UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended September 30, 2002Quarterly Period Ended March 31, 2003

Commission file number 1-2198

The registrant meets the conditions set forth in General Instruction H (1) (a) and (b) of Form 10-Q and is, therefore, filing this Form with the reduced disclosure format.

THE DETROIT EDISON COMPANY

313-235-8000313-235-4000
(Registrant’s telephone number, including area code)

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 (Exchange Act) 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.

Yes   [X]No   [  ]

Indicate by check mark whether the registrant is an accelerated filer as defined in Rule 12b-2 of the Exchange Act.

Yes  [X]No  [  ]

THE DETROIT EDISON COMPANY

QUARTERLY REPORT ON FORM 10-Q
QUARTER ENDED MARCH 31, 2003

TABLE OF CONTENTS

The Detroit Edison Company

Quarterly Report on Form 10-Q
Quarter Ended September 30, 2002

Table of ContentsDEFINITIONS

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Definitions

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The Detroit Edison CompanyFORWARD-LOOKING STATEMENTS

Forward-Looking Statements

Certain information presented herein includes forward-looking statements.statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve certain risks and uncertainties that may cause actual future results to differ materially from those contemplated, projected, estimated or budgeted in such forward-looking statements. FactorsThere are many factors that may impact forward-looking statements include,including, but are not limited to, interest rates,the following:

•		the effects of weather and other natural phenomena on operations and sales to customers;
•		economic climate and growth in the geographic areas where we do business;
•		environmental issues, including changes in the climate, and regulations;
•		nuclear regulations and risks associated with nuclear operations;
•		implementation of electric Customer Choice programs;
•		implementation of electric restructuring in Michigan;
•		employee relations;
•		unplanned outages;
•		capital market conditions and access to capital markets and other financing efforts which can be affected by credit agency ratings;
•		the timing and extent of changes in interest rates;
•		the level of borrowings;
•		changes in the cost of fuel and purchased power;
•		effects of competition;
•		impact of FERC and MPSC proceedings and regulations;
•		changes in federal or state tax laws and their interpretations, including the code, regulations, rulings, court proceedings and audits;
•		ability to recover costs through rates;
•		property insurance;
•		the cost of protecting assets against or damage due to terrorism; and
•		changes in accounting standards and financial reporting regulations.

New factors emerge from time to the capital markets and capital market conditions (including the effect on Detroit Edison’s pension plan investments), the level of borrowings, the effects of weather and other natural phenomena on operations, actual sales, economic climate and growthtime. We cannot predict what factors may arise or how such factors may cause our results to differ materially from those contained in the geographic areas in which Detroit Edison does business, the timing and extent of changes in commodity prices for electricity, unscheduled generation outages, maintenance or repairs, nuclear power plant performance, changes in the cost of fuel and purchased power due to the suspensionany forward-looking statement. Any forward-looking statement speaks only as of the PSCR mechanism,date on which such statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the effectsdate on which such statement is made or to reflect the occurrence of increased competition from other energy suppliers and the implementation of electric Customer Choice programs as well as alternative forms of energy, the implementation of electric utility restructuring in Michigan (which involves pending regulatory and related judicial proceedings, and actual and possible reductions in authorized rates and earnings), the effects of changes in governmental policies including income taxes, environmental compliance and nuclear requirements and the ability to recover these costs through rate increases, the impact of FERC and MPSC proceedings and existing and proposed regulations and the timing of the accretive effects of DTE Energy’s merger with MCN Energy.unanticipated events.

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THE DETROIT EDISON COMPANY

Management’s Narrative Analysis of the Results of OperationsRESULTS OF OPERATIONS

The Results of Operations discussion for Detroit Edison is presented in accordance with General Instruction H (2) (a) of Form 10-Q.

Detroit Edison reported net incomeOur earnings for the 2003 first quarter were $15 million compared to earnings of $105$92 million for the 2002 three-month period, comparedfirst quarter. The comparability of earnings was impacted by the adoption of a new accounting rule in the 2003 first quarter. As required by generally accepted accounting principles, we adopted a new accounting rule for asset retirement obligations as discussed in Note 2. The cumulative effect of adopting this new accounting rule was to net income of $88 millionreduce 2003 first quarter earnings by $6 million. Results for the same period in 2001. For the nine-month period, net income was $272 million compared to $124 million for the same period in 2001. The earnings comparability for the three- and nine-month periods iscurrent quarter were also affected by $9 million ($5a $14 million net of tax) and $184 million ($119 million nettax loss on the sale of tax), respectively, of merger and restructuring charges that were recordedour steam heating business in 2001.January 2003.

