##### 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 June 30, 2010
 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
(State or other jurisdiction of 
incorporation or organization)
    
    38-0478650
(I.R.S. Employer
Identification No.)One Energy Plaza, Detroit, Michigan
(Address of principal executive offices)
    
    48226-1279
(Zip Code)
 313-235-4000
  Yes þ No o
  Yes o No o
  Large accelerated filer o
    

Accelerated filer o
    

Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  Yes o No þ




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##### 



The Detroit Edison Company  Quarterly Report on Form 10-Q  Quarter Ended June 30, 2010
  
 Table Of Contents
 PageDefinitions
    
    
    1Forward-Looking Statements
    
    
    2Part I  Financial InformationItem 1. Financial StatementsConsolidated Statements of Financial Position (Unaudited)
    
    
    4Consolidated Statements of Operations (Unaudited)
    
    
    6Consolidated Statements of Cash Flows (Unaudited)
    
    
    7Consolidated Statements of Changes in Shareholders Equity
and Comprehensive Income (Unaudited)
    
    
    8Notes to Consolidated Financial Statements (Unaudited)
    
    
    9Item 2. Managements Narrative Analysis of Results of Operations
    
    
    22Item 4. Controls and Procedures
    
    
    27Part II  Other InformationItem 1. Legal Proceedings
    
    
    28Item 1A. Risk Factors
    
    
    28Item 6. Exhibits
    
    
    29Signature
    
    
    30EX-12.37EX-31.57EX-31.58EX-32.57EX-32.58




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Definitions
 ASC
    
    Accounting Standards CodificationASU
    
    Accounting Standards UpdateCustomer Choice
    
    Michigan legislation giving customers the option to
choose alternative suppliers for electricity.Detroit Edison
    
    The Detroit Edison Company (a direct wholly owned
subsidiary of DTE Energy) and subsidiary companiesDTE Energy
    
    DTE Energy Company, directly or indirectly the parent
of Detroit Edison, Michigan Consolidated Gas Company
and numerous non-utility subsidiariesEPA
    
    United States Environmental Protection AgencyFASB
    
    Financial Accounting Standards BoardFERC
    
    Federal Energy Regulatory CommissionFTRs
    
    Financial transmission rights are financial instruments
that entitle the holder to receive payments related to
costs incurred for congestion on the transmission grid.MISO
    
    Midwest Independent System Operator is an Independent
System Operator and the Regional Transmission
Organization serving the Midwest United States and
Manitoba, Canada.MNRE
    
    Michigan Department of Natural Resources and EnvironmentMPSC
    
    Michigan Public Service CommissionNRC
    
    United States Nuclear Regulatory CommissionPSCR
    
    A power supply cost recovery mechanism authorized by
the MPSC that allows Detroit Edison to recover through
rates its fuel, fuel-related and purchased power costs.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.VIE
    
    Variable Interest EntityUnits of MeasurementGWh
    
    Gigawatthour of electricitykWh
    
    Kilowatthour of electricityMW
    
    Megawatt of electricityMWh
    
    Megawatthour of electricity
 1




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##### Table of Contents



Forward-Looking Statements
  
    
    economic conditions resulting in changes in demand, customer conservation and increased
thefts of electricity;
 
    
    changes in the economic and financial viability of our customers, suppliers, and trading
counterparties, and the continued ability of such parties to perform their obligations to the
Company;
 
    
    economic climate and population growth or decline in the geographic areas where we do
business;
 
    
    high levels of uncollectible accounts receivable;
 
    
    access to capital markets and capital market conditions and the results of other financing
efforts which can be affected by credit agency ratings;
 
    
    instability in capital markets which could impact availability of short and long-term
financing;
 
    
    the timing and extent of changes in interest rates;
 
    
    the level of borrowings;
 
    
    the potential for losses on investments, including nuclear decommissioning and benefit plan
assets and the related increases in future expense and contributions;
 
    
    the potential for increased costs or delays in completion of significant construction
projects;
 
    
    the effects of weather and other natural phenomena on operations and sales to customers, and
purchases from suppliers;
 
    
    environmental issues, laws, regulations, and the increasing costs of remediation and
compliance, including actual and potential new federal and state requirements that include or
could include carbon and more stringent mercury emission controls, a renewable portfolio
standard, energy efficiency mandates, carbon tax or cap and trade structure and ash landfill
regulations;
 
