DTE Energy 2014 Annual Report Download - page 60

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Revenues from the sale and delivery of electricity, and the sale, delivery and storage of natural gas are recognized as services are provided. DTE Electric
and DTE Gas record revenues for electricity and gas provided but unbilled at the end of each month. Rates for DTE Electric and DTE Gas include provisions
to adjust billings for fluctuations in fuel and purchased power costs, cost of natural gas and certain other costs. Revenues are adjusted for differences between
actual costs subject to reconciliation and the amounts billed in current rates. Under or over recovered revenues related to these cost recovery mechanisms are
recorded on the Consolidated Statements of Financial Position and are recovered or returned to customers through adjustments to the billing factors.
For further discussion of recovery mechanisms authorized by the MPSC see Note 8 to the Consolidated Financial Statements, "Regulatory Matters".
Non-utility businesses recognize revenues as services are provided and products are delivered. For discussion of derivative contracts see Note 12 to the
Consolidated Financial Statements, "Financial and Other Derivative Instruments".
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Other income is recognized for non-operating income such as equity earnings, allowance for equity funds used during construction and contract
services. Power & Industrial Projects also recognizes Other income in connection with the sale of membership interests in reduced emissions fuel facilities to
investors. In exchange for the cash received, the investors will receive a portion of the economic attributes of the facilities, including income tax attributes.
The transactions are not treated as a sale of membership interests for financial reporting purposes. Other income is considered earned when refined coal is
produced and tax credits are generated. Power & Industrial Projects recognized approximately $78 million, $81 million and $63 million of Other income for
the years ended December 31, 2014, 2013 and 2012, respectively.
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DTE Electric participates in the energy market through MISO. MISO requires that we submit hourly day-ahead, real- time and FTR bids and offers for
energy at locations across the MISO region. DTE Electric accounts for MISO transactions on a net hourly basis in each of the day-ahead, real-time and FTR
markets and net transactions across all MISO energy market locations. In any single hour DTE Electric records net purchases in Fuel, purchased power and
gas and net sales in Operating revenues on the Consolidated Statements of Operations.
Energy Trading participates in the energy markets through various independent system operators and regional transmission organizations (ISOs and
RTOs). These markets require that Energy Trading submits hourly day-ahead, real-time bids and offers for energy at locations across each region. Energy
Trading submits bids in the annual and monthly auction revenue rights and FTR auctions to the regional transmission organizations. Energy Trading
accounts for these transactions on a net hourly basis for the day-ahead, real-time and FTR markets. These transactions are related to trading contracts which
are presented on a net basis in Operating Revenues in the Consolidated Statements of Operations.
DTE Electric and Energy Trading record accruals for future net purchases adjustments based on historical experience, and reconcile accruals to actual
costs when invoices are received from MISO, and other ISOs and RTOs.
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Comprehensive income (loss) is the change in common shareholders’ equity during a period from transactions and events from non-owner sources,
including net income. The amounts recorded to accumulated other comprehensive loss include unrealized gains and losses from derivatives accounted for as
cash flow hedges, unrealized gains and losses on available-for-sale securities and the Company’s interest in other comprehensive income of equity investees,
which comprise the net unrealized gains and losses on investments, changes in benefit obligations, consisting of deferred actuarial losses, prior service costs,
and foreign currency translation adjustments.
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