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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
 ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE OF 1934
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2007
 Commission file number 1-2198
 The Detroit Edison Company, a Michigan corporation, meets the conditions set forth in General Instruction I (1) (a) and (b) of Form 10-K and is,
therefore, filing this form with the reduced disclosure format.
 THE DETROIT EDISON COMPANY
  Michigan
    
    38-0478650(State or other jurisdiction of incorporation or
    
    (I.R.S. Employerorganization)
    
    Identification No.)2000 2ndAvenue, Detroit, Michigan
    
    48226-1279(Address of principal executive offices)
    
    (Zip Code)
 313-235-4000
 
 
 Yes o No þ
 Yes o No þ
 Yes þ No o
 o
  Large
accelerated filer o
    Accelerated filer o
    Non-accelerated filer
þ
    Smaller reporting company o(Do not check if a
smaller reporting company)
 Yes o No þ
  DOCUMENTS INCORPORATED BY REFERENCE




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##### 



The Detroit Edison Company  Annual Report on Form 10-K  Year Ended December 31, 2007  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
    
    
    10Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    11Part IIItem 5.
    
    Market for Registrants Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    11Item 6.
    
    Selected Financial Data
    
    
    11Item 7.
    
    Managements Narrative Analysis of Results of Operations
    
    
    12Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    15Item 8.
    
    Financial Statements and Supplementary Data
    
    
    17Item 9.
    
    Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
    
    
    61Item 9A.
    
    Controls and Procedures
    
    
    61Item 9B.
    
    Other Information
    
    
    61Part IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    61Item 11.
    
    Executive Compensation
    
    
    61Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
    
    
    61Item 13.
    
    Certain Relationships and Related Transactions, and Director
Independence
    
    
    61Item 14.
    
    Principal Accountant Fees and Services
    
    
    61Part IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    62Signatures
    
    
    
    
    72Computation of Ratio of Earnings to Fixed ChargesConsent of Deloitte & Touche LLPChief Executive Officer Section 302Chief Financial Officer Section 302Chief Executive Officer Section 906Chief Financial Officer Section 906




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Definitions
 CTA
    
    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 AgencyFERC
    
    Federal Energy Regulatory CommissionITC
    
    International Transmission Company (until February
28, 2003, a wholly owned subsidiary of DTE Energy
Company)MDEQ
    
    Michigan Department of Environmental QualityMISO
    
    Midwest Independent System Operator, a Regional
Transmission OrganizationMPSC
    
    Michigan Public Service CommissionNRC
    
    Nuclear Regulatory CommissionPSCR
    
    A power supply cost recovery mechanism authorized
by the MPSC that allows Detroit Edison to recover
through rates its fuel, fuel-related and purchased
power expenses.Securitization
    
    Detroit Edison financed specific stranded costs at
lower interest rates through the sale of rate
reduction bonds by a wholly owned special purpose
entity, the Detroit Edison Securitization Funding
LLC.SFAS
    
    Statement of Financial Accounting StandardsStranded Costs
    
    Costs incurred by utilities in order to serve
customers in a regulated environment that absent
special regulatory approval would not otherwise be
recoverable if customers switch to alternative
energy suppliers.Units of MeasurementkWh
    
    Kilowatthour of electricityMW
    
    Megawatt of electricityMWh
    
    Megawatthour of electricity
 1




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Forward-Looking Statements
  
    
    the effects of weather and other natural phenomena on operations and sales to customers,
and purchases from suppliers;
    
    economic climate and population growth or decline in the geographic areas where we do
business;
    
    environmental issues, laws, regulations, and the cost of remediation and compliance,
including potential new federal and state requirements that could include carbon and more
stringent mercury emission controls, a renewable portfolio standard and energy efficiency
mandates;
    
