##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period ended March 31, 2008
 Commission file number 1-2198
 The Detroit Edison Company meets the conditions set forth in General Instruction H (1) (a) and (b) of Form
10-Q and is, therefore, filing this Form with the reduced disclosure format.
 THE DETROIT EDISON COMPANY
  Michigan
    
    38-0478650(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)2000 2nd Avenue, Detroit, Michigan
    
    48226-1279(Address of principal executive offices)
    
    (Zip Code)
 313-235-4000
  Yes þ No o
  Large accelerated filer
o
    
    Accelerated filero
    
    Non-accelerated filer
þ
    
    Smaller reporting
company o(Do not check if a smaller reporting company)
  Yes o No þ




---



##### 



The Detroit Edison Company  Quarterly Report on Form 10-Q  Quarter Ended March 31, 2008
 Table Of Contents
 PageDefinitions
    
    
    1Forward-Looking Statements
    
    
    2Part I  Financial InformationItem 1. Financial StatementsConsolidated Statements of Operations (Unaudited)
    
    
    8Consolidated Statements of Financial Position (Unaudited)
    
    
    9Consolidated Statements of Cash Flows (Unaudited)
    
    
    11Consolidated Statements of Changes in Shareholders Equity
and Comprehensive Income (Unaudited)
    
    
    12Notes to Consolidated Financial Statements (Unaudited)
    
    
    13Item 2. Managements Narrative Analysis of Results of Operations
    
    
    3Item 4. Controls and Procedures
    
    
    7Part II  Other InformationItem 1. Legal Proceedings
    
    
    23Item 1A. Risk Factors
    
    
    23Item 5. Other Information
    
    
    23Item 6. Exhibits
    
    
    23Signature
    
    
    24Supplemental IndentureTwenty-Third Supplemental IndentureAmendment No.8 to Amended & Restated Trade Receivables Purchase and Sale AgreementComputation of Ratio of Earnings to Fixed ChargesChief Executive Officer Section 302 CertificationChief Financial Officer Section 302 CertificationChief Executive Officer Section 906 CertificationChief Financial Officer Section 906 Certification




---



##### Table of Contents



Definitions
 CTA
    
    Costs to achieve, consisting of project management, consultant support and employee severance, related to
the Performance Excellence ProcessCustomer Choice
    
    Statewide initiatives giving customers in Michigan the option to choose alternative suppliers for
electricity.Detroit Edison
    
    The Detroit Edison Company (a direct wholly owned subsidiary of
DTE Energy Company) and subsidiary companiesDTE Energy
    
    DTE Energy Company, the parent of Detroit Edison
and directly or indirectly the parent company of
numerous non-utility subsidiariesEPA
    
    United States Environmental Protection AgencyFERC
    
    Federal Energy Regulatory CommissionMDEQ
    
    Michigan Department of Environmental QualityMISO
    
    Midwest Independent System Operator, a Regional
Transmission OrganizationMPSC
    
    Michigan Public Service CommissionNRC
    
    Nuclear Regulatory CommissionPSCR
    
    A power supply cost recovery mechanism authorized
by the MPSC that allows Detroit Edison to recover
through rates its fuel, fuel-related and purchased
power expenses.Securitization
    
    Detroit Edison financed specific stranded costs at
lower interest rates through the sale of rate
reduction bonds by a wholly owned special purpose
entity, the Detroit Edison Securitization Funding
LLC.SFAS
    
    Statement of Financial Accounting StandardsStranded Costs
    
    Costs incurred by utilities in order to serve
customers in a regulated environment that absent
special regulatory approval would not otherwise be
recoverable if customers switch to alternative
energy suppliers.Units of MeasurementkWh
    