New reporting alignment- Beginning in 2002, Detroit Edison’s parent company, DTE Energy, realigned its internal and external financial reporting structure into three strategic business units (Energy Resources, Energy Distribution and Energy Gas) that have both regulated and non-regulated operations. Based on this structure, management sets strategic goals, allocates resources and evaluates performance. The realignment resulted inEdison has the following two reportable segments for Detroit Edison:segments.

ENERGY RESOURCES

Energy ResourcesPower Generationincludes the

The power generation servicesplants of Detroit Edison. Electricity is generated fromEdison comprise our regulated power generation business. Detroit Edison’s numerous fossil plants, orhydroelectric pumped storage plant and its nuclear plant generate electricity that is sold principally throughout Michigan and sold throughout Southeastern Michiganthe Midwest to residential, commercial, industrial and wholesale customers.

Power Generation earnings declined $40 million during the 2003 first quarter reflecting lower gross margins due to higher fuel and purchased power costs and lost margins from customers participating in the electric Customer Choice program. The higher purchased power costs reflect unfavorable energy market prices in 2003 and lower plant availability. As a result of the electric Customer Choice program, Detroit Edison lost 9% of retail sales in the 2003 first quarter. To partially offset the impact of these lost margins, Detroit Edison recorded a $6 million regulatory asset representing stranded costs that are recoverable under Michigan legislation. The lower earnings were also attributed to higher operation and maintenance expense due to employee pension and health care benefit costs and expenses due to the timing of planned reliability and maintenance work done to improve the production and availability of the generation fleet.

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System output and average fuel and purchased power costs were as follows:

(1)  Represents fuel costs associated with power plants.

(2)  The average purchased power amounts include hedging activities.

Outlook– We expect electric restructuring to continue resulting in increased customer choice in the retail electric generation business. As a result of customers choosing to participate in the electric Customer Choice program, Detroit Edison lost 6% of retail sales in 2002 and estimates losing 10% to 13% of such sales in 2003. Unrecovered generation fixed costs due to electric Customer Choice are allowed for future recovery under Michigan legislation. As a result, Detroit Edison recorded a regulatory asset relating to stranded costs during the first quarter of 2003 and anticipates recording additional regulatory assets during the balance of 2003. The regulatory asset will be subject to review by the MPSC in future regulatory proceedings, and we cannot predict the outcome of this matter. See Note 4 – Regulatory Matters.

The June 2000 Michigan legislation imposed a rate freeze for all classes of customers through 2003. In addition, the MPSC determined that adjusting rates for changes in fuel and purchased power through continuance of the Power Supply Cost Recovery (PSCR) clause would be inconsistent with the rate freeze, therefore the MPSC suspended the PSCR clause. It is unclear at this time whether the PSCR clause will be suspended beyond 2003. Detroit Edison expects to file a rate case in the second quarter of 2003 addressing this and other issues.

Future operating results are expected to vary as a result of factors such as regulatory proceedings, weather, changes in economic conditions and the level of customer participation in the electric Customer Choice program.

ENERGY DISTRIBUTION

EnergyPower Distribution

Power Distribution includes the electric distribution services of Detroit Edison. EnergyPower Distribution distributes electricity generated by Energy Resources and alternative electric suppliers to Detroit Edison’s 2.1 million residential, commercial and industrial customers.

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Management’s Narrative Analysis and Results of Operations

Energy Resources

Earnings increased $8 million and $30Power Distribution earnings decreased $31 million during the 2002 three- and nine-month periods, respectively, reflecting higher gross margins2003 first quarter due to lower purchased power costs. The lower purchased power costs reflect favorable energy market prices in 2002. Mark to market accounting for forward and option contracts in 2001 impacted revenues and purchased power, resulting in a favorable impact on marginsnet of $36 million in the 2001 third quarter, and an unfavorable impact on margins of $9 million in the 2001 nine-month period. Margins were also impacted by higher revenues due to greater cooling demand in the 2002 third quarter and thetax loss of revenues resulting from customers switching$14 million on the sale of our unprofitable steam heating business (Note 3) and to alternative electric suppliers under the electric Customer Choice program. Revenues for the 2002 nine-month period also were reduced due to the impact of a 5% legislatively mandated, securitization based, rate reduction for commercialhigher operation and industrial customers that began in April 2001. The higher gross margins weremaintenance expenses, partially offset by increased employee benefit costs and higher operations and maintenance expenses due to planned and unplanned reliability and maintenance work done to improve the production and availability of the generation fleet. Depreciation and amortization expense decreased in the nine-month period reflecting the extension of the amortization period from 7 years to 15 years for certain regulatory assets that were securitized in 2001.