    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;
    
    access to capital markets and capital market conditions and the results of other
financing efforts which can be affected by credit agency ratings;
    
    the timing and extent of changes in interest rates;
    
    the level of borrowings;
    
    changes in the cost and availability of coal and other raw materials, and purchased
power;
    
    effects of competition;
    
    impact of regulation by the FERC, MPSC, NRC and other applicable governmental
proceedings and regulations, including any associated impact on rate structures;
    
    changes in and application of federal, state and local tax laws and their
interpretations, including the Internal Revenue Code, regulations, rulings, court
proceedings and audits;
    
    the ability to recover costs through rate increases;
    
    the availability, cost, coverage and terms of insurance;
    
    the cost of protecting assets against, or damage due to, terrorism;
    
    changes in and application of accounting standards and financial reporting regulations;
 2




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
    
    changes in federal or state laws and their interpretation with respect to regulation,
energy policy and other business issues;
    
    amounts of uncollectible accounts receivable;
    
    binding arbitration, litigation and related appeals; and
    
    changes in the economic and financial viability of our suppliers, customers and trading
counterparties, and the continued ability of such parties to perform their obligations to
Detroit Edison; and
  3




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Part I
 
 Items 1., 1A. & 2. Business, Company Risk Factors and Properties
 General
     Revenue by Service(in Millions)
    
    2007
    
    
    2006
    
    
    2005Residential
    
    $
    1,739
    
    
    $
    1,671
    
    
    $
    1,517Commercial
    
    
    1,723
    
    
    
    1,603
    
    
    
    1,331Industrial
    
    
    854
    
    
    
    835
    
    
    
    697Wholesale
    
    
    125
    
    
    
    109
    
    
    
    73Other
    
    
    259
    
    
    
    350
    
    
    
    464Subtotal
    
    
    4,700
    
    
    
    4,568
    
    
    
    4,082Interconnection sales (1)
    
    
    200
    
    
    
    169
    
    
    
    380Total Revenue
    
    $
    4,900
    
    
    $
    4,737
    
    
    $
    4,462
 
 (1)
    
    Represents power that is not distributed by Detroit Edison.    Fuel Supply and Purchased Power
  4




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Properties
   Location by
    
    Summer NetMichigan
    
    Rated Capability (1) (2)Plant Name
    
    County
    
    (MW)
    
    (%)
    
    Year in ServiceFossil-fueled Steam-ElectricBelle River (3)
    
    St. Clair
    
    
    1,026
    
    
    
    9.3
    
    
    1984 and 1985Conners Creek
    
    Wayne
    
    
    230
    
    
    
    2.1
    
    
    1951Greenwood
    
    St. Clair
    
    
    785
    
    
    
    7.1
    
    
    1979Harbor Beach
    
    Huron
    
    
    103
    
    
    
    0.9
    
    
    1968Monroe (4)
    
    Monroe
    
    
    3,115
    
    
    
    28.3
    
    
    1971, 1973 and 1974River Rouge
    
    Wayne
    
    
    523
    
    
    
    4.8
    
    
    1957 and 1958St. Clair
    
    St. Clair
    
    
    1,368
    
    
    
    12.4
    
    
    1953, 1954, 1959, 1961 and 1969Trenton Channel
    
    Wayne
    
    
    730
    
    
    
    6.6
    
    
    1949 and 19687,880
    
    
    
    71.5Oil or Gas-fueled Peaking Units
    
    Various
    
    
    1,101
    
    
    
    10.0
    
    
    1966-1971, 1981 and 1999Nuclear-fueled Steam-Electric
Fermi 2 (5)
    
    Monroe
    
    
    1,122
    
    
    
    10.2
    
    
    1988Hydroelectric Pumped Storage
Ludington (6)
    
    Mason
    
    
    917
    
    
    
    8.3
    
    
    197311,020
    
    
    
    100.0
 
 (1)
    
    Summer net rated capabilities of generating plants in service are based on periodic load tests and are changed depending on operating experience, the physical
condition of units, environmental control limitations and customer requirements for steam, which otherwise would be used for electric generation.(2)
    
    Excludes one oil-fueled unit, St. Clair Unit No. 5 (250 MW), and one coal-fired unit, Marysville (84 MW), in cold standby status.(3)
    
