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TABLE OF CONTENTS




|                                                                                                                                               |                                                     |  |  |  |  |  |  | 
|---------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- |  |  |  |  |  |  | 
|SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549                                                                                     
|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, 2000    
|DOCUMENTS INCORPORATED BY REFERENCE                                                                                                           
|DTE Energy Company and The Detroit Edison Company FORM 10-K
Year Ended December 31, 2000                                                      
|INDEX                                                                                                                                         
|DEFINITIONS                                                                                                                                   
|Annual Report on Form 10-K for DTE Energy Company
PART I                                                                                      
|PART II                                                                                                                                       
|DTE Energy Company
Consolidated Statement of Income
(Millions, Except Per Share Amounts)                                                      
|DTE Energy Company
Consolidated Statement of Cash Flows                                                                                       
|(Millions)                                                                                                                                    
|DTE Energy Company
Consolidated Balance Sheet
(Millions, Except Per Share Amounts and Shares)                                                 
|DTE Energy Company
Consolidated Statement of Changes in Shareholders Equity
(Millions, Except Per Share Amounts; Shares in Thousands)        
|The Detroit Edison Company
Consolidated Statement of Income
(Millions)                                                                        
|The Detroit Edison Company
Consolidated Statement of Cash Flows
(Millions)                                                                    
|The Detroit Edison Company
Consolidated Balance Sheet
(Millions, Except Per Share Amounts and Shares)                                         
|The Detroit Edison Company
Consolidated Statement of Changes in Shareholders Equity
(Millions, Except Per Share Amounts; Shares in Thousands)
|                                                                                                                                               | NOTE 1  SIGNIFICANT ACCOUNTING POLICIES           
|                                                                                                                                               | Corporate Structure and Principles of Consolidation
|                                                                                                                                               | NOTE 13  EMPLOYEE BENEFITS                        
|PART III                                                                                                                                      
|Annual Report on Form 10-K for The Detroit Edison Company                                                                                     
|PART I                                                                                                                                        
|PART II                                                                                                                                       
|PART III                                                                                                                                      
|DTE ENERGY COMPANY                                                                                                                            
|SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS                                                                                               
|THE DETROIT EDISON COMPANY                                                                                                                    
|SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS                                                                                               
|SIGNATURES                                                                                                                                    
|SIGNATURES                                                                                                                                    
|Exhibit 2.2                                                                                                                                   
|Supplemental Indenture, Dated 12/1/89                                                                                                         
|Supplemental Indenture, Dated 2/15/90                                                                                                         
|Supplemental Indenture, Dated 11/30/92                                                                                                        
|Supplemental Indenture, Dated 4/1/93                                                                                                          
|Supplemental Indenture, Dated 4/26/93                                                                                                         
|Supplemental Indenture, Dated 6/30/93                                                                                                         
|Supplemental Indenture, Dated 9/15/93                                                                                                         
|Supplemental Indenture, Dated 6/15/94                                                                                                         
|Supplemental Indenture, Dated 8/15/94                                                                                                         
|Supplemental Indenture, Dated 12/1/94                                                                                                         
|Supplemental Indenture, Dated 8/1/95                                                                                                          
|Form of Indemnification Agreement                                                                                                             
|Basic & Diluted Earnings Per Share of Common Stock                                                                                            
|Company Computation of Ratio of Earnings                                                                                                      
|Company Computation of Ratio of Earnings                                                                                                      
|Subsidiaries of the Company and Detroit Edison                                                                                                
|Consent of Deloitte & Touche LLP                                                                                                              
|4th Amendment & Restated Credit Agreement, 1/16/01                                                                                            
|Order, Dated 1/4/01                                                                                                                           






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

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

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

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

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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  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.

At January 31, 2001, 142,649,172 shares of DTE Energys Common Stock,
substantially all held by non-affiliates, were outstanding, with an aggregate
market value of approximately $5.034 billion based upon the closing price on the
New York Stock Exchange.






Certain information in DTE Energy Companys definitive Proxy Statement for its
2001 Annual Meeting of Common Shareholders to be held April 25, 2001, 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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This document contains the Annual Reports on Form 10-K for the fiscal year
ended December 31, 2000 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.

|                                                                     |          |   |                                                                         |                                                                |  |      |    | 
|-------------------------------------------------------------------- | -------- | - | ----------------------------------------------------------------------- | -------------------------------------------------------------- |  | ---- | -- | 
|                                                                     |          |   |                                                                         |                                                                |  | 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  |                                                                |  | 15   |   
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Part II  |  | Item 5 - Market for Registrants Common Equity
        and Related      |                                                                |  |      |   
|                                                                     |          |   |                                                                         | Stockholder
          Matters                                  |  |      | 15 | 
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |          |   | Item 6
          - Selected Financial Data                              |                                                                |  | 16   |   
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |          |   | Item 7
          - Managements Discussion and Analysis of Financial   
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |          |   |                                                                         | Condition
          and Results of Operations                  |  |      | 17 | 
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |          |   | Item 7A-Quantitative
          and Qualitative Disclosures About Market
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |          |   |                                                                         | Risk (Included
          in Item 7)                            |  |      | 17 | 
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |          |   | Item 8
          - Financial Statements and Supplementary Data          |                                                                |  | 28   |   
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |          |   | Item 9
          - Changes in and Disagreements with Accountants on    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |          |   |                                                                         | Accounting
          and Financial Disclosure                  |  |      | 72 | 
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | 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)      |  |      | 72 | 
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Annual
          Report on Form 10-K for The Detroit Edison Company:
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Part I   |  | Item 1 - Business                                                       |                                                                |  | 73   |    | 
|                                                                     |          |   | Item 2
          - Properties                                           |                                                                |  | 74   |   
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |          |   | Item 3
          - Legal Proceedings                                    |                                                                |  | 74   |   
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     |          |   | Item 4
          - Submission of Matters to a Vote of Security Holders  |                                                                |  | 74   |   

2



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|                                                                                                       |          |   |                                                                         |                                               |  |    |    | 
|------------------------------------------------------------------------------------------------------ | -------- | - | ----------------------------------------------------------------------- | --------------------------------------------- |  | -- | -- | 
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |         
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       | Part II  |  | Item 5
          - Market for Registrants Common Equity and Related    |                                               |  |    |   
|                                                                                                       |          |   |                                                                         | Stockholder
          Matters                 |  |    | 75 | 
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |          |   | Item 6
          - Selected Financial Data                              |                                               |  | 75 |   
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |          |   | Item 7
          - Managements Discussion and Analysis of Financial   
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |          |   |                                                                         | Condition
          and Results of Operations |  |    | 75 | 
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |          |   | Item 8
          - Financial Statements and Supplementary Data          |                                               |  | 75 |   
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |          |   | Item 9
          - Changes in and Disagreements with Accountants on    
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |          |   |                                                                         | Accounting
          and Financial Disclosure |  |    | 79 | 
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       | Part III |  | Item 10
          - Directors and Executive Officers of the Registrant  |                                               |  | 79 |    | 
|                                                                                                       |          |   | Item 11
          - Executive Compensation                              |                                               |  | 79 |   
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |          |   | Item 12
          - Security Ownership of Certain Beneficial Owners and
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |          |   |                                                                         | Management                                    |  |    | 79 | 
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                       |          |   | Item 13
          - Certain Relationships and Related Transactions      |                                               |  | 79 |   
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|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                                   |  |    | 80 | 
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|Signature
          Page to DTE Energy Company Annual Report on Form 10-K                              |          |   | 95                                                                      |                                              
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|Signature
          Page to The Detroit Edison Company Annual Report on Form 10-K                      |          |   | 96                                                                      |                                              

3



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|                |  |                                                                                                                                                  
|--------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------
|ABATE           |  | Association of Businesses Advocating Tariff Equity                                                                                               
|               
|               
|               
|               
|Company         |  | DTE Energy Company and Subsidiary Companies                                                                                                      
|               
|               
|               
|               
|Consumers       |  | Consumers Energy Company (a wholly owned subsidiary of                                                                                           
|               
|               
|               
|               
|                |  | CMS Energy Corporation)                                                                                                                          
|               
|               
|               
|               
|Detroit Edison  |  | The Detroit Edison Company (a wholly owned subsidiary of                                                                                         
|               
|               
|               
|               
|                |  | DTE Energy Company) and Subsidiary Companies                                                                                                     
|               
|               
|               
|               
|DTE Capital     |  | DTE Capital Corporation (a wholly owned subsidiary of DTE    Energy Company)                                                                     
|               
|               
|               
|               
|Electric Choice |  | Gives all retail customers equal opportunity to utilize the    transmission system which results in access to competitive    generation resources
|               
|               
|               
|               
|EPA             |  | United States Environmental Protection Agency                                                                                                    
|               
|               
|               
|               
|FERC            |  | Federal Energy Regulatory Commission                                                                                                             
|               
|               
|               
|               
|ITC             |  | International Transmission Company                                                                                                               
|               
|               
|               
|               
|kWh             |  | Kilowatthour                                                                                                                                     
|               
|               
|               
|               
|Ludington       |  | Ludington Hydroelectric Pumped Storage Plant (owned jointly    with Consumers)                                                                   
|               
|               
|               
|               
|MCN             |  | MCN Energy Group Inc.                                                                                                                            
|               
|               
|               
|               
|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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|               
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|MWh             |  | Megawatthour                                                                                                                                     
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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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|SEC             |  | Securities and Exchange Commission                                                                                                               
|               
|               
|               
|               
|SFAS            |  | Statement of Financial Accounting Standards                                                                                                      

4



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Item 1  Business.

GENERAL

The Company, a Michigan corporation incorporated in 1995, is an exempt
holding company under the Public Utility Holding Company Act of 1935,
as amended. 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 87% and 74% of the Companys assets and revenues, respectively, at
December 31, 2000. The Company has no employees. Detroit Edison has 8,691
employees and other Company affiliates have 453 employees.

See Note 2 for information regarding the Companys proposed 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 pulverized coal facilities 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 and power marketing and trading. Another affiliate, DTE
Capital, has
approximately $400 million of outstanding debt. DTE Capital will transfer all of
its assets and liabilities to the Company and merge its operations into the
Company. See Note 9 for further discussion.

Non-regulated operating revenues of $1.468 billion for 2000 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. 4,287 of Detroit Edisons 8,691
employees are represented by unions under two collective bargaining agreements.
One agreement expires in June 2004 for 3,719 employees and the other agreement
expires in September 2005 for 568 employees.

Effective January 2001, the transmission assets of Detroit Edison were
transferred to ITC, a wholly owned subsidiary of Detroit Edison.

5



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

|         |                 |              |                                |                    |                   |            |   |        |        |  |   |        |        |  |  | 
|-------- | --------------- | ------------ | ------------------------------ | ------------------ | ----------------- | ---------- | - | ------ | ------ |  | - | ------ | ------ |  |  | 
|         |                 |              |                                |                    |                   | 2000       |   |        | 1999   |  |   | 1998   |       
|         |                 |              |                                |                    |                   |            |   |        |        |  |   |        |       
|         |                 |              |                                | Operating Revenues |                   | (Millions)
|        
|        
|        
|        
|Electric
|        
|        
|        
|        
|         | Residential     |              | $                              | 1,265              |                   |            | $ | 1,300  |        |  | $ | 1,253  |       
|        
|        
|        
|        
|         | Commercial      |              |                                | 1,670              |                   |            |   | 1,629  |        |  |   | 1,553  |       
|        
|        
|        
|        
|         | Industrial      |              |                                | 848                |                   |            |   | 809    |        |  |   | 753    |       
|        
|        
|        
|        
|         | Other           |              |                                | 346                |                   |            |   | 309    |        |  |   | 343    |       
|         |                 |              |                                |                    |                   |            |   |        |        |  |   |        |       
|         |                 | Total        |                                | $                  | 4,129             |            |   | $      | 4,047  |  |   | $      | 3,902  | 
|         |                 |              |                                |                    |                   |            |   |        |        |  |   |        |       
|         |                 |              |                                | Sales              | (Millions of kWh)
|        
|        
|        
|        
|Electric
|        
|        
|        
|        
|         | Residential     |              |                                | 13,903             |                   |            |   | 14,064 |        |  |   | 13,752 |       
|        
|        
|        
|        
|         | Commercial      |              |                                | 19,762             |                   |            |   | 19,546 |        |  |   | 18,897 |       
|        
|        
|        
|        
|         | Industrial      |              |                                | 16,090             |                   |            |   | 15,647 |        |  |   | 14,700 |       
|        
|        
|        
|        
|         | Other           |              |                                | 2,653              |                   |            |   | 2,595  |        |  |   | 2,357  |       
|         |                 |              |                                |                    |                   |            |   |        |        |  |   |        |       
|         |                 | Total System |                                |                    | 52,408            |            |   |        | 51,852 |  |   |        | 49,706 | 
|        
|        
|        
|        
|         | Interconnection |              |                                | 2,592              |                   |            |   | 3,672  |        |  |   | 5,207  |       
|         |                 |              |                                |                    |                   |            |   |        |        |  |   |        |       
|         |                 | Total        |                                |                    | 55,000            |            |   |        | 55,524 |  |   |        | 54,913 | 
|         |                 |              |                                |                    |                   |            |   |        |        |  |   |        |       
|         |                 |              | Electric Customers at Year-End |                    | (Thousands)      
|        
|        
|        
|        
|Electric
|        
|        
|        
|        
|         | Residential     |              |                                | 1,922              |                   |            |   | 1,904  |        |  |   | 1,884  |       
|        
|        
|        
|        
|         | Commercial      |              |                                | 185                |                   |            |   | 182    |        |  |   | 181    |       
|        
|        
|        
|        
|         | Industrial      |              |                                | 1                  |                   |            |   | 1      |        |  |   | 1      |       
|        
|        
|        
|        
|         | Other           |              |                                | 2                  |                   |            |   | 2      |        |  |   | 2      |       
|         |                 |              |                                |                    |                   |            |   |        |        |  |   |        |       
|         |                 | Total        |                                |                    | 2,110             |            |   |        | 2,089  |  |   |        | 2,068  | 
|         |                 |              |                                |                    |                   |            |   |        |        |  |   |        |       

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 2000, 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 2000, 1999 and 1998, and no one customer accounted
for more than 5% 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 three coal suppliers for a total
purchase of up to 39 million tons of low-sulfur western coal to be delivered
during the period from 2001 through 2005. It also has one contract for the
purchase of approximately 11.9 million tons of Appalachian coal to be delivered
during the period from 2001 through 2007. These existing long-term coal
contracts include provisions for price escalation as well as de-escalation.

6



---



Certain Factors Affecting Public Utilities

The electric utility industry is changing as the transition to competition
occurs. The implementation of electric utility restructuring creates uncertainty
as Electric Choice and the unbundling of utility products and services
continues. 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.

See Notes 1 and 3 for a discussion of June 2000 Michigan restructuring
legislation and related MPSC orders. Other regulatory matters are discussed
below.

In July 1998, Detroit Edison filed a required review of its current depreciation
rates with the MPSC. The application requested an effective increase in annual
depreciation expenses of $66 million; an adjustment in customer rates was not requested.
Detroit Edison has not implemented the revised depreciation rates and is unable
to predict the timing or final outcome of this request.

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 approved a licensing procedure for alternative electric
suppliers in June 2000. The MPSC issued guidelines for transactions between
affiliates in May 2000. These guidelines require accounting separation, annual
reporting of transactions, and internal audits to ensure that Detroit Edison is
complying with the guidelines. Detroit Edison, in conjunction with other parties,
 has appealed certain aspects of
the order.

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. In December 2000, the MPSC issued an order that
expanded the application of the code of conduct broadly to any activities
between Detroit Edison and any affiliates. Detroit Edison has filed a petition
for rehearing of the

7



---



order and is to file a compliance plan outlining how it will comply with the
code of conduct 60 days after the MPSC issues a rehearing order. Detroit Edison
cannot determine the timing or outcome of the proceeding.

Detroit Edison is under an obligation to solicit capacity from external
suppliers whenever it determines that additional capacity is required. In April
2000, the MPSC approved Detroit Edisons plan to use an alternative capacity
solicitation process. If Detroit Edison 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 2000, Detroit Edison filed with the MPSC its plan to
meet customers needs in the summer of 2001. An update filed in February 2001
indicates that Detroit Edison expects a peak demand of 12,283 MW, which could be
lowered by about 451 MW as customers participate in the Electric Choice program.
Detroit Edison anticipates it will need to purchase 2,147 MW, of which 1,880 MW
of firm transmission into Michigan has already been reserved. Detroit Edison
expects to purchase power from Canada and merchant suppliers within Michigan, as
well as from customer-owned generation.

Proceedings were held before the MPSC concerning claims that Detroit Edisons
service is lacking in reliability in certain aspects. In one proceeding the MPSC
approved a settlement agreement that provides for a program of system
improvements designed to address areas in Detroit Edisons service territory
that have been subject to severe storm damage and multiple outages. In another
proceeding, the MPSC Staff issued a report proposing electric distribution
performance standards that would apply to Michigan utilities including Detroit
Edison. The Staff proposed that quarterly reports be filed with the MPSC and
that a twelve-month rolling average of data will be used to determine compliance
with the standards. If the rolling average is not met, Staff recommends, after
notice and hearing, that reductions in rates be imposed for a period of time
equal to the time of non-compliance or until the non-compliance is corrected.
The amount of reductions would be equal to 1 mill/kwh for all energy sold, or a
minimum of $1 per customer per month. Detroit Edison is unable to predict
whether the MPSC will take further action in this matter.

In April 2000, Energy Michigan, an intervenor group, filed with the MPSC to reopen the Fermi 2
amortization case, raising similar issues that Nordic Electric raised in a
complaint filed at the FERC. Energy Michigan alleges that Detroit Edison has
violated its commitment to implement Electric Choice, and requests that a
hearing is conducted before the MPSC. Energy Michigan also alleges that Detroit
Edison is monopolizing available electric import capability from other utilities
within the United States, and is refusing to allow Nordic Electric to import
electric supplies from Ontario Hydro Services Company. Detroit Edison believes
that the allegations are without merit.

The MPSC initiated a contested case hearing in February 2001, to
address the August 2000 request by ABATE to consider the consequences
of the proposed transfer of transmission assets from Detroit Edison
to ITC. ABATE alleges that Electric Choice customers may overpay
for the use of transmission assets, and that Detroit Edison has
circumvented the rate freeze provisions in PA141. The Company
believes the allegations are without merit. The Company is unable to
determine the timing or outcome of the proceedings.

Nuclear Regulatory Commission

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

8



---



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.

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 requested that the FERC approve its termination. In
February 2001, Detroit Edison and Consumers filed with the FERC to terminate the
pooling agreement effective March 31, 2001, with a new agreement between ITC and
Consumers to be effective April 1, 2001. ITC and Consumers will jointly operate
the transmission system and will still be the control area operator; however,
there will no longer be joint-dispatch of the respective companies units.

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.

The EPA has initiated enforcement actions against several major electric
utilities citing violations of new source provisions of the Clean Air Act.
Detroit Edison has received and responded to information requests from the EPA
on this subject. It is impossible at this time to predict the future impact of
this issue upon Detroit Edison.

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

9



---



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 to
meet increased electricity demand. 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. Detroit Edison converted the plant and
began operating it as a gas-fired facility in 1999. In January 2001, Detroit
Edison agreed to pay $450,000 to settle all matters related to the operation of
the plant.

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.

10



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EXECUTIVE OFFICERS OF THE REGISTRANT



---

|                                    |  |        |    |                  |  |                                                              |  |         
|----------------------------------- |  | ------ | -- | ---------------- |  | ------------------------------------------------------------ |  | --------
|                                    |  |        |    |                  |  |                                                              |  | Present 
|                                    |  |        |    |                  |  |                                                              |  | Position
|Name                                |  | Age(a) |    | Present Position |  | Held Since                                                  
|                                    |  |        |    |                  |  |                                                             
|Anthony
        F. Earley, Jr.      |  |        | 51 |                  |  | Chairman
        of the Board, Chief Executive Officer,      |  | 8-1-98  
|                                   
|                                   
|                                   
|                                   
|                                    |  |        |    |                  |  | President,
        Chief Operating Officer                  
|                                   
|                                   
|                                   
|                                   
|Larry G.
        Garberding         |  |        | 62 |                  |  | Executive
        Vice President and Chief Financial Officer |  | 1-26-95 
|                                   
|                                   
|                                   
|                                   
|Gerard M.
        Anderson          |  |        | 42 |                  |  | President
        and Chief Operating Officer  DTE Energy   |  | 8-1-98  
|                                   
|                                   
|                                   
|                                   
|                                    |  |        |    |                  |  | Resources                                                   
|                                   
|                                   
|                                   
|                                   
|Robert J.
        Buckler           |  |        | 51 |                  |  | President
        and Chief Operating Officer  DTE Energy   |  | 8-1-98  
|                                   
|                                   
|                                   
|                                   
|                                    |  |        |    |                  |  | Distribution                                                
|                                   
|                                   
|                                   
|                                   
|Michael
        E. Champley         |  |        | 52 |                  |  | Senior Vice
        President                                |  | 4-1-97  
|                                   
|                                   
|                                   
|                                   
|S. Martin
        Taylor            |  |        | 60 |                  |  | Senior Vice
        President                                |  | 4-28-99 
|                                   
|                                   
|                                   
|                                   
|Eric H.
        Peterson            |  |        | 40 |                  |  | Senior Vice
        President and General Counsel            |  | 9-5-00  
|                                   
|                                   
|                                   
|                                   
|Susan M.
        Beale              |  |        | 52 |                  |  | Vice President
        and Corporate Secretary               |  | 12-11-95
|                                   
|                                   
|                                   
|                                   
|David E.
        Meador             |  |        | 43 |                  |  | Senior Vice
        President and Treasurer                  |  | 5-15-00 
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|                                   
|(a) As of
        December 31, 2000



---

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. With the exception of Messrs. Peterson and
Meador, all of the above officers have been employed by the Company in one or
more management capacities during the past five years.

Eric H. Peterson was with Worsham Forsythe Wooldridge LLP of
Dallas, Texas for 15 years. He was a partner for seven years prior to joining the Company. Effective September 5, 2000, he was elected Senior
Vice President and General Counsel.

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 and effective May 15, 2000, he was elected Senior
Vice President and Treasurer.

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.

11



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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 11.

The MCN merger agreement provides that at the completion of the proposed
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.

12



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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 |            |  |       | 27.2 |   |  |  | 1971, 1973 and 1974       | 
|                                     
|                                     
|                                     
|                                     
|                                      | River Rouge             |  |             | Wayne     |  |                                |        | 510   |            |  |       | 4.6  |   |  |  | 1957 and 1958             | 
|                                     
|                                     
|                                     
|                                     
|                                      | St. Clair               |  |             | St. Clair |  |                                |        | 1,417 |            |  |       | 12.9 |   |  |  | 1953, 1954, 1961 and 1969 | 
|                                     
|                                     
|                                     
|                                     
|                                      | Trenton
        Channel |  |             | Wayne     |  |                                |        | 725   |            |  |       | 6.6  |   |  |  | 1949, 1950 and 1968       | 
|                                      |                         |  |             |           |  |                                |        |       |            | 
|                                      |                         |  |             |           |  |                                | 7,900  |       |            |  | 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    |  |                                |        | 1,111 |            |  |       | 10.1 |   |  |  | 1988                      | 
|                                     
|                                     
|                                     
|                                     
|Hydroelectric
        Pumped Storage 
|                                     
|                                     
|                                     
|                                     
|                                      | Ludington
        (6)   |  |             | Mason     |  |                                |        | 917   |            |  |       | 8.3  |   |  |  | 1973                      | 
|                                      |                         |  |             |           |  |                                |        |       |            | 
|                                      |                         |  |             |           |  |                                | 11,030 |       |            |  | 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 one oil-fueled unit, 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 35.56% of Detroit Edisons total 2000 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 interchange energy through 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 Services Company. In addition, Detroit Edison has interchange
agreements for the exchange of electric energy with Michigan South Central Power
Agency, Rouge Steel Company and the City of Wyandotte.

13



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Detroit Edison also purchases energy from cogeneration facilities and other
small power producers. Energy purchased from cogeneration facilities and small
power producers amounted to $37 million, $34 million and $31 million for 2000,
1999 and 1998, respectively, and is currently estimated at $39 million for 2001.

Detroit Edisons electric generating plants are interconnected by a
transmission system operating at up to 345 kilovolts through 41 transmission
stations. As of December 31, 2000, electric energy was being distributed in
Detroit Edisons service area through 618 substations over 3,700 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 has
acquired significant additional commitments from other utilities, and modified
operating practices to provide flexibility to respond to increasing
uncertainties of load and market conditions.

