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, 2021~~March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 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, Michigan 48226-1279

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

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

Title of Each Class

Trading Symbol(s)

Name of Exchange on which Registered

Common stock, without par value

DTE

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

2019 6.25% Corporate Units

DTP

New York Stock Exchange

2020 Series G 4.375% Junior Subordinated Debentures due 2080

DTB

New York Stock Exchange

2021 Series E 4.375% Junior Subordinated Debentures due 2081

DTG

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

☒

☐

DTE Electric Company (DTE Electric)

Yes

☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).

DTE Energy

Yes

☒

☐

DTE Electric

Yes

☒

☐

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 accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

DTE Energy

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

☒

☐

DTE Electric

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

☐

☒

☐

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. ☐

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

DTE Energy

Yes

☐

☒

DTE Electric

Yes

☐

☒

Number of shares of Common Stock outstanding at ~~September 30, 2021:~~March 31, 2022:

Registrant

Description

DTE Energy

Common Stock, without par value

~~193,727,278~~193,739,166

DTE Electric

Common Stock, $10 par value, 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 any 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, an 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.

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		Page
	Definitions	1
	Filing Format	3
	Forward-Looking Statements	3
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	DTE Energy Consolidated Financial Statements (Unaudited)	5





	DTE Electric Consolidated Financial Statements (Unaudited)	1211





	Combined Notes to Consolidated Financial Statements (Unaudited)	1817
	Note 1 — Organization and Basis of Presentation	1817
	Note 2 — Significant Accounting Policies	2120
	Note 3 — New Accounting Pronouncements	2524
	Note 4 — ~~Dispositions and Impairments~~Discontinued Operations	2625
	Note 5 — Revenue	3026
	Note 6 — Regulatory Matters	3228
	Note 7 — ~~Common Stock and~~ Earnings Per Share	3329
	Note 8 — Fair Value	3530
	Note 9 — Financial and Other Derivative Instruments	4237
	Note 10 — Long-Term Debt	4742
	Note 11 — Short-Term Credit Arrangements and Borrowings	4842
	Note 12 — Leases	4944
	Note 13 — Commitments and Contingencies	5045
	Note 14 — Retirement Benefits and Trusteed Assets	5549
	Note 15 — Segment and Related Information	5651



Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5853
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	7466
Item 4.	Controls and Procedures	7668
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	7769
Item 1A.	Risk Factors	7769
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	7769
Item 6.	Exhibits	7870
	Signatures	7971

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DEFINITIONS


ACE						Affordable Clean Energy

AFUDC						Allowance for Funds Used During Construction


~~AMV~~						~~Applicable Market Value~~

ASU						Accounting Standards Update issued by the FASB



CAD						Canadian Dollar (C$)

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

~~CARES Act~~Carbon emissions						~~Coronavirus Aid, Relief,~~Emissions of carbon containing compounds, including carbon dioxide and ~~Economic Security Act enacted in March 2020 to assist individuals and employers with the impacts of the COVID-19 pandemic, including certain tax relief provisions~~methane, that are identified as greenhouse gases

CCR						Coal Combustion Residuals

CFTC						U.S. Commodity Futures Trading Commission

COVID-19						Coronavirus disease of 2019

DTE Electric						DTE Electric Company (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 Securitization						DTE Electric Securitization Funding I, LLC, a special purpose entity wholly-owned by DTE Electric. The entity was created to issue securitization bonds for certain qualified costs authorized by the MPSC and to recover debt service costs from DTE Electric customers

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

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

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

EGU						Electric Generating Unit

ELG						Effluent Limitations Guidelines

EPA						U.S. Environmental Protection Agency

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

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

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

FASB						Financial Accounting Standards Board

FERC						Federal Energy Regulatory Commission

FGD						Flue Gas Desulfurization

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

~~DEFINITIONS~~


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



~~LIBOR~~						~~London Inter-Bank Offered Rates~~

MGP						Manufactured Gas Plant

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DEFINITIONS


MPSC						Michigan Public Service Commission

MTM						Mark-to-market

NAV						Net Asset Value

~~NEXUS~~Net zero						~~NEXUS Gas Transmission, LLC, a joint venture in which~~Collective efforts to reduce the carbon emissions of DTE ~~Energy previously owned a 50% partnership interest that separated~~Energy's utility operations and gas suppliers, as well as efforts to offset an amount equivalent to any remaining emissions. Progress towards this goal is estimated and may vary from the calculations of other utility businesses with ~~DT Midstream effective July 1, 2021~~similar targets

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

NOX						Nitrogen Oxides

NPDES						National Pollutant Discharge Elimination System

NRC						U.S. Nuclear Regulatory Commission

Production tax credits						Tax credits as authorized under ~~Sections 45K and~~Section 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

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

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

~~RSN~~						~~Remarketable Senior Note~~



~~SGG~~						~~Stonewall Gas Gathering is a midstream natural gas asset that was previously owned 85% by DTE Energy and separated with DT Midstream effective July 1, 2021~~

SIP						State Implementation Plan

SO2						Sulfur Dioxide

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

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





VIE						Variable Interest Entity


Units of Measurement

Bcf						Billion cubic feet of natural gas

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





MMBtu						One million BTU



MWh						Megawatt-hour of electricity

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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 to 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 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 ~~2020~~2021 Annual Report on Form 10-K.

FORWARD-LOOKING STATEMENTS

Certain information presented herein includes "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," and "goals" signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions, but rather are subject to numerous assumptions, risks, and uncertainties that may cause actual future results to be materially different from those contemplated, projected, estimated, or budgeted. Many factors may impact forward-looking statements of the Registrants including, but not limited to, the following:

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

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

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

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

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

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

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

•the risk of a major safety incident;

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

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

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

•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 significant customers and strategic partners;

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

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

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

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

•the level of borrowings;

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

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

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

•unplanned ~~outages;~~outages at our generation plants;

•employee relations and the impact of collective bargaining agreements;

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

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

•the effects of competition;

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

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

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

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

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

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

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

Part I — Financial Information

Item 1. Financial Statements

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DTE Energy Company

Consolidated Statements of Operations (Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(In millions, except per share amounts)
Operating Revenues
Utility operations $ 1,875 $ 1,844 $ 5,483 $ 5,119
Non-utility operations 1,840 1,236 4,834 3,224
3,715 3,080 10,317 8,343
Operating Expenses
Fuel, purchased power, and gas — utility 477 455 1,411 1,296
Fuel, purchased power, gas, and other — non-utility 1,766 1,174 4,708 2,923
Operation and maintenance 615 556 1,750 1,651
Depreciation and amortization 344 318 1,010 949
Taxes other than income 106 100 329 294
Asset (gains) losses and impairments, net 2 (2) 29 43
3,310 2,601 9,237 7,156
Operating Income 405 479 1,080 1,187
Other (Income) and Deductions
Interest expense 156 149 477 450
Interest income (6) (11) (16) (25)
Non-operating retirement benefits, net 3 5 10 20
Loss on extinguishment of debt 376 — 384 —
Other income (90) (75) (187) (188)
Other expenses 30 20 50 72
469 88 718 329
Income (Loss) Before Income Taxes (64) 391 362 858
Income Tax Expense (Benefit) (Note 2) (119) 21 (124) 19
Net Income from Continuing Operations 55 370 486 839
Income (Loss) from Discontinued Operations, Net of Taxes (Note 4) (33) 107 112 257
Net Income 22 477 598 1,096
Less: Net Income (Loss) Attributable to Noncontrolling Interests
Continuing operations (3) (2) (9) (5)
Discontinued operations — 3 6 8
Net Income Attributable to DTE Energy Company $ 25 $ 476 $ 601 $ 1,093
Basic Earnings per Common Share
Continuing operations 0.30 1.93 2.55 4.37
Discontinued operations (0.17) 0.54 0.55 1.30
Total $ 0.13 $ 2.47 $ 3.10 $ 5.67
Diluted Earnings per Common Share
Continuing operations 0.30 1.92 2.55 4.37
Discontinued operations (0.17) 0.54 0.55 1.29
Total $ 0.13 $ 2.46 $ 3.10 $ 5.66
Weighted Average Common Shares Outstanding
Basic 193 193 193 192
Diluted 194 193 194 193


	Three Months Ended March 31,
		2022		2021
		(In millions, except per share amounts)
Operating Revenues
Utility operations		$	2,234	$	1,953
Non-utility operations		2,343		1,628
		4,577		3,581
Operating Expenses
Fuel, purchased power, and gas — utility		700		544
Fuel, purchased power, gas, and other — non-utility		2,242		1,595
Operation and maintenance		596		567
Depreciation and amortization		358		327
Taxes other than income		123		115

		4,019		3,148
Operating Income		558		433

Other (Income) and Deductions
Interest expense		154		155
Interest income		(8)		(4)
Non-operating retirement benefits, net		(3)		4

Other income		(8)		(43)
Other expenses		13		10
		148		122
Income Before Income Taxes		410		311

Income Tax Expense (Benefit) (Note 2)		16		(6)

Net Income from Continuing Operations		394		317
Net Income from Discontinued Operations, Net of Taxes (Note 4)		—		80
Net Income		394		397

Less: Net Income (Loss) Attributable to Noncontrolling Interests
Continuing operations		—		(3)
Discontinued operations		—		3
Net Income Attributable to DTE Energy Company		$	394	$	397

Basic Earnings per Common Share
Continuing operations		2.03		1.65
Discontinued operations		—		0.40
Total		$	2.03	$	2.05

Diluted Earnings per Common Share
Continuing operations		2.03		1.65
Discontinued operations		—		0.40
Total		$	2.03	$	2.05

Weighted Average Common Shares Outstanding
Basic		193		194
Diluted		194		194

See Combined Notes to Consolidated Financial Statements (Unaudited)

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DTE Energy Company

Consolidated Statements of Comprehensive Income (Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(In millions)
Net Income $ 22 $ 477 $ 598 $ 1,096
Other comprehensive income, net of tax:
Benefit obligations, net of taxes of $1, $1, $2, and $3, respectively 2 2 5 7
Net unrealized gains (losses) on derivatives, net of taxes of $1, $—, $2, and $1, respectively 4 1 6 3
Other comprehensive income 6 3 11 10
Comprehensive income 28 480 609 1,106
Less: Comprehensive income (loss) attributable to noncontrolling interests (3) 1 (3) 3
Comprehensive Income Attributable to DTE Energy Company $ 31 $ 479 $ 612 $ 1,103


	Three Months Ended March 31,
		2022		2021
		(In millions)
Net Income		$	394	$	397

Other comprehensive income, net of tax:
Benefit obligations, net of taxes of $1 for both periods		3		2
Net unrealized gains (losses) on derivatives, net of taxes of $— for both periods		—		1


Other comprehensive income		3		3

Comprehensive income		397		400
Less: Comprehensive income attributable to noncontrolling interests		—		—
Comprehensive Income Attributable to DTE Energy Company		$	397	$	400

See Combined Notes to Consolidated Financial Statements (Unaudited)

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DTE Energy Company

Consolidated Statements of Financial Position (Unaudited)

September 30, December 31,
2021 2020
(In millions)
ASSETS
Current Assets
Cash and cash equivalents $ 54 $ 472
Restricted cash 2 2
Accounts receivable (less allowance for doubtful accounts of $102 and $104, respectively)
Customer 1,522 1,542
Other 170 127
Inventories
Fuel and gas 398 335
Materials, supplies, and other 517 373
Derivative assets 347 116
Regulatory assets 187 129
Other 297 185
Current assets of discontinued operations — 217
3,494 3,498
Investments
Nuclear decommissioning trust funds 2,007 1,855
Investments in equity method investees 186 177
Other 187 196
2,380 2,228
Property
Property, plant, and equipment 36,134 34,016
Accumulated depreciation and amortization (9,977) (9,517)
26,157 24,499
Other Assets
Goodwill 1,993 1,993
Regulatory assets 3,974 4,125
Intangible assets 181 199
Notes receivable 304 261
Derivative assets 81 40
Prepaid postretirement costs 620 561
Operating lease right-of-use assets 100 107
Other 151 126
Noncurrent assets of discontinued operations — 7,859
7,404 15,271
Total Assets $ 39,435 $ 45,496


	March 31,		December 31,
	2022		2021
	(In millions)
ASSETS
Current Assets
Cash and cash equivalents	$	150	$	28
Restricted cash	6		7
Accounts receivable (less allowance for doubtful accounts of $100 and $92, respectively)
Customer	1,628		1,695
Other	184		135
Inventories
Fuel and gas	226		368
Materials, supplies, and other	503		490
Derivative assets	352		181
Regulatory assets	309		195

Other	252		218

	3,610		3,317
Investments
Nuclear decommissioning trust funds	2,010		2,071
Investments in equity method investees	174		187
Other	175		194
	2,359		2,452
Property
Property, plant, and equipment	37,606		37,083
Accumulated depreciation and amortization	(10,340)		(10,139)
	27,266		26,944
Other Assets
Goodwill	1,993		1,993
Regulatory assets	3,313		3,482
Securitized regulatory assets	229		—
Intangible assets	175		177
Notes receivable	319		310
Derivative assets	114		90
Prepaid postretirement costs	705		678
Operating lease right-of-use assets	93		97
Other	184		179

	7,125		7,006
Total Assets	$	40,360	$	39,719

See Combined Notes to Consolidated Financial Statements (Unaudited)

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DTE Energy Company

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

September 30, December 31,
2021 2020
(In millions, except shares)
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 1,365 $ 1,000
Accrued interest 147 158
Dividends payable 160 210
Short-term borrowings 361 38
Current portion long-term debt, including finance leases 324 469
Derivative liabilities 465 68
Regulatory liabilities 41 39
Operating lease liabilities 14 16
Other 556 594
Current liabilities of discontinued operations — 99
3,433 2,691
Long-Term Debt (net of current portion)
Mortgage bonds, notes, and other 16,022 17,802
Junior subordinated debentures 883 1,175
Finance lease liabilities 19 24
16,924 19,001
Other Liabilities
Deferred income taxes 2,105 2,069
Regulatory liabilities 3,220 3,363
Asset retirement obligations 2,974 2,829
Unamortized investment tax credit 158 162
Derivative liabilities 244 60
Accrued pension liability 732 797
Accrued postretirement liability 398 407
Nuclear decommissioning 310 283
Operating lease liabilities 77 83
Other 281 326
Noncurrent liabilities of discontinued operations — 836
10,499 11,215
Commitments and Contingencies (Notes 6 and 13)
0 0
Equity
Common stock (No par value, 400,000,000 shares authorized, and 193,727,278 and 193,770,617 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively) 5,366 5,406
Retained earnings 3,317 7,156
Accumulated other comprehensive loss (116) (137)
Total DTE Energy Company Equity 8,567 12,425
Noncontrolling interests of continuing operations 12 10
Noncontrolling interests of discontinued operations — 154
Total Equity 8,579 12,589
Total Liabilities and Equity $ 39,435 $ 45,496


	March 31,		December 31,
	2022		2021
	(In millions, except shares)
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	1,320	$	1,414
Accrued interest	149		140
Dividends payable	171		171
Short-term borrowings	244		758

Current portion long-term debt, including securitization bonds and finance leases	2,645		2,874
Derivative liabilities	453		238
Gas inventory equalization	108		—
Regulatory liabilities	105		156
Operating lease liabilities	13		14

Other	472		581

	5,680		6,346
Long-Term Debt (net of current portion)
Mortgage bonds, notes, and other	14,520		13,629
Securitization bonds	209		—
Junior subordinated debentures	883		883
Finance lease liabilities	17		19
	15,629		14,531
Other Liabilities
Deferred income taxes	2,233		2,163
Regulatory liabilities	3,033		3,106
Asset retirement obligations	3,217		3,162
Unamortized investment tax credit	158		158
Derivative liabilities	280		192
Accrued pension liability	314		339
Accrued postretirement liability	350		358
Nuclear decommissioning	312		321
Operating lease liabilities	71		74
Other	216		256

	10,184		10,129
Commitments and Contingencies (Notes 6 and 13)
	0		0
Equity
Common stock (No par value, 400,000,000 shares authorized, and 193,739,166 and 193,747,509 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively)	5,310		5,379
Retained earnings	3,662		3,438
Accumulated other comprehensive loss	(109)		(112)
Total DTE Energy Company Equity	8,863		8,705
Noncontrolling interests	4		8

Total Equity	8,867		8,713
Total Liabilities and Equity	$	40,360	$	39,719

See Combined Notes to Consolidated Financial Statements (Unaudited)

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DTE Energy Company

Consolidated Statements of Cash Flows (Unaudited)

Nine Months Ended September 30,
2021 2020
(In millions)
Operating Activities
Net Income $ 598 $ 1,096
Adjustments to reconcile Net Income to Net cash from operating activities:
Depreciation and amortization 1,092 1,059
Nuclear fuel amortization 44 22
Allowance for equity funds used during construction (20) (19)
Deferred income taxes (36) 350
Equity earnings of equity method investees (90) (96)
Dividends from equity method investees 78 122
Loss on extinguishment of debt 384 —
Asset (gains) losses and impairments, net 46 44
Changes in assets and liabilities:
Accounts receivable, net (8) 343
Inventories (209) (54)
Prepaid postretirement benefit costs (59) (56)
Accounts payable 225 (80)
Accrued pension liability (65) (126)
Accrued postretirement liability (9) —
Derivative assets and liabilities 309 15
Regulatory assets and liabilities 270 (30)
Other current and noncurrent assets and liabilities (178) 191
Net cash from operating activities 2,372 2,781
Investing Activities
Plant and equipment expenditures — utility (2,591) (2,362)
Plant and equipment expenditures — non-utility (109) (526)
Acquisitions related to business combinations, net of cash acquired — (126)
Proceeds from sale of assets 2 7
Proceeds from sale of nuclear decommissioning trust fund assets 854 2,054
Investment in nuclear decommissioning trust funds (853) (2,051)
Distributions from equity method investees 11 6
Contributions to equity method investees (7) (32)
Notes receivable (65) (58)
Other (22) (5)
Net cash used for investing activities (2,780) (3,093)
Financing Activities
Issuance of long-term debt, net of discount and issuance costs 4,033 2,724
Redemption of long-term debt (3,242) (682)
Short-term borrowings, net 323 160
Repurchase of common stock (66) —
Dividends paid on common stock (631) (574)
Contributions from noncontrolling interests, principally REF entities 35 25
Distributions to noncontrolling interests (33) (27)
Acquisition related deferred payment, excluding accretion — (380)
Prepayment costs for extinguishment of long-term debt (361) —
Transfer of cash to DT Midstream at separation (37) —
Other (73) (65)
Net cash from (used for) financing activities (52) 1,181
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash (460) 869
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 516 93
Cash, Cash Equivalents, and Restricted Cash at End of Period $ 56 $ 962
Supplemental disclosure of non-cash investing and financing activities
Plant and equipment expenditures in accounts payable $ 386 $ 282
Separation of DT Midstream net assets, excluding cash transferred $ 3,962 $ —


	Three Months Ended March 31,
	2022		2021
	(In millions)
Operating Activities
Net Income	$	394	$	397
Adjustments to reconcile Net Income to Net cash from operating activities:
Depreciation and amortization	358		368
Nuclear fuel amortization	3		15
Allowance for equity funds used during construction	(8)		(7)
Deferred income taxes	18		41
Equity (earnings) losses of equity method investees	11		(32)
Dividends from equity method investees	1		42

Asset (gains) losses and impairments, net	—		1
Changes in assets and liabilities:
Accounts receivable, net	18		107
Inventories	129		52
Prepaid postretirement benefit costs	(27)		(15)
Accounts payable	(42)		(20)
Gas inventory equalization	108		68
Accrued pension liability	(25)		(24)
Accrued postretirement liability	(8)		(3)
Derivative assets and liabilities	108		126
Regulatory assets and liabilities	(154)		128
Other current and noncurrent assets and liabilities	(76)		(187)
Net cash from operating activities	808		1,057
Investing Activities
Plant and equipment expenditures — utility	(737)		(630)
Plant and equipment expenditures — non-utility	(27)		(39)

Proceeds from sale of assets	—		1
Proceeds from sale of nuclear decommissioning trust fund assets	207		271
Investment in nuclear decommissioning trust funds	(209)		(273)
Distributions from equity method investees	2		4
Contributions to equity method investees	(1)		(2)
Notes receivable	(8)		(27)
Other	(9)		(10)
Net cash used for investing activities	(782)		(705)
Financing Activities
Issuance of long-term debt, net of discount and issuance costs	1,119		989
Redemption of long-term debt	(250)		—


Short-term borrowings, net	(514)		14

Repurchase of common stock	(55)		(54)
Dividends paid on common stock	(171)		(210)
Contributions from noncontrolling interests	1		12
Distributions to noncontrolling interests	(5)		(14)




Other	(30)		(35)
Net cash from financing activities	95		702
Net Increase in Cash, Cash Equivalents, and Restricted Cash	121		1,054
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	35		516
Cash, Cash Equivalents, and Restricted Cash at End of Period	$	156	$	1,570

Supplemental disclosure of non-cash investing and financing activities
Plant and equipment expenditures in accounts payable	$	300	$	208

See Combined Notes to Consolidated Financial Statements (Unaudited)

Table of Contents

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, 2020 193,771 $ 5,406 $ 7,156 $ (137) $ 164 $ 12,589
Net Income — — 397 — — 397
Dividends declared on common stock ($1.09 per Common Share) — — (210) — — (210)
Repurchase of common stock (430) (54) — — — (54)
Other comprehensive income, net of tax — — — 3 — 3
Stock-based compensation, net distributions to noncontrolling interests, and other 386 (8) (1) — (2) (11)
Balance, March 31, 2021 193,727 $ 5,344 $ 7,342 $ (134) $ 162 $ 12,714
Net Income — — 179 — — 179
Dividends declared on common stock ($1.91 per Common Share) — — (370) — — (370)
Other comprehensive income, net of tax — — — 2 — 2
Stock-based compensation, net distributions to noncontrolling interests, and other 25 17 (2) — (1) 14
Balance, June 30, 2021 193,752 $ 5,361 $ 7,149 $ (132) $ 161 $ 12,539
Net Income (Loss) — — 25 — (3) 22
Repurchase of common stock (99) (12) — — — (12)
Other comprehensive income, net of tax — — — 6 — 6
Stock-based compensation, net contributions from noncontrolling interests, and other 74 17 1 — 5 23
Separation of DT Midstream — — (3,858) 10 (151) (3,999)
Balance, September 30, 2021 193,727 $ 5,366 $ 3,317 $ (116) $ 12 $ 8,579

~~See Combined Notes to Consolidated Financial Statements (Unaudited)~~


				Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests
	Common Stock
	Shares	Amount								Total
	(Dollars in millions, shares in thousands)
Balance, December 31, 2021	193,748	$	5,379	$	3,438	$	(112)	$	8	$	8,713
Net Income	—	—		394		—		—		394
Dividends declared on common stock ($0.89 per Common Share)	—	—		(171)		—		—		(171)

Repurchase of common stock	(465)	(55)		—		—		—		(55)

Other comprehensive income, net of tax	—	—		—		3		—		3
Stock-based compensation, net distributions to noncontrolling interests, and other	456	(14)		1		—		(4)		(17)
Balance, March 31, 2022	193,739	$	5,310	$	3,662	$	(109)	$	4	$	8,867

~~DTE Energy Company~~

~~Consolidated Statements of Changes in Equity (Unaudited) — (Continued)~~

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
Net Income — — 277 — — 277
Dividends declared on common stock ($2.03 per Common Share) — — (390) — — (390)
Other comprehensive income, net of tax — — — 4 — 4
Stock-based compensation, net contributions from noncontrolling interests, and other 39 12 (1) — 2 13
Balance, June 30, 2020 192,651 $ 5,247 $ 6,618 $ (141) $ 168 $ 11,892
Net Income — — 476 — 1 477
Issuance of common stock 98 11 — — — 11
Contribution of common stock to pension plan 694 82 — — — 82
Other comprehensive income, net of tax — — — 3 — 3
Stock-based compensation, net distributions to noncontrolling interests, and other 117 29 (2) — (4) 23
Balance, September 30, 2020 193,560 $ 5,369 $ 7,092 $ (138) $ 165 $ 12,488


				Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests
	Common Stock
	Shares	Amount								Total
	(Dollars in millions, shares in thousands)
Balance, December 31, 2020	193,771	$	5,406	$	7,156	$	(137)	$	164	$	12,589

Net Income	—	—		397		—		—		397
Dividends declared on common stock ($1.09 per Common Share)	—	—		(210)		—		—		(210)

Repurchase of common stock	(430)	(54)		—		—		—		(54)

Other comprehensive income, net of tax	—	—		—		3		—		3
Stock-based compensation, net distributions to noncontrolling interests, and other	386	(8)		(1)		—		(2)		(11)
Balance, March 31, 2021	193,727	$	5,344	$	7,342	$	(134)	$	162	$	12,714

See Combined Notes to Consolidated Financial Statements (Unaudited)

1110

Table of Contents

DTE Electric Company

Consolidated Statements of Operations (Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(In millions)
Operating Revenues — Utility operations $ 1,700 $ 1,690 $ 4,468 $ 4,211
Operating Expenses
Fuel and purchased power — utility 462 451 1,185 1,090
Operation and maintenance 410 361 1,122 1,074
Depreciation and amortization 278 258 810 768
Taxes other than income 83 79 245 220
Asset (gains) losses and impairments, net — — — 41
1,233 1,149 3,362 3,193
Operating Income 467 541 1,106 1,018
Other (Income) and Deductions
Interest expense 84 83 251 249
Interest income — — — (2)
Non-operating retirement benefits, net — — (1) —
Other income (14) (18) (52) (68)
Other expenses 8 18 26 66
78 83 224 245
Income Before Income Taxes 389 458 882 773
Income Tax Expense 45 58 92 96
Net Income $ 344 $ 400 $ 790 $ 677


