DTE Energy 2009 Annual Report Download - page 20

Download and view the complete annual report

Please find page 20 of the 2009 DTE Energy annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 39

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39

18
NOTE 6 — PROPERTY, PLANT AND EQUIPMENT
Summary of property by classification as of December 31:
(in Millions)
2009
2008
Property, Plant and Equipment
Distribution
$ 2,386
$ 2,327
Storage
383
378
Transmission and Other
984
1,061
Total
3,753
3,766
Less Accumulated Depreciation
Distribution
(972)
(955)
Storage
(113)
(107)
Transmission and Other
(527)
(587)
Total
(1,612)
(1,649)
Net Property, Plant and Equipment
$ 2,141
$ 2,117
AFUDC capitalized during 2009 and 2008 was approximately $2 million and $6 million, respectively.
The composite depreciation rate for MichCon was 3.1% in 2009, 3.2% in 2008, and 3.1% in 2007.
The average estimated useful life for gas distribution and transmission property was 40 years and 37 years, respectively, at December
31, 2009.
The gross carrying amount and accumulated amortization of capitalized software costs at December 31, 2009 were $98 million and
$50 million, respectively. The gross carrying amount and accumulated amortization of capitalized software costs at December 31,
2008 were $96 million and $47 million, respectively. Capitalized software costs amortization expense was $7 million in 2009 and $6
million in each of the years 2008 and 2007. Amortization expense for capitalized software costs is estimated to be $6 million annually
for 2010 through 2014.
NOTE 7 — ASSET RETIREMENT OBLIGATIONS
The Company has conditional retirement obligations for gas pipeline retirement costs. To a lesser extent, MichCon has conditional
retirement obligations at certain service centers, compressor and gate stations. The Company recognizes such obligations as liabilities
at fair market value at the time the associated assets are placed in service. Fair value is measured using expected future cash outflows
discounted at our credit-adjusted risk-free rate. The Company defers timing differences that arise in the expense recognition of legal
asset retirement costs that are currently recovered in rates.
No liability has been recorded with respect to lead-based paint, as the quantities of lead-based paint in our facilities are unknown. In
addition, there is no incremental cost to demolitions of lead-based paint facilities vs. non-lead-based paint facilities and no regulations
currently exist requiring any type of special disposal of items containing lead-based paint.
A reconciliation of the asset retirement obligation for 2009 follows:
(in Millions)
Asset retirement obligations at January 1, 2009
$ 112
Accretion
6
Liabilities settled
(4)
Asset retirement obligations at December 31, 2009
$ 114