##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period ended March 31, 2011
 Commission file number 1-2198
 The Detroit Edison Company meets the conditions set forth in General Instruction H (1) (a) and (b)
of Form 10-Q and is, therefore, filing this Form with the reduced disclosure format.
 THE DETROIT EDISON COMPANY
  Michigan
    
    38-0478650(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)One Energy Plaza, Detroit, Michigan
    
    48226-1279(Address of principal executive offices)
    
    (Zip Code)
 313-235-4000
  Yes þ       No o
  Yes o       No o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  Yes o       No þ




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##### 



The Detroit Edison CompanyQuarterly Report on Form 10-QQuarter Ended March 31, 2011
 Table Of Contents
 PageDefinitions
    
    
    1Forward-Looking Statements
    
    
    3Part IFinancial InformationItem 1. Financial StatementsConsolidated Statements of Operations (Unaudited)
    
    
    5Consolidated Statements of Financial Position (Unaudited)
    
    
    6Consolidated Statements of Cash Flows (Unaudited)
    
    
    8Consolidated Statements of Changes in Shareholders Equity
and Comprehensive Income (Unaudited)
    
    
    9Notes to Consolidated Financial Statements (Unaudited)
    
    
    10Item 2. Managements Narrative Analysis of Results of Operations
    
    
    24Item 4. Controls and Procedures
    
    
    27Part IIOther InformationItem 1. Legal Proceedings
    
    
    28Item 1A. Risk Factors
    
    
    28Item 6. Exhibits
    
    
    30Signature
    
    
    31EX-4.274EX-12.40EX-31.63EX-31.64EX-32.63EX-32.64




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Definitions
 ASC
    
    Accounting Standards CodificationASU
    
    Accounting Standards UpdateCIM
    
    A Choice Incentive Mechanism authorized by the MPSC that
allows Detroit Edison to recover or refund non-fuel
revenues lost or gained as a result of fluctuations in
electric Customer Choice sales.Customer Choice
    
    Michigan legislation giving customers the option to choose
alternative suppliers for electricity.Detroit Edison
    
    The Detroit Edison Company (a direct wholly owned
subsidiary of DTE Energy) and subsidiary companiesDTE Energy
    
    DTE Energy Company, directly or indirectly the parent of
Detroit Edison, Michigan Consolidated Gas Company and
numerous non-utility subsidiariesEPA
    
    United States Environmental Protection AgencyFASB
    
    Financial Accounting Standards BoardFERC
    
    Federal Energy Regulatory CommissionFTRs
    
    Financial transmission rights are financial instruments
that entitle the holder to receive payments related to
costs incurred for congestion on the transmission grid.MDEQ
    
    Michigan Department of Environmental QualityMISO
    
    Midwest Independent System Operator is an Independent
System Operator and the Regional Transmission Organization
serving the Midwest United States and Manitoba, Canada.MPSC
    
    Michigan Public Service CommissionNRC
    
    United States Nuclear Regulatory CommissionPSCR
    
    A Power Supply Cost Recovery mechanism authorized by the
MPSC that allows Detroit Edison to recover through rates
its fuel, fuel-related and purchased power costs.RDM
    
    A Revenue Decoupling Mechanism authorized by the MPSC that
is designed to minimize the impact on revenues of changes
in average customer usage of electricitySecuritization
    
    Detroit Edison financed specific stranded costs at lower
interest rates through the sale of rate reduction bonds by
a wholly-owned special purpose entity, The Detroit Edison
Securitization Funding LLC.VIE
    
    Variable Interest Entity
 1




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Units of
MeasurementkWh
    
    Kilowatthour of electricityMW
    
    Megawatt of electricityMWh
    
    Megawatthour of electricity
 2




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Forward-Looking Statements
  
    
    economic conditions and population changes in our geographic area resulting in changes in
demand, customer conservation, increased thefts of electricity and high levels of
uncollectible accounts receivable;
 
    
    changes in the economic and financial viability of suppliers and trading counterparties, and
the continued ability of such parties to perform their obligations to the Company;
 
    
    access to capital markets and the results of other financing efforts which can be affected by
credit agency ratings;
 
    
    instability in capital markets which could impact availability of short and long-term
financing;
 
    
    the timing and extent of changes in interest rates;
 
    
    the level of borrowings;
 
    
    the potential for losses on investments, including nuclear decommissioning and benefit plan
assets and the related increases in future expense and contributions;
 
