DTE ELECTRIC CO, 10-Q filed on 7/30/2012
Quarterly Report
Document Entity Information Document
6 Months Ended
Jun. 30, 2012
Entity Registrant Name
DETROIT EDISON CO 
Entity Central Index Key
0000028385 
Current Fiscal Year End Date
--12-31 
Entity Filer Category
Non-accelerated Filer 
Document Type
10-Q 
Document Period End Date
Jun. 30, 2012 
Document Fiscal Year Focus
2012 
Document Fiscal Period Focus
Q2 
Amendment Flag
false 
Entity Common Stock, Shares Outstanding
138,632,324 
Consolidated Statements of Operations (Unaudited) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Operating Revenues
$ 1,289 
$ 1,240 
$ 2,487 
$ 2,432 
Operating Expenses
 
 
 
 
Fuel and purchased power
428 
417 
805 
795 
Operation and maintenance
334 
331 
689 
660 
Depreciation and amortization
203 
202 
388 
404 
Taxes other than income
60 
60 
128 
119 
Asset (gains) and losses, net
(1)
(5)
(1)
14 
Total operating expenses
1,024 
1,005 
2,009 
1,992 
Operating Income
265 
235 
478 
440 
Other (Income) and Deductions
 
 
 
 
Interest expense
65 
73 
134 
144 
Other income
(11)
(11)
(27)
(21)
Other expenses
9 
6 
15 
12 
Total Other (Income) and Deductions
63 
68 
122 
135 
Income Before Income Taxes
202 
167 
356 
305 
Income Tax Expense
75 
63 
132 
116 
Net Income
$ 127 
$ 104 
$ 224 
$ 189 
Consolidated Statements of Comprehensive Income (Unaudited) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Statement of Other Comprehensive Income [Abstract]
 
 
 
 
Net Income
$ 127 
$ 104 
$ 224 
$ 189 
Other comprehensive income (loss), net of tax:
 
 
 
 
Benfit obligations, net of taxes
1 
0 
2 
1 
Comprehensive income
$ 128 
$ 104 
$ 226 
$ 190 
Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Operating Activities
 
 
Net Income
$ 224 
$ 189 
Adjustments to reconcile net income to net cash from operating activities:
 
 
Depreciation, depletion and amortization
388 
404 
Deferred income taxes
(9)
35 
Asset (gains), losses and reserves and impairments, net
(1)
14 
Changes in assets and liabilities, exclusive of changes shown separately (Note 11)
44 
(220)
Net cash from operating activities
646 
422 
Investing Activities
 
 
Payments to Acquire Property, Plant, and Equipment
(610)
(606)
Restricted cash for debt redemption, principally Securitization
14 
(2)
Proceeds from sale of nuclear decommissioning trust fund assets
36 
59 
Investment in nuclear decommissioning trust funds
(44)
(76)
Notes receivable - affiliates
(166)
103 
Other investments
(7)
(13)
Net cash used for investing activities
(777)
(535)
Financing Activities
 
 
Issuance of long-term debt
496 
248 
Redemption of long-term debt
(97)
(115)
Short-term borrowings — affiliates
17 
21 
Short-term borrowings — other
0 
107 
Dividends on common stock
(152)
(152)
Other
(3)
(7)
Net cash used for financing activities
261 
102 
Net Increase (Decrease) in Cash and Cash Equivalents
130 
(11)
Cash and Cash Equivalents at Beginning of Period
13 
30 
Cash and Cash Equivalents at End of Period
$ 143 
$ 19 
Consolidated Statements of Financial Position (Unaudited) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Current Assets
 
 
Cash and cash equivalents
$ 143 
$ 13 
Restricted cash, principally Securitization
92 
127 
Accounts receivable (less allowance for doubtful accounts of $72 and $80, respectively)
 
 
Customer
751 
709 
Affiliates
87 
61 
Other
57 
76 
Inventories
 
 
Fuel
258 
264 
Materials and supplies
186 
183 
Notes receivable
 
 
Affiliates
192 
26 
Other
2 
2 
Regulatory assets
154 
272 
Other
60 
63 
Total Current Assets
1,982 
1,796 
Investments
 
 
Nuclear decommissioning trust funds
985 
937 
Other
126 
121 
Total Investments
1,111 
1,058 
Property
 
 
Property, plant and equipment
17,163 
16,788 
Less accumulated depreciation and amortization
(6,627)
(6,526)
Property, plant and equipment, net
10,536 
10,262 
Other Assets
 
 
Regulatory assets
3,497 
3,618 
Securitized regulatory assets
497 
577 
Intangible assets
32 
36 
Notes receivable
4 
4 
Other
140 
142 
Total Noncurrent Assets
4,170 
4,377 
Total Assets
17,799 
17,493 
Accounts payable
 
 
Affiliates
45 
67 
Other
397 
421 
Accrued interest
65 
69 
Current portion long-term debt, including capital leases
474 
470 
Regulatory liabilities
8 
27 
Short-term borrowings - affiliates
81 
64 
Other
241 
283 
Total Current Liabilities
1,311 
1,401 
Long-Term Debt (net of current portion)
 
 
Mortgage bonds, notes and other
4,591 
4,105 
Securitization bonds
391 
479 
Capital lease obligations
1 
9 
Total Long-Term Debt (net of current portion)
4,983 
4,593 
Other Liabilities
 
 
Deferred income taxes
2,773 
2,701 
Regulatory liabilities
429 
454 
Asset retirement obligations
1,487 
1,440 
Unamortized investment tax credit
53 
57 
Nuclear decommissioning
149 
148 
Accrued pension liability — affiliates
1,176 
1,231 
Accrued postretirement liability - affiliates
1,124 
1,217 
Other
104 
115 
Total Noncurrent Liabilities
7,295 
7,363 
Equity
 
 
Common stock, $10 par value, 400,000,000 shares authorized, 138,632,324 shares issued and outstanding
3,196 
3,196 
Retained earnings
1,032 
960 
Accumulated other comprehensive loss
(18)
(20)
Total Equity
4,210 
4,136 
Total Liabilities and Equity
$ 17,799 
$ 17,493 
Consolidated Statements of Financial Position (Unaudited) (Parentheticals) (USD $)
In Millions, except Share data, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Allowance for doubtful accounts
$ 72 
$ 80 
Common stock, par value
$ 10.00 
$ 10.00 
Common stock, shares authorized
400,000,000 
400,000,000 
Common stock, shares issued
138,632,324 
138,632,324 
Common stock, shares outstanding
138,632,324 
138,632,324 
Consolidated Statements of Changes in Equity (Unaudited) (USD $)
In Millions, except Share data
Total
Common Stock
Additional Paid-in Capital [Member]
Retained Earnings
Accumulated Other Comprehensive Loss
Stockholders' Equity, Total [Member]
Beginning Balance at Dec. 31, 2011
$ 4,136 
$ 1,386 
$ 1,810 
$ 960 
$ (20)
$ 4,136 
Beginning Balance, shares at Dec. 31, 2011
138,632,324 
138,632,000 
 
 
 
 
Net income
 
 
 
224 
 
224 
Dividends declared on common stock
(152)
 
 
(152)
 
 
Benefit obligations, net of tax
2 
 
 
 
2 
2 
Ending Balance at Jun. 30, 2012
$ 4,210 
$ 1,386 
$ 1,810 
$ 1,032 
$ (18)
$ 4,210 
Ending Balance, shares at Jun. 30, 2012
138,632,324 
138,632,000 
 
 
 
 
Basis of Presentation
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]
BASIS OF PRESENTATION

Corporate Structure

Detroit Edison is an electric utility engaged in the generation, purchase, distribution and sale of electricity to approximately 2.1 million customers in southeastern Michigan. Detroit Edison is regulated by the MPSC and the FERC. In addition, the Company is regulated by other federal and state regulatory agencies including the NRC, the EPA and the MDEQ.

References in this report to “we,” “us,” “our” or “Company” are to Detroit Edison and its subsidiaries, collectively.

Basis of Presentation

These Consolidated Financial Statements should be read in conjunction with the Notes to Consolidated Financial Statements included in the 2011 Annual Report on Form 10-K.

The accompanying Consolidated Financial Statements 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 Company's estimates.

The Consolidated Financial Statements are unaudited, but in the Company's opinion include all adjustments necessary to 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 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, 2012.

Principles of Consolidation

The Company consolidates all majority owned subsidiaries and investments in entities in which it has controlling influence. Non-majority owned investments are accounted for using the equity method when the Company is able to influence the operating policies of the investee. Non-majority owned investments include investments in limited liability companies, partnerships or joint ventures. When the Company does not influence the operating policies of an investee, the cost method is used. These Consolidated Financial Statements also reflect the Company's proportionate interests in certain jointly owned utility plant. The Company eliminates all intercompany balances and transactions.

The Company consolidates VIEs for which it is the primary beneficiary. If the Company 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, the Company 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 Company evaluates whether an entity is a VIE whenever reconsideration events occur. The Company performs ongoing reassessments of all VIEs to determine if the primary beneficiary status has changed.

