##### 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 quarter ended September 30, 2002

Commission file number 1-2198

The registrant 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

(Exact name of registrant as specified in its charter)


|                                                                            |  |                                                
|--------------------------------------------------------------------------- |  | -----------------------------------------------
|Michigan
(State or other jurisdiction of incorporation or
organization)     |  | 38-0478650
(I.R.S. Employer
Identification No.)
|                                                                            |  |                                                
|2000 2nd Avenue, Detroit, Michigan
(Address of principal executive offices) |  | 48226-1279
(Zip Code)                          

313-235-8000
(Registrants telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes [X]    No [  ]



---

---





---

TABLE OF CONTENTS



|                                          |                                                                      |                                                           |  |  |  |  |  | 
|----------------------------------------- | -------------------------------------------------------------------- | --------------------------------------------------------- |  |  |  |  |  | 
|Definitions                              
|                                          | Item 2. Managements Narrative Analysis of the Results of Operations
|                                          | Item 4. Controls and Procedures                                     
|PART I - FINANCIAL INFORMATION           
|                                          | Item 1. Financial Statements                                        
|                                          |                                                                      | Consolidated Statement of Operations                     
|                                          |                                                                      | Consolidated Statement of Financial Position             
|                                          |                                                                      | Consolidated Statement of Cash Flows                     
|                                          |                                                                      | Consolidated Statement of Changes in Shareholders Equity
|                                          |                                                                      | Notes to Consolidated Financial Statements               
|                                          |                                                                      | Independent Accountants Report                          
|PART II - OTHER INFORMATION              
|                                          | Item 6. Exhibits and Reports on Form 8-K                            
|SIGNATURE                                
|CERTIFICATION                            
|Supplemental Indenture                   
|Tenth Supplemental Indenture             
|Awareness Letter of Deloitte & Touche LLP
|364-Day Credit Agreement                 
|Three-Year Credit Agreement              
|Chief Executive Officer Certification    
|Chief Financial Officer Certification    



---



##### Table of Contents



The Detroit Edison Company

Quarterly Report on Form 10-Q
Quarter Ended September 30, 2002

Table of Contents

|                               |                                                                      |                                                           |    |      |    | 
|------------------------------ | -------------------------------------------------------------------- | --------------------------------------------------------- | -- | ---- | -- | 
|                               |                                                                      |                                                           |    | Page
|                               |                                                                      |                                                           |    |     
|                              
|Definitions                    |                                                                      |                                                           | 3  |     
|                              
|Part I  Financial Information |                                                                      |                                                           |    |     
|                              
|                               | Item 1. Financial Statements                                         |                                                           |    |      |   
|                              
|                               |                                                                      | Consolidated Statement of Operations                      |    |      | 11 | 
|                              
|                               |                                                                      | Consolidated Statement of Financial Position              |    |      | 12 | 
|                              
|                               |                                                                      | Consolidated Statement of Cash Flows                      |    |      | 14 | 
|                              
|                               |                                                                      | Consolidated Statement of Changes in Shareholders Equity |    |      | 15 | 
|                              
|                               |                                                                      | Notes to Consolidated Financial Statements                |    |      | 16 | 
|                              
|                               |                                                                      | Independent Accountants Report                           |    |      | 21 | 
|                              
|                               | Item 2. Managements Narrative Analysis of the Results of Operations |                                                           |    | 4    |   
|                              
|                               | Item 4. Controls and Procedures                                      |                                                           |    | 10   |   
|                              
|Part II  Other Information    |                                                                      |                                                           |    |     
|                              
|                               | Item 6. Exhibits and Reports on Form 8-K                             |                                                           |    | 22   |   
|                              
|Signature                      |                                                                      |                                                           | 23 |     
|                              
|Certifications                 |                                                                      |                                                           | 24 |     

2



---



##### Table of Contents






Definitions

|                |  |                                                                                                                                                                                                                                                                                                                                    
|--------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Customer Choice |  | The choice program is a statewide initiative giving customers
in Michigan the option to choose alternative suppliers for electricity.                                                                                                                                                                                              
|                |  |                                                                                                                                                                                                                                                                                                                                    
|DTE Energy      |  | DTE Energy Company and Subsidiary Companies                                                                                                                                                                                                                                                                                        
|                |  |                                                                                                                                                                                                                                                                                                                                    
|Detroit Edison  |  | The Detroit Edison Company (a wholly owned subsidiary of DTE
Energy Company) and Subsidiary Companies                                                                                                                                                                                                                              
|                |  |                                                                                                                                                                                                                                                                                                                                    
|Enterprises     |  | DTE Enterprises Inc. (successor to MCN Energy), a wholly owned
subsidiary of DTE Energy Company                                                                                                                                                                                                                                    
|                |  |                                                                                                                                                                                                                                                                                                                                    
|EPA             |  | United States Environmental Protection Agency                                                                                                                                                                                                                                                                                      
|                |  |                                                                                                                                                                                                                                                                                                                                    
|FERC            |  | Federal Energy Regulatory Commission                                                                                                                                                                                                                                                                                               
|                |  |                                                                                                                                                                                                                                                                                                                                    
|kWh             |  | Kilowatthour                                                                                                                                                                                                                                                                                                                       
|                |  |                                                                                                                                                                                                                                                                                                                                    
|MCN Energy      |  | MCN Energy Group Inc.                                                                                                                                                                                                                                                                                                              
|                |  |                                                                                                                                                                                                                                                                                                                                    
|MichCon         |  | Michigan Consolidated Gas Company                                                                                                                                                                                                                                                                                                  
|                |  |                                                                                                                                                                                                                                                                                                                                    
|MPSC            |  | Michigan Public Service Commission                                                                                                                                                                                                                                                                                                 
|                |  |                                                                                                                                                                                                                                                                                                                                    
|MW              |  | Megawatt                                                                                                                                                                                                                                                                                                                           
|                |  |                                                                                                                                                                                                                                                                                                                                    
|MWh             |  | Megawatthour                                                                                                                                                                                                                                                                                                                       
|                |  |                                                                                                                                                                                                                                                                                                                                    
|PSCR            |  | A power supply cost recovery mechanism authorized by the MPSC that
allowed Detroit Edison to recover through rates its fuel, fuel-related and
purchased power electric expenses. The clause was suspended under
Michigans restructuring legislation signed into law June 5, 2000, which
lowered and froze electric customer rates.
|                |  |                                                                                                                                                                                                                                                                                                                                    
|SEC             |  | Securities and Exchange Commission                                                                                                                                                                                                                                                                                                 
|                |  |                                                                                                                                                                                                                                                                                                                                    
|Securitization  |  | A mechanism used by Detroit Edison to refinance specific
stranded costs at lower interest rates through the sale of rate reduction
bonds.                                                                                                                                                                                          
|                |  |                                                                                                                                                                                                                                                                                                                                    
|SFAS            |  | Statement of Financial Accounting Standards                                                                                                                                                                                                                                                                                        
|                |  |                                                                                                                                                                                                                                                                                                                                    
|Stranded Costs  |  | Costs incurred by utilities in order to serve customers in a
regulated environment, but some of which may not be recoverable if
customers switch to alternative suppliers of electricity.                                                                                                                                          

3



---



##### Table of Contents



The Detroit Edison Company

Forward-Looking Statements

Certain information presented herein includes forward-looking statements.
Forward-looking statements involve certain risks and uncertainties that may
cause actual future results to differ materially from those contemplated,
projected, estimated or budgeted in such forward-looking statements. Factors
that may impact forward-looking statements include, but are not limited to,
interest rates, access to the capital markets and capital market conditions
(including the effect on Detroit Edisons pension plan investments), the level
of borrowings, the effects of weather and other natural phenomena on
operations, actual sales, economic climate and growth in the geographic areas
in which Detroit Edison does business, the timing and extent of changes in
commodity prices for electricity, unscheduled generation outages, maintenance
or repairs, nuclear power plant performance, changes in the cost of fuel and
purchased power due to the suspension of the PSCR mechanism, the effects of
increased competition from other energy suppliers and the implementation of
electric Customer Choice programs as well as alternative forms of energy, the
implementation of electric utility restructuring in Michigan (which involves
pending regulatory and related judicial proceedings, and actual and possible
reductions in authorized rates and earnings), the effects of changes in
governmental policies including income taxes, environmental compliance and
nuclear requirements and the ability to recover these costs through rate
increases, the impact of FERC and MPSC proceedings and existing and proposed
regulations and the timing of the accretive effects of DTE Energys merger with
MCN Energy.




Managements Narrative Analysis of the Results of Operations

The Results of Operations discussion for Detroit Edison is presented in
accordance with General Instruction H (2) (a) of Form 10-Q.

Detroit Edison reported net income of $105 million for the 2002 three-month
period, compared to net income of $88 million for the same period in 2001. For
the nine-month period, net income was $272 million compared to $124 million for
the same period in 2001. The earnings comparability for the three- and
nine-month periods is affected by $9 million ($5 million net of tax) and $184
million ($119 million net of tax), respectively, of merger and restructuring
charges that were recorded in 2001.

