DTE Energy 2011 Annual Report Download - page 21

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recover these costs.
MichCon UETM
In March 2011, MichCon filed an application with the MPSC for approval of its UETM for 2010 requesting recovery of
approximately $31 million, consisting of $7 million related to 2010 uncollectible expense and $24 million related to the 2008
UETM under-collection. In September 2011, the MPSC approved a settlement agreement approving the 2010 UETM and the
implementation of a surcharge beginning October 1, 2011.
MichCon Revenue Decoupling Mechanism (RDM)
In September 2011, MichCon filed an application with the MPSC for approval of its RDM reconciliation for the period July 1,
2010 through June 30, 2011. MichCon's RDM application proposed the recovery of approximately $20 million.
Low Income Energy Efficiency Fund
The Customer Choice and Electricity Reliability Act of 2000 authorized the creation of the LIEEF administered by the MPSC.
The purpose of the fund is to provide shut-off and other protection for low income customers and to promote energy efficiency
by all customer classes. MichCon collects funding for the LIEEF as part of its base rates and remits the funds to the State of
Michigan monthly. In July 2011, the Michigan Court of Appeals issued a decision reversing the portion of MichCon's June
2010 MPSC rate order that permitted MichCon to recover funding for the LIEEF in base rates. In response to the Court of
Appeals decision, MichCon ceased remitting payments for LIEEF funding to the State of Michigan. In October 2011, the
MPSC issued an order directing MichCon to continue collecting funds for LIEEF in rates and to escrow the collected funds
pending further order by the MPSC. On January 26, 2012, the MPSC issued an order directing MichCon to file a
comprehensive plan by March 1, 2012 for refunding previously escrowed LIEEF funds of $3 million. On December 20, 2011,
The Vulnerable Household Warmth Fund (VHWF) was created under Michigan law. The purpose of the fund is to provide
payment or partial payment of bills for electricity, natural gas, propane, heating oil, or any other type of fuel used to heat the
primary residence of a vulnerable customer during the 2011-2012 heating season. Effective with the new law, MichCon is to
contribute the amounts collected in its base rates, previously remitted for the LIEEF, to the new VHWF. The monthly
payments into the VHWF will cease on the earlier of September 30, 2012 or when $48 million has been accumulated in the
fund from payments by major Michigan electric and gas utilities.
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.
2009-2010 GCR Year - An MPSC order was issued on December 6, 2011 for the GCR reconciliation for the 12-month period
ended March 31, 2010 disallowing recovery of $3.3 million related to the pricing of certain gas purchases from an affiliate.
The MPSC also authorized MichCon to include in its 2010-2011 GCR reconciliation beginning balance the net overrecovery of
approximately $9 million. On January 5, 2012, MichCon filed a petition for rehearing related to the $3.3 million disallowance.
2010-2011 Plan Year - In June 2011, MichCon filed its 2010-2011 GCR plan year reconciliation case calculating a net over-
recovery of $1 million, including interest. This over-recovery does not reflect the December 6, 2011 MPSC order on the
2009-2010 plan year reconciliation case.
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.
2012-2013 Plan Year - In December 2011, MichCon filed its GCR plan case for the 2012-2013 GCR plan year. MichCon filed
for a maximum base GCR factor of $5.18 per Mcf adjustable monthly by a contingency factor.
Gas Main Renewal and Gas Meter Move Out Programs
The June 3, 2010 MPSC gas rate case order required MichCon to make filings related to gas main renewal and meter move-out
programs. In a July 30, 2010 filing, MichCon proposed to implement a 10-year gas main renewal program beginning in 2012
which would require capital expenditures of approximately $17 million per year for renewing gas distribution mains, retiring
gas mains, and where appropriate and when related to the gas main renewal or retirement activity, relocate inside meters to