investments. The 2016 increase was primarily due to increased earnings from pipeline investments, partially offset by increased interest expense as a result of the acquisition of AGS and SGG in 2016.

~~Income Tax Expense (Benefit)~~ decreased $101 million in 2017 from the expense of $71 million in 2016 and increased $1 million in 2016. The 2017 decrease was primarily due to the $115 million remeasurement of deferred tax assets and liabilities to reflect the reduction in the corporate tax rate from the enactment of the TCJA in December 2017. This was partially offset by increased tax expense on higher earnings in 2017.

~~Net Income Attributable to Noncontrolling Interests~~ ~~increased $20 million in 2017 and increased $5 million in 2016. The increase in both periods was primarily due to the acquisition of SGG in October 2016.~~Registrants or their customers.

See Items 1. and 2. Business and Properties and Note 418 to the Consolidated Financial Statements, ~~in Item 8 of this Report, "Acquisitions~~"Commitments and ~~Exit Activities"~~Contingencies," for further discussion of ~~the acquisition of AGS and SGG in October 2016.~~Environmental Matters.

~~Outlook —~~ The Bluestone Pipeline and Susquehanna gathering system are being expanded with additional compression facilities and gathering lines as needed to accommodate shipper demand. DTE Energy believes its long-term agreement with Southwestern Energy Production Company and the quality of the natural gas reserves in the Marcellus region soundly positions Bluestone Pipeline and Susquehanna gathering system for future growth.

Progress continues on development activities on the NEXUS Pipeline, a transportation path to transport Appalachian Basin shale gas, including Utica and Marcellus shale gas, directly to consuming markets in northern Ohio, southeastern Michigan, and Dawn Ontario. DTE Energy owns a 50% partnership interest in the NEXUS Pipeline. The FERC application was approved on August 25, 2017 and construction commenced in October 2017. DTE Energy anticipates a third quarter 2018 in-service date for the NEXUS Pipeline.

The October 2016 acquisition of AGS and SGG provides a platform for midstream growth and access to further investment opportunities in the Appalachian basin, an additional connection to the NEXUS Pipeline which should drive incremental volumes on the NEXUS Pipeline, and a new set of producer relationships that may lead to more partnering opportunities.

~~In May 2017, DTE Energy filed a FERC application for approval of the Birdsboro Pipeline, a 14-mile lateral to serve a new power plant in Pennsylvania. DTE Energy is targeting a 2018 in-service date.~~

Gas Storage and Pipelines expects to maintain its steady growth by developing an asset portfolio with multiple growth platforms through investment in new projects and expansions. Gas Storage and Pipelines will continue to look for additional investment opportunities and other storage and pipeline projects at favorable prices.

~~POWER AND INDUSTRIAL PROJECTS~~

The Power and Industrial Projects segment is comprised primarily of projects that deliver energy and utility-type products and services to industrial, commercial, and institutional customers, produce reduced emissions fuel, and sell electricity from renewable energy projects. Power and Industrial Projects results are discussed below:

2017 2016 2015
(In millions)
Operating Revenues — Non-utility operations $ 2,089
$ 1,906
$ 2,224
Fuel, purchased power, and gas — non-utility 1,813
1,640
1,837
Non-utility Margin 276
266
387
Operation and maintenance 343
320
379
Depreciation and amortization 72
72
78
Taxes other than income 11
13
15
Asset (gains) losses and impairments, net 20
(1 ) 106
Operating Loss (170 ) (138 ) (191 )
Other (Income) and Deductions (64 ) (52 ) (58 )
Income Taxes
Benefit (42 ) (26 ) (49 )
Production Tax Credits (153 ) (114 ) (91 )
(195 ) (140 ) (140 )
Net Income 89
54
7
Less: Net Loss Attributable to Noncontrolling Interests (49 ) (41 ) (9 )
Net Income Attributable to DTE Energy Company $ 138
$ 95
$ 16

~~Operating Revenues — Non-utility operations~~ ~~increased $183 million in 2017 and decreased $318 million in 2016. The changes are due to the following:~~

2017
(In millions)
Higher demand due to improved conditions in the steel business $ 107
Higher production driven by new projects, offset by lower coal prices in the REF business 102
Lower production and one-time recovery in 2016, offset by an acquisition in the renewables business (9 )
Lower sales primarily associated with expired contracts in the on-site business (17 )
$ 183

2016
(In millions)
Closure of the Shenango coke battery and lower demand in the steel business $ (264 )
Termination of a lease agreement in the REF business (40 )
Contract termination at a renewable power project facility, offset by a one-time revenue recovery (9 )
Other (5 )
$ (318 )

~~Non-utility Margin~~ ~~increased $10 million in 2017 and decreased $121 million in 2016. The changes are due to the following:~~

2017
(In millions)
Higher demand due to improved conditions in the steel business $ 42
Lower production and one-time recovery in 2016 in the renewables business (11 )
Lower sales primarily associated with expired contracts in the on-site business (15 )
Other (6 )
$ 10

2016
(In millions)
Closure of the Shenango coke battery and lower demand in the steel business $ (114 )
Termination of a lease agreement in the REF business (12 )
Lower fuel costs in a renewable power project business 5
$ (121 )

~~Operation and maintenance~~ expense increased $23 million in 2017 and decreased $59 million in 2016. The 2017 increase was primarily due to an increase in maintenance spending driven by improved conditions in the steel business of $16 million, higher maintenance and a new acquisition in the renewables business of $7 million, and an increase associated with new projects in the REF business of $5 million, offset by lower spending as a result of the closure of the Shenango coke battery in 2015 of $6 million. The 2016 decrease was primarily due to lower spending as a result of the closure of the Shenango coke battery in 2015 of $68 million, cost control due to lower demand in the steel business, and lower spending primarily due to the closure of a renewable power project of $4 million, partially offset by an increase associated with new projects in the REF business of $14 million.

~~Asset (gains) losses and impairments, net~~ decreased by $21 million in 2017 from the net gain of $1 million in 2016 and decreased by $107 million in 2016 from the net loss of $106 million in 2015. The 2017 decrease was primarily due to an impairment in the REF business of $14 million and an impairment of a petroleum coke project of $6 million. The 2016 decrease was primarily due to a loss associated with the closure of the Shenango coke battery in 2015.

~~Other (Income) and Deductions~~ increased $12 million in 2017 and decreased $6 million in 2016. The 2017 increase was primarily due to increased equity earnings in the renewable business of $9 million and insurance settlements in the renewable and REF businesses of $6 million, offset by increased contributions to the DTE Energy Foundation of $6 million. The 2016 decrease was primarily due to the reduction of refined coal produced at REF sites with investors of $9 million and lower equity earnings primarily from a renewable power project of $8 million, offset by higher contributions to the DTE Energy Foundation and other not-for-profit organizations in 2015 of $11 million.

~~Income Taxes — Benefit~~ increased by $16 million in 2017 and decreased by $23 million in 2016. The 2017 increase was primarily due to the remeasurement of deferred tax assets and liabilities to reflect the reduction in the corporate tax rate from the enactment of the TCJA in December 2017 of $21 million, an increase due to higher pretax loss of $7 million, and a decrease due to a worthless stock deduction associated with the Shenango closure in 2016 of $10 million. The decrease in 2016 was primarily driven by a lower pretax loss of $33 million, offset by a $10 million worthless stock deduction due to the Shenango closure.

~~Income Taxes — Production Tax Credits~~ ~~increased by $39 million in 2017 and increased $23 million in 2016. The increase in both periods was primarily due to new projects in the REF business.~~

~~Net Loss Attributable to Noncontrolling Interests~~ increased by $8 million in 2017 and increased by $32 million in 2016. The 2017 increase is primarily due to a change in the ownership percentage in one of the REF projects of $8 million. The 2016 increase consists of $27 million due to new lease arrangements and $5 million due to existing lease arrangements with investors at various REF facilities.

~~Outlook —~~ Power and Industrial Projects has constructed and placed in service REF facilities at eleven sites including facilities located at eight third-party owned coal-fired power plants. DTE Energy has sold membership interests in four of the facilities and entered into lease arrangements in three of the facilities. DTE Energy will continue to optimize these facilities by seeking investors or entering into lease arrangements for facilities operating at DTE Electric and other utility sites.

Power and Industrial Projects will continue to leverage its extensive energy-related operating experience and project management capability to develop additional energy projects to serve energy intensive industrial customers.

ENERGY TRADING

Description

Energy Trading focuses on physical and financial power, ~~and~~ natural gas and environmental marketing and trading, structured transactions, enhancement of returns from its asset portfolio, and optimization of contracted natural gas pipeline transportation and storage positions. Energy Trading also provides natural gas, power, environmental and related services which may include the management of associated storage and transportation contracts on the customers’ behalf and the supply or purchase of environmental attributes to various customers. Energy Trading's customer base is predominantly utilities, local distribution companies, pipelines, producers and generators, and other marketing and trading companies. Energy Trading also provides commodity risk management services to the other businesses within DTE Energy.

Regulation

Strategy and Competition

CORPORATE AND OTHER

Corporate and Other includes various holding company activities, holds certain non-utility debt, and holds certain investments, including funds supporting regional development and economic growth.

ENVIRONMENTAL MATTERS


	DTE Electric		DTE Gas		Total
	(In millions)

Water	$	10	$	—	$	10
Contaminated and other sites	12		14		26
Coal combustion residuals and effluent limitations guidelines	417		—		417
Estimated total future expenditures through 2026	$	439	$	14	$	453
Estimated 2022 expenditures	$	81	$	8	$	89
Estimated 2023 expenditures	$	65	$	3	$	68

HUMAN CAPITAL MANAGEMENT

DTE Energy and utilities across the country are managing the turnover of our workforce due to a significant number of retirements expected in the next ten years - a period that will be impacted by major transformation of our business through technology investments, changes to our electric generation portfolio, and upgrades to our distribution infrastructure.

Amidst this challenge, DTE Energy is building a culture of highly engaged employees with skills and expertise in science, technology, engineering, math, analytics, and skilled trades, which are in high demand and critical to our industry. To attract and retain the best talent, DTE Energy promotes the engagement of its employees through diversity, equity, and inclusion; health, safety, and well-being; and compensation and benefits.

Diversity, Equity, and Inclusion (DEI)

•Diversity of candidates, hires, high potential talent, and leadership promotions

•Employee engagement, including specific elements that measure a culture of inclusion

•Number of DEI related communications and events

•Supplier diversity spend

•Rankings and scores from DEI benchmarking surveys

•Formal training programs, including unconscious bias training for employees and leaders

Health, Safety, and Well-being

Safety

COVID-19 Response

Culture of Health and Well-being

Compensation and Benefits

DTE Energy provides competitive, customizable benefits for all regular full-time and regular part-time employees. Innovative compensation and benefits initiatives at DTE Energy include:

•Competitive health and welfare benefits

•Child bonding/parental leave of absence

•Additional vacation days available for employee purchase

•Competitive incentive plans, which are offered to all non-represented employees to create alignment of corporate and individual goals

Incentive Plans

For additional information on the metrics above, please see the "Annual and Long-term Incentives" section of DTE Energy's Proxy Statement.

Item 1A. Risk Factors

Regulatory, Legislative, and Legal Risks

Operational Risks

Weather, including extreme weather caused by climate change, significantly affects operations. At both utilities, deviations from normal hot and cold weather conditions affect the Registrants' earnings and cash flows. Mild temperatures can result in decreased utilization of the Registrants' assets, lowering income and cash flows. At DTE Electric, ice storms, floods, tornadoes, or high winds can damage the electric distribution system infrastructure and power generation facilities and require it to perform emergency repairs and incur material unplanned expenses. The expenses of storm restoration efforts may not be fully recoverable through the regulatory process. Prolonged and/or more frequent outages caused by extreme weather could also negatively impact DTE Energy's reputation and customer satisfaction or result in increased regulatory oversight, and related damages to customer assets could subject DTE Energy to litigation. DTE Gas can also experience higher than anticipated expenses from emergency repairs on its gas distribution infrastructure required as a result of weather-related issues.

A work interruption may adversely affect the Registrants. There are several bargaining units for DTE Energy's approximately 5,200 and DTE Electric's approximately 2,700 represented employees. The majority of represented employees are under contracts that expire in 2027. A union choosing to strike would have an impact on the Registrants' businesses. The Registrants are unable to predict the effect a work stoppage would have on their costs of operations and financial performance.

DTE Energy may not achieve the net zero carbon emissions goals of its electric and gas utilities. DTE Energy has announced the voluntary commitments of its electric and gas utilities to achieve net zero carbon emissions by 2050. Technology research and developments, innovations, and advancements are critical to DTE Energy's ability to achieve this commitment. Other factors that may impact DTE Energy's ability to achieve these net zero goals include our service territory size and capacity needs remaining in line with current expectations, the impacts on our business of future regulations or legislation, the price and availability of carbon offsets, adoption of alternative energy products by the public such as greater use of electric vehicles, greater standardization of emissions reporting, and our ability over time to transition our electric generating portfolio. DTE Energy's net zero goals require making assumptions that involve risks and uncertainties. Should one or more of these underlying assumptions prove incorrect, our actual results and ability to achieve net zero emissions by 2050 could differ materially from expectations. In addition, DTE Energy cannot predict the ultimate impact of achieving this objective, or the various implementation aspects on its reliability or its results of operations, financial condition, or liquidity.

Financial, Economic, and Market Risks

Safety and Security Risks

The Registrants' businesses have safety risks. The Registrants' electric distribution system, power plants, renewable energy equipment, and other facilities, and DTE Energy's gas distribution system, gas infrastructure, and other facilities, could be involved in incidents that result in injury, death, or property loss to employees, customers, third parties, or the public. Although the Registrants have insurance coverage for many potential incidents, depending upon the nature and severity of any incident, they could experience financial loss, damage to their reputation, and negative consequences from regulatory agencies or other public authorities.

Threats of cyber incidents, physical security, and terrorism could affect the Registrants' business. Issues may threaten the Registrants such as cyber incidents, physical security, or terrorism that may disrupt the Registrants' operations, and could harm the Registrants' operating results.

Failure to maintain the security of personally identifiable information could adversely affect the Registrants. In connection with the Registrants' businesses, they collect and retain personally identifiable information of their customers, shareholders, and employees. Customers, shareholders, and employees expect that the Registrants will adequately protect their personal information. The regulatory environment surrounding information security and privacy is increasingly demanding. A significant theft, loss, or fraudulent use of customer, shareholder, employee, or Registrant data by cybercrime or otherwise, could adversely impact the Registrants' reputation, and could result in significant costs, fines, and litigation.

General and Other Risks

The COVID-19 pandemic and resulting impact on business and economic conditions could negatively affect the Registrants' businesses and operations. The COVID-19 pandemic is currently impacting countries, communities, supply chains and markets. The continued spread of COVID-19 and efforts to contain the virus, such as quarantines, closures, or reduced operations of businesses, governmental agencies and other institutions, have resulted in disruptions in various public, commercial, and industrial activities and have caused employee absences which interfered with certain operation and maintenance of the Registrants' facilities. Travel bans and restrictions, quarantines, and shelter in place orders could also cause us to experience operational delays, delay the delivery of critical infrastructure and other supplies we source globally, or delay the connection of electric or gas service to new customers, and have reduced the use of electricity and gas by certain customers in the commercial and industrial segments. Any of the foregoing circumstances could adversely affect customer demand or revenues, impact the ability of the Registrants' suppliers, vendors or contractors to perform, or cause other unpredictable events, which could adversely affect the Registrants' businesses, results of operations or financial condition. The continued spread of COVID-19 has also led to disruption and volatility in the financial markets, which could increase the Registrants' costs to fund capital requirements and impact the operating results of our energy trading operations. To the extent that the Registrants' access to the capital markets is adversely affected by COVID-19, the Registrants may need to consider alternative sources of funding for our operations and for working capital, any of which could increase the Registrants' cost of capital. The extent to which COVID-19 may continue to impact the Registrants' liquidity, financial condition, and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including new information concerning the severity of COVID-19 and its related variants, vaccine distribution and public acceptance, and other actions taken to contain it or treat its impact, and the extent to which normal economic and operating conditions can resume, among others. Our business continuity plans and insurance coverage may be insufficient to mitigate these adverse impacts to our business.

Failure to attract and retain key executive officers and other skilled professional and technical employees could have an adverse effect on the Registrants’ operations. The Registrants' businesses are dependent on their ability to attract and retain skilled employees. Competition for skilled employees in some areas is high, and the inability to attract and retain these employees could adversely affect the Registrants' business and future operating results. In addition, the Registrants have an aging utility workforce, and the failure of a successful transfer of knowledge and expertise could negatively impact their operations.

The spin-off of DT Midstream (the "Spin-off") may not achieve its intended benefits and may present additional risk to DTE Energy. As a result of the Spin-off, DTE Energy faces new and unique risks, including having fewer assets, reduced financial resources and less diversification of revenue sources. The Spin-off may not achieve some or all of its anticipated benefits and we face risks providing DT Midstream with transition services. Each of these factors may adversely impact DTE Energy's financial condition, results of operations, and cash flows.

In connection with the Spin-off, DTE received a legal opinion that the distribution of shares of DT Midstream to DTE Energy shareholders qualifies as tax-free under Section 355 of the U.S. Internal Revenue Code. However, if the IRS determined on audit that the distribution is taxable, both DTE Energy and our shareholders could incur significant U.S. federal income tax liabilities.

