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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
 ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE OF 1934
 þ
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
SECURITIES EXCHANGE ACT OF 1934oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2005
 Commission file number 1-2198
 The Detroit Edison Company, a Michigan corporation, meets the conditions set forth in General Instruction I (1) (a) and (b) of Form 10-K and
is, therefore, filing this form with the reduced disclosure format.
 THE DETROIT EDISON COMPANY
  Michigan
    
    38-0478650(State or other jurisdiction of incorporation or
    
    (I.R.S. Employerorganization)
    
    Identification No.)2000 2nd Avenue, Detroit, Michigan
    
    48226-1279(Address of principal executive offices)
    
    (Zip Code)
 313-235-4000
 
 
 Yes o   No þ
 Yes o   No þ
 Yes þ No o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
 Yes o No þ
  DOCUMENTS INCORPORATED BY REFERENCE




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##### 



The Detroit Edison Company  Annual Report on Form 10-K  Year Ended December 31, 2005  Table of Contents
 PageDefinitions
    
    
    
    1Forward-Looking Statements


    
    2Part IItems 1., 1A. & 2.
    
    Business, Company Risk Factors and Properties
    
    3Item 3.
    
    Legal Proceedings
    
    9Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    10Part IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    10Item 6.
    
    Selected Financial Data
    
    10Item 7.
    
    Managements Narrative Analysis of Results of Operations
    
    11Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    15Item 8.
    
    Financial Statements and Supplementary Data
    
    16Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    54Item 9A.
    
    Controls and Procedures
    
    54Item 9B.
    
    Other Information
    
    55Part IIIItem 10.
    
    Directors and Executive Officers of the Registrant
    
    55Item 11.
    
    Executive Compensation
    
    55Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    55Item 13.
    
    Certain Relationships and Related Transactions
    
    55Item 14.
    
    Principal Accountant Fees and Services
    
    55PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    56Signatures
    
    
    
    64Computation of Ratio of Earnings to Fixed ChargesConsent of Deloitte & Touche LLPChief Executive Officer Section 302 CertificationChief Financial Officer Section 302 CertificationChief Executive Officer Section 906 CertificationChief Financial Officer Section 906 Certification




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Definitions
 Customer Choice
    
    Statewide initiatives giving customers in Michigan the option to choose alternative suppliers for
electricity.Detroit Edison
    
    The Detroit Edison Company (a direct wholly owned subsidiary of
DTE Energy Company) and subsidiary companiesDTE Energy
    
    DTE Energy Company, the parent of Detroit Edison
and directly or indirectly the parent company of
numerous utility and non-utility subsidiariesEPA
    
    United States Environmental Protection AgencyFERC
    
    Federal Energy Regulatory CommissionITC
    
    International Transmission Company (until
February 28, 2003, a wholly owned subsidiary of
DTE Energy Company)MDEQ
    
    Michigan Department of Environmental QualityMPSC
    
    Michigan Public Service CommissionNRC
    
    Nuclear Regulatory CommissionPSCR
    
    A power supply cost recovery mechanism
authorized by the MPSC that allows Detroit
Edison to recover through rates its fuel,
fuel-related and purchased power expenses. The
power supply cost recovery mechanism was
suspended under Michigans restructuring
legislation (signed into law June 5, 2000),
which lowered and froze electric customer rates
and was reinstated by the MPSC effective January
1, 2004.Securitization
    
    Detroit Edison financed specific stranded costs
at lower interest rates through the sale of rate
reduction bonds by a wholly owned special
purpose entity, the Detroit Edison
Securitization Funding LLC.SFAS
    
    Statement of Financial Accounting StandardsStranded Costs
    
    Costs incurred by utilities in order to serve
customers in a regulated environment that absent
special regulatory approval would not otherwise
be recoverable if customers switch to
alternative energy suppliers.Units of MeasurementkWh
    
    Kilowatthour of electricityMW
    
    Megawatt of electricityMWh
    
    Megawatthour of electricity
 1




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




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Part I
 
 Items
1., 1A. & 2. Business, Company Risk Factors and Properties
 General
    (in millions)
    
    2005
    
    
    2004
    
    
    2003Revenue by ServiceResidential
    
    $
    1,517
    
    
    
    1,345
    
    
    
    1,351Commercial
    
    
    1,331
    
    
    
    1,123
    
    
    
    1,308Industrial
    
    
    697
    
    
    
    557
    
    
    
    634Wholesale
    
    
    73
    
    
    
    65
    
    
    
    67Other
    
    
    464
    
    
    
    234
    
    
    
    201Subtotal
    
    
    4,082
    
    
    
    3,324
    
    
    
    3,561Interconnection sales (1)
    
    
    380
    
    
    
    244
    
    
    
    134Total Revenue
    
    $
    4,462
    
    
    $
    3,568
    
    
    $
    3,695
 
 (1)
    
    Represents power that is not distributed by Detroit Edison.   Fuel Supply and Purchased Power
  3




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Properties
  Location by
    
    
    Summer NetMichigan
    
    
    Rated Capability (1) (2)Plant Name
    
    County
    
    
    (MW)
    
    
    (%)
    
    
    Year in ServiceFossil-fueled Steam-ElectricBelle River (3)
    
    St. Clair
    
    
    1,026
    
    
    
    9.2
    %
    
    1984 and 1985Conners Creek
    
    Wayne
    
    
    215
    
    
    
    1.9
    
    

    1951Greenwood
    
    St. Clair
    
    
    785
    
    
    
    7.1
    
    

    1979Harbor Beach
    
    Huron
    
    
    103
    
    
    
    0.9
    
    

    1968Marysville
    
    St. Clair
    
    
    84
    
    
    
    0.8
    
    
    1943 and 1947Monroe (4)
    
    Monroe
    
    
    3,115
    
    
    
    28.0
    
    
    1971, 1973 and 1974River Rouge
    
    Wayne
    
    
    510
    
    
    
    4.6
    
    
    1957 and 1958St. Clair
    
    St. Clair
    
    
    1,415
    
    
    
    12.7
    
    
    1953, 1954, 1959, 1961 and 1969Trenton Channel
    
    Wayne
    
    
    730
    
    
    
    6.6
    
    
    1949 and 19687,983
    
    
    
    71.8Oil or Gas-fueled Peaking Units
    
    Various
    
    
    1,102
    
    
    
    9.9
    
    
    1966-1971, 1981 and 1999Nuclear-fueled Steam-ElectricFermi 2 (5)
    
    Monroe
    
    
    1,111
    
    
    
    10.0
    
    

    1988Hydroelectric Pumped StorageLudington (6)
    
    Mason
    
    
    917
    
    
    
    8.3
    
    

    197311,113
    
    
    
    100.0
    %
 
 (1)
    
    Summer net rated capabilities of generating plants 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 one oil-fueled unit, St. Clair Unit No. 5 (250 MW), in cold standby status.(3)
    
    The Belle River capability represents Detroit Edisons entitlement to 81.39% of the capacity and energy of the plant. See Note 6  Jointly Owned
Utility Plant.(4)
    
    The Monroe Power Plant provided 38% of Detroit Edisons total 2005 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. See Note 6.  4




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Electric Distribution
 Circuit MilesOperating Voltage-Kilovolts (kV)
    
    Overhead
    
    
    Underground4.8 kV to 13.2 kV
    
    
    28,104
    
    
    
    13,37924 kV
    
    
    101
    
    
    
    69040 kV
    
    
    2,323
    
    
    
    327120 kV
    
    
    70
    
    
    
    1330,598
    
    
    
    14,409
  Regulation
     5




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Energy Assistance Programs
  Strategy and Competition
      6




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ENVIRONMENTAL MATTERS
  (in Millions)Air
    
    $
    2,385Water
    
    
    50Other Clean Up Sites
    
    
    10MGP Sites
    
    
    3Estimated total expenditures
    
    $
    2,448Estimated 2006 expenditures
    
    $
    224
 Air
 Water
 Contaminated
Sites
  Note
    
    Title4
    
    Regulatory Matters5
    
    Nuclear Operations13
    
    Commitments and Contingencies
 Item 1A. Company Risk Factors
  Failure to successfully implement new processes and information systems could interrupt our
operations.
 7




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Michigans electric Customer Choice program is negatively impacting our financial performance
 Weather
significantly affects our operations .
 We are subject to rate regulation
 Adverse changes in our credit ratings may negatively affect us.
 Regional and national economic conditions can have an unfavorable impact on us.
 Environmental laws and liability may be costly.
   8




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Operation of a nuclear facility subjects us to risk.
 The supply and price of fuel and other commodities may impact our financial results.
 A work interruption may adversely affect us.
 Unplanned power plant outages may be costly.
 Our ability to access capital markets at attractive interest rates is important.
 Michigan tax reform may be costly
 We may not be fully covered by insurance.
 Terrorism could affect our business
 EMPLOYEES
  
 Item 3. Legal Proceedings
  9




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Note
    
    Title4
5
13
    
    Regulatory Matters

Nuclear Operations

Commitments and Contingencies
 
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Part II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
   
 Item 6. Selected Financial Data
  10




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Item 7. Managements Narrative Analysis of Results of Operations
  Factors impacting income:
 Increase (Decrease) in Income Statement Components Compared to Prior Year(in Millions)
    
    2005
    
    
    2004Operating Revenues
    
    $
    894
    
    
    $
    (127
    )Fuel and Purchased Power
    
    
    705
    
    
    
    (54
    )Gross Margin
    
    
    189
    
    
    
    (73
    )Operation and Maintenance
    
    
    (87
    )
    
    
    63Depreciation and Amortization
    
    
    117
    
    
    
    50Taxes Other Than Income
    
    
    (8
    )
    
    
    (8
    )Gains on sales of assets
    
    
    (25
    )
    
    
    (21
    )Operating Income
    
    
    192
    
    
    
    (157
    )Other (Income) and Deductions
    
    
    (20
    )
    
    
    26Income Tax Provision
    
    
    85
    
    
    
    (81
    )Net Income before Accounting Change
    
    
    127
    
    
    
    (102
    )Cumulative Effect of Accounting Change
    
    
    (3
    )
    
    
    6Net Income
    
    $
    124
    
    
    $
    (96
    )
 Gross margins
 Increase (Decrease) in Gross Margin Components Compared to Prior Year(in Millions)
    
    2005
    
    
    2004Weather related margin
    
    $
    166
    
    
    $
    (25
    )MPSC 2004 rate orders
    
    
    116
    
    
    
    22Unrecovered power supply costs  residential customers
    
    
    (73
    )
    
    
    Transmission charges (1)
    
    
    (93
    )
    