The Company has variable interests in VIEs through certain of its long-term purchase contracts. As of June 30, 2012, the carrying amount of assets and liabilities in the Consolidated Statement of Financial Position that relate to its variable interests under long-term purchase contracts are predominately related to working capital accounts and generally represent the amounts owed by the Company for the deliveries associated with the current billing cycle under the contracts. The Company has not provided any form of financial support associated with these long-term contracts. There is no significant potential exposure to loss as a result of its variable interests through these long-term purchase contracts.

In 2001, Detroit Edison financed a regulatory asset related to Fermi 2 and certain other regulatory assets through the sale of rate reduction bonds by a wholly-owned special purpose entity, Securitization. Detroit Edison performs servicing activities including billing and collecting surcharge revenue for Securitization. This entity is a VIE, and is consolidated as the Company is the primary beneficiary. The maximum risk exposure related to Securitization is reflected on the Company's Consolidated Statements of Financial Position.

The following table summarizes the major balance sheet items at June 30, 2012 and December 31, 2011 restricted for Securitization that are either (1) assets that can be used only to settle its obligations or (2) liabilities for which creditors do not have recourse to the general credit of the primary beneficiary (in millions).
 
June 30, 2012
 
December 31, 2011
ASSETS
 
 
 
Restricted cash
$
92

 
$
107

Accounts receivable
37

 
34

Securitized regulatory assets
497

 
577

Other assets
9

 
10

 
$
635

 
$
728

LIABILITIES
 
 
 
Accounts payable and accrued current liabilities
$
12

 
$
14

Current portion long-term debt, including capital leases
168

 
164

Other current liabilities
48

 
55

Securitization bonds
391

 
479

Other long-term liabilities
7

 
7

 
$
626

 
$
719



As of June 30, 2012 and December 31, 2011, Detroit Edison had $4 million in Notes receivable, related to non-consolidated VIEs.
Significant Accounting Policies
Significant Accounting Policies [Text Block]
SIGNIFICANT ACCOUNTING POLICIES

Income Taxes

The Company had $3 million and $4 million of unrecognized tax benefits at June 30, 2012 and December 31, 2011, respectively, that, if recognized, would favorably impact its effective tax rate. In 2012, DTE Energy settled a federal tax audit for the 2009 and 2010 tax years and, as a result, Detroit Edison's unrecognized tax benefit decreased by $53 million. The Company does not anticipate any material changes to the unrecognized tax benefits within the next twelve months. The Company had no income tax receivable due from DTE Energy at June 30, 2012 and an income tax receivable of $48 million at December 31, 2011.

Stock-Based Compensation

The Company received an allocation of costs from DTE Energy associated with stock-based compensation of $11 million and $5 million for the three months ended June 30, 2012 and June 30, 2011, respectively, while such allocation was $20 million and $14 million for the six months ended June 30, 2012 and June 30, 2011, respectively.
Fair Value
FAIR VALUE
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 Company makes certain assumptions it believes 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 Company and its counterparties is incorporated in the valuation of assets and liabilities through the use of credit reserves, the impact of which was immaterial at June 30, 2012 and December 31, 2011. The Company believes it uses 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 Company classifies 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 Company has 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.

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. The fair values of the shares in these investments are based upon observable market prices for similar securities and, therefore, have been categorized as Level 2 in the fair value hierarchy.

Nuclear Decommissioning Trusts and Other Investments

The nuclear decommissioning trusts and other investments hold debt and equity securities directly and indirectly through commingled funds and institutional mutual funds. Exchange-traded debt and equity securities held directly are valued using quoted market prices in actively traded markets. The commingled funds and institutional mutual funds which hold exchange-traded equity or debt securities are valued based on the underlying securities, using quoted prices in actively traded markets. Non-exchange-traded fixed income securities are valued based upon quotations available from brokers or pricing services. A primary price source is identified by asset type, class or issue for each security. The trustees monitor prices supplied by pricing services and may use a supplemental price source or change the primary price source of a given security if the trustees determine that another price source is considered to be preferable. Detroit Edison has obtained an understanding of how these prices are derived, including the nature and observability of the inputs used in deriving such prices. Additionally, Detroit Edison selectively corroborates the fair values of securities by comparison of market-based price sources.

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 Company considers 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 Company monitors 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 Company has obtained an understanding of how these prices are derived. Additionally, the Company selectively corroborates the fair value of its 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 Company has 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 our forward price curves has been assigned to our Risk Management group, which is part of the corporate treasury function.

The following table presents assets and liabilities measured and recorded at fair value on a recurring basis as of June 30, 2012 and December 31, 2011 (in millions):
 
June 30, 2012
 
December 31, 2011
 
Level 1
 
Level 2
 
Level 3
 
Net Balance
 
Level 1
 
Level 2
 
Level 3
 
Net Balance
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash equivalents
$
—

 
$
108

 
$
—

 
$
108

 
$
—

 
$
129

 
$
—

 
$
129

Nuclear decommissioning trusts
624

 
361

 
—

 
985

 
577

 
360

 
—

 
937

Other investments
58

 
41

 
—

 
99

 
55

 
38

 
—

 
93

Derivative assets — FTRs
—

 
—

 
2

 
2

 
—

 
—

 
1

 
1

Net Assets
$
682

 
$
510

 
$
2

 
$
1,194

 
$
632

 
$
527

 
$
1

 
$
1,160

 
 
 
 
 
 
 
 
 


 


 


 


Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Current
$
—

 
$
108

 
$
2

 
$
110

 
$
—

 
$
129

 
$
1

 
$
130

Noncurrent
682

 
402

 
—

 
1,084

 
632

 
398

 
—

 
1,030

Total Assets
$
682

 
$
510

 
$
2

 
$
1,194

 
$
632

 
$
527

 
$
1

 
$
1,160


The following table presents the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis for the three and six months ended June 30, 2012 and 2011 (in millions):
 
Three Months Ended
 
Six Months Ended
 
June 30
 
June 30
 
2012
 
2011
 
2012
 
2011
Asset balance as of beginning of the period
$
—

 
$
1

 
$
1

 
$
2

Changes in fair value recorded in regulatory assets/liabilities
4

 
4

 
5

 
3

Purchases, issuances and settlements:
 
 
 
 
 
 
 
Settlements
(2
)
 
$
(2
)
 
(4
)
 
(2
)
Asset balance as of June 30
$
2

 
$
3

 
$
2

 
$
3

The amount of total gains (losses) included in regulatory assets and liabilities attributed to the change in unrealized gains (losses) related to assets and liabilities held at June 30, 2012 and 2011
$
2

 
$
3

 
$
2

 
$
3


No significant transfers between Levels 1, 2 or 3 occurred in the three months and six months ended June 30, 2012 and June 30, 2011.

Fair Value of Financial Instruments

The fair value of financial instruments included in the table below is determined by using quoted market prices when available. When quoted prices are not available, pricing services may be used to determine the fair value with reference to observable interest rate indexes. The Company has obtained an understanding of how the fair values are derived. The Company also selectively corroborates the fair value of its transactions by comparison of market-based price sources. Discounted cash flow analyses based upon estimated current borrowing rates are also used to determine fair value when quoted market prices are not available. The fair values of notes receivable, excluding capital leases, are estimated using discounted cash flow techniques that incorporate market interest rates as well as assumptions about the remaining life of the loans and credit risk. Depending on the information available, other valuation techniques may be used that rely on internal assumptions and models. Valuation policies and procedures are determined by the Company's Treasury Department which reports to the Company's Vice President and Treasurer. The table below shows the fair value and the carrying value for long-term debt securities. The carrying value of other financial instruments, such as notes receivable and short-term borrowings approximates fair value.
The following table presents fair value of financial instruments as of June 30 , 2012 and December 31, 2012 (in millions):

 
June 30, 2012
 
December 31, 2011
 
Carrying
 
Fair Value
 
Carrying
 
Fair
 
Amount
 
Level 1
 
Level 2
 
Level 3
 
Amount
 
Value
Notes receivable, excluding capital leases
$
6

 
$
—

 
$
—

 
$
6

 
$
6

 
$
6

Notes receivable — affiliates
192

 
—

 
—

 
192

 
26

 
26

Short-term borrowings — affiliates
81

 
—

 
—

 
81

 
64

 
64

Long-term debt
5,453

 
—

 
6,128

 
43

 
5,051

 
5,740


See Note 4 for further fair value information on financial derivative instruments.
Nuclear Decommissioning Trust Funds

Detroit Edison has a legal obligation to decommission its nuclear power plants following the expiration of their operating licenses. This obligation is reflected as an asset retirement obligation on the 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. Detroit Edison is continuing to fund FERC jurisdictional amounts for decommissioning even though explicit provisions are not included in FERC rates. See Note 5.

