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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number 1-2198
 The Detroit Edison Company, a Michigan corporation, meets the conditions set forth in General
Instruction I (1) (a) and (b) of Form
10-K and is, therefore, filing this form with the reduced disclosure format.
 THE DETROIT EDISON COMPANY
  Michigan
(State or other jurisdiction of incorporation or 
organization)
    
    38-0478650
(I.R.S. Employer
Identification No.)
 One Energy Plaza, Detroit, Michigan
(Address of principal executive offices)
    
    48226-1279
(Zip Code)
 313-235-4000
 
 
 o þ
 o þ
 þ o
 o o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



The Detroit Edison Company  Annual Report on Form 10-K  Year Ended December 31, 2009
  
 Table of Contents
 PageDefinitions
    
    1Forward-Looking Statements
    
    2Part IItems 1. 1A., 1B. &2. Business, Risk Factors, Unresolved Staff Comments and Properties
    
    4Item 3. Legal Proceedings
    
    12Item 4. Submission of Matters to a Vote of Security Holders
    
    13Part IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    13Item 6. Selected Financial Data
    
    13Item 7. Managements Narrative Analysis of Results of Operations
    
    14Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    16Item 8. Financial Statements and Supplementary Data
    
    17Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    65Item 9A. Controls and Procedures
    
    65Item 9B. Other Information
    
    65Part IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    65Item 11. Executive Compensation
    
    65Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    65Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    65Item 14. Principal Accountant Fees and Services
    
    65Part IVItem 15. Exhibits and Financial Statement Schedules
    
    66Signatures
    
    74EX-4.267EX-4.268EX-12.36EX-23.22EX-23.23EX-31.53EX-31.54EX-32.53EX-32.54




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Definitions
 ASC
    
    Accounting Standards CodificationASU
    
    Accounting Standards UpdateCTA
    
    Costs to achieve, consisting of project management,
consultant support and employee severance, related to
the Performance Excellence ProcessCustomer Choice
    
    Statewide initiatives giving customers in Michigan
the option to choose alternative suppliers for
electricity.Detroit Edison
    
    The Detroit Edison Company (a direct wholly owned
subsidiary of DTE Energy Company) and subsidiary
companiesDTE Energy
    
    DTE Energy Company, the parent of Detroit Edison and
directly or indirectly the parent company of numerous
utility and non-utility subsidiariesEPA
    
    United States Environmental Protection AgencyFASB
    
    Financial Accounting Standards BoardFERC
    
    Federal Energy Regulatory CommissionFSP
    
    FASB Staff PositionFTRs
    
    Financial transmission rightsMDEQ
    
    Michigan Department of Environmental QualityMISO
    
    Midwest Independent System Operator, is an
Independent System Operator and the Regional
Transmission Organization serving the Midwest United
States and Manitoba, Canada.MPSC
    
    Michigan Public Service CommissionNRC
    
    Nuclear Regulatory CommissionPSCR
    
    A power supply cost recovery mechanism authorized by
the MPSC that allows Detroit Edison to recover
through rates its fuel, fuel-related and purchased
power costs.Securitization
    
    Detroit Edison financed specific stranded costs at
lower interest rates through the sale of rate
reduction bonds by a wholly-owned special purpose
entity, The Detroit Edison Securitization Funding
LLC.SFAS
    
    Statement of Financial Accounting StandardsUnits of MeasurementGWh
    
    Gigawatthour of electricitykWh
    
    Kilowatthour of electricityMW
    
    Megawatt of electricityMWh
    
    Megawatthour of electricity
 1




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Forward-Looking Statements
  
    
    the length and severity of ongoing economic decline resulting in lower demand, customer
conservation and increased thefts of electricity;
    
    changes in the economic and financial viability of our customers, suppliers, and trading
counterparties, and the continued ability of such parties to perform their obligations to the
Company;
    
    economic climate and population growth or decline in the geographic areas where we do business;
    
    high levels of uncollectible accounts receivable;
    
    access to capital markets and capital market conditions and the results of other financing
efforts which can be affected by credit agency ratings;
    
    instability in capital markets which could impact availability of short and long-term financing;
    
    the timing and extent of changes in interest rates;
    
    the level of borrowings;
    
    potential for losses on investments, including nuclear decommissioning and benefit plan
assets and the related increases in future expense and contributions;
    
    the potential for increased costs or delays in completion of significant construction projects;
    
    the effects of weather and other natural phenomena on operations and sales to customers, and
purchases from suppliers;
    
    environmental issues, laws, regulations, and the increasing costs of remediation and
compliance, including actual and potential new federal and state requirements that include or
could include carbon and more stringent mercury emission controls, a renewable portfolio
standard, energy efficiency mandates, carbon tax or cap and trade structure and ash landfill
regulations;
    
    nuclear regulations and operations associated with nuclear facilities;
    
    impact of electric utility restructuring in Michigan, including legislative amendments and
Customer Choice programs;
    
    employee relations and the impact of collective bargaining agreements;
    
    unplanned outages;
    
    changes in the cost and availability of coal and other raw materials and purchased power;
    
    cost reduction efforts and the maximization of plant and distribution system performance;
    
    the effects of competition;
 2




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
    
    impact of regulation by the FERC, MPSC, NRC and other applicable governmental proceedings and
regulations, including any associated impact on rate structures;
    
    changes in and application of federal, state and local tax laws and their interpretations,
including the Internal Revenue Code, regulations, rulings, court proceedings and audits;
    
    the amount and timing of cost recovery allowed as a result of regulatory proceedings, related
appeals or new legislation;
    
    the cost of protecting assets against, or damage due to, terrorism or cyber attacks;
    
    the availability, cost, coverage and terms of insurance and stability of insurance providers;
    
    changes in and application of accounting standards and financial reporting regulations;
    
    changes in federal or state laws and their interpretation with respect to regulation, energy
policy and other business issues; and
    
    binding arbitration, litigation and related appeals.
  3




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Part I
 
 Items 1. and 2. Business and Properties
      Revenue by Service(in Millions)
    
    2009
    
    
    2008
    
    
    2007Residential
    
    $
    1,820
    
    
    $
    1,726
    
    
    $
    1,739Commercial
    
    
    1,702
    
    
    
    1,753
    
    
    
    1,723Industrial
    
    
    730
    
    
    
    894
    
    
    
    854Other
    
    
    299
    
    
    
    289
    
    
    
    384Subtotal
    
    
    4,551
    
    
    
    4,662
    
    
    
    4,700Interconnection sales (1)
    
    
    163
    
    
    
    212
    
    
    
    200Total Revenue
    
    $
    4,714
    
    
    $
    4,874
    
    
    $
    4,900
 
 (1)
    
    Represents power that is not distributed by Detroit Edison.     4




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Location by
    
    
    Summer NetMichigan
    
    
    Rated Capability (1)Plant Name
    
    County
    
    
    (MW)
    
    
    (%)
    
    
    Year in ServiceFossil-fueled Steam-ElectricBelle River (2)
    
    St. Clair
    
    
    1,034
    
    
    
    9.3
    
    
    1984 and 1985Conners Creek
    
    Wayne
    
    
    230
    
    
    
    2.1
    
    
    1951Greenwood
    
    St. Clair
    
    
    785
    
    
    
    7.1
    
    
    1979Harbor Beach
    
    Huron
    
    
    103
    
    
    
    0.9
    
    
    1968Marysville
    
    St. Clair
    
    
    84
    
    
    
    0.8
    
    
    1943 and 1947Monroe (3)
    
    Monroe
    
    
    3,090
    
    
    
    27.9
    
    
    1971, 1973 and 1974River Rouge
    
    Wayne
    
    
    523
    
    
    
    4.7
    
    
    1957 and 1958St. Clair (4)
    
    St. Clair
    
    
    1,365
    
    
    
    12.3
    
    
    1953, 1954, 1959, 1961 and 1969Trenton Channel
    
    Wayne
    
    
    730
    
    
    
    6.6
    
    
    1949 and 19687,944
    
    
    
    71.7Oil or Gas-fueled Peaking Units
    
    Various
    
    
    1,101
    
    
    
    10.0
    
    
    1966-1971, 1981 and 1999Nuclear-fueled Steam-Electric Fermi 2 (5)
    
    Monroe
    
    
    1,102
    
    
    
    10.0
    
    
    1988Hydroelectric Pumped Storage Ludington(6)
    
    Mason
    
    
    917
    
    
    
    8.3
    
    
    197311,064
    
    
    
    100.0
 
 (1)
    
    Summer net rated capabilities of generating plants in service are based on periodic load tests and are changed
depending on operating experience, the physical condition of units, environmental control limitations and
customer requirements for steam, which otherwise would be used for electric generation.(2)
    
    The Belle River capability represents Detroit Edisons entitlement to 81.39% of the capacity and energy of the plant.
See Note 7 of the Notes to the Consolidated Financial Statements in Item 8 of this Report.(3)
    
    The Monroe power plant provided 38% of Detroit Edisons total 2009 power generation.(4)
    
    Excludes one oil-fueled unit (250 MW) in cold standby status.(5)
    
    Fermi 2 has a design electrical rating (net) of 1,150 MW.(6)
    
    Represents Detroit Edisons 49% interest in Ludington with a total capability of 1,872 MW.
See Note 7 of the Notes to the Consolidated Financial Statements in Item 8 of this Report.  5




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Circuit MilesOperating Voltage-Kilovolts (kV)
    
    Overhead
    
    
    Underground4.8 kV to 13.2 kV
    
    
    28,243
    
    
    
    13,88424 kV
    
    
    177
    
    
    
    68140 kV
    
    
    2,317
    
    
    
    363120 kV
    
    
    54
    
    
    
    1330,791
    
    
    
    14,941
           6




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ENVIRONMENTAL MATTERS
  (in Millions)Air
    
    $
    2,200Water
    
    
    55MGP sites
    
    
    5Other sites
    
    
    21Estimated total future expenditures through 2019
    
    $
    2,281Estimated 2010  expenditures
    
    $
    82Estimated 2011 expenditures
    
    $
    253
 Air
 Water
 Manufactured Gas Plant (MGP) and Other Sites
 7




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Landfill
  Global Climate Change
  EMPLOYEES
  8




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Item 1A. Risk Factors
  Regional and national economic conditions can have an unfavorable impact on us.
 Adverse changes in our credit ratings may negatively affect us.
 Our ability to access capital markets is important.
 Poor investment performance of pension and other postretirement benefit plan holdings and other
factors impacting benefit plan costs could unfavorably impact our liquidity and results of
operations.
 We are exposed to credit risk of counterparties with whom we do business.
 9




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We are subject to rate regulation
 We may be required to refund amounts we collect under self-implemented rates.
 Michigans electric Customer Choice program could negatively impact our financial performance.
 Weather significantly affects operations
 Operation of a nuclear facility subjects us to risk.
 Construction and capital improvements to our power facilities subject us to risk.
 The supply and/or price of energy commodities and/or related service may impact our financial
results.
 10




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The supply and/or price other industrial raw and finished inputs and/or related services may impact
our financial results.
 Unplanned power plant outages may be costly.
 Environmental laws and liability may be costly.
  Renewable portfolio standards and energy efficiency programs may affect our business.
  Threats of terrorism or cyber attacks could affect our business.
  11




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We may not be fully covered by insurance.
 Failure to maintain the security of personally identifiable information could adversely affect us.
 Benefits of continuous improvement initiatives could be less than we expect
 A work interruption may adversely affect us.
 Failure to retain and attract key executive officers and other skilled professional and technical
employees could have an adverse effect on our operations.
 Item 1B. Unresolved Staff Comments
  
 Item 3. Legal Proceedings
   12




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Note
        
        Title10
        
        Regulatory Matters16
        
        Commitments and Contingencies
 
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Part II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
   
 Item 6. Selected Financial Data
  13




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Item 7.
    
