TABLE OF CONTENTS




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|--------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|DEFINITIONS                                                                      
|                                                                                  | Item 1  Business.                                                                             
|                                                                                  | Item 2  Properties.                                                                           
|                                                                                  | Item 3  Legal Proceedings.                                                                    
|                                                                                  | Item 4  Submission of Matters to a Vote of Security Holders.                                  
|                                                                                  | Item 5  Market for Registrants Common Equity and Related Stockholder Matters.                
|                                                                                  | Item 6  Selected Financial Data.                                                              
|                                                                                  | Item 8  Financial Statements and Supplementary Data.                                          
|                                                                                  | Item 9   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|PART III                                                                         
|                                                                                  | Items 10, 11, 12 and 13                                                                        
|Annual Report on Form 10-K for The Detroit Edison Company
PART I                 
|                                                                                  | Item 1  Business.                                                                             
|                                                                                  | Item 2  Properties.                                                                           
|                                                                                  | Item 3  Legal Proceedings.                                                                    
|                                                                                  | Item 4  Submission of Matters to a Vote of Security Holders.                                  
|PART II                                                                          
|                                                                                  | Item 5  Market for Registrants Common Equity and Related Stockholder Matters.                
|                                                                                  | Item 6  Selected Financial Data.                                                              
|                                                                                  | Item 7  Managements Discussion and Analysis of Financial Condition and Results of Operations.
|                                                                                  | Item 8  Financial Statements and Supplementary Data.                                          
|                                                                                  | Item 9 -Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.  
|PART III                                                                         
|                                                                                  | Items 10, 11, 12 and 13                                                                        
|Annual Reports on Form 10-K for DTE Energy Company
and The Detroit Edison Company
|PART IV                                                                          
|                                                                                  | Item 14  Exhibits, Financial Statement Schedules and Reports on Form 8-K.                     

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



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FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999

|            |  |                                                                                                               |  |                   
|----------- |  | ------------------------------------------------------------------------------------------------------------- |  | ------------------
|Commission  |  | Registrants; State of Incorporation;                                                                          |  | I.R.S. Employer   
|File Number |  | Address; and Telephone Number                                                                                 |  | Identification No.
|            |  |                                                                                                               |  |                   
|1-11607     |  | DTE Energy Company
(a Michigan corporation)
2000 2nd Avenue
Detroit, Michigan 48226-1279
313-235-4000         |  | 38-3217752        
|           
|           
|           
|           
|1-2198      |  | The Detroit Edison Company
(a Michigan corporation)
2000 2nd Avenue
Detroit, Michigan 48226-1279
313-235-8000 |  | 38-0478650        

Securities registered pursuant to Section 12(b) of the Act:

|                                                                                                                                |  |                                          
|------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------
|Title of each class                                                                                                             |  | Name of each exchange on which registered
|                                                                                                                                |  |                                          
|DTE Energy Company                                                                                                             
|                                                                                                                               
|                                                                                                                               
|                                                                                                                               
|                                                                                                                               
|Common Stock, without par value, with contingent preferred
stock purchase rights                                                |  | New York and Chicago Stock Exchanges     
|                                                                                                                               
|                                                                                                                               
|                                                                                                                               
|                                                                                                                               
|The Detroit Edison Company                                                                                                     
|                                                                                                                               
|                                                                                                                               
|                                                                                                                               
|                                                                                                                               
|Quarterly Income Debt Securities (QUIDS)
(Junior Subordinated Deferrable Interest Debentures
- 7.625%, 7.54% and 7.375% Series) |  | New York Stock Exchange                  

Securities registered pursuant to Section 12(g) of the Act:

None



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(Title of Class)

Indicate by check mark whether the registrants (1) have 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 registrants
were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes X
No __

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ]

At January 31, 2000, 145,036,824 shares of DTE Energys Common Stock, substantially all held by non-affiliates, were
outstanding, with an aggregate market value of approximately $5.04 billion based upon the closing price on the New York
Stock Exchange.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information in DTE Energy Companys definitive Proxy Statement for its 2000 Annual Meeting of Common
Shareholders to be held April 14, 2000, which will be filed with the Securities and Exchange Commission pursuant to
Regulation 14A, not later than 120 days after the end of the Registrants fiscal year covered by this report on Form
10-K, is incorporated herein by reference to Part III (Items 10, 11, 12 and 13) of this Form 10-K.

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DTE Energy Company
and
The Detroit Edison Company
FORM 10-K
Year Ended December 31, 1999

This document contains the Annual Reports on Form 10-K for the fiscal year
ended December 31, 1999 for each of DTE Energy Company and The Detroit Edison
Company. Information contained herein relating to an individual registrant is
filed by such registrant on its own behalf. Accordingly, except for its
subsidiaries, The Detroit Edison Company makes no representation as to
information relating to DTE Energy Company or any other companies affiliated
with DTE Energy Company.

INDEX

|                                                           |                                                                                                                                                                                                                                                                              |                                                                                                |   |      |    | 
|---------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | - | ---- | -- | 
|                                                           |                                                                                                                                                                                                                                                                              |                                                                                                |   | Page
|                                                           |                                                                                                                                                                                                                                                                              |                                                                                                |   |     
|Definitions                                                |                                                                                                                                                                                                                                                                              |                                                                                                | 4 |     
|                                                          
|                                                          
|                                                          
|                                                          
|Annual Report on
Form 10-K for DTE Energy Company:        
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           | Part I  Item 1 - Business                                                                                                                                                                                                                                                   |                                                                                                |   | 5    |   
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           |                                                                                                                                                                                                                                                                              | Item 2 - Properties                                                                            |   |      | 13 | 
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           |                                                                                                                                                                                                                                                                              | Item 3 - Legal Proceedings                                                                     |   |      | 14 | 
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           |                                                                                                                                                                                                                                                                              | Item 4 - Submission of Matters to a Vote of Security Holders                                   |   |      | 16 | 
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           | Part II   Item 5 - Market for Registrants Common Equity and Related
Stockholder Matters                                                                                                                                                                                    |                                                                                                |   | 16   |   
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           |                                                                                                                                                                                                                                                                              | Item 6 - Selected Financial Data                                                               |   |      | 17 | 
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           |                                                                                                                                                                                                                                                                              | Item 7 - Managements Discussion and Analysis of Financial
Condition and Results of Operations |   |      | 18 | 
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           |                                                                                                                                                                                                                                                                              | Item 7A-Quantitative and Qualitative Disclosures About Market
Risk (Included in Item 7)        |   |      | 18 | 
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           |                                                                                                                                                                                                                                                                              | Item 8 - Financial Statements and Supplementary Data                                           |   |      | 30 | 
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           |                                                                                                                                                                                                                                                                              | Item 9 - Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure  |   |      | 71 | 
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           | Part III   Items 10, 11, 12 and 13 - (Incorporated by
reference from DTE Energy Companys definitive
Proxy Statement which will be filed with the
Securities and Exchange Commission, pursuant to
Regulation 14A, not later
than 120 days after the end of the fiscal year) |                                                                                                |   | 71   |   
|                                                          
|                                                          
|                                                          
|                                                          
|Annual Report on
Form 10-K for The Detroit Edison Company:
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           | Part I   Item 1 - Business                                                                                                                                                                                                                                                  |                                                                                                |   | 72   |   
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           |                                                                                                                                                                                                                                                                              | Item 2 - Properties                                                                            |   |      | 73 | 
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           |                                                                                                                                                                                                                                                                              | Item 3 - Legal Proceedings                                                                     |   |      | 73 | 
|                                                          
|                                                          
|                                                          
|                                                          
|                                                           |                                                                                                                                                                                                                                                                              | Item 4 - Submission of Matters to a Vote of Security Holders                                   |   |      | 73 | 

2



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|                                                                                   |                                                                                           |                                                                                                |    |    |    | 
|---------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | -- | -- | -- | 
|                                                                                   | Part II   Item 5 - Market for Registrants Common Equity and Related
Stockholder Matters |                                                                                                |    | 73 |   
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   |                                                                                           | Item 6 - Selected Financial Data                                                               |    |    | 74 | 
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   |                                                                                           | Item 7 - Managements Discussion and Analysis of Financial
Condition and Results of Operations |    |    | 74 | 
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   |                                                                                           | Item 8 - Financial Statements and Supplementary Data                                           |    |    | 74 | 
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   |                                                                                           | Item 9 - Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure  |    |    | 77 | 
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Part III   Item 10 - Directors and Executive Officers of the Registrant                  |                                                                                                |    | 77 |   
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   |                                                                                           | Item 11 - Executive Compensation                                                               |    |    | 77 | 
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   |                                                                                           | Item 12 - Security Ownership of Certain Beneficial Owners and
Management                       |    |    | 77 | 
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   |                                                                                           | Item 13 - Certain Relationships and Related Transactions                                       |    |    | 77 | 
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Annual Reports on Form 10-K for DTE Energy Company and
The Detroit Edison Company:
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Part IV   Item 14 - Exhibits, Financial Statement Schedules and Reports
on Form 8-K      |                                                                                                |    | 78 |   
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Signature Page to DTE Energy Company Annual Report on Form 10-K                    |                                                                                           |                                                                                                | 91 |   
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Signature Page to The Detroit Edison Company Annual Report on Form 10-K            |                                                                                           |                                                                                                | 92 |   

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DEFINITIONS

|                |  |                                                                                                                                            
|--------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------
|Company         |  | DTE Energy Company and Subsidiary Companies                                                                                                
|               
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|               
|               
|Consumers       |  | Consumers Energy Company (a wholly owned subsidiary of
CMS Energy Corporation)                                                             
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|Detroit Edison  |  | The Detroit Edison Company (a wholly owned subsidiary of
DTE Energy Company) and Subsidiary Companies                                      
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|DTE Capital     |  | DTE Capital Corporation (a wholly owned subsidiary of DTE Energy Company)                                                                  
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|Electric Choice |  | Gives all retail customers equal opportunity to utilize the transmission system which results in
access to competitive generation resources
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|EPA             |  | United States Environmental Protection Agency                                                                                              
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|FERC            |  | Federal Energy Regulatory Commission                                                                                                       
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|kWh             |  | Kilowatthour                                                                                                                               
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|Ludington       |  | Ludington Hydroelectric Pumped Storage Plant (owned jointly
with Consumers)                                                                
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|MCN             |  | MCN Energy Group Inc.                                                                                                                      
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|MDEQ            |  | Michigan Department of Environmental Quality                                                                                               
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|MPSC            |  | Michigan Public Service Commission                                                                                                         
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|MW              |  | Megawatt                                                                                                                                   
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|MWh             |  | Megawatt hour                                                                                                                              
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|Note(s)         |  | Note(s) to Consolidated Financial Statements of the Company
and Detroit Edison                                                             
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|NRC             |  | Nuclear Regulatory Commission                                                                                                              
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|PSCR            |  | Power Supply Cost Recovery                                                                                                                 
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|Registrant      |  | Company or Detroit Edison, as the case may be                                                                                              
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|SALP            |  | Systematic Assessment of Licensee Performance                                                                                              
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|SEC             |  | Securities and Exchange Commission                                                                                                         
|               
|               
|               
|               
|SFAS            |  | Statement of Financial Accounting Standards                                                                                                

4



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Annual Report on Form 10-K for DTE Energy Company
PART I




Item 1  Business.

General

The Company, a Michigan corporation incorporated in 1995, is an exempt
holding company under the Public Utility Holding Company Act. The Company has
no operations of its own, holding instead directly or indirectly, the stock of
Detroit Edison and other subsidiaries engaged in energy-related businesses.
Detroit Edison is the Companys principal operating subsidiary, representing
approximately 90% and 86% of the Companys assets and revenues, respectively,
at December 31, 1999. The Company has no employees. Detroit Edison has 8,523
employees and other Company affiliates have 363 employees.

See Note 2 for information regarding the Companys pending merger with
MCN.

Non-Regulated Operations

Affiliates of the Company are engaged in non-regulated businesses,
including energy-related services and products. Such services and products
include the operation of a pulverized coal facility and coke oven batteries,
coal sourcing, blending and transportation, landfill gas-to-energy facilities,
providing expertise in the application of new energy technologies, real estate
development, power marketing and trading, specialty engineering services and
retail marketing of energy and other convenience products. Another affiliate,
DTE Capital Corporation, has approximately $400 million of outstanding debt;
the Company has decided to merge DTE Capital's operations into its
own; DTE Capital will transfer all of its assets and liabilities to the Company.

Non-regulated operating revenues of $681 million for 1999 were earned
primarily from projects related to the steel industry and from energy trading
activities.

Utility Operations

Detroit Edison, incorporated in Michigan since 1967, is a public utility
subject to regulation by the MPSC and FERC and is engaged in the generation,
purchase, transmission, distribution and sale of electric energy in a 7,600
square mile area in Southeastern Michigan. Detroit Edisons service area
includes about 13% of Michigans total land area and about half of its
population (approximately five million people). Detroit Edisons residential
customers reside in urban and rural areas, including an extensive shoreline
along the Great Lakes and connecting waters. 3,887 of Detroit Edisons 8,523
employees are represented by unions under two collective bargaining agreements.
One agreement expires in June 2004 for 3,307 employees and the other agreement
expires in August 2000 for 580 employees.

5



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Operating revenues, sales and customer data by rate class are as follows:

|         |                 |                                            |              |                               |   |        |   |        |   |        |   |        |   |        |  | 
|-------- | --------------- | ------------------------------------------ | ------------ | ----------------------------- | - | ------ | - | ------ | - | ------ | - | ------ | - | ------ |  | 
|         |                 |                                            |              |                               |   | 1999   |   | 1998   |   | 1997  
|         |                 |                                            |              |                               |   |        |   |        |   |       
|         |                 |                                            |              | Operating Revenues (Millions)
|        
|        
|        
|        
|Electric |                 |                                            |              |                              
|        
|        
|        
|        
|         | Residential     |                                            | $            | 1,300                         |   |        | $ | 1,253  |   |        | $ | 1,179  |  
|        
|        
|        
|        
|         | Commercial      |                                            |              | 1,629                         |   |        |   | 1,553  |   |        |   | 1,501  |  
|        
|        
|        
|        
|         | Industrial      |                                            |              | 809                           |   |        |   | 753    |   |        |   | 726    |  
|        
|        
|        
|        
|         | Other           |                                            |              | 309                           |   |        |   | 343    |   |        |   | 251    |  
|         |                 |                                            |              |                               |   |        |   |        |   |        |   |        |   |        |  | 
|         |                 |                                            | Total        |                               | $ | 4,047  |   |        | $ | 3,902  |   |        | $ | 3,657  | 
|         |                 |                                            |              |                               |   |        |   |        |   |        |   |        |   |        |  | 
|         |                 |                                            |              | Sales (Millions of kWh)      
|        
|        
|        
|        
|Electric |                 |                                            |              |                              
|         | Residential     |                                            |              | 14,064                        |   |        |   | 13,752 |   |        |   | 12,898 |  
|        
|        
|        
|        
|         | Commercial      |                                            |              | 19,546                        |   |        |   | 18,897 |   |        |   | 17,997 |  
|        
|        
|        
|        
|         | Industrial      |                                            |              | 15,647                        |   |        |   | 14,700 |   |        |   | 14,345 |  
|        
|        
|        
|        
|         | Other           |                                            |              | 2,595                         |   |        |   | 2,357  |   |        |   | 1,855  |  
|         |                 |                                            |              |                               |   |        |   |        |   |        |   |        |   |        |  | 
|         |                 |                                            | Total System |                               |   | 51,852 |   |        |   | 49,706 |   |        |   | 47,095 | 
|        
|        
|        
|        
|         | Interconnection |                                            |              | 3,672                         |   |        |   | 5,207  |   |        |   | 3,547  |  
|         |                 |                                            |              |                               |   |        |   |        |   |        |   |        |   |        |  | 
|         |                 |                                            | Total        |                               |   | 55,524 |   |        |   | 54,913 |   |        |   | 50,642 | 
|         |                 |                                            |              |                               |   |        |   |        |   |        |   |        |   |        |  | 
|         |                 | Electric Customers at Year-End (Thousands)
|        
|        
|        
|        
|Electric |                 |                                            |              |                              
|         | Residential     |                                            |              | 1,904                         |   |        |   | 1,884  |   |        |   | 1,870  |  
|        
|        
|        
|        
|         | Commercial      |                                            |              | 182                           |   |        |   | 181    |   |        |   | 178    |  
|        
|        
|        
|        
|         | Industrial      |                                            |              | 1                             |   |        |   | 1      |   |        |   | 1      |  
|        
|        
|        
|        
|         | Other           |                                            |              | 2                             |   |        |   | 2      |   |        |   | 2      |  
|         |                 |                                            |              |                               |   |        |   |        |   |        |   |        |   |        |  | 
|         |                 |                                            | Total        |                               |   | 2,089  |   |        |   | 2,068  |   |        |   | 2,051  | 
|         |                 |                                            |              |                               |   |        |   |        |   |        |   |        |   |        |  | 

Detroit Edison generally experiences its peak load and highest total
system sales during the third quarter of the year as a result of air
conditioning and cooling-related loads.

During 1999, sales to automotive and automotive-related customers
accounted for approximately 9% of total Detroit Edison operating revenues.
Detroit Edisons 30 largest industrial customers accounted for approximately
17% of total operating revenues in 1999, 1998 and 1997, and no one customer
accounted for more than 4% of total operating revenues.

Detroit Edisons generating capability is primarily dependent upon coal.
Detroit Edison expects to obtain the majority of its coal requirements through
long-term contracts and the balance through short-term agreements and spot
purchases. Detroit Edison has contracts with four coal suppliers for a total
purchase of up to 38 million tons of low-sulfur western coal to be delivered
during the period from 2000 through 2005. It also has four contracts for the
purchase of approximately 3.5 million tons of Appalachian coal to be delivered
during the period from 2000 through 2001. These existing long-term coal
contracts include provisions for price escalation as well as de-escalation.

6



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Certain Factors Affecting Public Utilities

The electric utility industry is changing as the transition to competition
occurs. MPSC orders issued in 1997 through 1999 form the beginning of the
restructuring of the Michigan electric public utility industry. The
implementation of restructuring creates uncertainty as Electric Choice and the
unbundling of utility products and services continues. While Detroit Edison is
implementing MPSC orders pertaining to competition, Federal and Michigan
legislation regarding competition is under discussion and pending.

Restructuring presents serious issues, such as planning for peak sales and
defining the scope of the public utility obligation. The introduction of
Electric Choice has created uncertainty regarding the timing and level of
customer load that may move to other suppliers.

Detroit Edison is subject to extensive environmental regulation.
Additional costs may result as the effects of various chemicals on the
environment (including nuclear waste) are studied and governmental regulations
are developed and implemented. The costs of future nuclear decommissioning
activities are the subject of increased regulatory attention, and recovery of
environmental costs through traditional ratemaking is the subject of
considerable uncertainty.

Regulation and Rates

Michigan Public Service Commission.Detroit Edison is subject to the
general regulatory jurisdiction of the MPSC, which, from time to time, issues
its orders pertaining to Detroit Edisons conditions of service, rates and
recovery of certain costs, accounting and various other matters.

As discussed in Notes 1 and 3, MPSC orders issued in 1997 through 1999 have
provided the beginning of the restructuring of the Michigan electric utility
industry. Other restructuring and regulatory matters are discussed below.

In July 1998, Detroit Edison filed a required review of its current
depreciation expense with the MPSC. The application requested an effective
increase in annual depreciation expenses of $66 million; an adjustment in rates
was not requested. An order from the MPSC is expected in 2000.

In an order issued December 28, 1998 related to the 1988 Settlement Agreement
regarding Fermi 2, the MPSC requested parties to file briefs discussing whether
the past MPSC orders surrounding Fermi 2 (including the June 1995 order
regarding the retail wheeling experiment, the November 1997 order that
reflected the net effect of the $53 million reduction associated with the Fermi
2 phase in for 1998 and a two-year amortization of incremental storm damage
costs, and the December 1998 order regarding the accelerated amortization of
Fermi 2) have fully accounted for the reductions in the Fermi 2 cost of service
and, if not, what additional actions should be taken, as well as what actions
are needed to revert to non-phase-in ratemaking in 2000. In March 1999, the
MPSC ruled that no further action needed to be taken at this time.

7



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In March 1999, Detroit Edison filed for reconciliation of its MPSC
jurisdictional PSCR revenues and expenses. Detroit Edison indicated that an
underrecovery of $42.6 million, including interest, existed, and when offset by
a Fermi 2 performance standard credit of $34 million, a net amount of $8.6
million remains to be collected from PSCR customers. An order could be issued by the
MPSC in the first quarter 2000. In September 1999, Detroit Edison filed its
2000 PSCR plan case. Fuel and purchased power costs for 2000 are projected to
increase by up to 6 percent, on average, over the corresponding forecast for
1999. Detroit Edison is seeking a corresponding increase in its PSCR Factor for
2000. An order is expected in the third quarter of 2000.

In March 1999, the MPSC initiated new dockets to 1) evaluate the need to
expedite the supplier licensing program as an alternative for suppliers to
obtain local franchises and Certificates of Public Convenience and Necessity
from the MPSC, and 2) to establish guidelines for transactions between
affiliates. The MPSC has not yet issued orders on these issues.

In September 1999, the MPSC approved an interim code of conduct filed by
Detroit Edison. The interim code allows DTE Energy affiliated companies to
participate in the Electric Choice program. The MPSC also opened a proceeding
to develop a permanent code of conduct. An order from the MPSC is expected in
the third quarter of 2000.

Detroit Edison is under an obligation to solicit capacity from external
suppliers, whenever it determines that additional capacity is required. In
October 1999, Detroit Edison filed to use an alternative capacity solicitation
process. Detroit Edison is proposing that if it decides to meet its capacity
requirements by executing contracts with a term longer than one year, it will
utilize a Request for Proposal (RFP) to solicit offers. Otherwise, as long as
Detroit Edison has a need to procure summer capacity to serve native load
customers, Detroit Edison will file an annual report with the MPSC outlining
its expected summer generating needs and the method by which it expects to meet
those needs. In December 1999, the MPSC asked interested parties to file
comments on the revised capacity solicitation process in January 2000.
Comments opposing the proposal, including the demand for a contested case
hearing process, have been filed.

Proceedings are pending before the MPSC concerning claims that Detroit Edisons
service is lacking in reliability in certain aspects. Detroit Edison must file
with the MPSC its plan to address reliability concerns. The MPSC Staff will
meet with Detroit Edison, other utilities, customer groups and other relevant
parties to formulate recommendations to improve reliability. The MPSC Staff
must file a report with the MPSC by March 31, 2000.

On January 19, 2000, the MPSC ordered Detroit Edison to file a plan assessing
its generation and transmission capacity for the upcoming summer and
identifying their plans for meeting the electric demand of all electric
customers. In addition, the MPSC asked Detroit Edison to include an assessment
of the impact of the actions of their affiliates on its plan. The plan is to be
filed with the Commission by February 8, 2000.

On February 3, 2000, the MPSC approved Detroit Edisons request to transfer
River Rouge 1 assets to its affiliate, DTE River Rouge. The transfer price is
set at $6.6

8



---



million, or two times the book value of the assets. The MPSC also
found that 1) the transfer will benefit consumers, 2) is in the public interest
and, 3) does not violate state law. The FERC requires that state commissions
make these findings before it will accept an application for determination of
Exempt Wholesale Generator (EWG) status. EWG status will allow the unit to
sell power into the wholesale market. The MPSC conditioned its approval by
requiring Detroit Edison to apply any proceeds above the current book
balance to stranded costs, to offer the plant output first to retail marketers
participating in Electric Choice, and to file reports with the MPSC detailing
the prices, terms and conditions of its offers.

Nuclear Regulatory Commission.The NRC has regulatory jurisdiction over
all phases of the operation, construction (including plant modifications),
licensing and decommissioning of Fermi 2.

Federal Energy Regulatory Commission.In 1996, the FERC issued Order 888,
which requires public utilities to file open access transmission tariffs for
wholesale transmission services in accordance with non-discriminatory terms and
conditions, and Order 889, which requires public utilities and others to obtain
transmission information for wholesale transactions through a system on the
Internet. In addition, Order 889 requires public utilities to separate
transmission operations from wholesale marketing functions.

In July 1996, Detroit Edison filed its Pro Forma Open Access Transmission
Tariff in compliance with FERC Order 888. During 1997, Detroit Edison
negotiated a partial settlement regarding the price and terms and conditions of
certain services provided as part of the tariff. Several issues were litigated
and an Order was issued in July 1999. Detroit Edisons request for rehearing
was denied by the FERC. Detroit Edison has filed a claim of appeal with the
Federal Court of Appeals for the Sixth Circuit.

Detroit Edison has a power pooling agreement with Consumers. In March 1997, a
joint transmission tariff, filed by Detroit Edison and Consumers, became
effective. In compliance with FERC Order 888, the tariff modified the pooling
agreement to permit third-party access to transmission facilities utilized for
pooled operations under non-discriminatory terms and conditions. As Detroit
Edison and Consumers were unable to agree on other modifications to the pooling
agreement, Detroit Edison has requested that the FERC approve its termination.
Consumers has requested that the pooling agreement be continued. The FERC has
not ruled on either of these requests.

In February 1999, Detroit Edison submitted a request to the FERC for
authorization to use certain plant accounts to recognize the impairment loss of
Detroit Edisons Fermi 2 plant and associated assets in accordance with
generally accepted accounting principles. In March 1999, the Michigan Attorney
General filed a protest with the FERC and requested that the FERC set the issue
for hearing. In April 1999, Detroit Edison filed its response with the FERC,
requesting that the FERC reject the Michigan Attorney Generals protest as an
improper collateral attack on MPSC orders. The FERC has not made a ruling on
these matters.

9



---



Environmental Matters

Detroit Edison

Detroit Edison, in common with other electric utilities, is subject to
applicable permit and associated record keeping requirements, and to
increasingly stringent federal, state and local standards covering, among other
things, particulate and gaseous stack emission limitations, the discharge of
effluents (including heated cooling water) into lakes and streams and the
handling and disposal of waste material.

Air.During 1997 and 1998, the EPA issued ozone transport regulations and
final new air quality standards relating to ozone and particulate air
pollution. The new rules will lead to additional controls on fossil-fueled
power plants to reduce nitrogen oxides, sulfur dioxide, carbon dioxide and
particulate emissions. See Item 7  Environmental Matters for further
discussion.

Water.Detroit Edison is required to demonstrate that the cooling water
intake structures at all of its facilities reflect the best technology
available for minimizing adverse environmental impact. Detroit Edison filed
such demonstrations and the MDEQ Staff accepted all of them except those
relating to the St. Clair and Monroe Power Plants for which it requested
further information. Detroit Edison subsequently submitted the information.
In the event of a final adverse decision, Detroit Edison may be required to
install additional control technologies to further minimize the impact.

Wastes and Toxic Substances.The Michigan Solid Waste and Hazardous Waste
Management Acts, the Michigan Environmental Response Act, the Federal Resource
Conservation and Recovery Act, Toxic Substances Control Act, and the Federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980
regulate Detroit Edisons handling, storage and disposal of its waste
materials.

The EPA and the MDEQ have aggressive programs regarding the clean-up of
contaminated property. Detroit Edison has extensive land holdings and, from
time to time, must investigate claims of improperly disposed of contaminants.
Detroit Edison anticipates that it will be periodically included in these types
of environmental proceedings.

Conners Creek.The Conners Creek Power Plant was in reserve status from
1988 to 1998. In April, 1998 the MPSC issued an order granting Detroit
Edisons request to waive competitive bidding for Conners Creek and restart the
plant. Although Detroit Edison believed that the plant complied with all
applicable environmental requirements, the Michigan Department of Natural
Resources and the Wayne County Air Quality Management Division issued notices
of violation contending that Detroit Edison was required to obtain a series of
new permits prior to plant operation. Subsequently the EPA issued a similar
notice of violation.

In August 1998, Detroit Edison filed suit seeking a review of determinations
asserted by the state and local agencies that Detroit Edisons activities in
reactivating the Conners Creek power plant were in violation of certain
environmental regulations.

10



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In January 1999, the Department of Justice (DOJ) on behalf of the EPA sent
Detroit Edison a Demand Letter requiring the payment of $2.3 million in civil
penalties and an unconditional
commitment to abandon the use of the facility as a coal plant. Detroit Edison
rejected the DOJ/EPA demand and the DOJ/EPA filed suit. In March 1999, the
United States District Court for the Eastern District of Michigan issued an
Interim Remedial Order which allowed the company to convert the plant and
operate it as a gas-fired facility. This was accomplished in time for the
Conners Creek Power Plant to help meet record electricity demand in the summer
of 1999. Detroit Edison is presently trying to resolve the remaining
outstanding issues through settlement discussions. It is impossible to predict
what impact, if any, the outcome of this will have upon Detroit Edison.

Non-Regulated

The Companys non-regulated affiliates are subject to a number of
environmental laws and regulations dealing with the protection of the
environment from various pollutants. These non-regulated affiliates are in
substantial compliance with all environmental requirements.

Executive Officers of the Registrant

|                       |  |        |    |                  |  |                                                                                                                               |  |         
|---------------------- |  | ------ | -- | ---------------- |  | ----------------------------------------------------------------------------------------------------------------------------- |  | --------
|                       |  |        |    |                  |  |                                                                                                                               |  | Present 
|                       |  |        |    |                  |  |                                                                                                                               |  | Position
|Name                   |  | Age(a) |    | Present Position |  | Held Since                                                                                                                   
|                       |  |        |    |                  |  |                                                                                                                              
|Anthony F. Earley, Jr. |  |        | 50 |                  |  | Chairman of the Board, Chief Executive Officer,
President, Chief Operating Officer, and Member
of the Office of the President |  | 8-1-98  
|                      
|                      
|                      
|                      
|Larry G. Garberding    |  |        | 61 |                  |  | Executive Vice President and Chief Financial Officer
Member of the Office of the President since
December 1998                |  | 1-26-95 
|                      
|                      
|                      
|                      
|Gerard M. Anderson     |  |        | 41 |                  |  | President and Chief Operating Officer  DTE Energy
Resources, and Member of the Office of
the President                       |  | 8-1-98  
|                      
|                      
|                      
|                      
|Robert J. Buckler      |  |        | 50 |                  |  | President and Chief Operating Officer  DTE Energy
Distribution, and Member of the Office of
the President                    |  | 8-1-98  
|                      
|                      
|                      
|                      
|Michael E. Champley    |  |        | 51 |                  |  | Senior Vice President                                                                                                         |  | 4-1-97  
|                      
|                      
|                      
|                      
|S. Martin Taylor       |  |        | 59 |                  |  | Senior Vice President                                                                                                         |  | 4-28-99 
|                      
|                      
|                      
|                      
|Susan M. Beale         |  |        | 51 |                  |  | Vice President and Corporate Secretary                                                                                        |  | 12-11-95
|                      
|                      
|                      
|                      
|Leslie L. Loomans      |  |        | 56 |                  |  | Vice President and Treasurer                                                                                                  |  | 1-26-95 
|                      
|                      
|                      
|                      
|David E. Meador        |  |        | 42 |                  |  | Vice President                                                                                                                |  | 4-28-99 
|                      
|                      
|                      
|                      
|Christopher C. Nern    |  |        | 55 |                  |  | Vice President and General Counsel                                                                                            |  | 1-26-95 

(a) As of December 31, 1999

---

Under the Companys By-Laws, the officers of the Company are elected
annually by the Board of Directors at a meeting held for such purpose, each to
serve until the next annual meeting of directors or until their respective
successors are chosen and qualified.

11



---



Pursuant to Article VI of the Companys Articles of Incorporation,
directors of the Company will not be personally liable to the Company or its
shareholders in the performance of their duties to the full extent permitted by
law.

Article VII of the Companys Articles of Incorporation provides that each
person who is or was or had agreed to become a director or officer of the
Company, or each such person who is or was serving or who had agreed to serve
at the request of the Board of Directors as an employee or agent of the Company
or as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise (including the heirs,
executors, administrators or estate of such person), shall be indemnified by
the Company to the full extent permitted by the Michigan Business Corporation
Act or any other applicable laws as presently or hereafter in effect. In
addition, the Company has entered into indemnification agreements with all of
its officers and directors, which agreements set forth procedures for claims
for indemnification as well as contractually obligating the Company to provide
indemnification to the maximum extent permissible by law.

The Company and its directors and officers in their capacities as such are
insured against liability for alleged wrongful acts (to the extent defined)
under three insurance policies providing aggregate coverage in the amount of
$100 million.

Other Information.Pursuant to the provisions of the Companys By-Laws,
the Board of Directors has by resolution set the number of directors comprising
the full Board at 12.

The MCN merger agreement provides that at the completion of the merger,
the Company will promptly increase the size of its board of directors or
exercise its best efforts to secure the resignation of its present directors in
order to cause Mr. Alfred R. Glancy III and two additional persons selected by
MCN after consultation with the Company from among MCNs directors as of the
date of the merger agreement to be appointed to the Companys board of
directors.

After the merger, Stephen E.
Ewing, currently President and Chief Operating Officer of MCN, is expected to be added as a Member of
the Office of the President.

12



---









Item 2  Properties.

Detroit Edison

The summer net rated capability of Detroit Edisons generating units is as
follows:

|                                               |  |             |  |                          |        |            |  |  |       |   |  |                          
|---------------------------------------------- |  | ----------- |  | ------------------------ | ------ | ---------- |  |  | ----- | - |  | -------------------------
|                                               |  | Location By
|                                               |  | Michigan    |  | Summer Net               |        | Year      
|Plant Name                                     |  | County      |  | Rated Capability (1) (2) |        | in Service
|                                               |  |             |  |                          |        |           
|                                               |  |             |  | (MW)                    
|Fossil-fueled Steam-Electric                   |  |             |  |                          |        |            |  |  |       |   |  |                          
|                                              
|                                              
|                                              
|                                              
|Belle River (3)                                |  | St. Clair   |  |                          | 1,026  |            |  |  | 9.3   | % |  | 1984 and 1985            
|Conners Creek                                  |  | Wayne       |  |                          | 167    |            |  |  | 1.5   |   |  | 1999                     
|                                              
|                                              
|                                              
|                                              
|Greenwood                                      |  | St. Clair   |  |                          | 785    |            |  |  | 7.1   |   |  | 1979                     
|                                              
|                                              
|                                              
|                                              
|Harbor Beach                                   |  | Huron       |  |                          | 103    |            |  |  | 0.9   |   |  | 1968                     
|                                              
|                                              
|                                              
|                                              
|Marysville                                     |  | St. Clair   |  |                          | 167    |            |  |  | 1.5   |   |  | 1930, 1943 and 1947      
|                                              
|                                              
|                                              
|                                              
|Monroe (4)                                     |  | Monroe      |  |                          | 3,000  |            |  |  | 27.3  |   |  | 1971, 1973 and 1974      
|                                              
|                                              
|                                              
|                                              
|River Rouge                                    |  | Wayne       |  |                          | 510    |            |  |  | 4.6   |   |  | 1957 and 1958            
|                                              
|                                              
|                                              
|                                              
|St. Clair                                      |  | St. Clair   |  |                          | 1,402  |            |  |  | 12.8  |   |  | 1953, 1954, 1961 and 1969
|                                              
|                                              
|                                              
|                                              
|Trenton Channel                                |  | Wayne       |  |                          | 725    |            |  |  | 6.6   |   |  | 1949, 1950 and 1968      
|                                               |  |             |  |                          |        |            |  |  |       |  
|                                               |  |             |  |                          | 7,885  |            |  |  | 71.6  | %
|                                              
|                                              
|                                              
|                                              
|Oil or Gas-fueled Peaking
    Units            |  | Various     |  |                          | 1,102  |            |  |  | 10.0  |   |  | 1966-1971, 1981 and 1999 
|                                              
|                                              
|                                              
|                                              
|Nuclear-fueled Steam-Electric
    Fermi 2 (5)  |  | Monroe      |  |                          | 1,101  |            |  |  | 10.0  |   |  | 1988                     
|                                              
|                                              
|                                              
|                                              
|Hydroelectric Pumped Storage
    Ludington (6) |  | Mason       |  |                          | 917    |            |  |  | 8.4   |   |  | 1973                     
|                                               |  |             |  |                          |        |            |  |  |       |  
|                                               |  |             |  |                          | 11,005 |            |  |  | 100.0 | %
|                                               |  |             |  |                          |        |            |  |  |       |  



|(1) |  | Summer net rated capabilities of generating units in service are based on
periodic load tests and are changed depending on operating experience, the
physical condition of units, environmental control limitations and
customer requirements for steam, which otherwise would be used for
electric generation.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Excludes two oil-fueled units, River Rouge Unit No. 1 (206 MW) and St. Clair Unit No. 5 (250 MW), in
economy reserve status.                                                                                                                                                                                   
|   
|(3) |  | The Belle River capability represents Detroit Edisons entitlement to 81.39% of the capacity and energy of
the plant. See Note 5.                                                                                                                                                                              
|   
|(4) |  | The Monroe Power Plant provided 33.7% of Detroit Edisons total 1999 power plant generation.                                                                                                                                                                                                                   
|   
|(5) |  | Fermi 2 has a design electrical rating (net) of 1,150 MW.                                                                                                                                                                                                                                                      
|   
|(6) |  | Represents Detroit Edisons 49% interest in Ludington with a total
capability of 1,872 MW. Detroit Edison is leasing 306 MW to First Energy
for the six-year period June 1, 1996 through May 31, 2002.                                                                                                         

---

Detroit Edison and Consumers are parties to an Electric Coordination
Agreement providing for emergency assistance, coordination of operations and
planning for bulk power supply, with energy interchanged at nine
interconnections. Detroit Edison and Consumers also have interchange agreements
to exchange electric energy through 12 interconnections with FirstEnergy,
Indiana Michigan Power Company, Northern Indiana Public Service Company and
Ontario Hydro. In addition, Detroit Edison has interchange

13



---



agreements for the exchange of
electric energy with Michigan South Central Power Agency, Rouge Steel Company
and the City of Wyandotte.