    
    Electric Customer Choice program
    
    
    79
    
    
    
    (82
    )Service territory economic performance
    
    
    (23
    )
    
    
    9Other, net
    
    
    17
    
    
    
    3Increase in gross margin performance
    
    $
    189
    
    
    $
    (73
    )
 
 (1)
    
    Transmission expenses were recorded in operation and maintenance expense in 2004.  11




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Power Generated and Purchased(in Thousands of MWh)
    
    2005
    
    
    2004
    
    
    2003Power Plant GenerationFossil
    
    
    40,756
    
    
    
    73
    %
    
    
    39,432
    
    
    
    75
    %
    
    
    38,052
    
    
    
    72
    %Nuclear
    
    
    8,754
    
    
    
    16
    
    
    
    8,440
    
    
    
    16
    
    
    
    8,114
    
    
    
    1649,510
    
    
    
    89
    
    
    
    47,872
    
    
    
    91
    
    
    
    46,166
    
    
    
    88Purchased Power
    
    
    6,378
    
    
    
    11
    
    
    
    4,650
    
    
    
    9
    
    
    
    6,354
    
    
    
    12System Output
    
    
    55,888
    
    
    
    100
    %
    
    
    52,522
    
    
    
    100
    %
    
    
    52,520
    
    
    
    100
    %Less Line Loss and Internal Use
    
    
    (3,205
    )
    
    
    
    
    
    
    (3,574
    )
    
    
    
    
    
    
    (3,248
    )Net System Output
    
    
    52,683
    
    
    
    
    
    
    
    48,948
    
    
    
    
    
    
    
    49,272Average Unit Cost ($/MWh)Generation (1)
    
    $
    15.47
    
    
    
    
    
    
    $
    12.98
    
    
    
    
    
    
    $
    12.89Purchased Power
    
    $
    89.37
    
    
    
    
    
    
    $
    37.06
    
    
    
    
    
    
    $
    41.73Overall Average Unit Cost
    
    $
    23.90
    
    
    
    
    
    
    $
    15.11
    
    
    
    
    
    
    $
    16.38
 
 (1)
    
    Represents fuel costs associated with power plants. 12




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(in Thousands of MWh)
    
    2005
    
    
    2004
    
    
    2003Electric SalesResidential
    
    
    16,812
    
    
    
    15,081
    
    
    
    15,074Commercial
    
    
    15,618
    
    
    
    13,425
    
    
    
    15,942Industrial
    
    
    12,317
    
    
    
    11,472
    
    
    
    12,254Wholesale
    
    
    2,329
    
    
    
    2,197
    
    
    
    2,241Other
    
    
    390
    
    
    
    401
    
    
    
    40247,466
    
    
    
    42,576
    
    
    
    45,913Interconnection sales (1)
    
    
    5,217
    
    
    
    6,372
    
    
    
    3,359Total Electric Sales
    
    
    52,683
    
    
    
    48,948
    
    
    
    49,272Electric DeliveriesRetail and Wholesale
    
    
    47,466
    
    
    
    42,576
    
    
    
    45,913Electric Choice
    
    
    6,760
    
    
    
    9,245
    
    
    
    6,193Electric Choice  Self Generators (2)
    
    
    518
    
    
    
    595
    
    
    
    1,088Total Electric Sales and Deliveries
    
    
    54,744
    
    
    
    52,416
    
    
    
    53,194
 
 (1)
    
    Represents power that is not distributed by Detroit Edison.(2)
    
    Represents deliveries for self generators who have purchased power from alternative energy
suppliers to supplement their power requirements. Operation and maintenance
  
  Depreciation and amortization
 13




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Asset (gains) and losses, net
 Other income and deductions
 Outlook
    
    
    amount and timing of cost recovery allowed as a result of regulatory proceedings,
related appeals, or new legislation;
    
    our ability to reduce costs;
    
    variations in market prices of power, coal and gas;
    
    plant performance;
    
    economic conditions within the state of Michigan;
    
    weather, including the severity and frequency of storms; and
    
    levels of customer participation in the electric Customer Choice program.
  CUMULATIVE EFFECT OF ACCOUNTING CHANGES
    14




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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
 Commodity Price Risk
   Interest Rate Risk
  Credit Risk
  15




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Item 8. Financial Statements and Supplementary Data
  PageReport of Independent Registered Public Accounting Firm
    
    17Consolidated Statement of Operations
    
    18Consolidated Statement of Financial Position
    
    19Consolidated Statement of Cash Flows
    
    21Consolidated Statement of Changes in Shareholders Equity and Comprehensive Income
    
    22Notes to Consolidated Financial Statements
    
    23Schedule II  Valuation and Qualifying Accounts
    
    63
 16




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      
 17




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The Detroit Edison Company
 
 Consolidated Statement of Operations
 Year Ended December 31(in Millions)
    
    2005
    
    
    2004
    
    
    2003Operating Revenues
    
    $
    4,462
    
    
    $
    3,568
    
    
    $
    3,695Operating ExpensesFuel and purchased power
    
    
    1,590
    
    
    
    885
    
    
    
    939Operation and maintenance
    
    
    1,308
    
    
    
    1,395
    
    
    
    1,332Depreciation and amortization
    
    
    640
    
    
    
    523
    
    
    
    473Taxes other than income
    
    
    241
    
    
    
    249
    
    
    
    257Asset (gains) and losses, net
    
    
    (26
    )
    
    
    (1
    )
    
    
    203,753
    
    
    
    3,051
    
    
    
    3,021Operating Income
    
    
    709
    
    
    
    517
    
    
    
    674Other (Income) and DeductionsInterest expense
    
    
    267
    
    
    
    280
    
    
    
    284Interest income
    
    
    (3
    )
    
    
    
    
    
    
    (7
    )Other income
    
    
    (27
    )
    
    
    (34
    )
    
    
    (66
    )Other expenses
    
    
    46
    
    
    
    57
    
    
    
    66283
    
    
    
    303
    
    
    
    277Income Before Income Taxes
    
    
    426
    
    
    
    214
    
    
    
    397Income Tax Provision
    
    
    149
    
    
    
    64
    
    
    
    145Income Before Accounting Change
    
    
    277
    
    
    
    150
    
    
    
    252Cumulative Effect of Accounting Change (Note 2)
    
    
    (3
    )
    
    
    
    
    
    
    (6
    )Net Income
    
    $
    274
    
    
    $
    150
    
    
    $
    246
  18




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The Detroit Edison Company
 
 Consolidated Statement of Financial Position
 December 31(in Millions)
    
    2005
    
    
    2004AssetsCurrent AssetsCash and cash equivalents
    
    $
    26
    
    
    $
    6Restricted cash
    
    
    84
    
    
    
    75Accounts receivableCustomer (less allowance for doubtful accounts of $54 and
$55, respectively)
    
    
    305
    
    
    
    258Accrued unbilled revenues
    
    
    223
    
    
    
    207Accrued power supply cost recovery revenue
    
    
    144
    
    
    
    Other
    
    
    112
    
    
    
    120InventoriesFuel
    
    
    123
    
    
    
    100Materials and supplies
    
    
    116
    
    
    
    118Notes receivable from affiliate (Note 15)
    
    
    
    
    
    
    85Other
    
    
    43
    
    
    
    461,176
    
    
    
    1,015InvestmentsNuclear decommissioning trust funds
    
    
    646
    
    
    
    590Other
    
    
    65
    
    
    
    55711
    
    
    
    645PropertyProperty, plant and equipment
    
    
    13,416
    
    
    
    12,931Less accumulated depreciation (Notes 1 and 2)
    
    
    (5,595
    )
    
    
    (5,354
    )7,821
    
    
    
    7,577Other AssetsRegulatory assets (Note 4)
    
    
    2,006
    
    
    
    2,053Securitized regulatory assets (Note 4)
    
    
    1,340
    
    
    
    1,438Other
    
    
    115
    
    
    
    1143,461
    
    
    
    3,605Total Assets
    
    $
    13,169
    
    
    $
    12,842
  19




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The Detroit Edison Company  Consolidated Statement of Financial Position
 December 31(in Millions, Except Shares)
    
    2005
    
    
    2004Liabilities and Shareholders EquityCurrent LiabilitiesAccounts payable
    
    $
    392
    
    
    $
    346Accrued interest
    
    
    79
    
    
    
    79Dividends payable (Note 15)
    
    
    76
    
    
    
    76Accrued payroll
    
    
    12
    
    
    
    12Accrued vacations
    
    
    80
    
    
    
    76Short-term borrowings
    
    
    163
    
    
    
    Accrued power supply cost recovery refund
    
    
    129
    
    
    
    112Current portion long-term debt, including capital leases
    
    
    135
    
    
    
    499Other
    
    
    196
    
    
    
    1301,262
    
    
    
    1,330Other LiabilitiesDeferred income taxes
    
    
    1,961
    
    
    
    1,941Regulatory liabilities (Notes 2 and 4)
    
    
    224
    
    
    
    253Asset retirement obligations (Note 2)
    
    
    953
    
    
    
    869Unamortized investment tax credit
    
    
    115
    
    
    
    125Nuclear decommissioning (Notes 2 and 5)
    
    
    85
    
    
    
    77Accrued pension liability
    
    
    261
    
    
    
    247Other
    
    
    787
    
    
    
    6764,386
    
    
    
    4,188Long-Term Debt (net of current portion) (Note 9)Mortgage bonds, notes and other
    
    
    3,221
    
    
    
    2,879Securitization bonds
    
    
    1,295
    
    
    
    1,400Capital lease obligations
    
    
    57
    
    
    
    664,573
    
    
    
    4,345Commitments and Contingencies (Notes 4, 5 and 13)Shareholders EquityCommon stock, $10 par value, 400,000,000 shares
authorized and 138,632,324 shares
issued and outstanding
    
    
    1,386
    
    
    
    1,386Premium on common stock
    
    
    1,104
    
    
    
    1,104Common stock expense
    
    
    (44
    )
    
    
    (44
    )Retained earnings
    
    
    500
    
    
    
    531Accumulated other comprehensive income
    
    
    2
    
    
    
    22,948
    
    
    
    2,979Total Liabilities and Shareholders Equity
    
    $
    13,169
    
    
    $
    12,842
  20




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##### Table of Contents



The Detroit Edison Company
 
 Consolidated Statement of Cash Flows
 Year Ended December 31(in Millions)
    
    2005
    
    
    2004
    
    
    2003Operating ActivitiesNet Income
    
    $
    274
    
    
    $
    150
    
    
    $
    246Adjustments to reconcile net income to net cash from
operating activities:Depreciation and amortization
    