    Kilowatthour of electricityMW
    
    Megawatt of electricityMWh
    
    Megawatthour of electricity
 1




---



##### Table of Contents



Forward-Looking Statements
  
    
    the effects of weather and other natural phenomena on operations and sales to customers,
and purchases from suppliers;
    
    economic climate and population growth or decline in the geographic areas where we do
business;
    
    environmental issues, laws, regulations, and the cost of remediation and compliance,
including potential new federal and state requirements that could include carbon and more
stringent mercury emission controls, a renewable portfolio standard and energy efficiency
mandates;
    
    nuclear regulations and operations associated with nuclear facilities;
    
    impact of electric utility restructuring in Michigan, including legislative amendments
and Customer Choice programs;
    
    employee relations and the impact of collective bargaining agreements;
    
    unplanned outages;
    
    access to capital markets and capital market conditions and the results of other
financing efforts which can be affected by credit agency ratings;
    
    the timing and extent of changes in interest rates;
    
    the level of borrowings;
    
    changes in the cost and availability of coal and other raw materials, and purchased
power;
    
    effects of competition;
    
    impact of regulation by the FERC, MPSC, NRC and other applicable governmental proceedings
and regulations, including any associated impact on rate structures;
    
    changes in and application of federal, state and local tax laws and their
interpretations, including the Internal Revenue Code, regulations, rulings, court
proceedings and audits;
    
    the ability to recover costs through rate increases;
    
    the availability, cost, coverage and terms of insurance;
    
    the cost of protecting assets against, or damage due to, terrorism;
    
    changes in and application of accounting standards and financial reporting regulations;
    
    changes in federal or state laws and their interpretation with respect to regulation,
energy policy and other business issues;
    
    amounts of uncollectible accounts receivable;
    
    binding arbitration, litigation and related appeals; and
    
    changes in the economic and financial viability of our suppliers, customers and trading
counterparties, and the continued ability of such parties to perform their obligations to
Detroit Edison.
  2




---



##### Table of Contents



Part I  Item 2.
 The Detroit Edison Company
Managements Narrative Analysis of Results of Operations
  Factors impacting income
 Increase (Decrease) in Statement of Operations Components Compared to Prior Year
 (in Millions)
    
    Three MonthsOperating Revenues
    
    $
    59Fuel and Purchased Power
    
    
    48Gross Margin
    
    
    11Operation and Maintenance
    
    
    10Depreciation and Amortization
    
    
    10Taxes Other Than Income
    
    
    (10
    )Other Asset (Gains), Losses and Reserves, Net
    
    
    (7
    )Operating Income
    
    
    8Other (Income) and Deductions
    
    
    3Income Tax Provision
    
    
    4Net Income
    
    $
    1
 Gross margin
  Increase (Decrease) in Gross Margin Components Compared to Prior Year
 (in Millions)
    
    Three MonthsWeather related margin impacts
    
    $
    3Return of customers from electric Customer Choice
    
    
    8Service territory performance
    
    
    8RARS over-collection
    
    
    (3
    )Recoverable pension cost
    
    
    (4
    )Other, net
    
    
    (1
    )Increase in gross margin
    
    $
    11
 3




---



##### Table of Contents



Three Months EndedPower Generated and Purchased
    
    March 31(in Thousands of MWh)
    
    2008
    
    
    2007Power Plant GenerationFossil
    
    
    10,240
    
    
    
    10,557Nuclear
    
    
    2,343
    
    
    
    2,42812,583
    
    
    
    12,985Purchased Power
    
    
    1,730
    
    
    
    1,233System Output
    
    
    14,313
    
    
    
    14,218Less Line Loss and Internal Use
    
    
    (845
    )
    
    
    (784
    )Net System Output
    
    
    13,468
    
    
    
    13,434Average Unit Cost ($/MWh)Generation (1)
    
    $
    16.60
    
    
    $
    15.41Purchased Power
    
    $
    61.60
    
    
    $
    63.88Overall Average Unit Cost
    
    $
    22.04
    
    
    $
    19.62
 
 (1)
    
    Represents fuel costs associated with power plants. Three Months EndedMarch 31(in Thousands of MWh)
    
