DTE Energy 2009 Annual Report Download - page 23

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• Unamortized loss on reacquired debt — The unamortized discount, premium and expense related to debt redeemed with a
refinancing are deferred, amortized and recovered over the life of the replacement issue. (1)
(1) Regulatory assets not earning a return.
LIABILITIES
• Asset removal costs — The amount collected from customers for the funding of future asset removal activities.
• Negative pension offset — The Company’ s negative pension costs are not included as a reduction to its authorized rates; therefore,
the Company is accruing a regulatory liability to eliminate the impact on earnings of the negative pension expense accrued. This
regulatory liability will reverse to the extent the Company’ s pension expense is positive in future years.
• Refundable income taxes — Income taxes refundable to our customers representing the difference in property-related deferred
income taxes payable and amounts recognized pursuant to MPSC authorization.
• Deferred income taxes — Michigan Business Tax — In July 2007, the MBT was enacted by the State of Michigan. State deferred
tax assets were established, and offsetting regulatory liabilities were recorded as the impacts of the deferred tax assets will be
reflected in rates.
• Accrued GCR refund — Liability for the temporary over-recovery of and a return on gas costs incurred by MichCon which are
recoverable through the GCR mechanism.
2009 Gas Rate Case Filing
MichCon filed a general rate case on June 9, 2009 based on a 2008 historical test year. The filing with the MPSC requested a
$193 million, or 11.5 percent average increase in MichCon’ s annual revenues for a 2010 projected test year. The requested
$193 million increase in revenues is required to recover the increased costs associated with increased investments in net plant and
working capital, the impact of high levels of uncollectible expense and the cost of natural gas theft primarily due to economic
conditions in Michigan, sales reductions due to customer conservation and the trend of warmer weather on MichCon’ s market, and
increasing operating costs, largely due to inflation.
In addition, MichCon’ s filing made, among other requests, the following proposals:
• Implementation of a Lost Gas and Company Use — Expense Tracking Mechanism;
• Continued application of an uncollectible expense tracking mechanism based on a $70 million expense level of uncollectible
expenses; and,
• Implementation of a revenue decoupling mechanism. Revenue decoupling is an adjustment mechanism that would provide
revenues consistent with the allowed revenue requirement with a periodic adjustment for changes in sales levels.
Pursuant to the October 2008 Michigan legislation, and the settlement in MichCon’ s last base gas sale case, MichCon self-
implemented $170 million of its requested annual increase on January 1, 2010. This increase will remain in place until a final order is
issued by the MPSC, which is expected in June 2010. If the final rate case order does not support the self-implemented rate increase,
MichCon must refund the difference with interest.
2008 MichCon Depreciation Filing