Following the Spin-off, the management and directors of each of DTE Energy and DT Midstream own common stock in both companies, and Robert Skaggs, Jr., who is DT Midstream's Executive Chairman, also serves on DTE Energy's Board and may be required to recuse himself from deliberations relating to arrangements between DTE Energy and DT Midstream in the future. This ownership and directorship overlap could create, or appear to create, potential conflicts of interest when the management and directors of one company face decisions that could have different implications for themselves and the other company. Potential conflicts of interest may also arise out of commercial arrangements that DTE Energy and DT Midstream have or may enter into in the future.

Item 1B. Unresolved Staff Comments

None.

Item 3. Legal Proceedings

For more information on legal proceedings and matters related to the Registrants, see Notes 9 and 18 to the Consolidated Financial Statements, "Regulatory Matters" and "Commitments and Contingencies," respectively.

For environmental proceedings in which the government is a party, the Registrants include disclosures if any sanctions of $1 million or greater are expected.

Item 4. Mine Safety Disclosures

Not applicable.

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

DTE Energy common stock is listed under the ticker symbol "DTE" on the New York Stock Exchange, which is the principal market for such stock.

At December 31, 2021, there were 193,747,509 shares of DTE Energy common stock outstanding. These shares were held by a total of 45,230 shareholders of record.

For information on DTE Energy dividend restrictions, see Note 16 to the Consolidated Financial Statements, "Short-Term Credit Arrangements and Borrowings."

All of DTE Energy's equity compensation plans that provide for the annual awarding of stock-based compensation have been approved by shareholders. For additional detail, see Note 21 to the Consolidated Financial Statements, "Stock-Based Compensation."

See the following table for information as of December 31, 2021:


	Number of Securities to be Issued Upon Exercise of Outstanding Options	Weighted-Average Exercise Price of Outstanding Options		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
Plans approved by shareholders	—	$	—	4,221,599

UNREGISTERED SALES OF DTE ENERGY EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of DTE Energy Equity Securities by the Issuer and Affiliated Purchasers


	Number of Shares Purchased(a)	Average Price Paid per Share(a)		Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Average Price Paid per Share	Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs
10/01/2021 — 10/31/2021	1,028	$	108.95	—	—	—
11/01/2021 — 11/30/2021	2,653	$	105.32	—	—	—
12/01/2021 — 12/31/2021	505	$	115.23	—	—	—
Total	4,186			—

(a)Represents shares of DTE Energy common stock withheld to satisfy income tax obligations upon the vesting of restricted stock based on the price in effect at the grant date.

COMPARISON OF CUMULATIVE FIVE YEAR TOTAL RETURN

Total Return to DTE Energy Shareholders

(Includes reinvestment of dividends)


	Annual Return Percentage Year Ended December 31,
Company/Index	2017	2018	2019	2020	2021
DTE Energy Company	14.59	4.19	21.36	(2.90)	19.42
S&P 500 Index	21.82	(4.39)	31.48	18.39	28.68
S&P 500 Multi-Utilities Index	12.09	1.77	24.36	(5.87)	17.67


	Indexed Returns Year Ended December 31,
	Base Period
Company/Index	2016	2017	2018	2019	2020	2021
DTE Energy Company	100.00	114.59	119.39	144.90	140.69	168.01
S&P 500 Index	100.00	121.82	116.47	153.14	181.29	233.29
S&P 500 Multi-Utilities Index	100.00	112.09	114.07	141.86	133.53	157.13

Item 6. Selected Financial Data

Information is no longer required as the Registrants have adopted the SEC amendment to Regulation S-K to eliminate Item 301, Selected Financial Data.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

EXECUTIVE OVERVIEW

On July 1, 2021, DTE Energy completed the separation of its natural gas pipeline, storage and gathering non-utility business. Effective with the separation, DTE retains no ownership in the new company, DT Midstream, which was formerly comprised of DTE Energy’s Gas Storage and Pipelines segment and certain DTE Energy holding company activity within the Corporate and Other segment. Gas Storage and Pipelines is no longer a reportable segment of DTE Energy, and financial results of DT Midstream are presented as discontinued operations in the Consolidated Financial Statements. Refer to Note 4 to the Consolidated Financial Statements, “Dispositions and Impairments,” for additional information regarding the separation of DT Midstream and discontinued operations.

Management’s Discussion and Analysis of Financial Condition and Results of Operations below reflect DTE Energy’s continuing operations, unless noted otherwise. The following table summarizes DTE Energy's financial results:


	Years Ended December 31,
	2021		2020		2019
	(In millions, except per share amounts)
Net Income Attributable to DTE Energy Company — Continuing operations	$	796	$	1,054	$	955
Diluted Earnings per Common Share — Continuing operations	$	4.10	$	5.45	$	5.15

The decrease in 2021 Net Income Attributable to DTE Energy Company was primarily due to lower earnings in the Corporate and Other segment, driven primarily by losses on the extinguishment of debt incurred in 2021. The decrease was also due to lower earnings in the Energy Trading segment, partially offset by higher earnings in the Electric, Gas, and DTE Vantage segments. The increase in 2020 Net Income Attributable to DTE Energy Company was primarily due to higher earnings in the Electric and Corporate and Other segments, partially offset by lower earnings in the Energy Trading segment.

STRATEGY

DTE Energy's strategy is to achieve long-term earnings growth with a strong balance sheet and an attractive dividend.

DTE Energy's utilities are investing capital to support a modern, reliable grid and cleaner, affordable energy through investments in base infrastructure and new generation. An increasing amount of high wind and other extreme weather events driven by climate change, coupled with increasing electric vehicle adoption, will drive a continued need for substantial grid investment over the long-term.

DTE Energy is committed to reducing the carbon emissions of its electric utility operations by 32% by 2023, 50% by 2028, and 80% by 2040 from 2005 carbon emissions levels. DTE Energy is also committed to a net zero carbon emissions goal by 2050 for its electric and gas utility operations. To achieve the carbon reduction goals at the electric utility, DTE Energy has begun to transition away from coal-powered sources and is replacing or offsetting the generation from these facilities with renewable energy and energy waste reduction initiatives. Refer to the "Capital Investments" section below for further discussion regarding DTE Energy's retirement of its aging coal-fired plants and transition to renewable energy and other sources. Over the long-term, DTE Energy is also monitoring the viability of emerging technologies involving energy storage, carbon capture and sequestration, alternative fuels such as hydrogen, and advanced nuclear power.

For gas utility operations, DTE Energy aims to cut carbon emissions across the entire value chain.To achieve net zero emissions by 2050 for both internal operations and from suppliers, DTE Energy is working to source gas with lower methane intensity, reduce emissions through its gas main renewal and pipeline integrity programs, and if necessary, use carbon offsets to address any remaining emissions. DTE Energy is also committed to helping DTE Gas customers reduce their emissions by 35% by 2050 by increasing energy efficiency, pursuing advanced technologies such as hydrogen, and through the CleanVision Natural Gas Balance program which provides customers the option to use carbon offsets and renewable natural gas.

DTE Energy expects that these initiatives at the electric and gas utilities will continue to provide significant opportunities for capital investments and result in earnings growth. DTE Energy is focused on executing its plans to achieve operational excellence and customer satisfaction with a focus on customer affordability. DTE Energy's utilities operate in a constructive regulatory environment and have solid relationships with their regulators.

A key priority for DTE Energy is to maintain a strong balance sheet which facilitates access to capital markets and reasonably priced short-term and long-term financing. Near-term growth will be funded through internally generated cash flows and the issuance of debt and equity. DTE Energy has an enterprise risk management program that, among other things, is designed to monitor and manage exposure to earnings and cash flow volatility related to commodity price changes, interest rates, and counterparty credit risk.

CAPITAL INVESTMENTS

DTE Energy's utility businesses require significant capital investments to maintain and improve the electric generation and electric and natural gas distribution infrastructure and to comply with environmental regulations and renewable energy requirements. Capital plans may be regularly updated as these requirements change.

DTE Electric's capital investments over the 2022-2026 period are estimated at $15 billion, comprised of $8 billion for distribution infrastructure, $4 billion for base infrastructure, and $3 billion for cleaner generation including renewables. DTE Electric has retired six coal-fired generation units at the Trenton Channel, River Rouge, and St. Clair facilities and has announced plans to retire its remaining eleven coal-fired generating units, including five units at Trenton Channel and St. Clair in 2022. The two units at the Belle River facility will cease the use of coal by 2028 and will be evaluated for conversion to cleaner energy resources. The four units at the Monroe facility are expected to be retired by 2040. Generation from the retired facilities will be replaced or offset with a combination of renewables, energy waste reduction, demand response, and natural gas fueled generation, including the Blue Water Energy Center which will commence operations in 2022.

DTE Gas' capital investments over the 2022-2026 period are estimated at $3.1 billion, comprised of $1.5 billion for base infrastructure and $1.6 billion for gas main renewal, meter move out, and pipeline integrity programs.

DTE Electric and DTE Gas plan to seek regulatory approval for capital expenditures consistent with ratemaking treatment.

ENVIRONMENTAL MATTERS

The Registrants are subject to extensive environmental regulations, including those to address climate change. Additional costs may result as the effects of various substances on the environment are studied and governmental regulations are developed and implemented. Actual costs to comply could vary substantially. The Registrants expect to continue recovering environmental costs related to utility operations through rates charged to customers, as authorized by the MPSC.

Increased costs for energy produced from traditional coal-based sources due to recent, pending, and future regulatory initiatives could also increase the economic viability of energy produced from renewable, natural gas fueled generation, and/or nuclear sources, energy waste reduction initiatives, and the potential development of market-based trading of carbon instruments which could provide new business opportunities for DTE Energy's utility and non-utility segments. At the present time, it is not possible to quantify the financial impacts of these climate related regulatory initiatives on the Registrants or their customers.

See Items 1. and 2. Business and Properties and Note 18 to the Consolidated Financial Statements, "Commitments and Contingencies," for further discussion of Environmental Matters.

OUTLOOK

The next few years will be a period of rapid change for DTE Energy and for the energy industry. DTE Energy's strong utility base, combined with its integrated non-utility operations, position it well for long-term growth.

Looking forward, DTE Energy will focus on several areas that are expected to improve future performance:

•electric and gas customer satisfaction;

•electric distribution system reliability;

•new electric generation and decarbonization;

•gas distribution system renewal;

•rate competitiveness and affordability;

•regulatory stability and investment recovery for the electric and gas utilities;

•strategic investments in growth projects at DTE Vantage;

•employee engagement, health, safety and well-being, and diversity, equity, and inclusion;

•cost structure optimization across all business segments; and

•cash, capital, and liquidity to maintain or improve financial strength.

The separation of DT Midstream on July 1, 2021 will result in a reduction to DTE Energy's net income and cash flows in the near term. However, DTE Energy remains well-positioned for long-term growth and focused on the key objectives noted above. DTE Energy will continue to pursue opportunities to grow its businesses in a disciplined manner if it can secure opportunities that meet its strategic, financial, and risk criteria.

COVID-19 Pandemic

DTE Energy has been monitoring the COVID-19 pandemic and any related impacts to operating costs, customer demand, and the recoverability of assets in our business segments that could materially impact the Registrants' financial results.

As noted in Note 18 to the Consolidated Financial Statements, "Commitments and Contingencies," the pandemic has contributed to a shift in electric sales volumes from commercial and industrial customers to residential customers. DTE Energy expects this shift to continue in the near term as businesses maintain more remote operations. Other impacts from COVID-19 have related primarily to health and safety-related costs at the utilities and volumes at certain non-utility businesses, but these impacts have not been significant in 2021.

Please see detailed explanations of segment performance in the "Results of Operations" section below, including impacts from the COVID-19 pandemic where applicable.

DTE Energy will continue to monitor these impacts as well as any regulatory and legislative activities related to COVID-19. The Registrants cannot predict the ultimate impact of these factors to our Consolidated Financial Statements as future developments involving COVID-19 and related impacts on economic and operating conditions are highly uncertain. For further discussion of these uncertainties, refer to "Risk Factors" in Item 1A. of this Report.

RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations includes financial information prepared in accordance with GAAP, as well as the non-GAAP financial measures, Utility Margin and Non-utility Margin, discussed below, which DTE Energy uses as measures of its operational performance. Generally, a non-GAAP financial measure is a numerical measure of financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP.

DTE Energy uses Utility Margin and Non-utility Margin, non-GAAP financial measures, to assess its performance by reportable segment.

Utility Margin includes electric utility and gas utility Operating Revenues net of Fuel, purchased power, and gas expenses. The utilities’ fuel, purchased power, and natural gas supply are passed through to customers, and therefore, result in changes to the utilities’ revenues that are comparable to changes in such expenses. As such, DTE Energy believes Utility Margin provides a meaningful basis for evaluating the utilities’ operations across periods, as it excludes the revenue effect of fluctuations in these expenses. For the Electric segment, non-utility Operating Revenues are reported separately so that Utility Margin can be used to assess utility performance.

The Non-utility Margin relates to the DTE Vantage and Energy Trading segments. For the DTE Vantage segment, Non-utility Margin primarily includes Operating Revenues net of Fuel, purchased power, and gas expenses. Operating Revenues include sales of refined coal to third parties and the affiliated Electric utility, metallurgical coke and related by-products, petroleum coke, renewable natural gas and related credits, and electricity, as well as rental income and revenues from utility-type consulting, management, and operational services. For the Energy Trading segment, Non-utility Margin includes revenue and realized and unrealized gains and losses from physical and financial power and gas marketing, optimization, and trading activities, net of Purchased power and gas related to these activities. DTE Energy evaluates its operating performance of these non-utility businesses using the measure of Operating Revenues net of Fuel, purchased power, and gas expenses.


	2021		2020		2019
	(In millions)
Net Income (Loss) Attributable to DTE Energy by Segment
Electric	$	864	$	777	$	714
Gas	214		186		185
DTE Vantage	168		134		133
Energy Trading	(83)		36		49
Corporate and Other	(367)		(79)		(126)
Income From Continuing Operations Attributable to DTE Energy Company	796		1,054		955
Discontinued Operations	111		314		214
Net Income Attributable to DTE Energy Company	$	907	$	1,368	$	1,169

ELECTRIC

The Results of Operations discussion for DTE Electric is presented in a reduced disclosure format in accordance with General Instruction I (2) (a) of Form 10-K for wholly-owned subsidiaries.

The Electric segment consists principally of DTE Electric. Electric results and outlook are discussed below:


	2021		2020		2019
	(In millions)
Operating Revenues — Utility operations	$	5,809	$	5,506	$	5,224
Fuel and purchased power — utility	1,531		1,386		1,387
Utility Margin	4,278		4,120		3,837
Operating Revenues — Non-utility operations	12		14		5
Operation and maintenance	1,556		1,489		1,434
Depreciation and amortization	1,122		1,057		949
Taxes other than income	321		297		311
Asset (gains) losses and impairments, net	1		41		13
Operating Income	1,290		1,250		1,135
Other (Income) and Deductions	322		365		284
Income Tax Expense	104		108		137
Net Income Attributable to DTE Energy Company	$	864	$	777	$	714

See DTE Electric's Consolidated Statements of Operations in Item 8 of this Report for a complete view of its results. Differences between the Electric segment and DTE Electric's Consolidated Statements of Operations are primarily due to non-utility operations at DTE Sustainable Generation and the classification of certain benefit costs. Refer to Note 20 to the Consolidated Financial Statements, "Retirement Benefits and Trusteed Assets" for additional information.

Utility Margin increased $158 million in 2021 and $283 million in 2020. Revenues associated with certain mechanisms and surcharges are offset by related expenses elsewhere in the Registrants' Consolidated Statements of Operations.

The following table details changes in various Utility Margin components relative to the comparable prior period:


	2021		2020
	(In millions)
Implementation of new rates	$	71	$	215
Regulatory mechanism — EWR	61		18
Regulatory mechanism — RPS	57		19
Weather	14		8
Base sales / rate mix	13		52
Regulatory mechanism — TRM	6		(12)
Voluntary refunds(a)	(60)		(30)
Other regulatory mechanisms and other	(4)		13
Increase in Utility Margin	$	158	$	283

______________________________

(a)Variances reflect the $90 million voluntary refund recognized in 2021 for the incremental tree trim surge and the $30 million COVID-19 voluntary refund recognized in 2020. Refer to Note 9 to the Consolidated Financial Statements, "Regulatory Matters," for additional information regarding these refunds and the related regulatory liabilities.


	2021	2020	2019
	(In thousands of MWh)
DTE Electric Sales
Residential	16,386	16,315	15,066
Commercial	16,393	15,648	16,955
Industrial	8,487	8,446	9,826
Other	216	220	226
	41,482	40,629	42,073
Interconnection sales(a)	4,263	1,808	3,046
Total DTE Electric Sales	45,745	42,437	45,119

DTE Electric Deliveries
Retail and wholesale	41,482	40,629	42,073
Electric retail access, including self-generators(b)	4,357	3,746	4,550
Total DTE Electric Sales and Deliveries	45,839	44,375	46,623

(a)Represents power that is not distributed by DTE Electric.

(b)Represents deliveries for self-generators that have purchased power from alternative energy suppliers to supplement their power requirements.

DTE Electric sales volumes increased in 2021, primarily attributable to commercial customers which were impacted more significantly in 2020 by the COVID-19 pandemic and temporary shut-downs of certain commercial operations.

Operating Revenues — Non-utility operations decreased $2 million in 2021 and increased $9 million in 2020. The decrease in 2021 was primarily due to lower sales volumes at DTE Sustainable Generation. The increase in 2020 was due to renewable energy projects acquired in January 2020.