See Item 7  Managements Discussion and Analysis of Financial Condition
and Results of Operations, and Note 1 for a discussion of the transfer of
transmission assets from Detroit Edison to International Transmission Company.

NON-REGULATED

Non-regulated property consists primarily of coke oven battery facilities
in Michigan and Indiana, coal processing facilities in Michigan and Maryland,
merchant natural gas turbine facilities in Indiana and Michigan, and numerous 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, 2000, Detroit Edison was named as defendant in 149
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 and 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 of the United States. Payment of such penalties
represents full disposition of these matters.

14



---



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

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

None during the fourth quarter of 2000.

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:



---

|                 |  |  |        |  |  |             |          |  |           |  |          |  |  |   |       | 
|---------------- |  |  | ------ |  |  | ----------- | -------- |  | --------- |  | -------- |  |  | - | ----- | 
|                 |  |  |        |  |  | Price Range |          |  | Dividends | 
|                 |  |  |        |  |  |             |          |  | Paid      | 
|Calendar Quarter |  |  | High   |  |  | Low         |          |  | Per Share | 
|                 |  |  |        |  |  |             |          |  |           | 
|1999             |  |  | First  |  |  |             | 43-3/4   |  |           |  | 37-15/16 |  |  | $ | 0.515 | 
|                
|                
|                
|                
|                 |  |  | Second |  |  |             | 44-11/16 |  |           |  | 38-1/4   |  |  |   | 0.515 | 
|                
|                
|                
|                
|                 |  |  | Third  |  |  |             | 41-7/8   |  |           |  | 35-3/16  |  |  |   | 0.515 | 
|                
|                
|                
|                
|                 |  |  | Fourth |  |  |             | 37-5/16  |  |           |  | 31-1/16  |  |  |   | 0.515 | 
|                
|                
|                
|                
|2000             |  |  | First  |  |  |             | 41-1/4   |  |           |  | 28-7/16  |  |  | $ | 0.515 | 
|                
|                
|                
|                
|                 |  |  | Second |  |  |             | 35-15/16 |  |           |  | 28-7/8   |  |  |   | 0.515 | 
|                
|                
|                
|                
|                 |  |  | Third  |  |  |             | 40-1/4   |  |           |  | 30-7/16  |  |  |   | 0.515 | 
|                
|                
|                
|                
|                 |  |  | Fourth |  |  |             | 39-5/16  |  |           |  | 34-15/16 |  |  |   | 0.515 | 



---

At December 31, 2000, there were 142,651,172 shares of the Companys Common
Stock outstanding. These shares were held by a total of 96,153 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 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 proposed merger with MCN.

15



---



Pursuant to Article I, Section 8. (c) and Article II, Section 3.(c) of the
Companys By-laws, as amended through September 1, 1999, notice is given that
the 2002 Annual Meeting of the Companys Common Shareholders will be held on
Wednesday, April 24, 2002.

Item 6  Selected Financial Data.



---

|                                  |                            |                                |       |        |       |   |       |        |                        |   |                                      |        |       |      |       |        |       |   |       |        |       |  | 
|--------------------------------- | -------------------------- | ------------------------------ | ----- | ------ | ----- | - | ----- | ------ | ---------------------- | - | ------------------------------------ | ------ | ----- | ---- | ----- | ------ | ----- | - | ----- | ------ | ----- |  | 
|                                  |                            |                                |       |        |       |   |       |        | Year Ended December 31 |  
|                                  |                            |                                |       |        |       |  
|                                  |                            |                                |       |        | 2000  |   |       | 1999   |                        |   | 1998                                 |        |       | 1997 |       |        | 1996  |  
|                                  |                            |                                |       |        |       |   |       |        |                        |   |                                      |        |       |      |       |        |       |  
|                                  |                            |                                |       |        |       |   |       |        |                        |   | (Millions, except per share amounts)
|                                 
|                                 
|                                 
|                                 
|Operating Revenues                |                            | $                              | 5,597 |        |       | $ | 4,728 |        |                        | $ | 4,221                                |        |       | $    | 3,764 |        |       | $ | 3,645 |       
|                                 
|                                 
|                                 
|                                 
|Net Income                        |                            | $                              | 468   |        |       | $ | 483   |        |                        | $ | 443                                  |        |       | $    | 417   |        |       | $ | 309   |       
|                                 
|                                 
|                                 
|                                 
|Earnings Per Common Share  Basic
|                                 
|                                 
|                                 
|                                 
|                                  | and Diluted                |                                | $     | 3.27   |       |   | $     | 3.33   |                        |   | $                                    | 3.05   |       |      | $     | 2.88   |       |   | $     | 2.13   |      
|                                 
|                                 
|                                 
|                                 
|Dividends Declared Per           
|                                 
|                                 
|                                 
|                                 
|                                  | Share of Common Stock      |                                | $     | 2.06   |       |   | $     | 2.06   |                        |   | $                                    | 2.06   |       |      | $     | 2.06   |       |   | $     | 2.06   |      
|                                 
|                                 
|                                 
|                                 
|At year end:                     
|                                 
|                                 
|                                 
|                                 
|                                  | Total Assets               |                                | $     | 12,662 |       |   | $     | 12,316 |                        |   | $                                    | 12,088 |       |      | $     | 11,223 |       |   | $     | 11,015 |      
|                                 
|                                 
|                                 
|                                 
|                                  | Long-Term Debt Obligations
|                                 
|                                 
|                                 
|                                 
|                                  |                            | (including capital leases) and
|                                 
|                                 
|                                 
|                                 
|                                  |                            | Redeemable Preferred and      
|                                 
|                                 
|                                 
|                                 
|                                  |                            | Preference Stock Outstanding   |       | $      | 4,018 |   |       | $      | 4,052                  |   |                                      | $      | 4,323 |      |       | $      | 4,058 |   |       | $      | 4,038 | 



---

16



---



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

GROWTH

DTE Energy Company (Company) is focused on prudently growing its earnings base.
For the past three years, it has articulated a growth strategy that has
consistently achieved its 6% growth objective (after adjustment in 2000 for
one-time legislative and merger items). Given its prior successes, depth of
management team and strategic asset base, the Company has increased its growth
objective up to 8% over the next several years. The new anticipated growth rate
is expected to be achieved by strengthening our core electric and gas (after the
proposed merger with MCN Energy Group Inc. (MCN)) utility businesses in the
short term, building our non-regulated businesses in the mid term and leveraging
investments in energy technology over the long term. The growth strategy,
focused on the greater Midwest region, leverages and expands existing assets and
skills.

We will strengthen our core electric and gas (after the proposed merger with
MCN) utility businesses through continuous improvement actions, balancing cost,
reliability and customer satisfaction, and leveraging opportunities to create
value with the non-regulated businesses.

We have established a portfolio of non-regulated businesses, with approximately
$1.7 billion in assets that contributed approximately $84 million to net income
in 2000 and is expected to provide the greatest growth potential for the Company
in the next five years. These non-regulated businesses are expected to provide
approximately $125 million in net income in 2001. Our merchant energy business
will include optimizing fuel supply and plant operations, broadening coal
marketing and coal tolling efforts, rapidly expanding power marketing and
trading operations, growing an emerging base of non-regulated generation assets
in the Midwest region and capitalizing on MCNs storage and pipeline assets to
serve the rapidly expanding generation sector.

The Companys long-term growth strategy recognizes the fact that competition,
new technologies and environmental concerns will reshape the electric utility
industry and the manner in which power is delivered. As a result, the Company
has started a distributed generation business, DTE Energy Technologies, a wholly
owned subsidiary, which will provide one-stop sales and service to energy
customers using a variety of new technology products, including backup
generation, micro-turbines, fuel cells and control equipment. Additionally, the
Company continues to make strategic technology investments in companies like
Plug Power, a developer and manufacturer of fuel cell systems.

As discussed in Note 2, the Company and MCN have entered into a merger
agreement. The Company expects that completion of the proposed merger will
result in the issuance of approximately 30 million shares of its common stock
and approximately $1.4 billion in external financing. The proposed merger is
expected to create a fully integrated electric and natural gas company that is
anticipated to support the

17



---



Companys commitment to a long-term earnings growth rate of up to 8%. The
proposed merger is expected to permit the Company to be responsive to
competitive pressures. The external financing needs of the proposed merger may
create a sensitivity to interest rate changes. The Company will need to
successfully integrate the two operations to service the expected debt
requirements and achieve aggregate operating cost reductions. The delay in the
receipt of regulatory approvals will negatively impact the effect on earnings in
2001 resulting from the proposed merger, as will the escalation in the price of
natural gas. The Company believes that the proposed merger is strategic for the
Company and has and will continue to fulfill all of its obligations under the
merger agreement. The Company continues to approach this proposed merger with
the best interests of the Companys shareholders in mind. See Notes 2 and 11 for
further discussion of the proposed DTE/MCN merger and the financial instruments
used to hedge the interest rate risk associated with financing the proposed
merger.

See Note 17 for discussion of subsequent events concerning the
merger.

The Company projects that 2001 earnings will be approximately $3.60 to $3.70 per
share. In addition, 2002 earnings are expected to grow at least 6%, consistent
with the Companys growth objective. These earnings estimates exclude the impact
of the Companys proposed merger with MCN.

The Companys earnings are largely dependent on the earnings of The Detroit
Edison Company (Detroit Edison), the principal operating subsidiary of the
Company, and the use of alternate fuels tax credits generated from certain
non-regulated businesses. Securitization, discussed in Note 3, is expected to
reduce Detroit Edisons earnings, which may impact the Companys ability to use
all future available alternate fuels tax credits. However, if that is the case,
a portion of the tax credits may be monetized through sale of interests in
projects that generate the credits.

ELECTRIC INDUSTRY RESTRUCTURING

Detroit Edison 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 and are committed to opening the
electric generation market in Michigan to competition while providing for the
right of electric utilities to recover stranded costs. Electric Choice will give
all retail customers the opportunity to access alternative generation resources.

Michigans Customer Choice and Electricity Reliability Act

See Note 3 for a discussion of Public Acts 141 and 142 of 2000 (PA 141 and PA
142), new legislation signed into effect on June 3, 2000, by Michigan Governor
John Engler.

Michigan Public Service Commission

Restructuring Orders

Detroit Edison expects that a limited liability corporation, wholly owned by
Detroit Edison, will issue approximately $1.751 billion of securitization bonds
in the first quarter

18



---



of 2001. The bonds may not exceed 15 years in term to recover Detroit Edisons
qualified costs, as approved by the MPSC. Detroit Edison will use the proceeds
of the bonds to retire debt and equity as required by Michigan restructuring
legislation in a manner that will maintain its debt/equity ratio at
approximately 50%. See Note 3 for additional discussion of the November 2, 2000
and January 4, 2001 MPSC orders regarding securitization of Detroit Edisons
qualified costs.

On October 24, 2000, the MPSC initiated a case to determine the methodology of
calculating net stranded costs, as required by PA 141. Methods to be considered
include: (1) the relationship of market value to net book value of generation
assets and purchase power contracts, (2) evaluations based on the market price
of power in relation to the price assumed by the MPSC in prior orders and (3)
any other method the MPSC considers appropriate. It is expected that the MPSC
will issue an order by the end of 2001. Detroit Edison is unable to predict the
outcome of these proceedings.

Electric Choice

The Electric Choice program began in December 1999, when Detroit Edison
delivered energy from an alternate supplier in a MPSC-directed 90 megawatt (MW)
voluntary portion of the program. As of December 31, 2000, Detroit Edison has
made available 1,125 MW, or more than 12% of its capacity, for Electric Choice.
Detroit Edison has spent approximately $57 million through December 31, 2000,
and estimates that additional expenditures of up to $25 million may be required
through 2001 to fully implement the program on January 1, 2002. Securitization
proceeds will recover $28 million of this amount, with recovery of the remaining
balance determined in current and future MPSC net stranded cost proceedings.

Detroit Edison anticipates that Electric Choice will result in a decrease in its
annual sales as well as a decrease in its peak demand beginning in 2002. These
decreases are not expected to have a significant impact on the Companys net
income due to effective load management techniques, which are expected to reduce
high-cost sales during peak periods and increase non-regulated sales outside of
Detroit Edisons service territory at other times.

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, 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.

On September 28, 2000, the FERC conditionally approved an open access
transmission tariff designed to allow for the collection of $138 million in
annual revenues for transmission services provided by the International
Transmission Company (ITC), a wholly owned subsidiary of Detroit Edison. The
level of tariff represents an increase of $45 million over current tariffs.
These revenues may not be collected until such time as ITC notifies FERC that
the Companys Board of Directors

19



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has approved a sale or spin-off of the transmission business to a fully
independent transmission company that has no active or passive ownership
interests by the Company, Detroit Edison or any other market participant. The
ITC must become independent within 24 months of the September 28, 2000 order and
join a FERC-approved Regional Transmission Organization (RTO) by December 15,
2001; otherwise the innovative transmission rates will revert back to present
tariff rates, and revenue collected under the new transmission tariff will be
refunded back to ITC customers. If ITC becomes independent, but has not joined
an RTO in the required time frame, FERC has the authority to assign ITC to an
RTO. The Company and Detroit Edison intend to comply with the FERC requirements.
Effective January 1, 2001, Detroit Edison transferred approximately $390 million
of property and other assets to ITC. This transfer began the process of
establishing the transmission business as an independent company.

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). The Alliance would operate more than 43,000 miles of transmission
lines in nine states. In December 1999, FERC issued an order approving the
Alliance proposal, but indicated that certain elements needed modification or
further development. In January 2001, FERC approved key aspects of Alliances
compliance filing, including independence, scope and configuration and rate
design, but directed Alliance to make certain additional modifications in the
areas of ancillary services, market monitoring and inter-regional coordination.
Alliance was directed to make a further compliance filing by May 15, 2001, and
file actual tariffs rates, terms and conditions no later than 120 days prior to
commencement of operation.

LIQUIDITY AND CAPITAL RESOURCES

Cash From Operating Activities

Net cash from operating activities, which is the Companys primary source of
liquidity, was $1,088 million in 2000, $1,097 million in 1999 and $834 million
in 1998. Net cash from operating activities decreased in 2000, due primarily to
lower net income, partially offset by higher non-cash items. 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.

Cash Used for Investing Activities

Net cash used for investing activities was lower in 2000, due primarily to
decreased plant and equipment expenditures by Detroit Edison, partially offset
by higher non-regulated plant and equipment expenditures. 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.

20



---



Cash requirements for 2000 Detroit Edison capital expenditures were $587
million. Detroit Edisons cash requirements for capital expenditures are
expected to be approximately $2.5 billion for the period 2001 through 2005.

Cash requirements for 2000 non-regulated investments and capital expenditures
were $162 million. Excluding the effects of the proposed merger with MCN, cash
requirements for non-regulated investments and capital expenditures are expected
to be approximately $1.2 billion for the period 2001 through 2005.

Cash Used for Financing Activities

Net cash used for financing activities was lower in 2000 due to decreased
redemptions of long-term debt, partially offset by repurchases of common stock.

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

The following securities were issued and redeemed in 2000:



---

|                      |                   |                                                   |            |    |     | 
|--------------------- | ----------------- | ------------------------------------------------- | ---------- | -- | --- | 
|Securities Issued     |                   |                                                   | (Millions) |   
|                      |                   |                                                   |            |   
|Mortgage Bonds        |                   |                                                   |            |   
|                     
|                     
|                     
|                     
|                      |                   | 2000 Series A 7.50% issued in February            |            | $  | 220 | 
|                     
|                     
|                     
|                     
|                      |                   | 2000 Series B (variable) issued in August         |            |    | 51  | 
|                     
|                     
|                     
|                     
|Term Loan            
|                     
|                     
|                     
|                     
|                      |                   | 7.37% issued in August                            |            |    | 2   | 
|                      |                   |                                                   |           
|Total Issued          |                   | $                                                 | 273        |   
|                      |                   |                                                   |           
|Securities Redeemed  
|                     
|                     
|                     
|                     
|Mandatory Redemptions
|                     
|                     
|                     
|                     
|                      | Mortgage Bonds   
|                     
|                     
|                     
|                     
|                      |                   | 1990 Series A, B, C 7.9% - 8.4% redeemed in March |            | $  | 19  | 
|                     
|                     
|                     
|                     
|                      |                   | 1993 Series E 6.25% - 6.4% redeemed in March      |            |    | 175 | 
|                     
|                     
|                     
|                     
|                      | Non-Recourse Debt |                                                   |            | 86 |    
|                     
|                     
|                     
|                     
|Early Redemptions    
|                     
|                     
|                     
|                     
|                      | Mortgage Bonds   
|                     
|                     
|                     
|                     
|                      |                   | Series KKP 7.3% - 7.65% redeemed in September     |            |    | 51  | 
|                      |                   |                                                   |           
|Total Redeemed        |                   | $                                                 | 331        |   
|                      |                   |                                                   |           



---

Due to the securitization of $1.751 billion of Detroit Edisons qualified costs
in the first quarter of 2001, the Company expects that 75% of the proceeds will
be used to retire debt and 25% to repurchase the Companys common stock. In
February 2001, the

21



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Companys Board of Directors increased the authorization for
a stock repurchase program for the purchase of up to 20 million shares. Stock
repurchases will be made from time to time on the open market or through
negotiated transactions.

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. Detroit
Edison has spent approximately $50 million and estimates that it will incur
approximately $410 million of future capital expenditures, over the next three
years, to comply with recent EPA ozone transport regulations and final new air
quality standards relating to ozone and particulate air pollution.

INTEREST RATE RISK

The Company is subject to interest rate risk in conjunction with the anticipated
issuance of long-term debt to be used to finance the proposed merger with MCN.
The Companys exposure to interest rate risk arises from market fluctuations in
interest rates until the date of the anticipated debt issuance. To limit the
sensitivity to interest rate fluctuations, the Company has entered into a series
of forward-starting interest rate swaps and Treasury locks and designated such
instruments as hedges. See Note 11 for further discussion of these derivative
financial instruments.

A sensitivity analysis model was used to calculate the fair value of the
Companys derivative financial instruments using applicable market interest
rates in effect at December 31, 2000. The sensitivity analysis involved
increasing and decreasing the market rates by a hypothetical 10% and calculating
the resulting change in the fair value of the interest rate sensitive
instruments. The favorable (unfavorable) changes in fair value are as follows:



---

|                        |                                 |           |           |     |      |                   |   |            |                   |       |   | 
|----------------------- | ------------------------------- | --------- | --------- | --- | ---- | ----------------- | - | ---------- | ----------------- | ----- | - | 
|                        |                                 |           |           |     |      | Assuming 10%      |   |            | Assuming 10%      |      
|                        |                                 |           |           |     |      | Increase in Rates |   |            | Decrease in Rates |      
|                        |                                 |           |           |     |      |                   |   |            |                   |      
|                        |                                 |           |           |     |      |                   |   | (Millions)
|                       
|                       
|                       
|                       
|Interest Rate Risk      |                                 |           |           |     |      |                   |   |           
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|                       
|Interest Rate Sensitive |                                
|                       
|                       
|                       
|                       
|                        | Forward-Starting Swaps  5-year |           | $         | 6.5 |      |                   | $ | (6.8       | )                
|                       
|                       
|                       
|                       
|                        |                                 |           |  10-year |     |      | 20.5              |   |            |                   | (21.7 | )
|                       
|                       
|                       
|                       
|                        | Treasury Locks  10-year        |           |           | 1.9 |      |                   |   | (2.0       | )                
|                       
|                       
|                       
|                       
|                        |                                 |  30-year |           |     | 11.8 |                   |   |            | (13.2             | )    



---

22



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MARKET RISK

Detroit Edison expects to have adequate supplies of electric capacity in 2001
and plans to meet expected customer demand through its own electric generating
capability and purchase of over 2,000 MW from other suppliers. Detroit Edison
has secured purchase power contracts for its 2001 requirements, but has not
procured its purchase power requirements for 2002 and beyond. Detroit Edison
expects that its future electricity demands will be impacted by the Electric
Choice program, interruptible contracts with certain customers and weather.

As a result of the June 2000 Michigan restructuring legislation, the MPSC
determined that adjusting rates for changes in fuel and purchased power expenses
would be inconsistent with the legislation. Therefore, actual fuel and purchased
power costs are recorded in the period incurred, without any change in revenue.

Detroit Edison had investments valued at market of $398 million and $361 million
in three nuclear decommissioning trust funds at December 31, 2000 and 1999,
respectively. At December 31, 2000, these investments consisted of approximately
43% in fixed debt instruments, 53% in publicly traded equity securities and 4%
in cash equivalents. 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. A hypothetical 10% increase in interest
rates and a 10% decrease in equity prices quoted by stock exchanges would result
in a $14 million and $11 million reduction in the fair value of debt and a $21
million reduction in the fair value of equity securities held by the trusts both
at December 31, 2000 and 1999, respectively.

A hypothetical 10% decrease in interest rates would increase the fair value of
long-term debt from $4.2 billion to $4.7 billion at December 31, 2000, and from
$4 billion to $4.5 billion at December 31, 1999.

DTE Energy Trading, Inc. (DTE ET), an indirect wholly owned subsidiary of the
Company, provides price risk management services using energy commodity
derivative instruments. The Company measures the risk inherent in DTE ETs
portfolio using 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 potential future losses related to open
contract positions. DTE ET VaR expresses the potential loss in fair value of its
forward contract and option position over a particular period of time, with a
specified likelihood of occurrence, due to an adverse market movement. The
Company calculates VaR based on a 95% confidence interval, using 10-day holding
periods. 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. At
December 31, 2000 and 1999, 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, 2000 and 1999. For further information,
see Notes 1 and 11.

23



---



RESULTS OF OPERATIONS

Net income for 2000 was $468 million, down $15 million from 1999 earnings due
primarily to the 5% residential rate reduction provided for in the June 2000
Michigan restructuring legislation, and expenses incurred for the proposed
merger with MCN, partially offset by lower income taxes resulting from tax
credits generated by non-regulated businesses.

Since the MPSC has determined that adjusting rates for changes in fuel and
purchased power expenses, through continuance of the PSCR clause, is
inconsistent with the June 2000 Michigan restructuring legislation, the Company
expects that the distribution of yearly earnings will shift significantly. The
first and fourth quarters of the year are expected to show higher earnings,
while lower earnings are expected in the second and third quarters. In addition,
the fuel clause suspension will have an impact on earnings, since rates will no
longer be adjusted for changes in fuel and purchased power expenses.

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.