The following table summarizes the fair value of the nuclear decommissioning trust fund assets (in millions):
 
June 30, 2012
 
December 31, 2011
Fermi 2
$
960

 
$
915

Fermi 1
3

 
3

Low level radioactive waste
22

 
19

Total
$
985

 
$
937


The costs of securities sold are determined on the basis of specific identification. The following table sets forth the gains and losses and proceeds from the sale of securities by the nuclear decommissioning trust funds (in millions):
 
Three Months Ended
 
Six Months Ended
 
June 30
 
June 30
 
2012
 
2011
 
2012
 
2011
Realized gains
$
8

 
$
12

 
$
14

 
$
26

Realized losses
(7
)
 
(9
)
 
(11
)
 
(17
)
Proceeds from sales of securities
25

 
39

 
36

 
59


Realized gains and losses from the sale of securities for the Fermi 2 and the low level radioactive waste funds are recorded to the Regulatory asset and Nuclear decommissioning liability. The following table sets forth the fair value and unrealized gains for the nuclear decommissioning trust funds (in millions):
 
June 30, 2012
 
December 31, 2011
 
Fair
Value
 
Unrealized
Gains
 
Fair
Value
 
Unrealized
Gains
Equity securities
$
581

 
$
102

 
$
533

 
$
80

Debt securities
397

 
26

 
385

 
22

Cash and cash equivalents
7

 
—

 
19

 
—

 
$
985

 
$
128

 
$
937

 
$
102


The debt securities at June 30, 2012 and December 31, 2011 had an average maturity of approximately 7 years. Securities held in the nuclear decommissioning trust funds are classified as available-for-sale. As Detroit Edison does not have the ability to hold impaired investments for a period of time sufficient to allow for the anticipated recovery of market value, all unrealized losses are considered to be other than temporary impairments.

Unrealized losses incurred by the Fermi 2 trust are recognized as a Regulatory asset. Detroit Edison recognized $65 million and $67 million of unrealized losses as Regulatory assets at June 30, 2012 and December 31, 2011, respectively. Since the decommissioning of Fermi 1 is funded by Detroit Edison rather than through a regulatory recovery mechanism, there is no corresponding regulatory asset treatment. Therefore, unrealized losses incurred by the Fermi 1 trust are recognized in earnings immediately. There were no unrealized losses recognized for the three and six months ended June 30, 2012 and June 30, 2011 for Fermi 1 trust assets.

Other Available-For-Sale Securities

The following table summarizes the fair value of the Company's investment in available-for-sale debt and equity securities, excluding nuclear decommissioning trust fund assets (in millions):
 
Fair Value
 
June 30, 2012
 
December 31, 2011
Cash equivalents (a)
$
108

 
$
129

Equity securities (b)
5

 
4


(a)
Cash equivalents at June 30, 2012 of $92 million and $16 million are included in Restricted cash and Other investments on the Consolidated Statements of Financial Position, respectively. Cash equivalents at December 31, 2011 of $113 million and $16 million are included in Restricted cash and Other investments on the Consolidated Statements of Financial Position, respectively.

(b)
Equity securities at June 310 2012 and December 31, 2011 of $5 million and $4 million are included in Other investments on the Consolidated Statements of Financial Position, respectively.

As of June 30, 2012, these securities were comprised primarily of money-market funds and equity securities. Gains related to trading securities held at June 30, 2012 and June 30, 2011 were $5 million and $4 million, respectively.
Financial and Other Derivative Instruments
FINANCIAL AND OTHER DERIVATIVE INSTRUMENTS
FINANCIAL AND OTHER DERIVATIVE INSTRUMENTS

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

Detroit Edison's primary market risk exposure is associated with commodity prices, credit and interest rates. The Company has risk management policies to monitor and manage market risks. The Company uses derivative instruments to manage some of the exposure. Detroit Edison generates, purchases, distributes and sells electricity. Detroit Edison uses forward energy and capacity contracts to manage changes in the price of electricity and fuel. Substantially all of these contracts meet the normal purchases and sales exemption and are therefore accounted for under the accrual method. Other derivative contracts are recoverable through the PSCR mechanism when settled. This results in the deferral of unrealized gains and losses as Regulatory assets or liabilities until realized.

The following represents the fair value of derivative instruments as of June 30, 2012 and December 31, 2011 (in millions):
 
June 30, 2012
 
December 31, 2011
FTRs — Other current assets
$
2

 
$
1

Total derivatives not designated as hedging instruments
$
2

 
$
1



The effect of derivative instruments recoverable through the PSCR mechanism when realized on the Consolidated Statements of Financial Position are $4 million and $5 million in gains related to FTRs recognized in Regulatory liabilities for the three and six months ended June 30, 2012, respectively.

The following represents the cumulative gross volume of derivative contracts outstanding as of June 30, 2012:
Commodity
 
Number of Units
FTRs (MWh)
 
108,832

Asset Retirement Obligations
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS

A reconciliation of the asset retirement obligations for the six months ended June 30, 2012 follows (in millions):
Asset retirement obligations at December 31, 2011
$
1,442

Accretion
45

Revision in estimated cash flows
1

Liabilities settled
(1
)
Asset retirement obligations at June 30, 2012
$
1,487

Regulatory Matters
REGULATORY MATTERS
REGULATORY MATTERS

2009 Electric Rate Case Filing - Court of Appeals Decision

On April 10, 2012, the Michigan Court of Appeals issued a decision relating to an appeal of the January 2010 MPSC order in Detroit Edison's January 2009 rate case filing. The order by the Court of Appeals is subject to further appellate review.

The Court determined that the MPSC only had statutory authority to implement a Revenue Decoupling Mechanism (RDM) for gas providers, but not for electric providers, thereby reversing the MPSC's decision to authorize an RDM for Detroit Edison. As discussed below, Detroit Edison has accrued RDM refund liabilities of $56 million and $71 million for the 2010 and 2011 RDM reconciliation periods, respectively. It is the Company's interpretation that the parties in this proceeding have until July 30, 2012 to appeal the decision to the Michigan Supreme Court. Detroit Edison continues to retain the RDM liabilities until it is able to make a determination that the estimation of the liability should be revised. If the Court of Appeals decision is not appealed, Detroit Edison is considering filing an application with the MPSC requesting authority to defer the gain that will arise from the reversal of the RDM liabilities by establishing a new regulatory liability to be refunded to customers through a deferral of base rate increases expected to be needed in future years.

The Court found that the record of evidence in the 2009 rate case order was insufficient to support the MPSC's authorization to recover costs for the pilot advanced metering infrastructure (AMI) program and remanded this matter to the MPSC. The MPSC had approved $37 million of rate base related to the AMI program in the January 2010 order. Detroit Edison is currently operating its AMI program pursuant to the MPSC's approval set forth in its October 20, 2011 order, which was not reviewed by or subject to the Court of Appeal's April 10, 2012 decision. Detroit Edison will provide the necessary data and evidence to the MPSC supporting the AMI program expenditures at the remand hearing. Detroit Edison's AMI program expenditures are $90 million as of June 30, 2012, net of Department of Energy matching grant funds of $58 million.

The Court affirmed the use of tracking mechanisms (restoration, line clearance, uncollectibles expense and choice incentive) and the peak demand computations approved in the January 2010 order.

Detroit Edison RDM

In May 2011, Detroit Edison filed an application with the MPSC for approval of its initial pilot RDM reconciliation for the period February 2010 through January 2011, requesting authority to refund to customers approximately $56 million, plus interest. This amount was accrued by Detroit Edison at December 31, 2011. There are various interpretations and alternative calculation methodologies relating to the pilot RDM refund calculation that could ultimately be adopted by the MPSC which may result in a range of customer refund amounts from $56 million to $140 million for this initial reconciliation filing under the pilot RDM.
 
Detroit Edison accrued a pilot RDM liability for February 2011 through October 2011 of approximately $71 million, plus interest at December 31, 2011. Detroit Edison terminated the pilot RDM effective October 2011, and has requested a rehearing on this issue asserting that for reconciliation purposes, the pilot RDM should have been considered terminated in April 2011, when Detroit Edison self-implemented rates, consistent with prior MPSC orders. An April 2011 termination would result in a decrease to the liability. However, there can be no assurance that Detroit Edison will prevail in this matter. Similar to the initial reconciliation case, there are various interpretations and alternative calculation methodologies that could be adopted which may result in a range of refund obligations in excess of the amount accrued. Considering these variables, the potential customer refund amount could range from $10 million to $130 million for the second and final pilot RDM period.
 
The primary uncertainties involved in the calculation methodologies of the pilot RDM for both reconciliation periods include customer class groupings and treatment of fixed customer charges. The Company believes that the calculation methodology used and the resulting refund estimates recorded follow the requirements and intent of the MPSC orders and represent the most probable amount of Detroit Edison's pilot RDM refund liability as of June 30, 2012.

In light of the Court of Appeals decision, actions related to the RDM reconciliation periods have been suspended pending further appellate review. Detroit Edison's RDM liabilities will be retained until Detroit Edison is able to make a determination that the estimation of the liability should be revised.

Energy Optimization (EO) Plan
 
In September 2011, Detroit Edison filed a biennial EO Plan with the MPSC as required. Detroit Edison's EO Plan application proposed the recovery of EO expenditures for the period 2012-2015 of $294 million and further requested approval of surcharges to recover these costs. On April 17, 2012, the MPSC approved the EO plan proposed by Detroit Edison subject to the Detroit Edison's agreement to certain modifications. On April 27, 2012, Detroit Edison filed a letter with the MPSC rejecting modifications to its EO plan. Accordingly, the amended 2010 EO plan remains in effect.