Detroit Edison also purchases energy from cogeneration facilities and
other small power producers. Energy purchased from cogeneration facilities and
small power producers amounted to $34 million, $31 million and $31 million for
1999, 1998 and 1997, respectively, and is currently estimated at $43 million
for 2000.

Detroit Edisons electric generating plants are interconnected by a
transmission system operating at up to 345 kilovolts through 37 transmission
stations. As of December 31, 1999, electric energy was being distributed in
Detroit Edisons service area through 616 substations over 3,682 distribution
circuits.

Because Detroit Edison must currently import power to meet peak loads in
the summer, transmission capacity is a necessary requirement to serve customers
reliably during peak load periods. As a result of certain transmission
procedures, there continues to be uncertainty surrounding the ability of
Detroit Edison to import power reliably into Michigan. To relieve this
uncertainty, additional efforts to secure firm transmission rights continue to
be necessary, as well as additional in-state generating capability.

Detroit Edison acquired significant additional commitments in 1999 from
other utilities, and modified operating practices to provide flexibility to
respond to increasing uncertainties of load and market conditions. Detroit
Edison also added 550 MW of gas-fired combustion turbine peakers, and completed
the conversion of the Conners Creek Plant to natural gas fuel.

Non-Regulated

Non-regulated property primarily consists of a coke oven battery facility
and a coal processing facility located in River Rouge, Michigan, and a coke
oven battery facility in Burns Harbor, Indiana, along with 22 landfill gas
projects located throughout the United States.







Item 3  Legal Proceedings.

Detroit Edison, in the ordinary course of its business, is involved in a
number of suits and controversies including claims for personal injuries and
property damage and matters involving zoning ordinances and other regulatory
matters. As of December 31, 1999, Detroit Edison was named as defendant in 164
lawsuits involving claims for personal injuries and property damage and had
been advised of 29 other potential claims not evidenced by lawsuits.

From time to time, Detroit Edison has paid nominal penalties which were
administratively assessed by the United States Coast Guard, United States
Department of Transportation under the Federal Water Pollution Control Act, as
amended, with respect to minor accidental oil spills at Detroit Edisons power plants into
navigable waters

14



---



of the United States. Payment of such penalties represents
full disposition of these matters.

See Note 12  Commitments and Contingencies and Environmental Matters,
Detroit Edison, Conners Creek herein for additional information.

15



---






Item 4  Submission of Matters to a Vote of Security Holders.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) At a special meeting of the holders of Common Stock of the Company
held on December 20, 1999, a proposal to approve the issuance of shares
of common stock, without par value, of the Company pursuant to the
Agreement and Plan of Merger, dated as of October 4, 1999, as amended,
among the Company, MCN, and DTE Enterprises, Inc., a wholly owned
subsidiary of the Company, pursuant to which MCN will be merged with
and into DTE Enterprises and will become a wholly owned subsidiary of
the Company was ratified with the votes shown:

|           |  |         |           |         |  |  |           | 
|---------- |  | ------- | --------- | ------- |  |  | --------- | 
|For        |  | Against |           | Abstain
|           |  |         |           |        
|99,767,427 |  |         | 4,621,731 |         |  |  | 1,671,678 | 

PART II




Item 5  Market for Registrants Common Equity and Related Stockholder Matters.

The Companys Common Stock is listed on the New York Stock Exchange, which
is the principal market for such stock, and the Chicago Stock Exchange. The
following table indicates the reported high and low sales prices of the
Companys Common Stock on the Composite Tape of the New York Stock Exchange and
dividends paid per share for each quarterly period during the past two years:

|                 |  |                           |  |                                |  |                                 |  |           |                         | 
|---------------- |  | ------------------------- |  | ------------------------------ |  | ------------------------------- |  | --------- | ----------------------- | 
|                 |  |                           |  |                                |  |                                 |  | Dividends
|                 |  |                           |  | Price Range                    |  | Paid                           
|                 |  |                           |  |                                |  |                                
|Calendar Quarter |  | High                      |  | Low                            |  | Per Share                      
|                 |  |                           |  |                                |  |                                
|1998             |  | First
Second
Third
Fourth |  | 39-5/8
42
45-5/16
49-1/4       |  | 33-1/2
37-11/16
39-3/16
41-7/16 |  | $         | 0.515
0.515
0.515
0.515 | 
|                
|                
|                
|                
|1999             |  | First
Second
Third
Fourth |  | 43-3/4
44-11/16
41-7/8
37-5/16 |  | 37-15/16
38-1/4
35-3/16
31-1/16 |  | $         | 0.515
0.515
0.515
0.515 | 

At December 31, 1999, there were 145,041,324 shares of the Companys
Common Stock outstanding. These shares were held by a total of 103,858
shareholders of record.

The Companys By-Laws provide that Chapter 7B of the Michigan Business
Corporation Act (Act) does not apply to the Company. The Act regulates
shareholder rights when an individuals stock ownership reaches at least 20
percent of a Michigan corporations outstanding shares. A shareholder seeking
control of the Company cannot require the Companys Board of Directors to call
a meeting to vote on issues related to

16



---



corporate control within 10 days, as
stipulated by the Act. See Note 7  Shareholders
Equity for additional information, including information concerning the Rights
Agreement, dated as of September 23, 1997.

The amount of future dividends will depend on the Companys earnings,
financial condition and other factors, including the effects of utility
restructuring and the transition to competition, each of which is periodically
reviewed by the Companys Board of Directors and the successful completion of
the pending merger with MCN.

Pursuant to Article I, Section 8. (c) and Article II, Section 3.(c) of the
Companys By-laws, as amended through May 1, 1999, notice is given that the
2001 Annual Meeting of the Companys Common Shareholders will be held on
Wednesday, April 25, 2001.




Item 6  Selected Financial Data.

|                                              |                                                                                                                 |   |       |        |      |   |                                      |        |      |   |       |        |  |   |       |        |  |   |       |        | 
|--------------------------------------------- | --------------------------------------------------------------------------------------------------------------- | - | ----- | ------ | ---- | - | ------------------------------------ | ------ | ---- | - | ----- | ------ |  | - | ----- | ------ |  | - | ----- | ------ | 
|                                              |                                                                                                                 |   |       |        |      |   | Year Ended December 31              
|                                              |                                                                                                                 |   |      
|                                              |                                                                                                                 |   | 1999  |        | 1998 |   | 1997                                 |        | 1996 |   | 1995 
|                                              |                                                                                                                 |   |       |        |      |   |                                      |        |      |   |      
|                                              |                                                                                                                 |   |       |        |      |   | (Millions, except per share amounts)
|Operating Revenues                            |                                                                                                                 | $ | 4,728 |        |      | $ | 4,221                                |        |      | $ | 3,764 |        |  | $ | 3,645 |        |  | $ | 3,636 |       
|                                             
|                                             
|                                             
|                                             
|Net Income                                    |                                                                                                                 | $ | 483   |        |      | $ | 443                                  |        |      | $ | 417   |        |  | $ | 309   |        |  | $ | 406   |       
|                                             
|                                             
|                                             
|                                             
|Earnings Per Common Share  Basic
and Diluted |                                                                                                                 | $ | 3.33  |        |      | $ | 3.05                                 |        |      | $ | 2.88  |        |  | $ | 2.13  |        |  | $ | 2.80  |       
|                                             
|                                             
|                                             
|                                             
|Dividends Declared Per
Share of Common Stock  |                                                                                                                 | $ | 2.06  |        |      | $ | 2.06                                 |        |      | $ | 2.06  |        |  | $ | 2.06  |        |  | $ | 2.06  |       
|                                             
|                                             
|                                             
|                                             
|At year end:                                 
|                                             
|                                             
|                                             
|                                             
|                                              | Total Assets                                                                                                    |   | $     | 12,316 |      |   | $                                    | 12,088 |      |   | $     | 11,223 |  |   | $     | 11,015 |  |   | $     | 11,131 | 
|                                             
|                                             
|                                             
|                                             
|                                              | Long-Term Debt Obligations
(including capital leases) and
Redeemable Preferred and
Preference Stock Outstanding |   | $     | 4,052  |      |   | $                                    | 4,323  |      |   | $     | 4,058  |  |   | $     | 4,038  |  |   | $     | 4,004  | 

17



---



Item 7 - Managements Discussion and Analysis of
Financial Condition and Results of Operations.

GROWTH

To sustain long-term earnings growth of 6% annually, DTE Energy Company
(Company) has developed a business strategy focused on its core competencies,
consisting of expertise in developing, managing and operating energy assets,
including coal sourcing, blending and transportation skills. As part of this
strategy, it was expected that one new line of business would be developed in
1999 through acquisition or start-up.

As discussed in Note 2, the Company and MCN Energy Group Inc. (MCN) have
entered into a merger agreement. Subject to the receipt of all regulatory
approvals, and the satisfaction of other agreed upon conditions, the merger is
expected to be completed in the first half of 2000. The Company expects that
completion of the merger will result in the issuance of approximately 30
million additional shares of its common stock and approximately $1.4 billion in
external financing. The merger is expected to create a fully integrated
electric and natural gas company that would be able to achieve an average of
$60 million in after-tax cost savings per year during the first 10 years of the
merger due to anticipated cost reductions. This business combination is also
expected to be accretive by $0.05 to the Companys earnings per share for the
year 2001, and is expected to strongly support the Companys commitment to a
long-term earnings growth rate of 6%. The merger is expected to permit the
Company to be responsive to competitive pressures. The external financing
needs of the merger may create a sensitivity to interest rate changes; and the
Company will need to successfully integrate the two operations in order to be
able to service the expected debt requirements and achieve aggregate operating
cost reductions.

The Company is building a portfolio of growth businesses that leverage its
skills and build upon key customer relationships. These growth businesses
include on-site energy projects and services, coal transportation and
processing, and energy marketing and trading. These businesses contributed $69
million to Company earnings in 1999; the earnings contribution is expected to
increase in the future.

The Companys long-term growth strategy recognizes the fact that competition,
new technologies and environmental concerns will have a significant impact on
reshaping the electric utility industry. As a result, the Company is investing
in new energy-related technologies such as distributed generation, including
fuel cells, and renewable sources of energy.

The Company believes that its financial and technological resources, experience
in the energy field and strategic growth plan position it well to compete in
the changing energy markets, as competition is introduced in Michigan and
across the United States.

18



---



ELECTRIC INDUSTRY RESTRUCTURING

The Detroit Edison Company (Detroit Edison), the principal operating subsidiary
of the Company, is subject to regulation by the Michigan Public Service
Commission (MPSC) and the Federal Energy Regulatory Commission (FERC).
Michigan legislators and regulators have focused on competition and Electric
Choice in the Michigan electric public utility industry. Electric Choice would
give all retail customers the opportunity to access competitive generation
resources. The MPSC is committed to opening the electric generation market in
Michigan to competition and as a result has issued several Orders relating to
restructuring and competition.

Various bills have been introduced and proposed for introduction at the federal
level and in the Michigan Legislature addressing competition in the electric
markets. The Company and Detroit Edison are reviewing these bills and continue
to work with the parties involved to develop proposals that are fair for the
Company and its shareholders. While the impacts of the adoption and
implementation of one or more of these legislative proposals are unknown, they
may include generation divestiture, securitization, and possible reductions in
earnings. In the meantime, Detroit Edison is voluntarily proceeding with the
implementation of Electric Choice as provided for in MPSC Orders and pursuing
the recovery of stranded costs.

Michigan Public Service Commission

Background

Details on restructuring the electric generation market began to emerge in 1996
with the issuance of a MPSC Staff Report on Electric Industry Restructuring.
MPSC Orders issued since that time have stated that Michigan utilities should
recover stranded costs during a transition period ending December 31, 2007.

Restructuring Orders

MPSC Orders issued in 1997 facilitated restructuring, but left several issues
unresolved. Due to the uncertainty regarding the future price of electricity,
the MPSC indicated a true-up mechanism should be established to ensure that
Detroit Edison did not over-recover its stranded costs. The MPSC also
established that during the transition period, affiliates of out-of-state
utilities could not be alternative suppliers without reciprocal arrangements,
but unaffiliated marketers could be an alternative supplier without providing
reciprocal service in another service territory.

MPSC Orders issued in 1998 identified a phased-in approach to restructuring,
whereby Detroit Edison would implement Electric Choice in 225 megawatt (MW)
blocks of power through the transition period, with 1,125 MW, or approximately
12.5% of total load, made available at the end of the transition period, with
all remaining load available for direct access on January 1, 2002. Detroit
Edison has received MPSC approval of accelerated amortization of the Fermi 2
nuclear plant. As discussed in Note 3, the December 28, 1998 MPSC Order, while
granting Detroit Edisons request, imposed several conditions for the recovery
of Fermi 2 costs.

19



---



In March 1999, Detroit Edison filed an application with the MPSC for a review
of its stranded costs, including Electric Choice implementation costs. MPSC
staff and intervenors have made filings in opposition to certain of Detroit
Edisons proposals for the recovery of stranded costs. A final order is not
expected before the end of the first quarter of 2000. While uncertainties
exist regarding the ultimate amount of costs to be recovered, including
potential disallowances for the recovery of recorded regulatory assets,
recovery of costs to be incurred to implement Electric Choice, and recovery of
other stranded costs, the MPSC has ruled that stranded costs are recoverable.

In July 1999, the Association of Businesses Advocating Tariff Equity (ABATE)
made a filing with the MPSC indicating that Detroit Edisons retail rates
produce approximately $333 million of excess revenues. Of this amount,
approximately $202 million is related to ABATEs proposed reversal of the
December 28, 1998 MPSC Order authorizing the accelerated amortization of Fermi
2. Detroit Edison supports a revenue deficiency of $33 million. The MPSC
staff concluded that no revenue sufficiency exists when Detroit Edisons
pending required review of its depreciation rates is taken into account.
Detroit Edison requested an increase of $66 million in annual depreciation
expense with no corresponding increase in rates. The Michigan Attorney General
proposes the reversal of the December 28, 1998 Fermi 2 Amortization Order. A
final MPSC order is not expected until the end of the first quarter of 2000.
Detroit Edison is unable to predict the outcome of this proceeding.

Electric Choice

On June 29, 1999, the Michigan Supreme Court, on a 4-3 vote, issued an opinion
determining that the MPSC lacked authority to order experimental retail
wheeling in the context of an Electric Choice program. The court reversed an
earlier Michigan Court of Appeals opinion finding such authority and vacated
two MPSC orders directing implementation of the experimental program. The
court held that the MPSC possesses no common law powers and may only exercise
authority clearly conferred upon it by the Legislature. It stated that retail
wheeling issues involve many policy concerns and stated that the Legislature,
not the court, is the body that must consider and weigh the economic and social
costs, and benefits of electric restructuring.

In September 1999, Detroit Edison filed a letter with the MPSC reaffirming the
decision to expeditiously move ahead with the voluntary implementation of
Electric Choice. In September 1999, the bidding on 225 MW was fully subscribed.
The second and third bid periods that ended in November 1999 and January 2000,
respectively, were also fully subscribed. Two additional bidding phases are
contemplated, with 225 MW each closing in March and November 2000.

The Electric Choice Program began in December 1999, when Detroit Edison
delivered energy from an alternate supplier in the 90 MW portion of the
program. However, several technical issues still remain to be resolved before
Electric Choice can be fully implemented. Detroit Edison has spent
approximately $29 million through December 31, 1999 and estimates that
expenditures of up to $120 million may be required through 2001 to fully
implement the program, and is currently deferring the costs as a regulatory
asset.

20



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Detroit Edison anticipates that Electric Choice will result in a decrease in
annual sales as well as a decrease in peak demand over the next five years.
These decreases are not expected to have a
significant impact on the Companys net income due to the opportunity for
non-regulated sales outside of Detroit Edisons service territory.

Federal Energy Regulatory Commission

Detroit Edison is regulated at the federal level by the FERC with respect to
accounting, sales for resale in interstate commerce, certain transmission
services, issuances of securities, licensing of hydro and pumping stations and
other matters. The FERC, as a policy matter, believes that transmission should
be made available on a non-discriminatory basis.

In a Final Rule issued in December 1999, the FERC required that all public
utilities that own, operate or control interstate transmission file by October
15, 2000, a proposal for a Regional Transmission Organization (RTO) or,
alternatively, a description of any efforts made by the utility to participate
in an existing RTO or the reasons for not participating and any obstacles to
such participation, and any plans for further work toward participation. Any
proposed RTO is to be operational by December 15, 2001. The FERC said it wants
RTOs in place nationwide to facilitate the development of an open and more
competitive market in bulk power sales of electricity. A public utility that
is a member of an existing transmission entity that conforms to Independent
System Operator (ISO) principles identified by the FERC would have until
January 15, 2001 to explain the extent to which the organization meets the
minimum standards for a RTO.

In June 1999, Detroit Edison, along with Consumers Energy Co., the American
Electric Power Service Corp., FirstEnergy Corp., and Virginia Electric and
Power Co., filed applications with FERC requesting approval of the Alliance RTO
(Alliance). If approved by the FERC, the Alliance would operate over 43,000
miles of transmission lines in nine states. The Alliance companies hope to
have the RTO begin operations in about 12 to 18 months after FERC approval.

The Alliance indicated it will ensure independent and nondiscriminatory
operation of the regional grid, and provide flexibility to current and
potential future members to allow them to divest their transmission assets if
they so desire. The Alliance indicated that a separate for-profit transmission
company, or transco, is a possible end-state and could be an attractive
business model for independent management of transmission assets.

On December 20, 1999, the FERC issued an order conditionally approving the
Alliance proposal, but indicated that certain elements needed modification or
further development. The FERC also indicated that it would address the
proposed tariff in a future order, but indicated in this order that the
existing tariff included inappropriate multiple rates unacceptable to the FERC.
It also indicated concerns with the governance structure and the regional
configuration, believing that it may have created a potential barrier to
east-west power transactions.

21



---



The FERC directed the Alliance to make a compliance filing, but did not include
a deadline for this filing.

LIQUIDITY AND CAPITAL RESOURCES

Cash From Operating Activities

Net cash from operating activities, which is the Companys primary source of
liquidity, was $1,097 million in 1999, $834 million in 1998 and $905 million in
1997. Net cash from operating activities increased in 1999 due primarily to
higher net income and non-cash items and lower cash used for current assets and
liabilities. Net cash from operating activities decreased in 1998 compared to
1997 due primarily to increased accounts receivable and other non-cash items.

Cash Used for Investing Activities

Net cash used for investing activities was lower in 1999 due to lower
investments in non-regulated businesses partially offset by increased plant and
equipment expenditures by Detroit Edison. Net cash used for investing
activities was higher in 1998 due to increased plant and equipment expenditures
and non-regulated investments in coke oven batteries.

Cash requirements for 1999 Detroit Edison capital expenditures were $638
million. Detroit Edisons cash requirements for capital expenditures are
expected to be approximately $2.5 billion for the period 2000 through 2004, and
are expected to be financed from operating cash flows.

Cash requirements for 1999 non-regulated investments and capital expenditures
were $130 million. Excluding the effects of the planned merger with MCN, cash
requirements for non-regulated investments and capital expenditures are
expected to be approximately $1.1 billion for the period 2000 through 2004.
Significant non-regulated investments are expected to be externally financed.

In February 2000, the Companys board of directors authorized the repurchase of
up to 10 million common shares. Stock purchases will be made from time to time
on the open market or through negotiated transactions. The current programs
timeframe will depend on market conditions and is tentatively set to not exceed
$100 million. Consistent with prior Company commitments to repurchase shares
when funds were available, the Company has reduced its 2000 capital commitment
by $100 million.

Cash (Used for) From Financing Activities

Net cash used for Company financing activities was $426 million in 1999 due to
higher redemptions and reduced issuances of long-term debt.

Net cash from Company financing activities was higher in 1998 due to increases
in long- and short-term borrowings, partially offset by redemptions of
preferred stock and long-term debt.

22



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The following securities were issued and redeemed in 1999:

|                      |                                       |                                                 |     |   
|--------------------- | ------------------------------------- | ----------------------------------------------- | --- | --
|Securities Issued     |                                       | (Millions)                                     
|                     
|                     
|                     
|                     
|Mortgage Bonds       
|                      |                                       | 1999 Series A 5.55% issued in September         |     | $ 
|                     
|                     
|                     
|                     
|                      |                                       | 1999 Series B 4.7% (variable) issued in August  |     |   
|                     
|                     
|                     
|                     
|                      |                                       | 1999 Series C 4.73% issued in September         |     |   
|                     
|                     
|                     
|                     
|                      |                                       | 1999 Series D floating rate issued in August    |     |   
|                      |                                       |                                                 |     |   
|Total Issued          |                                       | $                                               | 265 |   
|                      |                                       |                                                 |     |   
|Securities Redeemed  
|Mandatory Redemptions
|                      | Mortgage Bonds                       
|                      |                                       | 1990 Series A, B, C 7.9%-8.4% redeemed in March |     | $ 
|                     
|                     
|                     
|                     
|                      |                                       | 1993 Series D 6.45% redeemed in April           |     |   
|                     
|                     
|                     
|                     
|                      |                                       | 1993 Series B 6.83% redeemed in December        |     |   
|                     
|                     
|                     
|                     
|                      |                                       | 1993 Series E 6.83% redeemed in December        |     |   
|                     
|                     
|                     
|                     
|                      | Non-Recourse Debt                     |                                                 |     | 80
|                     
|                     
|                     
|                     
|Early Redemptions    
|                      | Mortgage Bonds                       
|                      |                                       | Series KKP 7.3% - 7.5% redeemed in September    |     |   
|                     
|                     
|                     
|                     
|                      |                                       | 1992 Series D 8.3% redeemed in November         |     |   
|                     
|                     
|                     
|                     
|                      |                                       | 1989 Series CC 7.5% redeemed in December        |     |   
|                     
|                     
|                     
|                     
|                      | Unsecured Installment Sales
Contracts
|                      |                                       | Series A 1989 7.75% redeemed in December        |     |   
|                     
|                     
|                     
|                     
|                      |                                       | Series A 1989B 7.875% redeemed in December      |     |   
|                      |                                       |                                                 |    
|Total Redeemed        |                                       | $                                               | 548 |   
|                      |                                       |                                                 |    

YEAR 2000

The Company spent approximately $85 million on the Year 2000 program through
December 31, 1999. Year 2000 modification costs had no material impact on
operating results or cash flows. No significant additional spending is
anticipated since the Company and Detroit Edison experienced no Year 2000
related failures of mission critical systems during the rollover to the new
millennium. Though there can be no assurances that Year 2000 issues can be
totally eliminated, the Company and Detroit Edison anticipate no further impact
on financial position, liquidity or results of operations resulting from Year
2000 issues. In addition, no assurances can be given that the systems of
vendors, interconnected utilities and customers will not result in Year 2000
problems.

23



---



ENVIRONMENTAL MATTERS

Protecting the environment from damage, as well as correcting past
environmental damage, continues to be a focus of state and federal regulators.
Legislation and/or rulemaking could further impact the electric utility
industry including Detroit Edison. The U.S. Environmental Protection Agency
(EPA) and the Michigan Department of Environmental Quality have aggressive
programs regarding the clean-up of
contaminated property. Detroit Edison anticipates that it will be periodically
included in these types of environmental proceedings.

The EPA has issued ozone transport regulations and final new air quality
standards relating to ozone and particulate air pollution. In September 1998,
the EPA issued a State Implementation Plan (SIP) call, giving states a year to
develop new regulations to limit nitrogen oxide emissions because of their
contribution to ozone formation. The EPA draft proposal suggests most emission
reductions should come from utilities. If Michigan follows the EPAs
recommendations, it is estimated that Detroit Edison will incur $300 million of
capital expenditures to comply. Both the ozone transport regulations and the
new air quality standards have been upheld in legal challenges in the U.S.
Court of Appeals. Michigan has proposed regulations to address the ozone
transport issue that would result in capital expenditures of approximately $100
million less than the EPAs recommendations. Until the legal issues are
resolved and the state issues its regulations, it is impossible to predict the
full impact of the SIP call. Detroit Edison is unable to predict what effect,
if any, restructuring of the electric utility industry would have on
recoverability of such environmental costs.

MARKET RISK

Detroit Edison had investments valued at market of $361 million and $309
million in three nuclear decommissioning trust funds at December 31, 1999 and
1998, respectively. At December 31, 1999, these investments consisted of
approximately 37% in fixed debt instruments, 59% in publicly traded equity
securities and 4% in cash equivalents. At December 31, 1998, these investments
consisted of approximately 33% in fixed debt instruments, 63% in publicly
traded equity securities and 4% in cash equivalents. A hypothetical 10%
increase in interest rates and a 10% decrease in equity prices quoted by stock
exchanges would result in an $11 million and $9 million reduction in the fair
value of debt and a $21 million and $20 million reduction in the fair value of
equity securities held by the trusts at December 31, 1999 and 1998,
respectively.

A hypothetical 10% decrease in interest rates would increase the fair value of
long-term debt from $4 billion to $4.5 billion at December 31, 1999 and from
$4.8 billion to $5.3 billion at December 31, 1998.

DTE Energy Trading, Inc. (DTE ET), an indirect wholly owned subsidiary of the
Company, provides price risk management services utilizing energy commodity
derivative instruments. The Company measures the risk inherent in DTE ETs
portfolio utilizing Value at Risk (VaR) analysis and other methodologies, which
simulate forward price curves in electric power markets to quantify estimates
of the magnitude and probability of

24



---



potential future losses related to open
contract positions. The Company reports VaR as a percentage of its earnings,
based on a 95% confidence interval, utilizing 10-day holding periods. At
December 31, 1999 and 1998, DTE ETs VaR from its power marketing and trading
activities was less than 1% of the Companys consolidated Income Before Income
Taxes for the years ended December 31, 1999 and 1998. The VaR model uses the
variance-covariance statistical modeling technique, and implied and historical
volatilities and correlations over the past 20-day period. The estimated
market prices used to value these transactions for VaR purposes reflect the use
of established pricing models and various factors including quotations from
exchanges and over-the-counter markets, price volatility factors, the time
value of money, and location differentials. For further information, see Notes
1 and 11.

RESULTS OF OPERATIONS

Net income for 1999 was up $40 million over 1998 earnings due primarily to
lower income taxes resulting from tax credits generated by non-regulated
businesses and the effects of the end of the Fermi 2 phase-in plan in 1998.

Net income for 1998 was up $26 million over 1997 earnings due to lower income
taxes resulting from tax credits generated by non-regulated businesses.

Operating Revenues

Operating revenue was $4.7 billion, up 12% from 1998 operating revenue of $4.2
billion. Operating revenues increased (decreased) due to the following:

|                                   |                                   |   |                      |     |            |     |      |     |   |     | 
|---------------------------------- | --------------------------------- | - | -------------------- | --- | ---------- | --- | ---- | --- | - | --- | 
|                                   |                                   |   |                      |     | 1999       |     | 1998
|                                   |                                   |   |                      |     |            |     |      |    
|                                   |                                   |   |                      |     | (Millions)
|Detroit Edison
Rate change         |                                   | $ | (25                  | )   |            | $   | (8   | )  
|                                  
|                                  
|                                  
|                                  
|                                   | System sales volume and mix       |   |                      | 151 |            |     |      | 220 |  
|                                  
|                                  
|                                  
|                                  
|                                   | Wholesale sales                   |   |                      | (19 | )          |     |      | 51  |  
|                                  
|                                  
|                                  
|                                  
|                                   | Fermi 2 performance disallowances |   |                      | 34  |            |     |      | (11 | )
|                                  
|                                  
|                                  
|                                  
|                                   | Other  net                       |   |                      | 4   |            |     |      | (7  | )
|                                   |                                   |   |                      |     |            |     |      |    
|                                   |                                   |   | Total Detroit Edison |     |            | 145 |      |     |   | 245 | 
|                                   |                                   |   |                      |     |            |     |      |    
|Non-regulated
DTE Energy Resources |                                   |   | 147                  |     |            |     | 163  |    
|                                  
|                                  
|                                  
|                                  
|                                   | DTE Energy Trading                |   |                      | 209 |            |     |      | 43  |  
|                                  
|                                  
|                                  
|                                  
|                                   | Other  net                       |   |                      | 6   |            |     |      | 6   |  
|                                   |                                   |   |                      |     |            |     |      |    
|                                  
|                                  
|                                  
|                                  
|                                   |                                   |   | Total Non-Regulated  |     |            | 362 |      |     |   | 212 | 
|                                   |                                   |   |                      |     |            |     |      |    
|                                  
|                                  
|                                  
|                                  
|Total                              |                                   | $ | 507                  |     |            | $   | 457  |    
|                                   |                                   |   |                      |     |            |     |      |    

25



---



Detroit Edison kilowatt-hour (kWh) sales for 1999 and the percentage change by year were as follows:

|                                   |              |  |                   |      |      |  |       |     |  |  |      |     | 
|---------------------------------- | ------------ |  | ----------------- | ---- | ---- |  | ----- | --- |  |  | ---- | --- | 
|                                   |              |  | 1999              |      | 1999 |  | 1998 
|                                   |              |  |                   |      |      |  |      
|                                   |              |  | (Billions of kWh)
|                                   |              |  | Sales            
|                                   |              |  |                  
|Residential                        |              |  | 14.1              |      |      |  | 2.3   | %   |  |  | 6.6  | %  
|                                  
|                                  
|                                  
|                                  
|Commercial                         |              |  | 19.5              |      |      |  | 3.4   |     |  |  | 5.0  |    
|                                  
|                                  
|                                  
|                                  
|Industrial                         |              |  | 15.6              |      |      |  | 6.4   |     |  |  | 2.5  |    
|                                  
|                                  
|                                  
|                                  
|Other (primarily sales for resale) |              |  | 2.6               |      |      |  | 10.1  |     |  |  | 27.1 |    
|                                   |              |  |                   |     
|                                   | Total System |  |                   | 51.8 |      |  |       | 4.3 |  |  |      | 5.5 | 
|                                  
|                                  
|                                  
|                                  
|Wholesale sales                    |              |  | 3.7               |      |      |  | (29.5 | )   |  |  | 46.8 |    
|                                   |              |  |                   |     
|                                   | Total        |  |                   | 55.5 |      |  |       | 1.1 |  |  |      | 8.4 | 
|                                   |              |  |                   |     

In 1999, residential sales increased due to more heating demand, increased
usage, and growth in the customer base. Commercial and industrial sales
increased due to favorable economic conditions. In addition, industrial sales
increased due to sales of replacement energy to the Ford Rouge plant.
Wholesale sales decreased due to lower demand for energy and decreased
availability of energy for sale over native load.

In 1998, residential sales increased due to more cooling demand and growth in
the customer base. Commercial sales increased due to more cooling demand and
favorable economic conditions. Industrial sales increased due to higher usage.
Wholesale sales increased due to greater demand for energy and increased
availability of energy for sale.

Non-regulated revenues were higher due to an increased level of operations,
primarily DTE Energy Trading, and the addition of new businesses.

26



---



Operating Expenses

Fuel and Purchased Power

Net system output and average fuel and purchased power unit costs per
megawatthour (MWh) for Detroit Edison were as follows:

|                                     |                 |   |                    |        |      |   |        |        |  |   |        |        | 
|------------------------------------ | --------------- | - | ------------------ | ------ | ---- | - | ------ | ------ |  | - | ------ | ------ | 
|                                     |                 |   | 1999               |        | 1998 |   | 1997  
|                                     |                 |   |                    |        |      |   |       
|                                     |                 |   | (Thousands of MWh)
|Power plant generation               |                 |   |                    |        |      |   |        |        |  |   |        |       
|                                    
|                                    
|                                    
|                                    
|                                     | Fossil          |   |                    | 43,016 |      |   |        | 44,091 |  |   |        | 42,162 | 
|                                    
|                                    
|                                    
|                                    
|                                     | Nuclear         |   |                    | 9,484  |      |   |        | 7,130  |  |   |        | 5,523  | 
|                                    
|                                    
|                                    
|                                    
|Purchased power                      |                 |   | 6,959              |        |      |   | 7,216  |        |  |   | 6,146  |       
|                                     |                 |   |                    |        |      |   |        |        |  |   |        |       
|Net system output                    |                 |   | 59,459             |        |      |   | 58,437 |        |  |   | 53,831 |       
|                                     |                 |   |                    |        |      |   |        |        |  |   |        |       
|Average unit cost ($/MWh)
Generation |                 | $ | 12.51              |        |      | $ | 12.76  |        |  | $ | 12.94  |       
|                                     |                 |   |                    |        |      |   |        |        |  |   |        |       
|                                     | Purchased Power |   | $                  | 54.80  |      |   | $      | 42.26  |  |   | $      | 26.98  | 
|                                     |                 |   |                    |        |      |   |        |        |  |   |        |       

In 1999, fuel and purchased power expense increased due to higher purchased
power unit costs and a 1.7% increase in net system output. The increase was
partially offset by lower fuel unit costs primarily resulting from increased
usage of low-cost nuclear fuel.

In 1998, fuel and purchased power expense increased for Detroit Edison due to
higher purchased power unit costs as a result of price volatility during
periods of unseasonably warm summer weather and an 8.6% increase in system
output. These increases were partially offset by lower unit costs as a result
of increased usage of low-cost nuclear fuel.

In 1999 and 1998, non-regulated purchased power expense increased due to the
operations of DTE Energy Trading.

Operation and Maintenance

In 1999, operation and maintenance expenses increased $192 million. Higher
non-regulated expenses of $162 million were due to an increased level of
operations and the addition of new businesses. Higher Detroit Edison expenses
of $30 million were due to increased system and customer enhancements ($22
million), higher Year 2000 expenses ($10 million), higher employee benefit
costs ($9 million), and generation reliability and maintenance work to address
unplanned outages ($8 million), partially offset by lower storm expense ($19
million).

In 1998, operation and maintenance expenses increased $287 million. Higher
non-regulated subsidiary expenses of $184 million were due to the increased
level of non-regulated operations and the addition of new businesses. Higher
Detroit Edison expenses of $103 million were due to higher Year 2000
expenses ($32 million), the 1997 storm

27



---



expense deferral ($30 million), 1998
storm expense ($21 million), a 1997 insurance recovery ($15 million), 1997
storm amortization ($14 million), and the Conners Creek Power Plant restart
($13 million), partially offset by cost reductions ($22 million).

Depreciation and Amortization

In 1999, depreciation and amortization expense was higher due to higher levels
of plant in service, the accelerated amortization of unamortized nuclear costs,
the adjustment recording one-half of utility earnings in excess of the allowed
11.6% return on equity sharing threshold as additional nuclear cost
amortization, and increased Fermi 2 decommissioning funding due to higher
revenues.

In 1998, depreciation and amortization expense increased due primarily to
increases in property, plant and equipment. These increases were almost
entirely offset by lower Detroit Edison amortization of regulatory assets.

Interest Expense

In 1999, interest expense increased due to the write-off of unamortized bond
issuance expense for early redemption of securities and higher short-term
borrowing costs.

Interest expense increased in 1998 due primarily to the issuance of debt to
finance asset acquisitions of non-regulated subsidiaries and the issuance of
debt to redeem Detroit Edisons preferred stock.

Income Taxes

Income tax expense for the Company decreased in 1999 and 1998 due primarily to
increased utilization of alternate fuel credits generated from non-regulated
businesses. The majority of alternate fuel credits are available through 2002,
while others have been extended through 2007. The end of the Fermi 2 phase-in
plan also contributed to the decrease in income tax expense for 1999.

FORWARD-LOOKING STATEMENTS

Certain information presented herein is based on the expectations of the
Company and Detroit Edison, and, as such, is forward-looking. The Private
Securities Litigation Reform Act of 1995 encourages reporting companies to
provide analyses and estimates of future prospects and also permits reporting
companies to point out that actual results may differ from those anticipated.

Actual results for the Company and Detroit Edison may differ from those
expected due to a number of variables including, but not limited to, interest
rates, the level of borrowings, weather, actual sales, the effects of
competition and the phased-in implementation of Electric Choice, the
implementation of utility restructuring in Michigan (which involves pending and
proposed regulatory and legislative proceedings, the recovery of stranded
costs, and possible reductions in earnings), environmental and nuclear
requirements, the impact of FERC proceedings and regulations, and the success
of non-regulated lines of business. In addition, expected results will be
affected by the Companys pending merger with MCN.

28



---



While the Company and
Detroit Edison believe that estimates given accurately measure the expected
outcome, actual results could vary materially due to the variables mentioned,
as well as others.

29



---









Item 8  Financial Statements and Supplementary Data.

