DTE Energy 2010 Annual Report Download - page 22

Download and view the complete annual report

Please find page 22 of the 2010 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

20
rate increase of $170 million effective on January 1, 2010, the MPSC ordered refunds for the period the self-implemented rates were
in effect. On January 20, 2011, the MPSC issued an order authorizing this refund to be applied as credits to customer bills during the
February 2011 billing period. MichCon has a refund liability of approximately $26 million, including interest at December 31, 2010
representing the refund due customers.
Other key aspects of the MPSC order include the following:
• Continued application of an Uncollectible Expense Tracking Mechanism with two modifications. The base amount was
increased prospectively from $37 million to $70 million with an 80/20 percent sharing of the expenses (modified from 90/10)
above or below the base amount.
• Implementation of a pilot RDM, that will require MichCon to recover or refund the change in distribution revenue resulting
from the difference in weather-adjusted average sales per customer by rate schedule compared to the base average sales per
customer by rate schedule established in the MPSC order for the period July 1, 2010 to June 30, 2011.
• Approval of the recovery of regulatory unamortized balance of CTA, which the Company had previously expensed. See Note 8.
2008 MichCon Depreciation Filing
On March 18, 2010, the MPSC issued an order reducing MichCon’ s composite depreciation rates from 2.97% to 2.38% effective
April 1, 2010.
MichCon UETM
In March 2010, MichCon filed an application with the MPSC for approval of its UETM for 2009 requesting approximately
$59 million consisting of $51 million of costs related to 2009 uncollectible expense and associated carrying charges and $8 million of
under-collections for the 2007 UETM. On December 21, 2010, the MPSC approved MichCon’ s request with new surcharges
applicable to services rendered beginning on January 1, 2011.
Gas Cost Recovery Proceedings
The GCR process is designed to allow MichCon to recover all of its gas supply costs if incurred under reasonable and prudent policies
and practices. The MPSC reviews these costs, policies and practices for prudence in annual plan and reconciliation filings.
The following table summarizes MichCon’ s GCR reconciliation filing currently pending with the MPSC:
GCR Year
Date Filed
Net Over-Recovery,
Including Interest
GCR Cost of Gas Sold
2009-2010
June 2010
$5.9 million
$1.0 billion
2010-2011 Plan Year — In December 2009, MichCon filed its GCR plan case for the 2010-2011 GCR plan year. The MPSC issued an
order in this case in September 2010 authorizing MichCon to charge a maximum of $7.06 per Mcf, adjustable monthly by a contingent
factor. The MPSC also approved MichCon’ s proposed fixed price gas purchasing program and provided clarification regarding
treatment of certain affiliate purchases.
2011-2012 Plan Year — In December 2010, MichCon filed its GCR plan case for the 2011-2012 GCR plan year. MichCon filed for a
maximum base GCR factor of $5.89 per Mcf adjustable monthly by a contingency factor.