Operation and maintenance expense increased $67 million in 2021 and $55 million in 2020. The increase in 2021 was primarily due to higher EWR expense of $45 million, higher distribution operations expense of $42 million (primarily due to higher storm costs), higher corporate support costs of $21 million, higher legal and environmental expense of $15 million, and higher benefits expense of $13 million. These increases were partially offset by lower COVID-19 related expenses of $43 million, lower uncollectible expense of $26 million, and lower plant generation expense of $4 million.

The increase in 2020 was primarily due to COVID-19 related expenses of $50 million, higher benefits expense of $15 million, higher EWR expense of $11 million, higher RPS expenses of $9 million, and an $11 million adjustment in 2019 to defer expenses previously accrued for a new customer billing system. These increases were partially offset by lower plant generation expense of $25 million and lower distribution operations expense of $12 million.

Depreciation and amortization expense increased $65 million in 2021 and $108 million in 2020. In 2021, the increase was primarily due to a $64 million increase resulting from a higher depreciable base. In 2020, the increase was primarily due to a $108 million increase resulting from a higher depreciable base and change in depreciation rates effective May 2019 and a $10 million increase resulting from new non-utility assets at DTE Sustainable Generation, partially offset by a decrease of $11 million associated with the TRM.

Taxes other than income increased $24 million in 2021 and decreased $14 million in 2020. In 2021, the increase was primarily due to higher property taxes of $22 million as a result of an increase in tax base and a favorable property tax settlement in 2020. In 2020, the decrease was primarily due to lower property taxes of $9 million as a result of a property tax settlement, partially offset by an increase in tax base. The decrease in 2020 was also due to lower payroll taxes of $3 million, which was primarily attributable to employee retention credits recognized pursuant to the CARES Act.

Asset (gains) losses and impairments, net decreased $40 million in 2021 and increased $28 million in 2020. The decrease in 2021 was primarily due to lower activity in the current year compared to a $41 million write-off of capital expenditures related to incentive compensation in 2020. The increase in 2020 was primarily due to the $41 million write-off of capital expenditures, which were disallowed in the May 8, 2020 rate order from the MPSC, compared to losses of $13 million in 2019.

Other (Income) and Deductions decreased $43 million in 2021 and increased $81 million in 2020. The decrease in 2021 was primarily due to lower contributions to the DTE Energy Foundation and other not-for-profit organizations of $28 million, a change in rabbi trust investment earnings (net gain of $7 million in 2021 compared to a net loss of $3 million in 2020), and lower non-operating retirement benefits expense of $4 million. The increase in 2020 was primarily due to a change in rabbi trust investment earnings (net loss of $3 million in 2020 compared to a gain of $37 million in 2019), $30 million of contributions to the DTE Energy Foundation and other not-for-profit organizations, and $22 million of higher interest expense. These increases were partially offset by a 2019 accrual of $6 million associated with an environmental-related settlement.

Income Tax Expense decreased $4 million in 2021 and $29 million in 2020. The decrease in both 2021 and 2020 was primarily due to higher amortization of the TCJA regulatory liability and higher production tax credits, partially offset by higher earnings.

Outlook— DTE Electric will continue to move forward in its efforts to achieve operational excellence, sustain strong cash flows, and earn its authorized return on equity. DTE Electric expects that planned significant capital investments will result in earnings growth. DTE Electric will maintain a strong focus on customers by increasing reliability and satisfaction while keeping customer rate increases affordable. Looking forward, additional factors may impact earnings such as weather, the outcome of regulatory proceedings, benefit plan design changes, investment returns and changes in discount rate assumptions in benefit plans and health care costs, uncertainty of legislative or regulatory actions regarding climate change, and effects of energy waste reduction programs.

On March 26, 2021, DTE Electric filed an application requesting a financing order approving the securitization financing of $184 million of qualified costs related to the net book value of the River Rouge generation plant and tree trimming surge program costs. The filing requested recovery of these qualifying costs from DTE Electric's customers. A final MPSC financing order was issued on June 23, 2021 authorizing DTE Electric to proceed with the issuance of securitization bonds for qualified costs of up to $236 million, increased for the inclusion of deferred taxes. The financing order further authorized customer charges for the timely recovery of the debt service costs on the securitization bonds and other ongoing qualified costs. Securitization financing is expected to occur in March 2022.

DTE Electric filed a rate case with the MPSC on January 21, 2022 requesting an increase in base rates of $388 million based on a projected twelve-month period ending October 31, 2023. The requested increase in base rates is primarily due to an increase in net plant resulting from generation and distribution investments, as well as related increases to depreciation and property tax expenses. The rate filing also requests an increase in return on equity from 9.9% to 10.25% and includes projected changes in sales. A final MPSC order in this case is expected in November 2022. Refer to Note 9 to the Consolidated Financial Statements, "Regulatory Matters", for additional information.

GAS

The Gas segment consists principally of DTE Gas. Gas results and outlook are discussed below:


	2021		2020		2019
	(In millions)
Operating Revenues — Utility operations	$	1,553	$	1,414	$	1,482
Cost of gas — utility	422		356		427
Utility Margin	1,131		1,058		1,055
Operation and maintenance	521		496		515
Depreciation and amortization	177		157		144
Taxes other than income	93		84		80
Asset (gains) losses and impairments, net	4		14		—
Operating Income	336		307		316
Other (Income) and Deductions	84		73		69
Income Tax Expense	38		48		62
Net Income Attributable to DTE Energy Company	$	214	$	186	$	185

Utility Margin increased $73 million in 2021 and $3 million in 2020. Revenues associated with certain mechanisms and surcharges are offset by related expenses elsewhere in DTE Energy's Consolidated Statements of Operations.

The following table details changes in various Utility Margin components relative to the comparable prior period:


	2021		2020
	(In millions)
Implementation of new rates	$	75	$	32
Home protection program	6		4
Regulatory mechanism — EWR	3		9
TCJA rate reduction liability	—		(9)
Weather	(7)		(46)
Infrastructure recovery mechanism	(15)		17


Other regulatory mechanisms and other	11		(4)
Increase in Utility Margin	$	73	$	3


	2021	2020	2019
	(In Bcf)
Gas Markets
Gas sales	128	126	139
End-user transportation	165	180	185
	293	306	324
Intermediate transportation	488	477	497
Total Gas sales	781	783	821

The change in sales in 2021 was primarily due to a decrease in End-user transportation volumes, including lower generation needs at certain industrial customers. The decrease in sales in 2020 was primarily due to more unfavorable weather compared to 2019. Intermediate transportation volumes fluctuate period to period based on available market opportunities.

Operation and maintenance expense increased $25 million in 2021 and decreased $19 million in 2020. The increase in 2021 was primarily due to higher gas operations expense of $41 million, partially offset by lower uncollectible expense of $15 million. The decrease in 2020 was primarily due to lower gas operations expense of $36 million, partially offset by higher EWR expense of $7 million, higher corporate overhead costs of $3 million, and a $6 million adjustment in 2019 to defer expenses previously accrued for a new customer billing system.

Depreciation and amortization expense increased $20 million in 2021 and $13 million in 2020. The increase in both periods was primarily due to a higher depreciable base and change in depreciation rates effective October 2020.

Taxes other than income increased$9 million in 2021 and $4 million in 2020. The 2021 increase was primarily due to higher property taxes of $6 million and employee retention credits of $3 million recognized in 2020 pursuant to the CARES Act. The 2020 increase was primarily due to higher property taxes of $8 million, partially offset by the employee retention credits of $3 million.

Asset (gains) losses and impairments, net decreased$10 million in 2021 and increased $14 million in 2020. The decrease in 2021 was due to lower activity in the current year, including $4 million of capital write-offs, compared to a $14 million write-off of capital expenditures related to incentive compensation in 2020. The increase in 2020 was primarily due to the $14 million write-off of capital expenditures, which were disallowed in the July 17, 2020 rate case settlement.

Other (Income) and Deductions increased $11 million in 2021 and $4 million in 2020. The increase in 2021 was primarily due to contributions to the DTE Energy Foundation and other not-for-profit organizations. The increase in 2020 was primarily due to lower investment earnings of $2 million and higher interest expense of $2 million.

Income Tax Expense decreased $10 million in 2021 and $14 million in 2020. The decrease in 2021 was primarily due to higher amortization of the TCJA regulatory liability, partially offset by higher earnings. The decrease in 2020 was primarily due to higher amortization of the TCJA regulatory liability and lower earnings.

Outlook — DTE Gas will continue to move forward in its efforts to achieve operational excellence, sustain strong cash flows, and earn its authorized return on equity. DTE Gas expects that planned significant infrastructure capital investments will result in earnings growth. Looking forward, additional factors may impact earnings such as weather, the outcome of regulatory proceedings, benefit plan design changes, and investment returns and changes in discount rate assumptions in benefit plans and health care costs. DTE Gas expects to continue its efforts to improve productivity and decrease costs while improving customer satisfaction with consideration of customer rate affordability.

DTE VANTAGE

The DTE Vantage segment is comprised primarily of projects that deliver energy and utility-type products and services to industrial, commercial, and institutional customers, produce reduced emissions fuel, and sell electricity and pipeline-quality gas from renewable energy projects. DTE Vantage results and outlook are discussed below:


	2021		2020		2019
	(In millions)
Operating Revenues — Non-utility operations	$	1,482	$	1,224	$	1,560
Fuel, purchased power, and gas — non-utility	1,086		901		1,220
Non-utility Margin	396		323		340
Operation and maintenance	301		294		328
Depreciation and amortization	71		72		69
Taxes other than income	11		10		11
Asset (gains) losses and impairments, net	28		(18)		1
Operating Loss	(15)		(35)		(69)
Other (Income) and Deductions	(142)		(120)		(126)
Income Taxes
Expense	37		26		20
Production Tax Credits	(68)		(66)		(83)
	(31)		(40)		(63)
Net Income	158		125		120
Less: Net Loss Attributable to Noncontrolling Interests	(10)		(9)		(13)
Net Income Attributable to DTE Energy Company	$	168	$	134	$	133

Operating Revenues — Non-utility operations increased $258 million in 2021 and decreased $336 million in 2020. The changes are due to the following:


	2021
	(In millions)
Higher production partially offset by the sale of membership interests in the REF business	$	175
Higher demand partially offset by lower prices in the Steel business	104
New projects in the Renewables business	42
Recognition of revenues from termination of a contract in the Steel business	17
Higher volumes partially offset by a terminated contract in the On-site business	15
Closed projects in the Renewables business	(7)
Site closures in the REF business	(88)
	$	258


	2020
	(In millions)
Sale of membership interests and project terminations in the REF business	$	(234)
Lower demand in the Steel business	(142)
Expired contract in the Renewables business	(21)
New projects and higher production in the Renewables business	30
New projects in the On-site business	31
	$	(336)

Non-utility Margin increased $73 million in 2021 and decreased $17 million in 2020. The changes are due to the following:


	2021
	(In millions)
New projects in the Renewables business	$	42
Higher demand partially offset by lower prices in the Steel business	18
Recognition of revenues from termination of a contract in the Steel business	17
Closed projects in the Renewables business	(6)
Other	2
	$	73


	2020
	(In millions)
Lower demand in the Steel business	$	(50)
Expired contracts in the Renewables business	(18)
New projects in the On-site business	22
New projects and higher production in the Renewables business	27
Other	2
	$	(17)

Operation and maintenance expense increased $7 million in 2021 and decreased $34 million in 2020. The 2021 increase was primarily due to higher production and new projects, partially offset by closed projects. The 2020 decrease was primarily due to $46 million of lower maintenance spending associated with lower production and terminated contracts, partially offset by $12 million of costs associated with new projects.

Asset (gains) losses and impairments, net changed by $46 million in 2021 from the net gain of $18 million in 2020, and changed by $19 million in 2020 from the net loss of $1 million in 2019. The change in 2021 was primarily due to an asset impairment of $27 million recorded in the Steel business for the closure of a pulverized coal facility and $17 million of activity in 2020. Refer to Note 4 to the Consolidated Financial Statements, "Dispositions and Impairments," for additional information regarding the $27 million asset impairment.

The change in 2020 was primarily due to to $11 million in the Steel business for an asset sale and write-off of environmental liabilities upon completing site remediation, $4 million for the sale of assets in the On-site business, and $2 million for the divestiture of a project in the Renewables business.

Other (Income) and Deductions increased $22 million in 2021 and decreased $6 million in 2020. The 2021 increase was primarily due to a $22 million settlement charge associated with a qualified pension plan in the Steel business recorded in 2020. The 2021 increase also included higher production in the REF business, offset by profit recognized from the sale of membership interests recorded in 2020.

The 2020 decrease was primarily due to the $22 million settlement charge in the Steel business and a change in insurance proceeds in the REF and Renewables businesses ($7 million received in 2019). This decrease was partially offset by $12 million of higher interest income associated with lease transactions in the On-site business and $11 million of profit recognized from the sale of membership interests in the REF business.

Income Taxes — Production Tax Credits increased by $2 million in 2021 and decreased by $17 million in 2020. The increase in 2021 was primarily due to higher production partially offset by the sale of membership interests in the REF business. The decrease in 2020 was primarily due to the sale of membership interests in the REF business.

Net Loss Attributable to Noncontrolling Interests increased by $1 million in 2021 and decreased by $4 million in 2020. The 2020 decrease was primarily due to lower production in the REF business.

Outlook — DTE Vantage will continue to leverage its extensive energy-related operating experience and project management capability to develop additional energy and renewable natural gas projects to serve energy intensive industrial customers. Beginning in 2022, DTE Vantage expects decreases in Other Income and Production Tax Credits that will cause a corresponding reduction to Net Income as REF facilities will have ceased operations. Over the long-term, DTE Vantage expects that growth in renewable energy and industrial energy services projects will offset the decreases to Net Income caused by the REF phase-out. DTE Vantage is also exploring decarbonization opportunities relating to carbon capture and storage projects.

ENERGY TRADING

Energy Trading focuses on physical and financial power, natural gas and environmental marketing and trading, structured transactions, enhancement of returns from its asset portfolio, and optimization of contracted natural gas pipeline transportation and storage positions. Energy Trading also provides natural gas, power, environmental and related services, which may include the management of associated storage and transportation contracts on the customers' behalf and the supply or purchase of ~~renewable energy credits~~environmental attributes to various customers. Energy Trading results and outlook are discussed below:


	2021		2020		2019
	(In millions)
Operating Revenues — Non-utility operations	$	6,831	$	3,863	$	4,610
Purchased power and gas — non-utility	6,825		3,725		4,455
Non-utility Margin	6		138		155
Operation and maintenance	81		77		75
Depreciation and amortization	6		5		6
Taxes other than income	5		4		4
Operating Income (Loss)	(86)		52		70
Other (Income) and Deductions	24		4		4
Income Tax Expense (Benefit)	(27)		12		17
Net Income (Loss) Attributable to DTE Energy Company	$	(83)	$	36	$	49

2017 2016 2015
(In millions)
Operating Revenues — Non-utility operations $ 4,277
$ 2,575
$ 2,459
Purchased power and gas — non-utility 4,077
2,552
2,417
Non-utility Margin 200
23
42
Operation and maintenance 68
63
67
Depreciation and amortization 5
3
2
Taxes other than income 4
2
4
Operating Income (Loss) 123
(45 ) (31 )
Other (Income) and Deductions 2
29
6
Income Tax Expense (Benefit) 49
(29 ) (15 )
Net Income (Loss) Attributable to DTE Energy Company $ 72
$ (45 ) $ (22 )

Operating Revenues — Non-utility operations and Purchased power and gas — non-utility ~~were impacted by an increase~~ increased in ~~both volumes and~~2021 primarily due to significantly higher gas prices ~~for the year ended December 31, 2017, primarily~~ in the gas structured ~~strategy. For 2016, these line items were impacted by an increase~~and gas transportation strategies and decreased in ~~volumes, partially offset by a decrease in~~2020 primarily due to lower gas prices, primarily in the gas structured strategy.

Non-utility Margin ~~increased $177~~ decreased by $132 million in ~~2017~~2021 and ~~decreased $19~~$17 million in ~~2016.~~2020. The change in both periods was primarily due to timing from the unrealized and realized margins presented in the following tables:

2017
(In millions)
Unrealized Margins^(a)

Favorable results, primarily in gas structured and gas full requirements strategies^(b)
$ 113
Unfavorable results, primarily in power and gas trading and power full requirements strategies (26 )
$ 87
Realized Margins^(a)

Favorable results, primarily in gas structured, environmental trading and gas storage strategies^(c)
$ 103
Unfavorable results, primarily in the power full requirements strategy (13 )
$ 90
Increase in Non-utility Margin $ 177


~~(a)~~	~~Natural~~2021
	(In millions)
Unrealized Margins(a)
Favorable results, primarily in gas and power trading strategies	$	36
Unfavorable results, primarily in gas structured, ~~transactions typically involve a physical purchase or sale of natural~~environmental trading, and gas storage strategies (b)	(215)
	(179)
Realized Margins(a)
Favorable results, primarily in ~~the future and/or natural gas basis financial instruments which are derivatives and a related non-derivative pipeline transportation contract. These~~ gas structured ~~transactions can result~~and gas transportation strategies(c)	126
Unfavorable results, primarily in ~~significant earnings volatility as the derivative components are marked-to-market without revaluing the related non-derivative contracts.~~power ERCOT trading and power full requirements strategies	(79)
	47
Decrease in Non-utility Margin	$	(132)

2018 2019 2020 2021 2022
(In millions)
Estimated amortization expense $ 26
$ 26
$ 25
$ 25
$ 25

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

DTE Energy amortizes ~~customer relationship and~~ contract intangible assets on a straight-line basis over the expected period of benefit. DTE Energy's Intangible assets amortization expense was ~~$29 million in 2017,~~ $16 million in ~~2016,~~2021 and ~~$11~~2020 and $9 million in ~~2015.~~2019.