    2008
    
    
    2007Electric SalesResidential
    
    
    3,932
    
    
    
    3,786Commercial
    
    
    4,362
    
    
    
    4,309Industrial
    
    
    3,516
    
    
    
    3,374Wholesale
    
    
    723
    
    
    
    735Other
    
    
    109
    
    
    
    11012,642
    
    
    
    12,314Interconnections sales (1)
    
    
    826
    
    
    
    1,120Total Electric Sales
    
    
    13,468
    
    
    
    13,434Electric DeliveriesRetail and Wholesale
    
    
    12,642
    
    
    
    12,314Electric Customer Choice
    
    
    398
    
    
    
    451Electric Customer Choice  Self Generators (2)
    
    
    58
    
    
    
    67Total Electric Sales and Deliveries
    
    
    13,098
    
    
    
    12,832
 
 (1)
    
    Represents power that is not distributed by Detroit Edison.(2)
    
    Represents deliveries for self generators who have purchased power from alternative energy
suppliers to
supplement their power requirements. Operation and maintenance
 Depreciation and amortization
 Taxes other than income
 4




---



##### Table of Contents



Other asset (gains), losses and reserves, net
 Outlook
    
    
    The amount and timing of cost recovery allowed as a result of regulatory proceedings,
related appeals or new legislation;
    
    Our ability to reduce costs and maximize plant and distribution system performance;
    
    Variations in market prices of power, coal and gas;
    
    Economic conditions within Michigan;
    
    Weather, including the severity and frequency of storms;
    
    The level of customer participation in the electric Customer Choice program; and
    
    Any potential new federal and state environmental, renewable energy and energy efficiency
requirements.
  
    
    A 10 percent limit on the electric Customer Choice program. Once customers representing
10 percent of a utilitys load have elected to receive their generation from an alternate
electricity supplier, remaining customers would be maintained on full, bundled utility
service. As of March 31, 2008, approximately 2 percent of Detroit Edisons load was on the
electric Customer Choice program. The bill also codifies prior MPSC requirements for
customers returning to full utility service.
    
    A requirement that the MPSC set rates based on cost-of-service for all customer classes,
eliminating the current subsidy for residential customers included in business customer
rates. Elimination of the subsidy (de-skewing) would be phased in over a five year period.
Rates for schools and other qualified educational institutions would be immediately set at
their cost of service.
    
    A 12 month hard-stop deadline for the MPSC to complete a rate case and the ability for
the utility to self-implement rate changes six months after a rate filing, bringing
Michigan in line with many other states. If the final rate case order leads to lower rates
than the utility had self-implemented, the utility would refund, with interest, the
difference. In addition, utility rate cases would be based on a forward test year. The bill
also
provides organizational changes which may enable the MPSC to obtain increased funding to
hire staff to meet the new timetable.
 5




---



##### Table of Contents




    
    A Certificate of Need (CON) process for capital projects costing more than $500 million.
The MPSC would be required to review for prudency proposed investments in new generating
assets, acquisition of existing power plants, major upgrades of power plants, and long-term
power purchase agreements. Utilities would also be provided the opportunity to recover
interest expense during construction. As part of the CON process, the MPSC would be
directed to establish and approve a financing plan and the recovery of new investments in
customer rates.
    
    A review and approval process, including evaluation criteria, for the MPSC for proposed
utility merger and acquisitions in Michigan.
    
    A renewable portfolio standard (RPS) of 4% by 2012 and 10% by 2015. Qualifying renewable
energy sources would include wind, biomass, solar, hydro, geothermal, waste industrial
gases and industrial thermal energy. After passage of the new law, the MPSC would establish
a per meter surcharge to fund the RPS requirements. The monthly surcharge is limited to $3
for residential customers, $16.58 for commercial customers and $187.50 for industrial
customers. The recovery mechanism starts prior to actual construction in order to smooth
the rate impact for customers. Within 5 months of the passage of the new law, the utilities
would file an RPS plan with the MPSC. A utility will not have to comply with the RPS
standards if the MPSC determines that the added costs of meeting the RPS standard exceed
the per meter caps. The bills specify that a utility can build up to 33 percent of the
generation required to meet the RPS. An additional 33 percent would be developed by others
and sold to the utility. The remaining renewable generation would be contracted through
long-term power purchase agreements (PPA).
    