    
    the potential for increased costs or delays in completion of significant construction
projects;
 
    
    the effects of weather and other natural phenomena on operations and sales to customers, and
purchases from suppliers;
 
    
    environmental issues, laws, regulations, and the increasing costs of remediation and
compliance, including actual and potential new federal and state requirements;
 
    
    health, safety, financial, environmental and regulatory risks associated with ownership and
operation of nuclear facilities;
 
    
    impact of electric utility restructuring in Michigan, including legislative amendments and
Customer Choice programs;
 
    
    employee relations and the impact of collective bargaining agreements;
 
    
    unplanned outages;
 
    
    changes in the cost and availability of coal and other raw materials and purchased power;
 
    
    cost reduction efforts and the maximization of plant and distribution system performance;
 
    
    the effects of competition;
 
    
    impact of regulation by the FERC, MPSC, NRC and other applicable governmental proceedings and
regulations, including any associated impact on rate structures;
 
    
    changes in and application of federal, state and local tax laws and their interpretations,
including the Internal Revenue Code, regulations, rulings, court proceedings and audits;
 
    
    the amount and timing of cost recovery allowed as a result of regulatory proceedings, related
appeals or new legislation;
 
    
    the cost of protecting assets against, or damage due to, terrorism or cyber attacks;
 
    
    the availability, cost, coverage and terms of insurance and stability of insurance providers;
 
    
    changes in and application of accounting standards and financial reporting regulations;
 
    
    changes in federal or state laws and their interpretation with respect to regulation, energy
policy and other business issues; and
 3




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
    
    binding arbitration, litigation and related appeals.
  4




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The Detroit Edison Company
 
 Consolidated Statements of Operations (Unaudited)
 Three Months EndedMarch 31(in Millions)
    
    2011
    
    
    2010Operating Revenues
    
    $
    1,192
    
    
    $
    1,146Operating ExpensesFuel and purchased power
    
    
    378
    
    
    
    343Operation and maintenance
    
    
    329
    
    
    
    309Depreciation and amortization
    
    
    202
    
    
    
    204Taxes other than income
    
    
    59
    
    
    
    65Asset (gains) and losses, net
    
    
    19
    
    
    
    (1
    )987
    
    
    
    920Operating Income
    
    
    205
    
    
    
    226Other (Income) and DeductionsInterest expense
    
    
    71
    
    
    
    81Other income
    
    
    (10
    )
    
    
    (8
    )Other expenses
    
    
    6
    
    
    
    667
    
    
    
    79Income Before Income Taxes
    
    
    138
    
    
    
    147Income Tax Provision
    
    
    53
    
    
    
    56Net Income
    
    $
    85
    
    
    $
    91
  5




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The Detroit Edison Company
 
 Consolidated Statements of Financial Position (Unaudited)
 March 31,
    
    
    December 31,(in Millions)
    
    2011
    
    
    2010ASSETSCurrent AssetsCash and cash equivalents
    
    $
    15
    
    
    $
    30Restricted cash
    
    
    55
    
    
    
    104Accounts receivable (less allowance for
doubtful accounts of $83 and $93,
respectively)Customer
    
    
    627
    
    
    
    690Affiliates
    
    
    18
    
    
    
    8Other
    
    
    78
    
    
    
    204InventoriesFuel
    
    
    201
    
    
    
    224Materials and supplies
    
    
    174
    
    
    
    170Notes receivableAffiliates
    
    
    
    
    
    
    97Other
    
    
    2
    
    
    
    Prepaid property taxes
    
    
    71
    
    
    
    44Other
    
    
    79
    
    
    
    651,320
    
    
    
    1,636InvestmentsNuclear decommissioning trust funds
    
    
    961
    
    
    
    939Other
    
    
    115
    
    
    
    1181,076
    
    
    
    1,057PropertyProperty, plant and equipment
    
    
    16,178
    
    
    
    16,068Less accumulated depreciation and amortization
    
    
    (6,484
    )
    
    
    (6,418
    )9,694
    
    
    
    9,650Other AssetsRegulatory assets
    
    
    3,243
    
    
    
    3,277Securitized regulatory assets
    
    
    692
    
    
    
    729Intangible assets
    
    
    28
    
    
    
    25Notes receivableAffiliates
    
    
    
    
    
    
    6Other
    
    
    6
    
    
    