	Three Months Ended March 31,
		2022		2021
		(In millions)
Operating Revenues — Utility operations		$	1,486	$	1,360

Operating Expenses
Fuel and purchased power — utility		440		362
Operation and maintenance		381		357
Depreciation and amortization		294		260
Taxes other than income		88		82

		1,203		1,061
Operating Income		283		299

Other (Income) and Deductions
Interest expense		87		82

Non-operating retirement benefits, net		(1)		—
Other income		(16)		(19)
Other expenses		9		8
		79		71
Income Before Income Taxes		204		228

Income Tax Expense		3		20

Net Income		$	201	$	208

See Combined Notes to Consolidated Financial Statements (Unaudited)

Table of Contents

DTE Electric Company

Consolidated Statements of Comprehensive Income (Unaudited)


	Three Months Ended March 31,
		2022		2021
		(In millions)
Net Income		$	201	$	208


Other comprehensive income		—		—
Comprehensive Income		$	201	$	208

See Combined Notes to Consolidated Financial Statements (Unaudited)

Table of Contents

DTE Electric Company

Consolidated Statements of ~~Comprehensive Income~~Financial Position (Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(In millions)
Net Income $ 344 $ 400 $ 790 $ 677
Other comprehensive income — — — —
Comprehensive Income $ 344 $ 400 $ 790 $ 677


	March 31,		December 31,
	2022		2021
	(In millions)
ASSETS
Current Assets
Cash and cash equivalents	$	49	$	9
Restricted Cash	1		—
Accounts receivable (less allowance for doubtful accounts of $53 and $54, respectively)
Customer	659		694
Affiliates	29		36
Other	100		40
Inventories
Fuel	156		171
Materials and supplies	319		316



Regulatory assets	255		168
Prepaid property tax	98		57
Other	49		44
	1,715		1,535
Investments
Nuclear decommissioning trust funds	2,010		2,071
Other	45		44
	2,055		2,115
Property
Property, plant, and equipment	29,260		28,849
Accumulated depreciation and amortization	(7,835)		(7,676)
	21,425		21,173
Other Assets
Regulatory assets	2,825		2,968
Securitized regulatory assets	229		—


Prepaid postretirement costs — affiliates	417		402
Operating lease right-of-use assets	62		64
Other	152		148
	3,685		3,582
Total Assets	$	28,880	$	28,405

See Combined Notes to Consolidated Financial Statements (Unaudited)

Table of Contents

DTE Electric Company

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

September 30, December 31,
2021 2020
(In millions)
ASSETS
Current Assets
Cash and cash equivalents $ 18 $ 16
Accounts receivable (less allowance for doubtful accounts of $55 and $57, respectively)
Customer 782 763
Affiliates 17 13
Other 64 62
Inventories
Fuel 175 187
Materials and supplies 320 292
Regulatory assets 178 123
Prepaid property tax 126 52
Other 43 19
1,723 1,527
Investments
Nuclear decommissioning trust funds 2,007 1,855
Other 41 42
2,048 1,897
Property
Property, plant, and equipment 28,014 26,171
Accumulated depreciation and amortization (7,506) (7,050)
20,508 19,121
Other Assets
Regulatory assets 3,335 3,440
Intangible assets 3 11
Prepaid postretirement costs — affiliates 371 335
Operating lease right-of-use assets 67 75
Other 120 107
3,896 3,968
Total Assets $ 28,175 $ 26,513


	March 31,		December 31,
	2022		2021
	(In millions, except shares)
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Accounts payable
Affiliates	$	77	$	83
Other	574		567
Accrued interest	88		95

Current portion long-term debt, including securitization bonds and finance leases	94		322
Regulatory liabilities	102		154
Short-term borrowings
Affiliates	—		53
Other	—		153
Operating lease liabilities	10		10
Other	179		206
	1,124		1,643
Long-Term Debt (net of current portion)
Mortgage bonds, notes, and other	9,479		8,591
Securitization bonds	209		—
Finance lease liabilities	5		7
	9,693		8,598
Other Liabilities
Deferred income taxes	2,791		2,741
Regulatory liabilities	2,145		2,221
Asset retirement obligations	2,984		2,932
Unamortized investment tax credit	158		158
Nuclear decommissioning	312		321
Accrued pension liability — affiliates	392		405
Accrued postretirement liability — affiliates	332		340
Operating lease liabilities	44		46
Other	78		97
	9,236		9,261
Commitments and Contingencies (Notes 6 and 13)	0		0

Shareholder’s Equity
Common stock ($10 par value, 400,000,000 shares authorized, and 138,632,324 shares issued and outstanding for both periods)	6,002		6,002
Retained earnings	2,825		2,901

Total Shareholder’s Equity	8,827		8,903
Total Liabilities and Shareholder’s Equity	$	28,880	$	28,405

See Combined Notes to Consolidated Financial Statements (Unaudited)

Table of Contents

DTE Electric Company

Consolidated Statements of ~~Financial Position~~Cash Flows (Unaudited) ~~— (Continued)~~

September 30, December 31,
2021 2020
(In millions, except shares)
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Accounts payable
Affiliates $ 64 $ 62
Other 582 410
Accrued interest 87 91
Current portion long-term debt, including finance leases 322 468
Regulatory liabilities 36 18
Short-term borrowings
Affiliates 32 101
Other 159 —
Operating lease liabilities 11 11
Other 165 219
1,458 1,380
Long-Term Debt (net of current portion)
Mortgage bonds, notes, and other 8,590 7,774
Finance lease liabilities 9 13
8,599 7,787
Other Liabilities
Deferred income taxes 2,677 2,525
Regulatory liabilities 2,322 2,432
Asset retirement obligations 2,744 2,607
Unamortized investment tax credit 158 162
Nuclear decommissioning 310 283
Accrued pension liability — affiliates 697 731
Accrued postretirement liability — affiliates 378 384
Operating lease liabilities 49 56
Other 91 96
9,426 9,276
Commitments and Contingencies (Notes 6 and 13) 0 0
Shareholder’s Equity
Common stock ($10 par value, 400,000,000 shares authorized, and 138,632,324 shares issued and outstanding for both periods) 5,720 5,447
Retained earnings 2,972 2,623
Total Shareholder’s Equity 8,692 8,070
Total Liabilities and Shareholder’s Equity $ 28,175 $ 26,513


	Three Months Ended March 31,
	2022		2021
	(In millions)
Operating Activities
Net Income	$	201	$	208
Adjustments to reconcile Net Income to Net cash from operating activities:
Depreciation and amortization	294		260
Nuclear fuel amortization	3		15
Allowance for equity funds used during construction	(7)		(6)
Deferred income taxes	—		15

Changes in assets and liabilities:
Accounts receivable, net	(18)		114
Inventories	12		24
Accounts payable	34		(8)
Prepaid postretirement benefit costs — affiliates	(15)		(8)
Accrued pension liability — affiliates	(13)		(12)
Accrued postretirement liability — affiliates	(8)		(2)
Regulatory assets and liabilities	(165)		121
Other current and noncurrent assets and liabilities	(33)		(150)
Net cash from operating activities	285		571
Investing Activities
Plant and equipment expenditures	(609)		(502)



Proceeds from sale of nuclear decommissioning trust fund assets	207		271
Investment in nuclear decommissioning trust funds	(209)		(273)
Other	(8)		(9)
Net cash used for investing activities	(619)		(513)
Financing Activities
Issuance of long-term debt, net of discount and issuance costs	1,119		989
Redemption of long-term debt	(250)		—


Short-term borrowings, net — affiliate	(53)		(23)
Short-term borrowings, net — other	(153)		—
Dividends paid on common stock	(277)		(147)
Other	(11)		(15)
Net cash from financing activities	375		804
Net Increase in Cash, Cash Equivalents, and Restricted Cash	41		862
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	9		16
Cash, Cash Equivalents, and Restricted Cash at End of Period	$	50	$	878

Supplemental disclosure of non-cash investing and financing activities
Plant and equipment expenditures in accounts payable	$	251	$	141

See Combined Notes to Consolidated Financial Statements (Unaudited)

Table of Contents

DTE Electric Company

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

Nine Months Ended September 30,
2021 2020
(In millions)
Operating Activities
Net Income $ 790 $ 677
Adjustments to reconcile Net Income to Net cash from operating activities:
Depreciation and amortization 810 768
Nuclear fuel amortization 44 22
Allowance for equity funds used during construction (18) (18)
Deferred income taxes 90 74
Asset (gains) losses and impairments, net — 41
Changes in assets and liabilities:
Accounts receivable, net (25) (71)
Inventories (19) (30)
Accounts payable 40 37
Prepaid postretirement benefit costs — affiliates (36) —
Accrued pension liability — affiliates (34) (80)
Accrued postretirement liability — affiliates (6) (35)
Regulatory assets and liabilities 229 (79)
Other current and noncurrent assets and liabilities (259) (20)
Net cash from operating activities 1,606 1,286
Investing Activities
Plant and equipment expenditures (2,152) (1,981)
Proceeds from sale of nuclear decommissioning trust fund assets 854 2,054
Investment in nuclear decommissioning trust funds (853) (2,051)
Notes Receivable and Other (22) (14)
Net cash used for investing activities (2,173) (1,992)
Financing Activities
Issuance of long-term debt, net of discount and issuance costs 986 1,683
Redemption of long-term debt (321) (632)
Capital contribution by parent company 273 400
Short-term borrowings, net — affiliate (69) 7
Short-term borrowings, net — other 159 (154)
Dividends paid on common stock (441) (404)
Other (18) (17)
Net cash from financing activities 569 883
Net Increase in Cash and Cash Equivalents 2 177
Cash and Cash Equivalents at Beginning of Period 16 12
Cash and Cash Equivalents at End of Period $ 18 $ 189
Supplemental disclosure of non-cash investing and financing activities
Plant and equipment expenditures in accounts payable $ 307 $ 141


				Additional Paid-in Capital		Retained Earnings
	Common Stock
	Shares	Amount						Total
	(Dollars in millions, shares in thousands)
Balance, December 31, 2021	138,632	$	1,386	$	4,616	$	2,901		$	8,903
Net Income	—	—		—		201			201
Dividends declared on common stock	—	—		—		(277)			(277)


Balance, March 31, 2022	138,632	$	1,386	$	4,616	$	2,825		$	8,827


				Additional Paid-in Capital		Retained Earnings
	Common Stock
	Shares	Amount						Total
	(Dollars in millions, shares in thousands)
Balance, December 31, 2020	138,632	$	1,386	$	4,061	$	2,623		$	8,070

Net Income	—	—		—		208			208
Dividends declared on common stock	—	—		—		(147)			(147)


Balance, March 31, 2021	138,632	$	1,386	$	4,061	$	2,684		$	8,131

See Combined Notes to Consolidated Financial Statements (Unaudited)

~~DTE Electric Company~~

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

Additional Paid-in Capital Retained Earnings
Common Stock
Shares Amount Total
(Dollars in millions, shares in thousands)
Balance, December 31, 2020 138,632 $ 1,386 $ 4,061 $ 2,623 $ 8,070
Net Income — — — 208 208
Dividends declared on common stock — — — (147) (147)
Balance, March 31, 2021 138,632 $ 1,386 $ 4,061 $ 2,684 $ 8,131
Net Income — — — 238 238
Dividends declared on common stock — — — (146) (146)
Balance, June 30, 2021 138,632 $ 1,386 $ 4,061 $ 2,776 $ 8,223
Net Income — — — 344 344
Dividends declared on common stock — — — (148) (148)
Capital contribution by parent company — — 273 — 273
Balance, September 30, 2021 138,632 $ 1,386 $ 4,334 $ 2,972 $ 8,692

Additional Paid-in Capital Retained Earnings
Common Stock
Shares Amount Total
(Dollars in millions, shares in thousands)
Balance, December 31, 2019 138,632 $ 1,386 $ 3,425 $ 2,384 $ 7,195
Net Income — — — 94 94
Dividends declared on common stock — — — (135) (135)
Balance, March 31, 2020 138,632 $ 1,386 $ 3,425 $ 2,343 $ 7,154
Net Income — — — 183 183
Dividends declared on common stock — — — (134) (134)
Balance, June 30, 2020 138,632 $ 1,386 $ 3,425 $ 2,392 $ 7,203
Net Income — — — 400 400
Dividends declared on common stock — — — (135) (135)
Capital contribution by parent company 400 400
Balance, September 30, 2020 138,632 $ 1,386 $ 3,825 $ 2,657 $ 7,868

~~See Combined Notes to Consolidated Financial Statements (Unaudited)~~

Contents

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

~~Dispositions and Impairments~~Discontinued Operations

DTE Energy

Note 5

Revenue

DTE Energy and DTE Electric

Note 6

Regulatory Matters

DTE Energy and DTE Electric

Note 7

~~Common Stock and~~ Earnings per Share

DTE Energy

Note 8

Fair Value

DTE Energy and DTE Electric

Note 9

Financial and Other Derivative Instruments

DTE Energy and DTE Electric

Note 10

Long-Term Debt

DTE Energy and DTE Electric

Note 11

Short-Term Credit Arrangements and Borrowings

DTE Energy and DTE Electric

Note 12

Leases

DTE Energy

Note 13

Commitments and Contingencies

DTE Energy and DTE Electric

Note 14

Retirement Benefits and Trusteed Assets

DTE Energy and DTE Electric

Note 15

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 2.3 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 include (1) DTE Vantage, ~~formerly DTE Energy's Power and Industrial Projects segment,~~ which is primarily involved in renewable natural gas projects and providing industrial energy services and was formerly involved in reduced emissions fuel projects ~~and renewable natural gas projects,~~until 2022, and 2) 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, EGLE, and for DTE Energy, the CFTC and CARB.

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 ~~2020~~2021 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.

1817

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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, ~~2021.~~2022.

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 ~~DTE Electric~~the Registrants were reclassified to match the current year's Consolidated Financial Statements presentation.

Separation of DT Midstream

On July 1, 2021, DTE Energy completed the ~~previously announced~~ separation of DT Midstream, its former natural gas pipeline, storage and gathering non-utility business. Effective with the separation, DTE retains no ownership in the new company, DT Midstream, which was formerly comprised of DTE Energy's Gas Storage and Pipelines segment and also included certain DTE Energy holding company activity within the Corporate and Other segment. Gas Storage and Pipelines is no longer a reportable segment of DTE Energy, and financialFinancial results of DT Midstream are presented as Income from discontinued operations, net of taxes on DTE Energy's Consolidated Statements of Operations. ~~Assets and liabilities of DT Midstream are also presented as discontinued operations on DTE Energy's Consolidated Statements of Financial Position.~~ Prior periods have been recast to reflect this presentation.

No adjustments were made to the historical activity within the Consolidated Statements of Comprehensive Income, Consolidated Statements of Cash Flows, or the Consolidated Statements of Changes in Equity. Unless noted otherwise, discussion in the Notes to the Consolidated Financial Statements relate to continuing operations. Refer to Note 4 to the Consolidated Financial Statements, ~~“Dispositions and Impairments,~~“Discontinued Operations,” for additional ~~information regarding the separation of DT Midstream and discontinued operations.~~information.

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 equity investment is valued at cost minus any impairments, if applicable. 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.

During the third quarter of 2021, the Registrants performed reassessments of certain VIEs owned by DT Midstream. Upon the separation of DT Midstream, DTE Energy no longer owns any interest in SGG, owner and operator of certain midstream natural gas assets. Therefore, SGG has been removed from the amounts for DTE Energy's consolidated VIEs in the table below. Additionally, as a result of the separation of DT Midstream, DTE Energy no longer has an equity interest in NEXUS, owner of a 256-mile pipeline which transports shale gas to Ohio, Michigan, and Ontario market centers. DTE Energy has removed its equity investment in NEXUS from the amounts for its non-consolidated VIEs. The Registrants maintain a variable interest in NEXUS relating to DTE Electric's transportation services contract. Assets, liabilities, and earnings related to SGG and NEXUS are included in discontinued operations in the Consolidated Financial Statements.

~~DTE Energy Company — DTE Electric Company~~

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

Legal entities within the DTE Vantage 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.

The Registrants hold ownership interests in certain limited partnerships. The limited partnerships include investment funds which support regional development and economic growth, and 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.

Table of Contents

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, 2021,~~March 31, 2022, 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, 2021,~~March 31, 2022, 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 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 material potential exposure to loss as a result of DTE Electric's variable interests through these long-term purchase contracts.

In the first quarter 2022, DTE Electric financed regulatory assets for previously deferred costs related to the River Rouge generation plant and tree trimming surge program through the sale of bonds by a wholly-owned special purpose entity, DTE Securitization. DTE Securitization is a VIE. DTE Electric has the power to direct the most significant activities of DTE Securitization, including performing servicing activities such as billing and collecting surcharge revenue. Accordingly, DTE Electric is the primary beneficiary and DTE Securitization is consolidated by the Registrants.

The maximum risk exposure for consolidated VIEs is reflected on the Registrants' Consolidated Statements of Financial ~~Position and, for DTE Energy, in Note 13 to the Consolidated Financial Statements, "Commitments and Contingencies," related to REF guarantees and indemnities.~~Position. For non-consolidated VIEs, the maximum risk exposure of the Registrants is generally limited to their investment, notes receivable, and future funding ~~commitments, and amounts which DTE Energy has guaranteed.~~commitments.

The following table summarizes the major Consolidated Statements of Financial Position items for consolidated VIEs as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021. All assets and liabilities of a consolidated VIE are presented where it has been determined that a consolidated 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~~the Registrants' consolidated VIEs are as follows:


		September 30, 2021			December 31, 2020			March 31, 2022				December 31, 2021
								DTE Energy		DTE Electric(a)		DTE Energy
		(In millions)		(In millions)
ASSETS	ASSETS						ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	23		$	20	Cash and cash equivalents	$	10	$	—	$	11

Accounts receivable		26			28
Inventories		45			107
Property, plant, and equipment, net		5			14

Notes receivable and other		67			33
		$	166		$	202

LIABILITIES
Accounts payable		$	21		$	22
Short-term borrowings		74			38
Restricted cash							Restricted cash	4		1		6

Securitized regulatory assets							Securitized regulatory assets	229		229		—

Notes receivable							Notes receivable	80		—		70
Other current and long-term assets							Other current and long-term assets	10		2		8
								$	333	$	232	$	95

LIABILITIES							LIABILITIES

Short-term borrowings							Short-term borrowings	$	82	$	—	$	75

Securitization bonds(b)							Securitization bonds(b)	230		230		—

Other current and long-term liabilities	Other current and long-term liabilities	2			4		Other current and long-term liabilities	7		1		5
		$	97		$	64		$	319	$	231	$	80

(a)DTE Electric amounts reflect DTE Securitization, which was a new VIE beginning the first quarter of 2022. See Note 6 to the Consolidated Financial Statements, "Regulatory Matters."

(b)Includes $21 million reported in Current portion of long-term debt on the Registrants' Consolidated Statements of Financial Position for the period ended March 31, 2022.

2019

Table of Contents

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:


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(In millions)					(In millions)
Investments in equity method investees	Investments in equity method investees	$	170	$	159	Investments in equity method investees	$	157	$	172
Notes receivable	Notes receivable	$	16	$	21	Notes receivable	$	13	$	13
Future funding commitments	Future funding commitments	$	3	$	6	Future funding commitments	$	3	$	3

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,
		2021		2020		2021		2020				2022		2021
		(In millions)										(In millions)
Income from REF entities		$	57	$	43	$	102	$	95
Equity earnings of equity method investees		17		12		31		21
Allowance for equity funds used during construction										Allowance for equity funds used during construction		$	8	$	7
Contract services	Contract services	6		7		21		20		Contract services		7		8

Allowance for equity funds used during construction		7		6		20		19
Income from REF entities										Income from REF entities		—		24
Gains from rabbi trust securities(a)	Gains from rabbi trust securities(a)	—		2		4		24		Gains from rabbi trust securities(a)		—		2
Equity earnings (losses) of equity method investees										Equity earnings (losses) of equity method investees		(11)		1
Other	Other	3		5		9		9		Other		4		1
		$	90	$	75	$	187	$	188			$	8	$	43

(a)Losses from rabbi trust securities are recorded separately to Other expenses on the Consolidated Statements of Operations.

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
		(In millions)										(In millions)
Contract services	Contract services	$	6	$	7	$	21	$	20	Contract services		$	7	$	8
Allowance for equity funds used during construction	Allowance for equity funds used during construction	6		6		18		18		Allowance for equity funds used during construction		7		6
Gains from rabbi trust securities allocated from DTE Energy(a)	Gains from rabbi trust securities allocated from DTE Energy(a)	—		2		4		24		Gains from rabbi trust securities allocated from DTE Energy(a)		—		2

Other	Other	2		3		9		6		Other		2		3
		$	14	$	18	$	52	$	68			$	16	$	19

(a)Losses from rabbi trust securities are recorded separately to Other expenses on the Consolidated Statements of Operations.

Changes in Accumulated Other Comprehensive Income (Loss)

Comprehensive income (loss) is the change in common shareholders' equity during a period from transactions and 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 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. For ~~DTE Energy, this includes a one-time reduction of $10 million in Accumulated other comprehensive loss due to the Separation of DT Midstream in the third quarter 2021. For~~ the three ~~and nine~~ months ended ~~months ended September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ reclassifications out of Accumulated other comprehensive income (loss) were not material.

2120

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DTE Energy Company — DTE Electric Company

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

Income Taxes

The interim effective tax rates of the Registrants are as follows:


		Effective Tax Rate										Effective Tax Rate
		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
DTE Energy	DTE Energy	186	%	5	%	(34)	%	2	%	DTE Energy		4	%	(2)	%
DTE Electric	DTE Electric	12	%	13	%	10	%	12	%	DTE Electric		2	%	9	%

These tax rates are affected by estimated annual permanent items, including AFUDC equity, production tax credits, and other flow-through items, as well as discrete items that may occur in any given period, but are not consistent from period to period. DTE Energy's effective tax rates in 2021 have been significantly impacted by pre-tax losses in the third quarter, driven primarily by the loss on extinguishment of debt and reclassification of DT Midstream earnings to discontinued operations.

The ~~181%~~6% increase in DTE ~~Energy's~~Energy’s effective tax rate for the three months ended ~~September 30, 2021~~March 31, 2022 was primarily due to ~~a deferred tax remeasurement~~an increase of ~~133%,~~8% due to the closure of the REF business and resulting decrease in production tax credits, ~~of 51%, and~~partially offset by higher amortization of the TCJA regulatory liability of ~~35%, partially offset by a valuation allowance of 29% and recognition of a deferred intercompany gain of 13%~~2%.

The 36% decrease in DTE Energy’s effective tax rate for the nine months ended September 30, 2021 was primarily due to a deferred tax remeasurement of 23%, production tax credits of 13%, and amortization of the TCJA regulatory liability of 9%, partially offset by the 2020 carryback of 2018 net operating losses due to the CARES Act of 4%, a valuation allowance of 4%, recognition of a deferred intercompany gain of 2%, and West Virginia tax law change of 2% in 2021.

The valuation allowance referenced above was established in the third quarter 2021 based on a change in DTE Energy's assessment of its ability to utilize certain charitable contribution carryforwards. The valuation allowance resulted in $18 million of deferred tax expense and was reflected in Income Tax Expense (Benefit) in the Consolidated Statements of Operations for the three and nine months ended September 30, 2021. For the deferred tax remeasurement and deferred intercompany gain noted above, refer to the "Separation of DT Midstream - Tax Impacts" section below for additional information.

~~The 1%~~7% decrease in DTE Electric's effective tax rate for the three months ended ~~September 30, 2021~~March 31, 2022 was primarily due to ~~production tax credits. The 2% decrease in DTE Electric's effective tax rate for the nine months ended September 30, 2021 was primarily due to production tax credits of 1% and~~higher amortization of the TCJA regulatory liability, ~~of 1%.~~which was driven by the accelerated amortization approved in DTE Electric's 2021 accounting application to the MPSC.

DTE Electric had income tax receivables with DTE Energy related to federal and state taxes of ~~$11~~$28 million and $8$33 million at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020, respectively.~~

~~Separation of DT Midstream~~2021, respectively, which are included in Accounts Receivable - ~~Tax Impacts~~

~~On July 1, 2021,~~Affiliates on the DTE Energy completed the separation of its natural gas pipeline, storage and gathering non-utility business, DT Midstream. Refer to Note 4 to the Consolidated Financial Statements, "Dispositions and Impairments" for additional information regarding the separation. The separation was a tax free distribution to shareholders, but triggered certain tax effects at DTE Energy including the remeasurement of state deferred tax assets and liabilities and the recognition of a deferred intercompany gain. The state remeasurement reduced deferred tax liabilities and generated a deferred tax benefit of $85 million. The recognition of the deferred intercompany gain resulted in $9 million of additional deferred tax expense. Both of these impacts were reflected in Income Tax Expense (Benefit) in theElectric Consolidated Statements of ~~Operations for~~Financial Position. DTE Electric also had income tax payables with DTE Energy related to state taxes of $2 million at December 31, 2021, which is included in Accounts Payable - Affiliates on the ~~three and nine months ended September 30, 2021.~~DTE Electric Consolidated Statements of Financial Position.

Unrecognized Compensation Costs

As of ~~September 30, 2021,~~March 31, 2022, DTE Energy had ~~$76~~$109 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 ~~1.4~~1.8 years.

Allocated Stock-Based Compensation

DTE Electric received an allocation of costs from DTE Energy associated with stock-based compensation of ~~$10~~$12 million and ~~$12~~$14 million for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, while such allocation was $35 million and $28 million for the nine months ended September 30, 2021 and 2020,~~ respectively.

~~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, fund certain construction projects, and guarantee performance. Restricted cash also includes amounts at DTE Securitization to pay for debt service and other qualified costs. Restricted cash designated for payments within one year is classified as a Current Asset.