Cloud Computing Arrangements

Effective upon the adoption of ASU No. 2018-15 in January 2020, the Registrants capitalize implementation costs incurred in a cloud computing arrangement that is a service contract consistent with capitalized implementation costs incurred to develop or obtain internal-use software. Capitalized costs are recorded in Other noncurrent assets on the Consolidated Statements of Financial Position and amortization of the costs is reflected in Operation and maintenance within the Consolidated Statements of Operations. Costs are amortized on a straight-line basis over the life of the contract. Contracts primarily involve the implementation or upgrade of cloud-based solutions for generation and distribution operations and customer service support.

Capitalized cloud computing costs were $16 million for DTE Energy, including $12 million for DTE Electric, at December 31, 2021. Amortization of these costs was not material for the year ended December 31, 2021. There were no cloud computing costs capitalized in Other noncurrent assets at December 31, 2020.

Excise and Sales Taxes

The Registrants record the billing of excise and sales taxes as a receivable with an offsetting payable to the applicable taxing authority, with no net impact on the Registrants’ Consolidated Statements of Operations.

Deferred Debt Costs

The costs related to the issuance of long-term debt are deferred and amortized over the life of each debt issue. The deferred amounts are included as a direct deduction from the carrying amount of each debt issue in Mortgage bonds, notes, and other and Junior subordinated debentures on DTE Energy's Consolidated Statements of Financial Position and in Mortgage bonds, notes, and other on DTE Electric's Consolidated Statements of Financial Position. In accordance with MPSC regulations applicable to DTE Energy’s electric and gas utilities, the unamortized discount, premium, and expense related to utility debt redeemed with a refinancing are amortized over the life of the replacement issue. ~~Discount, premium,~~Discounts, premiums, and expense on early redemptions of debt associated with DTE Energy's non-utility operations are charged to earnings.

Investments in Debt and Equity Securities

The Registrants generally ~~classify~~record investments in debt and equity securities ~~as either trading or available-for-sale and have recorded such investments~~ at market value with unrealized gains or losses included in ~~earnings or in Other comprehensive income or loss, respectively.~~earnings. Changes in the fair value of Fermi 2 nuclear decommissioning investments are recorded as adjustments to Regulatory assets or liabilities, due to a recovery mechanism from customers. The Registrants' equity investments are reviewed for impairment each reporting period. If the assessment indicates that ~~the~~an impairment ~~is other than temporary,~~exists, a loss is recognized resulting in the equity investment being written down to its estimated fair value. See Note 12 of the Consolidated Financial Statements, "Fair Value."

~~Government Grants~~

Grants are recognized when there is reasonable assurance that the grant will be received and that any conditions associated with the grant will be met. When grants are received related to Property, plant, and equipment, the Registrants reduce the cost of the assets on their Consolidated Statements of Financial Position, resulting in lower depreciation expense over the life of the associated asset. Grants received related to expenses are reflected as a reduction of the associated expense in the period in which the expense is incurred.

DTE Energy Foundation

DTE Energy's ~~charitable~~ contributions to the DTE Energy Foundation were ~~$43 million, $26~~$25 million and ~~$12~~$20 million for the years ended December 31, ~~2017, 2016,~~2021 and ~~2015,~~December 31, 2020, respectively. There were no charitable contributions made to the DTE Energy Foundation for the year ended December 31, 2019. The DTE Energy Foundation is a non-consolidated not-for-profit private foundation, the purpose of which is to contribute to and assist charitable organizations.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

Other Accounting Policies

See the following notes for other accounting policies impacting the Registrants’ Consolidated Financial Statements:



Note						Title
85						Revenue
6						Property, Plant, and Equipment
8						Asset Retirement Obligations
9						Regulatory Matters
10						Income Taxes
12						Fair Value
13						Financial and Other Derivative Instruments
2017						Leases
20						Retirement Benefits and Trusteed Assets
21						Stock-Based Compensation

NOTE 3 — NEW ACCOUNTING PRONOUNCEMENTS

Recently Adopted Pronouncements

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes. The amendments in this update simplify the accounting for income taxes by removing certain exceptions, and clarifying certain requirements regarding franchise taxes, goodwill, consolidated tax expenses, and annual effective tax rate calculations. The Registrants adopted the ASU effective January 1, 2021 using the modified retrospective and prospective approaches, where applicable. The adoption of the ASU did not have a significant impact on the Registrants' Consolidated Financial Statements.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting, as amended. The amendments in this update provide optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The optional relief is temporary and cannot be applied to contract modifications and hedging relationships entered into or evaluated after December 31, 2022. The Registrants adopted the ASU and elected the optional expedients for contract modifications prospectively. The adoption of the ASU did not have a significant impact on the registrant's Consolidated Financial Statements.

In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. The amendments in this update simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts indexed to and potentially settled in an entity's own equity. The Registrants adopted the ASU effective January 1, 2021 using the modified retrospective approach. The adoption of the ASU did not have a significant impact on the Registrants' Consolidated Financial Statements.

Recently Issued Pronouncements

In July 2021, the FASB issued ASU No. 2021-05, Leases (Topic 842): Lessors – Certain Leases with Variable Lease Payments. The amendments in this update modify lease classification requirements for lessors, providing that lease contracts with variable lease payments that do not depend on a reference index or a rate should be classified as operating leases if they would have been classified as a sales-type or direct financing lease and resulted in the recognition of a selling loss at lease commencement. The ASU is effective for the Registrants for fiscal years beginning after December 15, 2021, and interim periods therein. The Registrants will apply the guidance prospectively. The Registrants are currently assessing the impact of this standard on their Consolidated Financial Statements.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

~~NOTE 3 — NEW ACCOUNTING PRONOUNCEMENTS~~

~~Recently Issued Pronouncements~~

In ~~May 2014, the~~October 2021, The FASB issued ASU No. ~~2014-09,~~ ~~Revenue~~2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ~~(Topic 606),~~ ~~as amended~~. The objectives of this ASU are to improve upon revenue recognition requirements by providing a single comprehensive model to determine the measurement of revenue and timing of recognition. The core principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. This ASU also requires expanded qualitative and quantitative disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. The standard is to be applied retrospectively. The Registrants will adopt the standard effective January 1, 2018 using the modified retrospective approach. The Registrants have substantially completed the assessment of the amended ASU's impact, on their Consolidated Financial Statements. The ASU will not significantly affect the Registrants' financial position or results of operations. The Registrants will continue to monitor the impact of the ASU on existing revenue recognition internal controls, policies, and procedures. Industry-related issues being vetted through the final stages of the American Institute of Certified Public Accountants' Power and Utilities Industry Task Force process, which are not expected to have a significant impact on the Registrants, will continue to be monitored. The ASU will result in additional disclosures for revenue compared to the current guidance. Accordingly, the Registrants are evaluating information that would be useful for users of the Consolidated Financial Statements.

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~Leases (Topic 842),~~ ~~a replacement of~~ ~~Leases (Topic 840)~~. This guidance requires a lessee to account for leases as finance or operating leases, and include disclosure of key information about leasing arrangements. Both types of leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability on its balance sheet, with differing methodology for income statement recognition. For lessors, the standard modifies the classification criteria and the accounting for sales-type and direct financing leases. Entities will classify leases to determine how to recognize lease-related revenue and expense. This standard is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. The Registrants do not plan to early adopt the standard. A modified retrospective approach is required for leases existing or entered into after the beginning of the earliest comparative period in the Consolidated Financial Statements, with certain practical expedients permitted. The Registrants expect an increase in assets and liabilities, as well as additional disclosures, however, they are currently assessing the impact of this ASU on their Consolidated Financial Statements. This assessment includes monitoring unresolved utility industry implementation guidance. The Registrants have conducted outreach activities across their lines of business and have begun implementation of a third-party software tool that will assist with the initial adoption and ongoing compliance.

~~In June 2016, the FASB issued ASU No. 2016-13,~~ ~~Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~. The amendments in this update ~~replace~~require contract assets and contract liabilities acquired in a business combination to be recognized and measured by the ~~incurred loss impairment methodology~~acquirer on the acquisition date in ~~current generally accepted accounting principles~~accordance with ~~a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Entities will apply~~ASC 606, Revenue from Contracts with Customers. Historically, such amounts were recognized by the ~~new guidance as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period~~acquirer at fair value in ~~which the guidance is adopted.~~acquisition accounting. The ASU is effective for the Registrants for fiscal years beginning after December 15, ~~2019,~~2022, and interim periods therein. Early adoption is permitted. The Registrants ~~are currently assessing~~will apply the guidance prospectively to acquisitions occurring on or after the effective date.

NOTE 4 — DISPOSITIONS AND IMPAIRMENTS

Separation of DT Midstream

On October 27, 2020, DTE Energy announced that its Board of Directors had authorized management to pursue a plan to spin-off its natural gas pipeline, storage and gathering non-utility business. On July 1, 2021, DTE Energy completed the separation of the new company, DT Midstream, through the distribution of 96,732,466 shares of DT Midstream common stock to DTE Energy shareholders. The distribution reflected 100% of the outstanding common stock of DT Midstream as of 5:00 p.m. ET on June 18, 2021 (the “record date”). DTE Energy shareholders received one share of DT Midstream common stock for every two shares of DTE Energy common stock held at the close of business on the record date, with certain shareholders receiving cash in lieu of fractional shares of DT Midstream common stock. For U.S. federal income tax purposes, DTE Energy’s U.S. shareholders generally should not recognize gain or loss as a result of the distribution of DT Midstream stock, except with respect to cash received in lieu of fractional shares.

In June 2021, in order to facilitate the separation and settle intercompany balances with DTE Energy, DT Midstream issued long-term debt in the form of $2.1 billion senior notes and a $1.0 billion term loan. Using the debt proceeds, net of discount and issuance costs of $53 million, DT Midstream made the following cash payments:

•Settled Short-term borrowings due to DTE Energy as of June 30, 2021 of $2,537 million

•Settled affiliate Accounts receivable due from DTE Energy and affiliate Accounts payable due to DTE Energy as of June 30, 2021 for net cash paid to DTE Energy of $9 million

•Provided a one-time special dividend to DTE Energy of $501 million

These payments eliminated in consolidation and had no direct impact ~~of this standard~~ on ~~their~~DTE Energy’s Consolidated Financial ~~Statements.~~

~~In March 2017,~~Statements of Financial Position. During the ~~FASB issued ASU No. 2017-07,~~ ~~Compensation~~ — ~~Retirement Benefits (Topic 715): Improving~~third quarter 2021, DTE Energy used the ~~Presentation~~proceeds received from DT Midstream to optionally redeem $2.6 billion of ~~Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.~~ The amendments in this update require that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are requiredlong-term debt. Refer to be presented in the income statement separately from the service cost component and outside income from operations. The amendments in this update also allow only the service cost component to be eligible for capitalization when applicable. The standard will be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. The ASU is effective for the Registrants for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. The Registrants will adopt the standard effective January 1, 2018. The components of net periodic benefit costs (credits) for pension benefits and other postretirement benefits are disclosed in Note 2010 to the Consolidated Financial Statements, ~~"Retirement Benefits and Trusteed Assets." The ASU will not have a significant impact~~“Long-term Debt,” for additional information.

Continuing Involvement

Following the separation on July 1, 2021, DT Midstream became an independent public company listed under the symbol “DTM” on the ~~Registrants' Consolidated Financial Statements.~~New York Stock Exchange (NYSE) and DTE Energy no longer retains any ownership in DT Midstream. In order to govern the ongoing relationships between DT Midstream and DTE Energy after the separation and to facilitate an orderly transition, the parties entered into a series of agreements including the following:

•Separation and Distribution Agreement – sets forth the principal actions to be taken in connection with the separation, including the transfer of assets and assumption of liabilities, among others, and sets forth other agreements governing aspects of the relationship between DTE Energy and DT Midstream

•Transition Services Agreement – allows for DTE Energy to provide DT Midstream with specified services for a limited time and no longer than 24 months following the separation, with related costs to be paid by DT Midstream. Services include support for gas operations, information technology, accounting, tax, legal, human resources, and various other administrative services

•Tax Matters Agreement – governs the respective rights, responsibilities and obligations of DTE Energy and DT Midstream after the separation with respect to all tax matters

•Employee Matters Agreement – addresses certain employment, compensation and benefits matters, including the allocation and treatment of certain assets and liabilities relating to DT Midstream employees

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

~~In February 2018, the FASB issued ASU No. 2018-02,~~ ~~Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income~~. The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA. The amendments in this update also require entities to disclose their accounting policy for releasing income tax effects from accumulated other comprehensive income. The ASU is effective for the Registrants for fiscal years beginning after December 15, 2018, and interim periods therein. Early adoption is permitted. The Registrants are currently assessing the impact of this standard on their Consolidated Financial Statements.

~~NOTE 4 — ACQUISITIONS AND EXIT ACTIVITIES~~

~~Gas Storage and Pipelines Acquisition~~

Effective October 1, 2016, DTE Energy closed on the purchase of midstream natural gas assets in support of the strategy to continue to grow and earn competitive returns for shareholders. DTE Energy purchased 100% of AGS, located in Pennsylvania and West Virginia, and 40% of SGG, located in West Virginia, from M3 Midstream. In addition, DTE Energy ~~purchased 15% of SGG from Vega Energy Partners, resulting in 55% total ownership of SGG by DTE Energy.~~

~~Consideration transferred for~~and its subsidiaries have various commercial agreements that are continuing after the entities acquired was approximately $1.2 billion paid in cash and the assumption of SGG debt of $204 million. The $204 million of debt was comprised of DTE Energy's 55% interest in SGG of $112 million and 45% related to noncontrolling interest partners of $92 million. The acquisition was financed through the issuance of Equity Units and Senior Notes.separation. These ~~entities are part of DTE Energy's Gas Storage and Pipelines segment which owns and manages a network of natural gas~~agreements include certain pipeline, gathering, ~~transmission,~~ and storage ~~facilities servicing the Midwest, Ontario,~~services and ~~Northeast markets. SGG has been deemed to be a VIE,~~operating and ~~DTE Energy is the primary beneficiary. Thus, SGG's assets~~maintenance agreements, and ~~liabilities~~ are ~~included in DTE Energy's Consolidated Statements of Financial Position. See Note 1~~not considered material to the Consolidated Financial Statements.

Discontinued Operations

The table below reflects the financial results of DT Midstream that have been reclassified from continuing operations and included in discontinued operations within the Consolidated Statements ~~"Organization~~of Operations. These results include the impact of tax-related adjustments and ~~Basis of Presentation," for more information.~~

~~DTE Energy applied purchase accounting~~all transaction costs related to the ~~acquired entities. The excess purchase price over~~separation. General corporate overhead costs have been excluded and no portion of corporate interest costs were allocated to discontinued operations.


	Year Ended December 31,
	2021		2020		2019

Operating Revenues — Non-utility operations	$	405	$	754	$	501

Operating Expenses
Cost of gas and other — non-utility	15		21		18
Operation and maintenance(a)	123		138		103
Depreciation and amortization	82		151		94
Taxes other than income	13		15		8
Asset (gains) losses and impairments, net	17		(2)		1
	250		323		224
Operating Income	155		431		277

Other (Income) and Deductions
Interest expense	50		113		73
Interest income	(4)		(9)		(8)
Other income	(62)		(129)		(100)
Other expenses	—		—		1
	(16)		(25)		(34)
Income from Discontinued Operations Before Income Taxes	171		456		311

Income Tax Expense	54		130		81

Net Income from Discontinued Operations, Net of Taxes	117		326		230

Less: Net Income Attributable to Noncontrolling Interests	6		12		16

Net Income from Discontinued Operations	$	111	$	314	$	214

(a)Includes separation transaction costs of $59 million and $8 million for the ~~fair value of net assets acquired was classified as goodwill. September 30, 2017 marked the expiration of the one-year period from the acquisition to revise the fair value of assets acquired~~years ended December 31, 2021 and ~~liabilities assumed. As a result, the purchase~~2020, respectively, for various legal, accounting adjustments through September 30, 2017 contributed approximately $7 million of additional goodwill. The factors contributing to the recognition of goodwill were based on various strategic benefits that are expected to be realized from the AGS and SGG acquisition. The acquisition provides DTE Energy with a platform for midstream growth and access to further investment opportunities in the Appalachian basin, an additional connection to the NEXUS Pipeline which should drive incremental volumes on the NEXUS Pipeline, and a new set of producer relationships that may lead to more partnering opportunities. The goodwill is expected to be deductible for income tax purposes.other professional services fees.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

The ~~final allocation of~~table below reflects the ~~purchase price was based on estimated fair values of the AGS and SGG~~major assets ~~acquired~~ and liabilities ~~assumed at the date of acquisition, October 1, 2016. The components of the final purchase price allocation, inclusive of purchase accounting adjustments, are~~that were transferred to DT Midstream and presented as ~~follows:~~

(In millions)
Assets
Cash $ 83
Accounts receivable 24
Inventory 6
Property, plant, and equipment, net 719
Goodwill 275
Customer relationship intangibles 770
Other current assets 1
$ 1,878
Liabilities
Accounts payable $ 19
Other current liabilities 11
Long-term debt 204
Other long-term liabilities 20
$ 254
Less: Noncontrolling interest 392
Total cash consideration $ 1,232

The intangible assets recorded as a result of the acquisition pertain to existing customer relationships, which were valued at approximately $770 million as of the acquisition date. The fair value of the intangible assets acquired was estimated by applying the income approach. The income approach was based upon discounted projected future cash flows attributable to the existing contracts and agreements. The fair value measurement was based on significant unobservable inputs, including management estimates and assumptions, and thus represents a Level 3 measurement, pursuant to the applicable accounting guidance. Key estimates and inputs included revenue and expense projections and discount rates based on the risks associated with the entities. The intangible assets are amortized on a straight-line basis over a period of 40 years, which is based on the number of years the assets are expected to economically contribute to the business. The expected economic benefit incorporates existing customer contracts with a weighted-average amortization life of 10 years and expected renewal rates, based on the estimated volume and production lives of gas resourcesdiscontinued operations in ~~the region.~~

~~The fair value of the noncontrolling interest in the table above was derived based on the purchase price DTE Energy paid for the 55% interest in SGG.~~

DTE Energy evaluated pre-acquisition contingencies relating to the purchase that existed as of the acquisition date. Based on the evaluation, DTE Energy determined that $30 million of certain pre-acquisition contingencies, related to repairing existing rights-of-way, were probable in nature and estimable as of the acquisition date. Accordingly, DTE Energy recorded its best estimates for these contingencies as part of purchase accounting, which are included in the Other current and long-term liabilities in the purchase price allocation table above.