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Management’s Narrative Analysis and Results of Operations

System output and average fuel and purchased power costs were as follows:

Outlook-Electric restructuring will continue to result in increased competition in the electric generation business. Effective January 1, 2002, the electric Customer Choice program in Michigan was expanded to allow all electric customers to choose to purchase their electricity from suppliers other than their local utility. Detroit Edison expects to lose between 5% to 8% of retail sales in 2002 and between 10% to 15% of such sales in 2003 as a result of customers choosing to participate in the electric Customer Choice program. To the extent Detroit Edison experiences net stranded costs as a result of customers switching to an alternative electric supplier, Michigan law allows the recovery of all amounts of such net stranded costs. Detroit Edison disagreed with the MPSC initial methodology for determining and recovering net stranded costs and has asked for rehearing, clarification and modification of the December 2001 order. In May 2002, the MPSC denied Detroit Edison’s request for rehearing and clarification on certain aspects of the order. In June 2002, Detroit Edison filed a claim of appeal of the December 2001 MPSC order with the Michigan Court of Appeals.

In May 2002, Detroit Edison filed a new net stranded cost case with the MPSC that seeks to refine the methodology approved by the MPSC in December 2001 and calculates actual net stranded costs for 2000 and 2001. The MPSC Staff and interveners submitted their net stranded cost filings in November 2002. Detroit Edison expects to record 2002 net stranded costs as a regulatory asset with the offsetting entry reducing expense in the fourth quarter of 2002. See Note 3.

Energy Distribution

Earnings increased $4 million during the 2002 three-month period and decreased $1 million during the 2002 nine-month period reflecting higher operating revenues which were offset by increased operation and maintenance expenses. Operating revenues increased due primarily to higher residential sales attributable to greater cooling demand.revenues. The increased operation and maintenance expenses are attributable to heat-related maintenance expenses due to prolonged periods of above normal temperatureshigher employee pension and the related stress placed on the distribution system, higher employeehealth care benefit costs and expensesincreased costs associated with restoring power to customers who lostcustomer service during two stormsprocess improvements, partially offset by lower storm expenses in the 2003 first quarter as compared to the 2002 nine-month period.

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Management’s Narrative Analysis and Results of Operationsfirst quarter.

Outlook-– Regulated electric system deliveries are expected to continue to increase for the remainder of 2002 and intoin 2003 due to thecontinued territory and economic recovery.growth. Operating results willare expected to vary as a result of various external factors such as weather, changes in economic conditions and the severity and frequency of storms. As previously discussed, Detroit Edison expects to file a rate case in the second quarter of 2003 to address future operating costs and other issues.

In April 2003, a catastrophic ice storm in our service territory resulted in over 400,000 customers losing power and more than 3,300 downed power lines. Restoration expenses will reduce second quarter 2003 net of tax earnings by approximately $15 million. We expect the impact of the storm will be partially offset by the avoidance of other costs throughout the remainder of the year.

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Management’s Narrative Analysis and Results of Operations

CAPITAL RESOURCES AND LIQUIDITY

Operating Activities

Net cash fromused for operating activities decreased $193increased $112 million induring the 2002 nine-month period2003 first quarter as compared to the same period in 2001.2002 period. The decreaseincrease reflects a $45decline of $15 million decline in net income, after adjusting for non-cash items (depreciation depletion and amortization merger and restructuring charges and deferred taxes), and highera $97 million decrease in working capital levels.and other requirements. The decrease in working capital requirements reflect loweris primarily due to an increase in accounts payable balances in 2003 and a reduction in fuel inventories. We also contributed $222 million of cash to more normalized levels, representing the internal focus on managing external payments and taking greater advantage of purchase discounts.our pension plan in 2003.

Investing Activities

Net cash used forrelating to investing activities decreased $244improved $80 million in the 2002 nine-month period2003 first quarter as compared to the same period2002 period. The improvement is attributed to decreases in 2001 due to lower investments in regulatory assets associated with securitizing the company’s Fermi 2 power generation facility in March 2001. Additionally, a significantly lower amount of cash that was restrictedcontractually designated for debt redemptions also affected the comparison.service and other investments, partially offset by an increase in plant and equipment expenditures.