    Other
    
    
    144
    
    
    
    1424,113
    
    
    
    4,179Total Assets
    
    $
    16,203
    
    
    $
    16,522
  6




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The Detroit Edison CompanyConsolidated Statements of Financial Position (Unaudited)
 March 31,
    
    
    December 31,(in Millions, Except Shares)
    
    2011
    
    
    2010LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesAccounts payableAffiliates
    
    $
    55
    
    
    $
    50Other
    
    
    296
    
    
    
    349Accrued interest
    
    
    74
    
    
    
    81Current portion long-term debt, including capital leases
    
    
    285
    
    
    
    308Regulatory liabilities
    
    
    
    
    
    
    60Short-term borrowing  affiliates
    
    
    131
    
    
    
    Other
    
    
    259
    
    
    
    2791,100
    
    
    
    1,127Long-Term Debt (net of current portion)Mortgage bonds, notes and other
    
    
    4,064
    
    
    
    4,046Securitization bonds
    
    
    559
    
    
    
    643Capital lease obligations
    
    
    17
    
    
    
    204,640
    
    
    
    4,709Other LiabilitiesDeferred income taxes
    
    
    2,175
    
    
    
    2,235Regulatory liabilities
    
    
    749
    
    
    
    714Asset retirement obligations
    
    
    1,389
    
    
    
    1,354Unamortized investment tax credit
    
    
    64
    
    
    
    67Nuclear decommissioning
    
    
    151
    
    
    
    149Accrued pension liability affiliates
    
    
    770
    
    
    
    960Accrued postretirement liability affiliates
    
    
    1,028
    
    
    
    1,060Other
    
    
    118
    
    
    
    1386,444
    
    
    
    6,677Commitments and Contingencies (Notes 7 and 10)Shareholders EquityCommon stock, $10 par value, 400,000,000 shares
authorized, and 138,632,324 shares issued and
outstanding
    
    
    3,196
    
    
    
    3,196Retained earnings
    
    
    838
    
    
    
    829Accumulated other comprehensive income (loss)
    
    
    (15
    )
    
    
    (16
    )4,019
    
    
    
    4,009Total Liabilities and Shareholders Equity
    
    $
    16,203
    
    
    $
    16,522
  7




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The Detroit Edison Company
 
 Consolidated Statements of Cash Flows (Unaudited)
 Three Months EndedMarch 31(in Millions)
    
    2011
    
    
    2010Operating ActivitiesNet income
    
    $
    85
    
    
    $
    91Adjustments to reconcile net income to net cash from operating activities:Depreciation and amortization
    
    
    202
    
    
    
    204Deferred income taxes
    
    
    19
    
    
    
    5Asset gains (losses), net
    
    
    19
    
    
    
    (1
    )Changes in assets and liabilities, exclusive of changes shown
separately (Note 12)
    
    
    (225
    )
    
    
    76Net cash from operating activities
    
    
    100
    
    
    
    375Investing ActivitiesPlant and equipment expenditures
    
    
    (219
    )
    
    
    (177
    )Restricted cash for debt redemptions
    
    
    49
    
    
    
    51Proceeds from sale of nuclear decommissioning trust fund assets
    
    
    20
    
    
    
    59Investment in nuclear decommissioning trust funds
    
    
    (28
    )
    
    
    (68
    )Note receivable  affiliates
    
    
    103
    
    
    
    59Other investments
    
    
    (4
    )
    
    
    (9
    )Net cash used for investing activities
    
    
    (79
    )
    
    
    (85
    )Financing ActivitiesShort-term borrowings
    
    
    131
    
    
    
    Redemption of long-term debt
    
    
    (89
    )
    
    
    (85
    )Dividends on common stock
    
    
    (76
    )
    
    
    (76
    )Other
    
    
    (2
    )
    
    
    (2
    )Net cash used for financing activities
    
    
    (36
    )
    
    
    (163
    )Net Increase in Cash and Cash Equivalents
    
    
    (15
    )
    
    
    127Cash and Cash Equivalents at Beginning of the Period
    
    
    30
    
    
    
    34Cash and Cash Equivalents at End of the Period
    
    $
    15
    
    
    $
    161
  8




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The Detroit Edison Company
 
 Consolidated Statements of Changes in Shareholders Equity and Comprehensive Income
 (Unaudited)
 AccumulatedAdditional
    
    
    
    
    