    A requirement for utilities to create specific efficiency programs for each customer
class including incentives for meeting performance goals. For electric sales, the program
would target 0.3 percent annual savings in 2008/2009, ramping up to 1 percent annual
savings by 2012. For natural gas sales, the targeted annual savings start at 0.1 percent in
2008/2009 before ramping up to 0.75 percent by 2012. The MPSC may allow a utility to
recover over time the actual costs of its efficiency programs in base rates. Costs would be
limited to 2 percent maximum of total utility revenues (1.5 percent of business revenues).
The bill would also allow a natural gas utility that spends at least 0.5 percent of its
revenues on energy efficiency programs to decouple revenues from volumetric sales,
adjusting for sales volumes above or below forecasted levels. Similar to the RPS bills, a
cost test would be implemented to ensure reasonable costs. If a utility spends at the MPSC
approved levels, it would be considered in full compliance even if the savings targets are
not met.
  6




---



##### Table of Contents



Part I  Item 4.
 CONTROLS AND PROCEDURES
 (a) Evaluation of disclosure controls and procedures
  (b) Changes in internal control over financial reporting
  7




---



##### Table of Contents



Part I  Item 1.
 The Detroit Edison Company
 
 Consolidated Statements of Operations (Unaudited)
 Three Months EndedMarch 31(in Millions)
    
    2008
    
    
    2007Operating Revenues
    
    $
    1,153
    
    
    $
    1,094Operating ExpensesFuel and purchased power
    
    
    402
    
    
    
    354Operation and maintenance
    
    
    358
    
    
    
    348Depreciation and amortization
    
    
    192
    
    
    
    182Taxes other than income
    
    
    62
    
    
    
    72Other reserves
    
    
    
    
    
    
    71,014
    
    
    
    963Operating Income
    
    
    139
    
    
    
    131Other (Income) and DeductionsInterest expense
    
    
    76
    
    
    
    74Interest income
    
    
    (1
    )
    
    
    (1
    )Other income
    
    
    (12
    )
    
    
    (11
    )Other expenses
    
    
    11
    
    
    
    974
    
    
    
    71Income Before Income Taxes
    
    
    65
    
    
    
    60Income Tax Provision
    
    
    24
    
    
    
    20Net Income
    
    $
    41
    
    
    $
    40
  8




---



##### Table of Contents



The Detroit Edison Company
 
 Consolidated Statements of Financial Position (Unaudited)
 March 31
    
    
    December 31(in Millions)
    
    2008
    
    
    2007ASSETSCurrent AssetsCash and cash equivalents
    
    $
    30
    
    
    $
    47Restricted cash
    
    
    80
    
    
    
    135Accounts receivable (less allowance for
doubtful accounts of $94 and $93,
respectively)Customer
    
    
    683
    
    
    
    727Collateral held by others
    
    
    33
    
    
    
    32Affiliates
    
    
    11
    
    
    
    3Other
    
    
    16
    
    
    
    58Accrued power supply cost recovery revenue
    
    
    25
    
    
    
    75InventoriesFuel
    
    
    157
    
    
    
    150Materials and supplies
    
    
    169
    
    
    
    165Other
    
    
    87
    
    
    
    601,291
    
    
    
    1,452InvestmentsNuclear decommissioning trust funds
    
    
    797
    
    
    
    824Other
    
    
    107
    
    
    
    111904
    
    
    
    935PropertyProperty, plant and equipment
    
    
    14,481
    
    
    