New reporting alignment- Beginning in 2002, Detroit Edisons parent company,
DTE Energy, realigned its internal and external financial reporting structure
into three strategic business units (Energy Resources, Energy Distribution and
Energy Gas) that have both regulated and non-regulated operations. Based on
this structure, management sets strategic goals, allocates resources and
evaluates performance. The realignment resulted in the following two
reportable segments for Detroit Edison:

Energy Resourcesincludes the power generation services of Detroit Edison.
Electricity is generated from Detroit Edisons numerous fossil plants or its
nuclear plant and sold throughout Southeastern Michigan to residential,
commercial, industrial and wholesale customers.

Energy Distributionincludes the electric distribution services of Detroit
Edison. Energy Distribution distributes electricity generated by Energy
Resources and alternative electric suppliers to Detroit Edisons 2.1 million
residential, commercial and industrial customers.

4



---



##### Table of Contents



Managements Narrative Analysis and Results of Operations

|                                             |       |      |                    |      |                   |      |    |      |  |   |     |     |  |   |      |     | 
|-------------------------------------------- | ----- | ---- | ------------------ | ---- | ----------------- | ---- | -- | ---- |  | - | --- | --- |  | - | ---- | --- | 
|                                             |       |      | Three Months Ended |      | Nine Months Ended
|                                             |       |      | September 30       |      | September 30     
|                                             |       |      |                    |      |                  
|(in
Millions)                                |       | 2002 |                    | 2001 |                   | 2002 |    | 2001
|                                             |       |      |                    |      |                   |      |    |      | 
|Net Income                                   |       |      |                    |      |                   |      |    |      |  |   |     |     |  |   |      |    
|Energy Resources                             |       | $    | 38                 |      |                   | $    | 30 |      |  | $ | 150 |     |  | $ | 120  |    
|Energy Distribution                          |       |      | 67                 |      |                   |      | 63 |      |  |   | 122 |     |  |   | 123  |    
|                                             |       |      |                    |      |                   |      |    |      |  |   |     |     |  |   |      |    
|                                             |       |      | 105                |      |                   |      | 93 |      |  |   | 272 |     |  |   | 243  |    
|Merger and Restructuring Charges, net of tax |       |      |                   |      |                   |      | (5 | )    |  |   |    |     |  |   | (119 | )  
|                                             |       |      |                    |      |                   |      |    |      |  |   |     |     |  |   |      |    
|                                             | Total |      | $                  | 105  |                   |      | $  | 88   |  |   | $   | 272 |  |   | $    | 124 | 
|                                             |       |      |                    |      |                   |      |    |      |  |   |     |     |  |   |      |    

Energy Resources

Earnings increased $8 million and $30 million during the 2002 three- and
nine-month periods, respectively, reflecting higher gross margins due to lower
purchased power costs. The lower purchased power costs reflect favorable energy
market prices in 2002. Mark to market accounting for forward and option contracts in 2001 impacted revenues and purchased power, resulting in a favorable impact on margins of $36
million in the 2001 third quarter, and an unfavorable impact on margins of $9 million in the 2001 nine-month period. Margins were
also impacted by higher revenues due to greater cooling demand in the 2002
third quarter and the loss of revenues resulting from customers switching to
alternative electric suppliers under the electric Customer Choice program.
Revenues for the 2002 nine-month period also were reduced due to the impact of
a 5% legislatively mandated, securitization based, rate reduction for
commercial and industrial customers that began in April 2001. The higher gross
margins were partially offset by increased employee benefit costs and higher
operations and maintenance expenses due to planned and unplanned reliability
and maintenance work done to improve the production and availability of the
generation fleet. Depreciation and amortization expense decreased in the
nine-month period reflecting the extension of the amortization period from 7
years to 15 years for certain regulatory assets that were securitized in 2001.

|                               |  |                    |     |                   |  |      |     |      |  |   |       |  |  |   |       | 
|------------------------------ |  | ------------------ | --- | ----------------- |  | ---- | --- | ---- |  | - | ----- |  |  | - | ----- | 
|                               |  | Three Months Ended |     | Nine Months Ended
|                               |  | September 30       |     | September 30     
|                               |  |                    |     |                  
|                               |  | 2002               |     | 2001              |  | 2002 |     | 2001
|                               |  |                    |     |                   |  |      |     |     
|(in Millions)                  |  |                    |     |                   |  |      |     |      |  |   |       |  |  |   |       | 
|Operating revenues             |  | $                  | 784 |                   |  | $    | 766 |      |  | $ | 2,052 |  |  | $ | 2,172 | 
|Less: Fuel and purchased power |  |                    | 365 |                   |  |      | 397 |      |  |   | 780   |  |  |   | 974   | 
|                               |  |                    |     |                   |  |      |     |      |  |   |       |  |  |   |       | 
|Gross margin                   |  | $                  | 419 |                   |  | $    | 369 |      |  | $ | 1,272 |  |  | $ | 1,198 | 
|                               |  |                    |     |                   |  |      |     |      |  |   |       |  |  |   |       | 
|Net income                     |  | $                  | 38  |                   |  | $    | 30  |      |  | $ | 150   |  |  | $ | 120   | 
|                               |  |                    |     |                   |  |      |     |      |  |   |       |  |  |   |       | 

5



---



##### Table of Contents



Managements Narrative Analysis and Results of Operations

System output and average fuel and purchased power costs were as follows:

|                              |                    |  |                    |        |                   |  |        |        |      |  |        |        |  |  |        |        | 
|----------------------------- | ------------------ |  | ------------------ | ------ | ----------------- |  | ------ | ------ | ---- |  | ------ | ------ |  |  | ------ | ------ | 
|                              |                    |  | Three Months Ended |        | Nine Months Ended
|                              |                    |  | September 30       |        | September 30     
|                              |                    |  |                    |        |                  
|                              |                    |  | 2002               |        | 2001              |  | 2002   |        | 2001
|                              |                    |  |                    |        |                   |  |        |        |     
|(in Thousands of MWh)         |                    |  |                    |        |                   |  |        |        |      |  |        |        |  |  |        |       
|Power generated and purchased |                    |  |                    |        |                   |  |        |        |      |  |        |        |  |  |        |       
|Power
plant generation        |                    |  |                    |        |                   |  |        |        |      |  |        |        |  |  |        |       
|                              | Fossil             |  |                    | 11,183 |                   |  |        | 11,021 |      |  |        | 29,813 |  |  |        | 30,639 | 
|                              | Nuclear            |  |                    | 2,384  |                   |  |        | 2,406  |      |  |        | 7,008  |  |  |        | 7,135  | 
|Purchased power               |                    |  | 3,439              |        |                   |  | 2,092  |        |      |  | 7,257  |        |  |  | 5,360  |       
|                              |                    |  |                    |        |                   |  |        |        |      |  |        |        |  |  |        |       
|System output                 |                    |  | 17,006             |        |                   |  | 15,519 |        |      |  | 44,078 |        |  |  | 43,134 |       
|                              |                    |  |                    |        |                   |  |        |        |      |  |        |        |  |  |        |       
|Average unit cost ($/MWh)     |                    |  |                    |        |                   |  |        |        |      |  |        |        |  |  |        |       
|                              | Generation(1)      |  | $                  | 12.98  |                   |  | $      | 12.60  |      |  | $      | 12.62  |  |  | $      | 12.34  | 
|                              |                    |  |                    |        |                   |  |        |        |      |  |        |        |  |  |        |       
|                              | Purchased power(2) |  | $                  | 52.96  |                   |  | $      | 148.08 |      |  | $      | 43.24  |  |  | $      | 92.84  | 
|                              |                    |  |                    |        |                   |  |        |        |      |  |        |        |  |  |        |       



---

|(1) |  | Represents fuel costs associated with power plants.            
|--- |  | ---------------------------------------------------------------
|   
|(2) |  | The average purchased power amounts include hedging activities.

Outlook-Electric restructuring will continue to result in increased
competition in the electric generation business. Effective January 1, 2002,
the electric Customer Choice program in Michigan was expanded to allow all
electric customers to choose to purchase their electricity from suppliers other
than their local utility. Detroit Edison expects to lose between 5% to 8% of
retail sales in 2002 and between 10% to 15% of such sales in 2003 as a result
of customers choosing to participate in the electric Customer Choice program.
To the extent Detroit Edison experiences net stranded costs as a result of
customers switching to an alternative electric supplier, Michigan law allows
the recovery of all amounts of such net stranded costs. Detroit Edison
disagreed with the MPSC initial methodology for determining and recovering net
stranded costs and has asked for rehearing, clarification and modification of
the December 2001 order. In May 2002, the MPSC denied Detroit Edisons request
for rehearing and clarification on certain aspects of the order. In June 2002,
Detroit Edison filed a claim of appeal of the December 2001 MPSC order with the
Michigan Court of Appeals.

In May 2002, Detroit Edison filed a new net stranded cost case with the MPSC
that seeks to refine the methodology approved by the MPSC in December 2001 and
calculates actual net stranded costs for 2000 and 2001. The MPSC Staff and
interveners submitted their net stranded cost filings in November 2002. Detroit
Edison expects to record 2002 net stranded costs as a regulatory asset with the
offsetting entry reducing expense in the fourth quarter of 2002. See Note 3.