    
    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;
 
    
    changes in the cost and availability of coal and other raw materials and purchased power;
 
    
    cost reduction efforts and the maximization of plant and distribution system performance;
 
    
    the effects of competition;
 
    
    impact of regulation by the FERC, MPSC, NRC and other applicable governmental proceedings and
regulations, including any associated impact on rate structures;
 
    
    changes in and application of federal, state and local tax laws and their interpretations,
including the Internal Revenue Code, regulations, rulings, court proceedings and audits;
 
    
    the amount and timing of cost recovery allowed as a result of regulatory proceedings, related
appeals or new legislation;
 
    
    the cost of protecting assets against, or damage due to, terrorism or cyber attacks;
 
    
    the availability, cost, coverage and terms of insurance and stability of insurance providers;
 2




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##### Table of Contents




    
    changes in and application of accounting standards and financial reporting regulations;
 
    
    changes in federal or state laws and their interpretation with respect to regulation, energy
policy and other business issues; and
 
    
    binding arbitration, litigation and related appeals.
  3




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Part I  Item 1.
 The Detroit Edison Company
 
 Consolidated Statements of Financial Position (Unaudited)
 June 30
    
    
    December 31(in Millions)
    
    2010
    
    
    2009ASSETSCurrent AssetsCash and cash equivalents
    
    $
    20
    
    
    $
    34Restricted cash
    
    
    77
    
    
    
    79Accounts receivable (less allowance for
doubtful accounts of $101 and $118,
respectively)Customer
    
    
    707
    
    
    
    696Affiliates
    
    
    7
    
    
    
    3Other
    
    
    49
    
    
    
    108InventoriesFuel
    
    
    184
    
    
    
    135Materials and supplies
    
    
    178
    
    
    
    173Notes ReceivableAffiliates
    
    
    4
    
    
    
    65Other
    
    
    
    
    
    
    3Other
    
    
    71
    
    
    
    791,297
    
    
    
    1,375InvestmentsNuclear decommissioning trust funds
    
    
    824
    
    
    
    817Other
    
    
    102
    
    
    
    104926
    
    
    
    921PropertyProperty, plant and equipment
    
    
    15,686
    
    
    
    15,451Less accumulated depreciation and amortization
    
    
    (6,239
    )
    
    
    (6,133
    )9,447
    
    
    
    9,318Other AssetsRegulatory assets
    
    
    3,325
    
    
    
    3,333Securitized regulatory assets
    
    
    802
    
    
    
    870Intangible assets
    
    
    15
    
    
    
    9Notes receivable  affiliates
    
    
    12
    
    
    
    17Other
    
    
    123
    
    
    
    1184,277
    
    
    
    4,347Total Assets
    
    $
    15,947
    
    
    $
    15,961
  4




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The Detroit Edison Company
 
 Consolidated Statements of Financial Position (Unaudited)
 June 30
    
    
    December 31(in Millions, Except Shares)
    
    2010
    
    
    2009LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesAccounts payableAffiliates
    
    $
    62
    
    
    $
    74Vendors and other
    
    
    308
    
    
    
    251Accrued interest
    
    
    84
    
    
    
    83Current portion of long-term debt, including capital leases
    
    
    722
    
    
    
    660Short-term borrowings  affiliates
    
    
    66
    
    
    
    Other
    
    
    273
    
    
    
    2611,515
    
    
    
    1,329Long-Term Debt (net of current portion)Mortgage bonds, notes and other
    
    
    3,509
    
    
    
    3,579Securitization bonds
    
    
    717
    
    
    
    793Capital lease obligations
    
    
    20
    
    
    
    254,246
    
    
    
    4,397Other LiabilitiesDeferred income taxes
    
    
    1,888
    
    
    
