UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended ~~September 30, 2017~~March 31, 2020

☐TRANSITION REPORT PURSUANT TO SECTION 12 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-11607

DTE Energy Company



Michigan		38-3217752
(State or other jurisdiction of incorporation or organization)		(I.R.S Employer Identification No.)

Commission File Number: 1-2198

DTE Electric Company



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

Registrants address of principal executive offices: One Energy Plaza, Detroit, Michigan48226-1279

Registrants telephone number, including area code: (313) 235-4000

Securities registered pursuant to Section 12(b) of the Act:



~~Commission File Number~~Title of Each Class	~~Registrants; State of Incorporation; Address; and Telephone Number~~Trading Symbol(s)	~~I.R.S. Employer Identification No.~~Name of Exchange on which Registered
~~1-11607~~Common stock, without par value	DTE ~~Energy Company~~ ~~(a Michigan corporation)~~ ~~One Energy Plaza~~ ~~Detroit, Michigan 48226-1279~~ ~~313-235-4000~~	~~38-3217752~~New York Stock Exchange

~~1-2198~~2012 Series C 5.25% Junior Subordinated Debentures due 2062	~~DTE Electric Company~~ ~~(a Michigan corporation)~~ ~~One Energy Plaza~~ ~~Detroit, Michigan 48226-1279~~ ~~313-235-4000~~ DTQ	~~38-0478650~~New York Stock Exchange

2016 Series B 5.375% Junior Subordinated Debentures due 2076	DTJ	New York Stock Exchange

2016 Series F 6.00% Junior Subordinated Debentures due 2076	DTY	New York Stock Exchange

2017 Series E 5.25% Junior Subordinated Debentures due 2077	DTW	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

~~DTE Energy Company (DTE Energy) Yes~~ x No o~~DTE Electric Company (DTE Electric) Yes~~ x No o



DTE Energy Company (DTE Energy)	Yes	☒	No	☐	DTE Electric Company (DTE Electric)	Yes	☒	No	☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).

~~DTE Energy Yes~~ x No o~~DTE Electric Yes~~ x No o



DTE Energy	Yes	☒	No	☐	DTE Electric	Yes	☒	No	☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of ~~“large~~"large accelerated filer,~~” “accelerated~~" "accelerated filer,~~” “smaller~~" "smaller reporting company,”" and ~~“emerging~~"emerging growth ~~company”~~company" in Rule 12b-2 of the Exchange Act.



DTE Energy	Large accelerated filerx	Accelerated filero	Non-accelerated filero	Smaller reporting companyo	Emerging growth company
	☒	☐	☐	☐	☐
			~~(Do not check if a smaller~~ ~~reporting company)~~	~~Emerging growth company~~ o
DTE Electric	Large accelerated filero	Accelerated filero	Non-accelerated filerx	Smaller reporting companyo	Emerging growth company
	☐	☐	~~(Do not check if a smaller~~ ~~reporting company)~~ ☒	~~Emerging growth company~~ o ☐	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

~~DTE Energy Yes~~ o No x~~DTE Electric Yes~~ o No x



DTE Energy	Yes	☐	No	☒	DTE Electric	Yes	☐	No	☒

Number of shares of Common Stock outstanding at ~~September 30, 2017:~~March 31, 2020:



Registrant	Description	Shares
DTE Energy	Common Stock, without par value	~~179,390,286~~192,611,882

DTE Electric	Common Stock, $10 par value, ~~directly owned~~indirectly-owned by DTE Energy	138,632,324

This combined Form 10-Q is filed separately by two registrants: DTE Energy and DTE Electric. Information contained herein relating to anany individual registrant is filed by such registrant solely on its own behalf. DTE Electric makes no representation as to information relating exclusively to DTE Energy.

DTE Electric, aan indirect wholly-owned subsidiary of DTE Energy, meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format specified in General Instructions H(2) of Form 10-Q.

~~THIS PAGE INTENTIONALLY LEFT BLANK~~

TABLE OF CONTENTS



		Page
	Definitions	1
	Filing Format	34
	Forward-Looking Statements	34
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	DTE Energy Consolidated Financial Statements (Unaudited)	56
	DTE Electric Consolidated Financial Statements (Unaudited)	1112
	Combined Notes to Consolidated Financial Statements (Unaudited)	1718
	Note 1 — Organization and Basis of Presentation	1718
	Note 2 — Significant Accounting Policies	20
	~~Note 3 — New Accounting Pronouncements~~	21
	Note 43 — ~~Acquisition~~	22
	~~Note 5 — Regulatory Matters~~	24
	~~Note 6 — Earnings Per Share~~New Accounting Pronouncements	25
	Note ~~7 �� Fair Value~~4 — Acquisitions	26
	Note 5 — Revenue	29
	Note 6 — Regulatory Matters	31
	Note 7 — Earnings Per Share	31
	Note 8 — Fair Value	32
	Note 9 — Financial and Other Derivative Instruments	3340
	Note 910 — Long-Term Debt	38
	~~Note 10 — Short-Term Credit Arrangements and Borrowings~~	38
	~~Note 11 — Commitments and Contingencies~~	39
	~~Note 12 — Retirement Benefits and Trusteed Assets~~	44
	Note 1311 — ~~Segment~~Short-Term Credit Arrangements and ~~Related Information~~Borrowings	45
	~~Item 2.~~Note 12 — Leases	46
	Note 13 — Commitments and Contingencies	47
	Note 14 — Retirement Benefits and Trusteed Assets	52
	Note 15 — Segment and Related Information	53
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4656
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6169
Item 4.	Controls and Procedures	6472
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	6573
Item 1A.	Risk Factors	6573
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6574
Item 6.	Exhibits	6675
	Signatures	6777

DEFINITIONS



ACE		Affordable Clean Energy

AFUDC		Allowance for Funds Used During Construction

AGS		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.

~~ANPR~~AMT	~~Advanced Notice of Proposed Rulemaking~~	Alternative Minimum Tax

ASU		Accounting Standards Update issued by the FASB

Blue Union		Blue Union gathering system is a midstream natural gas asset located in the Haynesville shale formation of Louisiana. DTE Energy purchased 100% of Blue Union in December 2019 and this asset is part of DTE Energy's Gas Storage and Pipelines segment

CAD		Canadian Dollar (C$)

CCR		Coal Combustion Residuals

CFTC		U.S. Commodity Futures Trading Commission

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

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

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

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		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 on December 4, 2019

FASB		Financial Accounting Standards Board

FERC		Federal Energy Regulatory Commission

FOV		Finding of Violation

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

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

GHGs		Greenhouse gases

~~MDEQ~~Green Bonds	~~Michigan Department~~	A financing option to fund projects that have a positive environmental impact based upon a specified set of ~~Environmental Quality~~criteria. The proceeds are required to be used for eligible green expenditures.

LEAP		Louisiana Energy Access Project gathering pipeline is a midstream natural gas asset located in the Haynesville shale formation of Louisiana. DTE Energy purchased 100% of LEAP in December 2019 and this asset is part of DTE Energy's Gas Storage and Pipelines segment

LIBOR		London Inter-Bank Offered Rates

DEFINITIONS



MGP		Manufactured Gas Plant

~~MISO~~	~~Midcontinent Independent System Operator, Inc.~~

MPSC		Michigan Public Service Commission

MTM		Mark-to-market

NAV		Net Asset Value

NEXUS		NEXUS Gas Transmission, LLC, a joint venture in which DTE Energy ~~own~~owns a 50% partnership ~~interest.~~interest

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_X		Nitrogen Oxides

NRC		U.S. Nuclear Regulatory Commission

~~DEFINITIONS~~


PG&E		Pacific Gas and Electric Corporation

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 Internal Revenue Service.

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.

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

REC		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.

RNG		Renewable Natural Gas

SEC		Securities and Exchange Commission

SGG		Stonewall Gas Gathering is a midstream natural gas asset located in West Virginia. DTE Energy purchased 55% of SGG in October 2016, and ~~this asset~~an additional 30% in May 2019, bringing its ownership to 85%. SGG is part of DTE Energy's Gas Storage and Pipelines segment.

SO₂		Sulfur Dioxide

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

TCJA rate reduction liability		Reduction in DTE Gas revenue with an offsetting Regulatory liability related to Calculation C of the TCJA. DTE Gas's 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

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 City of Detroit's Public Lighting Department customers to DTE Electric's distribution ~~system.~~system

USD		United States Dollar ($)

VIE		Variable Interest Entity

DEFINITIONS



Units of Measurement


Bcf		Billion cubic feet of natural gas

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

MMBtu		One million BTU

MW		Megawatt of electricity

MWh	~~Megawatthour~~	Megawatt-hour of electricity

FILING FORMAT

This combined Form 10-Q is separately filed by DTE Energy and DTE Electric. Information in this combined Form 10-Q 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 in respect ofto debt securities of DTE Energy. This combined Form 10-Q should be read in its entirety. No one section of this combined Form 10-Q deals with all aspects of the subject matter of this combined Form 10-Q. This combined Form 10-Q ~~report~~ should be read in conjunction with the Consolidated Financial Statements and Combined Notes to Consolidated Financial Statements and with Management's Discussion and Analysis included in the combined DTE Energy and DTE Electric ~~2016~~2019 Annual Report on 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:

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

impact of regulation by the EPA, the FERC, the MPSC, the NRC, and for DTE Energy, the CFTC, 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;

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

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

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

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

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;

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 against, or damage due to, cyber 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;

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;

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 on operations and sales to customers, and purchases from suppliers;

unplanned outages;

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

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;

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

~~implementation of new information systems;~~ 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 — Financial Information

Item 1. Financial Statements

DTE Energy Company

Consolidated Statements of Operations (Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2017			2016			2017			2016			2020			2019
	(In millions, except per share amounts)												(In millions, except per share amounts)
Operating Revenues
Utility operations	$	1,573		$	1,748		$	4,714		$	4,847		$	1,733		$	1,864
Non-utility operations	1,672			1,180			4,622			2,909			1,289			1,650
	3,245			2,928			9,336			7,756			3,022			3,514

Operating Expenses
Fuel, purchased power, and gas — utility	437			503			1,362			1,482			467			582
Fuel, purchased power, and gas — non-utility	1,469			1,034			3,897			2,527			968			1,385
Operation and maintenance	566			562			1,725			1,620			579			591
Depreciation and amortization	258			230			756			702			353			296
Taxes other than income	91			92			297			282			119			118
Asset (gains) losses and impairments, net	6			—			9			(1		)	(10		)	—
	2,827			2,421			8,046			6,612			2,476			2,972
Operating Income	418			507			1,290			1,144			546			542

Other (Income) and Deductions
Interest expense	146			114			404			341			175			152
Interest income	(4		)	(3		)	(9		)	(17		)	(10		)	(4		)
Non-operating retirement benefits, net													9			9
Other income	(74		)	(51		)	(204		)	(160		)	(65		)	(88		)
Other expenses	13			12			26			27			46			11
	81			72			217			191			155			80
Income Before Income Taxes	337			435			1,073			953			391			462

Income Tax Expense	74			110			241			243			49			54

Net Income	263			325			832			710			342			408

Less: Net Loss Attributable to Noncontrolling Interests	(7		)	(13		)	(15		)	(27		)
Less: Net Income Attributable to Noncontrolling Interests													2			7

Net Income Attributable to DTE Energy Company	$	270		$	338		$	847		$	737		$	340		$	401

Basic Earnings per Common Share
Net Income Attributable to DTE Energy Company	$	1.51		$	1.88		$	4.72		$	4.10		$	1.77		$	2.20

Diluted Earnings per Common Share
Net Income Attributable to DTE Energy Company	$	1.51		$	1.88		$	4.72		$	4.10		$	1.76		$	2.19

Weighted Average Common Shares Outstanding
Basic	179			179			179			179			192			182
Diluted	179			180			179			180			192			183
Dividends Declared per Common Share	$	0.825		$	0.77		$	2.475		$	2.23

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Energy Company

Consolidated Statements of Comprehensive Income (Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2017			2016			2017			2016			2020			2019
	(In millions)												(In millions)
Net Income	$	263		$	325		$	832		$	710		$	342		$	408

Other comprehensive income, net of tax:
Benefit obligations, net of taxes of $2, $2, $6, and $3, respectively	3			4			10			6
Net unrealized gains on investments during the period, net of taxes of $1, respectively	—			1			1			1
Other comprehensive income (loss), net of tax:
Benefit obligations, net of taxes of $1 for both periods													3			4
Net unrealized gains (losses) on derivatives during the period, net of taxes of $—, and $(1), respectively													1			(3		)
Foreign currency translation	2			(1		)	2			—			(1		)	1
Other comprehensive income	5			4			13			7			3			2

Comprehensive income	268			329			845			717			345			410
Less: Comprehensive loss attributable to noncontrolling interests	(7		)	(13		)	(15		)	(27		)
Less: Comprehensive income attributable to noncontrolling interests													2			7
Comprehensive Income Attributable to DTE Energy Company	$	275		$	342		$	860		$	744		$	343		$	403

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Energy Company

Consolidated Statements of Financial Position (Unaudited)


	September 30,			December 31,			March 31,			December 31,
	2017			2016			2020			2019
	(In millions)						(In millions)
ASSETS
Current Assets
Cash and cash equivalents	$	63		$	92		$	552		$	93
Restricted cash	23			21			124			—
Accounts receivable (less allowance for doubtful accounts of $39 and $41, respectively)
Accounts receivable (less allowance for doubtful accounts of $90 and $91, respectively)
Customer	1,395			1,522			1,482			1,642
Other	166			71			260			245
Inventories
Fuel and gas	453			416			294			373
Materials and supplies	363			356			413			386
Derivative assets	76			47			112			133
Regulatory assets	6			42			21			5
Other	270			195			268			209
	2,815			2,762			3,526			3,086
Investments
Nuclear decommissioning trust funds	1,439			1,320			1,439			1,661
Investments in equity method investees	971			752			1,867			1,862
Other	224			201			228			265
	2,634			2,273			3,534			3,788
Property
Property, plant, and equipment	30,924			30,029			36,146			35,072
Accumulated depreciation and amortization	(10,617		)	(10,299		)	(9,910		)	(9,755		)
	20,307			19,730			26,236			25,317
Other Assets
Goodwill	2,293			2,286			2,466			2,464
Regulatory assets	3,828			3,871			4,356			4,171
Intangible assets	883			842			2,402			2,393
Notes receivable	74			73			217			202
Derivative assets	62			34			58			41
Prepaid postretirement costs							83			69
Operating lease right-of-use assets							164			169
Other	175			170			190			182
	7,315			7,276			9,936			9,691
Total Assets	$	33,071		$	32,041		$	43,232		$	41,882

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Energy Company

Consolidated Statements of Financial Position (Unaudited) — (Continued)


	September 30,			December 31,			March 31,			December 31,
	2017			2016			2020			2019
	(In millions, except shares)						(In millions, except shares)
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	994		$	1,079		$	1,028		$	1,076
Accrued interest	131			96			169			147
Dividends payable	148			148			195			195
Short-term borrowings	659			499			1,131			828
Current portion long-term debt, including capital leases	109			14
Current portion long-term debt, including finance leases							387			687
Derivative liabilities	42			69			88			83
Gas inventory equalization							62			—
Regulatory liabilities	86			34			61			65
Operating lease liabilities							32			33
Acquisition related deferred payment							382			379
Other	429			498			437			504
	2,598			2,437			3,972			3,997
Long-Term Debt (net of current portion)
Mortgage bonds, notes, and other	11,038			10,506			15,870			14,778
Junior subordinated debentures	756			756			1,146			1,146
Capital lease obligations	1			7
Finance lease liabilities							10			11
	11,795			11,269			17,026			15,935
Other Liabilities
Deferred income taxes	4,396			4,162			2,553			2,315
Regulatory liabilities	489			555			3,244			3,264
Asset retirement obligations	2,288			2,197			2,721			2,672
Unamortized investment tax credit	138			93			165			166
Derivative liabilities	48			98			47			86
Accrued pension liability	922			1,152			795			808
Accrued postretirement liability	6			36
Nuclear decommissioning	213			194			215			249
Operating lease liabilities							124			127
Other	325			349			382			427
	8,825			8,836			10,246			10,114
Commitments and Contingencies (Notes 5 and 11)
Commitments and Contingencies (Notes 6 and 13)

Equity
Common stock, without par value, 400,000,000 shares authorized, and 179,390,286 and 179,432,581 shares issued and outstanding, respectively	3,978			4,030
Common stock (No par value, 400,000,000 shares authorized, and 192,611,882 and 192,208,533 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively)							5,235			5,233
Retained earnings	5,515			5,114			6,732			6,587
Accumulated other comprehensive loss	(120		)	(133		)	(145		)	(148		)
Total DTE Energy Company Equity	9,373			9,011			11,822			11,672
Noncontrolling interests	480			488			166			164
Total Equity	9,853			9,499			11,988			11,836
Total Liabilities and Equity	$	33,071		$	32,041		$	43,232		$	41,882

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Energy Company

Consolidated Statements of Cash Flows (Unaudited)


	Nine Months Ended September 30,						Three Months Ended March 31,
	2017			2016			2020			2019
	(In millions)						(In millions)
Operating Activities
Net Income	$	832		$	710		$	342		$	408
Adjustments to reconcile Net Income to Net cash from operating activities:
Depreciation and amortization	756			702			353			296
Nuclear fuel amortization	39			44			13			15
Allowance for equity funds used during construction	(17		)	(15		)	(6		)	(7		)
Deferred income taxes	261			244			213			49
Equity earnings of equity method investees	(77		)	(49		)	(29		)	(23		)
Dividends from equity method investees	55			52			39			44
Asset (gains) losses and impairments, net	5			—			(6		)	—
Changes in assets and liabilities:
Accounts receivable, net	43			6			151			143
Inventories	(41		)	10			55			207
Prepaid postretirement benefit costs							(14		)	(31		)
Accounts payable	25			39			(24		)	(288		)
Gas inventory equalization							62			88
Accrued pension liability	(230		)	(1		)	(13		)	(115		)
Accrued postretirement liability	(30		)	(80		)
Derivative assets and liabilities	(133		)	122			(30		)	(15		)
Regulatory assets and liabilities	260			93			(149		)	112
Other current and noncurrent assets and liabilities	(198		)	(110		)	104			(131		)
Net cash from operating activities	1,550			1,767			1,061			752
Investing Activities
Plant and equipment expenditures — utility	(1,439		)	(1,267		)	(993		)	(641		)
Plant and equipment expenditures — non-utility	(133		)	(75		)	(195		)	(27		)
Acquisitions related to Business Combinations, net of cash acquired							(128		)	—
Proceeds from sale of assets							4			—
Proceeds from sale of nuclear decommissioning trust fund assets	951			1,135			439			176
Investment in nuclear decommissioning trust funds	(936		)	(1,140		)	(438		)	(178		)
Distributions from equity method investees	10			8			1			1
Contributions to equity method investees	(194		)	(199		)	(15		)	(22		)
Notes receivable							(14		)	(48		)
Other	(63		)	35			(3		)	(9		)
Net cash used for investing activities	(1,804		)	(1,503		)	(1,342		)	(748		)
Financing Activities
Issuance of long-term debt, net of issuance costs	1,010			646			1,092			644
Redemption of long-term debt	(385		)	(322		)	(300		)	—
Repurchase of long-term debt	—			(59		)
Short-term borrowings, net	160			(89		)	303			(453		)
Repurchase of common stock	(51		)	(33		)
Dividends on common stock	(444		)	(393		)
Dividends paid on common stock							(195		)	(172		)
Contributions from noncontrolling interests, principally REF entities							10			9
Distributions to noncontrolling interests							(10		)	(21		)
Other	(65		)	15			(36		)	(26		)
Net cash from (used for) financing activities	225			(235		)	864			(19		)
Net Increase (Decrease) in Cash and Cash Equivalents	(29		)	29
Cash and Cash Equivalents at Beginning of Period	92			37
Cash and Cash Equivalents at End of Period	$	63		$	66
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash							583			(15		)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period							93			76
Cash, Cash Equivalents, and Restricted Cash at End of Period							$	676		$	61

Supplemental disclosure of non-cash investing and financing activities
Plant and equipment expenditures in accounts payable	$	222		$	168		$	285		$	235

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Energy Company

Consolidated Statements of Changes in Equity (Unaudited)

Retained Earnings Accumulated Other Comprehensive Income (Loss) Noncontrolling Interests
Common Stock
Shares Amount Total
(Dollars in millions, shares in thousands)
Balance, December 31, 2016 179,433
$ 4,030
$ 5,114
$ (133 ) $ 488
$ 9,499
Net Income (Loss) —
—
847
—
(15 ) 832
Dividends declared on common stock —
—
(444 ) —
—
(444 )
Repurchase of common stock (524 ) (51 ) —
—
—
(51 )
Benefit obligations, net of tax —
—
—
10
—
10
Net change in unrealized gains on investments, net of tax —
—
—
1
—
1
Foreign currency translation —
—
—
2
—
2
Stock-based compensation, net contributions from noncontrolling interests, and other 481
(1 ) (2 ) —
7
4
Balance, September 30, 2017 179,390
$ 3,978
$ 5,515
$ (120 ) $ 480
$ 9,853



				Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests
	Common Stock
	Shares	Amount										Total
	(Dollars in millions, shares in thousands)
Balance, December 31, 2019	192,209	$	5,233	$	6,587		$	(148	)	$	164	$	11,836
Net Income	—	—		340			—			2		342
Dividends declared on common stock ($1.01 per Common Share)	—	—		(195		)	—			—		(195		)
Other comprehensive income, net of tax	—	—		—			3			—		3
Stock-based compensation, net distributions to noncontrolling interests, and other	403	2		—			—			—		2
Balance, March 31, 2020	192,612	$	5,235	$	6,732		$	(145	)	$	166	$	11,988



					Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests
	Common Stock
	Shares	Amount												Total
	(Dollars in millions, shares in thousands)
Balance, December 31, 2018	181,925	$	4,245		$	6,112		$	(120	)	$	480		$	10,717
Implementation of ASU 2018-02	—	—			25			(25		)	—			—
Net Income	—	—			401			—			7			408
Dividends declared on common stock ($0.95 per Common Share)	—	—			(173		)	—			—			(173		)
Contribution of common stock to pension plan	815	100			—			—			—			100
Other comprehensive income, net of tax	—	—			—			2			—			2
Stock-based compensation, net contributions from noncontrolling interests, and other	472	(21		)	(1		)	—			(12		)	(34		)
Balance, March 31, 2019	183,212	$	4,324		$	6,364		$	(143	)	$	475		$	11,020

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Electric Company

Consolidated Statements of Operations (Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2017			2016			2017			2016			2020			2019
	(In millions)												(In millions)
Operating Revenues — Utility operations	$	1,434		$	1,608		$	3,827		$	3,976		$	1,212		$	1,235

Operating Expenses
Fuel and purchased power — utility	428			495			1,097			1,191			297			346
Operation and maintenance	349			363			1,068			1,019			360			358
Depreciation and amortization	188			176			549			539			258			221
Taxes other than income	74			73			229			216			83			84
	1,039			1,107			2,943			2,965			998			1,009
Operating Income	395			501			884			1,011			214			226

Other (Income) and Deductions
Interest expense	68			66			206			196			81			76
Interest income	—			—			—			(8		)	(2		)	(1		)
Other income	(21		)	(15		)	(57		)	(48		)	(13		)	(33		)
Other expenses	11			9			23			22			41			8
	58			60			172			162			107			50
Income Before Income Taxes	337			441			712			849			107			176

Income Tax Expense	118			156			249			302			13			29

Net Income	$	219		$	285		$	463		$	547		$	94		$	147

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Electric Company

Consolidated Statements of Comprehensive Income (Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2017		2016		2017		2016		2020		2019
	(In millions)								(In millions)
Net Income	$	219	$	285	$	463	$	547	$	94	$	147
Other comprehensive income	—		—		—		—		—		—
Comprehensive Income	$	219	$	285	$	463	$	547	$	94	$	147

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Electric Company

Consolidated Statements of Financial Position (Unaudited)


	September 30,			December 31,			March 31,			December 31,
	2017			2016			2020			2019
	(In millions)						(In millions)
ASSETS
Current Assets
Cash and cash equivalents	$	12		$	13		$	13		$	12
Accounts receivable (less allowance for doubtful accounts of $23 and $25, respectively)
Accounts receivable (less allowance for doubtful accounts of $43 and $46, respectively)
Customer	770			728			694			729
Affiliates	16			12			9			25
Other	86			29			38			41
Inventories
Fuel	182			225			205			187
Materials and supplies	282			271			280			280
Regulatory assets	5			36			17			5
Prepaid property tax	107			45			96			52
Other	14			18			29			26
	1,474			1,377			1,381			1,357
Investments
Nuclear decommissioning trust funds	1,439			1,320			1,439			1,661
Other	35			36			35			38
	1,474			1,356			1,474			1,699
Property
Property, plant, and equipment	22,606			22,094			24,950			24,279
Accumulated depreciation and amortization	(7,921		)	(7,721		)	(6,810		)	(6,706		)
	14,685			14,373			18,140			17,573
Other Assets
Regulatory assets	3,108			3,113			3,653			3,448
Intangible assets	33			31			19			15
Prepaid postretirement costs — affiliates	114			114			266			266
Operating lease right-of-use assets							84			87
Other	124			125			149			143
	3,379			3,383			4,171			3,959
Total Assets	$	21,012		$	20,489		$	25,166		$	24,588

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Electric Company

Consolidated Statements of Financial Position (Unaudited) — (Continued)


	September 30,		December 31,		March 31,		December 31,
	2017		2016		2020		2019
	(In millions, except shares)				(In millions, except shares)
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Accounts payable
Affiliates	$	52	$	58	$	92	$	59
Other	371		452		431		406
Accrued interest	70		65		83		84
Current portion long-term debt, including capital leases	5		6
Current portion long-term debt, including finance leases					336		636
Regulatory liabilities	70		27		57		40
Short-term borrowings
Affiliates	66		117		139		97
Other	311		62		71		354
Operating lease liabilities					12		12
Other	146		146		150		155
	1,091		933		1,371		1,843
Long-Term Debt (net of current portion)
Mortgage bonds, notes, and other	6,016		5,878		7,638		6,548
Capital lease obligations	1		7
Finance lease liabilities					3		4
	6,017		5,885		7,641		6,552
Other Liabilities
Deferred income taxes	3,985		3,793		2,382		2,355
Regulatory liabilities	189		229		2,531		2,546
Asset retirement obligations	2,094		2,012		2,493		2,447
Unamortized investment tax credit	136		90		164		166
Nuclear decommissioning	213		194		215		249
Accrued pension liability — affiliates	826		1,008		711		717
Accrued postretirement liability — affiliates	252		269		359		367
Operating lease liabilities					65		67
Other	75		81		80		84
	7,770		7,676		9,000		8,998
Commitments and Contingencies (Notes 5 and 11)
Commitments and Contingencies (Notes 6 and 13)

Shareholder’s Equity
Common stock, $10 par value, 400,000,000 shares authorized, and 138,632,324 shares issued and outstanding	4,206		4,206
Common stock ($10 par value, 400,000,000 shares authorized, and 138,632,324 shares issued and outstanding for both periods)					4,811		4,811
Retained earnings	1,926		1,787		2,343		2,384
Accumulated other comprehensive income	2		2
Total Shareholder’s Equity	6,134		5,995		7,154		7,195
Total Liabilities and Shareholder’s Equity	$	21,012	$	20,489	$	25,166	$	24,588

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Electric Company

Consolidated Statements of Cash Flows (Unaudited)