    Managements Narrative Analysis of Results of Operations
  Increase (Decrease) in Income Statement Components Compared to Prior Year
(in Millions)
    
    2009
    
    
    2008Operating revenues
    
    $
    (160
    )
    
    $
    (26
    )Fuel and purchased power
    
    
    (287
    )
    
    
    92Gross margin
    
    
    127
    
    
    
    (118
    )Operation and maintenance
    
    
    (45
    )
    
    
    (100
    )Depreciation and amortization
    
    
    101
    
    
    
    (21
    )Taxes other than income
    
    
    (27
    )
    
    
    (45
    )Asset (gains) losses and reserves, net
    
    
    (1
    )
    
    
    (9
    )Operating income
    
    
    99
    
    
    
    57Other (income) and deductions
    
    
    12
    
    
    
    6Income tax provision
    
    
    42
    
    
    
    37Net Income
    
    $
    45
    
    
    $
    14
 Gross margin
 Increase (Decrease) in Gross Margin Components Compared to Prior Year(in Millions)
    
    2009
    
    2008December 2008 rate order
    
    $
    80
    
    
    $
    Securitization bond and tax surcharge rate increase
    
    
    62
    
    
    
    July 2009 rate self-implementation
    
    
    93
    
    
    
    Energy Optimization and Renewable Energy surcharge
    
    
    54
    
    
    
    April 2008 expiration of show cause rate decrease
    
    
    25
    
    
    
    46Weather
    
    
    (66
    )
    
    
    (37
    )Reduction in customer demand and other
    
    
    (121
    )
    
    
    (127
    )Increase (decrease) in gross margin
    
    $
    127
    
    
    $
    (118
    )
 (in Thousands of MWh)
    
    2009
    
    
    2008
    
    
    2007Electric SalesResidential
    
    
    14,625
    
    
    
    15,492
    
    
    
    16,147Commercial
    
    
    18,200
    
    
    
    18,920
    
    
    
    19,332Industrial
    
    
    9,922
    
    
    
    13,086
    
    
    
    13,338Other
    
    
    3,229
    
    
    
    3,218
    
    
    
    3,30045,976
    
    
    
    50,716
    
    
    
    52,117Interconnection sales (1)
    
    
    5,156
    
    
    
    3,583
    
    
    
    3,587Total Electric Sales
    
    
    51,132
    
    
    
    54,299
    
    
    
    55,704Electric DeliveriesRetail and Wholesale
    
    
    45,976
    
    
    
    50,716
    
    
    
    52,117Electric Customer Choice, including self generators (2)
    
    
    1,477
    
    
    
    1,457
    
    
    
    2,239Total Electric Sales and Deliveries
    
    
    47,453
    
    
    
    52,173
    
    
    
    54,356
 
 (1)
    
    Represents power that is not distributed by Detroit Edison(2)
    
    Includes deliveries for self generators who have purchased power from alternative energy
suppliers to supplement their power requirements 14




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Power Generated and Purchased(in Thousands of MWh)
    
    2009
    
    
    
    
    
    2008
    
    
    
    
    
    2007Power Plant GenerationFossil
    
    
    40,595
    
    
    74
    %
    
    
    41,254
    
    
    71
    %
    
    
    42,359
    
    
    72
    %Nuclear
    
    
    7,406
    
    
    14
    
    
    
    9,613
    
    
    17
    
    
    
    8,314
    
    
    1448,001
    
    
    88
    
    
    
    50,867
    
    
    88
    
    
    
    50,673
    
    
    86Purchased Power
    
    
    6,495
    
    
    12
    
    
    
    6,877
    
    
    12
    
    
    
    8,422
    
    
    14System Output
    
    
    54,496
    
    
    100
    %
    
    
    57,744
    
    
    100
    %
    
    
    59,095
    
    
    100
    %Less Line Loss and Internal Use
    
    
    (3,364
    )
    
    
    
    
    
    (3,445
    )
    
    
    
    
    
    (3,391
    )Net System Output
    
    
    51,132
    
    
    
    
    
    
    54,299
    
    
    
    
    
    
    55,704Average Unit Cost ($/MWh)Generation (1)
    
    $
    18.20
    
    
    
    
    
    $
    17.93
    
    
    
    
    
    $
    15.83Purchased Power
    
    $
    37.74
    
    
    
    
    
    $
    69.50
    
    
    
    
    
    $
    62.40Overall Average Unit Cost
    
    $
    20.53
    
    
    
    
    
    $
    24.07
    
    
    
    
    
    $
    22.47
 
 (1)
    
    Represents fuel costs associated with power plants. Operation and maintenance
 Depreciation and amortization
 Taxes other than income
 Outlook
  15




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Item 7A.
    
    Quantitative and Qualitative Disclosures about Market Risk
 Commodity Price Risk
  Credit Risk
 Bankruptcies
   Other
  Interest Rate Risk
  16




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Item 8.
    
    Financial Statements and Supplementary Data
 PageControls and Procedures
    
    18Consolidated Financial StatementsReports of Independent Registered Public Accounting Firms
    
    19Consolidated Statements of Operations
    
    21Consolidated Statements of Financial Position
    
    22Consolidated Statements of Cash Flows
    
    24Consolidated Statements of Changes in Shareholders Equity and Comprehensive Income
    
    25Notes to Consolidated Financial Statements
    
    26Financial Statement ScheduleSchedule II  Valuation and Qualifying Accounts
    
    73
 17




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Controls and Procedures
 (a) Evaluation of disclosure controls and procedures
  (b) Managements report on internal control over financial reporting
   Internal ControlIntegrated Framework.
  (c) Changes in internal control over financial reporting
  18




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    
 19




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      
 20




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The Detroit Edison Company  Consolidated Statements of Operations
 Year Ended December 31(in Millions)
    
    2009
    
    
    2008
    
    
    2007Operating Revenues
    
    $
    4,714
    
    
    $
    4,874
    
    
    $
    4,900Operating ExpensesFuel and purchased power
    
    
    1,491
    
    
    
    1,778
    
    
    
    1,686Operation and maintenance
    
    
    1,277
    
    
    
    1,322
    
    
    
    1,422Depreciation and amortization
    
    
    844
    
    
    
    743
    
    
    
    764Taxes other than income
    
    
    205
    
    
    
    232
    
    
    
    277Asset (gains) losses and reserves, net
    
    
    (2
    )
    
    
    (1
    )
    
    
    83,815
    
    
    
    4,074
    
    
    
    4,157Operating Income
    
    
    899
    
    
    
    800
    
    
    
    743Other (Income) and DeductionsInterest expense
    
    
    325
    
    
    
    293
    
    
    
    294Interest income
    
    
    (2
    )
    
    
    (6
    )
    
    
    (7
    )Other income
    
    
    (39
    )
    
    
    (51
    )
    
    
    (40
    )Other expenses
    
    
    11
    
    
    
    47
    
    
    
    30295
    
    
    
    283
    
    
    
    277Income Before Income Taxes
    
    
    604
    
    
    
    517
    
    
    
    466Income Tax Provision
    
    
    228
    
    
    
    186
    
    
    
    149Net Income
    
    $
    376
    
    
    $
    331
    
    
    $
    317
  21




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The Detroit Edison Company  Consolidated Statements of Financial Position
 December 31(in Millions)
    
    2009
    
    
    2008AssetsCurrent AssetsCash and cash equivalents
    
    $
    34
    
    
    $
    30Restricted cash
    
    
    79
    
    
    
    84Accounts receivable (less allowance for
doubtful accounts of $118 and $121,
respectively)Customer
    
    
    696
    
    
    
    709Affiliates
    
    
    3
    
    
    
    5Other
    
    
    108
    
    
    
    34InventoriesFuel
    
    
    135
    
    
    
    170Materials and supplies
    
    
    173
    
    
    
    169Notes receivableAffiliates
    
    
    65
    
    
    
    41Other
    
    
    3
    
    
    
    3Other
    
    
    79
    
    
    
    951,375
    
    
    
    1,340InvestmentsNuclear decommissioning trust funds
    
    
    817
    
    
    
    685Other
    
    
    104
    
    
    
    99921
    
    
    
    784PropertyProperty, plant and equipment
    
    
    15,451
    
    
    
    14,977Less accumulated depreciation and amortization
    
    
    (6,133
    )
    
    
    (5,828
    )9,318
    
    
    
    9,149Other AssetsRegulatory assets
    
    
    3,333
    
    
    
    3,456Securitized regulatory assets
    
    
    870
    
    
    
    1,001Intangible assets
    
    
    9
    
    
    
    19Notes receivable  affiliates
    
    
    17
    
    
    
    Other
    
    
    118
    
    
    
    934,347
    
    
    
    4,569Total Assets
    
    $
    15,961
    
    
    $
    15,842
  22




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The Detroit Edison Company  Consolidated Statements of Financial Position
 December 31(in Millions, Except Shares)
    
    2009
    
    
    2008Liabilities and Shareholders EquityCurrent LiabilitiesAccounts payableAffiliates
    
    $
    74
    
    
    $
    103Other
    
    
    251
    
    
    
    346Accrued interest
    
    
    83
    
    
    
    80Accrued vacations
    
    
    48
    
    
    
    58Short-term borrowings
    
    
    
    
    
    
    75Current portion long-term debt, including capital leases
    
    
    660
    
    
    
    153Other
    
    
    213
    
    
    
    2631,329
    
    
    
    1,078Long-Term Debt (net of current portion)Mortgage bonds, notes and other
    
    
    3,579
    
    
    
    4,091Securitization bonds
    
    
    793
    
    
    
    932Capital lease obligations
    
    
    25
    
    
    
    334,397
    
    
    
    5,056Other LiabilitiesDeferred income taxes
    
    
    1,871
    
    
    
    1,894Regulatory liabilities
    
    
    711
    
    
    
    593Asset retirement obligations
    
    
    1,285
    
    
    
    1,205Unamortized investment tax credit
    
    
    75
    
    
    
    85Nuclear decommissioning
    
    
    136
    
    
    
    114Accrued pension liability affiliates
    
    
    987
    
    
    
    978Accrued postretirement liability affiliates
    
    
    1,058
    
    
    
    1,075Other
    
    
    239
    
    
    
    2086,362
    
    
    
    6,152Commitments and Contingencies (Notes 10 and 16)Shareholders EquityCommon stock, $10 par value, 400,000,000 shares
authorized, and 138,632,324 shares issued and
outstanding
    
    
    3,196
    
    
    
    2,946Retained earnings
    
    
    693
    
    
    
    622Accumulated other comprehensive income (loss)
    
    
    (16
    )
    
    
    (12
    )3,873
    
    
    
    3,556Total Liabilities and Shareholders Equity
    
    $
    15,961
    
    
    $
    15,842
  23




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##### Table of Contents



The Detroit Edison Company  Consolidated Statements of Cash Flows
 Year Ended December 31(in Millions)
    
    2009
    
    
    2008
    
    
    2007Operating ActivitiesNet income
    
    $
    376
    
    
    $
    331
    
    
    $
    317Adjustments to reconcile net income to net cash from operating activities:Depreciation and amortization
    
    
    844
    
    
    
    743
    
    
    
    764Deferred income taxes
    
    
    15
    
    
    
    91
    
    
    
    (111
    )Asset (gains) losses and reserves, net
    
    
    (2
    )
    
    
    (2
    )
    
    
    8Changes in assets and liabilities, exclusive of changes shown separately
(Note 18)
    
    
    (39
    )
    
    
    118
    
    
    
    (213
    )Net cash from operating activities
    
    
    1,194
    
    
    
    1,281
    
    
    
    765Investing ActivitiesPlant and equipment expenditures
    
    
    (793
    )
    
    
    (943
    )
    
    
    (809
    )Proceeds from sale of assets, net
    
    
    
    
    
    
    
    
    
    
    3Restricted cash
    
    
    5
    
    
    
    50
    
    
    
    (3
    )Notes receivable from affiliate
    
    
    (42
    )
    
    
    (41
    )
    
    
    Proceeds from sale of nuclear decommissioning trust fund assets
    
    
    295
    
    
    
    232
    
    
    
    286Investment in nuclear decommissioning trust funds
    
    
    (315
    )
    
    
    (255
    )
    
    
    (323
    )Other investments
    
    
    (46
    )
    
    
    (54
    )
    
    
    (33
    )Net cash used for investing activities
    
    
    (896
    )
    
    
    (1,011
    )
    
    
    (879
    )Financing ActivitiesIssuance of long-term debt
    
    
    129
    
    
    
    862
    
    
    
    50Redemption of long-term debt
    
    
    (278
    )
    
    
    (166
    )
    
    
    (185
    )Repurchase of long-term debt
    
    
    
    
    
    
    (238
    )
    
    
    Short-term borrowings, net
    
    
    (75
    )
    
    
    (331
    )
    
    
    129Short-term borrowings from affiliate
    
    
    
    
    
    
    (277
    )
    
    
    277Capital contribution by parent company
    
    
    250
    
    
    
    175
    
    
    
    175Dividends on common stock
    
    
    (305
    )
    
    
    (305
    )
    
    
    (305
    )Other
    
    
    (15
    )
    
    
    (7
    )
    
    
    (7
    )Net cash from (used for) financing activities
    
    
    (294
    )
    
    
    (287
    )
    
    
    134Net Increase (Decrease) in Cash and Cash Equivalents
    
    
    4
    
    
    
    (17
    )
    
    
    20Cash and Cash Equivalents at Beginning of the Period
    
    
    30
    
    
    