Energy Distribution

Earnings increased $4 million during the 2002 three-month period and decreased
$1 million during the 2002 nine-month period reflecting higher operating
revenues which were offset by increased operation and maintenance expenses.
Operating revenues increased due primarily to higher residential sales
attributable to greater cooling demand. The increased operation and
maintenance expenses are attributable to heat-related maintenance expenses due
to prolonged periods of above normal temperatures and the related stress placed
on the distribution system, higher employee benefit costs, and expenses
associated with restoring power to customers who lost service during two storms
in the 2002 nine-month period.

6



---



##### Table of Contents



Managements Narrative Analysis and Results of Operations

|                   |  |                    |     |                   |  |      |     |      |  |   |       |  |  |   |     | 
|------------------ |  | ------------------ | --- | ----------------- |  | ---- | --- | ---- |  | - | ----- |  |  | - | --- | 
|                   |  | Three Months Ended |     | Nine Months Ended
|                   |  | September 30       |     | September 30     
|                   |  |                    |     |                  
|                   |  | 2002               |     | 2001              |  | 2002 |     | 2001
|                   |  |                    |     |                   |  |      |     |     
|(in Millions)      |  |                    |     |                   |  |      |     |      |  |   |       |  |  |   |     | 
|Operating revenues |  | $                  | 416 |                   |  | $    | 355 |      |  | $ | 1,040 |  |  | $ | 965 | 
|                   |  |                    |     |                   |  |      |     |      |  |   |       |  |  |   |     | 
|Net income         |  | $                  | 67  |                   |  | $    | 63  |      |  | $ | 122   |  |  | $ | 123 | 
|                   |  |                    |     |                   |  |      |     |      |  |   |       |  |  |   |     | 

|                                    |  |                    |        |                   |  |      |        |      |  |  |        |  |  |  |        | 
|----------------------------------- |  | ------------------ | ------ | ----------------- |  | ---- | ------ | ---- |  |  | ------ |  |  |  | ------ | 
|                                    |  | Three Months Ended |        | Nine Months Ended
|Electric Sales and Deliveries       |  | September 30       |        | September 30     
|                                    |  |                    |        |                  
|                                    |  | 2002               |        | 2001              |  | 2002 |        | 2001
|                                    |  |                    |        |                   |  |      |        |     
|(in Thousands of MWh)               |  |                    |        |                   |  |      |        |      |  |  |        |  |  |  |        | 
|Electric Sales                      |  |                    |        |                   |  |      |        |      |  |  |        |  |  |  |        | 
|Residential                         |  |                    | 5,131  |                   |  |      | 4,415  |      |  |  | 12,377 |  |  |  | 11,321 | 
|Commercial                          |  |                    | 5,076  |                   |  |      | 5,115  |      |  |  | 14,135 |  |  |  | 14,370 | 
|Industrial                          |  |                    | 3,472  |                   |  |      | 3,641  |      |  |  | 10,342 |  |  |  | 10,964 | 
|Wholesale                           |  |                    | 578    |                   |  |      | 506    |      |  |  | 1,670  |  |  |  | 1,623  | 
|Other                               |  |                    | 100    |                   |  |      | 90     |      |  |  | 298    |  |  |  | 277    | 
|                                    |  |                    |        |                   |  |      |        |      |  |  |        |  |  |  |        | 
|                                    |  |                    | 14,357 |                   |  |      | 13,767 |      |  |  | 38,822 |  |  |  | 38,555 | 
|Electric Choice (delivery only)     |  |                    | 935    |                   |  |      | 322    |      |  |  | 2,577  |  |  |  | 894    | 
|                                    |  |                    |        |                   |  |      |        |      |  |  |        |  |  |  |        | 
|Total Electric Sales and Deliveries |  |                    | 15,292 |                   |  |      | 14,089 |      |  |  | 41,399 |  |  |  | 39,449 | 
|                                    |  |                    |        |                   |  |      |        |      |  |  |        |  |  |  |        | 

Outlook- Regulated electric system deliveries are expected to continue to
increase for the remainder of 2002 and into 2003 due to the economic recovery.
Operating results will vary as a result of various external factors such as
weather, changes in economic conditions and the severity and frequency of
storms.

7



---



##### Table of Contents



Managements Narrative Analysis and Results of Operations

CAPITAL RESOURCES AND LIQUIDITY

|                                          |                      |   |                   |      |      |   |    |      |  
|----------------------------------------- | -------------------- | - | ----------------- | ---- | ---- | - | -- | ---- | -
|                                          |                      |   | Nine Months Ended
|                                          |                      |   | September 30     
|                                          |                      |   |                  
|                                          |                      |   | 2002              |      | 2001
|                                          |                      |   |                   |      |     
|Cash and Cash Equivalents                 |                      |   |                   |      |      |   |    |     
|(in Millions)                             |                      |   |                   |      |      |   |    |     
|Cash Flow From (Used For)                 |                      |   |                   |      |      |   |    |     
|                                          | Operating activities |   | $                 | 556  |      |   | $  | 749  |  
|                                          | Investing activities |   |                   | (508 | )    |   |    | (752 | )
|                                          | Financing activities |   |                   | (236 | )    |   |    | 1    |  
|                                          |                      |   |                   |      |      |   |    |     
|Net Decrease in Cash and Cash Equivalents |                      | $ | (188              | )    |      | $ | (2 | )   
|                                          |                      |   |                   |      |      |   |    |     

Operating Activities

Net cash from operating activities decreased $193 million in the 2002
nine-month period compared to the same period in 2001. The decrease reflects a
$45 million decline in net income, after adjusting for non-cash items
(depreciation, depletion and amortization, merger and restructuring charges and
deferred taxes), and higher working capital levels. The working capital
requirements reflect lower accounts payable balances, to more normalized
levels, representing the internal focus on managing external payments and
taking greater advantage of purchase discounts.

Investing Activities

Net cash used for investing activities decreased $244 million in the 2002
nine-month period compared to the same period in 2001 due to lower investments
in regulatory assets associated with securitizing the companys Fermi 2 power
generation facility in March 2001. Additionally, a significantly lower amount
of cash that was restricted for debt redemptions also affected the comparison.

Financing Activities

Net cash used for financing activities increased $237 million during the 2002
nine-month period compared to the same period in 2001. This change is due
primarily to the repurchase of more debt, net of issuances in the 2002 period.
Additionally, the repurchase of $846 million in common stock in 2001 also
contributed to the change.

PENSION AND POSTRETIREMENT COSTS

Detroit Edisons costs of providing pension and postretirement benefits are
dependent upon a number of factors, such as the rates of return on plan assets,
the discount rate and the rate of increase in health care costs. The market
value of plan assets has been affected by sharp declines in the equity market
since 2000. As a result, at December 31, 2002, Detroit Edison could be required
to recognize an additional minimum pension liability as prescribed by SFAS No.
87 Employers Accounting for Pensions and SFAS No. 132 Employers
Disclosures about Pensions and Postretirement Benefits. The offset to any
liability would be recorded as a reduction in shareholders equity, net of tax,
or as a regulatory asset. The additional minimum pension liability and related
accounting entries would be reversed on the balance sheet in future periods if
the fair value of plan assets exceeds the accumulated pension benefit
obligations. The additional minimum

8



---



##### Table of Contents



Managements Narrative Analysis and Results of Operations

pension liability recorded, if any, will depend upon actual returns and
interest rates in 2002, but could exceed $300 million pre-tax ($195 million
after tax). The recording of any minimum pension liability would not affect net
income or cash flow in 2002. Pension and postretirement costs and pension cash
funding requirements could increase in future years without a substantial
recovery in the equity markets. It is estimated that the increase in 2003
pension and postretirement costs could range from $80 million-$110
million, pre-tax, depending on actual plan asset returns, the
discount rate and other actuarial assumptions that will not be
determined until December 31, 2002. Detroit Edison
will initiate cost saving strategies to significantly offset the earnings
impact of higher pension and postretirement costs.

ENVIRONMENTAL MATTERS

EPA ozone transport regulations and new air quality standards relating to ozone
and particulate air pollution will impact the Company. Detroit Edison has
spent approximately $409 million through September 2002 and estimates that it
will incur an additional $400 to $450 million of future capital expenditures
over the next five years to comply.

NEW ACCOUNTING PRONOUNCEMENTS

During 2001, the Financial Accounting Standards Board (FASB) issued new
accounting pronouncements concerning business combinations, goodwill and other
intangible assets, asset retirement obligations and impairment or disposal of
long-lived assets. See Note 7 for a discussion of Detroit Edisons evaluation
of the adoption of these new accounting pronouncements.