In May 2012, Detroit Edison filed an application for approval of its reconciliation of 2011 EO plan expenses. Detroit Edison's EO reconciliation included a cumulative $23 million net over-recovery. Detroit Edison proposed that the calculated cumulative over-recovery for 2011 be carried forward into 2012 and used as a beginning balance for the 2012 reconciliation.

Vulnerable Household Warmth Fund

In December 2011, The Vulnerable Household Warmth Fund (VHWF) was created under Michigan law. The purpose of the fund is to provide payment or partial payment of bills for electricity, natural gas, propane, heating oil, or any other type of fuel used to heat the primary residence of a vulnerable customer during the 2011-2012 heating season. Effective with the new law, Detroit Edison is to contribute the amounts collected in its base rates, previously remitted for the LIEEF, to the new VHWF. The monthly payments into the VHWF will cease on the earlier of September 30, 2012 or when $48 million has been accumulated in the fund from payments by major Michigan electric and gas utilities. In May 2012, Detroit Edison filed an application requesting approval of per customer monthly credits to remove the annualized funding for the VHWF from rates in the amount of $40 million. On July 13, 2012, The MPSC approved the plan to remove the VHWF from rates beginning in August 2012.

Other

The Company is unable to predict the outcome of the unresolved regulatory matters discussed herein. Resolution of these matters is dependent upon future MPSC orders and appeals, which may materially impact the financial position, results of operations and cash flows of the Company.
Long-Term Debt
Long-term Debt [Text Block]
LONG-TERM DEBT

Debt Issuances

In 2012, the Company has issued or remarketed the following long-term debt (in millions):
Month
 
Type
 
Interest Rate
 
Maturity
 
Amount
June
 
Mortgage Bonds (a)
 
2.65
%
 
2022
 
$
250

June
 
Mortgage Bonds (a)
 
3.95
%
 
2042
 
250

 
 
 
 
 
 
 
 
$
500


_____________________________
(a)
Proceeds to be used for the early redemption of Detroit Edison long-term debt; for the repayment of short-term borrowings; and for general corporate purposes.

In July 2012, Detroit Edison redeemed $225 million of 5.2% senior notes due October 2012.
Short-Term Credit Arrangements and Borrowings
SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS
SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS

Detroit Edison has a $300 million unsecured revolving credit agreement with a syndicate of 20 banks that may be used for general corporate borrowings, but is intended to provide liquidity support for the Company's commercial paper program. No one bank provides more than 8.5% of the commitment in the facility. Borrowings under the facility are available at prevailing short-term interest rates. The facility will expire in October 2016. At June 30, 2012, there were no amounts outstanding against this facility. facility.

The agreement require the Company to maintain a total funded debt to capitalization ratio of no more than 0.65 to 1. In the agreements, “total funded debt” means all indebtedness of the Company and its consolidated subsidiaries, including capital lease obligations, hedge agreements and guarantees of third parties' debt, but excluding contingent obligations and nonrecourse and junior subordinated debt. “Capitalization” means the sum of (a) total funded debt plus (b) “consolidated net worth,” which is equal to consolidated total stockholders' equity of the Company and its 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 June 30, 2012, the total funded debt to total capitalization ratio for Detroit Edison was 0.54 to 1. Should Detroit Edison have delinquent obligations of at least $50 million to any creditor, such delinquency will be considered a default under its credit agreements.
Commitments and Contingencies
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES

Environmental

Air — Detroit Edison is subject to the EPA ozone and fine particulate transport and acid rain regulations that limit power plant emissions of sulfur dioxide and nitrogen oxides. Since 2005, the EPA and the State of Michigan have issued additional emission reduction regulations relating to ozone, fine particulate, regional haze, mercury, and other air pollution. These rules have led to additional controls on fossil-fueled power plants to reduce nitrogen oxide, sulfur dioxide, mercury and other emissions. To comply with these requirements, Detroit Edison has spent approximately $1.7 billion through 2011. It is estimated that Detroit Edison will make capital expenditures of approximately $186 million in 2012 and up to approximately $2 billion of additional capital expenditures through 2021 based on current regulations. Further, additional rulemakings are expected over the next few years which could require additional controls for sulfur dioxide, nitrogen oxides and hazardous air pollutants. The Cross State Air Pollution Rule (CSAPR), finalized in July 2011, requires further reductions of sulfur dioxide and nitrogen oxides emissions beginning in 2012. On December 30, 2011, the United States Court of Appeals for the District of Columbia Circuit granted the motions to stay the rule, leaving Detroit Edison temporarily subject to the previously existing Clean Air Interstate Rule (CAIR). The Mercury and Air Toxics Standard (MATS) rule, formerly known as the Electric Generating Unit Maximum Achievable Control Technology (EGU MACT) Rule was finalized on December 16, 2011. The MATS rule requires reductions of mercury and other hazardous air pollutants beginning in 2015. Because these rules were recently finalized and technologies to comply are still being tested, it is not possible to quantify the impact of these rulemakings.

In July 2009, DTE Energy received a Notice of Violation/Finding of Violation (NOV/FOV) from the EPA alleging, among other things, that five Detroit Edison power plants violated New Source Performance standards, Prevention of Significant Deterioration requirements, and operating permit requirements under the Clean Air Act. An additional NOV/FOV was received in June 2010 related to a recent project and outage at Unit 2 of the Monroe Power Plant.

On August 5, 2010, the United States Department of Justice, at the request of the EPA, brought a civil suit in the U.S. District Court for the Eastern District of Michigan against DTE Energy and Detroit Edison, related to the June 2010 NOV/FOV and the outage work performed at Unit 2 of the Monroe Power Plant, but not relating to the July 2009 NOV/FOV. Among other relief, the EPA requested the court to require Detroit Edison to install and operate the best available control technology at Unit 2 of the Monroe Power Plant. Further, the EPA requested the court to issue a preliminary injunction to require Detroit Edison to (i) begin the process of obtaining the necessary permits for the Monroe Unit 2 modification and (ii) offset the pollution from Monroe Unit 2 through emissions reductions from Detroit Edison's fleet of coal-fired power plants until the new control equipment is operating.

On August 23, 2011, the U.S. District judge granted DTE Energy's motion for summary judgment in the civil case, dismissing the case and entering judgment in favor of DTE Energy. On October 20, 2011, the EPA caused to be filed a Notice of Appeal to the U.S. Court of Appeals for the Sixth Circuit. Briefs have been filed with the Court of Appeals. A decision by the Court of Appeals is not expected until late 2012. DTE Energy and Detroit Edison believe that the plants identified by the EPA, including Unit 2 of the Monroe Power Plant, have complied with all applicable federal environmental regulations. Depending upon the outcome of discussions with the EPA regarding the NOV/FOV and the result of the appeals process, the Company could also be required to install additional pollution control equipment at some or all of the power plants in question, implement early retirement of facilities where control equipment is not economical, engage in supplemental environmental programs, and/or pay fines. The Company cannot predict the financial impact or outcome of this matter, or the timing of its resolution.

Water — In response to an EPA regulation, Detroit Edison is 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, Detroit Edison may be required to install additional control technologies to reduce the impacts of the water intakes. Initially, it was estimated that Detroit Edison could incur up to approximately $55 million in additional capital expenditures over the four to six years subsequent to 2008 to comply with these requirements. However, a January 2007 circuit court decision remanded back to the EPA several provisions of the federal regulation that has resulted in a delay in compliance dates. The decision also raised the possibility that Detroit Edison may have to install cooling towers at some facilities at a cost substantially greater than was initially estimated for other mitigative technologies. In 2008, the Supreme Court agreed to review the remanded cost-benefit analysis provision of the rule and in April 2009 upheld the EPA's use of this provision in determining best technology available for reducing environmental impacts. The EPA published a proposed rule in 2011 that extended the time line to 2020 with an estimated expected increase in costs to $80 million. The timing of the final rule is currently unknown. The EPA has also issued an information collection request to begin a review of steam electric effluent guidelines. It is not possible at this time to quantify the impacts of these developing requirements.

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 manufactured gas plant (MGP) sites. Detroit Edison conducted remedial investigations at contaminated sites, including three former MGP sites. The investigations have revealed contamination related to the by-products of gas manufacturing at each site. In addition to the MGP sites, the Company is also in the process of cleaning up other contaminated sites, including the area surrounding an ash landfill, electrical distribution substations, and underground and aboveground storage tank locations. The findings of these investigations indicated that the estimated cost to remediate these sites is expected to be incurred over the next several years. At June 30, 2012 and December 31, 2011, the Company had $8 million accrued for remediation. Any significant 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 the Company's financial position and cash flows.

Detroit Edison owns and operates a permitted engineered ash storage facility at the Monroe Power Plant to dispose of fly ash from the coal fired power plant. Detroit Edison performed an engineering analysis in 2009 and identified the need for embankment side slope repairs and reconstruction. The repairs to the landfill embankment are expected to be completed by 2013.