	Nine Months Ended September 30,						Three Months Ended March 31,
	2017			2016			2020			2019
	(In millions)						(In millions)
Operating Activities
Net Income	$	463		$	547		$	94		$	147
Adjustments to reconcile Net Income to Net cash from operating activities:
Depreciation and amortization	549			539			258			221
Nuclear fuel amortization	39			44			13			15
Allowance for equity funds used during construction	(14		)	(13		)	(6		)	(6		)
Deferred income taxes	248			298			7			23
Changes in assets and liabilities:
Accounts receivable, net	(104		)	(135		)	54			47
Inventories	32			18			(18		)	51
Accounts payable	32			59			106			(36		)
Accrued pension liability — affiliates	(182		)	9			(6		)	(103		)
Accrued postretirement liability — affiliates	(17		)	(52		)	(8		)	(21		)
Regulatory assets and liabilities	223			100			(152		)	130
Other current and noncurrent assets and liabilities	(174		)	(119		)	132			(146		)
Net cash from operating activities	1,095			1,295			474			322
Investing Activities
Plant and equipment expenditures	(1,103		)	(999		)	(871		)	(531		)
Notes receivable, including affiliates	5			(64		)	—			(96		)
Proceeds from sale of nuclear decommissioning trust fund assets	951			1,135			439			176
Investment in nuclear decommissioning trust funds	(936		)	(1,140		)	(438		)	(178		)
Other	(5		)	40			(2		)	(10		)
Net cash used for investing activities	(1,088		)	(1,028		)	(872		)	(639		)
Financing Activities
Issuance of long-term debt, net of issuance costs	435			355			1,092			644
Redemption of long-term debt	(300		)	(10		)	(300		)	—
Repurchase of long-term debt	—			(59		)
Short-term borrowings, net — affiliate	(51		)	37			42			(50		)
Short-term borrowings, net — other	249			(272		)	(283		)	(149		)
Dividends on common stock	(324		)	(315		)
Dividends paid on common stock							(135		)	(124		)
Other	(17		)	(2		)	(17		)	(12		)
Net cash used for financing activities	(8		)	(266		)
Net cash from financing activities							399			309
Net Increase (Decrease) in Cash and Cash Equivalents	(1		)	1			1			(8		)
Cash and Cash Equivalents at Beginning of Period	13			15			12			18
Cash and Cash Equivalents at End of Period	$	12		$	16		$	13		$	10

Supplemental disclosure of non-cash investing and financing activities
Plant and equipment expenditures in accounts payable	$	112		$	118		$	138		$	140

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Electric Company

Consolidated Statements of Changes in Shareholder's Equity (Unaudited)


				Additional Paid-in Capital			Retained Earnings				Accumulated Other Comprehensive Income											Additional Paid-in Capital		Retained Earnings
	Common Stock									Common Stock
	Shares	Amount				Total				Shares			Amount					Total
	(Dollars in millions, shares in thousands)														(Dollars in millions, shares in thousands)
Balance, December 31, 2016	138,632	$	1,386			$			2,820				$	1,787		$	2			$	5,995
Balance, December 31, 2019															138,632			$	1,386			$	3,425	$	2,384		$	7,195
Net Income	—	—				—						463		—			463			—			—		—			94		94
Dividends declared on common stock	—	—		—				(324		)		—		(324	)	—			—				—		(135	)		(135	)
Balance, September 30, 2017	138,632	$	1,386	$	2,820		$	1,926			$	2	$	6,134
Balance, March 31, 2020															138,632			1,386				3,425		2,343			7,154



				Additional Paid-in Capital		Retained Earnings
	Common Stock
	Shares	Amount							Total
	(Dollars in millions, shares in thousands)
Balance, December 31, 2018	138,632	$	1,386	$	3,245	$	2,162		$	6,793
Net Income	—	—		—		147			147
Dividends declared on common stock	—	—		—		(124		)	(124		)
Balance, March 31, 2019	138,632	1,386		3,245		2,185			6,816

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited)

Index of Combined Notes to Consolidated Financial Statements (Unaudited)

The Combined Notes to Consolidated Financial Statements (Unaudited) are a combined presentation for DTE Energy and DTE Electric. The following list indicates the Registrant(s) to which each note applies:



Note 1	Organization and Basis of Presentation	DTE Energy and DTE Electric
Note 2	Significant Accounting Policies	DTE Energy and DTE Electric
Note 3	New Accounting Pronouncements	DTE Energy and DTE Electric
Note 4	~~Acquisition~~Acquisitions	DTE Energy
Note 5	Revenue	DTE Energy and DTE Electric
Note 6	Regulatory Matters	DTE Energy and DTE Electric
Note 67	Earnings per Share	DTE Energy
Note 78	Fair Value	DTE Energy and DTE Electric
Note 89	Financial and Other Derivative Instruments	DTE Energy and DTE Electric
Note 910	Long-Term Debt	DTE Energy and DTE Electric
Note 1011	Short-Term Credit Arrangements and Borrowings	DTE Energy and DTE Electric
Note 1112	Leases	DTE Energy and DTE Electric
Note 13	Commitments and Contingencies	DTE Energy and DTE Electric
Note 1214	Retirement Benefits and Trusteed Assets	DTE Energy and DTE Electric
Note 1315	Segment and Related Information	DTE Energy

NOTE 1 — ORGANIZATION AND BASIS OF PRESENTATION

Corporate Structure

DTE Energy owns the following businesses:

DTE Electric is a public utility engaged in the generation, purchase, distribution, and sale of electricity to approximately 2.2 million customers in southeastern Michigan;

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; and

Other businesses primarily involved in 1) services related to the gathering, transportation, and storage of natural ~~gas pipelines, gathering, and storage;~~gas; 2) power and industrial projects; and 3) energy marketing and trading operations.

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.

Basis of Presentation

The Consolidated Financial Statements should be read in conjunction with the Combined Notes to Consolidated Financial Statements included in the combined DTE Energy and DTE Electric ~~2016~~2019 Annual Report on Form 10-K.

The accompanying Consolidated Financial Statements of the Registrants are prepared using accounting principles generally accepted in the United States of America. These accounting principles require management to use estimates and assumptions that impact reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results may differ from the Registrants' estimates.

DTE Energy Company — DTE Electric Company

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

The Consolidated Financial Statements are unaudited but, in the Registrants' opinions, include all adjustments necessary to present a fair statement of the results for the interim periods. All adjustments are of a normal recurring nature, except as otherwise disclosed in these Consolidated Financial Statements and Combined Notes to Consolidated Financial Statements. Financial results for this interim period are not necessarily indicative of results that may be expected for any other interim period or for the fiscal year ending December 31, ~~2017.~~

~~DTE Energy Company — DTE Electric Company~~

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

2020.

The information in these combined notes relates to each of the Registrants as noted in the Index of Combined Notes to Consolidated Financial Statements. However, DTE Electric does not make any representation as to information related solely to DTE Energy or the subsidiaries of DTE Energy other than itself.

Certain prior year balances for the Registrants were reclassified to match the current year's Consolidated Financial Statements presentation.

Principles of Consolidation

The Registrants consolidate all majority-owned subsidiaries and investments in entities in which they have controlling influence. Non-majority owned investments are accounted for using the equity method when the Registrants are able to significantly influence the operating policies of the investee. When the Registrants do not influence the operating policies of an investee, the cost method is used. These Consolidated Financial Statements also reflect the Registrants' proportionate interests in certain jointly-owned utility plants. The Registrants eliminate all intercompany balances and transactions.

The Registrants evaluate whether an entity is a VIE whenever reconsideration events occur. The Registrants consolidate VIEs for which they are the primary beneficiary. If a Registrant is not the primary beneficiary and an ownership interest is held, the VIE is accounted for under the equity method of accounting. When assessing the determination of the primary beneficiary, a Registrant considers all relevant facts and circumstances, including: the power, through voting or similar rights, to direct the activities of the VIE that most significantly impact the VIE's economic performance and the obligation to absorb the expected losses and/or the right to receive the expected returns of the VIE. The Registrants perform ongoing reassessments of all VIEs to determine if the primary beneficiary status has changed.

Legal entities within DTE Energy's Power and Industrial Projects segment enter into long-term contractual arrangements with customers to supply energy-related products or services. The entities are generally designed to pass-through the commodity risk associated with these contracts to the customers, with DTE Energy retaining operational and customer default risk. These entities generally are VIEs and consolidated when DTE Energy is the primary beneficiary. In addition, DTE Energy has interests in certain VIEs through which control of all significant activities is shared with partners, and therefore are generally accounted for under the equity method.

DTE Energy currently owns ~~a 55%~~an 85% interest in SGG, which owns and operates midstream natural gas assets. SGG has contracts through which certain construction risk is designed to pass-through to the customers, with DTE Energy retaining operational and customer default risk. SGG is a VIE with DTE Energy as the primary beneficiary. ~~See Note 4 to the Consolidated Financial Statements, "Acquisition," for more information.~~

The Registrants ~~hold~~have variable interests in NEXUS, ~~including a~~which include DTE Energy's 50% ownership ~~interest.~~interest and DTE Electric's transportation services contract. NEXUS is a joint venture which ~~is in the process of constructing~~owns a ~~255-mile~~256-mile pipeline to transport Utica and Marcellus shale gas to Ohio, Michigan, and Ontario market centers. NEXUS also owns Generation Pipeline, LLC, a 23-mile regulated pipeline system located in northern Ohio, which was acquired in September 2019. NEXUS is a VIE as it has insufficient equity at risk to finance its activities. The Registrants are not the primary beneficiaries, as the power to direct significant activities is shared between the owners of the equity interests. DTE Energy accounts for its ownership interest in NEXUS under the equity method.

The Registrants hold ownership interests in certain limited partnerships. The limited partnerships include investment funds which support regional development and economic growth, as well as, an operational business providing energy-related products. These entities are generally VIEs as a result of certain characteristics of the limited partnership voting rights. The ownership interests are accounted for under the equity method as the Registrants are not the primary beneficiaries.

DTE Energy Company — DTE Electric Company

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

DTE Energy has variable interests in VIEs through certain of its long-term purchase and sale contracts. DTE Electric has variable interests in VIEs through certain of its long-term purchase contracts. As of ~~September 30, 2017,~~March 31, 2020, the carrying amount of assets and liabilities in DTE Energy's Consolidated Statements of Financial Position that relate to its variable interests under long-term purchase and sale contracts are predominantly related to working capital accounts and generally represent the amounts owed by or to DTE Energy for the deliveries associated with the current billing cycle under the contracts. As of ~~September 30, 2017,~~March 31, 2020, the carrying amount of assets and liabilities in DTE Electric's Consolidated Statements of Financial Position that relate to its variable interests under long-term purchase contracts are predominantly related to working capital accounts and generally represent the amounts owed by DTE Electric for the deliveries associated with the current billing cycle under the contracts. The Registrants have not provided any significant form of financial support associated with these long-term contracts. There is ~~no significant~~0 material potential exposure to loss as a result of DTE Energy's variable interests through these long-term purchase and sale contracts. In addition, there is ~~no significant~~0 material potential exposure to loss as a result of DTE Electric's variable interests through these long-term purchase contracts.

~~DTE Energy Company — DTE Electric Company~~

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

The maximum risk exposure for consolidated VIEs is reflected on the Registrants' Consolidated Statements of Financial Position and, for DTE Energy, in Note 1113 to the Consolidated Financial Statements, "Commitments and Contingencies," related to the REF guarantees and indemnities. For non-consolidated VIEs, the maximum risk exposure of the Registrants is generally limited to their investment, notes receivable, future funding commitments, and amounts which DTE Energy has guaranteed. See Note 1113 to the Consolidated Financial Statements, "Commitments and Contingencies," for further discussion of the NEXUS guarantee arrangements.

The following table summarizes the major Consolidated Statements of Financial Position items for consolidated VIEs as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016.~~2019. All assets and liabilities of a consolidated VIE are presented where it has been determined that aconsolidated VIE has either (1) assets that can be used only to settle obligations of the VIE or (2) liabilities for which creditors do not have recourse to the general credit of the primary beneficiary. VIEs, in which DTE Energy holds a majority voting interest and is the primary beneficiary, that meet the definition of a business and whose assets can be used for purposes other than the settlement of the VIE's obligations have been excluded from the table below.

Amounts for DTE Energy's consolidated VIEs are as follows:


	September 30, 2017						December 31, 2016						March 31, 2020						December 31, 2019
	SGG^(a)		Other		Total		SGG^(a)		Other		Total		SGG^(a)		Other		Total		SGG^(a)		Other		Total
	(In millions)												(In millions)
ASSETS
Cash and cash equivalents	$	31	$	13	$	44	$	36	$	27	$	63	$	20	$	13	$	33	$	16	$	11	$	27
Restricted cash	—		8		8		—		7		7
Accounts receivable	11		30		41		8		34		42		7		19		26		8		19		27
Inventories	3		84		87		3		112		115		—		101		101		—		74		74
Property, plant, and equipment, net	397		70		467		398		76		474		408		31		439		410		33		443
Goodwill	25		—		25		17		—		17		25		—		25		25		—		25
Intangible assets	576		—		576		586		—		586		538		—		538		542		—		542
Other current and long-term assets	1		—		1		1		1		2		2		—		2		2		—		2
	$	1,044	$	205	$	1,249	$	1,049	$	257	$	1,306	$	1,000	$	164	$	1,164	$	1,003	$	137	$	1,140

LIABILITIES
Accounts payable and accrued current liabilities	$	26	$	29	$	55	$	19	$	32	$	51	$	1	$	14	$	15	$	2	$	13	$	15
Current portion long-term debt, including capital leases	—		3		3		—		5		5
Mortgage bonds, notes, and other	—		2		2		—		5		5
Other current and long-term liabilities	1		15		16		2		15		17		6		7		13		7		7		14
	$	27	$	49	$	76	$	21	$	57	$	78	$	7	$	21	$	28	$	9	$	20	$	29

(a)Amounts shown are 100% of SGG's assets and liabilities, of which DTE Energy owns ~~55%.~~

~~Amounts for DTE Energy's non-consolidated VIEs are as follows:~~85% at March 31, 2020 and December 31, 2019.

September 30, 2017 December 31, 2016
(In millions)
Investments in equity method investees $ 716
$ 509
Notes receivable $ 17
$ 15
Future funding commitments $ 688
$ 692

DTE Energy Company — DTE Electric Company

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

Amounts for DTE Energy's non-consolidated VIEs are as follows:



	March 31, 2020		December 31, 2019
	(In millions)
Investments in equity method investees	$	1,510	$	1,503
Notes receivable	$	28	$	21
Future funding commitments	$	33	$	63

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES

Other Income

The following is a summary of DTE Energy's Other income:


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2017		2016		2017		2016		2020		2019
	(In millions)								(In millions)
Equity earnings of equity method investees	$	26	$	14	$	77	$	49	$	29	$	23
Income from REF entities	20		20		60		59		23		27
Gains from trading securities	6		5		19		15
Contract services									7		8
Allowance for equity funds used during construction	5		5		17		15		6		7
Contract services	9		5		17		16
Gains from equity and fixed income securities									—		17
Other	8		2		14		6		—		6
	$	74	$	51	$	204	$	160	$	65	$	88

The following is a summary of DTE Electric's Other income:



	Three Months Ended March 31,
	2020		2019
	(In millions)
Contract services	$	7	$	8
Allowance for equity funds used during construction	6		6
Gains from equity and fixed income securities allocated from DTE Energy	—		17
Other	—		2
	$	13	$	33

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(In millions)
Gains from trading securities allocated from DTE Energy $ 6
$ 5
$ 19
$ 15
Contract services 9
5
18
16
Allowance for equity funds used during construction 4
4
14
13
Equity earnings of equity method investees —
—
1
1
Other 2
1
5
3
$ 21
$ 15
$ 57
$ 48

Changes in Accumulated Other Comprehensive Income (Loss)

~~For~~Comprehensive income (loss) is the ~~three~~change in common shareholders' equity during a period from transactions and ~~nine months ended September 30, 2017 and 2016, reclassifications out of~~events from non-owner sources, including Net Income. The amounts recorded to Accumulated other comprehensive income (loss) for DTE Energy include changes in benefit obligations, consisting of deferred actuarial losses and prior service costs, unrealized gains and losses from derivatives accounted for as cash flow hedges, and foreign currency translation adjustments. DTE Energy releases income tax effects from accumulated other comprehensive income when the ~~Registrants were not material.~~ circumstances upon which they are premised cease to exist.

Changes in Accumulated other comprehensive income (loss) are presented in DTE Energy's Consolidated Statements of Changes in Equity and DTE Electric's Consolidated Statements of Changes in Shareholder's Equity.

~~Income Taxes~~

~~The effective tax rate of the Registrants are as follows:~~

Effective Tax Rate
Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
DTE Energy 22 % 25 % 22 % 25 %
DTE Electric 35 % 35 % 35 % 36 %

~~The 3% decrease in DTE Energy's effective tax rate for~~ For the three months ended September 30, 2017 was primarily due to higher forecasted production tax credits in 2017. The 3% decrease in DTE Energy's effective tax rate for the nine months ended September 30, 2017 was primarily due to higher forecasted production tax credits in 2017 and $13 millionMarch 31, 2020, reclassifications out of ~~excess tax benefits on stock-based compensation recognized in accordance with ASU 2016-09,~~ ~~Improvements to Employee Share-Based Payment Accounting, which was adopted effective July 1, 2016.~~

Accumulated other comprehensive income (loss) were not material.

DTE Energy Company — DTE Electric Company

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

For the three months ended March 31, 2019, DTE ~~Energy's total amount~~Energy reclassified $25 million of ~~unrecognized~~stranded tax ~~benefits~~effects resulting from the TCJA from Accumulated other comprehensive income (loss) to Retained Earnings. The reclassification was recorded upon adoption of ASU No. 2018-02, Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income on January 1, 2019. Reclassifications out of Accumulated other comprehensive income (loss) not relating to the adoption of this standard were not material.

Income Taxes

The interim effective tax rates of the Registrants are as ~~of September 30, 2017~~follows:



	Effective Tax Rate
	Three Months Ended March 31,
	2020		2019
DTE Energy	13	%	12	%
DTE Electric	12	%	16	%

These tax rates are affected by estimated annual permanent items, including AFUDC equity, production tax credits, and ~~December 31, 2016 was $10 million.~~ other flow-through items, as well as discrete items that may occur in any given period, but are not consistent from period to period.

The ~~amount, if recognized, that would favorably impact~~1% increase in DTE Energy's effective tax rate asfor the three months ended March 31, 2020 was primarily due to a decrease in annual production tax credits of ~~September 30, 2017 and December 31, 2016 was $6 million and $7 million, respectively.~~2%, a decrease in stock-based compensation tax benefit of 1%, partially offset by higher amortization of the TCJA regulatory liability of 2% in 2020.

The 4% decrease in DTE Electric's ~~total amount~~effective tax rate for the three months ended March 31, 2020 was primarily due to higher amortization of the TCJA regulatory liability of 3% and an increase in annual production tax credits of 1% in 2020.

DTE Energy had $8 million of unrecognized tax benefits ~~as of September 30, 2017 and December~~at March 31, ~~2016 was $13~~2020, that if recognized, would favorably impact its effective tax rate. DTE Electric had $10 million of ~~which $8 million,~~unrecognized tax benefits at March 31, 2020, that if recognized, would favorably impact its effective tax rate. The Registrants do not anticipate any material changes ~~to the~~in unrecognized tax benefits in the next twelve months.

DTE Electric had income tax receivables with DTE Energy of $9$8 million and $14 million at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016.~~2019, respectively.

In March 2020, the "Coronavirus Aid, Relief, and Economic Security Act" (CARES Act) was signed into law and included several significant changes to the Internal Revenue Code. The CARES Act includes certain tax relief provisions applicable to the Registrants including a) the immediate refund of the corporate AMT credit, b) the ability to carryback net operating losses five years for tax years 2018 through 2020, c) delayed payment of employer payroll taxes, and d) the employee retention credit.

As of March 31, 2020, DTE Energy had a $153 million AMT credit refund recorded in anticipation of a refund from the U.S. Treasury. DTE Energy was most recently a taxpayer in 2013 and is currently evaluating the ability to recover cash taxes paid in 2013 under the 5-year net operating loss carryback provision. The Registrants also implemented the deferral of employee payroll taxes in April 2020 and are evaluating the impact of the employee retention credit.

Unrecognized Compensation Costs

As of ~~September 30, 2017,~~March 31, 2020, DTE Energy had ~~$71~~$91 million of total unrecognized compensation cost related to non-vested stock incentive plan arrangements. That cost is expected to be recognized over a weighted-average period of ~~1.35~~1.88 years.

Allocated Stock-Based Compensation

DTE Electric received an allocation of costs from DTE Energy associated with stock-based compensation of ~~$10~~$9 million and $7$13 million for the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016, respectively, while such allocation was $28 million and $26 million for the nine months ended September 30, 2017 and 2016,~~2019, respectively.

~~NOTE 3 — NEW ACCOUNTING PRONOUNCEMENTS~~

~~Recently Adopted Pronouncements~~

~~In July 2015, the FASB issued ASU No. 2015-11,~~ ~~Inventory (Topic 330), Simplifying the Measurement of Inventory~~. The ASU replaces the current lower of cost or market test with a lower of cost or net realizable value test when cost is determined on a first-in, first-out or average cost basis. The standard is effective for public entities for annual reporting periods beginning after December 15, 2016, and interim periods therein. It was applied prospectively. The Registrants adopted this ASU at January 1, 2017. The adoption of the ASU did not have a significant impact on the Registrants' Consolidated Financial Statements.

~~Recently Issued Pronouncements~~

~~In May 2014, the FASB issued ASU No. 2014-09,~~ ~~Revenue 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 are finalizing the assessment of the impact of the ASU, as amended, on their Consolidated Financial Statements. The ASU is not expected to significantly affect the Registrants' results of operations. The Registrants will continue to evaluate the impact of the ASU on existing revenue recognition 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 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.

DTE Energy Company — DTE Electric Company

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

Cash, Cash Equivalents, and Restricted Cash

Cash and cash equivalents include cash on hand, cash in banks, and temporary investments purchased with remaining maturities of three months or less. Restricted cash consists of funds held in separate bank accounts to satisfy contractual obligations to fund certain construction projects and guarantee performance. Restricted cash designated for payments within one year is classified as a Current Asset.

Financing Receivables

The Registrants monitor the credit quality of their financing receivables on a regular basis by reviewing credit quality indicators and monitoring for trigger events, such as a credit rating downgrade or bankruptcy. Credit quality indicators include, but are not limited to, ratings by credit agencies where available, collection history, collateral, counterparty financial statements and other internal metrics. Utilizing such data, the Registrants have determined three internal grades of credit quality. Internal grade 1 includes financing receivables for counterparties where credit rating agencies have ranked the counterparty as investment grade. To the extent credit ratings are not available, the Registrants utilize other credit quality indicators to determine the level of risk associated with the financing receivable. Internal grade 1 may include financing receivables for counterparties for which credit rating agencies have ranked the counterparty as below investment grade, however, due to favorable information on other credit quality indicators, the Registrants have determined the risk level to be similar to that of an investment grade counterparty. Internal grade 2 includes financing receivables for counterparties with limited credit information and those with a higher risk profile based upon credit quality indicators. Internal grade 3 reflects financing receivables for which the counterparties have the greatest level of risk, including those in bankruptcy status.

The following represents the Registrants' financing receivables by year of origination, classified by internal grade of credit risk. The related credit quality indicators and risk ratings utilized to develop the internal grades have been updated through March 2020.



	DTE Energy								DTE Electric
	Year of origination
	2020		2019		2018 and prior		Total		2020 and prior
	(In millions)
Notes receivable
Internal grade 1	$	2	$	9	$	9	$	20	$	11
Internal grade 2	10		31		7		48		—
Total notes receivable	$	12	$	40	$	16	$	68	$	11

Net investment in leases
Net investment in leases, internal grade 1	$	—	$	—	$	43	$	43	$	—
Net investment in leases, internal grade 2	133		—		1		134		—
Total net investment in leases	$	133	$	—	$	44	$	177	$	—

The allowance for doubtful accounts on accounts receivable for the utility entities is generally calculated using the aging approach that utilizes rates developed in reserve studies. DTE Electric and DTE Gas establish an allowance for uncollectible accounts based on historical losses and management's assessment of existing and future economic conditions, customer trends and other factors. Customer accounts are generally considered delinquent if the amount billed is not received by the due date, which is typically in 21 days, however, factors such as assistance programs may delay aggressive action. DTE Electric and DTE Gas generally assess late payment fees on trade receivables based on past-due terms with customers. Customer accounts are written off when collection efforts have been exhausted. The time period for write-off is 150 days after service has been terminated.

The customer allowance for doubtful accounts for non-utility businesses and other receivables for both utility and non-utility businesses is generally calculated based on specific review of probable future collections based on receivable balances generally in excess of 30 days. Existing and future economic conditions, customer trends and other factors are also considered. Receivables are written off on a specific identification basis and determined based upon the specific circumstances of the associated receivable.

DTE Energy Company — DTE Electric Company

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

Notes receivable, or financing receivables, for DTE Energy are primarily comprised of finance lease receivables and loans that are included in Notes Receivable and Other current assets on DTE Energy's Consolidated Statements of Financial Position. Notes receivable, or financing receivables, for DTE Electric are primarily comprised of loans.

Notes receivable are typically considered delinquent when payment is not received for periods ranging from 60 to 120 days. The Registrants cease accruing interest (nonaccrual status), consider a note receivable impaired, and establish an allowance for credit loss when it is probable that all principal and interest amounts due will not be collected in accordance with the contractual terms of the note receivable. In ~~February 2016,~~determining the ~~FASB issued ASU No. 2016-02,~~ ~~Leases (Topic 842),~~ allowance for credit losses for notes receivable, the Registrants consider the historical payment experience and other factors that are expected to have a ~~replacement~~specific impact on the counterparty's ability to pay including existing and future economic conditions.

DTE Energy has off balance sheet exposure in the form of ~~Leases (Topic 840). This guidance requires~~ a ~~lessee~~revolving credit facility. Refer to Note 13, "Commitments and Contingencies," for additional information. In determining the level of credit reserve needed, DTE considers the likelihood of funding in addition to the other factors noted above. A reserve may be established when it is likely that funding will occur. Cash payments received on nonaccrual status notes receivable, that do not bring the account contractually current, are first applied to the contractually owed past due interest, with any remainder applied to principal. Accrual of interest is generally resumed when the note receivable becomes contractually current.

The following table presents a roll-forward of the activity for the Registrants' financing receivables credit loss reserves as of March 31, 2020.



	DTE Energy									DTE Electric
	Trade accounts receivable			Other receivables			Total			Trade accounts receivable
	(In millions)
Beginning reserve balance at 1/1/2020	$	87		$	4		$	91		$	46
Current period provision	34			1			35			17
Write-offs charged against allowance	(51		)	(1		)	(52		)	(30		)
Recoveries of amounts previously written off	16			—			16			10
Ending reserve balance at 3/31/2020	$	86		$	4		$	90		$	43

Bad debt expense for the three months ended March 31, 2019 was $29 million and $16 million for DTE Energy and DTE Electric, respectively.

The Registrants are monitoring the impacts from the COVID-19 pandemic on our customers and various counterparties. During the three months ended March 31, 2020, the allowance for doubtful accounts was increased to account for ~~leases as finance or operating leases. Both types~~additional risk related to the pandemic. However, these adjustments were not material.

In April 2020, the MPSC issued an order in response to the COVID-19 pandemic and authorized the deferral of ~~leases will result~~certain uncollectible expense that is 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 beginningexcess of the ~~earliest comparative period in~~amount used to set current rates. DTE Energy is still evaluating this order for any potential impact to the allowance for doubtful accounts. Refer to Note 6 to the Consolidated Financial Statements, ~~with certain practical expedients permitted. The~~"Regulatory Matters," for further information regarding the order.

There are no material amounts of past due financing receivables for the Registrants ~~expect an increase in assets and liabilities, however, they are currently assessing the impact~~as of ~~this ASU on their~~March 31, 2020.

DTE Energy Company — DTE Electric Company

Combined Notes to 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.Statements (Unaudited) — (Continued)

NOTE 3 — NEW ACCOUNTING PRONOUNCEMENTS

Recently Adopted Pronouncements

In June 2016, the FASB issued ASU No. 2016-13,Financial Instruments —- Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments., as amended. The amendments in this update ~~replace~~have replaced the previous incurred loss impairment methodology ~~in current GAAP~~ with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information, including forecasts, to ~~inform~~develop credit loss estimates. The ASU requires entities to use the new methodology to measure impairment of financial instruments, including accounts receivable, and may result in earlier recognition of credit losses than under previous generally accepted accounting principles. Entities ~~will~~must apply the new guidance as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Registrants adopted the standard effective January 1, 2020. The adoption of the ASU did not have an impact on the Registrants' financial position or results of operations. Additional required disclosures have been included in Note 2 to the Consolidated Financial Statements, “Significant Accounting Policies”.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this update modify the disclosure requirements on fair value measurements in Topic 820. The Registrants adopted the ASU effective January 1, 2020. The Registrants have updated Note 8 to the Consolidated Financial Statements, Fair Value, to incorporate the disclosure changes required by the ASU.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The Registrants adopted the standard effective January 1, 2020 using the prospective approach. The adoption of the ASU did not have an impact on the Registrants’ Consolidated Financial Statements. On a prospective basis, costs within the scope of this amendment will be accounted for consistent with any underlying service contracts. Capitalized implementation costs will be reflected in Other noncurrent assets on the Consolidated Statements of Financial Position and amortization of these costs will be reflected in Operation and maintenance within the Consolidated Statements of Operations. Cash flow activity will be reflected in the Other current and noncurrent assets and liabilities line within the Operating Activities section of the Consolidated Statements of Cash Flows.

