DTE Energy 2014 Annual Report Download - page 94

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Nuclear Fuel Disposal Costs
In accordance with the Federal Nuclear Waste Policy Act of 1982, DTE Electric has a contract with the DOE for the future storage and disposal of spent
nuclear fuel from Fermi 2 that required DTE Electric to pay the DOE a fee of 1 mill per kWh of Fermi 2 electricity generated and sold. The fee was a
component of nuclear fuel expense. The DOE's Yucca Mountain Nuclear Waste Repository program for the acceptance and disposal of spent nuclear fuel was
terminated in 2011. DTE Electric is a party in the litigation against the DOE for both past and future costs associated with the DOE's failure to accept spent
nuclear fuel under the timetable set forth in the Federal Nuclear Waste Policy Act of 1982. In July 2012, DTE Electric executed a settlement agreement with
the federal government for costs associated with the DOE's delay in acceptance of spent nuclear fuel from Fermi 2 for permanent storage. The settlement
agreement, including extensions, provides for a claims process and payment of delay-related costs experienced by DTE Electric through 2016. DTE Electric's
claims are being settled and paid on a timely basis. The settlement proceeds reduce the cost of the dry cask storage facility assets and provide reimbursement
for related operating expenses. The 1 mill per kWh DOE fee was reduced to zero effective May 16, 2014.
DTE Electric currently employs a spent nuclear fuel storage strategy utilizing a fuel pool and a newly completed dry cask storage facility. The initial
dry cask loading campaign planned for 2014 has been completed. The dry cask storage facility is expected to provide sufficient spent fuel storage capability
for the life of the plant as defined by the original operating license.
The federal government continues to maintain its legal obligation to accept spent nuclear fuel from Fermi 2 for permanent storage. Issues relating to
long-term waste disposal policy and to the disposition of funds contributed by DTE Electric ratepayers to the federal waste fund await future governmental
action.
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The Company discontinued the operations of its synthetic fuel production facilities throughout the United States as of December 31, 2007. The
Company provided certain guarantees and indemnities in conjunction with the sales of interests in its synfuel facilities. The guarantees cover potential
commercial, environmental, oil price and tax-related obligations and will survive until 90 days after expiration of all applicable statutes of limitations. The
Company estimates that its maximum potential liability under these guarantees at December 31, 2014 is approximately $1 billion. Payment under these
guarantees is considered remote.
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The Company has provided certain guarantees and indemnities in conjunction with the sales of interests in its REF facilities. The guarantees cover
potential commercial, environmental, and tax-related obligations and will survive until 90 days after expiration of all applicable statutes of limitations. The
Company estimates that its maximum potential liability under these guarantees at December 31, 2014 is approximately $172 million. Payment under these
guarantees is considered remote.
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In certain limited circumstances, the Company enters into contractual guarantees. The Company may guarantee another entity’s obligation in the event
it fails to perform. The Company may provide guarantees in certain indemnification agreements. Finally, the Company may provide indirect guarantees for
the indebtedness of others. The Company’s guarantees are not individually material with maximum potential payments totaling $60 million at December 31,
2014. Payment under these guarantees is considered remote.
The Company is periodically required to obtain performance surety bonds in support of obligations to various governmental entities and other
companies in connection with its operations. As of December 31, 2014, the Company had approximately $49 million of performance bonds outstanding. In
the event that such bonds are called for nonperformance, the Company would be obligated to reimburse the issuer of the performance bond. The Company is
released from the performance bonds as the contractual performance is completed and does not believe that a material amount of any currently outstanding
performance bonds will be called.
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There are several bargaining units for the Company's approximately 4,900 represented employees. The majority of the represented employees are under
contracts that expire in 2016 and 2017.
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