    
    640
    
    
    
    523
    
    
    
    473Deferred income taxes
    
    
    40
    
    
    
    142
    
    
    
    32Loss (gain) on sale of assets
    
    
    (26
    )
    
    
    (1
    )
    
    
    21Cumulative effect of accounting change
    
    
    3
    
    
    
    
    
    
    
    6Changes in assets and liabilities, exclusive of
changes shown separately (Note 1)
    
    
    98
    
    
    
    376
    
    
    
    (13
    )Net cash from operating activities
    
    
    1,029
    
    
    
    1,190
    
    
    
    765Investing ActivitiesPlant and equipment expenditures
    
    
    (722
    )
    
    
    (702
    )
    
    
    (580
    )Proceeds from sale of assets, net
    
    
    30
    
    
    
    1
    
    
    
    2Restricted cash for debt redemptions
    
    
    (9
    )
    
    
    6
    
    
    
    49Notes receivable from affiliate
    
    
    85
    
    
    
    (78
    )
    
    
    50Proceeds from sale of nuclear decommissioning trust
fund assets
    
    
    201
    
    
    
    254
    
    
    
    199Investment in nuclear decommissioning trust funds
    
    
    (235
    )
    
    
    (287
    )
    
    
    (231
    )Other investments
    
    
    (71
    )
    
    
    (33
    )
    
    
    (94
    )Net cash used for investing activities
    
    
    (721
    )
    
    
    (839
    )
    
    
    (605
    )Financing ActivitiesIssuance of long-term debt
    
    
    857
    
    
    
    266
    
    
    
    49Redemption of long-term debt
    
    
    (997
    )
    
    
    (206
    )
    
    
    (504
    )Short-term borrowings, net
    
    
    163
    
    
    
    (100
    )
    
    
    100Capital contribution by parent company
    
    
    
    
    
    
    
    
    
    
    470Dividends on common stock
    
    
    (305
    )
    
    
    (303
    )
    
    
    (295
    )Other
    
    
    (6
    )
    
    
    (8
    )
    
    
    (10
    )Net cash used for financing activities
    
    
    (288
    )
    
    
    (351
    )
    
    
    (190
    )Net Increase (Decrease) in Cash and Cash Equivalents
    
    
    20
    
    
    
    
    
    
    
    (30
    )Cash and Cash Equivalents at Beginning of the Period
    
    
    6
    
    
    
    6
    
    
    
    36Cash and Cash Equivalents at End of the Period
    
    $
    26
    
    
    $
    6
    
    
    $
    6
  21




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##### Table of Contents



The Detroit Edison Company
 
 Consolidated Statement of Changes in Shareholders Equity and
Comprehensive Income
 Premium
    
    
    
    
    
    
    
    
    
    AccumulatedOn
    
    Common
    
    
    
    
    
    OtherCommon Stock
    
    Common
    
    Stock
    
    Retained
    
    ComprehensiveShares
    
    Amount
    
    Stock
    
    Expense
    
    Earnings
    
    Income (Loss)
    
    Total(Dollars in Millions,Shares in Thousands)Balance, December 31, 2002
    
    
    134,288
    
    
    $
    1,343
    
    
    $
    507
    
    
    $
    (44
    )
    
    $
    735
    
    
    $
    (419
    )
    
    $
    2,122Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    246
    
    
    
    
    
    
    
    246Dividends declared on
Common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (295
    )
    
    
    
    
    
    
    (295
    )Net change in unrealized
losses
on derivatives, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    3Pension obligation (Note 14)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    417
    
    
    
    417Capital contribution by
parent company
    
    
    
    
    
    
    
    
    
    
    470
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    470Balance, December 31, 2003
    
    
    134,288
    
    
    
    1,343
    
    
    
    977
    
    
    
    (44
    )
    
    
    686
    
    
    
    1
    
    
    
    2,963Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150
    
    
    
    
    
    
    
    150Dividends declared on
Common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (305
    )
    
    
    
    
    
    
    (305
    )Net change in unrealized gain
on investments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Common stock issued to
parent company
    
    
    4,344
    
    
    
    43
    
    
    
    127
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    170Balance, December 31, 2004
    
    
    138,632
    
    
    
    1,386
    
    
    
    1,104
    
    
    
    (44
    )
    
    
    531
    
    
    
    2
    
    
    
    2,979Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    274
    
    
    
    
    
    
    
    274Dividends declared on
Common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (305
    )
    
    
    
    
    
    
    (305
    )Balance, December 31, 2005
    
    
    138,632
    
    
    $
    1,386
    
    
    $
    1,104
    
    
    $
    (44
    )
    
    $
    500
    
    
    $
    2
    
    
    $
    2,948
  (in Millions)
    
    2005
    
    
    2004
    
    
    2003Net income
    
    $
    274
    
    
    $
    150
    
    
    $
    246Other comprehensive income (loss), net of tax:Net unrealized losses on derivatives:Gains or (losses) arising during the period, net of taxes of $-, $- and $4
    
    
    
    
    
    
    
    
    
    
    8Amounts reclassified to income, net of taxes of $-, $- and $(3)
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    
    3Net change in unrealized gain on investments, net of taxes of $-, $- and $-
    
    
    
    
    
    
    1
    
    
    
    Pension obligations, net of taxes of $-, $- and $224 (Notes 4 and 14)
    
    
    
    
    
    
    
    
    
    
    417Comprehensive income
    
    $
    274
    
    
    $
    151
    
    
    $
    666
  22




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##### Table of Contents



The Detroit Edison Company
 
 Notes to Consolidated Financial Statements
 NOTE 1  SIGNIFICANT ACCOUNTING POLICIES
 Corporate Structure
   Principles of Consolidation
  Consolidation of Variable Interest
Entities, an Interpretation of ARB No. 51.
 Basis of Presentation
   Revenues
   23




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##### Table of Contents



Comprehensive Income
  Net
    
    
    Net
    
    
    AccumulatedUnrealized
    
    
    Unrealized
    
    
    OtherLosses on
    
    
    Gains on
    
    
    Comprehensive(in Millions)
    
    Derivatives
    
    
    Investments
    
    
    IncomeBeginning balance
    
    $
    1
    
    
    $
    1
    
    
    $
    2Current-period change
    
    
    
    
    
    
    
    
    
    
    Ending balance
    
    $
    1
    
    
    $
    1
    
    
    $
    2
 Cash Equivalents and Restricted Cash
  Inventories
  Property, Retirement and Maintenance, and Depreciation and Depletion
  (in Millions)
    
    2005
    
    
    2004Property, Plant and EquipmentGeneration
    
    $
    7,375
    
    
    $
    7,100Distribution
    
    
    6,041
    
    
    
    5,831Total
    
    
    13,416
    
    
    
    12,931Less Accumulated Depreciation and DepletionGeneration
    
    
    (3,439
    )
    
    
    (3,277
    )Distribution
    
    
    (2,156
    )
    
    
    (2,077
    )Total
    
    
    (5,595
    )
    
    
    (5,354
    )Net Property, Plant and Equipment
    
    $
    7,821
    
    
    $
    7,577
  24




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##### Table of Contents



Long-Lived Assets
  Intangible Assets, including Software Costs
  Excise and Sales Taxes
  Deferred Debt Costs
  Insured and Uninsured Risks
  25




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##### Table of Contents



Investments in Debt and Equity Securities
  Affiliate Transactions
  Consolidated Statement of Cash Flows
  (in Millions)
    
    2005
    
    
    2004
    
    
    2003Changes in Assets and Liabilities, Exclusive
of Changes Shown SeparatelyAccounts receivable, net
    
    $
    (29
    )
    
    $
    91
    
    
    $
    13Accrued unbilled receivables
    
    
    (16
    )
    
    
    (11
    )
    
    
    (19
    )Inventories
    
    
    (21
    )
    
    
    14
    
    
    
    18Accrued pensions
    
    
    41
    
    
    
    123
    
    
    
    (179
    )Accounts payable
    
    
    46
    
    
    
    135
    
    
    
    (27
    )Accrued power supply cost recovery refund
    
    
    (127
    )
    
    
    112
    
    
    
    Accrued payroll
    
    
    
    
    
    
    (15
    )
    
    
    3Income taxes payable
    
    
    (10
    )
    
    
    (14
    )
    
    
    (24
    )General taxes
    
    
    (1
    )
    
    
    (13
    )
    
    
    (7
    )Risk management and trading activities
    
    
    
    
    
    
    (1
    )
    
    
    (7
    )Postretirement obligation
    
    
    110
    
    
    
    11
    
    
    
    93Other assets
    
    
    58
    
    
    
    (17
    )
    
    
    71Other liabilities
    
    
    47
    
    
    
    (39
    )
    
    
    52$
    98
    
    
    $
    376
    
    
    $
    (13
    )
 26




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##### Table of Contents



(in Millions)
    
    2005
    
    
    2004
    
    
    2003Cash Paid forInterest (excluding interest capitalized)
    
    $
    267
    
    
    $
    277
    
    
    $
    291Income taxes
    
    
    118
    
    
    
    2
    
    
    
    153Non-cash Financing ActivitySale of assets
    
    
    13
    
    
    
    
    
    
    
    Common stock issued to parent company in conjunction with
parent company common stock contribution to pension plan
    
    
    
    
    
    
    170
    
    
    
    
  Note
    
    Title2
    
    New Accounting Pronouncements4
    
    Regulatory Matters7
    
    Income Taxes12
    
    Financial and Other Derivative Instruments14
    
    Retirement Benefits and Trusteed Assets
 27




---



##### Table of Contents



NOTE 2  NEW ACCOUNTING PRONOUNCEMENTS
 Consolidation of Variable Interest Entities
 Consolidation of Variable Interest Entities, an Interpretation of
Accounting Research Bulletin (ARB) No. 51
  Medicare Act Accounting
 Medicare Prescription Drug, Improvement and Modernization Act of 2003
   Asset Retirement Obligations
 Accounting for Asset Retirement Obligations,
 Accounting for Conditional Asset
Retirement Obligations an interpretation of FASB Statement No. 143.
 28




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##### Table of Contents



Accounting for the Effects of Certain Types of
Regulation
      (in Millions)Asset retirement obligations at January 1, 2005
    
    $
    869Accretion
    
    
    58Liabilities incurred (primarily adoption of FIN 47)
    
    
    32Liabilities settled
    
    
    (6
    )Asset retirement obligations at December 31, 2005
    
    $
    953
  NOTE 3  DISPOSITIONS
 Steam Heating Business
  29




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##### Table of Contents



NOTE 4  REGULATORY MATTERS
 Regulation
   Regulatory Assets and Liabilities
 Accounting for the Effects of Certain
Types of Regulation,
  (in Millions)
    
