DTE Energy 2010 Annual Report Download - page 19

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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 2010 follows:
(in Millions)
Asset retirement obligations at January 1, 2010
$ 114
Accretion
7
Liabilities settled
(3)
Asset retirement obligations at December 31, 2010
$ 118
NOTE 8 — RESTRUCTURING
Restructuring Costs
In 2005, the Company initiated a company-wide review of its operations called the Performance Excellence Process. The Company
incurred CTA restructuring expense for employee severance, early retirement programs and other costs which include project
management and consultant support. In September 2006, the MPSC issued an order approving a settlement agreement that allowed
MichCon, commencing in 2006, to defer the incremental CTA. Further, the order provided for MichCon to amortize the CTA
deferrals over a ten-year period beginning with the year subsequent to the year the CTA was deferred. The September 2006 order did
not provide a regulatory recovery mechanism for MichCon, therefore MichCon expensed CTA incurred during the period 2006
through 2008. The Company incurred restructuring expense, net of amounts deferred and capitalized of $10 million in 2008. The June
2010 MPSC order provided for MichCon’ s recovery of the regulatory unamortized balance of CTA. At June 30, 2010, MichCon
deferred and recognized in income approximately $32 million ($20 million after-tax) of previously expensed CTA. The non-pension
component of CTA of approximately $21 million is included in Regulatory assets. The pension component of CTA of approximately
$11 million is included in Regulatory liabilities. MichCon amortized approximately $2 million of deferred CTA costs in 2010.
Amounts expensed are recorded in Operation and maintenance expense on the Consolidated Statements of Operations. Deferred
amounts are recorded in Regulatory assets and Regulatory liabilities on the Consolidated Statements of Financial Position. See Note 9.
NOTE 9 — REGULATORY MATTERS
Regulation
MichCon’ s business is subject to the regulatory jurisdiction of the MPSC, which issues orders pertaining to rates, recovery of certain
costs, including the costs of regulatory assets, conditions of service, accounting and operating-related matters. MichCon’ s MPSC-
approved rates charged to customers have historically been designed to allow for the recovery of costs, plus an authorized rate of
return on our investments. MichCon operates natural gas storage and transportation facilities in Michigan as intrastate facilities
regulated by the MPSC and provides intrastate storage and transportation services pursuant to an MPSC-approved tariff.
MichCon also provides interstate storage and transportation services in accordance with an Operating Statement on file with the
FERC. The FERC’ s jurisdiction is limited and extends to the rates, non-discriminatory requirements and terms and conditions
applicable to storage and transportation provided by MichCon in interstate markets. FERC granted MichCon authority to provide
storage and related services in interstate commerce at market-based rates. MichCon provides transportation services in interstate
commerce at cost-based rates approved by the MPSC and filed with the FERC.
We are subject to the requirements of other regulatory agencies with respect to safety, the environment and health.