    47
    
    
    
    27Cash and Cash Equivalents at End of the Period
    
    $
    34
    
    
    $
    30
    
    
    $
    47
  24




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##### Table of Contents



The Detroit Edison Company
 
 Consolidated Statements of Changes in Shareholders Equity and Comprehensive income
 AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon Stock
    
    
    Paid in
    
    
    Retained
    
    
    Comprehensive(Dollars in Millions, Shares in Thousands)
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    TotalBalance, December 31, 2006
    
    
    138,632
    
    
    $
    1,386
    
    
    $
    1,210
    
    
    $
    516
    
    
    $
    3
    
    
    $
    3,115Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    317
    
    
    
    
    
    
    
    317Dividends declared on common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (305
    )
    
    
    
    
    
    
    (305
    )Net change in unrealized gains on
investments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Capital contribution by parent company
    
    
    
    
    
    
    
    
    
    
    175
    
    
    
    
    
    
    
    
    
    
    
    175Balance, December 31, 2007
    
    
    138,632
    
    
    
    1,386
    
    
    
    1,385
    
    
    
    528
    
    
    
    4
    
    
    
    3,303Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    331
    
    
    
    
    
    
    
    331Implementation of ASC 715 (SFAS No. 158)
measurement date provision, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9
    )
    
    
    
    
    
    
    (9
    )Dividends declared on common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (228
    )
    
    
    
    
    
    
    (228
    )Net change in unrealized gains on
investments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )Benefit obligations, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14
    )
    
    
    (14
    )Capital contribution by parent company
    
    
    
    
    
    
    
    
    
    
    175
    
    
    
    
    
    
    
    
    
    
    
    175Balance, December 31, 2008
    
    
    138,632
    
    
    
    1,386
    
    
    
    1,560
    
    
    
    622
    
    
    
    (12
    )
    
    
    3,556Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    376
    
    
    
    
    
    
    
    376Dividends declared on common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (305
    )
    
    
    
    
    
    
    (305
    )Net change in unrealized losses on
investments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )Benefit obligations, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )Capital contribution by parent company
    
    
    
    
    
    
    
    
    
    
    250
    
    
    
    
    
    
    
    
    
    
    
    250Balance, December 31, 2009
    
    
    138,632
    
    
    $
    1,386
    
    
    $
    1,810
    
    
    $
    693
    
    
    $
    (16
    )
    
    $
    3,873
  (in Millions)
    
    2009
    
    
    2008
    
    
    2007Net income
    
    $
    376
    
    
    $
    331
    
    
    $
    317Other comprehensive income:Net change in unrealized gain (losses) on investments, net of tax of $(1), $(1) and $1
    
    
    (2
    )
    
    
    (2
    )
    
    
    1Benefit obligations, net of tax of $(1), $(7) and $
    
    
    (2
    )
    
    
    (14
    )
    
    
    Comprehensive income
    
    $
    372
    
    
    $
    315
    
    
    $
    318
  25




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##### Table of Contents



The Detroit Edison Company
 
 Notes to Consolidated Financial Statements
 NOTE 1  BASIS OF PRESENTATION
 Corporate Structure
   Basis of Presentation
   Principles of Consolidation
   NOTE 2  SIGNIFICANT ACCOUNTING POLICIES
 Revenues
  Accounting for ISO Transactions
  26




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##### Table of Contents



Comprehensive Income
  AccumulatedOtherBenefit
    
    
    
    
    
    
    Comprehensive(in Millions)
    
    Obligations
    
    
    Other
    
    
    LossBeginning balances
    
    $
    (14
    )
    
    $
    2
    
    
    $
    (12
    )Current period change
    
    
    (2
    )
    
    
    (2
    )
    
    
    (4
    )Ending balance
    
    $
    (16
    )
    
    $
    
    
    
    $
    (16
    )
 Cash Equivalents and Restricted Cash
  Receivables
    Inventories
  Property, Retirement and Maintenance, and Depreciation, Depletion and Amortization
   27




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##### Table of Contents



Long-Lived Assets
  Intangible Assets
  Excise and Sales Taxes
  Deferred Debt Costs
  Investments in Debt and Equity Securities
  28




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##### Table of Contents



Stock-Based Compensation
  Asset (gains) losses and reserves, net
  Subsequent Events
  Other Accounting Policies
  Note
    
    Title3
    
    New Accounting Pronouncements4
    
    Fair Value5
    
    Financial and Other Derivative Instruments10
    
    Regulatory Matters11
    
    Income Taxes17
    
    Retirement Benefits and Trusteed Assets
 29




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##### Table of Contents



NOTE 3  NEW ACCOUNTING PRONOUNCEMENTS
 FASB
Accounting Standards Codification (Codification)
  Fair Value Accounting
 Fair Value Measurements)
   Interim Disclosures about Fair Value of Financial
Instruments,
  Determining Fair Value When the Volume and Level of Activity for the
Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly,
  Recognition and Presentation of
Other-Than-Temporary Impairments,
  Disclosures about Derivative Instruments and Guarantees
 Disclosures about Derivative Instruments
and Hedging Activities  an amendment of FASB Statement No. 133)
 30




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##### Table of Contents



Subsequent Events
 Subsequent Events)
 Transfers of Financial Assets
 Accounting for Transfers of Financial
Assets  an amendment of FASB No. 140).
 Variable Interest Entities (VIE)
 Amendments to FASB Interpretation 46(R)).
 Fair Value Measurements and Disclosures
 Fair Value Measurements
and Disclosure, Measuring Liabilities at Fair Value.
 31




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##### Table of Contents



Improving Disclosures about Fair Value Measurements
 Revenue Arrangements
 Revenue Arrangements with Multiple
Deliverables (not yet codified).
 32




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##### Table of Contents



NOTE 4  FAIR VALUE
   
 
 
  Net Balance at(in Millions)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    December 31, 2009Assets:Cash equivalents
    
    $
    15
    
    
    $
    
    
    
    $
    
    
    
    $
    15Nuclear decommissioning trusts and other investments
    
    
    589
    
    
    
    325
    
    
    
    
    
    
    
    914Derivative assets
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    2Total
    
    $
    604
    
    
    $
    325
    
    
    $
    2
    
    
    $
    931Liabilities:Derivative liabilities
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    (8
    )Total
    
    $
    
    
    
    $
    (8
    )
    
    $
    
    
    
    $
    (8
    )Net Assets at December 31, 2009
    
    $
    604
    
    
    $
    317
    
    
    $
    2
    
    
    $
    923
 33




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##### Table of Contents



Year EndedDecember 31(in Millions)
    
    2009
    
    
    2008Asset balance as of beginning of period
    
    $
    4
    
    
    
    4Changes in fair value recorded in regulatory assets/liabilities
    
    
    
    
    
    
    2Purchases, issuances and settlements
    
    
    
    
    
    
    (2
    )Transfers in/out of Level 3
    
    
    (2
    )
    
    
    Asset balance as of December 31
    
    $
    2
    
    
    $
    4The amount of total gains (losses) included in regulatory
assets and liabilities attributed to the change in unrealized
gains (losses) related to regulatory assets and liabilities held at
December 31, 2009 and 2008
    
    $
    2
    
    
    $
    
  Cash Equivalents
  Nuclear Decommissioning Trusts and Other Investments
  Derivative Assets and Liabilities
  34




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##### Table of Contents



Fair Value of Financial Instruments
  December 31, 2009
    
    
    December 31, 2008Fair Value
    
    
    Carrying Value
    
    
    Fair Value
    
    
    Carrying ValueLong-Term Debt
    
    $5.2 billion
    
    $5.0 billion
    
    $5.0 billion
    
    $5.2 billion
 Investments in Debt and Equity Securities
  Nuclear Decommissioning Trust Funds
     December 31
    
    
    December 31(in Millions)
    
    2009
    
    
    2008Fermi 2
    
    $
    790
    
    
    $
    649Fermi 1
    
    
    3
    
    
    
    3Low level radioactive waste
    
    
    24
    
    
    
    33Total
    
    $
    817
    
    
    $
    685
 35




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##### Table of Contents



Year Ended December 312009
    
    2008
    
    2007(in Millions)Realized gains
    
    $
    37
    
    
    $
    34
    
    
    $
    25Realized losses
    
    $
    (55
    )
    
    $
    (49
    )
    
    $
    (17
    )Proceeds from sales of securities
    
    $
    295
    
    
    $
    232
    
    
    $
    286
  (in Millions)As of December 31, 2009Equity securities
    
    $
    420
    
    
    $
    135Debt securities
    
    
    388
    
    
    
    17Cash and cash equivalents
    
    
    9
    
    
    
    $
    817
    
    
    $
    152As of December 31, 2008Equity securities
    
    $
    288
    
    
    $
    65Debt securities
    
    
    388
    
    
    
    17Cash and cash equivalents
    
    
    9
    
    
    
    $
    685
    
    
    $
    82
   Other Available-For-Sale Securities
  December 31, 2009
    
    December 31, 2008(in Millions)
    
    Fair Value
    
    Carrying value
    
    Fair Value
    
    Carrying ValueCash equivalents
    
    $
    105
    
    
    $
    105
    
    
    $
    98
    
    
    $
    98Equity securities
    
    $
    4
    
    
    $
    4
    
    
    $
    20
    
    
    $
    20
  36




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##### Table of Contents



NOTE 5  FINANCIAL AND OTHER DERIVATIVE INSTRUMENTS
     Balance Sheet
    
    
    FairLocation
    
    
    Value(in Millions)FTRs
    
    Other current assets
    
    $
    2Emissions
    
    Other current liabilities
    
    
    (5
    )Emissions
    
    Other non-current liabilities
    
    
    (3
    )Total derivatives not designated as hedging instrument
    
    
    
    
    
    $
    (6
    )Total derivatives:Current
    
    
    
    
    
    $
    (3
    )Noncurrent
    
    
    
    
    
    
    (3
    )Total derivatives as reported
    
    
    
    
    
    $
    (6
    )
  Year EndedLocation of Gain
    
    
    Gain (Loss)(Loss) Recognized
    
    
    Recognized inin Regulatory
    
    
    Regulatory AssetsAssets / Liabilities
    
    
    / Liabilities onOn Derivative
    
    
    Derivative(in Millions)FTRs and Emissions
    
    Regulatory Asset
    
    $
    (14
    )FTRs and Emissions
    
    Regulatory Liability
    
    
    (2
    )Total
    
    
    
    
    
    $
    (16
    )
 37




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##### Table of Contents



Commodity
    
    Number of UnitsEmissions (Tons)
    
    
    61,927FTRs (MW)
    
    
    4,486
 NOTE 6  PROPERTY, PLANT AND EQUIPMENT
  (in Millions)
    
    2009
    
    
    2008Property, Plant and EquipmentGeneration
    
    $
    8,833
    
    
    $
    8,544Distribution
    
    
    6,618
    
    
    
    6,433Total
    
    
    15,451
    
    
    
    14,977Less Accumulated Depreciation and AmortizationGeneration
    
    
    (3,890
    )
    
    
    (3,690
    )Distribution
    
    
    (2,243
    )
    
    
    (2,138
    )Total
    
    
    (6,133
    )
    
    
    (5,828
    )Net Property, Plant and Equipment
    
    $
    9,318
    
    
    $
    9,149
      38




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##### Table of Contents



NOTE 7  JOINTLY OWNED UTILITY PLANT
  LudingtonHydroelectricBelle River
    
    Pumped StorageIn-service date
    
    
    1984-1985
    
    
    
    1973Total plant capacity
    
    
    1,260
    MW
    
    
    1,872
    MWOwnership interest
    
    
    
    *


    
    
    49
    %Investment (in Millions)
    
    $
    1,626
    
    
    $
    197Accumulated depreciation (in Millions)
    
    $
    889
    
    
    $
    128
 
 *
    
    Detroit Edisons ownership interest is 63% in Unit No. 1, 81% of the facilities applicable to
Belle River used jointly by the Belle River and St. Clair Power Plants and 75% in common facilities
used at Unit No. 2. Belle River
  Ludington Hydroelectric Pumped Storage
  39




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##### Table of Contents



NOTE 8  ASSET RETIREMENT OBLIGATIONS
     (in Millions)Asset retirement obligations at January 1, 2009
    
    $
    1,226Accretion
    
    
    80Liabilities settled
    
    
    (10
    )Revision in estimated cash flows
    
    
    4Asset retirement obligations at December 31, 2009
    
    
    1,300Less amount included in current liabilities
    
    
    (15
    )$
    1,285
    40




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##### Table of Contents



NOTE 9  RESTRUCTURING
 Performance Excellence Process
   Employee Severance Costs(1)
    