Operating Revenues

Operating revenues were $5.6 billion, up 18% from 1999 operating revenues of
$4.7 billion. Operating revenues increased (decreased) due to the following:



---

|               |                                   |                      |     |      |     |  |           |   |  |   |      |     |     | 
|-------------- | --------------------------------- | -------------------- | --- | ---- | --- |  | --------- | - |  | - | ---- | --- | --- | 
|               |                                   |                      |     | 2000 |     |  |           |   |  |   | 1999 |    
|               |                                   |                      |     |      |     |  |           |   |  |   |      |    
|               |                                   |                      |     |      |     |  | (Millions | )
|              
|              
|              
|              
|Detroit Edison |                                   |                      |     |      |     |  |           |   |  |   |      |    
|              
|              
|              
|              
|               | Rate change                       |                      | $   | 70   |     |  |           |   |  |   | $    | (25 | )  
|              
|              
|              
|              
|               | Residential rate reduction        |                      |     | (43  | )   |  |           |   |  |   |      |    |    
|              
|              
|              
|              
|               | System sales volume and mix       |                      |     | 24   |     |  |           |   |  |   |      | 151 |    
|              
|              
|              
|              
|               | Suspension of PSCR mechanism      |                      |     | 14   |     |  |           |   |  |   |      |    |    
|              
|              
|              
|              
|               | Wholesale sales                   |                      |     | (2   | )   |  |           |   |  |   |      | (19 | )  
|              
|              
|              
|              
|               | Fermi 2 performance disallowances |                      |     |     |     |  |           |   |  |   |      | 34  |    
|              
|              
|              
|              
|               | Other  net                       |                      |     | 19   |     |  |           |   |  |   |      | 4   |    
|               |                                   |                      |     |      |     |  |           |   |  |  
|               |                                   | Total Detroit Edison |     |      | 82  |  |           |   |  |   |      |     | 145 | 
|               |                                   |                      |     |      |     |  |           |   |  |  
|Non-Regulated  |                                   |                      |     |      |     |  |           |   |  |   |      |    
|              
|              
|              
|              
|               | DTE Energy Services               |                      |     | 54   |     |  |           |   |  |   |      | 147 |    
|              
|              
|              
|              
|               | DTE Energy Trading                |                      |     | 734  |     |  |           |   |  |   |      | 209 |    
|              
|              
|              
|              
|               | Other  net                       |                      |     | (1   | )   |  |           |   |  |   |      | 6   |    
|               |                                   |                      |     |      |     |  |           |   |  |  
|               |                                   | Total Non-Regulated  |     |      | 787 |  |           |   |  |   |      |     | 362 | 
|               |                                   |                      |     |      |     |  |           |   |  |  
|Total          |                                   | $                    | 869 |      |     |  |           |   |  | $ | 507  |    
|               |                                   |                      |     |      |     |  |           |   |  |  



---

24



---



Detroit Edison megawatthour (MWh) sales for 2000 and the percentage change by
year were as follows:

|                                   |              |  |                    |        |  |      |       |      |      |  |       |     | 
|---------------------------------- | ------------ |  | ------------------ | ------ |  | ---- | ----- | ---- | ---- |  | ----- | --- | 
|                                   |              |  | 2000               |        |  | 2000 |       |      | 1999 | 
|                                   |              |  |                    |        |  |      |       |      |      | 
|                                   |              |  | (Thousands of MWh) |       
|                                  
|                                  
|                                  
|                                  
|                                   |              |  | Sales              |       
|                                  
|                                  
|                                  
|                                  
|Residential                        |              |  | 13,903             |        |  |      | (1.1  | )%   |      |  | 2.3   | %  
|                                  
|                                  
|                                  
|                                  
|Commercial                         |              |  | 19,762             |        |  |      | 1.1   |      |      |  | 3.4   |    
|                                  
|                                  
|                                  
|                                  
|Industrial                         |              |  | 16,090             |        |  |      | 2.8   |      |      |  | 6.4   |    
|                                  
|                                  
|                                  
|                                  
|Other (primarily sales for resale) |              |  | 2,653              |        |  |      | 2.2   |      |      |  | 10.1  |    
|                                   |              |  |                   
|                                   | Total System |  |                    | 52,408 |  |      |       | 1.1  |      |  |       | 4.3 | 
|                                  
|                                  
|                                  
|                                  
|Wholesale sales                    |              |  | 2,592              |        |  |      | (29.4 | )    |      |  | (29.5 | )  
|                                   |              |  |                   
|                                   | Total        |  |                    | 55,000 |  |      |       | (0.9 | )    |  |       | 1.1 | 
|                                   |              |  |                   

Residential sales decreased in 2000 due to reduced cooling demand, and increased
in 1999 due to more heating demand, increased usage, and growth in the customer
base. In both 2000 and 1999, commercial and industrial sales increased due to
favorable economic conditions. In addition, industrial sales increased due to
sales to the Ford Rouge plant. Wholesale sales decreased due to lower demand for
energy and decreased availability of energy for sale.

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

Operating Expenses

Fuel and Purchased Power

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

|                          |                 |  |        |        |      |  |        |                    |  |  |        |        |  |  | 
|------------------------- | --------------- |  | ------ | ------ | ---- |  | ------ | ------------------ |  |  | ------ | ------ |  |  | 
|                          |                 |  |        |        | 2000 |  |        | 1999               |  |  | 1998   |       
|                          |                 |  |        |        |      |  |        |                    |  |  |        |       
|                          |                 |  |        |        |      |  |        | (Thousands of MWh)
|                         
|                         
|                         
|                         
|Power plant generation   
|                          | Fossil          |  |        | 42,100 |      |  |        | 43,016             |  |  |        | 44,091 | 
|                         
|                         
|                         
|                         
|                          | Nuclear         |  |        | 8,239  |      |  |        | 9,484              |  |  |        | 7,130  | 
|                         
|                         
|                         
|                         
|Purchased power           |                 |  | 8,877  |        |      |  | 6,959  |                    |  |  | 7,216  |       
|                          |                 |  |        |        |      |  |        |                    |  |  |       
|Net system output         |                 |  | 59,216 |        |      |  | 59,459 |                    |  |  | 58,437 |       
|                          |                 |  |        |        |      |  |        |                    |  |  |       
|Average unit cost ($/MWh)
|                          | Generation      |  | $      | 12.78  |      |  | $      | 12.51              |  |  | $      | 12.76  | 
|                          |                 |  |        |        |      |  |        |                    |  |  |       
|                          | Purchased power |  | $      | 62.57  |      |  | $      | 54.80              |  |  | $      | 42.26  | 
|                          |                 |  |        |        |      |  |        |                    |  |  |       

25



---



In 2000, fuel and purchased power expense increased due to greater purchases of energy and higher purchased power
unit costs. The increase was partially offset by reduced plant generation and lower cost of low sulfur western
coal.

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.

Non-regulated purchased power expense increased in all periods due to the operations of DTE Energy Trading, with
purchased power expenses amounting to $959 million, $227 million and $42 million in 2000, 1999 and 1998,
respectively.

Operation and Maintenance

In 2000, operation and maintenance expense remained at the same level as 1999. Higher non-regulated expenses of
$50 million were due to an increased level of operations and the addition of new businesses. Lower Detroit
Edison expenses resulted primarily from decreased storm activities ($26 million) and elimination of Y2K costs
($46 million). The decrease was partially offset by expenses associated with the proposed DTE/MCN merger ($25
million).

In 1999, operation and maintenance expense 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 Y2K costs ($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).

Depreciation and Amortization

In 2000, depreciation and amortization expense was higher due to increased levels of plant in service and the
accelerated amortization of unamortized nuclear costs, partially offset by a reduction in amortization for the
deferral of the effects of the 5% residential rate reduction.

In 1999, depreciation and amortization expense increased 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.

Interest Expense

In 2000, interest expense decreased due to the redemption of long-term securities and the write-off in 1999 of
unamortized bond issuance expense, partially offset in 2000 by increased short-term borrowing costs.

26



---



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.

Income Taxes

Income tax expense for the Company decreased, due primarily to the decrease in pretax income and increased
utilization of alternate fuels credits generated from non-regulated businesses. The majority of alternate fuels
credits are available through 2002, while others have been extended through 2007.

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, changes in the
cost of fuel and purchased power due to the suspension of the PSCR mechanism, (including natural gas subsequent
to the proposed merger with MCN), the effects of competition and the phased-in implementation of Electric Choice,
the implementation of utility restructuring in Michigan (which involves pending regulatory and related judicial
proceedings, the successful recovery of stranded costs, and actual and possible reductions in rates and
earnings), environmental and nuclear requirements, the impact of FERC proceedings and regulations, and the
contributions to earnings by non-regulated businesses. In addition, expected results will be affected by the
Companys proposed merger with MCN and the timing of the accretive effect of such merger. 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.

27



---



Item 8  Financial Statements and Supplementary Data.

The following consolidated financial statements and schedules are included herein.

|                                                                                                                                                                          |                                                 |                                                           |  |      |    | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | --------------------------------------------------------- |  | ---- | -- | 
|                                                                                                                                                                          |                                                 |                                                           |  | Page |   
|                                                                                                                                                                          |                                                 |                                                           |  |      |   
|                                                                                                                                                                          | Independent Auditors Report                    |                                                           |  | 29   |   
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                          | DTE Energy Company:                            
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                          |                                                 | Consolidated Statement of Income                          |  |      | 30 | 
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                          |                                                 | Consolidated Statement of Cash Flows                      |  |      | 31 | 
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                          |                                                 | Consolidated Balance Sheet                                |  |      | 32 | 
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                          |                                                 | Consolidated Statement of Changes in Shareholders Equity |  |      | 34 | 
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                          | The Detroit Edison Company:                    
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                          |                                                 | Consolidated Statement of Income                          |  |      | 36 | 
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                          |                                                 | Consolidated Statement of Cash Flows                      |  |      | 37 | 
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                          |                                                 | Consolidated Balance Sheet                                |  |      | 38 | 
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                          |                                                 | Consolidated Statement of Changes in Shareholders Equity |  |      | 40 | 
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                          | Notes to Consolidated Financial Statements      |                                                           |  | 41   |   
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                          | Schedule II  Valuation and Qualifying Accounts |                                                           |  | 93   |   
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|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.

28



---



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, 2000 and 1999, 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, 2000. 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 auditing standards generally accepted in the United States of
America. 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, 2000 and 1999, and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 2000 in conformity with accounting principles generally accepted
in the United States of America. 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 24, 2001

29



---



|                                              |                                         |                                  |       |                        |       |   |       |       |       |      |       |       |       | 
|--------------------------------------------- | --------------------------------------- | -------------------------------- | ----- | ---------------------- | ----- | - | ----- | ----- | ----- | ---- | ----- | ----- | ----- | 
|                                              |                                         |                                  |       | Year Ended December 31 |      
|                                              |                                         |                                  |       |                        |      
|                                              |                                         |                                  |       | 2000                   |       |   | 1999  |       |       | 1998 |      
|                                              |                                         |                                  |       |                        |       |   |       |       |       |      |      
|Operating Revenues                            |                                         | $                                | 5,597 |                        |       | $ | 4,728 |       |       | $    | 4,221 |      
|                                              |                                         |                                  |       |                        |       |   |       |       |      
|Operating Expenses                           
|                                             
|                                             
|                                             
|                                             
|                                              | Fuel and purchased power                |                                  |       | 2,233                  |       |   |       | 1,335 |       |      |       | 1,063 |      
|                                             
|                                             
|                                             
|                                             
|                                              | Operation and maintenance               |                                  |       | 1,480                  |       |   |       | 1,480 |       |      |       | 1,288 |      
|                                             
|                                             
|                                             
|                                             
|                                              | Depreciation and amortization           |                                  |       | 758                    |       |   |       | 735   |       |      |       | 661   |      
|                                             
|                                             
|                                             
|                                             
|                                              | Taxes other than income                 |                                  |       | 296                    |       |   |       | 277   |       |      |       | 272   |      
|                                              |                                         |                                  |       |                        |       |   |       |       |      
|                                              |                                         | Total Operating Expenses         |       |                        | 4,767 |   |       |       | 3,827 |      |       |       | 3,284 | 
|                                              |                                         |                                  |       |                        |       |   |       |       |      
|Operating Income                              |                                         |                                  | 830   |                        |       |   | 901   |       |       |      | 937   |      
|                                              |                                         |                                  |       |                        |       |   |       |       |      
|Interest Expense and Other                   
|                                             
|                                             
|                                             
|                                             
|                                              | Interest expense                        |                                  |       | 336                    |       |   |       | 340   |       |      |       | 319   |      
|                                             
|                                             
|                                             
|                                             
|                                              | Preferred stock dividends of subsidiary |                                  |       |                       |       |   |       |      |       |      |       | 6     |      
|                                             
|                                             
|                                             
|                                             
|                                              | Other  net                             |                                  |       | 17                     |       |   |       | 18    |       |      |       | 15    |      
|                                              |                                         |                                  |       |                        |       |   |       |       |      
|                                              |                                         | Total Interest Expense and Other |       |                        | 353   |   |       |       | 358   |      |       |       | 340   | 
|                                              |                                         |                                  |       |                        |       |   |       |       |      
|Income Before Income Taxes                    |                                         |                                  | 477   |                        |       |   | 543   |       |       |      | 597   |      
|                                             
|                                             
|                                             
|                                             
|Income Taxes                                  |                                         |                                  | 9     |                        |       |   | 60    |       |       |      | 154   |      
|                                              |                                         |                                  |       |                        |       |   |       |       |      
|Net Income                                    |                                         | $                                | 468   |                        |       | $ | 483   |       |       | $    | 443   |      
|                                              |                                         |                                  |       |                        |       |   |       |       |      
|Average Common Shares Outstanding             |                                         |                                  | 143   |                        |       |   | 145   |       |       |      | 145   |      
|                                              |                                         |                                  |       |                        |       |   |       |       |      
|Earnings per Common Share  Basic and Diluted |                                         | $                                | 3.27  |                        |       | $ | 3.33  |       |       | $    | 3.05  |      
|                                              |                                         |                                  |       |                        |       |   |       |       |      

30



---



|                                                     |                                                                            |                                               |                     |      |                        |      |     |      |       |     |      |      |      |     |  
|---------------------------------------------------- | -------------------------------------------------------------------------- | --------------------------------------------- | ------------------- | ---- | ---------------------- | ---- | --- | ---- | ----- | --- | ---- | ---- | ---- | --- | -
|                                                     |                                                                            |                                               |                     |      | Year Ended December 31 |     
|                                                     |                                                                            |                                               |                     |      |                        |     
|                                                     |                                                                            |                                               |                     |      | 2000                   |      |     | 1999 |       |     | 1998 |     
|                                                     |                                                                            |                                               |                     |      |                        |      |     |      |       |     |      |     
|Operating Activities                                
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Net Income                                                                 |                                               | $                   | 468  |                        |      | $   | 483  |       |     | $    | 443  |     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Adjustments to reconcile net income to net cash from operating activities:
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            | Depreciation and amortization                 |                     |      | 758                    |      |     |      | 735   |     |      |      | 661  |    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            | Other                                         |                     |      | (146                   | )    |     |      | (90   | )   |      |      | (146 | )  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            | Changes in current assets and liabilities:   
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            |                                               | Restricted cash     |      |                        | 43   |     |      |       | (10 | )    |      |      | (67 | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            |                                               | Accounts receivable |      |                        | (140 | )   |      |       | (94 | )    |      |      | (84 | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            |                                               | Inventories         |      |                        | 8    |     |      |       | (5  | )    |      |      | (35 | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            |                                               | Payables            |      |                        | 139  |     |      |       | 30  |      |      |      | 99  |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            |                                               | Other               |      |                        | (42  | )   |      |       | 48  |      |      |      | (37 | )
|                                                     |                                                                            |                                               |                     |      |                        |      |     |      |      
|                                                     |                                                                            | Net cash from operating activities            |                     |      | 1,088                  |      |     |      | 1,097 |     |      |      | 834  |    
|                                                     |                                                                            |                                               |                     |      |                        |      |     |      |      
|Investing Activities                                
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Plant and equipment expenditures                                           |                                               |                     | (749 | )                      |      |     | (739 | )     |     |      | (589 | )   
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Investment in non-regulated businesses                                     |                                               |                     |     |                        |      |     | (29  | )     |     |      | (408 | )   
|                                                     |                                                                            |                                               |                     |      |                        |      |     |      |      
|                                                     |                                                                            | Net cash used for investing activities        |                     |      | (749                   | )    |     |      | (768  | )   |      |      | (997 | )  
|                                                     |                                                                            |                                               |                     |      |                        |      |     |      |      
|                                                    
|                                                    
|                                                    
|                                                    
|Financing Activities                                
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Issuance of long-term debt                                                 |                                               |                     | 273  |                        |      |     | 265  |       |     |      | 763  |     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Increase in short-term borrowings                                          |                                               |                     | 116  |                        |      |     | 156  |       |     |      | 189  |     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Redemption of long-term debt                                               |                                               |                     | (331 | )                      |      |     | (548 | )     |     |      | (255 | )   
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Redemption of preferred stock                                              |                                               |                     |     |                        |      |     |     |       |     |      | (150 | )   
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Repurchase of common stock                                                 |                                               |                     | (70  | )                      |      |     |     |       |     |      |     |     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Dividends on common stock                                                  |                                               |                     | (296 | )                      |      |     | (299 | )     |     |      | (299 | )   
|                                                     |                                                                            |                                               |                     |      |                        |      |     |      |      
|                                                     |                                                                            | Net cash (used for) from financing activities |                     |      | (308                   | )    |     |      | (426  | )   |      |      | 248  |    
|                                                     |                                                                            |                                               |                     |      |                        |      |     |      |      
|Net Increase (Decrease) in Cash and Cash Equivalents |                                                                            |                                               | 31                  |      |                        |      | (97 | )    |       |     | 85   |     
|                                                    
|                                                    
|                                                    
|                                                    
|Cash and Cash Equivalents at Beginning of the Year   |                                                                            |                                               | 33                  |      |                        |      | 130 |      |       |     | 45   |     
|                                                     |                                                                            |                                               |                     |      |                        |      |     |      |      
|Cash and Cash Equivalents at End of the Year         |                                                                            | $                                             | 64                  |      |                        | $    | 33  |      |       | $   | 130  |     
|                                                     |                                                                            |                                               |                     |      |                        |      |     |      |      
|Supplementary Cash Flow Information                 
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Interest paid (excluding interest capitalized)                             |                                               | $                   | 334  |                        |      | $   | 340  |       |     | $    | 309  |     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Income taxes paid                                                          |                                               |                     | 104  |                        |      |     | 152  |       |     |      | 160  |     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | New capital lease obligations                                              |                                               |                     | 41   |                        |      |     | 3    |       |     |      | 52   |     
|                                                     |                                                                            |                                               |                     |      |                        |      |     |      |      

31



---



|                                               |                                        |                                       |                  |        |             |     |        |        |     |     | 
|---------------------------------------------- | -------------------------------------- | ------------------------------------- | ---------------- | ------ | ----------- | --- | ------ | ------ | --- | --- | 
|                                               |                                        |                                       |                  |        | December 31 |    
|                                               |                                        |                                       |                  |        |             |    
|                                               |                                        |                                       |                  |        | 2000        |     |        | 1999   |    
|                                               |                                        |                                       |                  |        |             |     |        |        |    
|ASSETS                                        
|                                              
|                                              
|                                              
|                                              
|Current Assets                                
|                                              
|                                              
|                                              
|                                              
|                                               | Cash and cash equivalents              |                                       | $                | 64     |             |     | $      | 33     |    
|                                              
|                                              
|                                              
|                                              
|                                               | Restricted cash                        |                                       |                  | 88     |             |     |        | 131    |    
|                                              
|                                              
|                                              
|                                              
|                                               | Accounts receivable                   
|                                              
|                                              
|                                              
|                                              
|                                               |                                        | Customer (less allowance for doubtful
|                                              
|                                              
|                                              
|                                              
|                                               |                                        |                                       | accounts of $21) |        |             | 510 |        |        |     | 388 | 
|                                              
|                                              
|                                              
|                                              
|                                               |                                        | Accrued unbilled revenues             |                  |        | 188         |     |        |        | 166 |    
|                                              
|                                              
|                                              
|                                              
|                                               |                                        | Other                                 |                  |        | 140         |     |        |        | 144 |    
|                                              
|                                              
|                                              
|                                              
|                                               | Inventories (at average cost)         
|                                              
|                                              
|                                              
|                                              
|                                               |                                        | Fuel                                  |                  |        | 163         |     |        |        | 175 |    
|                                              
|                                              
|                                              
|                                              
|                                               |                                        | Materials and supplies                |                  |        | 172         |     |        |        | 168 |    
|                                              
|                                              
|                                              
|                                              
|                                               | Assets from risk management activities |                                       |                  | 289    |             |     |        | 67     |    
|                                              
|                                              
|                                              
|                                              
|                                               | Other                                  |                                       |                  | 38     |             |     |        | 38     |    
|                                               |                                        |                                       |                  |        |             |    
|                                               |                                        |                                       | 1,652            |        |             |     | 1,310  |       
|                                               |                                        |                                       |                  |        |             |    
|Investments                                   
|                                              
|                                              
|                                              
|                                              
|                                               | Nuclear decommissioning trust funds    |                                       |                  | 398    |             |     |        | 361    |    
|                                              
|                                              
|                                              
|                                              
|                                               | Other                                  |                                       |                  | 269    |             |     |        | 274    |    
|                                               |                                        |                                       |                  |        |             |    
|                                               |                                        |                                       | 667              |        |             |     | 635    |       
|                                               |                                        |                                       |                  |        |             |    
|Property                                      
|                                              
|                                              
|                                              
|                                              
|                                               | Property, plant and equipment          |                                       |                  | 12,179 |             |     |        | 11,755 |    
|                                              
|                                              
|                                              
|                                              
|                                               | Property under capital leases          |                                       |                  | 221    |             |     |        | 222    |    
|                                              
|                                              
|                                              
|                                              
|                                               | Nuclear fuel under capital lease       |                                       |                  | 705    |             |     |        | 663    |    
|                                              
|                                              
|                                              
|                                              
|                                               | Construction work in progress          |                                       |                  | 57     |             |     |        | 106    |    
|                                               |                                        |                                       |                  |        |             |    
|                                               |                                        |                                       | 13,162           |        |             |     | 12,746 |       
|                                               |                                        |                                       |                  |        |             |    
|Less accumulated depreciation and amortization |                                        |                                       | 5,775            |        |             |     | 5,598  |       
|                                               |                                        |                                       |                  |        |             |    
|                                              
|                                              
|                                              
|                                              
|                                               |                                        |                                       | 7,387            |        |             |     | 7,148  |       
|                                               |                                        |                                       |                  |        |             |    
|Regulatory Assets                              |                                        |                                       | 2,686            |        |             |     | 2,935  |       
|                                               |                                        |                                       |                  |        |             |    
|Other Assets                                   |                                        |                                       | 270              |        |             |     | 288    |       
|                                               |                                        |                                       |                  |        |             |    
|Total Assets                                   |                                        | $                                     | 12,662           |        |             | $   | 12,316 |       
|                                               |                                        |                                       |                  |        |             |    

32



---



|                                                                        |                                                     |                                                |        |             |       |   |        |       |       | 
|----------------------------------------------------------------------- | --------------------------------------------------- | ---------------------------------------------- | ------ | ----------- | ----- | - | ------ | ----- | ----- | 
|                                                                        |                                                     |                                                |        | December 31 |      
|                                                                        |                                                     |                                                |        |             |      
|                                                                        |                                                     |                                                |        | 2000        |       |   | 1999   |      
|                                                                        |                                                     |                                                |        |             |       |   |        |      
|LIABILITIES AND SHAREHOLDERS EQUITY                                   
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Current Liabilities                                                    
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Accounts payable                                    |                                                | $      | 404         |       |   | $      | 273   |      
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Accrued interest                                    |                                                |        | 59          |       |   |        | 57    |      
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Dividends payable                                   |                                                |        | 73          |       |   |        | 75    |      
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Accrued payroll                                     |                                                |        | 103         |       |   |        | 97    |      
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Short-term borrowings                               |                                                |        | 503         |       |   |        | 387   |      
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Income taxes                                        |                                                |        | 97          |       |   |        | 61    |      
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Current portion long-term debt                      |                                                |        | 233         |       |   |        | 270   |      
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Current portion capital leases                      |                                                |        | 41          |       |   |        | 36    |      
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Liabilities from risk management activities         |                                                |        | 280         |       |   |        | 50    |      
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Other                                               |                                                |        | 218         |       |   |        | 259   |      
|                                                                        |                                                     |                                                |        |             |       |  
|                                                                        |                                                     |                                                | 2,011  |             |       |   | 1,565  |      
|                                                                        |                                                     |                                                |        |             |       |  
|Other Liabilities                                                      
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Deferred income taxes                               |                                                |        | 1,801       |       |   |        | 1,925 |      
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Capital leases                                      |                                                |        | 145         |       |   |        | 153   |      
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Regulatory liabilities                              |                                                |        | 185         |       |   |        | 262   |      
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Other                                               |                                                |        | 588         |       |   |        | 564   |      
|                                                                        |                                                     |                                                |        |             |       |  
|                                                                        |                                                     |                                                | 2,719  |             |       |   | 2,904  |      
|                                                                        |                                                     |                                                |        |             |       |  
|Long-Term Debt                                                          |                                                     |                                                | 3,917  |             |       |   | 3,938  |      
|                                                                        |                                                     |                                                |        |             |       |  
|Shareholders Equity                                                   
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Common stock, without par value, 400,000,000 shares
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        |                                                     | authorized, 142,651,172 and 145,041,324 issued
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        |                                                     | and outstanding, respectively                  |        |             | 1,918 |   |        |       | 1,950 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Retained earnings                                   |                                                |        | 2,097       |       |   |        | 1,959 |      
|                                                                        |                                                     |                                                |        |             |       |  
|                                                                        |                                                     |                                                | 4,015  |             |       |   | 3,909  |      
|                                                                        |                                                     |                                                |        |             |       |  
|Commitments
and Contingencies (Notes 1, 2, 3, 4, 10, 11, 12, 13 and 17)
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Total Liabilities and Shareholders Equity                              |                                                     | $                                              | 12,662 |             |       | $ | 12,316 |      
|                                                                        |                                                     |                                                |        |             |       |  