DTE Energy incurred $15 million of direct transaction costs for the year ended December 31, 2016. These costs were primarily related to advisory fees and included in Operation and maintenance in DTE Energy's 2016 Consolidated Statements of Operations.

DTE Energy's 2016 Consolidated Statements of Operations included Operating Revenues — Non-utility operations of $39 million and Net Income of $4 million associated with the acquired entities for the three-month period following the acquisition date, excluding the $15 million transaction costs described above. The pro forma financial information was not presented for DTE Energy because the effects of the acquisition were not material to the Consolidated Statements of ~~Operations.~~Financial Position as of December 31, 2020.


	December 31, 2020
	(In millions)
Total Assets of Discontinued Operations
Cash	$	42
Accounts receivable	126
Inventories	8
Other	44
Current assets of DT Midstream	220
Less: Previously affiliated amounts eliminated at DTE Energy	3
Current assets of discontinued operations for DTE Energy	217

Investments in equity method investees	1,691
Net property, plant, and equipment	3,470
Goodwill	473
Intangible assets	2,140
Notes receivable	19
Operating lease right-of-use assets	45
Other	21
Noncurrent assets of discontinued operations for DTE Energy	7,859
Total Assets of Discontinued Operations for DTE Energy	$	8,076

Total Liabilities of Discontinued Operations
Accounts payable	$	39
Operating lease liabilities	17
Short-term borrowings due to DTE Energy	2,913
Other	53
Current liabilities of DT Midstream	3,022
Less: Previously affiliated amounts eliminated at DTE Energy	2,923
Current liabilities of discontinued operations for DTE Energy	99

Deferred income taxes	753
Asset retirement obligations	10
Operating lease liabilities	28
Other	45
Noncurrent liabilities of discontinued operations for DTE Energy	836
Total Liabilities of Discontinued Operations for DTE Energy	$	935

There were no assets or liabilities from discontinued operations as of December 31, 2021. DT Midstream had net assets of $4.0 billion that separated on July 1, 2021 that resulted in a reduction to DTE Energy's equity. Refer to the Separation of DT Midstream line within DTE Energy's Consolidated Statements of Changes in Equity for further details.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

The following table is a summary of significant non-cash items, capital expenditures, and significant financing activities of discontinued operations included in DTE Energy's Consolidated Statements of Cash Flows:

~~Exit Activities~~


	Year Ended December 31,
	2021		2020		2019
	(In millions)
Operating Activities
Depreciation and amortization	$	82	$	151	$	94
Deferred income taxes	53		125		78
Equity earnings of equity method investees	(59)		(106)		(97)
Asset (gains) losses and impairments, net	19		(2)		1
Investing Activities
Plant and equipment expenditures — non-utility	$	(60)	$	(517)	$	(214)
Acquisitions related to business combinations, net of cash acquired	—		—		(2,296)
Financing Activities
Purchase of noncontrolling interest	$	—	$	—	$	(297)
Acquisition related deferred payment, excluding accretion	—		(380)		—

OnDTE Vantage Segment Impairment

DTE Vantage owns a pulverized coal facility located at DTE Electric’s River Rouge power plant. The facility provides pulverized coal to a steel industry customer through a supply agreement expiring in 2028. The River Rouge plant provides operation and maintenance services to the facility through an agreement which also expires in 2028.

During the second quarter 2021, DTE Electric retired the River Rouge plant and provided an early termination notice of the operation and maintenance services agreement with the pulverized coal facility. The termination became effective December ~~17, 2015,~~31, 2021 and DTE Vantage has ceased operations at the facility.

In connection with these events, DTE Energy ~~announced the closure~~performed an impairment analysis of the ~~Shenango coke battery plant~~pulverized coal facility long-lived assets in ~~response to a sharp downturn in~~accordance with ASC 360, Property, Plant and Equipment. Based on its undiscounted cash flow projections, DTE Energy determined that the ~~North American steel industry. The plant, which was included in~~carrying value of the ~~Power and Industrial Projects segment,~~pulverized coal facility asset group is ~~located in Pittsburgh, PA.~~not recoverable. As a result, ~~of the closure,~~ DTE Energy recorded a ~~one-time pre-tax~~ non-cash impairment charge of ~~$111 million.~~$27 million, which is included in Asset (gains) losses and impairments, net on DTE Energy’s Consolidated Statements of Operations for the year ended December 31, 2021. The charge included ~~$96~~$18 million to fully impair the long-lived assets ~~employee severance expenses related~~recorded to ~~the workforce reduction~~Property, plant and equipment and a $9 million write-down of ~~approximately 170 employees for $3 million, and other expenses, including write downs of inventory, of $12 million. DTE Energy's coke production has been shifted~~Other noncurrent assets to ~~a larger, more efficient coke battery plant in the Power and Industrial Projects segment. Production of coke from the Shenango coke battery plant ceased in January 2016.~~

~~A summary~~fair value. Fair value of the ~~charges in~~assets was determined using an income approach, which utilized assumptions including management’s best estimates of the ~~Consolidated Statements~~expected future cash flows, the estimated useful life of ~~Operations resulting from~~the asset group and discount rate.

During the fourth quarter 2021, DTE ~~Energy's exit activities is shown below:~~

2015
(In millions)
Fuel, purchased power, and gas — non-utility $ 5
Operation and maintenance 10
Asset (gains) losses and impairments, net 96
Total exit activity charges $ 111

Energy terminated the supply agreement with the steel industry customer and settled all outstanding claims. As a result, DTE Energy reversed $17 million of deferred revenues that were previously recorded, which increased Operating Revenues - Non-utility operations for the year ended December 31, 2017, DTE Energy had approximately $1 million accrued related to these exit activities and expects future cash payments of this remaining balance to be made in 2018. DTE Energy does not anticipate incurring significant additional expenses, including required environmental remediation costs, in connection with the closure.2021.

NOTE 5 — ~~GOODWILL~~REVENUE

~~DTE Energy has goodwill resulting from business combinations.~~Significant Accounting Policy

~~The following~~Revenue is measured based upon the ~~summary~~consideration specified in a contract with a customer at the time when performance obligations are satisfied. A performance obligation is a promise in a contract to transfer a distinct good or service or a series of ~~change in the carrying amount of goodwill for the years ended December 31:~~

2017 2016
(In millions)
Balance as of January 1 $ 2,286
$ 2,018
Goodwill attributable to Gas Storage and Pipelines acquisition 7
268
Balance at December 31 $ 2,293
$ 2,286

~~Refer to Note 4~~distinct goods or services to the ~~Consolidated Financial Statements, "Acquisitions and Exit Activities," for additional information related~~customer. The Registrants recognize revenue when performance obligations are satisfied by transferring control over a product or service to a customer. The Registrants have determined control to be transferred when the product is delivered, or the service is provided to the ~~acquisition.~~customer.

117

2018 2019 2020 2021 2022 2023 and Thereafter Total
(In millions)
DTE Energy^(a)
$ 104
$ 1,497
$ 683
$ 462
$ 616
$ 9,045
$ 12,407
DTE Electric $ —
$ —
$ 632
$ 462
$ 316
$ 4,655
$ 6,065


~~(a)~~	~~Amounts include DTE Electric's scheduled debt maturities.~~

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

During the third quarter 2021, DTE Energy optionally redeemed $2.6 billion of Senior Notes included in the table above using proceeds from DT Midstream's repayment of short-term borrowings and one-time special dividend. To early retire this debt and reduce future interest expense, DTE Energy incurred prepayment costs of $361 million and wrote off $15 million of unamortized issuance costs and discounts related to the debt. These amounts have been included within the Loss on extinguishment of debt line item within the Consolidated Statements of Operations for the year ended December 31, 2021.

The following table shows the Registrants' scheduled debt maturities, excluding any unamortized discount on debt:


	2022		2023		2024		2025		2026		2027 and Thereafter		Total
	(In millions)
DTE Energy(a)	$	2,866	$	277	$	1,075	$	1,220	$	777	$	11,302	$	17,517
DTE Electric	$	316	$	202	$	400	$	350	$	177	$	7,543	$	8,988

(a)Amounts include DTE Electric's scheduled debt maturities.

The following table shows scheduled interest payments related to the Registrants' long-term debt:


	2022		2023		2024		2025		2026		2027 and Thereafter		Total
	(In millions)
DTE Energy(a)	$	575	$	548	$	529	$	494	$	450	$	7,510	$	10,106
DTE Electric	$	330	$	322	$	305	$	292	$	284	$	4,222	$	5,755

_______________________________________

(a)Amounts include DTE Electric's scheduled interest payments.

Junior Subordinated Debentures

~~At December 31, 2017, DTE Energy had the following Junior Subordinated Debentures:~~

Interest Rate Maturity Date Amount
(In millions)
2012 Series C 5.25% 2062 $ 200
2016 Series B 5.375% 2076 300
2016 Series F 6.00% 2076 280
2017 Series E 5.25% 2077 400
$ 1,180

DTE Energy has the right to defer interest payments on the ~~debt securities.~~Junior Subordinated Debentures. Should DTE Energy exercise this right, it cannot declare or pay dividends on, or redeem, purchase or acquire, any of its capital stock during the deferral period. Any deferred interest payments will bear additional interest at the rate associated with the related debt issue. As of December 31, ~~2017,~~2021, no interest payments have been deferred on the ~~debt securities.~~Junior Subordinated Debentures.

Cross Default Provisions

Substantially all of the net utility properties of DTE Electric and DTE Gas are subject to the lien of mortgages. Should DTE Electric or DTE Gas fail to timely pay their indebtedness under these mortgages, such failure may create cross defaults in the indebtedness of DTE Energy.

Acquisition Financing

~~Effective October 1, 2016,~~In December 2019, DTE Energy closed on the purchase of midstream natural gas assets. The acquisition was financed through the issuance of ~~Equity Units~~Senior Notes, common stock, and ~~Senior Notes. See Note 4 to the Consolidated Financial Statements, "Acquisitions and Exit Activities," for more information on the acquisition.~~

~~In October 2016, DTE issued $675 million~~$1.3 billion of ~~Equity Units.~~equity units. Each ~~Equity Unit~~equity unit has a stated amount of $50 and was initially issued in the form of a Corporate Unit, is comprised of (i) a forward purchase contract to buy DTE Energy common stock (stock purchase contract) and (ii) a 1/20 undivided beneficial ownership interest in a $1,000 principal amount of DTE Energy’s ~~2016~~2019 Series ~~C 1.5%~~F 2.25% RSNs due ~~2024.~~2025. The RSN debt instruments and the stock purchase contract equity instruments are deemed to be separate instruments as the investor may trade the RSNs separately from the stock purchase contracts and may also settle the stock purchase contracts separately. The Corporate Units are listed on the New York Stock Exchange under the symbol ~~DTV.~~DTP.

118

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

The stock purchase contract obligates the holder to purchase from DTE Energy on the settlement date, ~~October~~November 1, ~~2019,~~2022, for a price of $50 per stock purchase contract, a certain number of shares of DTE Energy's common stock. As a result of the separation of DT Midstream in July 2021, there was a change in the settlement rates in the stock purchase contract to reflect the dividend of DT Midstream stock to DTE Energy shareholders. As adjusted for this change, anti-dilution adjustments to date, and subject to future anti-dilution adjustments, the following number of shares ~~of DTE Energy’s common stock, subject to anti-dilution adjustments:~~must be purchased:

•if the AMV of DTE Energy’s common stock, which is the average volume-weighted average price of DTE Energy’s common stock for the trading days during the 20 consecutive scheduled trading day period ending on the third scheduled trading day immediately preceding the stock purchase contract settlement date, is equal to or greater than ~~$116.31, 0.4299~~$133.08, 0.3757 shares of common stock;

•if the AMV is less than ~~$116.31~~$133.08 but greater than ~~$93.05,~~$106.50, a number of shares of common stock equal to $50 divided by the ~~AMV, rounded to the nearest 1/10,000th of a share;~~AMV; and

•if the AMV is less than or equal to ~~$93.05, 0.5373~~$106.50, 0.4695 shares of common stock.

The RSNs bear interest at a rate of ~~1.5%~~2.25% per year, payable quarterly, and mature on ~~October~~November 1, ~~2024.~~2025. The RSNs will be remarketed in ~~2019.~~2022. If this remarketing is successful, the interest rate on the RSNs will be reset, and interest thereafter ~~interest~~ will be payable semi-annually at the reset rate. If there is no successful remarketing, the interest rate on the RSNs will not be ~~reset, and the~~reset. The holders of the RSNs ~~will~~would have the right to put the RSNs to DTE Energy at a price equal to 100% of the principal amount, and the proceeds of the put right ~~will~~would be deemed to have been applied against the holders’ obligation under the stock purchase contracts. DTE Energy may also redeem, in whole or in part, the RSNs in the event of a failed final remarketing.

~~DTE Energy Company — DTE Electric Company~~

~~Combined Notes to Consolidated Financial Statements — (Continued)~~

On January 1, 2017, DTE Energy began paying the stock purchase contract holders quarterly contract adjustment payments at a rate of 5% per year of the stated amount of $50 per Equity Unit, or $2.50 per year. The present value of the future contract adjustment payments of ~~$98~~$150 million was recorded as a reduction of shareholders’ equity, offset by the stock purchase contract liability. The stock purchase contract liability is included in Current Liabilities — Other and Other Liabilities ~~— Other~~—Other on DTE Energy’s Consolidated Statements of Financial Position. On February 1, 2020, DTE Energy began paying the stock purchase contract holders quarterly contract adjustment payments at a rate of 4% per year of the stated amount of $50 per equity unit, or $2 per year. Interest payments on the RSNs are being recorded as ~~interest~~Interest expense and stock purchase contract payments are being charged against the liability. Accretion of the stock purchase contract liability is recorded as imputed ~~interest~~Interest expense.

The treasury stock method is used to compute diluted EPS for the stock purchase contract. Under the treasury stock method, the stock purchase contract will only have a dilutive effect when the settlement rate is based on the market value of DTE’s common stock that is greater than ~~$116.31~~$133.08 (the threshold appreciation price). At December 31, ~~2017,~~2021, the stock purchase price contract was anti-dilutive and, therefore, not included in the computation of diluted earnings per share.

If payments for the stock purchase contract are deferred, DTE Energy may not make any cash distributions related to its capital stock, including dividends, redemptions, repurchases, liquidation payments or guarantee payments. Also, during the deferral period, DTE Energy may not make any payments on or redeem or repurchase any debt securities that are equal in right of payment with, or subordinated to, the RSNs.

Until settlement of the stock purchase contracts, the shares of stock underlying each contract are not outstanding. Under the terms of the stock purchase contracts, assuming no anti-dilution or other adjustments, DTE Energy will issue between ~~5.8~~9.8 million and ~~7.3~~12.2 million shares of its common stock in ~~October 2019.~~November 2022. A total of 913 million shares of DTE Energy’s common stock have been reserved for issuance in connection with the stock purchase contracts.

Selected information about DTE Energy’s ~~2016 Equity Units~~equity units is presented below:


Issuance Date	Units Issued	Total Net Proceeds		Total Long-Term Debt		RSN Annual Interest Rate	Stock Purchase Contract Annual Rate	Stock Purchase Settlement Date	Stock Purchase Contract Liability(a)		RSN Maturity Date
(In millions, except interest rates)
11/1/19	26	$	1,265	$	1,300	2.25%	4.0%	11/1/2022	$	150	11/1/2025

(a)Payments of $50 million and $49 million were made in 2021 and 2020, respectively. The stock purchase contract liability was $51 million and $101 million as of December 31, 2021 and 2020, respectively, exclusive of interest.