9



---



##### Table of Contents






Controls and Procedures



|(a) |  | Evaluation of disclosure controls and procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Detroit Edisons Chief Executive Officer and Chief Financial Officer have
evaluated the effectiveness of Detroit Edisons disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14(c) and 15d-14(d)) as of
a date within 90 days before the filing of this quarterly report, and have concluded that, as of the evaluation date, such controls and
procedures were effective at ensuring that required information will be
disclosed on a timely basis in reports filed under the Exchange Act.
|   
|(b) |  | Changes in internal controls                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|    |  | There have been no significant changes (including corrective actions with
regard to significant deficiencies or material weaknesses) in Detroit
Edisons internal controls or in other factors that could significantly
affect these controls subsequent to the evaluation date referenced in
paragraph (a) above.                                                                                                                                                                                                

10



---



##### Table of Contents












The Detroit Edison Company
Consolidated Statement of Operations (Unaudited)

|                                       |                                  |                                  |       |              |     |              |       |      |     |      |       |     |       |   |       |       |       | 
|-------------------------------------- | -------------------------------- | -------------------------------- | ----- | ------------ | --- | ------------ | ----- | ---- | --- | ---- | ----- | --- | ----- | - | ----- | ----- | ----- | 
|                                       |                                  |                                  |       | Three Months |     | Nine Months 
|                                       |                                  |                                  |       | Ended        |     | Ended       
|                                       |                                  |                                  |       | September 30 |     | September 30
|                                       |                                  |                                  |       |              |     |             
|                                       |                                  |                                  |       | 2002         |     | 2001         |       | 2002 |     | 2001
|                                       |                                  |                                  |       |              |     |              |       |      |     |     
|(in Millions)                          |                                  |                                  |       |              |     |              |       |      |     |      |       |     |       |   |       |      
|Operating Revenues                     |                                  | $                                | 1,200 |              |     | $            | 1,121 |      |     | $    | 3,092 |     |       | $ | 3,137 |      
|Operating Expenses                     |                                  |                                  |       |              |     |              |       |      |     |      |       |     |       |   |       |      
|                                       | Fuel and purchased power         |                                  |       | 386          |     |              |       | 414  |     |      |       | 841 |       |   |       | 1,037 |      
|                                       | Operation and maintenance        |                                  |       | 341          |     |              |       | 279  |     |      |       | 937 |       |   |       | 813   |      
|                                       | Depreciation and amortization    |                                  |       | 164          |     |              |       | 164  |     |      |       | 449 |       |   |       | 498   |      
|                                       | Taxes other than income          |                                  |       | 69           |     |              |       | 56   |     |      |       | 206 |       |   |       | 207   |      
|                                       | Merger and restructuring charges |                                  |       |             |     |              |       | 9    |     |      |       |    |       |   |       | 184   |      
|                                       |                                  |                                  |       |              |     |              |       |      |     |      |       |     |       |   |       |      
|                                       |                                  | Total Operating Expenses         |       |              | 960 |              |       |      | 922 |      |       |     | 2,433 |   |       |       | 2,739 | 
|                                       |                                  |                                  |       |              |     |              |       |      |     |      |       |     |       |   |       |      
|Operating Income                       |                                  |                                  | 240   |              |     |              | 199   |      |     |      | 659   |     |       |   | 398   |      
|                                       |                                  |                                  |       |              |     |              |       |      |     |      |       |     |       |   |       |      
|Interest Expense and Other             |                                  |                                  |       |              |     |              |       |      |     |      |       |     |       |   |       |      
|                                       | Interest expense                 |                                  |       | 76           |     |              |       | 75   |     |      |       | 232 |       |   |       | 225   |      
|                                       | Interest
income                  |                                  |       |             |     |              |       |     |     |      |       | (1  | )     |   |       | (3    | )    
|                                       | Other income                     |                                  |       | (5           | )   |              |       | (11  | )   |      |       | (16 | )     |   |       | (50   | )    
|                                       | Other expenses                   |                                  |       | 10           |     |              |       | 16   |     |      |       | 34  |       |   |       | 63    |      
|                                       |                                  |                                  |       |              |     |              |       |      |     |      |       |     |       |   |       |      
|                                       |                                  | Total Interest Expense and Other |       |              | 81  |              |       |      | 80  |      |       |     | 249   |   |       |       | 235   | 
|                                       |                                  |                                  |       |              |     |              |       |      |     |      |       |     |       |   |       |      
|Income Before Income Taxes             |                                  |                                  | 159   |              |     |              | 119   |      |     |      | 410   |     |       |   | 163   |      
|Income Tax Provision                   |                                  |                                  | 54    |              |     |              | 31    |      |     |      | 138   |     |       |   | 36    |      
|                                       |                                  |                                  |       |              |     |              |       |      |     |      |       |     |       |   |       |      
|Income Before Accounting Change        |                                  |                                  | 105   |              |     |              | 88    |      |     |      | 272   |     |       |   | 127   |      
|Cumulative Effect of Accounting Change |                                  |                                  |      |              |     |              |      |      |     |      |      |     |       |   | (3    | )    
|                                       |                                  |                                  |       |              |     |              |       |      |     |      |       |     |       |   |       |      
|Net Income                             |                                  | $                                | 105   |              |     | $            | 88    |      |     | $    | 272   |     |       | $ | 124   |      
|                                       |                                  |                                  |       |              |     |              |       |      |     |      |       |     |       |   |       |      

See Notes to Consolidated Financial Statements (Unaudited)

11



---



##### Table of Contents






The Detroit Edison Company
Consolidated Statement of Financial Position

|               |                                           |                                                                              |        |              |     |             |        |        |     | 
|-------------- | ----------------------------------------- | ---------------------------------------------------------------------------- | ------ | ------------ | --- | ----------- | ------ | ------ | --- | 
|               |                                           |                                                                              |        | September 30 |     |             |        |       
|               |                                           |                                                                              |        | 2002         |     | December 31
|               |                                           |                                                                              |        | (Unaudited)  |     | 2001       
|               |                                           |                                                                              |        |              |     |            
|(in Millions)  |                                           |                                                                              |        |              |     |             |        |       
|Assets         |                                           |                                                                              |        |              |     |             |        |       
|Current Assets |                                           |                                                                              |        |              |     |             |        |       
|               | Cash and cash equivalents                 |                                                                              | $      | 27           |     |             | $      | 215    |    
|               | Restricted cash                           |                                                                              |        | 36           |     |             |        | 68     |    
|               | Accounts receivable                       |                                                                              |        |              |     |             |        |        |    
|               |                                           | Customer (less allowance for doubtful accounts of $43 and
$27, respectively) |        |              | 408 |             |        |        | 348 | 
|               |                                           | Accrued unbilled revenues                                                    |        |              | 169 |             |        |        | 130 | 
|               |                                           | Other                                                                        |        |              | 98  |             |        |        | 101 | 
|               | Inventories                               |                                                                              |        |              |     |             |        |        |    
|               |                                           | Fuel                                                                         |        |              | 137 |             |        |        | 162 | 
|               |                                           | Materials and supplies                                                       |        |              | 128 |             |        |        | 127 | 
|               | Property taxes assessed to future periods |                                                                              |        | 31           |     |             |        |       |    
|               | Other                                     |                                                                              |        | 7            |     |             |        | 14     |    
|               |                                           |                                                                              |        |              |     |             |        |        |    
|               |                                           |                                                                              | 1,041  |              |     |             | 1,165  |       
|               |                                           |                                                                              |        |              |     |             |        |        |    
|Investments    |                                           |                                                                              |        |              |     |             |        |       
|               | Nuclear decommissioning trust funds       |                                                                              |        | 396          |     |             |        | 417    |    
|               | Other                                     |                                                                              |        | 106          |     |             |        | 97     |    
|               |                                           |                                                                              |        |              |     |             |        |        |    
|               |                                           |                                                                              | 502    |              |     |             | 514    |       
|               |                                           |                                                                              |        |              |     |             |        |        |    
|Property       |                                           |                                                                              |        |              |     |             |        |       
|               | Property, plant and equipment             |                                                                              |        | 11,763       |     |             |        | 11,353 |    
|               | Property under capital leases             |                                                                              |        | 220          |     |             |        | 219    |    
|               |                                           |                                                                              |        |              |     |             |        |        |    
|               |                                           |                                                                              | 11,983 |              |     |             | 11,572 |       
|               | Less accumulated depreciation             |                                                                              |        | (5,268       | )   |             |        | (5,010 | )  
|               |                                           |                                                                              |        |              |     |             |        |        |    
|               |                                           |                                                                              | 6,715  |              |     |             | 6,562  |       
|               |                                           |                                                                              |        |              |     |             |        |        |    
|Other Assets   |                                           |                                                                              |        |              |     |             |        |       
|               | Regulatory assets                         |                                                                              |        | 1,128        |     |             |        | 1,141  |    
|               | Securitized regulatory assets             |                                                                              |        | 1,636        |     |             |        | 1,692  |    
|               | Prepaid pensions                          |                                                                              |        | 113          |     |             |        | 106    |    
|               | Other                                     |                                                                              |        | 66           |     |             |        | 75     |    
|               |                                           |                                                                              |        |              |     |             |        |        |    
|               |                                           |                                                                              | 2,943  |              |     |             | 3,014  |       
|               |                                           |                                                                              |        |              |     |             |        |        |    
|Total Assets   |                                           | $                                                                            | 11,201 |              |     | $           | 11,255 |       
|               |                                           |                                                                              |        |              |     |             |        |        |    

See Notes to Consolidated Financial Statements (Unaudited)