    The Belle River capability represents Detroit Edisons entitlement to 81.39% of the capacity and energy of the plant. See Note 6 of the Notes to the
Consolidated Financial Statements in Item 8 of this Report.(4)
    
    The Monroe Power Plant provided 39% of Detroit Edisons total 2007 power plant generation.(5)
    
    Fermi 2 has a design electrical rating (net) of 1,150 MW.(6)
    
    Represents Detroit Edisons 49% interest in Ludington with a total capability of 1,872 MW. See Note 6 of the Notes to the Consolidated Financial Statements
in Item 8 of this Report.  5




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Electric Distribution
    
    Circuit MilesOperating Voltage-Kilovolts (kV)
    
    Overhead
    
    Underground4.8 kV to 13.2 kV
    
    
    28,202
    
    
    
    13,98524 kV
    
    
    99
    
    
    
    69040 kV
    
    
    2,324
    
    
    
    335120 kV
    
    
    72
    
    
    
    1330,697
    
    
    
    15,023
  Regulation
   Energy Assistance Programs
  Strategy and Competition
    6




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ENVIRONMENTAL MATTERS
  (in Millions)Air
    
    $
    2,441Water
    
    
    55Other clean up sites
    
    
    11MGP sites
    
    
    4Estimated total future expenditures through 2018
    
    $
    2,511Estimated 2008 expenditures
    
    $
    288
 Air
 Water
 Manufactured
Gas Plant (MGP) Sites
 Global Climate Change 
  7




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EMPLOYEES
  Item 1A. Company Risk Factors
  We are subject to rate regulation
 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.
 The supply and price of fuel and other commodities may impact our financial results.
 8




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Unplanned power plant outages may be costly.
 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 at attractive interest rates is important.
 Poor investment performance of pension plan holdings and other factors impacting pension plan costs
could unfavorably impact our liquidity and results of operations.
 We are exposed to credit risk of counterparties with whom we do business.
 Environmental laws and liability may be costly.
  9




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We may not be fully covered by insurance.
 Terrorism could affect our business
 Benefits of the Performance Excellence Process to us could be less than we have projected.
 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
    Note
    
    Title4
    
    
    Regulatory Matters5
    
    
    Nuclear Operations13
    
    
    Commitments and Contingencies
 10




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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
  11




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Item 7. Managements Narrative Analysis of Results of Operations
  Factors impacting income:
 Increase (Decrease) in Income Statement Components Compared to Prior Year
    
    2007
    
    
    2006(in Millions)Operating revenues
    
    $
    163
    
    
    $
    275Fuel and purchased power
    
    
    120
    
    
    
    (24
    )Gross margin
    
    
    43
    
    
    
    299Operation and maintenance
    
    
    85
    
    
    
    29Depreciation and amortization
    
    
    (48
    )
    
    
    172Taxes other than income
    
    
    25
    
    
    
    11Gains on sales of assets
    
    
    14
    
    
    
    20Operating income
    
    
    (33
    )
    
    
    67Other (income) and deductions
    
    
    (17
    )
    
    
    11Income tax provision
    
    
    (13
    )
    
    
    13Net income before accounting change
    
    
    (3
    )
    
    
    43Cumulative effect of accounting change
    
    
    (1
    )
    
    
    4Net Income
    
    $
    (4
    )
    
    $
    47
 Gross margin
  Increase (Decrease) in Gross Margin Components Compared to Prior Year
    
    2007
    
    
    2006(in Millions)Weather-related margin impacts
    
    $
    31
    
    
    $
    (81
    )Removal of residential rate caps effective January 1, 2006
    
    
    
    
    
    
    186Return of customers from electric Customer Choice
    
    
    43
    
    
    
    156Service territory economic performance
    
    
    28
    
    
    
    (16
    )Impact of 2006 MPSC show cause order
    
    
    (64
    )
    