33



---



|                                          |                                           |            |  |         |   |   |        |       |      |        |  |         |        |   |       |        |      |   |        |         |   |   |       |       |      |  
|----------------------------------------- | ----------------------------------------- | ---------- |  | ------- | - | - | ------ | ----- | ---- | ------ |  | ------- | ------ | - | ----- | ------ | ---- | - | ------ | ------- | - | - | ----- | ----- | ---- | -
|                                          |                                           |            |  | 2000    |   |   | 1999   |       |      | 1998   | 
|                                          |                                           |            |  |         |   |   |        |       |      |        | 
|                                          |                                           |            |  | Shares  |   |   | Amount |       |      | Shares |  |         | Amount |   |       | Shares |      |   | Amount |        
|                                          |                                           |            |  |         |   |   |        |       |      |        |  |         |        |   |       |        |      |   |        |        
|Detroit Edison Cumulative Preferred Stock
|                                         
|                                         
|                                         
|                                         
|                                          | Balance at beginning of year              |            |  |        |   |   | $      |      |      |        |  |        |        |   | $     |       |      |   |        | 1,501   |   |   | $     | 144   |     
|                                         
|                                         
|                                         
|                                         
|                                          | Redemption of Cumulative Preferred Stock  |            |  |        |   |   |        |      |      |        |  |        |        |   |       |       |      |   |        | (1,501  | ) |   |       | (150  | )   
|                                         
|                                         
|                                         
|                                         
|                                          | Preferred stock expense                   |            |  |        |   |   |        |      |      |        |  |        |        |   |       |       |      |   |        |        |   |   |       | 6     |     
|                                          |                                           |            |  |         |   |   |        |       |      |        |  |         |        |   |       |        |      |  
|                                          | Balance at end of year                    |            |  |        |   |   | $      |      |      |        |  |        |        |   | $     |       |      |   |        |        |   |   | $     |      |     
|                                          |                                           |            |  |         |   |   |        |       |      |        |  |         |        |   |       |        |      |  
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|Common Stock                             
|                                         
|                                         
|                                         
|                                         
|                                          | Balance at beginning of year              |            |  | 145,041 |   |   | $      | 1,950 |      |        |  | 145,071 |        |   | $     | 1,951  |      |   |        | 145,098 |   |   | $     | 1,951 |     
|                                         
|                                         
|                                         
|                                         
|                                          | Repurchase and retirement of common stock |            |  | (2,390  | ) |   |        | (32   | )    |        |  | (30     | )      |   |       | (1     | )    |   |        | (27     | ) |   |       |      |     
|                                          |                                           |            |  |         |   |   |        |       |      |        |  |         |        |   |       |        |      |  
|                                          | Balance at end of year                    |            |  | 142,651 |   |   | $      | 1,918 |      |        |  | 145,041 |        |   | $     | 1,950  |      |   |        | 145,071 |   |   | $     | 1,951 |     
|                                          |                                           |            |  |         |   |   |        |       |      |        |  |         |        |   |       |        |      |  
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|                                         
|Retained Earnings                        
|                                         
|                                         
|                                         
|                                         
|                                          | Balance at beginning of year              |            |  |         |   |   | $      | 1,959 |      |        |  |         |        |   | $     | 1,747  |      |   |        |         |   |   | $     | 1,611 |     
|                                         
|                                         
|                                         
|                                         
|                                          | Net income                                |            |  |         |   |   |        | 468   |      |        |  |         |        |   |       | 483    |      |   |        |         |   |   |       | 443   |     
|                                         
|                                         
|                                         
|                                         
|                                          | Dividends declared on common stock ($2.06
|                                         
|                                         
|                                         
|                                         
|                                          |                                           | per share) |  |         |   |   |        |       | (294 | )      |  |         |        |   |       |        | (299 | ) |        |         |   |   |       |       | (299 | )
|                                         
|                                         
|                                         
|                                         
|                                          | Preferred stock expense                   |            |  |         |   |   |        |      |      |        |  |         |        |   |       |       |      |   |        |         |   |   |       | (6    | )   
|                                         
|                                         
|                                         
|                                         
|                                          | Repurchase and retirement of common stock |            |  |         |   |   |        | (39   | )    |        |  |         |        |   |       |       |      |   |        |         |   |   |       |      |     
|                                         
|                                         
|                                         
|                                         
|                                          | Other                                     |            |  |         |   |   |        | 3     |      |        |  |         |        |   |       | 28     |      |   |        |         |   |   |       | (2    | )   
|                                          |                                           |            |  |         |   |   |        |       |      |        |  |         |        |   |       |        |      |   |        |         |  
|                                          | Balance at end of year                    |            |  |         |   |   | $      | 2,097 |      |        |  |         |        |   | $     | 1,959  |      |   |        |         |   |   | $     | 1,747 |     
|                                          |                                           |            |  |         |   |   |        |       |      |        |  |         |        |   |       |        |      |   |        |         |  
|Total Shareholders Equity                |                                           |            |  |         |   | $ | 4,015  |       |      |        |  |         |        | $ | 3,909 |        |      |   |        |         |   | $ | 3,698 |      
|                                          |                                           |            |  |         |   |   |        |       |      |        |  |         |        |   |       |        |      |   |        |         |  

34



---



35



---



|                                      |                               |                                  |       |                        |       |   |       |       |       |      |       |       |       | 
|------------------------------------- | ----------------------------- | -------------------------------- | ----- | ---------------------- | ----- | - | ----- | ----- | ----- | ---- | ----- | ----- | ----- | 
|                                      |                               |                                  |       | Year Ended December 31 |      
|                                      |                               |                                  |       |                        |      
|                                      |                               |                                  |       | 2000                   |       |   | 1999  |       |       | 1998 |      
|                                      |                               |                                  |       |                        |       |   |       |       |       |      |      
|Operating Revenues                    |                               | $                                | 4,129 |                        |       | $ | 4,047 |       |       | $    | 3,902 |      
|                                      |                               |                                  |       |                        |       |   |       |       |      
|Operating Expenses                   
|                                     
|                                     
|                                     
|                                     
|                                      | Fuel and purchased power      |                                  |       | 1,271                  |       |   |       | 1,106 |       |      |       | 1,021 |      
|                                     
|                                     
|                                     
|                                     
|                                      | Operation and maintenance     |                                  |       | 977                    |       |   |       | 1,028 |       |      |       | 998   |      
|                                     
|                                     
|                                     
|                                     
|                                      | Depreciation and amortization |                                  |       | 719                    |       |   |       | 703   |       |      |       | 643   |      
|                                     
|                                     
|                                     
|                                     
|                                      | Taxes other than income       |                                  |       | 289                    |       |   |       | 275   |       |      |       | 270   |      
|                                      |                               |                                  |       |                        |       |   |       |       |      
|                                      |                               | Total Operating Expenses         |       |                        | 3,256 |   |       |       | 3,112 |      |       |       | 2,932 | 
|                                      |                               |                                  |       |                        |       |   |       |       |      
|Operating Income                      |                               |                                  | 873   |                        |       |   | 935   |       |       |      | 970   |      
|                                      |                               |                                  |       |                        |       |   |       |       |      
|Interest Expense and Other           
|                                     
|                                     
|                                     
|                                     
|                                      | Interest expense              |                                  |       | 277                    |       |   |       | 284   |       |      |       | 277   |      
|                                     
|                                     
|                                     
|                                     
|                                      | Other  net                   |                                  |       | 13                     |       |   |       | 6     |       |      |       | 15    |      
|                                      |                               |                                  |       |                        |       |   |       |       |      
|                                      |                               | Total Interest Expense and Other |       |                        | 290   |   |       |       | 290   |      |       |       | 292   | 
|                                      |                               |                                  |       |                        |       |   |       |       |      
|Income Before Income Taxes            |                               |                                  | 583   |                        |       |   | 645   |       |       |      | 678   |      
|                                     
|                                     
|                                     
|                                     
|Income Taxes                          |                               |                                  | 172   |                        |       |   | 211   |       |       |      | 260   |      
|                                      |                               |                                  |       |                        |       |   |       |       |      
|Net Income                            |                               |                                  | 411   |                        |       |   | 434   |       |       |      | 418   |      
|                                     
|                                     
|                                     
|                                     
|Preferred Stock Dividends             |                               |                                  |      |                        |       |   |      |       |       |      | 6     |      
|                                      |                               |                                  |       |                        |       |   |       |       |      
|Net Income Available for Common Stock |                               | $                                | 411   |                        |       | $ | 434   |       |       | $    | 412   |      
|                                      |                               |                                  |       |                        |       |   |       |       |      

36



---



|                                                     |                                                                            |                                            |                     |      |                        |     |    |      |       |     |      |      |      |     |  
|---------------------------------------------------- | -------------------------------------------------------------------------- | ------------------------------------------ | ------------------- | ---- | ---------------------- | --- | -- | ---- | ----- | --- | ---- | ---- | ---- | --- | -
|                                                     |                                                                            |                                            |                     |      | Year Ended December 31 |    
|                                                     |                                                                            |                                            |                     |      |                        |    
|                                                     |                                                                            |                                            |                     |      | 2000                   |     |    | 1999 |       |     | 1998 |     
|                                                     |                                                                            |                                            |                     |      |                        |     |    |      |       |     |      |     
|Operating Activities                                
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Net Income                                                                 |                                            | $                   | 411  |                        |     | $  | 434  |       |     | $    | 418  |     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Adjustments to reconcile net income to net cash from operating activities:
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            | Depreciation and amortization              |                     |      | 719                    |     |    |      | 703   |     |      |      | 643  |    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            | Other                                      |                     |      | (151                   | )   |    |      | 2     |     |      |      | (217 | )  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            | Changes in current assets and liabilities:
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            |                                            | Accounts receivable |      |                        | (23 | )  |      |       | (70 | )    |      |      | (51 | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            |                                            | Inventories         |      |                        | 13  |    |      |       | (6  | )    |      |      | (28 | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            |                                            | Payables            |      |                        | 37  |    |      |       | 17  |      |      |      | 64  |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                            |                                            | Other               |      |                        | 12  |    |      |       | (52 | )    |      |      | (25 | )
|                                                     |                                                                            |                                            |                     |      |                        |     |    |      |      
|                                                     |                                                                            | Net cash from operating activities         |                     |      | 1,018                  |     |    |      | 1,028 |     |      |      | 804  |    
|                                                     |                                                                            |                                            |                     |      |                        |     |    |      |      
|Investing Activities                                
|                                                     | Plant and equipment expenditures                                           |                                            |                     | (587 | )                      |     |    | (638 | )     |     |      | (548 | )   
|                                                     |                                                                            |                                            |                     |      |                        |     |    |      |      
|                                                     |                                                                            | Net cash used for investing activities     |                     |      | (587                   | )   |    |      | (638  | )   |      |      | (548 | )  
|                                                     |                                                                            |                                            |                     |      |                        |     |    |      |      
|Financing Activities                                
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Issuance of long-term debt                                                 |                                            |                     | 270  |                        |     |    | 265  |       |     |      | 200  |     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Increase (decrease) in short-term borrowings                               |                                            |                     | (117 | )                      |     |    | 131  |       |     |      | 231  |     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Redemption of long-term debt                                               |                                            |                     | (245 | )                      |     |    | (468 | )     |     |      | (219 | )   
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Redemption of preferred stock                                              |                                            |                     |     |                        |     |    |     |       |     |      | (150 | )   
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Dividends on common and preferred stock                                    |                                            |                     | (319 | )                      |     |    | (319 | )     |     |      | (328 | )   
|                                                     |                                                                            |                                            |                     |      |                        |     |    |      |      
|                                                     |                                                                            | Net cash used for financing activities     |                     |      | (411                   | )   |    |      | (391  | )   |      |      | (266 | )  
|                                                     |                                                                            |                                            |                     |      |                        |     |    |      |      
|Net Increase (Decrease) in Cash and Cash Equivalents |                                                                            |                                            | 20                  |      |                        |     | (1 | )    |       |     | (10  | )   
|                                                    
|                                                    
|                                                    
|                                                    
|Cash and Cash Equivalents at Beginning of the Period |                                                                            |                                            | 4                   |      |                        |     | 5  |      |       |     | 15   |     
|                                                     |                                                                            |                                            |                     |      |                        |     |    |      |      
|Cash and Cash Equivalents at End of the Period       |                                                                            | $                                          | 24                  |      |                        | $   | 4  |      |       | $   | 5    |     
|                                                     |                                                                            |                                            |                     |      |                        |     |    |      |      
|Supplementary Cash Flow Information                 
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Interest paid (excluding interest capitalized)                             |                                            | $                   | 275  |                        |     | $  | 284  |       |     | $    | 269  |     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Income taxes paid                                                          |                                            |                     | 235  |                        |     |    | 276  |       |     |      | 292  |     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | New capital lease obligations                                              |                                            |                     | 41   |                        |     |    | 3    |       |     |      | 52   |     
|                                                     |                                                                            |                                            |                     |      |                        |     |    |      |      

37



---



|                                               |                                     |                                       |                                    |        |             |     |        |        |     |     | 
|---------------------------------------------- | ----------------------------------- | ------------------------------------- | ---------------------------------- | ------ | ----------- | --- | ------ | ------ | --- | --- | 
|                                               |                                     |                                       |                                    |        | December 31 |    
|                                               |                                     |                                       |                                    |        |             |    
|                                               |                                     |                                       |                                    |        | 2000        |     |        | 1999   |    
|                                               |                                     |                                       |                                    |        |             |     |        |        |    
|ASSETS                                        
|                                              
|                                              
|                                              
|                                              
|Current Assets                                
|                                              
|                                              
|                                              
|                                              
|                                               | Cash and cash equivalents           |                                       | $                                  | 24     |             |     | $      | 4      |    
|                                              
|                                              
|                                              
|                                              
|                                               | Accounts receivable                
|                                              
|                                              
|                                              
|                                              
|                                               |                                     | Customer (less allowance for doubtful
|                                              
|                                              
|                                              
|                                              
|                                               |                                     |                                       | accounts of $20 for 2000 and 1999) |        |             | 328 |        |        |     | 316 | 
|                                              
|                                              
|                                              
|                                              
|                                               |                                     | Accrued unbilled revenues             |                                    |        | 188         |     |        |        | 166 |    
|                                              
|                                              
|                                              
|                                              
|                                               |                                     | Other                                 |                                    |        | 127         |     |        |        | 138 |    
|                                              
|                                              
|                                              
|                                              
|                                               | Inventories (at average cost)      
|                                              
|                                              
|                                              
|                                              
|                                               |                                     | Fuel                                  |                                    |        | 163         |     |        |        | 175 |    
|                                              
|                                              
|                                              
|                                              
|                                               |                                     | Materials and supplies                |                                    |        | 139         |     |        |        | 140 |    
|                                              
|                                              
|                                              
|                                              
|                                               | Other                               |                                       |                                    | 25     |             |     |        | 29     |    
|                                               |                                     |                                       |                                    |        |             |    
|                                               |                                     |                                       | 994                                |        |             |     | 968    |       
|                                               |                                     |                                       |                                    |        |             |    
|Investments                                   
|                                              
|                                              
|                                              
|                                              
|                                               | Nuclear decommissioning trust funds |                                       |                                    | 398    |             |     |        | 361    |    
|                                              
|                                              
|                                              
|                                              
|                                               | Other                               |                                       |                                    | 38     |             |     |        | 34     |    
|                                               |                                     |                                       |                                    |        |             |    
|                                               |                                     |                                       | 436                                |        |             |     | 395    |       
|                                               |                                     |                                       |                                    |        |             |    
|Property                                      
|                                              
|                                              
|                                              
|                                              
|                                               | Property, plant and equipment       |                                       |                                    | 11,431 |             |     |        | 11,204 |    
|                                              
|                                              
|                                              
|                                              
|                                               | Property under capital leases       |                                       |                                    | 220    |             |     |        | 221    |    
|                                              
|                                              
|                                              
|                                              
|                                               | Nuclear fuel under capital lease    |                                       |                                    | 705    |             |     |        | 663    |    
|                                              
|                                              
|                                              
|                                              
|                                               | Construction work in progress       |                                       |                                    | 2      |             |     |        | 4      |    
|                                               |                                     |                                       |                                    |        |             |    
|                                               |                                     |                                       | 12,358                             |        |             |     | 12,092 |       
|                                               |                                     |                                       |                                    |        |             |    
|Less accumulated depreciation and amortization |                                     |                                       | 5,659                              |        |             |     | 5,526  |       
|                                               |                                     |                                       |                                    |        |             |    
|                                               |                                     |                                       | 6,699                              |        |             |     | 6,566  |       
|                                               |                                     |                                       |                                    |        |             |    
|Regulatory Assets                              |                                     |                                       | 2,686                              |        |             |     | 2,935  |       
|                                               |                                     |                                       |                                    |        |             |    
|Other Assets                                   |                                     |                                       | 171                                |        |             |     | 187    |       
|                                               |                                     |                                       |                                    |        |             |    
|Total Assets                                   |                                     | $                                     | 10,986                             |        |             | $   | 11,051 |       
|                                               |                                     |                                       |                                    |        |             |    

38



---



|                                                                    |                                                                                                |   |             |       |   |      |        |       |  
|------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | - | ----------- | ----- | - | ---- | ------ | ----- | -
|                                                                    |                                                                                                |   | December 31 |      
|                                                                    |                                                                                                |   |             |      
|                                                                    |                                                                                                |   | 2000        |       |   | 1999 |       
|                                                                    |                                                                                                |   |             |       |   |      |       
|LIABILITIES AND SHAREHOLDERS EQUITY                               
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Current Liabilities                                                
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Accounts payable                                                                               |   | $           | 253   |   |      | $      | 224   |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Accrued interest                                                                               |   |             | 56    |   |      |        | 54    |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Dividends payable                                                                              |   |             | 80    |   |      |        | 80    |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Accrued payroll                                                                                |   |             | 96    |   |      |        | 90    |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Short-term borrowings                                                                          |   |             | 245   |   |      |        | 362   |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Income taxes                                                                                   |   |             | 95    |   |      |        | 84    |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Current portion long-term debt                                                                 |   |             | 159   |   |      |        | 194   |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Current portion capital leases                                                                 |   |             | 41    |   |      |        | 36    |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Other                                                                                          |   |             | 167   |   |      |        | 159   |  
|                                                                    |                                                                                                |   |             |       |   |     
|                                                                    |                                                                                                |   | 1,192       |       |   |      | 1,283  |      
|                                                                    |                                                                                                |   |             |       |   |     
|Other Liabilities                                                  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Deferred income taxes                                                                          |   |             | 1,811 |   |      |        | 1,879 |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Capital leases                                                                                 |   |             | 145   |   |      |        | 153   |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Regulatory liabilities                                                                         |   |             | 185   |   |      |        | 262   |  
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                    | Other                                                                                          |   |             | 586   |   |      |        | 562   |  
|                                                                    |                                                                                                |   |             |       |   |     
|                                                                    |                                                                                                |   | 2,727       |       |   |      | 2,856  |      
|                                                                    |                                                                                                |   |             |       |   |     
|Long-Term Debt                                                      |                                                                                                |   | 3,344       |       |   |      | 3,284  |      
|                                                                    |                                                                                                |   |             |       |   |     
|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                                                                              |   |             | 1,772 |   |      |        | 1,677 |  
|                                                                    |                                                                                                |   |             |       |   |     
|                                                                    |                                                                                                |   | 3,723       |       |   |      | 3,628  |      
|                                                                    |                                                                                                |   |             |       |   |     
|Commitments
and Contingencies (Notes 1, 2, 3, 9, 10, 11, 12 and 17)
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Total Liabilities and Shareholders Equity                          |                                                                                                | $ | 10,986      |       |   | $    | 11,051 |      
|                                                                    |                                                                                                |   |             |       |   |     

39



---



|                                      |                                          |                                |         |        |  |   |        |       |      |        |         |   |        |   |       |        |      |   |         |        |   |   |       |       |      |  
|------------------------------------- | ---------------------------------------- | ------------------------------ | ------- | ------ |  | - | ------ | ----- | ---- | ------ | ------- | - | ------ | - | ----- | ------ | ---- | - | ------- | ------ | - | - | ----- | ----- | ---- | -
|                                      |                                          |                                |         | 2000   |  |   | 1999   |       |      | 1998   |        
|                                      |                                          |                                |         |        |  |   |        |       |      |        |        
|                                      |                                          |                                |         | Shares |  |   | Amount |       |      | Shares |         |   | Amount |   |       | Shares |      |   | Amount  |       
|                                      |                                          |                                |         |        |  |   |        |       |      |        |         |   |        |   |       |        |      |   |         |       
|Cumulative Preferred Stock           
|                                     
|                                     
|                                     
|                                     
|                                      | Balance at beginning of year             |                                |         |       |  |   | $      |      |      |        |         |  |        |   | $     |       |      |   |         | 1,501  |   |   | $     | 144   |     
|                                     
|                                     
|                                     
|                                     
|                                      | Redemption of Cumulative Preferred Stock |                                |         |       |  |   |        |      |      |        |         |  |        |   |       |       |      |   |         | (1,501 | ) |   |       | (150  | )   
|                                     
|                                     
|                                     
|                                     
|                                      | Preferred stock expense                  |                                |         |       |  |   |        |      |      |        |         |  |        |   |       |       |      |   |         |       |   |   |       | 6     |     
|                                      |                                          |                                |         |        |  |   |        |       |      |        |         |   |        |   |       |        |      |  
|                                      | Balance at end of year                   |                                |         |       |  |   | $      |      |      |        |         |  |        |   | $     |       |      |   |         |       |   |   | $     |      |     
|                                      |                                          |                                |         |        |  |   |        |       |      |        |         |   |        |   |       |        |      |  
|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             |                                |         |        |  |   | $      | 1,677 |      |        |         |   |        |   | $     | 1,562  |      |   |         |        |   |   | $     | 1,478 |     
|                                     
|                                     
|                                     
|                                     
|                                      | Net income                               |                                |         |        |  |   |        | 411   |      |        |         |   |        |   |       | 434    |      |   |         |        |   |   |       | 418   |     
|                                     
|                                     
|                                     
|                                     
|                                      | Dividends declared                      
|                                     
|                                     
|                                     
|                                     
|                                      |                                          | Common stock ($2.20 per share) |         |        |  |   |        |       | (319 | )      |         |   |        |   |       |        | (319 | ) |         |        |   |   |       |       | (319 | )
|                                     
|                                     
|                                     
|                                     
|                                      |                                          | Cumulative Preferred Stock*    |         |        |  |   |        |       |     |        |         |   |        |   |       |        |     |   |         |        |   |   |       |       | (6   | )
|                                     
|                                     
|                                     
|                                     
|                                      | Preferred stock expense                  |                                |         |        |  |   |        |      |      |        |         |   |        |   |       |       |      |   |         |        |   |   |       | (6    | )   
|                                     
|                                     
|                                     
|                                     
|                                      | Other                                    |                                |         |        |  |   |        | 3     |      |        |         |   |        |   |       |       |      |   |         |        |   |   |       | (3    | )   
|                                      |                                          |                                |         |        |  |   |        |       |      |        |         |   |        |   |       |        |      |   |         |        |  
|                                      | Balance at end of year                   |                                |         |        |  |   | $      | 1,772 |      |        |         |   |        |   | $     | 1,677  |      |   |         |        |   |   | $     | 1,562 |     
|                                      |                                          |                                |         |        |  |   |        |       |      |        |         |   |        |   |       |        |      |   |         |        |  
|Total Shareholders Equity            |                                          |                                |         |        |  | $ | 3,723  |       |      |        |         |   |        | $ | 3,628 |        |      |   |         |        |   | $ | 3,513 |      
|                                      |                                          |                                |         |        |  |   |        |       |      |        |         |   |        |   |       |        |      |   |         |        |  
|* At established rate for each series

40



---



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. The
balance of the Plug Power investment at December 31, 2000, is approximately $37
million.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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. 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 assume
that rates are set at

41



---



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. See the
following table of regulatory assets and liabilities, and Note 3 for further
details.

June 2000 Michigan restructuring legislation provided for securitization, a
mechanism for Detroit Edison to refinance specific assets and costs at lower
interest rates through the issuance of securitization bonds. The MPSC, in an
order issued on January 4, 2001, clarifying a November 2, 2000 order,
authorized Detroit Edison to securitize up to $1.774 billion of qualified
costs, including most of the regulatory assets currently recorded. The MPSC
denied Detroit Edisons request to include the residential rate reduction
commencing June 5, 2000, until the date of the order and proposed 2000 Electric
Choice implementation costs in the amount securitized. Detroit Edison will
continue to defer the 2000 and future Electric Choice implementation costs ($30
million in 2000 and an estimated $25 million in 2001) as regulatory assets,
whose recovery will be determined in annual true-ups of stranded cost
proceedings. The MPSC also clarified that recovery of incurred costs, equal to
the impact of the 5% residential rate reduction from the date of the November
order until the securitization bonds are issued (approximately $10 million in
2000 and approximately $15 million for the first quarter of 2001) will occur
before any rate reductions are provided to the commercial and industrial
customers and before the low income energy efficiency fund is initiated.
Securitization bonds are expected to be issued in the first quarter of 2001.