    
    Other Costs
    
    
    Total Cost(in Millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Costs incurred:
    
    $
    
    
    
    $
    15
    
    
    $
    26
    
    
    $
    50
    
    
    $
    26
    
    
    $
    65Less amounts
deferred or
capitalized:
    
    
    
    
    
    
    15
    
    
    
    26
    
    
    
    50
    
    
    
    26
    
    
    
    65Amount expensed
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
 
 (1)
    
    Includes corporate allocations 41




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##### Table of Contents



NOTE 10  REGULATORY MATTERS
 Regulation
  Regulatory Assets and Liabilities
   (in Millions)
    
    2009
    
    
    2008AssetsRecoverable pension and postretirement costs:Pension
    
    $
    1,261
    
    
    $
    1,133Postretirement costs
    
    
    515
    
    
    
    609Recoverable income taxes related to securitized regulatory assets
    
    
    476
    
    
    
    549Asset retirement obligation
    
    
    415
    
    
    
    452Deferred income taxes  Michigan Business Tax
    
    
    343
    
    
    
    336Costs to achieve Performance Excellence Process
    
    
    136
    
    
    
    154Other recoverable income taxes
    
    
    89
    
    
    
    89Enterprise Business Systems costs
    
    
    24
    
    
    
    26Recoverable costs under PA 141Unamortized loss on reacquired debt
    
    
    38
    
    
    
    40Electric Customer Choice implementation costs
    
    
    18
    
    
    
    37Deferred Clean Air Act expenditures
    
    
    
    
    
    
    10Accrued PSCR revenue
    
    
    
    
    
    
    20Other
    
    
    18
    
    
    
    213,333
    
    
    
    3,476Less amount included in current assets
    
    
    
    
    
    
    (20
    )$
    3,333
    
    
    $
    3,456Securitized regulatory assets
    
    $
    870
    
    
    $
    1,001LiabilitiesDeferred income taxes  Michigan Business Tax
    
    $
    367
    
    
    $
    335Asset removal costs
    
    
    157
    
    
    
    182Accrued pension
    
    
    75
    
    
    
    72Renewable energy program
    
    
    32
    
    
    
    Refundable costs under PA 141
    
    
    27
    
    
    
    16Refundable self implemented rates
    
    
    27
    
    
    
    Refundable restoration expense
    
    
    15
    
    
    
    Accrued PSCR refund
    
    
    14
    
    
    
    11Fermi 2 refueling outage
    
    
    13
    
    
    
    25Other
    
    
    11
    
    
    
    4738
    
    
    
    645Less amount included in current liabilities
    
    
    (27
    )
    
    
    (52
    )$
    711
    
    
    $
    593
 42




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##### Table of Contents



ASSETS
 
    
    Recoverable pension and postretirement costs In 2007, the Company adopted ASC 715 (SFAS
No. 158) which required, among other things, the recognition in other comprehensive income of
the actuarial gains or losses and the prior service costs that arise during the period but
that are not immediately recognized as components of net periodic benefit costs. The Company
records the charge related to the additional liability as a regulatory asset since the
traditional rate setting process allows for the recovery of pension and postretirement costs.
The asset will reverse as the deferred items are recognized as benefit expenses in net income.
(1)
    
    Recoverable income taxes related to securitized regulatory assets Receivable for the
recovery of income taxes to be paid on the non-bypassable securitization bond surcharge. A
non-bypassable securitization tax surcharge recovers the income tax over a fourteen-year
period ending 2015.
    
    Asset retirement obligation This obligation is primarily for Fermi 2 decommissioning
costs. The asset captures the timing differences between expense recognition and current
recovery in rates and will reverse over the remaining life of the related plant. (1)
    
    Deferred income taxes  Michigan Business Tax (MBT) In July 2007, the MBT was enacted by
the State of Michigan. State deferred tax liabilities were established for the Companys
utilities, and offsetting regulatory assets were recorded as the impacts of the deferred tax
liabilities will be reflected in rates as the related taxable temporary differences reverse
and flow through current income tax expense. (1)
    
    Cost to achieve Performance Excellence Process (PEP) The MPSC authorized the deferral of
costs to implement the PEP. These costs consist of employee severance, project management and
consultant support. These costs will be amortized over a ten-year period beginning with the
year subsequent to the year the costs were deferred. (1)
    
    Other recoverable income taxes Income taxes receivable from Detroit Edisons customers
representing the difference in property-related deferred income taxes receivable and amounts
previously reflected in Detroit Edisons rates. This asset will reverse over the remaining
life of the related plant. (1)
    
    Enterprise Business Systems (EBS) costs The MPSC approved the deferral and amortization
over 10 years beginning in January 2009 of EBS costs that would otherwise be expensed. (1)
    
    Unamortized loss on reacquired debt The unamortized discount, premium and expense related
to debt redeemed with a refinancing are deferred, amortized and recovered over the life of the
replacement issue. (1)
    
    Electric Customer Choice implementation costs PA 141 permits, after MPSC authorization,
the recovery of and a return on costs incurred associated with the implementation of the electric Customer
Choice program.
    
    Deferred Clean Air Act expenditures PA 141 permits, after MPSC authorization, the recovery
of and a return on Clean Air Act expenditures.
    
    Accrued PSCR revenue Receivable for the temporary under-recovery of and a return on fuel
and purchased power costs incurred by Detroit Edison which are recoverable through the PSCR
mechanism.
    
    Securitized regulatory assets The net book balance of the Fermi 2 nuclear plant was
written off in 1998 and an equivalent regulatory asset was established. In 2001, the Fermi 2
regulatory asset and certain other regulatory assets were securitized pursuant to PA 142 and
an MPSC order. A non-bypassable securitization bond surcharge recovers the securitized
regulatory asset over a fourteen-year period ending in 2015.
 
 (1)
    
    Regulatory assets not earning a return. 43




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##### Table of Contents



LIABILITIES
 
    
    Deferred income taxes  Michigan Business Tax In July 2007, the MBT was enacted by the
State of Michigan. State deferred tax assets were established for the Companys utilities, and
offsetting regulatory liabilities were recorded as the impacts of the deferred tax assets will
be reflected in rates.
    
    Asset removal costs The amount collected from customers for the funding of future asset
removal activities.
    
    Accrued pension Pension expense refundable to customers representing the difference
created from volatility in the pension obligation and amounts recognized pursuant to MPSC
authorization.
    
    Renewable energy Amounts collected in rates in excess of renewable energy expenditures.
    
    Refundable costs under PA 141 Detroit Edisons 2007 Choice Incentive Mechanism (CIM)
reconciliation and allocation resulted in the elimination of Regulatory Asset Recovery
Surcharge (RARS) balances for commercial and industrial customers. RARS revenues received in
2008 that exceed the regulatory asset balances are required to be refunded to the affected
classes.
    
    Refundable self implemented rates  Amounts due customers for self implemented rates in
excess of amounts provided for in January 2010 Detroit Edison MPSC order.
    
    Refundable restoration expense Amounts refundable for the MPSC approved restoration
expenses tracking mechanism that tracks the difference between actual restoration expense and
the amount provided for in base rates, recognized pursuant to the
MPSC authorization.
    
    Accrued PSCR refund Liability for the temporary over-recovery of and a return on power
supply costs and transmission costs incurred by Detroit Edison which are recoverable through
the PSCR mechanism.
    
    Fermi 2 refueling outage Accrued liability for refueling outage at Fermi 2 pursuant to
MPSC authorization.
 2009 Electric Rate Case Filing
   
    
    Continued progress toward correcting the existing rate structure to more accurately
reflect the actual cost of providing service to business customers;
    
    Continued application of an adjustment mechanism for Electric Choice sales that
reconciles actual customer choice sales with a base customer choice sales level of 1,586
GWh;
    
    Continued application of adjustment mechanisms to track expenses associated with
restoration costs (storm and non-storm related expenses) and line clearance expenses.
Annual reconciliations will be required using a base expense level of $117 million and $47
million, respectively. The change in base expense level was applied effective as of the
July 26, 2009 self-implementation date;
 44




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##### Table of Contents




    
    Implementation of a pilot Revenue Decoupling Mechanism, that will compare actual
non-weather normalized sales per customer with the base sales per customer level
established in this case for the period February 1, 2010 to
January 31, 2011; and
    
    Implementation of an Uncollectible Expense Tracking Mechanism, based on a $66 million
expense level, with an 80/20 percent sharing of the expenses above or below the base
amount. The Uncollectible Expenses Tracking Mechanism was applied effective as of the July
26, 2009 self-implementation date.
 Renewable Energy Plan
  Energy Optimization Plans
  2009 Detroit Edison Depreciation Filing
  Power Supply Cost Recovery Proceedings
  2007 Plan Year
 45




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##### Table of Contents



Net Over
    
    PSCR Cost of Power
    
    Description of NetPSCR Year
    
    Date Filed
    
    (Under)-recovery
    
    Sold
    
    Under-recovery2008
    
    
    
    March 2009
    
    ($15.6) million
    
    $1.3 billion
    
    The total amount
reflects an
under-recovery of
$14.8 million, plus
$0.8 million in
accrued interest
due from customers
 2009 Plan Year
 2010 Plan Year
 Merger Control Premium Costs
  Other
  46




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##### Table of Contents



NOTE 11  INCOME TAXES
 Income Tax Summary
   (Dollars in Millions)
    
    2009
    
    
    2008
    
    
    2007Income tax expense at 35% statutory rate
    
    $
    211
    
    
    $
    181
    
    
    $
    163Investment tax credits
    
    
    (6
    )
    
    
    (6
    )
    
    
    (7
    )Depreciation
    
    
    3
    
    
    
    3
    
    
    
    3Employee Stock Ownership Plan dividends
    
    
    (4
    )
    
    
    (2
    )
    
    
    (4
    )Medicare Part D subsidy
    
    
    (5
    )
    
    
    (4
    )
    
    
    (4
    )Domestic production activities deduction
    
    
    (5
    )
    
    
    (2
    )
    
    
    (2
    )State and other income taxes, net of federal benefit
    
    
    36
    
    
    
    19
    
    
    
    1Other, net
    
    
    (2
    )
    
    
    (3
    )
    
    
    (1
    )Total
    
    $
    228
    
    
    $
    186
    
    
    $
    149Effective income tax rate
    
    
    37.7
    %
    
    
    36.0
    %
    
    
    32.0
    %
  (in Millions)
    
    2009
    
    
    2008
    
    
    2007Current income taxes Federal
    
    $
    168
    
    
    $
    66
    
    
    $
    257State and other income tax expense
    
    
    45
    
    
    
    30
    
    
    
    3Total current income taxes
    
    
    213
    
    
    
    96
    
    
    
    260Deferred income taxes Federal
    
    
    4
    
    
    
    91
    
    
    
    (109
    )State and other income tax expense
    
    
    11
    
    
    
    (1
    )
    
    
    (2
    )Total deferred income taxes
    
    
    15
    
    
    
    90
    
    
    
    (111
    )Total
    
    $
    228
    
    
    $
    186
    
    
    $
    149
    (in Millions)
    
    2009
    
    
    2008Property, plant and equipment
    
    $
    (1,409
    )
    
    $
    (1,297
    )Securitized regulatory assets
    
    
    (474
    )
    
    
    (545
    )Pension and benefits
    
    
    103
    
    
    
    110Other comprehensive income
    
    
    9
    
    
    
    (1
    )Other, net
    
    
    (76
    )
    
    
    (142
    )$
    (1,847
    )
    
    $
    (1,875
    )
 47




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##### Table of Contents



(in Millions)
    
    2009
    
    
    2008Deferred income tax liabilities
    
    $
    (2,832
    )
    
    $
    (2,777
    )Deferred income tax assets
    
    
    985
    
    
    
    902$
    (1,847
    )
    
    $
    (1,875
    )Current deferred income tax asset (included in Current Assets  Other)
    
    $
    24
    
    
    $
    19Long term deferred income tax liabilities
    
    
    (1,871
    )
    
    
    (1,894
    )$
    (1,847
    )
    
    $
    (1,875
    )
  Uncertain Tax Positions
  (in Millions)
    
    2009
    
    
    2008
    
    
    2007Balance at January 1
    
    $
    70
    
    
    $
    7
    
    
    $
    12Additions for tax positions of current years
    
    
    10
    
    
    
    72
    
    
    
    2Additions for tax positions of prior years
    
    
    24
    
    
    
    (9
    )
    
    
    Reductions for tax positions of prior years
    
    
    (8
    )
    
    
    
    
    
    
    (7
    )Balance at December 31
    
    $
    96
    
    
    $
    70
    
    
    $
    7
    Michigan Business Tax
   48




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NOTE 12  LONG-TERM DEBT
  (in Millions)
    