    1,871Regulatory liabilities
    
    
    759
    
    
    
    711Asset retirement obligations
    
    
    1,337
    
    
    
    1,285Unamortized investment tax credit
    
    
    71
    
    
    
    75Nuclear decommissioning
    
    
    138
    
    
    
    136Accrued pension liability  affiliates
    
    
    800
    
    
    
    987Accrued postretirement liability  affiliates
    
    
    1,067
    
    
    
    1,058Other
    
    
    227
    
    
    
    2396,287
    
    
    
    6,362Commitments and Contingencies (Notes 7 and 10)Shareholders EquityCommon stock, $10 par value, 400,000,000 shares
authorized, and 138,632,324 shares issued and outstanding
    
    
    3,196
    
    
    
    3,196Retained earnings
    
    
    718
    
    
    
    693Accumulated other comprehensive income (loss)
    
    
    (15
    )
    
    
    (16
    )3,899
    
    
    
    3,873Total Liabilities and Shareholders Equity
    
    $
    15,947
    
    
    $
    15,961
  5




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The Detroit Edison Company
 
 Consolidated Statements of Operations (Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30
    
    
    June 30(in Millions)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Operating Revenues
    
    $
    1,208
    
    
    $
    1,108
    
    
    $
    2,354
    
    
    $
    2,226Operating ExpensesFuel and purchased power
    
    
    390
    
    
    
    372
    
    
    
    733
    
    
    
    712Operation and maintenance
    
    
    326
    
    
    
    306
    
    
    
    635
    
    
    
    622Depreciation and amortization
    
    
    210
    
    
    
    197
    
    
    
    414
    
    
    
    385Taxes other than income
    
    
    61
    
    
    
    44
    
    
    
    126
    
    
    
    104Asset gains, net
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    987
    
    
    
    919
    
    
    
    1,907
    
    
    
    1,823Operating Income
    
    
    221
    
    
    
    189
    
    
    
    447
    
    
    
    403Other (Income) and DeductionsInterest expense
    
    
    77
    
    
    
    84
    
    
    
    158
    
    
    
    163Interest income
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Other income
    
    
    (9
    )
    
    
    (10
    )
    
    
    (17
    )
    
    
    (17
    )Other expenses
    
    
    11
    
    
    
    (12
    )
    
    
    17
    
    
    
    79
    
    
    
    61
    
    
    
    158
    
    
    
    145Income Before Income Taxes
    
    
    142
    
    
    
    128
    
    
    
    289
    
    
    
    258Income Tax Provision
    
    
    55
    
    
    
    49
    
    
    
    111
    
    
    
    101Net Income
    
    $
    87
    
    
    $
    79
    
    
    $
    178
    
    
    $
    157
  6




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The Detroit Edison Company
 
 Consolidated Statements of Cash Flows (Unaudited)
 Six Months EndedJune 30(in Millions)
    
    2010
    
    
    2009Operating ActivitiesNet income
    
    $
    178
    
    
    $
    157Adjustments to reconcile net income to net cash from operating activities:Depreciation and amortization
    
    
    414
    
    
    
    385Deferred income taxes
    
    
    (1
    )
    
    
    (23
    )Asset gains, net
    
    
    (1
    )
    
    
    Changes in assets and liabilities, exclusive of changes shown separately
    
    
    (67
    )
    
    
    132Net cash from operating activities
    
    
    523
    
    
    
    651Investing ActivitiesPlant and equipment expenditures
    
    
    (401
    )
    
    
    (490
    )Restricted cash for debt redemptions
    
    
    2
    
    
    
    18Proceeds from sale of nuclear decommissioning trust fund assets
    
    
    128
    
    
    
    182Investment in nuclear decommissioning trust funds
    
    
    (145
    )
    
    
    (190
    )Other
    
    
    57
    
    
    
    (102
    )Net cash used for investing activities
    
    
    (359
    )
    
    
    (582
    )Financing ActivitiesIssuance of long-term debt
    
    
    
    
    