    14,372Accumulated depreciation
    
    
    (5,723
    )
    
    
    (5,640
    )8,758
    
    
    
    8,732Other AssetsRegulatory assets
    
    
    2,491
    
    
    
    2,511Securitized regulatory assets
    
    
    1,095
    
    
    
    1,124Intangible assets
    
    
    14
    
    
    
    9Other
    
    
    125
    
    
    
    1223,725
    
    
    
    3,766Total Assets
    
    $
    14,678
    
    
    $
    14,885
  9




---



##### Table of Contents



The Detroit Edison Company  Consolidated Statements of Financial Position (Unaudited)
 March 31
    
    
    December 31(in Millions, Except Shares)
    
    2008
    
    
    2007LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesAccounts payable  affiliates
    
    $
    140
    
    
    $
    138Accounts payable  other
    
    
    351
    
    
    
    396Accrued interest
    
    
    66
    
    
    
    77Dividends payable
    
    
    76
    
    
    
    76Accrued vacations
    
    
    57
    
    
    
    52Short-term borrowings  affiliates
    
    
    290
    
    
    
    277Short-term borrowings  other
    
    
    440
    
    
    
    406Current portion of long-term debt, including capital leases
    
    
    181
    
    
    
    174Other
    
    
    250
    
    
    
    2431,851
    
    
    
    1,839Long-Term Debt (net of current portion)Mortgage bonds, notes and other
    
    
    3,221
    
    
    
    3,473Securitization bonds
    
    
    996
    
    
    
    1,065Capital lease obligations
    
    
    40
    
    
    
    424,257
    
    
    
    4,580Other LiabilitiesDeferred income taxes
    
    
    1,800
    
    
    
    1,825Regulatory liabilities
    
    
    574
    
    
    
    583Asset retirement obligations
    
    
    1,165
    
    
    
    1,160Unamortized investment tax credit
    
    
    92
    
    
    
    95Nuclear decommissioning
    
    
    130
    
    
    
    134Accrued pension liability
    
    
    47
    
    
    
    47Accrued postretirement liability
    
    
    818
    
    
    
    816Other
    
    
    500
    
    
    
    5035,126
    
    
    
    5,163Commitments
and Contingencies (Notes 5 and 8)Shareholders EquityCommon stock, $10 par value, 400,000,000 shares authorized,
and 138,632,324 shares issued and outstanding
    
    
    2,946
    
    
    
    2,771Retained earnings
    
    
    493
    
    
    
    528Accumulated other comprehensive income
    
    
    5
    
    
    
    43,444
    
    
    
    3,303Total Liabilities and Shareholders Equity
    
    $
    14,678
    
    
    $
    14,885
  10




---



##### Table of Contents



The Detroit Edison Company
 
 Consolidated Statements of Cash Flows (Unaudited)
 Three Months EndedMarch 31(in Millions)
    
    2008
    
    
    2007Operating ActivitiesNet Income
    
    $
    41
    
    
    $
    40Adjustments to reconcile net income to net cash from operating activities:Depreciation and amortization
    
    
    192
    
    
    
    182Deferred income taxes
    
    
    (14
    )
    
    
    (48
    )Asset (gains) and reserves, net
    
    
    (1
    )
    
    
    7Changes in assets and liabilities, exclusive of changes shown separately
    
    
    113
    
    
    
    41Net cash from operating activities
    
    
    331
    
    
    
    222Investing ActivitiesPlant and equipment expenditures
    
    
    (213
    )
    
    
    (253
    )Restricted cash for debt redemptions
    
    
    55
    
    
    
    47Proceeds from sale of nuclear decommissioning trust fund assets
    
    
    52
    
    
    
    57Investment in nuclear decommissioning trust funds
    
    
    (61
    )
    
    
    (66
    )Other investments
    
    
    (12
    )
    
    
    Net cash used for investing activities
    
    
    (179
    )
    