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

|            |                                              |  |            |       |      |  |   |       | 
|----------- | -------------------------------------------- |  | ---------- | ----- | ---- |  | - | ----- | 
|            |                                              |  | 2000       |       | 1999
|            |                                              |  |            |       |     
|            |                                              |  | (Millions)
|Assets     
|           
|           
|           
|           
|            | Unamortized nuclear costs                    |  | $          | 2,328 |      |  | $ | 2,570 | 
|           
|           
|           
|           
|            | Unamortized loss on reacquired debt          |  |            | 82    |      |  |   | 85    | 
|           
|           
|           
|           
|            | Recoverable income taxes                     |  |            | 194   |      |  |   | 201   | 
|           
|           
|           
|           
|            | Power supply cost recovery                   |  |            |      |      |  |   | 39    | 
|           
|           
|           
|           
|            | Electric Choice implementation costs         |  |            | 57    |      |  |   | 29    | 
|           
|           
|           
|           
|            | Other                                        |  |            | 25    |      |  |   | 11    | 
|            |                                              |  |            |       |      |  |   |      
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|            | Total Assets                                 |  | $          | 2,686 |      |  | $ | 2,935 | 
|            |                                              |  |            |       |      |  |   |      
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|Liabilities
|           
|           
|           
|           
|            | Unamortized deferred investment tax credits  |  | $          | 167   |      |  | $ | 177   | 
|           
|           
|           
|           
|            | Fermi 2 capacity factor performance standard |  |            |      |      |  |   | 63    | 
|           
|           
|           
|           
|            | Other                                        |  |            | 18    |      |  |   | 22    | 
|            |                                              |  |            |       |      |  |   |      
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|            | Total Liabilities                            |  | $          | 185   |      |  | $ | 262   | 
|            |                                              |  |            |       |      |  |   |      

42



---



Unamortized nuclear costs  See Note 3.

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. If related to the generation business,
the unamortized amounts will be securitized. 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
or other non-regulated operations of the Company.

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. On 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)

As a result of the June 2000 Michigan restructuring legislation, the MPSC
determined that adjusting rates for changes in fuel and purchased power
expenses, through continuance of the PSCR clause, would be inconsistent with
the legislation. See Note 3 for further discussion. Beginning in June 2000,
actual fuel and purchased power costs are recorded in the period incurred.

Electric Choice implementation costs

Costs incurred to implement the Electric Choice program, which will allow
customers to purchase electricity from a supplier other than Detroit Edison.

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

As a result of the June 2000 Michigan restructuring legislation and the
corresponding MPSC orders regarding the PSCR clause, the MPSC mechanism that
provided for the disallowance of net incremental replacement power cost when
Fermi 2 did not perform to certain operating criteria, is no longer in effect.

43



---



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:

|             |  |                                  |       |            |        |      |       |   |        |  
|------------ |  | -------------------------------- | ----- | ---------- | ------ | ---- | ----- | - | ------ | -
|             |  |                                  |       | 2000       |        | 1999
|             |  |                                  |       |            |        |     
|             |  |                                  |       | (Millions)
|Distribution
|            
|            
|            
|            
|             |  | Property                         |       | $          | 5,153  |      |       | $ | 4,856  |  
|            
|            
|            
|            
|             |  | Construction work in progress    |       |            | 1      |      |       |   | 1      |  
|            
|            
|            
|            
|             |  | Property under capital leases    |       |            | 9      |      |       |   | 4      |  
|            
|            
|            
|            
|             |  | Less accumulated depreciation    |       |            | (1,924 | )    |       |   | (1,767 | )
|             |  |                                  |       |            |        |      |       |  
|             |  |                                  | 3,239 |            |        |      | 3,094 |  
|             |  |                                  |       |            |        |      |       |  
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|Transmission
|            
|            
|            
|            
|             |  | Property                         |       |            | 772    |      |       |   | 742    |  
|            
|            
|            
|            
|             |  | Construction work in progress    |       |            |       |      |       |   |       |  
|            
|            
|            
|            
|             |  | Property under capital leases    |       |            |       |      |       |   |       |  
|            
|            
|            
|            
|             |  | Less accumulated depreciation    |       |            | (389   | )    |       |   | (413   | )
|             |  |                                  |       |            |        |      |       |  
|             |  |                                  | 383   |            |        |      | 329   |  
|             |  |                                  |       |            |        |      |       |  
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|Generation  
|            
|            
|            
|            
|             |  | Property                         |       |            | 5,506  |      |       |   | 5,606  |  
|            
|            
|            
|            
|             |  | Construction work in progress    |       |            | 1      |      |       |   | 3      |  
|            
|            
|            
|            
|             |  | Property under capital leases    |       |            | 211    |      |       |   | 217    |  
|            
|            
|            
|            
|             |  | Less accumulated depreciation    |       |            | (2,715 | )    |       |   | (2,747 | )
|             |  |                                  |       |            |        |      |       |  
|             |  |                                  | 3,003 |            |        |      | 3,079 |  
|             |  |                                  |       |            |        |      |       |  
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|            
|             |  | Nuclear fuel under capital lease |       |            | 705    |      |       |   | 663    |  
|            
|            
|            
|            
|             |  | Less accumulated amortization    |       |            | (631   | )    |       |   | (599   | )
|             |  |                                  |       |            |        |      |       |  
|             |  |                                  | 74    |            |        |      | 64    |  
|             |  |                                  |       |            |        |      |       |  

44



---



|            |                |                               |     |            |      |      |     |       |     |  
|----------- | -------------- | ----------------------------- | --- | ---------- | ---- | ---- | --- | ----- | --- | -
|            |                |                               |     | 2000       |      | 1999
|            |                |                               |     |            |      |     
|            |                |                               |     | (Millions)
|Non-utility
|           
|           
|           
|           
|            |                | Property                      |     |            | 748  |      |     |       | 551 |  
|           
|           
|           
|           
|            |                | Construction work in progress |     |            | 55   |      |     |       | 102 |  
|           
|           
|           
|           
|            |                | Property under capital leases |     |            | 1    |      |     |       | 1   |  
|           
|           
|           
|           
|            |                | Less accumulated depreciation |     |            | (116 | )    |     |       | (72 | )
|            |                |                               |     |            |      |      |     |      
|            |                |                               | 688 |            |      |      | 582 |      
|            |                |                               |     |            |      |      |     |      
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|           
|            | Total property |                               | $   | 7,387      |      |      |     | 7,148 |    
|            |                |                               |     |            |      |      |     |      

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, in current liabilities, 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 3.38%,
3.33% and 3.32% for 2000, 1999 and 1998, respectively.

Effective January 2001, the transmission assets of Detroit Edison were
transferred to International Transmission Company, a wholly owned subsidiary of
Detroit Edison. This transfer began the process of establishing the
transmission business as a fully independent company pursuant to FERC orders.

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 for impairment
based on market factors and operational considerations 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.

45



---



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. During the
restriction period, recipients of restricted stock grants have the right to be
paid an amount equal to the dividend equivalent of such shares as dividends are
paid. The Company recognizes these amounts as compensation expense.

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 the underlying
commodity are recorded gross in operating revenues and fuel and purchased power
expense.

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

Accounting for Derivative Instruments and Hedging Activities

The Company adopted SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities, as of January 1, 2001. See Note 11 for further
discussion.

Reclassifications

Certain prior year balances have been reclassified to conform to the 2000
presentation.

NOTE 2  MERGER AGREEMENT

In October 1999, the Company entered into a definitive merger agreement with
MCN. MCN, a Michigan corporation, is primarily involved in natural gas
production, gathering, processing, transmission, storage and distribution 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. The merger

46



---



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
proposed 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 proposed merger. Shareholders of the Company have
approved the issuance of the necessary shares of common stock to complete the
proposed merger and shareholders of MCN have approved the Agreement and Plan of
Merger.

The proposed merger is being reviewed by the Federal Trade Commission (FTC)
pursuant to the Hart-Scott-Rodino Act. The FTC staff has focused primarily on
possible competition between the Company and MCN for cogeneration load and
other gas/electric displacement technologies in the companies coincident
retail distribution areas. The Company and MCN are taking action to address
issues raised by the FTC staff, including an agreement for the proposed
transfer to a unit of Exelon Corp. (previously Unicom Corp.) of a property
interest allowing for the utilization of up to 20 billion cubic feet of natural
gas transportation capacity annually on the Michigan Consolidated Gas Company
system in the applicable distribution area. The MPSC approved the agreement in
February 2001. The agreement is subject to regulatory approvals and
consummation of the merger. The Company cannot predict the timing or outcome
of the regulatory review process and, therefore, a projected completion date
for the proposed merger cannot be predicted.

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, regulatory assets 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.

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
provided an opportunity for full recovery under 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.

On June 3, 2000, Michigan Governor John Engler signed Enrolled Senate Bill No.
937, Public Act 141 of 2000 (PA 141), which provides Detroit Edison with the
right to recover

47



---



stranded costs, codifies and establishes January 1, 2002, as
the date for full implementation of the MPSCs existing Electric Choice
program, and requires the MPSC to reduce electric residential rates by 5%.

On that same date, the Governor signed Enrolled Senate Bill No. 1253, Public
Act 142 of 2000 (PA 142). PA 142 provides for the recovery through
securitization of qualified costs, which consist of an electric utilitys
regulatory assets plus various costs associated with, or resulting from, the
establishment of a competitive electric market, and the issuance of
securitization bonds.

In an order issued on November 2, 2000, and clarified on January 4, 2001, the
MPSC approved the issuance of securitization bonds, which may not exceed 15
years in term, the proceeds of which will be used to recover up to $1.774
billion (compared to approximately $1.850 billion requested by Detroit Edison)
of qualified costs. The qualified costs approved by the MPSC include Fermi 2
costs, costs of certain other regulatory assets, Electric Choice implementation
costs, the initial and periodic costs of issuance associated with
securitization bonds, and the costs of retiring and refunding securities with
the proceeds of securitization. Detroit Edison will use the proceeds of
securitization bonds to retire debt and equity as required. The issuance of
securitization bonds will result in an overall revenue requirement reduction
for Detroit Edison.

Acting pursuant to PA 141, in an order issued June 5, 2000, the MPSC reduced
Detroit Edisons residential electric rates by 5%, or approximately $65 million
on an annual basis, and imposed a rate freeze for all classes of customers
through 2003.

The legislation also contains provisions preventing rate increases for
residential customers through 2005, for small business customers through 2004
and remaining business customers through 2003. Certain costs may be deferred
after 2003 and during the period that rate increases are impermissible. This
rate cap may be lifted when certain market test provisions are met, namely, an
electric utility has no more than 30% of generation capacity in its relevant
market, with allowance for capacity needed to meet a utilitys responsibility
to serve its customers. Statewide, multi-utility transmission system
improvements also are required. If these market conditions and transmission
improvements conditions are not met, the rate cap may continue until such
conditions are met or through 2013.

In addition, as a result of the legislation the Company must:



| |  | File an application by June 5, 2001, to unbundle its commercial and industrial rates.                                     
|- |  | --------------------------------------------------------------------------------------------------------------------------
| 
| |  | Join a FERC-approved Regional Transmission Organization (RTO) or divest its interest in transmission by December 15, 2001.
| 
| |  | Continue to provide service to customers who wish to take service from Detroit Edison.                                    
| 
| |  | Establish a worker transition program for workers that might be displaced.                                                

As a result of the legislation discussed above, in several orders issued on
June 19, 2000, the MPSC determined that adjusting rates for changes in fuel and
purchased

48



---



power expenses, through continuance of the PSCR clause, would be
inconsistent with the new statutes. Detroit Edison was not permitted to collect
the 1998 PSCR underrecovery of $8.6 million, plus accrued interest of $3.0
million. Detroit Edison reversed approximately $55 million of liabilities
associated with the PSCR clause as of
the effective date of the legislation. Parties have filed Claims of Appeal
regarding the PSCR issues with the Michigan Court of Appeals. The Company is
not able to determine the timing or outcome of these proceedings.

Detroit Edison is unable to predict the outcome of the matters discussed
herein. Resolution of these matters is dependent upon future MPSC orders which
may impact the financial position of Detroit Edison.

Accounting Implications

Due to 1997 and 1998 restructuring orders which provided sufficient details
regarding the transition to competition for its electric generation business,
at December 31, 1998, Detroit Edison performed an impairment test of its Fermi
2 nuclear generation plant and related regulatory assets. 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 provided for full
recovery of Fermi 2 through the regulated transmission and distribution
business, a regulatory asset was established which was planned to 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. The regulatory asset is included in the amounts
planned to be securitized as provided for in the 2000 Michigan restructuring
legislation and MPSC orders.

Other

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 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. In December 2000, the MPSC
issued an order reopening the case for hearing. Detroit Edison is unable to
determine the timing or the outcome of the remand.

49



---



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 megawatts (MW). This unit represents approximately 11% of total
operation and maintenance expenses and 10% of summer net rated capability of
Detroit Edison. The net book balance of the Fermi 2 plant was written off at
December 31, 1998, and an equivalent regulatory asset was established. See
Note 3.

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-fuel plant.

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. 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 $15 million per loss if any
one loss should exceed the accumulated funds available to NEIL.

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 (Act), 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, 2000, 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. The Act will expire on August 1, 2002. It is unknown
whether this statute will be renewed or modified.

50



---



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. 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
2000, 1999 and 1998, Detroit Edison collected $38 million, $38 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. A net
unrealized loss of $18 million and a net unrealized gain of $4 million in 2000
and 1999, respectively, were recorded as adjustments 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, 2000, Detroit Edison had a reserve of $351 million for the
future decommissioning of Fermi 2, $15 million for low-level radioactive waste
disposal costs, and $32 million for the 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
$912 million in 2000 dollars and $3.7 billion in 2025 dollars using a 6%
inflation rate. The cost of decommissioning Fermi 1 is approximately $30-35
million. During 2000, Detroit Edison decided to proceed with the
decommissioning of Fermi 1, with the goal of removing the radioactive material
and terminating the Fermi 1 license. The full project is expected to take
about five years.

Fermi 2 Phase-In Plan

Based on a MPSC-authorized phase-in plan, Detroit Edison recorded a receivable
totaling $507 million from 1988 through 1992. Beginning in 1993 and ending in
1998, these amounts were amortized to operating expense as they were included
in rates. Amortization of these amounts totaled $84 million in 1998.

Capacity Factor Performance Standard

At December 31, 1999, Detroit Edison had an accrual of $63 million for the
Fermi 2 capacity factor performance standard disallowances that were expected
to be imposed

51



---



by the MPSC. As a result of the June 2000 Michigan restructuring
legislation, this liability was reversed.

Nuclear Fuel Disposal Costs

In accordance with the Federal Nuclear Waste Policy Act of 1982, Detroit Edison
has a contract with the U.S. 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 2007, after
the expansion of such storage capacity in 2001.

NOTE 5  JOINTLY OWNED UTILITY PLANT

Detroit Edisons portion of jointly owned utility plant at December 31, 2000 is
as follows:



---

|                                    |  |             |           |                          |  |   |      |  
|----------------------------------- |  | ----------- | --------- | ------------------------ |  | - | ---- | -
|                                    |  | Belle River |           | Ludington Pumped Storage
|                                    |  |             |           |                         
|In-service date                     |  |             | 1984-1985 |                          |  |   | 1973 |  
|                                   
|                                   
|                                   
|                                   
|Ownership interest                  |  |             | *         |                          |  |   | 49   | %
|                                   
|                                   
|                                   
|                                   
|Investment (millions)               |  | $           | 1,030     |                          |  | $ | 192  |  
|                                   
|                                   
|                                   
|                                   
|Accumulated depreciation (millions) |  | $           | 436       |                          |  | $ | 96   |  



| | * |  | 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, 2000, 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.

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.

52



---



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:

|                                         |  |      |       |      |  |      |       |   |  |  |       |  
|---------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                                         |  | 2000 |       | 1999 |  | 1998
|                                         |  |      |       |      |  |     
|Statutory income tax rate                |  |      | 35.0  | %    |  |      | 35.0  | % |  |  | 35.0  | %
|                                        
|                                        
|                                        
|                                        
|Deferred Fermi 2 depreciation and return |  |      |      |      |  |      |      |   |  |  | 3.9   |  
|                                        
|                                        
|                                        
|                                        
|Investment tax credit                    |  |      | (2.2  | )    |  |      | (1.9  | ) |  |  | (2.5  | )
|                                        
|                                        
|                                        
|                                        
|Depreciation                             |  |      | 2.3   |      |  |      | 1.5   |   |  |  | 5.1   |  
|                                        
|                                        
|                                        
|                                        
|Removal costs                            |  |      | (5.0  | )    |  |      | (2.3  | ) |  |  | (1.9  | )
|                                        
|                                        
|                                        
|                                        
|Alternate fuels credit                   |  |      | (27.1 | )    |  |      | (21.3 | ) |  |  | (13.1 | )
|                                        
|                                        
|                                        
|                                        
|Other-net                                |  |      | (1.1  | )    |  |      | 0.1   |   |  |  | (1.0  | )
|                                         |  |      |       |      |  |      |       |   |  |  |       |  
|Effective income tax rate                |  |      | 1.9   | %    |  |      | 11.1  | % |  |  | 25.5  | %
|                                         |  |      |       |      |  |      |       |   |  |  |       |  

Components of income tax expense were as follows:

|                                              |  |      |      |      |  |            |     |   |  |   |     |  
|--------------------------------------------- |  | ---- | ---- | ---- |  | ---------- | --- | - |  | - | --- | -
|                                              |  | 2000 |      | 1999 |  | 1998      
|                                              |  |      |      |      |  |           
|                                              |  |      |      |      |  | (Millions)
|Current federal income tax expense            |  | $    | 138  |      |  | $          | 144 |   |  | $ | 143 |  
|                                             
|                                             
|                                             
|                                             
|Deferred federal income tax (benefit) expense |  |      | (118 | )    |  |            | (73 | ) |  |   | 26  |  
|                                             
|                                             
|                                             
|                                             
|Investment tax credit                         |  |      | (11  | )    |  |            | (11 | ) |  |   | (15 | )
|                                              |  |      |      |      |  |            |     |   |  |   |     |  
|Total                                         |  | $    | 9    |      |  |            | 60  |   |  | $ | 154 |  
|                                              |  |      |      |      |  |            |     |   |  |   |     |  

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 $130 million, $116 million and $79 million for 2000, 1999
and 1998, respectively.

53



---



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

|                                     |  |            |        |      |  |   |        |  
|------------------------------------ |  | ---------- | ------ | ---- |  | - | ------ | -
|                                     |  | 2000       |        | 1999
|                                     |  |            |        |     
|                                     |  | (Millions)
|Property                             |  | $          | (1,212 | )    |  | $ | (1,209 | )
|                                    
|                                    
|                                    
|                                    
|Unamortized nuclear costs            |  |            | (822   | )    |  |   | (899   | )
|                                    
|                                    
|                                    
|                                    
|Property taxes                       |  |            | (68    | )    |  |   | (66    | )
|                                    
|                                    
|                                    
|                                    
|Investment tax credit                |  |            | 90     |      |  |   | 96     |  
|                                    
|                                    
|                                    
|                                    
|Reacquired debt losses               |  |            | (29    | )    |  |   | (30    | )
|                                    
|                                    
|                                    
|                                    
|Contributions in aid of construction |  |            | 90     |      |  |   | 73     |  
|                                    
|                                    
|                                    
|                                    
|Other                                |  |            | 88     |      |  |   | 51     |  
|                                     |  |            |        |      |  |   |        |  
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                     |  | $          | (1,863 | )    |  | $ | (1,984 | )
|                                     |  |            |        |      |  |   |        |  
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|Deferred income tax liabilities      |  | $          | (2,414 | )    |  | $ | (2,463 | )
|                                    
|                                    
|                                    
|                                    
|Deferred income tax assets           |  |            | 551    |      |  |   | 479    |  
|                                     |  |            |        |      |  |   |        |  
|                                     |  | $          | (1,863 | )    |  | $ | (1,984 | )
|                                     |  |            |        |      |  |   |        |  

Included in deferred income tax assets is an alternative minimum tax credit
carry-forward of $125 million for 2000 and $50 million for 1999.

The federal income tax returns of the Company are settled through 1992. The
Company believes that adequate provisions for federal income taxes have been
made through December 31, 2000.

NOTE 7  SHAREHOLDERS EQUITY

At December 31, 2000, the Company had 5 million shares of Cumulative Preferred
Stock, without par value, authorized with no shares issued. At December 31,
2000, 1.5 million shares of preferred stock are reserved for issuance in
accordance with the
Shareholders Rights Agreement.

At December 31, 2000, 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.

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

54



---



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 that would permit the Rights to be exercised. The Company
may amend the 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.

During the year ended December 31, 2000, the Company repurchased approximately
2.3 million shares at an aggregate cost of approximately $70 million, under a
program that began in February 2000.

55



---



NOTE 8  LONG-TERM DEBT

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



---

|                                |                           |                                   |                             |       |                          |       |   |            |     |       |  |  |     | 
|------------------------------- | ------------------------- | --------------------------------- | --------------------------- | ----- | ------------------------ | ----- | - | ---------- | --- | ----- |  |  | --- | 
|                                |                           |                                   |                             |       |                          |       |   | 2000       |     | 1999 
|                                |                           |                                   |                             |       |                          |       |   |            |     |      
|                                |                           |                                   |                             |       |                          |       |   | (Millions)
|Mortgage Bonds                 
|                               
|                               
|                               
|                               
|                                |                           | 6.6% to 8.4% due 2001 to 2023     |                             |       | $                        | 1,564 |   |            | $   | 1,539 | 
|                               
|                               
|                               
|                               
|Remarketed Notes               
|                               
|                               
|                               
|                               
|                                |                           | 6.0% to 7.4% 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 |      
|                               
|                               
|                               
|                               
|                                |                           |                                   |                             |       | 6.6% due 2004 to 2024(b) |       |   |            | 125 |       |  |  | 176 | 
|                               
|                               
|                               
|                               
|                                |                           |                                   | Loan Agreements             |      
|                               
|                               
|                               
|                               
|                                |                           |                                   |                             |       | 6.1% due 2008 to 2030(b) |       |   |            | 882 |       |  |  | 831 | 
|                               
|                               
|                               
|                               
|                                | Unsecured                
|                               
|                               
|                               
|                               
|                                |                           |                                   | Installment Sales Contracts |      
|                               
|                               
|                               
|                               
|                                |                           |                                   |                             |       | 6.4% due 2004            |       |   |            | 24  |       |  |  | 24  | 
|                               
|                               
|                               
|                               
|                                |                           |                                   | Loan Agreements             |      
|                               
|                               
|                               
|                               
|                                |                           |                                   |                             |       | 3.9% due 2024 to 2030(a) |       |   |            | 113 |       |  |  | 113 | 
|                               
|                               
|                               
|                               
|QUIDS                          
|                               
|                               
|                               
|                               
|                                |                           | 7.4% to 7.6% due 2026 to 2028     |                             |       |                          | 385   |   |            |     | 385   | 
|                               
|                               
|                               
|                               
|Non-Recourse Debt              
|                               
|                               
|                               
|                               
|                                |                           | 7.8% due 2001 to 2009 (b)         |                             |       |                          | 247   |   |            |     | 330   | 
|                               
|                               
|                               
|                               
|Less amount due within one year |                           |                                   |                             | (233) |                          |       |   | (270       | )  
|                                |                           |                                   |                             |       |                          |       |   |            |     |       |  |  |     | 
|Total Long-Term Debt            |                           |                                   | $                           | 3,917 |                          |       | $ | 3,938      |    
|                                |                           |                                   |                             |       |                          |       |   |            |     |       |  |  |     | 



|(a) |  | Variable rate at December 31, 2000.                 
|--- |  | ----------------------------------------------------
|   
|   
|   
|   
|(b) |  | Weighted average interest rate at December 31, 2000.



---

In the years 2001  2005, the Companys long-term debt maturities are $233
million, $275 million, $238 million, $64 million and $254 million,
respectively.

Detroit Edisons 1924 Mortgage and Deed of Trust (Mortgage), the lien of which
covers a substantial portion of Detroit Edisons properties, provides for the
issuance of additional General and Refunding Mortgage Bonds (Mortgage Bonds).
At December 31, 2000, approximately $4.2 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 7% on any such
additional Mortgage Bonds. An additional $2.1 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,

56



---



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, 2000, $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.