The following consolidated financial statements and schedules are included
herein.

|                                                          |  |     
|--------------------------------------------------------- |  | ----
|                                                          |  | Page
|                                                         
|                                                         
|                                                         
|                                                         
|Independent Auditors Report                              |  | 31  
|                                                         
|                                                         
|                                                         
|                                                         
|DTE Energy Company:                                      
|                                                         
|                                                         
|                                                         
|                                                         
|Consolidated Statement of Income                          |  | 32  
|                                                         
|                                                         
|                                                         
|                                                         
|Consolidated Statement of Cash Flows                      |  | 33  
|                                                         
|                                                         
|                                                         
|                                                         
|Consolidated Balance Sheet                                |  | 34  
|                                                         
|                                                         
|                                                         
|                                                         
|Consolidated Statement of Changes in Shareholders Equity |  | 36  
|                                                         
|                                                         
|                                                         
|                                                         
|The Detroit Edison Company:                              
|                                                         
|                                                         
|                                                         
|                                                         
|Consolidated Statement of Income                          |  | 38  
|                                                         
|                                                         
|                                                         
|                                                         
|Consolidated Statement of Cash Flows                      |  | 39  
|                                                         
|                                                         
|                                                         
|                                                         
|Consolidated Balance Sheet                                |  | 40  
|                                                         
|                                                         
|                                                         
|                                                         
|Consolidated Statement of Changes in Shareholders Equity |  | 42  
|                                                         
|                                                         
|                                                         
|                                                         
|Notes to Consolidated Financial Statements                |  | 43  
|                                                         
|                                                         
|                                                         
|                                                         
|Schedule II  Valuation and Qualifying Accounts           |  | 89  

Note: Detroit Edisons financial statements are presented here for ease of reference
and are not considered to be part of Part II  Item 8 of the Companys report.

30



---



INDEPENDENT AUDITORS REPORT

To the Boards of Directors and Shareholders of
DTE Energy Company and
The Detroit Edison Company

We have audited the consolidated balance sheets of DTE Energy Company and
subsidiaries and of The Detroit Edison Company and subsidiaries (together, the
Companies) as of December 31, 1999 and 1998, and the related consolidated
statements of income, cash flows, and changes in shareholders equity for each
of the three years in the period ended December 31, 1999. Our audits also
included the financial statement schedules listed in the Index at Item 8. These
financial statements and financial statement schedules are the responsibility of
the Companies management. Our responsibility is to express an opinion on the
consolidated financial statements and financial statement schedules based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such consolidated financial statements referred to above
present fairly, in all material respects, the financial position of DTE Energy
Company and subsidiaries and of The Detroit Edison Company and subsidiaries at
December 31, 1999 and 1998, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1999 in
conformity with generally accepted accounting principles. Also, in our
opinion, such financial statement schedules, when considered in relation to the
basic consolidated financial statements of the Companies taken as a whole,
present fairly in all material respects the information set forth therein.

DELOITTE & TOUCHE LLP

Detroit, Michigan
January 26, 2000

31



---



DTE Energy Company
Consolidated Statement of Income
(Millions, Except Per Share Amounts)

|                                              |                                         |                                  |       |                        |       |      |       |       |       |   |       |       |       | 
|--------------------------------------------- | --------------------------------------- | -------------------------------- | ----- | ---------------------- | ----- | ---- | ----- | ----- | ----- | - | ----- | ----- | ----- | 
|                                              |                                         |                                  |       | Year Ended December 31
|                                              |                                         |                                  |       |                       
|                                              |                                         |                                  |       | 1999                   |       | 1998 |       | 1997 
|                                              |                                         |                                  |       |                        |       |      |       |      
|Operating Revenues                            |                                         | $                                | 4,728 |                        |       | $    | 4,221 |       |       | $ | 3,764 |      
|                                              |                                         |                                  |       |                        |       |      |       |       |       |   |       |      
|Operating Expenses                           
|                                             
|                                             
|                                             
|                                             
|                                              | Fuel and purchased power                |                                  |       | 1,335                  |       |      |       | 1,063 |       |   |       | 837   |      
|                                             
|                                             
|                                             
|                                             
|                                              | Operation and maintenance               |                                  |       | 1,480                  |       |      |       | 1,288 |       |   |       | 1,001 |      
|                                             
|                                             
|                                             
|                                             
|                                              | Depreciation and amortization           |                                  |       | 735                    |       |      |       | 661   |       |   |       | 660   |      
|                                             
|                                             
|                                             
|                                             
|                                              | Taxes other than income                 |                                  |       | 277                    |       |      |       | 272   |       |   |       | 265   |      
|                                              |                                         |                                  |       |                        |       |      |       |       |       |   |       |      
|                                              |                                         | Total Operating Expenses         |       |                        | 3,827 |      |       |       | 3,284 |   |       |       | 2,763 | 
|                                              |                                         |                                  |       |                        |       |      |       |       |       |   |       |      
|Operating Income                              |                                         |                                  | 901   |                        |       |      | 937   |       |       |   | 1,001 |      
|                                              |                                         |                                  |       |                        |       |      |       |       |       |   |       |      
|Interest Expense and Other                   
|                                             
|                                             
|                                             
|                                             
|                                              | Interest expense                        |                                  |       | 340                    |       |      |       | 319   |       |   |       | 297   |      
|                                             
|                                             
|                                             
|                                             
|                                              | Preferred stock dividends of subsidiary |                                  |       |                       |       |      |       | 6     |       |   |       | 12    |      
|                                             
|                                             
|                                             
|                                             
|                                              | Other  net                             |                                  |       | 18                     |       |      |       | 15    |       |   |       | 18    |      
|                                              |                                         |                                  |       |                        |       |      |       |       |       |   |       |      
|                                              |                                         | Total Interest Expense and Other |       |                        | 358   |      |       |       | 340   |   |       |       | 327   | 
|                                              |                                         |                                  |       |                        |       |      |       |       |       |   |       |      
|Income Before Income Taxes                    |                                         |                                  | 543   |                        |       |      | 597   |       |       |   | 674   |      
|                                             
|                                             
|                                             
|                                             
|Income Taxes                                  |                                         |                                  | 60    |                        |       |      | 154   |       |       |   | 257   |      
|                                              |                                         |                                  |       |                        |       |      |       |       |       |   |       |      
|Net Income                                    |                                         | $                                | 483   |                        |       | $    | 443   |       |       | $ | 417   |      
|                                              |                                         |                                  |       |                        |       |      |       |       |       |   |       |      
|Average Common Shares Outstanding             |                                         |                                  | 145   |                        |       |      | 145   |       |       |   | 145   |      
|                                              |                                         |                                  |       |                        |       |      |       |       |       |   |       |      
|Earnings per Common Share  Basic and Diluted |                                         | $                                | 3.33  |                        |       | $    | 3.05  |       |       | $ | 2.88  |      
|                                              |                                         |                                  |       |                        |       |      |       |       |       |   |       |      

(See Notes to Consolidated Financial Statements.)

32



---



DTE Energy Company
Consolidated Statement of Cash Flows
(Millions)

|                                                     |                                                                            |                                               |                     |      |                        |     |      |      |      |     |    |      |      |     |  
|---------------------------------------------------- | -------------------------------------------------------------------------- | --------------------------------------------- | ------------------- | ---- | ---------------------- | --- | ---- | ---- | ---- | --- | -- | ---- | ---- | --- | -
|                                                     |                                                                            |                                               |                     |      | Year Ended December 31
|                                                     |                                                                            |                                               |                     |      |                       
|                                                     |                                                                            |                                               |                     |      | 1999                   |     | 1998 |      | 1997
|                                                     |                                                                            |                                               |                     |      |                        |     |      |      |     
|Operating Activities                                
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Net Income                                                                 |                                               | $                   | 483  |                        |     | $    | 443  |      |     | $  | 417  |     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Adjustments to reconcile net income to net cash from operating activities:
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            | Depreciation and amortization                 |                     |      | 735                    |     |      |      | 661  |     |    |      | 660  |    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            | Other                                         |                     |      | (90                    | )   |      |      | (146 | )   |    |      | (75  | )  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            | Changes in current assets and liabilities:   
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            |                                               | Restricted cash     |      |                        | (10 | )    |      |      | (67 | )  |      |      | (54 | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            |                                               | Accounts receivable |      |                        | (94 | )    |      |      | (84 | )  |      |      | (36 | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            |                                               | Inventories         |      |                        | (5  | )    |      |      | (35 | )  |      |      | (39 | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            |                                               | Payables            |      |                        | 30  |      |      |      | 99  |    |      |      | (3  | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            |                                               | Other               |      |                        | 48  |      |      |      | (37 | )  |      |      | 35  |  
|                                                     |                                                                            |                                               |                     |      |                        |     |      |      |      |     |    |      |      |    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            | Net cash from operating activities            |                     |      | 1,097                  |     |      |      | 834  |     |    |      | 905  |    
|                                                     |                                                                            |                                               |                     |      |                        |     |      |      |      |     |    |      |      |     |  
|                                                    
|                                                    
|                                                    
|                                                    
|Investing Activities                                
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Plant and equipment expenditures                                           |                                               |                     | (739 | )                      |     |      | (589 | )    |     |    | (484 | )   
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Investment in non-regulated businesses                                     |                                               |                     | (29  | )                      |     |      | (408 | )    |     |    | (216 | )   
|                                                     |                                                                            |                                               |                     |      |                        |     |      |      |      |     |    |      |      |     |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            | Net cash used for investing activities        |                     |      | (768                   | )   |      |      | (997 | )   |    |      | (700 | )  
|                                                     |                                                                            |                                               |                     |      |                        |     |      |      |      |     |    |      |      |     |  
|                                                    
|                                                    
|                                                    
|                                                    
|Financing Activities                                
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Issuance of long-term debt                                                 |                                               |                     | 265  |                        |     |      | 763  |      |     |    | 250  |     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Increase in short-term borrowings                                          |                                               |                     | 156  |                        |     |      | 189  |      |     |    | 32   |     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Redemption of long-term debt                                               |                                               |                     | (548 | )                      |     |      | (255 | )    |     |    | (196 | )   
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Redemption of preferred stock                                              |                                               |                     |     |                        |     |      | (150 | )    |     |    |     |     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Dividends on common stock                                                  |                                               |                     | (299 | )                      |     |      | (299 | )    |     |    | (299 | )   
|                                                     |                                                                            |                                               |                     |      |                        |     |      |      |      |     |    |      |      |     |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            | Net cash (used for) from financing activities |                     |      | (426                   | )   |      |      | 248  |     |    |      | (213 | )  
|                                                     |                                                                            |                                               |                     |      |                        |     |      |      |      |     |    |      |      |     |  
|                                                    
|                                                    
|                                                    
|                                                    
|Net (Decrease) Increase in Cash and Cash Equivalents |                                                                            |                                               | (97                 | )    |                        |     | 85   |      |      |     | (8 | )   
|                                                    
|                                                    
|                                                    
|                                                    
|Cash and Cash Equivalents at Beginning of the Year   |                                                                            |                                               | 130                 |      |                        |     | 45   |      |      |     | 53 |     
|                                                     |                                                                            |                                               |                     |      |                        |     |      |      |      |     |    |      |      |     |  
|                                                    
|                                                    
|                                                    
|                                                    
|Cash and Cash Equivalents at End of the Year         |                                                                            | $                                             | 33                  |      |                        | $   | 130  |      |      | $   | 45 |     
|                                                     |                                                                            |                                               |                     |      |                        |     |      |      |      |     |    |     
|                                                    
|                                                    
|                                                    
|                                                    
|Supplementary Cash Flow Information                 
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Interest paid (excluding interest capitalized)                             |                                               | $                   | 340  |                        |     | $    | 309  |      |     | $  | 290  |     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Income taxes paid                                                          |                                               |                     | 152  |                        |     |      | 160  |      |     |    | 243  |     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | New capital lease obligations                                              |                                               |                     | 3    |                        |     |      | 52   |      |     |    | 34   |     

(See Notes to Consolidated Financial Statements.)

33



---



DTE Energy Company
Consolidated Balance Sheet
(Millions, Except Per Share Amounts and Shares)

|                                               |                                     |                                                                              |        |             |     |      |        |        |     | 
|---------------------------------------------- | ----------------------------------- | ---------------------------------------------------------------------------- | ------ | ----------- | --- | ---- | ------ | ------ | --- | 
|                                               |                                     |                                                                              |        | December 31
|                                               |                                     |                                                                              |        |            
|                                               |                                     |                                                                              |        | 1999        |     | 1998
|                                               |                                     |                                                                              |        |             |     |     
|ASSETS                                        
|                                              
|                                              
|                                              
|                                              
|Current Assets                                
|                                              
|                                              
|                                              
|                                              
|                                               | Cash and cash equivalents           |                                                                              | $      | 33          |     |      | $      | 130    |    
|                                              
|                                              
|                                              
|                                              
|                                               | Restricted cash                     |                                                                              |        | 131         |     |      |        | 121    |    
|                                              
|                                              
|                                              
|                                              
|                                               | Accounts receivable                
|                                               |                                     | Customer (less allowance for
doubtful accounts of $21 and $20, respectively) |        |             | 388 |      |        |        | 320 | 
|                                              
|                                              
|                                              
|                                              
|                                               |                                     | Accrued unbilled revenues                                                    |        |             | 166 |      |        |        | 153 | 
|                                              
|                                              
|                                              
|                                              
|                                               |                                     | Other                                                                        |        |             | 144 |      |        |        | 131 | 
|                                              
|                                              
|                                              
|                                              
|                                               | Inventories (at average
cost)      
|                                               |                                     | Fuel                                                                         |        |             | 175 |      |        |        | 171 | 
|                                              
|                                              
|                                              
|                                              
|                                               |                                     | Materials and supplies                                                       |        |             | 168 |      |        |        | 167 | 
|                                              
|                                              
|                                              
|                                              
|                                               | Other                               |                                                                              |        | 105         |     |      |        | 39     |    
|                                               |                                     |                                                                              |        |             |     |      |        |       
|                                               |                                     |                                                                              | 1,310  |             |     |      | 1,232  |       
|                                               |                                     |                                                                              |        |             |     |      |        |       
|Investments                                   
|                                              
|                                              
|                                              
|                                              
|                                               | Nuclear decommissioning trust funds |                                                                              |        | 361         |     |      |        | 309    |    
|                                              
|                                              
|                                              
|                                              
|                                               | Other                               |                                                                              |        | 274         |     |      |        | 261    |    
|                                               |                                     |                                                                              |        |             |     |      |        |       
|                                               |                                     |                                                                              | 635    |             |     |      | 570    |       
|                                               |                                     |                                                                              |        |             |     |      |        |       
|Property                                      
|                                              
|                                              
|                                              
|                                              
|                                               | Property, plant and equipment       |                                                                              |        | 11,755      |     |      |        | 11,121 |    
|                                              
|                                              
|                                              
|                                              
|                                               | Property under capital leases       |                                                                              |        | 222         |     |      |        | 242    |    
|                                              
|                                              
|                                              
|                                              
|                                               | Nuclear fuel under capital lease    |                                                                              |        | 663         |     |      |        | 659    |    
|                                              
|                                              
|                                              
|                                              
|                                               | Construction work in progress       |                                                                              |        | 106         |     |      |        | 156    |    
|                                               |                                     |                                                                              |        |             |     |      |        |       
|                                               |                                     |                                                                              | 12,746 |             |     |      | 12,178 |       
|                                               |                                     |                                                                              |        |             |     |      |        |       
|Less accumulated depreciation and amortization |                                     |                                                                              | 5,598  |             |     |      | 5,235  |       
|                                               |                                     |                                                                              |        |             |     |      |        |       
|                                               |                                     |                                                                              | 7,148  |             |     |      | 6,943  |       
|                                               |                                     |                                                                              |        |             |     |      |        |       
|Regulatory Assets                              |                                     |                                                                              | 2,935  |             |     |      | 3,091  |       
|                                               |                                     |                                                                              |        |             |     |      |        |       
|Other Assets                                   |                                     |                                                                              | 288    |             |     |      | 252    |       
|                                               |                                     |                                                                              |        |             |     |      |        |       
|Total Assets                                   |                                     | $                                                                            | 12,316 |             |     | $    | 12,088 |       
|                                               |                                     |                                                                              |        |             |     |      |        |       

(See Notes to Consolidated Financial Statements.)

34



---



|                                                                    |                                                                                                                                  |   |             |       |      |   |        |       | 
|------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------- | - | ----------- | ----- | ---- | - | ------ | ----- | 
|                                                                    |                                                                                                                                  |   | December 31
|                                                                    |                                                                                                                                  |   |            
|                                                                    |                                                                                                                                  |   | 1999        |       | 1998
|                                                                    |                                                                                                                                  |   |             |       |     
|LIABILITIES AND SHAREHOLDERS EQUITY                               
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Current Liabilities                                                
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Accounts payable                                                                                                                 |   | $           | 273   |      |   | $      | 239   | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Accrued interest                                                                                                                 |   |             | 57    |      |   |        | 57    | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Dividends payable                                                                                                                |   |             | 75    |      |   |        | 75    | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Accrued payroll                                                                                                                  |   |             | 97    |      |   |        | 101   | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Short-term borrowings                                                                                                            |   |             | 387   |      |   |        | 231   | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Income taxes                                                                                                                     |   |             | 61    |      |   |        | 69    | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Current portion long-term debt                                                                                                   |   |             | 270   |      |   |        | 294   | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Current portion capital leases                                                                                                   |   |             | 75    |      |   |        | 118   | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Other                                                                                                                            |   |             | 309   |      |   |        | 208   | 
|                                                                    |                                                                                                                                  |   |             |       |      |   |        |      
|                                                                    |                                                                                                                                  |   | 1,604       |       |      |   | 1,392  |      
|                                                                    |                                                                                                                                  |   |             |       |      |   |        |      
|Other Liabilities                                                  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Deferred income taxes                                                                                                            |   |             | 1,925 |      |   |        | 1,888 | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Capital leases                                                                                                                   |   |             | 114   |      |   |        | 126   | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Regulatory liabilities                                                                                                           |   |             | 262   |      |   |        | 294   | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Other                                                                                                                            |   |             | 564   |      |   |        | 493   | 
|                                                                    |                                                                                                                                  |   |             |       |      |   |        |      
|                                                                    |                                                                                                                                  |   | 2,865       |       |      |   | 2,801  |      
|                                                                    |                                                                                                                                  |   |             |       |      |   |        |      
|Long-Term Debt                                                      |                                                                                                                                  |   | 3,938       |       |      |   | 4,197  |      
|                                                                    |                                                                                                                                  |   |             |       |      |   |        |      
|Shareholders Equity                                               
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Common stock, without par value, 400,000,000 shares
authorized, 145,041,324 and 145,071,317 issued
and outstanding, respectively |   |             | 1,950 |      |   |        | 1,951 | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Retained earnings                                                                                                                |   |             | 1,959 |      |   |        | 1,747 | 
|                                                                    |                                                                                                                                  |   |             |       |      |   |        |      
|                                                                    |                                                                                                                                  |   | 3,909       |       |      |   | 3,698  |      
|                                                                    |                                                                                                                                  |   |             |       |      |   |        |      
|Commitments and Contingencies
(Notes 1, 2, 3, 4, 10, 11, 12 and 13)
|Total Liabilities and Shareholders Equity                          |                                                                                                                                  | $ | 12,316      |       |      | $ | 12,088 |      
|                                                                    |                                                                                                                                  |   |             |       |      |   |        |       | 

(See Notes to Consolidated Financial Statements.)

35



---



DTE Energy Company Consolidated Statement of Changes in Shareholders Equity
(Millions, Except Per Share Amounts; Shares in Thousands)

|                                          |                                                      |  |        |         |        |   |        |       |        |  |        |         |        |   |       |       |   |  |  |         |   |   |       |       |  
|----------------------------------------- | ---------------------------------------------------- |  | ------ | ------- | ------ | - | ------ | ----- | ------ |  | ------ | ------- | ------ | - | ----- | ----- | - |  |  | ------- | - | - | ----- | ----- | -
|                                          |                                                      |  | 1999   |         | 1998   |   | 1997  
|                                          |                                                      |  |        |         |        |   |       
|                                          |                                                      |  | Shares |         | Amount |   | Shares |       | Amount |  | Shares |         | Amount
|                                          |                                                      |  |        |         |        |   |        |       |        |  |        |         |       
|Detroit Edison Cumulative Preferred Stock
|                                         
|                                         
|                                         
|                                         
|                                          | Balance at beginning of year                         |  |        |        |        |   | $      |      |        |  |        | 1,501   |        |   | $     | 144   |   |  |  | 1,501   |   |   | $     | 144   |  
|                                         
|                                         
|                                         
|                                         
|                                          | Redemption of Cumulative Preferred Stock             |  |        |        |        |   |        |      |        |  |        | (1,501  | )      |   |       | (150  | ) |  |  |        |   |   |       |      |  
|                                         
|                                         
|                                         
|                                         
|                                          | Preferred stock expense                              |  |        |        |        |   |        |      |        |  |        |        |        |   |       | 6     |   |  |  |        |   |   |       |      |  
|                                          |                                                      |  |        |         |        |   |        |       |        |  |        |         |        |   |       |       |   |  |  |         |   |   |       |      
|                                         
|                                         
|                                         
|                                         
|                                          | Balance at end of year                               |  |        |        |        |   | $      |      |        |  |        |        |        |   | $     |      |   |  |  | 1,501   |   |   | $     | 144   |  
|                                          |                                                      |  |        |         |        |   |        |       |        |  |        |         |        |   |       |       |   |  |  |         |   |   |       |      
|                                         
|                                         
|                                         
|                                         
|Common Stock                             
|                                         
|                                         
|                                         
|                                         
|                                          | Balance at beginning of year                         |  |        | 145,071 |        |   | $      | 1,951 |        |  |        | 145,098 |        |   | $     | 1,951 |   |  |  | 145,120 |   |   | $     | 1,951 |  
|                                         
|                                         
|                                         
|                                         
|                                          | Repurchase and retirement of common stock            |  |        | (30     | )      |   |        | (1    | )      |  |        | (27     | )      |   |       |      |   |  |  | (22     | ) |   |       |      |  
|                                          |                                                      |  |        |         |        |   |        |       |        |  |        |         |        |   |       |       |   |  |  |         |   |   |       |      
|                                          | Balance at end of year                               |  |        | 145,041 |        |   | $      | 1,950 |        |  |        | 145,071 |        |   | $     | 1,951 |   |  |  | 145,098 |   |   | $     | 1,951 |  
|                                          |                                                      |  |        |         |        |   |        |       |        |  |        |         |        |   |       |       |   |  |  |         |   |   |       |      
|Retained Earnings                        
|                                         
|                                         
|                                         
|                                         
|                                          | Balance at beginning of year                         |  |        |         |        |   | $      | 1,747 |        |  |        |         |        |   | $     | 1,611 |   |  |  |         |   |   | $     | 1,493 |  
|                                         
|                                         
|                                         
|                                         
|                                          | Net income                                           |  |        |         |        |   |        | 483   |        |  |        |         |        |   |       | 443   |   |  |  |         |   |   |       | 417   |  
|                                         
|                                         
|                                         
|                                         
|                                          | Dividends declared on common stock ($2.06
per share) |  |        |         |        |   |        | (299  | )      |  |        |         |        |   |       | (299  | ) |  |  |         |   |   |       | (299  | )
|                                         
|                                         
|                                         
|                                         
|                                          | Preferred stock expense                              |  |        |         |        |   |        |      |        |  |        |         |        |   |       | (6    | ) |  |  |         |   |   |       |      |  
|                                         
|                                         
|                                         
|                                         
|                                          | Other                                                |  |        |         |        |   |        | 28    |        |  |        |         |        |   |       | (2    | ) |  |  |         |   |   |       |      |  
|                                          |                                                      |  |        |         |        |   |        |       |        |  |        |         |        |   |       |       |   |  |  |         |   |   |       |      
|                                          | Balance at end of year                               |  |        |         |        |   | $      | 1,959 |        |  |        |         |        |   | $     | 1,747 |   |  |  |         |   |   | $     | 1,611 |  
|                                          |                                                      |  |        |         |        |   |        |       |        |  |        |         |        |   |       |       |   |  |  |         |   |   |       |      
|Total Shareholders Equity                |                                                      |  |        |         |        | $ | 3,909  |       |        |  |        |         |        | $ | 3,698 |       |   |  |  |         |   | $ | 3,706 |      
|                                          |                                                      |  |        |         |        |   |        |       |        |  |        |         |        |   |       |       |   |  |  |         |   |   |       |      

(See Notes to Consolidated Financial Statements.)

36



---



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37



---



The Detroit Edison Company
Consolidated Statement of Income
(Millions)

|                                      |                               |                                  |       |                        |       |      |       |       |       |   |       |     |       | 
|------------------------------------- | ----------------------------- | -------------------------------- | ----- | ---------------------- | ----- | ---- | ----- | ----- | ----- | - | ----- | --- | ----- | 
|                                      |                               |                                  |       | Year Ended December 31
|                                      |                               |                                  |       |                       
|                                      |                               |                                  |       | 1999                   |       | 1998 |       | 1997 
|                                      |                               |                                  |       |                        |       |      |       |      
|Operating Revenues                    |                               | $                                | 4,047 |                        |       | $    | 3,902 |       |       | $ | 3,657 |    
|                                      |                               |                                  |       |                        |       |      |       |       |       |   |       |    
|Operating Expenses                   
|                                     
|                                     
|                                     
|                                     
|                                      | Fuel and purchased power      |                                  |       | 1,106                  |       |      |       | 1,021 |       |   |       | 837 |      
|                                     
|                                     
|                                     
|                                     
|                                      | Operation and maintenance     |                                  |       | 1,028                  |       |      |       | 998   |       |   |       | 895 |      
|                                     
|                                     
|                                     
|                                     
|                                      | Depreciation and amortization |                                  |       | 703                    |       |      |       | 643   |       |   |       | 658 |      
|                                     
|                                     
|                                     
|                                     
|                                      | Taxes other than income       |                                  |       | 275                    |       |      |       | 270   |       |   |       | 264 |      
|                                      |                               |                                  |       |                        |       |      |       |       |       |   |       |    
|                                      |                               | Total Operating Expenses         |       |                        | 3,112 |      |       |       | 2,932 |   |       |     | 2,654 | 
|                                      |                               |                                  |       |                        |       |      |       |       |       |   |       |    
|Operating Income                      |                               |                                  | 935   |                        |       |      | 970   |       |       |   | 1,003 |    
|                                      |                               |                                  |       |                        |       |      |       |       |       |   |       |    
|Interest Expense and Other           
|                                     
|                                     
|                                     
|                                     
|                                      | Interest expense              |                                  |       | 284                    |       |      |       | 277   |       |   |       | 282 |      
|                                     
|                                     
|                                     
|                                     
|                                      | Other  net                   |                                  |       | 6                      |       |      |       | 15    |       |   |       | 16  |      
|                                      |                               |                                  |       |                        |       |      |       |       |       |   |       |    
|                                      |                               | Total Interest Expense and Other |       |                        | 290   |      |       |       | 292   |   |       |     | 298   | 
|                                      |                               |                                  |       |                        |       |      |       |       |       |   |       |    
|Income Before Income Taxes            |                               |                                  | 645   |                        |       |      | 678   |       |       |   | 705   |    
|                                     
|                                     
|                                     
|                                     
|Income Taxes                          |                               |                                  | 211   |                        |       |      | 260   |       |       |   | 288   |    
|                                      |                               |                                  |       |                        |       |      |       |       |       |   |       |    
|Net Income                            |                               |                                  | 434   |                        |       |      | 418   |       |       |   | 417   |    
|                                     
|                                     
|                                     
|                                     
|Preferred Stock Dividends             |                               |                                  |      |                        |       |      | 6     |       |       |   | 12    |    
|                                      |                               |                                  |       |                        |       |      |       |       |       |   |       |    
|Net Income Available for Common Stock |                               | $                                | 434   |                        |       | $    | 412   |       |       | $ | 405   |    
|                                      |                               |                                  |       |                        |       |      |       |       |       |   |       |    

(See Notes to Consolidated Financial Statements.)

38



---



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

|                                                     |                                                                            |                                            |                     |      |                        |     |      |      |      |     |    |      |       |     |  
|---------------------------------------------------- | -------------------------------------------------------------------------- | ------------------------------------------ | ------------------- | ---- | ---------------------- | --- | ---- | ---- | ---- | --- | -- | ---- | ----- | --- | -
|                                                     |                                                                            |                                            |                     |      | Year Ended December 31
|                                                     |                                                                            |                                            |                     |      |                       
|                                                     |                                                                            |                                            |                     |      | 1999                   |     | 1998 |      | 1997
|                                                     |                                                                            |                                            |                     |      |                        |     |      |      |     
|Operating Activities                                
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Net Income                                                                 |                                            | $                   | 434  |                        |     | $    | 418  |      |     | $  | 417  |      
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Adjustments to reconcile net income to net cash from operating activities:
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            | Depreciation and amortization              |                     |      | 703                    |     |      |      | 643  |     |    |      | 658   |    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            | Other                                      |                     |      | 2                      |     |      |      | (217 | )   |    |      | (62   | )  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            | Changes in current assets and liabilities:
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            |                                            | Accounts receivable |      |                        | (70 | )    |      |      | (51 | )  |      |       | (18 | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            |                                            | Inventories         |      |                        | (6  | )    |      |      | (28 | )  |      |       | (16 | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            |                                            | Payables            |      |                        | 17  |      |      |      | 64  |    |      |       | (14 | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            |                                            | Other               |      |                        | (52 | )    |      |      | (25 | )  |      |       | 41  |  
|                                                     |                                                                            |                                            |                     |      |                        |     |      |      |      |     |    |     
|                                                     |                                                                            | Net cash from operating activities         |                     |      | 1,028                  |     |      |      | 804  |     |    |      | 1,006 |    
|                                                     |                                                                            |                                            |                     |      |                        |     |      |      |      |     |    |     
|Investing Activities                                
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Plant and equipment expenditures                                           |                                            |                     | (638 | )                      |     |      | (548 | )    |     |    | (467 | )    
|                                                     |                                                                            |                                            |                     |      |                        |     |      |      |      |     |    |     
|                                                     |                                                                            | Net cash used for investing activities     |                     |      | (638                   | )   |      |      | (548 | )   |    |      | (467  | )  
|                                                     |                                                                            |                                            |                     |      |                        |     |      |      |      |     |    |     
|Financing Activities                                
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Issuance of long-term debt                                                 |                                            |                     | 265  |                        |     |      | 200  |      |     |    |     |      
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Increase (decrease) in short-term borrowings                               |                                            |                     | 131  |                        |     |      | 231  |      |     |    | (10  | )    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Redemption of long-term debt                                               |                                            |                     | (468 | )                      |     |      | (219 | )    |     |    | (185 | )    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Redemption of preferred stock                                              |                                            |                     |     |                        |     |      | (150 | )    |     |    |     |      
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Dividends on common and preferred stock                                    |                                            |                     | (319 | )                      |     |      | (328 | )    |     |    | (331 | )    
|                                                     |                                                                            |                                            |                     |      |                        |     |      |      |      |     |    |     
|                                                     |                                                                            | Net cash used for financing activities     |                     |      | (391                   | )   |      |      | (266 | )   |    |      | (526  | )  
|                                                     |                                                                            |                                            |                     |      |                        |     |      |      |      |     |    |     
|Net (Decrease) Increase in Cash and Cash Equivalents |                                                                            |                                            | (1                  | )    |                        |     | (10  | )    |      |     | 13 |     
|                                                    
|                                                    
|                                                    
|                                                    
|Cash and Cash Equivalents at Beginning of the Period |                                                                            |                                            | 5                   |      |                        |     | 15   |      |      |     | 2  |     
|                                                     |                                                                            |                                            |                     |      |                        |     |      |      |      |     |    |     
|Cash and Cash Equivalents at End of the Period       |                                                                            | $                                          | 4                   |      |                        | $   | 5    |      |      | $   | 15 |     
|                                                     |                                                                            |                                            |                     |      |                        |     |      |      |      |     |    |     
|Supplementary Cash Flow Information                 
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Interest paid (excluding interest capitalized)                             |                                            | $                   | 284  |                        |     | $    | 269  |      |     | $  | 277  |      
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Income taxes paid                                                          |                                            |                     | 276  |                        |     |      | 292  |      |     |    | 277  |      
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | New capital lease obligations                                              |                                            |                     | 3    |                        |     |      | 52   |      |     |    | 34   |      

(See Notes to Consolidated Financial Statements.)

39



---



The Detroit Edison Company
Consolidated Balance Sheet
(Millions, Except Per Share Amounts and Shares)

|                                               |                                     |                                                                          |        |             |     |      |        |        |     | 
|---------------------------------------------- | ----------------------------------- | ------------------------------------------------------------------------ | ------ | ----------- | --- | ---- | ------ | ------ | --- | 
|                                               |                                     |                                                                          |        | December 31
|                                               |                                     |                                                                          |        |            
|                                               |                                     |                                                                          |        | 1999        |     | 1998
|                                               |                                     |                                                                          |        |             |     |     
|ASSETS                                        
|                                              
|                                              
|                                              
|                                              
|Current Assets                                
|                                              
|                                              
|                                              
|                                              
|                                               | Cash and cash equivalents           |                                                                          | $      | 4           |     |      | $      | 5      |    
|                                              
|                                              
|                                              
|                                              
|                                               | Accounts receivable                
|                                               |                                     | Customer (less allowance for doubtful
accounts of $20 for 1999 and 1998) |        |             | 316 |      |        |        | 307 | 
|                                              
|                                              
|                                              
|                                              
|                                               |                                     | Accrued unbilled revenues                                                |        |             | 166 |      |        |        | 153 | 
|                                              
|                                              
|                                              
|                                              
|                                               |                                     | Other                                                                    |        |             | 138 |      |        |        | 90  | 
|                                              
|                                              
|                                              
|                                              
|                                               | Inventories (at average cost)       |                                                                          |        |             |     |      |        |        |    
|                                              
|                                              
|                                              
|                                              
|                                               |                                     | Fuel                                                                     |        |             | 175 |      |        |        | 171 | 
|                                              
|                                              
|                                              
|                                              
|                                               |                                     | Materials and supplies                                                   |        |             | 140 |      |        |        | 138 | 
|                                              
|                                              
|                                              
|                                              
|                                               | Other                               |                                                                          |        | 29          |     |      |        | 21     |    
|                                               |                                     |                                                                          |        |             |     |      |        |       
|                                               |                                     |                                                                          | 968    |             |     |      | 885    |       
|                                               |                                     |                                                                          |        |             |     |      |        |       
|Investments                                   
|                                              
|                                              
|                                              
|                                              
|                                               | Nuclear decommissioning trust funds |                                                                          |        | 361         |     |      |        | 309    |    
|                                              
|                                              
|                                              
|                                              
|                                               | Other                               |                                                                          |        | 34          |     |      |        | 74     |    
|                                               |                                     |                                                                          |        |             |     |      |        |       
|                                               |                                     |                                                                          | 395    |             |     |      | 383    |       
|                                               |                                     |                                                                          |        |             |     |      |        |       
|Property                                      
|                                              
|                                              
|                                              
|                                              
|                                               | Property, plant and equipment       |                                                                          |        | 11,204      |     |      |        | 10,610 |    
|                                              
|                                              
|                                              
|                                              
|                                               | Property under capital leases       |                                                                          |        | 221         |     |      |        | 242    |    
|                                              
|                                              
|                                              
|                                              
|                                               | Nuclear fuel under capital lease    |                                                                          |        | 663         |     |      |        | 659    |    
|                                              
|                                              
|                                              
|                                              
|                                               | Construction work in progress       |                                                                          |        | 4           |     |      |        | 118    |    
|                                               |                                     |                                                                          |        |             |     |      |        |       
|                                               |                                     |                                                                          | 12,092 |             |     |      | 11,629 |       
|                                               |                                     |                                                                          |        |             |     |      |        |       
|Less accumulated depreciation and amortization |                                     |                                                                          | 5,526  |             |     |      | 5,201  |       
|                                               |                                     |                                                                          |        |             |     |      |        |       
|                                               |                                     |                                                                          | 6,566  |             |     |      | 6,428  |       
|                                               |                                     |                                                                          |        |             |     |      |        |       
|Regulatory Assets                              |                                     |                                                                          | 2,935  |             |     |      | 3,091  |       
|                                               |                                     |                                                                          |        |             |     |      |        |       
|Other Assets                                   |                                     |                                                                          | 187    |             |     |      | 200    |       
|                                               |                                     |                                                                          |        |             |     |      |        |       
|Total Assets                                   |                                     | $                                                                        | 11,051 |             |     | $    | 10,987 |       
|                                               |                                     |                                                                          |        |             |     |      |        |       

(See Notes to Consolidated Financial Statements.)

