Company: DTK
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0000936340-25-000223
Chunk: 73

Company: DTE ENERGY CO
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 1
Chunk 73
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 the inputs to valuation techniques.  Credit risk of the Registrants and their counterparties is incorporated in the valuation of assets and liabilities through the use of credit reserves, the impact of which was immaterial at September 30, 2025 and December 31, 2024.  The Registrants believe they use valuation techniques that maximize the use of observable market-based inputs and minimize the use of unobservable inputs.A fair value hierarchy has been established that prioritizes the inputs to valuation techniques used to measure fair value in three broad levels.  The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).  In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy.  All assets and liabilities are required to be classified in their entirety based on the lowest level of input that is significant to the fair value measurement in its entirety.  Assessing the significance of a particular input may require judgment considering factors specific to the asset or liability and may affect the valuation of the asset or liability and its placement within the fair value hierarchy.  The Registrants classify fair value balances based on the fair value hierarchy defined as follows:•Level 1 — Consists of unadjusted quoted prices in active markets for identical assets or liabilities that the Registrants have the ability to access as of the reporting date.•Level 2 — Consists of inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.•Level 3 — Consists of unobservable inputs for assets or liabilities whose fair value is estimated based on internally developed models or methodologies using inputs that are generally less readily observable and supported by little, if any, market activity at the measurement date.  Unobservable inputs are developed based on the best available information and subject to cost-benefit constraints.The following table presents assets and liabilities for DTE Energy measured and recorded at fair value on a recurring basis:

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

September 30, 2025December 31, 2024Level1Level2Level3Other(a)Netting(b)Net BalanceLevel1Level2Level3Other(a)Netting(b)Net Balance(In millions)AssetsCash equivalents and Restricted