    OtherCommon Stock
    
    Paid In
    
    Retained
    
    Comprehensive(Dollars in Millions, shares in thousands)
    
    Shares
    
    Amount
    
    Capital
    
    Earnings
    
    Loss
    
    TotalBalance, December 31, 2010
    
    
    138,632
    
    
    $
    1,386
    
    
    $
    1,810
    
    
    $
    829
    
    
    $
    (16
    )
    
    $
    4,009Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    85
    
    
    
    
    
    
    
    85Dividends declared on common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (76
    )
    
    
    
    
    
    
    (76
    )Benefit obligations, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Balance, March 31, 2011
    
    
    138,632
    
    
    $
    1,386
    
    
    $
    1,810
    
    
    $
    838
    
    
    $
    (15
    )
    
    $
    4,019
  (in Millions)
    
    2011
    
    
    2010Net income
    
    $
    85
    
    
    $
    91Other comprehensive income, net of tax:Benefit obligations, net of taxes
    
    
    1
    
    
    
    1Comprehensive income
    
    $
    86
    
    
    $
    92
  9




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The Detroit Edison Company
 
 Notes to Consolidated Financial Statements (Unaudited)
 NOTE 1 BASIS OF PRESENTATION
 Corporate Structure
   Basis of Presentation
     Principles of Consolidation
    10




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March 31,
    
    
    December 31,(in Millions)
    
    2011
    
    
    2010ASSETSRestricted cash
    
    $
    55
    
    
    $
    104Accounts receivable
    
    
    39
    
    
    
    42Securitized regulatory assets
    
    
    692
    
    
    
    729Other assets
    
    
    12
    
    
    
    13$
    798
    
    
    $
    888LIABILITIESAccounts payable and accrued current liabilities
    
    $
    4
    
    
    $
    17Current portion long-term debt, including capital leases
    
    
    158
    
    
    
    150Other current liabilities
    
    
    62
    
    
    
    62Securitization bonds
    
    
    559
    
    
    
    643Other long term liabilities
    
    
    6
    
    
    
    6$
    789
    
    
    $
    878
  NOTE 2 SIGNIFICANT ACCOUNTING POLICIES
 Income Taxes
  Stock-Based Compensation
  NOTE 3 NEW ACCOUNTING PRONOUNCEMENTS
 Fair Value Measurements and Disclosures
 Improving Disclosures about Fair Value Measurements
 11




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NOTE 4 FAIR VALUE
   
    
    Level 1  Consists of unadjusted quoted prices in active markets for identical assets or
liabilities that the Company has 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.
  Net Balance at(in Millions)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    March 31, 2011Assets:Nuclear decommissioning trusts
    
    $
    624
    
    
    $
    337
    
    
    $
    
    
    
    $
    961Other investments
    
    
    52
    
    
    
    53
    
    
    
    
    
    
    
    105Derivative assets  FTRs
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Total
    
    $
    676
    
    
    $
    390
    
    
    $
    1
    
    
    $
    1,067Liabilities:Derivative liabilities  Emissions
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Total
    
    $
    
    
    
    $
    (3
    )
    
    $
    
    
    
    $
    (3
    )Net Assets at March 31, 2011
    
    $
    676
    
    
    $
    387
    
    
    $
    1
    
    
    $
    1,064
 12




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Net Balance at(in Millions)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    March 31, 2011Assets:Current
    
    $
    
    
    
    $
    
    
    
    $
    1
    
    
    $
    1Noncurrent
    
    
    676
    
    
    
    390
    
    
    
    
    
    
    
    1,066Total Assets
    
    $
    676
    
    
    $
    390
    
    
    $
    1
    
    
    $
    1,067Liabilities:Current
    
    $
    
    
    
    $
    (3
    )
    
    $
    
    
    
    $
    (3
    )Noncurrent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Liabilities
    
    $
    
    
    
    $
    (3
    )
    
    $
    
    
    
    $
    (3
    )Net Assets at March 31, 2011
    
    $
    676
    
    
    $
    387
    
    
    $
    1
    
    
    $
    1,064
  Net Balance at(in Millions)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    December 31, 2010Assets:Nuclear decommissioning trusts
    
    $
    599
    
    
    $
    340
    
    
    $
    
    
    
    $
    939Other investments
    
    
    52
    
    
    
    55
    
    
    
    
    
    
    
    107Derivative assets  FTRs
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    2Total
    
