DTE Energy 2012 Annual Report Download - page 31

Table of Contents
$25 million, higher energy optimization and renewable energy expenses of $19 million, higher employee benefit expense of $9 million, partially offset by
reduced contributions of $23 million to the Low Income Energy Efficiency Fund due to a court order, and reduced uncollectible expenses of $7 million.
Depreciation and amortization expense increased $9 million in 2012 due primarily to higher amortization of regulatory assets, partially offset by the
net effect of lower depreciation rates on a higher depreciable base. Depreciation and amortization expense was $31 million lower in 201l due primarily to
reduced amortization of regulatory assets, partially offset by expenses related to a higher depreciable base.
Asset (gains) and losses, reserves and impairments, net decreased $15 million in 2012 and increased $19 million in 2011 principally attributable to
a 2011 accrual of $19 million resulting from management's revisions of the timing and estimate of cash flows for the decommissioning of Fermi 1, partially
offset by a 2011 revision of $6 million in the timing and estimate of cash flows for the Fermi 1 asbestos removal obligation and other items. See Note 10 of the
Notes to the Consolidated Financial Statements.
Other (income) and deductions were lower by $37 million in 2012 and $19 million in 2011. The decrease in 2012 was due primarily to the lower
contributions to the DTE Foundation of $21 million and lower interest expense of $17 million. The 2011 decrease was due to lower interest expense of $24
million, partially offset by higher contributions to the DTE Foundation of $7 million.
Outlook — We continue to move forward in our efforts to achieve operational excellence, sustained strong cash flows and earn our authorized return on
equity. We expect that our planned significant environmental and renewable expenditures will result in earnings growth. Looking forward, additional factors
may impact earnings such as weather, the outcome of regulatory proceedings, investment returns and changes in discount rate assumptions in benefit plans
and health care costs, and uncertainty of legislative or regulatory actions regarding climate change and electric choice. We expect to continue our efforts to
improve productivity and decrease our costs while improving customer satisfaction with consideration of customer rate affordability.
On June 25, 2012, our Fermi 2 nuclear power plant was manually shutdown after one of the plant's two non-safety related feed-water pumps failed.
Supported by a detailed analysis, DTE Electric decided to operate the plant with one feed-water pump at a reduced power level until the second feed-water
pump is returned to service. The plant was restarted on July 30, 2012 which restored production to 68% of full capacity. We expect that a substantial portion
of the property damage will be covered by existing insurance coverage, subject to deductibles. We are able to purchase sufficient power from MISO to continue
to provide uninterrupted service to our customers. We plan to seek recovery of the related incremental purchased power costs through the PSCR process. The
plant is scheduled to be brought down in the first quarter of 2013 to complete the repair.
GAS
Our Gas segment consists of DTE Gas and Citizens.
Gas results are discussed below:
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
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
Operating Revenues 
$1,505
$1,648
Cost of Gas 
744
870
Gross Margin 
761
778
Operation and Maintenance 
394
378
Depreciation and Amortization 
89
92
Taxes Other Than Income 
54
55
Operating Income 
224
253
Other (Income) and Deductions 
54
59
Income Tax Expense 
60
67
Net Income Attributable to DTE Energy Company 
$110
$127
Operating Income as a Percent of Operating Revenues 
15%
15%
29