Financing Receivables

Financing receivables are primarily composed of trade receivables, notes receivable, and unbilled revenue. The Registrants' financing receivables are stated at net realizable value.

Table of Contents

DTE Energy Company — DTE Electric Company

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

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 ~~September 30, 2021.~~March 31, 2022.


		DTE Energy								DTE Electric			DTE Energy								DTE Electric
		Year of Origination											Year of Origination
		2021		2020		2019 and Prior		Total		2021 and Prior			2022		2021		2020 and Prior		Total		2022 and Prior
		(In millions)											(In millions)
Notes receivable	Notes receivable											Notes receivable
Internal grade 1	Internal grade 1	$	—	$	—	$	19	$	19	$	14	Internal grade 1	$	—	$	—	$	19	$	19	$	14
Internal grade 2	Internal grade 2	2		100		21		123		3		Internal grade 2	1		16		91		108		3
Internal grade 3		—		—		—		—		—

Total notes receivable(a)	Total notes receivable(a)	$	2	$	100	$	40	$	142	$	17	Total notes receivable(a)	$	1	$	16	$	110	$	127	$	17

Net investment in leases	Net investment in leases											Net investment in leases
Net investment in leases, internal grade 1	Net investment in leases, internal grade 1	$	—	$	2	$	39	$	41	$	—	Net investment in leases, internal grade 1	$	—	$	—	$	38	$	38	$	—
Net investment in leases, internal grade 2	Net investment in leases, internal grade 2	—		159		1		160		—		Net investment in leases, internal grade 2	—		—		191		191		—
Total net investment in leases(a)	Total net investment in leases(a)	$	—	$	161	$	40	$	201	$	—	Total net investment in leases(a)	$	—	$	—	$	229	$	229	$	—

(a)For DTE Energy, included in Current Assets — Other and Other Assets — Notes Receivable on the Consolidated Statements of Financial Position. For DTE Electric, included in Current Assets — Other on the Consolidated Statements of Financial Position.

The allowance for doubtful accounts on accounts receivable for the utility entities is generally calculated using an 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.

~~DTE Energy Company — DTE Electric Company~~

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

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.

Notes receivable 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 for DTE Electric are primarily comprised of loans.

Table of Contents

DTE Energy Company — DTE Electric Company

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

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 determining the allowance for credit losses for notes receivable, the Registrants consider the historical payment experience and other factors that are expected to have a specific impact on the counterparty's ability to pay including existing and future economic conditions.

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 tables present a roll-forward of the activity for the Registrants' financing receivables credit loss reserves:


		DTE Energy				DTE Electric	DTE Energy								DTE Electric
		Trade accounts receivable		Other receivables				Total		Trade and other accounts receivable			Trade accounts receivable		Other receivables		Total		Trade and other accounts receivable
		(In millions)					(In millions)
Beginning reserve balance, January 1, 2021		$	101	$	3			$	104	$	57
Beginning reserve balance, January 1, 2022												Beginning reserve balance, January 1, 2022	$	89	$	3	$	92	$	54
Current period provision	Current period provision	41		1				42		27		Current period provision	20		—		20		8

Write-offs charged against allowance	Write-offs charged against allowance	(92)		(1)				(93)		(58)		Write-offs charged against allowance	(25)		—		(25)		(18)
Recoveries of amounts previously written off	Recoveries of amounts previously written off	49		—				49		29		Recoveries of amounts previously written off	13		—		13		9
Ending reserve balance, September 30, 2021		$	99	$	3			$	102	$	55
Ending reserve balance, March 31, 2022												Ending reserve balance, March 31, 2022	$	97	$	3	$	100	$	53

DTE Energy DTE Electric
Trade accounts receivable Other receivables Total Trade and other accounts receivable
(In millions)
Beginning reserve balance, January 1, 2020(a)
$ 79 $ 4 $ 83 $ 46
Current period provision 102 3 105 61
Write-offs charged against allowance (130) (4) (134) (80)
Recoveries of amounts previously written off 50 — 50 30
Ending reserve balance, December 31, 2020 $ 101 $ 3 $ 104 $ 57

~~(a)~~DTE Energy Trade accounts receivable beginning reserve balance excludes $8 million related to the discontinued operations of DT Midstream. Prospective activity includes only the continuing operations of DTE Energy.

~~DTE Energy Company — DTE Electric Company~~

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


	DTE Energy				DTE Electric
	Trade accounts receivable		Other receivables			Total		Trade and other accounts receivable
	(In millions)
Beginning reserve balance, January 1, 2021	$	101	$	3		$	104	$	57
Current period provision	53		1			54		36

Write-offs charged against allowance	(126)		(1)			(127)		(77)
Recoveries of amounts previously written off	61		—			61		38
Ending reserve balance, December 31, 2021	$	89	$	3		$	92	$	54

Uncollectible expense for the Registrants is primarily comprised of the current period provision for allowance for doubtful accounts and is summarized as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
		(In millions)										(In millions)
DTE Energy	DTE Energy	$	7	$	22	$	42	$	72	DTE Energy		$	20	$	31
DTE Electric	DTE Electric	10		16		26		42		DTE Electric		$	8	$	11

There are no material amounts of past due financing receivables for the Registrants as of ~~September 30, 2021.~~March 31, 2022.

Table of Contents

DTE Energy Company — DTE Electric Company

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

NOTE 3 — NEW ACCOUNTING PRONOUNCEMENTS

Recently Adopted Pronouncements

In ~~December 2019,~~July 2021, the FASB issued ASU No. ~~2019-12,~~2021-05, ~~Income Taxes~~Leases (Topic ~~740) - Simplifying the Accounting for Income Taxes~~842): Lessors – Certain Leases with Variable Lease Payments. . The amendments in this update ~~simplify~~modify lease classification requirements for lessors, providing that lease contracts with variable lease payments that do not depend on a reference index or a rate should be classified as operating leases if they would have been classified as a sales-type or direct financing lease and resulted in the 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.recognition of a selling loss at lease commencement. The Registrants adopted the ASU effective January 1, ~~2021~~2022 using the ~~modified retrospective and~~ prospective ~~approaches, where applicable.~~approach. The adoption of the ASU did not have a significant impact on the Registrants' Consolidated Financial Statements.

In ~~August 2020,~~October 2021, the FASB issued ASU No. ~~2020-06,~~2021-08, ~~Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40)~~Business Combinations (Topic 805): Accounting for ~~Convertible Instruments~~Contract Assets and Contract Liabilities from Contracts ~~in an Entity's Own Equity.~~ with Customers. The amendments in this update ~~simplify~~require contract assets and contract liabilities acquired in a business combination to be recognized and measured by the ~~accounting for certain financial instruments~~acquirer on the acquisition date in accordance with ~~characteristics of liabilities and equity, including convertible instruments and contracts indexed to and potentially settled~~ASC 606, Revenue from Contracts with Customers. Historically, such amounts were recognized by the acquirer at fair value in ~~an entity's own equity.~~acquisition accounting. The Registrants early adopted the ASU effective January 1, ~~2021 using the modified retrospective approach. The adoption of the ASU did not have a significant~~2022, which had no impact on the Registrants' Consolidated Financial ~~Statements.~~Statements for the current period. The Registrants will apply the guidance prospectively to any future business combinations.

Recently Issued Pronouncements

In March ~~2020,~~2022, the FASB issued ASU No. ~~2020-04,~~2022-02, ~~Reference Rate Reform~~Financial Instruments – Credit Losses (Topic ~~848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting, as amended. The amendments in this update provide optional expedients~~326): Troubled Debt Restructurings and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The guidance can be applied prospectively from any date beginning March 12, 2020 through December 31, 2022. The optional relief is temporary and cannot be applied to contract modifications and hedging relationships entered into or evaluated after December 31, 2022. The Registrants presently have various contracts that reference LIBOR and are assessing how this standard may be applied to specific contract modifications.

~~In July 2021, the FASB issued ASU No. 2021-05,~~ ~~Leases (Topic 842): Lessors – Certain Leases with Variable Lease Payments.~~Vintage Disclosures. The amendments in this update ~~modify lease classification~~eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the Current Expected Credit Loss (“CECL”) model under ASC 326 and enhance the disclosure requirements for ~~lessors, providing that lease contracts~~loan refinancings and restructurings made with ~~variable lease payments that do not depend on a reference index or a rate should be classified as operating~~borrowers experiencing financial difficulty. Additionally, the amendments require the disclosure of current period gross write-offs for financing receivables and net investment in leases ~~if they would have been classified as a sales-type or direct financing lease and resulted~~by year of origination in the ~~recognition of a selling loss at lease commencement.~~vintage disclosures. The ASU is effective for the Registrants for fiscal years beginning after December 15, ~~2021,~~2022, and interim periods therein. Early adoption is permitted. The Registrants ~~are currently assessing~~will apply the ~~impact of this standard on their Consolidated Financial Statements.~~guidance prospectively after the effective date.

2524

Table of Contents

DTE Energy Company — DTE Electric Company

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

NOTE 4 — ~~DISPOSITIONS AND IMPAIRMENTS~~DISCONTINUED OPERATIONS

Separation of DT Midstream

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

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

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

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

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

These payments eliminated in consolidation and had no direct impact on DTE Energy’s Consolidated Financial Statements of Financial Position. During July and August 2021, DTE Energy used the proceeds received from DT Midstream to optionally redeem $2.6 billion of long-term debt. Refer to Note 10 to the Consolidated Financial Statements, “Long-term Debt,” for additional information.

~~Continuing Involvement~~

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

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

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

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

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

~~In addition, DTE Energy and its subsidiaries have various commercial agreements that will continue after the separation. These agreements include certain pipeline,~~ gathering ~~and storage services and operating and maintenance agreements, and are not considered material to the Consolidated Financial Statements.~~

~~DTE Energy Company — DTE Electric Company~~

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

~~Discontinued Operations~~

non-utility business. The table below reflects the financial results of DT Midstream that ~~have been reclassified from continuing operations and~~are included in discontinued operations within the Consolidated Statements of Operations. These results include the impact of tax-related adjustments and all transaction costs related to the separation. General corporate overhead costs have been excluded and no portion of corporate interest costs were allocated to discontinued operations.

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(In millions)
Operating Revenues — Non-utility operations $ — $ 204 $ 405 $ 546
Operating Expenses
Cost of gas and other — non-utility — 6 15 14
Operation and maintenance(a)
30 32 124 80
Depreciation and amortization — 38 82 110
Taxes other than income — 3 13 12
Asset (gains) losses and impairments, net — (4) 17 (4)
30 75 251 212
Operating Income (Loss) (30) 129 154 334
Other (Income) and Deductions
Interest expense — 29 50 82
Interest income — (4) (4) (6)
Other income — (45) (62) (98)
— (20) (16) (22)
Income (Loss) from Discontinued Operations Before Income Taxes (30) 149 170 356
Income Tax Expense 3 42 58 99
Income (Loss) from Discontinued Operations, Net of Taxes (33) 107 112 257
Less: Net Income Attributable to Noncontrolling Interests — 3 6 8
Net Income (Loss) from Discontinued Operations $ (33) $ 104 $ 106 $ 249


	Three Months Ended March 31,
		2021
		(In millions)
Operating Revenues — Non-utility operations		$	197

Operating Expenses
Cost of gas and other — non-utility		5
Operation and maintenance(a)		41
Depreciation and amortization		41
Taxes other than income		7
Asset (gains) losses and impairments, net		(1)
		93
Operating Income		104

Other (Income) and Deductions
Interest expense		26
Interest income		(3)
Other income		(33)
		(10)
Income from Discontinued Operations Before Income Taxes		114

Income Tax Expense		34

Net Income from Discontinued Operations, Net of Taxes		80

Less: Net Income Attributable to Noncontrolling Interests		3

Net Income from Discontinued Operations		$	77

(a)Includes separation transaction costs of ~~$30 million and $59~~$10 million for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 ~~respectively,~~ for various legal, accounting and other professional services fees. ~~There were no costs incurred in the comparable prior year periods. Total transaction costs of $67 million have been incurred since October 2020.~~

2725

~~DTE Energy Company — DTE Electric Company~~

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

~~The table below reflects the major assets and liabilities that were transferred to DT Midstream and presented as discontinued operations in the Consolidated Statements~~Table of ~~Financial Position as of December 31, 2020.~~


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

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

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

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

~~______________________________________~~

~~(a)~~Short-term borrowings due to DTE Energy resulted in an intercompany note receivable in the Corporate and Other segment at December 31, 2020. The settlement of these borrowings in June 2021 and use of proceeds to redeem DTE Energy long-term debt in the third quarter 2021 has reduced the Total Assets of the Corporate and Other segment in the current period. Other changes in DTE Energy's Total Assets due to the separation of DT Midstream primarily relate to the elimination of Gas Storage and Pipelines segment assets in 2021.

There were no assets or liabilities from discontinued operations as of September 30, 2021. DT Midstream had net assets of $4.0 billion that separated on July 1, 2021 that resulted in a reduction to DTE Energy's equity during the third quarter. Refer to the Separation of DT Midstream line within DTE Energy's Consolidated Statements of Changes in Equity for further details.

Contents

DTE Energy Company — DTE Electric Company

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

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

Nine Months Ended September 30,
2021 2020
(In millions)
Operating Activities
Depreciation and amortization $ 82 $ 110
Deferred income taxes 57 95
Equity earnings of equity method investees (59) (75)
Asset (gains) losses and impairments, net 19 (4)
Investing Activities
Plant and equipment expenditures — non-utility $ (60) $ (440)
Financing Activities
Acquisition related deferred payment, excluding accretion $ — $ (380)

~~DTE Vantage Segment Impairment~~

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

During the second quarter 2021, DTE Electric retired the River Rouge plant and provided an early termination notice of the operation and maintenance services agreement with the pulverized coal facility. The termination would be effective December 31, 2021, at which point DTE Vantage expects to cease operations at the facility.

~~In connection with these events, DTE Energy performed an impairment analysis of the pulverized coal facility long-lived assets in accordance with ASC 360,~~ ~~Property, Plant and Equipment~~. Based on its undiscounted cash flow projections, DTE Energy determined that the carrying value of the pulverized coal facility asset group is not recoverable. As a result, DTE Energy recorded a non-cash impairment charge of $27 million, which is included in Asset (gains) losses and impairments, net on DTE Energy’s Consolidated Statements of Operations for the nine months ended September 30, 2021. The charge included $18 million to fully impair the long-lived assets recorded to Property, plant and equipment and a $9 million write-down of Other noncurrent assets to fair value. Fair value of the assets was determined using an income approach, which utilized assumptions including management’s best estimates of the expected future cash flows, the estimated useful life of the asset group and discount rate.

There were no other adjustments deemed necessary as of September 30, 2021 related to the closure of the facility. DTE Energy is currently monitoring contract negotiations with the steel industry customer to determine any future impacts. An estimate of such impacts cannot be determined at this time as alternatives are currently being evaluated; however, the likelihood of any impact being material to DTE Energy’s Consolidated Financial Statements is remote.


	Three Months Ended March 31,
	2021
	(In millions)
Operating Activities
Depreciation and amortization	$	41
Deferred income taxes	33
Equity earnings of equity method investees	(31)

Investing Activities
Plant and equipment expenditures — non-utility	$	(27)

~~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 September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
		(In millions)										(In millions)
Electric(a)	Electric(a)									Electric(a)
Residential	Residential	$	885	$	900	$	2,262	$	2,169	Residential		$	700	$	672
Commercial	Commercial	533		498		1,452		1,313		Commercial		477		451
Industrial	Industrial	167		157		473		434		Industrial		161		159
Other(b)	Other(b)	117		138		290		305		Other(b)		152		82
Total Electric operating revenues	Total Electric operating revenues	$	1,702	$	1,693	$	4,477	$	4,221	Total Electric operating revenues		$	1,490	$	1,364

Gas	Gas									Gas
Gas sales	Gas sales	$	95	$	92	$	726	$	655	Gas sales		$	596	$	461
End User Transportation	End User Transportation	38		34		171		154		End User Transportation		98		85
Intermediate Transportation	Intermediate Transportation	16		15		59		57		Intermediate Transportation		29		26
Other(b)	Other(b)	44		32		114		98		Other(b)		43		40
Total Gas operating revenues	Total Gas operating revenues	$	193	$	173	$	1,070	$	964	Total Gas operating revenues		$	766	$	612

Other segment operating revenues	Other segment operating revenues									Other segment operating revenues
DTE Vantage	DTE Vantage	$	372	$	324	$	1,132	$	850	DTE Vantage		$	179	$	366
Energy Trading	Energy Trading	$	1,602	$	1,061	$	4,208	$	2,714	Energy Trading		$	2,203	$	1,439

(a)Revenues generally represent those of DTE Electric, except ~~$2 million and $3~~$4 million of Other revenues related to DTE Sustainable Generation for the three months ended ~~September 30, 2021~~March 31, 2022 and ~~2020, respectively, and $9 million and $10 million for the nine months ended September 30, 2021 and 2020, respectively.~~2021.

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

Table of Contents

DTE Energy Company — DTE Electric Company

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

Revenues included the following which were outside the scope of Topic 606:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
		(In millions)										(In millions)

Electric — Other revenues	Electric — Other revenues	$	6	$	8	$	14	$	18	Electric — Other revenues		$	4	$	3
Gas — Alternative Revenue Programs		—		—		—		2

Gas — Other revenues	Gas — Other revenues	1		2		5		7		Gas — Other revenues		$	2	$	2
DTE Vantage — Leases	DTE Vantage — Leases	26		26		70		74		DTE Vantage — Leases		$	20	$	21
Energy Trading — Derivatives	Energy Trading — Derivatives	1,324		731		3,377		1,835		Energy Trading — Derivatives		$	1,734	$	1,146

Deferred Revenue

The following is a summary of deferred revenue activity:


	DTE Energy
	(In millions)
Beginning Balance, January 1, ~~2021~~2022~~(a)~~	$	6578
Increases due to cash received or receivable, excluding amounts recognized as revenue during the period	7927
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	~~(19)~~(26)
Ending Balance, ~~September 30, 2021~~March 31, 2022	$	~~125~~79

~~(a)Excludes $22 million of deferred revenue related to the discontinued operations of DT Midstream. Prospective activity includes only the continuing operations of DTE Energy.~~

~~DTE Energy Company — DTE Electric Company~~

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

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.

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			DTE Energy
		(In millions)			(In millions)
2021		$	72
2022	2022	50		2022	$	68
2023	2023	1		2023	8
2024	2024	1		2024	1
2025	2025	—		2025	—
2026 and thereafter		1
2026				2026	—
2027 and thereafter				2027 and thereafter	2
		$	125		$	79

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.

Table of Contents

DTE Energy Company — DTE Electric Company

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

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 cancellable 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			DTE Energy		DTE Electric
		(In millions)					(In millions)
2021		$	41	$	2
2022	2022	308		8		2022	$	218	$	6
2023	2023	264		7		2023	296		7
2024	2024	159		7		2024	183		7
2025	2025	80		1		2025	106		1
2026 and thereafter		421		—
2026						2026	63		—
2027 and thereafter						2027 and thereafter	365		—
		$	1,273	$	25		$	1,231	$	21

~~DTE Energy Company — DTE Electric Company~~

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

NOTE 6 — REGULATORY MATTERS

~~2020-2021 Accounting Applications~~

On July 9, 2020, the MPSC approved DTE Electric's request to accelerate amortization of the portion of its refundable federal income taxes regulatory liability related to non-plant accumulated deferred income tax balances that resulted from the TCJA. DTE Electric was authorized to increase amortization by $102 million beginning in May 2021, which would fully amortize this portion of the liability by the end of 2021 instead of April 2033. The accelerated amortization would not impact customer rates and would allow DTE Electric to defer its next rate case filing previously set for July 2020 to March 2021.

On February 26, 2021, DTE Electric filed an additional application requesting a delay in the accelerated amortization approved in the 2020 application. DTE Electric requested delaying the start of amortization from May 2021 to December 1, 2021, which would fully amortize these balances by the end of 2022 and allow DTE Electric to further defer its next rate case filing. The accounting application was approved by the MPSC on April 8, 2021.

On August 31, 2021, DTE Electric filed an accounting application with the MPSC requesting approval of a one-time voluntary refund of $70 million collected in 2021 associated with the unexpected customer usage patterns due to the COVID-19 pandemic. This refund would be administered by investing in additional tree trimming without seeking future cost recovery. Such efforts would serve to improve customer reliability without impacting rates, thus providing an affordability benefit to customers. These investments would be incremental to the Tree Trim Surge expenses previously authorized by the MPSC.

DTE Electric anticipates receiving an order by the end of 2021. If approved by the end of the year, a regulatory liability will be recognized at that time. The regulatory liability would be reduced as the additional tree trim expenses are incurred during the remainder of 2021 through 2023. If the full $70 million is not spent by the end of 2023, DTE Electric would provide refunds to customers via bill credits for any shortage.

2021 Securitization Filing

On ~~March 26,~~June 23, 2021, ~~DTE Electric filed an application requesting~~the MPSC issued a financing order ~~approving the securitization of $184 million of~~authorizing DTE Electric to issue Securitization bonds for qualified costs ~~related~~of up to $236 million, including $73 million for the net book value of the River Rouge generation plant, ~~and~~$157 million for tree trimming surge program costs, and $6 million for other qualified costs. The ~~filing requested collection of these qualifying costs from DTE Electric's customers.~~

~~A final MPSC~~financing order was issued on June 23, 2021 authorizing DTE Electric to proceed with the issuance of securitization bonds for qualified costs of up to $236 million, increased for the inclusion of deferred income taxes. The orderfurther authorized customer charges for the timely recovery of the ~~amount securitized~~debt service costs on the Securitization bonds and other ongoing qualified costs.

On March 17, 2022, DTE Electric closed on the issuance of Securitization ~~is expected in~~bonds of $236 million. Refer to Note 10 to the ~~first quarter 2022.~~Consolidated Financial Statements, “Long-Term Debt,” for additional information regarding the terms of the bonds and use of proceeds. Upon closing the transaction, DTE Electric recognized Securitized regulatory assets of $230 million, which were reclassified from existing Regulatory assets for the net book value of the River Rouge plant and tree trimming surge program. Debt service costs relating to tree trimming will be recovered over a period not to exceed 5 years, while amounts relating to River Rouge will be recovered over a period not to exceed 14 years.

~~2021 Gas~~2022 Electric Rate Case Filing

DTE ~~Gas~~Electric filed a rate case with the MPSC on ~~February 12, 2021~~January 21, 2022 requesting an increase in base rates of ~~$195~~$388 million based on a projected twelve-month period ending ~~December~~October 31, ~~2022.~~2023. The requested increase in base rates is primarily due to an increase in net plant resulting from ~~infrastructure~~generation and distribution investments, as well as related increases to depreciation and ~~operating and maintenance~~property tax expenses. The rate filing also requested an increase in return on equity from 9.9% to 10.25% and includes projected changes in ~~sales and working capital.~~sales. A final MPSC order in this case is expected ~~by December 2021.~~in November 2022.

3228

Table of Contents

DTE Energy Company — DTE Electric Company

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

NOTE 7 — ~~COMMON STOCK AND~~ EARNINGS PER SHARE

~~Earnings per Share~~

Basic earnings per share is calculated by dividing 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 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,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
		(In millions, except per share amounts)										(In millions, except per share amounts)
Basic Earnings per Share	Basic Earnings per Share									Basic Earnings per Share
Net Income attributable to DTE Energy — continuing operations		$	58	$	372	$	495	$	844
Net Income Attributable to DTE Energy Company — continuing operations										Net Income Attributable to DTE Energy Company — continuing operations		$	394	$	320
Less: Allocation of earnings to net restricted stock awards	Less: Allocation of earnings to net restricted stock awards	—		1		1		2		Less: Allocation of earnings to net restricted stock awards		1		—
		$	58	$	371	$	494	$	842			$	393	$	320
Net Income (Loss) attributable to DTE Energy — discontinued operations		(33)		104		106		249
Net Income Attributable to DTE Energy Company — discontinued operations										Net Income Attributable to DTE Energy Company — discontinued operations		—		77
Net income available to common shareholders — basic	Net income available to common shareholders — basic	$	25	$	475	$	600	$	1,091	Net income available to common shareholders — basic		$	393	$	397

Average number of common shares outstanding — basic	Average number of common shares outstanding — basic	193		193		193		192		Average number of common shares outstanding — basic		193		194

Income from continuing operations	Income from continuing operations	$	0.30	$	1.93	$	2.55	$	4.37	Income from continuing operations		$	2.03	$	1.65
Income (loss) from discontinued operations		(0.17)		0.54		0.55		1.30
Income from discontinued operations										Income from discontinued operations		—		0.40
Basic Earnings per Common Share	Basic Earnings per Common Share	$	0.13	$	2.47	$	3.10	$	5.67	Basic Earnings per Common Share		$	2.03	$	2.05

Diluted Earnings per Share	Diluted Earnings per Share									Diluted Earnings per Share
Net Income attributable to DTE Energy — continuing operations		$	58	$	372	$	495	$	844
Net Income Attributable to DTE Energy Company — continuing operations										Net Income Attributable to DTE Energy Company — continuing operations		$	394	$	320
Less: Allocation of earnings to net restricted stock awards	Less: Allocation of earnings to net restricted stock awards	—		1		1		2		Less: Allocation of earnings to net restricted stock awards		1		—
		$	58	$	371	$	494	$	842			$	393	$	320
Net Income (Loss) attributable to DTE Energy — discontinued operations		(33)		104		106		249
Net Income Attributable to DTE Energy Company — discontinued operations										Net Income Attributable to DTE Energy Company — discontinued operations		—		77
Net income available to common shareholders — diluted	Net income available to common shareholders — diluted	$	25	$	475	$	600	$	1,091	Net income available to common shareholders — diluted		$	393	$	397

Average number of common shares outstanding — basic	Average number of common shares outstanding — basic	193		193		193		192		Average number of common shares outstanding — basic		193		194

Average dilutive equity units, performance share awards, and stock options		1		—		1		1
Average dilutive equity units and performance share awards										Average dilutive equity units and performance share awards		1		—
Average number of common shares outstanding — diluted	Average number of common shares outstanding — diluted	194		193		194		193		Average number of common shares outstanding — diluted		194		194

Income from continuing operations	Income from continuing operations	$	0.30	$	1.92	$	2.55	$	4.37	Income from continuing operations		$	2.03	$	1.65
Income (loss) from discontinued operations		(0.17)		0.54		0.55		1.29
Income from discontinued operations										Income from discontinued operations		—		0.40
Diluted Earnings per Common Share(a)	Diluted Earnings per Common Share(a)	$	0.13	$	2.46	$	3.10	$	5.66	Diluted Earnings per Common Share(a)		$	2.03	$	2.05

(a)Equity ~~Units~~units excluded from the calculation of diluted EPS were approximately ~~11.1~~10.7 million and 10.3 million for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and 11.5 million and 10.3 million for the nine months ended September 30, 2021 and 2020,~~ respectively, as the dilutive stock price threshold was not met.