12



---



##### Table of Contents



The Detroit Edison Company
Consolidated Statement of Financial Position

|                                           |                                                                                                           |   |              |       |             |   |        |       |  
|------------------------------------------ | --------------------------------------------------------------------------------------------------------- | - | ------------ | ----- | ----------- | - | ------ | ----- | -
|                                           |                                                                                                           |   | September 30 |       |             |   |       
|                                           |                                                                                                           |   | 2002         |       | December 31
|                                           |                                                                                                           |   | (Unaudited)  |       | 2001       
|                                           |                                                                                                           |   |              |       |            
|(in Millions, Except Shares)               |                                                                                                           |   |              |       |             |   |        |      
|Liabilities and Shareholders Equity       |                                                                                                           |   |              |       |             |   |        |      
|Current Liabilities                        |                                                                                                           |   |              |       |             |   |        |      
|                                           | Accounts payable                                                                                          |   | $            | 264   |             |   | $      | 307   |  
|                                           | Accrued interest                                                                                          |   |              | 46    |             |   |        | 85    |  
|                                           | Dividends payable                                                                                         |   |              | 74    |             |   |        | 74    |  
|                                           | Accrued payroll                                                                                           |   |              | 81    |             |   |        | 89    |  
|                                           | Short-term borrowings                                                                                     |   |              | 224   |             |   |        |      |  
|                                           | Income taxes payable                                                                                      |   |              | 159   |             |   |        | 93    |  
|                                           | Deferred income taxes                                                                                     |   |              | 60    |             |   |        | 28    |  
|                                           | Current portion long-term debt, including capital leases                                                  |   |              | 266   |             |   |        | 215   |  
|                                           | Liabilities from risk management activities                                                               |   |              | 10    |             |   |        | 39    |  
|                                           | Other                                                                                                     |   |              | 237   |             |   |        | 284   |  
|                                           |                                                                                                           |   |              |       |             |   |        |       |  
|                                           |                                                                                                           |   | 1,421        |       |             |   | 1,214  |      
|                                           |                                                                                                           |   |              |       |             |   |        |       |  
|Other Liabilities                          |                                                                                                           |   |              |       |             |   |        |      
|                                           | Deferred income taxes                                                                                     |   |              | 1,742 |             |   |        | 1,751 |  
|                                           | Unamortized investment tax credit                                                                         |   |              | 149   |             |   |        | 156   |  
|                                           | Nuclear decommissioning                                                                                   |   |              | 389   |             |   |        | 412   |  
|                                           | Other                                                                                                     |   |              | 470   |             |   |        | 466   |  
|                                           |                                                                                                           |   |              |       |             |   |        |       |  
|                                           |                                                                                                           |   | 2,750        |       |             |   | 2,785  |      
|                                           |                                                                                                           |   |              |       |             |   |        |       |  
|Long-Term Debt                             |                                                                                                           |   |              |       |             |   |        |      
|                                           | Mortgage bonds, notes and other                                                                           |   |              | 2,833 |             |   |        | 3,038 |  
|                                           | Securitization bonds                                                                                      |   |              | 1,585 |             |   |        | 1,673 |  
|                                           | Capital lease obligations                                                                                 |   |              | 84    |             |   |        | 87    |  
|                                           |                                                                                                           |   |              |       |             |   |        |       |  
|                                           |                                                                                                           |   | 4,502        |       |             |   | 4,798  |      
|                                           |                                                                                                           |   |              |       |             |   |        |       |  
|Contingencies (Note 4)                     |                                                                                                           |   |              |       |             |   |        |      
|Shareholders Equity                       |                                                                                                           |   |              |       |             |   |        |      
|                                           | Common stock, $10 par value, 400,000,000 shares
authorized, and 134,287,832 shares
issued and outstanding |   |              | 1,343 |             |   |        | 1,343 |  
|                                           | Premium on common stock                                                                                   |   |              | 507   |             |   |        | 507   |  
|                                           | Common stock expense                                                                                      |   |              | (44   | )           |   |        | (44   | )
|                                           | Retained earnings                                                                                         |   |              | 725   |             |   |        | 675   |  
|                                           | Accumulated other comprehensive loss                                                                      |   |              | (3    | )           |   |        | (23   | )
|                                           |                                                                                                           |   |              |       |             |   |        |       |  
|                                           |                                                                                                           |   | 2,528        |       |             |   | 2,458  |      
|                                           |                                                                                                           |   |              |       |             |   |        |       |  
|Total Liabilities and Shareholders Equity |                                                                                                           | $ | 11,201       |       |             | $ | 11,255 |      
|                                           |                                                                                                           |   |              |       |             |   |        |       |  

See Notes to Consolidated Financial Statements (Unaudited)

13



---



##### Table of Contents






The Detroit Edison Company
Consolidated Statement of Cash Flows (Unaudited)

|                                                     |                                                              |                                                                            |                                               |                                        |      |                   |     |      |       |      |      |  
|---------------------------------------------------- | ------------------------------------------------------------ | -------------------------------------------------------------------------- | --------------------------------------------- | -------------------------------------- | ---- | ----------------- | --- | ---- | ----- | ---- | ---- | -
|                                                     |                                                              |                                                                            |                                               |                                        |      | Nine Months Ended
|                                                     |                                                              |                                                                            |                                               |                                        |      | September 30     
|                                                     |                                                              |                                                                            |                                               |                                        |      |                  
|                                                     |                                                              |                                                                            |                                               |                                        |      | 2002              |     | 2001
|                                                     |                                                              |                                                                            |                                               |                                        |      |                   |     |     
|(in Millions)                                        |                                                              |                                                                            |                                               |                                        |      |                   |     |     
|Operating Activities                                 |                                                              |                                                                            |                                               |                                        |      |                   |     |     
|                                                     |                                                              | Net Income                                                                 |                                               | $                                      | 272  |                   |     | $    | 124   |     
|                                                     |                                                              | Adjustments to reconcile net income to net cash from
operating activities: |                                               |                                        |      |                   |     |      |       |     
|                                                     |                                                              |                                                                            | Depreciation and amortization                 |                                        |      | 449               |     |      |       | 498  |     
|                                                     |                                                              |                                                                            | Merger and restructuring charges              |                                        |      |                  |     |      |       | 150  |     
|                                                     |                                                              |                                                                            | Deferred income taxes                         |                                        |      | 15                |     |      |       | 9    |     
|                                                     |                                                              | Changes in assets and liabilities:                                         |                                               |                                        |      |                   |     |      |       |     
|                                                     |                                                              |                                                                            |                                               | Accounts receivable, net               |      |                   | (57 | )    |       |      | (65  | )
|                                                     |                                                              |                                                                            |                                               | Accrued unbilled receivables           |      |                   | (39 | )    |       |      | 47   |  
|                                                     |                                                              |                                                                            |                                               | Inventories                            |      |                   | 25  |      |       |      | 52   |  
|                                                     |                                                              |                                                                            |                                               | Accounts payable                       |      |                   | (51 | )    |       |      | 22   |  
|                                                     |                                                              |                                                                            |                                               | Income taxes payable                   |      |                   | 66  |      |       |      | 55   |  
|                                                     |                                                              |                                                                            |                                               | General taxes                          |      |                   | (28 | )    |       |      | (13  | )
|                                                     |                                                              |                                                                            |                                               | Risk management and trading activities |      |                   | (32 | )    |       |      | 33   |  
|                                                     |                                                              |                                                                            |                                               | Other                                  |      |                   | (64 | )    |       |      | (163 | )
|                                                     |                                                              |                                                                            |                                               |                                        |      |                   |     |      |       |     
|                                                     |                                                              |                                                                            | Net cash from operating activities            |                                        |      | 556               |     |      |       | 749  |     
|                                                     |                                                              |                                                                            |                                               |                                        |      |                   |     |      |       |     
|Investing Activities                                 |                                                              |                                                                            |                                               |                                        |      |                   |     |     
|                                                     |                                                              | Plant and equipment expenditures                                           |                                               |                                        | (478 | )                 |     |      | (503  | )   
|                                                     |                                                              | Restricted cash for debt redemptions                                       |                                               |                                        | 32   |                   |     |      | (114  | )   
|                                                     |                                                              | Other investments                                                          |                                               |                                        | (62  | )                 |     |      | (135  | )   
|                                                     |                                                              |                                                                            |                                               |                                        |      |                   |     |      |       |     
|                                                     |                                                              |                                                                            | Net cash used for investing activities        |                                        |      | (508              | )   |      |       | (752 | )   
|                                                     |                                                              |                                                                            |                                               |                                        |      |                   |     |      |       |     
|Financing Activities                                 |                                                              |                                                                            |                                               |                                        |      |                   |     |     
|                                                     |                                                              | Issuance of long-term debt                                                 |                                               |                                        |     |                   |     |      | 1,890 |     
|                                                     |                                                              | Redemption of long-term debt                                               |                                               |                                        | (240 | )                 |     |      | (861  | )   
|                                                     |                                                              | Short-term borrowings, net                                                 |                                               |                                        | 224  |                   |     |      | 56    |     
|                                                     |                                                              | Capital lease obligations                                                  |                                               |                                        | 2    |                   |     |      | (6    | )   
|                                                     |                                                              | Repurchase of common stock                                                 |                                               |                                        |     |                   |     |      | (846  | )   
|                                                     |                                                              | Dividends on common stock                                                  |                                               |                                        | (222 | )                 |     |      | (232  | )   
|                                                     |                                                              |                                                                            |                                               |                                        |      |                   |     |      |       |     
|                                                     |                                                              |                                                                            | Net cash (used for) from financing activities |                                        |      | (236              | )   |      |       | 1    |     
|                                                     |                                                              |                                                                            |                                               |                                        |      |                   |     |      |       |     
|Net Decrease in Cash and Cash Equivalents            |                                                              |                                                                            | (188                                          | )                                      |      |                   | (2  | )   
|Cash and Cash Equivalents at Beginning of the Period |                                                              |                                                                            | 215                                           |                                        |      |                   | 24  |     
|                                                     |                                                              |                                                                            |                                               |                                        |      |                   |     |      |       |     
|Cash and Cash Equivalents at End of the Period       |                                                              | $                                                                          | 27                                            |                                        |      | $                 | 22  |     
|                                                     |                                                              |                                                                            |                                               |                                        |      |                   |     |      |       |     
|Supplementary Cash Flow Information                  |                                                              |                                                                            |                                               |                                        |      |                   |     |     
|                                                     |                                                              | Interest paid (excluding interest capitalized)                             |                                               | $                                      | 271  |                   |     | $    | 231   |     
|                                                     |                                                              | Income taxes paid                                                          |                                               |                                        | 55   |                   |     |      | 80    |     
|Noncash Financing Activity                           |                                                              |                                                                            |                                               |                                        |      |                   |     |     
|                                                     | Distribution of International Transmission Company to parent |                                                                            |                                               |                                       |      |                   |     | 327  |      