    
    (215
    )Financing ActivitiesRedemption of long-term debt
    
    
    (74
    )
    
    
    (73
    )Repurchase of long-term debt
    
    
    (238
    )
    
    
    Short-term borrowings, net
    
    
    47
    
    
    
    (35
    )Capital contribution by parent company
    
    
    175
    
    
    
    175Dividends on common stock
    
    
    (76
    )
    
    
    (76
    )Other
    
    
    (3
    )
    
    
    Net cash used for financing activities
    
    
    (169
    )
    
    
    (9
    )Net Decrease in Cash and Cash Equivalents
    
    
    (17
    )
    
    
    (2
    )Cash and Cash Equivalents at Beginning of the Period
    
    
    47
    
    
    
    27Cash and Cash Equivalents at End of the Period
    
    $
    30
    
    
    $
    25
  11




---



##### Table of Contents



The Detroit Edison Company
 
 Consolidated Statements of Changes in Shareholders Equity and
Comprehensive Income (Unaudited)
 AccumulatedAdditional
    
    
    
    
    
    OtherCommon Stock
    
    Paid In
    
    Retained
    
    Comprehensive(Dollars in Millions, shares in thousands)
    
    Shares
    
    Amount
    
    Capital
    
    Earnings
    
    Income
    
    TotalBalance, December 31, 2007
    
    
    138,632
    
    
    $
    1,386
    
    
    $
    1,385
    
    
    $
    528
    
    
    $
    4
    
    
    $
    3,303Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41
    
    
    
    
    
    
    
    41Capital contribution by parent
company
    
    
    
    
    
    
    
    
    
    
    175
    
    
    
    
    
    
    
    
    
    
    
    175Dividends declared on
common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (76
    )
    
    
    
    
    
    
    (76
    )Net change in unrealized gains
on investments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Balance, March 31, 2008
    
    
    138,632
    
    
    $
    1,386
    
    
    $
    1,560
    
    
    $
    493
    
    
    $
    5
    
    
    $
    3,444
  (in Millions)
    
    2008
    
    
    2007Net income
    
    $
    41
    
    
    $
    40Other comprehensive income, net of tax:Net unrealized gains on investments:Amounts reclassified to income, net of taxes of $1 and $1
    
    
    1
    
    
    
    2Comprehensive income
    
    $
    42
    
    
    $
    42
  12




---



##### Table of Contents



The Detroit Edison Company
 
 Notes to Consolidated Financial Statements (Unaudited)
 NOTE 1  GENERAL
    Asset Retirement Obligations
 Accounting for
Asset Retirement Obligations Accounting for Conditional Asset Retirement Obligations,
an interpretation of FASB Statement No. 143
 Accounting for the Effects of Certain Types of Regulation
  (in Millions)Asset retirement obligations at January 1, 2008
    
    $
    1,170Accretion
    
    
    19Liabilities settled
    
    
    (2
    )Revision in estimated cash flows
    
    
    (10
    )Asset retirement obligations at March 31, 2008
    
    
    1,177Less amount included in current liabilities
    
    
    (12
    )$
    1,165
  13




---



##### Table of Contents



Retirement Benefits and Trusteed Assets
  Pension Benefits
    
    
    Other Postretirement Benefits(in Millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Service cost
    
    $
    12
    
    
    $
    13
    
    
    $
    12
    
    
    $
    11Interest cost
    
    
    37
    
    
    
    34
    
    
    
    23
    
    
    
    23Expected return on plan assets
    
    
    (41
    )
    
    
    (37
    )
    
    
    (14
    )
    
    
    (13
    )Amortization of:Net actuarial loss
    
    
    7
    
    
    
    11
    
    
    
    7
    
    
    
    12Prior service cost
    
    
    2
    
    
    
    2
    
    
    
    
    
    
    
    1Net transition liability
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    2Special termination benefits
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    2Net periodic benefit cost
    