~~DTE Energy Company — DTE Electric Company~~

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

~~Stock Purchase Contract Adjustments~~

In December 2019, DTE Energy closed on the purchase of midstream natural gas assets. The acquisition was financed through the issuance of Senior Notes, common stock, and $1.3 billion of Equity Units. Each Equity Unit has a stated amount of $50 and was initially issued in the form of a Corporate Unit, comprised of (i) a forward purchase contract to buy DTE Energy common stock (stock purchase contract) and (ii) a 1/20 undivided beneficial ownership interest in a $1,000 principal amount of DTE Energy’s 2019 Series F 2.25% RSNs due 2025.

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

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

•~~if the AMV is less than $133.08 but greater than $106.50, a number of shares of common stock equal to $50 divided by the AMV; and~~

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

The present value of future contract adjustment payments of $150 million was initially recorded as a reduction of shareholders’ equity, offset by the stock purchase contract liability. The stock purchase contract liability was not impacted by the change in settlement rates and a liability of $64 million remains included in Current Liabilities — Other and Other Liabilities — Other on DTE Energy’s Consolidated Statements of Financial Position as of September 30, 2021. DTE Energy will continue issuing quarterly payments through the settlement date of November 1, 2022.

The treasury stock method is used to compute diluted EPS for the stock purchase contract. Under the treasury stock method, the stock purchase contract will only have a dilutive effect when the settlement rate is based on the market value of DTE’s common stock that is greater than $133.08 (the threshold appreciation price). At September 30, 2021, the stock purchase price contract was anti-dilutive and, therefore, not included in the computation of diluted earnings per share.

Until settlement of the stock purchase contracts, the shares of stock underlying each contract are not outstanding. Under the terms of the stock purchase contracts, assuming no anti-dilution or other adjustments, DTE Energy will issue between 9.8 million and 12.2 million shares of its common stock in November 2022. A total of 13 million shares of DTE Energy’s common stock have been reserved for issuance in connection with the stock purchase contracts.

~~For additional information regarding the equity units, refer to Note 15, "Long-term Debt" in the combined DTE Energy and DTE Electric 2020 Annual Report on Form 10-K.~~

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

NOTE 8 — 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, 2021~~March 31, 2022 and December 31, ~~2020.~~2021. The Registrants believe they use valuation techniques that maximize the use of observable market-based inputs and minimize the use of unobservable inputs.

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.

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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:


		September 30, 2021												December 31, 2020																March 31, 2022																		December 31, 2021
		Level 1		Level 2		Level 3		Other(a)		Netting(b)		Net Balance		Level 1		Level 2		Level 3		Other(a)		Netting(b)				Net Balance				Level 1			Level 2			Level 3			Other(a)			Netting(b)			Net Balance			Level 1			Level 2			Level 3			Other(a)			Netting(b)		Net Balance
		(In millions)																								(In millions)
Assets	Assets																								Assets
Cash equivalents(c)	Cash equivalents(c)	$	9	$	—	$	—	$	—	$	—	$	9	$	438	$	—	$	—	$	—	$	—			$	438	Cash equivalents(c)		$	123		$	—		$	—		$	—		$	—		$	123		$	4		$	—		$	—		$	—		$	—	$	4
Nuclear decommissioning trusts	Nuclear decommissioning trusts																								Nuclear decommissioning trusts
Equity securities	Equity securities	944		—		—		196		—		1,140		947		—		—		222		—				1,169		Equity securities		851			—			—			182			—			1,033			917			—			—			190			—		1,107
Fixed income securities	Fixed income securities	127		429		—		102		—		658		102		371		—		82		—				555		Fixed income securities		112			398			—			99			—			609			124			418			—			102			—		644
Private equity and other	Private equity and other	—		—		—		175		—		175		—		—		—		104		—				104		Private equity and other		—			—			—			236			—			236			—			—			—			205			—		205

Hedge funds and similar investments																								Hedge funds and similar investments	65				30			—			—			—			95			58			18			—			—			—			76
Cash equivalents	Cash equivalents	34		—		—		—		—		34		27		—		—		—		—				27		Cash equivalents		37			—			—			—			—			37			39			—			—			—			—		39
Other investments(d)	Other investments(d)																								Other investments(d)
Equity securities	Equity securities	61		—		—		—		—		61		55		—		—		—		—				55		Equity securities		65			—			—			—			—			65			68			—			—			—			—		68
Fixed income securities	Fixed income securities	7		—		—		—		—		7		8		—		—		—		—				8		Fixed income securities		7			—			—			—			—			7			7			—			—			—			—		7
Cash equivalents	Cash equivalents	86		—		—		—		—		86		97		—		—		—		—				97		Cash equivalents		71			—			—			—			—			71			86			—			—			—			—		86

Derivative assets	Derivative assets																								Derivative assets
Commodity contracts(e)	Commodity contracts(e)																								Commodity contracts(e)
Natural gas	Natural gas	579		146		53		—		(715)		63		99		74		60		—		(156)				77		Natural gas		505			135			71			—			(679)			32			273			115			66			—			(394)		60
Electricity	Electricity	—		707		245		—		(627)		325		—		128		52		—		(120)				60		Electricity		—			1,006			328			—			(905)			429			—			500			143			—			(441)		202
Environmental & Other	Environmental & Other	—		598		12		—		(570)		40		—		150		4		—		(135)				19		Environmental & Other		—			325			7			—			(327)			5			—			285			9			—			(285)		9

Total derivative assets	Total derivative assets	579		1,451		310		—		(1,912)		428		99		352		116		—		(411)				156		Total derivative assets		505			1,466			406			—			(1,911)			466			273			900			218			—			(1,120)		271
Total	Total	$	1,847	$	1,880	$	310	$	473	$	(1,912)	$	2,598	$	1,773	$	723	$	116	$	408	$	(411)			$	2,609	Total		$	1,836		$	1,894		$	406		$	517		$	(1,911)		$	2,742		$	1,576		$	1,336		$	218		$	497		$	(1,120)	$	2,507

Liabilities	Liabilities																								Liabilities
Derivative liabilities	Derivative liabilities																								Derivative liabilities
Commodity contracts(e)	Commodity contracts(e)																								Commodity contracts(e)
Natural gas	Natural gas	$	(425)	$	(297)	$	(333)	$	—	$	664	$	(391)	$	(88)	$	(59)	$	(76)	$	—	$	151			$	(72)	Natural gas		$	(232)		$	(372)		$	(301)		$	—		$	553		$	(352)		$	(177)		$	(172)		$	(245)		$	—		$	347	$	(247)
Electricity	Electricity	—		(576)		(340)		—		614		(302)		—		(126)		(42)		—		125				(43)		Electricity		—			(880)			(445)			—			950			(375)			—			(434)			(188)			—			443		(179)
Environmental & Other	Environmental & Other	—		(581)		—		—		570		(11)		—		(137)		—		—		129				(8)		Environmental & Other		—			(325)			(1)			—			326			—			—			(288)			—			—			288		—

Foreign currency exchange contracts	Foreign currency exchange contracts	—		(5)		—		—		—		(5)		—		(5)		0		—		—				(5)		Foreign currency exchange contracts		—			(6)			—			—			—			(6)			—			(4)			0			—			—		(4)

Total	Total	$	(425)	$	(1,459)	$	(673)	$	—	$	1,848	$	(709)	$	(88)	$	(327)	$	(118)	$	—	$	405			$	(128)	Total		$	(232)		$	(1,583)		$	(747)		$	—		$	1,829		$	(733)		$	(177)		$	(898)		$	(433)		$	—		$	1,078	$	(430)
Net Assets (Liabilities) at end of period	Net Assets (Liabilities) at end of period	$	1,422	$	421	$	(363)	$	473	$	(64)	$	1,889	$	1,685	$	396	$	(2)	$	408	$	(6)			$	2,481	Net Assets (Liabilities) at end of period		$	1,604		$	311		$	(341)		$	517		$	(82)		$	2,009		$	1,399		$	438		$	(215)		$	497		$	(42)	$	2,077
Assets	Assets																											Assets
Current	Current	$	506	$	1,183	$	258	$	—	$	(1,591)	$	356	$	532	$	260	$	92	$	—	$	(330)			$	554	Current		$	532		$	1,128		$	339		$	—		$	(1,524)		$	475		$	227		$	646		$	166		$	—		$	(854)	$	185
Noncurrent	Noncurrent	1,341		697		52		473		(321)		2,242		1,241		463		24		408		(81)				2,055		Noncurrent		1,304			766			67			517			(387)			2,267			1,349			690			52			497			(266)		2,322
Total Assets	Total Assets	$	1,847	$	1,880	$	310	$	473	$	(1,912)	$	2,598	$	1,773	$	723	$	116	$	408	$	(411)			$	2,609	Total Assets		$	1,836		$	1,894		$	406		$	517		$	(1,911)		$	2,742		$	1,576		$	1,336		$	218		$	497		$	(1,120)	$	2,507
Liabilities	Liabilities																											Liabilities
Current	Current	$	(409)	$	(1,138)	$	(464)	$	—	$	1,546	$	(465)	$	(84)	$	(223)	$	(79)	$	—	$	318			$	(68)	Current		$	(218)		$	(1,165)		$	(485)		$	—		$	1,415		$	(453)		$	(168)		$	(609)		$	(260)		$	—		$	799	$	(238)
Noncurrent	Noncurrent	(16)		(321)		(209)		—		302		(244)		(4)		(104)		(39)		—		87				(60)		Noncurrent		(14)			(418)			(262)			—			414			(280)			(9)			(289)			(173)			—			279		(192)
Total Liabilities	Total Liabilities	$	(425)	$	(1,459)	$	(673)	$	—	$	1,848	$	(709)	$	(88)	$	(327)	$	(118)	$	—	$	405			$	(128)	Total Liabilities		$	(232)		$	(1,583)		$	(747)		$	—		$	1,829		$	(733)		$	(177)		$	(898)		$	(433)		$	—		$	1,078	$	(430)
Net Assets (Liabilities) at end of period	Net Assets (Liabilities) at end of period	$	1,422	$	421	$	(363)	$	473	$	(64)	$	1,889	$	1,685	$	396	$	(2)	$	408	$	(6)			$	2,481	Net Assets (Liabilities) at end of period		$	1,604		$	311		$	(341)		$	517		$	(82)		$	2,009		$	1,399		$	438		$	(215)		$	497		$	(42)	$	2,077

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

(b)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.

(c)Amounts consisted of $1$3 million and $2$1 million of cash equivalents included in Restricted cash on DTE Energy's Consolidated Statements of Financial Position at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. All other amounts are included in Cash and cash equivalents on ~~the~~DTE Energy's Consolidated Statements of Financial Position.

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

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

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

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


		September 30, 2021										December 31, 2020											March 31, 2022										December 31, 2021
		Level 1		Level 2		Level 3		Other(a)		Net Balance		Level 1		Level 2		Level 3		Other(a)		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																					Assets
Cash equivalents(b)	Cash equivalents(b)	$	—	$	—	$	—	$	—	$	—	$	4	$	—	$	—	$	—	$	4	Cash equivalents(b)	$	38	$	—	$	—	$	—	$	38	$	—	$	—	$	—	$	—	$	—
Nuclear decommissioning trusts	Nuclear decommissioning trusts																					Nuclear decommissioning trusts
Equity securities	Equity securities	944		—		—		196		1,140		947		—		—		222		1,169		Equity securities	851		—		—		182		1,033		917		—		—		190		1,107
Fixed income securities	Fixed income securities	127		429		—		102		658		102		371		—		82		555		Fixed income securities	112		398		—		99		609		124		418		—		102		644
Private equity and other	Private equity and other	—		—		—		175		175		—		—		—		104		104		Private equity and other	—		—		—		236		236		—		—		—		205		205

Hedge funds and similar investments																						Hedge funds and similar investments	65		30		—		—		95		58		18		—		—		76
Cash equivalents	Cash equivalents	34		—		—		—		34		27		—		—		—		27		Cash equivalents	37		—		—		—		37		39		—		—		—		39
Other investments	Other investments																					Other investments
Equity securities	Equity securities	18		—		—		—		18		16		—		—		—		16		Equity securities	20		—		—		—		20		20		—		—		—		20

Cash equivalents	Cash equivalents	11		—		—		—		11		11		—		—		—		11		Cash equivalents	11		—		—		—		11		11		—		—		—		11
Derivative assets — FTRs	Derivative assets — FTRs	—		—		12		—		12		—		—		4		—		4		Derivative assets — FTRs	—		—		3		—		3		—		—		9		—		9
Total	Total	$	1,134	$	429	$	12	$	473	$	2,048	$	1,107	$	371	$	4	$	408	$	1,890	Total	$	1,134	$	428	$	3	$	517	$	2,082	$	1,169	$	436	$	9	$	497	$	2,111

Assets	Assets																					Assets
Current	Current	$	—	$	—	$	12	$	—	$	12	$	4	$	—	$	4	$	—	$	8	Current	$	38	$	—	$	3	$	—	$	41	$	—	$	—	$	9	$	—	$	9
Noncurrent	Noncurrent	1,134		429		—		473		2,036		1,103		371		—		408		1,882		Noncurrent	1,096		428		—		517		2,041		1,169		436		—		497		2,102
Total Assets	Total Assets	$	1,134	$	429	$	12	$	473	$	2,048	$	1,107	$	371	$	4	$	408	$	1,890	Total Assets	$	1,134	$	428	$	3	$	517	$	2,082	$	1,169	$	436	$	9	$	497	$	2,111

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

(b)Amounts consisted of $1 million of cash equivalents included in Restricted cash on DTE Electric's Consolidated Statements of Financial Position at March 31, 2022. All other amounts are included in Cash and cash equivalents on DTE Electric's Consolidated Statements of Financial Position.

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 commingled funds. Exchange-traded debt and equity securities held directly, as well as publicly-traded commingled funds, are valued using quoted market prices in actively traded markets. Non-exchange traded fixed income securities are valued based upon quotations available from brokers or pricing services.

Non-publicly traded commingled funds holding exchange-traded equity or debt securities are valued based on stated NAVs. There are no significant restrictions for these funds and investments may be redeemed with 7 to 65 days notice depending on the fund. There is no intention to sell the investment in these commingled funds.

Private equity and other assets include a diversified group of funds that are classified as NAV assets. These funds primarily invest in limited partnerships, including private equity, private real estate and private credit. Distributions are received through the liquidation of the underlying fund assets over the life of the funds. There are generally no redemption rights. The 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 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 further extended with the approval of the limited partners. Unfunded commitments related to these investments totaled ~~$155~~$192 million and ~~$183~~$199 million as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

Table of Contents

DTE Energy Company — DTE Electric Company

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

Hedge funds and similar investments utilize a diversified group of strategies that attempt to capture uncorrelated sources of return. These investments include publicly traded mutual funds that are valued using quoted prices in actively traded markets, as well as insurance-linked and asset-backed securities that are valued using quotations from broker or pricing services.

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 source of a given security if the trustee determines that another price source is considered 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.

~~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 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, 2021								Three Months Ended September 30, 2020
		Natural Gas		Electricity		Other		Total		Natural Gas		Electricity		Other		Total			Three Months Ended March 31, 2022								Three Months Ended March 31, 2021
		(In millions)																	Natural Gas		Electricity		Other		Total		Natural Gas		Electricity		Other		Total
Net Assets (Liabilities) as of June 30		$	(181)	$	(49)	$	15	$	(215)	$	20	$	16	$	10	$	46
																			(In millions)
Net Assets (Liabilities) as of December 31																		Net Assets (Liabilities) as of December 31	$	(179)	$	(45)	$	9	$	(215)	$	(16)	$	10	$	4	$	(2)

Transfers from Level 3 into Level 2	Transfers from Level 3 into Level 2	—		—		—		—		(1)		—		—		(1)		Transfers from Level 3 into Level 2	5		—		—		5		—		—		—		—
Total gains (losses)	Total gains (losses)																	Total gains (losses)
Included in earnings(a)	Included in earnings(a)	(162)		(21)		—		(183)		(80)		37		1		(42)		Included in earnings(a)	(171)		(50)		3		(218)		(67)		26		—		(41)
Recorded in Regulatory liabilities	Recorded in Regulatory liabilities	—		—		(1)		(1)		—		—		9		9		Recorded in Regulatory liabilities	—		—		(4)		(4)		—		—		(1)		(1)
Purchases, issuances, and settlements	Purchases, issuances, and settlements																	Purchases, issuances, and settlements

Settlements	Settlements	63		(25)		(2)		36		22		(48)		(13)		(39)		Settlements	115		(22)		(2)		91		(6)		(55)		(2)		(63)
Net Assets (Liabilities) as of September 30		$	(280)	$	(95)	$	12	$	(363)	$	(39)	$	5	$	7	$	(27)
Total gains (losses) included in Net Income attributed to the change in unrealized gains (losses) related to assets and liabilities held at September 30(a)		$	(109)	$	(30)	$	(2)	$	(141)	$	(57)	$	11	$	(1)	$	(47)
Net Assets (Liabilities) as of March 31																		Net Assets (Liabilities) as of March 31	$	(230)	$	(117)	$	6	$	(341)	$	(89)	$	(19)	$	1	$	(107)
Total gains (losses) included in Net Income attributed to the change in unrealized gains (losses) related to assets and liabilities held at March 31(a)																		Total gains (losses) included in Net Income attributed to the change in unrealized gains (losses) related to assets and liabilities held at March 31(a)	$	(129)	$	(64)	$	3	$	(190)	$	(93)	$	(7)	$	—	$	(100)

(a)Amounts are reflected in Operating Revenues — Non-utility operations and Fuel, purchased power, gas, and other — non-utility in DTE Energy's Consolidated Statements of Operations.

3833

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DTE Energy Company — DTE Electric Company

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

Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020
Natural Gas Electricity Other Total Natural Gas Electricity Other Total
(In millions)
Net Assets (Liabilities) as of December 31 $ (16) $ 10 $ 4 $ (2) $ (15) $ 16 $ 3 $ 4
Transfers from Level 3 into Level 2 — — — — (5) — — (5)
Total gains (losses)
Included in earnings(a)
(356) (5) — (361) (44) 90 (7) 39
Recorded in Regulatory liabilities — — 14 14 — — 21 21
Purchases, issuances, and settlements
Settlements 92 (100) (6) (14) 25 (101) (10) (86)
Net Assets (Liabilities) as of September 30 $ (280) $ (95) $ 12 $ (363) $ (39) $ 5 $ 7 $ (27)
Total gains (losses) included in Net Income attributed to the change in unrealized gains (losses) related to assets and liabilities held at September 30(a)
$ (301) $ (54) $ (17) $ (372) $ (20) $ 53 $ (17) $ 16
Total gains (losses) included in Regulatory liabilities attributed to the change in unrealized gains (losses) related to assets and liabilities held at September 30 $ — $ — $ 12 $ 12 $ — $ — $ 7 $ 7

~~(a)Amounts are reflected in Operating Revenues — Non-utility operations and Fuel, purchased power, gas, and other — non-utility in DTE Energy's Consolidated Statements of Operations.~~

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 September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
		(In millions)										(In millions)
Net Assets as of beginning of period	Net Assets as of beginning of period	$	15	$	10	$	4	$	3	Net Assets as of beginning of period		$	9	$	4
Change in fair value recorded in Regulatory liabilities		(1)		9		14		21
Total losses recorded in Regulatory liabilities										Total losses recorded in Regulatory liabilities		(4)		(1)
Purchases, issuances, and settlements	Purchases, issuances, and settlements									Purchases, issuances, and settlements
Settlements	Settlements	(2)		(12)		(6)		(17)		Settlements		(2)		(2)
Net Assets as of September 30		$	12	$	7	$	12	$	7
Total gains (losses) included in Regulatory liabilities attributed to the change in unrealized gains (losses) related to assets and liabilities held at September 30		$	—	$	—	$	12	$	7
Net Assets as of March 31										Net Assets as of March 31		$	3	$	1

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 from or into Level 3 for DTE Electric during the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 and ~~2020.~~2021.

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


		September 30, 2021																March 31, 2022
Commodity Contracts	Commodity Contracts	Derivative Assets		Derivative Liabilities		Valuation Techniques	Unobservable Input	Range						Weighted Average			Commodity Contracts	Derivative Assets		Derivative Liabilities		Valuation Techniques	Unobservable Input	Range						Weighted Average
		(In millions)																(In millions)
Natural Gas	Natural Gas	$	53	$	(333)	Discounted Cash Flow	Forward basis price (per MMBtu)	$	(1.33)	—	$	3.53	/MMBtu	$	(0.04)	/MMBtu	Natural Gas	$	71	$	(301)	Discounted Cash Flow	Forward basis price (per MMBtu)	$	(1.54)	—	$	6.46	/MMBtu	$	(0.10)	/MMBtu
Electricity	Electricity	$	245	$	(340)	Discounted Cash Flow	Forward basis price (per MWh)	$	(8)	—	$	10	/MWh	$	(1)	/MWh	Electricity	$	328	$	(445)	Discounted Cash Flow	Forward basis price (per MWh)	$	(12)	—	$	8	/MWh	$	(2)	/MWh

~~DTE Energy Company — DTE Electric Company~~

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


		December 31, 2020																December 31, 2021
Commodity Contracts	Commodity Contracts	Derivative Assets		Derivative Liabilities		Valuation Techniques	Unobservable Input	Range						Weighted Average			Commodity Contracts	Derivative Assets		Derivative Liabilities		Valuation Techniques	Unobservable Input	Range						Weighted Average
		(In millions)																(In millions)
Natural Gas	Natural Gas	$	60	$	(76)	Discounted Cash Flow	Forward basis price (per MMBtu)	$	(0.86)	—	$	2.50	/MMBtu	$	(0.07)	/MMBtu	Natural Gas	$	66	$	(245)	Discounted Cash Flow	Forward basis price (per MMBtu)	$	(1.36)	—	$	3.82	/MMBtu	$	(0.04)	/MMBtu
Electricity	Electricity	$	52	$	(42)	Discounted Cash Flow	Forward basis price (per MWh)	$	(9)	—	$	6	/MWh	$	—	/MWh	Electricity	$	143	$	(188)	Discounted Cash Flow	Forward basis price (per MWh)	$	(12)	—	$	7	/MWh	$	(2)	/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 weighted average price for unobservable inputs was calculated using the average of forward price curves for natural gas and electricity and the absolute value of monthly volumes.

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 have resulted in a higher (lower) fair value for long positions, with offsetting impacts to short positions.

Table of Contents

DTE Energy Company — DTE Electric Company

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

Fair Value of Financial Instruments

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


		September 30, 2021								December 31, 2020									March 31, 2022								December 31, 2021
		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(a), excluding lessor finance leases	Notes receivable(a), excluding lessor finance leases	$	142	$	—	$	—	$	142	$	141	$	—	$	—	$	141	Notes receivable(a), excluding lessor finance leases	$	127	$	—	$	—	$	140	$	150	$	—	$	—	$	167
Short-term borrowings	Short-term borrowings	$	361	$	—	$	361	$	—	$	38	$	—	$	38	$	—	Short-term borrowings	$	244	$	—	$	244	$	—	$	758	$	—	$	758	$	—
Notes payable(b)	Notes payable(b)	$	5	$	—	$	—	$	5	$	19	$	—	$	—	$	19	Notes payable(b)	$	17	$	—	$	—	$	17	$	27	$	—	$	—	$	27
Long-term debt(c)	Long-term debt(c)	$	17,222	$	2,241	$	15,486	$	1,104	$	19,439	$	2,547	$	18,230	$	1,397	Long-term debt(c)	$	18,249	$	2,247	$	15,029	$	1,163	$	17,378	$	2,284	$	15,425	$	1,207

(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.

(c)Includes debt due within one year and excludes finance lease obligations. Carrying value also includes unamortized debt discounts and issuance costs.

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


		September 30, 2021								December 31, 2020									March 31, 2022								December 31, 2021
		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(a)	Notes receivable(a)	$	17	$	—	$	—	$	17	$	16	$	—	$	—	$	16	Notes receivable(a)	$	17	$	—	$	—	$	17	$	17	$	—	$	—	$	17

Short-term borrowings — affiliates	Short-term borrowings — affiliates	$	32	$	—	$	—	$	32	$	101	$	—	$	—	$	101	Short-term borrowings — affiliates	$	—	$	—	$	—	$	—	$	53	$	—	$	—	$	53
Short-term borrowings — other	Short-term borrowings — other	$	159	$	—	$	159	$	—	$	—	$	—	$	—	$	—	Short-term borrowings — other	$	—	$	—	$	—	$	—	$	153	$	—	$	153	$	—
Notes payable(b)	Notes payable(b)	$	4	$	—	$	—	$	4	$	17	$	—	$	—	$	17	Notes payable(b)	$	17	$	—	$	—	$	17	$	27	$	—	$	—	$	27
Long-term debt(c)	Long-term debt(c)	$	8,906	$	—	$	9,952	$	150	$	8,236	$	—	$	9,579	$	379	Long-term debt(c)	$	9,775	$	—	$	9,824	$	169	$	8,907	$	—	$	9,898	$	150

(a)Included in Current 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.

