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EXHIBIT 99.10
[DETROIT EDISON LOGO]
August 10, 2001
Ms. Dorothy Wideman
Executive Secretary
Michigan Public Service Commission
6545 Mercantile Way
Lansing, Michigan 48909
Re: MPSC Case No. U-12478
Updated Securitization Bond Charge and Securitization Bond Tax Charge
Dear Ms. Wideman:
The Commission's November 2, 2000 order in Case No. U-12478 (Financing Order)
authorized the Detroit Edison Company following the sale of securitization
bonds, to bill its customers, an initial securitization charge of not more than
$0.004239 per kilowatt-hour and an initial tax charge of not more than $0.000766
per kilowatt-hour.
The Securitization Bonds were sold on March 9, 2001 and beginning March 26,
2001, Detroit Edison began billing a Securitization Bond Charge of $0.0032 per
kilowatt-hour and a Securitization Bond Tax Charge of $0.0005 per kilowatt-hour.
The purpose of this letter is to inform the Commission that Detroit Edison is
adjusting the Securitization Bond Charge to $0.0041 per kilowatt-hour and the
Securitization Bond Tax Charge to $0.0006 per kilowatt-hour beginning with bills
rendered on and after September 1, 2001. These adjustments are required to
ensure that the securitization charges will recover amounts sufficient to timely
provide all payments and other required amounts in connection with the
Securitization Bonds and to ensure recovery of the associated tax liability.
The new charges are less than those authorized by the Commission in its November
2nd order.
The change in the Securitization Bond Charge and Securitization Bond Tax Charge
will not impact the overall charge to our customers. For full-requirement
customers, the increase in charges will be offset by an equal and opposite
adjustment to base energy rates thereby preserving the rate freeze and the 5%
rate reductions mandated by PA 141. Electric Choice Customer's overall charge
remains unaffected due to the fact that, per the Commission's Order in Case No.
U-12478, prior to January 1, 2002, these customers are charged, on a net basis,
a transition charge equal to their bid participation charge.
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August 10, 2001
Attachment A shows the values for each of the variables used in calculating the
updated Securitization Bond Charge and Securitization Bond Tax Charge. In a
separate letter to Mr. William Celio, Director - Electric Division, Detroit
Edison will submit updated tariff sheets necessary to implement these charge
updates.
Sincerely,
/s/ James J. Musial
James J. Musial
Manager - Regulatory Compliance
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ATTACHMENT A
THE DETROIT EDISON COMPANY
SECURITIZATION BOND CHARGES MARCH 26, 2001
THROUGH FEBRUARY 28, 2002
INITIAL REVISED
ANNUALIZED FACTORS FACTORS
MARCH 16, 2001 REVISED BILLED THRU BILLED STARTING
FILING FACTORS AUG 31, 2001 SEPT 1, 2001
1 SECURITIZATION BOND CHARGE
2 FORECAST PERIOD SECURITIZATION BONDS COSTS
3 Principal Payment 39,660,023 39,660,023
4 Interest Charges 104,769,019 104,769,019
5 Servicing and Administrative Fee 1,125,000 1,125,000
6 Over-collateralization Fee 625,000 625,000
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7 Total Forecast Period Securitization Bond Charges (Lines 3 to 6) 146,179,042 146,179,042
8 TRUE-UP FOR PRIOR PERIOD
9 (Over)Under principal payments 0 0
10 (Over)Under interest 0 0
11 (Over)Under ongoing transaction expenses 0 0
12 (Over)Under Overcollateralization account deficiency 0 0
13 (Over)Under Capital account deficiency 0 0
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14 Total (Over)Under collections of Securitization Bond
Costs (Lines 9 to 13) 0 0
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15
16 Total Securitization Bond Charge Obligation to be billed
17 and collected during the forecast period (Lines 7 + 14) 146,179,042 146,179,042 70,726,709 75,452,333
============== ============== ============== ==============
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19 Forecasted kWh sales (adjusted for uncollectibles) 45,732,831,000 40,308,385,575 21,905,377,502 18,403,008,073
============== ============== ============== ==============
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21 SECURITIZATION BOND CHARGE (mills per kWh) (Lines 17 / 19) 3.2 3.6 3.2 4.1
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23 SECURITIZATION BOND TAX CHARGE
24 FORECAST PERIOD TAX REQUIREMENT
25 Principal Payment * (Tax Rate) / (1 - Tax Rate) 21,355,397 21,355,397
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27 TRUE-UP FOR PRIOR PERIOD
28 Prior period actual Securitization Bond Tax Charge revenue 0 0
29 Prior period actual Securitization Bond Tax Charge requirements 0 0
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30 (Over)Under collections of prior period Securitization Bond
31 Tax Charge requirements (Lines 30 - 31) 0 0
32 Interest on (Over)Under collections at bond rate 0 0
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33 (Over) Under collections including interest (Lines 33 + 34) 0 0
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35 Total Securitization Bond Tax Charge Obligation to be billed
36 and collected during the forecast period (Lines 25 + 33) 21,355,397 21,355,397 10,313,592 11,041,805
============== ============== ============== ==============
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38 Forecasted kWh sales (adjusted for uncollectibles) 45,732,831,000 40,308,385,575 21,905,377,502 18,403,008,073
============== ============== ============== ==============
39
40 SECURITIZATION BOND TAX CHARGE (mills per kWh)
(Lines 36 + 38) 0.5 0.5 0.5 0.6
============== ============== ============== ==============
41
42 TOTAL SECURITIZATION BOND CHARGES IN FORECAST PERIOD
43 (mills per kWh) (Lines 21 + 40) 3.7 4.1 3.7 4.7
============== ============== ============== ==============
Note: Lines 19 and 38 have been adjusted to reflect forecasted kWh sales that
have been billed and collected versus forecasted kWh sales that have been
billed.