    
    65Redemption of long-term debt
    
    
    (85
    )
    
    
    (150
    )Short-term borrowings, net
    
    
    66
    
    
    
    (75
    )Capital contribution by parent company
    
    
    
    
    
    
    250Dividends on common stock
    
    
    (152
    )
    
    
    (152
    )Other
    
    
    (7
    )
    
    
    (12
    )Net cash used for financing activities
    
    
    (178
    )
    
    
    (74
    )Net Decrease in Cash and Cash Equivalents
    
    
    (14
    )
    
    
    (5
    )Cash and Cash Equivalents at Beginning of Period
    
    
    34
    
    
    
    30Cash and Cash Equivalents at End of Period
    
    $
    20
    
    
    $
    25
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The Detroit Edison Company
 
 Consolidated Statements of Changes in Shareholders Equity and Comprehensive Income (Unaudited)
 AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon Stock
    
    
    Paid In
    
    
    Retained
    
    
    Comprehensive(Dollars in Millions, shares in thousands)
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Loss
    
    
    TotalBalance, December 31, 2009
    
    
    138,632
    
    
    $
    1,386
    
    
    $
    1,810
    
    
    $
    693
    
    
    $
    (16
    )
    
    $
    3,873Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    178
    
    
    
    
    
    
    
    178Dividends declared on common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (153
    )
    
    
    
    
    
    
    (153
    )Benefit obligations, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Balance, June 30, 2010
    
    
    138,632
    
    
    $
    1,386
    
    
    $
    1,810
    
    
    $
    718
    
    
    $
    (15
    )
    
    $
    3,899
  (in Millions)
    
    2010
    
    
    2009Net income
    
    $
    178
    
    
    $
    157Other comprehensive income, net of tax:Benefit obligations, net of taxes
    
    
    1
    
    
    
    Net unrealized gains on investments:Amounts reclassified to income, net of taxes
    
    
    
    
    
    
    (1
    )Comprehensive income
    
    $
    179
    
    
    $
    156
  8




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The Detroit Edison Company
 Notes to Consolidated Financial Statements (Unaudited)
 
 NOTE 1  BASIS OF PRESENTATION
 Corporate Structure
   Basis of Presentation
     Principles of Consolidation  Variable Interest Entity (VIE)
 Amendments to FASB Interpretation 46(R)
    9




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June 30,(in Millions)
    
    2010ASSETSRestricted cash
    
    $
    77Accounts receivable
    
    
    46Securitized regulatory assets
    
    
    802Other assets
    
    
    18$
    943LIABILITIESAccounts payable and accrued current liabilities
    
    $
    19Current portion long-term debt, including capital leases
    
    
    144Other current liabilities
    
    
    44Securitization bonds
    
    
    717Other long term liabilities
    
    
    5$
    929
 NOTE 2  SIGNIFICANT ACCOUNTING POLICIES
 Income Taxes
  Stock-Based Compensation
  Government Grants
  NOTE 3  NEW ACCOUNTING PRONOUNCEMENTS
 Variable Interest Entity
 Amendments to FASB Interpretation 46(R). Consolidation
 Fair Value Measurements and Disclosures
 Improving Disclosures about Fair Value Measurements
 10




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NOTE 4  FAIR VALUE
   
 
 
  Net Balance at(in Millions)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    June 30, 2010Assets:Nuclear decommissioning trusts
    
    $
    548
    
    
    $
    276
    
    
    $
    
    
    
    $
    824Other investments
    
    
    38
    
    
    
    54
    
    
    
    
    
    
    
    92Derivative assets  FTRs
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    3Total
    
    $
    586
    
    
    $
    330
    
    
    $
    3
    
    
    $
    919Liabilities:Derivative liabilities  Emissions
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    (8
    )Total
    
    $
    
    
    
    $
    (8
    )
    
    $
    
    
    
    $
    (8
    )Net Assets at June 30, 2010
    
    $
    586
    
    
    $
    322
    
    
    $
    3
    
    
    $
    911
 11




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Net Balance at(in Millions)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    June 30, 2010Assets:Current
    