    $
    651
    
    
    $
    395
    
    
    $
    2
    
    
    $
    1,048Liabilities:Derivative liabilities  Emissions
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Total
    
    $
    
    
    
    $
    (3
    )
    
    $
    
    
    
    $
    (3
    )Net Assets at December 31, 2010
    
    $
    651
    
    
    $
    392
    
    
    $
    2
    
    
    $
    1,045
 Net Balance at(in Millions)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    December 31, 2010Assets:Current
    
    $
    
    
    
    $
    
    
    
    $
    2
    
    
    $
    2Noncurrent
    
    
    651
    
    
    
    395
    
    
    
    
    
    
    
    1,046Total Assets
    
    $
    651
    
    
    $
    395
    
    
    $
    2
    
    
    $
    1,048Liabilities:Current
    
    $
    
    
    
    $
    (3
    )
    
    $
    
    
    
    $
    (3
    )Noncurrent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Liabilities
    
    $
    
    
    
    $
    (3
    )
    
    $
    
    
    
    $
    (3
    )Net Assets at December 31, 2010
    
    $
    651
    
    
    $
    392
    
    
    $
    2
    
    
    $
    1,045
  Three Months EndedMarch 31(in Millions)
    
    2011
    
    
    2010Asset balance as of beginning of the period
    
    $
    2
    
    
    $
    2Changes in fair value recorded in regulatory assets/liabilities
    
    
    (1
    )
    
    
    (1
    )Asset balance as of March 31
    
    $
    1
    
    
    $
    1The amount of total gains (losses) included in regulatory
assets and liabilities attributed to the change in unrealized
gains (losses) related to regulatory assets and liabilities
held at March 31, 2011 and 2010
    
    $
    
    
    
    $
    
 13




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Nuclear Decommissioning Trusts and Other Investments
  Derivative Assets and Liabilities
  Fair Value of Financial Instruments
  March 31, 2011
    
    December 31, 2010Fair Value
    
    Carrying Value
    
    Fair Value
    
    Carrying ValueLong-Term Debt
    
    $5.2 billion
    
    $4.9 billion
    
    $5.3 billion
    
    $5.0 billion
 14




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Nuclear Decommissioning Trust Funds
     March 31
    
    
    December 31(in Millions)
    
    2011
    
    
    2010Fermi 2
    
    $
    930
    
    
    $
    910Fermi 1
    
    
    3
    
    
    
    3Low level radioactive waste
    
    
    28
    
    
    
    26Total
    
    $
    961
    
    
    $
    939
  Three Months EndedMarch 31(in Millions)
    
    2011
    
    2010Realized gains
    
    $
    14
    
    
    $
    9Realized losses
    
    
    (8
    )
    
    
    (8
    )Proceeds from sales of securities
    
    
    20
    
    
    
    59
  Fair
    
    
    Unrealized(in Millions)
    
    Value
    
    
    GainsAs of March 31, 2011Equity securities
    
    $
    590
    
    
    $
    100Debt securities
    
    
    359
    
    
    
    10Cash and cash equivalents
    
    
    12
    
    
    
    $
    961
    
    
    $
    110
 Fair
    
    
    Unrealized(in Millions)
    
    Value
    
    
    GainsAs of December 31, 2010Equity securities
    
    $
    572
    
    
    $
    77Debt securities
    
    
    361
    
    
    
    11Cash and cash equivalents
    
    
    6
    
    
    
    $
    939
    
    
    $
    88
 15




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Other Available-For-Sale Securities
  March 31, 2011
    
    December 31, 2010(in Millions)
    
    Fair Value
    
    Carrying value
    
    Fair Value
    
    Carrying ValueCash equivalents
    
    $
    71
    
    
    $
    71
    
    
    $
    125
    
    
    $
    125Equity securities
    
    
    5
    
    
    
    5
    
    
    
    4
    
    
    
    4
  NOTE 5 FINANCIAL AND OTHER DERIVATIVE INSTRUMENTS
    March 31
    
    
    December 31(in Millions)
    
    2011
    
    
    2010FTRs  Other current assets
    
    $
    1
    
    
    $
    2Emissions  Other current liabilities
    
    
    (3
    )
    
    
    (3
    )Total derivatives not designated as hedging instrument
    
    $
    (2
    )
    
    $
    (1
    )
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Commodity
    
    Number of UnitsEmissions (Tons)
    
