DTE Energy 2009 Annual Report Download - page 29

27
Less current portion
(2)
$ 73
NOTE 14 — COMMITMENTS AND CONTINGENCIES
Environmental Matters
Contaminated 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 Company owns, or previously owned, 14 such former
manufactured gas plant (MGP) sites. 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. Cleanup activities
associated with these sites will be conducted over the next several years.
The MPSC has established a cost deferral and rate recovery mechanism for investigation and remediation costs incurred at former
MGP sites. Accordingly, the Company recognizes a liability and corresponding regulatory asset for estimated investigation and
remediation costs at former MGP sites. During 2009, the Company spent approximately $1 million investigating and remediating
these former MGP sites. As of December 31, 2009 and 2008, MichCon had $36 million and $38 million, respectively, 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. However, the Company anticipates the cost deferral and rate recovery mechanism approved by the MPSC will prevent
environmental costs from having a material adverse impact on our results of operations.
Labor Contracts
There are several bargaining units for the Company’ s union employees. The majority of our union employees are under contracts that
expire in October 2010.
Purchase Commitments
As of December 31, 2009, the Company was party to numerous long-term purchase commitments relating to a variety of goods and
services required for its business. These agreements primarily consist of long-term gas purchase and transportation agreements. The
Company estimates that these commitments will be approximately $1.6 billion through 2051. MichCon also estimates that 2010
capital expenditures will be approximately $150 million. The Company has made certain commitments in connection with expected
capital expenditures.
Bankruptcies
The Company buys and sells gas and gas transportation and storage services to 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 sale contracts and it
records provisions for amounts considered at risk of probable loss. The Company believes its previously accrued amounts are
adequate for probable losses. The final resolution of these matters is not expected to 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