Financing Activities

Net cash used forfrom financing activities increased $237$210 million during the 2002 nine-month period2003 first quarter as compared to the same period in 2001. This change is due primarily to the repurchase of more debt, net of issuances in the 2002 period. Additionally, the repurchase of $846 million in common stock in 2001 also contributedThe increase is primarily attributed to the change.

PENSION AND POSTRETIREMENT COSTS

Detroit Edison’s costs of providing pensionhigher notes payable to affiliates and postretirement benefits are dependent upon a number of factors, such as the rates of return on plan assets, the discount rate and the rate ofcash infusion from its parent company, partially offset by an increase in health care costs. The market valueredemptions of plan assets has been affected by sharp declines in the equity market since 2000. As a result, at December 31, 2002, Detroit Edison could be required to recognize an additional minimum pension liability as prescribed by SFAS No. 87 “Employers’ Accounting for Pensions” and SFAS No. 132 “Employers’ Disclosures about Pensions and Postretirement Benefits.” The offset to any liability would be recorded as a reduction in shareholder’s equity, net of tax, or as a regulatory asset. The additional minimum pension liability and related accounting entries would be reversed on the balance sheet in future periods if the fair value of plan assets exceeds the accumulated pension benefit obligations. The additional minimum

8

Management’s Narrative Analysis and Results of Operations

pension liability recorded, if any, will depend upon actual returns and interest rates in 2002, but could exceed $300 million pre-tax ($195 million after tax). The recording of any minimum pension liability would not affect net income or cash flow in 2002. Pension and postretirement costs and pension cash funding requirements could increase in future years without a substantial recovery in the equity markets. It is estimated that the increase in 2003 pension and postretirement costs could range from $80 million-$110 million, pre-tax, depending on actual plan asset returns, the discount rate and other actuarial assumptions that will not be determined until December 31, 2002. Detroit Edison will initiate cost saving strategies to significantly offset the earnings impact of higher pension and postretirement costs.long-term debt.

ENVIRONMENTAL MATTERS

EPA ozone transport regulations and final new air quality standards relating to ozone and particulate air pollution will continue to impact the Company.us. Detroit Edison has spent approximately $409$488 million through September 2002March 2003 and estimates that it will incur an additionalapproximately $300 to $400 to $450 million of future capital expenditures over the next five to eight years to comply.comply with the existing air quality standards. We expect to file a rate case during 2003 to securitize costs we have incurred to comply with these standards.

NEW ACCOUNTING PRONOUNCEMENTS

During 2001, the Financial Accounting Standards Board (FASB) issued new accounting pronouncements concerning business combinations, goodwill and other intangible assets, asset retirement obligations and impairment or disposal of long-lived assets. See Note 72 – New Accounting Pronouncements for a discussion of Detroit Edison’s evaluation of the adoption of these new accounting pronouncements.

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Controls and ProceduresCONTROLS AND PROCEDURES

(a)		Evaluation of disclosure controls and procedures
		Detroit Edison’sThe Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of Detroit Edison’sthe Company’s disclosure controls and procedures (as defined in the Exchange Act Rules 13a-14(c)13a – 14(c) and 15d-14(d)15d – 14(d)) as of a date within 90 days before the filing of this quarterly report, and have concluded that, as of the evaluation date,Evaluation Date, such controls and procedures were effective at ensuring that required information will be disclosed on a timely basis in reports filed under the Exchange Act.
(b)		Changes in internal controls
		There have been no significant changes (including corrective actions with regard to significant deficiencies or material weaknesses) in Detroit Edison’sthe Company’s internal controls or in other factors that could significantly affect these controls subsequent to the evaluation dateEvaluation Date referenced in paragraph (a) above.

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THE DETROIT EDISON COMPANY

See Notes to Consolidated Financial Statements (Unaudited)

10

The Detroit Edison Company
Consolidated Statement of Operations (Unaudited)THE DETROIT EDISON COMPANY

See Notes to Consolidated Financial Statements (Unaudited)

11

The Detroit Edison CompanyTHE DETROIT EDISON COMPANY
Consolidated Statement of Financial PositionCONSOLIDATED STATEMENT OF FINANCIAL POSITION

See Notes to Consolidated Financial Statements (Unaudited)

12

The Detroit Edison Company
Consolidated Statement of Financial PositionTHE DETROIT EDISON COMPANY

See Notes to Consolidated Financial Statements (Unaudited)

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THE DETROIT EDISON COMPANY