In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments in this update modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The Registrants adopted the ASU effective January 1, 2020. The required disclosures for this ASU will be reflected in the 2020 year-end financial statements.

In October 2018, the FASB issued ASU No. 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. The amendments in this update modify the requirements for determining whether fees paid to a decision maker or service provider are variable interests and require reporting entities to consider indirect interests held through related parties under common control on a proportional basis. The Registrants adopted the ASU effective January 1, 2020. The adoption of the ASU did not have a significant impact on the Registrants’ Consolidated Financial Statements.

Recently Issued 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 ASU is effective for the Registrants for fiscal years beginning after December 15, ~~2019, and interim periods therein.~~2020. Early adoption is permitted. The Registrants are currently assessing the impact of this standard on their Consolidated Financial Statements.

In March ~~2017,~~2020, the FASB issued ASU No. ~~2017-07,~~ ~~Compensation~~ — ~~Retirement Benefits~~2020-04, Reference Rate Reform (Topic ~~715): Improving~~848) - Facilitation of the ~~Presentation~~Effects of ~~Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.~~ Reference Rate Reform on Financial Reporting. The amendments in this update ~~require that an employer report the service cost component in the same line item or items as~~provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other ~~compensation costs arising from services rendered~~transactions affected by ~~the pertinent employees during the period. The other components of net benefit cost~~reference rate reform if certain criteria are required 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.met. The ASU is effective for the Registrants ~~for fiscal years, and interim periods within those years,~~ beginning ~~after~~March 12, 2020 through December ~~15, 2017, and early adoption is permitted.~~31, 2022. The Registrants ~~will adopt~~are currently assessing the impact of this standard ~~effective January 1, 2018. The components of net periodic benefit costs (credits) for pension benefits and other postretirement benefits are disclosed in Note 12 to the~~on their Consolidated Financial ~~Statements, "Retirement Benefits and Trusteed Assets." The ASU will not have a significant impact on the Registrants' Consolidated Financial~~ Statements.

~~NOTE 4 — ACQUISITION~~

~~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 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. These entities are part of DTE Energy's Gas Storage and Pipelines segment which owns and manages a network of natural gas gathering, transmission, and storage facilities servicing the Midwest, Ontario, and Northeast markets. SGG has been deemed to be a VIE, and DTE Energy is the primary beneficiary. Thus, SGG's assets and liabilities are included in DTE Energy's Consolidated Statements of Financial Position. See Note 1 to the Consolidated Financial Statements, "Organization and Basis of Presentation," for more information.

DTE Energy Company — DTE Electric Company

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

NOTE 4 — ACQUISITIONS

Power and Industrial Projects Segment Acquisition

On February 18, 2020, DTE Energy closed on the purchase of an 8 MW combined heat and power generation facility from South Jersey Industries (“SJI”) that provides electricity and hot and chilled water to a hotel and casino in Atlantic City, New Jersey. Direct transaction costs primarily related to advisory fees were immaterial and are included in Operation and maintenance in DTE Energy's Consolidated Statements of Operations. The fair value of consideration provided for the acquisition was approximately $97 million paid in cash.

The acquisition was accounted for using the acquisition method of accounting for business combinations. Accordingly, the cost was allocated to the underlying net assets based on their respective fair values as shown below:



	(In millions)
Contract intangibles	$	18
Property, plant, and equipment, net	76
Working capital	3
Total	$	97

The intangible assets recorded pertain to existing customer contracts and were estimated by applying the income approach, based on discounted projected cash flows attributable to the existing agreements. The contract intangible assets are amortized on a straight-line basis over a period of 13 years, which is based on the number of years the assets are expected to economically contribute to the business. The pro forma financial information has not been presented for DTE Energy because the effects of the acquisition were not material to the Consolidated Statements of Operations.

Electric Segment Acquisitions

Effective September 12, 2019, DTE Sustainable Generation closed on the purchase of an 89 MW renewable energy project located in Michigan from Heritage Sustainable Energy in support of DTE Energy's renewable energy goals. Direct transaction costs primarily related to advisory fees were immaterial and were included in Operation and maintenance in DTE Energy's Consolidated Statements of Operations for the period incurred. The fair value of consideration provided for the acquisition was approximately $175 million, paid in cash.



	(In millions)
Contract intangibles	$	109
Property, plant, and equipment, net	60
Working capital	6
Total	$	175

The intangible assets recorded pertain to existing customer contracts and were estimated by applying the income approach, based on discounted projected cash flows attributable to the existing agreements. The contract intangible assets are amortized on a straight-line basis with useful lives ranging from 11 years to 13 years, which is based on the remaining number of years the assets are expected to economically contribute to the business. The pro forma financial information has not been presented for DTE Energy because the effects of the acquisition were not material to the Consolidated Statements of Operations.

In conjunction with the above acquisition, DTE Sustainable Generation closed on a purchase and sale agreement with Heritage Sustainable Energy in January 2020 to acquire an additional renewable energy project for approximately $33 million paid in cash.

DTE Energy ~~applied~~Company — DTE Electric Company

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

Gas Storage and Pipelines Segment Acquisition

On December 4, 2019, DTE Energy closed on the purchase of midstream natural gas assets in support of its strategy to continue to grow and earn competitive returns for shareholders. DTE Energy purchased 100 percent of M5 Louisiana Gathering, LLC and its wholly owned subsidiaries from Momentum Midstream and Indigo Natural Resources. The acquisition includes the Blue Union and LEAP assets which provide natural gas gathering and other midstream services to producers located primarily in Louisiana.

The fair value of the consideration provided for the entities acquired was $2.74 billion and includes $2.36 billion paid in cash and an estimated $380 million of contingent consideration to be paid upon completion of a gathering pipeline in the second half of 2020. The contingent payment will range from $0 million to $385 million, with no payment due until the pipeline is completed. As of March 31, 2020, the liability for the contingent consideration payment and the related accretion expense of $2 million is included in the 'Acquisition related deferred payment' line in the Consolidated Statements of Financial Position. The acquisition was financed through the issuance of Equity Units, common stock, and Senior Notes. The acquired assets are part of DTE Energy's non-utility Gas Storage and Pipelines segment.

The acquisition was accounted for using the acquisition method of accounting for business combinations. The allocation of the purchase price included in the Consolidated Statements of Financial Position is preliminary and may be revised up to one year from the date of acquisition due to adjustments in the estimated fair value of the assets acquired ~~entities.~~ and the liabilities assumed. The purchase price is subject to (i) final working capital settlement adjustments, and (ii) resolution of any indemnification claims that might be deducted from the $100 million of cash consideration paid and held in escrow.

The excess purchase price over 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 and liabilities assumed.~~ As of ~~September 30, 2017, the final~~March 31, 2020, total goodwill was approximately $173 million, including $2 million resulting from working capital adjustments ~~and certain indemnification claims were settled. The settlements and final~~recorded during the first quarter of 2020. DTE Energy cannot estimate the potential for any further revisions to the purchase price allocation ~~resulted in purchase accounting adjustments~~for the remainder of ~~approximately $7 million of additional goodwill.~~ 2020.

The factors contributing to the recognition of goodwill ~~were~~are based on various strategic benefits that are expected to be realized from the ~~AGS~~Blue Union and ~~SGG~~LEAP acquisition. The acquisition ~~provides~~will provide 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.Haynesville basin. The goodwill is expected to be deductible for income tax purposes.

The ~~final~~preliminary allocation of the purchase price ~~was~~is based on estimated fair values of the ~~AGS~~Blue Union and ~~SGG~~LEAP assets acquired and liabilities assumed at the date of acquisition, ~~October 1, 2016.~~December 4, 2019. The components of the ~~final~~preliminary purchase price allocation, inclusive of purchase accounting adjustments, are as follows:



	(In millions)
Assets
Cash	$	62
Accounts receivable	31
Property, plant, and equipment, net	1,035
Goodwill	173
Customer relationship intangibles	1,473
Other current assets	1
	$	2,775
Liabilities
Accounts payable	$	26
Acquisition related deferred payment	380
Other current liabilities	2
Asset retirement obligations	9
	$	417
Total cash consideration	$	2,358

DTE Energy Company — DTE Electric Company

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

(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~~$1.47 billion as of the acquisition date. The fair value of the intangible assets acquired was estimated by applying the income approach. The income approach ~~was~~is based upon discounted projected future cash flows attributable to the existing contracts and agreements. The fair value measurement ~~was~~is 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~~include 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 1013 years and expected renewal rates, based on the estimated volume and production lives of gas resources 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 Company — DTE Electric Company~~

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

DTE Energy incurred ~~$15~~$18 million of direct transaction costs for the year ended December 31, ~~2016.~~2019. These costs were primarily related to advisory fees and were included in Operation and maintenance in DTE Energy's ~~2016~~ Consolidated Statements of Operations. Additionally, DTE Energy incurred $49 million of issuance costs related to the acquisition financing, of which $10 million were included in Mortgage bonds, notes, and other, and $39 million were included in Common Stock in DTE Energy's Consolidated Statements of Financial Position.

DTE Energy's ~~2016~~2019 Consolidated Statements of Operations included Operating Revenues — Non-utility operations of ~~$39~~$15 million and Net Income of $4$3 million associated with the acquired entities for the ~~three-month~~one-month period following the acquisition date, excluding the ~~$15~~$18 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.

DTE Energy Company — DTE Electric Company

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

NOTE 5 — REVENUE

Disaggregation of Revenue

The following is a summary of revenues disaggregated by segment for DTE Energy:



	Three Months Ended March 31,
	2020		2019
	(In millions)
Electric^(a)
Residential	$	599	$	553
Commercial	426		421
Industrial	156		163
Other^(b)	35		98
Total Electric operating revenues^(c)	$	1,216	$	1,235

Gas
Gas sales	$	394	$	477
End User Transportation	77		81
Intermediate Transportation	26		26
Other^(b)	43		61
Total Gas operating revenues^(d)	$	540	$	645

Other segment operating revenues
Gas Storage and Pipelines^(e)	$	170	$	116
Power and Industrial Projects^(f)	$	307	$	388
Energy Trading^(g)	$	913	$	1,301


(a)	Revenues under the Electric segment include $1,212 million related to DTE Electric and $4 million of Other revenues related to DTE Sustainable Generation.


(b)	Includes revenue adjustments related to various regulatory mechanisms.


(c)	Includes $4 million of other revenues outside the scope of Topic 606 for the three months ended March 31, 2020 and 2019.


(d)	Includes $2 million under Alternative Revenue Programs and $2 million of other revenues, which are outside the scope of Topic 606 for the three months ended March 31, 2020 and includes $3 million under Alternative Revenue Programs and $2 million of other revenues, which are both outside the scope of Topic 606 for the three months ended March 31, 2019.


(e)	Includes revenues outside the scope of Topic 606 primarily related to $2 million of contracts accounted for as leases for the three months ended March 31, 2020 and 2019.


(f)	Includes revenues outside the scope of Topic 606 primarily related to $27 million and $31 million of contracts accounted for as leases for the three months ended March 31, 2020 and 2019, respectively.


(g)	Includes revenues outside the scope of Topic 606 primarily related to $637 million and $926 million of derivatives for the three months ended March 31, 2020 and 2019, respectively.

Deferred Revenue

The following is a summary of deferred revenue activity:



	DTE Energy
	(In millions)
Beginning Balance, January 1, 2020	$	75
Increases due to cash received or receivable, excluding amounts recognized as revenue during the period	17
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	(9		)
Ending Balance, March 31, 2020	$	83

The deferred revenues at DTE Energy generally represent amounts paid by or receivable from customers for which the associated performance obligation has not yet been satisfied.

DTE Energy Company — DTE Electric Company

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

Deferred revenues include amounts associated with REC performance obligations under certain wholesale full requirements power contracts. Deferred revenues associated with RECs are recognized as revenue when control of the RECs has transferred.

Other performance obligations associated with deferred revenues include providing products and services related to customer prepayments. Deferred revenues associated with these products and services are recognized when control has transferred to the customer.

The following table represents deferred revenue amounts for DTE Energy that are expected to be recognized as revenue in future periods:



	DTE Energy
	(In millions)
2020	$	6
2021	50
2022	7
2023	3
2024	6
2025 and thereafter	11
	$	83

Transaction Price Allocated to the Remaining Performance Obligations

In accordance with optional exemptions available under Topic 606, the Registrants did not disclose the value of unsatisfied performance obligations for (1) contracts with an original expected length of one year or less, (2) with the exception of fixed consideration, contracts for which revenue is recognized at the amount to which the Registrants have the right to invoice for goods provided and services performed, and (3) contracts for which variable consideration relates entirely to an unsatisfied performance obligation.

Such contracts consist of varying types of performance obligations across the segments, including the supply and delivery of energy related products and services. Contracts with variable volumes and/or variable pricing, including those with pricing provisions tied to a consumer price or other index, have also been excluded as the related consideration under the contract is variable at inception of the contract. Contract lengths vary from cancelable to multi-year.

The Registrants expect to recognize revenue for the following amounts related to fixed consideration associated with remaining performance obligations in each of the future periods noted:



	DTE Energy		DTE Electric
	(In millions)
2020	$	186	$	6
2021	329		7
2022	272		7
2023	207		7
2024	135		7
2025 and thereafter	566		1
	$	1,695	$	35

DTE Energy Company — DTE Electric Company

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

NOTE 6 — REGULATORY MATTERS

~~2016~~2020 COVID-19 Response

In response to the COVID-19 pandemic, the MPSC issued an order on April 15, 2020 to provide guidance and direction to utilities and other stakeholders on topics including customer protections and affordability, utility accounting, regulatory activities, energy assistance, and energy waste reduction and demand response continuity. The order authorizes the deferral of uncollectible expense that is in excess of the amount used to set current rates effective March 24, 2020, the date of Michigan's executive order to "Stay Home, Stay Safe". The Registrants are currently evaluating the impact of this order for potential change in accounting treatment, and will continue to monitor MPSC activities for further guidance on COVID-19 and any other pandemic related costs.

2019 Electric Rate Case Filing

DTE Electric filed a rate case with the MPSC on ~~February 1, 2016~~July 8, 2019 requesting an increase in base rates of ~~$344~~$351 million based on a projected twelve-month period ending ~~July 31, 2017. On August 1, 2016, DTE Electric self-implemented a~~April 30, 2021. The requested increase in base rates is primarily due to an increase in net plant resulting from infrastructure and generation investments. The rate filing also requests an increase ~~of $245 million. On January 31, 2017, the MPSC issued an order approving an annual revenue increase of $184 million for service rendered on or after February 7, 2017. The MPSC authorized a~~in return on equity ~~of 10.1%. On April 28, 2017, DTE Electric filed~~from 10.0% to ~~refund its customers their pro-rata share of the revenue collected through the self-implementation surcharge~~10.5% and includes projected changes in ~~effect from August 1, 2016 through February 7, 2017. On September 15, 2017, the~~sales and operating and maintenance expenses. A final MPSC approved a settlement authorizing DTE Electric to refund its customers $38.5 million of the self-implementation surcharge during the months of October through December 2017. DTE has recorded a refund liability for the settlement as of September 30, 2017.order in this case is expected by May 2020.

~~2017 Electric~~2019 Gas Rate Case Filing

DTE ~~Electric~~Gas filed a rate case with the MPSC on ~~April 19, 2017~~November 25, 2019 requesting an increase in base rates of ~~$231~~$204 million based on a projected twelve-month period ending ~~October 31, 2018.~~September 30, 2021. 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~~operating and maintenance ~~expenses, and working capital.~~expenses. The rate filing also requests an increase in return on equity from ~~10.1%~~10.0% to 10.5%~~. To mitigate the impact to its customers resulting from ASU No. 2017-07,~~ ~~Compensation~~ — ~~Retirement Benefits (Topic 715),~~ ~~DTE Electric suggested regulatory accounting treatment for the pension~~ and postretirement cost components previously included as capital overhead. If the MPSC adopts DTE Electric's suggestion, the rate request will be reduced. For further discussion of ASU No. 2017-07, see Note 3 to the Consolidated Financial Statements, "New Accounting Pronouncements." 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.includes projected changes in sales and working capital. A final MPSC order in this case is expected by ~~April 2018.~~September 2020.

~~PSCR Proceedings~~

The PSCR process is designed to allow DTE Electric to recover all of its power supply costs if incurred under reasonable and prudent policies and practices. DTE Electric's power supply costs include fuel and related transportation costs, purchased and net interchange power costs, NOx and SO₂ ~~emission allowances costs, urea costs, transmission costs, MISO, and other related costs. The MPSC reviews these costs, policies, and practices for prudence in annual plan and reconciliation filings.~~

~~2015 PSCR Year~~ — In March 2016, DTE Electric filed its 2015 PSCR reconciliation that included the recovery of approximately $13 million of costs related to the pass through of a billing adjustment associated with a previous MPSC ordered customer refund. On July 12, 2017, the MPSC issued an order that disallowed recovery of this 2015 PSCR billing adjustment pass through of approximately $16 million, inclusive of interest. DTE Electric recorded the impact of the disallowance in the second quarter of 2017 and filed a claim of appeal with the Michigan Court of Appeals in August 2017.

~~DTE Energy Company — DTE Electric Company~~

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

~~Certificate of Necessity~~

On July 31, 2017, DTE Electric filed a request for authority to build a 1,100 megawatt natural gas fueled combined cycle generation facility at DTE Electric's Belle River Power Plant. DTE Electric requested the MPSC to issue three CONs for the following: (1) power supplied by the proposed project is needed, (2) the size, fuel type, and other design characteristics of the proposed project represent the most reasonable and prudent means of meeting the power need, and (3) the estimated capital costs of $989 million for the proposed project will be recoverable in rates from DTE Electric's customers. DTE Electric also reserved the right to revise, amend, or otherwise change the relief it is requesting in any way appropriate, including updating of the cost estimate within the 150 days of the filing date. DTE Electric expects an order in this proceeding from the MPSC by April 28, 2018.

NOTE 67 — EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net income, adjusted for income allocated to participating securities, by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect the dilution that would occur if any potentially dilutive instruments were exercised or converted into common shares. DTE Energy’s participating securities are restricted shares under the stock incentive program that contain rights to receive non-forfeitable dividends. Equity units and performance shares ~~and stock options~~ do not receive cash dividends; as such, these awards are not considered participating securities.

~~The following is a reconciliation of DTE Energy's basic and diluted income per share calculation:~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(In millions, except per share amounts)
Basic Earnings per Share
Net Income Attributable to DTE Energy Company $ 270
$ 338
$ 847
$ 737
Less: Allocation of earnings to net restricted stock awards 1
—
2
1
Net income available to common shareholders — basic $ 269
$ 338
$ 845
$ 736

Average number of common shares outstanding 179
179
179
179
Basic Earnings per Common Share $ 1.51
$ 1.88
$ 4.72
$ 4.10

Diluted Earnings per Share
Net Income Attributable to DTE Energy Company $ 270
$ 338
$ 847
$ 737
Less: Allocation of earnings to net restricted stock awards 1
—
2
1
Net income available to common shareholders — diluted $ 269
$ 338
$ 845
$ 736

Average number of common shares outstanding 179
179
179
179
Incremental shares attributable to:
Average dilutive performance share awards and stock options^(a)
—
1
—
1
Average number of common shares outstanding — diluted 179
180
179
180
Diluted Earnings per Common Share $ 1.51
$ 1.88
$ 4.72
$ 4.10


~~(a)~~	The 2016 equity units are potentially dilutive securities but were excluded from the calculation of diluted EPS for the three and nine months ended September 30, 2017, as the dilutive stock price threshold was not met.

DTE Energy Company — DTE Electric Company

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

The following is a reconciliation of DTE Energy's basic and diluted income per share calculation:



	Three Months Ended March 31,
	2020		2019
	(In millions, except per share amounts)
Basic Earnings per Share
Net Income Attributable to DTE Energy Company	$	340	$	401
Less: Allocation of earnings to net restricted stock awards	1		1
Net income available to common shareholders — basic	$	339	$	400

Average number of common shares outstanding — basic	192		182
Basic Earnings per Common Share	$	1.77	$	2.20

Diluted Earnings per Share
Net Income Attributable to DTE Energy Company	$	340	$	401
Less: Allocation of earnings to net restricted stock awards	1		1
Net income available to common shareholders — diluted	$	339	$	400

Average number of common shares outstanding — basic	192		182
Incremental shares attributable to:
Average dilutive equity units, performance share awards, and stock options	—		1
Average number of common shares outstanding — diluted	192		183
Diluted Earnings per Common Share^(a)	$	1.76	$	2.19

_______________________________________


(a)	Equity Units excluded from the calculation of diluted EPS were approximately 9.7 million for the three months ended March 31, 2020 as the dilutive stock price threshold was not met.

NOTE 78 — FAIR VALUE

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in a principal or most advantageous market. Fair value is a market-based measurement that is determined based on inputs, which refer broadly to assumptions that market participants use in pricing assets or liabilities. These inputs can be readily observable, market corroborated, or generally unobservable inputs. The Registrants make certain assumptions they believe that market participants would use in pricing assets or liabilities, including assumptions about risk, and the risks inherent in the inputs to valuation techniques. Credit risk of the Registrants and their counterparties is incorporated in the valuation of assets and liabilities through the use of credit reserves, the impact of which was immaterial at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016.~~2019. The Registrants believe they use valuation techniques that maximize the use of observable market-based inputs and minimize the use of unobservable inputs.

DTE Energy Company — DTE Electric Company

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

A fair value hierarchy has been established that prioritizes the inputs to valuation techniques used to measure fair value in three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. All assets and liabilities are required to be classified in their entirety based on the lowest level of input that is significant to the fair value measurement in its entirety. Assessing the significance of a particular input may require judgment considering factors specific to the asset or liability and may affect the valuation of the asset or liability and its placement within the fair value hierarchy. The Registrants classify fair value balances based on the fair value hierarchy defined as follows:


•	Level 1 — Consists of unadjusted quoted prices in active markets for identical assets or liabilities that the Registrants have the ability to access as of the reporting date.


•	Level 2 — Consists of inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.


•	Level 3 — Consists of unobservable inputs for assets or liabilities whose fair value is estimated based on internally developed models or methodologies using inputs that are generally less readily observable and supported by little, if any, market activity at the measurement date. Unobservable inputs are developed based on the best available information and subject to cost-benefit constraints.

~~Level 1~~ ~~— Consists of unadjusted quoted prices in active markets for identical assets or liabilities that the Registrants have the ability to access as of the reporting date.~~

~~Level 2~~ — Consists of inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.

~~Level 3~~ — Consists of unobservable inputs for assets or liabilities whose fair value is estimated based on internally developed models or methodologies using inputs that are generally less readily observable and supported by little, if any, market activity at the measurement date. Unobservable inputs are developed based on the best available information and subject to cost-benefit constraints.

DTE Energy Company — DTE Electric Company

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

The following table presents assets and liabilities for DTE Energy measured and recorded at fair value on a recurring ~~basis:~~basis^(a):



	March 31, 2020																	December 31, 2019
	Level 1			Level 2			Level 3			Other^(b)		Netting^(c)			Net Balance			Level 1			Level 2			Level 3			Other^(b)		Netting^(c)			Net Balance
	(In millions)
Assets
Cash equivalents^(d)	$	421		$	—		$	—		$	—	$	—		$	421		$	15		$	—		$	—		$	—	$	—		$	15
Nuclear decommissioning trusts
Equity securities	792			—			—			—		—			792			1,046			—			—			—		—			1,046
Fixed income securities	127			376			—			—		—			503			160			378			—			—		—			538
Private equity and other	—			—			—			62		—			62			—			—			—			43		—			43
Cash equivalents	82			—			—			—		—			82			34			—			—			—		—			34
Other investments^(e)
Equity securities	115			—			—			—		—			115			140			—			—			—		—			140
Fixed income securities	71			—			—			—		—			71			79			—			—			—		—			79
Cash equivalents	4			—			—			—		—			4			4			—			—			—		—			4
Derivative assets
Commodity contracts^(f)
Natural gas	132			78			72			—		(204		)	78			205			76			74			—		(266		)	89
Electricity	—			214			99			—		(242		)	71			—			223			83			—		(225		)	81
Environmental & Other	—			178			1			—		(163		)	16			—			110			3			—		(110		)	3
Foreign currency exchange contracts	—			7			—			—		(2		)	5			—			1			—			—		—			1
Total derivative assets	132			477			172			—		(611		)	170			205			410			160			—		(601		)	174
Total	$	1,744		$	853		$	172		$	62	$	(611	)	$	2,220		$	1,683		$	788		$	160		$	43	$	(601	)	$	2,073

Liabilities
Derivative liabilities
Commodity contracts^(f)
Natural gas	$	(170	)	$	(44	)	$	(64	)	$	—	$	204		$	(74	)	$	(221	)	$	(41	)	$	(89	)	$	—	$	266		$	(85	)
Electricity	—			(233		)	(84		)	—		242			(75		)	—			(231		)	(67		)	—		225			(73		)
Environmental & Other	(5		)	(144		)	—			—		163			14			—			(121		)	—			—		110			(11		)
Foreign currency exchange contracts	—			(2		)	—			—		2			—			—			—			—			—		—			—
Total	$	(175	)	$	(423	)	$	(148	)	$	—	$	611		$	(135	)	$	(221	)	$	(393	)	$	(156	)	$	—	$	601		$	(169	)
Net Assets at end of period	$	1,569		$	430		$	24		$	62	$	—		$	2,085		$	1,462		$	395		$	4		$	43	$	—		$	1,904
Assets
Current	$	550		$	350		$	122		$	—	$	(489	)	$	533		$	218		$	320		$	123		$	—	$	(513	)	$	148
Noncurrent	1,194			503			50			62		(122		)	1,687			1,465			468			37			43		(88		)	1,925
Total Assets	$	1,744		$	853		$	172		$	62	$	(611	)	$	2,220		$	1,683		$	788		$	160		$	43	$	(601	)	$	2,073
Liabilities
Current	$	(163	)	$	(325	)	$	(89	)	$	—	$	489		$	(88	)	$	(211	)	$	(300	)	$	(85	)	$	—	$	513		$	(83	)
Noncurrent	(12		)	(98		)	(59		)	—		122			(47		)	(10		)	(93		)	(71		)	—		88			(86		)
Total Liabilities	$	(175	)	$	(423	)	$	(148	)	$	—	$	611		$	(135	)	$	(221	)	$	(393	)	$	(156	)	$	—	$	601		$	(169	)
Net Assets at end of period	$	1,569		$	430		$	24		$	62	$	—		$	2,085		$	1,462		$	395		$	4		$	43	$	—		$	1,904

September 30, 2017 December 31, 2016
Level
1 Level
2 Level
3
Netting^(a)
Net Balance Level
1 Level
2 Level
3
Netting^(a)
Net Balance
(In millions)
Assets:
Cash equivalents^(b)
$ 16
$ 3
$ —
$ —
$ 19
$ 14
$ 3
$ —
$ —
$ 17
Nuclear decommissioning trusts^(c)

Equity securities 949
—
—
—
949
887
—
—
—
887
Fixed income securities 10
474
—
—
484
11
414
—
—
425
Cash equivalents 6
—
—
—
6
8
—
—
—
8
Other investments^(d)

Equity securities 120
—
—
—
120
104
—
—
—
104
Fixed income securities 63
—
—
—
63
58
—
—
—
58
Cash equivalents 4
—
—
—
4
3
—
—
—
3
Derivative assets
Commodity Contracts
Natural Gas 64
104
62
(151 ) 79
216
79
53
(306 ) 42
Electricity —
155
47
(148 ) 54
—
154
39
(157 ) 36
Other —
—
4
—
4
—
—
2
—
2
Foreign currency exchange contracts —
3
—
(2 ) 1
—
6
—
(5 ) 1
Total derivative assets 64
262
113

(301 ) 138
216
239
94
(468 ) 81
Total $ 1,232
$ 739
$ 113

$ (301 ) $ 1,783
$ 1,301
$ 656
$ 94
$ (468 ) $ 1,583
Liabilities:
Derivative liabilities
Commodity Contracts
Natural Gas $ (64 ) $ (76 ) $ (64 ) $ 151
$ (53 ) $ (226 ) $ (86 ) $ (149 ) $ 321
$ (140 )
Electricity —
(159 ) (40 ) 164
(35 ) —
(159 ) (30 ) 163
(26 )
Other —
—
(2 ) 2
—
—
—
(3 ) 2
(1 )
Foreign currency exchange contracts —
(4 ) —
2
(2 ) —
(3 ) —
3
—
Total derivative liabilities (64 ) (239 ) (106 ) 319
(90 ) (226 ) (248 ) (182 ) 489
(167 )
Total $ (64 ) $ (239 ) $ (106 ) $ 319
$ (90 ) $ (226 ) $ (248 ) $ (182 ) $ 489
$ (167 )
Net Assets (Liabilities) at end of period $ 1,168
$ 500
$ 7
$ 18
$ 1,693
$ 1,075
$ 408
$ (88 ) $ 21
$ 1,416
Assets:
Current $ 65
$ 194
$ 61
$ (225 ) $ 95
$ 205
$ 199
$ 60
$ (400 ) $ 64
Noncurrent 1,167
545
52
(76 ) 1,688
1,096
457
34
(68 ) 1,519
Total Assets $ 1,232
$ 739
$ 113
$ (301 ) $ 1,783
$ 1,301
$ 656
$ 94
$ (468 ) $ 1,583
Liabilities:
Current $ (60 ) $ (183 ) $ (54 ) $ 255
$ (42 ) $ (203 ) $ (211 ) $ (79 ) $ 424
$ (69 )
Noncurrent (4 ) (56 ) (52 ) 64
(48 ) (23 ) (37 ) (103 ) 65
(98 )
Total Liabilities $ (64 ) $ (239 ) $ (106 ) $ 319
$ (90 ) $ (226 ) $ (248 ) $ (182 ) $ 489
$ (167 )
Net Assets (Liabilities) at end of period $ 1,168
$ 500
$ 7
$ 18
$ 1,693
$ 1,075
$ 408
$ (88 ) $ 21
$ 1,416


(a)	See footnotes on following page.