2005
    
    
    2004AssetsSecuritized regulatory assets
    
    $
    1,340
    
    
    $
    1,438Recoverable income taxes related to securitized regulatory assets
    
    $
    734
    
    
    $
    788Recoverable minimum pension liability
    
    
    543
    
    
    
    604Asset retirement obligation
    
    
    196
    
    
    
    183Other recoverable income taxes
    
    
    104
    
    
    
    109Recoverable costs under PA 141Net stranded costs
    
    
    112
    
    
    
    122Excess capital investment
    
    
    22
    
    
    
    7Deferred Clean Air Act expenditures
    
    
    82
    
    
    
    76Midwest Independent System Operator charges
    
    
    56
    
    
    
    27Electric Customer Choice implementation costs
    
    
    98
    
    
    
    95Enhanced security costs
    
    
    13
    
    
    
    8Unamortized loss on reacquired debt
    
    
    41
    
    
    
    29Accrued PSCR revenue
    
    
    144
    
    
    
    Other
    
    
    5
    
    
    
    52,150
    
    
    
    2,053Less amount
included in current assets
    
    
    (144
    )
    
    
    
 30




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##### Table of Contents



(in Millions)
    
    2005
    
    
    2004$
    2,006
    
    
    $
    2,053LiabilitiesAsset removal costs
    
    $
    213
    
    
    $
    250Accrued PSCR refund
    
    
    129
    
    
    
    112Accrued pension
    
    
    11
    
    
    
    Other
    
    
    2
    
    
    
    3355
    
    
    
    365Less amount included in current liabilities
    
    
    (131
    )
    
    
    (112
    )$
    224
    
    
    $
    253
  
    
    Securitized regulatory assets The net book balance of the
Fermi 2 nuclear plant was written off in 1998 and an
equivalent regulatory asset was established. In 2001, the
Fermi 2 regulatory asset and certain other regulatory assets
were securitized pursuant to PA 142 and an MPSC order. A
non-bypassable securitization bond surcharge recovers the
securitized regulatory asset over a fourteen-year period
ending in 2015.
    
    Recoverable income taxes related to securitized regulatory
assets Receivable for the recovery of income taxes to be
paid on the non-bypassable securitization bond surcharge. A
non-bypassable securitization tax surcharge recovers the
income tax over a fourteen-year period ending 2015.
    
    Recoverable minimum pension liability An additional minimum
pension liability was recorded under generally accepted
accounting principles due to the current under funded status
of certain pension plans. The traditional rate setting
process allows for the recovery of pension costs as measured
by generally accepted accounting principles. Accordingly,
the minimum pension liability is recoverable. See Note 14.
    
    Asset retirement obligation Asset retirement obligations
were recorded pursuant to adoption of SFAS No. 143 in 2003
and FIN 47 in 2005. These obligations are primarily for Fermi
2 decommissioning costs that are recovered in rates.
    
    Other recoverable income taxes Income taxes receivable from
Detroit Edisons customers representing the difference in
property-related deferred income taxes receivable and amounts
previously reflected in Detroit Edisons rates.
    
    Net stranded costs PA 141 permits, after MPSC
authorization, the recovery of and a return on fixed cost
deficiency associated with the electric Customer Choice
program. Net stranded costs occur when fixed cost related
revenues do not cover the fixed cost revenue requirements.
    
    Excess capital investment Starting in 2004, PA 141 permits,
after MPSC authorization, the recovery of and a return on
capital expenditures that exceed a base level of depreciation
expense.
    
    Deferred Clean Air Act expenditures PA 141 permits, after
MPSC authorization, the recovery of and a return on Clean Air
Act expenditures.
    
    Midwest Independent System Operator charges PA 141 permits,
after MPSC authorization, the recovery of and a return on
charges from a regional transmission operator such as the
Midwest Independent System Operator.
    
    Electric Customer Choice implementation costs PA 141
permits, after MPSC authorization, the recovery of and a
return on costs incurred associated with the implementation
of the electric Customer Choice program.
    
    Enhanced security costs PA 609 of 2002 permits, after MPSC
authorization, the recovery of enhanced security costs for an
electric generating facility.
    
    Unamortized loss on reacquired debt The unamortized
discount, premium and expense related to debt redeemed with a
refinancing are deferred, amortized and recovered over the
life of the replacement issue.
    
    Accrued PSCR revenue Receivable for the temporary
under-recovery of and a return on fuel and purchased power
costs incurred by Detroit Edison which are recoverable
through the PSCR mechanism.
 31




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##### Table of Contents




    
    Asset removal costs The amount collected from customers for
the funding of future asset removal activities.
 
    
    Accrued PSCR refund Payable for the temporary over-recovery
of and a return on power supply costs, and beginning with the
MPSCs November 2004 rate order, transmission costs incurred
by Detroit Edison which are recoverable through the PSCR
mechanism.
 
    
    Accrued pension Pension expense refundable to Detroit
Edisons customers representing the difference created from
volatility in the pension obligation and amounts recognized
pursuant to MPSC authorization.
 Electric Rate Restructuring Proposal
  Other Postretirement Benefits Costs Tracker
  2004 PSCR Reconciliation and 2004 Net Stranded Cost Case
   32




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##### Table of Contents



Electric Industry Restructuring
 Electric Rates, Customer Choice and Stranded Costs
   Securitization
 33




---



##### Table of Contents



DTE2 Accounting
  Power Supply Recovery Proceedings
 2005 Plan Year
 2006 Plan Year 
  34




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##### Table of Contents



Administrative and General Expenses Report to the MPSC
  Emergency Rules for Electric Bills
  
    
    lengthen the period of time before a bill is due once it is transmitted to the customer;
    
    prohibit shut off or late payment fees unless an actual meter read is made;
    
    limit the required monthly payment on a settlement agreement;
    
    increase the income level qualifying for shut-off protection and lower the payment
required to remain on shut-off protection; and
    
    lessen or eliminate certain deposit requirements.
 Transmission Proceedings
  Minimum Pension Liability
  Other
  35




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##### Table of Contents



NOTE 5  NUCLEAR OPERATIONS
 General
  36




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##### Table of Contents



Property Insurance
      Public Liability Insurance
  Decommissioning
   (in Millions)
    
    2005
    
    
    2004
    
    
    2003Revenue
    
    $
    40
    
    
    $
    38
    
    
    $
    36Net unrealized investment gains
    
    
    
    
    
    
    17
    
    
    
    62
 37




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##### Table of Contents



(in Millions)
    
    As of December 31,Decommissioning trust funds
    
    2005
    
    
    2004Fermi 2
    
    $
    601
    
    
    $
    546Fermi 1
    
    
    18
    
    
    
    18Low level radioactive waste
    
    
    27
    
    
    
    26Total
    
    $
    646
    
    
    $
    590
   Nuclear Fuel Disposal Costs
  NOTE 6  JOINTLY OWNED UTILITY PLANT
  38




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##### Table of Contents



LudingtonHydroelectricBelle River
    
    Pumped StorageIn-service date
    
    
    1984-1985
    
    
    
    1973Total plant capacity
    
    1,026 MW
    
    1,872 MWOwnership interest
    
    
    *
    
    
    
    49
    %Investment (in Millions)
    
    $
    1,571
    
    
    $
    167Accumulated depreciation (in Millions)
    
    $
    778
    
    
    $
    92
 
 *
    
    Detroit Edisons ownership interest is 63% in Unit No. 1, 81% of the facilities
applicable to Belle River used jointly by the Belle River and St. Clair Power Plants and 75% in common facilities used at Unit No. 2. Belle River
  Ludington Hydroelectric Pumped Storage
  NOTE 7  INCOME TAXES
   (Dollars in Millions)2005
    
    
    2004
    
    
    2003Income tax expense at 35% statutory rate
    
    $
    149
    
    
    $
    75
    
    
    $
    139Investment tax credits
    
    
    (7
    )
    
    
    (7
    )
    
    
    (7
    )Depreciation
    
    
    3
    
    
    
    3
    
    
    
    3Employee Stock Ownership Plan dividends
    
    
    (4
    )
    
    
    (4
    )
    
    
    (4
    )Adjustment
to deferred tax accounts
    
    
    14
    
    
    
    
    
    
    
    Other, net
    
    
    (6
    )
    
    
    (3
    )
    
    
    14Total
    
    $
    149
    
    
    $
    64
    
    
    $
    145Effective federal income tax rate
    
    
    35.0
    %
    
    
    29.9
    %
    
    
    36.5
    %
 39




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##### Table of Contents



(in Millions)
    
    2005
    
    
    2004
    
    
    2003Current federal and other income tax expense (benefit)
    
    $
    110
    
    
    $
    (78
    )
    
    $
    109Deferred federal and other income tax expense
    
    
    39
    
    
    
    142
    
    
    
    36Total
    
    $
    149
    
    
    $
    64
    
    
    $
    145
   (in Millions)
    
    2005
    
    
    2004Property
    
    $
    (1,179
    )
    
    $
    (1,147
    )Securitized regulatory assets
    
    
    (723
    )
    
    
    (778
    )Pension and benefits
    
    
    92
    
    
    
    26Other, net
    
    
    (147
    )
    
    
    (17
    )$
    (1,957
    )
    
    $
    (1,916
    )Deferred income tax liabilities
    
    $
    (2,328
    )
    
    $
    (2,326
    )Deferred income tax assets
    
    
    371
    
    
    
    410$
    (1,957
    )
    
    $
    (1,916
    )
   NOTE 8
 COMMON STOCK
  NOTE 9  LONG-TERM DEBT AND PREFERRED SECURITIES
 Long-Term Debt
  40




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##### Table of Contents



(in Millions)
    
    2005
    
    
    2004Detroit Edison Taxable Debt, Principally Secured5.8% (1) due 2010 to 2037
    
    $
    2,030
    
    
    $
    1,672Detroit Edison Tax Exempt Revenue Bonds (2)5.3% (1) due 2008 to 2032
    
    
    1,145
    
    
    
    1,145Quarterly Income Debt Securities (QUIDS)7.5% (1) due 2026 to 2028
    
    
    
    
    
    
    385Other Long-Term Debt
    
    
    67
    
    
    
    743,242
    
    
    
    3,276Less amount due within one year
    
    
    (21
    )
    
    
    (397
    )$
    3,221
    
    
    $
    2,879Securitization Bonds
    
    $
    1,400
    
    
    $
    1,496Less amount due within one year
    
    
    (105
    )
    