The EPA has published proposed rules to regulate coal ash under the authority of the Resources Conservation and Recovery Act (RCRA). The proposed rule published in June 2010 contains two primary regulatory options to regulate coal ash residue. The EPA is currently considering either designating coal ash as a “Hazardous Waste” as defined by RCRA or regulating coal ash as non-hazardous waste under RCRA. Agencies and legislatures have urged the EPA to regulate coal ash as a non-hazardous waste. If the EPA designates coal ash as a hazardous waste, the agency could apply some, or all, of the disposal and reuse standards that have been applied to other existing hazardous wastes to disposal and reuse of coal ash. Some of the regulatory actions currently being contemplated could have a significant impact on our operations and financial position and the rates we charge our customers. It is not possible to quantify the impact of those expected rulemakings at this time.

Other

In March 2011, the EPA finalized a new set of regulations regarding the identification of non-hazardous secondary materials that are considered solid waste, industrial boiler and process heater maximum achievable control technologies (IBMACT) for major and area sources, and commercial/industrial solid waste incinerator new source performance standard and emission guidelines (CISWI). The effective dates of the major source IBMACT and CISWI regulations were stayed and a re-proposal was issued by the EPA in December 2011. The re-proposed rules may impact our existing operations and may require us, in certain instances, to install new air pollution control devices. The re-proposed regulations will provide a minimum period of three years for compliance with the applicable standards. Based on the final approved regulations, anticipated in 2012, the Company will assess the financial impact, if any, on current operations for compliance with the applicable new standards.
In 2010, the EPA finalized a new sulfur dioxide ambient air quality standard that requires states to submit plans for non-attainment areas to be in compliance by 2017. Michigan's proposed non-attainment area includes Detroit Edison facilities in southwest Detroit and areas of Wayne County. Preliminary modeling runs by the MDEQ suggest that emission reductions may be required by significant sources of sulfur dioxide emissions in these areas, including Detroit Edison power plants. The state implementation plan process is in the preliminary stage and any required emission reductions for Detroit Edison sources to meet the standard cannot be estimated currently.

Nuclear Operations

Property Insurance

Detroit Edison maintains property insurance policies specifically for the Fermi 2 plant. These policies cover such items as replacement power and property damage. The Nuclear Electric Insurance Limited (NEIL) is the primary supplier of the insurance policies.

Detroit Edison maintains a policy for extra expenses, including replacement power costs necessitated by Fermi 2's unavailability due to an insured event. This policy has a 12-week waiting period and provides an aggregate $490 million of coverage over a three-year period.
Detroit Edison has $500 million in primary coverage and $2.25 billion of excess coverage for stabilization, decontamination, debris removal, repair and/or replacement of property and decommissioning. The combined coverage limit for total property damage is $2.75 billion, subject to a $1 million deductible.

In 2007, the Terrorism Risk Insurance Extension Act of 2005 (TRIA) was extended through December 31, 2014. A major change in the extension is the inclusion of “domestic” acts of terrorism in the definition of covered or “certified” acts. For multiple terrorism losses caused by acts of terrorism not covered under the TRIA occurring within one year after the first loss from terrorism, the NEIL policies would make available to all insured entities up to $3.2 billion, plus any amounts recovered from reinsurance, government indemnity, or other sources to cover losses.

Under the NEIL policies, Detroit Edison could be liable for maximum assessments of up to approximately $31 million per event if the loss associated with any one event at any nuclear plant in the United States should exceed the accumulated funds available to NEIL.

Public Liability Insurance

As of January 1, 2012, as required by federal law, Detroit Edison maintains $375 million of public liability insurance for a nuclear incident. For liabilities arising from a terrorist act outside the scope of TRIA, the policy is subject to one industry aggregate limit of $300 million. Further, under the Price-Anderson Amendments Act of 2005, deferred premium charges up to $117.5 million could be levied against each licensed nuclear facility, but not more than $17.5 million per year per facility. Thus, deferred premium charges could be levied against all owners of licensed nuclear facilities in the event of a nuclear incident at any of these facilities.

Nuclear Fuel Disposal Costs

In accordance with the Federal Nuclear Waste Policy Act of 1982, Detroit Edison has a contract with the U.S. Department of Energy (DOE) for the future storage and disposal of spent nuclear fuel from Fermi 2. Detroit Edison is obligated to pay the DOE a fee of 1 mill per kWh of Fermi 2 electricity generated and sold. The fee is a component of nuclear fuel expense. The DOE's Yucca Mountain Nuclear Waste Repository program for the acceptance and disposal of spent nuclear fuel was terminated in 2011. Detroit Edison currently employs a spent nuclear fuel storage strategy utilizing a fuel pool. The Company continues to develop its on-site dry cask storage facility and has postponed the initial offload from the spent fuel pool until 2013. The dry cask storage facility is expected to provide sufficient spent fuel storage capability for the life of the plant as defined by the original operating license.

Detroit Edison is a party in the litigation against the DOE for both past and future costs associated with the DOE's failure to accept spent nuclear fuel under the timetable set forth in the Federal Nuclear Waste Policy Act of 1982. In July 2012, Detroit Edison executed a settlement agreement with the federal government for costs associated with the DOE's delay in acceptance of spent nuclear fuel from Fermi 2 for permanent storage. The settlement provides for a payment of approximately $48 million, expected to be received in 2012, for delay-related costs experienced by Detroit Edison through 2010, and a claims process for submittal of delay-related costs from 2011 through 2013. The settlement proceeds will reduce the cost of the dry cask storage facility assets. The federal government continues to maintain its legal obligation to accept spent nuclear fuel from Fermi 2 for permanent storage. Issues relating to long-term waste disposal policy and to the disposition of funds contributed by Detroit Edison ratepayers to the federal waste fund await future governmental action.

Guarantees

In certain limited circumstances, the Company enters into contractual guarantees. The Company may guarantee another entity’s obligation in the event it fails to perform. The Company may provide guarantees in certain indemnification agreements. Finally, the Company may provide indirect guarantees for the indebtedness of others.

Labor Contracts

There are several bargaining units for the Company’s approximately 2,800 represented employees. The Company is negotiating the contract with one union representing approximately 500 electrical linemen that is due to expire in August 2012. The majority of the remaining represented employees are under a contract that expires in June 2013.

Purchase Commitments

As of December 31, 2011, the Company was party to numerous long-term purchase commitments relating to a variety of goods and services required for the Company’s business. These agreements primarily consist of fuel supply commitments. The Company estimates that these commitments will be approximately $1.4 billion from 2012 through 2027.

The Company also estimates that 2012 capital expenditures will be approximately $1.3 billion. The Company has made certain commitments in connection with expected capital expenditures.

Bankruptcies

The Company purchases and sells electricity from and to governmental entities and numerous companies operating in the steel, automotive, energy, retail and other industries. Certain of its customers have filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. The Company regularly reviews contingent matters relating to these customers and its purchase and sale contracts and records provisions for amounts considered at risk of probable loss. The Company believes its accrued amounts are adequate for probable loss. The final resolution of these matters may have a material effect on its consolidated financial statements.

Other Contingencies

The Company is 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 Company cannot predict the final disposition of such proceedings. The Company regularly reviews legal matters and records provisions for claims that it can estimate and are considered probable of loss. The resolution of these pending proceedings is not expected to have a material effect on the Company’s operations or financial statements in the periods they are resolved.

See Notes 4 and 6 for a discussion of contingencies related to derivatives and regulatory matters.
Retirement Benefits and Trusteed Assets
Pension and Other Postretirement Benefits Disclosure [Text Block]
RETIREMENT BENEFITS AND TRUSTEED ASSETS

The following details the components of net periodic benefit costs for pension benefits and other postretirement benefits (in millions):
 
Pension Benefits
 
Other Postretirement Benefits
 
2012
 
2011
 
2012
 
2011
Three Months Ended June 30
 
 
 
 
 
 
 
Service cost
$
17

 
$
15

 
$
14

 
$
13

Interest cost
39

 
38

 
23

 
24

Expected return on plan assets
(42
)
 
(42
)
 
(16
)
 
(15
)
Amortization of:
 
 
 
 
 
 
 
Net actuarial loss
30

 
24

 
14

 
10

Prior service cost (credit)
—

 
1

 
(4
)
 
(4
)
Settlements
—

 
2

 
—

 
—

Net periodic benefit cost
$
44

 
$
38

 
$
31

 
$
28


 
Pension Benefits
 
Other Postretirement Benefits
 
2012
 
2011
 
2012
 
2011
Six Months Ended June 30
 
 
 
 
 
 
 
Service cost
$
33

 
$
30

 
$
27

 
$
26

Interest cost
78

 
77

 
46

 
47

Expected return on plan assets
(83
)
 
(84
)
 
(31
)
 
(31
)
Amortization of:
 
 
 
 
 
 
 
Net actuarial loss
60

 
47

 
28

 
21

Prior service cost (credit)
—

 
2

 
(8
)
 
(8
)
Net transition liability
—

 
—

 
1

 
1

Settlements
2

 
2

 
—

 
—

Net periodic benefit cost
$
90

 
$
74

 
$
63

 
$
56



Pension and Other Postretirement Contributions

The Company contributed $80 million of DTE Energy common stock to its pension plans in the second quarter of 2012,
consisting of approximately 1.3 million shares valued at an average price of $59.94 per share.

At the discretion of management, and depending upon financial market conditions, the Company may make up to an additional $120 million contribution to its pension plans in 2012.

