DTE Energy 2012 Annual Report Download - page 83

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Table of Contents


January 1, 2013. A refund liability of approximately $1 million, representing the difference between the final ordered rate relief and the self- implemented
revenue, was accrued as of December 31, 2012.
The case also included a proposal for an infrastructure recovery mechanism (IRM) designed to recover DTE Gas' projected costs related to its gas main
renewal and meter move out programs. The approved settlement did not resolve the IRM which will continue to be litigated with an order expected by April
2013.
DTE Gas UETM
In March 2012, DTE Gas filed an application with the MPSC for approval of its UETM for 2011 requesting authority to refund approximately $ 7
million, consisting of a $19 million over-recovery related to 2011 uncollectible expense, partially offset by $ 12 million related to the 2010 UETM under-
recovery. In September 2012, the MPSC approved a settlement agreement approving the net refund of $ 7 million and the implementation of credits and
surcharges over a twelve-month period beginning in November 2012. The December 2012 order in DTE Gas' rate case requires the UETM be terminated
effective November 1, 2012 and the reconciliation to be filed by March 31, 2013. DTE Gas accrued a refund obligation of approximately $ 20 million for the
2012 over-recovery.
DTE Gas Revenue Decoupling Mechanism (RDM)
In September 2011, DTE Gas filed an application with the MPSC for approval of its RDM reconciliation for the period July 1, 2010 through June 30,
2011. DTE Gas' RDM application proposed the recovery of approximately $ 20 million. On July 13, 2012, the MPSC approved a settlement agreement
approving the RDM reconciliation and the implementation of a surcharge over a twelve-month period beginning in August 2012. As a result of the provisions
of the settlement, during the quarter ended June 30, 2012, DTE Gas recognized an additional $ 5 million of revenue related to the 2010/2011 period and $3
million related to the 2011/2012 period.
In October 2012, DTE Gas filed an application with the MPSC for approval of its RDM reconciliation for the period July 1, 2011 through June 30,
2012. The application requests authority to adjust existing retail gas rates so as to collect a net amount of $ 8.6 million, plus interest. An order is expected in
the first quarter of 2013.
The December 2012 order in DTE Gas' rate case requires the RDM be discontinued effective November 1, 2012 and a reconciliation be filed by October
31, 2013. DTE Gas recognized approximately $5 million for the under-recovery during the July through October 2012 period. The order provides for a new
RDM beginning in November 2013 for the period November 1, 2013 through October 31, 2014. The new RDM decouples weather normalized distribution
revenue inside caps. The caps are tied to expected conservation targets: 1.125% in the first reconciliation period and 2.25% for the second and future periods.
DTE Gas Depreciation Filing
In June 2012, DTE Gas filed a depreciation study, as ordered by the MPSC, indicating an annual depreciation expense increase of $ 12.4 million.
Pursuant to the December 2012 order in DTE Gas' rate case, the final approved depreciation rates will be implemented in conjunction with the MPSC's order
in DTE Gas' next general rate case. Management cannot predict when DTE Gas will file its next rate case.
Gas Cost Recovery Proceedings
The GCR process is designed to allow DTE Gas 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.
2010-2011 GCR Year - An MPSC order was issued on August 14, 2012 approving the GCR reconciliation for the twelve-month period ended March
31, 2011. The MPSC authorized DTE Gas to include in its 2011-2012 GCR reconciliation beginning balance the net over-recovery of approximately $ 6
million.
2011-2012 GCR Year - In June 2012, DTE Gas filed its GCR reconciliation for the twelve months ending March 31, 2012 calculating a net under-
recovery of $6.4 million.
Gas Recovery of Costs to Achieve (CTA) Performance Excellence Process
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