    $
    17
    
    
    $
    27
    
    
    $
    29
    
    
    $
    38
     Income Taxes
   Short-Term
Credit Arrangements and Borrowings
  Stock-Based Compensation
 Share-Based Payment,
 14




---



##### Table of Contents



Consolidated Statements of Cash Flows
  Three Months EndedMarch 31(in Millions)
    
    2008
    
    
    2007Changes in Assets and Liabilities, Exclusive of
Changes Shown SeparatelyAccounts receivable, net
    
    $
    76
    
    
    $
    (9
    )Inventories
    
    
    (11
    )
    
    
    7Accrued pensions
    
    
    7
    
    
    
    13Accounts payable
    
    
    
    
    
    
    (2
    )Accrued PSCR refund
    
    
    52
    
    
    
    49Income taxes payable
    
    
    3
    
    
    
    62General taxes
    
    
    (9
    )
    
    
    11Postretirement obligation
    
    
    2
    
    
    
    5Other assets
    
    
    4
    
    
    
    (35
    )Other liabilities
    
    
    (11
    )
    
    
    (60
    )$
    113
    
    
    $
    41Supplementary Cash InformationCash paid for interest (net of interest capitalized)
    
    $
    87
    
    
    $
    114Cash paid for income taxes
    
    $
    1
    
    
    $
    1
 Other reserves
  NOTE 2  NEW ACCOUNTING PRONOUNCEMENTS
 Fair Value Accounting
 Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities  Including an Amendment of FASB Statement No. 115
 15




---



##### Table of Contents



Business Combinations
 Business Combinations,
 Noncontrolling Interests in Consolidated Financial Statements
 Noncontrolling Interests in Consolidated Financial
Statements  an Amendment of ARB No. 51.
 Disclosures about Derivative Instruments and Hedging Activities
  Offsetting Amounts Related to Certain Contracts
 Amendment of FASB Interpretation No. 39
 NOTE 3  FAIR VALUE
    
    
    Level 1  Consists of unadjusted quoted prices in active markets for identical assets or
liabilities that the Company has the ability to access as of the reporting date.
    
    Level 2  Consists of inputs other than quoted prices included within Level 1 that are
directly observable for the asset or liability or indirectly observable through corroboration
with observable market data.
    
    Level 3  Consists of unobservable inputs for assets or liabilities whose fair value is
estimated based on internally developed models or methodologies using inputs that are
generally less readily observable and supported by little, if any, market activity at the
measurement date. Unobservable inputs are developed based on the best available information
and subject to cost-benefit constraints.
  Net Balance at(in Millions)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    March 31, 2008Assets:Nuclear decommissioning trusts
    
    $
    474
    
    
    $
    323
    
    
    $
    
    
    
    $
    797Employee benefit trust investments
    
    
    
    
    
    
    60
    
    
    
    
    
    
    
    60Derivative assets
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    2Total
    
    $
    474
    
    
    $
    383
    
    
    $
    2
    
    
    $
    859Liabilities:Deferred compensation
    
    $
    
    
    
    $
    (2
    )
    
    $
    
    
    
    $
    (2
    )Derivative liabilities
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    (1
    )Total
    
    $
    
    
    
    $
    (2
    )
    
    $
    (1
    )
    
    $
    (3
    )Net Assets at March 31, 2008
    
    $
    474
    
    
    $
    381
    
    
    $
    1
    
    
    $
    856
 Nuclear Decommissioning Funds
 Employee Benefit Trust Investments
 Deferred Compensation Liabilities
 Derivative Assets and Liabilities
 16




---



##### Table of Contents



NOTE 4  RESTRUCTURING
 Restructuring  Performance Excellence Process
    Employee Severance Costs (1)
    
    
    Other Costs
    
    
    Total Cost(in Millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Costs incurred
    
    $
    
    
    