See Notes to Consolidated Financial Statements (Unaudited)

14



---



##### Table of Contents






The Detroit Edison Company
Consolidated Statement of Changes in Shareholders Equity (Unaudited)

|                                                           |  |              |         |        |  |        |       |          |  |               |     |       |  |       |     |   |  |   |      |             |  |   |     |   |  |   |       |  
|---------------------------------------------------------- |  | ------------ | ------- | ------ |  | ------ | ----- | -------- |  | ------------- | --- | ----- |  | ----- | --- | - |  | - | ---- | ----------- |  | - | --- | - |  | - | ----- | -
|                                                           |  |              |         |        |  |        |       |          |  | Premium       |     |       |  |       |     |   |  |   |      | Accumulated |  |   |     |  
|                                                           |  | Common Stock |         | On     |  | Common |       |          |  |               |     | Other |  |       |     |  
|                                                           |  |              |         | Common |  | Stock  |       | Retained |  | Comprehensive |     |       |  |      
|                                                           |  | Shares       |         | Amount |  | Stock  |       | Expense  |  | Earnings      |     | Loss  |  | Total
|                                                           |  |              |         |        |  |        |       |          |  |               |     |       |  |      
|(Dollars in Millions,
Shares in Thousands)                 |  |              |         |        |  |        |       |          |  |               |     |       |  |       |     |   |  |   |      |             |  |   |     |   |  |   |       |  
|Balance, January 1, 2002                                   |  |              | 134,288 |        |  |        | 1,343 |          |  |               | 507 |       |  |       | (44 | ) |  | $ | 675  |             |  | $ | (23 | ) |  | $ | 2,458 |  
|                                                           |  |              |         |        |  |        |       |          |  |               |     |       |  |       |     |   |  |   |      |             |  |   |     |   |  |   |       |  
|Net income                                                 |  |              |        |        |  |        |      |          |  |               |    |       |  |       |    |   |  |   | 272  |             |  |   |    |   |  |   | 272   |  
|Dividends declared on
common stock                         |  |              |        |        |  |        |      |          |  |               |    |       |  |       |    |   |  |   | (222 | )           |  |   |    |   |  |   | (222  | )
|Net change in unrealized losses
on derivatives, net of tax |  |              |        |        |  |        |      |          |  |               |    |       |  |       |    |   |  |   |     |             |  |   | 20  |   |  |   | 20    |  
|                                                           |  |              |         |        |  |        |       |          |  |               |     |       |  |       |     |   |  |   |      |             |  |   |     |   |  |   |       |  
|Balance, September 30, 2002                                |  |              | 134,288 |        |  |        | 1,343 |          |  | $             | 507 |       |  | $     | (44 | ) |  | $ | 725  |             |  | $ | (3  | ) |  | $ | 2,528 |  
|                                                           |  |              |         |        |  |        |       |          |  |               |     |       |  |       |     |   |  |   |      |             |  |   |     |   |  |   |       |  

The following table displays comprehensive income for nine-month periods in
2002 and 2001:

|                                               |                                               |                                                                           |                                                                             |    |      |    |      |     |     |    | 
|---------------------------------------------- | --------------------------------------------- | ------------------------------------------------------------------------- | --------------------------------------------------------------------------- | -- | ---- | -- | ---- | --- | --- | -- | 
|                                               |                                               |                                                                           |                                                                             |    | 2002 |    | 2001
|                                               |                                               |                                                                           |                                                                             |    |      |    |     
|(in Millions)                                  |                                               |                                                                           |                                                                             |    |      |    |      |    
|Net income                                     |                                               | $                                                                         | 272                                                                         |    |      | $  | 124  |    
|                                               |                                               |                                                                           |                                                                             |    |      |    |      |    
|Other comprehensive income (loss), net of tax: |                                               |                                                                           |                                                                             |    |      |    |      |    
|                                               | Net unrealized gains (losses) on derivatives: |                                                                           |                                                                             |    |      |    |      |     |    
|                                               |                                               | Cumulative effect of a change in accounting principle, net of taxes of $6 |                                                                             |    |     |    |      |     | 13  |   
|                                               |                                               | Losses arising during the year, net of taxes of $3 and $29, respectively  |                                                                             |    | (5   | )  |      |     | (54 | ) 
|                                               |                                               |                                                                           | Amounts reclassified to earnings, net of taxes of $16 and $11, respectively |    |      | 25 |      |     |     | 20 | 
|                                               |                                               |                                                                           |                                                                             |    |      |    |      |    
|                                               | Total other comprehensive income (loss)       |                                                                           |                                                                             | 20 |      |    |      | (21 | )  
|                                               |                                               |                                                                           |                                                                             |    |      |    |      |    
|Comprehensive income                           |                                               | $                                                                         | 292                                                                         |    |      | $  | 103  |    
|                                               |                                               |                                                                           |                                                                             |    |      |    |      |    

See Notes to Consolidated Financial Statements (Unaudited)

15



---



##### Table of Contents






The Detroit Edison Company
Notes to Consolidated Financial Statements (Unaudited)

NOTE 1  GENERAL

These consolidated financial statements should be read in conjunction with the
notes to consolidated financial statements included in the 2001 Annual Report
to the Securities and Exchange Commission on Form 10-K.

The accompanying consolidated financial statements were prepared in conformity
with accounting principles generally accepted in the United States of America.
In connection with their preparation, management makes estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses, and disclosure of contingent assets and liabilities. Actual
results could differ from those estimates.

The consolidated financial statements are unaudited, but in the opinion of the
Companys management, include all adjustments necessary for a fair statement of
the results for the interim periods. Financial results for this interim period
are not necessarily indicative of results that may be expected for any other
interim period or for the fiscal year.

Certain prior year balances have been reclassified to conform to the current
years presentation.

NOTE 2  MERGER AND RESTRUCTURING CHARGES

On May 31, 2001, Detroit Edisons parent company, DTE Energy, completed the
acquisition of MCN Energy. Detroit Edison incurred merger-related charges and
restructuring charges associated with the acquisition. The merger-related
charges of $7 million ($4 million after tax) in the 2001 three-month period and
$19 million ($12 million after tax) in the 2001 nine-month period, consisted
primarily of system integration, relocation, legal, accounting and consulting
costs. Restructuring charges of $2 million ($1 million after tax) in the 2001
three-month period and $165 million ($107 million after tax) in the 2001
nine-month period, were primarily associated with a work force reduction plan.
The plan included early retirement incentives along with voluntary separation
arrangements for 890 employees, primarily in overlapping corporate support
functions. The merger and restructuring costs had the effect of decreasing
Detroit Edisons earnings by $9 million ($5 million after tax) and $184 million
($119 million after tax) for the 2001 three- and nine-month periods,
respectively.

NOTE 3  REGULATORY MATTERS

Electric Industry Restructuring

As required by 2000 Public Act (PA) 141, the MPSC conducted a proceeding to
develop a methodology for calculating the net stranded costs associated with
electric Customer Choice. In a December 2001 order, the MPSC determined that
Detroit Edison could recover net stranded costs associated with the fixed cost
component of its electric generation operations. Specifically, there would be
an annual filing with the MPSC comparing the actual revenues associated with
the fixed cost component of its generation services to the revenue requirement
for the fixed cost component of those services, inclusive of an allowance for
the cost of capital. Any resulting shortfall in recovery, net of mitigation,
would be considered a net stranded cost. The MPSC, in its December 2001 order,
also determined that Detroit Edison had no stranded costs in 2000 and
consequently established a zero net stranded cost transition charge for billing
purposes in 2002. The MPSC

16



---



##### Table of Contents



Notes to Consolidated Financial Statements (Unaudited)

authorized Detroit Edison to establish a regulatory asset to defer recovery of
its incurred stranded costs after review in a subsequent annual net stranded
cost proceeding. The MPSC also determined that Detroit Edison should provide a
full and offsetting credit for the securitization and tax charges applied to
electric Customer Choice bills in 2002 and maintained an additional credit on
bills equivalent to the 5% rate reduction benefiting full service customers,
both funded by savings derived from securitization. The December 2001 order
when combined with lower wholesale power prices has encouraged additional
customer participation in the electric Customer Choice program and has resulted
in the loss of margins attributable to generation services. In May 2002, the
MPSC denied Detroit Edisons request for rehearing and clarification. In June
2002, Detroit Edison filed an appeal of the MPSC order at the Michigan Court of
Appeals, challenging the legality of specific aspects of the MPSC order.