40



---



|                                                                                                              |  |   |             |   |      |   |        |   | 
|------------------------------------------------------------------------------------------------------------- |  | - | ----------- | - | ---- | - | ------ | - | 
|                                                                                                              |  |   | December 31
|                                                                                                              |  |   |            
|                                                                                                              |  |   | 1999        |   | 1998
|                                                                                                              |  |   |             |   |     
|LIABILITIES AND
SHAREHOLDERS EQUITY                                                                         
|                                                                                                             
|                                                                                                             
|                                                                                                             
|                                                                                                             
|Current Liabilities                                                                                          
|                                                                                                             
|                                                                                                             
|                                                                                                             
|                                                                                                             
|Accounts payable                                                                                              |  | $ | 224         |   |      | $ | 211    |  
|                                                                                                             
|                                                                                                             
|                                                                                                             
|                                                                                                             
|Accrued interest                                                                                              |  |   | 54          |   |      |   | 54     |  
|                                                                                                             
|                                                                                                             
|                                                                                                             
|                                                                                                             
|Dividends payable                                                                                             |  |   | 80          |   |      |   | 80     |  
|                                                                                                             
|                                                                                                             
|                                                                                                             
|                                                                                                             
|Accrued payroll                                                                                               |  |   | 90          |   |      |   | 86     |  
|                                                                                                             
|                                                                                                             
|                                                                                                             
|                                                                                                             
|Short-term borrowings                                                                                         |  |   | 362         |   |      |   | 231    |  
|                                                                                                             
|                                                                                                             
|                                                                                                             
|                                                                                                             
|Income taxes                                                                                                  |  |   | 84          |   |      |   | 60     |  
|                                                                                                             
|                                                                                                             
|                                                                                                             
|                                                                                                             
|Current portion long-term debt                                                                                |  |   | 194         |   |      |   | 219    |  
|                                                                                                             
|                                                                                                             
|                                                                                                             
|                                                                                                             
|Current portion capital leases                                                                                |  |   | 75          |   |      |   | 118    |  
|                                                                                                             
|                                                                                                             
|                                                                                                             
|                                                                                                             
|Other                                                                                                         |  |   | 159         |   |      |   | 203    |  
|                                                                                                              |  |   |             |   |      |   |        |  
|                                                                                                              |  |   | 1,322       |   |      |   | 1,262  |  
|                                                                                                              |  |   |             |   |      |   |        |  
|Other Liabilities                                                                                            
|                                                                                                             
|                                                                                                             
|                                                                                                             
|                                                                                                             
|Deferred income taxes                                                                                         |  |   | 1,879       |   |      |   | 1,846  |  
|                                                                                                             
|                                                                                                             
|                                                                                                             
|                                                                                                             
|Capital leases                                                                                                |  |   | 114         |   |      |   | 126    |  
|                                                                                                             
|                                                                                                             
|                                                                                                             
|                                                                                                             
|Regulatory liabilities                                                                                        |  |   | 262         |   |      |   | 294    |  
|                                                                                                             
|                                                                                                             
|                                                                                                             
|                                                                                                             
|Other                                                                                                         |  |   | 562         |   |      |   | 484    |  
|                                                                                                              |  |   |             |   |      |   |        |  
|                                                                                                              |  |   | 2,817       |   |      |   | 2,750  |  
|                                                                                                              |  |   |             |   |      |   |        |  
|Long-Term Debt                                                                                                |  |   | 3,284       |   |      |   | 3,462  |  
|                                                                                                              |  |   |             |   |      |   |        |  
|Shareholders
Equity                                                                                         
|                                                                                                             
|                                                                                                             
|                                                                                                             
|                                                                                                             
|Common
stock, $10 par value, 400,000,000 shares
               authorized, 145,119,875 issued and outstanding |  |   | 1,451       |   |      |   | 1,451  |  
|                                                                                                             
|                                                                                                             
|                                                                                                             
|                                                                                                             
|Premium on common stock                                                                                       |  |   | 548         |   |      |   | 548    |  
|                                                                                                             
|                                                                                                             
|                                                                                                             
|                                                                                                             
|Common stock expense                                                                                          |  |   | (48         | ) |      |   | (48    | )
|                                                                                                             
|                                                                                                             
|                                                                                                             
|                                                                                                             
|Retained earnings                                                                                             |  |   | 1,677       |   |      |   | 1,562  |  
|                                                                                                              |  |   |             |   |      |   |        |  
|                                                                                                              |  |   | 3,628       |   |      |   | 3,513  |  
|                                                                                                              |  |   |             |   |      |   |        |  
|Commitments and Contingencies (Notes 1, 2, 3, 9, 10, 11 and 12)                                              
|Total Liabilities and Shareholders Equity                                                                    |  | $ | 11,051      |   |      | $ | 10,987 |  
|                                                                                                              |  |   |             |   |      |   |        |  

(See Notes to Consolidated Financial Statements.)

41



---



The Detroit Edison Company
Consolidated Statement of Changes in Shareholders Equity
(Millions, Except Per Share Amounts; Shares in Thousands)

|                           |                                          |                                |         |        |  |        |       |        |   |        |         |        |   |        |       |       |   |  |         |       |  |   |       |       |   | 
|-------------------------- | ---------------------------------------- | ------------------------------ | ------- | ------ |  | ------ | ----- | ------ | - | ------ | ------- | ------ | - | ------ | ----- | ----- | - |  | ------- | ----- |  | - | ----- | ----- | - | 
|                           |                                          |                                |         | 1999   |  | 1998   |       | 1997  
|                           |                                          |                                |         |        |  |        |       |       
|                           |                                          |                                |         | Shares |  | Amount |       | Shares |   | Amount |         | Shares |   | Amount
|                           |                                          |                                |         |        |  |        |       |        |   |        |         |        |   |       
|Cumulative Preferred Stock
|                          
|                          
|                          
|                          
|                           | Balance at beginning of year             |                                |         |       |  |        | $     |       |   |        |         | 1,501  |   |        | $     | 144   |   |  |         | 1,501 |  |   | $     | 144   |  
|                           |                                          |                                |         |        |  |        |       |        |   |        |         |        |   |        |       |       |   |  |         |       |  |   |       |      
|                          
|                          
|                          
|                          
|                           | Redemption of Cumulative Preferred Stock |                                |         |       |  |        |       |       |   |        |         | (1,501 | ) |        |       | (150  | ) |  |         |      |  |   |       |      |  
|                          
|                          
|                          
|                          
|                           | Preferred stock expense                  |                                |         |       |  |        |       |       |   |        |         |       |   |        |       | 6     |   |  |         |      |  |   |       |      |  
|                           |                                          |                                |         |        |  |        |       |        |   |        |         |        |   |        |       |       |   |  |         |       |  |   |       |      
|                           | Balance at end of year                   |                                |         |       |  |        | $     |       |   |        |         |       |   |        | $     |      |   |  |         | 1,501 |  |   | $     | 144   |  
|                           |                                          |                                |         |        |  |        |       |        |   |        |         |        |   |        |       |       |   |  |         |       |  |   |       |      
|Common Stock               |                                          |                                | 145,120 |        |  | $      | 1,451 |        |   |        | 145,120 |        |   | $      | 1,451 |       |   |  | 145,120 |       |  | $ | 1,451 |      
|                           |                                          |                                |         |        |  |        |       |        |   |        |         |        |   |        |       |       |   |  |         |       |  |   |       |      
|                          
|                          
|                          
|                          
|Premium on Common Stock    |                                          |                                |         |        |  | $      | 548   |        |   |        |         |        |   | $      | 548   |       |   |  |         |       |  | $ | 548   |      
|                           |                                          |                                |         |        |  |        |       |        |   |        |         |        |   |        |       |       |   |  |         |       |  |   |       |      
|                          
|                          
|                          
|                          
|Common Stock Expense       |                                          |                                |         |        |  | $      | (48   | )      |   |        |         |        |   | $      | (48   | )     |   |  |         |       |  | $ | (48   | )    
|                           |                                          |                                |         |        |  |        |       |        |   |        |         |        |   |        |       |       |   |  |         |       |  |   |       |      
|                          
|                          
|                          
|                          
|Retained Earnings         
|                          
|                          
|                          
|                          
|                           | Balance at beginning of year             |                                |         |        |  |        | $     | 1,562  |   |        |         |        |   |        | $     | 1,478 |   |  |         |       |  |   | $     | 1,392 |  
|                          
|                          
|                          
|                          
|                           | Net income                               |                                |         |        |  |        |       | 434    |   |        |         |        |   |        |       | 418   |   |  |         |       |  |   |       | 417   |  
|                          
|                          
|                          
|                          
|                           | Dividends declared                      
|                           |                                          | Common stock ($2.20 per share) |         |        |  |        |       | (319   | ) |        |         |        |   |        |       | (319  | ) |  |         |       |  |   |       | (319  | )
|                          
|                          
|                          
|                          
|                           |                                          | Cumulative Preferred Stock*    |         |        |  |        |       |       |   |        |         |        |   |        |       | (6    | ) |  |         |       |  |   |       | (12   | )
|                          
|                          
|                          
|                          
|                           | Preferred stock expense                  |                                |         |        |  |        |       |       |   |        |         |        |   |        |       | (6    | ) |  |         |       |  |   |       |      |  
|                          
|                          
|                          
|                          
|                           | Other                                    |                                |         |        |  |        |       |       |   |        |         |        |   |        |       | (3    | ) |  |         |       |  |   |       |      |  
|                           |                                          |                                |         |        |  |        |       |        |   |        |         |        |   |        |       |       |   |  |         |       |  |   |       |      
|                           | Balance at end of year                   |                                |         |        |  |        | $     | 1,677  |   |        |         |        |   |        | $     | 1,562 |   |  |         |       |  |   | $     | 1,478 |  
|                           |                                          |                                |         |        |  |        |       |        |   |        |         |        |   |        |       |       |   |  |         |       |  |   |       |      
|Total Shareholders Equity |                                          |                                |         |        |  | $      | 3,628 |        |   |        |         |        |   | $      | 3,513 |       |   |  |         |       |  | $ | 3,573 |      
|                           |                                          |                                |         |        |  |        |       |        |   |        |         |        |   |        |       |       |   |  |         |       |  |   |       |      



|* |  | At established rate for each series.
|- |  | ------------------------------------

(See Notes to Consolidated Financial Statements.)

42



---



DTE Energy Company and The Detroit Edison Company
Notes to Consolidated Financial Statements

NOTE 1  SIGNIFICANT ACCOUNTING POLICIES

---

Corporate Structure and Principles of Consolidation

DTE Energy Company (Company), a Michigan corporation incorporated in 1995, is
an exempt holding company under the Public Utility Holding Company Act. The
Company has no significant operations of its own, holding instead the stock of
its principal operating subsidiary, The Detroit Edison Company (Detroit
Edison), an electric public utility regulated by the Michigan Public Service
Commission (MPSC) and the Federal Energy Regulatory Commission (FERC), and
other energy-related businesses.

All majority owned subsidiaries are consolidated. Non-majority owned
investments, including investments in limited liability companies, partnerships
and joint ventures are accounted for using the equity method. All significant
inter-company balances and transactions have been eliminated.

In October 1999, the Companys investee, Plug Power Inc., completed its initial
public offering (IPO) of shares of common stock at $15 per share. After the
IPO, the Company owned approximately 32% of Plug Powers outstanding common
stock. As a result of Plug Powers IPO, the Company recognized its
proportionate share of Plug Powers net assets immediately after the IPO and
recorded an increase of $44 million in its investment and an after-tax increase
of $28 million to retained earnings with no earnings impact in 1999.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Regulation and Regulatory Assets and Liabilities

Detroit Edisons transmission and distribution business meets the criteria of
Statement of Financial Accounting Standards (SFAS) No. 71, Accounting for the
Effects of Certain Types of Regulation. This accounting standard recognizes
the cost based ratemaking process which results in differences in the
application of generally accepted accounting principles between regulated and
non-regulated businesses. SFAS No. 71 requires the recording of regulatory
assets and liabilities for certain transactions that would have been treated as
revenue and expense in non-regulated businesses. Detroit Edisons regulatory
assets and liabilities are being amortized to revenue and expense as they are
included in rates. Continued applicability of SFAS No. 71 requires that rates
be designed to recover specific costs of providing regulated services and
products, and that it be reasonable to

43



---



assume that rates are set at levels that
will recover a utilitys costs and can be charged to and collected from
customers.

MPSC Orders issued in 1997 and 1998 altered the regulatory process in Michigan
and provided a plan for transition to competition for the generation business
of Detroit Edison. Therefore, effective December 31, 1998, Detroit Edisons
generation business no longer met the criteria of SFAS No. 71. Detroit Edison
did not write off any regulatory assets as a result of the discontinuation of
SFAS No. 71 for its generation business, since accounting guidance issued by
the Financial Accounting Standards Board and its Emerging Issues Task Force
permits the recording of regulatory assets which are expected to be recovered
through regulated rates. A December 1998 MPSC Order authorized the recovery of
an additional regulatory asset equal to the net book value of Fermi 2 at
December 31, 1998, which includes recoverable income taxes, deferred tax
credits and deferred amortization. See the following table of regulatory
assets and liabilities, and Note 3 for further details.

Detroit Edison has recorded the following regulatory assets and liabilities at
December 31:

| |             |                                              |  |            |       |      |  |   |       | 
| | ----------- | -------------------------------------------- |  | ---------- | ----- | ---- |  | - | ----- | 
| |             |                                              |  | 1999       |       | 1998
| |             |                                              |  |            |       |     
| |             |                                              |  | (Millions)
| | Assets     
|
|
|
|
| |             | Unamortized nuclear costs                    |  | $          | 2,570 |      |  | $ | 2,808 | 
|
|
|
|
| |             | Unamortized loss on reacquired debt          |  |            | 85    |      |  |   | 94    | 
|
|
|
|
| |             | Recoverable income taxes                     |  |            | 201   |      |  |   | 107   | 
|
|
|
|
| |             | Power supply cost recovery                   |  |            | 39    |      |  |   | 49    | 
|
|
|
|
| |             | 1997 storm damage costs                      |  |            |      |      |  |   | 15    | 
|
|
|
|
| |             | Electric Choice implementation costs         |  |            | 29    |      |  |   | 7     | 
|
|
|
|
| |             | Other                                        |  |            | 11    |      |  |   | 11    | 
| |             |                                              |  |            |       |      |  |  
| |             | Total Assets                                 |  | $          | 2,935 |      |  | $ | 3,091 | 
| |             |                                              |  |            |       |      |  |  
| | Liabilities
|
|
|
|
| |             | Unamortized deferred investment tax credits  |  | $          | 177   |      |  | $ | 188   | 
|
|
|
|
| |             | Fermi 2 capacity factor performance standard |  |            | 63    |      |  |   | 86    | 
|
|
|
|
| |             | Other                                        |  |            | 22    |      |  |   | 20    | 
| |             |                                              |  |            |       |      |  |  
| |             | Total Liabilities                            |  | $          | 262   |      |  | $ | 294   | 
| |             |                                              |  |            |       |      |  |  

Unamoritized nuclear costs  See Note 3.

44



---



Unamortized loss on reacquired debt

In accordance with MPSC regulations applicable to Detroit Edison, the discount,
premium and expense related to debt redeemed with a refinancing are amortized
over the life of the replacement issue, or if related to the generation
business, beginning in 2002 they will be amortized through 2007. See Note 3.
Discount, premium and expense on early redemptions of debt subsequent to
December 31, 1998 are charged to earnings if they relate to the generation
business of Detroit Edison.

Recoverable income taxes

In 1993, the Company was required to adopt SFAS No. 109, Accounting for Income
Taxes. SFAS No. 109 requires that deferred income taxes be recorded at the
current income tax rate for all temporary differences between the book and tax
basis of assets and liabilities. Prior to 1993, only those deferred taxes that
were authorized by the MPSC were recorded. Upon adoption of SFAS No. 109, the
MPSC authorized the Company to record a regulatory asset providing assurance of
future revenue recovery from customers for all deferred income taxes.

Power supply cost recovery (PSCR)

State legislation provides Detroit Edison a mechanism for recovery of changes
in power supply costs for purchased power and generation based on a
reconciliation of actual costs and usage which is subject to MPSC approval.

1997 storm damage costs

The costs of major storms in 1997 were deferred, as authorized by the MPSC, and
were amortized into expense in 1998 and 1999 as they were recovered through
rates.

Electric Choice implementation costs

Costs incurred to implement the Electric Choice Program are being deferred,
with amortization planned to begin coincident with full implementation of the
program.

Unamortized deferred investment tax credits

Investment tax credits utilized, which relate to utility property, were
deferred and are amortized over the estimated composite service life of the
related property.

Fermi 2 capacity factor performance standard

The MPSC has established a mechanism which provides for the disallowance of net
incremental replacement power cost if Fermi 2 does not perform to certain
operating criteria. A disallowance is imposed for the amount by which the
Fermi 2 three-year rolling average capacity factor is less than the greater of
either the average of the top 50% of U.S. boiling water reactors or 50%. An
estimate of the incremental cost of replacement

45



---



power is required in computing
the reserve for amounts due customers under this performance standard.

Cash Equivalents

For purposes of the Consolidated Statement of Cash Flows, the Company considers
investments purchased with a maturity of three months or less to be cash
equivalents.

Restricted Cash

Cash maintained for debt service requirements and other contractual obligations
is classified as restricted cash.

Revenues

Detroit Edison records unbilled revenues for electric and steam heating
services provided after cycle billings through month-end.

Property, Retirement and Maintenance, Depreciation and Amortization

A summary of property by classification at December 31 is as follows:

|                              |                                  |  |            |        |      |  |       |        |  
|----------------------------- | -------------------------------- |  | ---------- | ------ | ---- |  | ----- | ------ | -
|                              |                                  |  | 1999       |        | 1998
|                              |                                  |  |            |        |     
|                              |                                  |  | (Millions)
|Transmission and
distribution
|                              | Property                         |  | $          | 5,598  |      |  | $     | 5,354  |  
|                             
|                             
|                             
|                             
|                              | Construction work in progress    |  |            | 1      |      |  |       | 3      |  
|                             
|                             
|                             
|                             
|                              | Property under capital leases    |  |            | 4      |      |  |       | 5      |  
|                             
|                             
|                             
|                             
|                              | Less accumulated depreciation    |  |            | (2,180 | )    |  |       | (2,063 | )
|                              |                                  |  |            |        |      |  |       |       
|                              |                                  |  | 3,423      |        |      |  | 3,299 |       
|                              |                                  |  |            |        |      |  |       |       
|Generation                   
|                              | Property                         |  |            | 5,606  |      |  |       | 5,256  |  
|                             
|                             
|                             
|                             
|                              | Construction work in progress    |  |            | 3      |      |  |       | 115    |  
|                             
|                             
|                             
|                             
|                              | Property under capital leases    |  |            | 217    |      |  |       | 237    |  
|                             
|                             
|                             
|                             
|                              | Less accumulated depreciation    |  |            | (2,747 | )    |  |       | (2,587 | )
|                              |                                  |  |            |        |      |  |       |       
|                              |                                  |  | 3,079      |        |      |  | 3,021 |       
|                              |                                  |  |            |        |      |  |       |       
|                              | Nuclear fuel under capital lease |  |            | 663    |      |  |       | 659    |  
|                             
|                             
|                             
|                             
|                              | Less accumulated amortization    |  |            | (599   | )    |  |       | (551   | )
|                              |                                  |  |            |        |      |  |       |       
|                              |                                  |  | 64         |        |      |  | 108   |       
|                              |                                  |  |            |        |      |  |       |       

46



---



|            |                |                               |     |       |     |   |     |       |     |  
|----------- | -------------- | ----------------------------- | --- | ----- | --- | - | --- | ----- | --- | -
|Non-utility
|            |                | Property                      |     |       | 551 |   |     |       | 511 |  
|           
|           
|           
|           
|            |                | Construction work in progress |     |       | 102 |   |     |       | 38  |  
|           
|           
|           
|           
|            |                | Property under capital leases |     |       | 1   |   |     |       |    |  
|           
|           
|           
|           
|            |                | Less accumulated depreciation |     |       | (72 | ) |     |       | (34 | )
|            |                |                               |     |       |     |   |     |      
|            |                |                               | 582 |       |     |   | 515 |      
|            |                |                               |     |       |     |   |     |      
|            | Total property |                               | $   | 7,148 |     |   | $   | 6,943 |    
|            |                |                               |     |       |     |   |     |      

---

Utility properties are stated at original cost less regulatory disallowances
and impairment losses. In general, the cost of properties retired in the
normal course of business is charged to accumulated depreciation. Expenditures
for maintenance and repairs are charged to expense as incurred, and the cost of
new property installed, which replaces property retired, is charged to property
accounts. Detroit Edison recognizes a provision for incremental costs of Fermi
2 refueling outages, including maintenance activities, anticipated to be
incurred during the next scheduled Fermi 2 refueling outage. The annual
provision for utility property depreciation is calculated on the straight-line
remaining life method by applying annual rates approved by the MPSC to the
average of year-beginning and year-ending balances of depreciable property by
primary plant accounts. Provision for depreciation of utility plant, as a
percent of average depreciable property, was 3.33%, 3.32% and 3.29% for 1999,
1998 and 1997, respectively.

Non-utility property is stated at original cost. Depreciation is computed over
the estimated useful lives using straight-line and declining-balance methods.

Long-Lived Assets

Long-lived assets held and used by the Company are reviewed based on market
factors and operational considerations for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable.

Software Costs

The Company capitalizes the cost of software developed for internal use. These
costs are amortized on a straight-line basis over a five-year period beginning
with the projects completion.

Debt Issue Costs

The costs related to the issuance of long-term debt are amortized over the life
of each issue.

47



---



Stock-Based Compensation

The Company accounts for stock-based compensation using the intrinsic value
method. Compensation expense is not recorded for stock options granted with an
exercise price equal to the fair market value at the date of grant. For grants
of restricted stock, compensation equal to the market value of the shares at
the date of grant is deferred and amortized to expense over the vesting period.

Accounting for Risk Management Activities

Trading activities of DTE Energy Trading, Inc. (DTE ET), an indirect wholly
owned subsidiary of the Company, are accounted for using the mark-to-market
method of accounting. Under such method, DTE ETs energy trading contracts,
including both transactions for physical delivery and financial instruments,
are recorded at market value. The resulting unrealized gains and losses from
changes in market value of open positions are recorded as other current assets
or liabilities. Current period changes in the trading assets or liabilities
are recognized as net gains or losses in operating revenues. The market prices
used to value these transactions reflect managements best estimate considering
various factors, including closing exchange and over-the-counter quotations,
time value and volatility factors underlying the commitments. Realized gains
and losses from transactions settled with cash are also recognized in operating
revenues. Transactions settled by physical delivery of power are recorded
gross in operating revenues and fuel and purchased power expense.

Detroit Edison continues to account for its forward purchase and sale
commitments and over-the-counter options on a settlement basis.

New Accounting Standard

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. This statement
requires companies to record derivatives on the balance sheet as assets and
liabilities, measured at fair value. Gains or losses resulting from changes in
the values of those derivatives would be accounted for depending on the use of
the derivative and whether it qualifies for hedge accounting. In June 1999,
SFAS No. 137, Accounting for Derivative Instruments and Hedging Activities 
Deferral of the Effective Date of FASB Statement No. 133 was issued. SFAS No.
137 amends the effective date of SFAS No. 133 to fiscal years beginning after
June 15, 2000, with earlier adoption encouraged. The Company will adopt this
accounting standard as required by January 1, 2001, but has not yet determined
the impact of this new pronouncement on the consolidated financial statements.

Reclassifications

Certain prior year balances have been reclassified to conform to the 1999
presentation.

48



---



NOTE 2  MERGER AGREEMENT

---

On October 4, 1999, the Company entered into a definitive merger agreement with
MCN Energy Group Inc. (MCN). MCN, a Michigan corporation, is primarily
involved in natural gas production, gathering, processing, transmission,
storage and distribution, electric power generation and energy marketing.
MCNs largest subsidiary is Michigan Consolidated Gas Company, a natural gas
utility serving 1.2 million customers in more than 500 communities throughout
Michigan. Shareholders of the Company have approved the issuance of the
necessary shares of common stock to complete the merger and shareholders of MCN
have approved the Agreement and Plan of Merger. The merger, which is also
subject to a number of regulatory approvals and other agreed upon conditions,
is expected to be completed in the first half of 2000. The merger agreement
provides that the Company will acquire all outstanding shares of MCN for $28.50
per share in cash or 0.775 shares of Company common stock for each share of
MCN common stock, subject to certain allocation procedures requiring that the
aggregate number of shares of MCN common stock that will be converted into cash
and the Companys common stock will be equal to 55% and 45%, respectively, of
the total number of shares of MCN common stock outstanding immediately prior to
the merger. The transaction was preliminarily valued at $4.6 billion, which
includes the assumption of approximately $2 billion of MCNs debt. The Company
expects to continue as an exempt public utility holding company after the
completion of the merger.

NOTE 3  REGULATORY MATTERS

---

Detroit Edison is subject to the primary regulatory jurisdiction of the MPSC,
which, from time to time, issues its Orders pertaining to Detroit Edisons
conditions of service, rates and recovery of certain costs including the costs
of generating facilities. MPSC Orders issued December 1988, January 1994,
November 1997, December 1998 and March 1999, are currently in effect with
respect to Detroit Edisons rates and certain other revenue, accounting and
operating-related matters.

Electric Industry Restructuring

There are ongoing proceedings for the restructuring of the Michigan electric
public utility industry and the implementation of Electric Choice. During the
period from 1997 through 1999, the MPSC issued several Orders relating to
Electric Choice and competition.

In a December 28, 1998 Order, as clarified March 8, 1999, the MPSC authorized
the accelerated amortization of the remaining net book balances (as of December
31, 1998) of Fermi 2 and its associated regulatory assets in a manner that will
provide an opportunity for full recovery under current rates from bundled
customers and through transition surcharges from future retail access
customers, taking into account the related tax consequences of those assets, by
December 31, 2007.

The December 28, 1998 Order, as clarified March 8, 1999, imposed conditions for
the recovery by Detroit Edison of accelerated amortization of Fermi 2 and on
March 8,

49



---



1999, the MPSC issued Orders clarifying several issues related to
Electric Choice. As a result of the Order, as clarified, Detroit Edison:



| |  | Reduced its base rates by approximately $94 million annually ,
effective January 1, 1999 and effective January 1, 2000, by an
additional $15 million to reflect the expiration of the two-year
extraordinary storm damage surcharge;                                                                                                                                                                                                                                                                                   
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Indicated it will reduce its jurisdictional retail rates by removing
the Fermi 2 regulatory asset, referred to in Note 1 as unamortized
nuclear costs, from rate base on a pro rata jurisdictional rate
basis when such asset reaches zero, which is currently anticipated
to occur January 1, 2008;                                                                                                                                                                                                                   
| 
| |  | Indicated that while it has no plans to sell Fermi 2, should such a
sale occur, it will return to customers the difference between Fermi
2s net book value (currently recorded as a regulatory asset) at the
time of sale and the actual sale price; and the MPSC will be advised
of a purchase of Detroit Edison during the accelerated amortization
period so that the MPSC may determine whether the proposed
transaction is in the public interest and properly balances the
interests of investors and customers;
| 
| |  | Agreed that should Detroit Edison seek to abandon Fermi 2 (which
Detroit Edison has no plans to do) during the accelerated
amortization period, and only if electric generation has not been
deregulated by either Michigan state or federal action, Detroit
Edison will initiate a contested case proceeding before the MPSC
seeking approval of the abandonment;                                                                                                                                                     
| 
| |  | Indicated that if its earned rate of return exceeds its authorized
rate of return during the period of time that amortization of Fermi
2 is being accelerated, it will apply 50% of the excess earnings to
reduce its stranded investment in Fermi 2;                                                                                                                                                                                                                                                                  
| 
| |  | Indicated it will implement a 90 megawatt (MW) Electric Choice pilot
program and will also begin the phase-in of full Electric Choice
commencing in 1999, with full Electric Choice effective January 1,
2002; and                                                                                                                                                                                                                                                                                                     
| 
| |  | Indicated it will use its best efforts to provide standby service
to Electric Choice customers. Best efforts means that Detroit
Edison must make the service available to Electric Choice customers
who request it, but Detroit Edison does not have to build or
purchase new capacity or interrupt firm customers to provide the
service. Standby service is to be priced at Detroit Edisons top
incremental cost plus 1 cent.                                                                                     

Several parties have filed petitions for rehearing or clarification; the MPSC
has not ruled on these petitions. The Association of Businesses Advocating
Tariff Equity in Michigan (ABATE) has also filed an appeal with the Michigan
Court of Appeals. Detroit Edison is unable to determine the timing or outcome
of these proceedings.

Accounting Implications

Detroit Edison accounts for its transmission and distribution business in
accordance with SFAS No. 71. Continued application of SFAS No. 71 by Detroit
Edison requires: 1) third party regulation of rates, 2) cost-based rates, and
3) a reasonable assumption that all costs will be recoverable from customers
through rates.

Due to the restructuring orders which provided sufficient details regarding the
transition to competition for its electric generation business, effective
December 31, 1998, Detroit

50



---



Edison adopted the provisions of SFAS No. 101,
Regulated Enterprises-Accounting for the Discontinuation of Application of
FASB Statement No. 71, for its electric generation business. SFAS No. 101
requires an evaluation to be performed to determine whether or not indications
of impairment exist for plant assets under SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,
and the elimination of certain effects of rate regulation that have been
recognized as assets or liabilities pursuant to SFAS No. 71.

At December 31, 1998, Detroit Edison performed an impairment test of its Fermi
2 nuclear generation plant and related regulatory assets pursuant to SFAS No.
121. The impairment test for Fermi 2 indicated that it was fully impaired.
Therefore, the Fermi 2 plant asset and its related regulatory assets were
written off. At December 31, 1998, the accumulation of future regulatory
recovery for Fermi 2 assets from bundled customers and transition surcharges
from future retail access customers was calculated. Since the December 28,
1998 MPSC Order provides for full recovery of Fermi 2 through the regulated
transmission and distribution business, a regulatory asset was established
which will be amortized through December 31, 2007. There was no impact on
income from the write off of the Fermi 2 plant assets and subsequent recording
of the regulatory asset for unamortized nuclear costs.

1988 Settlement Agreement

The December 1988 MPSC Order established for the period January 1989 through
December 2003: 1) a cap on Fermi 2 capital additions of $25 million per year,
in 1988 dollars adjusted by the Consumers Price Index (CPI), cumulative, 2) a
cap on Fermi 2 non-fuel operation and maintenance expenses adjusted by the CPI,
and 3) a capacity factor performance standard based on a three-year rolling
average commencing in 1991. For a capital investment of $200 million or more
(in 1988 dollars adjusted by the CPI), Detroit Edison must obtain prior MPSC
approval to include the investment in rate base. Under the cap on Fermi 2
capital expenditures, the cumulative amount available totals $76 million (in
1999 dollars) at December 31, 1999. In a 1999 filing on the true-up of
stranded costs, Detroit Edison requested continued recovery of Fermi 2 capital
additions through 2007, which is the end of the transition period for stranded
cost recovery as ordered by the MPSC. The 1999 Fermi 2 capital additions of
$27 million are recorded as a regulatory asset. Under the cap on Fermi 2
non-fuel operation and maintenance expenses, the cumulative amount available
totals $143 million (in 1999 dollars) at December 31, 1999.

Under the December 1988 Order, if nuclear operations at Fermi 2 permanently
cease, amortization in rates of a $513 million investment in Fermi 2 would
continue and the remaining net rate base investment amount would be removed
from rate base and amortized in rates, without return, over 10 years with such
amortization not to exceed $290 million per year. The December 1988 and
January 1994 Orders do not address the costs of decommissioning if the
operations at Fermi 2 prematurely cease.

In accordance with a November 1997 MPSC Order, Detroit Edison reduced revenues
by $53 million to reflect the scheduled reduction in the revenue requirement
for Fermi 2, in accordance with the 1988 settlement agreement. The $53 million
decrease is

51



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included in the $94 million decrease effective January 1, 1999. In
addition, the November 1997 MPSC Order authorized the deferral of $30 million
of 1997 storm damage costs and amortization and recovery of the costs over a
24-month period commencing January 1998. In December 1997, ABATE and the
Residential Ratepayer Consortium filed a lawsuit in Ingham County Circuit Court
contending that Detroit Edison and the MPSC breached the December 1988 MPSC
Order but the lawsuit was subsequently dismissed. The Michigan Attorney General
has filed an appeal of the November 1997 Order in the Michigan Court of
Appeals. In June 1999, in an unpublished opinion, the Michigan Court of
Appeals remanded back to the MPSC for hearing the November 1997 Order. Detroit
Edison filed a motion for rehearing with the Michigan Court of Appeals in July
1999, but the motion was subsequently dismissed. Detroit Edison is unable to
determine the timing or the outcome of the remand.

NOTE 4  FERMI 2

---

General

Fermi 2, a nuclear generating unit, began commercial operation in January 1988.
The Nuclear Regulatory Commission (NRC) maintains jurisdiction over the
licensing and operation of Fermi 2. Fermi 2 has a design electrical rating
(net) of 1,150 MW. This unit represents approximately 11% of total operation
and maintenance expenses and 10% of summer net rated capability. The net book
balance of the Fermi 2 plant was written off at December 31, 1998 and an
equivalent regulatory asset was established.

Ownership of an operating nuclear generating unit subjects Detroit Edison to
significant additional risks. Fermi 2 is regulated by a number of different
governmental agencies concerned with public health, safety and environmental
protection. Consequently, Fermi 2 is subjected to greater scrutiny than a
conventional fossil-fueled plant. See Note 3.

Insurance

Detroit Edison insures Fermi 2 with property damage insurance provided by
Nuclear Electric Insurance Limited (NEIL). The NEIL insurance policies provide
$500 million of composite primary coverage (with a $1 million deductible) and
$2.25 billion of excess coverage, respectively, for stabilization,
decontamination and debris removal costs, repair and/or replacement of property
and decommissioning. Accordingly, the combined limits provide total property
damage insurance of $2.75 billion.

Detroit Edison maintains insurance policies with NEIL providing for extra
expenses, including certain replacement power costs necessitated by Fermi 2s
unavailability due to an insured event. These policies have a 12-week waiting
period and provide for three years of coverage.

Under the NEIL policies, Detroit Edison could be liable for maximum
retrospective assessments of up to approximately $20 million per loss if any
one loss should exceed the accumulated funds available to NEIL.

52



---



As required by federal law, Detroit Edison maintains $200 million of public
liability insurance for a nuclear incident. Further, under the Price-Anderson
Amendments Act of 1988, deferred premium charges of $84 million could be levied
against each licensed nuclear facility, but not more than $10 million per year
per facility. On December 31, 1999, there were 106 licensed nuclear facilities
in the United States. Thus, deferred premium charges in the aggregate amount
of approximately $8.89 billion could be levied against all owners of licensed
nuclear facilities in the event of a nuclear incident at any of these
facilities.

Decommissioning

The NRC has jurisdiction over the decommissioning of nuclear power plants and
requires decommissioning funding based upon a formula. The MPSC and FERC
regulate the recovery of costs of decommissioning nuclear power plants and both
require the use of external trust funds to finance the decommissioning of Fermi
2. Base rates approved by the MPSC provide for the decommissioning costs of
Fermi 2. Detroit Edison is continuing to fund FERC jurisdictional amounts for
decommissioning even though explicit provisions are not included in FERC rates.
Detroit Edison believes that the MPSC and FERC collections will be adequate to
fund the estimated cost of decommissioning using the NRC formula.

Detroit Edison has established external trust funds to hold decommissioning and
low-level radioactive waste disposal funds collected from customers. During
1999, 1998 and 1997 Detroit Edison collected $38 million, $36 million and $36
million, respectively, from customers for decommissioning and low-level
radioactive waste disposal. Such amounts were recorded as components of
depreciation and amortization expense and in other liabilities. Net unrealized
gains of $4 million and $37 million in 1999 and 1998, respectively, were
recorded as increases to the nuclear decommissioning trust funds and other
liabilities. Investments in debt and equity securities held within the
external trust funds are classified as available for sale.

At December 31, 1999, Detroit Edison had a reserve of $314 million for the
future decommissioning of Fermi 2, $12 million for low-level radioactive waste
disposal costs, and $35 million for the future decommissioning of Fermi 1, an
experimental nuclear unit on the Fermi 2 site that has been shut down since
1972. These reserves are included in other liabilities, with a like amount
deposited in external trust funds. It is estimated that the cost of
decommissioning Fermi 2 when its license expires in the year 2025 will be $688
million in 1999 dollars and $3 billion in 2025 dollars using a 6% inflation
rate, and the cost of decommissioning Fermi 1 in 2025 is $34 million in 1999
dollars and $161 million in 2025 dollars using a 6% inflation rate.

Fermi 2 Phase-In Plan

SFAS No. 92, Regulated Enterprises  Accounting for Phase-in Plans, permits
the capitalization of costs deferred for future recovery under a phase-in plan.
Based on a MPSC-authorized phase-in plan, Detroit Edison recorded a receivable
totaling $506.5 million from 1988 through 1992. Beginning in 1993 and ending
in 1998, these amounts

53



---



were amortized to operating expense as they were
included in rates. Amortization of these amounts totaled $84 million and $112
million in 1998 and 1997, respectively.

Capacity Factor Performance Standard

The capacity factor disallowances for 1998 and 1999 have not yet been
determined by the MPSC. At December 31, 1999 and 1998, Detroit Edison had
accruals of $63 million and $86 million, respectively, for the Fermi 2 capacity
factor performance standard disallowances that are expected to be imposed by
the MPSC for 1998 and 1999, and for the estimated impact on the 2000 capacity
factor disallowance resulting from Fermi 2s lower than expected capacity
utilization in 1998.