    2009
    
    
    2008Detroit Edison Taxable Debt, Principally Secured5.9% due 2010 to 2038
    
    $
    2,829
    
    
    $
    2,841Detroit Edison Tax- Exempt Revenue Bonds (2)5.5% due 2011 to 2038
    
    
    1,263
    
    
    
    1,2634,092
    
    
    
    4,104Less amount due within one year
    
    
    (513
    )
    
    
    (13
    )$
    3,579
    
    
    $
    4,091Securitization Bonds6.5% due 2010 to 2015
    
    $
    933
    
    
    $
    1,064Less amount due within one year
    
    
    (140
    )
    
    
    (132
    )$
    793
    
    
    $
    932
 
 (1)
    
    Weighted average interest rates as of December
31, 2009 are shown below the description of each
category of debt.(2)
    
    Detroit Edison Tax-Exempt Revenue Bonds are
issued by a public body that loans the proceeds to
Detroit Edison on terms substantially mirroring the
Revenue Bonds. Debt Issuances
  (in Millions)Month Issued
    
    Type
    
    Interest Rate
    
    
    Maturity
    
    
    AmountApril
    
    Tax-Exempt Revenue Bonds  (1)
    
    
    6.00
    %
    
    
    2036
    
    
    
    69June
    
    Tax-Exempt Revenue Bonds  (2)
    
    
    5.625
    %
    
    
    2020
    
    
    
    32June
    
    Tax-Exempt Revenue Bonds  (3)
    
    
    5.25
    %
    
    
    2029
    
    
    
    60June
    
    Tax-Exempt Revenue Bonds  (4)
    
    
    5.50
    %
    
    
    2029
    
    
    
    59November
    
    Tax-Exempt Revenue Bonds  (5)
    
    
    3.05
    %
    
    
    2024
    
    
    
    65$
    285
 
 (1)
    
    Proceeds were used to refund existing Tax-Exempt Revenue Bonds.(2)
    
    These Tax-Exempt Revenue Bonds were converted from a variable rate mode and remarketed in a
fixed rate mode to maturity.(3)
    
    These Tax-Exempt Revenue Bonds were converted from a variable rate mode and remarketed in a
fixed rate mode with a five-year mandatory put.(4)
    
    These Tax-Exempt Revenue Bonds were converted from a variable rate mode and remarketed in a
fixed rate mode with a seven-year mandatory put.(5)
    
    These Tax-Exempt Revenue Bonds were issued in a fixed rate mode with a three-year mandatory
put. Proceeds were used to refund existing Tax-Exempt Revenue Bonds. 49




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Debt Retirements and Redemptions
  (in Millions)Month Retired
    
    Type
    
    Interest Rate
    
    
    Maturity
    
    
    AmountApril
    
    Tax-Exempt Revenue Bonds (1)
    
    Variable
    
    
    2036
    
    
    $
    69December
    
    Tax-Exempt Revenue Bonds (1)
    
    
    6.40
    %
    
    
    2024
    
    
    
    65$
    134
 
 (1)
    
    These Tax-Exempt Revenue Bonds were redeemed with the proceeds from the issuance of new Detroit
Edison Tax-Exempt Revenue Bonds.  2015 &(in Millions)
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    thereafter
    
    
    TotalAmount to mature
    
    $
    513
    
    
    $
    152
    
    
    $
    303
    
    
    $
    313
    
    
    $
    341
    
    
    $
    2,475
    
    
    $
    4,097
 Default Provisions
  NOTE 13  PREFERRED AND PREFERENCE SECURITIES
  NOTE 14  SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS
    50




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NOTE 15  CAPITAL AND OPERATING LEASES
 Lessee
  Capital
    
    
    Operating(in Millions)
    
    Leases
    
    
    Leases2010
    
    $
    9
    
    
    $
    232011
    
    
    7
    
    
    
    222012
    
    
    5
    
    
    
    222013
    
    
    5
    
    
    
    192014
    
    
    4
    
    
    
    14Thereafter
    
    
    7
    
    
    
    77Total minimum lease payments
    
    
    37
    
    
    $
    177Less imputed interest
    
    
    5Present value of net minimum lease payments
    
    
    32Less current portion
    
    
    7Non-current portion
    
    $
    25
  NOTE 16  COMMITMENTS AND CONTINGENCIES
 Environmental
 Air
  Water
 51




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##### Table of Contents



Contaminated Sites
 Landfill
 Nuclear Operations
 Property Insurance
      Public Liability Insurance
  Nuclear Fuel Disposal Costs
  52




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##### Table of Contents



Guarantees
   Labor Contracts
  Purchase Commitments
  Bankruptcies
   53




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Other
   NOTE 17  RETIREMENT BENEFITS AND TRUSTEED ASSETS
 Measurement Date
  Pension Plan Benefits
    Pension Plans(in Millions)
    
    2009
    
    
    2008
    
    
    2007Service cost
    
    $
    43
    
    
    $
    45
    
    
    $
    51Interest cost
    
    
    158
    
    
    
    148
    
    
    
    138Expected return on plan assets
    
    
    (165
    )
    
    
    (163
    )
    
    
    (148
    )Amortization of:Net actuarial loss
    
    
    38
    
    
    
    27
    
    
    
    46Prior service cost
    
    
    7
    
    
    
    5
    
    
    
    6Special termination benefits
    
    
    
    
    
    
    
    
    
    
    8Net pension cost
    
    $
    81
    
    
    $
    62
    
    
    $
    101
  Pension Plans(in Millions)
    
    2009
    
    
    2008Other changes in plan assets and benefit obligations
recognized in other comprehensive income and regulatory assetsNet actuarial loss
    
    $
    177
    
    
    $
    665Amortization of net actuarial loss
    
    
    (38
    )
    
    
    (27
    )Prior service cost
    
    
    
    
    
    
    12Amortization of prior service cost
    
    
    (7
    )
    
    
    (6
    )Total recognized in other comprehensive income and regulatory assets
    
    $
    132
    
    
    $
    644
 54




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##### Table of Contents



Pension Plans(in Millions)
    
    2009
    
    
    2008Total recognized in net periodic pension cost and other
comprehensive income and regulatory assets
    
    $
    213
    
    
    $
    707Estimated amounts to be amortized from accumulated other
comprehensive income and regulatory assets into net periodic
benefit cost during next fiscal yearNet actuarial loss
    
    $
    70
    
    
    $
    37Prior service cost
    
    
    5
    
    
    
    7
  Pension Plans(in Millions)
    
    2009
    
    
    2008Accumulated benefit obligation, end of year
    
    $
    2,490
    
    
    $
    2,206Change in projected benefit obligation Projected benefit obligation, beginning of year
    
    $
    2,368
    
    
    $
    2,754Adjustment due to plan sponsorship change
    
    
    
    
    
    
    (385
    )December 2007 benefit payments
    
    
    
    
    
    
    (15
    )Service cost
    
    
    43
    
    
    
    45Interest cost
    
    
    158
    
    
    
    149Actuarial (gain) loss
    
    
    264
    
    
    
    (53
    )Benefits paid
    
    
    (156
    )
    
    
    (156
    )Measurement date change
    
    
    
    
    
    
    16Plan amendments
    
    
    
    
    
    
    13Projected benefit obligation, end of year
    
    $
    2,677
    
    
    $
    2,368Change in plan assetsPlan assets at fair value, beginning of year
    
    $
    1,387
    
    
    $
    2,599Adjustment due to plan sponsorship change
    
    
    
    
    
    
    (752
    )December 2007 contributions
    
    
    
    
    
    
    150December 2007 payments
    
    
    
    
    
    
    (15
    )Actual return on plan assets
    
    
    252
    
    
    
    (557
    )Company contributions
    
    
    204
    
    
    
    104Measurement date change
    
    
    
    
    
    
    14Benefits paid
    
    
    (156
    )
    
    
    (156
    )Plan assets at fair value, end of year
    
    $
    1,687
    
    
    $
    1,387Funded status, end of year
    
    $
    (990
    )
    
    $
    (981
    )Amount recorded as:Current liabilities
    
    $
    (3
    )
    
    $
    (3
    )Noncurrent liabilities
    
    
    (987
    )
    
    
    (978
    )$
    (990
    )
    
    $
    (981
    )Amounts recognized in regulatory assets (see Note 10)Net actuarial loss
    
    $
    1,241
    
    
    $
    1,106Prior service cost
    
    
    20
    
    
    
    27Regulatory assets
    
    $
    1,261
    
    
    $
    1,133
 55




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##### Table of Contents



2009
    
    2008
    
    2007Projected benefit obligationDiscount rate
    
    
    5.90
    %
    
    
    6.90
    %
    
    
    6.50
    %Rate of compensation increase
    
    
    4.00
    %
    
    
    4.00
    %
    
    
    4.00
    %Net pension costsDiscount rate
    
    
    6.90
    %
    
    
    6.50
    %
    
    
    5.70
    %Rate of compensation increase
    
    
    4.00
    %
    
    
    4.00
    %
    
    
    4.00
    %Expected long-term rate of return on plan assets
    
    
    8.75
    %
    
    
    8.75
    %
    
    
    8.75
    %
  (in Millions)2010
    
    $
    1612011
    
    
    1652012
    
    
    1692013
    
    
    1752014
    
    
    1802015 - 2019
    
    
    993Total
    
    $
    1,843
   56




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##### Table of Contents



U.S. Large Cap Equity Securities
    
    
    25
    %U.S. Small Cap and Mid Cap Equity Securities
    
    
    6Non U.S. Equity Securities
    
    
    14Fixed Income Securities
    
    
    26Hedge Funds and Similar Investments
    
    
    20Private Equity and Other
    
    
    6Short-Term Investments
    
    
    3100
    %
  Fair Value Measurements at
 December 31, 2009
 Balance at(in Millions)(a)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    December 31, 2009Asset Category:Short-term investments (b)
    
    $
    
    
    
    $
    42
    
    
    $
    
    
    
    $
    42Equity securitiesU.S. Large Cap(c)
    
    
    436
    
    
    
    20
    
    
    
    
    
    
    
    456U.S. Small/Mid Cap(d)
    
    
    101
    
    
    
    2
    
    
    
    
    
    
    
    103Non U.S(e)
    
    
    153
    
    
    
    79
    
    
    
    
    
    
    
    232Fixed income securities(f)
    
    
    31
    
    
    
    397
    
    
    
    
    
    
    
    428Other types of investmentsHedge Funds and Similar Investments(g)
    
    
    
    
    
    
    
    
    
    
    320
    
    
    
    320Private Equity and Other(h)
    
    
    
    
    
    
    
    
    
    
    106
    
    
    
    106Total
    
    $
    721
    
    
    $
    540
    
    
    $
    426
    
    
    $
    1,687
 
 (a)
    
    See Note 4  Fair Value for a description of levels within the fair value hierarchy.(b)
    
    This category predominantly represents certain short-term fixed income securities and money
market investments that are managed in separate accounts or commingled funds. Pricing for
investments in this category are obtained from quoted prices in actively traded markets or
valuations from brokers or pricing services.(c)
    
    This category comprises both actively and not actively managed portfolios that track the S&P
500 low cost equity index funds. Investments in this category are exchange-traded securities
whereby unadjusted quote prices can be obtained. Exchange-traded securities held in a
commingled fund are classified as Level 2 assets.(d)
    
    This category represents portfolios of small and medium mid capitalization domestic equities.
Investments in this category are exchange-traded securities whereby unadjusted quote prices
can be obtained. Exchange-traded securities held in a commingled fund are classified as Level
2 assets.(e)
    
    This category primarily consists of portfolios of non-U.S. developed and emerging market
equities. Investments in this category are exchange-traded securities whereby unadjusted
quote prices can be obtained. Exchange-traded securities held in a commingled fund are
classified as Level 2 assets.(f)
    
    This category includes corporate bonds from diversified industries, U.S. Treasuries, and
mortgage backed securities. Pricing for investments in this category is obtained from quoted
prices in actively traded markets and quotations from broker or pricing services. Non-exchange
traded securities and exchange-traded securities held in commingled funds are classified as
Level 2 assets.(g)
    
    This category includes a diversified group of funds and strategies that attempt to capture
financial market inefficiencies. Pricing for investments in this category is based on limited
observable inputs as there is little, if any, publicly available pricing. Valuations for
assets in this category may be based on relative publicly-traded securities, derivatives, and
privately-traded securities.(h)
    
    This category includes a diversified group of funds and strategies that primarily invests in
private equity partnerships. This category also includes investments in timber and private
mezzanine debt. Pricing for investments in this category is based on limited observable
inputs as there is little, if any, publicly available 57




