DTE Energy 2012 Annual Report Download - page 69
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Table of Contents
See Note 4 for further fair value information on financial and derivative instruments.
Nuclear Decommissioning Trust Funds
DTE Electric has a legal obligation to decommission its nuclear power plants following the expiration of their operating licenses. This obligation is
reflected as an asset retirement obligation on the Consolidated Statements of Financial Position. Rates approved by the MPSC provide for the recovery of
decommissioning costs of Fermi 2 and the disposal of low-level radioactive waste. DTE Electric is continuing to fund FERC jurisdictional amounts for
decommissioning even though explicit provisions are not included in FERC rates. See Note 10.
The following table summarizes the fair value of the nuclear decommissioning trust fund assets:
Fermi 2
$915
Fermi 1
3
Low level radioactive waste
19
Total
$ 937
At December 31, 2012, investments in the nuclear decommissioning trust funds consisted of approximately 61% in publicly traded equity securities,
38% in fixed debt instruments and 1% in cash equivalents. At December 31, 2011, investments in the nuclear decommissioning trust funds consisted of
approximately 57% in publicly traded equity securities, 41% in fixed debt instruments and 2% in cash equivalents. The debt securities at both December 31,
2012 and December 31, 2011 had an average maturity of approximately 6 and 7 years, respectively.
The costs of securities sold are determined on the basis of specific identification. The following table sets forth the gains and losses and proceeds from
the sale of securities by the nuclear decommissioning trust funds:
Realized gains
$ 46
$192
Realized losses
$(38)
$(83)
Proceeds from sales of securities
$ 80
$ 377
Realized gains and losses from the sale of securities for the Fermi 2 and the low level radioactive waste funds are recorded to the Regulatory asset and
Nuclear decommissioning liability. The following table sets forth the fair value and unrealized gains for the nuclear decommissioning trust funds:
Equity securities
$ 533
$ 80
Debt securities
385
22
Cash and cash equivalents
19
—
Securities held in the nuclear decommissioning trust funds are classified as available-for-sale. As DTE Electric does not have the ability to hold
impaired investments for a period of time sufficient to allow for the anticipated recovery of market value, all unrealized losses are considered to be other than
temporary impairments.
Unrealized losses incurred by the Fermi 2 trust are recognized as a Regulatory asset. DTE Electric recognized $ 44 million and $67 million of unrealized
losses as Regulatory assets at December 31, 2012 and 2011, respectively. Since the decommissioning of Fermi 1 is funded by DTE Electric rather than
through a regulatory recovery mechanism, there is no corresponding regulatory asset treatment. Therefore, unrealized losses incurred by the Fermi 1 trust are
recognized in earnings immediately. There were no unrealized losses recognized in 2012, 2011 and 2010 for Fermi 1.
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