At December 31, 2000, the Company had letters of credit from a bank that
allowed the Company to use approximately $45 million of cash previously
classified as restricted on the Companys balance sheet. There were no
amounts drawn on these letters of credit at December 31, 2000.

NOTE 9  SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS

At December 31, 2000, Detroit Edison had total short-term credit arrangements
of approximately $517 million, under which $245 million was outstanding. At
December 31, 1999, $162 million was outstanding. The weighted average interest
rates for short-term borrowings at December 31, 2000 and 1999 were 6.6% and
6.9%, respectively.

Detroit Edisons short-term credit arrangements included 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
$45 million and $162 million of commercial paper outstanding at December 31,
2000 and 1999, respectively.

Detroit Edisons short-term credit arrangements also included 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, 2000 and 1999, with a weighted average interest rate of 6.76% and
5.42%, respectively.

Detroit Edison has 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

57



---



December 31, 2000, approximately $316 million was available to Detroit Edison
under such Loan Agreement.

At December 31, 2000 and 1999, DTE Capital Corporation (DTE Capital), a wholly
owned subsidiary of the Company, had $258 million and $25 million of commercial
paper outstanding with a weighted average interest rate of 7.69% and 6.80%,
respectively. A $400 million short-term credit arrangement, backed by a
Support Agreement from the Company, provided credit support for this commercial
paper.

During the first quarter of 2000, plans were announced to terminate DTE
Capitals operations. Subsequently, the Company assumed all of DTE Capitals
outstanding guarantees. The Company is authorized to issue up to $550 million
of guarantees. At December 31, 2000, the Company had assumed and/or issued
guarantees of various consolidated affiliate obligations of approximately $238
million.

NOTE 10  LEASES

Future minimum lease payments under capital leases, consisting of nuclear fuel
($85 million computed on a projected units of production basis), lake vessels
($13 million), locomotives and coal cars ($142 million), office space ($9
million), and computers, vehicles and other equipment ($1 million) at December
31, 2000 are as follows:



---

(Millions)

|     |  |      |    |      |  |      |    |      |  |       |    |          |  |       |    |  |  |           |    |  |  |   |     |   |  |   |     | 
|---- |  | ---- | -- | ---- |  | ---- | -- | ---- |  | ----- | -- | -------- |  | ----- | -- |  |  | --------- | -- |  |  | - | --- | - |  | - | --- | 
|     |  |      |    |      |  |      |    |      |  |       |    |          |  |       |    |  |  | Remaining
|2001 |  | 2002 |    | 2003 |  | 2004 |    | 2005 |  | Years |    | Interest |  | Total
|     |  |      |    |      |  |      |    |      |  |       |    |          |  |      
|$54  |  | $    | 45 |      |  | $    | 30 |      |  | $     | 21 |          |  | $     | 14 |  |  | $         | 86 |  |  | $ | (64 | ) |  | $ | 186 | 
|     |  |      |    |      |  |      |    |      |  |       |    |          |  |       |    |  |  |           |    |  |  |   |     |   |  |   |     | 



---

Future minimum lease payments for operating leases are as follows:



---

(Millions)

|     |  |      |    |      |  |      |   |      |  |       |   |       |  |   |   |  |  |           |    |  |  |   |    | 
|---- |  | ---- | -- | ---- |  | ---- | - | ---- |  | ----- | - | ----- |  | - | - |  |  | --------- | -- |  |  | - | -- | 
|     |  |      |    |      |  |      |   |      |  |       |   |       |  |   |   |  |  | Remaining
|2001 |  | 2002 |    | 2003 |  | 2004 |   | 2005 |  | Years |   | Total
|     |  |      |    |      |  |      |   |      |  |       |   |      
|$10  |  | $    | 10 |      |  | $    | 9 |      |  | $     | 9 |       |  | $ | 9 |  |  | $         | 45 |  |  | $ | 92 | 
|     |  |      |    |      |  |      |   |      |  |       |   |       |  |   |   |  |  |           |    |  |  |   |    | 



---

Rental expenses for both capital and operating leases were $116 million
(including $38 million for nuclear fuel), $107 million (including $52 million
for nuclear fuel) and $96 million (including $49 million for nuclear fuel) for
2000, 1999 and 1998, 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.

58



---



NOTE 11  FINANCIAL AND OTHER DERIVATIVE 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.

Notional Amounts and Terms

The notional amounts and terms of DTE ETs outstanding energy trading financial
instruments at December 31, 2000 were:

|                        |  |                   |       |             |  |                |       |  |  |  |   | 
|----------------------- |  | ----------------- | ----- | ----------- |  | -------------- | ----- |  |  |  | - | 
|                        |  | Fixed Price       |       | Fixed Price |  | Maximum       
|                        |  | Payor             |       | Receiver    |  | Terms in Years
|                        |  |                   |       |             |  |               
|                        |  | (Thousand of MWh) |       |             |  |                |      
|Electricity Commodities |  |                   | 1,116 |             |  |                | 1,933 |  |  |  | 1 | 
|                        |  |                   |       |             |  |                |       |  |  |  |   | 

At December 31, 2000, DTE ET also had sales and purchase commitments for
physical delivery of electricity associated with contracts based on fixed
prices totaling 810,578 net MWh purchased with terms extending up to 2 years.

Notional amounts reflect the volume of transactions, but do not necessarily
represent the amounts exchanged by the parties to the energy commodity
derivative instruments. Accordingly, notional amounts do not accurately
measure DTE ETs exposure to market or credit risks. The maximum terms in
years detailed above are not indicative of likely future cash flows as these
positions may be offset in the markets at any time in response to DTE ETs risk
management needs.

Fair Values

The average fair values of DTE ETs derivative financial assets and liabilities
during 2000 were $109.4 million and $95.1 million, respectively, and during
1999 $28.7 million and $24.3 million, respectively. At December 31, 2000 and
1999, the fair values of the derivative financial assets and liabilities were
$288.9 million and $279.9 million and, $66.6 million and $49.6 million,
respectively. Net unrealized gains were $9.0 million and $17.0 million at
December 31, 2000 and 1999, respectively.

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

59



---



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

The Company has entered into a series of forward-starting interest rate swaps
and Treasury locks in order to limit its sensitivity to interest rate
fluctuations associated with its anticipated issuance of long-term debt to be
used to finance the proposed merger with MCN. The Company has designated these
instruments as hedges. The Company expects to issue this debt subsequent to
the proposed merger. The forward-starting swaps, which include notional
amounts of $250 million and $450 million in five- and 10-year maturities,
respectively, have a weighted average interest rate of 7.55% and 7.61%,
respectively. The Treasury locks, which include notional amounts of $50 million
and $150 million in 10- and 30-year maturities, respectively, have a weighted
average interest rate of 6.01% and 6.26%, respectively. At December 31, 2000,
the fair value of these derivative financial instruments indicated an
unrealized loss of approximately $84 million. The unrealized loss is not
reflected in the financial statements at December 31, 2000, but would be
recognized as a deferred item upon issuance of the anticipated long-term debt.
The deferred item would be amortized through interest expense over the life of
the associated long-term debt as a yield adjustment.

PCI Enterprises Company (PCI), a wholly owned 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 a
portion of its variable rate non-recourse debt. The initial notional amount
was $30 million. The notional amount outstanding at December 31, 2000 and
1999, was $22 million and $24 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 2000 and 1999, the average rate

60



---



received was 6.48% and 5.28%, respectively. The net of interest received and
interest paid on the swap is accrued as a component of interest expense in the
current period.

New Accounting Pronouncement

In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No.
133. SFAS No. 133, as amended, requires every derivative instrument to be
recorded on the balance sheet as an asset or a liability measured at its fair
value, and that changes in the derivatives fair value be recognized currently
in earnings unless specific hedge accounting criteria are met.

SFAS No. 133 requires that as of the date of initial adoption, the difference
between the fair market value of derivative instruments recorded on the balance
sheet and the previous carrying amount of those derivatives be reported in net
income or other comprehensive income, as appropriate, as the cumulative effect
of a change in accounting principle in accordance with Accounting Principles
Board Opinion 20, Accounting Changes.

As of January 1, 2001, the Company adopted SFAS No. 133, as required. The
cumulative effect of the adoption of SFAS No. 133 is expected to be an
after-tax increase in net income of approximately $3.6 million, and an
after-tax decrease in other comprehensive income of approximately $41.5
million. The adoption will also impact assets and liabilities recorded on the
balance sheet. At January 1, 2001, the Company had the following types of
derivative instruments: forward-starting swaps, Treasury locks, wholesale power
contracts and an interest rate swap.

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 and other instruments
disclosed herein, approximates fair value. The estimated fair value of total
long-term debt at December 31, 2000 and 1999 was $4.2 billion and $4 billion,
respectively, compared to the carrying amount of $4.1 billion and $4.2 billion,
respectively.

NOTE 12  COMMITMENTS AND CONTINGENCIES

Commitments

Detroit Edison has outstanding purchase commitments of approximately $1,048
million at December 31, 2000, 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 $1,005 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 per

61



---



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 is recording 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 approximately $35 million, $35 million and $31 million for
2000, 1999 and 1998, respectively. Annual steam purchase commitments are
approximately $38 million, $39 million, $40 million, $42 million and $43
million for 2001, 2002, 2003, 2004 and 2005, 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 offsets a concurrent agreement to lease
approximately one-third of Detroit Edisons Ludington 917 MW capacity to
FirstEnergy for the same time period. The net economic effect of the Ludington
lease and the Ontario Hydro purchase is an estimated reduction in expense of
$74 million over the term of the agreement.

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. Detroit Edison has spent approximately $50
million and estimates that it will incur approximately $410 million of future
capital expenditures over the next three years to comply. In March 2000, the
U.S. Court of Appeals, D.C. Circuit ruled in favor of the EPAs SIP call
regulations. The new air quality standards have been upheld in legal
challenges in the U.S. Court of Appeals, but the U.S. Supreme Court has agreed
to hear the appeal. Until the legal issues are resolved, it is impossible to
predict the full impact of the new air quality standards. Under the June 2000
Michigan restructuring legislation, beginning January 1, 2004, annual return of
and on this capital expenditure, in excess of current depreciation levels,
would be deferred, in ratemaking, until after the expiration of the rate cap
period, presently expected to end December 31, 2005.

Contingencies

The Company is involved in various legal proceedings, including environmental
matters, of a nature considered normal to its business. The Company believes
that such litigation and the matters discussed above will not have a material
effect on its financial position and results of operations.

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

62



---






NOTE 13  EMPLOYEE BENEFITS

Retirement Plan

Detroit Edison has a trusteed and non-contributory defined benefit retirement
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.

Net pension cost included the following components:

|                                                                              |  |      |      |      |  |            |      |   |  |   |      |  
|----------------------------------------------------------------------------- |  | ---- | ---- | ---- |  | ---------- | ---- | - |  | - | ---- | -
|                                                                              |  | 2000 |      | 1999 |  | 1998      
|                                                                              |  |      |      |      |  |           
|                                                                              |  |      |      |      |  | (Millions)
|Service cost  benefits earned during period                                  |  | $    | 35   |      |  | $          | 35   |   |  | $ | 31   |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Interest cost on projected benefit obligation                                 |  |      | 107  |      |  |            | 92   |   |  |   | 88   |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Expected return on Plan assets                                                |  |      | (139 | )    |  |            | (124 | ) |  |   | (118 | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Amortization of unrecognized prior service cost                               |  |      | 10   |      |  |            | 5    |   |  |   | 5    |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Amortization of unrecognized net asset resulting
from initial     application |  |      | (4   | )    |  |            | (4   | ) |  |   | (4   | )
|                                                                              |  |      |      |      |  |            |      |   |  |   |      |  
|Net pension cost                                                              |  | $    | 9    |      |  | $          | 4    |   |  | $ | 2    |  
|                                                                              |  |      |      |      |  |            |      |   |  |   |      |  

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

|                                                                                        |                                               |   |            |     |      |   |       |     |  
|--------------------------------------------------------------------------------------- | --------------------------------------------- | - | ---------- | --- | ---- | - | ----- | --- | -
|                                                                                        |                                               |   | 2000       |     | 1999
|                                                                                        |                                               |   |            |     |     
|                                                                                        |                                               |   | (Millions)
|Projected benefit obligation at beginning of year                                       |                                               | $ | 1,457      |     |      | $ | 1,400 |    
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                        | Service cost  benefits earned during period  |   |            | 35  |      |   |       | 35  |  
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                        | Interest cost on projected benefit obligation |   |            | 107 |      |   |       | 92  |  
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                        | Net loss (gain)                               |   |            | 21  |      |   |       | (49 | )
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                        | Benefits paid to participants                 |   |            | (82 | )    |   |       | (77 | )
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                        | Plan amendments                               |   |            | 2   |      |   |       | 56  |  
|                                                                                        |                                               |   |            |     |      |   |       |    
|Projected benefit obligation at year-end                                                |                                               |   | 1,540      |     |      |   | 1,457 |    
|                                                                                        |                                               |   |            |     |      |   |       |    
|Fair value of Plan assets (primarily equity and
debt securities) at beginning   of year |                                               |   | 1,585      |     |      |   | 1,416 |    
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                        | Actual return on Plan assets                  |   |            | (87 | )    |   |       | 246 |  
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                        | Benefits paid to participants                 |   |            | (82 | )    |   |       | (77 | )
|                                                                                        |                                               |   |            |     |      |   |       |    
|Fair value of Plan assets at year-end                                                   |                                               |   | 1,416      |     |      |   | 1,585 |    
|                                                                                        |                                               |   |            |     |      |   |       |    

63



---



|                                                                  |  |   |            |   |      |   |      |   | 
|----------------------------------------------------------------- |  | - | ---------- | - | ---- | - | ---- | - | 
|                                                                  |  |   | 2000       |   | 1999
|                                                                  |  |   |            |   |     
|                                                                  |  |   | (Millions)
|Plan assets (less than) in excess of projected
benefit obligation |  |   | (124       | ) |      |   | 128  |  
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Unrecognized net asset resulting from initial application         |  |   | (7         | ) |      |   | (11  | )
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Unrecognized net loss (gain)                                      |  |   | 112        |   |      |   | (136 | )
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Unrecognized prior service cost                                   |  |   | 85         |   |      |   | 94   |  
|                                                                  |  |   |            |   |      |   |      |  
|Asset recorded in the Consolidated Balance Sheet                  |  | $ | 66         |   |      | $ | 75   |  
|                                                                  |  |   |            |   |      |   |      |  

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

|                                                 |  |      |     |      |  |  |     |  
|------------------------------------------------ |  | ---- | --- | ---- |  |  | --- | -
|                                                 |  | 2000 |     | 1999
|                                                 |  |      |     |     
|Discount rate                                    |  |      | 7.5 | %    |  |  | 7.5 | %
|                                                
|                                                
|                                                
|                                                
|Annual increase in future compensation levels    |  |      | 4.0 |      |  |  | 4.0 |  
|                                                
|                                                
|                                                
|                                                
|Expected long-term rate of return on Plan assets |  |      | 9.5 |      |  |  | 9.5 |  

The unrecognized net asset at the 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.

There are several additional 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
$22 million, $21 million and $21 million for 2000, 1999 and 1998,
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.

64



---



Net other postretirement benefits cost included the following components:

|                                                   |  |      |     |      |  |            |     |   |  |   |     |  
|-------------------------------------------------- |  | ---- | --- | ---- |  | ---------- | --- | - |  | - | --- | -
|                                                   |  | 2000 |     | 1999 |  | 1998      
|                                                   |  |      |     |      |  |           
|                                                   |  |      |     |      |  | (Millions)
|Service cost  benefits earned during period       |  | $    | 22  |      |  | $          | 23  |   |  | $ | 19  |  
|                                                  
|                                                  
|                                                  
|                                                  
|Interest cost on accumulated
benefit obligation    |  |      | 48  |      |  |            | 41  |   |  |   | 38  |  
|                                                  
|                                                  
|                                                  
|                                                  
|Expected return on assets                          |  |      | (46 | )    |  |            | (39 | ) |  |   | (30 | )
|                                                  
|                                                  
|                                                  
|                                                  
|Amortization of unrecognized transition obligation |  |      | 20  |      |  |            | 21  |   |  |   | 21  |  
|                                                   |  |      |     |      |  |            |     |   |  |   |     |  
|Net other postretirement benefits cost             |  | $    | 44  |      |  | $          | 46  |   |  | $ | 48  |  
|                                                   |  |      |     |      |  |            |     |   |  |   |     |  

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

|                                                        |                                                                                    |                                                 |      |            |     |      |      |     |     |  
|------------------------------------------------------- | ---------------------------------------------------------------------------------- | ----------------------------------------------- | ---- | ---------- | --- | ---- | ---- | --- | --- | -
|                                                        |                                                                                    |                                                 |      | 2000       |     | 1999
|                                                        |                                                                                    |                                                 |      |            |     |     
|                                                        |                                                                                    |                                                 |      | (Millions)
|                                                        | Postretirement benefit obligation at beginning of year                             |                                                 | $    | 607        |     |      | $    | 625 |    
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                                                                                    | Service cost  benefits earned during period    |      |            | 22  |      |      |     | 23  |  
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                                                                                    | Interest cost on accumulated benefit obligation |      |            | 48  |      |      |     | 43  |  
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                                                                                    | Benefit payments                                |      |            | (31 | )    |      |     | (29 | )
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                                                                                    | Net loss (gain)                                 |      |            | 105 |      |      |     | (55 | )
|                                                        |                                                                                    |                                                 |      |            |     |      |      |    
|                                                        | Postretirement benefit obligation at year-end                                      |                                                 |      | 751        |     |      |      | 607 |    
|                                                        |                                                                                    |                                                 |      |            |     |      |      |    
|                                                        | Fair value of assets (primarily equity and debt
securities) at beginning   of year |                                                 |      | 501        |     |      |      | 422 |    
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                                                                                    | Detroit Edison contributions                    |      |            | 23  |      |      |     | 26  |  
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                                                                                    | Benefit payments                                |      |            | (9  | )    |      |     | (8  | )
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                                                                                    | Actual return on assets                         |      |            | 2   |      |      |     | 61  |  
|                                                        |                                                                                    |                                                 |      |            |     |      |      |    
|                                                        | Fair value of assets at year-end                                                   |                                                 |      | 517        |     |      |      | 501 |    
|                                                        |                                                                                    |                                                 |      |            |     |      |      |    
|Postretirement benefit obligation in (excess) of assets |                                                                                    |                                                 | (234 | )          |     |      | (106 | )  
|                                                       
|                                                       
|                                                       
|                                                       
|Unrecognized transition obligation                      |                                                                                    |                                                 | 246  |            |     |      | 267  |    
|                                                       
|                                                       
|                                                       
|                                                       
|Unrecognized net loss (gain)                            |                                                                                    |                                                 | 44   |            |     |      | (105 | )  
|                                                        |                                                                                    |                                                 |      |            |     |      |      |    
|                                                        | Asset recorded in the Consolidated
Balance Sheet                                   |                                                 | $    | 56         |     |      | $    | 56  |    
|                                                        |                                                                                    |                                                 |      |            |     |      |      |    

65



---



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

|                                              |  |      |     |      |  |  |     |  
|--------------------------------------------- |  | ---- | --- | ---- |  |  | --- | -
|                                              |  | 2000 |     | 1999
|                                              |  |      |     |     
|Discount rate                                 |  |      | 7.5 | %    |  |  | 7.5 | %
|                                             
|                                             
|                                             
|                                             
|Annual increase in future compensation levels |  |      | 4.0 |      |  |  | 4.0 |  
|                                             
|                                             
|                                             
|                                             
|Expected long-term rate of return on assets   |  |      | 9.0 |      |  |  | 9.0 |  

Benefit costs were calculated assuming health care cost trend rates beginning
at 9.2% for 2001 and decreasing to 5% in 2008 and thereafter for persons under
age 65 and decreasing from 9.8% to 5% for persons age 65 and over. A
one-percentage-point increase in health care cost trend rates would have
increased the aggregate of the service cost and interest cost components of
benefit costs by $12.6 million and would have increased the accumulated benefit
obligation by $96.4 million at December 31, 2000. A one-percentage-point
decrease in the health care cost trend rates would have decreased the aggregate
of the service cost and interest cost components of benefit costs by $10.1
million and would have decreased the accumulated benefit obligation by $78.9
million at December 31, 2000.

66



---



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, 2000, no stock appreciation
rights 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:

|                                                     |  |      |        |      |  |      |        |  |  |   |        | 
|---------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|                                                     |  | 2000 |        | 1999 |  | 1998
|                                                     |  |      |        |      |  |     
|Restricted common shares awarded                     |  |      | 29,565 |      |  |      | 99,500 |  |  |   | 74,000 | 
|                                                    
|                                                    
|                                                    
|                                                    
|Weighted average market price of shares awarded      |  | $    | 32.00  |      |  | $    | 40.99  |  |  | $ | 38.77  | 
|                                                    
|                                                    
|                                                    
|                                                    
|Compensation cost charged against
income (thousands) |  | $    | 1,130  |      |  | $    | 945    |  |  | $ | 976    | 

67



---



Effective February 22, 2000, under the LTIP, the Companys Special Committee on
Compensation (the Committee) granted performance share awards. The
performance share award includes a target award established by the Committee
that when paid, can equal a multiple from zero to two times the recipients
target award, based on the Companys performance as compared against the goals
established by the Committee on February 22, 2000, for the four fiscal year
cycle that began on January 1, 2000. The four performance goals established by
the Committee with respect to this grant are based on: 1) the Companys
four-year total shareholder return compared to the Dow Jones Electric Utility
Industry Group; 2) the Companys four-year earnings per share growth; 3) the
Companys four-year employee satisfaction goal; and 4) the Companys four-year
Institute of Nuclear Power Operations goal. During the applicable restriction
period, the recipient of a performance share award has no rights as a
shareholder until and to the extent that the performance share award is earned
and common stock is actually distributed to the recipient. However, recipients
will be paid an amount equal to the dividend equivalent on such shares as
dividends are paid. Performance share awards are nontransferable and are
subject to risk of forfeiture. As of December 31, 2000, there were 125,750
performance share awards outstanding.

Stock options were also issued under the LTIP. Usually options are exercisable
at a rate of 25% per year during the four years following the date of grant.
However in 2000, more than 97% of the 2,018,400 options granted vest 50%, 20%,
20% and 10% over a four-year period. 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:

|                                                                                                        |           |  |            |           |                |  |          |       | 
|------------------------------------------------------------------------------------------------------- | --------- |  | ---------- | --------- | -------------- |  | -------- | ----- | 
|                                                                                                        |           |  |            |           |                |  | Weighted
|                                                                                                        |           |  | Number     |           | Average       
|                                                                                                        |           |  | of Options |           | Exercise Price
|                                                                                                        |           |  |            |           |               
|Outstanding at January 1, 1998                                                                          |           |  | 310,500    |           |                |  | 28.50    |      
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | 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)                                                  |           |  | 999,075    |           |                |  | 37.03    |      
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Granted   |  |            | 2,018,400 |                |  |          | 32.10 | 
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Exercised |  |            | (10,750   | )              |  |          | 28.50 | 
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                       
|                                                                                                        | Canceled  |  |            | (29,500   | )              |  |          | 41.14 | 
|                                                                                                        |           |  |            |          
|Outstanding at December 31, 2000 (442,431 exercisable
at a   weighted average exercise price of $34.72) |           |  | 2,977,225  |           |                |  | 33.68    |      
|                                                                                                        |           |  |            |          

68



---



The range of exercise prices for options outstanding at December 31, 2000, 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   |  |                   | 2,260,475 |                |  | $                | 31.65 |           |  |                  | 8.8 years | 
|                 
|                 
|                 
|                 
|$38.04 - $43.85   |  |                   | 716,750   |                |  | $                | 40.11 |           |  |                  | 7.9 years | 
|                  |  |                   |           |               
|                  |  |                   | 2,977,225 |                |  | $                | 33.68 |           |  |                  | 8.6 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 it 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:

|                        |  |      |           |      |  |      |           |   |  |   |           |  
|----------------------- |  | ---- | --------- | ---- |  | ---- | --------- | - |  | - | --------- | -
|                        |  | 2000 |           | 1999 |  | 1998
|                        |  |      |           |      |  |     
|Risk-free interest rate |  |      | 6.57      | %    |  |      | 5.64      | % |  |   | 5.84      | %
|                       
|                       
|                       
|                       
|Dividend yield          |  |      | 6.48      | %    |  |      | 4.95      | % |  |   | 5.39      | %
|                       
|                       
|                       
|                       
|Expected volatility     |  |      | 18.51     | %    |  |      | 17.28     | % |  |   | 17.48     | %
|                       
|                       
|                       
|                       
|Expected life           |  |      | 10  years |      |  |      | 10  years |   |  |   | 10  years |  
|                       
|                       
|                       
|                       
|Fair value per option   |  | $    | 5.19      |      |  | $    | 7.18      |   |  | $ | 6.43      |  

The pro forma effect of these options would be to reduce pretax income by
$2,725,000, $1,289,000, and $695,000 for the years ended December 31, 2000,
1999 and 1998, respectively, and to reduce earnings per share by $0.02 and
$0.01 for the years ended December 31, 2000 and 1999, respectively. There was
no pro forma effect on earnings per share for the year ended December 31, 1998.