    $
    
    
    
    $
    
    
    
    $
    3
    
    
    $
    3Noncurrent(1)
    
    
    586
    
    
    
    330
    
    
    
    
    
    
    
    916Total Assets
    
    $
    586
    
    
    $
    330
    
    
    $
    3
    
    
    $
    919Liabilities:Current
    
    $
    
    
    
    $
    (5
    )
    
    $
    
    
    
    $
    (5
    )Noncurrent
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Total Liabilities
    
    $
    
    
    
    $
    (8
    )
    
    $
    
    
    
    $
    (8
    )Net Assets at June 30, 2010
    
    $
    586
    
    
    $
    322
    
    
    $
    3
    
    
    $
    911The following table presents assets and liabilities measured and recorded at fair value on a
recurring basis as of December 31, 2009:Net Balance at(in Millions)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    December 31, 2009Assets:Cash equivalents
    
    $
    15
    
    
    $
    
    
    
    $
    
    
    
    $
    15Nuclear decommissioning trusts and other investments
    
    
    589
    
    
    
    325
    
    
    
    
    
    
    
    914Derivative assets
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    2Total
    
    $
    604
    
    
    $
    325
    
    
    $
    2
    
    
    $
    931Liabilities:Derivative liabilities
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    (8
    )Total
    
    $
    
    
    
    $
    (8
    )
    
    $
    
    
    
    $
    (8
    )Net Assets at December 31, 2009
    
    $
    604
    
    
    $
    317
    
    
    $
    2
    
    
    $
    923
 
 (1)
    
    Includes $92 million of other investments that are included in the Consolidated Statements of
Financial Position in Other Investments.  Three Months Ended
    
    
    Six Months EndedJune 30
    
    
    June 30(in Millions)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Asset balance as of beginning of the period
    
    $
    1
    
    
    $
    1
    
    
    $
    2
    
    
    $
    4Changes in fair value recorded in regulatory assets/liabilities
    
    
    4
    
    
    
    
    
    
    
    3
    
    
    
    (2
    )Purchases, issuances and settlements
    
    
    (2
    )
    
    
    1
    
    
    
    (2
    )
    
    
    2Transfers in/out of Level 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )Asset balance as of June 30
    
    $
    3
    
    
    $
    2
    
    
    $
    3
    
    
    $
    2The amount of total gains (losses) included in regulatory
assets and liabilities attributed to the change
in unrealized gains (losses) related to assets and
liabilities held at June 30, 2010 and 2009
    
    $
    3
    
    
    $
    1
    
    
    $
    3
    
    
    $
    2
  12




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Cash Equivalents
  Nuclear Decommissioning Trusts and Other Investments
  Derivative Assets and Liabilities
  Fair Value of Financial Instruments
  June 30, 2010
    
    
    December 31, 2009Fair Value
    
    
    Carrying Value
    
    
    Fair Value
    
    
    Carrying ValueLong-Term Debt
    
    $5.3 billion
    
    $4.9 billion
    
    $5.2 billion
    
    $5.0 billion
 Nuclear Decommissioning Trust Funds
   13




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June 30,
    
    
    December 31,(in Millions)
    
    2010
    
    
    2009Fermi 2
    
    $
    794
    
    
    $
    790Fermi 1
    
    
    3
    
    
    
    3Low level radioactive waste
    
    
    27
    
    
    
    24Total
    
    $
    824
    
    
    $
    817
  Three Months Ended
    
    
    Six Months EndedJune 30
    
    
    June 30(in Millions)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Realized gains
    
    $
    12
    
    
    $
    3
    
    
    $
    21
    
    
    $
    19Realized losses
    
    
    (11
    )
    
    
    (7
    )
    
    
    (19
    )
    
    
    (34
    )Proceeds from sales of securities
    
    
    69
    
    
    
    69
    
    
    
    128
    
    
    
    182
  Fair
    
    
    Unrealized(in Millions)
    