In January 2012, the Company contributed $95 million to its other postretirement benefit plans. At the discretion of
management, the Company may make up to an additional $120 million contribution to its postretirement benefit plans in 2012.
Supplemental Cash Flow Information
SUPPLEMENTAL CASH FLOW INFORMATION
SUPPLEMENTAL CASH FLOW INFORMATION

The following provides detail of the changes in assets and liabilities that are reported in the Consolidated Statements of Cash Flows (in millions):
 
Six Months Ended
 
June 30
 
2012
 
2011
Changes in Assets and Liabilities, Exclusive of Changes Shown Separately
 
 
 
Accounts receivable, net
$
(102
)
 
$
(35
)
Inventories
3

 
(21
)
Accrued pension liability — affiliates
(55
)
 
(178
)
Accounts payable
(1
)
 
(1
)
Accrued PSCR refund
63

 
(33
)
Income taxes receivable/payable
102

 
66

Postretirement obligation — affiliates
(93
)
 
(31
)
Other assets
186

 
85

Other liabilities
(59
)
 
(72
)
 
$
44

 
$
(220
)
Significant Accounting Policies Significant Accountingn (Policies)
Income Tax, Policy [Policy Text Block] 
Income Taxes

The Company had $3 million and $4 million of unrecognized tax benefits at June 30, 2012 and December 31, 2011, respectively, that, if recognized, would favorably impact its effective tax rate. In 2012, DTE Energy settled a federal tax audit for the 2009 and 2010 tax years and, as a result, Detroit Edison's unrecognized tax benefit decreased by $53 million. The Company does not anticipate any material changes to the unrecognized tax benefits within the next twelve months. The Company had no income tax receivable due from DTE Energy at June 30, 2012 and an income tax receivable of $48 million at December 31, 2011.

Stock-Based Com
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] 
Stock-Based Compensation

The Company received an allocation of costs from DTE Energy associated with stock-based compensation of $11 million and $5 million for the three months ended June 30, 2012 and June 30, 2011, respectively, while such allocation was $20 million and $14 million for the six months ended June 30, 2012 and June 30, 2011, respectively.
Basis of Presentation (Tables)
Schedule of Variable Interest Entities [Table Text Block]
 
June 30, 2012
 
December 31, 2011
ASSETS
 
 
 
Restricted cash
$
92

 
$
107

Accounts receivable
37

 
34

Securitized regulatory assets
497

 
577

Other assets
9

 
10

 
$
635

 
$
728

LIABILITIES
 
 
 
Accounts payable and accrued current liabilities
$
12

 
$
14

Current portion long-term debt, including capital leases
168

 
164

Other current liabilities
48

 
55

Securitization bonds
391

 
479

Other long-term liabilities
7

 
7

 
$
626

 
$
719

Fair Value (Tables)
Assets and liabilities measured and recorded at fair value on a recurring basis 
e following table presents assets and liabilities measured and recorded at fair value on a recurring basis as of June 30, 2012 and December 31, 2011 (in millions):
 
June 30, 2012
 
December 31, 2011
 
Level 1
 
Level 2
 
Level 3
 
Net Balance
 
Level 1
 
Level 2
 
Level 3
 
Net Balance
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash equivalents
$
—

 
$
108

 
$
—

 
$
108

 
$
—

 
$
129

 
$
—

 
$
129

Nuclear decommissioning trusts
624

 
361

 
—

 
985

 
577

 
360

 
—

 
937

Other investments
58

 
41

 
—

 
99

 
55

 
38

 
—

 
93

Derivative assets — FTRs
—

 
—

 
2

 
2

 
—

 
—

 
1

 
1

Net Assets
$
682

 
$
510

 
$
2

 
$
1,194

 
$
632

 
$
527

 
$
1

 
$
1,160

 
 
 
 
 
 
 
 
 


 


 


 


Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Current
$
—

 
$
108

 
$
2

 
$
110

 
$
—

 
$
129

 
$
1

 
$
130

Noncurrent
682

 
402

 
—

 
1,084

 
632

 
398

 
—

 
1,030

Total Assets
$
682

 
$
510

 
$
2

 
$
1,194

 
$
632

 
$
527

 
$
1

 
$
1,160


Th
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] 

Fair Value of Financial Instruments [Table Text Block] 
e following table presents fair value of financial instruments as of June 30 , 2012 and December 31, 2012 (in millions):

 
June 30, 2012
 
December 31, 2011
 
Carrying
 
Fair Value
 
Carrying
 
Fair
 
Amount
 
Level 1
 
Level 2
 
Level 3
 
Amount
 
Value
Notes receivable, excluding capital leases
$
6

 
$
—

 
$
—

 
$
6

 
$
6

 
$
6

Notes receivable — affiliates
192

 
—

 
—

 
192

 
26

 
26

Short-term borrowings — affiliates
81

 
—

 
—

 
81

 
64

 
64

Long-term debt
5,453

 
—

 
6,128

 
43

 
5,051

 
5,740


Fair Value of Nuclear Decommissioning Trust Fund Assets [Table Text Block] 
e following table summarizes the fair value of the nuclear decommissioning trust fund assets (in millions):
 
June 30, 2012
 
December 31, 2011
Fermi 2
$
960

 
$
915

Fermi 1
3

 
3

Low level radioactive waste
22

 
19

Total
$
985

 
$
937


Schedule of Realized Gain (Loss) [Table Text Block] 
e costs of securities sold are determined on the basis of specific identification. The following table sets forth the gains and losses and proceeds from the sale of securities by the nuclear decommissioning trust funds (in millions):
 
Three Months Ended
 
Six Months Ended
 
June 30
 
June 30
 
2012
 
2011
 
2012
 
2011
Realized gains
$
8

 
$
12

 
$
14

 
$
26

Realized losses
(7
)
 
(9
)
 
(11
)
 
(17
)
Proceeds from sales of securities
25

 
39

 
36

 
59


Fair Value and Unrealized Gains for Nuclear Decommissioning Trust Fund [Table Text Block] 
he following table sets forth the fair value and unrealized gains for the nuclear decommissioning trust funds (in millions):
 
June 30, 2012
 
December 31, 2011
 
Fair
Value
 
Unrealized
Gains
 
Fair
Value
 
Unrealized
Gains
Equity securities
$
581

 
$
102

 
$
533

 
$
80

Debt securities
397

 
26

 
385

 
22

Cash and cash equivalents
7

 
—

 
19

 
—

 
$
985

 
$
128

 
$
937

 
$
102


Th
Available-for-sale debt and equity securities 
he following table summarizes the fair value of the Company's investment in available-for-sale debt and equity securities, excluding nuclear decommissioning trust fund assets (in millions):
 
Fair Value
 
June 30, 2012
 
December 31, 2011
Cash equivalents (a)
$
108

 
$
129

Equity securities (b)
5

 
4


Financial and Other Derivative Instruments (Tables)
Fair value of derivative instruments 
The following represents the fair value of derivative instruments as of June 30, 2012 and December 31, 2011 (in millions):
 
June 30, 2012
 
December 31, 2011
FTRs — Other current assets
$
2

 
$
1

Total derivatives not designated as hedging instruments
$
2

 
$
1

Volume of Commodity Contracts [Table Text Block] 
The following represents the cumulative gross volume of derivative contracts outstanding as of June 30, 2012:
Commodity
 
Number of Units
FTRs (MWh)
 
108,832

Asset Retirement Obligations (Tables)
Schedule of Change in Asset Retirement Obligation [Table Text Block]
A reconciliation of the asset retirement obligations for the six months ended June 30, 2012 follows (in millions):
Asset retirement obligations at December 31, 2011
$
1,442

Accretion
45

Revision in estimated cash flows
1

Liabilities settled
(1
)
Asset retirement obligations at June 30, 2012
$
1,487

Long-Term Debt (Tables)
Schedule of Long-term Debt Instruments [Table Text Block]
In 2012, the Company has issued or remarketed the following long-term debt (in millions):
Month
 
Type
 
Interest Rate
 
Maturity
 
Amount
June
 
Mortgage Bonds (a)
 
2.65
%
 
2022
 
$
250

June
 
Mortgage Bonds (a)
 
3.95
%
 
2042
 
250

 
 
 
 
 
 
 
 
$
500

Retirement Benefits and Trusteed Assets (Tables)
Schedule of Defined Benefit Plans Disclosures [Table Text Block]
The following details the components of net periodic benefit costs for pension benefits and other postretirement benefits (in millions):
 
Pension Benefits
 
Other Postretirement Benefits
 
2012
 
2011
 
2012
 
2011
Three Months Ended June 30
 
 
 
 
 
 
 
Service cost
$
17

 
$
15

 
$
14

 
$
13

Interest cost
39

 
38

 
23

 
24

Expected return on plan assets
(42
)
 
(42
)
 
(16
)
 
(15
)
Amortization of:
 
 
 
 
 
 
 
Net actuarial loss
30

 
24

 
14

 
10

Prior service cost (credit)
—

 
1

 
(4
)
 
(4
)
Settlements
—

 
2

 
—

 
—

Net periodic benefit cost
$
44

 
$
38

 
$
31

 
$
28


 
Pension Benefits
 
Other Postretirement Benefits
 
2012
 
2011
 
2012
 
2011
Six Months Ended June 30
 
 
 