Nuclear Fuel Disposal Costs

In accordance with the Federal Nuclear Waste Policy Act of 1982, Detroit Edison
has a contract with the United States Department of Energy (DOE) for the future
storage and disposal of spent nuclear fuel from Fermi 2. Detroit Edison is
obligated to pay DOE a fee of one mill per net kilowatthour of Fermi 2
electricity generated and sold. The fee is a component of nuclear fuel
expense. Delays have occurred in the DOEs program for the acceptance and
disposal of spent nuclear fuel at a permanent repository. Until the DOE is
able to fulfill its obligation under the contract, Detroit Edison is
responsible for the spent nuclear fuel storage and estimates that existing
storage capacity will be sufficient until 2001, or until 2015 with expansion of
such storage capacity. Plans are currently under way to complete the expansion
project by 2001.

NOTE 5  JOINTLY-OWNED UTILITY PLANT

---

Detroit Edisons portion of jointly-owned utility plant is as follows:

|                                    |  |             |           |                          |  |   |      |  
|----------------------------------- |  | ----------- | --------- | ------------------------ |  | - | ---- | -
|                                    |  | Belle River |           | Ludington Pumped Storage
|                                    |  |             |           |                         
|In-service date                     |  |             | 1984-1985 |                          |  |   | 1973 |  
|                                   
|                                   
|                                   
|                                   
|Ownership interest                  |  |             | *         |                          |  |   | 49   | %
|                                   
|                                   
|                                   
|                                   
|Investment (millions)               |  | $           | 1,031     |                          |  | $ | 190  |  
|                                   
|                                   
|                                   
|                                   
|Accumulated depreciation (millions) |  | $           | 417       |                          |  | $ | 90   |  



|* |  | Detroit Edisons ownership interest is 62.78% in Unit No. 1, 81.39%
of the portion of the facilities applicable to Belle River used jointly
by the Belle River and St. Clair Power Plants, 49.59% in certain
transmission lines and, at December 31, 1999, 75% in facilities used in
common with Unit No. 2.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Belle River

The Michigan Public Power Agency (MPPA) has an ownership interest in Belle
River Unit No. 1 and certain other related facilities. MPPA is entitled to
18.61% of the capacity and energy of the entire plant and is responsible for
the same percentage of the plants operation and maintenance expenses and
capital improvements.

54



---



Ludington Pumped Storage

Operation, maintenance and other expenses of the Ludington Pumped Storage Plant
are shared by Detroit Edison and Consumers Energy Company in proportion to
their respective ownership interests in the plant.

NOTE 6  INCOME TAXES

---

Total income tax expense as a percent of income before tax varied from the
statutory federal income tax rate for the following reasons:

|                                         |  |      |       |      |  |      |       |   |  |  |      |  
|---------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  |  | ---- | -
|                                         |  | 1999 |       | 1998 |  | 1997
|                                         |  |      |       |      |  |     
|Statutory income tax rate                |  |      | 35.0  | %    |  |      | 35.0  | % |  |  | 35.0 | %
|                                        
|                                        
|                                        
|                                        
|Deferred Fermi 2 depreciation and return |  |      |      |      |  |      | 3.9   |   |  |  | 4.6  |  
|                                        
|                                        
|                                        
|                                        
|Investment tax credit                    |  |      | (1.9  | )    |  |      | (2.5  | ) |  |  | (2.1 | )
|                                        
|                                        
|                                        
|                                        
|Depreciation                             |  |      | 1.5   |      |  |      | 5.1   |   |  |  | 4.6  |  
|                                        
|                                        
|                                        
|                                        
|Removal costs                            |  |      | (2.3  | )    |  |      | (1.9  | ) |  |  | (1.5 | )
|                                        
|                                        
|                                        
|                                        
|Alternate fuels credit                   |  |      | (21.3 | )    |  |      | (13.1 | ) |  |  | (3.5 | )
|                                        
|                                        
|                                        
|                                        
|Other-net                                |  |      | 0.1   |      |  |      | (1.0  | ) |  |  | 0.4  |  
|                                         |  |      |       |      |  |      |       |   |  |  |      |  
|Effective income tax rate                |  |      | 11.1  | %    |  |      | 25.5  | % |  |  | 37.5 | %
|                                         |  |      |       |      |  |      |       |   |  |  |      |  

Components of income tax expense were as follows:

|                                                    |       |   |            |    |      |   |      |     |  |   |     |     | 
|--------------------------------------------------- | ----- | - | ---------- | -- | ---- | - | ---- | --- |  | - | --- | --- | 
|                                                    |       |   | 1999       |    | 1998 |   | 1997
|                                                    |       |   |            |    |      |   |     
|                                                    |       |   | (Millions)
|Current federal income tax expense                  |       | $ | 144        |    |      | $ | 143  |     |  | $ | 267 |    
|                                                   
|                                                   
|                                                   
|                                                   
|Deferred federal income tax (benefit) expense  net |       |   | (73        | )  |      |   | 26   |     |  |   | 5   |    
|                                                   
|                                                   
|                                                   
|                                                   
|Investment tax credit                               |       |   | (11        | )  |      |   | (15  | )   |  |   | (15 | )  
|                                                    |       |   |            |    |      |   |      |     |  |   |     |    
|                                                    | Total |   | $          | 60 |      |   | $    | 154 |  |   | $   | 257 | 
|                                                    |       |   |            |    |      |   |      |     |  |   |     |    

Internal Revenue Code Section 29 provides a tax credit (alternate fuels credit)
for qualified fuels produced and sold by a taxpayer to an unrelated person
during the taxable year. The alternate fuels credit reduced current federal
income tax expense $116 million, $79 million and $24 million for 1999, 1998 and
1997 respectively.

55



---



Deferred income tax assets (liabilities) were comprised of the following at
December 31:

|                                     |  |            |        |   |  |  |  |      |  |   |        |  
|------------------------------------ |  | ---------- | ------ | - |  |  |  | ---- |  | - | ------ | -
|                                     |  | 1999       |        |   |  |  |  | 1998
|                                     |  |            |        |   |  |  |  |     
|                                     |  | (Millions)
|Property                             |  | $          | (1,209 | ) |  |  |  |      |  | $ | (1,139 | )
|                                    
|                                    
|                                    
|                                    
|Unamortized nuclear costs            |  |            | (899   | ) |  |  |  |      |  |   | (983   | )
|                                    
|                                    
|                                    
|                                    
|Property taxes                       |  |            | (66    | ) |  |  |  |      |  |   | (66    | )
|                                    
|                                    
|                                    
|                                    
|Investment tax credit                |  |            | 96     |   |  |  |  |      |  |   | 154    |  
|                                    
|                                    
|                                    
|                                    
|Reacquired debt losses               |  |            | (30    | ) |  |  |  |      |  |   | (32    | )
|                                    
|                                    
|                                    
|                                    
|Contributions in aid of construction |  |            | 73     |   |  |  |  |      |  |   | 63     |  
|                                    
|                                    
|                                    
|                                    
|Other                                |  |            | 51     |   |  |  |  |      |  |   | 55     |  
|                                     |  |            |        |   |  |  |  |      |  |   |        |  
|                                     |  | $          | (1,984 | ) |  |  |  |      |  | $ | (1,948 | )
|                                     |  |            |        |   |  |  |  |      |  |   |        |  
|Deferred income tax liabilities      |  | $          | (2,463 | ) |  |  |  |      |  | $ | (2,447 | )
|                                    
|                                    
|                                    
|                                    
|Deferred income tax assets           |  |            | 479    |   |  |  |  |      |  |   | 499    |  
|                                     |  |            |        |   |  |  |  |      |  |   |        |  
|                                     |  | $          | (1,984 | ) |  |  |  |      |  | $ | (1,948 | )
|                                     |  |            |        |   |  |  |  |      |  |   |        |  

The federal income tax returns of the Company are settled through the year
1992. The Company believes that adequate provisions for federal income taxes
have been made through December 31, 1999.

NOTE 7  SHAREHOLDERS EQUITY

---

At December 31, 1999, the Company had 5 million shares of Cumulative Preferred
Stock, without par value, authorized with no shares issued. At December 31,
1999, 1.5 million shares of preferred stock are reserved for issuance in
accordance with the
Shareholders Rights Agreement.

At December 31, 1999, Detroit Edison had 30 million shares of Cumulative
Preference Stock of $1 par value and 6.75 million shares of Cumulative
Preferred Stock of $100 par value authorized, with no shares issued. All of
Detroit Edisons 7.75% Series and 7.74% Series Cumulative Preferred Stock were
redeemed in 1998.

In September 1997, the Board of Directors of the Company declared a dividend
distribution of one right (Right) for each share of Company common stock
outstanding. Under certain circumstances, each Right entitles the shareholder
to purchase one one-hundredth of a share of Company Series A Junior
Participating Preferred Stock at a price of $90. If the acquiring person or
group acquires 10% or more of the Company common stock, and the Company
survives, each Right (other than those held by the acquirer) will entitle its
holder to buy Company common stock having a value of $180 for $90. If the
acquiring person or group acquires 10% or more of the Company common stock, and
the Company does not survive, each Right (other than those held by the
surviving or acquiring company) will entitle its holder to buy shares of common
stock of the surviving or acquiring company having a value of $180 for $90.
The Rights will expire on October 6, 2007, unless redeemed by the Company at
$0.01 per Right at any time prior to an event which would permit the Rights to
be exercised. The Company may amend the

56



---



Rights agreement without the approval
of the holders of the Rights Certificates, except that the redemption price may
not be less than $0.01 per Right.

NOTE 8  LONG-TERM DEBT

---

The Companys long-term debt outstanding at December 31 was:

|                                |                           |                                   |                                                       |   |            |     |       |   |       |     | 
|------------------------------- | ------------------------- | --------------------------------- | ----------------------------------------------------- | - | ---------- | --- | ----- | - | ----- | --- | 
|                                |                           |                                   |                                                       |   | 1999       |     | 1998 
|                                |                           |                                   |                                                       |   |            |     |      
|                                |                           |                                   |                                                       |   | (Millions)
|Mortgage Bonds                 
|                               
|                               
|                               
|                               
|                                |                           | 5.6% to 8.4% due 2000 to 2023     |                                                       | $ | 1,539      |     |       | $ | 1,742 |    
|                               
|                               
|                               
|                               
|Remarketed Notes               
|                               
|                               
|                               
|                               
|                                |                           | 6.0% to 6.4% due 2028 to 2034 (a) |                                                       |   | 410        |     |       |   | 410   |    
|                               
|                               
|                               
|                               
|                                |                           | 6.2% and 7.1% due 2038            |                                                       |   | 400        |     |       |   | 400   |    
|                               
|                               
|                               
|                               
|Tax Exempt Revenue Bonds       
|                               
|                               
|                               
|                               
|                                | Secured by Mortgage Bonds
|                               
|                               
|                               
|                               
|                                |                           |                                   | Installment Sales Contracts
6.9% due 2004 to 2024 (b) |   |            | 176 |       |   |       | 282 | 
|                               
|                               
|                               
|                               
|                                |                           |                                   | Loan Agreements
6.3% due 2008 to 2029 (b)             |   |            | 831 |       |   |       | 607 | 
|                               
|                               
|                               
|                               
|                                | Unsecured                
|                               
|                               
|                               
|                               
|                                |                           |                                   | Installment Sales Contracts
6.4% due 2004             |   |            | 24  |       |   |       | 142 | 
|                               
|                               
|                               
|                               
|                                |                           |                                   | Loan Agreements
3.6% due 2024 to 2030 (a)             |   |            | 113 |       |   |       | 113 | 
|                               
|                               
|                               
|                               
|QUIDS                          
|                               
|                               
|                               
|                               
|                                |                           | 7.4% to 7.6% due 2026 to 2028     |                                                       |   | 385        |     |       |   | 385   |    
|                               
|                               
|                               
|                               
|Non-Recourse Debt              
|                               
|                               
|                               
|                               
|                                |                           | 7.5% due 2000 to 2009 (b)         |                                                       |   | 330        |     |       |   | 410   |    
|                               
|                               
|                               
|                               
|Less amount due within one year |                           |                                   | (270                                                  | ) |            |     | (294  | )
|                                |                           |                                   |                                                       |   |            |     |       |  
|Total Long-Term Debt            |                           | $                                 | 3,938                                                 |   |            | $   | 4,197 |  
|                                |                           |                                   |                                                       |   |            |     |       |  



(a)   Variable rate at December 31, 1999.

(b)   Weighted average interest rate at December 31, 1999.

In the years 2000  2004, the Companys long-term debt maturities are $270
million, $234 million, $275 million, $238 million and $64 million,
respectively.

Detroit Edisons 1924 Mortgage and Deed of Trust (Mortgage), the lien of which
covers substantially all of Detroit Edisons properties, provides for the
issuance of additional General and Refunding Mortgage Bonds (Mortgage Bonds).
At December 31, 1999, approximately $4.1 billion principal amount of Mortgage
Bonds could have been issued on the basis of property additions, combined with
an earnings test provision, assuming an interest rate of 8% on any such
additional Mortgage Bonds. An additional $1.9 billion principal amount of
Mortgage Bonds could have been issued on the basis of bond retirements.

57



---



Unless an event of default has occurred, and is continuing, each series of
Quarterly Income Debt Securities (QUIDS) provides that interest will be paid
quarterly. However, Detroit Edison also has the right to extend the interest
payment period on the QUIDS for up to 20 consecutive interest payment periods.
Interest would continue to accrue during the deferral period. If this right
is exercised, Detroit Edison may not declare or pay dividends on, or redeem,
purchase or acquire, any of its capital stock during the deferral period.
Detroit Edison may redeem any series of capital stock pursuant to the terms of
any sinking fund provisions during the deferral period. Additionally, during
any deferral period, Detroit Edison may not enter into any inter-company
transactions with any affiliate of Detroit Edison, including the Company, to
enable the payment of dividends on any equity securities of the Company.

At December 31, 1999, $273 million of notes and bonds were subject to periodic
remarketings within one year. Remarketing agents remarket these securities at
the lowest interest rate necessary to produce a par bid. In the event that a
remarketing fails, Standby Note Purchase Agreements and/or Letters of Credit
provide that banks will purchase the securities and, after the conclusion of
all necessary proceedings, remarket the bonds. In the event the banks
obligations under the Standby Note Purchase Agreements and/or Letters of
Credit are not honored, then Detroit Edison would be required to purchase any
securities subject to a failed remarketing.

NOTE 9  SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS

---

At December 31, 1999, Detroit Edison had total short-term credit arrangements
of approximately $524 million, under which $162 million was outstanding. At
December 31, 1998, $231 million was outstanding. The weighted average interest
rates for short-term borrowings at December 31, 1999 and 1998 were 6.9% and
6.2%, respectively.

Detroit Edison had bank lines of credit of $201 million, all of which had
commitment fees in lieu of compensating balances. Detroit Edison uses bank
lines of credit and other credit facilities to support the issuance of
commercial paper and bank loans. Detroit Edison had $162 million and $231
million of commercial paper outstanding at December 31, 1999 and 1998,
respectively.

Detroit Edison had a nuclear fuel financing arrangement with Renaissance Energy
Company (Renaissance), an unaffiliated company. Renaissance may issue
commercial paper or borrow from participating banks on the basis of promissory
notes. To the extent the maximum amount of funds available to Renaissance
(currently $400 million) is not needed by Renaissance to purchase nuclear fuel,
such funds may be loaned to Detroit Edison for general corporate purposes
pursuant to a separate Loan Agreement. At December 31, 1999, approximately
$323 million was available to Detroit Edison under such Loan Agreement.

Detroit Edison had a $200 million short-term financing agreement secured by its
customer accounts receivable and unbilled revenues portfolio under which $200
million was outstanding at December 31, 1999 at a weighted average interest
rate of 6.1%. At December 31, 1998, there were no amounts outstanding.

58



---



At December 31, 1999, DTE Capital Corporation (DTE Capital), a Company
subsidiary, had short-term credit arrangements of $400 million backed by a
Support Agreement from the Company, under which $25 million was outstanding.
The credit agreement provides support for DTE Capitals commercial paper. At
December 31, 1998, there was no commercial paper outstanding. In addition, the
Company has entered into a total of $550 million of Support Agreements with
DTE Capital for the purpose of DTE Capitals credit enhancing activities on
behalf of DTE Energy non-regulated affiliates.

NOTE 10  LEASES

---

Future minimum lease payments under capital leases, consisting of nuclear fuel
($72 million computed on a projected units of production basis), lake vessels
($19 million), locomotives and coal cars ($157 million), office space ($11
million), and computers, vehicles and other equipment ($2 million) at December
31, 1999 are as follows:

(Millions)

|     |  |      |    |      |  |      |    |      |  |       |    |       |  |   |    |  |  |           |     |  |  |   |     | 
|---- |  | ---- | -- | ---- |  | ---- | -- | ---- |  | ----- | -- | ----- |  | - | -- |  |  | --------- | --- |  |  | - | --- | 
|     |  |      |    |      |  |      |    |      |  |       |    |       |  |   |    |  |  | Remaining
|2000 |  | 2001 |    | 2002 |  | 2003 |    | 2004 |  | Years |    | Total
|     |  |      |    |      |  |      |    |      |  |       |    |      
|$48  |  | $    | 42 |      |  | $    | 35 |      |  | $     | 21 |       |  | $ | 14 |  |  | $         | 101 |  |  | $ | 261 | 
|     |  |      |    |      |  |      |    |      |  |       |    |       |  |   |    |  |  |           |     |  |  |   |     | 

Future minimum lease payments for an operating lease for railcars are as follows:

(Millions)

|     |  |      |   |      |  |      |   |      |  |       |   |       |  |   |   |  |  |           |    |  |  |   |    | 
|---- |  | ---- | - | ---- |  | ---- | - | ---- |  | ----- | - | ----- |  | - | - |  |  | --------- | -- |  |  | - | -- | 
|     |  |      |   |      |  |      |   |      |  |       |   |       |  |   |   |  |  | Remaining
|2000 |  | 2001 |   | 2002 |  | 2003 |   | 2004 |  | Years |   | Total
|     |  |      |   |      |  |      |   |      |  |       |   |      
|$9   |  | $    | 9 |      |  | $    | 9 |      |  | $     | 8 |       |  | $ | 8 |  |  | $         | 40 |  |  | $ | 83 | 
|     |  |      |   |      |  |      |   |      |  |       |   |       |  |   |   |  |  |           |    |  |  |   |    | 

Rental expenses for both capital and operating leases were $107 million
(including $52 million for nuclear fuel), $96 million (including $49 million
for nuclear fuel) and $72 million (including $42 million for nuclear fuel) for
1999, 1998 and 1997, respectively.

Detroit Edison has a contract with Renaissance which provides for the purchase
by Renaissance for Detroit Edison of up to $400 million of nuclear fuel,
subject to the continued availability of funds to Renaissance to purchase such
fuel. Title to the nuclear fuel is held by Renaissance. Detroit Edison makes
quarterly payments under the contract based on the consumption of nuclear fuel
for the generation of electricity.

NOTE 11  FINANCIAL INSTRUMENTS

---

Trading Activities

DTE ET markets and trades electricity and natural gas physical products and
financial instruments, and provides risk management services utilizing energy
commodity derivative instruments which include futures, exchange traded and
over-the-counter options, and forward purchase and sale commitments. The
notional amounts and

59



---



terms of DTE ETs outstanding
energy trading financial instruments and the fair values of DTE ETs energy
commodity derivative instruments were not material at December 31, 1999.

Market Risk

DTE ET manages, on a portfolio basis, the market risks inherent in its
activities subject to parameters established by the Companys Risk Management
Committee (RMC), which is authorized by its Board of Directors. Market risks
are monitored by the RMC to ensure compliance with the Companys stated risk
management policies. DTE ET marks its portfolio to market and measures its
risk on a daily basis in accordance with Value at Risk (VaR) and other risk
methodologies. The quantification of market risk using VaR provides a
consistent measure of risk across diverse energy markets and products.

Credit Risk

DTE ET is exposed to credit risk in the event of nonperformance by customers or
counterparties of its contractual obligations. The concentration of customers
and/or counterparties may impact overall exposure to credit risk, either
positively or negatively, in that the counterparties may be similarly affected
by changes in economic, regulatory or other conditions. However, DTE ET
maintains credit policies with regard to its customers and counterparties that
management believes significantly minimize overall credit risk. These policies
include an evaluation of potential customers and counterparties financial
condition and credit rating, collateral requirements or other credit
enhancements such as letters of credit or guarantees, and the use of
standardized agreements which allow for the netting or offsetting of positive
and negative exposures associated with a single counterparty. Based on these
policies, the Company does not anticipate a materially adverse effect on
financial position or results of operations as a result of customer or
counterparty nonperformance. Those futures and option contracts which are
traded on the New York Mercantile Exchange are financially guaranteed by the
Exchange and have nominal credit risk.

Non-Trading Activities

Interest Rate Swaps

In October 1996, Detroit Edison entered into a three-year interest rate swap
agreement based on a notional amount of $25 million, which was nominally linked
to the Detroit Edison 1993 Series B Remarketed Notes. In 1999 and 1998, the
average rate received was 5.12% and 5.68%, respectively, and the average rate
paid was 4.71% and 5.02%, respectively. The net of interest received and
interest paid on the swap was accrued as a component of interest expense in the
current period.

PCI Enterprises Company (PCI), a coal pulverizing subsidiary, entered into a
seven-year interest rate swap agreement beginning June 30, 1997, with the
intent of reducing the impact of changes in interest rates on its variable rate
non-recourse debt. The initial notional amount was $30 million which was based
on 60% of its term loan of $50 million.

60



---



The notional amount outstanding at December 31, 1999 and 1998, was $24 million
and $27 million, respectively, and will decline throughout the term of the loan
based on amortization of principal amounts. PCI pays a fixed interest rate of
6.96% on the notional amount and receives a variable interest rate based on
LIBOR. In 1999 and 1998, the average rate received was 5.28% and 5.65%,
respectively. The net of interest received and interest paid on the swap is
accrued as a component of interest expense in the current period.

Fair Value of Financial Instruments

The fair value of financial instruments is determined by reference to various
market data and other valuation techniques as appropriate. The carrying amount
of financial instruments, except for long-term debt, approximates fair value.
The estimated fair value of total long-term debt at December 31, 1999 and 1998
was $4 billion and $4.8 billion, respectively, compared to the carrying amount
of $4.2 billion and $4.5 billion, respectively.

NOTE 12  COMMITMENTS AND CONTINGENCIES

---

Commitments

Detroit Edison has outstanding purchase commitments of approximately $850
million at December 31, 1999, which includes, among other things, line
construction and clearance costs and equipment purchases. The Company and
Detroit Edison have also entered into long-term fuel supply commitments of
approximately $621 million.

Detroit Edison has an Energy Purchase Agreement (Agreement) for the purchase of
steam and electricity from the Detroit Resource Recovery Facility. Under the
Agreement, Detroit Edison will purchase steam through 2008 and electricity
through June 2024. In 1996, a special charge to net income of $149 million
($97 million after-tax) or $0.67 cents per share was recorded. The special
charge included a reserve for steam purchase commitments from 1997 through 2008
and expenditures for closure of a portion of the steam heating system. The
reserve for steam purchase commitments was recorded at its present value,
therefore Detroit Edison will record non-cash accretion expense through 2008.
In addition, amortization of the reserve for steam purchase commitments is
netted against losses on steam heating purchases recorded in fuel and purchased
power expense. Purchases of steam and electricity were $35 million, $31
million and $34 million for 1999, 1998 and 1997, respectively. Annual steam
purchase commitments are approximately $38 million, $39 million, $40 million,
$42 million and $43 million for 2000, 2001, 2002, 2003 and 2004, respectively.

In October 1995, the MPSC issued an Order approving Detroit Edisons six-year
capacity and energy purchase agreement with Ontario Hydro. Ontario Hydro
agreed to sell Detroit Edison 300 MW of capacity from mid-May through
mid-September. This purchase will offset a concurrent agreement to lease
approximately a third of Detroit Edisons Ludington 917 MW capacity to
FirstEnergy for the same time period. The net economic effect of
Ludington lease and the Ontario Hydro purchase is an estimated reduction in
PSCR expense of $74 million.

61



---



Contingencies

Legal Proceedings

Detroit Edison and plaintiffs in a class action pending in the Circuit Court
for Wayne County, Michigan (Gilford, et al v. Detroit Edison), as well as
plaintiffs in two other pending actions which make class claims (Sanchez, et al
v. Detroit Edison, Circuit Court for Wayne County, Michigan; and Frazier v.
Detroit Edison, United States District Court, Eastern District of Michigan),
agreed to binding arbitration to settle these matters. A Consent Judgment
received preliminary Court approval. On October 28, 1999, a panel of
arbitrators awarded the plaintiffs $45.15 million. As a result of sufficient
prior accruals and anticipated insurance coverage, Detroit Edison did not incur
a material 1999 earnings impact due to this award. Detroit Edison anticipates
that the insurance claims process will conclude favorably. While Detroit
Edison can give no assurances as to the final resolution of the claims process,
it does not believe that an unfavorable earnings impact will result.

Other

In addition to the matters reported herein, the Company and its subsidiaries
are involved in litigation and environmental matters dealing with the numerous
aspects of their business operations. The Company believes that such
litigation and the matters discussed above will not have a material effect on
its financial position, results of operations and cash flows.

See Notes 3 and 4 for a discussion of contingencies related to Regulatory
Matters and Fermi 2.

NOTE 13  EMPLOYEE BENEFITS

---

Retirement Plan

Detroit Edison has a trusteed and non-contributory defined benefit retirement
plan (Plan) covering all eligible employees who have completed six months of
service. The Plan provides retirement benefits based on the employees years
of benefit service, average final compensation and age at retirement. Detroit
Edisons policy is to fund pension cost calculated under the projected unit
credit actuarial cost method.

62



---



Net pension cost included the following components:

|                                                                          |  |            |      |      |  |      |      |   |  |   |      |  
|------------------------------------------------------------------------- |  | ---------- | ---- | ---- |  | ---- | ---- | - |  | - | ---- | -
|                                                                          |  | 1999       |      | 1998 |  | 1997
|                                                                          |  |            |      |      |  |     
|                                                                          |  | (Millions)
|Service cost  benefits earned during period                              |  | $          | 35   |      |  | $    | 31   |   |  | $ | 27   |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Interest cost on projected benefit obligation                             |  |            | 92   |      |  |      | 88   |   |  |   | 86   |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Expected return on Plan assets                                            |  |            | (124 | )    |  |      | (118 | ) |  |   | (104 | )
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Amortization of unrecognized prior service cost                           |  |            | 5    |      |  |      | 5    |   |  |   | 5    |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Amortization of unrecognized net asset resulting
from initial application |  |            | (4   | )    |  |      | (4   | ) |  |   | (4   | )
|                                                                          |  |            |      |      |  |      |      |   |  |   |      |  
|Net pension cost                                                          |  | $          | 4    |      |  | $    | 2    |   |  | $ | 10   |  
|                                                                          |  |            |      |      |  |      |      |   |  |   |      |  

The following reconciles the funded status of the Plan to the amount recorded
in the Consolidated Balance Sheet at December 31:

|                                                                                      |                                               |   |            |     |      |   |       |     |  
|------------------------------------------------------------------------------------- | --------------------------------------------- | - | ---------- | --- | ---- | - | ----- | --- | -
|                                                                                      |                                               |   | 1999       |     | 1998
|                                                                                      |                                               |   |            |     |     
|                                                                                      |                                               |   | (Millions)
|Projected benefit obligation at beginning of year                                     |                                               | $ | 1,400      |     |      | $ | 1,294 |    
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      | Service cost  benefits earned during period  |   |            | 35  |      |   |       | 31  |  
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      | Interest cost on projected benefit obligation |   |            | 92  |      |   |       | 88  |  
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      | Net (gain) loss                               |   |            | (49 | )    |   |       | 61  |  
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      | Benefits paid to participants                 |   |            | (77 | )    |   |       | (74 | )
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      | Plan amendments                               |   |            | 56  |      |   |       |    |  
|                                                                                      |                                               |   |            |     |      |   |       |    
|Projected benefit obligation at end of year                                           |                                               |   | 1,457      |     |      |   | 1,400 |    
|                                                                                      |                                               |   |            |     |      |   |       |    
|Fair value of Plan assets (primarily equity and
debt securities) at beginning of year |                                               |   | 1,416      |     |      |   | 1,347 |    
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      | Actual return on Plan assets                  |   |            | 246 |      |   |       | 143 |  
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      | Benefits paid to participants                 |   |            | (77 | )    |   |       | (74 | )
|                                                                                      |                                               |   |            |     |      |   |       |    
|Fair value of Plan assets at end of year                                              |                                               |   | 1,585      |     |      |   | 1,416 |    
|                                                                                      |                                               |   |            |     |      |   |       |    
|Plan assets in excess of projected benefit obligation                                 |                                               |   | 128        |     |      |   | 16    |    
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Unrecognized net (asset) resulting from initial application                           |                                               |   | (11        | )   |      |   | (15   | )  
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Unrecognized net (gain) loss                                                          |                                               |   | (136       | )   |      |   | 31    |    
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Unrecognized prior service cost                                                       |                                               |   | 94         |     |      |   | 47    |    
|                                                                                      |                                               |   |            |     |      |   |       |    
|Asset recorded in the Consolidated Balance Sheet                                      |                                               | $ | 75         |     |      | $ | 79    |    
|                                                                                      |                                               |   |            |     |      |   |       |    

63



---



Assumptions used in determining the projected benefit obligation at December 31
were as follows:

|                                                 |  |      |     |      |  |  |     |  
|------------------------------------------------ |  | ---- | --- | ---- |  |  | --- | -
|                                                 |  | 1999 |     | 1998
|                                                 |  |      |     |     
|Discount rate                                    |  |      | 7.5 | %    |  |  | 6.5 | %
|                                                
|                                                
|                                                
|                                                
|Annual increase in future compensation levels    |  |      | 4.0 |      |  |  | 4.0 |  
|                                                
|                                                
|                                                
|                                                
|Expected long-term rate of return on Plan assets |  |      | 9.5 |      |  |  | 9.0 |  

The unrecognized net asset at date of initial application is being amortized
over approximately 15.4 years, which was the average remaining service period
of employees at January 1, 1987.

In addition to the Plan, there are several supplemental non-qualified,
non-contributory, retirement benefit plans for certain management employees.

Savings and Investment Plans

Detroit Edison has voluntary defined contribution plans qualified under Section
401 (a) and (k) of the Internal Revenue Code for all eligible employees.
Detroit Edison contributes up to 6% of base compensation for non-represented
employees and up to 4% for represented employees. Matching contributions were
$21 million, $21 million and $20 million for 1999, 1998 and 1997,
respectively.

Other Postretirement Benefits

Detroit Edison provides certain postretirement health care and life insurance
benefits for retired employees. Substantially all of Detroit Edisons
employees will become eligible for such benefits if they reach retirement age
while working for Detroit Edison. These benefits are provided principally
through insurance companies and other organizations.

Net other postretirement benefits cost included the following components:

|                                                   |  |   |            |   |      |   |      |   |  |   |     |   | 
|-------------------------------------------------- |  | - | ---------- | - | ---- | - | ---- | - |  | - | --- | - | 
|                                                   |  |   | 1999       |   | 1998 |   | 1997
|                                                   |  |   |            |   |      |   |     
|                                                   |  |   | (Millions)
|Service cost  benefits earned during period       |  | $ | 23         |   |      | $ | 19   |   |  | $ | 19  |  
|                                                  
|                                                  
|                                                  
|                                                  
|Interest cost on accumulated
benefit obligation    |  |   | 41         |   |      |   | 38   |   |  |   | 39  |  
|                                                  
|                                                  
|                                                  
|                                                  
|Expected return on assets                          |  |   | (39        | ) |      |   | (30  | ) |  |   | (20 | )
|                                                  
|                                                  
|                                                  
|                                                  
|Amortization of unrecognized transition obligation |  |   | 21         |   |      |   | 21   |   |  |   | 21  |  
|                                                   |  |   |            |   |      |   |      |   |  |   |     |   | 
|Net other postretirement benefits cost             |  | $ | 46         |   |      | $ | 48   |   |  | $ | 59  |  
|                                                   |  |   |            |   |      |   |      |   |  |   |     |   | 

64



---



The following reconciles the funded status to the amount recorded in the
Consolidated Balance Sheet at December 31:

|                                                                                 |                                                 |                              |      |            |    |      |      |     |    | 
|-------------------------------------------------------------------------------- | ----------------------------------------------- | ---------------------------- | ---- | ---------- | -- | ---- | ---- | --- | -- | 
|                                                                                 |                                                 |                              |      | 1999       |    | 1998
|                                                                                 |                                                 |                              |      |            |    |     
|                                                                                 |                                                 |                              |      | (Millions)
|Postretirement benefit obligation at beginning of year                           |                                                 | $                            | 625  |            |    | $    | 580  |    
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Service cost  benefits earned during period    |                              |      | 23         |    |      |      | 19  |   
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Interest cost on accumulated benefit obligation |                              |      | 43         |    |      |      | 38  |   
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Benefit payments                                |                              |      | (29        | )  |      |      | (27 | ) 
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 | Net (gain) loss                                 |                              |      | (55        | )  |      |      | 15  |   
|                                                                                 |                                                 |                              |      |            |    |      |      |    
|Postretirement benefit obligation at end of year                                 |                                                 |                              | 607  |            |    |      | 625  |    
|                                                                                 |                                                 |                              |      |            |    |      |      |    
|Fair value of assets (primarily equity and debt
securities) at beginning of year |                                                 |                              | 422  |            |    |      | 309  |    
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                                                 | Detroit Edison contributions |      |            | 26 |      |      |     | 57 | 
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                                                 | Benefit payments             |      |            | (8 | )    |      |     |   | 
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|                                                                                 |                                                 | Actual return on assets      |      |            | 61 |      |      |     | 56 | 
|                                                                                 |                                                 |                              |      |            |    |      |      |    
|Fair value of assets at end of year                                              |                                                 |                              | 501  |            |    |      | 422  |    
|                                                                                 |                                                 |                              |      |            |    |      |      |    
|Postretirement benefit obligation in (excess) of assets                          |                                                 |                              | (106 | )          |    |      | (203 | )  
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Unrecognized transition obligation                                               |                                                 |                              | 267  |            |    |      | 287  |    
|                                                                                
|                                                                                
|                                                                                
|                                                                                
|Unrecognized net (gain)                                                          |                                                 |                              | (105 | )          |    |      | (28  | )  
|                                                                                 |                                                 |                              |      |            |    |      |      |    
|Asset recorded in the
Consolidated                                              
|                                                                                 |                                                 | Balance Sheet                |      | $          | 56 |      |      | $   | 56 | 
|                                                                                 |                                                 |                              |      |            |    |      |      |    

Assumptions used in determining the postretirement benefit obligation at
December 31 were as follows:

|                                              |  |      |     |      |  |  |     |  
|--------------------------------------------- |  | ---- | --- | ---- |  |  | --- | -
|                                              |  | 1999 |     | 1998
|                                              |  |      |     |     
|Discount rate                                 |  |      | 7.5 | %    |  |  | 6.5 | %
|                                             
|                                             
|                                             
|                                             
|Annual increase in future compensation levels |  |      | 4.0 |      |  |  | 4.0 |  
|                                             
|                                             
|                                             
|                                             
|Expected long-term rate of return on assets   |  |      | 9.0 |      |  |  | 8.5 |  

Benefit costs were calculated assuming health care cost trend rates beginning
at 8% for 2000 and decreasing to 5% in 2007 and thereafter for persons under
age 65 and decreasing from 5.8% to 5% for persons age 65 and over. A
one-percentage-point increase in health care cost trend rates would increase
the aggregate of the service cost and interest cost components of benefit costs
by $11 million for 1999 and increase the accumulated benefit obligation by $86
million at December 31, 1999. A one-percentage-point decrease in the health
care cost trend rates would decrease the aggregate of the service cost and
interest cost components of benefit costs by $9 million for 1999 and decrease
the accumulated benefit obligation by $70 million at December 31, 1999.

65



---



NOTE 14  STOCK-BASED COMPENSATION

---

The Company adopted a Long-Term Incentive Plan (LTIP) in 1995. Under the LTIP,
certain key employees may be granted restricted common stock, stock options,
stock appreciation rights, performance shares and performance units. Common
stock granted under the LTIP may not exceed 7.2 million shares. Performance
units (which have a face amount of $1) granted under the LTIP may not exceed 25
million in the aggregate. As of December 31, 1999, no stock appreciation
rights, performance shares or performance units have been granted under the
LTIP.