    Value
    
    
    GainsAs of June 30, 2010Equity securities
    
    $
    404
    
    
    $
    115Debt securities
    
    
    408
    
    
    
    25Cash and cash equivalents
    
    
    12
    
    
    
    $
    824
    
    
    $
    140As of December 31, 2009Equity securities
    
    $
    420
    
    
    $
    135Debt securities
    
    
    388
    
    
    
    17Cash and cash equivalents
    
    
    9
    
    
    
    $
    817
    
    
    $
    152
 14




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Other Available-For-Sale Securities
  June 30, 2010
    
    
    December 31, 2009(in Millions)
    
    Fair Value
    
    
    Carrying value
    
    
    Fair Value
    
    
    Carrying ValueCash equivalents
    
    $
    103
    
    
    $
    103
    
    
    $
    105
    
    
    $
    105Equity securities
    
    
    4
    
    
    
    4
    
    
    
    4
    
    
    
    4
  NOTE 5  FINANCIAL AND OTHER DERIVATIVE INSTRUMENTS
    Balance Sheet
    
    Fair(in Millions)
    
    Location
    
    ValueFTRs
    
    Other current assets
    
    $
    3Emissions
    
    Other current liabilities
    
    
    (5
    )Emissions
    
    Other non-current liabilities
    
    
    (3
    )Total derivatives not designated as hedging instrument
    
    
    
    $
    (5
    )
 15




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##### Table of Contents



Commodity
    
    Number of UnitsEmissions (Tons)
    
    
    4,486FTRs (MW)
    
    
    122,250
 NOTE 6  ASSET RETIREMENT OBLIGATIONS
  (in Millions)Asset retirement obligations at December 31, 2009
    
    $
    1,300Accretion
    
    
    43Liabilities incurred
    
    
    10Liabilities settled
    
    
    (3
    )Asset retirement obligations at June 30, 2010
    
    
    1,350Less amount included in current liabilities
    
    
    (13
    )$
    1,337
  NOTE 7  REGULATORY MATTERS
 Energy Optimization (EO) Plans
  Detroit Edison Restoration Expense Tracker Mechanism (RETM) and Line Clearance Tracker (LCT)
Reconciliation
  Detroit Edison Regulatory Asset Recovery Surcharge (RARS) Reconciliation
  Power Supply Cost Recovery Proceedings
  16




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##### Table of Contents



2008 Plan Year
  Net Over-recovery,
    
    PSCR Cost ofPSCR Year
    
    Date Filed
    
    including interest
    
    Power Sold2009
    
    March 2010
    
    $15.6 million
    
    $1.1 billion
 Other
  NOTE 8  LONG-TERM DEBT
  NOTE 9  SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS
  NOTE 10  COMMITMENTS AND CONTINGENCIES
 Environmental
 Air
  17




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Water
 Contaminated Sites
 Landfill
  Nuclear Operations
 Property Insurance
    18




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##### Table of Contents



Public Liability Insurance
  Nuclear Fuel Disposal Costs
  Guarantees
   Labor Contracts
  Purchase Commitments
  19




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##### Table of Contents



Bankruptcies
  Other Contingencies
   NOTE 11  RETIREMENT BENEFITS AND TRUSTEED ASSETS
  Other PostretirementPension Benefits
    
    
    Benefits(in Millions)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Three Months Ended June 30Service cost
    
    $
    13
    
    
    $
    11
    
    
    $
    11
    
    
    $
    10Interest cost
    
    
    38
    
    
    
    39
    
    
    
    24
    
    
    
    25Expected return on plan assets
    
    
    (43
    )
    
    
    (41
    )
    
    
    (13
    )
    
    
    (10
    )Amortization of:Net actuarial loss
    
    
    18
    
    
    
    9
    
    
    
    9
    
    
    
    14Prior service cost
    
    
    1
    
    
    
    2
    
    
    
    
    
    
    
    Net transition liability
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Net periodic benefit cost
    
    $
    27
    
    
    $
    20
    
    
    $
    32
    
    
    $
    40
 Other PostretirementPension Benefits
    
    
    Benefits(in Millions)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Six Months Ended June 30Service cost
    