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pricing. Valuations for assets in this category may be based on discounted cash flow analyses,
relative publicly-traded comparables and comparable transactions.  Fair Value Measurements Using Significant Unobservable Inputs (Level 3):
 Hedge Fundsand Similar
    
    
    Private Equity(in Millions)
    
    Investments
    
    
    and Other
    
    
    TotalBeginning Balance at January 1, 2009
    
    $
    310
    
    
    $
    105
    
    
    $
    415Total realized/unrealized gains (losses)
    
    
    20
    
    
    
    (7
    )
    
    
    13Purchases, sales and settlements
    
    
    (10
    )
    
    
    8
    
    
    
    (2
    )Ending Balance at December 31, 2009
    
    $
    320
    
    
    $
    106
    
    
    $
    426The amount of total gains (losses) for
the period attributable to the change in
unrealized gains or losses related to
assets
still held at the end of the period
    
    $
    23
    
    
    $
    (7
    )
    
    $
    16
  Other Postretirement Benefits
   (in Millions)
    
    2009
    
    
    2008
    
    
    2007Service cost
    
    $
    45
    
    
    $
    48
    
    
    $
    48Interest cost
    
    
    102
    
    
    
    94
    
    
    
    90Expected return on plan assets
    
    
    (42
    )
    
    
    (58
    )
    
    
    (54
    )Amortization of:Net loss
    
    
    53
    
    
    
    27
    
    
    
    51Prior service costs
    
    
    2
    
    
    
    2
    
    
    
    4Net transition obligation
    
    
    2
    
    
    
    2
    
    
    
    7Special termination benefits
    
    
    
    
    
    
    
    
    
    
    2Net postretirement cost
    
    $
    162
    
    
    $
    115
    
    
    $
    148
 58




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(in Millions)
    
    2009
    
    
    2008Other changes in plan assets and APBO recognized in regulatory assetsNet actuarial (gain) loss
    
    $
    (38
    )
    
    $
    237Amortization of net actuarial loss
    
    
    (52
    )
    
    
    (28
    )Prior service (credit)
    
    
    
    
    
    
    (1
    )Amortization of prior service cost
    
    
    (2
    )
    
    
    (2
    )Amortization of transition (asset)
    
    
    (2
    )
    
    
    (2
    )Total recognized in regulatory assets
    
    $
    (94
    )
    
    $
    204Total recognized in net periodic pension cost and regulatory assets
    
    $
    68
    
    
    $
    319
 (in Millions)Estimated amounts to be amortized from regulatory assets
into net periodic benefit cost during next fiscal yearNet actuarial loss
    
    $
    38
    
    
    $
    49Prior service cost
    
    
    2
    
    
    
    2Net transition obligation
    
    
    2
    
    
    
    2
 59




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##### Table of Contents



(in Millions)
    
    2009
    
    
    2008Change in accumulated post retirement benefit obligation during the yearAccumulated postretirement benefit obligation, beginning of year
    
    $
    1,553
    
    
    $
    1,479December 2007 cash flow
    
    
    
    
    
    
    (4
    )Service cost
    
    
    45
    
    
    
    48Interest cost
    
    
    102
    
    
    
    94Plan amendments
    
    
    
    
    
    
    (1
    )Actuarial (gain)/loss
    
    
    21
    
    
    
    (7
    )Measurement date change
    
    
    
    
    
    
    11Benefits paid
    
    
    (75
    )
    
    
    (72
    )Medicare Part D
    
    
    4
    
    
    
    5Accumulated postretirement benefit obligation , end of year
    
    $
    1,650
    
    
    $
    1,553Change in plan assets during the yearPlan assets at fair value, beginning of year
    
    $
    478
    
    
    $
    658December 2007 cash flow
    
    
    
    
    
    
    1Actual return on plan assets
    
    
    99
    
    
    
    (189
    )Measurement date change
    
    
    
    
    
    
    5Company contributions
    
    
    90
    
    
    
    76Benefits paid
    
    
    (75
    )
    
    
    (73
    )Plan assets at fair value, end of year
    
    $
    592
    
    
    $
    478Funded status, as of December 31
    
    $
    (1,058
    )
    
    $
    (1,075
    )Non-current liabilities
    
    $
    (1,058
    )
    
    $
    (1,075
    )Amounts recognized in regulatory assets (see Note 10)Net actuarial loss
    
    $
    510
    
    
    $
    600Prior service cost
    
    
    (2
    )
    
    
    Net transition obligation
    
    
    7
    
    
    
    9$
    515
    
    
    $
    609
  2009
    
    
    2008
    
    
    2007Projected Benefit ObligationDiscount rate
    
    
    5.90
    %
    
    
    6.90
    %
    
    
    6.50
    %Net Benefit CostsDiscount rate
    
    
    6.90
    %
    
    
    6.50
    %
    
    
    5.70
    %Expected long-term rate of return on Plan assets
    
    
    8.75
    %
    
    
    8.75
    %
    
    
    8.75
    %Health care trend rate pre-65
    
    
    7.00
    %
    
    
    7.00
    %
    
    
    8.00
    %Health care trend rate post-65
    
    
    7.00
    %
    
    
    6.00
    %
    
    
    7.00
    %Ultimate health care trend rate
    
    
    5.00
    %
    
    
    5.00
    %
    
    
    5.00
    %Year in which ultimate reached
    
    
    2016
    
    
    
    2011
    
    
    
    2011
  60




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##### Table of Contents



(in Millions)2010
    
    $
    922011
    
    
    972012
    
    
    1002013
    
    
    1042014
    
    
    1082015 - 2019
    
    
    611Total
    
    $
    1,112
   (in Millions)2010
    
    $
    52011
    
    
    62012
    
    
    62013
    
    
    62014
    
    
    72015 - 2019
    
    
    39Total
    
    $
    69
   U.S. Large Cap Equity Securities
    
    
    20
    %U.S. Small Cap and Mid Cap Equity Securities
    
    
    5Non U.S. Equity Securities
    
    
    20Fixed Income Securities
    
    
    25Hedge Funds and Similar Investments
    
    
    20Private Equity and Other
    
    
    10Short-Term Investments
    
    
    0100
    %
  Fair Value Measurements at
December 31, 2009
 Balance at(in Millions)(a)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    December 31, 2009Asset Category:Short-term investments(b)
    
    $
    
    
    
    $
    12
    
    
    $
    
    
    
    $
    12Equity securitiesU.S. Large Cap(c)
    
    
    102
    
    
    
    55
    
    
    
    
    
    
    
    157U.S. Small/Mid Cap(d)
    
    
    32
    
    
    
    34
    
    
    
    
    
    
    
    66Non U.S(e)
    
    
    50
    
    
    
    47
    
    
    
    
    
    
    
    97Fixed income securities(f)
    
    
    5
    
    
    
    160
    
    
    
    
    
    
    
    165Other types of investmentsHedge Funds and Similar Investments(g)
    
    
    
    
    
    
    
    
    
    
    63
    
    
    
    63Private Equity and Other(h)
    
    
    
    
    
    
    
    
    
    
    32
    
    
    
    32Total
    
    $
    189
    
    
    $
    308
    
    
    $
    95
    
    
    $
    592
 
 (a)
    
    See Note 4  Fair Value for a description of levels within the fair value hierarchy. 61




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##### Table of Contents



(b)
    
    This category predominantly represents certain short-term fixed income securities and money
market investments that are managed in separate accounts or commingled funds. Pricing for
investments in this category are obtained from quoted prices in actively traded markets or
valuations from brokers or pricing services.(c)
    
    This category comprises both actively and not actively managed portfolios that track the S&P
500 low cost equity index funds. Investments in this category are exchange-traded securities
whereby unadjusted quote prices can be obtained. Exchange-traded securities held in a
commingled fund are classified as Level 2 assets.(d)
    
    This category represents portfolios of small and medium mid capitalization domestic equities.
Investments in this category are exchange-traded securities whereby unadjusted quote prices
can be obtained. Exchange-traded securities held in a commingled fund are classified as Level
2 assets.(e)
    
    This category primarily consists of portfolios of non-U.S. developed and emerging market
equities. Investments in this category are exchange-traded securities whereby unadjusted
quote prices can be obtained. Exchange-traded securities held in a commingled fund are
classified as Level 2 assets.(f)
    
    This category includes corporate bonds from diversified industries, U.S. Treasuries, and
mortgage backed securities. Pricing for investments in this category is obtained from quoted
prices in actively traded markets and quotations from broker or pricing services. Non-exchange
traded securities and exchange-traded securities held in commingled funds are classified as
Level 2 assets.(g)
    
    This category includes a diversified group of funds and strategies that attempt to capture
financial market inefficiencies. Pricing for investments in this category is based on limited
observable inputs as there is little, if any, publicly available pricing. Valuations for
assets in this category may be based on relative publicly-traded securities, derivatives, and
privately-traded securities.(h)
    
    This category includes a diversified group of funds and strategies that primarily invests in
private equity partnerships. This category also includes investments in timber and private
mezzanine debt. Pricing for investments in this category is based on limited observable
inputs as there is little, if any, publicly available pricing. Valuations for assets in this
category may be based on discounted cash flow analyses, relative publicly-traded comparables
and comparable transactions.  Fair Value Measurements Using Significant Unobservable Inputs (Level 3):
 HedgeFunds Similar
    
    
    Private Equityand(in Millions)
    
    Investments
    
    
    Other
    
    
    TotalBeginning Balance at January 1, 2009
    
    $
    52
    
    
    $
    26
    
    
    $
    78Total realized/unrealized gains (losses)
    
    
    4
    
    
    
    3
    
    
    
    7Purchases, sales and settlements
    
    
    7
    
    
    
    3
    
    
    
    10Ending Balance at December 31, 2009
    
    $
    63
    
    
    $
    32
    
    
    $
    95The amount of total gains (losses)
for the period attributable to the
change in unrealized gains or
losses related to assets
still held at the end of the period
    
    $
    4
    
    
    $
    2
    
    
    $
    6
 62




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##### Table of Contents



NOTE 18  SUPPLEMENTAL CASH FLOW INFORMATION
  (in Millions)
    
    2009
    
    
    2008
    
    
    2007Changes in Assets and Liabilities, Exclusive of Changes Shown SeparatelyAccounts receivable, net
    
    $
    16
    
    
    $
    72
    
    
    $
    (163
    )Inventories
    
    
    30
    
    
    
    (24
    )
    
    
    (47
    )Recoverable pension and postretirement costs
    
    
    (13
    )
    
    
    (852
    )
    
    
    594Accrued pension liability  affiliates
    
    
    9
    
    
    
    598
    
    
    
    (330
    )Accounts payable
    
    
    (56
    )
    
    
    (82
    )
    
    
    73Accrued power supply cost recovery revenue
    
    
    7
    
    
    
    82
    
    
    
    41Accrued payroll
    
    
    2
    
    
    
    3
    
    
    
    (50
    )Income taxes payable
    
    
    (109
    )
    
    
    (29
    )
    
    
    10General taxes
    
    
    
    
    
    
    (12
    )
    
    
    4Risk management and trading activities
    
    
    8
    
    
    
    1
    
    
    
    (4
    )Accrued postretirement liability  affiliates
    
    
    (17
    )
    
    
    259
    
    
    
    (239
    )Other assets
    
    
    (26
    )
    
    
    3
    
    
    
    (387
    )Other liabilities
    
    
    110
    
    
    
    99
    
    
    
    285$
    (39
    )
    
    $
    118
    
    
    $
    (213
    )
  (in Millions)
    
    2009
    
    
    2008
    
    
    2007Cash Paid ForInterest (excluding interest capitalized)
    
    $
    328
    
    
    $
    290
    
    
    $
    295Income taxes
    
    
    319
    
    
    
    24
    
    
    
    280
 63




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##### Table of Contents



NOTE 19  RELATED PARTY TRANSACTIONS
   (in Millions)
    
    2009
    
    
    2008
    
    
    2007RevenuesEnergy sales
    
    $
    1
    
    
    $
    
    
    
    $
    Other services
    
    
    4
    
    
    
    6
    
    
    
    5Shared capital assets
    
    
    28
    
    
    
    23
    
    
    
    21CostsFuel and power purchases
    
    
    3
    
    
    
    5
    
    
    
    3Other services and interest
    
    
    3
    
    
    
    7
    
    
    
    6Corporate expenses (net)
    
    
    313
    
    
    
    388
    
    
    
    331OtherDividends declared
    
    
    305
    
    
    
    228
    
    
    
    305Dividends paid
    
    
    305
    
    
    
    305
    
    
    
    305Capital contribution
    
    
    250
    
    
    
    175
    
    
    
    175
 December 31,(in Millions)
    
    2009
    
    
    2008AssetsAccounts receivable
    
    $
    3
    
    
    $
    5Notes receivable
    
    
    82
    
    
    
    41Liabilities & EquityAccounts payable
    
    
    74
    
    
    
    103Other liabilitiesAccrued pension liability
    
    
    987
    
    
    
    978Accrued postretirement liability
    
    
    1,058
    
    
    
    1,075
  NOTE 20  SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
 First
    
    
    Second
    
    
    Third
    
    
    Fourth(in Millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter(1)
    
    
    Quarter
    
    
    Year2009Operating Revenues
    
    $
    1,118
    
    
    $
    1,108
    
    
    $
    1,289
    
    
    $
    1,199
    
    
    $
    4,714Operating Income
    
    
    214
    
    
    
    189
    
    
    
    318
    
    
    
    178
    
    
    
    899Net Income
    
    
    78
    
    
    
    79
    
    
    
    149
    
    
    
    70
    
    
    
    3762008Operating Revenues
    
    
    1,153
    
    
    
    1,173
    
    
    
    1,440
    
    
    
    1,108
    
    
    
    4,874Operating Income
    
    
    139
    
    
    
    151
    
    
    
    316
    
    
    
    194
    
    
    
    800Net Income
    
    
    41
    
    
    
    51
    
    
    
    159
    
    
    
    80
    
    
    
    331
 
 (1)
    
    The 2009 Third Quarter results were adjusted for the effect of the January 2010 Detroit
Edison MPSC rate order that required the refund of a portion of the self implemented rate
increase effective on July 26, 2009. The adjustments resulted in a reduction of Operating
Revenues of $11 million, Operating Income of $11 million and Net Income of $7 million. 64




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##### Table of Contents



Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A.
    