DTE Energy Company — DTE Electric Company

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


(b)	Amounts represent assets valued at NAV as a practical expedient for fair value.


(c)	Amounts represent the impact of master netting agreements that allow DTE Energy to net gain and loss positions and cash collateral held or placed with the same counterparties.

~~(b)~~(d)

At ~~September 30, 2017, available-for-sale securities~~March 31, 2020, the $421 million consisted of ~~$19~~$409 million ~~included $8~~, $1 million, and ~~$11~~$11 million of cash equivalents included in Cash and cash equivalents, Restricted cash, and Other investments on DTE Energy's Consolidated Statements of Financial Position, respectively. At December 31, ~~2016, available-for-sale securities~~2019, the $15 million consisted of ~~$17 million, included $7~~$4 million and ~~$10~~$11 million of cash equivalents included in ~~Restricted~~Cash and cash equivalents and Other investments on DTE Energy's Consolidated Statements of Financial Position, respectively.


~~(c)~~	At September 30, 2017, the Nuclear Decommissioning Master Trust had outstanding commitments to invest in private equity investments of approximately $25 million. These commitments will be funded by existing nuclear decommissioning trust funds.


~~(d)~~(e)	Excludes cash surrender value of life insurance investments.

~~DTE Energy Company — DTE Electric Company~~

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


(f)	For contracts with a clearing agent, DTE Energy nets all activity across commodities. This can result in some individual commodities having a contra balance.

The following table presents assets for DTE Electric measured and recorded at fair value on a recurring basis as of:


	September 30, 2017								December 31, 2016								March 31, 2020										December 31, 2019
	Level 1		Level 2		Level 3		Net Balance		Level 1		Level 2		Level 3		Net Balance		Level 1		Level 2		Level 3		Other^(a)		Net Balance		Level 1		Level 2		Level 3		Other^(a)		Net Balance
	(In millions)																(In millions)
Assets:
Assets
Cash equivalents^(a)(b)	$	8	$	3	$	—	$	11	$	8	$	3	$	—	$	11	$	11	$	—	$	—	$	—	$	11	$	11	$	—	$	—	$	—	$	11
Nuclear decommissioning trusts^(b)
Equity securities	949		—		—		949		887		—		—		887		792		—		—		—		792		1,046		—		—		—		1,046
Fixed income securities	10		474		—		484		11		414		—		425		127		376		—		—		503		160		378		—		—		538
Private equity and other																	—		—		—		62		62		—		—		—		43		43
Cash equivalents	6		—		—		6		8		—		—		8		82		—		—		—		82		34		—		—		—		34
Other investments
Equity securities	10		—		—		10		9		—		—		9		11		—		—		—		11		13		—		—		—		13
Derivative assets — FTRs	—		—		4		4		—		—		2		2		—		—		1		—		1		—		—		3		—		3
Total	$	983	$	477	$	4	$	1,464	$	923	$	417	$	2	$	1,342	$	1,023	$	376	$	1	$	62	$	1,462	$	1,264	$	378	$	3	$	43	$	1,688

Assets:
Assets
Current	$	8	$	3	$	4	$	15	$	8	$	3	$	2	$	13	$	11	$	—	$	1	$	—	$	12	$	11	$	—	$	3	$	—	$	14
Noncurrent	975		474		—		1,449		915		414		—		1,329		1,012		376		—		62		1,450		1,253		378		—		43		1,674
Total Assets	$	983	$	477	$	4	$	1,464	$	923	$	417	$	2	$	1,342	$	1,023	$	376	$	1	$	62	$	1,462	$	1,264	$	378	$	3	$	43	$	1,688


(a)	Amounts represent assets valued at NAV as a practical expedient for fair value.


(b)	At ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016, available-for-sale securities of~~2019, the $11 million consisted of cash equivalents included in Other investments on DTE Electric's Consolidated Statements of Financial Position.


~~(b)~~	At September 30, 2017, the Nuclear Decommissioning Master Trust had outstanding commitments to invest in private equity investments of approximately $25 million. These commitments will be funded by existing nuclear decommissioning trust funds.

Cash Equivalents

Cash equivalents include investments with maturities of three months or less when purchased. The cash equivalents shown in the fair value table are comprised of short-term investments and money market funds.

Nuclear Decommissioning Trusts and Other Investments

The nuclear decommissioning trusts and other investments hold debt and equity securities directly and indirectly through ~~institutional mutual funds and~~ commingled funds. Exchange-traded debt and equity securities held directly are valued using quoted market prices in actively traded markets. ~~Non-exchange-traded~~Commingled funds that hold exchange-traded equity or debt securities are valued based on stated NAVs. Non-exchange traded fixed income securities are valued based upon quotations available from brokers or pricing services.

Private equity and other assets include a diversified group of funds that are classified as NAV assets. These funds primarily invest in private equity partnerships, as well as real estate and private debt. Distributions are received through the liquidation of the underlying fund assets over the life of the funds. There are generally no redemption rights. The ~~institutional mutual~~limited partner must hold the fund for its life or find a third-party buyer, which may need to be approved by the general partner. The funds ~~hold exchange-traded equity or debt securities (exchange~~are established with varied contractual durations generally in the range of 7 years to 12 years. The fund life can often be extended by several years by the general partner, and ~~non-exchange traded)~~further extended with the approval of the limited partners. Unfunded commitments related to these investments totaled $159 million and ~~are valued based on publicly available NAVs. A~~$151 million as of March 31, 2020 and December 31, 2019, respectively.

DTE Energy Company — DTE Electric Company

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

For pricing the nuclear decommissioning trusts and other investments, a primary price source is identified by asset type, class, or issue for each security. The trustee monitors prices supplied by pricing services and may use a supplemental price source or change the primary ~~price~~ source of a given security if the trustee determines that another price source is considered ~~to be~~ preferable. The Registrants have obtained an understanding of how these prices are derived, including the nature and observability of the inputs used in deriving such prices. Additionally, the Registrants selectively corroborate the fair value of securities by comparison of market-based price sources. Investment policies and procedures are determined by DTE Energy's Trust Investments Department which reports to DTE Energy's Vice President and Treasurer.

~~DTE Energy Company — DTE Electric Company~~

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

Derivative Assets and Liabilities

Derivative assets and liabilities are comprised of physical and financial derivative contracts, including futures, forwards, options, and swaps that are both exchange-traded and over-the-counter traded contracts. Various inputs are used to value derivatives depending on the type of contract and availability of market data. Exchange-traded derivative contracts are valued using quoted prices in active markets. The Registrants consider the following criteria in determining whether a market is considered active: frequency in which pricing information is updated, variability in pricing between sources or over time, and the availability of public information. Other derivative contracts are valued based upon a variety of inputs including commodity market prices, broker quotes, interest rates, credit ratings, default rates, market-based seasonality, and basis differential factors. The Registrants monitor the prices that are supplied by brokers and pricing services and may use a supplemental price source or change the primary price source of an index if prices become unavailable or another price source is determined to be more representative of fair value. The Registrants have obtained an understanding of how these prices are derived. Additionally, the Registrants selectively corroborate the fair value of their transactions by comparison of market-based price sources. Mathematical valuation models are used for derivatives for which external market data is not readily observable, such as contracts which extend beyond the actively traded reporting period. The Registrants have established a Risk Management Committee whose responsibilities include directly or indirectly ensuring all valuation methods are applied in accordance with predefined policies. The development and maintenance of the Registrants' forward price curves has been assigned to DTE Energy's Risk Management Department, which is separate and distinct from the trading functions within DTE Energy.

The following ~~tables present~~table presents the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis for DTE Energy:


	Three Months Ended September 30, 2017												Three Months Ended September 30, 2016												Three Months Ended March 31, 2020												Three Months Ended March 31, 2019
	Natural Gas			Electricity			Other			Total			Natural Gas			Electricity			Other			Total			Natural Gas			Electricity			Other			Total			Natural Gas			Electricity			Other			Total
	(In millions)																								(In millions)
Net Assets (Liabilities) as of June 30	$	(17	)	$	6		$	5		$	(6	)	$	(62	)	$	(6	)	$	(1	)	$	(69	)
Net Assets (Liabilities) as of January 1																									$	(15	)	$	16		$	3		$	4		$	(49	)	$	(2	)	$	7		$	(44	)
Transfers into Level 3 from Level 2	—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—
Transfers from Level 3 into Level 2	—			—			—			—			(1		)	—			—			(1		)	(1		)	—			—			(1		)	—			—			—			—
Total gains (losses)
Included in earnings	(8		)	33			1			26			(65		)	24			—			(41		)	24			20			—			44			31			(31		)	(1		)	(1		)
Recorded in Regulatory liabilities	—			—			2			2			—			—			2			2			—			—			(2		)	(2		)	—			—			(3		)	(3		)
Purchases, issuances, and settlements
Settlements	23			(32		)	(6		)	(15		)	28			(24		)	(2		)	2			—			(21		)	—			(21		)	8			8			(1		)	15
Net Assets (Liabilities) as of September 30	$	(2	)	$	7		$	2		$	7		$	(100	)	$	(6	)	$	(1	)	$	(107	)
The amount of total gains (losses) included in Net Income attributed to the change in unrealized gains (losses) related to assets and liabilities held at September 30, 2017 and 2016 and reflected in Operating Revenues — Non-utility operations and Fuel, purchased power, and gas — non-utility in DTE Energy's Consolidated Statements of Operations	$	(8	)	$	18		$	1		$	11		$	(50	)	$	6		$	—		$	(44	)
Net Assets (Liabilities) as of March 31																									$	8		$	15		$	1		$	24		$	(10	)	$	(25	)	$	2		$	(33	)
The amount of total gains (losses) included in Net Income attributed to the change in unrealized gains (losses) related to assets and liabilities held at March 31, 2020 and 2019 and reflected in Operating Revenues — Non-utility operations and Fuel, purchased power, and gas — non-utility in DTE Energy's Consolidated Statements of Operations																									$	19		$	21		$	—		$	40		$	16		$	(21	)	$	(1	)	$	(6	)

DTE Energy Company — DTE Electric Company

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

Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016
Natural Gas Electricity Other Total Natural Gas Electricity Other Total
(In millions)
Net Assets (Liabilities) as of December 31 $ (96 ) $ 9
$ (1 ) $ (88 ) $ (5 ) $ 6
$ (5 ) $ (4 )
Transfers into Level 3 from Level 2 —
—
—
—
—
—
—
—
Transfers from Level 3 into Level 2 —
—
—
—
—
—
—
—
Total gains (losses)

Included in earnings 38
45
1
84
(123 ) (22 ) 1
(144 )
Recorded in Regulatory liabilities —
—
15
15
—
—
6
6
Purchases, issuances, and settlements

Issuances —
—
—
—
—
1
—
1
Settlements 56
(47 ) (13 ) (4 ) 28
9
(3 ) 34
Net Assets (Liabilities) as of September 30 $ (2 ) $ 7
$ 2
$ 7
$ (100 ) $ (6 ) $ (1 ) $ (107 )
The amount of total gains (losses) included in Net Income attributed to the change in unrealized gains (losses) related to assets and liabilities held at September 30, 2017 and 2016 and reflected in Operating Revenues — Non-utility operations and Fuel, purchased power, and gas — non-utility in DTE Energy's Consolidated Statements of Operations $ 8
$ 35
$ —
$ 43
$ (165 ) $ (1 ) $ 2
$ (164 )

The following table presents the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis for DTE Electric:



	Three Months Ended March 31,
	2020			2019
	(In millions)
Net Assets as of beginning of period	$	3		$	6
Change in fair value recorded in Regulatory liabilities	(2		)	(3		)
Purchases, issuances, and settlements
Settlements	—			(1		)
Net Assets as of March 31	$	1		$	2
The amount of total gains (losses) included in Regulatory liabilities attributed to the change in unrealized gains (losses) related to assets held at March 31, 2020 and 2019 and reflected in DTE Electric's Consolidated Statements of Financial Position	$	—		$	—

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(In millions)
Net Assets as of beginning of period $ 8
$ 4
$ 2
$ 3
Change in fair value recorded in Regulatory liabilities 2
2
15
6
Purchases, issuances, and settlements
Settlements (6 ) (3 ) (13 ) (6 )
Net Assets as of September 30 $ 4
$ 3
$ 4
$ 3
The amount of total gains (losses) included in Regulatory liabilities attributed to the change in unrealized gains (losses) related to assets held at September 30, 2017 and 2016 and reflected in DTE Electric's Consolidated Statements of Financial Position $ 1
$ 1
$ 4
$ 3

Derivatives are transferred between levels primarily due to changes in the source data used to construct price curves as a result of changes in market liquidity. Transfers in and transfers out are reflected as if they had occurred at the beginning of the period.

There ~~were no transfers between Levels 1 and 2 for the Registrants during the three and nine months ended September 30, 2017 and 2016, and there~~ were no transfers from or into Level 3 for DTE Electric during the ~~same periods.~~three months ended March 31, 2020 and 2019.

The following tables present the unobservable inputs related to DTE Energy's Level 3 assets and liabilities:


	September 30, 2017																	March 31, 2020
Commodity Contracts	Derivative Assets		Derivative Liabilities			Valuation Techniques	Unobservable Input	Range							Weighted Average			Derivative Assets		Derivative Liabilities			Valuation Techniques	Unobservable Input	Range							Weighted Average
	(In millions)																	(In millions)
Natural Gas	$	62	$	(64	)	Discounted Cash Flow	Forward basis price (per MMBtu)	$	(1.92	)	—	$	6.36	/MMBtu	$	(0.03	)/MMBtu	$	72	$	(64	)	Discounted Cash Flow	Forward basis price (per MMBtu)	$	(0.84	)	—	$	4.20	/MMBtu	$	(0.07	)/MMBtu
Electricity	$	47	$	(40	)	Discounted Cash Flow	Forward basis price (per MWh)	$	(10	)	—	$	7	/MWh	$	1	/MWh	$	99	$	(84	)	Discounted Cash Flow	Forward basis price (per MWh)	$	(10	)	—	$	5	/MWh	$	—



	December 31, 2019
Commodity Contracts	Derivative Assets		Derivative Liabilities			Valuation Techniques	Unobservable Input	Range							Weighted Average
	(In millions)
Natural Gas	$	74	$	(89	)	Discounted Cash Flow	Forward basis price (per MMBtu)	$	(1.78	)	—	$	5.78	/MMBtu	$	(0.09	)/MMBtu
Electricity	$	83	$	(67	)	Discounted Cash Flow	Forward basis price (per MWh)	$	(10	)	—	$	6	/MWh	$	—

~~DTE Energy Company — DTE Electric Company~~

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

December 31, 2016
Commodity Contracts Derivative Assets Derivative Liabilities Valuation Techniques Unobservable Input Range Weighted Average
(In millions)
Natural Gas $ 53
$ (149 ) Discounted Cash Flow Forward basis price (per MMBtu) $ (1.00 ) — $ 7.90 /MMBtu $ (0.05 )/MMBtu
Electricity $ 39
$ (30 ) Discounted Cash Flow Forward basis price (per MWh) $ (6 ) — $ 12 /MWh $ 1 /MWh

The unobservable inputs used in the fair value measurement of the electricity and natural gas commodity types consist of inputs that are less observable due in part to lack of available broker quotes, supported by little, if any, market activity at the measurement date or are based on internally developed models. Certain basis prices (i.e., the difference in pricing between two locations) included in the valuation of natural gas and electricity contracts were deemed unobservable.

The inputs listed above would have had a direct impact on the fair values of the above security types if they were adjusted. A significant increase (decrease) in the basis price would ~~result~~have resulted in a higher (lower) fair value for long positions, with offsetting impacts to short positions.

DTE Energy Company — DTE Electric Company

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

Fair Value of Financial Instruments

The fair value of financial instruments included in the table below is determined by using quoted market prices when available. When quoted prices are not available, pricing services may be used to determine the fair value with reference to observable interest rate indexes. The Registrants have obtained an understanding of how the fair values are derived. The Registrants also selectively corroborate the fair value of their transactions by comparison of market-based price sources. Discounted cash flow analyses based upon estimated current borrowing rates are also used to determine fair value when quoted market prices are not available. The fair values of notes receivable, excluding capital leases, and notes payable are generally estimated using discounted cash flow techniques that incorporate market interest rates as well as assumptions about the remaining life of the loans and credit risk. Depending on the information available, other valuation techniques may be used that rely on internal assumptions and models. Valuation policies and procedures for the Registrants are determined by DTE Energy's Treasury Department which reports to DTE Energy's Vice President and Treasurer and DTE Energy's Controller's Department which reports to DTE Energy's Vice President and Controller.

The following table presents the carrying amount and fair value of financial instruments for DTE Energy:

September 30, 2017 December 31, 2016
Carrying Fair Value Carrying Fair Value
Amount Level 1 Level 2 Level 3 Amount Level 1 Level 2 Level 3
(In millions)
Notes receivable, excluding capital leases $ 36
$ —
$ —
$ 36
$ 36
$ —
$ —
$ 36
Dividends payable $ 148
$ 148
$ —
$ —
$ 148
$ 148
$ —
$ —
Short-term borrowings $ 659
$ —
$ 659
$ —
$ 499
$ —
$ 499
$ —
Notes payable — Other^(a)
$ 16
$ —
$ —
$ 16
$ 17
$ —
$ —
$ 17
Long-term debt^(b)
$ 11,897
$ 1,554
$ 10,522
$ 744
$ 11,270
$ 1,465
$ 9,384
$ 1,056



	March 31, 2020								December 31, 2019
	Carrying		Fair Value						Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3		Amount		Level 1		Level 2		Level 3
	(In millions)
Notes receivable — Other^(a), excluding lessor finance leases	$	68	$	—	$	—	$	68	$	184	$	—	$	—	$	184
Short-term borrowings	$	1,131	$	—	$	1,131	$	—	$	828	$	—	$	828	$	—
Notes payable — Other^(b), excluding lessee finance leases	$	15	$	—	$	—	$	15	$	25	$	—	$	—	$	25
Long-term debt^(c)	$	17,398	$	2,120	$	12,108	$	3,824	$	16,606	$	2,572	$	14,207	$	1,252


(a)	Current portion included in Current Assets — Other on DTE Energy's Consolidated Statements of Financial Position.


(b)	Included in Current Liabilities — Other and Other Liabilities — Other on DTE Energy's Consolidated Statements of Financial Position.


~~(b)~~(c)	Includes debt due within one year, unamortized debt discounts, ~~premiums,~~ and issuance costs. Excludes ~~Capital~~finance lease obligations.

~~DTE Energy Company — DTE Electric Company~~

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

The following table presents the carrying amount and fair value of financial instruments for DTE Electric:


	September 30, 2017								December 31, 2016								March 31, 2020								December 31, 2019
	Carrying		Fair Value						Carrying		Fair Value						Carrying		Fair Value						Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3		Amount		Level 1		Level 2		Level 3		Amount		Level 1		Level 2		Level 3		Amount		Level 1		Level 2		Level 3
	(In millions)																(In millions)
Notes receivable, excluding capital leases	$	—	$	—	$	—	$	—	$	5	$	—	$	—	$	5
Notes receivable — Other^(a), excluding lessor finance leases																	$	11	$	—	$	—	$	11	$	9	$	—	$	—	$	9
Short-term borrowings — affiliates	$	66	$	—	$	—	$	66	$	117	$	—	$	—	$	117	$	139	$	—	$	—	$	139	$	97	$	—	$	—	$	97
Short-term borrowings — other	$	311	$	—	$	311	$	—	$	62	$	—	$	62	$	—	$	71	$	—	$	71	$	—	$	354	$	—	$	354	$	—
Notes payable — Other^(a)	$	5	$	—	$	—	$	5	$	6	$	—	$	—	$	6
Notes payable — Other^(b), excluding lessee finance leases																	$	11	$	—	$	—	$	11	$	21	$	—	$	—	$	21
Long-term debt^(b)(c)	$	6,016	$	—	$	6,395	$	163	$	5,878	$	—	$	6,026	$	264	$	7,970	$	—	$	7,373	$	1,330	$	7,180	$	—	$	7,916	$	173


(a)	Included in Current Assets — Other and Other Assets — Other on DTE Electric's Consolidated Statements of Financial Position.


(b)	Included in Current Liabilities — Other and Other Liabilities — Other on DTE Electric's Consolidated Statements of Financial Position.


~~(b)~~(c)	Includes debt due within one year, unamortized debt discounts, and issuance costs. Excludes ~~Capital~~finance lease obligations.

For further fair value information on financial and derivative instruments, see Note 89 to the Consolidated Financial Statements, "Financial and Other Derivative Instruments."

Nuclear Decommissioning Trust Funds

DTE Electric has a legal obligation to decommission its nuclear power plants following the expiration of its operating licenses. This obligation is reflected as an Asset retirement obligation on DTE Electric's Consolidated Statements of Financial Position. Rates approved by the MPSC provide for the recovery of decommissioning costs of Fermi 2 and the disposal of low-level radioactive waste.

The following table summarizes DTE Electric's fair value of the nuclear decommissioning trust fund assets:



	March 31, 2020		December 31, 2019
	(In millions)
Fermi 2	$	1,430	$	1,650
Fermi 1	3		3
Low-level radioactive waste	6		8
	$	1,439	$	1,661

DTE Energy Company — DTE Electric Company

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

September 30, 2017 December 31, 2016
(In millions)
Fermi 2 $ 1,423
$ 1,291
Fermi 1 3
3
Low-level radioactive waste 13
26
Total $ 1,439
$ 1,320

The costs of securities sold are determined on the basis of specific identification. The following table sets forth DTE Electric's gains and losses and proceeds from the sale of securities by the nuclear decommissioning trust funds:



	Three Months Ended March 31,
	2020			2019
	(In millions)
Realized gains	$	31		$	11
Realized losses	$	(16	)	$	(7	)
Proceeds from sale of securities	$	439		$	176

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(In millions)
Realized gains $ 14
$ 13
$ 63
$ 59
Realized losses $ (7 ) $ (8 ) $ (23 ) $ (48 )
Proceeds from sale of securities $ 246
$ 394
$ 951
$ 1,135

Realized gains and losses from the sale of securities ~~for~~and unrealized gains and losses incurred by the Fermi 2 trust are recorded to the Regulatory asset and Nuclear decommissioning liability. Realized gains and losses from the sale of securities ~~for~~and unrealized gains and losses on the low-level radioactive waste funds are recorded to the Nuclear decommissioning liability.

~~DTE Energy Company — DTE Electric Company~~

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

The following table sets forth DTE Electric's fair value and unrealized gains and losses for the nuclear decommissioning trust funds:



	March 31, 2020							December 31, 2019
	Fair Value		Unrealized Gains		Unrealized Losses			Fair Value		Unrealized Gains		Unrealized Losses
	(In millions)
Equity securities	$	792	$	244	$	(128	)	$	1,046	$	396	$	(39	)
Fixed income securities	503		26		(6		)	538		24		(1		)
Private equity and other	62		—		—			43		—		—
Cash equivalents	82		—		—			34		—		—
	$	1,439	$	270	$	(134	)	$	1,661	$	420	$	(40	)

September 30, 2017 December 31, 2016
Fair
Value Unrealized
Gains Unrealized
Losses Fair
Value Unrealized
Gains Unrealized
Losses
(In millions)
Equity securities $ 949
$ 287
$ (34 ) $ 887
$ 222
$ (46 )
Fixed income securities 484
14
(2 ) 425
11
(5 )
Cash equivalents 6
—
—
8
—
—
$ 1,439
$ 301
$ (36 ) $ 1,320
$ 233
$ (51 )

The following table summarizes the fair value of the fixed income securities held in nuclear decommissioning trust funds by contractual maturity:



	March 31, 2020
	(In millions)
Due within one year	$	24
Due after one through five years	83
Due after five through ten years	106
Due after ten years	290
	$	503

September 30, 2017
(In millions)
Due within one year $ 15
Due after one through five years 100
Due after five through ten years 111
Due after ten years 258
$ 484

Securities held in the Nuclear decommissioning trust funds are classified as available-for-sale. As DTE Electric does not have the ability to hold impaired investments for a period of time sufficient to allow for the anticipated recovery of market value, all unrealized losses are considered to be other-than-temporary impairments.

Unrealized losses incurred by the Fermi 2 trust are recognized as a Regulatory asset and Nuclear decommissioning liability. Unrealized losses on the low-level radioactive waste funds are recognized as a Nuclear decommissioning liability.

Other Securities

At ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, the Registrants' securities included in Other investments on the Consolidated Statements of Financial Position were comprised primarily of ~~money market~~equity and ~~equity securities. There were no unrealized losses on available-for-sale~~fixed income securities ~~which were reclassified out of Other comprehensive income (loss) and realized into Net Income for~~within DTE ~~Energy or DTE Electric during the three and nine months ended September 30, 2017 and 2016.~~Energy's Rabbi Trust. For the three months ended ~~September 30, 2017~~March 31, 2020, losses related to the Trust were $31 million, including $23 million related to equity securities and ~~2016,~~$8 million related to fixed income securities. For the three months ended March 31, 2019, gains related to ~~trading securities held at September 30, 2017 and 2016~~the Trust were $6$17 million, ~~and $5~~including $13 million ~~respectively, for the Registrants. For the nine months ended September 30, 2017 and 2016, gains~~ related to ~~trading~~equity securities ~~held at September 30, 2017~~ and ~~2016 were $19~~$4 million ~~and $15 million, respectively, for the Registrants. The trading gains~~related to fixed income securities. Gains or losses related to the Rabbi Trust assets ~~included in Other investments at DTE Energy,~~ are allocated from DTE Energy to DTE ~~Electric.~~Electric and are included in Other Income or Other Expense, respectively, in the Registrants' Consolidated Statements of Operations.

DTE Energy Company — DTE Electric Company

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

NOTE 89 — FINANCIAL AND OTHER DERIVATIVE INSTRUMENTS

The Registrants recognize all derivatives at their fair value as Derivative assets or liabilities on their respective Consolidated Statements of Financial Position unless they qualify for certain scope exceptions, including the normal purchases and normal sales exception. Further, derivatives that qualify and are designated for hedge accounting are classified as either hedges of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge); or as hedges of the fair value of a recognized asset or liability or of an unrecognized firm commitment (fair value hedge). For cash flow hedges, the ~~portion of the~~ derivative gain or loss ~~that is effective in offsetting the change in the value of the underlying exposure~~ is deferred in Accumulated other comprehensive income (loss) and later reclassified into earnings when the underlying transaction occurs. ~~Gains or losses from the ineffective portion of cash flow hedges are recognized in earnings immediately.~~ For fair value hedges, changes in fair values for the derivative and hedged item are recognized in earnings each period. For derivatives that do not qualify or are not designated for hedge accounting, changes in fair value are recognized in earnings each period.