(c)Includes debt due within one year and excludes finance lease obligations. Carrying value also includes unamortized debt discounts and issuance costs.

For further fair value information on financial and derivative instruments, see Note 9 to the Consolidated Financial Statements, "Financial and Other Derivative Instruments."

~~DTE Energy Company — DTE Electric Company~~

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

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:


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(In millions)					(In millions)
Fermi 2	Fermi 2	$	1,989	$	1,841	Fermi 2	$	1,990	$	2,051
Fermi 1	Fermi 1	3		3		Fermi 1	3		3
Low-level radioactive waste	Low-level radioactive waste	15		11		Low-level radioactive waste	17		17
		$	2,007	$	1,855		$	2,010	$	2,071

Table of Contents

DTE Energy Company — DTE Electric Company

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

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 September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
		(In millions)										(In millions)
Realized gains	Realized gains	$	21	$	38	$	80	$	172	Realized gains		$	14	$	24
Realized losses	Realized losses	$	(1)	$	(11)	$	(9)	$	(103)	Realized losses		$	(5)	$	(2)
Proceeds from sale of securities	Proceeds from sale of securities	$	217	$	816	$	854	$	2,054	Proceeds from sale of securities		$	207	$	271

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

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


		September 30, 2021						December 31, 2020							March 31, 2022						December 31, 2021
		Fair Value		Unrealized Gains		Unrealized Losses		Fair Value		Unrealized Gains		Unrealized Losses			Fair Value		Unrealized Gains		Unrealized Losses		Fair Value		Unrealized Gains		Unrealized Losses
		(In millions)													(In millions)
Equity securities	Equity securities	$	1,140	$	507	$	(8)	$	1,169	$	481	$	(6)	Equity securities	$	1,033	$	488	$	(13)	$	1,107	$	546	$	(9)
Fixed income securities	Fixed income securities	658		24		(5)		555		20		(1)		Fixed income securities	609		11		(30)		644		23		(6)
Private equity and other	Private equity and other	175		41		(2)		104		—		—		Private equity and other	236		70		(2)		205		58		(8)

Hedge funds and similar investments														Hedge funds and similar investments	95		1		(4)		76		1		(2)
Cash equivalents	Cash equivalents	34		—		—		27		—		—		Cash equivalents	37		—		—		39		—		—
		$	2,007	$	572	$	(15)	$	1,855	$	501	$	(7)		$	2,010	$	570	$	(49)	$	2,071	$	628	$	(25)

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


	~~September 30, 2021~~March 31, 2022
	(In millions)
Due within one year	$	1120
Due after one through five years	~~138~~127
Due after five through ten years	~~112~~98
Due after ten years	~~295~~265
	$	~~556~~510

Fixed income securities held in nuclear decommissioning trust funds include $99 million of non-publicly traded commingled funds that do not have a contractual maturity date.

Table of Contents

DTE Energy Company — DTE Electric Company

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

~~Fixed income securities held in nuclear decommissioning trust funds include $102 million of non-publicly traded commingled funds that do not have a contractual maturity date.~~

Other Securities

At ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Registrants' securities included in Other investments on the Consolidated Statements of Financial Position were comprised primarily of investments within DTE Energy's rabbi trust. The rabbi trust was established to fund certain non-qualified pension benefits, and therefore changes in market value are recognized in earnings. Gains and losses are allocated from DTE Energy to DTE Electric and are included in Other Income or Other Expense, respectively, in the Registrants' Consolidated Statements of Operations. The following table summarizes the Registrant's gains (losses) related to the trust:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
		(In millions)										(In millions)
Gains (losses) related to equity securities	Gains (losses) related to equity securities	$	(1)	$	2	$	3	$	(4)	Gains (losses) related to equity securities		$	(1)	$	2
Gains (losses) related to fixed income securities	Gains (losses) related to fixed income securities	—		—		—		(3)		Gains (losses) related to fixed income securities		—		—
		$	(1)	$	2	$	3	$	(7)			$	(1)	$	2

NOTE 9 — 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 derivative gain or loss is deferred in Accumulated other comprehensive income (loss) and later reclassified into earnings when the underlying transaction occurs. 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.

The 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 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, certain environmental contracts, and natural gas storage assets.

DTE Electric — DTE Electric generates, purchases, distributes, and sells electricity. DTE Electric uses forward 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, and buys and sells transportation and storage capacity. DTE Gas has fixed-priced contracts for portions of its expected natural gas supply requirements through March ~~2024.~~2025. Substantially all of these contracts meet the normal purchases and normal sales exception and are therefore accounted for under the accrual method. Forward transportation and storage contracts are generally not derivatives and are therefore accounted for under the accrual method.

DTE Vantage — This segment manages and operates renewable gas recovery projects, industrial energy projects, ~~reduced emissions fuel projects, renewable gas recovery,~~ and power generation assets. ~~Primarily fixed-price~~Long-term contracts and hedging instruments are used in the marketing and management of the segment assets. These contracts and hedging instruments are generally not derivatives and are therefore accounted for under the accrual method.

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DTE Energy Company — DTE Electric Company

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

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.

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, 2021~~March 31, 2022 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.

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.

4338

Table of Contents

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 Energy:


		September 30, 2021				December 31, 2020					March 31, 2022				December 31, 2021
		Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities			Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
		(In millions)									(In millions)
Derivatives designated as hedging instruments	Derivatives designated as hedging instruments									Derivatives designated as hedging instruments
Foreign currency exchange contracts	Foreign currency exchange contracts	$	—	$	(3)	$	—	$	(4)	Foreign currency exchange contracts	$	—	$	(4)	$	—	$	(4)
Derivatives not designated as hedging instruments	Derivatives not designated as hedging instruments									Derivatives not designated as hedging instruments
Commodity contracts	Commodity contracts									Commodity contracts
Natural gas	Natural gas	$	778	$	(1,055)	$	233	$	(223)	Natural gas	$	711	$	(905)	$	454	$	(594)
Electricity	Electricity	952		(916)		180		(168)		Electricity	1,334		(1,325)		643		(622)
Environmental & Other	Environmental & Other	610		(581)		154		(137)		Environmental & Other	332		(326)		294		(288)
Foreign currency exchange contracts	Foreign currency exchange contracts	—		(2)		—		(1)		Foreign currency exchange contracts	—		(2)		—		—
Total derivatives not designated as hedging instruments	Total derivatives not designated as hedging instruments	$	2,340	$	(2,554)	$	567	$	(529)	Total derivatives not designated as hedging instruments	$	2,377	$	(2,558)	$	1,391	$	(1,504)

Current	Current	$	1,938	$	(2,011)	$	446	$	(386)	Current	$	1,876	$	(1,868)	$	1,035	$	(1,037)
Noncurrent	Noncurrent	402		(546)		121		(147)		Noncurrent	501		(694)		356		(471)
Total derivatives	Total derivatives	$	2,340	$	(2,557)	$	567	$	(533)	Total derivatives	$	2,377	$	(2,562)	$	1,391	$	(1,508)

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

September 30, 2021 December 31, 2020
(In millions)
FTRs — Other current assets $ 12 $ 4
Total derivatives not designated as hedging instruments $ 12 $ 4
Electric was $3 million and $9 million at March 31, 2022 and December 31, 2021, respectively, comprised of FTRs recorded to Other current assets on the Consolidated Statements of Financial Position and not designated as hedging instruments.

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 ~~$20~~$13 million and $7$18 million outstanding at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, 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 ~~$55~~$45 million and $9$37 million at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, 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.

The following table presents net cash collateral offsetting arrangements for DTE Energy:


	March 31, 2022		December 31, 2021
	(In millions)
Cash collateral netted against Derivative assets	$	(225)	$	(90)
Cash collateral netted against Derivative liabilities	143		48
Cash collateral recorded in Accounts receivable(a)	36		55
Cash collateral recorded in Accounts payable(a)	(16)		(21)
Total net cash collateral posted (received)	$	(62)	$	(8)

(a)Amounts are recorded net by counterparty.

Table of Contents

DTE Energy Company — DTE Electric Company

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

The following table presents ~~net cash collateral offsetting arrangements for DTE Energy:~~

September 30, 2021 December 31, 2020
(In millions)
Cash collateral netted against Derivative assets $ (122) $ (12)
Cash collateral netted against Derivative liabilities 58 6
Cash collateral recorded in Accounts receivable(a)
66 14
Cash collateral recorded in Accounts payable(a)
(8) (1)
Total net cash collateral posted (received) $ (6) $ 7

~~(a)Amounts are recorded net by counterparty.~~

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


		September 30, 2021						December 31, 2020							March 31, 2022						December 31, 2021
		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			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)													(In millions)
Derivative assets	Derivative assets													Derivative assets
Commodity contracts	Commodity contracts													Commodity contracts
Natural gas	Natural gas	$	778	$	(715)	$	63	$	233	$	(156)	$	77	Natural gas	$	711	$	(679)	$	32	$	454	$	(394)	$	60
Electricity	Electricity	952		(627)		325		180		(120)		60		Electricity	1,334		(905)		429		643		(441)		202
Environmental & Other	Environmental & Other	610		(570)		40		154		(135)		19		Environmental & Other	332		(327)		5		294		(285)		9

Total derivative assets	Total derivative assets	$	2,340	$	(1,912)	$	428	$	567	$	(411)	$	156	Total derivative assets	$	2,377	$	(1,911)	$	466	$	1,391	$	(1,120)	$	271

Derivative liabilities	Derivative liabilities													Derivative liabilities
Commodity contracts	Commodity contracts													Commodity contracts
Natural gas	Natural gas	$	(1,055)	$	664	$	(391)	$	(223)	$	151	$	(72)	Natural gas	$	(905)	$	553	$	(352)	$	(594)	$	347	$	(247)
Electricity	Electricity	(916)		614		(302)		(168)		125		(43)		Electricity	(1,325)		950		(375)		(622)		443		(179)
Environmental & Other	Environmental & Other	(581)		570		(11)		(137)		129		(8)		Environmental & Other	(326)		326		—		(288)		288		—

Foreign currency exchange contracts	Foreign currency exchange contracts	(5)		—		(5)		(5)		—		(5)		Foreign currency exchange contracts	(6)		—		(6)		(4)		—		(4)
Total derivative liabilities	Total derivative liabilities	$	(2,557)	$	1,848	$	(709)	$	(533)	$	405	$	(128)	Total derivative liabilities	$	(2,562)	$	1,829	$	(733)	$	(1,508)	$	1,078	$	(430)

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:

September 30, 2021 December 31, 2020
Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities
Current Noncurrent Current Noncurrent Current Noncurrent Current Noncurrent
(In millions)
Total fair value of derivatives $ 1,938 $ 402 $ (2,011) $ (546) $ 446 $ 121 $ (386) $ (147)
Counterparty netting (1,498) (292) 1,498 292 (318) (81) 318 81
Collateral adjustment (93) (29) 48 10 (12) — — 6
Total derivatives as reported $ 347 $ 81 $ (465) $ (244) $ 116 $ 40 $ (68) $ (60)

~~DTE Energy Company — DTE Electric Company~~

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


	March 31, 2022								December 31, 2021
	Derivative Assets				Derivative Liabilities				Derivative Assets				Derivative Liabilities
	Current		Noncurrent		Current		Noncurrent		Current		Noncurrent		Current		Noncurrent
	(In millions)
Total fair value of derivatives	$	1,876	$	501	$	(1,868)	$	(694)	$	1,035	$	356	$	(1,037)	$	(471)
Counterparty netting	(1,335)		(351)		1,335		351		(791)		(239)		791		239
Collateral adjustment	(189)		(36)		80		63		(63)		(27)		8		40
Total derivatives as reported	$	352	$	114	$	(453)	$	(280)	$	181	$	90	$	(238)	$	(192)

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 September 30,						Gain (Loss) Recognized in Income on Derivatives for the Nine Months Ended September 30,							Location of Gain (Loss) Recognized in Income on Derivatives			Gain (Loss) Recognized in Income on Derivatives for the Three Months Ended March 31,
			2021			2020			2021			2020							2022		2021
						(In millions)																		(In millions)
Commodity contracts	Commodity contracts															Commodity contracts
Natural gas	Natural gas	Operating Revenues — Non-utility operations		$	(214)		$	(27)		$	(371)		$	(63)	Natural gas			Operating Revenues — Non-utility operations						$	(231)			$	(43)
Natural gas	Natural gas	Fuel, purchased power, gas, and other — non-utility		63			(51)			(16)			28		Natural gas		Fuel, purchased power, gas, and other — non-utility					65				(55)
Electricity	Electricity	Operating Revenues — Non-utility operations		68			33			143			75		Electricity		Operating Revenues — Non-utility operations					2				33
Environmental & Other	Environmental & Other	Operating Revenues — Non-utility operations		3			2			(36)			(40)		Environmental & Other		Operating Revenues — Non-utility operations					(4)				(32)
Foreign currency exchange contracts	Foreign currency exchange contracts	Operating Revenues — Non-utility operations		2			(2)			(1)			—		Foreign currency exchange contracts		Operating Revenues — Non-utility operations					(2)				(2)
Total	Total			$	(78)		$	(45)		$	(281)		$	—	Total							$	(170)			$	(99)

Table of Contents

DTE Energy Company — DTE Electric Company

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

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, gas, and other — non-utility.

The following represents the cumulative gross volume of DTE Energy's derivative contracts outstanding as of ~~September 30, 2021:~~March 31, 2022:


Commodity						Number of Units
Natural gas (MMBtu)						~~2,096,409,912~~2,174,656,330
Electricity (MWh)						~~29,383,562~~38,329,637
Oil (Gallons)						10,428,000
Foreign currency exchange ($ CAD)						~~119,281,865~~116,900,803

Renewable Energy Certificates (MWh)						~~8,387,594~~9,346,692
Carbon emissions (Metric Tons)						~~48,343,793~~1,355,694

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") 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, environmental, and coal) and the provisions and maturities of the underlying transactions. As of ~~September 30, 2021,~~March 31, 2022, 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 ~~$575~~$813 million.

As of ~~September 30, 2021,~~March 31, 2022, DTE Energy had ~~$2,180 million~~$2.2 billion of derivatives in net liability positions, for which hard triggers exist. There is ~~$52~~$26 million of collateral that has been posted against such liabilities, including cash and letters of credit. Associated derivative net asset positions for which contractual offset exists were ~~$1,788 million.~~$1.7 billion. The net remaining amount of ~~$340~~$510 million is derived from the ~~$575~~$813 million noted above.

4641

Table of Contents

DTE Energy Company — DTE Electric Company

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

NOTE 10 — LONG-TERM DEBT

Debt Issuances

In ~~2021,~~2022, the following debt was issued:

Company

Month

Type

Interest Rate

Maturity Date

Amount

Company

Month

Type

Interest Rate

Maturity Date

Amount

(In millions)

DTE Electric

March

Mortgage bonds(a)

1.90%

2028

575

DTE Electric

February

Mortgage bonds(a)

3.00%

2032

500

DTE Electric

March

Mortgage bonds(a)

3.25%

2051

425

DTE Electric

February

Mortgage bonds(b)

3.65%

2052

400

DT Midstream

June

Senior notes(b)

4.125%

2029

1,100

DT Midstream

June

Senior notes(b)

4.375%

2031

1,000

DT Midstream

June

Term loan facility(b)

Variable

2028

1,000

DTE Electric

March

Securitization bonds(c)

2.64%

2027(d)

184

DTE Electric

March

Securitization bonds(c)

3.11%

2036(e)

4,100

1,136

(a)Proceeds used for the repayment of short-term borrowings, for capital expenditures, and for other general corporate purposes.

(b)Bonds were issued as Green Bonds ~~and the~~with proceeds ~~will~~to be used for eligible green expenditures, including costs related to ~~finance qualified expenditures for~~the generation of solar and wind energy, ~~payments under~~purchases of renewable energy from wind and solar power ~~purchase agreements for solar and wind energy,~~facilities, and energy optimization programs.

~~(b)~~(c)Proceeds were used to reimburse DTE Electric for qualified costs previously incurred, including the ~~repayment~~net book value of ~~short-term borrowings due~~the River Rouge generation plant, tree trimming surge program costs, and other qualified costs. The securitization financing order from the MPSC required that the net proceeds be subsequently applied by DTE Electric to retire existing debt or equity. Accordingly, DTE ~~Energy to facilitate~~Electric used proceeds of $115 million towards retirement of the ~~separation of DT Midstream, as well as~~2012 Series A Mortgage bonds noted in the Debt Redemptions table below and issued a one-time special dividend ~~provided~~of $115 million to DTE Energy. ~~The debt was transferred to DT Midstream upon its separation on July 1, 2021.~~ Refer to Note 46 to the Consolidated Financial Statements, ~~“Dispositions and Impairments,~~“Regulatory Matters,” for additional information ~~and to~~

(d)Principal payments on the ~~Debt Redemptions section below for DTE Energy's use of the proceeds received from DT Midstream.~~

In September 2021, DTE Electric completed a mandatory remarketing of $82 million of 1.45% Tax-Exempt Revenue Bonds at the same rate of 1.45% until maturity in 2030 and $59 million of 1.45% Tax-Exempt Revenue Bonds at a rate of 1.35% until maturity in 2029.

Additionally in September 2021, DTE Gas agreed to issue $60 million of 2.07% First Mortgage Bonds due December 1, 2031 and $95 million of 2.85% First Mortgage Bonds due December 1, 2051 to a group of institutional investors in a private placement transaction. These bonds ~~are expected to close and fund in November 2021. Proceeds~~ will be ~~used~~made semi-annually beginning December 2022, with the final payment scheduled for December 2026.

(e)Principal payments on the ~~repayment of short-term borrowings and general corporate purposes, including capital expenditures.~~bonds will be made semi-annually beginning June 2027, with the final payment scheduled for December 2035.

Debt Redemptions

In ~~2021,~~2022, the following debt was redeemed:

Company Month Type Interest Rate Maturity Date Amount
(In millions)
DTE Electric April Mortgage bonds 3.90% 2021 $ 250
DTE Electric May Mortgage bonds 7.00% 2021 33
DTE Energy June
Junior subordinated debentures(a)
5.375% 2076 300
DTE Energy July Senior notes 3.30% 2022 300
DTE Energy July Senior notes 2.60% 2022 300
DTE Energy July Senior notes 3.70% 2023 600
DTE Energy July Senior notes 3.85% 2023 135
DTE Energy July Senior notes 3.50% 2024 350
DTE Energy July Senior notes 3.80% 2027 350
DTE Energy July Senior notes 3.40% 2029 21
DTE Energy July Senior notes 6.375% 2033 191
DTE Energy August Senior notes 3.85% 2023 165
DTE Energy August Senior notes 6.375% 2033 209
DTE Electric August Mortgage bonds 6.90% 2021 38
$ 3,242
~~_______________________________________~~

~~(a)Early redemption resulted in a loss on extinguishment of debt of $8 million relating to the write-off of unamortized issuance costs.~~

~~DTE Energy Company — DTE Electric Company~~

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

During the third quarter 2021, DTE Energy optionally redeemed $2.6 billion of Senior Notes included in the table above using proceeds from DT Midstream's repayment of short-term borrowings and one-time special dividend. To early retire this debt and reduce future interest expense, DTE Energy incurred prepayment costs of $361 million and wrote off $15 million of unamortized issuance costs and discounts related to the debt. These amounts have been included within the Loss on extinguishment of debt line item within the Consolidated Statements of Operations for the three and nine months ended September 30, 2021.

Company

Month

Type

Interest Rate

Maturity Date

Amount

(In millions)

DTE Electric

March

Mortgage bonds

2.65%

2022

250

NOTE 11 — SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS

DTE Energy, DTE Electric, and DTE Gas have unsecured revolving credit agreements that can be used for general corporate borrowings, but are intended to provide liquidity support for each of the companies’ commercial paper programs. Borrowings under the revolvers are available at prevailing short-term interest rates. DTE Energy also has other facilities to support letter of credit issuance.

The unsecured revolving credit agreements have historically required DTE Energy, DTE Electric, and DTE Gas to maintain a total funded debt to capitalization ratio of no more than 0.65 to 1. In June 2021, DTE Energy amended its total funded debt to capitalization ratio requirement to no more than 0.70 to 1 starting with the third quarter of 2021 and ending December 2022. The amendment was a result of temporary balance sheet impacts resulting from the separation of DT Midstream on July 1, 2021. In the agreements, "total funded debt" means all indebtedness of each respective company and their consolidated subsidiaries, including finance lease obligations, hedge agreements, and guarantees of third parties’ debt, but excluding contingent obligations, nonrecourse and junior subordinated debt, and certain equity-linked securities and, except for calculations at the end of the second quarter, certain DTE Gas short-term debt. "Capitalization" means the sum of (a) total funded debt plus (b) "consolidated net worth," which is equal to consolidated total equity of each respective company and their consolidated subsidiaries (excluding pension effects under certain FASB statements), as determined in accordance with accounting principles generally accepted in the United States of America. At ~~September 30, 2021,~~March 31, 2022, the total funded debt to total capitalization ratios for DTE Energy, DTE Electric, and DTE Gas were ~~0.66~~0.67 to 1, ~~0.51~~0.53 to 1, and 0.46 to 1, respectively, and were in compliance with this financial covenant.

Table of Contents

DTE Energy Company — DTE Electric Company

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

The availability under these facilities as of ~~September 30, 2021~~March 31, 2022 is shown in the following table:


		DTE Energy		DTE Electric		DTE Gas		Total			DTE Energy		DTE Electric		DTE Gas		Total
		(In millions)									(In millions)
Unsecured revolving credit facility, expiring April 2025(a)	Unsecured revolving credit facility, expiring April 2025(a)	$	1,500	$	500	$	300	$	2,300	Unsecured revolving credit facility, expiring April 2025(a)	$	1,500	$	500	$	300	$	2,300
Unsecured term loan(b)										Unsecured term loan(b)	400		—		—		400
Unsecured Canadian revolving credit facility, expiring May 2023	Unsecured Canadian revolving credit facility, expiring May 2023	87		—		—		87		Unsecured Canadian revolving credit facility, expiring May 2023	88		—		—		88
Unsecured letter of credit facility, expiring in February 2023		150		—		—		150
Unsecured letter of credit facility, expiring in July 2023		70		—		—		70
Unsecured letter of credit facility(b)		50		—		—		50
Unsecured letter of credit facility, expiring February 2023										Unsecured letter of credit facility, expiring February 2023	150		—		—		150
Unsecured letter of credit facility, expiring July 2023										Unsecured letter of credit facility, expiring July 2023	70		—		—		70
Unsecured letter of credit facility(c)										Unsecured letter of credit facility(c)	50		—		—		50
		1,857		500		300		2,657			2,258		500		300		3,058
Amounts outstanding at September 30, 2021
Amounts outstanding at March 31, 2022										Amounts outstanding at March 31, 2022
Revolver borrowings	Revolver borrowings	74		—		—		74		Revolver borrowings	83		—		—		83
Commercial paper issuances	Commercial paper issuances	—		159		128		287		Commercial paper issuances	161		—		—		161

Letters of credit	Letters of credit	268		—		—		268		Letters of credit	288		—		—		288
											532		—		—		532
		342		159		128		629
Net availability at September 30, 2021		$	1,515	$	341	$	172	$	2,028
Net availability at March 31, 2022										Net availability at March 31, 2022	$	1,726	$	500	$	300	$	2,526

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

(b)Term loan initially scheduled to expire June 2022 was terminated in April 2022.

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

~~DTE Energy Company — DTE Electric Company~~

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

In conjunction with maintaining certain exchange-traded risk management positions, DTE Energy may be required to post collateral with its clearing agents. DTE Energy has demand financing agreements with its clearing agents, including an agreement for up to ~~$100~~$50 million with an indefinite term and an agreement for up to $150 million currently contracted through 2022 and subject to renewal. The ~~$100~~$50 million agreement, as amended, also allows for up to $50 million of additional margin financing provided that DTE Energy posts a letter of credit for the incremental amount. Both agreements allow the right of setoff with posted collateral. At ~~September 30, 2021,~~March 31, 2022, the capacity under the facilities was ~~$300~~$250 million. The amounts outstanding under the agreements were $4$58 million and ~~$49~~$103 million at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, and were fully offset by the posted collateral.

Table of Contents

DTE Energy Company — DTE Electric Company

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

NOTE 12 — LEASES

Lessor

During the first quarter ~~2021,~~2022, DTE Energy completed construction of and began operating certain energy infrastructure assets for a large industrial customer under a long-term agreement, where the assets will transfer to the customer at the end of the contract term in 2040. DTE Energy has accounted for a portion of the agreement as a finance lease arrangement, recognizing an additional net investment of ~~$31~~$33 million.

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


		DTE Energy			DTE Energy
		September 30, 2021			March 31, 2022
		(In millions)			(In millions)
2021		$	6
2022	2022	22		2022	$	19
2023	2023	22		2023	26
2024	2024	22		2024	27
2025	2025	22		2025	27
2026 and Thereafter		292
2026				2026	26
2027 and Thereafter				2027 and Thereafter	335
Total minimum future lease receipts	Total minimum future lease receipts	386		Total minimum future lease receipts	460
Residual value of leased pipeline	Residual value of leased pipeline	17		Residual value of leased pipeline	17
Less unearned income	Less unearned income	202		Less unearned income	248
Net investment in finance lease	Net investment in finance lease	201		Net investment in finance lease	229
Less current portion	Less current portion	7		Less current portion	6
		$	194		$	223

Interest income recognized under finance leases was $5 million and $4 million for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020 and $13 million and $12 million for the nine months ended September 30, 2021 and 2020,~~ respectively.

