Company: DTK
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000936340-25-000097
Chunk: 111

Company: DTE ENERGY CO
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 1
Chunk 111
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 investment grade based on DTE Energy’s evaluation of the counterparty’s creditworthiness.  The five largest counterparty exposures, combined, for this category represented 10% of the total gross credit exposure.

(d)This category includes counterparties that have not been rated by Moody’s or Standard & Poor’s and are considered non-investment grade based on DTE Energy’s evaluation of the counterparty’s creditworthiness.  The five largest counterparty exposures, combined, for this category represented 2% of the total gross credit exposure.

Other

The Registrants engage in business with customers that are non-investment grade.  The Registrants closely monitor the credit ratings of these customers and, when deemed necessary and permitted under the tariffs, request collateral or guarantees from such customers to secure their obligations.

Interest Rate Risk

DTE Energy is subject to interest rate risk in connection with the issuance of debt.  In order to manage interest costs, DTE Energy may use treasury locks and interest rate swap agreements.  DTE Energy's exposure to interest rate risk arises primarily from changes in U.S. Treasury rates, commercial paper rates, credit spreads, and SOFR.  As of March 31, 2025, DTE Energy had floating rate debt of $513 million and a floating rate debt-to-total debt ratio of 2.3%.

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Foreign Currency Exchange Risk

DTE Energy has foreign currency exchange risk arising from market price fluctuations associated with fixed priced contracts.  These contracts are denominated in Canadian dollars and are primarily for the purchase and sale of natural gas and power, as well as for long-term transportation capacity.  To limit DTE Energy's exposure to foreign currency exchange fluctuations, DTE Energy has entered into a series of foreign currency exchange forward contracts through December 2032.

Summary of Sensitivity Analyses

Sensitivity analyses were performed on the fair values of commodity contracts for DTE Energy and long-term debt obligations for the Registrants.  The commodity contracts listed below principally relate to energy marketing and trading activities.  The sensitivity analyses involved increasing and decreasing forward prices and rates at March 31, 2025 and 2024 by a hypothetical 10% and calculating the resulting change in the fair values.  The hypothetical losses related to long-term debt would be realized only if DTE Energy transferred all of its fixed-rate long-term debt to other creditors.

The results of the sensitivity analyses:

Assuming a10% Increase in Prices/RatesAssuming a10% Decrease in Prices/R