~~DTE Energy Company — DTE Electric Company~~

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

The ~~Registrants’~~Registrants' primary market risk exposure is associated with commodity prices, credit, and interest rates. The Registrants have risk management policies to monitor and manage market risks. The Registrants use derivative instruments to manage some of the exposure. DTE Energy uses derivative instruments for trading purposes in its Energy Trading segment. Contracts classified as derivative instruments include electricity, natural gas, oil, certain ~~coal~~environmental contracts, forwards, futures, options, swaps, and foreign currency exchange contracts. Items not classified as derivatives include natural gas and environmental inventory, pipeline transportation contracts, ~~renewable energy credits,~~certain environmental contracts, and natural gas storage assets.

DTE Electric — DTE Electric generates, purchases, distributes, and sells electricity. DTE Electric uses forward ~~energy~~ contracts to manage changes in the price of electricity and fuel. Substantially all of these contracts meet the normal purchases and normal sales exception and are therefore accounted for under the accrual method. Other derivative contracts are MTM and recoverable through the PSCR mechanism when settled. This results in the deferral of unrealized gains and losses as Regulatory assets or liabilities until realized.

DTE Gas — DTE Gas purchases, stores, transports, distributes, and sells natural gas, buys and sells transportation capacity, and sells storage ~~and transportation~~ capacity. DTE Gas has fixed-priced contracts for portions of its expected natural gas supply requirements through March ~~2020.~~2023. Substantially all of these contracts meet the normal purchases and normal sales exception and are therefore accounted for under the accrual method. DTE Gas may also sell forward transportation and storage capacity contracts. Forward transportation and storage contracts are generally not derivatives and are therefore accounted for under the accrual method.

Gas Storage and Pipelines — This segment is primarily engaged in services related to the gathering, transportation, and storage of natural gas. Primarily fixed-priced contracts are used in the marketing and management of transportation and storage services. Generally, these contracts are not derivatives and are therefore accounted for under the accrual method.

Power and Industrial Projects — This segment manages and operates energy and pulverized coal projects, a coke battery, reduced emissions fuel projects, ~~landfill~~renewable gas recovery, and power generation assets. Primarily fixed-price contracts are used in the marketing and management of the segment assets. These contracts are generally not derivatives and are therefore accounted for under the accrual method.

Energy Trading — Commodity Price Risk — Energy Trading markets and trades electricity, natural gas physical products, and energy financial instruments, and provides energy and asset management services utilizing energy commodity derivative instruments. Forwards, futures, options, and swap agreements are used to manage exposure to the risk of market price and volume fluctuations in its operations. These derivatives are accounted for by recording changes in fair value to earnings unless hedge accounting criteria are met.

Energy Trading — Foreign Currency Exchange Risk — Energy Trading has foreign currency exchange forward contracts to economically hedge fixed Canadian dollar commitments existing under natural gas and power purchase and sale contracts and natural gas transportation contracts. Energy Trading enters into these contracts to mitigate price volatility with respect to fluctuations of the Canadian dollar relative to the U.S. dollar. These derivatives are accounted for by recording changes in fair value to earnings unless hedge accounting criteria are met.

Corporate and Other — Interest Rate Risk — DTE Energy may use interest rate swaps, treasury locks, and other derivatives to hedge the risk associated with interest rate market volatility.

DTE Energy Company — DTE Electric Company

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

Credit Risk — DTE Energy maintains credit policies that significantly minimize overall credit risk. These policies include an evaluation of potential customers’ and counterparties’ financial condition, including the viability of underlying productive assets, credit rating, collateral requirements, or other credit enhancements such as letters of credit or guarantees. DTE Energy generally uses standardized agreements that allow the netting of positive and negative transactions associated with a single counterparty. DTE Energy maintains a provision for credit losses based on factors surrounding the credit risk of its customers, historical trends, and other information. Based on DTE Energy's credit policies and its ~~September 30, 2017~~March 31, 2020 provision for credit losses, DTE Energy’s exposure to counterparty nonperformance is not expected to have a material adverse effect on DTE Energy's Consolidated Financial Statements.

~~DTE Energy Company — DTE Electric Company~~

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

Derivative Activities

DTE Energy manages its MTM risk on a portfolio basis based upon the delivery period of its contracts and the individual components of the risks within each contract. Accordingly, it records and manages the energy purchase and sale obligations under its contracts in separate components based on the commodity (e.g. electricity or natural gas), the product (e.g. electricity for delivery during peak or off-peak hours), the delivery location (e.g. by region), the risk profile (e.g. forward or option), and the delivery period (e.g. by month and year). The following describes the categories of activities represented by their operating characteristics and key risks:

~~Asset Optimization~~ — Represents derivative activity associated with assets owned and contracted by DTE Energy, including forward natural gas purchases and sales, natural gas transportation, and storage capacity. Changes in the value of derivatives in this category typically economically offset changes in the value of underlying non-derivative positions, which do not qualify for fair value accounting. The difference in accounting treatment of derivatives in this category and the underlying non-derivative positions can result in significant earnings volatility.

~~Marketing and Origination~~ — Represents derivative activity transacted by originating substantially hedged positions with wholesale energy marketers, producers, end-users, utilities, retail aggregators, and alternative energy suppliers.

~~Fundamentals Based Trading~~ — Represents derivative activity transacted with the intent of taking a view, capturing market price changes, or putting capital at risk. This activity is speculative in nature as opposed to hedging an existing exposure.

~~Other~~ — Includes derivative activity at DTE Electric related to FTRs. Changes in the value of derivative contracts at DTE Electric are recorded as Derivative assets or liabilities, with an offset to Regulatory assets or liabilities as the settlement value of these contracts will be included in the PSCR mechanism when realized.

•

Asset Optimization — Represents derivative activity associated with assets owned and contracted by DTE Energy, including forward natural gas purchases and sales, natural gas transportation, and storage capacity. Changes in the value of derivatives in this category typically economically offset changes in the value of underlying non-derivative positions, which do not qualify for fair value accounting. The difference in accounting treatment of derivatives in this category and the underlying non-derivative positions can result in significant earnings volatility.


•	Marketing and Origination — Represents derivative activity transacted by originating substantially hedged positions with wholesale energy marketers, producers, end-users, utilities, retail aggregators, and alternative energy suppliers.


•	Fundamentals Based Trading — Represents derivative activity transacted with the intent of taking a view, capturing market price changes, or putting capital at risk. This activity is speculative in nature as opposed to hedging an existing exposure.


•	Other — Includes derivative activity at DTE Electric related to FTRs. Changes in the value of derivative contracts at DTE Electric are recorded as Derivative assets or liabilities, with an offset to Regulatory assets or liabilities as the settlement value of these contracts will be included in the PSCR mechanism when realized.

The following table presents the fair value of derivative instruments for DTE Energy:



	March 31, 2020					December 31, 2019
	Derivative Assets		Derivative Liabilities			Derivative Assets		Derivative Liabilities
	(In millions)
Derivatives not designated as hedging instruments
Commodity contracts
Natural gas	$	282	$	(278	)	$	355	$	(351	)
Electricity	313		(317		)	306		(298		)
Environmental & Other	179		(149		)	113		(121		)
Foreign currency exchange contracts	7		(2		)	1		—
Total derivatives not designated as hedging instruments	$	781	$	(746	)	$	775	$	(770	)

Current	$	601	$	(577	)	$	646	$	(596	)
Noncurrent	180		(169		)	129		(174		)
Total derivatives	$	781	$	(746	)	$	775	$	(770	)

September 30, 2017 December 31, 2016
Derivative
Assets Derivative Liabilities Derivative
Assets Derivative Liabilities
(In millions)
Derivatives not designated as hedging instruments
Commodity Contracts
Natural Gas $ 230
$ (204 ) $ 348
$ (461 )
Electricity 202
(199 ) 193
(189 )
Other 4
(2 ) 2
(3 )
Foreign currency exchange contracts 3
(4 ) 6
(3 )
Total derivatives not designated as hedging instruments $ 439
$ (409 ) $ 549
$ (656 )

Current $ 301
$ (297 ) $ 447
$ (493 )
Noncurrent 138
(112 ) 102
(163 )
Total derivatives $ 439
$ (409 ) $ 549
$ (656 )

~~The following table presents the fair value of derivative instruments for DTE Electric:~~

September 30, 2017 December 31, 2016
(In millions)
FTRs — Other current assets $ 4
$ 2
Total derivatives not designated as hedging instrument $ 4
$ 2

DTE Energy Company — DTE Electric Company

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

The following table presents the fair value of derivative instruments for DTE Electric:



	March 31, 2020		December 31, 2019
	(In millions)
FTRs — Other current assets	$	1	$	3
Total derivatives not designated as hedging instruments	$	1	$	3

Certain of DTE Energy's derivative positions are subject to netting arrangements which provide for offsetting of asset and liability positions as well as related cash collateral. Such netting arrangements generally do not have restrictions. Under such netting arrangements, DTE Energy offsets the fair value of derivative instruments with cash collateral received or paid for those contracts executed with the same counterparty, which reduces DTE Energy's Total Assets and Liabilities. Cash collateral is allocated between the fair value of derivative instruments and customer accounts receivable and payable with the same counterparty on a pro-rata basis to the extent there is exposure. Any cash collateral remaining, after the exposure is netted to zero, is reflected in Accounts receivable and Accounts payable as collateral paid or received, respectively.

DTE Energy also provides and receives collateral in the form of letters of credit which can be offset against net Derivative assets and liabilities as well as Accounts receivable and payable. DTE Energy had issued letters of credit of ~~approximately $2~~$9 million and $4 million outstanding at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, respectively, which could be used to offset net Derivative liabilities. Letters of credit received from third parties which could be used to offset net Derivative assets were $3$5 million and $2$8 million at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, respectively. Such balances of letters of credit are excluded from the tables below and are not netted with the recognized assets and liabilities in DTE Energy's Consolidated Statements of Financial Position.

For contracts with certain clearing agents, the fair value of derivative instruments is netted against realized positions with the net balance reflected as either 1) a Derivative asset or liability or 2) an Account receivable or payable. Other than certain clearing agents, Accounts receivable and Accounts payable that are subject to netting arrangements have not been offset against the fair value of Derivative assets and liabilities.

For DTE Energy, the total cash collateral posted, net of cash collateral received, was $42 million and $34 million as of September 30, 2017 and December 31, 2016, respectively. DTE Energy had $12 million of cash collateral related to unrealized positions to net against Derivative assets while Derivative liabilities are shown net of cash collateral of $30 million as of September 30, 2017. DTE Energy had $7 million of cash collateral related to unrealized positions to net against Derivative assets while Derivative liabilities are shown net of cash collateral of $28 million as of December 31, 2016. DTE Energy recorded cash collateral paid of $25 million and cash collateral received of $1 million not related to unrealized derivative positions as of September 30, 2017. DTE Energy recorded cash collateral paid of $18 million and cash collateral received of $5 million not related to unrealized derivative positions as of December 31, 2016. These amounts are included in Accounts receivable and Accounts payable and are recorded net by counterparty.

The following table presents ~~the netting offsets of Derivative assets and liabilities~~net cash collateral offsetting arrangements for DTE Energy:

September 30, 2017 December 31, 2016
Gross Amounts of Recognized Assets (Liabilities) Gross Amounts Offset in the Consolidated Statements of Financial Position Net Amounts of Assets (Liabilities) Presented in the Consolidated Statements of Financial Position Gross Amounts of Recognized Assets (Liabilities) Gross Amounts Offset in the Consolidated Statements of Financial Position Net Amounts of Assets (Liabilities) Presented in the Consolidated Statements of Financial Position
(In millions)
Derivative assets
Commodity Contracts
Natural Gas $ 230
$ (151 ) $ 79
$ 348
$ (306 ) $ 42
Electricity 202
(148 ) 54
193
(157 ) 36
Other 4
—
4
2
—
2
Foreign currency exchange contracts 3
(2 ) 1
6
(5 ) 1
Total derivative assets $ 439
$ (301 ) $ 138
$ 549
$ (468 ) $ 81

Derivative liabilities
Commodity Contracts
Natural Gas $ (204 ) $ 151
$ (53 ) $ (461 ) $ 321
$ (140 )
Electricity (199 ) 164
(35 ) (189 ) 163
(26 )
Other (2 ) 2
—
(3 ) 2
(1 )
Foreign currency exchange contracts (4 ) 2
(2 ) (3 ) 3
—
Total derivative liabilities $ (409 ) $ 319
$ (90 ) $ (656 ) $ 489
$ (167 )



	March 31, 2020			December 31, 2019
	(In millions)
Cash collateral recorded in Accounts receivable^(a)	$	10		$	13
Cash collateral recorded in Accounts payable^(a)	(3		)	(3		)
Total net cash collateral posted (received)	$	7		$	10


(a)	Amounts are recorded net by counterparty.

DTE Energy Company — DTE Electric Company

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

The following table presents the netting offsets of Derivative assets and liabilities for DTE Energy:



	March 31, 2020									December 31, 2019
	Gross Amounts of Recognized Assets (Liabilities)			Gross Amounts Offset in the Consolidated Statements of Financial Position			Net Amounts of Assets (Liabilities) Presented in the Consolidated Statements of Financial Position			Gross Amounts of Recognized Assets (Liabilities)			Gross Amounts Offset in the Consolidated Statements of Financial Position			Net Amounts of Assets (Liabilities) Presented in the Consolidated Statements of Financial Position
	(In millions)
Derivative assets
Commodity contracts
Natural gas	$	282		$	(204	)	$	78		$	355		$	(266	)	$	89
Electricity	313			(242		)	71			306			(225		)	81
Environmental & Other	179			(163		)	16			113			(110		)	3
Foreign currency exchange contracts	7			(2		)	5			1			—			1
Total derivative assets	$	781		$	(611	)	$	170		$	775		$	(601	)	$	174

Derivative liabilities
Commodity contracts
Natural gas	$	(278	)	$	204		$	(74	)	$	(351	)	$	266		$	(85	)
Electricity	(317		)	242			(75		)	(298		)	225			(73		)
Environmental & Other	(149		)	163			14			(121		)	110			(11		)
Interest rate contracts	—			—			—			—			—			—
Foreign currency exchange contracts	(2		)	2			—			—			—			—
Total derivative liabilities	$	(746	)	$	611		$	(135	)	$	(770	)	$	601		$	(169	)

The following table presents the netting offsets of Derivative assets and liabilities showing the reconciliation of derivative instruments to DTE Energy's Consolidated Statements of Financial Position:



	March 31, 2020												December 31, 2019
	Derivative Assets						Derivative Liabilities						Derivative Assets						Derivative Liabilities
	Current			Noncurrent			Current			Noncurrent			Current			Noncurrent			Current			Noncurrent
	(In millions)
Total fair value of derivatives	$	601		$	180		$	(577	)	$	(169	)	$	646		$	129		$	(596	)	$	(174	)
Counterparty netting	(489		)	(122		)	489			122			(513		)	(88		)	513			88
Collateral adjustment	—			—			—			—			—			—			—			—
Total derivatives as reported	$	112		$	58		$	(88	)	$	(47	)	$	133		$	41		$	(83	)	$	(86	)

September 30, 2017 December 31, 2016
Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities
Current Noncurrent Current Noncurrent Current Noncurrent Current Noncurrent
(In millions)
Total fair value of derivatives $ 301
$ 138
$ (297 ) $ (112 ) $ 447
$ 102
$ (493 ) $ (163 )
Counterparty netting (225 ) (64 ) 225
64
(396 ) (65 ) 396
65
Collateral adjustment —
(12 ) 30
—
(4 ) (3 ) 28
—
Total derivatives as reported $ 76
$ 62
$ (42 ) $ (48 ) $ 47
$ 34
$ (69 ) $ (98 )

The effect of derivatives not designated as hedging instruments on DTE Energy's Consolidated Statements of Operations is as follows:



	Location of Gain (Loss) Recognized in Income on Derivatives	Gain (Loss) Recognized in Income on Derivatives for the Three Months Ended March 31,
	Location of Gain (Loss) Recognized in Income on Derivatives	2020			2019
		(In millions)
Commodity contracts
Natural gas	Operating Revenues — Non-utility operations	$	(11	)	$	(15	)
Natural gas	Fuel, purchased power, and gas — non-utility	36			70
Electricity	Operating Revenues — Non-utility operations	1			(49		)
Environmental & Other	Operating Revenues — Non-utility operations	21			1
Foreign currency exchange contracts	Operating Revenues — Non-utility operations	5			(1		)
Total		$	52		$	6

DTE Energy Company — DTE Electric Company

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

Derivatives not Designated as Hedging Instruments Location of Gain (Loss) Recognized in Income on Derivatives Gain (Loss) Recognized in Income on Derivatives for the Three Months Ended September 30, Gain (Loss) Recognized in Income on Derivatives for the Nine Months Ended September 30,
2017 2016 2017 2016
(In millions)
Commodity Contracts
Natural Gas Operating Revenues — Non-utility operations $ (14 ) $ 16
$ 63
$ (70 )
Natural Gas Fuel, purchased power, and gas — non-utility 10
(59 ) 56
(27 )
Electricity Operating Revenues — Non-utility operations 33
23
39
18
Other Operating Revenues — Non-utility operations 2
1
1
(1 )
Foreign currency exchange contracts Operating Revenues — Non-utility operations (2 ) —
(3 ) (4 )
Total $ 29
$ (19 ) $ 156
$ (84 )

Revenues and energy costs related to trading contracts are presented on a net basis in DTE Energy's Consolidated Statements of Operations. Commodity derivatives used for trading purposes, and financial non-trading commodity derivatives, are accounted for using the MTM method with unrealized and realized gains and losses recorded in Operating Revenues — Non-utility operations. Non-trading physical commodity sale and purchase derivative contracts are generally accounted for using the MTM method with unrealized and realized gains and losses for sales recorded in Operating Revenues — Non-utility operations and purchases recorded in Fuel, purchased power, and gas — non-utility.

The following represents the cumulative gross volume of DTE Energy's derivative contracts outstanding as of ~~September 30, 2017:~~March 31, 2020:



Commodity		Number of Units
Natural ~~Gas~~gas (MMBtu)		~~1,751,191,598~~1,756,620,693
Electricity (MWh)		~~28,924,416~~36,261,221
Foreign ~~Currency Exchange (Canadian dollars)~~currency exchange (CAD)		~~89,049,511~~82,707,523
Renewable Energy Certificates (MWh)		11,761,761

Various subsidiaries of DTE Energy have entered into contracts which contain ratings triggers and are guaranteed by DTE Energy. These contracts contain provisions which allow the counterparties to require that DTE Energy post cash or letters of credit as collateral in the event that DTE Energy’s credit rating is downgraded below investment grade. Certain of these provisions (known as ~~“hard triggers”~~"hard triggers") state specific circumstances under which DTE Energy can be required to post collateral upon the occurrence of a credit downgrade, while other provisions (known as ~~“soft triggers”~~"soft triggers") are not as specific. For contracts with soft triggers, it is difficult to estimate the amount of collateral which may be requested by counterparties and/or which DTE Energy may ultimately be required to post. The amount of such collateral which could be requested fluctuates based on commodity prices (primarily natural gas, power, environmental, and coal) and the provisions and maturities of the underlying transactions. As of ~~September 30, 2017,~~March 31, 2020, DTE Energy's contractual obligation to post collateral in the form of cash or letters of credit in the event of a downgrade to below investment grade, under both hard trigger and soft trigger provisions, was ~~approximately $470~~$381 million.

~~DTE Energy Company — DTE Electric Company~~

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

As of ~~September 30, 2017,~~March 31, 2020, DTE Energy had ~~approximately $339~~$676 millionof derivatives in net liability positions, for which hard triggers exist. There is no0collateral that has been posted against such liabilities, including cash and letters of credit. Associated derivative net asset positions for which contractual offset exists were ~~approximately $276~~$601 million. The net remaining amount of ~~approximately $63~~$75 million is derived from the ~~$470~~$381 millionnoted above.

NOTE 910 — LONG-TERM DEBT

Debt Issuances

In ~~2017,~~2020, the following debt was issued:



Company	Month	Type	Interest Rate	Maturity Date	Amount
					(In millions)
DTE Electric	February	Mortgage Bonds^(a)	2.25%	2030	$	600
DTE Electric	February	Mortgage Bonds^(a)	2.95%	2050	500
					$	1,100

Company Month Type Interest Rate Maturity Amount
(In millions)
DTE Energy March
Senior Notes^(a)
3.80% 2027 $ 500
DTE Electric August
General and Refunding Mortgage Bonds^(b)
3.75% 2047 440
DTE Gas September
First Mortgage Bonds^(a)
3.08% 2029 40
DTE Gas September
First Mortgage Bonds^(a)
3.75% 2047 40
$ 1,020


(a)	Proceeds were used for the repayment of ~~short-term borrowings and general corporate purposes.~~


~~(b)~~	~~Proceeds were used to repay~~ ~~$300~~$300 million of DTE Electric's ~~2008 series G 5.60%~~2010 Series A 4.89% Senior Notes due ~~on June 15, 2018,~~2020, for the repayment of short-term borrowings, for capital expenditures, and for other general corporate purposes.

In March 2020, DTE Energy entered into a $200 million unsecured term loan with a maturity date of March 2022. The purpose of the loan is to enhance liquidity and reduce reliance on the commercial paper market. NaN amounts have been drawn on the loan as of March 31, 2020. The loan will terminate in August 2020 if no amounts have been drawn. Other terms are consistent with DTE Energy’s unsecured revolving credit agreements. Refer to Note 11 to the Consolidated Financial Statements, "Short-Term Credit Arrangements and Borrowings," for additional information regarding the credit agreements.

DTE Energy Company — DTE Electric Company

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

In April 2020, DTE Electric issued $600 million of 2.625% Mortgage Bonds due 2031. Proceeds will be used for the repayment of $300 million of DTE Electric's 2010 Series B 3.45% Senior Notes due 2020, for the repayment of $32 million of DTE Electric's 2008 Series KT Variable Rate Senior Notes due 2020, for the repayment of short-term borrowings, for capital expenditures, and for other general corporate purposes.

Debt Redemptions

In ~~2017,~~2020, the following debt was redeemed:

Company

Month

Type

Interest Rate

Maturity Date

Amount

(In millions)

DTE Electric

March

Senior Notes

4.89%

2020

300

Company Month Type Interest Rate Maturity Amount
(In millions)
DTE Electric August Senior Notes 5.60% 2018 $ 300
DTE Energy September
Secured Note^(a)
7.29% 2029 77
DTE Energy Various Other Long-Term Debt Various 2017 8
$ 385


~~(a)~~	DTE Energy's Gas Storage and Pipelines segment recognized a $16 million net loss on extinguishment of debt associated with early repayment, consisting of $20 million of early redemption premiums and $4 million of unamortized debt premiums. The loss is reflected in Other (Income) and Deductions — Interest Expense on the Consolidated Statements of Operations.

NOTE 1011 — 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,~~In addition, DTE Energy entered into a $500 million unsecured term loan in March 2020 with terms consistent with the unsecured revolving credit agreements. DTE Energy has drawn the full $500 million available under this term loan, which expires in March 2021. DTE Energy also has other facilities to support letter of credit issuance.

The agreements require 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 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 ~~September 30, 2017,~~March 31, 2020, the total funded debt to total capitalization ratios for DTE Energy, DTE Electric, and DTE Gas were ~~0.54~~0.59 to 1, ~~0.51~~0.53 to 1, and ~~0.48~~0.47 to 1, respectively, and were in compliance with this financial covenant.

The availability under the facilities in place at March 31, 2020 is shown in the following table:



	DTE Energy		DTE Electric		DTE Gas		Total
	(In millions)
Unsecured letter of credit facility, expiring in February 2021	$	150	$	—	$	—	$	150
Unsecured letter of credit facility, expiring in August 2021	110		—		—		110
Unsecured term loan, expiring in March 2021	500		—		—		500
Unsecured revolving credit facility, expiring April 2024	1,500		500		300		2,300
	2,260		500		300		3,060
Amounts outstanding at March 31, 2020
Commercial paper issuances	107		71		3		181
Letters of credit	231		—		—		231
Unsecured term loan	500		—		—		500
Revolver borrowings	300		—		150		450
	1,138		71		153		1,362
Net availability at March 31, 2020	$	1,122	$	429	$	147	$	1,698

DTE Energy Company — DTE Electric Company

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

~~The availability under~~In April 2020, DTE Electric entered into a $200 million unsecured term loan, of which DTE Electric has drawn the ~~facilities~~full $200 million available, and a $200 million unsecured term loan, of which 0 amount has been drawn. In addition, in ~~place at September 30, 2017 is shown~~April 2020, DTE Gas entered into a $100 million unsecured term loan, of which DTE Gas has drawn the full $100 million available. All three loans expire in April 2021 and have terms consistent with the ~~following table:~~unsecured revolving credit agreements.

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^(a)
70
—
—
70
Unsecured revolving credit facility, expiring April 2022 1,200
400
300
1,900
1,420
400
300
2,120
Amounts outstanding at September 30, 2017
Commercial paper issuances 98
311
250
659
Letters of credit 132
—
—
132
230
311
250
791
Net availability at September 30, 2017 $ 1,190
$ 89
$ 50
$ 1,329


~~(a)~~	~~In August 2017, DTE Energy amended its $70 million letter of credit facility. The facility's maturity date was extended from September 2017 to September 2019.~~

DTE Energy has ~~approximately $17~~$9 million of other outstanding letters of credit which are used for various corporate purposes and are not included in the facilities described above.

In conjunction with maintaining certain exchange traded risk management positions, DTE Energy may be required to post collateral with its clearing agent. DTE Energy has a demand financing agreement for up to $100 million with its clearing agent. The 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 the right of setoff with posted collateral. At ~~September 30, 2017,~~March 31, 2020, the capacity under this facility was ~~$100~~$150 million. The amount outstanding under this agreement was ~~$32~~$96 million and ~~$50~~$114 million at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, respectively, and was fully offset by the posted collateral.

NOTE 1112 — LEASES

Lessor

During the first quarter of 2020, 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 a net investment of $133 million.

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



	DTE Energy
	March 31, 2020
	(In millions)
2020	$	17
2021	19
2022	19
2023	19
2024	19
2025 and Thereafter	273
Total minimum future lease receipts	366
Residual value of leased pipeline	19
Less unearned income	208
Net investment in finance lease	177
Less current portion	7
	$	170

Interest income recognized under finance leases was $4 million and $1 million for the three months ended March 31, 2020 and 2019, respectively.

DTE Energy’s lease income associated with operating leases was as follows:



	Three Months Ended March 31,
	2020		2019
	(In millions)
Fixed payments	$	16	$	17
Variable payments	23		27
	$	39	$	44

DTE Energy Company — DTE Electric Company

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

NOTE 13 — 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 ~~NOx.~~NO_X. 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 ~~NOx,~~ SO₂, NO_X, mercury, and other emissions. Additional rulemakings may occur over the next few years which could require additional controls for SO₂, ~~NOx,~~NO_X, and other hazardous air pollutants.

~~The Cross State Air Pollution Rule (CSAPR), required further reductions of SO~~₂ and NOx 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) NOx 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 NOx 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. ~~The Registrants expect~~On April 30, 2018, the EPA finalized the State of Michigan's recommended marginal non-attainment designation for southeast Michigan. The State is required to ~~designate areas as either attainment or~~develop and implement a plan to address the southeast Michigan ozone non-attainment ~~with the 2015 ozone standards in the fourth quarter of 2017. DTE Electric~~area by 2021. The Registrants cannot predict the scope and associated financial impact of the ~~revised~~State's plan to address the ozone ~~standards~~non-attainment area at this time.

~~DTE Energy Company — DTE Electric Company~~

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

In July 2009, ~~DTE Energy~~the Registrants received a NOV/FOV from the EPA alleging, among other things, that ~~five~~5 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. ~~Oral arguments before the Sixth Circuit occurred in December 2015.~~ On January 10, 2017, a divided panel of the Court reversed the decision of the U.S. District Court. ~~On February 24, 2017, DTE Energy and DTE Electric filed a petition with the Sixth Circuit Court for a rehearing and a rehearing en banc, which was denied on May 1, 2017.~~ 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 ~~district court~~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. ~~Responses~~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 ~~petition are due November 1, 2017.~~U.S. District Court for further proceedings and on June 14, 2018 the case was stayed pending settlement negotiations. The proceedings at the District Court remain stayed until May 2020 while the parties discuss potential resolution of the 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~~2 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. The Registrants ~~cannot predict~~do not expect the ~~financial impact or~~ outcome of this matter ~~or the timing of its resolution.~~to have a material impact on their Consolidated Financial Statements.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (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 requires the state of Michigan to submit a plan in 2022 that includes GHG standards for existing coal-fired power plant units in Michigan. These final rules do not impact DTE Energy's commitments for its electric utility operations to reduce carbon emissions 32% by the early 2020s, 50% by 2030, and 80% by 2040, or its goal of net 0 emissions for its electric utility operations by 2050, from the 2005 carbon emissions levels.