    Controls and Procedures
  
 Item 9B.
    
    Other Information
  
 Part III
 
 Item 10.
    
    Directors, Executive Officers and Corporate Governance
 
 Item 11.
    
    Executive Compensation
 
 Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
 
 Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
  
 Item 14.
    
    Principal Accountant Fees and Services
  2009
    
    
    2008Audit fees (1)
    
    $
    1,231,865
    
    
    $
    1,466,413Audit-related fees (2)
    
    
    37,400
    
    
    
    45,500Total
    
    $
    1,269,265
    
    
    $
    1,511,913
 
 (1)
    
    Represents the aggregate fees for the audits of Detroit Edisons annual financial statements
and for the reviews of the financial statements included in Detroit Edisons Quarterly Reports
on Form 10-Q.(2)
    
    Represents the aggregate fees billed for audit-related services.  65




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##### Table of Contents



Part
 
 Item 15.
    
    Exhibits and Financial Statement Schedules
  (1)
    
    Consolidated financial statements. See Item 8  Financial Statements and Supplementary
Data.(2)
    
    Financial statement schedule. See Item 8  Financial Statements and Supplementary Data.(3)
    
    Exhibits.
 (i)
    
    Exhibits filed herewith.
 4-267
    
    Supplemental Indenture, dated as of November 1, 2009 to the Mortgage and Deed
of Trust dated as of October 1, 1924 between The Detroit Edison Company and
The Bank of New York Mellon Trust Company N.A., as successor trustee (2009
Series CT).4-268
    
    Thirtieth Supplemental Indenture, dated as of November 1, 2009 to the
Collateral Trust Indenture, dated as of June 30, 1993 between The Detroit
Edison Company and The Bank of New York Mellon Trust Company, N.A., as
successor trustee (2009 Series CT Variable Rate Senior Notes due 2024).12-36
    
    Computation of Ratio of Earnings to Fixed Charges.23-22
    
    Consent of PricewaterhouseCoopers LLP.23-23
    
    Consent of Deloitte & Touche LLP.31-53
    
    Chief Executive Officer Section 302 Form 10-K Certification of Periodic Report.31-54
    
    Chief Financial Officer Section 302 Form 10-K Certification of Periodic Report.
 (ii)
    
    Exhibits incorporated herein by reference.
 3(a)
    
    Restated Articles of Incorporation of The Detroit Edison Company, as filed
December 10, 1991. (Exhibit 3-13 to Form 10-Q for the quarter ended June 30,
1999).3(b)
    
    Bylaws of The Detroit Edison Company, as amended through September 22, 1999.
(Exhibit 3-14 to Form 10-Q for the quarter ended September 30, 1999).4(a)
    
    Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit
Edison Company and The Bank of New York Mellon Trust Company, N.A., as
successor trustee (Exhibit B-1 to Registration Statement on Form A-2 (File No.
2-1630)) and indentures supplemental thereto, dated as of dates indicated
below, and filed as exhibits to the filings set forth below:Supplemental Indenture, dated as of December 1, 1940, to the Mortgage and Deed
of Trust, dated as of October 1, 1924, between The Detroit Edison Company and
The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit
B-14 to Registration Statement on Form A-2 (File No. 2-4609)). (amendment)Supplemental Indenture, dated as of September 1, 1947, to the Mortgage and
Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company
and The Bank of New York Mellon Trust Company, N.A., as successor trustee
(Exhibit B-20 to Registration Statement on Form S-1 (File No. 2-7136)).
(amendment)Supplemental Indenture, dated as of March 1, 1950, to the Mortgage and Deed of
Trust, dated as of October 1, 1924, between The Detroit Edison Company and The
Bank of New York Mellon Trust
 66




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##### Table of Contents



Company, N.A., as successor trustee (Exhibit
B-22 to Registration Statement on Form S-1 (File No. 2-8290)). (amendment)Supplemental Indenture, dated as of November 15, 1951, to the Mortgage and
Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company
and The Bank of New York Mellon Trust Company, N.A., as successor trustee
(Exhibit B-23 to Registration Statement on Form S-1 (File No. 2-9226)).
(amendment)Supplemental Indenture, dated as of August 15, 1957, to the Mortgage and Deed
of Trust, dated as of October 1, 1924, between The Detroit Edison Company and
The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit
3-B-30 to Form 8-K dated September 11, 1957). (amendment)Supplemental Indenture, dated as of December 1, 1966, to the Mortgage and Deed
of Trust, dated as of October 1, 1924, between The Detroit Edison Company and
The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit
2-B-32 to Registration Statement on Form S-9 (File No. 2-25664)). (amendment)Supplemental Indenture, dated as of February 15, 1990, to the Mortgage and
Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company
and The Bank of New York Mellon Trust Company, N.A., as successor trustee
(Exhibit 4-212 to Form 10-K for the year ended December 31, 2000). (1990
Series B, C, E and F) Supplemental Indenture, dated as of May 1, 1991, to the
Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit
Edison Company and The Bank of New York Mellon Trust Company, N.A., as
successor trustee (Exhibit 4-178 to Form 10-K for the year ended December 31,
1996). (1991 Series BP and CP)Supplemental Indenture, dated as of May 15, 1991, to the Mortgage and Deed of
Trust, dated as of October 1, 1924, between The Detroit Edison Company and The
Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit
4-179 to Form 10-K for the year ended December 31, 1996). (1991 Series DP)Supplemental Indenture, dated as of February 29, 1992, to the Mortgage and
Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company
and The Bank of New York Mellon Trust Company, N.A., as successor trustee
(Exhibit 4-187 to Form 10-Q for the quarter ended March 31, 1998). (1992
Series AP)Supplemental Indenture, dated as of April 26, 1993, to the Mortgage and Deed
of Trust, dated as of October 1, 1924, between The Detroit Edison Company and
The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit
4-215 to Form 10-K for the year ended December 31, 2000). (amendment)Supplemental Indenture, dated as of August 1, 1999, to the Mortgage and Deed
of Trust, dated as of October 1, 1924, between The Detroit Edison Company and
The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit
4-204 to Form 10-Q for the quarter ended September 30, 1999). (1999 Series AP,
BP and CP)Supplemental Indenture, dated as of August 1, 2000, to the Mortgage and Deed
of Trust, dated as of October 1, 1924, between The Detroit Edison Company and
The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit
4-210 to Form 10-Q for the quarter ended September 30, 2000). (2000 Series BP)Supplemental Indenture, dated as of March 15, 2001, to the Mortgage and Deed
of Trust, dated as of October 1, 1924, between The Detroit Edison Company and
The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit
4-222 to Form 10-Q for the quarter ended March 31, 2001). (2001 Series AP)
 67




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##### Table of Contents



Supplemental Indenture, dated as of May 1, 2001, to the Mortgage and Deed of
Trust, dated as of October 1, 1924, between Detroit Edison and The Bank of New
York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-226 to Form
10-Q for the quarter ended June 30, 2001). (2001 Series BP)Supplemental Indenture, dated as of August 15, 2001, to the Mortgage and Deed
of Trust, dated as of October 1, 1924, between The Detroit Edison Company and
The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit
4-227 to Form 10-Q for the quarter ended September 30, 2001). (2001 Series CP)Supplemental Indenture, dated as of September 15, 2001, to the Mortgage and
Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company
and The Bank of New York Mellon Trust Company, N.A., as successor trustee
(Exhibit 4-228 to Form 10-Q for the quarter ended September 30, 2001). (2001
Series D and E)Supplemental Indenture, dated as of September 17, 2002, to the Mortgage and
Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company
and The Bank of New York Mellon Trust Company, N.A., as successor trustee
(Exhibit 4.1 to Registration Statement on Form S-3 (File No. 333-100000)).
(amendment and successor trustee)Supplemental Indenture, dated as of October 15, 2002, to the Mortgage and Deed
of Trust, dated as of October 1, 1924, between The Detroit Edison Company and
The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit
4-230 to Form 10-Q for the quarter ended September 30, 2002). (2002 Series A
and B)Supplemental Indenture, dated as of December 1, 2002, to the Mortgage and Deed
of Trust, dated as of October 1, 1924, between The Detroit Edison Company and
The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit
4-232 to Form 10-K for the year ended December 31, 2002). (2002 Series C and
D)Supplemental Indenture, dated as of August 1, 2003, to the Mortgage and Deed
of Trust, dated as of October 1, 1924, between The Detroit Edison Company and
The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit
4-235 to Form 10-Q for the quarter ended September 30, 2003). (2003 Series A)Supplemental Indenture, dated as of March 15, 2004, to the Mortgage and Deed
of Trust, dated as of October 1, 1924, between The Detroit Edison Company and
The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit
4-238 to Form 10-Q for the quarter ended March 31, 2004). (2004 Series A and
B)Supplemental Indenture, dated as of July 1, 2004, to the Mortgage and Deed of
Trust, dated as of October 1, 1924, between The Detroit Edison Company and The
Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit
4-240 to Form 10-Q for the quarter ended June 30, 2004). (2004 Series D)Supplemental Indenture, dated as of April 1, 2005, to the Mortgage and Deed of
Trust, dated as of October 1, 1924, between Detroit Edison and The Bank of New
York Mellon Trust Company, N.A., as successor trustee (Exhibit 4.3 to
Registration Statement on Form S-4 (File No. 333-123926)). (2005 Series AR and
BR)Supplemental Indenture, dated as of September 15, 2005, to the Mortgage and
Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company
and The Bank of New York Mellon Trust Company, N.A., as successor trustee
(Exhibit 4.2 to Form 8-K dated September 29, 2005). (2005 Series C)Supplemental Indenture, dated as of September 30, 2005, to the Mortgage and
Deed of Trust, dated as of October 1, 1924, between Detroit Edison and The
Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit
4-248 to Form 10-Q for the quarter ended September 30, 2005). (2005 Series E)
 68