    $
    26
    
    
    $
    21
    
    
    $
    23
    
    
    $
    23Interest cost
    
    
    76
    
    
    
    79
    
    
    
    48
    
    
    
    51Expected return on plan assets
    
    
    (86
    )
    
    
    (82
    )
    
    
    (26
    )
    
    
    (21
    )Amortization of:Net actuarial loss
    
    
    35
    
    
    
    19
    
    
    
    19
    
    
    
    26Prior service cost
    
    
    3
    
    
    
    3
    
    
    
    1
    
    
    
    1Net transition liability
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Net periodic benefit cost
    
    $
    54
    
    
    $
    40
    
    
    $
    66
    
    
    $
    81
 Pension and other Postretirement Contributions
   20




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Healthcare Legislation
    NOTE 12  SUPPLEMENTAL CASH FLOW INFORMATION
  Six Months EndedJune 30(in Millions)
    
    2010
    
    
    2009Changes in Assets and Liabilities, Exclusive of Changes Shown SeparatelyAccounts receivable, net
    
    $
    (37
    )
    
    $
    45Inventories
    
    
    (53
    )
    
    
    (2
    )Accrued pension liability  affiliates
    
    
    (186
    )
    
    
    (54
    )Accounts payable
    
    
    59
    
    
    
    (41
    )Accrued PSCR refund
    
    
    (23
    )
    
    
    82Income taxes payable
    
    
    100
    
    
    
    14Postretirement obligation  affiliates
    
    
    10
    
    
    
    16Other assets
    
    
    47
    
    
    
    97Other liabilities
    
    
    16
    
    
    
    (25
    )$
    (67
    )
    
    $
    132
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Part I  Item 2.
 The Detroit Edison Company
 Managements Narrative Analysis of Results of Operations
  Overview
 Impact of Economic Conditions
    Collectibility of Accounts Receivable on Utility Operations
  22




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##### Table of Contents



Results of Operations
  Three Months Ended
    
    
    Six Months EndedJune 30
    
    
    June 30(in Millions)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Operating Revenues
    
    $
    1,208
    
    
    $
    1,108
    
    
    $
    2,354
    
    
    $
    2,226Fuel and Purchased Power
    
    
    390
    
    
    
    372
    
    
    
    733
    
    
    
    712Gross Margin
    
    
    818
    
    
    
    736
    
    
    
    1,621
    
    
    
    1,514Operation and Maintenance
    
    
    326
    
    
    
    306
    
    
    
    635
    
    
    
    622Depreciation and Amortization
    
    
    210
    
    
    
    197
    
    
    
    414
    
    
    
    385Taxes Other Than Income
    
    
    61
    
    
    
    44
    
    
    
    126
    
    
    
    104Asset Gains, Net
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    Operating Income
    
    
    221
    
    
    
    189
    
    
    
    447
    
    
    
    403Other (Income) and Deductions
    
    
    79
    
    
    
    61
    
    
    
    158
    
    
    
    145Income Tax Provision
    
    
    55
    
    
    
    49
    
    
    
    111
    
    
    
    101Net Income
    
    $
    87
    
    
    $
    79
    
    
    $
    178
    
    
    $
    157Operating Income as a
Percentage of Operating
Revenues
    
    
    18
    %
    
    
    17
    %
    
    
    19
    %
    
    
    18
    %
 Gross margin
 (in Millions)
    
    Three Months
    
    
    Six MonthsJanuary 2010 rate order
    
    $
    52
    
    
    $
    104Restoration tracker
    
    
    7
    
    
    
    (3
    )Securitization bond and tax surcharge rate increase
    
    
    4
    
    
    
    17Regulatory Asset Revenue surcharge
    
    
    (10
    )
    
    
    (21
    )Other
    
    
    29
    
    
    
    10Increase in gross margin
    
    $
    82
    
    
    $
    107
 Three Months Ended
    
    
    Six Months EndedJune 30
    
    
    June 30(in Thousands of MWh)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Electric SalesResidential
    
