Company: DTK
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0000936340-25-000065
Chunk: 84

Company: DTE ENERGY CO
Filing Date: 2025-02-13
Form: 10-K
Item: Item 1A
Chunk 84
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Item 1A. Risk Factors

There are various risks associated with the operations of the Registrants' utility businesses and DTE Energy's non-utility businesses.  To provide a framework to understand the operating environment of the Registrants, below is a brief explanation of the more significant risks associated with their businesses.  Although the Registrants have tried to identify and discuss key risk factors, others could emerge in the future.  Each of the following risks could affect performance.

Regulatory, Legislative, and Legal Risks

The Registrants are subject to rate regulation.  Electric and gas rates for the utilities are set by the MPSC and the FERC and cannot be changed without regulatory authorization.  The Registrants may be negatively impacted by new regulations or interpretations by the MPSC, the FERC, or other regulatory bodies.  The Registrants' ability to recover costs may be impacted by the time lag between the incurring of costs and the recovery of the costs in customers' rates.  Regulators also may decide to disallow recovery of certain costs in customers' rates if they determine that those costs do not meet the standards for recovery under current governing laws and regulations.  Regulators may also disagree with the Registrants' rate calculations under the various mechanisms that are intended to mitigate the risk to their utilities related to certain aspects of the business.  If the Registrants cannot agree with regulators on an appropriate reconciliation of those mechanisms, it may impact the Registrants' ability to recover certain costs through customer rates.  Regulators may also decide to eliminate these mechanisms in future rate cases, which may make it more difficult for the Registrants to recover their costs in the rates charged to customers.  The Registrants cannot predict what rates the MPSC will authorize in future rate cases, and unfavorable rate relief could impact our plans for significant capital investment.  New legislation, regulations, or interpretations could change how the business operates, impact the Registrants' ability to recover costs through rates or the timing of such recovery, or require the Registrants to incur additional expenses.

Changes to Michigan's electric retail access program could negatively impact the Registrants' financial performance.  The State of Michigan currently experiences a hybrid market, where the MPSC continues to regulate electric rates for DTE Electric customers, while alternative electric suppliers charge market-based rates.  MPSC rate orders, and energy legislation enacted by the State of Michigan, have placed a 10% cap on the total potential retail access migration.  However, even with the legislated 10% cap on