    
    (96
    )$
    1,295
    
    
    $
    1,400
 
 (1)
    
    Weighted average interest rate as of December 31,2005(2)
    
    Detroit Edison Tax Exempt Revenue Bonds are issued by a public body that loans the
proceeds to Detroit Edison on terms substantially mirroring the Revenue Bonds Debt Issuances
  (in Millions)MonthCompany
    
    Issued
    
    Type
    
    Interest Rate
    
    Maturity
    
    AmountDetroit Edison
    
    February
    
    Senior Notes (1)
    
    4.80%
    
    February 2015
    
    $
    200Detroit Edison
    
    February
    
    Senior Notes (1)
    
    5.45%
    
    February 2035
    
    
    200Detroit Edison
    
    August
    
    Tax Exempt Revenue Bonds (2)
    
    variable
    
    August 2029
    
    
    119Detroit Edison
    
    September
    
    Senior Notes (3)
    
    5.19%
    
    October 2023
    
    
    100Detroit Edison
    
    October
    
    Senior Notes (4)
    
    5.70%
    
    October 2037
    
    
    250Total Issuances
    
    $
    869
 
 (1)
    
    The proceeds from the issuance were used to redeem QUIDS of Detroit Edison(2)
    
    The proceeds from the issuance were used to refinance
Tax Exempt Revenue Bonds of Detroit Edison(3)
    
    The proceeds from the issuance were used to redeem
Senior Notes of Detroit Edison(4)
    
    The proceeds from the issuance were used to repay short term borrowings of Detroit Edison Debt Retirements and Redemptions
  41




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##### Table of Contents



(in Millions)MonthCompany
    
    Retired
    
    Type
    
    Interest Rate
    
    Maturity
    
    AmountDetroit Edison
    
    February
    
    Senior Notes
    
    7.500%
    
    February 2005
    
    $
    76Detroit Edison
    
    February
    
    Remarketed Senior Notes
    
    7.000%
    
    August 2034
    
    
    100Detroit Edison
    
    March
    
    QUIDS (1)
    
    7.625%
    
    March 2026
    
    
    185Detroit Edison
    
    March
    
    QUIDS (1)
    
    7.540%
    
    June 2028
    
    
    100Detroit Edison
    
    March
    
    QUIDS (1)
    
    7.375%
    
    December 2028
    
    
    100Detroit Edison
    
    September
    
    Tax Exempt Revenue Bond (2)
    
    6.400%
    
    September 2025
    
    
    97Detroit Edison
    
    September
    
    Tax Exempt Revenue Bond (2)
    
    6.200%
    
    August 2025
    
    
    22Detroit Edison
    
    October
    
    Senior Notes (3)
    
    5.050%
    
    October 2005
    
    
    200Total Retirements
    
    
    
    $
    880
 
 (1)
    
    The QUIDS were redeemed with the proceeds from issuance of Senior Notes by Detroit Edison(2)
    
    These Tax Exempt Revenue Bonds were redeemed with the proceeds from issuance of new Detroit Edison Tax Exempt Revenue Bonds(3)
    
    These Senior Notes were paid at maturity with the
proceeds from the issuance of Senior Notes by Detroit Edison and short-term borrowings  2011 &(in millions)
    
    2006
    
    2007
    
    2008
    
    2009
    
    2010
    
    thereafter
    
    TotalAmount to mature
    
    $
    126
    
    
    $
    135
    
    
    $
    178
    
    
    $
    158
    
    
    $
    667
    
    
    $
    3,384
    
    
    $
    4,648
 Remarketable Securities
  Quarterly Income Debt Securities (QUIDS)
  Cross Default Provisions
  42




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##### Table of Contents



Preferred
and Preference Securities  Authorized and Unissued
  NOTE 10  SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS
     NOTE
11  CAPITAL AND OPERATING LEASES
 Lessee
  Capital
    
    
    Operating(in Millions)
    
    Leases
    
    
    Leases2006
    
    $
    13
    
    
    $
    322007
    
    
    10
    
    
    
    272008
    
    
    11
    
    
    
    222009
    
    
    11
    
    
    
    162010
    
    
    9
    
    
    
    13Thereafter
    
    
    29
    
    
    
    104Total minimum lease payments
    
    
    83
    
    
    $
    214Less imputed interest
    
    
    (17
    )Present value of net minimum lease payments
    
    
    66Less current portion
    
    
    (9
    )Non-current portion
    
    $
    57
 43




---



##### Table of Contents



NOTE
12  FINANCIAL AND OTHER DERIVATIVE INSTRUMENTS
 Accounting for Derivative Instruments and Hedging Activities
 
    
    Derivative instruments must be recognized as assets or liabilities
and measured at fair value, unless they meet the normal purchases
and sales exemption.
 
    
    Accounting for changes in fair value depends upon the purpose of
the derivative instrument and whether it is designated as a hedge
and qualifies for hedge accounting.
 
    
    Special accounting is allowed for a derivative instrument
qualifying as a hedge and designated as a hedge for the
variability of cash flow associated with a forecasted transaction.
Gain or loss associated with the effective portion of the hedge is
recorded in other comprehensive income. The ineffective portion
is recorded to earnings. Amounts recorded in other comprehensive
income will be reclassified to net income when the forecasted
transaction affects earnings. If a cash flow hedge is
discontinued because it is likely the forecasted transaction will
not occur, net gains or losses are immediately recorded to
earnings.
 
    
    Special accounting is also allowed for a derivative instrument
qualifying as a hedge and designated as a hedge of the changes in
fair value of an existing asset, liability or firm commitment.
Gain or loss on the hedging instrument is recorded into earnings.
An offsetting loss or gain on the underlying asset, liability or
firm commitment is also recorded to earnings.
  Commodity Price Risk
  Credit Risk
  44




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##### Table of Contents



Fair Value of Other Financial Instruments
  2005
    
    2004Fair Value
    
    Carrying Value
    
    Fair Value
    
    Carrying ValueLong-Term Debt
    
    $4.8 billion
    
    $4.6 billion
    
    $5.1 billion
    
    $4.8 billion
 NOTE 13  COMMITMENTS AND CONTINGENCIES
 Environmental
 Air
 Water
 Contaminated
Sites
 Personal Property Taxes
  45




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##### Table of Contents



Other Commitments
   Bankruptcies
  Other
  46




---



##### Table of Contents



NOTE 14  RETIREMENT BENEFITS AND TRUSTEED ASSETS
 Measurement Date
  Qualified and Nonqualified Pension Plan Benefits
    Qualified Pension Plans
    
    
    Nonqualified Pension Plans(in Millions)
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003Service Cost
    
    $
    53
    
    
    $
    47
    
    
    $
    40
    
    
    $
    1
    
    
    $
    1
    
    
    $
    1Interest Cost
    
    
    130
    
    
    
    130
    
    
    
    127
    
    
    
    2
    
    
    
    2
    
    
    
    2Expected Return on Plan Assets
    
    
    (135
    )
    
    
    (135
    )
    
    
    (129
    )
    
    
    
    
    
    
    
    
    
    
    Amortization ofNet loss
    
    
    50
    
    
    
    49
    
    
    
    32
    
    
    
    1
    
    
    
    1
    
    
    
    1Prior service cost
    
    
    9
    
    
    
    9
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    Net Pension Cost
    
    $
    107
    
    
    $
    100
    
    
    $
    79
    
    
    $
    4
    
    
    $
    4
    
    
    $
    4
 47




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##### Table of Contents



Qualified Pension Plans
    
    
    Nonqualified Pension Plans(in Millions)
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Accumulated Benefit Obligation-End of Period
    
    $
    2,497
    
    
    $
    2,447
    
    
    $
    37
    
    
    $
    34Projected Benefit Obligation-Beginning of Period
    
    $
    2,643
    
    
    $
    2,498
    
    
    $
    36
    
    
    $
    36Service Cost
    
    
    59
    
    
    
    53
    
    
    
    1
    
    
    
    1Interest Cost
    
    
    154
    
    
    
    153
    
    
    
    2
    
    
    
    2Actuarial Loss (Gain)
    
    
    35
    
    
    
    69
    
    
    
    4
    
    
    
    (1
    )Benefits Paid
    
    
    (153
    )
    
    
    (136
    )
    
    
    (2
    )
    
    
    (2
    )Plan Amendments
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    Projected Benefit Obligation-End of Period
    
    $
    2,738
    
    
    $
    2,643
    
    
    $
    41
    
    
    $
    36Plan Assets at Fair Value-Beginning of Period
    
    $
    2,235
    
    
    $
    2,029
    
    
    $
    
    
    
    $
    Actual Return on Plan Assets
    
    
    191
    
    
    
    172
    
    
    
    
    
    
    
    Company Contributions
    
    
    
    
    
    
    170
    
    
    
    2
    
    
    
    2Benefits Paid
    
    
    (153
    )
    
    
    (136
    )
    
    
    (2
    )
    
    
    (2
    )Plan Assets at Fair Value-End of Period
    
    $
    2,273
    
    
    $
    2,235
    
    
    $
    
    
    
    $
    Funded Status of the Plans
    
    $
    (465
    )
    
    $
    (408
    )
    
    $
    (41
    )
    
    $
    (36
    )UnrecognizedNet loss
    
    
    773
    
    
    
    790
    
    
    
    15
    
    
    
    11Prior service cost
    
    
    34
    
    
    
    41
    
    
    
    1
    
    
    
    2Net transition assets
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    Net Amount Recognized-End of Period
    
    $
    342
    
    
    $
    422
    
    
    $
    (25
    )
    
    $
    (23
    )Amount Recorded asAccrued pension liability
    
    $
    (224
    )
    
    $
    (212
    )
    
    $
    (37
    )
    
    $
    (35
    )Regulatory asset
    
    
    532
    
    
    
    594
    
    
    
    11
    
    
    
    10Intangible asset
    
    
    34
    
    
    
    40
    
    
    
    1
    
    
    
    2$
    342
    
    
    $
    422
    
    
    $
    (25
    )
    
    $
    (23
    )
  2005
    
    
    2004
    
    
    2003Projected Benefit ObligationDiscount rate
    
    
    5.90
    %
    
    
    6.00
    %
    
    
    6.25
    %Annual increase in future compensation levels
    
    
    4.0
    %
    
    
    4.0
    %
    
    
    4.0
    %Net Pension CostsDiscount rate
    
    
    6.00
    %
    
    
    6.25
    %
    
    
    6.75
    %Annual increase in future compensation levels
    
    
    4.0
    %
    
    
    4.0
    %
    
    
    4.0
    %Expected long-term rate of return on Plan assets
    
    
    9.0
    %
    
    
    9.0
    %
    
    
    9.0
    %
  48




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##### Table of Contents



(in Millions)2006
    
    $
    1582007
    
    
    1622008
    
    
    1672009
    
    
    1712010
    
    
    1762011 - 2015
    
    
    954Total
    
    $
    1,788
    2005
    
    2004Equity Securities
    
    
    68
    %
    
    
    69
    %Debt Securities
    
    
    27
    
    
    