Under the LTIP, shares of restricted common stock were awarded and are
restricted for a period not exceeding four years. All shares are subject to
forfeiture if specified performance measures are not met. During the applicable
restriction period, the recipient has all the voting, dividend and other rights
of a record holder except that the shares are nontransferable, and non-cash
distributions paid upon the shares would be subject to transfer restrictions
and risk of forfeiture to the same extent as the shares themselves. The shares
were recorded at the market value on the date of grant and amortized to expense
based on the award that was expected to vest and the period during which the
related employee services were to be rendered. Restricted common stock
activity for the year ended December 31 was:

|                                                     |  |      |        |      |  |      |        |  |  |   |        | 
|---------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|                                                     |  | 1999 |        | 1998 |  | 1997
|                                                     |  |      |        |      |  |     
|Restricted common shares awarded                     |  |      | 99,500 |      |  |      | 74,000 |  |  |   | 68,500 | 
|                                                    
|                                                    
|                                                    
|                                                    
|Weighted average market price of shares awarded      |  | $    | 40.99  |      |  | $    | 38.77  |  |  | $ | 28.38  | 
|                                                    
|                                                    
|                                                    
|                                                    
|Compensation cost charged against
income (thousands) |  | $    | 945    |      |  | $    | 976    |  |  | $ | 222    | 

Stock options were also issued under the LTIP. Options are exercisable at a
rate of 25% per year during the four years following the date of grant. The
options will expire 10 years after the date of the grant. The option exercise
price equals the fair market value of the stock on the date that the option was
granted. Stock option activity was as follows:

66



---



|                                                      |                                                                      |           |         |            |         |                |       |          |       | 
|----------------------------------------------------- | -------------------------------------------------------------------- | --------- | ------- | ---------- | ------- | -------------- | ----- | -------- | ----- | 
|                                                      |                                                                      |           |         |            |         |                |       | Weighted
|                                                      |                                                                      |           |         | Number     |         | Average       
|                                                      |                                                                      |           |         | of Options |         | Exercise Price
|                                                      |                                                                      |           |         |            |         |               
|Outstanding at January 1, 1997                        |                                                                      |           |        |            |         |                |      |         
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                                                      | Granted   |         |            | 310,500 |                |       | $        | 28.38 | 
|                                                      |                                                                      |           |         |           
|Outstanding at December 31, 1997 (none exercisable)   |                                                                      |           | 310,500 |            |         |                | 28.38 |         
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                                                      | Granted   |         |            | 319,500 |                |       |          | 38.38 | 
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                                                      | Exercised |         |            | (22,625 | )              |       |          | 28.50 | 
|                                                      |                                                                      |           |         |           
|Outstanding at December 31, 1998 (58,750 exercisable) |                                                                      |           | 607,375 |            |         |                | 33.70 |         
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                                                      | Granted   |         |            | 428,000 |                |       |          | 41.30 | 
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                                                      | Exercised |         |            | (11,675 | )              |       |          | 30.99 | 
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                                                      | Canceled  |         |            | (24,625 | )              |       |          | 31.96 | 
|                                                      |                                                                      |           |         |           
|Outstanding at December 31, 1999                     
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | (194,371 exercisable at a weighted average exercise
price of $32.35) |           |         | 999,075    |         |                |       | 37.03    |      
|                                                      |                                                                      |           |         |            |         |                |      

The range of exercise prices for options outstanding at December 31, 1999 was
$28.50 to $43.85. The number, weighted average exercise price and weighted
average remaining contractual life of options outstanding was as follows:

|                  |  |                   |         |                |  |                  |       |           |  |                  |            | 
|----------------- |  | ----------------- | ------- | -------------- |  | ---------------- | ----- | --------- |  | ---------------- | ---------- | 
|                  |  |                   |         |                |  |                  |       |           |  | Weighted Average
|Range of Exercise |  |                   |         |                |  | Weighted Average |       | Remaining
|Prices            |  | Number of Options |         | Exercise Price |  | Contractual Life
|                  |  |                   |         |                |  |                 
|$28.50 - $34.75   |  |                   | 282,825 |                |  | $                | 28.68 |           |  |                  | 7.2  years | 
|                 
|                 
|                 
|                 
|$38.04 - $43.85   |  |                   | 716,250 |                |  | $                | 40.32 |           |  |                  | 8.9  years | 
|                  |  |                   |         |               
|                  |  |                   | 999,075 |                |  | $                | 37.03 |           |  |                  | 8.4  years | 
|                  |  |                   |         |               

The Company applies APB Opinion 25, Accounting for Stock Issued to Employees.
Accordingly, no compensation expense has been recorded for options granted.
As required by SFAS No. 123, Accounting for Stock-Based Compensation, the
Company has determined the pro forma information as if the Company had
accounted for its employee stock options under the fair value method. The fair
value for these options was estimated at the date of grant using a modified
Black/Scholes option pricing model  American style and the following weighted
average assumptions:

67



---



|                        |  |      |           |      |  |      |           |   |  |   |           |  
|----------------------- |  | ---- | --------- | ---- |  | ---- | --------- | - |  | - | --------- | -
|                        |  | 1999 |           | 1998 |  | 1997
|                        |  |      |           |      |  |     
|Risk-free interest rate |  |      | 5.64      | %    |  |      | 5.84      | % |  |   | 6.83      | %
|                       
|                       
|                       
|                       
|Dividend yield          |  |      | 4.95      | %    |  |      | 5.39      | % |  |   | 7.26      | %
|                       
|                       
|                       
|                       
|Expected volatility     |  |      | 17.28     | %    |  |      | 17.48     | % |  |   | 18.31     | %
|                       
|                       
|                       
|                       
|Expected life           |  |      | 10  years |      |  |      | 10  years |   |  |   | 10  years |  
|                       
|                       
|                       
|                       
|Fair value per option   |  | $    | 7.18      |      |  | $    | 6.43      |   |  | $ | 4.15      |  

The pro forma effect of these options would be to reduce net income by
$1,289,000, $695,000 and $244,000 for the years ended December 31, 1999, 1998
and 1997, respectively, and to reduce earnings per share by $0.01 for the
year-ended December 31, 1999. There was no pro forma effect on earnings per
share for the years ended December 31, 1998 and 1997.

NOTE 15  SEGMENT AND RELATED INFORMATION

---

The Companys reportable business segment is its regulated electric utility,
Detroit Edison, which is engaged in the generation, purchase, transmission,
distribution and sale of electric energy in a 7,600 square mile area in
Southeastern Michigan. All other includes non-regulated energy-related
businesses and services, which develop and manage electricity and other
energy-related projects, and engage in domestic energy trading and marketing.
Inter-segment revenues are not material. Income taxes are allocated based on
intercompany tax sharing agreements, which generally allocate the tax benefit
of alternative fuels tax credits and accelerated depreciation to the respective
subsidiary, without regard to the subsidiarys own net income or whether such
tax benefits are realized by the Company. Financial data for business segments
are as follows:

68



---



|                              |  |            |           |  |       |   |              |   |                 |   |     |   |  |   |        |  | 
|----------------------------- |  | ---------- | --------- |  | ----- | - | ------------ | - | --------------- | - | --- | - |  | - | ------ |  | 
|                              |  |            | Regulated |  |       |   |              |   | Reconciliations
|                              |  |            | Electric  |  | All   |   | and         
|                              |  |            | Utility   |  | Other |   | Eliminations |   | Consolidated   
|                              |  |            |           |  |       |   |              |   |                
|1999                          |  | (Millions)
|Operating revenues            |  | $          | 4,047     |  |       | $ | 681          |   |                 | $ |    |   |  | $ | 4,728  | 
|                             
|                             
|                             
|                             
|Depreciation and amortization |  |            | 703       |  |       |   | 32           |   |                 |   |    |   |  |   | 735    | 
|                             
|                             
|                             
|                             
|Interest expense              |  |            | 284       |  |       |   | 26           |   |                 |   | 30  |   |  |   | 340    | 
|                             
|                             
|                             
|                             
|Income tax expense (benefit)  |  |            | 211       |  |       |   | (140         | ) |                 |   | (11 | ) |  |   | 60     | 
|                             
|                             
|                             
|                             
|Net income                    |  |            | 434       |  |       |   | 69           |   |                 |   | (20 | ) |  |   | 483    | 
|                             
|                             
|                             
|                             
|Total assets                  |  |            | 11,051    |  |       |   | 1,160        |   |                 |   | 105 |   |  |   | 12,316 | 
|                             
|                             
|                             
|                             
|Capital expenditures          |  |            | 638       |  |       |   | 130          |   |                 |   |    |   |  |   | 768    | 
|                             
|                             
|                             
|                             
|1998                          |  | (Millions)
|                             
|                             
|                             
|                             
|Operating revenues            |  | $          | 3,902     |  |       | $ | 319          |   |                 | $ |    |   |  | $ | 4,221  | 
|                             
|                             
|                             
|                             
|Depreciation and amortization |  |            | 643       |  |       |   | 18           |   |                 |   |    |   |  |   | 661    | 
|                             
|                             
|                             
|                             
|Interest expense              |  |            | 277       |  |       |   | 34           |   |                 |   | 8   |   |  |   | 319    | 
|                             
|                             
|                             
|                             
|Income tax expense (benefit)  |  |            | 260       |  |       |   | (100         | ) |                 |   | (6  | ) |  |   | 154    | 
|                             
|                             
|                             
|                             
|Net income                    |  |            | 412       |  |       |   | 42           |   |                 |   | (11 | ) |  |   | 443    | 
|                             
|                             
|                             
|                             
|Total assets                  |  |            | 10,987    |  |       |   | 937          |   |                 |   | 164 |   |  |   | 12,088 | 
|                             
|                             
|                             
|                             
|Capital expenditures          |  |            | 548       |  |       |   | 449          |   |                 |   |    |   |  |   | 997    | 
|                             
|                             
|                             
|                             
|1997                          |  | (Millions)
|                             
|                             
|                             
|                             
|Operating revenues            |  | $          | 3,657     |  |       | $ | 107          |   |                 | $ |    |   |  | $ | 3,764  | 
|                             
|                             
|                             
|                             
|Depreciation and amortization |  |            | 658       |  |       |   | 2            |   |                 |   |    |   |  |   | 660    | 
|                             
|                             
|                             
|                             
|Interest expense              |  |            | 282       |  |       |   | 16           |   |                 |   | (1  | ) |  |   | 297    | 
|                             
|                             
|                             
|                             
|Income tax expense (benefit)  |  |            | 288       |  |       |   | (30          | ) |                 |   | (1  | ) |  |   | 257    | 
|                             
|                             
|                             
|                             
|Net income                    |  |            | 405       |  |       |   | 14           |   |                 |   | (2  | ) |  |   | 417    | 
|                             
|                             
|                             
|                             
|Total assets                  |  |            | 10,745    |  |       |   | 448          |   |                 |   | 30  |   |  |   | 11,223 | 
|                             
|                             
|                             
|                             
|Capital expenditures          |  |            | 467       |  |       |   | 233          |   |                 |   |    |   |  |   | 700    | 

NOTE 16  SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

---

|                          |  |                                      |       |         |  |         |       |         |  |   |       |  |  |   |       | 
|------------------------- |  | ------------------------------------ | ----- | ------- |  | ------- | ----- | ------- |  | - | ----- |  |  | - | ----- | 
|                          |  | 1999 Quarter Ended                  
|                          |  |                                     
|                          |  | Mar. 31                              |       | Jun. 30 |  | Sep. 30 |       | Dec. 31
|                          |  |                                      |       |         |  |         |       |        
|                          |  | (Millions, except per share amounts)
|Operating Revenues        |  | $                                    | 1,024 |         |  | $       | 1,150 |         |  | $ | 1,440 |  |  | $ | 1,114 | 
|                         
|                         
|                         
|                         
|Operating Income          |  |                                      | 215   |         |  |         | 211   |         |  |   | 281   |  |  |   | 194   | 
|                         
|                         
|                         
|                         
|Net Income                |  |                                      | 115   |         |  |         | 110   |         |  |   | 161   |  |  |   | 97    | 
|                         
|                         
|                         
|                         
|Earnings Per Common Share |  |                                      | 0.79  |         |  |         | 0.76  |         |  |   | 1.11  |  |  |   | 0.67  | 

69



---



|                          |  |                                      |      |         |  |         |       |         |  |   |       |  |  |   |       | 
|------------------------- |  | ------------------------------------ | ---- | ------- |  | ------- | ----- | ------- |  | - | ----- |  |  | - | ----- | 
|                          |  | 1998 Quarter Ended                  
|                          |  |                                     
|                          |  | Mar. 31                              |      | Jun. 30 |  | Sep. 30 |       | Dec. 31
|                          |  |                                      |      |         |  |         |       |        
|                          |  | (Millions, except per share amounts)
|Operating Revenues        |  | $                                    | 945  |         |  | $       | 1,064 |         |  | $ | 1,199 |  |  | $ | 1,013 | 
|                         
|                         
|                         
|                         
|Operating Income          |  |                                      | 233  |         |  |         | 248   |         |  |   | 266   |  |  |   | 190   | 
|                         
|                         
|                         
|                         
|Net Income                |  |                                      | 104  |         |  |         | 101   |         |  |   | 132   |  |  |   | 106   | 
|                         
|                         
|                         
|                         
|Earnings Per Common Share |  |                                      | 0.72 |         |  |         | 0.69  |         |  |   | 0.91  |  |  |   | 0.73  | 

70



---






Item 9   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.




PART III




Items 10, 11, 12 and 13

Information required by Part III (Items 10, 11, 12 and 13) of this Form
10-K is incorporated by reference from the Companys definitive Proxy Statement
for its 2000 Annual Meeting of Common Shareholders to be held April 14, 2000,
which will be filed with the Securities and Exchange Commission, pursuant to
Regulation 14A, not later than 120 days after the end of the Companys fiscal
year covered by this report on Form 10-K, all of which information is hereby
incorporated by reference in, and made part of, this Form 10-K, except that the
information required by Item 10 with respect to executive officers of the
Registrant is included in Part I of this report.

71



---






Annual Report on Form 10-K for The Detroit Edison Company
PART I




Item 1  Business.

See the Companys Item 1  Business which is incorporated herein by this
reference.

Executive Officers of the Registrant

|                       |  |        |    |                  |  |                                                                                                                               |  |         
|---------------------- |  | ------ | -- | ---------------- |  | ----------------------------------------------------------------------------------------------------------------------------- |  | --------
|                       |  |        |    |                  |  |                                                                                                                               |  | Present 
|                       |  |        |    |                  |  |                                                                                                                               |  | Position
|Name                   |  | Age(a) |    | Present Position |  | Held Since                                                                                                                   
|                       |  |        |    |                  |  |                                                                                                                              
|Anthony F. Earley, Jr. |  |        | 50 |                  |  | Chairman of the Board, Chief Executive Officer,
President, Chief Operating Officer, and Member
of the Office of the President |  | 8-1-98  
|                      
|                      
|                      
|                      
|Larry G. Garberding    |  |        | 61 |                  |  | Executive Vice
President and Chief Financial Officer
Member of the Office of the President since
December 1998                |  | 8-1-90  
|                      
|                      
|                      
|                      
|Gerard M. Anderson     |  |        | 41 |                  |  | President and Chief Operating Officer  DTE Energy
Resources, and Member of the Office of
the President                       |  | 8-1-98  
|                      
|                      
|                      
|                      
|Robert J. Buckler      |  |        | 50 |                  |  | President and Chief Operating Officer  DTE Energy
Distribution, and Member of the Office of
the President                    |  | 8-1-98  
|                      
|                      
|                      
|                      
|Daniel G. Brudzynski   |  |        | 39 |                  |  | Controller                                                                                                                    |  | 4-28-99 
|                      
|                      
|                      
|                      
|Michael E. Champley    |  |        | 51 |                  |  | Senior Vice President                                                                                                         |  | 4-1-97  
|                      
|                      
|                      
|                      
|Douglas R. Gipson      |  |        | 52 |                  |  | Senior Vice President                                                                                                         |  | 4-1-93  
|                      
|                      
|                      
|                      
|S. Martin Taylor       |  |        | 59 |                  |  | Senior Vice President                                                                                                         |  | 4-28-99 
|                      
|                      
|                      
|                      
|Susan M. Beale         |  |        | 51 |                  |  | Vice President and Corporate Secretary                                                                                        |  | 3-27-95 
|                      
|                      
|                      
|                      
|Leslie L. Loomans      |  |        | 56 |                  |  | Vice President and Treasurer                                                                                                  |  | 10-1-89 
|                      
|                      
|                      
|                      
|Ron A. May             |  |        | 48 |                  |  | Vice President                                                                                                                |  | 8-1-98  
|                      
|                      
|                      
|                      
|David E. Meador        |  |        | 42 |                  |  | Vice President                                                                                                                |  | 4-28-99 
|                      
|                      
|                      
|                      
|Sandra J. Miller       |  |        | 56 |                  |  | Vice President                                                                                                                |  | 3-30-98 
|                      
|                      
|                      
|                      
|Christopher C. Nern    |  |        | 55 |                  |  | Vice President and General Counsel                                                                                            |  | 6-1-93  
|                      
|                      
|                      
|                      
|Michael C. Porter      |  |        | 46 |                  |  | Vice President                                                                                                                |  | 9-22-97 
|                      
|                      
|                      
|                      
|William R. Roller      |  |        | 54 |                  |  | Vice President                                                                                                                |  | 4-22-96 

(a) As of December 31, 1999

Under Detroit Edison By-Laws, the officers of Detroit Edison are elected
annually by the Board of Directors at a meeting held for such purpose, each to
serve until the next annual meeting of directors or until their respective
successors are chosen and qualified. With the exception of Messrs. Brudzynski,
Meador and Porter, all of the above officers have been employed by Detroit
Edison in one or more management capacities during the past five years.

Daniel G. Brudzynski was Manager, Product Development Finance and Manager,
Forecasting Redesign and Implementation at Chrysler Corporation, an
international automotive manufacturer, from 1995 until 1997. He joined Detroit
Edison in 1997 as Assistant Controller and effective April 28, 1999 he was
elected Controller and appointed Assistant Vice President.

72



---



David E. Meador was Controller, Mopar Parts Division, at Chrysler
Corporation, an international automotive manufacturer, from November 1996 until
February 1997. From 1986 to 1996, he held a variety of executive financial
positions at Chrysler. Effective February 28, 1997, he was elected Vice
President and effective March 29, 1997, he assumed the duties of Controller.
Effective April 28, 1999, he was elected Vice President  Finance and
Accounting.

Michael C. Porter was Senior Vice President and Managing Director at
McCann-Erickson in Detroit from 1994 to September 1997 and Vice President of
Marketing for The Stroh Brewery Company in Detroit from 1990 to 1994.
Effective September 22, 1997, he was elected Vice President  Corporate
Communications.




Item 2  Properties.

See the Companys Item 2  Properties  Detroit Edison, which is
incorporated herein by this reference.




Item 3  Legal Proceedings.

See the Companys Item 3  Legal Proceedings, which is incorporated
herein by this reference.

In a lawsuit filed in January 1999 in the Circuit Court for Wayne County
Michigan (Cook, et al v. Detroit Edison), a number of individual plaintiffs
have claimed employment-related sex, gender and race discrimination, as well as
harassment. A hearing on plaintiffs request for class action has not yet been
held. Detroit Edison believes the claims are without merit and class action
certification is not appropriate.




Item 4  Submission of Matters to a Vote of Security Holders.

Not applicable.




PART II




Item 5  Market for Registrants Common Equity and Related Stockholder Matters.

See the Companys Item 5  Market for Registrants Common Equity and
Related Stockholder Matters, the third paragraph of which is incorporated
herein by this reference. Detroit Edisons By-Laws contain this same provision
with respect to the Michigan Business Corporation Act. All of Detroit Edisons
Common Stock is held by the Company.

The amount of future dividends paid by Detroit Edison to the Company will
depend on Detroit Edisons earnings, financial condition and other factors,
including the effects of utility restructuring and a transition to competition,
each of which is periodically reviewed by Detroit Edisons Board of Directors.

73



---






Item 6  Selected Financial Data.

|                                      |                                                                                                  |   |                        |        |      |   |       |        |      |   |       |        |  |   |       |        |  |   |       |        | 
|------------------------------------- | ------------------------------------------------------------------------------------------------ | - | ---------------------- | ------ | ---- | - | ----- | ------ | ---- | - | ----- | ------ |  | - | ----- | ------ |  | - | ----- | ------ | 
|                                      |                                                                                                  |   | Year Ended December 31
|                                      |                                                                                                  |   |                       
|                                      |                                                                                                  |   | 1999                   |        | 1998 |   | 1997  |        | 1996 |   | 1995 
|                                      |                                                                                                  |   |                        |        |      |   |       |        |      |   |      
|                                      |                                                                                                  |   | (Millions)            
|Operating Revenues                    |                                                                                                  | $ | 4,047                  |        |      | $ | 3,902 |        |      | $ | 3,657 |        |  | $ | 3,642 |        |  | $ | 3,636 |       
|                                     
|                                     
|                                     
|                                     
|Net Income                            |                                                                                                  | $ | 434                    |        |      | $ | 418   |        |      | $ | 417   |        |  | $ | 328   |        |  | $ | 434   |       
|                                     
|                                     
|                                     
|                                     
|Net Income Available
for Common Stock |                                                                                                  | $ | 434                    |        |      | $ | 412   |        |      | $ | 405   |        |  | $ | 312   |        |  | $ | 406   |       
|                                     
|                                     
|                                     
|                                     
|At year end:                         
|                                     
|                                     
|                                     
|                                     
|                                      | Total Assets                                                                                     |   | $                      | 11,051 |      |   | $     | 10,987 |      |   | $     | 10,745 |  |   | $     | 10,874 |  |   | $     | 11,131 | 
|                                     
|                                     
|                                     
|                                     
|Long-Term Debt                       
|                                      | Obligations (including capital
leases) and Redeemable
Preferred and Preference
Stock Outstanding |   | $                      | 3,398  |      |   | $     | 3,588  |      |   | $     | 3,812  |  |   | $     | 4,000  |  |   | $     | 4,004  | 




Item 7  Managements Discussion and Analysis of Financial Condition and Results of Operations.

See the Companys and Detroit Edisons Item 7  Managements Discussion
and Analysis of Financial Condition and Results of Operations, which is
incorporated herein by this reference.




Item 8  Financial Statements and Supplementary Data.

See pages 30 through 70 (except for Notes 6, 8 and 16 below).

NOTE 6  INCOME TAXES

---

Total income tax expense as a percent of income before tax varies from the
statutory federal income tax rate for the following reasons:

|                                         |  |  |      |      |      |  |      |      |   |  |      |      |  
|---------------------------------------- |  |  | ---- | ---- | ---- |  | ---- | ---- | - |  | ---- | ---- | -
|                                         |  |  | 1999 |      | 1998 |  | 1997
|                                         |  |  |      |      |      |  |     
|Statutory income tax rate                |  |  | 35.0 | %    |      |  | 35.0 | %    |   |  | 35.0 | %   
|                                        
|                                        
|                                        
|                                        
|Deferred Fermi 2 depreciation and return |  |  |     |      |      |  | 3.5  |      |   |  | 4.5  |     
|                                        
|                                        
|                                        
|                                        
|Investment tax credit                    |  |  |      | (1.6 | )    |  |      | (2.1 | ) |  |      | (2.0 | )
|                                        
|                                        
|                                        
|                                        
|Depreciation                             |  |  |      | 1.2  |      |  |      | 4.5  |   |  |      | 4.5  |  
|                                        
|                                        
|                                        
|                                        
|Removal costs                            |  |  |      | (1.9 | )    |  |      | (1.7 | ) |  |      | (1.5 | )
|                                        
|                                        
|                                        
|                                        
|Other-net                                |  |  |      |     |      |  |      | (0.9 | ) |  |      | 0.4  |  
|                                         |  |  |      |      |      |  |      |      |   |  |      |     
|Effective income tax rate                |  |  | 32.7 | %    |      |  | 38.3 | %    |   |  | 40.9 | %   
|                                         |  |  |      |      |      |  |      |      |   |  |      |     

74



---



Components of income tax expense are as follows:

|                                   |       |   |     |      |  |      |     |            |  |   |     |     |  | 
|---------------------------------- | ----- | - | --- | ---- |  | ---- | --- | ---------- |  | - | --- | --- |  | 
|                                   |       |   |     | 1999 |  | 1998 |     | 1997      
|                                   |       |   |     |      |  |      |     |           
|                                   |       |   |     |      |  |      |     | (Millions)
|Current federal tax expense        |       | $ | 282 |      |  | $    | 280 |            |  | $ | 308 |    
|                                  
|                                  
|                                  
|                                  
|Deferred federal tax benefit  net |       |   | (60 | )    |  |      | (5  | )          |  |   | (6  | )  
|                                  
|                                  
|                                  
|                                  
|Investment tax credits             |       |   | (11 | )    |  |      | (15 | )          |  |   | (14 | )  
|                                   |       |   |     |      |  |      |     |            |  |   |     |     |  | 
|                                   | Total |   | $   | 211  |  |      | $   | 260        |  |   | $   | 288 | 
|                                   |       |   |     |      |  |      |     |            |  |   |     |     |  | 

Deferred income tax assets (liabilities) are comprised of the following at December 31:

|                                     |  |   |        |            |        |      |        |   |        |  
|------------------------------------ |  | - | ------ | ---------- | ------ | ---- | ------ | - | ------ | -
|                                     |  |   |        | 1999       |        | 1998
|                                     |  |   |        |            |        |     
|                                     |  |   |        | (Millions)
|Property                             |  | $ | (1,197 | )          |        | $    | (1,139 | )
|                                    
|                                    
|                                    
|                                    
|Unamortized nuclear costs            |  |   | (899   | )          |        |      | (983   | )
|                                    
|                                    
|                                    
|                                    
|Property taxes                       |  |   | (66    | )          |        |      | (65    | )
|                                    
|                                    
|                                    
|                                    
|Investment tax credit                |  |   | 96     |            |        |      | 154    |  
|                                    
|                                    
|                                    
|                                    
|Reacquired debt losses               |  |   | (30    | )          |        |      | (32    | )
|                                    
|                                    
|                                    
|                                    
|Contributions in aid of construction |  |   | 73     |            |        |      | 63     |  
|                                    
|                                    
|                                    
|                                    
|Other                                |  |   | 83     |            |        |      | 96     |  
|                                     |  |   |        |            |        |      |        |   |       
|                                     |  |   |        | $          | (1,940 | )    |        | $ | (1,906 | )
|                                     |  |   |        |            |        |      |        |   |       
|Deferred income tax liabilities      |  | $ | (2,372 | )          |        | $    | (2,403 | )
|                                    
|                                    
|                                    
|                                    
|Deferred income tax assets           |  |   | 432    |            |        |      | 497    |  
|                                     |  |   |        |            |        |      |        |   |       
|                                     |  |   |        | $          | (1,940 | )    |        | $ | (1,906 | )
|                                     |  |   |        |            |        |      |        |   |       

NOTE 8  LONG-TERM DEBT

---

Long-term debt outstanding at December 31 was:

|                         |                                   |                                                       |   |            |     |      |   |       |     | 
|------------------------ | --------------------------------- | ----------------------------------------------------- | - | ---------- | --- | ---- | - | ----- | --- | 
|                         |                                   |                                                       |   | 1999       |     | 1998
|                         |                                   |                                                       |   |            |     |     
|                         |                                   |                                                       |   | (Millions)
|Mortgage Bonds          
|                        
|                        
|                        
|                        
|                         | 5.6% to 8.4% due 2000 to 2023     |                                                       | $ | 1,539      |     |      | $ | 1,742 |    
|                        
|                        
|                        
|                        
|Remarketed Notes        
|                        
|                        
|                        
|                        
|                         | 6.0% to 6.4% due 2028 to 2034 (a) |                                                       |   | 410        |     |      |   | 410   |    
|                        
|                        
|                        
|                        
|Tax Exempt Revenue Bonds
|                        
|                        
|                        
|                        
|                         | Secured by Mortgage Bonds        
|                        
|                        
|                        
|                        
|                         |                                   | Installment Sales Contracts
6.9% due 2004 to 2024 (b) |   |            | 176 |      |   |       | 282 | 
|                        
|                        
|                        
|                        
|                         |                                   | Loan Agreements
6.3% due 2008 to 2029 (b)             |   |            | 831 |      |   |       | 607 | 

75



---



|                                |                               |                                           |      |       |     |  |      |       |     | 
|------------------------------- | ----------------------------- | ----------------------------------------- | ---- | ----- | --- |  | ---- | ----- | --- | 
|                                | Unsecured                    
|                               
|                               
|                               
|                               
|                                |                               | Installment Sales Contracts
6.4% due 2004 |      |       | 24  |  |      |       | 142 | 
|                               
|                               
|                               
|                               
|                                |                               | Loan Agreements
3.6% due 2024 to 2030 (a) |      |       | 113 |  |      |       | 113 | 
|                               
|                               
|                               
|                               
|QUIDS                          
|                               
|                               
|                               
|                               
|                                | 7.4% to 7.6% due 2026 to 2028 |                                           |      | 385   |     |  |      | 385   |    
|                               
|                               
|                               
|                               
|Less amount due within one year |                               |                                           | (194 | )     |     |  | (219 | )    
|                                |                               |                                           |      |       |     |  |      |      
|                                | Total Long-Term Debt          |                                           | $    | 3,284 |     |  | $    | 3,462 |    
|                                |                               |                                           |      |       |     |  |      |      

(a) Variable rate at December 31, 1999.(b) Weighted average interest rate at December 31, 1999.

In the years 2000  2004, Detroit Edisons long-term debt maturities are $194,
$159, $198, $199 and $49 million, respectively.

Detroit Edisons 1924 Mortgage and Deed of Trust (Mortgage), the lien of which
covers substantially all of Detroit Edisons properties, provides for the
issuance of additional General and Refunding Mortgage Bonds (Mortgage Bonds).
At December 31, 1999, approximately $4.1 billion principal amount of Mortgage
Bonds could have been issued on the basis of property additions, combined with
an earnings test provision, assuming an interest rate of 8% on any such
additional Mortgage Bonds. An additional $1.9 billion principal amount of
Mortgage Bonds could have been issued on the basis of bond retirements.

Unless an event of default has occurred, and is continuing, each series of
Quarterly Income Debt Securities (QUIDS) provides that interest will be paid
quarterly. However, Detroit Edison also has the right to extend the interest
payment period on the QUIDS for up to 20 consecutive interest payment periods.
Interest would continue to accrue during the deferral period. If this right
is exercised, Detroit Edison may not declare or pay dividends on, or redeem,
purchase or acquire, any of its capital stock during the deferral period.
Detroit Edison may redeem any series of capital stock pursuant to the terms of
any sinking fund provisions during the deferral period. Additionally, during
any deferral period, Detroit Edison may not enter into any inter-company
transactions with any affiliate of Detroit Edison, including the Company, to
enable the payment of dividends on any equity securities of the Company.

At December 31, 1999, $113 million of notes and bonds were subject to periodic
remarketings within one year. Remarketing agents remarket these securities at
the lowest interest rate necessary to produce a par bid. In the event that a
remarketing fails, Standby Note Purchase Agreements and/or Letters of Credit
provide that banks will purchase the securities and, after the conclusion of
all necessary proceedings, remarket the bonds. In the event the banks
obligations under the Standby Note Purchase Agreements and/or Letters of
Credit are not honored, then, Detroit Edison would be required to purchase any
bonds subject to a failed remarketing.

76



---



NOTE 16  SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

---

|                   |  |                    |     |         |  |          |       |         |  |   |       |  |  |   |     | 
|------------------ |  | ------------------ | --- | ------- |  | -------- | ----- | ------- |  | - | ----- |  |  | - | --- | 
|                   |  | 1999 Quarter Ended
|                   |  |                   
|                   |  | Mar. 31            |     | June 30 |  | Sept. 30 |       | Dec. 31
|                   |  |                    |     |         |  |          |       |        
|                   |  | (Millions)        
|Operating Revenues |  | $                  | 911 |         |  | $        | 1,006 |         |  | $ | 1,211 |  |  | $ | 919 | 
|                  
|                  
|                  
|                  
|Operating Income   |  |                    | 224 |         |  |          | 225   |         |  |   | 286   |  |  |   | 200 | 
|                  
|                  
|                  
|                  
|Net Income         |  |                    | 104 |         |  |          | 107   |         |  |   | 138   |  |  |   | 85  | 

|                   |  |                    |     |         |  |            |     |         |  |   |       |  |  |   |     | 
|------------------ |  | ------------------ | --- | ------- |  | ---------- | --- | ------- |  | - | ----- |  |  | - | --- | 
|                   |  | 1998 Quarter Ended
|                   |  |                   
|                   |  | Mar. 31            |     | June 30 |  | Sept. 30   |     | Dec. 31
|                   |  |                    |     |         |  |            |     |        
|                   |  |                    |     |         |  | (Millions)
|Operating Revenues |  | $                  | 901 |         |  | $          | 992 |         |  | $ | 1,105 |  |  | $ | 904 | 
|                  
|                  
|                  
|                  
|Operating Income   |  |                    | 237 |         |  |            | 248 |         |  |   | 284   |  |  |   | 201 | 
|                  
|                  
|                  
|                  
|Net Income         |  |                    | 98  |         |  |            | 95  |         |  |   | 125   |  |  |   | 100 | 




Item 9 -Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.




PART III




Items 10, 11, 12 and 13

See the Companys Items 10, 11, 12 and 13 which is incorporated herein
by this reference, except for the information required by Item 10 with respect
to executive officers of the Registrant which is included in Part 1 of this
report. All of Detroit Edisons directors are the same as the Companys
directors.