    
    2,250FTRs (MW)
    
    
    21,562
 NOTE 6 ASSET RETIREMENT OBLIGATIONS
  (in Millions)Asset retirement obligations at December 31, 2010
    
    $
    1,366Accretion
    
    
    21Revision in estimated cash flows
    
    
    19Liabilities settled
    
    
    (2
    )Asset retirement obligations at March 31, 2011
    
    
    1,404Less amount included in current liabilities
    
    
    (15
    )$
    1,389
  NOTE 7  REGULATORY MATTERS
 2010 Electric Rate Case Filing
  Detroit Edison Restoration Expense Tracker Mechanism (RETM) and Line Clearance Tracker (LCT)
Reconciliation
  Detroit Edison Uncollectible Expense True-Up Mechanism (UETM)
  17




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##### Table of Contents



Detroit Edison Choice Incentive Mechanism (CIM)
  Energy Optimization (EO) Plans
  Power Supply Cost Recovery Proceedings
   Net Over/(Under)-Recovery,
    
    PSCR Cost ofPSCR Year
    
    Date Filed
    
    Including Interest
    
    Power Sold2009
    
    March 2010
    
    $15.6 million
    
    $1.2 billion2010
    
    March 2011
    
    $(52.6) million
    
    $1.2 billion
 2010
PSCR Year
 2011 Plan Year
 Other
  NOTE 8  LONG-TERM DEBT
  NOTE 9 SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS
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NOTE 10 COMMITMENTS AND CONTINGENCIES
 Environmental
 Air
    Water
 19




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Contaminated Sites
 Landfill
  Other
  Nuclear Operations
 Property Insurance
  20




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Public Liability Insurance
  Nuclear Fuel Disposal Costs
  Guarantees
  Labor Contracts
  21




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Purchase Commitments
   Bankruptcies
  Other Contingencies
   NOTE 11 RETIREMENT BENEFITS AND TRUSTEED ASSETS
  Other Postretirement(in Millions)
    
    Pension Benefits
    
    
    BenefitsThree Months Ended March 31
    
    2011
    
    
    2010
    
    
    2011
    
    
    2010Service cost
    
    $
    15
    
    
    $
    13
    
    
    $
    13
    
    
    $
    13Interest cost
    
    
    39
    
    
    
    38
    
    
    
    23
    
    
    
    24Expected return on plan assets
    
    
    (42
    )
    
    
    (43
    )
    
    
    (16
    )
    
    
    (13
    )Amortization of:Net actuarial loss
    
    
    23
    
    
    
    18
    
    
    
    11
    
    
    
    9Prior service cost
    
    
    1
    
    
    
    1
    
    
    
    (4
    )
    
    
    Net transition liability
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Net periodic benefit cost
    
    $
    36
    
    
    $
    27
    
    
    $
    28
    
    
    $
    34
 Pension and Other Postretirement Contributions
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NOTE 12 SUPPLEMENTAL CASH FLOW INFORMATION
  Three Months EndedMarch 31(in Millions)
    
    2011
    
    
    2010Changes in Assets and Liabilities, Exclusive of Changes Shown SeparatelyAccounts receivable, net
    
    $
    55
    
    
    $
    75Inventories
    
    
    18
    
    
    
    Accrued pension liability  affiliates
    
    
    (190
    )
    
    
    (93
    )Accounts payable
    
    
    (15
    )
    
    
    21Accrued PSCR refund
    
    
    (4
    )
    
    
    (3
    )Income taxes receivable/payable
    
    
    26
    
    
    
    77Postretirement obligation  affiliates
    
    
    (32
    )
    
    
    6Other assets
    
    
    (18
    )
    
    
    (9
    )Other liabilities
    
    
    (65
    )
    
    
    2$
    (225
    )
    
    $
    76
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##### Table of Contents



Part I Item 2.
 The Detroit Edison Company
 
 Managements Narrative Analysis of Results of Operations
   Three Months EndedMarch 31(in Millions)
    
    2011
    
    
    2010Operating Revenues
    
    $
    1,192
    
    
    $
    1,146Fuel and Purchased Power
    
    
    378
    
    
    
    343Gross Margin
    
    
    814
    
    
    
    803Operation and Maintenance
    
    
    329
    
    
    
    309Depreciation and Amortization
    
    
    202
    
    
    
