Company: DTK
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0000936340-25-000065
Chunk: 86

Company: DTE ENERGY CO
Filing Date: 2025-02-13
Form: 10-K
Item: Item 1A
Chunk 86
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 or not driven by political or public sentiment, may also result in investigations by regulators, legislators and law enforcement officials or in legal claims.

The Clean Energy Standard, Renewable Portfolio Standard and energy waste reduction may affect the Registrants' business and federal and state fuel standards may affect DTE Energy's non-utility investments.  The Registrants are subject to existing Michigan, and potential future, federal legislation and regulation requiring them to secure sources of clean and renewable energy.  The Registrants have complied with the existing federal and state legislation, but do not know what requirements may be added by federal or state legislation in the future.  In addition, the Registrants expect to comply with new Michigan legislation increasing the percentage of power required to be provided by clean energy resources and renewable energy sources.  The Registrants cannot predict the financial impact or costs associated with complying with potential future legislation and regulations.  Compliance with these requirements can significantly increase capital expenditures and operating expenses and can negatively affect the affordability of the rates charged to customers.

In addition, the Registrants are also required by Michigan legislation to implement energy waste reduction measures and provide energy waste reduction customer awareness and education programs.  These requirements necessitate expenditures, and implementation of these programs creates the risk of reducing the Registrants' revenues as customers decrease their energy usage.  The Registrants cannot predict how these programs will impact their business and future operating results.

DTE Energy's non-utility renewable natural gas investments are also dependent on the federal Renewable Fuel Standard and California's Low Carbon Fuel Standard.  Changes to these standards may affect DTE Energy's business and result in lower earnings.

DTE Energy's ability to utilize tax credits may be limited.  To promote U.S. climate initiatives, the Internal Revenue Code provides tax credits as an incentive for taxpayers to produce energy from alternative sources.  The Registrants have generated tax credits from renewable energy generation and DTE Energy has generated tax credits from renewable gas recovery, reduced emission fuel, and gas production operations.  If the Registrants' tax credits were disallowed in whole or in part as a result of an IRS audit or changes in tax law, there could be additional tax liabilities owed for previously recognized tax credits that could significantly impact the Registrants' earnings and cash flows.

Operational Risks

The Registrants' electric distribution system and DTE Energy's gas distribution system are subject to risks from their operation, which could reduce revenues, increase expenses, and have a material adverse effect on their business, financial position, and results of operations.  The Registrants