Company: DTK
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0000936340-25-000065
Chunk: 53

Company: DTE ENERGY CO
Filing Date: 2025-02-13
Form: 10-K
Item: Item 1
Chunk 53
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 well as for proprietary trading within defined risk guidelines.

Significant portions of the Energy Trading portfolio are economically hedged.  Most financial instruments, physical power and natural gas contracts, and certain environmental contracts are deemed derivatives; whereas, natural gas and environmental inventory, contracts for pipeline transportation, storage assets, and some environmental contracts are not derivatives.  As a result, this segment will experience earnings volatility as derivatives are marked-to-market without revaluing the underlying non-derivative contracts and assets.  The business’ strategy is to economically manage the price risk of these underlying non-derivative contracts and assets with futures, forwards, swaps, and options.  This results in gains and losses that are recognized in different interim and annual accounting periods.

Regulation

Energy Trading has market-based rate authority from the FERC to sell power and blanket authority from the FERC to sell natural gas at market prices.  Energy Trading is subject to FERC reporting requirements and market behavior rules.  Energy Trading is also subject to the applicable laws, rules, and regulations related to the CFTC, U.S. Department of Homeland Security, and DOE.  In addition, Energy Trading is subject to applicable laws, rules, and regulations in Canada.

14

Strategy and Competition

DTE Energy's strategy for the Energy Trading business is to deliver value-added services to DTE Energy customers.  DTE Energy seeks to manage this business in a manner complementary to the growth of DTE Energy's other business segments.  Energy Trading focuses on physical marketing and the optimization of its portfolio of energy assets.  The segment competes with electric and gas marketers, financial institutions, traders, utilities, and other energy providers.  The Energy Trading business is dependent upon the availability of capital and an investment grade credit rating.  DTE Energy believes it has ample available capital capacity to support Energy Trading activities.  DTE Energy monitors its use of capital closely to ensure that its commitments do not exceed capacity.  A material credit restriction would negatively impact Energy Trading's financial performance.  Competitors with greater access to capital, or at a lower cost, may have a competitive advantage.  DTE Energy has risk management and credit processes to monitor and mitigate risk.

CORPORATE AND OTHER

Corporate and Other includes various holding company activities, holds certain non-utility debt, and holds certain investments, including investments supporting regional development and economic growth.

ENVIRONMENTAL MATTERS

The Registrants are subject to extensive environmental regulation and expect to continue recovering environmental costs related to utility operations through rates charged