    26Other
    
    
    5
    
    
    
    5100
    %
    
    
    100
    %
  Equity Securities
    
    
    65
    %Debt Securities
    
    
    28Other
    
    
    7100
    %
 49




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##### Table of Contents



Employers Accounting for Pensions
  Other Postretirement Benefits
   (in Millions)
    
    2005
    
    
    2004
    
    
    2003Service Cost
    
    $
    44
    
    
    $
    33
    
    
    $
    31Interest Cost
    
    
    80
    
    
    
    69
    
    
    
    66Expected Return on Plan Assets
    
    
    (58
    )
    
    
    (45
    )
    
    
    (36
    )Amortization ofNet loss
    
    
    44
    
    
    
    33
    
    
    
    23Prior service costs
    
    
    3
    
    
    
    
    
    
    
    Net transition obligation
    
    
    7
    
    
    
    8
    
    
    
    13Net Postretirement Cost
    
    $
    120
    
    
    $
    98
    
    
    $
    97
  50




---



##### Table of Contents



(in Millions)
    
    2005
    
    
    2004Accumulated Postretirement Benefit Obligation-Beginning of Period
    
    $
    1,361
    
    
    $
    1,192Service Cost
    
    
    44
    
    
    
    33Interest Cost
    
    
    80
    
    
    
    69Actuarial Loss
    
    
    111
    
    
    
    106Plan Amendments
    
    
    (5
    )
    
    
    21Benefits Paid
    
    
    (66
    )
    
    
    (60
    )Accumulated Postretirement Benefit Obligation-End of Period
    
    $
    1,525
    
    
    $
    1,361Plan Assets at Fair Value-Beginning of Period
    
    $
    551
    
    
    $
    468Actual Return on Plan Assets
    
    
    49
    
    
    
    43Company Contributions
    
    
    40
    
    
    
    40Benefits Paid
    
    
    (59
    )
    
    
    Plan Assets at Fair Value-End of Period
    
    $
    581
    
    
    $
    551Funded Status of the Plans
    
    $
    (944
    )
    
    $
    (810
    )UnrecognizedNet loss
    
    
    670
    
    
    
    594Prior service cost
    
    
    26
    
    
    
    30Net transition obligation
    
    
    46
    
    
    
    58Accrued Postretirement Liability at Measurement Date
    
    
    (202
    )
    
    
    (128
    )December Adjustments
    
    
    (50
    )
    
    
    (14
    )Accrued Postretirement Liability-End of Period
    
    $
    (252
    )
    
    $
    (142
    )
  2005
    
    2004
    
    2003Projected Benefit ObligationDiscount rate
    
    
    5.90
    %
    
    
    6.00
    %
    
    
    6.25
    %Net Benefit CostsDiscount rate
    
    
    6.00
    %
    
    
    6.25
    %
    
    
    6.75
    %Expected long-term rate of return on Plan assets
    
    
    9.0
    %
    
    
    9.0
    %
    
    
    9.0
    %
   51




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##### Table of Contents



(in Millions)2006
    
    $
    832007
    
    
    882008
    
    
    902009
    
    
    952010
    
    
    982011 - 2015
    
    
    507Total
    
    $
    961
   2005
    
    
    2004Equity Securities
    
    
    68
    %
    
    
    68
    %Debt Securities
    
    
    28
    
    
    
    28Other
    
    
    4
    
    
    
    4100
    %
    
    
    100
    %
  Equity Securities
    
    
    65
    %Debt Securities
    
    
    28Other
    
    
    7100
    %
   52




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##### Table of Contents



(in Millions)2006
    
    $
    42007
    
    
    42008
    
    
    32009
    
    
    42010
    
    
    52011 - 2015
    
    
    27Total
    
    $
    47
 NOTE
15  RELATED PARTY TRANSACTIONS
  (in Millions)
    
    2005
    
    2004
    
    2003RevenuesEnergy sales
    
    $
    192
    
    
    $
    206
    
    
    $
    58Other services
    
    
    5
    
    
    
    37
    
    
    
    2Shared capital assets
    
    
    14
    
    
    
    12
    
    
    
    11CostsPower purchases
    
    
    102
    
    
    
    61
    
    
    
    36Other services and interest
    
    
    7
    
    
    
    5
    
    
    
    9Corporate expenses and merger costs (net) (1)
    
    
    (97
    )
    
    
    (19
    )
    
    
    (18
    )
 December 31,(in Millions)
    
    2005
    
    2004AssetsAccounts receivable
    
    $
    27
    
    
    $
    29Notes receivable
    
    
    
    
    
    
    85Liabilities & EquityAccounts payable
    
    
    51
    
    
    
    56Dividends payable
    
    
    76
    
    
    
    76Dividends declared
    
    
    305
    
    
    
    305Dividends paid
    
    
    305
    
    
    
    303Capital contribution
    
    
    
    
    
    
    170
 
 (1)
    
    As a result of an MPSC order, DTE Energy ceased billing merger costs to Detroit
Edison effective January 2005. 53




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##### Table of Contents



NOTE 16  SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
 First
    
    Second
    
    Third
    
    Fourth(in Millions)
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    Year2005Operating Revenues
    
    $
    990
    
    
    $
    1,035
    
    
    $
    1,409
    
    
    $
    1,028
    
    
    $
    4,462Operating Income
    
    
    149
    
    
    
    139
    
    
    
    264
    
    
    
    157
    
    
    
    709Net Income
    
    
    55
    
    
    
    43
    
    
    
    114
    
    
    
    62
    
    
    
    2742004Operating Revenues
    
    
    886
    
    
    
    835
    
    
    
    958
    
    
    
    889
    
    
    
    3,568Operating Income
    
    
    145
    
    
    
    92
    
    
    
    169
    
    
    
    111
    
    
    
    517Net Income
    
    
    44
    
    
    
    8
    
    
    
    62
    
    
    
    36
    
    
    
    150
 
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 (a) Evaluation of disclosure controls and procedures
  54




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##### Table of Contents



(b) Changes in internal control over financial reporting
  
 Item 9B. Other Information
  
 Part III
 
 Item 10. Directors and Executive Officers of the Registrant
 
 Item 11. Executive Compensation
 
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
 
 Item 13. Certain Relationships and Related Transactions
  
 Item 14. Principal Accountant Fees and Services
  2005
    
    
    2004Audit fees (1)
    
    $
    1,978,724
    
    
    $
    1,571,645Audit-related fees (2)(3)
    
    
    13,000
    
    
    
    59,750Tax fees (3)
    
    
    
    
    
    
    All other fees
    
    
    
    
    
    
    Total
    
    $
    1,991,724
    
    
    $
    1,631,395
 
 (1)
    
    Represents the aggregate fees billed for the audit of Detroit Edisons annual
financial statements and for the reviews of the financial statements included in Detroit Edisons Quarterly Reports
on Form 10-Q.(2)
    
    Represents the aggregate fees billed for audit-related services.(3)
    
    Certain audit-related and tax fees are charged to DTE Energy and are indirectly
allocated to Detroit Edison through overheads.  55




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##### Table of Contents



Part IV
 
 Item 15. Exhibits and Financial Statement Schedules
  (1)
    
    Consolidated financial statements. See Item 8  Financial Statements and Supplementary
Data.(2)
    
    Financial statement schedule. See Item 8  Financial Statements and Supplementary Data.(3)
    
    Exhibits.
 (i) Exhibits filed herewith.
 12-23
    
    Computation of Ratio of Earnings to Fixed Charges.23-18
    
    Consent of Deloitte & Touche LLP.31-21
    
    Chief Executive Officer Section 302 Form 10-K Certification of Periodic Report.31-22
    
    Chief Financial Officer Section 302 Form 10-K Certification of Periodic Report.
 (ii) Exhibits incorporated herein by reference.
 3(a)
    
    
    
    Restated Articles of The Detroit Edison Company, as filed December 10, 1991. (Exhibit 13-3 to Form 10-Q for quarter ended June 30, 1999)3(b)
    
    
    
    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)4(a)
    
    
    
    Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company (File No. 1-2198) and First Chicago Trust Company of New York as trustee (Exhibit
B-1 to Registration Statement No. 2-1630) and indentures supplemental thereto, dated as of dates indicated below, and filed as exhibits to the filings set forth below:
 September 1, 1947
    
    Exhibit B-20 to Registration Statement No. 2-7136.November 15, 1971
    
    Exhibit 2-B-38 to Registration Statement No. 2-42160.January 15,1973
    
    Exhibit 2-B-39 to Registration Statement No. 2-46595.June 1, 1978
    
    Exhibit 2-B-51 to Registration Statement No. 2-61643.June 30, 1982
    
    Exhibit 4-30 to Registration Statement No. 2-78941. (reconfirming obligations following merger)August 15, 1982
    
    Exhibit 4-32 to Registration Statement No. 2-79674.February 15, 1990
    
    Exhibit 4-212 to Form 10-K for year ended December 31, 2000. (1990 Series A, B, C, D, E and F)
 56




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##### Table of Contents



April 1, 1991
    
    Exhibit 4-15 to Form 10-K for year ended December 31, 1995. (1991 Series AP)May 1, 1991
    
    Exhibit 4-178 to Form 10-K for year ended December 31, 1996. (1991 Series BP and 1991 Series CP)May 15, 1991
    
    Exhibit 4-179 to Form 10-K for year ended December 31, 1996. (1991 Series DP)February 29, 1992
    
    Exhibit 4-187 to Form 10-Q for quarter ended March 31, 1998. (1992 Series AP)January 1, 1993
    
    Exhibit 4-131 to Registration Statement No. 33-56496.April 26, 1993
    
    Exhibit 4-215 to Form 10-K for year ended December 31, 2000. (amending indenture)May 31, 1993
    
    Exhibit 4-148 to Registration Statement No. 33-64296.June 30, 1993
    
    Exhibit 4-216 to Form 10-K for year ended December 31, 2000. (1993 Series AP)August 15, 1994
    
    Exhibit 4-219 to Form 10-K for year ended December 31, 2000. (1994 Series C)August 1, 1999
    
    Exhibit 4-204 to Form 10-Q for quarter ended September 30, 1999. (1999 Series AP, 1999 Series BP and 1999 Series CP)January 1, 2000
    