77



---






Annual Reports on Form 10-K for DTE Energy Company
and The Detroit Edison Company




PART IV




Item 14  Exhibits, Financial Statement Schedules and Reports on Form 8-K.



| |                                                                                    
| | -----------------------------------------------------------------------------------
| | (a) The following documents are filed as a part of this Annual
Report on Form 10-K.



| |                                                                                                              
| | -------------------------------------------------------------------------------------------------------------
| | (1) Consolidated financial statements. See Item 8 -
Financial Statements and Supplementary Data on page 30.



| |                                                                                                          
| | ---------------------------------------------------------------------------------------------------------
| | (2) Financial statement schedules. See Item 8  Financial
Statements and Supplementary Data on page 30.



| |                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (3) Exhibits (*Denotes management contract or compensatory
plan or arrangement required to be filed as an exhibit to this
report pursuant to Item 14 (c) of this report).



| |                             
| | ----------------------------
| | (i) Exhibits filed herewith.

|        |  |                                                                                                                                                                   |  |  |  | 
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
|Exhibit
|Number 
|2-1-    |  | Agreement and Plan of Merger, among DTE Energy, MCN
Energy Group Inc. and DTE Enterprises, Inc., dated as of
October 4, 1999 and amended as of November 12, 1999.
|       
|       
|       
|       
|4-205-  |  | Supplemental Indenture, dated as of January 1, 2000, creating the
General and Refunding Mortgage Bonds of 2000 Series A.                                         
|       
|       
|       
|       
|11-8 -  |  | DTE Energy Company Basic and Diluted Earnings Per Share of Common Stock.                                                                                         
|       
|       
|       
|       
|12-21-  |  | DTE Energy Company Computation of Ratio of Earnings to Fixed Charges.                                                                                            
|       
|       
|       
|       
|12-22-  |  | The Detroit Edison Company Computation of Ratio of Earnings to Fixed Charges.                                                                                    
|       
|       
|       
|       
|12-23-  |  | The Detroit Edison Company Computation of Ratio of Earnings to Fixed
Charges and Preferred Stock Dividends.                                                      
|       
|       
|       
|       
|21-4 -  |  | Subsidiaries of the Company and Detroit Edison.                                                                                                                  
|       
|       
|       
|       
|23-13-  |  | Consent of Deloitte & Touche LLP.                                                                                                                                
|       
|       
|       
|       
|27-31-  |  | Financial Data Schedule for the period ended December 31, 1999
for DTE Energy Company.                                                                           
|       
|       
|       
|       
|27-32-  |  | Financial Data Schedule for the period ended December 31, 1999
for The Detroit Edison Company.                                                                   

78



---



|       |  |                                                                                                                                                                                                                                                                                                                                          
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|99-32- |  | Third Amended and Restated Credit Agreement, Dated as of
January 18, 2000 among DTE Capital Corporation, the Initial
Lenders, Citibank, N.A., as Agent, and ABN AMRO Bank N.V., Bank
One N.A., Barclays Bank PLC, Bayerische Landesbank Girozertrale,
Cayman Islands Branch, Comerica Bank and Den Daske Bank
Aktieselskab, as Co-Agents.



| |                                                
| | -----------------------------------------------
| | (ii) Exhibits incorporated herein by reference.

|       |  |                                                                                                                                                                                                                                                                                                                 
|------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3(a) - |  | Amended and Restated Articles of Incorporation of DTE
Energy Company, dated December 13, 1995. (Exhibit 3-5 to Form
10-Q for quarter ended September 30, 1997)                                                                                                                                                  
|      
|      
|      
|      
|3(b) - |  | Certificate of Designation of Series A Junior
Participating Preferred Stock of DTE Energy Company. Exhibit 3-6
to Form 10-Q for quarter ended September 30, 1997.)                                                                                                                                              
|      
|      
|      
|      
|3(c) - |  | Restated Articles of Incorporation of Detroit Edison,
as filed December 10, 1991 with the State of Michigan, Department
of Commerce  Corporation and Securities Bureau (Exhibit 3-13 to
Form 10-Q for quarter ended June 30, 1999.)                                                                            
|      
|      
|      
|      
|3(d) - |  | Articles of Incorporation of DTE Enterprises, Inc.
(Exhibit 3.5 to Registration No. 333-89175.)                                                                                                                                                                                                                 
|      
|      
|      
|      
|3(e) - |  | Rights Agreement, dated as of September 23, 1997, by
and between DTE Energy Company and The Detroit Edison Company, as
Rights Agent (Exhibit 4-1 to DTE Energy Company Current Report on
Form 8-K, dated September 23, 1997.)                                                                                   
|      
|      
|      
|      
|3(f) - |  | Agreement and Plan of Exchange (Exhibit 1(2) to DTE
Energy Form 8-B filed January 2, 1996, File No. 1-11607.)                                                                                                                                                                                                   
|      
|      
|      
|      
|3(g) - |  | Bylaws of DTE Energy Company, as amended through
September 22, 1999. (Exhibit 3-3 to Registration No. 333-89175.)                                                                                                                                                                                               
|      
|      
|      
|      
|3(h) - |  | Bylaws of The Detroit Edison Company, as amended
through September 22, 1999. (Exhibit 3-14 to Form 10-Q for
quarter ended September 30, 1999.)                                                                                                                                                                  
|      
|      
|      
|      
|3(i) - |  | Bylaws of DTE Enterprises, Inc. (Exhibit 3.6 to
Registration No. 333-89175.)                                                                                                                                                                                                                                    
|      
|      
|      
|      
|4(a) - |  | Mortgage and Deed of Trust, dated as of October 1,
1924, between Detroit Edison (File No. 1-2198) and Bankers Trust
Company as Trustee (Exhibit B-1 to Registration No. 2-1630) and
indentures supplemental thereto, dated as of dates indicated
below, and filed as exhibits to the filings as set forth below:

79



---



|                   |  |                                                                                         
|------------------ |  | ----------------------------------------------------------------------------------------
|September 1, 1947  |  | Exhibit B-20 to Registration No. 2-7136                                                 
|                  
|                  
|                  
|                  
|November 15, 1971  |  | Exhibit 2-B-38 to Registration No. 2-42160                                              
|                  
|                  
|                  
|                  
|January 15, 1973   |  | Exhibit 2-B-39 to Registration No. 2-46595                                              
|                  
|                  
|                  
|                  
|June 1, 1978       |  | Exhibit 2-B-51 to Registration No. 2-61643                                              
|                  
|                  
|                  
|                  
|June 30, 1982      |  | Exhibit 4-30 to Registration No. 2-78941                                                
|                  
|                  
|                  
|                  
|August 15, 1982    |  | Exhibit 4-32 to Registration No. 2-79674                                                
|                  
|                  
|                  
|                  
|October 15, 1985   |  | Exhibit 4-170 to Form 10-K for
year ended December 31, 1994                             
|                  
|                  
|                  
|                  
|November 30, 1987  |  | Exhibit 4-139 to Form 10-K for                                                          
|                  
|                  
|                  
|                  
|July 15, 1989      |  | year ended December 31, 1992
Exhibit 4-171 to Form 10-K for
year ended December 31, 1994
|                  
|                  
|                  
|                  
|December 1, 1989   |  | Exhibit 4-172 to Form 10-K for
year ended December 31, 1994                             
|                  
|                  
|                  
|                  
|February 15, 1990  |  | Exhibit 4-173 to Form 10-K for
year ended December 31, 1994                             
|                  
|                  
|                  
|                  
|April 1, 1991      |  | Exhibit 4-15 to Form 10-K for year ended
December 31, 1996                              
|                  
|                  
|                  
|                  
|November 1, 1991   |  | Exhibit 4-181 to Form 10-K for year
ended December 31, 1996                             
|                  
|                  
|                  
|                  
|January 15, 1992   |  | Exhibit 4-182 to Form 10-K for year ended
December 31, 1996                             
|                  
|                  
|                  
|                  
|February 29, 1992  |  | Exhibit 4-187 to Form 10-Q for quarter
ended March 31, 1998                             
|                  
|                  
|                  
|                  
|April 15, 1992     |  | Exhibit 4-188 to Form 10-Q for quarter
ended March 31, 1998                             
|                  
|                  
|                  
|                  
|July 15, 1992      |  | Exhibit 4-189 to Form 10-Q for quarter
ended March 31, 1998                             
|                  
|                  
|                  
|                  
|July 31, 1992      |  | Exhibit 4-190 to Form 10-Q for
quarter ended September 30, 1992                         
|                  
|                  
|                  
|                  
|January 1, 1993    |  | Exhibit 4-131 to Registration No. 33-56496                                              
|                  
|                  
|                  
|                  
|March 1, 1993      |  | Exhibit 4-191 to Form 10-Q for
quarter ended March 31, 1998                             
|                  
|                  
|                  
|                  
|March 15, 1993     |  | Exhibit 4-192 to Form 10-Q for quarter
ended March 31, 1998                             
|                  
|                  
|                  
|                  
|April 1, 1993      |  | Exhibit 4-143 to Form 10-Q for quarter
ended March 31, 1993                             
|                  
|                  
|                  
|                  
|April 26, 1993     |  | Exhibit 4-144 to Form 10-Q for
quarter ended March 31, 1993                             
|                  
|                  
|                  
|                  
|May 31, 1993       |  | Exhibit 4-148 to Registration No. 33-64296                                              
|                  
|                  
|                  
|                  
|June 30, 1993      |  | Exhibit 4-149 to Form 10-Q for quarter
ended June 30, 1993 (1993 Series AP)             
|                  
|                  
|                  
|                  
|June 30, 1993      |  | Exhibit 4-150 to Form 10-Q for quarter
ended June 30, 1993 (1993 Series H)              
|                  
|                  
|                  
|                  
|September 15, 1993 |  | Exhibit 4-158 to Form 10-Q for quarter
ended September 30, 1993                         
|                  
|                  
|                  
|                  
|March 1, 1994      |  | Exhibit 4-163 to Registration No. 33-53207                                              
|                  
|                  
|                  
|                  
|June 15, 1994      |  | Exhibit 4-166 to Form 10-Q for quarter
ended June 30, 1994                              

80



---



|                 |  |                                                                
|---------------- |  | ---------------------------------------------------------------
|                
|                
|                
|                
|August 15, 1994  |  | Exhibit 4-168 to Form 10-Q for quarter
ended September 30, 1994
|                
|                
|                
|                
|December 1, 1994 |  | Exhibit 4-169 to Form 10-K for
year ended December 31, 1994    
|                
|                
|                
|                
|August 1, 1995   |  | Exhibit 4-174 to Form 10-Q for quarter
ended September 30, 1995
|                
|                
|                
|                
|August 1, 1999   |  | Exhibit 4-204 to Form 10-Q for quarter
ended September 30, 1999
|                
|                
|                
|                
|August 15, 1999  |  | Exhibit 4-205 to Form 10-Q for quarter
ended September 30, 1999

|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4(b) - |  | Collateral Trust Indenture (notes), dated as of June
30, 1993 (Exhibit 4-152 to Registration No. 33-50325).                                                                                                                                                                                                                                                                                                                                
|      
|      
|      
|      
|4(c) - |  | First Supplemental Note Indenture, dated as of June 30,
1993 (Exhibit 4-153 to Registration No. 33-50325).                                                                                                                                                                                                                                                                                                                                 
|      
|      
|      
|      
|4(d) - |  | Second Supplemental Note Indenture, dated as of
September 15, 1993 (Exhibit 4-159 to Form 10-Q for quarter ended
September 30, 1993).                                                                                                                                                                                                                                                                                                      
|      
|      
|      
|      
|4(e) - |  | First Amendment, dated as of August 15, 1996, to Second
Supplemental Note Indenture (Exhibit 4-17 to Form 10-Q for quarter
ended September 30, 1996).                                                                                                                                                                                                                                                                                      
|      
|      
|      
|      
|4(f) - |  | Third Supplemental Note Indenture, dated as of August
15, 1994 (Exhibit 4-169 to Form 10-Q for quarter ended September
30, 1994).                                                                                                                                                                                                                                                                                                          
|      
|      
|      
|      
|4(g) - |  | First Amendment, dated as of December 12, 1995, to
Third Supplemental Note Indenture, dated as of August 15, 1994
(Exhibit 4-12 to Registration No. 333-00023).                                                                                                                                                                                                                                                                            
|      
|      
|      
|      
|4(h) - |  | Sixth Supplemental Note Indenture, dated as of May 1,
1998, between Detroit Edison and Bankers Trust Company, as
Trustee, creating the 7.54% Quarterly Income Debt Securities
(QUIDS), including form of QUIDS. (Exhibit 4-193 to Form 10-Q
for quarter ended June 30, 1998.)                                                                                                                                                            
|      
|      
|      
|      
|4(i)-  |  | Seventh Supplemental Note Indenture, dated as of October
15, 1998, between Detroit Edison and Bankers Trust Company, as
Trustee, creating the 7.375% QUIDS, including form of QUIDS.
(Exhibit 4-198 to Form 10-K for year ended December 31, 1998.)                                                                                                                                                                                        
|      
|      
|      
|      
|4(j) - |  | Standby Note Purchase Credit Facility, dated as of
August 17, 1994, among The Detroit Edison Company, Barclays Bank
PLC, as Bank and Administrative Agent, Bank of America, The Bank
of new York, The Fuji Bank Limited, the Long-Term Credit Bank of
Japan, LTD, Union Bank and Citicorp Securities, Inc. and First
Chicago Capital Markets, Inc. as Remarketing Agents (Exhibit 99-18
to Form 10-Q for quarter ended September 30, 1994.)

81



---



|         |  |                                                                                                                                                                                                                                                                                                                                                                            
|-------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4(k)-    |  | $60,000,000 Support Agreement dated as of January 21,
1998 between DTE Energy Company and DTE Capital Corporation.
(Exhibit 4-183 to Form 10-K for year ended December 31, 1997.)                                                                                                                                                                                          
|        
|        
|        
|        
|4(l) -   |  | $100,000,000 Support Agreement, dated as of June 16,
1998, between DTE Energy Company and DTE Capital Corporation.
(Exhibit 4-194 to Form 10-Q for quarter ended June 30, 1998.)                                                                                                                                                                                           
|        
|        
|        
|        
|4(m)-    |  | $300,000,000 Support Agreement, dated as of November 18,
1998, between DTE Energy and DTE Capital Corporation. (Exhibit
4-199 to Form 10-K for year ended December 31, 1998.)                                                                                                                                                                                              
|        
|        
|        
|        
|4(n) -   |  | $400,000,000 Support Agreement, dated as of January 19,
1999, between DTE Energy Company and DTE Capital Corporation.
(Exhibit 4-201 to Form 10-K for year ended December 31, 1998.)                                                                                                                                                                                       
|        
|        
|        
|        
|4(o) -   |  | $40,000,000 Support Agreement, dated as of February 24,
1999 between DTE Energy Company and DTE Capital Corporation.
(Exhibit 4-202 to Form 10-Q for quarter ended March 31, 1999.)                                                                                                                                                                                        
|        
|        
|        
|        
|4(p) -   |  | $50,000,000 Support Agreement, dated as of June 10,
1999 between DTE Energy Company and DTE Capital Corporation.
(Exhibit 4-203 to Form 10-Q for quarter ended June 30, 1999.)                                                                                                                                                                                             
|        
|        
|        
|        
|4(q) -   |  | Indenture, dated as of June 15, 1998, between DTE
Capital Corporation and The Bank of New York, as Trustee.
(Exhibit 4-196 to Form 10-Q for quarter ended June 30, 1998.)                                                                                                                                                                                                  
|        
|        
|        
|        
|4(r) -   |  | First Supplemental Indenture, dated as of June 15,
1998, between DTE Capital Corporation and The Bank of New York, as
Trustee, creating the $100,000,000 Remarketed Notes, Series A due
2038, including form of Note. (Exhibit 4-197 to Form 10-Q for
quarter ended June 30, 1998.)                                                                                        
|        
|        
|        
|        
|4(s)-    |  | Second Supplemental Indenture, dated as of November 1,
1998, between DTE Capital Corporation and The Bank of New York, as
Trustee, creating the $300,000,000 Remarketed Notes, 1998 Series
B, including form of Note. (Exhibit 4-200 to Form 10-K for year
ended December 31, 1998.)                                                                                       
|        
|        
|        
|        
|*10(a)-  |  | Certain arrangements pertaining to the employment of Michael
C. Porter. (Exhibit 10-8* to Form 10-Q for Quarter ended
September 30, 1997.)                                                                                                                                                                                                                                 
|        
|        
|        
|        
|*10(b) - |  | Form of Change-in-Control Severance Agreement, dated as of
October 1, 1997, between DTE Energy Company and Gerard M.
Anderson, Susan M. Beale, Robert J. Buckler, Michael C. Champley,
Anthony F. Earley, Jr., Larry G. Garberding, Douglas R. Gipson,
John E. Lobbia, Leslie L. Loomans, David E. Meador, Christopher C. Nern,
Michael C. Porter, William R. Roller and S.

82



---



|         |  |                                                                                                                                                                                                        
|-------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |  | Martin Taylor. (Exhibit 10-9* to Form 10-Q for quarter
ended September 30, 1997.)                                                                                                                      
|        
|        
|        
|        
|*10(c) - |  | Form of 1995 Indemnification Agreement between the
Company and its directors and officers (Exhibit 3L
(10-1) to DTE Energy Company Form 8-B dated January
2, 1996).                                    
|        
|        
|        
|        
|*10(d) - |  | Form of Indemnification Agreement between Detroit
Edison and its officers other than those identified
in *10(b) (Exhibit 10-41 to Detroit Edisons Form
10-Q for quarter ended June 30, 1993.)         
|        
|        
|        
|        
|*10(e) - |  | Certain arrangements pertaining to the employment of S. Martin Taylor
(Exhibit 10-38 to Detroit Edisons Form 10-Q for quarter ended March 31, 1998.)                                                  
|        
|        
|        
|        
|*10(f) - |  | Amended and Restated Post-Employment Income
Agreement dated March 23, 1998, between Detroit
Edison and Anthony F. Earley, Jr. (Exhibit 10-20 to
Form 10-Q for quarter ended March 31, 1998.)           
|        
|        
|        
|        
|*10(g) - |  | Restricted Stock Agreement, dated March 23, 1998, between
Detroit Edison and Anthony F. Earley, Jr. (Exhibit 10-20 to Form
10-Q for quarter ended March 31, 1998.)                                     
|        
|        
|        
|        
|*10(h) - |  | Amended and Restated Detroit Edison Savings Reparation Plan
(February 23, 1998). Exhibit 10-19* for quarter ended March 31,
1998.)                                                                     
|        
|        
|        
|        
|*10(i) - |  | Certain arrangements pertaining to the employment of Larry G.
Garberding (Exhibit 10-23* to Form 10-Q for quarter ended March
31, 1998).                                                               
|        
|        
|        
|        
|*10(j) - |  | Form of Indemnification Agreement, between Detroit Edison and
(1) John E. Lobbia, (2) Larry G. Garberding and (3) Anthony F.
Earley, Jr. (Exhibit 10-24* to Form 10-Q for quarter ended March
3, 1998).
|        
|        
|        
|        
|*10(k) - |  | Form of Indemnification Agreement between Detroit Edison and
its directors (Exhibit 10-25* to Form 10-Q for quarter ended March
31, 1998).                                                             
|        
|        
|        
|        
|*10(l) - |  | Executive Vehicle Program, dated October 1, 1993 (Exhibit
10-47 to Detroit Edisons Form 10-Q for quarter ended September
30, 1993).                                                                   
|        
|        
|        
|        
|*10(m) - |  | Amendment No. 1 to Executive Vehicle Plan, November 1993
(Exhibit 10-58 to Detroit Edisons Form 10-K for year ended
December 31, 1993).                                                               
|        
|        
|        
|        
|*10(n) - |  | Certain arrangements pertaining to the employment of Gerard
M. Anderson (Exhibit 10-40 to Detroit Edisons Form 10-K for year
ended December 31, 1993).                                                
|        
|        
|        
|        
|*10(o) - |  | Long-Term Incentive Plan (Exhibit 10-3 to Form 10-K for year
ended December 31, 1996).                                                                                                                 

83



---



|          |  |                                                                                                                                                                                                 
|--------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*10(p) -  |  | Amendment No. 1 to The Detroit Edison Company Long-Term
Incentive Plan, effective December 31, 1998. (Exhibit 10-28* to
Form 10-K for year ended December 31, 1998.)                            
|         
|         
|         
|         
|*10(q) -  |  | 1999 Executive Incentive Plan Measures (Exhibit 10-33* to Form
10-Q for quarter ended March 31, 1999.)                                                                                          
|         
|         
|         
|         
|*10(r) -  |  | 1999 Shareholder Value Improvement Plans-A Measures (Exhibit
10-32* to Form 10-Q for quarter ended March 31, 1999.)                                                                             
|         
|         
|         
|         
|*10(s) -  |  | Fourth Restatement of The Benefit Equalization Plan for
Certain Employees of The Detroit Edison Company (October 1997).
(Exhibit 10-11* to Form 10-K for year ended December 31, 1997.)         
|         
|         
|         
|         
|*10(t) -  |  | The Detroit Edison Company Key Employee Deferred Compensation
Plan (October 1997). (Exhibit 10-12* to Form 10-K for year ended
December 31, 1997.)                                              
|         
|         
|         
|         
|*10(u) -  |  | The Detroit Edison Company Executive Incentive Plan (October
1997). (Exhibit 10-13* to Form 10-K for the year ended December
31, 1997.)                                                         
|         
|         
|         
|         
|*10(v) -  |  | Detroit Edison Company Shareholder Value Improvement Plan
(October 1997). (Exhibit 10-15* to Form 10-K for year ended
December 31, 1997.)                                                       
|         
|         
|         
|         
|*10(w) -  |  | Trust Agreement for DTE Energy Company Change-In-Control
Severance Agreements between DTE Energy Company and Wachovia Bank,
N.A. (Exhibit 10-16* to Form 10-K for year ended December 31,
1997.)
|         
|         
|         
|         
|*10(x) -  |  | Certain arrangements pertaining to the employment of David E.
Meador (Exhibit 10-5 to Form 10-K for year ended December 31,
1997.)                                                              
|         
|         
|         
|         
|*10(y) -  |  | Amended and Restated Supplemental Long-Term Disability Plan,
dated January 27, 1997. (Exhibit *10-4 to form 10-K for year
ended December 31, 1996.)                                             
|         
|         
|         
|         
|*10(z) -  |  | Fourth Restatement of the Retirement Reparation Plan for
Certain Employees of The Detroit Edison Company (October 1997).
Exhibit *10-10 to Form 10-K for year ended December 31, 1997.)         
|         
|         
|         
|         
|*10(aa) - |  | Sixth Restatement of The Detroit Edison Company Management
Supplemental Benefit Plan (1998). (Exhibit 10-27* to Form 10-K
for year ended December 31, 1998.)                                    
|         
|         
|         
|         
|*10(bb) - |  | DTE Energy Company Plan for Deferring the Payment of
Directors Fees (As Amended and Restated Effective As of January
1, 1999). (Exhibit 10-29* to Form 10-K for year ended December
31, 1998.) 

84



---



|          |  |                                                                                                                                                                                                                                                                                                                            
|--------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*10(cc) - |  | DTE Energy Company Deferred stock Compensation Plan for Non-Employee Directors, effective as of
January 1, 1999. (Exhibit 10-30* to Form 10-K for year ended December 31, 1998.)                                                                                                                                           
|         
|         
|         
|         
|*10(dd) - |  | DTE Energy Company Retirement Plan for Non-Employee Directors (As Amended and Restated Effective
As Of December 31, 1998). (Exhibit 10-31 to Form 10-K for year ended December 31, 1998.)                                                                                                                                  
|         
|         
|         
|         
|99(a) -   |  | Belle River Participation Agreement between Detroit Edison and Michigan Public Power Agency,
dated as of December 1, 1982 (Exhibit 28-5 to Registration No. 2-81501).                                                                                                                                                      
|         
|         
|         
|         
|99(b) -   |  | Belle River Transmission Ownership and Operating Agreement between Detroit Edison and Michigan
Public Power Agency, dated as of December 1, 1982 (Exhibit 28-6 to Registration No. 2-81501).                                                                                                                               
|         
|         
|         
|         
|99(c) -   |  | 1988 Amended and Restated Loan Agreement, dated as of October 4, 1988, between Renaissance Energy
Company (an unaffiliated company) (Renaissance) and Detroit Edison (Exhibit 99-6 to
Registration No. 33-50325).                                                                                                        
|         
|         
|         
|         
|99(d) -   |  | First Amendment to 1988 Amended and Restated Loan Agreement, dated as of February 1, 1990,
between Detroit Edison and Renaissance (Exhibit 99-7 to Registration No. 33-50325).                                                                                                                                             
|         
|         
|         
|         
|99(e) -   |  | Second Amendment to 1988 Amended and Restated Loan Agreement, dated as of September 1, 1993,
between Detroit Edison and Renaissance (Exhibit 99-8 to Registration No. 33-50325).                                                                                                                                           
|         
|         
|         
|         
|99(f) -   |  | Third Amendment, dated as of August 28, 1997, to 1988 Amended and Restated Loan Agreement between
Detroit Edison and Renaissance. (Exhibit 99-22 to Form 10-Q for quarter ended September 30, 1997.)                                                                                                                       
|         
|         
|         
|         
|99(g) -   |  | $200,000,000 364-Day Credit Agreement, dated as of September 1, 1993, among Detroit Edison,
Renaissance and Barclays Bank PLC, New York Branch, as Agent (Exhibit 99-12 to Registration No.
33-50325).                                                                                                                     
|         
|         
|         
|         
|99(h) -   |  | First Amendment, dated as of August 31, 1994, to $200,000,000 364-Day Credit Agreement, dated
September 1, 1993, among The Detroit Edison Company, Renaissance Energy Company, the Banks party
thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-19 to Form 10-Q for quarter
ended September 30, 1994).
|         
|         
|         
|         
|99(i) -   |  | Third Amendment, dated as of March 8, 1996, to $200,000,000 364-Day Credit Agreement, dated
September 1, 1993, as amended, among Detroit Edison, Renaissance, the Banks party thereto and
Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-11 to Form 10-Q for quarter ended March
31, 1996).                     

85



---



|        |  |                                                                                                                                                                                                                                                                                                                                                
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|       
|       
|       
|99(j) - |  | Fourth Amendment, dated as of August 29, 1996, to $200,000,000 364-Day Credit Agreement as of
September 1, 1990, as amended, among Detroit Edison, Renaissance, the Banks party thereto and
Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-13 to Form 10-Q for quarter ended
September 30, 1996).                                   
|       
|       
|       
|       
|99(k) - |  | Fifth Amendment, dated as of September 1, 1997, to $200,000,000 Multi-Year Credit Agreement,
dated as of September 1, 1993, as amended, among Detroit Edison, Renaissance, the Banks Party
thereto and Barclays Bank PLC, New York Branch, as Agent. (Exhibit 99-24 to Form 10-Q for
quarter ended September 30, 1997.)                        
|       
|       
|       
|       
|99(l) - |  | Seventh Amendment, dated as of August 26, 1999, to $200,000,000 364-Day Credit Agreement, dated
as of September 1, 1993, as amended among The Detroit Edison Company, Renaissance Energy Company,
the Banks parties thereto and Barclays Bank PLC, New York branch as Agent. (Exhibit 99-30 to
Form 10-Q for quarter ended September 30, 1999.)
|       
|       
|       
|       
|99(m) - |  | $200,000,000 Three-Year Credit Agreement, dated September 1, 1993, among Detroit Edison,
Renaissance and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-13 to Registration No.
33-50325).                                                                                                                                           
|       
|       
|       
|       
|99(n) - |  | First Amendment, dated as of September 1, 1994, to $200,000,000 Three-Year Credit Agreement,
dated as of September 1, 1993, among The Detroit Edison Company, Renaissance Energy Company, the
Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-20 to Form 10-Q
for quarter ended September 30, 1994).         
|       
|       
|       
|       
|99(o) - |  | Third Amendment, dated as of March 8, 1996, to $200,000,000 Three-Year Credit Agreement, dated
September 1, 1993, as amended among Detroit Edison, Renaissance, the Banks party thereto and
Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-12 to Form 10-Q for quarter ended March
31, 1996).                                       
|       
|       
|       
|       
|99(p) - |  | Fourth Amendment, dated as of September 1, 1996, to $200,000,000 Multi-Year (formerly Three-Year)
Credit Agreement, dated as of September 1, 1993, as amended among Detroit Edison, Renaissance,
the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-14 to Form
10-Q for quarter ended September 30, 1996).  
|       
|       
|       
|       
|99(q) - |  | Fifth Amendment, dated as of August 28, 1997, to $200,000,000 364-Day Credit Agreement, dated as
of September 1, 1990, as amended, among Detroit Edison, Renaissance, the Banks Party thereto and
Barclays Bank PLC, New York Branch, as Agent. (Exhibit 99-25 to Form 10-Q for quarter ended
September 30, 1997.)                             

86



---



|         |  |                                                                                                                                                                                                                                                                                                                                                                                       
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        
|        
|        
|        
|99(r) -  |  | Sixth Amendment, dated as of August 27, 1998, to $200,000,000 364-Day Credit Agreement dated as                                                                                                                                                                                                                                                                                       
|        
|        
|        
|        
|         |  | of September 1, 1990, as amended, among Detroit Edison, Renaissance, the Banks party thereto and
Barclays Bank PLC, New York Branch, as agent. (Exhibit 99-32 to Registration No. 333-65765.)                                                                                                                                                                                         
|        
|        
|        
|        
|99(s) -  |  | 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract, dated October 4, 1988, between
Detroit Edison and Renaissance (Exhibit 99-9 to Registration No. 33-50325).                                                                                                                                                                                                             
|        
|        
|        
|        
|99(t) -  |  | First Amendment to 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract, dated as of
February 1, 1990, between Detroit Edison and Renaissance (Exhibit 99-10 to Registration No.
33-50325).                                                                                                                                                                                  
|        
|        
|        
|        
|99(u) -  |  | Eighth Amendment, dated as of August 26, 1999 to 1988 Amended and Restated Nuclear Fuel heat
Purchase Contract between Detroit Edison and Renaissance Energy Company. (Exhibit 99-31 to Form
10-Q for quarter ended September 30, 1999.)                                                                                                                                              
|        
|        
|        
|        
|99(v) -  |  | U.S. $160,000,000 Standby Note Purchase Credit Facility, dated as of October 26, 1999, among
Detroit Edison, the Banks signatory thereto, Barclays Bank PLC, as Administrative Agent and
Barclays Capital Inc., Lehman Brothers Inc. and Banc One Capital Markets, Inc., as Remarketing
Agents. (Exhibit 99-29 to Form 10-Q for quarter ended September 30, 1999.)                   
|        
|        
|        
|        
|99(w) -  |  | Standby Note Purchase Credit Facility, dated as of September 12, 1997, among The Detroit Edison
Company and the Banks Signatory thereto and The Chase Manhattan Bank, as Administrative Agent,
and Citicorp Securities, Inc., Lehman Brokers, Inc., as Remarketing Agents and Chase Securities,
Inc. as Arranger. (Exhibit 999-26 to Form 10-Q for quarter ended September 30, 1997.)
|        
|        
|        
|        
|99(x) -  |  | Master Trust Agreement (Master Trust), dated as of June 30, 1994, between Detroit Edison and
Fidelity Management Trust Company relating to the Savings & Investment Plans (Exhibit 4-167 to
Form 10-Q for quarter ended June 30, 1994).                                                                                                                                             
|        
|        
|        
|        
|99(y) -  |  | First Amendment, effective as of February 1, 1995, to Master Trust (Exhibit 4-10 to Registration
No. 333-00023).                                                                                                                                                                                                                                                                      
|        
|        
|        
|        
|99(z) -  |  | Second Amendment, effective as of February 1, 1995 to Master Trust (Exhibit 4-11 to Registration
No. 333-00023).                                                                                                                                                                                                                                                                      
|99(aa) - |  | Third Amendment, effective January 1, 1996, to Master Trust (Exhibit 4-12 to Registration No.
333-00023).                                                                                                                                                                                                                                                                             

87



---



|          |  |                                                                                                                                                                                                   
|--------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         
|         
|         
|         
|         
|         
|         
|         
|99(bb) -  |  | Fourth Amendment to Trust Agreement Between Fidelity Management Trust Company and The Detroit
Edison Company (July 1996). Exhibit 4-185 to Form 10-K for year ended December 31, 1997.)           
|         
|         
|         
|         
|99(cc) -  |  | Fifth Amendment to Trust Agreement Between Fidelity Management Trust Company and The Detroit
Edison Company (December 1997). Exhibit 4-186 to Form 10-K for the year ended December 31, 1997.)    
|         
|         
|         
|         
|99(dd) -  |  | The Detroit Edison Company Irrevocable Grantor Trust for The Detroit Edison Company Savings
Reparation Plan (Exhibit 99-1 to Form 10-K for year ended December 31, 1996).                         
|         
|         
|         
|         
|99(ee) -  |  | The Detroit Edison Company Irrevocable Grantor Trust for The Detroit Edison Company Retirement
Reparation Plan (Exhibit 99-2 to Form 10-K for year ended December 31,1996).                       
|         
|         
|         
|         
|99(ff) -  |  | The Detroit Edison Company Irrevocable Grantor Trust for The Detroit Edison Company Management
Supplemental Benefit Plan (Exhibit 99-3 to Form 10-K for year ended December 31, 1996).            
|         
|         
|         
|         
|99(gg) -  |  | The Detroit Edison Company Irrevocable Grantor Trust for The Detroit Edison Company Benefit
Equalization Plan (Exhibit 99-4 to Form 10-K for year ended December 31, 1996).                       
|         
|         
|         
|         
|99(hh) -  |  | The Detroit Edison Company Irrevocable Grantor Trust for The Detroit Edison Company Plan for
Deferring the Payment of Directors Fees (Exhibit 99-5 to Form 10-K for year ended December
31, 1996.
|         
|         
|         
|         
|99 (ii) - |  | The Detroit Edison Company Irrevocable Grantor Trust for The DTE Energy Company Retirement Plan
for Non-Employee Directors (Exhibit 99-6 to Form 10-K for year ended December 31, 1996).          
|         
|         
|         
|         
|99 (jj) - |  | DTE Energy Company Irrevocable Grantor Trust for The DTE Energy Company Plan for Deferring the
Payment of Directors Fees (Exhibit 99-7 to Form 10-K for year ended December 31, 1996).           



|(b) |  | DTE Energy filed a report on Form 8-K,
dated October 5, 1999, discussing the proposed merger with
MCN.DTE Energy filed a report on Form 8-K, dated February 16,
2000, discussing its Common Share buyback program.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(c) |  | *Denotes management contract or compensatory plan or arrangement required to be entered as an exhibit to this
report.                                                                                             

88



---



DTE ENERGY COMPANY

SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS

|                                                                                                    |  |              |        |            |  |             |        |               |  |         |       |        |  |   |         |   |  |   |        | 
|--------------------------------------------------------------------------------------------------- |  | ------------ | ------ | ---------- |  | ----------- | ------ | ------------- |  | ------- | ----- | ------ |  | - | ------- | - |  | - | ------ | 
|                                                                                                    |  |              |        |            |  | Additions  
|                                                                                                    |  | Balance      |        |            |  |             |        |               |  | Balance
|                                                                                                    |  | at Beginning |        | Charged to |  | Charged to  |        |               |  |         |       | at End
|                                                                                                    |  | of           |        | Costs and  |  | Other       |        |               |  |         |       | of    
|Description                                                                                         |  | Period       |        | Expenses   |  | Accounts(a) |        | Deductions(b) |  | Period 
|                                                                                                    |  |              |        |            |  |             |        |               |  |        
|                                                                                                    |  | (Thousands) 
|YEAR 1999                                                                                          
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Allowance for
uncollectible accounts
(shown as deduction
from accounts receivable
in balance sheet) |  | $            | 20,000 |            |  | $           | 21,363 |               |  | $       | 3,357 |        |  | $ | (23,720 | ) |  | $ | 21,000 | 
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|YEAR 1998                                                                                          
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Allowance for
uncollectible accounts
(shown as deduction
from accounts receivable
in balance sheet) |  | $            | 20,000 |            |  | $           | 23,216 |               |  | $       | 2,789 |        |  | $ | (26,005 | ) |  | $ | 20,000 | 
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|YEAR 1997                                                                                          
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Allowance for
uncollectible accounts
(shown as deduction
from accounts receivable
in balance sheet) |  | $            | 20,000 |            |  | $           | 18,738 |               |  | $       | 2,657 |        |  | $ | (21,395 | ) |  | $ | 20,000 | 



---

(a) Collection of accounts previously written off.

(b) Uncollectible accounts written off.

89



---



THE DETROIT EDISON COMPANY

SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS

|                                                                                                    |  |              |        |            |  |             |        |               |  |         |       |        |  |   |         |   |  |   |        | 
|--------------------------------------------------------------------------------------------------- |  | ------------ | ------ | ---------- |  | ----------- | ------ | ------------- |  | ------- | ----- | ------ |  | - | ------- | - |  | - | ------ | 
|                                                                                                    |  |              |        |            |  | Additions  
|                                                                                                    |  | Balance      |        |            |  |             |        |               |  | Balance
|                                                                                                    |  | at Beginning |        | Charged to |  | Charged to  |        |               |  |         |       | at End
|                                                                                                    |  | of           |        | Costs and  |  | Other       |        |               |  |         |       | of    
|Description                                                                                         |  | Period       |        | Expenses   |  | Accounts(a) |        | Deductions(b) |  | Period 
|                                                                                                    |  |              |        |            |  |             |        |               |  |        
|                                                                                                    |  | (Thousands) 
|YEAR 1999                                                                                          
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Allowance for
uncollectible accounts
(shown as deduction
from accounts receivable
in balance sheet) |  | $            | 20,000 |            |  | $           | 20,363 |               |  | $       | 3,357 |        |  | $ | (23,720 | ) |  | $ | 20,000 | 
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|YEAR 1998                                                                                          
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Allowance for
uncollectible accounts
(shown as deduction
from accounts receivable
in balance sheet) |  | $            | 20,000 |            |  | $           | 23,216 |               |  | $       | 2,789 |        |  | $ | (26,005 | ) |  | $ | 20,000 | 
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|YEAR 1997                                                                                          
|                                                                                                   
|                                                                                                   
|                                                                                                   
|                                                                                                   
|Allowance for
uncollectible accounts
(shown as deduction
from accounts receivable
in balance sheet) |  | $            | 20,000 |            |  | $           | 18,738 |               |  | $       | 2,657 |        |  | $ | (21,395 | ) |  | $ | 20,000 | 



---

(a) Collection of accounts previously written off.

(b) Uncollectible accounts written off.