In May 2002, Detroit Edison submitted its 2002 net stranded cost filing with
the MPSC. The filing provides refinements to the MPSC Staffs calculation of
net stranded costs that was adopted in the December 2001 order, seeks more
timely recovery of net stranded costs, and addresses issues raised by the
continuation of securitization offsets and rate reduction equalization credits.
Detroit Edisons filing supports the following conclusions: (i) Detroit Edison
had no net stranded costs in 2000 and $13 million of recoverable net stranded
costs attributable to electric Customer Choice in 2001; (ii) Detroit Edison
requested recovery of 2001 net stranded costs through the use of excess
residual securitization savings; (iii) Detroit Edison expects to incur
additional net stranded costs in 2002 and 2003 as a result of increased
electric Customer Choice participation; and (iv) recommended that a pro-forma
or forward looking transition charge be approved for billing during the
remainder of 2002 and for 2003 to eliminate the time lag between the
occurrence and recovery of net stranded costs inherent in the methodology
approved in the December 2001 order. In November 2002, the MPSC Staff and
other interveners submitted their 2002 net stranded cost filings. Detroit
Edison expects to record 2002 net stranded costs as a regulatory asset with the
offsetting entry reducing expense in the fourth quarter of 2002.

In another December 2001 order, the MPSC finalized the prices, terms and
conditions contained in the Retail Access Service Tariff (RAST). Detroit
Edison requested rehearing and clarification on certain aspects of the order.
In an order issued in April 2002, the MPSC modified its December 2001 order
approving Detroit Edisons RAST and reduced the requirements imposed on Detroit
Edison in the December 2001 order concerning meter installation, meter reading
and computer system enhancements for customers that elect to participate in the
electric Customer Choice program.

In several orders issued in June 2000, the MPSC determined that adjusting rates
for changes in fuel and purchased power expenses through continuance of the
PSCR clause would be inconsistent with the rate freeze required by PA 141.
Detroit Edison was not permitted to collect the 1998 PSCR under-recovery of $9
million, plus accrued interest of $3 million. Also, Detroit Edison was not
required to refund approximately $55 million of liabilities for over-recoveries
of PSCR expenses for 1999 and 2000, and disallowances under the Fermi 2
performance standard mechanism. In January and March 2002, the Michigan Court
of Appeals rejected appeals and motions for rehearing filed by parties opposing
the MPSCs actions in this proceeding. In March 2002, the Michigan Attorney
General applied for leave to appeal at the Michigan Supreme Court. The court
has not yet determined whether or not it will hear the case.

17



---



##### Table of Contents



Notes to Consolidated Financial Statements (Unaudited)

Other

In accordance with a November 1997 MPSC order, Detroit Edison reduced rates by
$53 million annually to reflect the scheduled reduction in the revenue
requirement for Fermi 2. The $53 million reduction was effective in January
1999. In addition, the November 1997 MPSC order authorized the deferral of $30
million of storm damage costs and amortization and recovery of the costs over a
24-month period commencing January 1998. After various legal appeals, the
Michigan Court of Appeals remanded the matter to the MPSC. In December 2000,
the MPSC issued an order reopening the case for hearing. The parties in the
case have agreed to a stipulation of fact and waiver of hearing. In June 2002,
the MPSC issued an order modifying in part, and reaffirming in part, previous
orders that authorized Detroit Edison to amortize and collect in rates the
storm damage costs incurred in 1997. The MPSC modified its 1997 order
regarding the calculation of the storm damage costs, and in doing so ordered
Detroit Edison to refund approximately $1.5 million after January 1, 2004. The
2004 refund will also include interest accrued from January 1, 2000 at Detroit
Edisons authorized rate of return. In July 2002, the Michigan Attorney
General filed an appeal with the Michigan Court of Appeals regarding the June
2002 MPSC order.

Detroit Edison is unable to predict the outcome of the regulatory matters
discussed herein. Resolution of these matters is dependent upon future MPSC
orders, which may impact the financial position, results of operations and cash
flows of Detroit Edison.

NOTE 4  CONTINGENCIES

Personal Property Taxes

Detroit Edison and other Michigan utilities have asserted that Michigans
valuation tables result in the substantial overvaluation of utility personal
property. Valuation tables established by the Michigan State Tax Commission
(STC) are used to determine the taxable value of personal property based on the
propertys age. In November 1999, the STC approved new valuation tables that
more accurately recognize the value of a utilitys personal property. The new
tables became effective in 2000 and are currently used to calculate property
tax expense. However, several local taxing jurisdictions have taken legal
action attempting to prevent the STC from implementing the new valuation tables
and have continued to prepare assessments based on the superseded tables. The
legal actions regarding the appropriateness of the new tables were before the
Michigan Tax Tribunal (MTT) which, in April 2002, issued its decision
essentially affirming the validity of the STCs new tables. In June 2002,
petitioners in the case filed an appeal of the MTTs decision with the Michigan
Court of Appeals.

Other

Detroit Edison purchases and sells electricity to numerous companies operating
in the steel, automotive, energy and retail industries. During 2001 and 2002,
a number of customers have filed for bankruptcy protection under Chapter 11 of
the U.S. Bankruptcy Code, including certain Enron Corporation affiliates and
National Steel Company. Management regularly reviews contingent matters
relating to purchase and sale contracts and records provisions for amounts
considered probable of loss. Management believes its previously accrued
amounts are adequate for losses that are probable of occurring. The final
resolution of these matters are not expected to have a material effect on
Detroit Edisons financial statements in the period they are resolved.

18



---



##### Table of Contents



Notes to Consolidated Financial
Statements (Unaudited)

NOTE 5  LONG-TERM DEBT

On October 23, 2002, Detroit Edison issued $450 million of its senior notes
($225 million due 2012 at 5.20% and $225 million due 2032 at 6.35%). These
notes are collateralized by Detroit Edisons General and Refunding Mortgage
Bonds.

Substantially all of the net utility property of Detroit Edison is subject to
the lien of a Mortgage and Deed of Trust (Mortgage). Should Detroit Edison
fail to timely pay its indebtedness under the Mortgage, such failure will
create cross defaults in substantially all of Detroit Edisons indebtedness.

NOTE 6  SHORT TERM CREDIT ARRANGEMENTS AND BORROWINGS

On October 25, 2002, Detroit Edison entered into a $135 million, 364-day
revolving credit facility and a $65 million, three-year revolving credit
facility with a syndicate of banks. These credit facilities may be utilized
for general corporate borrowings, but primarily are intended to provide
liquidity support for Detroit Edisons commercial paper program up to $200
million in amount. These agreements require Detroit Edison to maintain a debt
to capitalization ratio of no more than 0.65 to 1 and an earnings before
interest, taxes, depreciation and amortization (EBITDA) to interest ratio of
no less than 2 to 1. Detroit Edison is currently in compliance with these
financial covenants.

NOTE 7  NEW ACCOUNTING PRONOUNCEMENTS

Goodwill and Other Intangible Assets- Effective January 1, 2002, Detroit
Edison adopted SFAS No. 142, Goodwill and Other Intangible Assets, which
addresses the financial accounting and reporting standards for the acquisition
of intangible assets outside of a business combination and for goodwill and
other intangible assets subsequent to their acquisition. As of the date of
adoption, Detroit Edison had no goodwill.

In connection with the adoption of SFAS No. 142, Detroit Edison also reassessed
the useful lives and the classification of identifiable intangible assets and
determined that they continue to be appropriate. Detroit Edisons intangible
assets consist primarily of software and are subject to amortization.
Intangible assets amortization expense was approximately $9 million and $27
million in the third quarter and nine-month period, respectively, compared with
approximately $10 million and $29 million for the comparable 2001 periods.
There were no material acquisitions of intangible assets during the 2002
nine-month period. The gross carrying amount and accumulated amortization of
intangible assets at September 30, 2002 were $346 million and $261 million,
respectively. Amortization expense of intangible assets is estimated to be $36
million annually for 2002 through 2006.

Asset Retirement Obligations- In June 2001, the FASB issued SFAS No. 143,
Accounting for Asset Retirement Obligations. This statement requires that
the fair value of an asset retirement obligation be recognized in the period in
which it is incurred. The associated asset retirement costs would be
capitalized as part of the carrying amount of the long-lived asset. It would
apply to legal obligations associated with the retirement of long-lived assets
that result from the acquisition, construction, development and (or) the normal
operation of a long-lived asset. This statement is effective for financial
statements issued for fiscal years beginning after June 15, 2002. Detroit
Edison will adopt this statement in January 2003 and has not yet determined the
impact of this statement on the consolidated financial statements.