    Exhibit 4-205 to Form 10-K for year ended December 31, 1999. (2000 Series A)April 15, 2000
    
    Exhibit 206 to Form 10-Q for quarter ended March 31, 2000. (relating to successor trustee)August 1, 2000
    
    Exhibit 4-210 to Form 10-Q for quarter ended September 30, 2000. (2000 Series BP)March 15, 2001
    
    Exhibit 4-222 to Form 10-Q for quarter ended March 31, 2001. (2001 Series AP)May 1, 2001
    
    Exhibit 4-226 to Form 10-Q for quarter ended June 30, 2001. (2001 Series BP)August 15, 2001
    
    Exhibit 4-227 to Form 10-Q for quarter ended September 30, 2001. (2001 Series CP)September 15, 2001
    
    Exhibit 4-228 to Form 10-Q for quarter ended September 30, 2001. (2001 Series D and 2001 Series E)September 17, 2002
    
    Exhibit 4-1 to Registration Statement No. 333-100000. (relating to successor trustee)October 15, 2002
    
    Exhibit 4-230 to Form 10-Q for quarter ended September 30, 2002. (2002 Series A and 2002 Series B)December 1, 2002
    
    Exhibit 4-232 to Form 10-K for year ended December 31, 2002. (2002 Series C and 2002 Series D)August 1, 2003
    
    Exhibit 4-235 to Form 10-Q for quarter ended September 30, 2003. (2003 Series A)March 15, 2004
    
    Exhibit 4-238 to Form 10-Q for quarter ended March 31, 2004. (2004 Series A and 2004 Series B)July 1, 2004
    
    Exhibit 4-240 to Form 10-Q for quarter ended June 30, 2004. (2004 Series D)February 1, 2005
    
    Exhibit 4.2 to Form 8-K dated
February 7, 2005. (2005 Series A and 2005 Series B)April 1, 2005
    
    Exhibit 4.3 to Registration Statement No.
333-123926. (2005 Series AR and 2005 Series BR)August 1, 2005
    
    Exhibit 4.2 to Form 8-K dated
August 17, 2005. (2005 Series DT)September 15, 2005
    
    Exhibit 4.1 to Form 8-K dated
September 29, 2005. (2005 Series C)September 30, 2005
    
    Exhibit 4-248 to Form 10-Q dated
November 8, 2005. (2005 Series E)4(b)
    
    Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and Bankers Trust Company, as trustee. (Exhibit 4-152 to
Registration Statement No. 33-50325)4(c)
    
    First Supplemental Indenture, dated as of June 30, 1993. (Exhibit 4-153 to Registration Statement No. 33-50325)4(d)
    
    First Amendment, dated as of July 17, 2000, to the First Supplemental Indenture amending the Multi-Mode Remarketed Secured Notes 1993 Series A due
2028. (Exhibit 4-209 to Form 10-Q for quarter ended September 30, 2000)4(e)
    
    Second Supplemental Indenture, dated as of September 15, 1993, providing for
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Remarketed Secured Notes 1993 Series B due 2033. (Exhibit 4-159 to Form
10-Q for quarter ended September 30, 1993)4(f)
    
    First Amendment, dated as of August 15, 1996, to Second Supplemental Indenture. (Exhibit 4-177 to Form 10-Q for quarter ended September 30, 1996)4(g)
    
    Third Supplemental Indenture, dated as of August 15, 1994, providing for Remarketed Secured Notes 1994 Series C due 2034. (Exhibit 4-169 to Form
10-Q for quarter ended September 30, 1994)4(h)
    
    First Amendment, dated as of December 12, 1995, to Third Supplemental Indenture, dated as of August 15, 1994. (Exhibit 4-13 to Registration
Statement No. 333-00023)4(i)
    
    Eighth Supplemental Indenture, dated as of April 15, 2000, appointing Bank One Trust Company, National Association, as successor trustee. (Exhibit
4-207 to Form 10-Q for quarter ended March 31, 2000)4(j)
    
    Ninth Supplemental Indenture, dated as of October 10, 2001, providing for 5.050% Senior Notes due 2005 and 6.125% Senior Notes due 2010. (Exhibit
4-229 to Form 10-Q for quarter ended September 30, 2001)4(k)
    
    Tenth Supplemental Indenture, dated as of October 23, 2002, providing for 5.20% Senior Notes due 2012 and 6.35% Senior Notes due 2032. (Exhibit
4-231 to Form 10-Q for quarter ended September 30, 2002)4(l)
    
    Eleventh Supplemental Indenture, dated as of December 1, 2002, providing for 5.45% Senior Notes due 2032 and 5.25% Senior Notes due 2032. (Exhibit
4-233 to Form 10-Q for quarter ended March 31, 2003)4(m)
    
    Twelfth Supplemental Indenture, dated as of August 1, 2003, providing for 5 1/2% Senior Notes due 2030. (Exhibit 4-236 to Form 10-Q for quarter
ended September 30, 2003)4(n)
    
    Thirteenth Supplemental Indenture, dated as of April 1, 2004, between J.P. Morgan Trust Company, National Association as successor trustee,
providing for 4.875% Senior Notes due 2029 and 4.65% Senior Notes due 2028. (Exhibit 4-237 to Form 10-Q for quarter ended March 31, 2004)4(o)
    
    Fourteenth Supplemental Indenture, dated as of July 15, 2004, providing for 2004 Series D 5.40% Senior Notes due 2014. (Exhibit 4-239 to Form 10-Q
for quarter ended June 30, 2004)4(p)
    
    Fifteenth Supplemental Indenture, dated as of February 1, 2005, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit
Edison Company and J.P. Morgan Trust Company, National Association, as successor trustee, providing for 2005 Series A 4.80% Senior Notes due 2015
and 2005 Series B 5.45% Senior Notes due 2035. (Exhibit 4.1 to Form 8-K dated February 7, 2005)4(q)
    
    Supplemental Indenture, dated as of February 1, 2005, to the Mortgage and Deed of Trust, dated as of October 1, 2004, between The Detroit Edison
Company and J.P. Morgan Trust Company, National Association, as successor trustee, providing for General and Refunding Mortgage Bonds 2005 Series A
and 2005 Series B. (Exhibit 4.2 to Form 8-K dated February 7, 2005)4(r)
    
    Sixteenth Supplemental Indenture, dated as of April, 1, 2005, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit
Edison Company and J.P. Morgan Trust Company, National Association, as successor trustee, providing for 2005 Series AR 4.80% Senior Notes due 2015
and 2005 Series BR 5.45% Senior Notes due 2035. (Exhibit 4.1 to Registration Statement (File No. 333-123926)
 58




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##### Table of Contents



4(s)
    
    Seventeenth Supplemental Indenture, dated as of August 1, 2005, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit
Edison Company and J.P. Morgan Trust Company, National Association, as successor trustee, providing for 2005 Series DT Variable Rate Senior Notes
due 2029 (Exhibit 4.1 to Form 8-K dated August 17, 2005)4(t)
    
    Eighteenth Supplemental Indenture, dated as of September 15, 2005, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit
Edison Company and J.P. Morgan Trust Company, National Association, as successor trustee, providing for 2005 Series C, 5.19% Senior Notes due
October 1, 2023. (Exhibit No. 4.1 to Form 8-K dated September 29, 2005)4(u)
    
    Nineteenth Supplemental Indenture, dated as of September 30, 2005, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit
Edison Company and J.P. Morgan Trust Company, National Association, as successor trustee, providing for 2005 Series E Senior Notes due 2037.
(Exhibit 4-247 to Form 10-Q dated
November 8, 2005)4(v)
    
    Trust Agreement of Detroit Edison Trust I. (Exhibit 4-9 to Registration Statement No. 333-100000)4(w)
    
    Trust Agreement of Detroit Edison Trust II. (Exhibit 4-10 to Registration Statement No. 333-100000)4(x)
    
    Registration Rights Agreement, dated as of February 7, 2005, between The
Detroit Edison Company and the Initial Purchasers named therein. (Exhibit 4-3
to Form 8-K dated February 7, 2005)10(a)
    
    Securitization Property Sales Agreement dated as of March 9, 2001, between The
Detroit Edison Securitization Funding LLC and The Detroit Edison Company.
(Exhibit 10-42 to Form 10-Q for quarter ended March 31, 2001)10(b)
    
    Five-Year Credit Agreement, dated as of October 15, 2004, among The Detroit
Edison Company, Citibank, N.A. as Administrative Agent and the Initial Lenders
named therein ($206,250,000). (Exhibit 10-1 to Form 8-K dated October 15,
2004)10(c)
    
    Form of Indemnification Agreement between The Detroit Edison Company and its
officers. (Exhibit 10-40 to Form 10-K for year ended December 31, 2000)10(d)
    
    Certain arrangements pertaining to the employment of Anthony F. Earley, Jr.
with The Detroit Edison Company, dated April 25, 1994. (Exhibit 10-53 to Form
10-Q for
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quarter ended March 31, 1994)10(e)
    
    Certain arrangements pertaining to the employment of Gerard M. Anderson with
The Detroit Edison Company, dated October 6, 1993. (Exhibit 10-48 to Form 10-K
for year ended December 31, 1993)10(f)
    
    Certain arrangements pertaining to the employment of David E. Meador with The
Detroit Edison Company, dated January 14, 1997. (Exhibit 10-5 to Form 10-K for
year ended December 31, 1996)10(g)
    
    Amended and Restated Post-Employment Income Agreement, dated March 23, 1998,
between The Detroit Edison Company and Anthony F. Earley, Jr. (Exhibit 10-21
to Form 10-Q for quarter ended March 31, 1998)10(h)
    
    Executive Post-Employment Income Arrangement, dated March 27, 1989, between
The Detroit Edison Company and S. Martin Taylor. (Exhibit 10-22 to Form 10-Q
for quarter ended March 31, 1998)10(i)
    
    Restricted Stock Agreement, dated March 23, 1998, between The Detroit Edison
Company and Anthony F. Earley, Jr. (Exhibit 10-20 to Form 10-Q for quarter
ended March 31, 1998)10(j)
    
    The Detroit Edison Company Supplemental Long-Term Disability Plan, dated
January 27, 1997. (Exhibit 10-4 to Form 10-K for year ended December 31, 1996)10(k)
    
    Executive Vehicle Plan of The Detroit Edison Company, dated as of September 1,
1999. (Exhibit 10-41 to Form 10-Q for quarter ended March 31, 2001)99(a)
    
    Belle River Participation Agreement, dated as of December 1, 1982, between The
Detroit Edison Company and Michigan Public Power Agency. (Exhibit 28-5 to
Registration Statement No. 2-81501)99(b)
    