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 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 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.

~~DTE Energy Company — DTE Electric Company~~

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

To comply with air pollution requirements, DTE Electric spent approximately $2.4 billion through ~~2016.~~2019. DTE Electric does not anticipate additional capital expenditures for air pollution requirements through ~~2023.~~2026, 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 ~~by April 2018~~and submitted as part of the National Pollutant Discharge Elimination System (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 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. 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 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 ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, DTE Electric had $8 million accrued for remediation. 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.

DTE Energy Company — DTE Electric Company

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

Coal Combustion Residuals and Effluent Limitations Guidelines — A final EPA rule for the disposal of ~~CCR,~~coal combustion residuals, commonly known as coal ash, became effective in October 2015, and was revised in October ~~2016. In September 2017,~~2016 and July 2018. 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 rule currently requires the installation 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. At other facilities, the rule requires ash laden waters be moved from earthen basins to steel and concrete tanks. DTE Electric has estimated the impact of the current rule to be $592 million of capital expenditures.

On December 2, 2019 a proposed revision to the CCR Rule was published in the Federal Register to address the D.C. Circuit's 2018 decision regarding CCR impoundments that are not lined with an engineered liner system. The rule proposes that all CCR impoundments that do not meet the engineered liner requirements must close by specific dates, and it further confirms that all clay lined impoundments are viewed as unlined. On March 3, 2020 an additional proposed revision to the CCR Rule was published in the Federal Register that provides a ~~basin becomes inactive.~~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 is currently evaluating options including the alternative liner system demonstration for our clay lined impoundments based on the range of outcomes of the current proposed rules to determine any changes to DTE Electric's plans in the operation and closure of coal ash impoundments.

At the State level, legislation was signed by the Governor in December 2018 and provides for further regulation of the CCR program in Michigan. Additionally, the bill provides the basis of a CCR program that EGLE will submit to the EPA for approval to fully regulate the CCR program in Michigan in lieu of a Federal permit program.

In November 2015, the EPA finalized the ELG Rule for the steam electric power generating industry which ~~may require~~requires additional controls to be installed between 2018 and 2023. Compliance schedules for individual facilities and individual waste streams are determined through issuance of new ~~wastewater~~National Pollutant Discharge Elimination System (NPDES) permits by the State of Michigan. The State of Michigan has issued a ~~National Pollutant Discharge Elimination System~~NPDES permit for the Belle River Power Plant establishing a compliance deadline of December 31, 2021. No new permits that would require ELG compliance 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 requirements of the November 2015 rules and for CCR requirements, costs associated with the building of new facilities or installation of controls are estimated to be approximately $311 million.

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 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 November 22, 2019, the EPA issued a proposed rule to revise the technology-based effluent limitations guidelines and standards applicable to flue gas desulfurization wastewater and bottom ash transport water. The ELG compliance requirements and final deadlines for bottom ash transport water and FGD wastewater, and total ELG related compliance costs will not be known until the EPA completes its reconsideration of the ELG ~~Rule.~~

~~DTE Energy Company — DTE Electric Company~~

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

Rule expected by the end of 2020.

DTE Gas

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 ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, DTE Gas had ~~$41~~$24 million and ~~$43~~$25 million, respectively, accrued for ~~remediation, respectively.~~remediation. 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.

DTE Energy Company — DTE Electric Company

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

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 a finding of violation 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. EES Coke evaluated the EPA's alleged violations and believes that the permits approved by EGLE complied with the Clean Air Act. 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.

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 (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. 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 emissions reductions on 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~~plan submittal and EPA approval describing the control strategy and timeline for demonstrating compliance with the new SO₂ standard ~~are due~~is the next step in the process and is expected to ~~the EPA by April 2018. DTE Energy is currently working with the MDEQ to develop the required SIP.~~be completed in 2020. DTE Energy is unable to determine the full impact of the SIP ~~strategy, as it is currently under development.~~strategy.

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 ~~September 30, 2017~~March 31, 2020 was approximately ~~$620~~$400 million. Payment under these guarantees isare 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 ~~September 30, 2017~~March 31, 2020 was ~~approximately $364~~$547 million. ~~Payment~~Payments under these guarantees isare considered remote.

~~DTE Energy Company — DTE Electric Company~~

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

NEXUS Guarantees

NEXUS ~~entered into~~is party to 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~~In conjunction with these agreements, ~~in December 2016,~~ DTE Energy ~~executed separate guarantee agreements with~~provided certain guarantees on behalf of NEXUS to DTE Gas and Texas Eastern Transmission, LP, with maximum potential payments totaling ~~$75~~$226 million and $9$360 million at ~~September 30, 2017,~~March 31, 2020, 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~~agreements in 2033. The amount of each guarantee decreases annually as payments are made by NEXUS to each of the aforementioned counterparties.

DTE Energy Company — DTE Electric Company

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

NEXUS is also party to certain 15-year capacity agreements for the transportation of natural gas with Vector, an equity method investee of DTE Energy. Pursuant to the terms of those agreements, in October 2018, DTE Energy executed a guarantee agreement with Vector, with a maximum potential payment totaling $7 million at March 31, 2020, representing 50% of the first-year payment obligations due and payable by NEXUS. The guarantee terminates at the earlier of (i) such time as all of the guaranteed obligations have been fully performed or (ii) 15 years from the date DTE Energy entered into the guarantee.

Should NEXUS fail to perform under the terms of these agreements, DTE Energy is required to perform on its behalf. 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 Registrants may provide indirect guarantees for the indebtedness of others. DTE Energy’s guarantees are not individually material with maximum potential payments totaling ~~$55~~$56 million at ~~September 30, 2017. Payment~~March 31, 2020. Payments under these guarantees isare considered remote.

DTE Energy is 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 ~~September 30, 2017,~~March 31, 2020, DTE Energy had ~~approximately $57~~$122 million of performance bonds outstanding. In the event that such bonds are called for nonperformance, DTE Energy would be obligated to reimburse the issuer of the performance bond. DTE Energy is 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.

Vector Line of Credit

In July 2019, DTE Energy, as lender, entered into a revolving term credit facility with Vector, as borrower, in the amount of C$70 million. The credit facility was executed in response to the passage of Canadian regulations requiring oil and gas pipelines to demonstrate their financial ability to respond to a catastrophic event and exists for the sole purpose of satisfying these regulations. Vector may only draw upon the facility if the funds are required to respond to a catastrophic event. The maximum potential payments under the line of credit at March 31, 2020 is $49 million. The funding of a loan under the terms of the credit facility is considered remote.

Labor Contracts

There are several bargaining units for DTE ~~Energy's approximately 4,800~~Energy subsidiaries' approximate 5,300 represented employees, including DTE Electric's ~~approximately 2,600~~approximate 2,900 represented employees. The majority of the represented employees are under contracts that expire in ~~2020~~2021 and ~~2021.~~2022.

Purchase Commitments

Utility capital expenditures, expenditures for non-utility businesses, and contributions to equity method investees will be approximately ~~$2.5~~$4.5 billion and ~~$1.5~~$2.6 billion in ~~2017~~2020 for DTE Energy and DTE Electric, respectively. The Registrants have made certain commitments in connection with ~~these~~the estimated ~~2017~~2020 annual capital expenditures and contributions to equity method investees.

Bankruptcies

DTE Energy's Power and Industrial Projects segment holds ownership interests in, and operates, 5 generating plants that sell electric output from renewable sources under long-term power purchase agreements with PG&E. PG&E filed for Chapter 11 bankruptcy protection on January 29, 2019. As of March 31, 2020, PG&Es account is substantially current and outstanding accounts receivable from PG&E are not material. Therefore, DTE Energy determined no reserve was necessary.

DTE Energy Company — DTE Electric Company

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

As of March 31, 2020, the book value of long-lived assets and operating lease right-of-use assets used in producing electric output for sale to PG&E was approximately $100 million and $7 million, respectively. The Power and Industrial Projects segment also has equity investments, including a note receivable, of approximately $69 million in entities that sell power to PG&E. In January 2019, following the bankruptcy filing, DTE Energy performed an impairment analysis on its long-lived assets. Based on its undiscounted cash flow projections, DTE Energy determined it did 0t have an impairment loss as of December 31, 2018. DTE Energy also determined there was 0t an other-than-temporary decline in its equity investments. DTE has not identified subsequent facts or circumstances that would cause a change to these conclusions through March 31, 2020. DTE Energy's assumptions and conclusions may change, and it could have impairment losses if any of the terms of the contracts are not honored by PG&E or the contracts are rejected through the bankruptcy process.

COVID-19 Pandemic

DTE Energy will continue to monitor the impact of the COVID-19 pandemic on supply chains, markets, counterparties, and customers, and any related impacts on operating costs, customer demand, and recoverability of assets that could materially impact the Registrants financial results. At this time, the Registrants cannot predict the ultimate impact of these factors to our Consolidated Financial Statements, as future developments involving the severity of COVID-19, actions to contain or treat its impact, and the extent to which normal economic and operating conditions can resume are highly uncertain.

Other Contingencies

The Registrants are involved in certain other legal, regulatory, administrative, and environmental proceedings before various courts, arbitration panels, and governmental agencies concerning claims arising in the ordinary course of business. These proceedings include certain contract disputes, additional environmental reviews and investigations, audits, inquiries from various regulators, and pending judicial matters. The Registrants cannot predict the final disposition of such proceedings. The Registrants regularly review legal matters and record provisions for claims that they can estimate and are considered probable of loss. The resolution of these pending proceedings is not expected to have a material effect on the Registrants' Consolidated Financial Statements in the periods they are resolved.

For a discussion of contingencies related to regulatory matters and derivatives, see Notes 56 and 89 to the Consolidated Financial Statements, "Regulatory ~~Matters,"~~Matters" and "Financial and Other Derivative Instruments," respectively.

~~DTE Energy Company — DTE Electric Company~~

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

NOTE 1214 — RETIREMENT BENEFITS AND TRUSTEED ASSETS

The following tables detail the components of net periodic benefit costs (credits) for pension benefits and other postretirement benefits for DTE Energy:


	Pension Benefits						Other Postretirement Benefits						Pension Benefits						Other Postretirement Benefits
	2017			2016			2017			2016			Three Months Ended March 31,
Three Months Ended September 30,	(In millions)
													2020			2019			2020			2019
													(In millions)
Service cost	$	22		$	23		$	7		$	7		$	25		$	21		$	6		$	5
Interest cost	53			55			18			20			46			55			14			18
Expected return on plan assets	(78		)	(77		)	(33		)	(33		)	(83		)	(81		)	(32		)	(31		)
Amortization of:
Net actuarial loss	46			43			3			6			43			32			5			3
Prior service cost (credit)	1			—			(3		)	(29		)
Prior service credit													—			—			(5		)	(2		)
Net periodic benefit cost (credit)	$	44		$	44		$	(8	)	$	(29	)	$	31		$	27		$	(12	)	$	(7	)

Pension Benefits Other Postretirement Benefits
2017 2016 2017 2016
Nine Months Ended September 30, (In millions)
Service cost $ 69
$ 69
$ 20
$ 20
Interest cost 160
164
55
60
Expected return on plan assets (233 ) (232 ) (98 ) (97 )
Amortization of:
Net actuarial loss 132
124
10
22
Prior service cost (credit) 1
—
(10 ) (88 )
Net periodic benefit cost (credit) $ 129
$ 125
$ (23 ) $ (83 )

~~The following tables detail the components of net periodic benefit costs (credits) for pension benefits and other postretirement benefits for DTE Electric:~~

Pension Benefits Other Postretirement Benefits
2017 2016 2017 2016
Three Months Ended September 30, (In millions)
Service cost $ 16
$ 18
$ 5
$ 5
Interest cost 40
42
14
15
Expected return on plan assets (56 ) (55 ) (23 ) (23 )
Amortization of:
Net actuarial loss 32
31
2
4
Prior service cost (credit) 1
—
(2 ) (22 )
Net periodic benefit cost (credit) $ 33
$ 36
$ (4 ) $ (21 )

Pension Benefits Other Postretirement Benefits
2017 2016 2017 2016
Nine Months Ended September 30, (In millions)
Service cost $ 53
$ 53
$ 15
$ 15
Interest cost 121
125
42
46
Expected return on plan assets (167 ) (165 ) (68 ) (68 )
Amortization of:
Net actuarial loss 94
88
6
15
Prior service cost (credit) 1
1
(7 ) (66 )
Net periodic benefit cost (credit) $ 102
$ 102
$ (12 ) $ (58 )

DTE Energy Company — DTE Electric Company

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

~~Pension~~DTE Electric participates in various plans that provide pension and ~~Other Postretirement Contributions~~

~~During the first nine months of 2017,~~other postretirement benefits for DTE Energy ~~made cash contributions of $220 million, including contributions from~~and its affiliates. The plans are sponsored by DTE Energy's subsidiary, DTE Energy Corporate Services, LLC. DTE Electric accounts for its participation in DTE Energy's qualified and nonqualified pension plans by applying multiemployer accounting. DTE Electric accounts for its participation in other postretirement benefit plans by applying multiple-employer accounting. Within multiemployer and multiple-employer plans, participants pool plan assets for investment purposes and to reduce the cost of ~~$185~~plan administration. The primary difference between plan types is assets contributed in multiemployer plans can be used to provide benefits for all participating employers, while assets contributed within a multiple-employer plan are restricted for use by the contributing employer. As a result of multiemployer accounting treatment, capitalized costs associated with these plans are reflected in Property, plant, and equipment in DTE Electric's Consolidated Statements of Financial Position. The same capitalized costs are reflected as Regulatory assets and liabilities in DTE Energy's Consolidated Statements of Financial Position. In addition, the service cost and non-service cost components are presented in Operation and maintenance in DTE Electric's Consolidated Statements of Operations. The same non-service cost components are presented in Other (Income) and Deductions — Non-operating retirement benefits, net in DTE Energy's Consolidated Statements of Operations. Plan participants of all plans are solely DTE Energy and affiliate participants.

DTE Energy's subsidiaries are responsible for their share of qualified and nonqualified pension benefit costs. DTE Electric's allocated portion of pension benefit costs included in capital expenditures and operating and maintenance expense were $26 million ~~to its pension plans.~~ and $23 million for the three months ended March 31, 2020 and 2019, respectively. These amounts include recognized contractual termination benefit charges, curtailment gains, and settlement charges.

The following tables detail the components of net periodic benefit costs (credits) for other postretirement benefits for DTE Electric:



	Other Postretirement Benefits
	Three Months Ended March 31,
	2020			2019
	(In millions)
Service cost	$	5		$	4
Interest cost	11			13
Expected return on plan assets	(22		)	(21		)
Amortization of:
Net actuarial loss	3			1
Prior service credit	(4		)	(1		)
Net periodic benefit credit	$	(7	)	$	(4	)

At the discretion of management, and depending upon economic and financial market conditions, DTE Energy ~~may make additional contributions~~anticipates making up to ~~$88~~$185 million in contributions to the qualified pension plans during 2020, including ~~additional contributions from~~$160 million of DTE Electric ~~of $85 million, to its pension plans in 2017.~~

contributions. DTE Energy does ~~not~~0t anticipate making any contributions to ~~the~~its other postretirement benefit plans in ~~2017.~~2020.

NOTE 1315 — SEGMENT AND RELATED INFORMATION

DTE Energy sets strategic goals, allocates resources, and evaluates performance based on the following structure:

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

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.

Gas Storage and Pipelines ~~consists~~ is primarily engaged in services related to the gathering, transportation, and storage of natural ~~gas pipeline, gathering, and storage businesses.~~gas.

Power and Industrial Projects 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 Energy Company — DTE Electric Company

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

Energy Trading consists of energy marketing and trading operations.

Corporate and Other includes various holding company activities, holds certain non-utility debt, and holds energy-related investments.

The federal income tax provisions or benefits of DTE Energy’s subsidiaries are determined on an individual company basis and recognize the tax benefit of tax credits and net operating losses, if applicable. The state and local income tax provisions of the utility subsidiaries are determined on an individual company basis and recognize the tax benefit of various tax credits and net operating losses, if applicable. The subsidiaries record federal, state, and local income taxes payable to or receivable from DTE Energy based on the federal, state, and local tax provisions of each company.

Inter-segment billing for goods and services exchanged between segments is based upon tariffed or market-based prices of the provider and primarily consists of the sale of reduced emissions fuel, power sales, and natural gas sales in the following segments:



	Three Months Ended March 31,
	2020		2019
	(In millions)
Electric	$	15	$	14
Gas	4		2
Gas Storage and Pipelines	4		3
Power and Industrial Projects	94		145
Energy Trading	6		7
Corporate and Other	1		1
	$	124	$	172

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(In millions)
Electric $ 11
$ 15
$ 36
$ 32
Gas 1
5
6
8
Gas Storage and Pipelines 10
2
32
7
Power and Industrial Projects 138
178
462
476
Energy Trading 8
10
27
28
Corporate and Other 1
—
2
2
$ 169
$ 210
$ 565
$ 553

DTE Energy Company — DTE Electric Company

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

Financial data of DTE Energy's business segments follows:



	Three Months Ended March 31,
	2020			2019
	(In millions)
Operating Revenues — Utility operations
Electric	$	1,212		$	1,235
Gas	540			645
Operating Revenues — Non-utility operations
Electric	4			—
Gas Storage and Pipelines	170			116
Power and Industrial Projects	307			388
Energy Trading	913			1,301
Corporate and Other	—			1
Reconciliation and Eliminations	(124		)	(172		)
Total	$	3,022		$	3,514

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(In millions)
Operating Revenues — Utility operations
Electric $ 1,434
$ 1,608
$ 3,827
$ 3,976
Gas 152
160
929
911
Operating Revenues — Non-utility operations
Gas Storage and Pipelines 115
63
333
199
Power and Industrial Projects 537
524
1,592
1,414
Energy Trading 1,174
782
3,217
1,807
Corporate and Other 2
1
3
2
Reconciliation and Eliminations (169 ) (210 ) (565 ) (553 )
Total $ 3,245
$ 2,928
$ 9,336
$ 7,756



	Three Months Ended March 31,
	2020			2019
	(In millions)
Net Income (Loss) Attributable to DTE Energy by Segment:
Electric	$	94		$	147
Gas	121			151
Gas Storage and Pipelines	72			48
Power and Industrial Projects	30			26
Energy Trading	34			32
Corporate and Other	(11		)	(3		)
Net Income Attributable to DTE Energy Company	$	340		$	401

Net Income (Loss) Attributable to DTE Energy by Segment:
Electric $ 219
$ 285
$ 463
$ 547
Gas (15 ) (4 ) 93
96
Gas Storage and Pipelines 36
28
121
93
Power and Industrial Projects 44
34
104
66
Energy Trading 1
(4 ) 97
(34 )
Corporate and Other (15 ) (1 ) (31 ) (31 )
Net Income Attributable to DTE Energy Company $ 270
$ 338
$ 847
$ 737

Item 2. 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 and 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 three energy-related non-utility segments with operations throughout the United States.

The following table summarizes DTE Energy's financial results:


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2017		2016		2017		2016		2020		2019
	(In millions, except per share amounts)								(In millions, except per share amounts)
Net Income Attributable to DTE Energy Company	$	270	$	338	$	847	$	737	$	340	$	401
Diluted Earnings per Common Share	$	1.51	$	1.88	$	4.72	$	4.10	$	1.76	$	2.19

The decrease in Net Income infor the ~~third~~first quarter was primarily due to lower earnings in the Electric and ~~Corporate and Other~~Gas segments, partially offset by higher earnings in the Gas Storage and Pipelines segment.

During the first quarter 2020, the COVID-19 pandemic began impacting Michigan and the other service territories throughout the United States in which the Registrants operate. DTE Energy has taken certain safety precautions, including directing employees to work remotely whenever possible and pausing all non-critical construction projects. DTE Energy has complied with Michigan and other states' "stay-at-home" orders, which require employees to stay home unless their work is necessary to sustain or protect life, such as providing safe and reliable energy.

The spread of COVID-19 and efforts to contain the virus have resulted in closures and reduced operations of businesses, governmental agencies, and other institutions. This has also contributed to disruption and volatility in the financial markets. For certain non-qualified benefit plan trusts for which gains and losses affect earnings, this impact to financial markets resulted in pre-tax investment losses of $31 million for the Electric segment and $3 million for the Gas segment for the three months ended March 31, 2020.

Other impacts from the COVID-19 pandemic have included decreased demand within the Electric segment, which contributed to lower base sales for the quarter, and lower production within the Power and Industrial Projects ~~and Gas Storage and Pipelines segments. The increase in Net Income in the nine-month period was primarily~~segment, due to ~~higher earnings in~~certain customers reducing their operations. The allowance for doubtful accounts was also increased for our utility customers. These impacts were not material to the ~~Energy Trading, Power and Industrial Projects, and Gas Storage and Pipelines segments, partially offset by lower earnings in~~Registrants' financial results for the ~~Electric segment.~~three months ended March 31, 2020.

Please see detailed explanations of segment performance in the following "Results of Operations" section.

STRATEGY

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

DTE Energy's utilities are investing capital to improve customer reliability through investments in base infrastructure and new generation, and to comply with environmental requirements. DTE Energy expects that planned significant capital investments will result in earnings growth. DTE Energy is focused on executing plans to achieve operational excellence and customer satisfaction with a focus on customer affordability. DTE Energy operates in a constructive regulatory environment and has solid relationships with its regulators.

~~In May 2017,~~

DTE Energy ~~announced its plan~~is committed to reduce ~~carbon emissions. This goal will be attained by cutting~~the carbon emissions ~~30%~~of its electric utility operations by 32% by the early 2020s, ~~45%~~50% by 2030, ~~75%~~and 80% by 2040 ~~and more than 80%~~from the 2005 carbon emissions levels. DTE Energy is also committed to a net zero carbon emissions goal by ~~2050.~~2050 for its electric utility operations. To achieve ~~this~~the reduction goals in the near term, DTE Energy will transition away from coal-powered sources and incorporate more renewable energy, energy ~~efficiency,~~waste reduction projects, demand response, and ~~highly-efficient~~ natural gas fueled ~~power plants.~~generation. DTE Energy has already begun the transition in the way it produces power through the continued retirement of its aging coal-fired plants. Refer to the "Capital Investments" section below for further discussion.

DTE Energy has significant investments in non-utility businesses. 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 energy markets with attractive competitive dynamics where meaningful scale is in alignment with its risk profile. DTE Energy expects growth opportunities in the Gas Storage and Pipelines and Power and Industrial Projects segments.

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.

DTE Electric's capital investments over the ~~2017-2021~~2020-2024 period are estimated at ~~$8.4~~$12.0 billion comprised of ~~$3.2~~$4.0 billion for capital replacements and other projects, ~~$3.2~~$5.0 billion for distribution infrastructure, and ~~$2.0~~$3.0 billion for new generation. DTE Electric has retired ~~four~~five coal-fired generation units at the Trenton Channel, River Rouge, and St. Clair facilities and has announced plans to retire its remaining ~~thirteen~~twelve coal-fired generating units. ~~Seven~~Six of these coal-fired generating units will be retired through ~~2023~~2022 at the Trenton Channel, River Rouge, and St. Clair facilities. The remaining coal-fired generating units at the Belle River and Monroe facilities are expected to be retired by 2040. The retired facilities will be replaced with renewables, energy ~~efficiency,~~waste reduction, demand response, and natural gas fueled generation. DTE Electric plans to build a natural gas fueled combined cycle generation facility to provide approximately 1,100 megawatts of energy beginning in 2022. In the third quarter of 2017, DTE Electric filed a CON with the MPSC seeking approval for the planned build of this natural gas plant. In September 2016, DTE Electric received an order from the MPSC in its amended Renewable Energy Plan approving two 150 megawatt wind projects expected to be constructed and in service between 2018 and 2020, and 25 megawatts of company-owned solar projects which will be constructed and in service between 2019 and 2020. DTE Electric constructed and placed in service 50 megawatts of solar generation in 2017. DTE Electric plans to seek regulatory approval for capital expenditures consistent with prior ratemaking treatment.

DTE Gas' capital investments over the ~~2017-2021~~2020-2024 period are estimated at ~~$1.8~~$3.0 billion comprised of ~~$1.0~~$1.4 billion for base infrastructure, ~~$700 million~~and $1.6 billion for gas main renewal, meter move out, and pipeline integrity ~~programs,~~programs.

DTE Electric and ~~$100 million for expenditures related to the NEXUS Pipeline.~~ DTE Gas ~~plans~~plan to seek regulatory approval ~~in general rate case filings~~ for ~~base infrastructure~~ capital expenditures consistent with ~~prior~~ ratemaking treatment.

DTE Energy's non-utility businesses' capital investments are primarily for expansion, growth, and ongoing maintenance. Gas Storage and Pipelines' capital investments over the ~~2017-2021~~2020-2024 period are estimated at $2.2 billion to ~~$2.8~~$2.7 billion for gathering and pipeline investments and ~~expansions, including the NEXUS Pipeline.~~expansions. Power and Industrial Projects' capital investments over the ~~2017-2021~~2020-2024 period are estimated at ~~$600 million to~~ $1.0 billion to $1.4 billion for ~~investments in cogeneration~~industrial energy services and ~~on-site energy~~RNG projects.

ENVIRONMENTAL MATTERS

The Registrants are subject to extensive environmental ~~regulation.~~regulations. 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.~~

~~DTE Electric is subject to the EPA ozone and fine particulate transport and acid rain regulations that limit power plant emissions of SO~~₂ and NOx. 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 NOx, SO₂~~, mercury and other emissions. Additional rulemakings are expected over the next few years which could require additional controls for SO~~₂, NOx, and other hazardous air pollutants. To comply with these requirements, DTE Electric spent approximately $2.4 billion through 2016. DTE Electric does not anticipate additional capital expenditures through 2023.

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 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 Clean Power Plan on existing sources at this time.

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.

For further discussion of environmental matters, see Note 1113 to the Consolidated Financial Statements, "Commitments and Contingencies."

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;

gas distribution system renewal;

rate competitiveness and affordability;

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

employee safety and engagement;

cost structure optimization across all business segments;

cash, capital, and liquidity to maintain or improve financial strength; and

investments that integrate assets and leverage skills and expertise.

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.

In the near term, DTE Energy will continue to monitor the impact of the COVID-19 pandemic on supply chains, markets, counterparties, and customers, and any related impacts on the operating costs, customer demand, and recoverability of assets in our business segments that could materially impact the Registrants financial results. At this time, the Registrants cannot predict the ultimate impact of these factors to our Consolidated Financial Statements, as future developments involving the severity of COVID-19, actions to contain or treat its impact, and the extent to which normal economic and operating conditions can resume are highly uncertain.

DTE Energy will also monitor and evaluate the impact of any regulatory and legislative activities related to the COVID-19 pandemic, including the MPSC order on April 15, 2020 which authorized the deferral of certain uncollectible expenses. Refer to Note 6 to the Consolidated Financial Statements, "Regulatory Matters," for further detail regarding the order.

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 ~~our~~the 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.


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2017			2016			2017			2016			2020			2019
	(In millions)												(In millions)
Net Income (Loss) Attributable to DTE Energy by Segment
Electric	$	219		$	285		$	463		$	547		$	94		$	147
Gas	(15		)	(4		)	93			96			121			151
Gas Storage and Pipelines	36			28			121			93			72			48
Power and Industrial Projects	44			34			104			66			30			26
Energy Trading	1			(4		)	97			(34		)	34			32
Corporate and Other	(15		)	(1		)	(31		)	(31		)	(11		)	(3		)
Net Income Attributable to DTE Energy Company	$	270		$	338		$	847		$	737		$	340		$	401

ELECTRIC

The Results of Operations discussion for DTE Electric is presented in a reduced disclosure format in accordance with General Instruction H(2) of Form 10-Q.

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


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2017		2016		2017		2016		2020		2019
	(In millions)								(In millions)
Operating Revenues — Utility operations	$	1,434	$	1,608	$	3,827	$	3,976	$	1,212	$	1,235
Fuel and purchased power — utility	428		495		1,097		1,191		294		346
Utility Margin	1,006		1,113		2,730		2,785		918		889
Operating Revenues — Non-utility operations									4		—
Operation and maintenance	349		363		1,068		1,019		356		352
Depreciation and amortization	188		176		549		539		261		221
Taxes other than income	74		73		229		216		83		84
Operating Income	395		501		884		1,011		222		232
Other (Income) and Deductions	58		60		172		162		115		56
Income Tax Expense	118		156		249		302		13		29
Net Income Attributable to DTE Energy Company	$	219	$	285	$	463	$	547	$	94	$	147

See DTE Electric's Consolidated Statements of Operations 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 14 to the Consolidated Financial Statements, "Retirement Benefits and Trusteed Assets" for additional information.