NOTE 15  SEGMENT AND RELATED INFORMATION

The Companys reportable business segments are its 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, its energy trading company, and energy services
business, which develops and manages energy-related projects and services
primarily concentrated in the steel industry. All Other includes businesses
involved in new energy technologies. Inter-segment revenues are not material.
Income taxes are allocated based on inter-company tax sharing agreements, which
generally allocate the tax benefit of alternate fuels tax credits and
accelerated depreciation to the respective subsidiary, without regard to the
subsidiarys own net

69



---



income or whether such tax benefits are realized by the
Company. Financial data for business segments are as follows:



---

|                              |  |          |            |         |  |          |     |       |  |              |      |              |  |   |     |   |  |                 |     |   |  |   |        | 
|----------------------------- |  | -------- | ---------- | ------- |  | -------- | --- | ----- |  | ------------ | ---- | ------------ |  | - | --- | - |  | --------------- | --- | - |  | - | ------ | 
|                              |  |          |            |         |  |          |     |       |  |              |      |              |  |   |     |   |  | Reconciliations
|                              |  | Electric |            | Energy  |  | Energy   |     | All   |  | and         
|                              |  | Utility  |            | Trading |  | Services |     | Other |  | Eliminations |      | Consolidated
|                              |  |          |            |         |  |          |     |       |  |              |      |             
|2000                          |  |          | (Millions)
|                             
|                             
|                             
|                             
|Operating
revenues            |  | $        | 4,129      |         |  | $        | 985 |       |  | $            | 472  |              |  | $ | 92  |   |  | $               | (81 | ) |  | $ | 5,597  | 
|                             
|                             
|                             
|                             
|Depreciation and
amortization |  |          | 719        |         |  |          |    |       |  |              | 34   |              |  |   | 5   |   |  |                 |    |   |  |   | 758    | 
|                             
|                             
|                             
|                             
|Interest expense              |  |          | 277        |         |  |          |    |       |  |              | 30   |              |  |   | 4   |   |  |                 | 25  |   |  |   | 336    | 
|                             
|                             
|                             
|                             
|Income tax
expense (benefit)  |  |          | 172        |         |  |          | 5   |       |  |              | (141 | )            |  |   | (18 | ) |  |                 | (9  | ) |  |   | 9      | 
|                             
|                             
|                             
|                             
|Net income (loss)             |  |          | 411        |         |  |          | 10  |       |  |              | 109  |              |  |   | (35 | ) |  |                 | (27 | ) |  |   | 468    | 
|                             
|                             
|                             
|                             
|Total assets                  |  |          | 10,986     |         |  |          | 468 |       |  |              | 942  |              |  |   | 268 |   |  |                 | (2  | ) |  |   | 12,662 | 
|                             
|                             
|                             
|                             
|Capital
expenditures          |  |          | 587        |         |  |          |    |       |  |              | 100  |              |  |   | 62  |   |  |                 |    |   |  |   | 749    | 
|                              |  |          |            |         |  |          |     |       |  |              |      |              |  |   |     |   |  |                 |     |   |  |   |        | 
|                             
|1999                          |  |          | (Millions)
|                             
|                             
|                             
|                             
|Operating
revenues            |  | $        | 4,047      |         |  | $        | 251 |       |  | $            | 418  |              |  | $ | 39  |   |  | $               | (27 | ) |  | $ | 4,728  | 
|                             
|                             
|                             
|                             
|Depreciation and
amortization |  |          | 703        |         |  |          |    |       |  |              | 31   |              |  |   | 1   |   |  |                 |    |   |  |   | 735    | 
|                             
|                             
|                             
|                             
|Interest expense              |  |          | 284        |         |  |          |    |       |  |              | 38   |              |  |   | 1   |   |  |                 | 17  |   |  |   | 340    | 
|                             
|                             
|                             
|                             
|Income tax
expense (benefit)  |  |          | 211        |         |  |          | 5   |       |  |              | (132 | )            |  |   | (12 | ) |  |                 | (12 | ) |  |   | 60     | 
|                             
|                             
|                             
|                             
|Net income (loss)             |  |          | 434        |         |  |          | 8   |       |  |              | 84   |              |  |   | (23 | ) |  |                 | (20 | ) |  |   | 483    | 
|                             
|                             
|                             
|                             
|Total assets                  |  |          | 11,051     |         |  |          | 109 |       |  |              | 945  |              |  |   | 175 |   |  |                 | 36  |   |  |   | 12,316 | 
|                             
|                             
|                             
|                             
|Capital
expenditures          |  |          | 638        |         |  |          |    |       |  |              | 95   |              |  |   | 35  |   |  |                 |    |   |  |   | 768    | 
|                              |  |          |            |         |  |          |     |       |  |              |      |              |  |   |     |   |  |                 |     |   |  |   |        | 
|                             
|1998                          |  |          | (Millions)
|                             
|                             
|                             
|                             
|Operating
revenues            |  | $        | 3,902      |         |  | $        | 42  |       |  | $            | 271  |              |  | $ | 12  |   |  | $               | (6  | ) |  | $ | 4,221  | 
|                             
|                             
|                             
|                             
|Depreciation and
amortization |  |          | 643        |         |  |          |    |       |  |              | 18   |              |  |   |    |   |  |                 |    |   |  |   | 661    | 
|                             
|                             
|                             
|                             
|Interest expense              |  |          | 277        |         |  |          |    |       |  |              | 33   |              |  |   |    |   |  |                 | 9   |   |  |   | 319    | 
|                             
|                             
|                             
|                             
|Income tax
expense (benefit)  |  |          | 260        |         |  |          | (4  | )     |  |              | (92  | )            |  |   | (5  | ) |  |                 | (5  | ) |  |   | 154    | 
|                             
|                             
|                             
|                             
|Net income (loss)             |  |          | 412        |         |  |          | (7  | )     |  |              | 55   |              |  |   | (6  | ) |  |                 | (11 | ) |  |   | 443    | 
|                             
|                             
|                             
|                             
|Total assets                  |  |          | 10,987     |         |  |          | 31  |       |  |              | 864  |              |  |   | 75  |   |  |                 | 131 |   |  |   | 12,088 | 
|                             
|                             
|                             
|                             
|Capital
expenditures          |  |          | 548        |         |  |          |    |       |  |              | 433  |              |  |   | 16  |   |  |                 |    |   |  |   | 997    | 
|                              |  |          |            |         |  |          |     |       |  |              |      |              |  |   |     |   |  |                 |     |   |  |   |        | 



---

70



---



NOTE 16  SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

|                          |  |                                      |       |         |  |         |       |         |  |   |       |  |  |   |       | 
|------------------------- |  | ------------------------------------ | ----- | ------- |  | ------- | ----- | ------- |  | - | ----- |  |  | - | ----- | 
|                          |  | 2000 Quarter Ended                  
|                          |  |                                     
|                          |  | Mar. 31                              |       | Jun. 30 |  | Sep. 30 |       | Dec. 31
|                          |  |                                      |       |         |  |         |       |        
|                          |  | (Millions, except per share amounts)
|Operating Revenues        |  | $                                    | 1,182 |         |  | $       | 1,428 |         |  | $ | 1,547 |  |  | $ | 1,440 | 
|                         
|                         
|                         
|                         
|Operating Income          |  |                                      | 215   |         |  |         | 203   |         |  |   | 172   |  |  |   | 240   | 
|                         
|                         
|                         
|                         
|Net Income                |  |                                      | 117   |         |  |         | 108   |         |  |   | 104   |  |  |   | 139   | 
|                         
|                         
|                         
|                         
|Earnings Per Common Share |  |                                      | 0.81  |         |  |         | 0.76  |         |  |   | 0.73  |  |  |   | 0.97  | 

|                          |  |                                      |       |         |  |         |       |         |  |   |       |  |  |   |       | 
|------------------------- |  | ------------------------------------ | ----- | ------- |  | ------- | ----- | ------- |  | - | ----- |  |  | - | ----- | 
|                          |  | 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  | 

NOTE 17  SUBSEQUENT EVENTS (UNAUDITED)

As discussed in Note 2, in October 1999, the Company entered into
a definitive merger agreement with MCN. On February 28, 2001, the
Company and MCN announced a revised merger agreement that provides
that the Company will acquire all outstanding shares of MCN for
$24.00 per share in cash or 0.715 shares of Company common stock for
each share of MCN common stock. As provided for in the original
agreement, certain allocation and proration procedures will be used
to ensure 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 proposed
merger. The value of the revised transaction is approximately $4.27
billion, including the assumption of approximately $2 billion of
MCNs debt.

The revised agreement extends the expiration date of the agreement
from April 15, 2001 to December 31, 2001 to allow sufficient time to
obtain the necessary approvals as well as MCN shareholder approval of
the revised agreement. The boards of directors of DTE and MCN have
approved the revised merger agreement. DTE and MCN now estimate that
all required approvals can be obtained and the merger can be
completed within four to five months.

71



---



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

None.

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 2001 Annual Meeting of Common Shareholders to be held April 25, 2001,
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.

72



---



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. |  |        | 51 |                  |  | Chairman of the Board, Chief Executive Officer,      |  | 8-1-98  
|                      
|                      
|                      
|                      
|                       |  |        |    |                  |  | President, Chief Operating Officer                  
|                      
|                      
|                      
|                      
|Larry G. Garberding    |  |        | 62 |                  |  | Executive Vice President and Chief Financial Officer |  | 8-1-90  
|                      
|                      
|                      
|                      
|Gerard M. Anderson     |  |        | 42 |                  |  | President and Chief Operating Officer  DTE Energy   |  | 8-1-98  
|                      
|                      
|                      
|                      
|                       |  |        |    |                  |  | Resources                                           
|                      
|                      
|                      
|                      
|Robert J. Buckler      |  |        | 51 |                  |  | President and Chief Operating Officer  DTE Energy   |  | 8-1-98  
|                      
|                      
|                      
|                      
|                       |  |        |    |                  |  | Distribution                                        
|                      
|                      
|                      
|                      
|Daniel G. Brudzynski   |  |        | 40 |                  |  | Controller                                           |  | 4-28-99 
|                      
|                      
|                      
|                      
|Michael E. Champley    |  |        | 52 |                  |  | Senior Vice President                                |  | 4-1-97  
|                      
|                      
|                      
|                      
|Douglas R. Gipson      |  |        | 53 |                  |  | Executive Vice President and Chief Nuclear Officer   |  | 5-18-00 
|                      
|                      
|                      
|                      
|S. Martin Taylor       |  |        | 60 |                  |  | Senior Vice President                                |  | 4-28-99 
|                      
|                      
|                      
|                      
|Susan M. Beale         |  |        | 52 |                  |  | Vice President and Corporate Secretary               |  | 3-27-95 
|                      
|                      
|                      
|                      
|Ron A. May             |  |        | 49 |                  |  | Vice President                                       |  | 8-1-98  
|                      
|                      
|                      
|                      
|David E. Meador        |  |        | 43 |                  |  | Senior Vice President and Treasurer                  |  | 5-15-00 
|                      
|                      
|                      
|                      
|Sandra J. Miller       |  |        | 57 |                  |  | Vice President                                       |  | 3-30-98 
|                      
|                      
|                      
|                      
|Michael C. Porter      |  |        | 47 |                  |  | Vice President                                       |  | 9-15-97 
|                      
|                      
|                      
|                      
|William R. Roller      |  |        | 55 |                  |  | Vice President                                       |  | 4-28-97 



|(a) |  | As of December 31, 2000
|--- |  | -----------------------



---

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.

73



---



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 February 2000, Ricci, et al v. Detroit Edison was filed in the U.S. Federal
District Court for the Eastern District of Michigan. The complaint alleges
that Detroit Edison employees formerly employed by contractors of Detroit
Edison should be treated as if they are entitled to various retirement benefits
under ERISA and other benefits that have been available to Detroit Edison
employees. The complaint also seeks class action certification. Detroit
Edison believes this matter is without merit.

In September 2000, an order was entered in Coch, et al v. Detroit Edison
(Circuit Court for Wayne County, Michigan), a lawsuit involving
employment-related claims of discrimination, denying plaintiffs motion for
class certification. An appeal of this motion has been filed.

In February 2001, plaintiffs in Lotharp, et alv. Detroit Edison (Circuit
Court for Wayne County, Michigan), an action claiming race/ethnic and gender-based
discrimination in Detroit Edisons employment testing programs, withdrew
their lawsuit.

Edison Development Corporation, a Company subsidiary, is an investor in Plug
Power, a developer of fuel cell technology. DCT, Inc. v. Detroit Edison, et al
(Circuit Court for Wayne County, Michigan) is a pending lawsuit claiming
breach of a nondisclosure agreement and a letter of intent as well as
misappropriation of trade secrets in connection with the evaluation and
eventual investment by Plug Power in fuel cell technology. Plug Power and
Edison Development are co-defendants. Discovery is underway. Detroit Edison
believes all claims are without merit and is vigorously defending the action.

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

Not applicable.

74



---



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.

Item 6  Selected Financial Data.



---

|                                      |                |                                                       |       |                        |       |      |       |        |       |      |       |            |       |   |       |        |       |   |       |        |       | 
|------------------------------------- | -------------- | ----------------------------------------------------- | ----- | ---------------------- | ----- | ---- | ----- | ------ | ----- | ---- | ----- | ---------- | ----- | - | ----- | ------ | ----- | - | ----- | ------ | ----- | 
|                                      |                |                                                       |       | Year Ended December 31
|                                      |                |                                                       |       |                       
|                                      |                |                                                       |       | 2000                   |       | 1999 |       | 1998   |       | 1997 |       | 1996      
|                                      |                |                                                       |       |                        |       |      |       |        |       |      |       |           
|                                      |                |                                                       |       |                        |       |      |       |        |       |      |       | (Millions)
|Operating Revenues                    |                | $                                                     | 4,129 |                        |       | $    | 4,047 |        |       | $    | 3,902 |            |       | $ | 3,657 |        |       | $ | 3,642 |       
|                                     
|                                     
|                                     
|                                     
|Net Income                            |                | $                                                     | 411   |                        |       | $    | 434   |        |       | $    | 418   |            |       | $ | 417   |        |       | $ | 328   |       
|                                     
|                                     
|                                     
|                                     
|Net Income Available
for Common Stock |                | $                                                     | 411   |                        |       | $    | 434   |        |       | $    | 412   |            |       | $ | 405   |        |       | $ | 312   |       
|                                     
|                                     
|                                     
|                                     
|At year end:                         
|                                     
|                                     
|                                     
|                                     
|                                      | Total Assets   |                                                       | $     | 10,986                 |       |      | $     | 11,051 |       |      | $     | 10,987     |       |   | $     | 10,745 |       |   | $     | 10,874 |      
|                                     
|                                     
|                                     
|                                     
|                                      | Long-Term Debt
|                                     
|                                     
|                                     
|                                     
|                                      |                | Obligations (including capital
leases) and Redeemable
|                                     
|                                     
|                                     
|                                     
|                                      |                | Preferred and Preference
Stock Outstanding            |       | $                      | 3,445 |      |       | $      | 3,398 |      |       | $          | 3,588 |   |       | $      | 3,812 |   |       | $      | 4,000 | 



---

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 28 through 71 (except for Notes 6, 8, 11 and 16 below).

75



---



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:

|                                         |  |      |      |      |  |      |      |   |  |  |      |  
|---------------------------------------- |  | ---- | ---- | ---- |  | ---- | ---- | - |  |  | ---- | -
|                                         |  | 2000 |      | 1999 |  | 1998
|                                         |  |      |      |      |  |     
|Statutory income tax rate                |  |      | 35.0 | %    |  |      | 35.0 | % |  |  | 35.0 | %
|                                        
|                                        
|                                        
|                                        
|Deferred Fermi 2 depreciation and return |  |      |     |      |  |      |     |   |  |  | 3.5  |  
|                                        
|                                        
|                                        
|                                        
|Investment tax credit                    |  |      | (1.8 | )    |  |      | (1.6 | ) |  |  | (2.1 | )
|                                        
|                                        
|                                        
|                                        
|Depreciation                             |  |      | 1.9  |      |  |      | 1.2  |   |  |  | 4.5  |  
|                                        
|                                        
|                                        
|                                        
|Removal costs                            |  |      | (4.1 | )    |  |      | (1.9 | ) |  |  | (1.7 | )
|                                        
|                                        
|                                        
|                                        
|Other-net                                |  |      | (1.5 | )    |  |      |     |   |  |  | (0.9 | )
|                                         |  |      |      |      |  |      |      |   |  |  |      |  
|Effective income tax rate                |  |      | 29.5 | %    |  |      | 32.7 | % |  |  | 38.3 | %
|                                         |  |      |      |      |  |      |      |   |  |  |      |  

Components of income tax expense are as follows:

|                                   |       |   |      |     |      |   |            |     |  |   |     |     | 
|---------------------------------- | ----- | - | ---- | --- | ---- | - | ---------- | --- |  | - | --- | --- | 
|                                   |       |   | 2000 |     | 1999 |   | 1998      
|                                   |       |   |      |     |      |   |           
|                                   |       |   |      |     |      |   | (Millions)
|Current federal tax expense        |       | $ | 245  |     |      | $ | 282        |     |  | $ | 280 |    
|                                  
|                                  
|                                  
|                                  
|Deferred federal tax benefit  net |       |   | (62  | )   |      |   | (60        | )   |  |   | (5  | )  
|                                  
|                                  
|                                  
|                                  
|Investment tax credits             |       |   | (11  | )   |      |   | (11        | )   |  |   | (15 | )  
|                                   |       |   |      |     |      |   |            |     |  |   |     |    
|                                   | Total |   | $    | 172 |      |   | $          | 211 |  |   | $   | 260 | 
|                                   |       |   |      |     |      |   |            |     |  |   |     |    

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

|                                     |  |            |        |      |  |   |        |  
|------------------------------------ |  | ---------- | ------ | ---- |  | - | ------ | -
|                                     |  | 2000       |        | 1999
|                                     |  |            |        |     
|                                     |  | (Millions)
|Property                             |  | $          | (1,199 | )    |  | $ | (1,197 | )
|                                    
|                                    
|                                    
|                                    
|Unamortized nuclear costs            |  |            | (822   | )    |  |   | (899   | )
|                                    
|                                    
|                                    
|                                    
|Property taxes                       |  |            | (68    | )    |  |   | (66    | )
|                                    
|                                    
|                                    
|                                    
|Investment tax credit                |  |            | 90     |      |  |   | 96     |  
|                                    
|                                    
|                                    
|                                    
|Reacquired debt losses               |  |            | (29    | )    |  |   | (30    | )
|                                    
|                                    
|                                    
|                                    
|Contributions in aid of construction |  |            | 90     |      |  |   | 73     |  
|                                    
|                                    
|                                    
|                                    
|Other                                |  |            | 67     |      |  |   | 83     |  
|                                     |  |            |        |      |  |   |        |  
|                                     |  | $          | (1,871 | )    |  | $ | (1,940 | )
|                                     |  |            |        |      |  |   |        |  
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|Deferred income tax liabilities      |  | $          | (2,293 | )    |  | $ | (2,372 | )
|                                    
|                                    
|                                    
|                                    
|Deferred income tax assets           |  |            | 422    |      |  |   | 432    |  
|                                     |  |            |        |      |  |   |        |  
|                                     |  | $          | (1,871 | )    |  | $ | (1,940 | )
|                                     |  |            |        |      |  |   |        |  

76



---



NOTE 8  LONG-TERM DEBT

Long-term debt outstanding at December 31 was:



---

|                                |                                   |                                   |                           |      |       |  |     |            |       |      |     |  |  | 
|------------------------------- | --------------------------------- | --------------------------------- | ------------------------- | ---- | ----- |  | --- | ---------- | ----- | ---- | --- |  |  | 
|                                |                                   |                                   |                           |      |       |  |     | 2000       |       | 1999
|                                |                                   |                                   |                           |      |       |  |     |            |       |     
|                                |                                   |                                   |                           |      |       |  |     | (Millions)
|Mortgage Bonds                 
|                               
|                               
|                               
|                               
|                                | 6.6% to 8.4% due 2001 to 2023     |                                   |                           | $    | 1,564 |  |     | $          | 1,539 |     
|                               
|                               
|                               
|                               
|Remarketed Notes               
|                               
|                               
|                               
|                               
|                                | 6.0% to 7.4% due 2028 to 2034 (a) |                                   |                           |      | 410   |  |     |            | 410   |     
|                               
|                               
|                               
|                               
|Tax Exempt Revenue Bonds       
|                               
|                               
|                               
|                               
|                                | Secured by Mortgage Bonds        
|                               
|                               
|                               
|                               
|                                |                                   | Installment
      Sales Contracts |                          
|                               
|                               
|                               
|                               
|                                |                                   |                                   | 6.6% due 2004 to 2024 (b) |      |       |  | 125 |            |       |      | 176 | 
|                               
|                               
|                               
|                               
|                                |                                   | Loan
      Agreements             |                          
|                               
|                               
|                               
|                               
|                                |                                   |                                   | 6.1% due 2008 to 2030 (b) |      |       |  | 882 |            |       |      | 831 | 
|                               
|                               
|                               
|                               
|                                | Unsecured                        
|                               
|                               
|                               
|                               
|                                |                                   | Installment
      Sales Contracts |                          
|                               
|                               
|                               
|                               
|                                |                                   |                                   | 6.4% due 2004             |      |       |  | 24  |            |       |      | 24  | 
|                               
|                               
|                               
|                               
|                                |                                   | Loan
      Agreements             |                          
|                               
|                               
|                               
|                               
|                                |                                   |                                   | 3.9% 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 |                                   |                                   |                           | (159 | )     |  |     | (194       | )    
|                                |                                   |                                   |                           |      |       |  |     |            |       |      |     |  |  | 
|                                | Total Long-Term Debt              |                                   |                           | $    | 3,344 |  |     | $          | 3,284 |     
|                                |                                   |                                   |                           |      |       |  |     |            |       |      |     |  |  | 



|(a) |  | Variable rate at December 31, 2000.                 
|--- |  | ----------------------------------------------------
|   
|   
|   
|   
|(b) |  | Weighted average interest rate at December 31, 2000.



---

In the years 2001  2005, Detroit Edisons long-term debt maturities are $159,
$198, $199, $49 and $239 million, respectively.

Detroit Edisons 1924 Mortgage and Deed of Trust (Mortgage), the lien of which
covers a substantial portion of Detroit Edisons properties, provides for the
issuance of additional General and Refunding Mortgage Bonds (Mortgage Bonds).
At December 31, 2000, approximately $4.2 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 7% on any such
additional Mortgage Bonds. An additional $2.1 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.

77



---



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, 2000, $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
bonds subject to a failed remarketing.

NOTE 11  FINANCIAL AND OTHER DERIVATIVE INSTRUMENTS

As of January 1, 2001, Detroit Edison adopted SFAS No. 133, as required. The
cumulative effect of the adoption of SFAS No. 133 is expected to be an
after-tax decrease in net income of approximately $2.6 million and an after-tax increase in other comprehensive income of
approximately $13.5 million, respectively. The adoption will
also impact assets and liabilities recorded on the balance sheet. At January
1, 2001, Detroit Edisons derivative instruments included wholesale power
contracts.

NOTE 16  SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

|                   |  |                    |     |         |  |            |       |         |  |   |       |  |  |   |       | 
|------------------ |  | ------------------ | --- | ------- |  | ---------- | ----- | ------- |  | - | ----- |  |  | - | ----- | 
|                   |  | 2000 Quarter Ended
|                   |  |                   
|                   |  | Mar. 31            |     | June 30 |  | Sept. 30   |       | Dec. 31
|                   |  |                    |     |         |  |            |       |        
|                   |  |                    |     |         |  | (Millions)
|Operating Revenues |  | $                  | 949 |         |  | $          | 1,071 |         |  | $ | 1,109 |  |  | $ | 1,000 | 
|                  
|                  
|                  
|                  
|Operating Income   |  |                    | 223 |         |  |            | 214   |         |  |   | 167   |  |  |   | 269   | 
|                  
|                  
|                  
|                  
|Net Income         |  |                    | 97  |         |  |            | 91    |         |  |   | 76    |  |  |   | 147   | 

|                   |  |                    |     |         |  |            |       |         |  |   |       |  |  |   |     | 
|------------------ |  | ------------------ | --- | ------- |  | ---------- | ----- | ------- |  | - | ----- |  |  | - | --- | 
|                   |  | 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  | 

78



---



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

None.

