8-KRegulation FDOther EventsExhibits & Filings

DTE ENERGY CO 8-K Report, Regulation FD Disclosure (Jan 12, 2010)

Filed January 12, 2010For Securities:DTEDTKDTBDTGDTW

Summary

DTE Energy Company (DTE) filed an 8-K on January 12, 2010, primarily to disclose information regarding the Michigan Public Service Commission's (MPSC) order in Detroit Edison's electric rate cases. The MPSC authorized Detroit Edison to increase its rates by $217 million. Notably, Detroit Edison had previously implemented a $280 million rate increase, meaning the final order does not result in an additional immediate cost to customers. Instead, the company is required to refund customers any difference between the self-implemented surcharge and the finally authorized amount, with interest. The filing also highlights the adoption of a pilot revenue decoupling mechanism (RDM) and uncollectible expenses tracking, which could alter the relationship between sales volumes and revenue for the utility. DTE Energy also reaffirmed its 2009 earnings per share guidance and provided an early outlook for 2010.

Key Highlights

  • 1Michigan Public Service Commission (MPSC) issued an order in Detroit Edison's electric rate cases on January 11, 2010.
  • 2The MPSC authorized Detroit Edison to raise rates by $217 million.
  • 3Detroit Edison had previously self-implemented a $280 million rate increase, meaning the final order does not lead to an additional immediate rate hike for customers.
  • 4Detroit Edison must refund customers the difference between the self-implemented surcharge and the finally authorized rate increase, with interest.
  • 5The MPSC order includes adoption of a pilot revenue decoupling mechanism (RDM) and an uncollectible expenses tracking mechanism.
  • 6DTE Energy reaffirmed its 2009 operating earnings per share guidance and provided an early outlook for 2010.
  • 7The utility also confirmed the continuation of a restoration and line clearance tracker, and a Choice Incentive Mechanism (CIM).

Frequently Asked Questions

The MPSC order authorized a $217 million rate increase for Detroit Edison. However, since the company had already self-implemented a $280 million increase, there will be no additional immediate rate hike for customers. Instead, Detroit Edison is required to refund customers any over-collected amount from the self-implemented surcharge, with interest.

The MPSC adopted a pilot revenue decoupling mechanism (RDM). This mechanism aims to separate the utility's revenue from the actual volume of electricity sold. If implemented successfully, it could reduce the direct impact of lower or higher customer usage on DTE Energy's revenue, potentially leading to more stable earnings regardless of weather or conservation efforts.

Yes, in this filing, DTE Energy reaffirmed its 2009 operating earnings per share guidance and also provided an early outlook for its 2010 operating earnings. Specific details would be found in the referenced press release (Exhibit 99.2).

In addition to the RDM, the MPSC ordered the continuation of a restoration and a line clearance tracker, and a Choice Incentive Mechanism (CIM). These mechanisms are designed to manage costs and revenue related to specific operational aspects of the utility.