    Belle River Transmission Ownership and Operating Agreement, dated as of
December 1, 1982, between The Detroit Edison Company and Michigan Public Power
Agency. (Exhibit 28-6 to Registration Statement No. 2-81501)99(c)
    
    Inter-Creditor Agreement, dated as of March 9, 2001, among Citicorp North
America, Inc., Citibank, N.A., The Bank of New York, The Detroit Edison
Securitization Funding LLC and The Detroit Edison Company. (Exhibit 99-41 to
Form 10-Q for quarter ended March 31, 2001)99(d)
    
    Amendment to Trade Receivables Purchase and Sale Agreement, dated as of March
9, 2001, among The Detroit Edison Company, Citibank, N.A., and Citicorp North
America, Inc. (Exhibit 99-42 to Form 10-Q for quarter ended March 31, 2001)99(e)
    
    Amended and Restated Trade Receivables Purchase and Sale Agreement, dated as
of March 9, 2001, among The Detroit Edison Company, Corporate Asset Funding,
Inc., Citibank, N.A., and Citicorp North America, Inc. (Exhibit 99-43 to Form
10-Q for quarter ended March 31, 2001)99(f)
    
    Amendment, dated as of May 28, 2003, to the Trade Receivables Purchase and
Sale Agreement, dated as of February 28, 1989, and an Amendment and
Restatement thereof, dated as of October 1, 1991, and as further amended by an
Amendment dated as of February 28, 1994, an Amendment dated as of February 1,
1999, an Amendment dated as of January 27, 2000 and an Amendment dated as of
January 25, 2001, among The Detroit Edison Company, Citibank, N.A., and
Citicorp North America, Inc. (Exhibit 99-11 to Form 10-Q for quarter ended June 30, 2003)99(g)
    
    Amendment No. 2, dated as of May 28, 2003, to the Trade Receivables Purchase
and Sale Agreement, dated as of February 28, 1989, an Amendment and
Restatement
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thereof, dated as of October 1, 1991, an Amendment and Restatement
thereof dated as of March 9, 2001 and an Amendment dated as of January 17,
2003, among The Detroit Edison Company, Corporate Asset Funding Company, Inc.,
Citibank, N.A., and Citicorp North America, Inc. (Exhibit 99-12 to Form 10-Q
for quarter ended June 30, 2003)99(h)
    
    Amendment, dated as of February 25, 2004, to the Trade Receivables Purchase
and Sale Agreement, dated as of February 28, 1989, and an Amendment and
Restatement thereof, dated as of October 1, 1991, and as further amended by an
Amendment dated as of February 28, 1994, an Amendment dated as of February 1,
1999, an Amendment dated as of January 27, 2000, and an Amendment dated as of
January 25, 2001 and an Amendment dated as of May 28, 2003, among The Detroit
Edison Company, Citibank, N.A. and Citicorp North America, Inc. (Exhibit 99-15
to Form 10-Q for quarter ended March 31, 2004)99(i)
    
    Amendment, dated as of January 20, 2005, to the Trade Receivables Purchase and
Sale Agreement, dated as of February 28, 1989, an Amendment and Restatement
thereof, dated as of October 1, 1991, and as further amended by an Amendment
dated as of February 28, 1994, an Amendment dated as of February 1, 1999, an
Amendment dated as of January 27, 2000, and an Amendment dated as of January
25, 2001, an Amendment dated as of May 28, 2003 and an Amendment dated as of
February 25, 2004, among The Detroit Edison Company, Citibank, N.A. and
Citicorp North America, Inc. (Exhibit 99-17 to Form 10-K for year ended
December 31, 2004)99(j)
    
    Amendment No. 4, dated as of January 20, 2005, to the Trade Receivables
Purchase and Sale Agreement, dated as of February 28, 1989, an Amendment and
Restatement thereof, dated as of October 1, 1991, an Amendment and Restatement
thereof, dated as of March 9, 2001, an Amendment dated as of January 17, 2003,
an Amendment dated as of May 28, 2003 and an Amendment dated February 25,
2004, as so amended and restated, among The Detroit Edison Company, CAFCO, LLC
(successor to Corporate Asset Funding Company, Inc.), Citibank, N.A. and
Citicorp North America, Inc. (Exhibit 99-18 to Form 10-K for the year ended
December 31, 2004)99(k)
    
    Amendment No. 3, dated as of February 25, 2004, to the Trade Receivables
Purchase and Sale Agreement, dated as of February 28, 1989, and an Amendment
and Restatement thereof, dated as of October 1, 1991, an Amendment and
Restatement thereof dated as of March 9, 2001, an Amendment dated as of
January 17, 2003, and an Amendment dated as of May 28, 2003, among The Detroit
Edison Company, CAFCO, LLC successor to Corporate Asset Funding Company,
Inc.), Citibank, N.A., and Citicorp North America, Inc. (Exhibit 99-16 to Form
10-Q for quarter ended March 31, 2004)99(l)
    
    Three-Year Credit Agreement, dated as of October 24, 2003 (as amended by the
Five-Year Credit Agreement identified as Exhibit 10(b) above, $68,750,000).
(Exhibit 99-14 to Form 10-Q for quarter ended September 30, 2003)99(m)
    
    Master Trust Agreement (Master Trust), dated as of June 30, 1994, between
The Detroit Edison Company and Fidelity Management Trust Company relating to
the Savings and Investment Plans. (Exhibit 4-167 to Form 10-Q for quarter
ended June 30, 1994)99(n)
    
    First Amendment, dated as of February 1, 1995, to Master Trust. (Exhibit 4-10
to Registration Statement No. 333-00023)
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##### Table of Contents



99(o)
    
    Second Amendment, dated as of February 1, 1995, to Master Trust. (Exhibit 4-11
to Registration Statement No. 333-00023)99(p)
    
    Third Amendment, effective January 1, 1996, to Master Trust. (Exhibit 4-12 to
Registration Statement No. 333-00023)99(q)
    
    Fourth Amendment, dated as of August 1, 1996, to Master Trust. (Exhibit 4-185
to Form 10-K for year ended December 31, 1997)99(r)
    
    Fifth Amendment, dated as of January 1, 1998, to Master Trust. (Exhibit 4-186
to Form 10-K for year ended December 31, 1997)99(s)
    
    Sixth Amendment, dated as of September 1, 1998, to Master Trust (Exhibit 99-19 to Form 10-K for year ended December 31, 2004)99(t)
    
    Seventh Amendment, dated as of December 15, 1999, to Master Trust. (Exhibit 99-20 to Form 10-K for year ended December 31, 2004)99(u)
    
    Eighth Amendment, dated as of February 1, 2000, to Master Trust. (Exhibit 99-21 to Form 10-K for year ended December 31, 2004)99(v)
    
    Ninth Amendment, dated as of April 1, 2000, to Master Trust. (Exhibit 99-22 to Form 10-K for year ended December 31, 2004)99(w)
    
    Tenth Amendment, dated as of May 1, 2000, to Master Trust. (Exhibit 99-23 to Form 10-K for year ended December 31, 2004)99(x)
    
    Eleventh Amendment, dated as of July 1, 2000, to Master Trust. (Exhibit 99-24 to Form 10-K for year ended December 31, 2004)99(y)
    
    Twelfth Amendment, dated as of August 1, 2000, to Master Trust. (Exhibit 99-25 to Form 10-K for year ended December 31, 2004)99(z)
    
    Thirteenth Amendment, dated as of December 21, 2001, to Master Trust. (Exhibit 99-26 to Form 10-K for year ended December 31, 2004)99(aa)
    
    Fourteenth Amendment, dated as of March 1, 2002, to Master Trust. (Exhibit 99-27 to Form 10-K for year ended December 31, 2004)99(bb)
    
    Fifteenth Amendment, dated as of January 1, 2002, to Master Trust. (Exhibit 99-28 to Form 10-K for year ended December 31, 2004)
 (iii) Exhibits furnished herewith.
 32-21
    
    Chief Executive Officer Section 906 Form 10-K Certification of Periodic Report.32-22
    
    Chief Financial Officer Section 906 Form 10-K Certification of Periodic Report.
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The Detroit Edison Company
 
 Schedule II  Valuation and Qualifying Accounts
 Year Ending December 31,(in Millions)
    
    2005
    
    
    2004
    
    
    2003Allowance for Doubtful Accounts (shown as
deduction from accounts receivable in
the consolidated statement
of financial position)Balance at Beginning of Period
    
    $
    55
    
    
    $
    51
    
    
    $
    48Additions:Charged to costs and expenses
    
    
    41
    
    
    
    45
    
    
    
    39Charged to other accounts (1)
    
    
    4
    
    
    
    5
    
    
    
    3Deductions (2)
    
    
    (46
    )
    
    
    (46
    )
    
    
    (39
    )Balance At End of Period
    
    $
    54
    
    
    $
    55
    
    
    $
    51
 
 (1)
    
    Collection of accounts previously written off.(2)
    
    Non-collectible accounts written off. 63




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Signatures
  THE DETROIT EDISON COMPANY(Registrant)Date: March 7, 2006
    
    By
    
    /s/ PETER B. OLEKSIAKPeter B. OleksiakController and Chief Accounting Officer
  By
    
    /s/ ANTHONY F. EARLEY, JR.
    
    By
    
    /s/ PETER B. OLEKSIAKAnthony F. Earley, Jr.
    
    
    
    Peter B. OleksiakChairman of the Board and
    
    
    
    Controller and Chief Accounting OfficerChief Executive OfficerBy
    
    /s/ SANDRA KAY ENNIS
    
    By
    
    /s/ DAVID E. MEADORSandra Kay Ennis
    
    
    
    David E. MeadorDirector and Corporate Secretary
    
    
    
    Director, Executive Vice Presidentand Chief Financial OfficerBy
    
    /s/ BRUCE D. PETERSONBruce D. PetersonDirector
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Exhibit Index
 Exhibit
Number
    
    Description(i) Exhibits filed herewith.12-23
    
    Computation of Ratio of Earnings to
Fixed Charges.23-18
    
    Consent of Deloitte & Touche LLP.31-21
    
    Chief Executive Officer Section 302
Form 10-K Certification of Periodic Report.31-22
    
    Chief Financial Officer Section 302 Form 10-K Certification of Periodic Report.
 (iii) Exhibits furnished herewith.
 32-21
    
    Chief Executive Officer Section 906 Form 10-K Certification of Periodic Report.32-22
    
    Chief Financial Officer Section 906 Form 10-K Certification of Periodic Report.