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
		(In millions)										(In millions)
Fixed payments	Fixed payments	$	13	$	14	$	42	$	43	Fixed payments		$	4	$	14
Variable payments	Variable payments	55		43		90		82		Variable payments		16		17
		$	68	$	57	$	132	$	125			$	20	$	31

Operating revenues	Operating revenues	$	26	$	26	$	70	$	74	Operating revenues		$	20	$	21
Other income	Other income	42		31		62		51		Other income		—		10
		$	68	$	57	$	132	$	125			$	20	$	31

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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. The EPA and the State of Michigan have also issued emission reduction regulations relating to ozone, fine particulate, regional haze, mercury, and other air pollution. These rules have led to controls on fossil-fueled power plants to reduce SO2, NOX, mercury, and other emissions. Additional rulemakings may occur over the next few years which could require additional controls for SO2, NOX, and other hazardous air pollutants.

~~The~~In 2015, the EPA ~~proposed revised air quality standards~~finalized National Ambient Air Quality Standards ("NAAQS") for ground level ~~ozone in November 2014 and specifically requested comments on~~ozone. In October 2016, 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~~State are not attaining the ~~new standard. On April 30,~~standards. In August 2018, the EPA ~~finalized~~designated southeast Michigan as "marginal non-attainment" with the 2015 ozone NAAQS. In January 2022, after collecting several years of data, the State ~~of Michigan's recommended marginal non-attainment designation~~submitted a request to the EPA for ~~southeast Michigan. The State is required to develop and implement a plan to address~~redesignation of the southeast Michigan ozone non-attainment area byto attainment, and to accept their maintenance plan and emission inventories as a revision to the ~~end of 2021.~~Michigan SIP. On March 14, 2022 the EPA published a proposal in the Federal Register to formally redesignate the southeast Michigan ozone non-attainment areas to attainment with the 2015 ozone NAAQS. The ~~Registrants~~redesignation includes a public comment period. Until the proposed redesignation is finalized, DTE Electric cannot predict the ~~scope and associated~~ financial impact of ~~the State's plan to address the ozone non-attainment area at~~ this ~~time.~~proposal.

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

In addition to the GHG standards for existing EGUs, in December 2018, the EPA issued proposed revisions to the carbon dioxide performance standards for new, modified, or reconstructed fossil-fuel fired EGUs. The rule was finalized on January 13, 2021 and immediately challenged. An order vacating the rule was filed by the D.C. Circuit Court of Appeals on April 5, 2021. The carbon standards for new sources are not expected to have a material impact on DTE Electric, since DTE Electric has no plans to build new coal-fired generation and any potential new gas generation ~~will~~is expected to be able to comply with the standards.

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~~Potential 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.

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

Water — In response to an EPA regulation, DTE Electric was required to examine alternatives for reducing the environmental impacts of the cooling water intake structures at several of its facilities. ~~Based on the results of completed studies and expected future studies, DTE Electric may be required to install technologies to reduce the impacts of the water intake structures.~~ A final rule became effective in October ~~2014. The final rule requires~~2014, which required studies to be completed and submitted as part of the NPDES permit application process to determine the type of technology needed to reduce impacts to fish. DTE Electric has ~~initiated the process of completing~~completed the required ~~studies.~~studies and submitted reports for most of its generation plants, and a final study is in-process for Monroe power plant. Final compliance for the installation of any required technology to reduce the impacts of water intake structures will be determined by 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~~determining 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 rule making at this time.

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

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 3 former MGP sites. Cleanup of one of the MGP sites is complete, and the site is closed. The investigations have revealed contamination related to the by-products of gas manufacturing at each MGP site. In addition to the MGP sites, DTE Electric is also in the process of cleaning up other contaminated sites, including the area surrounding an ash landfill, electrical distribution substations, electric generating power plants, and underground and above ground storage tank locations. The findings of these investigations indicated that the estimated cost to remediate these sites is expected to be incurred over the next several years. At ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, DTE Electric had ~~$13~~$12 million and ~~$10~~$14 million, respectively, accrued for remediation. These costs are not discounted to their present value. Any change in assumptions, such as remediation techniques, nature and extent of contamination, and regulatory requirements, could impact the estimate of remedial action costs for the sites and affect DTE Electric’s financial position and cash flows. DTE Electric believes the likelihood of a material change to the accrued amount is remote based on current knowledge of the conditions at each site.

Coal Combustion Residuals and Effluent Limitations Guidelines — A final EPA rule for the disposal of coal combustion residuals, commonly known as coal ash, became effective in October 2015, and was revised in ~~October~~August 2016, July 2018, ~~September~~August 2020, and November 2020. The rule is based on the continued listing of coal ash as a non-hazardous waste and relies on various self-implementation design and performance standards. DTE Electric owns and operates 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 subject to certain provisions in the CCR rule. At certain facilities, the rule currently requires ongoing sampling and testing of monitoring wells, compliance with groundwater standards, and the closure of basins at the end of the useful life of the associated power plant.

On ~~September~~August 28, 2020, the CCR rule "A Holistic Approach to Closure Part A: Deadline to Initiate Closure and Enhancing Public Access to Information" ~~became effective~~was published in the Federal Register and ~~established April 11, 2021 as the new deadline for~~required all unlined impoundments (including units previously classified as "clay-lined") to initiate ~~closure.~~closure as soon as technically feasible, but no later than April 11, 2021. Additionally, the rule amends certain reporting requirements and CCR website requirements. On November 12, 2020, an additional revision to the CCR Rule "A Holistic Approach to Closure Part B: Alternate Demonstration for Unlined Surface Impoundments" was published in the Federal Register that provides a 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 has submitted applications to the EPA that support continued use of all impoundments through their active lives. The applications are currently under review and the forced closure date of April 11, 2021 is effectively delayed while the ~~EPA's review has extended beyond this date.~~EPA completes their review.

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~~statutory revision provides the basis of a CCR program that EGLE has submitted to the EPA for approval to fully regulate the CCR program in Michigan in lieu of a Federal permit program. The EPA is currently working with EGLE in reviewing the submitted State program, and DTE Electric will work with EGLE to implement the State program that may be approved in the future.

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

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

In October 2020, the EPA published in the Federal Register the final version of the ELG Reconsideration Rule which updates the 2015 ELG Rule. The Reconsideration Rule re-establishes the technology-based effluent limitations guidelines and standards applicable to FGD wastewater and bottom ash transport water. The EPA set the applicability dates for bottom ash transport water and FGD wastewater retrofits to be "as soon as possible" beginning October 13, 2021 and no later than December 31, 2025.

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

Compliance schedules for individual facilities and individual waste streams are determined through issuance of new NPDES permits by the State of Michigan. The State of Michigan has issued an NPDES permit for the Belle River power plant establishing compliance deadlines based on the 2020 Reconsideration Rule. ~~The deadline is December 31, 2025 if~~On October 11, 2021, in consideration of the deadlines above, DTE Electric ~~chooses~~submitted the appropriate documentation titled the Notice of Planned Participation (NOPP) to ~~comply by installation~~the State of ~~new treatment technologies, or December 31, 2028 if DTE Electric chooses~~Michigan that formally announced the intent to pursue compliance subcategories as ELG compliance options: the cessation of coal ~~as their ELG compliance option.~~at the Belle River power plant no later than December 31, 2028 and the VIP for FGD wastewater at Monroe power plant by December 31, 2028.

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

On October 11, 2021, in consideration of the deadlines above, DTE Electric submitted the appropriate documentation titled the Notice of Planned Participation (NOPP) to the State of Michigan that formally announced the intent to pursue cessation of coal at the Belle River power plant as their ELG compliance option. No new permits that would require ELG compliance have been issued for other facilities, consequently no compliance timelines have been established.

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

DTE Electric has estimated the impact of the CCR and ELG rules to be ~~$661~~$562 million of capital expenditures, including ~~$516~~$457 million for ~~2021~~2022 through ~~2025.~~2026.

DTE Gas

~~Air~~ — In June 2020, DTE Energy expanded its net zero goal to include its gas utility operations by committing to reduce greenhouse gas emissions to net zero by 2050 from procurement of natural gas through delivery. As part of DTE Energy's 2050 net zero commitment, DTE Gas launched its CleanVision Natural Gas Balance program in January 2021 that offers customers a way to reduce their carbon footprint using carbon offsets and renewable natural gas. The carbon offset program is focused on protecting Michigan forests that naturally absorb carbon dioxide.

Contaminated and Other Sites — DTE Gas owns or previously owned 14 former MGP sites. Investigations have revealed contamination related to the by-products of gas manufacturing at each site. Cleanup of 8 of the MGP sites is complete, and the sites are closed. DTE Gas has also completed partial closure of 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, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, DTE Gas had $24 million accrued for remediation. These costs are not discounted to their present value. Any change in assumptions, such as remediation techniques, nature and extent of contamination, and regulatory requirements, could impact the estimate of remedial action costs for the sites and affect DTE Gas' financial position and cash flows. DTE Gas anticipates the cost amortization methodology approved by the MPSC, which allows for amortization of the MGP costs over a ten-year period beginning with the year subsequent to the year the MGP costs were incurred, will prevent the associated investigation and remediation costs from having a material adverse impact on DTE Gas' results of operations.

Non-utility

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

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

~~DTE Energy Company — DTE Electric Company~~

~~Combined Notes~~Additionally, in December 2021, EGLE issued a Notice of Violation to ~~Consolidated Financial Statements (Unaudited) — (Continued)~~

EES Coke alleging excess visible emissions from pushing operations. In January 2022, EES Coke provided EGLE a response describing the corrective actions taken to prevent future recurrences. At the present time, EES Coke cannot predict the outcome or financial impact of this matter.

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.

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DTE Energy Company — DTE Electric Company

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

Michigan's Phase 1 non-attainment area includes DTE Energy facilities in southwest Detroit and areas of Wayne County. Modeling runs by 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 Michigan's SIP process, DTE Energy has worked with 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~~State attain the standard and sustain its attainment. The Michigan SIP was completed and submitted to the EPA on May 31, 2016 and supplemented on June 30, 2016. On March 19, 2021, the EPA published in the Federal Register partial approval and partial disapproval of Michigan's Detroit SO2 non-attainment area plan. The partial disapproval does not appear to impact DTE's sources and further discussions are underway with the EPA to finalize the plan. Since several non-DTE Energy sources are also part of the proposed compliance plan, DTE Energy is unable to determine the full impact of any further emissions reductions that may be required from DTE's facilities at this time.

Michigan's Phase 2 non-attainment area includes DTE Electric facilities in St. Clair County. ~~EGLE has not made~~The EPA approved a ~~final determination on SIP strategy for this area, pending the EPA's review of their~~ clean data determination ~~request.~~request submitted by EGLE. This determination suspends certain planning requirements and sanctions for the non-attainment area for as long as the area continues to attain the 2010 SO2 air quality standards, but this does not automatically redesignate the area to attainment. Until ~~agency plans are final,~~the area is officially redesignated as attainment, DTE Energy is unable to determine the impacts.

~~Synthetic Fuel Guarantees~~

DTE Energy discontinued the operations of its synthetic fuel production facilities throughout the United States as of December 31, 2007. DTE Energy provided certain guarantees and indemnities in conjunction with the sales of interests in its synfuel facilities. The guarantees cover potential commercial, environmental, oil price, and tax-related obligations that will survive until 90 days after expiration of all applicable statutes of limitations. DTE Energy estimates that its maximum potential liability under these guarantees at September 30, 2021 was approximately $400 million. Payment under these guarantees is considered remote.

REF Guarantees

DTE Energy has provided certain guarantees and indemnities in conjunction with the sales of interests in or lease of its REF facilities. The guarantees cover potential commercial, environmental, and tax-related obligations that will survive until 90 days after expiration of all applicable statutes of limitations. DTE Energy estimates that its maximum potential liability under these guarantees at ~~September 30, 2021~~March 31, 2022 was ~~$698~~$720 million. Payments under these guarantees are considered remote.

Other Guarantees

In certain limited circumstances, the Registrants enter into contractual guarantees. The Registrants may guarantee another entity’s obligation in the event it fails to perform and may provide guarantees in certain indemnification agreements. ~~Finally, the~~The Registrants may also provide indirect guarantees for the indebtedness of others. DTE Energy’s guarantees are not individually material with maximum potential payments totaling $40 million at ~~September 30, 2021.~~March 31, 2022. Payments under these guarantees are considered remote.

The Registrants are periodically required to obtain performance surety bonds in support of obligations to various governmental entities and other companies in connection with its operations. As of ~~September 30, 2021,~~March 31, 2022, DTE Energy had ~~$171~~$135 million of performance bonds outstanding, including ~~$120~~$119 million for DTE Electric. In the event that such bonds are called for nonperformance, the Registrants would be obligated to reimburse the issuer of the performance bond. The Registrants are released from the performance bonds as the contractual performance is completed and does not believe that a material amount of any currently outstanding performance bonds will be called.

~~DTE Energy Company — DTE Electric Company~~

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

Labor Contracts

There are several bargaining units for DTE Energy subsidiaries' approximate ~~5,100~~5,200 represented employees, including DTE Electric's approximately 2,700 represented employees. This represents 50% and ~~57%~~56% of DTE Energy's and DTE Electric's total employees, respectively. Of these represented employees, approximately ~~16%~~14% and 21% have contracts expiring within one year for DTE Energy and DTE Electric, respectively.

Purchase Commitments

Utility capital expenditures and expenditures for non-utility businesses ~~and contributions to equity method investees~~ will be approximately ~~$3.9~~$3.7 billion and ~~$3.0~~$2.7 billion in ~~2021~~2022 for DTE Energy and DTE Electric, respectively. The Registrants have made certain commitments in connection with the estimated ~~2021~~2022 annual capital ~~expenditures and contributions to equity method investees.~~expenditures.

~~COVID-19 Pandemic~~

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DTE Energy Company — DTE Electric Company

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

Ludington Plant Contract Dispute

DTE Electric and Consumers Energy Company ("Consumers"), joint owners of the Ludington Hydroelectric Pumped Storage plant ("Ludington"), are parties to a 2010 engineering, procurement, and construction contract with Toshiba America Energy Systems ("TAES"), under which TAES is charged with performing a major overhaul and upgrade of Ludington. TAES' performance has been ~~actively monitoring the impact of the COVID-19 pandemic on supply chains, markets, counterparties,~~unsatisfactory and ~~customers, and any related impacts on operating costs, customer demand, and recoverability of assets that could materially impact the Registrants' financial results.~~

~~In 2021, the COVID-19 pandemic has continued to impact~~resulted in overhaul project delays. DTE Electric ~~sales volumes. As businesses~~and Consumers have ~~maintained certain remote operations, related sales volumes have been lower for commercial~~demanded that TAES provide a comprehensive plan to resolve quality control concerns, including adherence to its warranty commitments and ~~industrial customers and higher for residential customers as compared to historical volumes before the pandemic. This impact contributed to a net reduction in~~other contractual obligations. DTE Electric ~~sales, but has been offset by favorable rate mix.~~

~~In 2020, COVID-19 also resulted~~and Consumers have taken extensive efforts to resolve these issues with TAES, including a formal demand to TAES' parent, Toshiba Corporation, under a parent guaranty it provided in ~~incremental costs at our utilities related to personal protective equipment and other health and safety-related matters, as well as lower volumes for certain companies within~~ the ~~DTE Vantage segment. For the three and nine months ended September 30, 2021, however, there~~contract. TAES has not ~~been any significant impact~~provided a comprehensive plan or otherwise met its performance obligations. In order to enforce the ~~Registrants' Consolidated Financial Statements.~~

~~In consideration~~contract, DTE Electric and Consumers filed a complaint against TAES and Toshiba Corporation in the U.S. District Court for the Eastern District of the above factors and all other current and expected impacts to the Registrants' performance and cash flows resulting from the COVID-19 pandemic, there have been no material adjustments or reserves deemed necessary as of September 30, 2021. The RegistrantsMichigan in April 2022. DTE Electric cannot predict the ~~future impacts~~financial impact or outcome of ~~the COVID-19 pandemic on the Consolidated Financial Statements, as developments involving COVID-19 and its related effects on economic and operating conditions remain highly uncertain.~~this matter.

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 6 and 9 to the Consolidated Financial Statements, "Regulatory Matters" and "Financial and Other Derivative Instruments," respectively.

~~DTE Energy Company — DTE Electric Company~~

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

NOTE 14 — 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
		Three Months Ended September 30,									Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021		2022		2021
		(In millions)									(In millions)
Service cost	Service cost	$	27	$	25	$	8	$	7	Service cost	$	24	$	27	$	7	$	8
Interest cost	Interest cost	39		46		12		14		Interest cost	41		39		12		11
Expected return on plan assets	Expected return on plan assets	(84)		(84)		(33)		(32)		Expected return on plan assets	(87)		(84)		(32)		(32)
Amortization of:	Amortization of:									Amortization of:
Net actuarial loss	Net actuarial loss	49		43		3		4		Net actuarial loss	29		49		1		3
Prior service credit	Prior service credit	—		—		(5)		(5)		Prior service credit	—		—		(5)		(5)
Settlements		—		2		—		—

Net periodic benefit cost (credit)	Net periodic benefit cost (credit)	$	31	$	32	$	(15)	$	(12)	Net periodic benefit cost (credit)	$	7	$	31	$	(17)	$	(15)

Pension Benefits Other Postretirement Benefits
Nine Months Ended September 30,
2021 2020 2021 2020
(In millions)
Service cost $ 81 $ 74 $ 23 $ 20
Interest cost 118 139 35 42
Expected return on plan assets (254) (250) (97) (96)
Amortization of:
Net actuarial loss 147 129 10 12
Prior service credit — — (15) (15)
Settlements — 2 — —
Net periodic benefit cost (credit) $ 92 $ 94 $ (44) $ (37)

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DTE Energy Company — DTE Electric Company

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

DTE Electric participates in various plans that provide pension and other postretirement benefits for DTE Energy and its affiliates. The plans are primarily sponsored by DTE Energy's subsidiary, DTE Energy Corporate Services, LLC. DTE Electric accounts for its participation in DTE Energy's qualified and non-qualified 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 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 non-qualified pension benefit costs. DTE Electric's allocated portion of pension benefit costs included in capital expenditures and operating and maintenance expense was ~~$26~~$9 million and ~~$28~~$26 million for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $78 million and $79 million for the nine months ended September 30, 2021 and 2020,~~ respectively. These amounts include recognized contractual termination benefit charges, curtailment gains, and settlement charges.

~~DTE Energy Company — DTE Electric Company~~

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

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
		(In millions)										(In millions)
Service cost	Service cost	$	6	$	5	$	17	$	15	Service cost		$	5	$	6
Interest cost	Interest cost	8		11		25		32		Interest cost		9		8
Expected return on plan assets	Expected return on plan assets	(22)		(21)		(65)		(65)		Expected return on plan assets		(21)		(22)
Amortization of:	Amortization of:									Amortization of:
Net actuarial loss	Net actuarial loss	3		2		9		8		Net actuarial loss		1		3
Prior service credit	Prior service credit	(3)		(3)		(10)		(10)		Prior service credit		(3)		(3)
Net periodic benefit credit	Net periodic benefit credit	$	(8)	$	(6)	$	(24)	$	(20)	Net periodic benefit credit		$	(9)	$	(8)

Pension and Other Postretirement Contributions

AtNo contributions are currently expected for DTE Energy's qualified pension plans or postretirement benefit plans in 2022. Plans may be updated at the discretion of management and depending ~~upon~~on economic and financial market ~~conditions,~~conditions. DTE Energy anticipates ~~making~~a transfer of up to $7$50 million ~~in contributions to the~~of qualified pension ~~plans in 2021. No amounts relate~~plan funds from DTE Gas to DTE Electric ~~and no contributions are anticipated for DTE Energy's postretirement benefit plans in 2021.~~during 2022.

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DTE Energy Company — DTE Electric Company

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

NOTE 15 — 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 2.3 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.

DTE Vantage~~, formerly the Power and Industrial Projects segment,~~ is comprised primarily of renewable energy projects that sell electricity and pipeline-quality gas and projects that deliver energy and utility-type products and services to industrial, commercial, and institutional ~~customers, produce~~customers. DTE Vantage formerly included projects that produced reduced emissions ~~fuel, and sell electricity and pipeline-quality gas from renewable energy projects.~~fuel; however, these projects were closed as planned in 2022 upon REF facilities exhausting their eligibility for generating production tax credits.

Energy Trading consists of energy marketing and trading operations.

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

On July 1, 2021, DTE Energy completed the separation of DT Midstream, ~~on July 1, 2021,~~ which was comprised of the former Gas Storage and Pipelines segment and also certain ~~DTE Energy~~ holding company activity within the Corporate and Other segment. Amounts relating to DT Midstream have been classified as discontinued operations, and Gas Storage and Pipelines is no longer a reportable segment of DTE Energy. Refer to Note 4 to the Consolidated Financial Statements, ~~“Dispositions and Impairments,~~“Discontinued Operations,” for additional information.

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 power sales, natural gas sales, and renewable natural gas sales in the segments below. For the prior period, inter-segment billing also included the sale of reduced emissions fuel at DTE Vantage.


	Three Months Ended March 31,
		2022		2021
		(In millions)
Electric		$	16	$	16
Gas		3		4
DTE Vantage		25		162
Energy Trading		17		13
Corporate and Other		—		1
		$	61	$	196

All inter-segment transactions and balances are eliminated in consolidation for DTE Energy. Centrally incurred costs such as labor and overheads are assigned directly to DTE Energy's business segments or allocated based on various cost drivers, depending on the nature of service provided.

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 also 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.

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DTE Energy Company — DTE Electric Company

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

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, natural gas sales, and renewable natural gas sales in the following segments:

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(In millions)
Electric $ 17 $ 16 $ 48 $ 46
Gas 3 4 10 12
DTE Vantage 125 134 463 308
Energy Trading 9 9 35 23
Corporate and Other 1 1 2 2
$ 155 $ 164 $ 558 $ 391

Financial data of DTE Energy's business segments follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
		(In millions)										(In millions)
Operating Revenues — Utility operations	Operating Revenues — Utility operations									Operating Revenues — Utility operations
Electric	Electric	$	1,700	$	1,690	$	4,468	$	4,211	Electric		$	1,486	$	1,360
Gas	Gas	193		173		1,070		964		Gas		766		612
Operating Revenues — Non-utility operations	Operating Revenues — Non-utility operations									Operating Revenues — Non-utility operations
Electric	Electric	2		3		9		10		Electric		4		4
DTE Vantage	DTE Vantage	372		324		1,132		850		DTE Vantage		179		366
Energy Trading	Energy Trading	1,602		1,061		4,208		2,714		Energy Trading		2,203		1,439
Corporate and Other	Corporate and Other	1		1		2		2		Corporate and Other		—		1
Reconciliation and Eliminations(a)	Reconciliation and Eliminations(a)	(155)		(172)		(572)		(408)		Reconciliation and Eliminations(a)		(61)		(201)
Total	Total	$	3,715	$	3,080	$	10,317	$	8,343	Total		$	4,577	$	3,581

(a)Includes ~~$14 million for the nine months ended September 30, 2021 and $8 million and $17~~$5 million for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021 for eliminations related to DTE Energy's ~~prior~~former Gas Storage and Pipelines segment that remain in continuing operations. Eliminations for these revenues are offset by related cost eliminations and have no impact on DTE Energy net income.


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
		(In millions)										(In millions)
Net Income (Loss) Attributable to DTE Energy by Segment:	Net Income (Loss) Attributable to DTE Energy by Segment:									Net Income (Loss) Attributable to DTE Energy by Segment:
Electric	Electric	$	342	$	398	$	788	$	675	Electric		$	201	$	208
Gas	Gas	(30)		(20)		146		102		Gas		196		169
DTE Vantage	DTE Vantage	73		47		115		102		DTE Vantage		14		28
Energy Trading	Energy Trading	(52)		(28)		(173)		5		Energy Trading		(9)		(55)
Corporate and Other	Corporate and Other	(275)		(25)		(381)		(40)		Corporate and Other		(8)		(30)
Income from Continuing Operations Attributable to DTE Energy Company										Income from Continuing Operations Attributable to DTE Energy Company		394		320
Discontinued Operations	Discontinued Operations	(33)		104		106		249		Discontinued Operations		—		77
Net Income Attributable to DTE Energy Company	Net Income Attributable to DTE Energy Company	$	25	$	476	$	601	$	1,093	Net Income Attributable to DTE Energy Company		$	394	$	397

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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 two energy-related non-utility segments with operations throughout the United States.

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

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

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(In millions, except per share amounts)
Net Income attributable to DTE Energy — continuing operations $ 58 $ 372 $ 495 $ 844
Diluted Earnings per Common Share — continuing operations $ 0.30 $ 1.92 $ 2.55 $ 4.37


	Three Months Ended March 31,
		2022		2021
		(In millions, except per share amounts)
Net Income Attributable to DTE Energy Company — Continuing operations		$	394	$	320
Diluted Earnings per Common Share — Continuing operations		$	2.03	$	1.65

The ~~decrease~~increase in Net Income ~~for both periods was primarily due~~Attributable to ~~lower earnings in the Corporate and Other segment, driven primarily by the loss on debt extinguishment incurred in the third quarter 2021. The decrease in Net Income~~DTE Energy Company for the three months ended ~~September 30, 2021~~March 31, 2022 was ~~also~~primarily due to higher earnings in the Gas, Energy Trading, and Corporate and Other segments, partially offset by lower earnings in the DTE ~~Electric and Energy Trading segments, partially offset by higher earnings in the DTE~~ Vantage segment. For the nine months ended September 30, 2021, the decrease in Net Income was also due to lower earnings in the Energy Trading segment, partially offset by higher earnings in the Electric and Gas segments.