Issuance Date Units Issued Total Net Proceeds Total Long-Term Debt RSN Annual Interest Rate Stock Purchase Contract Annual Rate Stock Purchase Settlement Date
Stock Purchase Contract Liability^(a)
RSN Maturity Date
(In millions, except interest rates)
10/5/2016 13.5 $ 654
$ 675
1.5% 5.0% 10/1/2019 $ 98
10/1/2024

119


~~(a)~~	~~Payments of $32 million were made in 2017. The stock purchase contract liability was $66 million and $98 million at December 31, 2017 and 2016, respectively, exclusive of interest.~~

~~In October 2016,~~

DTE Energy ~~issued $400 million of 2016 Series D 1.50% Senior~~Company — DTE Electric Company

Combined Notes ~~due 2019 and $600 million of Series E 2.85% Senior Notes due 2026. The proceeds from the Senior Notes were used for the acquisition and general corporate purposes.~~to Consolidated Financial Statements — (Continued)

NOTE 15 — PREFERRED AND PREFERENCE SECURITIES

As of December 31, ~~2017,~~2021, the amount of authorized and unissued stock is as follows:


Company	Type of Stock	Par Value		Shares Authorized
DTE Energy	Preferred	$	—	5,000,000
DTE Electric	Preferred	$	100	6,747,484
DTE Electric	Preference	$	1	30,000,000
DTE Gas	Preferred	$	1	7,000,000
DTE Gas	Preference	$	1	4,000,000

NOTE 16 — 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. ~~Additionally,~~ DTE Energy also has other facilities to support letter of credit issuance.

In December 2021, DTE Energy ~~Company — DTE Electric Company~~

~~Combined Notes~~entered into a $400 million unsecured term loan to ~~Consolidated Financial Statements — (Continued)~~

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 ~~require~~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~~"total funded ~~debt”~~debt" means all indebtedness of each respective company and their consolidated subsidiaries, including ~~capital~~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”~~"Capitalization" means the sum of (a) total funded debt plus (b) ~~“consolidated~~"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, ~~2017,~~2021, the total funded debt to total capitalization ratios for DTE Energy, DTE Electric, and DTE Gas were ~~0.54~~0.66 to 1, ~~0.50~~0.51 to 1, and 0.48 to 1, respectively, and were in compliance with this financial covenant.

120

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

The availability under the facilities in place at December 31, ~~2017~~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

DTE Energy DTE Electric DTE Gas Total
(In millions)
Unsecured letter of credit facility, expiring in February 2019 $ 150
$ —
$ —
$ 150
Unsecured letter of credit facility, expiring in September 2019 70
—
—
70
Unsecured revolving credit facility, expiring April 2022 1,200
400
300
1,900
1,420
400
300
2,120
Amounts outstanding at December 31, 2017
Commercial paper issuances 83
238
300
621
Letters of credit 124
—
—
124
207
238
300
745
Net availability at December 31, 2017 $ 1,213
$ 162
$ —
$ 1,375

(a)Total availability of $102 million expires in April 2024, including $67 million at DTE Energy, ~~has approximately $9~~$22 million ofat DTE Electric, and $13 million at DTE Gas. All other ~~outstanding letters~~availability expires in April 2025.

(b)Uncommitted letter of credit ~~which are used~~facility with automatic renewal provision for ~~various corporate purposes~~each July and ~~are not included in~~therefore no expiration.

For DTE Energy, the ~~facilities described above.~~

~~The~~ weighted average interest rate for short-term borrowings was ~~1.9%~~0.3% and ~~0.9%~~1.1% at December 31, ~~2017~~2021 and ~~2016, respectively, for~~2020, respectively. For DTE ~~Energy. The~~Electric, the weighted average interest rate for short-term borrowings was ~~1.5% and 0.8%~~0.2% at December 31, ~~2017 and 2016, respectively, for DTE Electric.~~2021. There were no short-term borrowings outstanding as of December 31, 2020.

In conjunction with maintaining certain ~~exchange traded~~exchange-traded risk management positions, DTE Energy may be required to post collateral with its clearing ~~agent.~~agents. DTE Energy has a demand financing agreements with its clearing agents, including an agreement for up to ~~$100~~$50 million with ~~its clearing agent.~~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 and allows~~amount. Both agreements allow the right of setoff with posted collateral. At December 31, ~~2017,~~2021, the capacity under ~~this facility~~these facilities was ~~$100~~$250 million. The amount outstanding under ~~this agreement~~these agreements was ~~$56~~$103 million and ~~$50~~$49 million at December 31, ~~2017~~2021 and ~~2016,~~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, ~~2017,~~2021, the effect of this provision was a restriction on dividend payments to ~~restrict the payment of approximately $1.8~~no more than $1.4 billion of DTE Energy's Retained earnings ~~totaling $5.6~~of $3.4 billion. There are no other effective limitations with respect to DTE Energy’s ability to pay dividends.

NOTE 17 — ~~CAPITAL AND OPERATING~~ LEASES

Lessee— ~~Operating Lease~~ ~~— The Registrants lease~~

Leases at DTE Energy are primarily comprised of various ~~assets under operating leases, including~~forms of equipment, computer hardware, coal railcars, ~~office~~production facilities, buildings, ~~a warehouse, computers, vehicles,~~ and ~~other equipment. The lease arrangements expire~~certain easement leases with terms ranging from approximately 2 to 40 years. Leases at DTE Electric are primarily comprised of various ~~dates through 2046.~~forms of equipment, computer hardware, coal railcars, and certain easement leases with terms ranging from approximately 2 to 40 years.

121

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

A lease is deemed to exist when the Registrants have the right to control the use of identified property, plant or equipment, as conveyed through a contract, for a certain period of time and consideration paid. The right to control is deemed to occur when the Registrants have the right to obtain substantially all of the economic benefits of the identified assets and the right to direct the use of such assets.

Lease liabilities are determined utilizing a discount rate to determine the present values of lease payments. Topic 842 requires the use of the rate implicit in the lease when it is readily determinable. When the rate implicit in the lease is not readily determinable, the incremental borrowing rate is used. The Registrants have determined their respective incremental borrowing rates based upon the rate of interest that would have been paid on a collateralized basis over similar tenors to that of the leases. The incremental borrowing rates for DTE Electric and DTE Gas have been determined utilizing respective secured borrowing rates for first mortgage bonds with like tenors of remaining lease terms. Incremental borrowing rates for non-utility entities have been determined utilizing an implied secured borrowing rate based upon an unsecured rate for a similar tenor of remaining lease terms, which is then adjusted for the estimated impact of collateral.

Certain leases of the Registrants contain escalation clauses whereby the payments are adjusted for consumer price or labor indices. DTE Energy has leases with non-index based escalation clauses for fixed dollar or percentage increases. DTE Electric has leases with non-index based escalation clauses for fixed dollar increases. DTE Energy also has leases with variable payments based upon usage of, or revenues associated with, the leased assets. DTE Electric also has leases with variable payments based upon the usage of the leased assets.

Certain leases of easements and coal railcars contain provisions whereby the Registrants have the option to terminate the lease agreement by giving notice of such termination during the time frames specified in the respective lease. The Registrants have considered such provisions in the determination of the lease term when it is reasonably certain that the lease would be terminated.

The Registrants have certain leases which contain purchase options. Based upon the nature of the leased property and terms of the purchase options, the Registrants have determined it is not reasonably certain that such purchase options will be utilized. Thus, the impact of the purchase options has not been included in the determination of right-of-use assets and lease liabilities for the subject leases.

The Registrants have certain leases which contain renewal options. Where the renewal options were deemed reasonably certain to occur, the impacts of such options were included in the determination of the right of use assets and lease liabilities.

The Registrants have agreements with lease and non-lease components, which are generally accounted for separately. Consideration in a lease is allocated between lease and non-lease components based upon the estimated relative standalone prices. The Registrants have certain coal railcar leases for which non-lease and lease components are accounted for as a single lease component, as permitted under Topic 842.

The following is a summary of the components of lease cost for the years ended December 31:


	DTE Energy						DTE Electric
	2021		2020		2019		2021		2020		2019
	(In millions)
Operating lease cost	$	19	$	21	$	23	$	14	$	14	$	17
Finance lease cost:
Amortization of right-of-use assets	7		5		4		6		4		4
Interest of lease liabilities	1		—		—		—		—		—
Total finance lease cost	8		5		4		6		4		4
Variable lease cost	9		10		10		—		—		—
Short-term lease cost	14		11		9		6		6		3

	$	50	$	47	$	46	$	26	$	24	$	24

The Registrants have elected not to apply the recognition requirements of Topic 842 to leases with a term of 12 months or less. DTE Energy and DTE Electric record operating, variable, and short-term lease costs as Operating Expenses on the Consolidated Statements of Operations, except for certain amounts that may be capitalized to other assets.

122

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

The following is a summary of other information related to leases for the years ended December 31:


	DTE Energy									DTE Electric
	2021			2020			2019			2021			2020			2019
	(In millions)
Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of these liabilities:
Operating cash flows for finance leases	$	8		$	3		$	5		$	7		$	2		$	5
Operating cash flows for operating leases	$	19		$	22		$	22		$	14		$	14		$	16

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	5		$	2		$	42		$	1		$	—		$	27
Finance leases	$	3		$	19		$	8		$	1		$	14		$	—

Weighted Average Remaining Lease Term (Years)
Operating leases	12.7			12.1			12.1			10.3			10.4			10.6
Finance leases	7.8			7.6			9.1			2.1			3.1			2.0

Weighted Average Discount Rate
Operating leases	3.6		%	3.6		%	3.5		%	3.4		%	3.3		%	3.3		%
Finance leases	2.2		%	2.0		%	3.1		%	1.0		%	1.0		%	3.1		%

The Registrants' future minimum lease payments under ~~non-cancelable operating~~ leases atfor remaining periods as of December 31, ~~2017 were:~~2021 are as follows:


	DTE Energy				DTE Electric
	Operating Leases		Finance Leases		Operating Leases		Finance Leases
	(In millions)
2022	$	16	$	8	$	12	$	6
2023	13		9		10		6
2024	11		3		8		1
2025	8		1		6		—
2026	7		1		5		—
2027 and thereafter	56		8		27		—
Total future minimum lease payments	111		30		68		13
Imputed interest	(23)		(3)		(12)		—
Lease liabilities	$	88	$	27	$	56	$	13

Finance leases reported on the Consolidated Statements of Financial Position are as follows for the years ended December 31:


	DTE Energy				DTE Electric
	2021		2020		2021		2020
	(In millions)
Right-of-use assets, within Property, plant, and equipment, net	$	26	$	29	$	12	$	16
Current lease liabilities, within Current portion of long-term debt	$	8	$	7	$	6	$	6
Long-term lease liabilities	$	19	$	24	$	7	$	13

123

DTE Energy DTE Electric
(In millions)
2018 $ 40
$ 15
2019 34
14
2020 22
9
2021 13
9
2022 9
6
2022 and thereafter 48
38
Total minimum lease payments $ 166
$ 91

~~Rental expense for~~ DTE Energy ~~operating leases was $51 million in 2017 and $43 million in 2016 and 2015, including rental expense for~~Company — DTE Electric ~~operating leases of $28 million in 2017, $28 million in 2016, and $32 million in 2015.~~Company

Combined Notes to Consolidated Financial Statements — (Continued)

Lessor— ~~Capital Lease~~ —

During the first quarter 2021, DTE Energy completed construction of and began operating certain energy infrastructure assets for a large industrial customer under a long-term agreement, where the assets will transfer to the customer at the end of the contract term in 2040. DTE Energy has accounted for a portion of the agreement as a finance lease arrangement, recognizing an additional net investment of $31 million. DTE Energy also leases a portion of its pipeline system ~~to the Vector Pipeline~~ through a ~~capital~~finance lease contract that ~~expires in 2020,~~has been renewed through 2025, with additional renewal options ~~extending for five years.~~ reasonably certain to be exercised through 2040.

DTE Energy ~~owns~~also leases various assets under operating leases for a ~~40% interest~~pipeline, energy facilities and related equipment. Such leases are comprised of both fixed payments and variable payments which are contingent on volumes, with terms ranging from 2 to 24 years. Generally, the operating leases do not have renewal provisions or options to purchase the assets at the end of the lease. The operating leases generally do not have termination for convenience provisions. Termination may be allowed under specific circumstances stated in the ~~Vector Pipeline. In addition,~~ lease contract, such as under an event of default.

Certain of the finance and operating leases have lease terms that extend to the end of the estimated economic life of the leased assets, thereby resulting in no residual value. Any remaining residual values under the finance and operating leases are expected to be recovered through rates, renewals or new lease contracts. Residual values have been determined using the estimated economic life of the leased assets. The finance and operating leases do not contain residual value guarantees.

Certain of the operating leases have both lease and non-lease components. The lease and non-lease components are allocated based upon estimated relative standalone selling prices.

A lease is deemed to exist when the Registrants have provided other parties with the right to control the use of identified property, plant or equipment, as conveyed through a contract, for a certain period of time and consideration received. The right to control is deemed to occur when the Registrants have provided other parties with the right to obtain substantially all of the economic benefits of the identified assets and the right to direct the use of such assets.

DTE Energy’s lease income associated with operating leases, including the line items in which it was included on the Consolidated Statements of Operations, was as follows:


	2021		2020		2019
	(In millions)
Fixed payments	$	67	$	57	$	56
Variable payments	131		124		128
	$	198	$	181	$	184

Operating revenues	$	103	$	99	$	121
Other income	95		82		63
	$	198	$	181	$	184

DTE Energy’s minimum future rental revenues under operating leases for remaining periods as of December 31, 2021 are as follows:


	DTE Energy
	(In millions)
2022	$	15
2023	15
2024	15
2025	15
2026	11
2027 and thereafter	51
	$	122

Depreciation expense associated with DTE Energy's property under operating leases was $22 million, $24 million, and $23 million for the years ended December 31, 2021, 2020, and 2019 respectively.

124

DTE Energy ~~has two energy services agreements,~~Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

The following is a summary of property under operating leases for ~~which a portion~~DTE Energy as of ~~are accounted for as capital leases. These agreements were extended during the year and expire in 2019 and 2026.~~December 31:


	2021		2020
	(In millions)
Gross property under operating leases	$	341	$	389
Accumulated amortization of property under operating leases	$	181	$	191

The components of DTE ~~Energy's~~Energy’s net investment in ~~capital~~finance leases atfor remaining periods as of December 31, ~~2017, were~~2021 are as follows:


	DTE Energy
	(In millions)
2022	$	23
2023	22
2024	22
2025	21
2026	21
2027 and thereafter	271
Total minimum future lease receipts	380
Residual value of leased pipeline	17
Less unearned income	198
Net investment in finance lease	199
Less current portion	6
	$	193

DTE Energy
(In millions)
2018 $ 13
2019 10
2020 9
2021 —
2022 —
2023 and thereafter 1
Total minimum future lease receipts 33
Residual value of leased pipeline 40
Less unearned income (15 )
Net investment in capital lease 58
Less current portion (7 )
$ 51
Interest income recognized under finance leases was $17 million, $16 million, and $5 million for the years ended December 31, 2021, 2020, and 2019, respectively. During 2020, DTE Energy also recognized $11 million of profit from the sale of membership interests in the REF business accounted for as a finance lease arrangement.

NOTE 18 — COMMITMENTS AND CONTINGENCIES

Environmental

DTE Electric

Air — DTE Electric is subject to the EPA ozone and fine particulate transport and acid rain regulations that limit power plant emissions of SO₂ and NO_xX. The EPA and the State of Michigan have also issued emission reduction regulations relating to ozone, fine particulate, regional haze, mercury, and other air pollution. These rules have led to controls on fossil-fueled power plants to reduce SO₂, NO_xX, mercury, and other emissions. Additional rulemakings may occur over the next few years which could require additional controls for SO₂, NO_xX, and other hazardous air pollutants.

~~DTE Energy Company — DTE Electric Company~~

~~Combined Notes to Consolidated Financial Statements — (Continued)~~

~~The Cross State Air Pollution Rule (CSAPR), required further reductions of SO~~₂ ~~and NO~~_x emissions beginning in January 2015. On September 7, 2016, the EPA finalized an update to the CSAPR ozone season program by issuing the CSAPR Update Rule. This rule is expected to reduce summertime (May - September) NO_x emissions from power plants in 22 states in the eastern half of the U.S., including DTE Electric facilities. The CSAPR Update Rule is intended to reduce air quality impacts of the interstate transport of air pollution on downwind areas' ability to meet the 2008 ozone National Ambient Air Quality Standards implementing power sector emission budgets and NO_x ~~allowance trading programs. DTE Electric expects to meet its obligations under CSAPR. DTE Electric does not expect this rule to have a material effect on its compliance program.~~

The EPA proposed revised air quality standards for ground level ozone in November 2014 and specifically requested comments on the form and level of the ozone standards. The standards were finalized in October 2015. The State of Michigan recommended to the EPA in October 2016 which areas of the state are not attaining the new standard. ~~In November 2017,~~On April 30, 2018, the EPA ~~completed~~finalized the ~~majority~~State of Michigan's recommended marginal non-attainment designation for southeast Michigan. The State is planning to submit a request for redesignation of the ~~United States attainment/unclassifiable~~southeast Michigan ozone non-attainment area ~~designations.~~to the EPA. However, the State is required to develop and implement a plan to address the non-attainment area. The ~~Registrants expect~~plan will likely be submitted to the EPA ~~to complete the remaining designations, including the non-attainment area designations with the 2015 ozone standards~~ by ~~the first quarter in 2018. DTE Electric cannot predict the financial impact of the revised ozone standards at this time.~~

In July 2009, DTE Energy received a NOV/FOV from the EPA alleging, among other things, that five DTE Electric power plants violated New Source Performance standards, Prevention of Significant Deterioration requirements, and operating permit requirements under the Clean Air Act. In June 2010, the EPA issued a NOV/FOV making similar allegations related to a project and outage at Unit 2 of the Monroe Power Plant. In March 2013, DTE Energy received a supplemental NOV from the EPA relating to the July 2009 NOV/FOV. The supplemental NOV alleged additional violations relating to the New Source Review provisions under the Clean Air Act, among other things.

