DTE Energy 2012 Annual Report Download - page 92
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Table of Contents
2013 $ 7
$38
2014 5
31
2015 5
25
2016 3
21
2017 —
20
Thereafter —
98
Total minimum lease payments $20
$ 233
Less imputed interest 2
Present value of net minimum lease payments 18
Less current portion 6
Non-current portion $12
Rental expense for operating leases was $ 36 million in 2012, $40 million in 2011, and $32 million in 2010. Contingent rental payments of $27 million
were incurred in 2012 related to power purchase agreements. The contingent payments are based upon delivery of energy and renewable energy credits, which
are dependent upon future production.
Lessor — The Company leases a portion of its pipeline system to the Vector Pipeline through a capital lease contract that expires in 2020, with renewal
options extending for five years. The Company owns a 40% interest in the Vector Pipeline. In addition, the Company has an energy services agreement, a
portion of which is accounted for as a capital lease. The agreement expires in 2019, with a three or five year renewal option. The components of the net
investment in the capital leases at December 31, 2012, were as follows:
2013 $12
2014 12
2015 12
2016 12
2017 12
Thereafter 31
Total minimum future lease receipts 91
Residual value of leased pipeline 40
Less unearned income (48)
Net investment in capital lease 83
Less current portion (4)
$ 79
Environmental
Electric
Air - DTE Electric is subject to the EPA ozone and fine particulate transport and acid rain regulations that limit power plant emissions of sulfur dioxide
and nitrogen oxides. Since 2005, the EPA and the State of Michigan have issued additional emission reduction regulations relating to ozone, fine particulate,
regional haze, mercury, and other air pollution. These rules have led to additional controls on fossil-fueled power plants to reduce nitrogen oxide, sulfur
dioxide, mercury and other emissions. To comply with these requirements, DTE Electric has spent approximately $ 1.9 billion through 2012. The Company
estimates DTE Electric will make capital expenditures of approximately $ 335 million in 2013 and up to approximately $1.6 billion of additional capital
expenditures through 2020 based on current regulations. Further, additional rulemakings are expected over the next few years which could require additional
controls for sulfur dioxide, nitrogen oxides and hazardous air pollutants. The Cross State Air Pollution Rule (CSAPR), finalized in July 2011, requires further
reductions of sulfur dioxide and nitrogen oxides emissions beginning in 2012. On December 30, 2011, the U. S. Court of Appeals for the District of Columbia
Circuit granted the motions to stay the rule, leaving DTE Electric temporarily subject to the previously existing Clean Air Interstate Rule (CAIR). On August
21, 2012, the Court issued its decision, vacating CSAPR and leaving
90