    
    Impact of 2005 MPSC PSCR reconciliation order
    
    
    38
    
    
    
    Impact of 2004 MPSC PSCR reconciliation order
    
    
    (39
    )
    
    
    26Other, net
    
    
    6
    
    
    
    28Increase in gross margin
    
    $
    43
    
    
    $
    299
 12




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Power Generated and Purchased(in Thousands of MWh)
    
    2007
    
    
    
    
    
    2006
    
    
    
    
    
    2005Power Plant GenerationFossil
    
    
    42,359
    
    
    
    72
    %
    
    
    39,686
    
    
    
    70
    %
    
    
    40,756
    
    
    
    73
    %Nuclear
    
    
    8,314
    
    
    
    14
    
    
    
    7,477
    
    
    
    13
    
    
    
    8,754
    
    
    
    1650,673
    
    
    
    86
    
    
    
    47,163
    
    
    
    83
    
    
    
    49,510
    
    
    
    89Purchased Power
    
    
    8,422
    
    
    
    14
    
    
    
    9,861
    
    
    
    17
    
    
    
    6,378
    
    
    
    11System Output
    
    
    59,095
    
    
    
    100
    %
    
    
    57,024
    
    
    
    100
    %
    
    
    55,888
    
    
    
    100
    %Less Line Loss and Internal Use
    
    
    (3,391
    )
    
    
    
    
    
    
    (3,603
    )
    
    
    
    
    
    
    (3,205
    )Net System Output
    
    
    55,704
    
    
    
    
    
    
    
    53,421
    
    
    
    
    
    
    
    52,683Average Unit Cost ($/MWh)Generation (1)
    
    $
    15.83
    
    
    
    
    
    
    $
    15.61
    
    
    
    
    
    
    $
    15.47Purchased Power (2)
    
    $
    62.40
    
    
    
    
    
    
    $
    53.71
    
    
    
    
    
    
    $
    89.37Overall Average Unit Cost
    
    $
    22.47
    
    
    
    
    
    
    $
    22.20
    
    
    
    
    
    
    $
    23.90
 
 (1)
    
    Represents fuel costs associated with power plants.(2)
    
    The change in purchased power costs were driven primarily by seasonal demand and coal and
gas prices. (in Thousands of MWh)
    
    2007
    
    2006
    
    2005Electric SalesResidential
    
    
    16,147
    
    
    
    15,769
    
    
    
    16,812Commercial
    
    
    19,332
    
    
    
    17,948
    
    
    
    15,618Industrial
    
    
    13,338
    
    
    
    13,235
    
    
    
    12,317Wholesale
    
    
    2,902
    
    
    
    2,826
    
    
    
    2,329Other
    
    
    398
    
    
    
    402
    
    
    
    39052,117
    
    
    
    50,180
    
    
    
    47,466Interconnection sales (1)
    
    
    3,587
    
    
    
    3,241
    
    
    
    5,217Total Electric Sales
    
    
    55,704
    
    
    
    53,421
    
    
    
    52,683Electric DeliveriesRetail and Wholesale
    
    
    52,117
    
    
    
    50,180
    
    
    
    47,466Electric Customer Choice
    
    
    1,690
    
    
    
    2,694
    
    
    
    6,760Electric
Customer Choice-Self Generators (2)
    
    
    549
    
    
    
    909
    
    
    
    518Total Electric Sales and Deliveries
    
    
    54,356
    
    
    
    53,783
    
    
    
    54,744
 
 (1)
    
    Represents power that is not distributed by Detroit Edison.(2)
    
    Represents deliveries for self generators who have purchased power from alternative energy
suppliers to supplement their power requirements. Operation and maintenance
 Depreciation and amortization
 13




