Company: DTK
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0000936340-25-000182
Chunk: 164

Company: DTE ENERGY CO
Filing Date: 2025-07-29
Form: 10-Q
Item: Part I, Item 8
Chunk 164
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 Foreign Currency Exchange Risk — Energy Trading has foreign currency exchange forward contracts to economically hedge fixed Canadian dollar commitments existing under natural gas and power purchase and sale contracts and natural gas transportation contracts.  Energy Trading enters into these contracts to mitigate price volatility with respect to fluctuations of the Canadian dollar relative to the U.S. dollar.  These derivatives are accounted for by recording changes in fair value to earnings unless hedge accounting criteria are met.Corporate and Other — Interest Rate Risk — DTE Energy may use interest rate swaps, treasury locks, and other derivatives to hedge the risk associated with interest rate market volatility.Credit Risk — DTE Energy maintains credit policies that significantly minimize overall credit risk.  These policies include an evaluation of potential customers’ and counterparties’ financial condition, including the viability of underlying productive assets, credit rating, collateral requirements, or other credit enhancements such as letters of credit or guarantees.  DTE Energy generally uses standardized agreements that allow the netting of positive and negative transactions associated with a single counterparty.  DTE Energy maintains a provision for credit losses based on factors surrounding the credit risk of its customers, historical trends, and other information.  Based on DTE Energy's credit policies and its June 30, 2025 provision for credit losses, DTE Energy’s exposure to counterparty nonperformance is not expected to have a material adverse effect on DTE Energy's Consolidated Financial Statements.

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Table of ContentsDTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

Derivative ActivitiesDTE Energy manages its MTM risk on a portfolio basis based upon the delivery period of its contracts and the individual components of the risks within each contract.  Accordingly, it records and manages the energy purchase and sale obligations under its contracts in separate components based on the commodity (e.g. electricity or natural gas), the product (e.g. electricity for delivery during peak or off-peak hours), the delivery location (e.g. by region), the risk profile (e.g. forward or option), and the delivery period (e.g. by month and year).  The following describes the categories of activities represented by their operating characteristics and key risks:•Asset Optimization — Represents derivative activity associated with assets owned and contracted by DTE Energy, including forward natural gas purchases and sales, natural gas transportation, and storage capacity.  Changes in the value of derivatives in this category typically economically offset changes in the value of underlying non-derivative positions, which do not qualify