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.

79



---



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 28.                                                            
|
|
|
|
| | (2) |  | Financial statement schedules. See Item 8 -
Financial Statements and Supplementary Data on page 28.                                                                
|
|
|
|
| | (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 
|       
|        | 2-2   |  | Agreement and Plan of Merger, among DTE Energy Company, MCN Energy
Group Inc. and DTE Enterprises, Inc., dated as of October 4, 1999, as
amended as of November 12, 1999, as further amended as of February
28, 2001.
|       
|       
|       
|       
|        | 4-211 |  | Supplemental Indenture, dated as of December
1, 1989, creating the Series KKP No. 11 and BP General and
Refunding Mortgage Bonds                                                                                     
|       
|       
|       
|       
|        | 4-212 |  | Supplemental Indenture, dated as of February 15, 1990
creating the 1990 Series A, B, C, D, E, and F General and
Refunding Mortgage Bonds.                                                                            
|       
|       
|       
|       
|        | 4-213 |  | Supplemental Indenture, dated as of November 30, 1992,
creating the 1992 Series E General and Refunding Mortgage
Bonds.                                                                                              
|       
|       
|       
|       
|        | 4-214 |  | Supplemental Indenture, dated as of April 1, 1993, creating
the 1993 Series FP and IP General and Refunding Mortgage
Bonds.                                                                                          
|       
|       
|       
|       
|        | 4-215 |  | Supplemental Indenture, dated as of April 26,
1993, creating the 1993 Series G General and Refunding
Mortgage bonds and Amendment of Article II, Section 5.                                                          
|       
|       
|       
|       
|        | 4-216 |  | Supplemental Indenture, dated as of June 30,
1993, creating the Series AP General and Refunding Mortgage
Bonds.                                                                                                      

80



---



|       |  |                                                                                                                                                                                                                                                
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      
|      
|      
|      
|4-217  |  | Supplemental Indenture, dated as of September
15, 1993, creating the 1993 Series K General and Refunding
Mortgage Bonds.                                                                                                                       
|      
|      
|      
|      
|4-218  |  | Supplemental Indenture, dated as of June 15,
1994, creating the 1994 Series BP General and Refunding
Mortgage Bonds.                                                                                                                           
|      
|      
|      
|      
|4-219  |  | Supplemental Indenture, dated as of August 15,
1994, creating the 1994 Series C General and Refunding
Mortgage Bonds.                                                                                                                          
|      
|      
|      
|      
|4-220  |  | Supplemental Indenture, dated as of December 1,
1994, creating the Series KKP No. 15 and DP General and
Refunding Mortgage Bonds.                                                                                                              
|      
|      
|      
|      
|4-221  |  | Supplemental Indenture, dated as of August 1,
1995, creating the 1995 Series A and DP General and Refunding
Mortgage Bonds.                                                                                                                    
|      
|      
|      
|      
|10-40* |  | Form of Indemnification Agreement between Detroit Edison
and its officers.                                                                                                                                                                     
|      
|      
|      
|      
|11-21  |  | DTE Energy Company Basic and Diluted Earnings
Per Share
of Common Stock.                                                                                                                                                                       
|      
|      
|      
|      
|12-28  |  | DTE Energy Company Computation of Ratio of
Earnings to
Fixed Charges.                                                                                                                                                                          
|      
|      
|      
|      
|12-29  |  | The Detroit Edison Company Computation of Ratio
of Earnings to Fixed Charges.                                                                                                                                                                  
|      
|      
|      
|      
|21-5   |  | Subsidiaries of the Company and Detroit Edison.                                                                                                                                                                                                
|      
|      
|      
|      
|23-14  |  | Consent of Deloitte & Touche LLP.                                                                                                                                                                                                              
|      
|      
|      
|      
|99-38  |  | Fourth Amended and Restated Credit Agreement, Dated as of
January 16, 2001 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 and as Co-Agents.

81



---



|      |  |                                                                                    
|----- |  | -----------------------------------------------------------------------------------
|     
|     
|     
|     
|99-39 |  | Order, dated January 4, 2001, of the Michigan
Public Service Commission in U-12478.

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

|     |  |   |  |                                                                                                                                                                                                                                                                                                                                   
|---- |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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.
Exhibit 2-1 10 Form 10-K for year ended December 21, 2000.                                                                                                      
|    
|    
|    
|    
|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 First Chicago
Trust Company of New York 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:

82



---



|                  |  |                                                                
|----------------- |  | ---------------------------------------------------------------
|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                      
|                 
|                 
|                 
|                 
|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    
|                 
|                 
|                 
|                 
|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    
|                 
|                 
|                 
|                 
|May 31, 1993      |  | Exhibit 4-148 to Registration No. 33-
64296                    
|                 
|                 
|                 
|                 
|March 1, 1994     |  | Exhibit 4-163 to Registration No. 33-
53207                    
|                 
|                 
|                 
|                 
|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

83



---



|                |  |                                                                     
|--------------- |  | --------------------------------------------------------------------
|               
|               
|               
|               
|August 15, 1999 |  | Exhibit 4-205 to Form 10-Q for
quarter ended September 30, 1999     
|               
|               
|               
|               
|January 1, 2000 |  | Exhibit 4-205 to Form 10-K for year
ended December 31, 2000.        
|               
|               
|               
|               
|April 15, 2000  |  | Exhibit 4-206 to Form 10-Q for the
quarter ended March 31, 2000.    
|               
|               
|               
|               
|August 1, 2000  |  | Exhibit 4-210 to Form 10-Q for the
quarter ended September 30, 2000.

|     |  |   |  |                                                                                                                                                                                                                                                                                
|---- |  | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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) |  | - |  | First Amendment, dated as of July 17, 2000, to the
First Supplemental Indenture, dated as of June 30, 1993, to the
Collateral Trust Indenture (Notes), dated as of June 30, 1993.
(Exhibit 4-209 to Form 10-Q for the quarter ended September 30,
2000.)                       
|    
|    
|    
|    
|4(e) |  | - |  | Third Supplemental Note Indenture, dated as of
August 15, 1994 (Exhibit 4-169 to Form 10-Q for quarter ended
September 30, 1994).                                                                                                                                              
|    
|    
|    
|    
|4(f) |  | - |  | 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(g) |  | - |  | 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(h) |  | - |  | 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(i) |  | - |  | Eighth Supplemental Indenture, dated as of April
15, 2000, appointing Bank One Trust Company of New York as
Trustee under the Detroit Edison Trust Indenture (Notes), dated
as of June 30, 1993 (Exhibit 4-207 to Form 10-Q for quarter
ended March 31, 2000.                  

84



---



|       |  |   |  |                                                                                                                                                                                                                                                                                     
|------ |  | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      
|      
|      
|      
|4(j)   |  | - |  | $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(k)   |  | - |  | $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(l)   |  | - |  | $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(m)   |  | - |  | $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(n)   |  | - |  | $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(o)   |  | - |  | $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(p)   |  | - |  | 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(q)   |  | - |  | 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(r)   |  | - |  | 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 its officers
(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).                                                                                                                 

85



---



|       |  |   |  |                                                                                                                                                                                             
|------ |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      
|      
|      
|      
|*10(d) |  | - |  | 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(e) |  | - |  | 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(f) |  | - |  | 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(g) |  | - |  | Amended and Restated Detroit Edison Savings Reparation Plan
(February 23, 1998). Exhibit 10-19* for quarter ended March 31,
1998.)                                                          
|      
|      
|      
|      
|*10(h) |  | - |  | Certain arrangements pertaining to the employment of Larry
G. Garberding (Exhibit 10-23* to Form 10-Q for quarter ended
March 31, 1998).                                                    
|      
|      
|      
|      
|*10(i) |  | - |  | Form of Indemnification Agreement, between Detroit Edison
and employee directors (Exhibit 10-24* to Form 10-Q for quarter
ended March 3, 1998).                                             
|      
|      
|      
|      
|*10(j) |  | - |  | Form of Indemnification Agreement between Detroit Edison and
its directors (Exhibit 10-25* to Form 10-Q for quarter ended
March 31, 1998).                                                  
|      
|      
|      
|      
|*10(k) |  | - |  | Long-Term Incentive Plan as amended through February 22,
2000 (Exhibit 10-26 to Form 10-Q for quarter ended
March 31, 2000).                                                                
|      
|      
|      
|      
|10(l)  |  | - |  | 2000 Long-Term Incentive Plan Measures (Exhibit
10-137* to Form 10-Q for the quarter ended March 31, 2000.)                                                                                 
|      
|      
|      
|      
|*10(m) |  | - |  | 2000 Executive Incentive Plan Measures (Exhibit 10-35* to
Form 10-Q for quarter ended March 31, 2000.)                                                                                      
|      
|      
|      
|      
|*10(n) |  | - |  | 1999 Shareholder Value Improvement Plans-A Measures
(Exhibit 10-32* to Form 10-Q for quarter ended March 31,
1999.)                                                                         
|      
|      
|      
|      
|*10(o) |  | - |  | 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(p) |  | - |  | The Detroit Edison Company Key Employee Deferred Compensation
Plan (October 1997). (Exhibit 10-12* to Form 10-K for year ended
December 31, 1997.)                                          

86



---



|        |  |   |  |                                                                                                                                                                                                 
|------- |  | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|       
|       
|       
|*10(q)  |  | - |  | Amended and Restated Executive Incentive Plan. (Exhibit
10-35* to Form 10-Q for the quarter ended March 31, 2000.)                                                                              
|       
|       
|       
|       
|*10(r)  |  | - |  | Detroit Edison Company Shareholder Value Improvement Plan
(October 1997). (Exhibit 10-15* to Form 10-K for year ended
December 31, 1997.)                                                       
|       
|       
|       
|       
|*10(s)  |  | - |  | 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(t)  |  | - |  | Certain arrangements pertaining to the employment of David E.
Meador (Exhibit 10-5 to Form 10-K for year ended December 31,
1997.)                                                              
|       
|       
|       
|       
|*10(u)  |  | - |  | 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(v)  |  | - |  | 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(w)  |  | - |  | 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(x)  |  | - |  | 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(y)  |  | - |  | 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(z)  |  | - |  | 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.)       
|       
|       
|       
|       
|*10(aa) |  |   |  | Certain arrangement pertaining to the employment of Theodore
J. Vogel (Exhibit 10-38 to Form 10-Q for the quarter
ended March 31, 2000.)                                                        
|       
|       
|       
|       
|*10(bb) |  |   |  | Certain arrangement pertaining to the employment of Eric H.
Peterson (Exhibit 10-39 to Form 10-Q for the quarter ended
September 30, 2000.                                                      
|       
|       
|       
|       
|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).                           

87



---



|      |  |   |  |                                                                                                                                                                                                                                                                                                                            
|----- |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|     
|     
|     
|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.)    

88



---



|      |  |   |  |                                                                                                                                                                                                                                                                                                                                                
|----- |  | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|     
|     
|     
|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) |  | - |  | Eighth Amendment, dated as of August 24, 2000, to the
$200,000,000 364-Day 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 99-36 to Form 10-Q for the quarter ended September 30,
2000.)                    
|     
|     
|     
|     
|99(n) |  | - |  | $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(o) |  | - |  | 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(p) |  | - |  | 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(q) |  | - |  | 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(r) |  | - |  | 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(s) |  | - |  | 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.)                                                  

89



---



|       |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                       
|------ |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      
|      
|      
|      
|99(t)  |  | - |  | 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(u)  |  | - |  | 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(v)  |  | - |  | 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(w)  |  | - |  | 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 Bank One Capital Markets, Inc., as Remarketing Agents.
(Exhibit 99-29 to Form 10-Q for quarter ended September 30,
1999.)                   
|      
|      
|      
|      
|99(x)  |  |   |  | Amendment, dated October 24, 2000, to the Standby
Note Purchase Credit Facility, dated as of October 26, 1999,
among Detroit Edison, the banks party thereto, and Barclays
Bank PLC, as Administrative Agent. (Exhibit 24-208 to Form 10-Q
for the quarter ended September 30, 2000.)                                                                                                
|      
|      
|      
|      
|99(y)  |  | - |  | 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(z)  |  | - |  | 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(aa) |  | - |  | First Amendment, effective as of February 1, 1995, to Master
Trust (Exhibit 4-10 to Registration No. 333-00023).                                                                                                                                                                                                                                                                      
|      
|      
|      
|      
|99(bb) |  | - |  | Second Amendment, effective as of February 1, 1995 to Master
Trust (Exhibit 4-11 to Registration No. 333-00023).                                                                                                                                                                                                                                                                      
|      
|      
|      
|      
|99(cc) |  | - |  | Third Amendment, effective January 1, 1996, to Master Trust
(Exhibit 4-12 to Registration No. 333-00023).                                                                                                                                                                                                                                                                             

90



---



|       |  |   |  |                                                                                                                                                                                                   
|------ |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      
|      
|      
|      
|99(dd) |  | - |  | 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(ee) |  | - |  | 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(ff) |  | - |  | 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(gg) |  | - |  | 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(hh) |  | - |  | 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(ii) |  | - |  | 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(jj) |  | - |  | 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(kk) |  | - |  | 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(ll) |  | - |  | 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).           
|      
|      
|      
|      
|99(mm) |  | - |  | Order, dated November 2, 2000, of the Michigan Public Service
Commission in U-12478.)                                                                                                             

|    |                                   
|--- | ----------------------------------
|(b) | DTE and Detroit Edison have filed:

| |      |  |                                                                                                                                                                                   
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)  |  | Report on Form 8-K, dated November 7, 2000, discussing the
Michigan Public Service Commissions November 2, 2000 Securitization
Order;                                            
|
|
|
|
| | (ii) |  | Report on Form 8-K, dated November 22, 2000, discussing
Detroit Edisons Petition for Rehearing with respect to the November
2, 2000 Michigan Public Service Commission Order; and

91



---



| |       |  |                                                                                                                                                                  
| | ----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|
|
|
|
| | (iii) |  | Report on Form 8-K, dated December 7, 2000, reporting that
Detroit Edison had transferred its transmission assets to a
wholly owned subsidiary of Detroit Edison.

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

92



---



|                                 |                                                                                       |           |  |              |        |            |  |             |        |        |  |         |       |        |  |   |         |      |  |   |        | 
|-------------------------------- | ------------------------------------------------------------------------------------- | --------- |  | ------------ | ------ | ---------- |  | ----------- | ------ | ------ |  | ------- | ----- | ------ |  | - | ------- | ---- |  | - | ------ | 
|                                 |                                                                                       |           |  |              |        |            |  | Additions  
|                                 |                                                                                       |           |  | Balance      |        |            |  |             |        |        |  | Balance
|                                 |                                                                                       |           |  | at Beginning |        | Charged to |  | Charged to  |        |        |  |         |       | at End
|                                 |                                                                                       |           |  | of           |        | Costs and  |  | Other       |        |        |  |         |       | of    
|Description                      |                                                                                       | Period    |  | Expenses     |        | Accounts   |  | Deductions  |        | Period
|                                 |                                                                                       |           |  |              |        |            |  |             |        |       
|                                 |                                                                                       |           |  |              |        |            |  | (Thousands)
|Allowance for                   
|                                
|                                
|                                
|                                
|                                 | uncollectible accounts
(shown as deduction
from accounts receivable
in balance sheet)
|                                
|                                
|                                
|                                
|                                 |                                                                                       | YEAR 2000 |  | $            | 21,000 |            |  | $           | 18,219 |        |  | $       | 3,677 | (a)    |  | $ | (21,896 | )(b) |  | $ | 21,000 | 
|                                
|                                
|                                
|                                
|                                 |                                                                                       | 1999      |  | $            | 20,000 |            |  | $           | 21,363 |        |  | $       | 3,357 | (a)    |  | $ | (23,720 | )(b) |  | $ | 21,000 | 
|                                
|                                
|                                
|                                
|                                 |                                                                                       | 1998      |  | $            | 20,000 |            |  | $           | 23,216 |        |  | $       | 2,789 | (a)    |  | $ | (26,005 | )(b) |  | $ | 20,000 | 
|                                
|                                
|                                
|                                
|Fermi 2 refueling outage accrual
|                                
|                                
|                                
|                                
|                                 | (included in other current
liabilities in the balance
sheet)                         
|                                
|                                
|                                
|                                
|                                 |                                                                                       | YEAR 2000 |  | $            | 18,221 |            |  | $           | 14,002 |        |  | $       |      |        |  | $ | (22,434 | )(c) |  | $ | 9,789  | 
|                                
|                                
|                                
|                                
|                                 |                                                                                       | 1999      |  | $            | 3,156  |            |  | $           | 15,065 |        |  | $       |      |        |  | $ |        |      |  | $ | 18,221 | 
|                                
|                                
|                                
|                                
|                                 |                                                                                       | 1998      |  | $            | 15,690 |            |  | $           | 15,468 |        |  | $       |      |        |  | $ | (28,002 | )(c) |  | $ | 3,156  | 



---

|(a) |  | Collection of accounts previously written off.
|--- |  | ----------------------------------------------
|   
|   
|   
|   
|(b) |  | Uncollectible accounts written off.           
|   
|   
|   
|   
|(c) |  | Actual amounts paid during refueling outage.  

93



---



|                                 |                                                                                       |           |  |              |        |            |  |             |        |        |  |         |       |        |  |   |         |      |  |   |        | 
|-------------------------------- | ------------------------------------------------------------------------------------- | --------- |  | ------------ | ------ | ---------- |  | ----------- | ------ | ------ |  | ------- | ----- | ------ |  | - | ------- | ---- |  | - | ------ | 
|                                 |                                                                                       |           |  |              |        |            |  | Additions  
|                                 |                                                                                       |           |  | Balance      |        |            |  |             |        |        |  | Balance
|                                 |                                                                                       |           |  | at Beginning |        | Charged to |  | Charged to  |        |        |  |         |       | at End
|                                 |                                                                                       |           |  | of           |        | Costs and  |  | Other       |        |        |  |         |       | of    
|Description                      |                                                                                       | Period    |  | Expenses     |        | Accounts   |  | Deductions  |        | Period
|                                 |                                                                                       |           |  |              |        |            |  |             |        |       
|                                 |                                                                                       |           |  |              |        |            |  | (Thousands)
|Allowance for                   
|                                
|                                
|                                
|                                
|                                 | uncollectible accounts
(shown as deduction
from accounts receivable
in balance sheet)
|                                
|                                
|                                
|                                
|                                 |                                                                                       | YEAR 2000 |  | $            | 20,000 |            |  | $           | 18,219 |        |  | $       | 3,677 | (a)    |  | $ | (21,896 | )(b) |  | $ | 20,000 | 
|                                
|                                
|                                
|                                
|                                 |                                                                                       | 1999      |  | $            | 20,000 |            |  | $           | 20,363 |        |  | $       | 3,357 | (a)    |  | $ | (23,720 | )(b) |  | $ | 20,000 | 
|                                
|                                
|                                
|                                
|                                 |                                                                                       | 1998      |  | $            | 20,000 |            |  | $           | 23,216 |        |  | $       | 2,789 | (a)    |  | $ | (26,005 | )(b) |  | $ | 20,000 | 
|                                
|                                
|                                
|                                
|Fermi 2 refueling outage accrual
|                                
|                                
|                                
|                                
|                                 | (included in other current
liabilities in the balance sheet)                         
|                                
|                                
|                                
|                                
|                                 |                                                                                       | YEAR 2000 |  | $            | 18,221 |            |  | $           | 14,002 |        |  | $       |      |        |  | $ | (22,434 | )(c) |  | $ | 9,789  | 
|                                
|                                
|                                
|                                
|                                 |                                                                                       | 1999      |  | $            | 3,156  |            |  | $           | 15,065 |        |  | $       |      |        |  | $ |        |      |  | $ | 18,221 | 
|                                
|                                
|                                
|                                
|                                 |                                                                                       | 1998      |  | $            | 15,690 |            |  | $           | 15,468 |        |  | $       |      |        |  | $ | (28,002 | )(c) |  | $ | 3,156  | 



---

|(a) |  | Collection of accounts previously written off.  
|--- |  | ------------------------------------------------
|   
|   
|   
|   
|(b) |  | Uncollectible accounts written off.             
|   
|   
|   
|   
|(c) |  | Actual amounts paid during the refueling outage.

94



---



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

Date: March 1, 2001

95



---



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

Date: March 1, 2001

96



---



Exhibit Index

|        |        |  |                                                                                                                                                                                                                                                
|------- | ------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|       
|Exhibit
|Number 
|       
|        | 2-2    |  | Agreement and Plan of Merger, among DTE Energy Company, MCN Energy
Group Inc. and DTE Enterprises, Inc., dated as of October 4, 1999, as
amended as of November 12, 1999, as further amended as of February
28, 2001.                          
|       
|       
|       
|       
|        | 4-211  |  | Supplemental Indenture, dated as of December
1, 1989, creating the Series KKP No. 11 and BP General and
Refunding Mortgage Bonds                                                                                                               
|       
|       
|       
|       
|        | 4-212  |  | Supplemental Indenture, dated as of February 15, 1990
creating the 1990 Series A, B, C, D, E, and F General and
Refunding Mortgage Bonds.                                                                                                      
|       
|       
|       
|       
|        | 4-213  |  | Supplemental Indenture, dated as of November 30, 1992,
creating the 1992 Series E General and Refunding Mortgage
Bonds.                                                                                                                        
|       
|       
|       
|       
|        | 4-214  |  | Supplemental Indenture, dated as of April 1, 1993, creating
the 1993 Series FP and IP General and Refunding Mortgage
Bonds.                                                                                                                    
|       
|       
|       
|       
|        | 4-215  |  | Supplemental Indenture, dated as of April 26,
1993, creating the 1993 Series G General and Refunding
Mortgage bonds and Amendment of Article II, Section 5.                                                                                    
|       
|       
|       
|       
|        | 4-216  |  | Supplemental Indenture, dated as of June 30,
1993, creating the Series AP General and Refunding Mortgage
Bonds.                                                                                                                                
|       
|       
|       
|       
|        | 4-217  |  | Supplemental Indenture, dated as of September
15, 1993, creating the 1993 Series K General and Refunding
Mortgage Bonds.                                                                                                                       
|       
|       
|       
|       
|        | 4-218  |  | Supplemental Indenture, dated as of June 15,
1994, creating the 1994 Series BP General and Refunding
Mortgage Bonds.                                                                                                                           
|       
|       
|       
|       
|        | 4-219  |  | Supplemental Indenture, dated as of August 15,
1994, creating the 1994 Series C General and Refunding
Mortgage Bonds.                                                                                                                          
|       
|       
|       
|       
|        | 4-220  |  | Supplemental Indenture, dated as of December 1,
1994, creating the Series KKP No. 15 and DP General and
Refunding Mortgage Bonds.                                                                                                              
|       
|       
|       
|       
|        | 4-221  |  | Supplemental Indenture, dated as of August 1,
1995, creating the 1995 Series A and DP General and Refunding
Mortgage Bonds.                                                                                                                    
|       
|       
|       
|       
|        | 10-40* |  | Form of Indemnification Agreement between Detroit Edison
and its officers.                                                                                                                                                                     
|       
|       
|       
|       
|        | 11-21  |  | DTE Energy Company Basic and Diluted Earnings
Per Share
of Common Stock.                                                                                                                                                                       
|       
|       
|       
|       
|        | 12-28  |  | DTE Energy Company Computation of Ratio of
Earnings to
Fixed Charges.                                                                                                                                                                          
|       
|       
|       
|       
|        | 12-29  |  | The Detroit Edison Company Computation of Ratio
of Earnings to Fixed Charges.                                                                                                                                                                  
|       
|       
|       
|       
|        | 21-5   |  | Subsidiaries of the Company and Detroit Edison.                                                                                                                                                                                                
|       
|       
|       
|       
|        | 23-14  |  | Consent of Deloitte & Touche LLP.                                                                                                                                                                                                              
|       
|       
|       
|       
|        | 99-38  |  | Fourth Amended and Restated Credit Agreement, Dated as of
January 16, 2001 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 and as Co-Agents.
|       
|       
|       
|       
|        | 99-39  |  | Order, dated January 4, 2001, of the Michigan
Public Service Commission in U-12478.                                                                                                                                                            

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