90



---



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

|                                                                                                             |  |                                                                                   
|------------------------------------------------------------------------------------------------------------ |  | ----------------------------------------------------------------------------------
|                                                                                                             |  | DTE ENERGY COMPANY                                                                
|                                                                                                             |  |                                                                                   
|                                                                                                             |  | (Registrant)                                                                      
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|By /s/ ANTHONY F. EARLEY, JR                                                                                 |  | By /s/ LARRY G. GARBERDING                                                        
|                                                                                                             |  |                                                                                   
|Anthony F. Earley, Jr.
Chairman of the Board,
Chief Executive Officer, President
and Chief Operating Officer |  | Larry G. Garberding
Executive Vice President,
Chief Financial Officer and Director
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|By /s/ DAVID E. MEADOR                                                                                       |  | By /s/ TERENCE E. ADDERLEY                                                        
|                                                                                                             |  |                                                                                   
|David E. Meador
Vice President                                                                               |  | Terence E. Adderley, Director                                                     
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|By /s/ LILLIAN BAUDER                                                                                        |  | By /s/ DAVID BING                                                                 
|                                                                                                             |  |                                                                                   
|Lillian Bauder, Director                                                                                     |  | David Bing, Director                                                              
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|By /s/ WILLIAM C. BROOKS                                                                                     |  | By /s/ ALLAN D. GILMOUR                                                           
|                                                                                                             |  |                                                                                   
|William C. Brooks, Director                                                                                  |  | Allan D. Gilmour, Director                                                        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|By /s/ THEODORE S. LEIPPRANDT                                                                                |  | By /s/JOHN E. LOBBIA                                                              
|                                                                                                             |  |                                                                                   
|Theodore S. Leipprandt, Director                                                                             |  | John E. Lobbia, Director                                                          
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|By /s/ EUGENE A. MILLER                                                                                      |  | By /s/ DEAN E. RICHARDSON                                                         
|                                                                                                             |  |                                                                                   
|Eugene A. Miller, Director                                                                                   |  | Dean E. Richardson, Director                                                      
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|By /s/ CHARLES W. PRYOR, JR                                                                                 
|                                                                                                            
|Charles W. Pryor, Jr., Director                                                                             

Date: February 23, 2000

91



---



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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                                                        
|                                                                                                             |  |  |    |  |  |                                                                                   
|                                                                                                             |  |  |    |  |  | (Registrant)                                                                      
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|By /s/ ANTHONY F. EARLEY, JR                                                                                 |  |  | By |  |  | /s/ LARRY G. GARBERDING                                                           
|                                                                                                             |  |  |    |  |  |                                                                                   
|Anthony F. Earley, Jr.
Chairman of the Board,
Chief Executive Officer,
President and Chief Operating Officer |  |  |    |  |  | Larry G. Garberding
Executive Vice President,
Chief Financial Officer and Director
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|By /s/ DANIEL G. BRUDZYNSKI                                                                                  |  |  | By |  |  | /s/ TERENCE E. ADDERLEY                                                           
|                                                                                                             |  |  |    |  |  |                                                                                   
|Daniel G. Brudzynski
Controller                                                                              |  |  |    |  |  | Terence E. Adderley, Director                                                     
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|By /s/ LILLIAN BAUDER                                                                                        |  |  | By |  |  | /s/ DAVID BING                                                                    
|                                                                                                             |  |  |    |  |  |                                                                                   
|Lillian Bauder, Director                                                                                     |  |  |    |  |  | David Bing, Director                                                              
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|By /s/ WILLIAM C. BROOKS                                                                                     |  |  | By |  |  | /s/ ALLAN D. GILMOUR                                                              
|                                                                                                             |  |  |    |  |  |                                                                                   
|William C. Brooks, Director                                                                                  |  |  |    |  |  | Allan D. Gilmour, Director                                                        
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|By /s/ THEODORE S. LEIPPRANDT                                                                                |  |  | By |  |  | /s/JOHN E. LOBBIA                                                                 
|                                                                                                             |  |  |    |  |  |                                                                                   
|Theodore S. Leipprandt, Director                                                                             |  |  |    |  |  | John E. Lobbia, Director                                                          
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|By /s/ EUGENE A. MILLER                                                                                      |  |  | By |  |  | /s/ DEAN E. RICHARDSON                                                            
|                                                                                                             |  |  |    |  |  |                                                                                   
|Eugene A. Miller, Director                                                                                   |  |  |    |  |  | Dean E. Richardson, Director                                                      
|                                                                                                            
|                                                                                                            
|                                                                                                            
|                                                                                                            
|By /s/CHARLES W. PRYOR, JR                                                                                  
|                                                                                                            
|Charles W. Pryor, Jr., Director                                                                             

Date: February 23, 2000

92



---



Annual Reports on Form 10-K for DTE Energy Company
and The Detroit Edison Company

Exhibit Index

|        |  |   |  |                                                                                                                                                                                                                                                                                                                                           |  |        |  | 
|------- |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------ |  | 
|Exhibit |  |   |  |                                                                                                                                                                                                                                                                                                                                           |  | Page  
|Number  |  |   |  |                                                                                                                                                                                                                                                                                                                                           |  | Number
|        |  |   |  |                                                                                                                                                                                                                                                                                                                                           |  |       
|2-1     |  | - |  | Agreement and Plan of Merger, among DTE Energy, MCN
Energy Group Inc. and DTE Enterprises, Inc., dated as
of October 4, 1999 and amended as of November 12,
1999.                                                                                                                                                                        
|       
|       
|       
|       
|4-205   |  | - |  | Supplemental Indenture, dated as of January 1, 2000,
creating the General and Refunding Mortgage Bonds of
2000 Series A.                                                                                                                                                                                                                 
|       
|       
|       
|       
|11-8    |  | - |  | DTE Energy Company Basic and Diluted Earnings Per
Share of Common Stock.                                                                                                                                                                                                                                                                 
|       
|       
|       
|       
|12-21   |  | - |  | DTE Energy Company Computation of Ratio of Earnings to
Fixed Charges.                                                                                                                                                                                                                                                                    
|       
|       
|       
|       
|12-22   |  | - |  | The Detroit Edison Company Computation of Ratio of
Earnings to Fixed Charges.                                                                                                                                                                                                                                                            
|       
|       
|       
|       
|12-23   |  | - |  | The Detroit
Edison Company Computation of Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends.                                                                                                                                                                                                                              
|       
|       
|       
|       
|21-4    |  | - |  | Subsidiaries of the Company and Detroit Edison.                                                                                                                                                                                                                                                                                          
|       
|       
|       
|       
|23-13   |  | - |  | Consent of Deloitte & Touche LLP.                                                                                                                                                                                                                                                                                                        
|       
|       
|       
|       
|27-31   |  | - |  | Financial Data Schedule for the period ended December
31, 1999 for DTE Energy Company.                                                                                                                                                                                                                                                   
|       
|       
|       
|       
|27-32   |  | - |  | Financial Data Schedule for the period ended December
31, 1999 for The Detroit Edison Company.                                                                                                                                                                                                                                           
|       
|       
|       
|       
|99-32   |  | - |  | Third Amended and Restated Credit Agreement, Dated as
of January 18, 2000 among DTE Capital Corporation,
the Initial Lenders, Citibank, N.A., as Agent, and
ABN AMRO Bank N.V., Bank One N.A., Barclays Bank PLC,
Bayerische Landesbank Girozertrale, Cayman Islands
Branch, Comerica Bank and Den Daske Bank
Aktieselskab, as Co-Agents.

(ii) Exhibits incorporated herein by reference.

|     |  |   |  |                                                                                                                                                               
|---- |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|3(a) |  | - |  | Amended and Restated Articles of Incorporation of DTE Energy
Company, dated December 13, 1995. (Exhibit 3-5 to Form 10-Q for
quarter ended September 30, 1997)





---



|     |  |   |  |                                                                                                                                                                                                                                                                                                                 
|---- |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|    
|    
|    
|3(b) |  | - |  | Certificate of Designation of Series A Junior
Participating Preferred Stock of DTE Energy Company.
Exhibit 3-6 to Form 10-Q for quarter ended September
30, 1997.)                                                                                                                                              
|    
|    
|    
|    
|3(c) |  | - |  | Restated Articles of Incorporation of Detroit Edison, as filed December 10, 1991 with the
State of Michigan, Department of Commerce  Corporation and Securities Bureau (Exhibit
3-13 to Form 10-Q for quarter ended June 30, 1999.)                                                                            
|    
|    
|    
|    
|3(d) |  | - |  | Articles of Incorporation of DTE Enterprises, Inc. (Exhibit 3.5 to Registration No.
333-89175.)                                                                                                                                                                                                                 
|    
|    
|    
|    
|3(e) |  | - |  | Rights Agreement, dated as of September 23, 1997,
by and between DTE Energy Company and The Detroit
Edison Company, as Rights Agent (Exhibit 4-1 to DTE
Energy Company Current Report on Form 8-K, dated
September 23, 1997.)                                                                                   
|    
|    
|    
|    
|3(f) |  | - |  | Agreement and Plan of Exchange (Exhibit 1(2) to DTE Energy Form 8-B filed January 2,
1996, File No. 1-11607.)                                                                                                                                                                                                   
|    
|    
|    
|    
|3(g) |  | - |  | Bylaws of DTE Energy Company, as amended through
September 22, 1999. (Exhibit 3-3 to Registration No. 333-89175.)                                                                                                                                                                                               
|    
|    
|    
|    
|3(h) |  | - |  | Bylaws of The Detroit Edison Company, as amended
through September 22, 1999. (Exhibit 3-14 to Form
10-Q for quarter ended September 30, 1999.)                                                                                                                                                                  
|    
|    
|    
|    
|3(i) |  | - |  | Bylaws of DTE Enterprises, Inc. (Exhibit 3.6 to Registration No. 333-89175.)                                                                                                                                                                                                                                    
|    
|    
|    
|    
|4(a) |  | - |  | Mortgage and Deed of Trust, dated as of October 1,
1924, between Detroit Edison (File No. 1-2198) and
Bankers Trust Company as Trustee (Exhibit B-1 to
Registration No. 2-1630) and indentures supplemental
thereto, dated as of dates indicated below, and filed
as exhibits to the filings as set forth below:

|                  |  |                                                            
|----------------- |  | -----------------------------------------------------------
|September 1, 1947 |  | Exhibit B-20 to Registration No. 2-7136                    
|                 
|                 
|                 
|                 
|November 15, 1971 |  | Exhibit 2-B-38 to Registration No. 2-42160                 
|                 
|                 
|                 
|                 
|January 15, 1973  |  | Exhibit 2-B-39 to Registration No. 2-46595                 
|                 
|                 
|                 
|                 
|June 1, 1978      |  | Exhibit 2-B-51 to Registration No. 2-61643                 
|                 
|                 
|                 
|                 
|June 30, 1982     |  | Exhibit 4-30 to Registration No. 2-78941                   
|                 
|                 
|                 
|                 
|August 15, 1982   |  | Exhibit 4-32 to Registration No. 2-79674                   
|                 
|                 
|                 
|                 
|October 15, 1985  |  | Exhibit 4-170 to Form 10-K for
year ended December 31, 1994
|                 
|                 
|                 
|                 
|November 30, 1987 |  | Exhibit 4-139 to Form 10-K for
year ended December 31, 1992
|                 
|                 
|                 
|                 
|July 15, 1989     |  | Exhibit 4-171 to Form 10-K for
year ended December 31, 1994





---



|                   |  |                                                                            
|------------------ |  | ---------------------------------------------------------------------------
|December 1, 1989   |  | Exhibit 4-172 to Form 10-K for
year ended December 31, 1994                
|                  
|                  
|                  
|                  
|February 15, 1990  |  | Exhibit 4-173 to Form 10-K for
year ended December 31, 1994                
|                  
|                  
|                  
|                  
|April 1, 1991      |  | Exhibit 4-15 to Form 10-K for year ended
December 31, 1996                 
|                  
|                  
|                  
|                  
|November 1, 1991   |  | Exhibit 4-181 to Form 10-K for year
ended December 31, 1996                
|                  
|                  
|                  
|                  
|January 15, 1992   |  | Exhibit 4-182 to Form 10-K for year ended
December 31, 1996                
|                  
|                  
|                  
|                  
|February 29, 1992  |  | Exhibit 4-187 to Form 10-Q for quarter
ended March 31, 1998                
|                  
|                  
|                  
|                  
|April 15, 1992     |  | Exhibit 4-188 to Form 10-Q for quarter
ended March 31, 1998                
|                  
|                  
|                  
|                  
|July 15, 1992      |  | Exhibit 4-189 to Form 10-Q for quarter
ended March 31, 1998                
|                  
|                  
|                  
|                  
|July 31, 1992      |  | Exhibit 4-190 to Form 10-Q for
quarter ended September 30, 1992            
|                  
|                  
|                  
|                  
|January 1, 1993    |  | Exhibit 4-131 to Registration No. 33-56496                                 
|                  
|                  
|                  
|                  
|March 1, 1993      |  | Exhibit 4-191 to Form 10-Q for
quarter ended March 31, 1998                
|                  
|                  
|                  
|                  
|March 15, 1993     |  | Exhibit 4-192 to Form 10-Q for quarter
ended March 31, 1998                
|                  
|                  
|                  
|                  
|April 1, 1993      |  | Exhibit 4-143 to Form 10-Q for quarter
ended March 31, 1993                
|                  
|                  
|                  
|                  
|April 26, 1993     |  | Exhibit 4-144 to Form 10-Q for
quarter ended March 31, 1993                
|                  
|                  
|                  
|                  
|May 31, 1993       |  | Exhibit 4-148 to Registration No. 33-64296                                 
|                  
|                  
|                  
|                  
|June 30, 1993      |  | Exhibit 4-149 to Form 10-Q for quarter
ended June 30, 1993 (1993 Series AP)
|                  
|                  
|                  
|                  
|June 30, 1993      |  | Exhibit 4-150
to Form 10-Q for
quarter ended June 30,
1993 (1993 Series H) 
|                  
|                  
|                  
|                  
|September 15, 1993 |  | Exhibit 4-158 to Form 10-Q for quarter
ended September 30, 1993            
|                  
|                  
|                  
|                  
|March 1, 1994      |  | Exhibit 4-163 to Registration No. 33-53207                                 
|                  
|                  
|                  
|                  
|June 15, 1994      |  | Exhibit 4-166 to Form 10-Q for quarter
ended June 30, 1994                 
|                  
|                  
|                  
|                  
|August 15, 1994    |  | Exhibit 4-168 to Form 10-Q for quarter
ended September 30, 1994            
|                  
|                  
|                  
|                  
|December 1, 1994   |  | Exhibit 4-169 to Form 10-K for
year ended December 31, 1994                
|                  
|                  
|                  
|                  
|August 1, 1995     |  | Exhibit 4-174 to Form 10-Q for quarter
ended September 30, 1995            
|                  
|                  
|                  
|                  
|August 1, 1999     |  | Exhibit 4-204 to Form 10-Q for quarter
ended September 30, 1999            
|                  
|                  
|                  
|                  
|August 15, 1999    |  | Exhibit 4-205 to Form 10-Q for quarter
ended September 30, 1999            





---



|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4(b) - |  | Collateral Trust Indenture (notes), dated as of June 30, 1993 (Exhibit 4-152 to
Registration No. 33-50325).                                                                                                                                                                                                                                                                                                                                
|      
|      
|      
|      
|4(c) - |  | First Supplemental Note Indenture, dated as of June 30, 1993 (Exhibit 4-153 to
Registration No. 33-50325).                                                                                                                                                                                                                                                                                                                                 
|      
|      
|      
|      
|4(d) - |  | Second Supplemental Note Indenture, dated as of September 15, 1993 (Exhibit 4-159 to Form
10-Q for quarter ended September 30, 1993).                                                                                                                                                                                                                                                                                                      
|      
|      
|      
|      
|4(e) - |  | First Amendment, dated as of August 15, 1996, to
Second Supplemental Note Indenture (Exhibit 4-17 to
Form 10-Q for quarter ended September 30, 1996).                                                                                                                                                                                                                                                                                      
|      
|      
|      
|      
|4(f) - |  | Third Supplemental Note Indenture, dated as of August 15, 1994 (Exhibit 4-169 to Form
10-Q for quarter ended September 30, 1994).                                                                                                                                                                                                                                                                                                          
|      
|      
|      
|      
|4(g) - |  | First Amendment, dated as of December 12, 1995, to
Third Supplemental Note Indenture, dated as of August
15, 1994 (Exhibit 4-12 to Registration No. 333-00023).                                                                                                                                                                                                                                                                            
|      
|      
|      
|      
|4(h) - |  | Sixth Supplemental Note Indenture, dated as of May 1,
1998, between Detroit Edison and Bankers Trust Company,
as Trustee, creating the 7.54% Quarterly Income Debt
Securities (QUIDS), including form of QUIDS. (Exhibit
4-193 to Form 10-Q for quarter ended June 30, 1998.)                                                                                                                                                            
|      
|      
|      
|      
|4(i) - |  | Seventh Supplemental Note Indenture, dated as of
October 15, 1998, between Detroit Edison and Bankers
Trust Company, as Trustee, creating the 7.375% QUIDS,
including form of QUIDS. (Exhibit 4-198 to Form 10-K
for year ended December 31, 1998.)                                                                                                                                                                                        
|      
|      
|      
|      
|4(j) - |  | Standby Note Purchase Credit Facility, dated as of
August 17, 1994, among The Detroit Edison Company,
Barclays Bank PLC, as Bank and Administrative Agent,
Bank of America, The Bank of new York, The Fuji Bank
Limited, the Long-Term Credit Bank of Japan, LTD, Union
Bank and Citicorp Securities, Inc. and First Chicago
Capital Markets, Inc. as Remarketing Agents (Exhibit
99-18 to Form 10-Q for quarter ended September 30,
1994.)
|      
|      
|      
|      
|4(k) - |  | $60,000,000 Support Agreement dated as of January 21, 1998
between DTE Energy Company and DTE Capital Corporation.
(Exhibit 4-183 to Form 10-K for year ended December 31,
1997.)                                                                                                                                                                                                                                                          
|      
|      
|      
|      
|4(l) - |  | $100,000,000 Support Agreement, dated as of June 16,
1998, between DTE Energy Company and DTE Capital
Corporation. (Exhibit 4-194 to Form 10-Q for quarter
ended June 30, 1998.)                                                                                                                                                                                                                                                           





---



|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        
|        
|        
|        
|4(m) -   |  | $300,000,000 Support Agreement, dated as of November 18,
1998, between DTE Energy and DTE Capital Corporation.
(Exhibit 4-199 to Form 10-K for year ended December 31,
1998.)                                                                                                                                                                                                                                                                                
|        
|        
|        
|        
|4(n) -   |  | $400,000,000 Support Agreement, dated as of January
19, 1999, between DTE Energy Company and DTE Capital
Corporation. (Exhibit 4-201 to Form 10-K for year ended
December 31, 1998.)                                                                                                                                                                                                                                                                         
|        
|        
|        
|        
|4(o) -   |  | $40,000,000 Support Agreement, dated as of February
24, 1999 between DTE Energy Company and DTE Capital
Corporation. (Exhibit 4-202 to Form 10-Q for quarter
ended March 31, 1999.)                                                                                                                                                                                                                                                                          
|        
|        
|        
|        
|4(p) -   |  | $50,000,000 Support Agreement, dated as of June 10,
1999 between DTE Energy Company and DTE Capital
Corporation. (Exhibit 4-203 to Form 10-Q for quarter
ended June 30, 1999.)                                                                                                                                                                                                                                                                               
|        
|        
|        
|        
|4(q) -   |  | Indenture, dated as of June 15, 1998, between DTE
Capital Corporation and The Bank of New York, as
Trustee. (Exhibit 4-196 to Form 10-Q for quarter ended
June 30, 1998.)                                                                                                                                                                                                                                                                                    
|        
|        
|        
|        
|4(r) -   |  | First Supplemental Indenture, dated as of June 15,
1998, between DTE Capital Corporation and The Bank of
New York, as Trustee, creating the $100,000,000
Remarketed Notes, Series A due 2038, including form of
Note. (Exhibit 4-197 to Form 10-Q for quarter ended
June 30, 1998.)                                                                                                                                                                          
|        
|        
|        
|        
|4(s) -   |  | Second Supplemental Indenture, dated as of November
1, 1998, between DTE Capital Corporation and The Bank
of New York, as Trustee, creating the $300,000,000
Remarketed Notes, 1998 Series B, including form of
Note. (Exhibit 4-200 to Form 10-K for year ended
December 31, 1998.)                                                                                                                                                                         
|        
|        
|        
|        
|*10(a)   |  | Certain arrangements pertaining to the employment of Michael C.
Porter. (Exhibit 10-8* to Form 10-Q for Quarter ended
September 30, 1997.)                                                                                                                                                                                                                                                                                                                   
|        
|        
|        
|        
|*10(b)   |  | Form of Change-in-Control Severance Agreement, dated as of
October 1, 1997, between DTE Energy Company and Gerard M.
Anderson, Susan M. Beale, Robert J. Buckler, Michael C. Champley,
Anthony F. Earley, Jr., Larry G. Garberding, Douglas R. Gipson,
John E. Lobbia, Leslie L. Loomans, David E. Meador, Christopher C.
Nern, Michael C. Porter, William R. Roller and S. Martin Taylor.
(Exhibit 10-9* to Form 10-Q for quarter ended September 30, 1997.)
|        
|        
|        
|        
|*10(c) - |  | Form of 1995 Indemnification Agreement between the
Company and its directors and officers (Exhibit 3L
(10-1) to DTE Energy Company Form 8-B dated January 2,
1996).                                                                                                                                                                                                                                                                                          





---



|         |  |                                                                                                                                                                                                        
|-------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        
|        
|        
|        
|*10(d) - |  | Form of Indemnification Agreement between Detroit
Edison and its officers other than those identified in
*10(b) (Exhibit 10-41 to Detroit Edisons Form 10-Q for
quarter ended June 30, 1993.)         
|        
|        
|        
|        
|*10(e) - |  | Certain arrangements pertaining to the employment of
S. Martin Taylor (Exhibit 10-38 to Detroit Edisons
Form 10-Q for quarter ended March 31, 1998.)                                                  
|        
|        
|        
|        
|*10(f) - |  | Amended and Restated Post-Employment Income Agreement
dated March 23, 1998, between Detroit Edison and
Anthony F. Earley, Jr. (Exhibit 10-20 to Form 10-Q for
quarter ended March 31, 1998.)           
|        
|        
|        
|        
|*10(g) - |  | Restricted Stock Agreement, dated March 23, 1998,
between Detroit Edison and Anthony F. Earley, Jr.
(Exhibit 10-20 to Form 10-Q for quarter ended March
31, 1998.)                                     
|        
|        
|        
|        
|*10(h) - |  | Amended and Restated Detroit Edison Savings
Reparation Plan (February 23, 1998). Exhibit 10-19*
for quarter ended March 31, 1998.)                                                                     
|        
|        
|        
|        
|*10(i) - |  | Certain arrangements pertaining to the employment
of Larry G. Garberding (Exhibit 10-23* to Form 10-Q
for quarter ended March 31, 1998).                                                               
|        
|        
|        
|        
|*10(j) - |  | Form of Indemnification Agreement, between Detroit
Edison and (1) John E. Lobbia, (2) Larry G.
Garberding and (3) Anthony F. Earley, Jr. (Exhibit
10-24* to Form 10-Q for quarter ended March 3, 1998).
|        
|        
|        
|        
|*10(k) - |  | Form of Indemnification Agreement between Detroit
Edison and its directors (Exhibit 10-25* to Form 10-Q
for quarter ended March 31, 1998).                                                             
|        
|        
|        
|        
|*10(l) - |  | Executive Vehicle Program, dated October 1, 1993
(Exhibit 10-47 to Detroit Edisons Form 10-Q for
quarter ended September 30, 1993).                                                                   
|        
|        
|        
|        
|*10(m) - |  | Amendment No. 1 to Executive Vehicle Plan, November
1993 (Exhibit 10-58 to Detroit Edisons Form 10-K for
year ended December 31, 1993).                                                               
|        
|        
|        
|        
|*10(n) - |  | Certain arrangements pertaining to the employment
of Gerard M. Anderson (Exhibit 10-40 to Detroit
Edisons Form 10-K for year ended December 31, 1993).                                                
|        
|        
|        
|        
|*10(o) - |  | Long-Term Incentive Plan (Exhibit 10-3 to Form 10-K
for year ended December 31, 1996).                                                                                                                 
|        
|        
|        
|        
|*10(p) - |  | Amendment No. 1 to The Detroit Edison Company
Long-Term Incentive Plan, effective December 31,
1998. (Exhibit 10-28* to Form 10-K for year ended
December 31, 1998.)                                   





---



|          |  |                                                                                                                                                                                                 
|--------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         
|         
|         
|         
|*10(q) -  |  | 1999 Executive Incentive Plan Measures (Exhibit
10-33* to Form 10-Q for quarter ended March 31,
1999.)                                                                                          
|         
|         
|         
|         
|*10(r) -  |  | 1999 Shareholder Value Improvement Plans-A Measures
(Exhibit 10-32* to Form 10-Q for quarter ended March
31, 1999.)                                                                             
|         
|         
|         
|         
|*10(s) -  |  | Fourth Restatement of The Benefit Equalization Plan
for Certain Employees of The Detroit Edison Company
(October 1997). (Exhibit 10-11* to Form 10-K for year
ended December 31, 1997.)         
|         
|         
|         
|         
|*10(t) -  |  | The Detroit Edison Company Key Employee Deferred
Compensation Plan (October 1997). (Exhibit 10-12* to
Form 10-K for year ended December 31, 1997.)                                              
|         
|         
|         
|         
|*10(u) -  |  | The Detroit Edison Company Executive Incentive Plan
(October 1997). (Exhibit 10-13* to Form 10-K for the
year ended December 31, 1997.)                                                         
|         
|         
|         
|         
|*10(v) -  |  | Detroit Edison Company Shareholder Value
Improvement Plan (October 1997). (Exhibit 10-15* to
Form 10-K for year ended December 31, 1997.)                                                       
|         
|         
|         
|         
|*10(w) -  |  | Trust Agreement for DTE Energy Company
Change-In-Control Severance Agreements between DTE
Energy Company and Wachovia Bank, N.A. (Exhibit
10-16* to Form 10-K for year ended December 31,
1997.)
|         
|         
|         
|         
|*10(x) -  |  | Certain arrangements pertaining to the employment
of David E. Meador (Exhibit 10-5 to Form 10-K for
year ended December 31, 1997.)                                                              
|         
|         
|         
|         
|*10(y) -  |  | Amended and Restated Supplemental Long-Term
Disability Plan, dated January 27, 1997. (Exhibit
*10-4 to form 10-K for year ended December 31, 1996.)                                             
|         
|         
|         
|         
|*10(z) -  |  | Fourth Restatement of the Retirement Reparation
Plan for Certain Employees of The Detroit Edison
Company (October 1997). Exhibit *10-10 to Form 10-K
for year ended December 31, 1997.)         
|         
|         
|         
|         
|*10(aa) - |  | Sixth Restatement of The Detroit Edison Company
Management Supplemental Benefit Plan (1998). (Exhibit
10-27* to Form 10-K for year ended December 31,
1998.)                                    
|         
|         
|         
|         
|*10(bb) - |  | DTE Energy Company Plan for Deferring the Payment
of Directors Fees (As Amended and Restated Effective
As of January 1, 1999). (Exhibit 10-29* to Form 10-K
for year ended December 31, 1998.) 





---



|          |  |                                                                                                                                                                                                                                                                                                                            
|--------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         
|         
|         
|         
|*10(cc) - |  | DTE Energy Company Deferred stock Compensation Plan
for Non-Employee Directors, effective as of January
1, 1999. (Exhibit 10-30* to Form 10-K for year ended
December 31, 1998.)                                                                                                                                           
|         
|         
|         
|         
|*10(dd) - |  | DTE Energy Company Retirement Plan for Non-Employee
Directors (As Amended and Restated Effective As Of
December 31, 1998). (Exhibit 10-31 to Form 10-K for
year ended December 31, 1998.)                                                                                                                                  
|         
|         
|         
|         
|99(a) -   |  | Belle River Participation Agreement between Detroit
Edison and Michigan Public Power Agency, dated as of
December 1, 1982 (Exhibit 28-5 to Registration No.
2-81501).                                                                                                                                                      
|         
|         
|         
|         
|99(b) -   |  | Belle River Transmission Ownership and Operating
Agreement between Detroit Edison and Michigan Public
Power Agency, dated as of December 1, 1982 (Exhibit
28-6 to Registration No. 2-81501).                                                                                                                               
|         
|         
|         
|         
|99(c) -   |  | 1988 Amended and Restated Loan Agreement, dated as
of October 4, 1988, between Renaissance Energy
Company (an unaffiliated company) (Renaissance) and
Detroit Edison (Exhibit 99-6 to Registration No.
33-50325).                                                                                                        
|         
|         
|         
|         
|99(d) -   |  | First Amendment to 1988 Amended and Restated Loan
Agreement, dated as of February 1, 1990, between
Detroit Edison and Renaissance (Exhibit 99-7 to
Registration No. 33-50325).                                                                                                                                             
|         
|         
|         
|         
|99(e) -   |  | Second Amendment to 1988 Amended and Restated Loan
Agreement, dated as of September 1, 1993, between
Detroit Edison and Renaissance (Exhibit 99-8 to
Registration No. 33-50325).                                                                                                                                           
|         
|         
|         
|         
|99(f) -   |  | Third Amendment, dated as of August 28, 1997, to
1988 Amended and Restated Loan Agreement between
Detroit Edison and Renaissance. (Exhibit 99-22 to
Form 10-Q for quarter ended September 30, 1997.)                                                                                                                       
|         
|         
|         
|         
|99(g) -   |  | $200,000,000 364-Day Credit Agreement, dated as of
September 1, 1993, among Detroit Edison, Renaissance
and Barclays Bank PLC, New York Branch, as Agent
(Exhibit 99-12 to Registration No. 33-50325).                                                                                                                     
|         
|         
|         
|         
|99(h) -   |  | First Amendment, dated as of August 31, 1994, to
$200,000,000 364-Day Credit Agreement, dated
September 1, 1993, among The Detroit Edison Company,
Renaissance Energy Company, the Banks party thereto
and Barclays Bank, PLC, New York Branch, as Agent
(Exhibit 99-19 to Form 10-Q for quarter ended
September 30, 1994).
|         
|         
|         
|         
|99(i) -   |  | Third Amendment, dated as of March 8, 1996, to
$200,000,000 364-Day Credit Agreement, dated
September 1, 1993, as amended, among Detroit Edison,
Renaissance, the Banks party thereto and Barclays                                                                                                                         





---



|        |  |                                                                                                                                                                                                                                                                                                                                                
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|       
|       
|       
|        |  | Bank, PLC, New York Branch, as Agent (Exhibit 99-11
to Form 10-Q for quarter ended March 31, 1996).                                                                                                                                                                                                                                            
|       
|       
|       
|       
|99(j) - |  | Fourth Amendment, dated as of August 29, 1996, to
$200,000,000 364-Day Credit Agreement as of September
1, 1990, as amended, among Detroit Edison,
Renaissance, the Banks party thereto and Barclays
Bank, PLC, New York Branch, as Agent (Exhibit 99-13
to Form 10-Q for quarter ended September 30, 1996).                                   
|       
|       
|       
|       
|99(k) - |  | Fifth Amendment, dated as of September 1, 1997, to
$200,000,000 Multi-Year Credit Agreement, dated as of
September 1, 1993, as amended, among Detroit Edison,
Renaissance, the Banks Party thereto and Barclays
Bank PLC, New York Branch, as Agent. (Exhibit 99-24
to Form 10-Q for quarter ended September 30, 1997.)                        
|       
|       
|       
|       
|99(l) - |  | Seventh Amendment, dated as of August 26, 1999, to
$200,000,000 364-Day Credit Agreement, dated as of
September 1, 1993, as amended among The Detroit
Edison Company, Renaissance Energy Company, the Banks
parties thereto and Barclays Bank PLC, New York
branch as Agent. (Exhibit 99-30 to Form 10-Q for
quarter ended September 30, 1999.)
|       
|       
|       
|       
|99(m) - |  | $200,000,000 Three-Year Credit Agreement, dated
September 1, 1993, among Detroit Edison, Renaissance
and Barclays Bank, PLC, New York Branch, as Agent
(Exhibit 99-13 to Registration No. 33-50325).                                                                                                                                           
|       
|       
|       
|       
|99(n) - |  | First Amendment, dated as of September 1, 1994, to
$200,000,000 Three-Year Credit Agreement, dated as of
September 1, 1993, among The Detroit Edison Company,
Renaissance Energy Company, the Banks party thereto
and Barclays Bank, PLC, New York Branch, as Agent
(Exhibit 99-20 to Form 10-Q for quarter ended
September 30, 1994).         
|       
|       
|       
|       
|99(o) - |  | Third Amendment, dated as of March 8, 1996, to
$200,000,000 Three-Year Credit Agreement, dated
September 1, 1993, as amended among Detroit Edison,
Renaissance, the Banks party thereto and Barclays
Bank, PLC, New York Branch, as Agent (Exhibit 99-12
to Form 10-Q for quarter ended March 31, 1996).                                       
|       
|       
|       
|       
|99(p) - |  | Fourth Amendment, dated as of September 1, 1996, to
$200,000,000 Multi-Year (formerly Three-Year) Credit
Agreement, dated as of September 1, 1993, as amended
among Detroit Edison, Renaissance, the Banks party
thereto and Barclays Bank, PLC, New York Branch, as
Agent (Exhibit 99-14 to Form 10-Q for quarter ended
September 30, 1996).  
|       
|       
|       
|       
|99(q) - |  | Fifth Amendment, dated as of August 28, 1997, to
$200,000,000 364-Day Credit Agreement, dated as of
September 1, 1990, as amended, among Detroit Edison,
Renaissance, the Banks Party thereto and                                                                                                                                              





---



|         |  |                                                                                                                                                                                                                                                                                                                                                                                       
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        
|        
|        
|        
|         |  | Barclays
Bank PLC, New York Branch, as Agent. (Exhibit 99-25
to Form 10-Q for quarter ended September 30, 1997.)                                                                                                                                                                                                                                                                      
|        
|        
|        
|        
|99(r) -  |  | Sixth Amendment, dated as of August 27, 1998, to
$200,000,000 364-Day Credit Agreement dated as of
September 1, 1990, as amended, among Detroit Edison,
Renaissance, the Banks party thereto and Barclays
Bank PLC, New York Branch, as agent. (Exhibit 99-32
to Registration No. 333-65765.)                                                                                         
|        
|        
|        
|        
|99(s) -  |  | 1988 Amended and Restated Nuclear Fuel Heat
Purchase Contract, dated October 4, 1988, between
Detroit Edison and Renaissance (Exhibit 99-9 to
Registration No. 33-50325).                                                                                                                                                                                                             
|        
|        
|        
|        
|99(t) -  |  | First Amendment to 1988 Amended and Restated
Nuclear Fuel Heat Purchase Contract, dated as of
February 1, 1990, between Detroit Edison and
Renaissance (Exhibit 99-10 to Registration No.
33-50325).                                                                                                                                                                                  
|        
|        
|        
|        
|99(u) -  |  | Eighth Amendment, dated as of August 26, 1999 to
1988 Amended and Restated Nuclear Fuel heat Purchase
Contract between Detroit Edison and Renaissance
Energy Company. (Exhibit 99-31 to Form 10-Q for
quarter ended September 30, 1999.)                                                                                                                                              
|        
|        
|        
|        
|99(v) -  |  | U.S. $160,000,000 Standby Note Purchase Credit
Facility, dated as of October 26, 1999, among Detroit
Edison, the Banks signatory thereto, Barclays Bank
PLC, as Administrative Agent and Barclays Capital Inc.,
Lehman Brothers Inc. and Banc One Capital Markets,
Inc., as Remarketing Agents. (Exhibit 99-29 to Form
10-Q for quarter ended September 30, 1999.)                   
|        
|        
|        
|        
|99(w) -  |  | Standby Note Purchase Credit Facility, dated as of
September 12, 1997, among The Detroit Edison Company
and the Banks Signatory thereto and The Chase
Manhattan Bank, as Administrative Agent, and Citicorp
Securities, Inc., Lehman Brokers, Inc., as
Remarketing Agents and Chase Securities, Inc. as
Arranger. (Exhibit 999-26 to Form 10-Q for quarter
ended September 30, 1997.)
|        
|        
|        
|        
|99(x) -  |  | Master Trust Agreement (Master Trust), dated as
of June 30, 1994, between Detroit Edison and Fidelity
Management Trust Company relating to the Savings &
Investment Plans (Exhibit 4-167 to Form 10-Q for
quarter ended June 30, 1994).                                                                                                                                             
|        
|        
|        
|        
|99(y) -  |  | First Amendment, effective as of February 1, 1995,
to Master Trust (Exhibit 4-10 to Registration No.
333-00023).                                                                                                                                                                                                                                                                      
|        
|        
|        
|        
|99(z) -  |  | Second Amendment, effective as of February 1, 1995 to Master
Trust (Exhibit 4-11 to Registration No. 333-00023).                                                                                                                                                                                                                                                                      
|        
|        
|        
|        
|99(aa) - |  | Third Amendment, effective January 1, 1996, to
Master Trust (Exhibit 4-12 to Registration No.
333-00023).                                                                                                                                                                                                                                                                             





---



|          |  |                                                                                                                                                                                                   
|--------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         
|         
|         
|         
|99(bb) -  |  | Fourth Amendment to Trust Agreement Between Fidelity
Management Trust Company and The Detroit Edison
Company (July 1996). Exhibit 4-185 to Form 10-K for
year ended December 31, 1997.)           
|         
|         
|         
|         
|99(cc) -  |  | Fifth Amendment to Trust Agreement Between Fidelity
Management Trust Company and The Detroit Edison
Company (December 1997). Exhibit 4-186 to Form 10-K
for the year ended December 31, 1997.)    
|         
|         
|         
|         
|99(dd) -  |  | The Detroit Edison Company Irrevocable Grantor Trust
for The Detroit Edison Company Savings Reparation Plan
(Exhibit 99-1 to Form 10-K for year ended December 31,
1996).                         
|         
|         
|         
|         
|99(ee) -  |  | The Detroit Edison Company Irrevocable Grantor Trust
for The Detroit Edison Company Retirement Reparation
Plan (Exhibit 99-2 to Form 10-K for year ended
December 31,1996).                       
|         
|         
|         
|         
|99(ff) -  |  | The Detroit Edison Company Irrevocable Grantor Trust for The
Detroit Edison Company Management Supplemental Benefit
Plan (Exhibit 99-3 to Form 10-K for year ended December 31,
1996).            
|         
|         
|         
|         
|99(gg) -  |  | The Detroit Edison Company Irrevocable Grantor Trust
for The Detroit Edison Company Benefit Equalization
Plan (Exhibit 99-4 to Form 10-K for year ended
December 31, 1996).                       
|         
|         
|         
|         
|99(hh) -  |  | The Detroit Edison Company Irrevocable Grantor Trust for The
Detroit Edison Company Plan for Deferring the Payment of
Directors Fees (Exhibit 99-5 to Form 10-K for year ended
December 31, 1996.
|         
|         
|         
|         
|99(ii) -  |  | The Detroit Edison Company Irrevocable Grantor
Trust for The DTE DTE Energy Company Retirement Plan
for Non-Employee Directors (Exhibit 99-6 to Form 10-K
for year ended December 31, 1996).      
|         
|         
|         
|         
|99 (jj) - |  | DTE Energy Company Irrevocable Grantor Trust for The
DTE Energy Company Plan for Deferring the Payment of Directors
Fees (Exhibit 99-7 to Form 10-K for year ended December 31,
1996).           



|* |  | Denotes management contract or compensatory plan or arrangement
required to be entered as an exhibit to this report.
|- |  | --------------------------------------------------------------------------------------------------------------------