DTE Energy 2007 Annual Report Download - page 29

A one-percentage-point increase in health care cost trend rates would have increased the total service cost and interest cost
components of benefit costs by $5 million and increased the accumulated benefit obligation by $42 million at December 31, 2007. A
one-percentage-point decrease in the health care cost trend rates would have decreased the total service cost and interest cost
components of benefit costs by $6 million and would have decreased the accumulated benefit obligation by $60 million at December
31, 2007.
At December 31, 2007, the benefits expected to be paid, including prescription drug benefits, in each of the next five years and in the
aggregate for the five fiscal years thereafter are as follows:
(in Millions)
2008 $ 30
2009 32
2010 32
2011 34
2012 34
2013 — 2017 181
Total $ 343
The process used in determining the long-term rate of return for assets and the investment approach for our other postretirement
benefits plans is similar to those previously described for our pension plans.
Our plan’ s weighted-average asset allocations and related targets by asset category at December 31 were as follows:
2007 2006 Target
Equity securities 67% 68% 55%
Debt securities 22 27 20
Other 11 5 25
100% 100% 100%
In December 2003, the Medicare Act was signed into law which provides for a non-taxable federal subsidy to sponsors of retiree
health care benefit plans that provide a benefit that is at least “actuarially equivalent” to the benefit established by law. The effects of
the subsidy reduced net periodic postretirement benefit costs by $9 million in 2007, $2 million in 2006, and $5 million in 2005.
At December 31, 2007, the gross amount of federal subsidies expected to be received in each of the next five years and in the
aggregate for the five fiscal years thereafter was as follows:
(in Millions)
2008 $ 1
2009 1
2010 1
2011 2
2012 2
2013 — 2017 8
Total $ 15
Grantor Trust
We maintain a Grantor Trust that invests in life insurance contracts and income securities. Employees and retirees have no right, title
or interest in the assets of the Grantor Trust, and we can revoke the trust subject to providing the MPSC with prior notification. We
account for our investment at fair value with unrealized gains and losses recorded to earnings.
NOTE 12 – RELATED PARTY TRANSACTIONS
We have agreements with affiliated companies to provide transportation and storage services and for the purchase of natural gas. We
have an agreement with a DTE Energy affiliate where we are charged for our use of their shared capital assets. Prior to March 31,
2007, under a service agreement with DTE Energy, various DTE Energy affiliates, including MichCon, provide corporate support
services inclusive of various financial, auditing, tax, legal, treasury and cash management, human resources, information technology,
and regulatory services, which were billed to DTE Energy corporate. As these functions essentially support the entire DTE Energy
Company, total administrative and general expenses billed to DTE Energy corporate by MichCon and the other affiliates, along with
certain interest and financing costs were then billed to various subsidiaries of DTE Energy, including MichCon. Subsequent to March
31, 2007, a new affiliate company was formed, DTE Energy Corporate Services, LLC, to accumulate the aforementioned corporate
support services type expenses, which previously had been recorded on the various operating units of DTE Energy Company,
including MichCon. These administrative and general expenses incurred by DTE Energy Corporate Services, LLC were then billed to
various subsidiaries of DTE Energy, including MichCon. MichCon participates in a defined benefit retirement plan sponsored by
another affiliate of DTE Energy.
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