Utility Margin ~~decreased $107 million and $55~~ increased $29 million in the three ~~and nine~~ months ended ~~September 30, 2017, respectively.~~March 31, 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:


	Three Months			Nine Months			Three Months
	(In millions)						(In millions)
Implementation of new rates	$	—		$	97		$	68
PSCR disallowance	—			(13		)
Base sales	(19		)	(14		)	(5		)
Regulatory mechanism — TRM							(13		)
Weather	(84		)	(117		)	(33		)
Regulatory mechanisms and other	(4		)	(8		)
Decrease in Utility Margin	$	(107	)	$	(55	)
Other regulatory mechanisms and other							12
Increase in Utility Margin							$	29


	Three Months Ended September 30,		Nine Months Ended September 30,		Three Months Ended March 31,
	2017	2016	2017	2016	2020	2019
	(In thousands of MWh)				(In thousands of MWh)
DTE Electric Sales
Residential	4,335	5,174	11,290	12,361	3,570	3,688
Commercial	4,801	5,085	13,208	13,427	3,909	4,077
Industrial	2,627	2,618	7,461	7,596	2,302	2,460
Other	48	57	188	193	60	63
	11,811	12,934	32,147	33,577	9,841	10,288
Interconnection sales^(a)	318	456	2,330	1,992	408	1,030
Total DTE Electric Sales	12,129	13,390	34,477	35,569	10,249	11,318

DTE Electric Deliveries
Retail and wholesale	11,811	12,934	32,147	33,577	9,841	10,288
Electric retail access, including self-generators^(b)	1,249	1,241	3,636	3,731	1,043	1,120
Total DTE Electric Sales and Deliveries	13,060	14,175	35,783	37,308	10,884	11,408


(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.

~~Operation and maintenance~~ ~~expense decreased $14 million and~~Operating Revenues - Non-utility operations increased ~~$49~~$4 million in the three ~~and nine~~ months ended March 31, 2020 due to renewable energy projects acquired by DTE Sustainable Generation in September ~~30, 2017, respectively. The decrease~~2019.

Operation and maintenance expense increased $4 million in the ~~third quarter~~three months ended March 31, 2020. The increase was primarily due to ~~decreased power plant~~$10 million higher generation ~~expenses of $24 million related to outages,~~expense, partially offset by $6 million of lower benefit costs.

Depreciation and amortization expense increased ~~distribution operations expenses of $7~~$40 million ~~and increased expenses of $2 million related to~~in the ~~2016 fire at a generation facility.~~three months ended March 31, 2020. The increase ~~in the nine-month period~~ was primarily due to ~~increased storm restoration expenses~~a higher utility depreciable base of ~~$24 million, increased distribution operations expenses of $7~~$47 million and ~~$19 million related to the 2016 fire at~~ a ~~generation facility. DTE Electric expects the power plant generation expenses related to the 2016 fire at a generation facility to be partially reimbursed by insurance proceeds.~~

~~Depreciation and amortization~~ expense increased $12 million and $10 million in the three and nine months ended September 30, 2017, respectively. The increase in the third quarter was primarily due to $15 million of increased expense from an increased depreciable base, partially offset by a decrease of $3 million ~~in amortization of regulatory assets. The~~ increase ~~in the nine-month period was primarily due to $27 million of increased expenses~~resulting from ~~an increased depreciable base,~~new non-utility assets at DTE Sustainable Generation, partially offset by a decrease of $10 million associated with the ~~TRM and a decrease of $7 million in amortization of regulatory assets.~~TRM.

Other (Income) and Deductions ~~decreased $2 million and~~ increased ~~$10~~$59 million in the three ~~and nine~~ months ended ~~September 30, 2017, respectively.~~March 31, 2020. The ~~decrease in the third quarter~~increase was primarily due to $2a change in investment earnings (loss of $31 million in 2020 compared to a gain of $17 million in 2019) and $7 million of ~~contributions to not-for-profit organizations in 2016. The increase~~higher interest expense.

Income Tax Expense decreased $16 million in the ~~nine-month period was~~three months ended March 31, 2020 primarily due to lower ~~interest income of $8 million related to a sales and use tax settlement received in 2016 and higher interest expense of $10 million, partially offset by $5 million of higher investment~~ earnings and ~~$2 million~~amortization of ~~contributions to not-for-profit organizations in 2016.~~the TCJA regulatory liability.

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 ~~expects to continue its efforts to improve productivity~~will maintain a strong focus on customers by increasing reliability and ~~decrease costs~~satisfaction while ~~improving customer satisfaction with consideration of~~keeping customer rate ~~affordability.~~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, ~~impact of 2016 Michigan energy legislation,~~ uncertainty of legislative or regulatory actions regarding climate change, and effects of energy ~~efficiency~~waste reduction programs.

DTE Electric filed a rate case with the MPSC on ~~April 19, 2017~~July 8, 2019 requesting an increase in base rates of ~~$231~~$351 million based on a projected twelve-month period ending ~~October 31, 2018.~~April 30, 2021. 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.~~generation investments. The rate filing also requests an increase in return on equity from ~~10.1%~~10.0% to 10.5% ~~on capital structure. 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.~~and includes projected changes in sales and operating and maintenance expenses. A final MPSC order in this case is expected by ~~April 2018.~~May 2020. Refer to Note 6 to the Consolidated Financial Statements, "Regulatory Matters" for additional information.

DTE Electric is also monitoring the impacts of the COVID-19 pandemic on future operations and financial results. Refer to the "Executive Overview" and "Outlook" sections above for DTE Energy's consideration of COVID-19 impacts on our business segments.

GAS

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


	Three Months Ended September 30,						Nine Months Ended September 30,				Three Months Ended March 31,
	2017			2016			2017		2016		2020		2019
	(In millions)										(In millions)
Operating Revenues — Utility operations	$	152		$	160		$	929	$	911	$	540	$	645
Cost of gas — utility	12			15			278		306		178		241
Utility Margin	140			145			651		605		362		404
Operation and maintenance	110			99			330		293		121		128
Depreciation and amortization	31			27			91		79		37		35
Taxes other than income	10			13			48		49		25		24
Operating Income (Loss)	(11		)	6			182		184
Operating Income											179		217
Other (Income) and Deductions	12			13			38		35		22		16
Income Tax Expense (Benefit)	(8		)	(3		)	51		53
Net Income (Loss) Attributable to DTE Energy Company	$	(15	)	$	(4	)	$	93	$	96
Income Tax Expense											36		50
Net Income Attributable to DTE Energy Company											$	121	$	151

Utility Margin decreased ~~$5 million and increased $46~~$42 million in the three ~~and nine~~ months ended ~~September 30, 2017, respectively.~~March 31, 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:

Three Months Nine Months
(In millions)
Implementation of new rates $ 1
$ 70
Revenue decoupling mechanism —
6
Weather 2
(22 )
Other (8 ) (8 )
Increase (decrease) in Utility Margin $ (5 ) $ 46



	Three Months
	(In millions)
Weather	$	(43	)
TCJA rate reduction liability	(6		)
Infrastructure recovery mechanism	8
Other regulatory mechanisms and other	(1		)
Increase (decrease) in Utility Margin	$	(42	)


	Three Months Ended September 30,		Nine Months Ended September 30,		Three Months Ended March 31,
	2017	2016	2017	2016	2020	2019
	(In Bcf)				(In Bcf)
Gas Markets
Gas sales	8	7	77	80	58	69
End-user transportation	34	38	119	136	57	58
	42	45	196	216	115	127
Intermediate transportation	55	44	205	164	128	127
Total Gas sales	97	89	401	380	243	254

Operation and maintenance expense ~~increased $11 million and $37~~decreased $7 million in the three ~~and nine~~ months ended ~~September 30, 2017, respectively. The increase in the third quarter was~~March 31, 2020 primarily due to ~~increased employee benefits expenses of $8 million and increased~~lower gas operations ~~expenses of $2 million. The increase in the nine-month period was primarily due to~~expense.

Other (Income) and Deductions increased ~~employee benefits expenses of $24 million, increased corporate expenses of $8 million, and increased gas operations expenses of $5 million.~~

~~Depreciation and amortization~~ ~~expense increased $4 million and $12~~$6 million in the three ~~and nine~~ months ended ~~September 30, 2017, respectively. The increase in both periods was~~March 31, 2020 primarily due to ~~increased expense from an increased depreciable base~~a change in investment earnings (loss of $3 million in 2020 compared to a gain of $2 million in 2019).

Income Tax Expense decreased $14 million in the three months ended March 31, 2020 primarily due to lower earnings and ~~higher depreciation rates.~~amortization of the TCJA regulatory liability.

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 Gas filed a rate case with the MPSC on November 25, 2019 requesting an increase in base rates of $204 million based on a projected twelve-month period ending September 30, 2021. The requested increase in base rates is primarily due to an increase in net plant resulting from infrastructure investments and operating and maintenance expenses. The rate filing also requests an increase in return on equity from 10.0% to 10.5% and includes projected changes in sales and working capital. A final MPSC order in this case is expected by September 2020. Refer to Note 6 to the Consolidated Financial Statements, "Regulatory Matters" for additional information.

DTE Gas is also monitoring the impacts of the COVID-19 pandemic on future operations and financial results. Refer to the "Executive Overview" and "Outlook" sections above for DTE Energy's consideration of COVID-19 impacts on our business segments.

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:


	Three Months Ended September 30,					Nine Months Ended September 30,						Three Months Ended March 31,
	2017		2016			2017			2016			2020			2019
	(In millions)											(In millions)
Operating Revenues — Non-utility operations	$	115	$	63		$	333		$	199		$	170		$	116
Cost of gas — Non-utility	8		—			23			—
Cost of sales — Non-utility												4			—
Operation and maintenance	19		15			57			47			28			25
Depreciation and amortization	19		8			57			27			36			22
Taxes other than income	1		1			5			3			5			3
Asset (gains) losses and impairments, net	1		—			2			—
Operating Income	67		39			189			122			97			66
Other (Income) and Deductions	5		(9		)	(18		)	(28		)	(3		)	(6		)
Income Tax Expense	19		19			66			55			26			18
Net Income	43		29			141			95			74			54
Less: Net Income Attributable to Noncontrolling Interests	7		1			20			2			2			6
Net Income Attributable to DTE Energy Company	$	36	$	28		$	121		$	93		$	72		$	48

Operating Revenues — Non-utility operations increased ~~$52 million and $134~~$54 million in the three ~~and nine~~ months ended ~~September 30, 2017, respectively.~~March 31, 2020 primarily due to the acquisition of Blue Union.

Cost of sales — Non-utility increased $4 million in the three months ended March 31, 2020 primarily due to the acquisition of Blue Union.

Operation and maintenance expenseincreased $3 million in the three months ended March 31, 2020. The increase ~~in both periods~~ was primarily due to the acquisition of ~~AGS~~Blue Union, partially offset by cost savings initiatives.

Depreciation and ~~SGG and~~amortization expense increased ~~volumes from Susquehanna gathering.~~

~~Cost of gas — Non-utility~~ ~~increased $8 million and $23~~$14 million in the three ~~and nine~~ months ended ~~September 30, 2017, respectively. The increase in both periods was primarily driven by physical purchase of gas from AGS customers for resale to optimize available transportation capacity.~~

~~Operation and maintenance~~ ~~expense and~~ ~~Depreciation and amortization~~ ~~expense~~ ~~increased~~ ~~in the three and nine months ended September 30, 2017, respectively. The increase in both periods was~~March 31, 2020 primarily due to the acquisition of ~~AGS and SGG.~~Blue Union.

Other (Income) and Deductions decreased ~~$14 million and $10~~$3 million in the three ~~and nine~~ months ended ~~September 30, 2017, respectively.~~March 31, 2020. The decrease ~~in both periods~~ was primarily ~~driven by recognizing a $16 million net loss on extinguishment of debt within~~due to interest expense related to the ~~storage business,~~Blue Union acquisition, partially offset by higher pipeline earnings.

Income Tax Expenseincreased ~~AFUDC recorded on~~$8 million in the ~~NEXUS Pipeline.~~three months ended March 31, 2020 primarily due to higher earnings.

Net Income Attributable to Noncontrolling Interests ~~increased$6 million~~ ~~and $18~~decreased $4 million in the three ~~and nine~~ months ended ~~September 30, 2017, respectively.~~March 31, 2020. The ~~increase in both periods~~decrease was primarily due to the ~~acquisition~~May 2019 purchase of an additional 30% ownership interest in SGG.

See Note 4 to the Consolidated Financial Statements, ~~"Acquisition,~~"Acquisitions," for discussion of the acquisition of ~~AGS~~Blue Union and ~~SGG~~LEAP in ~~October 2016.~~December 2019.

Outlook — ~~The Susquehanna~~ Significant expansion activities are underway to increase capacity of the Blue Union and LEAP assets, which provide natural gas gathering ~~system is being expanded with additional compression facilities~~ and ~~gathering lines as needed~~other midstream services to ~~accommodate shipper demand.~~ producers located primarily in Louisiana.

DTE Energy believes its long-term ~~agreement~~agreements with ~~Southwestern Energy Production Company~~producers and the quality of the natural gas reserves in the ~~Marcellus region~~Marcellus/Utica and Haynesville shale regions soundly ~~positions Bluestone Pipeline and Susquehanna gathering system~~position the business 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, with an investment balance of $534 million at September 30, 2017. A FERC application was filed in the fourth quarter of 2015 and was approved on August 25, 2017. Construction is scheduled to commence in October 2017, with a third quarter 2018 in-service target 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.~~revenues. Gas Storage and Pipelines will continue to ~~look~~execute quality investments, with a focus on continued organic growth from well-positioned existing assets.

Recent declines in commodity prices can have a negative impact on customers of Gas Storage and Pipelines if sustained for ~~additional investment opportunities~~an extended period. DTE Energy continues to work with its customers by executing short, medium, and ~~other~~long-term storage, gathering, and ~~pipeline projects at favorable prices.~~transportation contracts.

Gas Storage and Pipelines is also monitoring the impacts of the COVID-19 pandemic on future operations and financial results. Refer to the "Executive Overview" and "Outlook" sections above for DTE Energy's consideration of COVID-19 impacts on our business segments.

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 and pipeline-quality gas from renewable energy projects. Power and Industrial Projects results are discussed below:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2017			2016			2017			2016			2020			2019
	(In millions)												(In millions)
Operating Revenues — Non-utility operations	$	537		$	524		$	1,592		$	1,414		$	307		$	388
Fuel, purchased power, and gas — non-utility	460			451			1,388			1,218			225			304
Non-utility Margin	77			73			204			196			82			84
Operation and maintenance	80			78			248			236			69			81
Depreciation and amortization	18			18			55			54			18			17
Taxes other than income	3			3			9			10			4			4
Asset (gains) losses and impairments, net	5			(1		)	7			(1		)	(10		)	—
Operating Loss	(29		)	(25		)	(115		)	(103		)
Operating Income (Loss)													1			(18		)
Other (Income) and Deductions	(21		)	(12		)	(60		)	(44		)	(19		)	(27		)
Income Taxes
Expense (Benefit)	2			1			(8		)	(11		)
Expense													5			3
Production Tax Credits	(40		)	(34		)	(116		)	(85		)	(15		)	(21		)
	(38		)	(33		)	(124		)	(96		)	(10		)	(18		)
Net Income	30			20			69			37			30			27
Less: Net Loss Attributable to Noncontrolling Interests	(14		)	(14		)	(35		)	(29		)
Less: Net Income Attributable to Noncontrolling Interests													—			1
Net Income Attributable to DTE Energy Company	$	44		$	34		$	104		$	66		$	30		$	26

Operating Revenues — Non-utility operations ~~increased $13 million and $178~~decreased $81 million in the three ~~and nine~~ months ended ~~September 30, 2017, respectively.~~March 31, 2020. The ~~increases are~~decrease was due to the following:

Three Months Nine Months
(In millions)
Lower coal prices offset by higher production associated with new projects in the REF business $ (17 ) $ 115
Higher sales due to improved conditions in the steel business 36
85
Lower production and one-time revenue recovery in third quarter 2016 in the renewables business (5 ) (16 )
Other (1 ) (6 )
$ 13
$ 178



	Three Months
	(In millions)
Lower production in the REF business	$	(69	)
Lower demand and prices in the Steel business	(11		)
Other	(1		)
	$	(81	)

Non-utility Margin ~~increased $4 million and $8~~ decreased $2 million in the three ~~and nine~~ months ended ~~September 30, 2017, respectively.~~March 31, 2020. The ~~increases are~~decrease was due to the following:

Three Months Nine Months
(In millions)
Higher sales due to improved conditions in the steel business $ 11
$ 38
Lower sales primarily associated with expired contracts in the on-site business (3 ) (11 )
Lower production and one-time revenue recovery in third quarter 2016 in the renewables business (4 ) (13 )
Other —
(6 )
$ 4
$ 8



	Three Months
	(In millions)
Lower demand and prices in the Steel business	$	(4	)
New projects offset by lower demand in the On-site business	1
New project in the Renewables business	1
	$	(2	)

Operation and maintenance expense ~~increased $2 million and~~decreased $12 million in the three ~~and nine~~ months ended ~~September 30, 2017, respectively. The increase in the third quarter was~~March 31, 2020 primarily due to ~~higher~~lower maintenance ~~in the renewables projects. The increase in the nine-month period was primarily due to $6 million of higher maintenance in the renewables projects~~spending and ~~$5 million of higher spending due to new projects~~lower production in the REF business.

Asset (gains) losses and impairments, net~~decreased $6~~ increased $10 million in the three months ended March 31, 2020. The increase was primarily due to the write-off of environmental liabilities upon completing site remediation in the Steel business and the sale of assets in the On-site business.

Other (Income) and Deductions decreased $8 million in the three ~~and nine~~ months ended ~~September 30, 2017, respectively.~~March 31, 2020. The decrease in ~~both periods was primarily due to a $6 million impairment recorded in~~ the ~~petroleum coke business in 2017.~~

~~Other (Income) and Deductions~~ ~~increased $9 million and $16 million in the three and nine months ended September 30, 2017, respectively. The increase in the third~~first quarter was primarily due to a $6 million increase in equity earnings in the renewable business and a $4 million increase due to an insurance settlement in the renewable business. The increase in the nine-month period was primarily due to a $6 million increase in equity earnings in the renewable business, a $4 million increase due to an insurance settlement in the renewable business, a $3 million increase in equity earnings in the landfill gas business, and a $2 million increase due to an insurance settlementlower production in the REF business and insurance proceeds received in 2019 in the Renewables business.

Income Taxes — Production Tax Credits ~~increased~~ decreased $6 ~~million and $31~~ million in the three ~~and nine~~ months ended ~~September 30, 2017, respectively. The increase in both periods was~~March 31, 2020 primarily due to ~~new projects~~lower production in the REF business.

~~Net Loss Attributable to Noncontrolling Interests~~ ~~increased $6 million in the nine months ended September 30, 2017. The increase was due to higher production in the 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. DTE Energy is in the process of entering into a sublicense agreement with a third-party owned and operated REF facility.

DTE Energy expects sustained production levels of metallurgical coke and pulverized coal supplied to steel industry customers for 2018. The segment has four renewable power generation facilities in operation. On-site energy services will continue to be delivered in accordance with the terms of long-term contracts. In October 2017, a Power and Industrial Projects subsidiary and Ford Motor Company (Ford) entered into a 30-year agreement to build, own, and operate utility assets to supply utility services to Ford’s new Research & Engineering Campus located in Dearborn, Michigan. Simultaneously, DTE Electric and Ford entered into a 30-year agreement to supply steam to the campus using a combined heat and power facility owned by DTE Electric. Construction is scheduled to begin in the fourth quarter of 2017, with commercial operation expected to begin in late 2019. DTE Energy will continue to look for additional investment opportunities and other energy projects at favorable prices.

Power and Industrial Projects 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.~~customers in addition to optimizing the REF facilities until the phase out at the end of 2021.

Power and Industrial Projects is also monitoring the impacts of the COVID-19 pandemic on future operations and financial results. Refer to the "Executive Overview" and "Outlook" sections above for DTE Energy's consideration of COVID-19 impacts on our business segments.

ENERGY TRADING

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 ~~renewable energy credits~~environmental attributes to various customers. Energy Trading results are discussed below:


	Three Months Ended September 30,					Nine Months Ended September 30,					Three Months Ended March 31,
	2017		2016			2017		2016			2020		2019
	(In millions)										(In millions)
Operating Revenues — Non-utility operations	$	1,174	$	782		$	3,217	$	1,807		$	913	$	1,301
Purchased power and gas — non-utility	1,154		773			2,999		1,810			841		1,235
Non-utility Margin	20		9			218		(3		)	72		66
Operation and maintenance	15		14			50		46			23		19
Depreciation and amortization	1		1			3		2			1		1
Taxes other than income	1		1			4		2			2		2
Operating Income (Loss)	3		(7		)	161		(53		)
Operating Income											46		44
Other (Income) and Deductions	1		—			2		3			1		1
Income Tax Expense (Benefit)	1		(3		)	62		(22		)
Net Income (Loss) Attributable to DTE Energy Company	$	1	$	(4	)	$	97	$	(34	)
Income Tax Expense											11		11
Net Income Attributable to DTE Energy Company											$	34	$	32

Operating Revenues — Non-utility operations ~~increased$392 million and $1,410~~decreased $388 million in the three ~~and nine~~ months ended ~~September 30, 2017, respectively. The increase in the third quarter was~~March 31, 2020 primarily due to ~~higher volumes~~a decrease in gas prices in the gas structured strategy. ~~The increase in the nine-month period was primarily due to higher gas prices and higher volumes in the gas structured strategy.~~

Non-utility Margin increased ~~$11 million and $221~~$6 million in the three ~~and nine~~ months ended ~~September 30, 2017, respectively.~~March 31, 2020. The ~~increases were due~~following table details changes in Non-utility margin relative to the ~~unrealized and realized margins presented in the following tables:~~comparable prior period:

Three Months
(In millions)
Unrealized Margins^(a)

Favorable results, primarily in gas structured and power trading strategies^(b)
$ 53
Unfavorable results, primarily in gas trading and gas transportation strategies (15 )
$ 38
Realized Margins^(a)

Unfavorable results, primarily in power full requirements, environmental trading, power trading, and gas storage strategies^(c)
$ (39 )
Favorable results, primarily in the gas trading strategy 12
$ (27 )
Increase in Non-utility Margin $ 11



	Three Months
	(In millions)
Unrealized Margins^(a)
Favorable results, primarily in environmental trading and gas structured strategies	$	54
Unfavorable results, primarily in the gas transportation strategy^(b)	(29		)
	25
Realized Margins^(a)
Favorable results, primarily in power trading and gas storage strategies	17
Unfavorable results, primarily in gas structured and environmental trading strategies^(c)	(36		)
	(19		)
Increase in Non-utility Margin	$	6

(a)

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.


(b)	Amount includes ~~$39~~$15 million of timing related ~~gains~~losses related to gas strategies which will reverse in future periods as the underlying contracts settle.


(c)	Amount includes $2$7 million of timing related gains related to gas strategies recognized in previous periods that reversed as the underlying contracts settled.

Nine Months
(In millions)
Unrealized Margins^(a)

Favorable results, primarily in gas structured, gas full requirements, and environmental trading strategies^(b)
$ 158
Unfavorable results, primarily in gas trading and power full requirements strategies (15 )
$ 143
Realized Margins^(a)

Favorable results, primarily in gas structured, gas storage, and gas trading strategies^(c)
$ 94
Unfavorable results, primarily in power full requirements and power trading strategies (16 )
$ 78
Increase in Non-utility Margin $ 221

~~(a)~~


~~(b)~~	~~Amount includes $152 million of timing related gains related to gas strategies which will reverse in future periods as the underlying contracts settle.~~


~~(c)~~	~~Amount includes $89 million of timing related losses related to gas strategies recognized in previous periods that reversed as the underlying contracts settled.~~

Outlook — In the near-term, Energy Trading expects market conditions to remain ~~challenging, and the~~challenging. The profitability of this segment may be impacted by the volatility in commodity prices and the uncertainty of impacts associated with ~~financial reform,~~ regulatory changes, and changes in operating rules of Regional Transmission Organizations. Significant portions of the Energy Trading portfolio are economically hedged. Most financial instruments, ~~and~~ physical power and natural gas contracts, and certain environmental contracts are deemed ~~derivatives,~~derivatives; whereas, natural gas and environmental inventory, contracts for pipeline transportation, ~~renewable energy credits,~~storage assets, and ~~storage assets~~some environmental contracts are not derivatives. As a result, Energy Trading will experience earnings volatility as derivatives are marked-to-market without revaluing the underlying non-derivative contracts and assets. Energy Trading's 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.

See also the "Fair Value" section herein and Notes 78 and 89 to the Consolidated Financial Statements, "Fair Value" and "Financial and Other Derivative Instruments," respectively.

Energy Trading is also monitoring the impacts of the COVID-19 pandemic on future operations and financial results. Refer to the "Executive Overview" and "Outlook" sections above for DTE Energy's consideration of COVID-19 impacts on our business segments.

CORPORATE AND OTHER

Corporate and Other includes various holding company activities, holds certain non-utility debt, and holds energy-related investments. The net ~~losses~~loss of ~~$15~~$11 million ~~and $31 million in~~for the three ~~and nine~~ months ended ~~September 30, 2017, represent~~March 31, 2020 represents an increase of ~~$14~~$8 million ~~and no change~~ from the net ~~losses~~loss of ~~$1 million and $31~~$3 million in the comparable ~~2016 periods.~~2019 period. The increase ~~in the third quarter~~ was primarily due to ~~effective income tax rate adjustments. For the nine-month period, decreases primarily due to interest expense and effective income tax rate adjustments were offset by~~lower excess tax benefits on stock-based compensation ~~recognized in accordance with ASU 2016-09,~~ ~~Improvements to Employee Share-Based Payment Accounting, which was adopted~~and effective ~~July 1, 2016.~~income tax rate adjustments.

CAPITAL RESOURCES AND LIQUIDITY

Cash Requirements

DTE Energy uses cash to maintain and invest in the electric and natural gas utilities, to grow the non-utility businesses, to retire and pay interest on long-term debt, and to pay dividends. DTE Energy believes it will have sufficient internal and external capital resources to fund anticipated capital and operating requirements. DTE Energy expects that cash from operations in ~~2017~~2020 will be approximately ~~$1.9~~$3.0 billion. DTE Energy anticipates base level utility capital ~~investments;~~investments, including environmental, renewable, and energy ~~optimization~~waste reduction expenditures; expenditures for non-utility businesses; and contributions to equity method investees in ~~2017~~2020 of approximately ~~$2.5~~$4.5 billion. DTE Energy plans to seek regulatory approval to include utility capital expenditures in regulatory rate base consistent with prior treatment. Capital spending for growth of existing or new non-utility businesses will depend on the existence of opportunities that meet strict risk-return and value creation criteria.

Nine Months Ended September 30,
2017 2016
Cash and Cash Equivalents (In millions)
Cash Flow From (Used For)
Operating Activities
Net Income $ 832
$ 710
Adjustments to reconcile Net Income to Net cash from operating activities:
Depreciation and amortization 756
702
Nuclear fuel amortization 39
44
Allowance for equity funds used during construction (17 ) (15 )
Deferred income taxes 261
244
Asset (gains) losses and impairments, net 5
—
Working capital and other (326 ) 82
Net cash from operating activities 1,550
1,767
Investing Activities
Plant and equipment expenditures — utility (1,439 ) (1,267 )
Plant and equipment expenditures — non-utility (133 ) (75 )
Contributions to equity method investees (194 ) (199 )
Other (38 ) 38
Net cash used for investing activities (1,804 ) (1,503 )
Financing Activities
Issuance of long-term debt, net of issuance costs 1,010
646
Redemption of long-term debt (385 ) (322 )
Repurchase of long-term debt —
(59 )
Short-term borrowings, net 160
(89 )
Repurchase of common stock (51 ) (33 )
Dividends on common stock and other (509 ) (378 )
Net cash from (used for) financing activities 225
(235 )
Net Increase (Decrease) in Cash and Cash Equivalents $ (29 ) $ 29



	Three Months Ended March 31,
	2020			2019
	(in millions)
Cash, Cash Equivalents, and Restricted Cash, Beginning	$	93		$	76
Net cash from operating activities	1,061			752
Net cash used for investing activities	(1,342		)	(748		)
Net cash from (used for) financing activities	864			(19		)
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash	583			(15		)
Cash, Cash Equivalents, and Restricted Cash, Ending	$	676		$	61

Cash from Operating Activities

A majority of DTE Energy's operating cash flows are provided by the electric and natural gas utilities, which are significantly influenced by factors such as weather, electric retail access, regulatory deferrals, regulatory outcomes, economic conditions, changes in working capital, and operating costs.