In August 2010, the U.S. Department of Justice, at the request of the EPA, brought a civil suit in the U.S. District Court for the Eastern District of Michigan against DTE Energy and DTE Electric, related to the June 2010 NOV/FOV and the outage work performed at Unit 2 of the Monroe Power Plant. In August 2011, the U.S. District Court judge granted DTE Energy's motion for summary judgment in the civil case, dismissing the case and entering judgment in favor of DTE Energy and DTE Electric. In October 2011, the EPA filed a Notice of Appeal to the Court of Appeals for the Sixth Circuit. In March 2013, the Court of Appeals remanded the case to the U.S. District Court for review of the procedural component of the New Source Review notification requirements. In September 2013, the EPA filed a motion seeking leave to amend their complaint regarding the June 2010 NOV/FOV adding additional claims related to outage work performed at the Trenton Channel and Belle River Power Plants as well as additional claims related to work performed at the Monroe Power Plant. In March 2014, the U.S. District Court judge again granted DTE Energy's motion for summary judgment dismissing the civil case related to Monroe Unit 2. In April 2014, the U.S. District Court judge granted motions filed by the EPA and the Sierra Club to amend their New Source Review complaint adding additional claims for Monroe Units 1, 2, and 3, Belle River Units 1 and 2, and Trenton Channel Unit 9. In October 2014, the EPA and the U.S. Department of Justice filed a notice of appeal of the U.S. District Court judge's dismissal of the Monroe Unit 2 case. The amended New Source Review claims were all stayed pending resolution of the appeal by the Court of Appeals for the Sixth Circuit. On January 10, 2017, a divided panel of the Court reversed the decision of the U.S. District Court. On May 8, 2017, DTE Energy and DTE Electric filed a motion to stay the mandate pending filing of a petition for writ of certiorari with the U.S. Supreme Court. The Sixth Circuit granted the motion on May 16, 2017, staying the claims in the U.S. District Court until the U.S. Supreme Court disposes of the case. DTE Electric and DTE Energy filed a petition for writ of certiorari on July 31, 2017. On December 11, 2017, the U.S. Supreme Court denied certiorari. As a result of the Supreme Court electing not to review the matter, the case was sent back to the U.S. District Court for further proceedings. The Registrants are in discussion with the EPA regarding this matter.

The Registrants believe that the plants and generating units identified by the EPA and the Sierra Club have complied with all applicable federal environmental regulations. Depending upon the outcome of the litigation and further discussions with the EPA regarding the two NOVs/FOVs, DTE Electric could be required to install additional pollution control equipment at some or all of the power plants in question, implement early retirement of facilities where control equipment is not economical, engage in supplemental environmental programs, and/or pay fines.mid-2022 The Registrants cannot predict the scope and associated financial impact ~~or outcome~~ of the State's plan to address the ozone non-attainment area at this ~~matter, or the timing of its resolution.~~time.

125

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

The EPA has implemented regulatory actions under the Clean Air Act to address emissions of GHGs from the utility sector and other sectors of the economy. Among these actions, in 2015 the EPA finalized performance standards for emissions of carbon dioxide from new and existing fossil-fuel fired EGUs. The performance standards for existing EGUs, known as the EPA Clean Power Plan, were challenged by petitioners and stayed by the U.S. Supreme Court in February 2016 pending final review by the courts. On October 10, 2017, the EPA, under a new administration, proposed to rescind the Clean Power Plan, and in August 2018, the EPA proposed revised emission guidelines for GHGs from existing EGUs. On June 19, 2019, the EPA Administrator officially repealed the Clean Power Plan and finalized its replacement, named the ACE rule. The ACE rule was vacated and remanded back to the EPA in a D.C. Circuit Court decision on January 19, 2021. Petitions were filed asking the Supreme Court to review the D.C. Circuit's decision vacating the ACE rule, and the petition was granted in October 2021. A decision from the Supreme Court is expected by June 2022. The next steps taken by the EPA with respect to regulation of GHGs from EGUs is uncertain. Regardless of future rules, DTE Energy remains committed for its electric utility operations to reduce carbon emissions 32% by 2023, 50% by 2028, and 80% by 2040 from 2005 carbon emissions levels, and its goal of net zero emissions from its electric utility operations by 2050.

In addition to the GHG standards for existing EGUs, in December 2018, the EPA issued proposed revisions to the carbon dioxide performance standards for new, modified, or reconstructed fossil-fuel fired EGUs. The rule was finalized on January 13, 2021 and immediately challenged. An order vacating the rule was filed by the D.C. Circuit Court of Appeals on April 5, 2021. The carbon standards for new sources are not expected to have a material impact on DTE Electric, since DTE Electric has no plans to build new coal-fired generation and any potential new gas generation will be able to comply with the standards. In February 2016, the U.S. Supreme Court granted petitioners' requests for a stay of the carbon rules for existing EGUs (also known as the EPA Clean Power Plan) pending final review by the courts. The Clean Power Plan has no legal effect while the stay is in place. On March 28, 2017, a presidential executive order was issued on "Promoting Energy Independence and Economic Growth." The order instructs the EPA to review, and if appropriate, suspend, revise or rescind the Clean Power Plan rule. Additionally, federal agencies have been directed to conduct a review of all existing regulations that potentially burden the development and use of domestically produced energy resources. Following the issuance of this order, the federal government requested the U.S. Court of Appeals for the D.C. Circuit to hold all legal challenges in abeyance until the review of these regulations is completed. On October 10, 2017, the EPA proposed to rescind the Clean Power Plan and announced its intent to issue an ANPR seeking input as to whether it should replace the rule and, if so, what form it should take. It is not possible to determine the potential impact of the EPA's repeal and possible replacement of the Clean Power Plan on existing sources at this time.

To comply with air pollution requirements, DTE Electric has spent approximately $2.4 ~~billion through 2017.~~billion. DTE Electric does not anticipate additional capital expenditures ~~through 2024.~~for air pollution requirements, subject to the results of future rulemakings.

Water — In response to an EPA regulation, DTE Electric was required to examine alternatives for reducing the environmental impacts of the cooling water intake structures at several of its facilities. Based on the results of completed studies and expected future studies, DTE Electric may be required to install technologies to reduce the impacts of the water intake structures. A final rule became effective in October ~~2015.~~2014. The final rule requires studies to be completed and submitted as part of the ~~National Pollutant Discharge Elimination System (NPDES)~~NPDES permit application process to determine the type of technology needed to reduce impacts to fish. DTE Electric has initiated the process of completing the required studies. Final compliance for the installation of any required technology will be determined by ~~each~~the state on a case by case, site specific basis. DTE Electric is currently evaluating the compliance options and working with the State of Michigan on evaluating whether any controls are needed. These evaluations/studies may require modifications to some existing intake structures. It is not possible to quantify the impact of this ~~rulemaking~~rule making at this time.

Contaminated and Other Sites — Prior to the construction of major interstate natural gas pipelines, gas for heating and other uses was manufactured locally from processes involving coal, coke, or oil. The facilities, which produced gas, have been designated as MGP sites. DTE Electric conducted remedial investigations at contaminated sites, including ~~three~~3 former MGP sites. Cleanup of one of the MGP sites is complete, and the site is closed. The investigations have revealed contamination related to the by-products of gas manufacturing at each MGP site. In addition to the MGP sites, DTE Electric is also in the process of cleaning up other contaminated sites, including the area surrounding an ash landfill, electrical distribution substations, electric generating power plants, and underground and ~~aboveground~~above ground storage tank locations. The findings of these investigations indicated that the estimated cost to remediate these sites is expected to be incurred over the next several years. At December 31, ~~2017~~2021 and ~~2016,~~2020, DTE Electric had $6$14 million and $8$10 million, respectively, accrued for ~~remediation, respectively.~~remediation. These costs are not discounted to their present value. Any change in assumptions, such as remediation techniques, nature and extent of contamination, and regulatory requirements, could impact the estimate of remedial action costs for the sites and affect DTE Electric’s financial position and cash flows. DTE Electric believes the likelihood of a material change to the accrued amount is remote based on current knowledge of the conditions at each site.

126

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

Coal Combustion Residuals and Effluent Limitations Guidelines — A final EPA rule for the disposal of coal combustion residuals, commonly known as coal ash, became effective in October 2015, and was revised in October ~~2016. In~~2016, July 2018, September ~~2017,~~2020, and November 2020. The rule is based on the ~~EPA indicated that it intends to reconsider certain provisions~~continued listing of ~~the CCR Rule, but the nature~~coal ash as a non-hazardous waste and ~~timing of such a reconsideration is unknown.~~relies on various self-implementation design and performance standards. DTE Electric owns and operates ~~three~~3 permitted engineered coal ash storage facilities to dispose of coal ash from coal-fired power plants and operates a number of smaller impoundments at its power ~~plants.~~plants subject to certain provisions in the CCR ~~obligations vary based on plant life, but include~~rule. At certain facilities, the ~~installation~~rule currently requires ongoing sampling and testing of monitoring wells, compliance with groundwater standards, and the closure of ~~landfills and~~ basins at the end of the useful life of the associated power ~~plant or~~plant.

On September 28, 2020, the CCR rule "A Holistic Approach to Closure Part A: Deadline to Initiate Closure and Enhancing Public Access to Information" became effective and established April 11, 2021 as the new deadline for all unlined impoundments (including units previously classified as "clay-lined") to initiate closure. Additionally, the rule amends certain reporting requirements and CCR website requirements. On November 12, 2020, an additional revision to the CCR Rule "A Holistic Approach to Closure Part B: Alternate Demonstration for Unlined Surface Impoundments" was published in the Federal Register that provides a ~~basin becomes inactive.~~

~~DTE Energy Company —~~process to determine if certain unlined impoundments consist of an alternative liner system that may be as protective as the current liners specified in the CCR rule, and therefore may continue to operate. DTE Electric ~~Company~~

~~Combined Notes~~has submitted applications to ~~Consolidated Financial Statements — (Continued)~~

~~In November 2015,~~ the EPA ~~finalized~~that support continued use of all impoundments through their active lives. The applications are currently under review and the ~~ELG Rule for~~forced closure date of April 11, 2021 is effectively delayed while the ~~steam electric power generating industry which may require additional controls to be installed between~~EPA completes their review.

At the State level, legislation was signed by the Governor in December 2018 and ~~2023. Compliance schedules~~provides for individual facilities and individual waste streams are determined through issuance of new wastewater permits by the State of Michigan. The State of Michigan has issued a National Pollutant Discharge Elimination System permit for the Belle River Power Plant establishing a compliance deadline of December 31, 2021. No new permits have been issued for other facilities, consequently no compliance timelines have been established. Under the current rule, certain ELG requirements would be required to be performed in conjunction with the CCR. Over the next six years, to comply with the ELG requirementsfurther regulation of the ~~November 2015 rules~~CCR program in Michigan. Additionally, the statutory revision provides the basis of a CCR program that EGLE has submitted to the EPA for approval to fully regulate the CCR program in Michigan in lieu of a Federal permit program. The EPA is currently working with EGLE in reviewing the submitted State program, and ~~for~~DTE Electric will work with EGLE to implement a State program that may be approved in the ~~CRR requirements, costs associated with the building of new facilities or installation of controls are estimated to be approximately $295 million.~~future.

On April 12, 2017, the EPA granted a petition for reconsideration of the 2015 ELG Rule. The EPA also signed an administrative stay of the 2015 ELG Rule’s compliance deadlines for fly ash transport water, bottom ash transport water, and flue gas desulfurization (FGD) wastewater, among others. On June 6, 2017, the EPA published in the Federal Register a proposed rule (Postponement Rule) to postpone certain applicable deadlines within the 2015 ELG rule. The ~~final rule~~Postponement Rule was published on September 18, ~~2017, which~~2017. The Postponement Rule nullified the administrative stay but also extended the earliest compliance deadlines for ~~the~~only FGD wastewater and bottom ash transport water until November 1, 2020 in order for the EPA to propose and finalize a new ruling. On October 13, 2020, the EPA finalized the ELG Reconsideration Rule which revised the regulations from the 2015 ELG rule. The Reconsideration Rule re-establishes the technology-based effluent limitations guidelines and standards applicable to FGD wastewater and bottom ash transport water. The EPA set the applicability dates for bottom ash transport water "as soon as possible" beginning October 13, 2021 and no later than December 31, 2025. FGD wastewater retrofits must be completed "as soon as possible" beginning October 13, 2021 and no later than December 31, 2025 or December 31, 2028 if a permittee decides to pursue the Voluntary Incentives Program (VIP) subcategory for FGD wastewater. If a facility applies for the VIP, they must meet more stringent standards, but are allowed an extended time period to complete the project.

The Reconsideration Rule also provides additional compliance opportunities by finalizing low utilization and cessation of coal burning subcategories. The Reconsideration Rule provides new opportunities for DTE Electric to evaluate existing ELG compliance ~~requirements, final~~strategies and make any necessary adjustments to ensure full compliance with the ELGs in a cost-effective manner.

Compliance schedules for individual facilities and individual waste streams are determined through issuance of new NPDES permits by the State of Michigan. The State of Michigan has issued an NPDES permit for the Belle River power plant establishing compliance deadlines based on the 2020 Reconsideration Rule. On October 11, 2021, in consideration of the deadlines above, DTE Electric submitted the appropriate documentation titled the Notice of Planned Participation (NOPP) to the State of Michigan that formally announced the intent to pursue compliance subcategories as ELG compliance options: the cessation of coal at the Belle River power plant no later than 2028 and ~~compliance costs will not be known until~~the VIP for FGD wastewater at Monroe power plant.

On July 27, 2021, the EPA ~~completes its reconsideration~~announced they will revisit some of the compliance requirements that were established in the 2020 Reconsideration Rule and plan to release a new proposed rule in Fall of 2022. The 2020 Reconsideration Rule remains in effect until that time.

DTE Electric continues to evaluate compliance strategies, technologies, and system designs for both FGD wastewater and bottom ash transport water system to achieve compliance with the EPA rules at the Monroe power plant.

127

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

DTE Electric has estimated the impact of the CCR and ELG ~~Rule.~~rules to be $522 million of capital expenditures, including $417 million for 2022 through 2026.

DTE Gas

Air — In June 2020, DTE Energy expanded its net zero goal to include its gas utility operations by committing to reduce greenhouse gas emissions to net zero by 2050 from procurement of natural gas and within its gas utility. DTE Energy is working to source gas with lower methane intensity, reduce emissions through its gas main renewal and pipeline integrity programs, and if necessary, use carbon offsets to achieve net zero. DTE Gas also committed to helping its customers reduce their emissions from natural gas by 35% by 2050. To support this goal, DTE Gas launched its CleanVision Natural Gas Balance program in January 2021 that offers customers a way to reduce their carbon footprint using carbon offsets and renewable natural gas. The carbon offset program is focused on protecting Michigan forests that naturally absorb carbon dioxide.

Contaminated and Other Sites — DTE Gas owns or previously owned 14 former MGP sites. Investigations have revealed contamination related to the by-products of gas manufacturing at each site. Cleanup of ~~six~~8 of the MGP sites is complete and the sites are closed. DTE Gas has also completed partial closure of ~~six~~4 additional sites. Cleanup activities associated with the remaining sites will continue over the next several years. The MPSC has established a cost deferral and rate recovery mechanism for investigation and remediation costs incurred at former MGP sites. In addition to the MGP sites, DTE Gas is also in the process of cleaning up other contaminated sites, including gate stations, gas pipeline releases, and underground storage tank locations. As of December 31, ~~2017~~2021 and ~~2016,~~2020, DTE Gas had ~~$41 million and $43~~$24 million accrued for ~~remediation, respectively.~~remediation. These costs are not discounted to their present value. Any change in assumptions, such as remediation techniques, nature and extent of contamination, and regulatory requirements, could impact the estimate of remedial action costs for the sites and affect DTE Gas' financial position and cash flows. DTE Gas anticipates the cost amortization methodology approved by the MPSC, which allows for amortization of the MGP costs over a ten-year period beginning with the year subsequent to the year the MGP costs were incurred, will prevent ~~environmental~~the associated investigation and remediation costs from having a material adverse impact on DTE Gas' results of operations.

Non-utility

DTE Energy's non-utility businesses are subject to a number of environmental laws and regulations dealing with the protection of the environment from various pollutants.

In March 2019, the EPA issued an FOV to EES Coke, the Michigan coke battery facility that is a wholly-owned subsidiary of DTE Energy, alleging that the 2008 and 2014 permits issued by EGLE did not comply with the Clean Air Act. In September 2020, the EPA issued another FOV alleging EES Coke's 2018 and 2019 SO2 emissions exceeded projections and hence violated non-attainment new source review requirements. EES Coke evaluated the EPA's alleged violations and believes that the permits approved by EGLE complied with the Clean Air Act. EES Coke also responded to the EPA's September 2020 allegations demonstrating its actual emissions are compliant with non-attainment new source review requirements. Discussions with the EPA are ongoing. At the present time, DTE Energy cannot predict the outcome or financial impact of this FOV.