    204Taxes Other Than Income
    
    
    59
    
    
    
    65Asset (Gains) and Losses, Net
    
    
    19
    
    
    
    (1
    )Operating Income
    
    
    205
    
    
    
    226Other (Income) and Deductions
    
    
    67
    
    
    
    79Income Tax Provision
    
    
    53
    
    
    
    56Net Income
    
    $
    85
    
    
    $
    91Operating Income as a Percentage of Operating Revenues
    
    
    17
    %
    
    
    20
    %
 Gross
margin
 (in Millions)
    
    Three MonthsBase sales, net of RDM and CIM
    
    $
    7Energy optimization incentive
    
    
    9Restoration tracker
    
    
    5Electric Choice implementation surcharge elimination
    
    
    (6
    )Securitization bond and tax surcharge
    
    
    (3
    )Other
    
    
    (1
    )Increase in gross margin
    
    $
    11
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Three Months EndedMarch 31(in Thousands of MWh)
    
    2011
    
    2010Electric SalesResidential
    
    
    3,889
    
    
    
    3,665Commercial
    
    
    3,993
    
    
    
    3,942Industrial
    
    
    2,341
    
    
    
    2,475Other
    
    
    798
    
    
    
    80211,021
    
    
    
    10,884Interconnection sales (1)
    
    
    306
    
    
    
    1,310Total Electric Sales
    
    
    11,327
    
    
    
    12,194Electric DeliveriesRetail and Wholesale
    
    
    11,021
    
    
    
    10,884Electric Customer Choice, including self generators(2)
    
    
    1,302
    
    
    
    1,103Total Electric Sales and Deliveries
    
    
    12,323
    
    
    
    11,987
 
 (1)
    
    Represents power that is not distributed by Detroit Edison.(2)
    
    Includes deliveries for self generators who have purchased power from alternative energy
suppliers to supplement their power requirements. Three Months EndedPower Generated and Purchased
    
    March 31(in Thousands of MWh)
    
    2011
    
    
    2010Power Plant GenerationFossil
    
    
    8,058
    
    
    
    9,520Nuclear
    
    
    1,706
    
    
    
    2,2009,764
    
    
    
    11,720Purchased Power
    
    
    2,477
    
    
    
    1,322System Output
    
    
    12,241
    
    
    
    13,042Less Line Loss and Internal Use
    
    
    (914
    )
    
    
    (848
    )Net System Output
    
    
    11,327
    
    
    
    12,194Average Unit Cost ($/MWh)Generation (1)
    
    $
    20.80
    
    
    $
    18.78Purchased Power
    
    $
    40.79
    
    
    $
    32.30Overall Average Unit Cost
    
    $
    24.84
    
    
    $
    20.15
 
 (1)
    
    Represents fuel costs associated with power plants. Operation
and maintenance
 Asset (gains) and losses, net
 Outlook
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Environmental Matters
    26




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Part I Item 4.
 
 CONTROLS AND PROCEDURES
 (a) Evaluation of disclosure controls and procedures
  (b) Changes in internal control over financial reporting
  27




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##### Table of Contents



Part IIOther Information
 
 Item 1.
    
     Legal Proceedings
      
 Item 1A.
    
     Risk Factors
  Operation of a nuclear facility subjects us to risk.
 Construction and capital improvements to our power facilities subject us to risk.
 28




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29




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##### Table of Contents



Item 6.
    
     Exhibits
 ExhibitNumber
    
    DescriptionExhibits filed herewith:4-274
    
    Supplemental Indenture, dated as of March 1, 2011, to the Mortgage and Deed of Trust, dated
as of October 1, 1924, by and between The Detroit Edison Company and The Bank of New York
Mellon Trust Company, N.A. as successor trustee (2011 Series AT)12-40
    
    Computation of Ratio of Earnings to Fixed Charges31-63
    
    Chief Executive Officer Section 302 Form 10-Q Certification31-64
    
    Chief Financial Officer Section 302 Form 10-Q CertificationExhibits furnished herewith:32-63
    
    Chief Executive Officer Section 906 Form 10-Q Certification32-64
    
    Chief Financial Officer Section 906 Form 10-Q Certification
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SIGNATURE
  THE DETROIT EDISON COMPANY(Registrant)Date: April 27, 2011
    
    /S/ PETER B. OLEKSIAKPeter B. OleksiakVice President and Controller andChief Accounting Officer
 31