    
    3,602
    
    
    
    3,147
    
    
    
    7,267
    
    
    
    6,885Commercial
    
    
    3,988
    
    
    
    4,536
    
    
    
    7,930
    
    
    
    8,959Industrial
    
    
    2,605
    
    
    
    2,385
    
    
    
    5,081
    
    
    
    5,022Other
    
    
    799
    
    
    
    782
    
    
    
    1,600
    
    
    
    1,59910,994
    
    
    
    10,850
    
    
    
    21,878
    
    
    
    22,465Interconnections sales (1)
    
    
    1,450
    
    
    
    1,189
    
    
    
    2,760
    
    
    
    2,224Total Electric Sales
    
    
    12,444
    
    
    
    12,039
    
    
    
    24,638
    
    
    
    24,689Electric DeliveriesRetail and Wholesale
    
    
    10,994
    
    
    
    10,850
    
    
    
    21,878
    
    
    
    22,465Electric Customer Choice, including self generators (2)
    
    
    1,283
    
    
    
    344
    
    
    
    2,386
    
    
    
    661Total Electric Sales and Deliveries
    
    
    12,277
    
    
    
    11,194
    
    
    
    24,264
    
    
    
    23,126
 
 (1)
    
    Represents power that is not distributed by Detroit Edison.(2)
    
    Includes deliveries for self generators who have purchased power from alternative energy
suppliers to supplement their power requirements. 23




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Power Generated and Purchased
 Three Months Ended
    
    
    Six Months EndedJune 30
    
    
    June 30(in Thousands of MWh)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Power Plant GenerationFossil
    
    
    9,595
    
    
    
    9,852
    
    
    
    19,115
    
    
    
    19,694Nuclear
    
    
    2,087
    
    
    
    1,486
    
    
    
    4,287
    
    
    
    3,74011,682
    
    
    
    11,338
    
    
    
    23,402
    
    
    
    23,434Purchased Power
    
    
    1,474
    
    
    
    1,464
    
    
    
    2,796
    
    
    
    2,816System Output
    
    
    13,156
    
    
    
    12,802
    
    
    
    26,198
    
    
    
    26,250Less Line Loss and Internal Use
    
    
    (712
    )
    
    
    (763
    )
    
    
    (1,560
    )
    
    
    (1,561
    )Net System Output
    
    
    12,444
    
    
    
    12,039
    
    
    
    24,638
    
    
    
    24,689Average Unit Cost ($/MWh)Generation (1)
    
    $
    18.96
    
    
    $
    18.97
    
    
    $
    18.87
    
    
    $
    18.10Purchased Power
    
    $
    45.60
    
    
    $
    41.83
    
    
    $
    39.31
    
    
    $
    38.05Overall Average Unit Cost
    
    $
    21.95
    
    
    $
    21.58
    
    
    $
    21.05
    
    
    $
    20.24
 
 (1)
    
    Represents fuel costs associated with power plants. Operation and maintenance
 Taxes other than income
 Outlook
 Environmental Matters
 Global Climate Change
  24




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Capital Resources and Liquidity
       25




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26




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##### 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
  27




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Part II  Other Information
 
 Item 1.  Legal Proceedings
   
 Item 1A.  Risk Factors
  A work interruption may adversely affect us.
 28




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Item 6.  Exhibits
 ExhibitNumber
    
    DescriptionExhibits filed herewith:12-37
    
    Computation of Ratio of Earnings to Fixed Charges31-57
    
    Chief Executive Officer Section 302 Form 10-Q Certification31-58
    
    Chief Financial Officer Section 302 Form 10-Q CertificationExhibits furnished herewith:32-57
    
    Chief Executive Officer Section 906 Form 10-Q Certification32-58
    
    Chief Financial Officer Section 906 Form 10-Q Certification
 29




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SIGNATURE
  THE DETROIT EDISON COMPANY(Registrant)Date: July 30, 2010
    /s/ PETER B. OLEKSIAKPeter B. OleksiakVice President and Controller
and Chief Accounting Officer 30