~~Cash~~Net cash from operations ~~decreased~~increased by ~~$217~~$309 million in ~~the nine months ended September 30, 2017 compared~~2020. The increase is primarily due to ~~the nine months ended September 30, 2016.~~ an increase in cash flow from working capital items and an increase in Deferred income taxes.

The change in working capital items in 2020 was primarily related to a decrease in ~~operating~~ cash ~~flows reflects a decrease to working capital adjustments,~~used for Accounts payable, Accrued pension costs, and Other current and noncurrent assets and liabilities, partially offset by an increase ~~to Net Income, Deferred income taxes,~~in cash used for Regulatory assets and ~~Depreciation~~liabilities and ~~amortization.~~Inventories.

Cash used for Investing Activities

Cash inflows associated with investing activities are primarily generated from the sale of assets, while cash outflows are the result of plant and equipment ~~expenditures.~~expenditures and acquisitions. In any given year, DTE Energy looks to realize cash from under-performing or non-strategic assets or matured, fully valued assets.

Capital spending within the utility businesses is primarily to maintain and improve electric generation and the electric and natural gas distribution infrastructure, and to comply with environmental regulations and renewable energy requirements.

Capital spending within the non-utility businesses is primarily for ongoing maintenance, expansion, and growth. DTE Energy looks to make growth investments that meet strict criteria in terms of strategy, management skills, risks, and returns. All new investments are analyzed for their rates of return and cash payback on a risk adjusted basis. DTE Energy has been disciplined in how it deploys capital and will not make investments unless they meet the criteria. For new business lines, DTE Energy initially invests based on research and analysis. DTE Energy starts with a limited investment, evaluates the results, and either expands or exits the business based on those results. In any given year, the amount of growth capital will be determined by the underlying cash flows of DTE Energy, with a clear understanding of any potential impact on its credit ratings.

Net cash used for investing activities increased by ~~$301~~$594 million in ~~2017~~2020 primarily due to ~~increased capital~~higher Plant and equipment expenditures and new acquisitions, as described in Note 4 to the ~~two acquisitions of landfill gas facilities, which are presented in Investing Activities — Other.~~Consolidated Financial Statements.

Cash from (used for) Financing Activities

DTE Energy relies on both short-term borrowing and long-term financing as a source of funding for capital requirements not satisfied by its operations.

DTE Energy's strategy is to have a targeted debt portfolio blend of fixed and variable interest rates and maturity. DTE Energy ~~continually evaluates its leverage target, which is currently 50% to 53%,~~targets balance sheet financial metrics to ensure it is consistent with the objective of a strong investment grade debt rating.

Net cash from financing activities increased by ~~$460~~$883 million in ~~2017~~2020 primarily due to an increase in ~~Issuance~~issuance of long-term ~~debt~~ and ~~Short-term borrowings,~~short-term debt, partially offset by an increase in ~~Redemption~~redemptions of long-term ~~debt, Dividends on common stock, and Repurchase of common stock.~~debt.

Outlook

DTE Energy expects cash flows from operations to increase over the long-term, primarily as a result of growth from the utility and non-utility businesses. Growth in the utilities is expected to be driven primarily by capital spending to maintain and improve the electric generation and electric and natural gas distribution infrastructure and to comply with new and existing state and federal regulations that will result in additional environmental and renewable energy investments which will increase the base from which rates are determined. Non-utility growth is expected from additional investments, primarily in the Gas Storage and Pipelines and Power and Industrial Projects segments.

DTE Energy may be impacted by the timing of collection or refund of various recovery and tracking mechanisms, as a result of timing of MPSC orders. Energy prices are likely to be a source of volatility with regard to working capital requirements for the foreseeable future. DTE Energy continues its efforts to identify opportunities to improve cash flows through working capital initiatives and maintaining flexibility in the timing and extent of long-term capital projects.

DTE Energy has approximately ~~$110 million~~$0.4 billion in long-term debt, including ~~capital~~finance leases, maturing in the next twelve months. The repayment of the debt is expected to be paid through internally generated funds or the issuance of unsecured term loans or long-term debt.

DTE Energy has approximately ~~$1.4~~$2.5 billion of available liquidity at ~~September 30, 2017,~~March 31, 2020, consisting of cash, ~~and~~ amounts available under unsecured revolving credit ~~agreements.~~agreements, and unsecured term loans.

At the discretion of management and depending upon economic and financial market conditions, DTE Energy ~~may make additional contributions~~expects to issue equity up to ~~$88~~$300 million in 2020. If issued, DTE Energy anticipates up to $185 million of these equity issuances will be made through contributions to the qualified pension plans, including ~~contributions from~~$160 million of DTE Electric ~~of $85 million, to its pension plans in 2017.~~contributions. DTE Energy does not anticipate making any contributions to the other postretirement ~~benefit~~ plans in ~~2017.~~2020.

Various subsidiaries and an equity ~~investee~~investees of DTE Energy have entered into contracts which contain ratings triggers and are guaranteed by DTE Energy. These contracts contain provisions which allow the counterparties to require that DTE Energy post cash or letters of credit as collateral in the event that DTE Energy's credit rating is downgraded below investment grade. Certain of these provisions (known as "hard triggers") state specific circumstances under which DTE Energy can be required to post collateral upon the occurrence of a credit downgrade, while other provisions (known as "soft triggers") are not as specific. For contracts with soft triggers, it is difficult to estimate the amount of collateral which may be requested by counterparties and/or which DTE Energy may ultimately be required to post. The amount of such collateral which could be requested fluctuates based on commodity prices (primarily natural gas, power, and coal) and the provisions and maturities of the underlying transactions. As of ~~September 30, 2017,~~March 31, 2020, DTE Energy's contractual obligation to post collateral in the form of cash or letters of credit in the event of a downgrade to below investment grade, under both hard trigger and soft trigger provisions, was ~~approximately $470~~$381 million.

In April 2020, Fitch Ratings downgraded DTE Energy's unsecured debt rating from BBB+ to BBB. The downgrade primarily reflects increased leverage and business risk associated with DTE Energy's acquisition of midstream natural gas assets in December 2019. Refer to Note 4 to the Consolidated Financial Statements, "Acquisitions," for additional information. We do not expect the downgrade to negatively impact DTE Energy's liquidity or access to the capital markets.

DTE Energy is also actively monitoring the impact of the COVID-19 pandemic on capital markets and any related effects to our cost of capital. During the three months ended March 31, 2020, concerns over the pandemic led to a lack of liquidity in the commercial paper market and increases to related borrowing costs. Despite these impacts, the Registrants have maintained adequate liquidity due to the availability of committed credit facilities and by raising additional liquidity through term loans and the public issuance of utility debt, while paying off maturing commercial paper.

DTE Energy believes it will have sufficient operating flexibility, cash resources, and funding sources to maintain adequate amounts of liquidity and to meet future operating cash and capital expenditure needs. However, virtually all of DTE Energy's businesses are capital intensive, or require access to capital, and the inability to access adequate capital could adversely impact earnings and cash flows.

See Notes ~~5, 9,~~6, 10, 11, 13, and 1214 to the Consolidated Financial Statements, "Regulatory Matters," "Long-Term Debt," "Short-Term Credit Arrangements and Borrowings," "Commitments and Contingencies," and "Retirement Benefits and Trusteed Assets," respectively.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 3 to the Consolidated Financial Statements, "New Accounting Pronouncements."

FAIR VALUE

Derivatives are generally recorded at fair value and shown as Derivative assets or liabilities. Contracts DTE Energy typically classifies as derivative instruments include power, natural gas, ~~oil,~~some environmental contracts, and certain ~~coal~~ forwards, futures, options and swaps, and foreign currency exchange contracts. Items DTE Energy does not generally account for as derivatives include natural gas and environmental inventory, pipeline transportation contracts, ~~renewable energy credits,~~storage assets, and ~~storage assets.~~some environmental contracts. See Notes 78 and 89 to the Consolidated Financial Statements, "Fair Value" and "Financial and Other Derivative Instruments," respectively.

The tables below do not include the expected earnings impact of non-derivative natural gas storage, transportation, certain power contracts, and ~~renewable energy credits~~some environmental contracts which are subject to accrual accounting. Consequently, gains and losses from these positions may not match with the related physical and financial hedging instruments in some reporting periods, resulting in volatility in the Registrants' reported period-by-period earnings; however, the financial impact of the timing differences will reverse at the time of physical delivery and/or settlement.

The Registrants manage their MTM risk on a portfolio basis based upon the delivery period of their contracts and the individual components of the risks within each contract. Accordingly, the Registrants record and manage the energy purchase and sale obligations under their contracts in separate components based on the commodity (e.g. electricity or natural gas), the product (e.g. electricity for delivery during peak or off-peak hours), the delivery location (e.g. by region), the risk profile (e.g. forward or option), and the delivery period (e.g. by month and year).

The Registrants have established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value in three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). For further discussion of the fair value hierarchy, see Note 78 to the Consolidated Financial Statements, "Fair Value."

The following table provides details on changes in DTE Energy's MTM net asset (or liability) position:


	Nine Months Ended			DTE Energy
	September 30, 2017			(In millions)
	(In millions)
MTM at December 31, 2016	$	(86	)
MTM at December 31, 2019				$	5
Reclassified to realized upon settlement	(34		)	(20		)
Changes in fair value recorded to income	156			52
Amounts recorded to unrealized income	122			32
Changes in fair value recorded in regulatory liabilities	15			(2		)
Change in collateral	(3		)
MTM at September 30, 2017	$	48
MTM at March 31, 2020				$	35

The table below shows the maturity of DTE Energy's MTM positions. The positions from ~~2020~~2023 and beyond principally represent longer tenor gas structured transactions:


Source of Fair Value	2017			2018		2019		2020 and Beyond			Total Fair Value		2020			2021			2022			2023 and Beyond			Total Fair Value
	(In millions)												(In millions)
Level 1	$	(7	)	$	2	$	5	$	—		$	—	$	(34	)	$	(6	)	$	(2	)	$	(1	)	$	(43	)
Level 2	5			6		6		6			23		23			23			3			5			54
Level 3	(14		)	17		12		(8		)	7		23			10			11			(20		)	24
MTM before collateral adjustments	$	(16	)	$	25	$	23	$	(2	)	30		$	12		$	27		$	12		$	(16	)	35
Collateral adjustments											18														—
MTM at September 30, 2017											$	48
MTM at March 31, 2020																									$	35

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market Price Risk

The Electric and Gas businesses have commodity price risk, primarily related to the purchases of coal, natural gas, uranium, and electricity. However, the Registrants do not bear significant exposure to earnings risk, as such changes are included in the PSCR and GCR regulatory rate-recovery mechanisms. In addition, changes in the price of natural gas can impact the valuation of lost and stolen gas, storage sales, and transportation services revenue at the Gas segment. The Gas segment manages its market price risk related to storage sales revenue primarily through the sale of long-term storage contracts. The Registrants are exposed to short-term cash flow or liquidity risk as a result of the time differential between actual cash settlements and regulatory rate recovery.

DTE Energy's Gas Storage and Pipelines segment has exposure to natural gas price fluctuations which impact the pricing for natural gas storage, gathering, and transportation. DTE Energy manages its exposure through the use of short, medium, and long-term storage, gathering, and transportation contracts.

DTE Energy's Power and Industrial Projects business segment is subject to electricity, natural gas, and coal product price risk. DTE Energy manages its exposure to commodity price risk through the use of long-term contracts.

DTE Energy's Energy Trading business segment has exposure to electricity, natural gas, ~~coal,~~environmental, crude oil, heating oil, and foreign currency exchange price fluctuations. These risks are managed by the energy marketing and trading operations through the use of forward energy, capacity, storage, options, and futures contracts, within pre-determined risk parameters.

Credit Risk

Bankruptcies

DTE Energy's Power and Industrial Projects segment holds ownership interests in, and operates, five generating plants that sell electric output from renewable sources under long-term power purchase agreements with PG&E. PG&E filed for Chapter 11 bankruptcy protection on January 29, 2019. As of March 31, 2020, PG&Es account is substantially current and outstanding accounts receivable from PG&E are not material. Therefore, DTE Energy determined no reserve was necessary.

As of March 31, 2020, the book value of long-lived assets and operating lease right-of-use assets used in producing electric output for sale to PG&E was approximately $100 million. The Power and Industrial Projects segment also has equity investments, including a note receivable, of approximately $69 million in entities that sell power to PG&E. In January 2019, following the bankruptcy filing, DTE Energy performed an impairment analysis on its long-lived assets. Based on its undiscounted cash flow projections, DTE Energy determined it did not have an impairment loss as of December 31, 2018. DTE Energy also determined there was not an other-than-temporary decline in its equity investments. DTE has not identified subsequent facts or circumstances that would cause a change to these conclusions through March 31, 2020. DTE Energy's assumptions and conclusions may change, and it could have impairment losses if any of the terms of the contracts are not honored by PG&E or the contracts are rejected through the bankruptcy process.

Allowance for Doubtful Accounts

The Registrants regularly review contingent matters relating to customers and their contracts and record provisions for amounts considered at risk of probable loss in the allowance for doubtful accounts. The Registrants believe their accrued amounts are adequate for probable loss.

Trading Activities

DTE Energy is exposed to credit risk through trading activities. Credit risk is the potential loss that may result if the trading counterparties fail to meet their contractual obligations. DTE Energy utilizes both external and internal credit assessments when determining the credit quality of trading counterparties.

The following table displays the credit quality of DTE Energy's trading counterparties as of ~~September 30, 2017:~~March 31, 2020:


	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)
A− and Greater	$	242	$	—	$	242
A- and Greater							$	213		$	—		$	213
BBB+ and BBB	282		—		282		187			—			187
BBB−	86		—		86
BBB-							17			—			17
Total Investment Grade	610		—		610		417			—			417
Non-investment grade^(b)	2		—		2		4		��	—			4
Internally Rated — investment grade^(c)	266		—		266		362			(1		)	361
Internally Rated — non-investment grade^(d)	15		—		15		20			—			20
Total	$	893	$	—	$	893	$	803		$	(1	)	$	802

(a)

This category includes counterparties with minimum credit ratings of Baa3 assigned by Moody’s Investors Service (Moody’s) or ~~BBB- assigned~~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 18%~~17% of the total gross credit exposure.


(b)	This category includes counterparties with credit ratings that are below investment grade. The five largest counterparty exposures, combined, for this category represented ~~approximately~~ 1% of the total gross credit exposure.


(c)	This category includes counterparties that have not been rated by Moody’s or Standard & Poor’s but are considered investment grade based on DTE Energy’s evaluation of the counterparty’s creditworthiness. The five largest counterparty exposures, combined, for this category represented ~~approximately 11%~~13% of the total gross credit exposure.


(d)	This category includes counterparties that have not been rated by Moody’s or Standard & Poor’s and are considered non-investment grade based on DTE Energy’s evaluation of the counterparty’s creditworthiness. The five largest counterparty exposures, combined, for this category represented ~~approximately~~ 1% of the total gross credit exposure.

Other

The Registrants engage in business with customers that are non-investment grade. The Registrants closely monitor the credit ratings of these customers and, when deemed necessary and permitted under the tariffs, request collateral or guarantees from such customers to secure their obligations.

Interest Rate Risk

DTE Energy is subject to interest rate risk in connection with the issuance of debt. In order to manage interest costs, DTE Energy may use treasury locks and interest rate swap agreements. DTE Energy's exposure to interest rate risk arises primarily from changes in U.S. Treasury rates, commercial paper rates, and ~~London Inter-Bank Offered Rates (LIBOR).~~LIBOR. As of ~~September 30, 2017,~~March 31, 2020, DTE Energy had a floating rate debt-to-total debt ratio of ~~approximately 5.3%~~6.10%.

Foreign Currency Exchange Risk

DTE Energy has foreign currency exchange risk arising from market price fluctuations associated with fixed priced contracts. These contracts are denominated in Canadian dollars and are primarily for the purchase and sale of natural gas and power, as well as for long-term transportation capacity. To limit DTE Energy's exposure to foreign currency exchange fluctuations, DTE Energy has entered into a series of foreign currency exchange forward contracts through June ~~2022.~~2024.

Summary of Sensitivity Analyses

~~The Registrants~~Sensitivity analyses were performed ~~sensitivity analyses~~ on the fair values of commodity contracts for DTE Energy and long-term debt ~~obligations.~~obligations for the Registrants. The commodity contracts listed below principally relate to energy marketing and trading activities. The sensitivity analyses involved increasing and decreasing forward prices and rates at ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 by a hypothetical 10% and calculating the resulting change in the fair values.

The results of the sensitivity analyses:


	Assuming a 10% Increase in Prices/Rates						Assuming a 10% Decrease in Prices/Rates							Assuming a 10% Increase in Prices/Rates						Assuming a 10% Decrease in Prices/Rates
	As of September 30,						As of September 30,							As of March 31,						As of March 31,
Activity	2017			2016			2017			2016			Change in the Fair Value of	2020			2019			2020			2019			Change in the Fair Value of
	(In millions)													(In millions)
Environmental contracts														$	(4	)	$	—		$	2		$	—		Commodity contracts
Gas contracts	$	3		$	17		$	(3	)	$	(17	)	Commodity contracts	$	18		$	20		$	(18	)	$	(20	)	Commodity contracts
Power contracts	$	9		$	14		$	(11	)	$	(14	)	Commodity contracts	$	5		$	1		$	(5	)	$	(3	)	Commodity contracts
Interest rate risk — DTE Energy	$	(545	)	$	(388	)	$	548		$	408		Long-term debt	$	(701	)	$	(636	)	$	731		$	683		Long-term debt
Interest rate risk — DTE Electric	$	(249	)	$	(235	)	$	267		$	252		Long-term debt	$	(328	)	$	(310	)	$	351		$	335		Long-term debt

For further discussion of market risk, see Note 89 to the Consolidated Financial Statements, "Financial and Other Derivative Instruments."

Item 4.Controls and Procedures

DTE Energy

(a) Evaluation of disclosure controls and procedures

Management of DTE Energy carried out an evaluation, under the supervision and with the participation of DTE Energy's Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of DTE Energy's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of ~~September 30, 2017,~~March 31, 2020, which is the end of the period covered by this report. Based on this evaluation, DTE Energy's CEO and CFO have concluded that such disclosure controls and procedures are effective in providing reasonable assurance that information required to be disclosed by DTE Energy in reports that it files or submits under the Exchange Act (i) is recorded, processed, summarized, and reported within the time periods specified in the U.S. Securities and Exchange Commission's rules and forms and (ii) is accumulated and communicated to DTE Energy's management, including its CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Due to the inherent limitations in the effectiveness of any disclosure controls and procedures, management cannot provide absolute assurance that the objectives of its disclosure controls and procedures will be attained.

(b) Changes in internal control over financial reporting

There have been no changes in DTE Energy's internal control over financial reporting during the quarter ended ~~September 30, 2017~~March 31, 2020 that have materially affected, or are reasonably likely to materially affect, DTE Energy's internal control over financial reporting.

DTE Electric

(a) Evaluation of disclosure controls and procedures

Management of DTE Electric carried out an evaluation, under the supervision and with the participation of DTE Electric's Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of DTE Electric's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of ~~September 30, 2017,~~March 31, 2020, which is the end of the period covered by this report. Based on this evaluation, DTE Electric's CEO and CFO have concluded that such disclosure controls and procedures are effective in providing reasonable assurance that information required to be disclosed by DTE Electric in reports that it files or submits under the Exchange Act (i) is recorded, processed, summarized, and reported within the time periods specified in the U.S. Securities and Exchange Commission's rules and forms and (ii) is accumulated and communicated to DTE Electric's management, including its CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Due to the inherent limitations in the effectiveness of any disclosure controls and procedures, management cannot provide absolute assurance that the objectives of its disclosure controls and procedures will be attained.

(b) Changes in internal control over financial reporting

There have been no changes in DTE Electric's internal control over financial reporting during the quarter ended ~~September 30, 2017~~March 31, 2020 that have materially affected, or are reasonably likely to materially affect, DTE Electric's internal control over financial reporting.

Part II — Other Information

Item 1. Legal Proceedings

For information on legal proceedings and matters related to the Registrants, see Notes 56 and 1113 to the Consolidated Financial Statements, "Regulatory Matters" and "Commitments and Contingencies," respectively.

Item 1A. Risk Factors

There are various risks associated with the operations of the Registrants' businesses. To provide a framework to understand the operating environment of the Registrants, a brief explanation of the more significant risks associated with the Registrants' businesses is provided in Part 1, Item 1A. Risk Factors in DTE Energy's and DTE Electric's combined ~~2016~~2019 Annual Report on Form 10-K. Although the Registrants have tried to identify and discuss key risk factors, others could emerge in the future.For the three months ended March 31, 2020, one additional risk factor was identified as noted below:

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 or closures or reduced operations of businesses, governmental agencies and other institutions, has caused an economic slowdown, and could lead to a recession, result in significant disruptions in various public, commercial or industrial activities and cause employee absences which could interfere with operation and maintenance of the Registrants' facilities. Travel bans and restrictions, quarantines, and shelter-in-place orders (including those in effect in our service areas in the State of Michigan) could also cause us to experience operational delays, delay the delivery of critical infrastructure and other supplies we source globally, delay the connection of electric or gas service to new customers, and significantly reduce the use of electricity and gas by our customers. We have experienced lower sales volumes in some operating segments, and any of the foregoing circumstances could further 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 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 the 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. In addition, the Registrants’ decision to suspend shut-offs for certain customers may adversely impact the Registrants’ collections process, which could have a negative impact on our results of operations, financial condition, and liquidity.

Item 2. Unregistered Sales of 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~~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 ~~September 30, 2017:~~March 31, 2020:

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
07/01/2017 — 07/31/2017 2,287
$ 106.05
—
—
—
08/01/2017 — 08/31/2017 7,066
$ 97.73
—
—
—
09/01/2017 — 09/30/2017 440
$ 97.78
—
—
—
Total 9,793
—



	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
01/01/20 - 01/31/20	7,802	$	119.17	—	—	—
02/01/20 - 02/29/20	35,055	$	132.61	—	—	—
03/01/20 - 03/31/20	—	$	—	—	—	—
Total	42,857			—


(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.

Item 6. Exhibits



Exhibit Number	Description	DTE Energy	DTE Electric

	(i) Exhibits filed herewith:

~~10.107~~4.314	Supplemental Indenture dated as of ~~August~~February 1, ~~2017,~~2020, to the Mortgage and Deed of Trust dated as of October 1, 1924, between DTE Electric Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee. ~~(2017~~(2020 Series A and B).	X	X

~~10.108~~4.315	~~Forty-Eighth~~ Supplemental Indenture dated as of ~~September~~April 1, ~~2017~~2020, to ~~Indenture of~~the Mortgage and Deed of Trust dated as of ~~March~~October 1, ~~1944~~1924, between DTE ~~Gas~~Electric Company and ~~Citibank,~~The Bank of New York Mellon Trust Company, N.A. ~~(2017 First Mortgage Bonds~~, as successor trustee. (2020 Series CC)	X	X

10.108	Transition and ~~D).~~Separation Agreement between Peter Oleksiak and DTE Energy Corporate Services, LLC, for the benefit of DTE Energy Company dated March 23, 2020	X

~~12.79~~10.109	~~Computation~~Fourth Amendment to the DTE Energy Company Executive Supplemental Retirement Plan (Amended and Restated Effective January 1, 2005) dated as of ~~Ratio of Earnings to Fixed Charges~~March 13, 2020	X

~~12.80~~10.110	~~Computation~~Term Loan Credit Agreement, dated as of ~~Ratio of Earnings to Fixed Charges~~March 24, 2020, by and among DTE Energy Company and the lenders party thereto, US. Bank National Association as Administrative Agent and Sole Book Runner and U.S. Bank National Association, KeyBanc Capital Markets Inc. and PNC Capital Markets LLC, as Joint Lead Arrangers	X

10.111	Term Loan Credit Agreement, dated as of March 27, 2020, by and among DTE Energy Company and the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and JPMorgan Chase Bank, N.A., as Lead Arranger and Sole Book Runner	X

10.112	Term Loan Credit Agreement, dated as of April 3, 2020, by and among DTE Gas Company and the lenders party thereto, The Bank of Nova Scotia as Administrative Agent and The Bank of Nova Scotia as Lead Arranger and Sole Book Runner	X

10.113	Term Loan Credit Agreement, dated as of April 8, 2020, by and among DTE Electric Company and the lenders party thereto, The Barclays Bank PLC as Administrative Agent and The Barclays Bank PLC as Lead Arranger and Sole Book Runner	X	X

~~31.137~~10.114	Term Loan Agreement, dated as of April 16, 2020, by and among DTE Electric Company and the lenders party thereto, Mizuhu Bank, Ltd. as Administrative Agent, Lead Arranger and Sole Book Runner	X	X

31.177	Chief Executive Officer Section 302 Form 10-Q Certification of Periodic Report	X

~~31.138~~31.178	Chief Financial Officer Section 302 Form 10-Q Certification of Periodic Report	X

~~31.139~~31.179	Chief Executive Officer Section 302 Form 10-Q Certification of Periodic Report		X

~~31.140~~31.180	Chief Financial Officer Section 302 Form 10-Q Certification of Periodic Report		X

101.INS	XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.	X	X

101.SCH	XBRL Taxonomy Extension Schema	X	X

101.CAL	XBRL Taxonomy Extension Calculation Linkbase	X	X

101.DEF	XBRL Taxonomy Extension Definition Database	X	X

101.LAB	XBRL Taxonomy Extension Label Linkbase	X	X

101.PRE	XBRL Taxonomy Extension Presentation Linkbase	X	X



Exhibit Number	~~(ii) Exhibits furnished herewith:~~Description	DTE Energy	DTE Electric

~~32.137~~32.177	Chief Executive Officer Section 906 Form 10-Q Certification of Periodic Report	X

~~32.138~~32.178	Chief Financial Officer Section 906 Form 10-Q Certification of Periodic Report	X

~~32.139~~32.179	Chief Executive Officer Section 906 Form 10-Q Certification of Periodic Report		X

~~32.140~~32.180	Chief Financial Officer Section 906 Form 10-Q Certification of Periodic Report		X

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized. The signature for each undersigned Registrant shall be deemed to relate only to matters having reference to such Registrant and any subsidiaries thereof.



Date:	~~October 25, 2017~~April 28, 2020
			DTE ENERGY COMPANY

		By:	/S/~~DONNA M. ENGLAND~~ MARK C. ROLLING
			~~Donna M. England~~ Mark C. Rolling Vice President, Controller, and Chief Accounting Officer
			(Duly Authorized Officer)


			DTE ELECTRIC COMPANY

		By:	/S/~~DONNA M. ENGLAND~~ MARK C. ROLLING
			~~Donna M. England~~ Mark C. Rolling Vice President, Controller, and Chief Accounting Officer
			(Duly Authorized Officer)

6777



	Nine Months Ended September 30, 2017												Nine Months Ended September 30, 2016
	Natural Gas			Electricity			Other			Total			Natural Gas			Electricity			Other			Total
	(In millions)
Net Assets (Liabilities) as of December 31	$	(96	)	$	9		$	(1	)	$	(88	)	$	(5	)	$	6		$	(5	)	$	(4	)
Transfers into Level 3 from Level 2	—			—			—			—			—			—			—			—
Transfers from Level 3 into Level 2	—			—			—			—			—			—			—			—
Total gains (losses)
Included in earnings	38			45			1			84			(123		)	(22		)	1			(144		)
Recorded in Regulatory liabilities	—			—			15			15			—			—			6			6
Purchases, issuances, and settlements
Issuances	—			—			—			—			—			1			—			1
Settlements	56			(47		)	(13		)	(4		)	28			9			(3		)	34
Net Assets (Liabilities) as of September 30	$	(2	)	$	7		$	2		$	7		$	(100	)	$	(6	)	$	(1	)	$	(107	)
The amount of total gains (losses) included in Net Income attributed to the change in unrealized gains (losses) related to assets and liabilities held at September 30, 2017 and 2016 and reflected in Operating Revenues — Non-utility operations and Fuel, purchased power, and gas — non-utility in DTE Energy's Consolidated Statements of Operations	$	8		$	35		$	—		$	43		$	(165	)	$	(1	)	$	2		$	(164	)