Other

In 2010, the EPA finalized a new one-hour SO₂ ambient air quality standard that requires states to submit plans and associated timelines for non-attainment areas that demonstrate attainment with the new SO₂ standard in phases. Phase 1 addresses non-attainment areas designated based on ambient monitoring data. Phase 2 addresses non-attainment areas with large sources of SO₂ and modeled concentrations exceeding the National Ambient Air Quality Standards for SO₂. Phase 3 addresses smaller sources of SO₂ with modeled or monitored exceedances of the new SO₂ standard.

128

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

Michigan's Phase 1 non-attainment area includes DTE Energy facilities in southwest Detroit and areas of Wayne County. Modeling runs by ~~the MDEQ~~EGLE suggest that emission reductions may be required by significant sources of SO₂ emissions in these areas, including DTE Electric power plants and DTE Energy's Michigan coke battery facility. As part of ~~the state implementation plan~~Michigan's SIP process, DTE Energy has worked with ~~the MDEQ~~EGLE to develop air permits reflecting significant SO2 emission reductions that, in combination with other non-DTE Energy sources' emission reduction strategies, will help the state attain the standard and sustain its attainment. The Michigan SIP was completed and submitted to the EPA on May 31, 2016 and supplemented on June 30, 2016. On March 19, 2021, the EPA published in the Federal Register partial approval and partial disapproval of Michigan's Detroit SO2 non-attainment area plan. The partial disapproval does not appear to impact DTE's sources and further discussions are underway with the EPA to finalize the plan. Since several non-DTE Energy sources are also part of the proposed compliance plan, DTE Energy is unable to determine the full impact of ~~the final required~~any further emissions reductions that may be required from DTE's facilities at this time.

Michigan's Phase 2 non-attainment area includes DTE Electric facilities in St. Clair County. ~~State implementation plans (SIPs) for Phase 2 areas describing~~The EPA recently approved a clean data determination request submitted by EGLE. This does not automatically redesignate the ~~control strategy and timeline for demonstrating compliance with~~area to attainment. Until the ~~new SO~~₂ ~~standard are due to the EPA by April 2018. DTE Energy~~area is ~~currently working with the MDEQ to develop the required SIP.~~officially redesignated as attainment, DTE Energy is unable to determine the ~~full impact of the SIP strategy, as it is currently under development.~~

~~DTE Energy Company — DTE Electric Company~~

~~Combined Notes to Consolidated Financial Statements — (Continued)~~

impacts.

Synthetic Fuel Guarantees

DTE Energy discontinued the operations of its synthetic fuel production facilities throughout the United States as of December 31, 2007. DTE Energy provided certain guarantees and indemnities in conjunction with the sales of interests in its synfuel facilities. The guarantees cover potential commercial, environmental, oil price, and tax-related obligations that will survive until 90 days after expiration of all applicable statutes of limitations. DTE Energy estimates that its maximum potential liability under these guarantees at December 31, ~~2017~~2021 was approximately ~~$620~~$70 million. Payment under these guarantees is considered remote.

REF Guarantees

DTE Energy has provided certain guarantees and indemnities in conjunction with the sales of interests in or lease of its REF facilities. The guarantees cover potential commercial, environmental, and tax-related obligations that will survive until 90 days after expiration of all applicable statutes of limitations. DTE Energy estimates that its maximum potential liability under these guarantees at December 31, ~~2017~~2021 was ~~approximately $386~~$720 million. ~~Payment under these guarantees is considered remote.~~

~~NEXUS Guarantees~~

NEXUS entered into certain 15-year capacity lease agreements for the transportation of natural gas with DTE Gas and Texas Eastern Transmission, LP, an unrelated third party. Pursuant to the terms of those agreements, in December 2016, DTE Energy executed separate guarantee agreements with DTE Gas and Texas Eastern Transmission, LP, with maximum potential payments totaling $80 million and $10 million at December 31, 2017, respectively; each representing 50% of all payment obligations due and payable by NEXUS. Should NEXUS fail to perform under the terms of those agreements, DTE Energy is required to perform on its behalf. Each guarantee terminates at the earlier of (i) such time as all of the guaranteed obligations have been fully performed, or (ii) two months following the end of the primary term of the capacity lease agreements. Subsequent to the NEXUS in-service date, the amount of each guarantee decreases annually as payments are made by NEXUS to each of the aforementioned counterparties. Payments under these guarantees are considered remote.

Other Guarantees

In certain limited circumstances, the Registrants enter into contractual guarantees. The Registrants may guarantee another entity’s obligation in the event it fails to perform and may provide guarantees in certain indemnification agreements. ~~Finally, the~~The Registrants may also provide indirect guarantees for the indebtedness of others. DTE Energy’s guarantees are not individually material with maximum potential payments totaling ~~$55~~$40 million at December 31, ~~2017. Payment~~2021. Payments under these guarantees isare considered remote.

~~DTE Energy is~~The Registrants are periodically required to obtain performance surety bonds in support of obligations to various governmental entities and other companies in connection with its operations. As of December 31, ~~2017,~~2021, DTE Energy had ~~approximately $58~~$168 million of performance bonds ~~outstanding.~~outstanding, including $119 million for DTE Electric. In the event that such bonds are called for nonperformance, ~~DTE Energy~~the Registrants would be obligated to reimburse the issuer of the performance bond. ~~DTE Energy is~~The Registrants are released from the performance bonds as the contractual performance is completed and does not believe that a material amount of any currently outstanding performance bonds will be called.

Labor Contracts

There are several bargaining units for DTE Energy subsidiaries' ~~approximate 5,000~~approximately 5,200 represented employees, including DTE Electric's ~~approximate~~approximately 2,700 represented employees. ~~The majority~~This represents 50% and 57% of ~~the~~DTE Energy's and DTE Electric's total employees, respectively. Of these represented employees, ~~are under~~approximately 15% and 21% have contracts ~~that expire in 2020~~expiring within one year for DTE Energy and ~~2021.~~DTE Electric, respectively.

129

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

Purchase Commitments

As of December 31, ~~2017,~~2021, the Registrants were party to numerous long-term purchase commitments relating to a variety of goods and services required for their businesses. These agreements primarily consist of fuel supply commitments and renewable energy contracts for the Registrants, as well as energy trading contracts for DTE Energy. The Registrants estimate the following commitments from ~~2018~~2022 through 2051 for DTE Energy, and ~~2018~~2022 through ~~2033~~2051 for DTE Electric, as detailed in the following ~~table:~~tables:


	2022		2023		2024		2025		2026		2027 and Thereafter		Total
DTE Energy	(In millions)
Long-term power purchase agreements(a)	$	87	$	92	$	103	$	103	$	103	$	986	$	1,474
Other purchase commitments(b)	3,203		1,704		1,174		482		357		980		7,900
Total commitments	$	3,290	$	1,796	$	1,277	$	585	$	460	$	1,966	$	9,374

	2022		2023		2024		2025		2026		2027 and Thereafter		Total
DTE Electric	(In millions)
Long-term power purchase agreements(a)	$	92	$	97	$	108	$	108	$	109	$	1,006	$	1,520
Other purchase commitments(b)	365		402		431		197		118		275		1,788
Total commitments	$	457	$	499	$	539	$	305	$	227	$	1,281	$	3,308

(a)The agreements represent the minimum obligations with suppliers for renewable energy and renewable energy credits under existing contract terms which expire from 2030 through 2035. DTE Electric's share of plant output ranges from 28% to 100%. Purchase commitments for DTE Electric include affiliate agreements with DTE Sustainable Generation that are eliminated in consolidation for DTE Energy.



~~Commission File Number~~Michigan		~~Registrants,~~ 38-3217752
(State or other jurisdiction of ~~Incorporation, Address, and Telephone Number~~incorporation or organization)		~~I.R.S.~~(I.R.S Employer Identification No.)
~~1-11607~~	~~DTE Energy Company~~


Michigan						38-0478650
(State or other jurisdiction of incorporation or organization)						(I.R.S Employer Identification No.)



						Dividends Declared per Share
Year	Quarter	High		Low		Dividends Declared per Share
2017
	First	$	102.96	$	96.56	$	0.8250
	Second	$	111.35	$	100.97	$	0.8250
	Third	$	113.71	$	104.19	$	0.8250
	Fourth	$	116.74	$	106.21	$	0.8825
2016
	First	$	91.00	$	78.01	$	0.7300
	Second	$	99.13	$	84.77	$	0.7300
	Third	$	100.45	$	90.61	$	0.7700
	Fourth	$	99.92	$	89.66	$	0.8250



	2017		2016		2015		2014		2013
	(In millions, except per share amounts)
Operating Revenues	$	12,607	$	10,630	$	10,337	$	12,301	$	9,661
Net Income Attributable to DTE Energy Company^(a)	$	1,134	$	868	$	727	$	905	$	661
Diluted Earnings Per Common Share	$	6.32	$	4.83	$	4.05	$	5.10	$	3.76
Financial Information
Dividends declared per share of common stock	$	3.36	$	3.06	$	2.84	$	2.69	$	2.59
Total Assets^(b)	$	33,767	$	32,041	$	28,662	$	27,827	$	25,864
Long-Term Debt^(b)(c)	$	12,185	$	11,269	$	8,760	$	8,271	$	7,143
Shareholders’ equity^(b)	$	9,512	$	9,011	$	8,772	$	8,327	$	7,921



	Number of Shares Purchased^(a)	Average Price Paid per Share^(a)		Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Average Price Paid per Share	Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs
10/01/2017 — 10/31/2017	3,269	$	99.19	—	—	—
11/01/2017 — 11/30/2017	—	$	—	—	—	—
12/01/2017 — 12/31/2017	1,300	$	89.46	—	—	—
Total	4,569			—


~~(a)~~	~~Represents shares of DTE Energy common stock withheld to satisfy income tax obligations upon the vesting of restricted stock based on the price in effect at the grant date.~~


~~(a)~~	~~The 2017 results include a $105 million net income tax benefit related to the enactment of the TCJA.~~


~~(c)~~	~~Long-Term Debt includes Capital lease obligations and excludes debt due within one year.~~



	2017
	(In millions)
Higher demand due to improved conditions in the steel business	$	107
Higher production driven by new projects, offset by lower coal prices in the REF business	102
Lower production and one-time recovery in 2016, offset by an acquisition in the renewables business	(9		)
Lower sales primarily associated with expired contracts in the on-site business	(17		)
	$	183

	2016
	(In millions)
Closure of the Shenango coke battery and lower demand in the steel business	$	(264	)
Termination of a lease agreement in the REF business	(40		)
Contract termination at a renewable power project facility, offset by a one-time revenue recovery	(9		)
Other	(5		)
	$	(318	)



	2017
	(In millions)
Unrealized Margins^(a)
Favorable results, primarily in gas structured and gas full requirements strategies^(b)	$	113
Unfavorable results, primarily in power and gas trading and power full requirements strategies	(26		)
	$	87
Realized Margins^(a)
Favorable results, primarily in gas structured, environmental trading and gas storage strategies^(c)	$	103
Unfavorable results, primarily in the power full requirements strategy	(13		)
	$	90
Increase in Non-utility Margin	$	177


~~(b)~~			~~Amount includes $113 million of timing related gains related to gas strategies which will reverse in future periods as the underlying contracts settle.~~2020

			(In millions)
Unrealized Margins(a)
~~(c)~~ Favorable results, primarily in gas structured and gas transportation strategies(b)			~~Amount includes $95 million of timing related losses related to gas strategies recognized in previous periods that reversed as the underlying contracts settled.~~$

83
~~(a)~~Unfavorable results, primarily in environmental and gas trading, and power full requirements strategies			Natural gas structured transactions typically involve a physical purchase or sale of natural gas in the future and/or natural gas basis financial instruments which are derivatives and a related non-derivative pipeline transportation contract. These gas structured transactions can result in significant earnings volatility as the derivative components are marked-to-market without revaluing the related non-derivative contracts.

(58)
~~(b)~~			~~Amount includes $46 million of timing related losses related to gas strategies which will reverse in future periods as the underlying contracts settle.~~



~~DTE Energy~~	x	~~DTE Electric~~	x

25
~~(c)~~ Realized Margins(a)	~~Amount includes $4 million of timing related gains related to~~
Favorable results, primarily in power full requirements, environmental trading, and gas transportation strategies ~~recognized~~	21
Unfavorable results, primarily in ~~previous periods that reversed as the underlying contracts settled.~~gas structured and gas full requirements strategies(c)	(63)
	(42)
Decrease in Non-utility Margin	$	(17)


~~(a)~~	~~Excludes $15 million of unamortized debt discount and $69 million of unamortized debt issuance costs.~~


~~(b)~~	~~Excludes~~ ~~$35 million~~ ~~of unamortized debt issuance costs.~~


~~(d)~~	~~Excludes amounts associated with full requirements contracts where no stated minimum purchase volume is required.~~


~~(e)~~	The agreements represent the minimum settlements with suppliers for renewable energy and renewable energy credits under existing contract terms which expire from 2030 through 2035. DTE Electric's share of plant output ranges from 44% to 100%.


~~(f)~~	~~Excludes a power purchase agreement with a non-utility affiliate of DTE Energy.~~


~~(g)~~	~~Includes liabilities for unrecognized tax benefits of $10 million.~~


~~(h)~~	~~Excludes other long-term liabilities of $178 million not directly derived from contracts or other agreements.~~


Reporting Unit	Goodwill		Fair Value Reduction %^(a)		Discount Rate		Terminal Multiple^(b)	Valuation Methodology^(c)	Reporting Unit	Goodwill		Fair Value Reduction %(a)		Discount Rate		Valuation Methodology(b)(c)
	(In millions)									(In millions)
Electric	$	1,208	46	%	6	%	10.0x	DCF, assuming stock sale	Electric	$	1,208	51	%	5.2	%	DCF and market multiples analysis
Gas	743		35	%	6	%	11.0x	DCF, assuming stock sale	Gas	743		47	%	5.3	%	DCF and market multiples analysis
Gas Storage and Pipelines	299		48	%	8	%	11.0x	DCF, assuming asset sale
Power and Industrial Projects^(d)	26		21	%	8	%	10.0x	DCF, assuming asset sale^(e)

DTE Vantage									DTE Vantage	25		50	%	7.7	%	DCF
Energy Trading	17		32	%	13	%	n/a^(f)	DCF, assuming asset sale	Energy Trading	17		95	%	9.3	%	DCF
	$	2,293								$	1,993


~~(a)~~	~~Percentage by which the fair value of equity of the reporting unit would need to decline to equal its carrying value, including goodwill.~~


~~(b)~~	~~Multiple of enterprise value (sum of debt plus equity value) to earnings before interest, taxes, depreciation, and amortization (EBITDA).~~


~~(c)~~	~~Discounted cash flows (DCF) incorporated 2018-2022 projected cash flows plus a calculated terminal value.~~


~~(d)~~	~~Power and Industrial Projects excludes the Biomass reporting unit, as this unit has no allocated goodwill.~~


~~(e)~~	~~Asset sales were assumed, except for Power and Industrial Projects' reduced emissions fuels projects, which assumed stock sales.~~


~~(f)~~	Due to lack of market comparable information for Energy Trading, DTE Energy capitalized the terminal year cash flows at the weighted average cost of capital (WACC) in lieu of applying a terminal EBITDA multiple.



	Total
	(In millions)
MTM at December 31, 2016	$	(86	)
Reclassified to realized upon settlement	(52		)
Changes in fair value recorded to income	128
Amounts recorded to unrealized income	76
Changes in fair value recorded in regulatory liabilities	25
Change in collateral	(7		)
MTM at December 31, 2017	$	8


	Total
	(In millions)
MTM at December 31, 2020	$	28
Reclassified to realized upon settlement	14
Changes in fair value recorded to income	(184)
Amounts recorded to unrealized income	(170)
Changes in fair value recorded in Regulatory liabilities	19


Change in collateral	(36)
MTM at December 31, 2021	$	(159)


Source of Fair Value	2022		2023		2024		2025 and Beyond		Total Fair Value
	(In millions)
Level 1	$	54	$	30	$	9	$	3	$	96
Level 2	37		(10)		(19)		(6)		2
Level 3	(93)		(38)		(15)		(69)		(215)
MTM before collateral adjustments	$	(2)	$	(18)	$	(25)	$	(72)	(117)
Collateral adjustments									(42)
MTM at December 31, 2021									$	(159)


	Credit Exposure Before Cash Collateral		Cash Collateral			Net Credit Exposure			Credit Exposure Before Cash Collateral		Cash Collateral		Net Credit Exposure
	(In millions)								(In millions)
Investment Grade^(a)								Investment Grade(a)
A- and Greater	$	226	$	—		$	226	A- and Greater	$	325	$	—	$	325
BBB+ and BBB	265		—			265		BBB+ and BBB	238		—		238
BBB-	65		—			65		BBB-	50		(12)		38
Total Investment Grade	556		—			556		Total Investment Grade	613		(12)		601
Non-investment grade^(b)	6		—			6		Non-investment grade(b)	4		—		4
Internally Rated — investment grade^(c)	295		(1		)	294
Internally Rated �� investment grade(c)								Internally Rated �� investment grade(c)	979		(32)		947
Internally Rated — non-investment grade^(d)	20		(2		)	18		Internally Rated — non-investment grade(d)	61		(8)		53
Total	$	877	$	(3	)	$	874	Total	$	1,657	$	(52)	$	1,605


~~(a)~~	This category includes counterparties with minimum credit ratings of Baa3 assigned by Moody’s Investors Service (Moody’s) or BBB- assigned by Standard & Poor’s Rating Group, a division of McGraw-Hill Companies, Inc. (Standard & Poor’s). The five largest counterparty exposures, combined, for this category represented approximately 15% of the total gross credit exposure.