19



---



##### Table of Contents



Notes to Consolidated Financial Statements (Unaudited)

Long-Lived Assets- On January 1, 2002, Detroit Edison adopted SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No. 144
supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed of, but retains the fundamental
provisions for recognizing and measuring impairment of long-lived assets to be
held and used or disposed of by sale. The statement also supersedes the
accounting and reporting provisions for the disposal of a segment of a
business. SFAS No. 144 eliminates the conflict between accounting models for
treating the disposition of long-lived assets that existed between SFAS No. 121
and the guidance for a segment of a business accounted for as a discontinued
operation by adopting the methodology established in SFAS No. 121, and also
resolves implementation issues related to SFAS No. 121. The adoption of the
statement did not have an impact on the consolidated financial statements of
Detroit Edison.

NOTE 8  SEGMENT INFORMATION

During 2002, Detroit Edisons parent company, DTE Energy, realigned its
financial reporting structure into strategic business units that provide
various regulated and non-regulated energy services. The realignment resulted
in the following two reportable segments for Detroit Edison. Inter-segment
revenues are not material.

|                                             |       |   |                    |       |                   |   |      |       |      |   |       |       |  |   |       |       | 
|-------------------------------------------- | ----- | - | ------------------ | ----- | ----------------- | - | ---- | ----- | ---- | - | ----- | ----- |  | - | ----- | ----- | 
|                                             |       |   | Three Months Ended |       | Nine Months Ended
|                                             |       |   | September 30       |       | September 30     
|                                             |       |   |                    |       |                  
|                                             |       |   | 2002               |       | 2001              |   | 2002 |       | 2001
|                                             |       |   |                    |       |                   |   |      |       |     
|(in Millions)                                |       |   |                    |       |                   |   |      |       |      |   |       |       |  |   |       |      
|Operating Revenues                           |       |   |                    |       |                   |   |      |       |      |   |       |       |  |   |       |      
|Energy Resources                             |       | $ | 784                |       |                   | $ | 766  |       |      | $ | 2,052 |       |  | $ | 2,172 |      
|Energy Distribution                          |       |   | 416                |       |                   |   | 355  |       |      |   | 1,040 |       |  |   | 965   |      
|                                             |       |   |                    |       |                   |   |      |       |      |   |       |       |  |   |       |      
|                                             | Total |   | $                  | 1,200 |                   |   | $    | 1,121 |      |   | $     | 3,092 |  |   | $     | 3,137 | 
|                                             |       |   |                    |       |                   |   |      |       |      |   |       |       |  |   |       |      
|Net Income                                   |       |   |                    |       |                   |   |      |       |      |   |       |       |  |   |       |      
|Energy Resources                             |       | $ | 38                 |       |                   | $ | 30   |       |      | $ | 150   |       |  | $ | 120   |      
|Energy Distribution                          |       |   | 67                 |       |                   |   | 63   |       |      |   | 122   |       |  |   | 123   |      
|                                             |       |   |                    |       |                   |   |      |       |      |   |       |       |  |   |       |      
|                                             |       |   | 105                |       |                   |   | 93   |       |      |   | 272   |       |  |   | 243   |      
|                                             |       |   |                    |       |                   |   |      |       |      |   |       |       |  |   |       |      
|Merger and Restructuring Charges, net of tax |       |   |                   |       |                   |   | (5   | )     |      |   |      |       |  |   | (119  | )    
|                                             |       |   |                    |       |                   |   |      |       |      |   |       |       |  |   |       |      
|                                             | Total |   | $                  | 105   |                   |   | $    | 88    |      |   | $     | 272   |  |   | $     | 124   | 
|                                             |       |   |                    |       |                   |   |      |       |      |   |       |       |  |   |       |      

20



---



##### Table of Contents






INDEPENDENT ACCOUNTANTS REPORT

To the Board of Directors and Shareholder of
The Detroit Edison Company

We have reviewed the accompanying condensed consolidated statement of financial
position of The Detroit Edison Company and subsidiaries as of September 30,
2002, and the related condensed consolidated statement of operations for the
three-month and nine-month periods ended September 30, 2002 and 2001, the
condensed consolidated statement of cash flows for the nine-month periods ended
September 30, 2002 and 2001, and the condensed consolidated statement of
changes in shareholders equity for the nine-month period ended September 30,
2002. These financial statements are the responsibility of The Detroit Edison
Companys management.

We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and of making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with auditing standards generally accepted in the United States
of America, the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express such
an opinion.

Based on our review, we are not aware of any material modifications that should
be made to such condensed consolidated financial statements for them to be in
conformity with accounting principles generally accepted in the United States
of America.

We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated statement of
financial position of The Detroit Edison Company and subsidiaries as of
December 31, 2001, and the related consolidated statements of operations, cash
flows and changes in shareholders equity for the year then ended (not
presented herein); and in our report dated February 26, 2002 (September 17, 2002 as to Note 16),
we expressed an
unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed consolidated
statement of financial position as of December 31, 2001 is fairly stated, in
all material respects, in relation to the consolidated statement of financial
position from which it has been derived.

/s/ DELOITTE & TOUCHE LLP 
Detroit,
Michigan
November 4, 2002

21



---



##### Table of Contents









Exhibits and Reports on Form 8-K



|(a) |  | Exhibits.
|--- |  | ---------

|        |  |                                                                                                                                          
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                          
|Number  |  | Description                                                                                                                              
|        |  |                                                                                                                                          
|4-230   |  | Supplemental Indenture dated as of October 15, 2002, establishing the 2002
Series A and 2002 Series B Mortgage Bonds.                    
|        |  |                                                                                                                                          
|4-231   |  | Tenth Supplemental Indenture, dated as of October 23, 2002, establishing
the 5.20% Senior Notes due 2012 and 6.35% Senior Notes due 2032.
|        |  |                                                                                                                                          
|15-22   |  | Awareness Letter of Deloitte & Touche LLP.                                                                                               
|        |  |                                                                                                                                          
|99-3    |  | 364-Day Credit Agreement dated as of October 25, 2002
($135 million).                                                                    
|        |  |                                                                                                                                          
|99-4    |  | Three-Year Credit Agreement dated as of October 25, 2002
($65 million).                                                                  
|        |  |                                                                                                                                          
|99-5    |  | Chief Executive Officer Certification of Periodic Report.                                                                                
|        |  |                                                                                                                                          
|99-6    |  | Chief Financial Officer Certification of Periodic Report.                                                                                



|(b) |  | Reports on Form 8-K.
|--- |  | --------------------

On September 20, 2002, Detroit Edison filed a Report on Form 8-K, dated
September 17, 2002, containing updated information as of year-end 2001 with
respect to its two reporting segments.

22



---



##### Table of Contents






Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                        |  |     |  |                                                                             
|----------------------- |  | --- |  | ----------------------------------------------------------------------------
|                        |  |     |  | THE DETROIT EDISON COMPANY                                                  
|                        |  |     |  |                                                                             
|Date: November 13, 2002 |  | By: |  | /s/ DANIEL G. BRUDZYNSKI                                                    
|                        |  |     |  |                                                                             
|                        |  |     |  | Daniel G. Brudzynski
Chief Accounting Officer,
Vice President and Controller

23



---



##### Table of Contents






FORM 10-Q CERTIFICATION

I, Anthony F. Earley, Jr., Chairman, President, Chief Executive and Chief
Operating Officer of The Detroit Edison Company, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of The Detroit Edison
Company;                                                                                                                                                                                                                                             
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                     



| | (a) |  | designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|
| | (c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material
weaknesses in internal controls; and
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                                                                                                                   |  |  |                        
| | ------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | -----------------------
| | /s/ ANTHONY F. EARLEY, JR.

Anthony F. Earley, Jr.
Chairman, President, Chief Executive and
Chief Operating Officer of
The Detroit Edison Company |  |  | Date: November 13, 2002

24



---



##### Table of Contents



FORM 10-Q CERTIFICATION

I, David E. Meador, Senior Vice President and Chief Financial Officer of The
Detroit Edison Company, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of The Detroit Edison
Company;                                                                                                                                                                                                                                             
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                     



| | (a) |  | designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|
| | (c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material
weaknesses in internal controls; and
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                                                                                      |  |  |                        
| | -------------------------------------------------------------------------------------------------------------------- |  |  | -----------------------
| | /s/ DAVID E. MEADOR

David E. Meador
Senior Vice President and
Chief Financial Officer of
The Detroit Edison Company |  |  | Date: November 13, 2002

25



---



##### Table of Contents



The Detroit Edison Company
Quarterly Report on Form 10-Q for Quarter Ended September 30, 2002
File No.1-2198

Exhibit Index

|        |  |                                                                                                                                         
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                         
|Number  |  | Description                                                                                                                             
|        |  |                                                                                                                                         
|4-230   |  | Supplemental Indenture dated as of October 15, 2002, establishing the
2002 Series A and 2002 Series B Mortgage Bonds                    
|4-231   |  | Tenth Supplemental Indenture, dated as of October 23, 2002, establishing
the 5.20% Senior Notes due 2012 and 6.35% Senior Notes due 2032
|15.22   |  | Awareness Letter of Deloitte & Touché                                                                                                   
|99.3    |  | 364-Day Credit Agreement dated as of October 25, 2002 ($135 million)                                                                    
|99.4    |  | Three-Year Credit Agreement dated as of October 25, 2002 ($65 million)                                                                  
|99.5    |  | Chief Executive Officer Certification of Periodic Report                                                                                
|99.6    |  | Chief Financial Officer Certification of Periodic Report