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##### Table of Contents



Supplemental Indenture, dated as of May 15, 2006, to the Mortgage and Deed of
Trust, dated as of October 1, 1924, between The Detroit Edison Company and The
Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit
4-250 to Form 10-Q for the quarter ended June 30, 2006). (2006 Series A)Supplemental Indenture, dated as of December 1, 2007, to the Mortgage and Deed
of Trust, dated as of October 1, 1924, between The Detroit Edison Company and
The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit
4.2 to Form 8-K dated December 18, 2007). (2007 Series A)Supplemental Indenture, dated as of May 1, 2008 to Mortgage and Deed of Trust
dated as of October 1, 1924 between The Detroit Edison Company and The Bank of
New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-253 to
Form 10-Q for the quarter ended June 30, 2008). (2008 Series ET)Supplemental Indenture, dated as of June 1, 2008 to Mortgage and Deed of Trust
dated as of October 1, 1924 between The Detroit Edison Company and The Bank of
New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-255 to
Form 10-Q for the quarter ended June 30, 2008). (2008 Series G)Supplemental Indenture, dated as of July 1, 2008 to Mortgage and Deed of Trust
dated as of October 1, 1924 between The Detroit Edison Company and The Bank of
New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-257 to
Form 10-Q for the quarter ended June 30, 2008). (2008 Series KT)Supplemental Indenture, dated as of October 1, 2008 to Mortgage and Deed of
Trust dated as of October 1, 1924 between The Detroit Edison Company and The
Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit
4-259 to Form 10-Q for the quarter ended September 30, 2008). (2008 Series J)Supplemental Indenture, dated as of December 1, 2008 to Mortgage and Deed of
Trust dated as of October 1, 1924 between The Detroit Edison Company and The
Bank of New York Mellon Trust Company, N.A., as successor trustee, providing
for General and Refunding Mortgage Bonds. (Exhibit 4-261 to Form 10-K for the
year ended December 31, 2008). (2008 Series LT)Supplemental Indenture, dated as of March 15, 2009 to Mortgage and Deed of
Trust dated as of October 1, 1924 between The Detroit Edison Company and The
Bank of New York Mellon Trust Company N.A., as successor trustee (Exhibit
4-263 to Form 10-Q for the quarter ended March 31, 2009). (2009 Series BT)4(b)
    
    Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit
Edison Company and The Bank of New York Mellon Trust Company, N.A., as
successor trustee (Exhibit 4-152 to Registration Statement on Form S-3 (File
No. 33-50325)).Ninth Supplemental Indenture, dated as of October 10, 2001, to the Collateral
Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company
and The Bank of New York Mellon Trust Company, N.A., as successor trustee
(Exhibit 4-229 to Form 10-Q for the quarter ended September 30, 2001). (6.125%
Senior Notes due 2010)Tenth Supplemental Indenture, dated as of October 23, 2002, to the Collateral
Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company
and The Bank of New York Mellon Trust Company, N.A., as successor trustee
(Exhibit 4-231 to Form 10-Q for the quarter ended September 30, 2002). (5.20%
Senior Notes due 2012 and 6.35% Senior Notes due 2032)Eleventh Supplemental Indenture, dated as of December 1, 2002, to the
Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit
Edison Company and The Bank of New York Mellon Trust Company, N.A., as
successor trustee (Exhibit 4-233 to Form 10-Q for the quarter ended March 31,
2003). (5.45% Senior Notes due 2032 and 5.25% Senior Notes due 2032)Twelfth Supplemental Indenture, dated as of August 1, 2003, to the Collateral
Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company
and The Bank of New York Mellon Trust Company, N.A., as successor trustee
(Exhibit 4-236 to Form 10-Q for the quarter ended September 30, 2003). (5 1/2%
Senior Notes due 2030)
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Thirteenth Supplemental Indenture, dated as of April 1, 2004, to the
Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit
Edison Company and The Bank of New York Mellon Trust Company, N.A., as
successor trustee (Exhibit 4-237 to Form 10-Q for the quarter ended March 31,
2004). (4.875% Senior Notes Due 2029 and 4.65% Senior Notes due 2028)Fourteenth Supplemental Indenture, dated as of July 15, 2004, to the
Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit
Edison Company and The Bank of New York Mellon Trust Company, N.A., as
successor trustee (Exhibit 4-239 to Form 10-Q for the quarter ended June 30,
2004). (2004 Series D 5.40% Senior Notes due 2014)Sixteenth Supplemental Indenture, dated as of April 1, 2005, to the Collateral
Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company
and The Bank of New York Mellon Trust Company, N.A., as successor trustee
(Exhibit 4.1 to Registration Statement on Form S-4 (File No. 333-123926)).
(2005 Series AR 4.80% Senior Notes due 2015 and 2005 Series BR 5.45% Senior
Notes due 2035)Eighteenth Supplemental Indenture, dated as of September 15, 2005, to the
Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit
Edison Company and The Bank of New York Mellon Trust Company, N.A., as
successor trustee (Exhibit 4.1 to Form 8-K dated September 29, 2005). (2005
Series C 5.19% Senior Notes due October 1, 2023)Nineteenth Supplemental Indenture, dated as of September 30, 2005, to the
Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit
Edison Company and The Bank of New York Mellon Trust Company, N.A., as
successor trustee (Exhibit 4-247 to Form 10-Q for the quarter ended September
30, 2005). (2005 Series E 5.70% Senior Notes due 2037)Twentieth Supplemental Indenture, dated as of May 15, 2006, to the Collateral
Trust Indenture dated as of June 30, 1993, between The Detroit Edison Company
and The Bank of New York Mellon Trust Company, N.A., as successor trustee
(Exhibit 4-249 to Form 10-Q for the quarter ended June 30, 2006). (2006 Series
A Senior Notes due 2036)Twenty-Second Supplemental Indenture, dated as of December 1, 2007, to the
Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit
Edison Company and The Bank of New York Trust Company, N.A., as successor
trustee (Exhibit 4.1 to Form 8-K dated December 18, 2007). (2007 Series A
Senior Notes due 2038)Twenty-Fourth Supplemental Indenture, dated as of May 1, 2008, to the
Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit
Edison Company and The Bank of New York Trust Company, N.A., as successor
trustee (Exhibit 4-254 to Form 10-Q for the quarter ended June 30, 2008).
(2008 Series ET Variable Rate Senior Notes due 2029)Amendment dated June 1, 2009 to the Twenty-fourth Supplemental Indenture,
dated as of May 1, 2008 to the Collateral Trust Indenture, dated as of June
30, 1993 between The Detroit Edison Company and The Bank of New York Mellon
Trust Company, N.A. as successor trustee (2008 Series ET Variable Rate Senior
Notes due 2029) (Exhibit 4-265 to Form 10-Q for the quarter ended June 30,
2009)Twenty-Fifth Supplemental Indenture, dated as of June 1, 2008, to the
Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit
Edison Company and The Bank of New York Trust Company, N.A., as successor
trustee (Exhibit 4-256 to Form 10-Q for the quarter ended June 30, 2008).
(2008 Series G 5.60% Senior Notes due 2018)Twenty-Sixth Supplemental Indenture, dated as of July 1, 2008, to the
Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit
Edison Company and The Bank of New York Trust Company, N.A., as successor
trustee (Exhibit 4-258 to Form 10-Q for the quarter ended June 30, 2008).
(2008 Series KT Variable Rate Senior Notes due 2020)Amendment dated June 1, 2009 to the Twenty-sixth Supplemental Indenture, dated
as of July 1, 2008 to the Collateral Trust Indenture, dated as of June 30,
1993 between The Detroit Edison Company and The Bank of New York Mellon Trust
Company, N.A., as successor trustee (2008 Series KT Variable Rate Senior Notes
due 2020) (Exhibit 4-266 to Form 10-Q for the quarter ended June 30, 2009)
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Twenty-Seventh Supplemental Indenture, dated as of October 1, 2008, to the
Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit
Edison Company and The Bank of New York Trust Company, N.A., as successor
trustee (Exhibit 4-260 to Form 10-Q for the quarter ended September 30, 2008).
(2008 Series J 6.40% Senior Notes due 2013)Twenty-Eighth Supplemental Indenture, dated as of December 1, 2008 to the
Collateral Trust Indenture, dated as of June 30, 1993 between The Detroit
Edison Company and The Bank of New York Mellon Trust Company, N.A. (Exhibit
4-262 to Detroit Edisons Form 10-K for the year ended December 31, 2008).
(2008 Series LT 6.75% Senior Notes due 2038)Twenty-Ninth Supplemental Indenture, dated as of March 15, 2009, to the
Collateral Trust Indenture, dated as of June 30, 1993 between The Detroit
Edison Company and The Bank of New York Mellon Trust Company, N.A., as
successor trustee (Exhibit 4-264 to Detroit Edisons Form 10-Q for the quarter
ended March 31, 2009). (2009 Series BT 6.00% Senior Notes due 2036)4(c)
    
    Trust Agreement of Detroit Edison Trust I. (Exhibit 4.9 to Registration
Statement on Form S-3 (File No. 333-100000)).4(d)
    
    Trust Agreement of Detroit Edison Trust II. (Exhibit 4.10 to Registration
Statement on Form S-3 (File No. 333-100000)).10(a)
    
    Securitization Property Sales Agreement dated as of March 9, 2001, between The
Detroit Edison Securitization Funding LLC and The Detroit Edison Company.
(Exhibit 10-42 to Form 10-Q for the quarter ended March 31, 2001).10(b)
    
    Certain arrangements pertaining to the employment of Anthony F. Earley, Jr.
with The Detroit Edison Company, dated April 25, 1994. (Exhibit 10-53 to Form
10-Q for the quarter ended March 31, 1994).10(c)
    
    Certain arrangements pertaining to the employment of Gerard M. Anderson with
The Detroit Edison Company, dated October 6, 1993. (Exhibit 10-48 to Form 10-K
for year ended December 31, 1993).10(d)
    
    Certain arrangements pertaining to the employment of David E. Meador with The
Detroit Edison Company, dated January 14, 1997. (Exhibit 10-5 to Form 10-K for
the year ended December 31, 1996).10(e)
    
    Amended and Restated Post-Employment Income Agreement, dated March 23, 1998,
between The Detroit Edison Company and Anthony F. Earley, Jr. (Exhibit 10-21
to Form 10-Q for the quarter ended March 31, 1998).10(f)
    
    The Detroit Edison Company Supplemental Long-Term Disability Plan, dated
January 27, 1997. (Exhibit 10-4 to Form 10-K for the year ended December 31,
1996).10(g)
    
    Form of The Detroit Edison Companys Five-Year Credit Agreement, dated as of
October 17, 2005, by and among The Detroit Edison Company, the lenders party
thereto, Barclays Bank PLC, as Administrative Agent, and Citibank, N.A. and
JPMorgan Chase Bank, N.A., as Co-Syndication Agents (Exhibit 10.1 to Form 8-K
dated October 17, 2005).10(h)
    
    Form of Detroit Edison Two-Year Credit Agreement, dated as of April 29, 2009,
by and among Detroit Edison, the lenders party thereto, Barclays, as
Administrative Agent, and Citibank, JPMorgan and RBS, as Co-Syndication
Agents. (Exhibit 10.1 to Form 8-K filed May 5, 2009).99(a)
    
    Belle River Participation Agreement, dated as of December 1, 1982, between The
Detroit Edison Company and Michigan Public Power Agency. (Exhibit 28-5 to
Registration Statement No. 2-81501).
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99(b)
    
    Belle River Transmission Ownership and Operating Agreement, dated as of
December 1, 1982, between The Detroit Edison Company and Michigan Public Power
Agency. (Exhibit 28-6 to Registration Statement No. 2-81501).
 (iii) Exhibits furnished herewith.
 32-53
    
    Chief Executive Officer Section 906 Form 10-K Certification of Periodic Report.32-54
    
    Chief Financial Officer Section 906 Form 10-K Certification of Periodic Report.
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The Detroit Edison Company
 
 Schedule II  Valuation and Qualifying Accounts
 Year Ended December 31(in Millions)
    
    2009
    
    
    2008
    
    
    2007Allowance for Doubtful
Accounts (shown as deduction
from Accounts Receivable in the
Consolidated Statements of
Financial Position)Balance at Beginning of Period
    
    $
    121
    
    
    $
    93
    
    
    $
    72Additions:Charged to costs and expenses
    
    
    62
    
    
    
    81
    
    
    
    63Charged to other accounts (1)
    
    
    7
    
    
    
    5
    
    
    
    4Deductions (2)
    
    
    (72
    )
    
    
    (58
    )
    
    
    (46
    )Balance At End of Period
    
    $
    118
    
    
    $
    121
    
    
    $
    93
 
 (1)
    
    Collection of accounts previously written off.(2)
    
    Non-collectible accounts written off. 73




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##### Table of Contents



Signatures
  THE DETROIT EDISON COMPANY
(Registrant)Date: February 23, 2010
By

    /s/ ANTHONY F. EARLEY, JR.Anthony F. Earley, Jr.Chairman of the Board and
Chief Executive Officer  By
    
    /s/ ANTHONY F. EARLEY, JR.
    
    By
    
    /s/ PETER B. OLEKSIAKAnthony F. Earley, Jr. 
Chairman of the Board and 
Chief Executive Officer
    
    
    
    Peter B. Oleksiak 
Vice President, Controller and Investor Relations, and 
Chief Accounting OfficerBy
    
    /s/ SANDRA KAY ENNIS
    
    By
    
    /s/ DAVID E. MEADORSandra Kay Ennis 
Director and Corporate Secretary
    
    
    
    David E. Meador 
Director, Executive Vice President and Chief Financial OfficerBy
    
    /s/ BRUCE D. PETERSONBruce D. Peterson 
Director
  74