STRATEGY

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

DTE Energy's utilities are investing capital to ~~improve customer reliability~~support a modern, reliable grid and cleaner, affordable energy through investments in base infrastructure and new ~~generation,~~generation. An increasing amount of high wind and ~~to comply~~other extreme weather events driven by climate change, coupled with ~~environmental requirements. DTE Energy expects that planned significant capital investments~~increasing electric vehicle adoption, will ~~result in earnings growth. DTE Energy is focused on executing plans to achieve operational excellence and customer satisfaction with~~drive a ~~focus on customer affordability. DTE Energy operates in a constructive regulatory environment and has solid relationships with its regulators.~~continued need for substantial grid investment over the long-term.

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

For gas utility operations, DTE Energy aims to cut carbon emissions across the entire value chain.To achieve net zero emissions by 2050 for both internal operations and from suppliers, DTE Energy is working to source gas with lower methane intensity, reduce emissions through its gas main renewal and pipeline integrity programs, and if necessary, use carbon offsets to address any remaining emissions. DTE Energy is also committed to helping DTE Gas customers reduce their emissions by 35% by 2040 by increasing energy efficiency, pursuing advanced technologies such as hydrogen, and through the CleanVision Natural Gas Balance program which provides customers the option to use carbon offsets and renewable natural gas.

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

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

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

CAPITAL INVESTMENTS

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

DTE Electric's capital investments over the ~~2021-2025~~2022-2026 period are estimated at ~~$14~~$15 billion, comprised of ~~$5 billion for capital replacements and other projects, $7~~$8 billion for distribution infrastructure, ~~and $2~~$4 billion for ~~renewable generation.~~base infrastructure, and $3 billion for cleaner generation including renewables. DTE Electric has retired six coal-fired generation units at the Trenton Channel, River Rouge, and St. Clair facilities and has announced plans to retire its remaining eleven coal-fired generating units, including five units at Trenton Channel and St. Clair expected to be retired in the second quarter 2022. The two units at the Belle River facility will cease the use of coal by 2028 and ~~will be~~are being evaluated for conversion to cleaner energy resources. The ~~final~~ four units at the Monroe facility are expected to be retired by 2040. Generation from the retired facilities will be replaced or offset with a combination of renewables, energy waste reduction, demand response, and natural gas fueled ~~generation.~~generation, including the Blue Water Energy Center which will commence operations in the second quarter 2022.

DTE Gas' capital investments over the ~~2021-2025~~2022-2026 period are estimated at $3$3.1 billion, comprised of ~~$1.4~~$1.5 billion for base infrastructure and $1.6 billion for gas main renewal, meter move out, and pipeline integrity programs.

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

DTE Energy's non-utility businesses' capital investments are primarily for expansion, growth, and ongoing maintenance in the DTE Vantage segment, including approximately $1 billion to ~~$1.4~~$1.5 billion from ~~2021-2025~~2022-2026 for renewable energy projects and industrial energy ~~services and renewable energy projects.~~services.

ENVIRONMENTAL MATTERS

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

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

For further discussion of environmental matters, see Note 13 to the Consolidated Financial Statements, "Commitments and Contingencies."

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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;

•reducing carbon emissions at the electric and gas utilities;

•rate competitiveness and affordability;

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

•strategic investments in growth projects at DTE Vantage;

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

•cost structure optimization across all business segments; and

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

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

~~COVID-19 Pandemic~~

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

As noted in Note 13 to the Consolidated Financial Statements, "Commitments and Contingencies," the pandemic contributed to a shift in electric sales volumes from commercial and industrial customers to residential customers. DTE Energy expects this shift to continue in the near term as businesses maintain more remote operations. Other impacts from COVID-19 have related primarily to health and safety-related costs at the utilities and volumes at certain non-utility businesses, but these impacts have not been significant in 2021.

DTE Energy will continue to monitor these impacts as well as any regulatory and legislative activities related to COVID-19. The Registrants cannot predict the ultimate impact of these factors to our Consolidated Financial Statements as future developments involving COVID-19 and related impacts on economic and operating conditions are highly uncertain.

RESULTS OF OPERATIONS

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

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

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

The Non-utility Margin relates to the DTE Vantage and Energy Trading segments. For the DTE Vantage segment, Non-utility Margin primarily includes Operating Revenues net of Fuel, purchased power, and gas expenses. Operating Revenues include sales of ~~refined coal to third parties and the affiliated Electric utility,~~ metallurgical coke and related by-products, petroleum coke, renewable natural gas and related credits, and electricity, as well as rental income and revenues from utility-type consulting, management, and operational services. For the prior period, Operating revenues also include sales of refined coal to third parties and the affiliated Electric utility. 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.

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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,
		2021		2020		2021		2020				2022		2021
		(In millions)										(In millions)
Net Income (Loss) Attributable to DTE Energy by Segment	Net Income (Loss) Attributable to DTE Energy by Segment									Net Income (Loss) Attributable to DTE Energy by Segment
Electric	Electric	$	342	$	398	$	788	$	675	Electric		$	201	$	208
Gas	Gas	(30)		(20)		146		102		Gas		196		169
DTE Vantage	DTE Vantage	73		47		115		102		DTE Vantage		14		28
Energy Trading	Energy Trading	(52)		(28)		(173)		5		Energy Trading		(9)		(55)
Corporate and Other	Corporate and Other	(275)		(25)		(381)		(40)		Corporate and Other		(8)		(30)
Income from Continuing Operations Attributable to DTE Energy Company										Income from Continuing Operations Attributable to DTE Energy Company		394		320
Discontinued Operations	Discontinued Operations	(33)		104		106		249		Discontinued Operations		—		77
Net Income Attributable to DTE Energy Company	Net Income Attributable to DTE Energy Company	$	25	$	476	$	601	$	1,093	Net Income Attributable to DTE Energy Company		$	394	$	397

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 and outlook are discussed below:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
		(In millions)										(In millions)
Operating Revenues — Utility operations	Operating Revenues — Utility operations	$	1,700	$	1,690	$	4,468	$	4,211	Operating Revenues — Utility operations		$	1,486	$	1,360
Fuel and purchased power — utility	Fuel and purchased power — utility	462		449		1,178		1,083		Fuel and purchased power — utility		437		360
Utility Margin	Utility Margin	1,238		1,241		3,290		3,128		Utility Margin		1,049		1,000
Operating Revenues — Non-utility operations	Operating Revenues — Non-utility operations	2		3		9		10		Operating Revenues — Non-utility operations		4		4
Operation and maintenance	Operation and maintenance	408		358		1,116		1,063		Operation and maintenance		388		354
Depreciation and amortization	Depreciation and amortization	281		262		820		779		Depreciation and amortization		297		264
Taxes other than income	Taxes other than income	82		79		245		220		Taxes other than income		88		82
Asset (gains) losses and impairments, net		—		—		—		41

Operating Income	Operating Income	469		545		1,118		1,035		Operating Income		280		304
Other (Income) and Deductions	Other (Income) and Deductions	82		89		238		264		Other (Income) and Deductions		76		76
Income Tax Expense	Income Tax Expense	45		58		92		96		Income Tax Expense		3		20
Net Income Attributable to DTE Energy Company	Net Income Attributable to DTE Energy Company	$	342	$	398	$	788	$	675	Net Income Attributable to DTE Energy Company		$	201	$	208

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 $3~~increased $49 million in the three months ended ~~September 30, 2021 and increased $162 million in the nine months ended September 30, 2021.~~March 31, 2022. Revenues associated with certain mechanisms and surcharges are offset by related expenses elsewhere in the Registrants' Consolidated Statements of Operations.

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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 $ — $ 71
Regulatory mechanism — RPS 22 43
Regulatory mechanism — EWR 10 34
Base sales / rate mix (3) 25
Weather (40) (19)
Other regulatory mechanisms and other 8 8
Increase (decrease) in Utility Margin $ (3) $ 162


	Three Months
	(In millions)
Weather	$	21
Regulatory mechanism — RPS	19
COVID-19 voluntary refund amortization	8
Base sales / rate mix	(4)



Other regulatory mechanisms and other	5
Increase in Utility Margin	$	49


		Three Months Ended September 30,		Nine Months Ended September 30,			Three Months Ended March 31,
		2021	2020	2021	2020			2022	2021
		(In thousands of MWh)						(In thousands of MWh)
DTE Electric Sales	DTE Electric Sales					DTE Electric Sales
Residential	Residential	4,998	5,154	12,705	12,646	Residential		3,839	3,759
Commercial	Commercial	4,625	4,507	12,532	11,936	Commercial		3,950	3,872
Industrial	Industrial	2,214	2,321	6,431	6,205��	Industrial		2,054	2,202
Other	Other	49	49	155	157	Other		57	59
		11,886	12,031	31,823	30,944			9,900	9,892
Interconnection sales(a)	Interconnection sales(a)	1,008	295	2,812	823	Interconnection sales(a)		594	1,203
Total DTE Electric Sales	Total DTE Electric Sales	12,894	12,326	34,635	31,767	Total DTE Electric Sales		10,494	11,095

DTE Electric Deliveries	DTE Electric Deliveries					DTE Electric Deliveries
Retail and wholesale	Retail and wholesale	11,886	12,031	31,823	30,944	Retail and wholesale		9,900	9,892
Electric retail access, including self-generators(b)	Electric retail access, including self-generators(b)	1,232	1,030	3,260	2,865	Electric retail access, including self-generators(b)		1,090	937
Total DTE Electric Sales and Deliveries	Total DTE Electric Sales and Deliveries	13,118	13,061	35,083	33,809	Total DTE Electric Sales and Deliveries		10,990	10,829

(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 increased ~~$50 million and $53~~$34 million in the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022. The increase ~~in the third quarter~~ was primarily due to higher plant generation expense of $27 million and higher distribution operations expense of ~~$41~~$14 million, ~~(primarily due to higher storm costs), higher~~partially offset by lower legal and environmental expense of ~~$10~~$4 million ~~higher EWR expense of $9 million,~~ and ~~higher corporate support costs of $6 million, partially offset by~~ lower uncollectible expense of $6 million, 2020 COVID-19 related expenses of $5 million, and lower benefits expense of $5 million. The increase in the nine-month period was primarily due to higher distribution operations expense of $36 million (primarily due to higher storm costs), higher EWR expense of $30 million, higher benefits expense of $19 million, higher legal and environmental expense of $13 million, and higher corporate support costs of $11 million, partially offset by 2020 COVID-19 related expenses of $34 million, lower uncollectible expense of $16 million, and lower plant generation expense of $10$3 million.

Depreciation and amortization expense increased ~~$19 million and $41~~$33 million in the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022. The increase ~~in both periods~~ was primarily due to a $30 million increase resulting from a higher depreciable base.

Taxes other than income increased ~~$3 million and $25~~$6 million in the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022. The increase ~~in the third quarter~~ was primarily due to higher property taxes of $3$4 million. ~~The increase in the nine-month period was primarily due to higher property taxes of $24 million, which resulted primarily from a favorable property tax settlement in 2020.~~

~~Asset (gains) losses and impairments, net~~ decreased $41 million in the nine months ended September 30, 2021. The decrease was primarily due to a 2020 write-off of capital expenditures related to incentive compensation, which were disallowed in the May 8, 2020 rate order from the MPSC.

~~Other (Income) and Deductions~~ ~~decreased$7 millionand~~$26 million in the three and nine months ended September 30, 2021, respectively. The decrease in the third quarter was primarily due to $10 million of contributions to not-for-profit organizations in 2020, partially offset by a change in rabbi trust investment earnings (loss of $1 million in 2021 compared to a gain of $2 million in 2020). The decrease in the nine-month period was primarily due to $10 million of contributions to not-for-profit organizations in 2020, a change in rabbi trust investment earnings (gain of $3 million in 2021 compared to a loss of $7 million in 2020), and lower non-operating retirement benefits expense of $5 million.

Income Tax Expense decreased ~~$13 million and $4~~$17 million in the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022. The decrease ~~in the third quarter~~ was primarily due to ~~lower earnings and higher production tax credits.The decrease in the nine-month period was primarily due to higher production tax credits and~~ higher amortization of the TCJA regulatory liability, ~~partially offset~~driven by ~~higher~~accelerated amortization approved in DTE Electric's 2021 accounting application to the MPSC, and lower earnings.

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

~~On March 26, 2021,~~

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DTE Electric filed a rate case with the MPSC on January 21, 2022 requesting an ~~application requesting~~increase in base rates of $388 million based on a ~~financing order approving the securitization of $184 million of qualified costs~~projected twelve-month period ending October 31, 2023. The requested increase in base rates is primarily due to an increase in net plant resulting from generation and distribution investments, as well as related increases to ~~the net book value of the River Rouge generation plant~~depreciation and ~~tree trimming surge program costs.~~property tax expenses. The rate filing ~~requested collection of these qualifying costs~~also requests an increase in return on equity from ~~DTE Electric's customers.~~9.9% to 10.25% and includes projected changes in sales. A final MPSC order was issued on June 23, 2021 authorizing DTE Electric to proceed with the issuance of securitization bonds for qualified costs of up to $236 million, increased for the inclusion of deferred taxes. The order authorized customer charges for the timely recovery of the amount securitized and other ongoing qualified costs. Securitizationin this case is expected in ~~the first quarter~~November 2022.

GAS

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
		(In millions)										(In millions)
Operating Revenues — Utility operations	Operating Revenues — Utility operations	$	193	$	173	$	1,070	$	964	Operating Revenues — Utility operations		$	766	$	612
Cost of gas — utility	Cost of gas — utility	23		12		263		232		Cost of gas — utility		280		195
Utility Margin	Utility Margin	170		161		807		732		Utility Margin		486		417
Operation and maintenance	Operation and maintenance	123		119		380		360		Operation and maintenance		135		130
Depreciation and amortization	Depreciation and amortization	44		37		130		112		Depreciation and amortization		47		43
Taxes other than income	Taxes other than income	20		18		71		62		Taxes other than income		28		26
Asset (gains) losses and impairments, net		1		—		1		14
Operating Income (Loss)		(18)		(13)		225		184

Operating Income										Operating Income		276		218
Other (Income) and Deductions	Other (Income) and Deductions	18		18		54		56		Other (Income) and Deductions		20		19
Income Tax Expense (Benefit)		(6)		(11)		25		26
Net Income (Loss) Attributable to DTE Energy Company		$	(30)	$	(20)	$	146	$	102
Income Tax Expense										Income Tax Expense		60		30
Net Income Attributable to DTE Energy Company										Net Income Attributable to DTE Energy Company		$	196	$	169

Utility Margin increased ~~$9 million and $75~~$69 million in the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022. 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 $ 11 $ 74
Home protection program 2 5
Regulatory mechanism — EWR (1) 5
Weather (2) 3
Infrastructure recovery mechanism (5) (18)
Other regulatory mechanisms and other 4 6
Increase in Utility Margin $ 9 $ 75


	Three Months
	(In millions)
Implementation of new rates	$	30
Weather	28

Home protection program	2
Midstream storage and transportation revenues	2


Other	7
Increase in Utility Margin	$	69


		Three Months Ended September 30,		Nine Months Ended September 30,			Three Months Ended March 31,
		2021	2020	2021	2020			2022	2021
		(In Bcf)						(In Bcf)
Gas Markets	Gas Markets					Gas Markets
Gas sales	Gas sales	7	7	88	85	Gas sales		71	62
End-user transportation	End-user transportation	34	40	123	135	End-user transportation		55	53
		41	47	211	220			126	115
Intermediate transportation	Intermediate transportation	102	110	370	349	Intermediate transportation		150	151
Total Gas sales	Total Gas sales	143	157	581	569	Total Gas sales		276	266

Operation and maintenance expense increased ~~$4 million and $20~~$5 million in the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022. The increase ~~in the third quarter~~ was primarily due to higher gas operations expense of ~~$14~~$4 million and higher corporate support costs of $3 million, partially offset by lower uncollectible expense of ~~$4 million and lower benefits expense~~$1 million.

Table of $4 million. The increase in the nine-month period was primarily due to higher gas operations expense of $30 million and higher EWR expense of $4 million, partially offset by lower uncollectible expense of $11 million.Contents

Depreciation and amortization expense increased ~~$7 million and $18~~$4 million in the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022. The increase ~~in both periods~~ was primarily due to a higher depreciable ~~base and a change in depreciation rates effective October 2020.~~base.

~~Taxes other than income~~ expense increased $2 million and $9 million in the three and nine months ended September 30, 2021, respectively. The increase in the third quarter was primarily due to higher property taxes. The increase in the nine-month period was primarily due to higher property taxes of $5 million and employee retention credits of $3 million recognized in 2020 pursuant to the CARES Act.

~~Asset (gains) losses and impairments, net~~Income Tax Expense increased $1$30 million in the three months ended ~~September 30, 2021 and decreased $13 million in the nine months ended September 30, 2021.~~March 31, 2022. The ~~decrease in the nine-month period was primarily due to a 2020 write-off of capital expenditures related to incentive compensation, which were disallowed in the July 17, 2020 rate case settlement.~~

~~Income Tax Expense (Benefit)~~ ~~decreased $5 million and $1 million in the three and nine months ended September 30, 2021, respectively. The decrease in the third quarter~~increase was primarily due to higher earnings and lower amortization of the TCJA regulatory liability. ~~The decrease in the nine-month period was primarily due to higher amortization of the TCJA regulatory liability, partially offset by higher earnings.~~

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

DTE Gas filed a rate case with the MPSC on February 12, 2021 requesting an increase in base rates of $195 million based on a projected twelve-month period ending December 31, 2022. 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 requested an increase in return on equity from 9.9% to 10.25% and includes projected changes in sales and working capital. A final MPSC order in this case is expected by December 2021.

DTE VANTAGE

The DTE Vantage segment is comprised primarily of renewable energy projects that sell electricity and pipeline-quality gas and projects that deliver energy and utility-type products and services to industrial, commercial, and institutional ~~customers, produce~~customers. DTE Vantage formerly included projects that produced reduced emissions ~~fuel, and sell electricity and pipeline-quality gas from renewable energy projects.~~fuel; however, these projects were closed as planned in 2022 upon REF facilities exhausting their eligibility for generating production tax credits. DTE Vantage results and outlook are discussed below:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
		(In millions)										(In millions)
Operating Revenues — Non-utility operations	Operating Revenues — Non-utility operations	$	372	$	324	$	1,132	$	850	Operating Revenues — Non-utility operations		$	179	$	366
Fuel, purchased power, and gas — non-utility	Fuel, purchased power, and gas — non-utility	267		246		851		624		Fuel, purchased power, and gas — non-utility		80		285
Non-utility Margin	Non-utility Margin	105		78		281		226		Non-utility Margin		99		81
Operation and maintenance	Operation and maintenance	77		71		226		206		Operation and maintenance		65		70
Depreciation and amortization	Depreciation and amortization	18		18		55		53		Depreciation and amortization		13		19
Taxes other than income	Taxes other than income	2		2		8		8		Taxes other than income		4		4
Asset (gains) losses and impairments, net		1		(2)		28		(12)

Operating Income (Loss)	Operating Income (Loss)	7		(11)		(36)		(29)		Operating Income (Loss)		17		(12)
Other (Income) and Deductions	Other (Income) and Deductions	(61)		(47)		(108)		(100)		Other (Income) and Deductions		1		(21)
Income Taxes	Income Taxes									Income Taxes
Expense	Expense	18		10		22		21		Expense		4		4
Production Tax Credits	Production Tax Credits	(20)		(19)		(56)		(47)		Production Tax Credits		(2)		(20)
		(2)		(9)		(34)		(26)				2		(16)
Net Income	Net Income	70		45		106		97		Net Income		14		25
Less: Net Loss Attributable to Noncontrolling Interests	Less: Net Loss Attributable to Noncontrolling Interests	(3)		(2)		(9)		(5)		Less: Net Loss Attributable to Noncontrolling Interests		—		(3)
Net Income Attributable to DTE Energy Company	Net Income Attributable to DTE Energy Company	$	73	$	47	$	115	$	102	Net Income Attributable to DTE Energy Company		$	14	$	28

Operating Revenues — Non-utility operations ~~increased $48 million and $282~~decreased $187 million in the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022. The ~~increase in both periods~~decrease was due to the following:

Three Months Nine Months
(In millions)
Higher production offset by the sale of membership interests in the REF business $ 10 $ 171
Higher demand offset by lower prices in the Steel business 40 81
New projects in the Renewables business 14 41
Higher volumes in the On-site business 2 12
Closed projects in the Renewables business (1) (6)
Site closure in the REF business (17) (17)
$ 48 $ 282


	Three Months
	(In millions)
Closure of the REF business	$	(213)
Closure in the Steel business	(6)
Higher prices in the On-site business	3
New contract in the Renewables business	5
Higher production in the Renewables business	11
Higher demand and prices in the Steel business	11
Other	2
	$	(187)

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Non-utility Margin increased ~~$27 million and $55~~$18 million in the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022. The following table details changes in Non-utility Margin relative to the comparable prior ~~periods:~~period:

Three Months Nine Months
(In millions)
New projects in the Renewables business $ 15 $ 41
Higher demand offset by lower prices in the Steel business 13 17
Closed projects in the Renewables business (1) (5)
Other — 2
$ 27 $ 55


	Three Months
	(In millions)
Higher production in the Renewables business	$	11
New contract in the Renewables business	4
Higher demand and prices in the Steel business	3
Closure of the REF business	3
Closure in the Steel business	(2)
Other	(1)
	$	18

Operation and maintenance expense ~~increased $6 millionand$20~~decreased $5 million in the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022. The ~~increase in both periods~~decrease was primarily due to ~~higher production and new projects.~~closure of the REF business.

~~Asset (gains) losses~~Depreciation and ~~impairments, net~~amortization ~~changed by $3 million and $40~~expense decreased $6 million in the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022. The ~~change in the third quarter~~decrease was primarily due to the divestiture of a project in the Renewables business in 2020. The change in the nine-month period was primarily due to an asset impairment of $27 million recorded in the Steel business for the anticipated closure of ~~a pulverized coal facility. The change in~~ the nine-month period was also due to $12 million of activity in 2020, including the write-off of environmental liabilities upon completing site remediation in the Steel business, the sale of assets in the On-site business, and the divestiture of a project in the RenewablesREF business.

Refer to Note 4 to the Consolidated Financial Statements, “Dispositions and Impairments,” for additional information regarding the $27 million asset impairment and consideration of any additional impacts to future periods.

Other (Income) and Deductions ~~increased $14 million and $8~~changed $22 million in the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022. The ~~increase in the third quarter~~change was primarily due to ~~higher production~~$24 million lower income associated with the closure of the REF business and $4 million of lower equity investment earnings due to a planned outage in the ~~REF business. The increase in the nine-month period was primarily due to higher production in the REF~~Renewables business, partially offset by ~~$11~~$4 million of ~~profit recognized from the sale of membership interests in the REF business recorded in 2020.~~lower interest expense.

Income Taxes — Production Tax Credits ~~increased $1 million and $9~~decreased $18 million in the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022. The ~~increase in the third quarter~~decrease was primarily due to ~~higher production in the REF business. The increase in the nine-month period was primarily due to higher production partially offset by the sale~~closure of ~~membership interests in~~ the REF business.

Net Loss Attributable to Noncontrolling Interests ~~increased $1 million and $4~~decreased $3 million in the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022. The ~~increase in both periods~~decrease was primarily due to ~~higher production in~~closure of the REF business.

Outlook — DTE Vantage will continue to leverage its extensive energy-related operating experience and project management capability to develop additional energy and renewable natural gas projects to serve energy intensive industrial ~~customers in addition~~customers. Compared to ~~optimizing the REF facilities until the phase-out at the end of 2021. Beginning in 2022,~~prior years, DTE Vantage expects ~~decreases~~that lower earnings will continue in ~~Other Income and Production Tax Credits that will cause a corresponding reduction~~2022 due to ~~Net Income as~~the closure of the REF ~~facilities will cease operations.~~business. Over the long-term, DTE Vantage expects that growth in renewable energy and industrial energy services ~~projects and renewable energy~~ projects will offset the decreases to Net Income caused by the REF ~~phase-out.~~closures. DTE Vantage is also exploring decarbonization opportunities relating to carbon capture and storage projects.

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ENERGY TRADING

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
		(In millions)										(In millions)
Operating Revenues — Non-utility operations	Operating Revenues — Non-utility operations	$	1,602	$	1,061	$	4,208	$	2,714	Operating Revenues — Non-utility operations		$	2,203	$	1,439
Purchased power and gas — non-utility	Purchased power and gas — non-utility	1,630		1,076		4,347		2,636		Purchased power and gas — non-utility		2,190		1,481
Non-utility Margin	Non-utility Margin	(28)		(15)		(139)		78		Non-utility Margin		13		(42)
Operation and maintenance	Operation and maintenance	17		19		60		60		Operation and maintenance		19		27
Depreciation and amortization	Depreciation and amortization	1		1		4		4		Depreciation and amortization		1		1
Taxes other than income	Taxes other than income	1		1		4		4		Taxes other than income		3		3
Operating Income (Loss)		(47)		(36)		(207)		10
Operating Loss										Operating Loss		(10)		(73)
Other (Income) and Deductions	Other (Income) and Deductions	22		1		23		3		Other (Income) and Deductions		2		—
Income Tax Expense (Benefit)		(17)		(9)		(57)		2
Net Income (Loss) Attributable to DTE Energy Company		$	(52)	$	(28)	$	(173)	$	5
Income Tax Benefit										Income Tax Benefit		(3)		(18)
Net Loss Attributable to DTE Energy Company										Net Loss Attributable to DTE Energy Company		$	(9)	$	(55)

Operating Revenues — Non-utility operations increased ~~$541 million and $1,494~~$764 million in the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022. The increase ~~in both periods~~ was primarily due to ~~an increase in~~higher gas prices in the gas structured and gas transportation strategies.