 
 
 
 
Service cost
$
33

 
$
30

 
$
27

 
$
26

Interest cost
78

 
77

 
46

 
47

Expected return on plan assets
(83
)
 
(84
)
 
(31
)
 
(31
)
Amortization of:
 
 
 
 
 
 
 
Net actuarial loss
60

 
47

 
28

 
21

Prior service cost (credit)
—

 
2

 
(8
)
 
(8
)
Net transition liability
—

 
—

 
1

 
1

Settlements
2

 
2

 
—

 
—

Net periodic benefit cost
$
90

 
$
74

 
$
63

 
$
56

Supplemental Cash Flow Information (Tables)
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]
The following provides detail of the changes in assets and liabilities that are reported in the Consolidated Statements of Cash Flows (in millions):
 
Six Months Ended
 
June 30
 
2012
 
2011
Changes in Assets and Liabilities, Exclusive of Changes Shown Separately
 
 
 
Accounts receivable, net
$
(102
)
 
$
(35
)
Inventories
3

 
(21
)
Accrued pension liability — affiliates
(55
)
 
(178
)
Accounts payable
(1
)
 
(1
)
Accrued PSCR refund
63

 
(33
)
Income taxes receivable/payable
102

 
66

Postretirement obligation — affiliates
(93
)
 
(31
)
Other assets
186

 
85

Other liabilities
(59
)
 
(72
)
 
$
44

 
$
(220
)
Basis of Presentation (Details Textuals) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
customers
Dec. 31, 2011
Legal Entities [Line Items]
 
 
Number of Electric Customers
2,100,000 
 
Notes, Loans and Financing Receivable, Net, Noncurrent
$ 4 
$ 4 
Consolidated Variable Interest Entity [Member]
 
 
Legal Entities [Line Items]
 
 
Notes, Loans and Financing Receivable, Net, Noncurrent
$ 4 
$ 4 
Basis of Presentation (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Assets [Abstract]
 
 
Restricted cash
$ 92 
$ 127 
Accounts receivable
751 
709 
Securitized regulatory assets
497 
577 
Other assets
140 
142 
Total Assets
17,799 
17,493 
Liabilities [Abstract]
 
 
Current portion long-term debt, including, capital leases
474 
470 
Other current liabilities
241 
283 
Securitization bonds
391 
479 
Other long-term liabilities
104 
115 
Notes, Loans and Financing Receivable, Net, Noncurrent
4 
4 
Variable Interest Entity Securitization [Member]
 
 
Assets [Abstract]
 
 
Restricted cash
92 
107 
Accounts receivable
37 
34 
Securitized regulatory assets
497 
577 
Other assets
9 
10 
Total Assets
635 
728 
Liabilities [Abstract]
 
 
Accounts payable and accrued current liabilities
12 
14 
Current portion long-term debt, including, capital leases
168 
164 
Other current liabilities
48 
55 
Securitization bonds
391 
479 
Other long-term liabilities
7 
7 
Total Liabilities
$ 626 
$ 719 
Significant Accounting Policies (Details Textuals) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Significant Accounting Policies [Line Items]
 
 
 
 
 
Unrecognized Tax Benefits
$ 3 
 
$ 3 
 
$ 4 
Unrecognized Tax Benefits, Decreases Resulting from Settlements with Taxing Authorities
 
 
53 
 
 
Income Tax Receivable Affiliate
0 
 
0 
 
48 
Allocation of Stock Based Compensation Expense from Affiliate
$ 11 
$ 5 
$ 20 
$ 14 
 
Fair Value (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Assets [Abstract]
 
 
Cash and Cash Equivalents, Fair Value Disclosure
$ 108 
$ 129 
Nuclear decommissioning trusts
985 
937 
Other investments
99 
93 
Derivative Asset, Fair Value, Gross Asset
2 
1 
Derivative Assets
1,194 
1,160 
Derivative Assets, Current
110 
130 
Derivative Assets, Noncurrent
1,084 
1,030 
Fair Value, Inputs, Level 1 [Member]
 
 
Assets [Abstract]
 
 
Cash and Cash Equivalents, Fair Value Disclosure
0 
0 
Nuclear decommissioning trusts
624 
577 
Other investments
58 
55 
Derivative Asset, Fair Value, Gross Asset
0 
0 
Derivative Assets
682 
632 
Derivative Assets, Current
0 
0 
Derivative Assets, Noncurrent
682 
632 
Fair Value, Inputs, Level 2 [Member]
 
 
Assets [Abstract]
 
 
Cash and Cash Equivalents, Fair Value Disclosure
108 
129 
Nuclear decommissioning trusts
361 
360 
Other investments
41 
38 
Derivative Asset, Fair Value, Gross Asset
0 
0 
Derivative Assets
510 
527 
Derivative Assets, Current
108 
129 
Derivative Assets, Noncurrent
402 
398 
Fair Value, Inputs, Level 3 [Member]
 
 
Assets [Abstract]
 
 
Cash and Cash Equivalents, Fair Value Disclosure
0 
0 
Nuclear decommissioning trusts
0 
0 
Other investments
0 
0 
Derivative Asset, Fair Value, Gross Asset
2 
1 
Derivative Assets
2 
1 
Derivative Assets, Current
2 
1 
Derivative Assets, Noncurrent
$ 0 
$ 0 
Fair Value (Details 1) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis
 
 
 
 
Beginning Balance
$ 0 
$ 1 
$ 1 
$ 2 
Fair Value Measurements with Unobservable Inputs Reconciliation Gains and Losses Recorded in Regulatory Assets Liabilities
4 
4 
5 
3 
Purchases issuances and settlements [Abstract]
 
 
 
 
Settlements
(2)
(2)
(4)
(2)
Ending Balance
2 
3 
2 
3 
The amount of total gains (losses) included in net income attributed to the change in unrealized gains or losses related to assets still held at the end of the period
$ 2 
$ 3 
$ 2 
$ 3 
Fair Value (Details 2) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Fair Value of Financial Instruments [Line Items]
 
 
Notes receivable, excluding capital leases
$ 6 
$ 6 
Notes receivable, excluding capital leases
 
6 
Notes receivable - affiliates
192 
26 
Notes receivable - affiliates
 
26 
Short-term borrowings - affiliates
81 
64 
Short term borrowing - affiliates
 
64 
Long-term Debt
5,453 
5,051 
Long-term debt
 
5,740 
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value of Financial Instruments [Line Items]
 
 
Notes receivable, excluding capital leases
0 
 
Notes receivable - affiliates
0 
 
Short term borrowing - affiliates
0 
 
Long-term debt
0 
 
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value of Financial Instruments [Line Items]
 
 
Notes receivable, excluding capital leases
0 
 
Notes receivable - affiliates
0 
 
Short term borrowing - affiliates
0 
 
Long-term debt
6,128 
 
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value of Financial Instruments [Line Items]
 
 
Notes receivable, excluding capital leases
6 
 
Notes receivable - affiliates
192 
 
Short term borrowing - affiliates
81 
 
Long-term debt
$ 43 
 
Fair Value (Details 3) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Decommissioning Fund Investments
$ 985 
$ 937 
Fermi 2 [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Decommissioning Fund Investments
960 
915 
Fermi 1 [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Decommissioning Fund Investments
3 
3 
Low level radioactive waste [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Decommissioning Fund Investments
$ 22 
$ 19 
Fair Value (Details 4) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Fair Value, Option, Quantitative Disclosures [Line Items]
 
 
 
 
Realized gains
$ 8 
$ 12 
$ 14 
$ 26 
Realized losses
(7)
(9)
(11)
(17)
Proceeds from sales of securities
$ 25 
$ 39 
$ 36 
$ 59 
Fair Value (Details 5) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Fair Value, Option, Quantitative Disclosures [Line Items]
 
 
Nuclear decommissioning trusts
$ 985 
$ 937 
Unrealized Gains
128 
102 
Equity securities [Member]
 
 
Fair Value, Option, Quantitative Disclosures [Line Items]
 
 
Equity securities
581 
533 
Unrealized Gains
102 
80 
Debt securities [Member]
 
 
Fair Value, Option, Quantitative Disclosures [Line Items]
 
 
Debt securities
397 
385 
Unrealized Gains
26 
22 
Cash and cash equivalents [Member]
 
 
Fair Value, Option, Quantitative Disclosures [Line Items]
 
 
Cash and cash equivalents
7 
19 
Unrealized Gains
$ 0 
$ 0 
Fair Value (Details 6) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Cash Equivalents [Member]
 
 
Fair Value, Option, Quantitative Disclosures [Line Items]
 
 
Available-for-sale Securities, Fair Value Disclosure
$ 108 
$ 129 
Equity securities [Member]
 
 
Fair Value, Option, Quantitative Disclosures [Line Items]
 
 
Available-for-sale Securities, Fair Value Disclosure
$ 5 
$ 4 
Fair Value (Details Textuals) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
years
Jun. 30, 2011
Jun. 30, 2012
years
Jun. 30, 2011
Dec. 31, 2011
years
Fair Value, Option, Quantitative Disclosures [Line Items]
 
