DTE Energy 2012 Annual Report Download - page 81

Table of Contents
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•Over recovery of Securitization — Over recovery of securitization bond expenses.
•Refundable uncollectible expense (UETM )— DTE Electric and DTE Gas liability for the MPSC approved uncollectible expense tracking
mechanism that tracks the difference in the fluctuation in uncollectible accounts and amounts recognized pursuant to the MPSC authorization.
The UETM was terminated for DTE Electric in the October 20, 2011 MPSC rate case order and terminated for DTE Gas in the December 20,
2012 MPSC approval of the partial settlement agreement.
•Energy Optimization (EO) - Amounts collected in rates in excess of energy optimization expenditures.
•Accrued PSCR/GCR refund — Liability for the temporary over-recovery of and a return on power supply costs and transmission costs incurred
by DTE Electric which are recoverable through the PSCR mechanism and temporary over-recovery of and a return on gas costs incurred by DTE
Gas which are recoverable through the GCR mechanism.
•Fermi 2 refueling outage — Accrued liability for refueling outage at Fermi 2 pursuant to MPSC authorization.
•Low Income Energy Efficiency Fund (LIEEF) — Escrow of LIEEF funds collected by DTE Electric and DTE Gas as ordered by the MPSC
pursuant to July 2011 Michigan Court of Appeals decision.
2009 Electric Rate Case Filing - Court of Appeals Decision/Refundable Deferred Gain
On April 10, 2012, the Michigan Court of Appeals (COA) issued a decision relating to an appeal of the January 2010 MPSC order in DTE Electric's
January 2009 rate case filing.
The COA found that the record of evidence in the 2009 rate case order was insufficient to support the MPSC's authorization to recover costs for the pilot
advanced metering infrastructure (AMI) program and remanded this matter to the MPSC. The MPSC had approved $37 million of rate base related to the AMI
program in the January 2010 order. DTE Electric is currently operating its AMI program pursuant to the MPSC's approval set forth in its October 20, 2011
order, which was not reviewed by or subject to the COA's April 10, 2012 decision. On November 28, 2012, DTE Electric filed the necessary data and
evidence to the MPSC supporting the AMI program expenditures. DTE Electric's AMI program expenditures are $110 million as of December 31, 2012, net of
Department of Energy matching grant funds of $ 60 million.
The COA affirmed the use of a number of tracking mechanisms (restoration, line clearance, uncollectibles expense and choice incentive) and the peak
demand computations approved in the January 2010 order. The COA also determined that the MPSC only had statutory authority to implement a Revenue
Decoupling Mechanism (RDM) for gas providers, but not for electric providers, thereby reversing the MPSC's decision to authorize an RDM for DTE Electric.
DTE Electric had accrued a total of $ 127 million of RDM refund liabilities for the 2010 and 2011 RDM reconciliation periods. No party appealed the COA
decision regarding the RDM determination.
On August 1, 2012, DTE Electric filed an application for approval of accounting authority to defer for future amortization the gain resulting from the
reversal of the Company's $127 million regulatory liability associated with the operation of the RDM. On August 14, 2012, the MPSC dismissed DTE
Electric's initial pilot RDM reconciliation cases. On September 25, 2012, the MPSC issued an order approving the Company's accounting application. As
described in the accounting application, DTE Electric will amortize the new regulatory liability to income, at a monthly rate of approximately $ 10.6 million,
beginning January 2014. It is currently anticipated that with this accounting treatment, along with other cost saving measures, DTE Electric will not need to
increase base rates until 2015. If DTE Electric's base rates are increased prior to January 1, 2015, the Company will cease amortization and refund to
customers the remaining unamortized balance of the new regulatory liability.
Energy Optimization (EO) Plans
The EO plan is designed to help each customer class reduce their electric usage by: 1) building customer awareness of energy efficiency options and 2)
offering a diverse set of programs and participation options that result in energy savings for each customer class.
In May 2012, DTE Electric and DTE Gas both filed separate applications for approval of their respective reconciliations
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