Non-utility Margin ~~decreased $13 million and $217~~increased $55 million in the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022. The following ~~tables detail~~table details changes in Non-utility margin relative to the comparable prior ~~periods:~~period:


	Three Months
	(In millions)
Unrealized Margins(a)
Favorable results, primarily in gas transportation, ~~environmental trading, and~~ power full requirements, and environmental trading strategies	$	8788
Unfavorable results, primarily in the gas structured ~~and gas storage strategies~~strategy(b)	~~(127)~~(52)
	~~(40)~~36
Realized Margins(a)
Favorable results, primarily in power trading, gas ~~structured,~~full requirements, and gas transportation ~~and power trading~~ strategies(c)	7284
Unfavorable results, primarily in ~~environmental trading and~~gas structured, power full requirements, and gas trading strategies	~~(45)~~(65)
	2719
~~Decrease~~Increase in Non-utility Margin	$	~~(13)~~55

(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 ~~$82~~$19 million of timing related losses related to gas strategies which will reverse in future periods as the underlying contracts settle.

(c)Amount includes ~~$54~~$33 million of timing related losses 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 the power full requirements strategy~~	$	25
~~Unfavorable results, primarily in gas structured, environmental trading, and gas storage strategies(b)~~	~~(297)~~
	~~(272)~~
~~Realized Margins(a)~~
~~Favorable results, primarily in gas structured, gas trading, and environmental trading strategies(c)~~	~~132~~
~~Unfavorable results, primarily in power ERCOT trading and power full requirements strategies~~	~~(77)~~
	55
~~Decrease in Non-utility Margin~~	$	~~(217)~~

~~(a)~~Operation and maintenance 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)~~decreased~~Amount includes $278 million of timing related losses related to gas strategies which will reverse in future periods as the underlying contracts settle.~~

~~(c)Amount includes $16 million of timing related losses related to gas strategies recognized in previous periods that reversed as the underlying contracts settled.~~

~~Other (Income) and Deductions~~ ~~increased $21 million and $20~~$8 million in the three ~~and nine~~ months ended ~~September 30, 2021, respectively.~~March 31, 2022. The ~~increase in both periods~~decrease was primarily due to ~~contributions to not-for-profit organizations including the DTE Energy Foundation.~~lower uncollectible expense.

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Outlook — In the near-term, Energy Trading expects market conditions to remain challenging. The profitability of this segment may be impacted by the volatility in commodity prices and the uncertainty of impacts associated with regulatory changes, and changes in operating rules of Regional Transmission Organizations. Significant portions of the Energy Trading portfolio are economically hedged. Most financial instruments, physical power and natural gas contracts, and certain environmental contracts are deemed derivatives; whereas, natural gas and environmental inventory, contracts for pipeline transportation, storage assets, and some environmental contracts are not derivatives. As a result, 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 8 and 9 to the Consolidated Financial Statements, "Fair Value" and "Financial and Other Derivative Instruments," respectively.

CORPORATE AND OTHER

Corporate and Other includes various holding company activities, holds certain non-utility debt, and holds certain investments, including funds supporting regional development and economic growth. The net loss of ~~$275 million and $381~~$8 million for the three ~~and nine~~ months ended ~~September 30, 2021, respectively,~~March 31, 2022 represents ~~an increase~~a decrease of ~~$250 million and $341~~$22 million from the net loss of ~~$25 million and $40~~$30 million in the comparable ~~2020 periods.~~

2021 period. The ~~increase in both periods~~decrease was primarily due to the loss on extinguishment of debt incurred in 2021, which reduced earnings by $286 million and $292 million for the three and nine months ended September 30, 2021, respectively. The increase in both periods was also driven by effective income tax rate adjustments ~~higher net~~and lower interest expense, and a valuation allowance established in the third quarter 2021 for certain charitable contribution carryforwards. For the nine-month period, the higher loss was also due to the carryback of 2018 net operating losses to 2013 pursuant to the CARES Act, which resulted in a $34 million reduction to Income Tax Expense in 2020. The losses in both periods were partially offset by ~~the remeasurement of state deferred taxes following the separation of DT Midstream, which resulted in a $85 million reduction to Income Tax Expense in the third quarter 2021.~~

For additional information regarding the loss on extinguishment of debt, refer to Note 10 to the Consolidated Financial Statements, "Long-term Debt." For additional information regarding the remeasurement of state deferred taxes and valuation allowance, refer to the Income Taxes section of Note 2 to the Consolidated Financial Statements, "Significant Accounting Policies."

lower equity investment earnings.

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 ~~2021~~2022 will be approximately ~~$2.7~~$2.6 billion. DTE Energy anticipates base level utility capital investments, including environmental, renewable, and energy waste reduction ~~expenditures;~~expenditures, and expenditures for non-utility ~~businesses; and contributions to equity method investees in 2021~~businesses of approximately ~~$3.9 billion.~~$3.7 billion in 2022. 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.

Refer to the "Capital Investments" section above for additional information on DTE Energy's capital strategy and estimated spend over the next five years. Any capital commitments are also included in the disclosure of Purchase Commitments within Note 13 to the Consolidated Financial Statements, "Commitments and Contingencies."

Nine Months Ended September 30,
2021 2020
(in millions)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period $ 516 $ 93
Net cash from operating activities 2,372 2,781
Net cash used for investing activities (2,780) (3,093)
Net cash from (used for) financing activities (52) 1,181
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash (460) 869
Cash, Cash Equivalents, and Restricted Cash at End of Period $ 56 $ 962

~~Refer~~ below for analysis of cash flows relating to operating, investing, and financing activities, which reflect DTE Energy's change in financial condition. Any significant non-cash items are included in the Supplemental disclosure of non-cash investing and financing activities within the ~~the~~ Consolidated Statements of Cash ~~Flows.~~Flows, as applicable.


	Three Months Ended March 31,
	2022		2021
	(in millions)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	$	35	$	516
Net cash from operating activities	808		1,057
Net cash used for investing activities	(782)		(705)
Net cash from financing activities	95		702
Net Increase in Cash, Cash Equivalents, and Restricted Cash	121		1,054
Cash, Cash Equivalents, and Restricted Cash at End of Period	$	156	$	1,570

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.

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Net cash from operations decreased by ~~$409~~$249 million in ~~2021.~~2022. The decrease was primarily due to ~~a decrease~~lower cash from working capital items, as well as decreases in Deferred income taxes and Net Income, adjusted for the Loss on extinguishment of debt to reconcile Net Income to Net cash from operating activities. The decrease was partially offset by an increase from working capital items and Depreciation and amortization.

The change in working capital items in ~~2021~~2022 was primarily due to ~~an increase~~decreases in cash related to ~~Accounts payable,~~ Regulatory assets and liabilities, Accounts receivable, net, and ~~Derivative assets and liabilities,~~Accounts payable, partially offset by ~~a decrease~~increases in cash related to ~~Accounts receivable, net,~~ Inventories and Other current and noncurrent assets and liabilities.

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 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 ~~decreased~~increased by ~~$313~~$77 million in ~~2021~~2022 primarily due to ~~a decrease in non-utility plant and equipment expenditures and a decrease in Acquisitions related to business combinations, net of cash acquired, partially offset by~~ an increase in utility plant and equipment expenditures, partially offset by decreases in Notes receivable and non-utility plant and equipment expenditures.

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 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 decreased by ~~$1.2 billion~~$607 million in ~~2021~~2022 primarily due to ~~an increase~~decreases in cash related to Short-term borrowings, net and Redemption of long-term debt, ~~Prepayment costs for redemption~~partially offset by increases in cash related to Issuance of long-term debt, ~~Repurchase~~net of ~~common stock,~~issuance costs and Dividends paid on common ~~stock, partially offset by increases in Issuance~~stock.

Outlook

Sources of ~~long-term debt and Short-term borrowings, net. The change is also due to the Acquisition related deferred payment during the nine months ended September 30, 2020.~~

~~Outlook~~Cash

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 which will increase the base from which rates are determined. Non-utility growth is expected from additional investments in the DTE Vantage segment. Compared to prior years, DTE Vantage expects that lower cash flows ~~are expected to temporarily decrease beginning~~will continue in 2022 asdue to the closure of REF ~~facilities will have ceased operations.~~business. Growth from new renewable energy investments and industrial energy services projects ~~and renewable energy investments~~ are expected to offset these decreases over the long-term.

DTE Energy's separation of DT Midstream ~~will~~on July 1, 2021 may also ~~reduce operating~~contribute to lower cash ~~flows~~from operations in 2022 and the near term. However, DTE Energy still expects higher cash flows from operations over the long-term due to the growth of its utilities and ~~other~~remaining non-utility ~~operations.~~businesses. For additional information regarding the separation of DT Midstream, refer to Note 4 to the Consolidated Financial Statements, "Discontinued Operations."

DTE ~~Energy~~Energy's utilities 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.

In July and August 2021, DTE Energy optionally redeemed $2.6 billion of long-term debt and incurred prepayment costs of $361 million. These redemptions were made using proceeds from DT Midstream's repayment of intercompany borrowings and one-time special dividend and will reduce interest expense in future periods. Refer to Notes 4 and 10 to the Consolidated Financial Statements, "Dispositions and Impairments" and "Long-term Debt," respectively, for additional information.

DTE Energy has $324 million in long-term debt, including finance leases, maturing within twelve months. Repayment of the debt is expected to be made through internally generated funds or the issuance of new long-term debt.

DTE Energy has approximately $2.1 billion of available liquidity at September 30, 2021, consisting primarily of cash and cash equivalents and amounts available under unsecured revolving credit agreements.

DTE Energy does not expect any equity issuances for 2021. Any contributions to the qualified pension plans are expected to be made in cash and DTE Energy does not anticipate making any contributions to its other postretirement benefit plans in 2021.

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To finance the acquisition of midstream natural gas assets in December 2019, DTE Energy issued equity units that will result in the issuance of $1.3 billion of common stock in November 2022. ~~This transaction is~~DTE Energy does not ~~expected to impact~~anticipate the issuance of any additional equity in 2022. However, at the discretion of management and depending upon economic and financial market conditions, DTE ~~Energy's cash flows. Cash flow impacts in 2021-2022 will relate primarily~~Energy could issue additional equity as part of its financial planning process. If issued, DTE Energy anticipates these discretionary equity issuances would be made through contributions to the ~~payment of the remaining stock purchase liability associated with the equity units, which remain with DTE Energy after the separation of DT Midstream.~~ dividend reinvestment plan or employee benefit plans.

Over the long-term, DTE Energy does not have any ~~other~~ equity commitments other than the 2019 equity units noted above and will continue to evaluate equity needs on an annual ~~basis~~basis.

Uses of Cash

DTE Energy has $2.6 billion in ~~consideration~~long-term debt, including finance leases, maturing within twelve months. Repayment of ~~economic~~the debt is expected to be made through internally generated funds, the issuance or remarketing of long-term debt, and ~~financial market conditions.~~proceeds from the equity issuances associated with the 2019 equity units.

DTE Energy has paid quarterly cash dividends for more than 100 consecutive years and expects to continue paying regular cash dividends in the future, including approximately ~~$0.8~~$0.7 billion in ~~2021.~~2022. Any payment of future dividends is subject to approval by the Board of Directors and may depend on DTE Energy's future earnings, capital requirements, and financial condition. Over the long-term, DTE Energy expects continued dividend growth and is targeting a payout ratio consistent with pure-play utility companies.

Various subsidiaries and equity 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, environmental, and coal) and the provisions and maturities of the underlying transactions. As of ~~September 30, 2021,~~March 31, 2022, 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 ~~$575~~$813 million.

~~The separation of DT Midstream has resulted~~Other obligations are further described in ~~a shift in~~the following Combined Notes to the Consolidated Financial Statements:


Note						Title
1						Organization and Basis of Presentation
6						Regulatory Matters
10						Long-Term Debt
11						Short-Term Credit Arrangements and Borrowings
13						Commitments and Contingencies
14						Retirement Benefits and Trusteed Assets

Also refer to the "Capital Investments" section above regarding DTE Energy's capital strategy ~~to a predominately pure-play utility, but to date has not had any impact on~~and estimated spend over the next five years. For additional information regarding DTE Energy's ~~credit ratings. Since~~future cash obligations, including scheduled debt maturities and interest payments, minimum lease payments, and future purchase commitments, refer to DTE Energy's Annual Report on Form 10-K for the announcement of the planned separation in October 2020 and completed separation in July 2021, Standard and Poor's Global Ratings, Fitch Ratings, and Moody's Investor Service have all affirmed the ratings and stable outlook of year ended December 31, 2021.

Liquidity

DTE Energy ~~DTE Electric,~~has approximately $2.7 billion of available liquidity at March 31, 2022, consisting primarily of cash and ~~DTE Gas.~~cash equivalents and amounts available under unsecured revolving credit agreements.

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 6, 10, 11, 13, and 14 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.

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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, some environmental contracts, and certain 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, storage assets, and some environmental contracts. See Notes 8 and 9 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 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 8 to the Consolidated Financial Statements, "Fair Value."

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


	DTE Energy
	(In millions)
MTM at December 31, ~~2020~~2021	$	28 (159)
Reclassified to realized upon settlement	1658
Changes in fair value recorded to income	~~(281)~~(170)
Amounts recorded to unrealized income	~~(265)~~(112)
Changes in fair value recorded in ~~regulatory~~Regulatory liabilities	14 (4)

Change in collateral	~~(58)~~8
MTM at ~~September 30, 2021~~March 31, 2022	$	~~(281)~~(267)

The table below shows the maturity of DTE Energy's MTM positions. The positions from ~~2024~~2025 and beyond principally represent longer tenor gas structured transactions:


Source of Fair Value	Source of Fair Value	2021		2022		2023		2024 and Beyond		Total Fair Value		Source of Fair Value	2022		2023		2024		2025 and Beyond		Total Fair Value
		(In millions)											(In millions)
Level 1	Level 1	$	21	$	86	$	35	$	12	$	154	Level 1	$	164	$	78	$	24	$	7	$	273
Level 2	Level 2	31		11		(22)		(28)		(8)		Level 2	(10)		(40)		(44)		(23)		(117)
Level 3	Level 3	(74)		(155)		(37)		(97)		(363)		Level 3	(124)		(96)		(40)		(81)		(341)
MTM before collateral adjustments	MTM before collateral adjustments	$	(22)	$	(58)	$	(24)	$	(113)	(217)		MTM before collateral adjustments	$	30	$	(58)	$	(60)	$	(97)	(185)
Collateral adjustments	Collateral adjustments									(64)		Collateral adjustments									(82)
MTM at September 30, 2021										$	(281)
MTM at March 31, 2022												MTM at March 31, 2022									$	(267)

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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.

The DTE Vantage segment is subject to price risk for electricity, natural gas, coal products, and ~~coal product price risk.~~environmental attributes generated from its renewable natural gas investments. DTE Energy manages its exposure to commodity price risk through the use of long-term ~~contracts.~~contracts and hedging instruments, when available.

DTE Energy's Energy Trading business segment has exposure to electricity, natural gas, 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 predetermined risk parameters.

Credit Risk

Allowance for Doubtful Accounts

The Registrants regularly review contingent matters, existing and future economic conditions, customer trends and other factors 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, 2021:~~March 31, 2022:


		Credit Exposure Before Cash Collateral		Cash Collateral		Net Credit Exposure			Credit Exposure Before Cash Collateral		Cash Collateral		Net Credit Exposure
		(In millions)							(In millions)
Investment Grade(a)	Investment Grade(a)							Investment Grade(a)
A- and Greater	A- and Greater	$	295	$	—	$	295	A- and Greater	$	334	$	—	$	334
BBB+ and BBB	BBB+ and BBB	156		—		156		BBB+ and BBB	219		—		219
BBB-	BBB-	18		—		18		BBB-	47		—		47
Total Investment Grade	Total Investment Grade	469		—		469		Total Investment Grade	600		—		600
Non-investment grade(b)	Non-investment grade(b)	2		—		2		Non-investment grade(b)	6		—		6
Internally Rated — investment grade(c)	Internally Rated — investment grade(c)	927		(72)		855		Internally Rated — investment grade(c)	1,156		(113)		1,043
Internally Rated — non-investment grade(d)	Internally Rated — non-investment grade(d)	56		(6)		50		Internally Rated — non-investment grade(d)	85		(5)		80
Total	Total	$	1,454	$	(78)	$	1,376	Total	$	1,847	$	(118)	$	1,729

(a)This category includes counterparties with minimum credit ratings of Baa3 assigned by Moody’s Investors Service (Moody’s) or BBB-assigned by Standard & Poor’s Rating Group, a division of McGraw-Hill Companies, Inc. (Standard & Poor’s). The five largest counterparty exposures, combined, for this category represented 11% 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 less than 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 ~~23%~~25% 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 2% of the total gross credit exposure.

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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 ~~LIBOR.~~other applicable short-term reference rates. As of ~~September 30, 2021,~~March 31, 2022, DTE Energy had floating rate debt of ~~$361~~$244 million and a floating rate debt-to-total debt ratio of ~~2.05%~~1.33%.

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 2030.~~December 2032.

Summary of Sensitivity Analyses

Sensitivity analyses were performed on the fair values of commodity contracts for DTE Energy and long-term debt 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,~~March 31, 2022 and 2021 ~~and 2020~~ by a hypothetical 10% and calculating the resulting change in the fair values. The hypothetical losses related to long-term debt would be realized only if DTE Energy transferred all of its fixed-rate long-term debt to other creditors.

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	Activity	2021		2020		2021		2020		Change in the Fair Value of	Activity	2022		2021		2022		2021		Change in the Fair Value of
		(In millions)										(In millions)
Environmental contracts	Environmental contracts	$	(16)	$	(3)	$	15	$	6	Commodity contracts	Environmental contracts	$	(6)	$	(8)	$	6	$	6	Commodity contracts
Gas contracts	Gas contracts	$	102	$	21	$	(102)	$	(20)	Commodity contracts	Gas contracts	$	52	$	33	$	(52)	$	(33)	Commodity contracts
Power contracts	Power contracts	$	13	$	6	$	(13)	$	(6)	Commodity contracts	Power contracts	$	13	$	4	$	(14)	$	(5)	Commodity contracts

Interest rate risk — DTE Energy	Interest rate risk — DTE Energy	$	(649)	$	(659)	$	674	$	681	Long-term debt	Interest rate risk — DTE Energy	$	(756)	$	(729)	$	791	$	758	Long-term debt
Interest rate risk — DTE Electric	Interest rate risk — DTE Electric	$	(329)	$	(298)	$	348	$	315	Long-term debt	Interest rate risk — DTE Electric	$	(404)	$	(348)	$	433	$	371	Long-term debt

For further discussion of market risk, see Note 9 to the Consolidated Financial Statements, "Financial and Other Derivative Instruments."

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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, 2021,~~March 31, 2022, 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, 2021~~March 31, 2022 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, 2021,~~March 31, 2022, 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, 2021~~March 31, 2022 that have materially affected, or are reasonably likely to materially affect, DTE Electric's internal control over financial reporting.

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Part II — Other Information

Item 1. Legal Proceedings

For information on legal proceedings and matters related to the Registrants, see Notes 6 and 13 to the Consolidated Financial Statements, "Regulatory Matters" and "Commitments and Contingencies," respectively.

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

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 ~~2020~~2021 Annual Report on Form 10-K. Although the Registrants have tried to identify and discuss key risk factors, others could emerge in the future.

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'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, 2021:~~March 31, 2022:

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
07/01/21 - 07/31/21 23,900 $ 114.70 — — —
08/01/21 - 08/30/21 100,832 $ 118.06 — — —
09/01/21 - 09/30/21 4,421 $ 104.46 — — —
Total 129,153 —


	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
01/01/22 - 01/31/22	1,804	$	112.02	—	—	—
02/01/22 - 02/28/22	483,898	$	118.73	—	—	—
03/01/22 - 03/31/22	14,232	$	116.16	—	—	—
Total	499,934			—

(a)Represents shares of DTE Energy common stock purchased on the open market to participants under various employee compensation and incentive programs. Also includes shares of common stock withheld to satisfy income tax obligations upon the vesting of restricted stock based on the price in effect at the grant date.

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Item 6. Exhibits

Exhibit Number

Description

DTE
Energy

DTE
Electric

(i) Exhibits filed herewith:

~~31.201~~31.1

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

~~31.202~~31.2

Chief Financial Officer Section 302 Form 10-Q Certification of Periodic Report

~~31.203~~31.3

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

~~31.204~~31.4

Chief Financial Officer Section 302 Form 10-Q Certification of Periodic Report

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.

101.SCH

XBRL Taxonomy Extension Schema

101.CAL

XBRL Taxonomy Extension Calculation Linkbase

101.DEF

XBRL Taxonomy Extension Definition Database

101.LAB

XBRL Taxonomy Extension Label Linkbase

101.PRE

XBRL Taxonomy Extension Presentation Linkbase

(ii) Exhibits furnished herewith:

~~32.201~~32.1

Chief Executive Officer Section 906 Form 10-Q Certification of Periodic Report

~~32.202~~32.2

Chief Financial Officer Section 906 Form 10-Q Certification of Periodic Report

~~32.203~~32.3

Chief Executive Officer Section 906 Form 10-Q Certification of Periodic Report

~~32.204~~32.4

Chief Financial Officer Section 906 Form 10-Q Certification of Periodic Report

(iii) Exhibits incorporated by reference:

4.1

Supplemental Indenture dated as of February 1, 2022, 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 (2022 Series A and B) (Exhibit 4.1 to DTE Energy's and DTE Electric’s Form S-3 filed April 8, 2022)

10.1

Securitization Property Servicing Agreement between DTE Electric Securitization Funding I LLC and DTE Electric Company, as Servicer, dated as of March 17, 2022 (Exhibit 10.1 to DTE Electric’s Form 8-K filed March 17, 2022)

10.2

Securitization Property Purchase and Sale Agreement between DTE Electric Securitization Funding I LLC and DTE Electric Company, as Seller, dated as of March 17, 2022 (Exhibit 10.2 to DTE Electric’s Form 8-K filed March 17, 2022)

10.3

Administration Agreement between DTE Electric Securitization Funding I LLC and DTE Electric Company, as Administrator, dated as of March 17, 2022 (Exhibit 10.3 to DTE Electric’s Form 8-K filed March 17, 2022)

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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 27, 2021~~April 28, 2022
			DTE ENERGY COMPANY

		By:	/S/ TRACY J. MYRICK
			Tracy J. Myrick Chief Accounting Officer
			(Duly Authorized Officer)


			DTE ELECTRIC COMPANY

		By:	/S/ TRACY J. MYRICK
			Tracy J. Myrick Chief Accounting Officer
			(Duly Authorized Officer)

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	September 30,		December 31,
	2021		2020
	(In millions)
ASSETS
Current Assets
Cash and cash equivalents	$	54	$	472
Restricted cash	2		2
Accounts receivable (less allowance for doubtful accounts of $102 and $104, respectively)
Customer	1,522		1,542
Other	170		127
Inventories
Fuel and gas	398		335
Materials, supplies, and other	517		373
Derivative assets	347		116
Regulatory assets	187		129

Other	297		185
Current assets of discontinued operations	—		217
	3,494		3,498
Investments
Nuclear decommissioning trust funds	2,007		1,855
Investments in equity method investees	186		177
Other	187		196
	2,380		2,228
Property
Property, plant, and equipment	36,134		34,016
Accumulated depreciation and amortization	(9,977)		(9,517)
	26,157		24,499
Other Assets
Goodwill	1,993		1,993
Regulatory assets	3,974		4,125
Intangible assets	181		199
Notes receivable	304		261
Derivative assets	81		40
Prepaid postretirement costs	620		561
Operating lease right-of-use assets	100		107
Other	151		126
Noncurrent assets of discontinued operations	—		7,859
	7,404		15,271
Total Assets	$	39,435	$	45,496



	Nine Months Ended September 30, 2021								Nine Months Ended September 30, 2020
	Natural Gas		Electricity		Other		Total		Natural Gas		Electricity		Other		Total
	(In millions)
Net Assets (Liabilities) as of December 31	$	(16)	$	10	$	4	$	(2)	$	(15)	$	16	$	3	$	4

Transfers from Level 3 into Level 2	—		—		—		—		(5)		—		—		(5)
Total gains (losses)
Included in earnings(a)	(356)		(5)		—		(361)		(44)		90		(7)		39
Recorded in Regulatory liabilities	—		—		14		14		—		—		21		21
Purchases, issuances, and settlements


Settlements	92		(100)		(6)		(14)		25		(101)		(10)		(86)
Net Assets (Liabilities) as of September 30	$	(280)	$	(95)	$	12	$	(363)	$	(39)	$	5	$	7	$	(27)
Total gains (losses) included in Net Income attributed to the change in unrealized gains (losses) related to assets and liabilities held at September 30(a)	$	(301)	$	(54)	$	(17)	$	(372)	$	(20)	$	53	$	(17)	$	16
Total gains (losses) included in Regulatory liabilities attributed to the change in unrealized gains (losses) related to assets and liabilities held at September 30	$	—	$	—	$	12	$	12	$	—	$	—	$	7	$	7


	Three Months		Nine Months
	(In millions)
Implementation of new rates	$	—	$	71
Regulatory mechanism — RPS	22		43
Regulatory mechanism — EWR	10		34
Base sales / rate mix	(3)		25
Weather	(40)		(19)


Other regulatory mechanisms and other	8		8
Increase (decrease) in Utility Margin	$	(3)	$	162