    $
    8
    
    
    $
    4
    
    
    $
    7
    
    
    $
    4
    
    
    $
    15Less amounts
deferred or
capitalized
    
    
    
    
    
    
    8
    
    
    
    4
    
    
    
    7
    
    
    
    4
    
    
    
    15Amount expensed
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
 
 (1)
    
    Includes corporate allocations. NOTE 5  REGULATORY MATTERS
 Regulation
  MPSC Show-Cause Order
   2007 Electric Rate Case Filing
  17




---



##### Table of Contents




    
    Make progress toward correcting the existing rate structure to more accurately reflect
the actual cost of providing service to business customers;
    
    Equalize distribution rates between Detroit Edison full service and Customer Choice
customers;
    
    Re-establish with modification the CIM originally established in the Detroit Edison 2006
show cause filing. The CIM reconciles changes related to customers moving between Detroit
Edison full service and electric Customer Choice;
    
    Terminate the Pension Equalization Mechanism;
    
    Establish an emission allowance pre-purchase plan to ensure that adequate emission
allowances will be available for environmental compliance; and
    
    Establish a methodology for recovery of the costs associated with preparation of an
application for a new nuclear generation facility.
 st
   Regulatory Accounting Treatment for Performance Excellence Process
  18




---



##### Table of Contents



Accounting for Costs Related to Enterprise Business Systems (EBS)
  Fermi 2 Enhanced Security Costs Settlement
  Reconciliation of Regulatory Asset Recovery Surcharge
  Power Supply Costs Recovery Proceedings
 2005 Plan Year
 19




---



##### Table of Contents



2006 Plan Year 
 2007 Plan Year  2
 2008 Plan Year  2
 Other
   20




---



##### Table of Contents



NOTE 6  SHAREHOLDERS EQUITY
  NOTE 7  LONG-TERM DEBT
  NOTE 8  COMMITMENTS AND CONTINGENCIES
 Environmental
 Air .
 Water
 Contaminated Sites .
 Labor Contracts
  Purchase Commitments
  21




---



##### Table of Contents



Bankruptcies
  Other Contingencies
   22




---



##### Table of Contents



Part II
 
 Item 1.  Legal Proceedings
   
 Item 1A.  Risk Factors
  
 Item 5.  Other Information
  
 Item 6.  Exhibits
 ExhibitNumber
    
    DescriptionExhibits filed herewith:4-251
    
    Supplemental Indenture, dated as of April 1, 2008 to
Mortgage and Deed of Trust dated as of October 1, 1924
between the Detroit Edison Company and J.P. Morgan Trust
Company, National Association, as successor trustee,
providing for General and Refunding Mortgage Bonds, 2008
Series DT.4-252
    
    Twenty-Third Supplemental Indenture, dated as of April 1,
2008 to the Collateral Trust Indenture, dated as of June
30, 1993 between The Detroit Edison Company and J.P. Morgan
Trust Company, National Association, as successor trustee,
providing for 2008 Series DT Variable Rate Senior Notes due
2036.10-43
    
    Amendment No. 8 dated as of
May 8, 2008 to the Amended and Restated Trade Receivables
Purchase and Sale Agreement among Detroit Edison, CAFCO, Citibank and
Citicorp, individually and as Agent dated March 9, 2001, as
amended.12-29
    
    Computation of Ratio of Earnings to
Fixed Charges31-39
    
    Chief Executive Officer Section 302 Form 10-Q Certification31-40
    
    Chief Financial Officer Section 302 Form 10-Q CertificationExhibits furnished herewith:32-39
    
    Chief Executive Officer Section 906 Form 10-Q Certification32-40
    
    Chief Financial Officer Section 906 Form 10-Q Certification
 23




---



##### Table of Contents



SIGNATURE
  THE DETROIT EDISON COMPANY(Registrant)Date: May 12, 2008
    
    /s/ PETER B. OLEKSIAK

Peter B. OleksiakVice President, Controller andChief Accounting Officer
 24