 
 
 
 
Transfers Between Levels 1, 2 and 3
$ 0 
$ 0 
$ 0 
$ 0 
 
Average Maturity of Debt Securities
7 
 
7 
 
7 
Unrealized losses recognized as regulatory assets
65 
 
65 
 
67 
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net
0 
0 
0 
0 
 
Fair Value of Cash Equivalents Included in Restricted Cash
92 
 
92 
 
113 
Fair Value of Cash Equivalents Included in Other Investments
16 
 
16 
 
16 
Trading Securities, Change in Unrealized Holding Gain (Loss)
 
 
5 
4 
 
Cash Equivalents [Member]
 
 
 
 
 
Fair Value, Option, Quantitative Disclosures [Line Items]
 
 
 
 
 
Available-for-sale Securities, Fair Value Disclosure
$ 108 
 
$ 108 
 
$ 129 
Financial and Other Derivative Instruments (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Derivatives designated as hedging instruments:
 
 
Derivative Asset Fair Value Gross Asset
$ 2 
$ 1 
Financial and Other Derivative Instruments (Details 1)
Jun. 30, 2012
deted.volumes
Derivative [Line Items]
 
Investment Contract Volume
108,832 
Financial and Other Derivative Instruments (Details Textuals) (FTR [Member], USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2012
FTR [Member]
 
 
Derivative [Line Items]
 
 
Derivative Instruments Recoverable Through PSCR Mechanism
$ 4 
$ 5 
Asset Retirement Obligations (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Asset Retirement Obligations [Line Items]
 
Asset retirement obligations at December 31, 2011
$ 1,442 
Accretion
45 
Asset Retirement Obligation, Revision of Estimate
1 
Asset Retirement Obligation, Liabilities Settled
(1)
Asset retirement obligations at June 30, 2012
$ 1,487 
Regulatory Matters (Details Textuals) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Regulatory Liabilities [Line Items]
 
Accrued Liabilities for RDM Refunds Relating to 2010
$ 56 
Accrued Liabilities for RDM Refunds Relating to 2011
71 
Approved Rate Base Relating to the AMI Program
37 
Expenditures Net of Grant Funds for AMI Program
90 
Matching Grant Funds for the AMI Program
58 
RDM Refund Range Minimum First Pilot
56 
RDM Refund Range Maximum First Pilot
140 
RDM Refund Range Minimum Second Pilot
10 
RDM Refund Range Maximum Second Pilot
130 
Requested Recovery of Enery Optimization Expenses for Future Period
294 
EO Plan Expense Cummulative Over Recovery
23 
Vulnerable household warmth fund amount to be collected
48 
Customer Monthly Credits to Remove Annualized Funding for VHWF from Rates
$ 40 
Long-Term Debt (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
percent
Debt Instrument [Line Items]
 
Debt Instrument, Interest Rate, Stated Percentage
5.20% 
Debt Instrument, Face Amount
$ 500 
Mortgages [Member]
 
Debt Instrument [Line Items]
 
Debt Instrument, Interest Rate, Stated Percentage
2.65% 
Debt Instrument, Face Amount
250 
Mortgage 1 [Member]
 
Debt Instrument [Line Items]
 
Debt Instrument, Interest Rate, Stated Percentage
3.95% 
Debt Instrument, Face Amount
$ 250 
Long-Term Debt Long-Term Debt Textuals (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2012
percent
Extinguishment of Debt [Line Items]
 
Extinguishment of Debt, Amount
$ 225 
Debt Instrument, Interest Rate, Stated Percentage
5.20% 
Short-Term Credit Arrangements and Borrowings (Details Textuals) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
percent
ratio
banks
Short-term Debt [Line Items]
 
Line of Credit Facility, Current Borrowing Capacity
$ 300 
Revolving Credit Facilities with a Syndicate Number of Banks
20 
Maximum Percentage of Commitment to Bank in Any Facility
8.50% 
Maximum Total Funded Debt to Total Capitalization Ratio
65.00% 
Total Funded Debt to Total Capitalization Ratio Denominator
100.00% 
Total Funded Debt to Total Capitalization Ratio
54.00% 
Amount of Delinquent Obligations Considered a Default Under Credit Agreements
$ 50 
Commitments and Contingencies (Details Textuals) (USD $)
6 Months Ended 12 Months Ended
Jun. 30, 2012
deted
kWh
weeks
employees
years
Jun. 30, 2011
Dec. 31, 2011
Loss Contingencies [Line Items]
 
 
 
Environmental Capital Expenditures Through Current Year
 
 
$ 1,700,000,000 
Environmental Capital Expenditures in Current Year
186,000,000 
 
 
Environmental Capital Expenditures In Future Years
2,000,000,000 
 
 
EPA is Alleging Detroit Edison Power Plants Violated New Source Performance Standards
5 
 
 
Possible Additional Capital Expenditures for EPA Regulations
80,000,000 
 
55,000,000 
Minimum Amount of Years to Incur Additional Capital Expenditures
4 
 
 
Maximum Amount of Years to Incur Additional Capital Expenditures
6 
 
 
Former MGP Sites
3 
 
 
Site Contingency, Accrual, Undiscounted Amount
8,000,000 
 
8,000,000 
Waiting Period of Policy
12 
 
 
Insurance Coverage for Extra Expense when to Necessitate Power Plant when Unavailable
490,000,000 
 
 
Period of coverage of policy for extra expenses
3 
 
 
Primary Coverage
500,000,000 
 
 
Coverage for Stabilization Decontamination Debris Removal Repair and Replacement of Property and Decommissioning
2,250,000,000 
 
 
Combined coverage limit for total property damage
2,750,000,000 
 
 
Insurance Deductible for Nuclear Power Plant
1,000,000 
 
 
NEIL Policies Against Terrorism Loss
 
3,200,000,000 
 
Amount Per Event Loss Associated With Nuclear Power Plants
31,000,000 
 
 
Maintenance of Public Liability Insurance for Nuclear Power Plants
375,000,000 
 
 
Aggregate Limit of Liabilities Arises From Terrorist Act Outside Scope of Trials Subject to One Industry
300,000,000 
 
 
Deferred premium charges levied against each licensed nuclear facility
117,500,000 
 
 
Limit deferred premium charges per year
17,500,000 
 
 
Company Obligated to Pay DOE Fee of Fermi 2 Electricity Generated and Sold
1 
 
 
Payment from the DOE for Delaying Acceptance of Spent Nuclear Fuel
48,000,000 
 
 
Number of Represented Employees
2,800 
 
 
Contract Expiring for Electrical Linemen
500 
 
 
Long-term Purchase Commitment, Amount
1,400,000,000 
 
 
Estimated Future Capital Expenditures for Current Year
$ 1,300,000,000 
 
 
Retirement Benefits and Trusteed Assets (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Pension Plans, Defined Benefit [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Service cost
$ 17 
$ 15 
$ 33 
$ 30 
Interest cost
39 
38 
78 
77 
Expected return on plan assets
42 
42 
83 
84 
Net actuarial loss
30 
24 
60 
47 
Prior service cost (credit)
0 
1 
0 
2 
Net transition liability
 
 
0 
0 
Settlements
0 
2 
2 
2 
Net periodic benefit cost
44 
38 
90 
74 
Other Postretirement Benefit Plans, Defined Benefit [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Service cost
14 
13 
27 
26 
Interest cost
23 
24 
46 
47 
Expected return on plan assets
16 
15 
31 
31 
Net actuarial loss
14 
10 
28 
21 
Prior service cost (credit)
(4)
(4)
(8)
(8)
Net transition liability
 
 
1 
1 
Settlements
0 
0 
0 
0 
Net periodic benefit cost
$ 31 
$ 28 
$ 63 
$ 56 
Retirement Benefits and Trusteed Assets (Details Textuals) (USD $)
In Millions, except Per Share data, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
Contribution of Common Stock to Pension Plan
$ 80 
Contribution of Common Stock to Pension Plan Shares
1.3 
Contribution of Common Stock to Pension Plans Amount per Share
$ 59.94 
Defined Benefit Plan, Contributions by Employer
95 
Pension Plans, Defined Benefit [Member]
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
Defined Benefit Plan, Estimated Future Employer Contributions in Current Fiscal Year
120 
Other Postretirement Benefit Plans, Defined Benefit [Member]
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
Defined Benefit Plan, Estimated Future Employer Contributions in Current Fiscal Year
$ 120 
Supplemental Cash Flow Information (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Supplemental Cash Flow [Line Items]
 
 
Increase (Decrease) in Accounts Receivable
$ (102)
$ (35)
Increase (Decrease) in Inventories
3 
(21)
Increase (Decrease) in Prepaid Pension Costs
(55)
(178)
Increase (Decrease) in Accounts Payable
(1)
(1)
Increase (Decrease) in Other Accrued Liabilities
63 
(33)
Increase (Decrease) in Income Taxes Payable
102 
66 
Increase (Decrease) in Postretirement Obligations
(93)
(31)
Increase (Decrease) in Other Operating Assets
186 
85 
Increase (Decrease) in Other Operating Liabilities
(59)
(72)
Increase (Decrease) in Operating Capital
$ 44 
$ (220)