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




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
    
    a requirement that all retail electric suppliers obtain at least 10 percent of their
energy supplies from renewable resources by 2015;
    
    an opportunity for utility-built generation, contingent upon the granting of a
certificate of need and competitive bidding of engineering, procurement and construction
services;
    
    investigating the cost of a requirement to bury certain power lines; and
    
    creation of a Michigan Energy Efficiency Program, administered by a third party under the
direction of the MPSC with initial funding estimated at $68 million.
   CUMULATIVE EFFECT OF ACCOUNTING CHANGES
 Accounting for Uncertainty
in Income Taxes  an interpretation of FASB Statement No. 109
 Share-Based Payment,
 , Accounting for Conditional Asset Retirement
Obligations, an interpretation of SFAS No. 143
 
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
 Commodity Price Risk
   15




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Credit Risk
 Bankruptcies
  Other
  Interest Rate Risk
  16




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Item 8. Financial Statements and Supplementary Data
 PageControls and Procedures
    
    
    18Report of Independent Registered Public Accounting Firm
    
    
    20Consolidated 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
    
    
    26Schedule II  Valuation and Qualifying Accounts
    
    
    71
 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
 
 
     
 20




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The Detroit Edison Company
 
 Consolidated Statements of Operations
 Year Ended December 31(in Millions)
    
    2007
    
    
    2006
    
    
    2005Operating Revenues
    
    $
    4,900
    
    
    $
    4,737
    
    
    $
    4,462Operating ExpensesFuel and purchased power
    
    
    1,686
    
    
    
    1,566
    
    
    
    1,590Operation and maintenance
    
    
    1,422
    
    
    
    1,337
    
    
    
    1,308Depreciation and amortization
    
    
    764
    
    
    
    812
    
    
    
    640Taxes other than income
    
    
    277
    
    
    
    252
    
    
    
    241Asset (gains) and reserves, net
    
    
    8
    
    
    
    (6
    )
    
    
    (26
    )4,157
    
    
    
    3,961
    
    
    
    3,753Operating Income
    
    
    743
    
    
    
    776
    
    
    
    709Other (Income) and DeductionsInterest expense
    
    
    294
    
    
    
    278
    
    
    
    267Interest income
    
    
    (7
    )
    
    
    (4
    )
    
    
    (3
    )Other income
    
    
    (40
    )
    
    
    (35
    )
    
    
    (27
    )Other expenses
    
    
    30
    
    
    
    55
    
    
    
    46277
    
    
    
    294
    
    
    
    283Income Before Income Taxes
    
    
    466
    
    
    
    482
    
    
    
    426Income Tax Provision
    
    
    149
    
    
    
    162
    
    
    
    149Income Before Accounting Change
    
    
    317
    
    
    
    320
    
    
    
    277Cumulative Effect of Accounting Change, net of tax
    
    
    
    
    
    
    1
    
    
    
    (3
    )Net Income
    
    $
    317
    
    
    $
    321
    
    
    $
    274
  21




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The Detroit Edison Company
  Consolidated
Statements of Financial Position
 December 31(in Millions)
    
    2007
    
    
    2006AssetsCurrent AssetsCash and cash equivalents
    
    $
    47
    
    
    $
    27Restricted cash
    
    
    135
    
    
    
    132Accounts receivable (less allowance for doubtful accounts
of $93 and $72, respectively)Customer
    
    
    727
    
    
    
    601Collateral held by others
    
    
    32
    
    
    
    Affiliates
    
    
    3
    
    
    
    19Other
    
    
    58
    
    
    
    51Accrued power supply cost recovery revenue
    
    
    75
    
    
    
    116InventoriesFuel
    
    
    150
    
    
    
    136Materials and supplies
    
    
    165
    
    
    
    130Other
    
    
    60
    
    
    
    541,452
    
    
    
    1,266InvestmentsNuclear decommissioning trust funds
    
    
    824
    
    
    
    740Other
    
    
    111
    
    
    
    89935
    
    
    
    829PropertyProperty, plant and equipment
    
    
    14,372
    
    
    
    13,916Less accumulated depreciation
    
    
    (5,640
    )
    
    
    (5,580
    )8,732
    
    
    
    8,336Other AssetsRegulatory assets
    
    
    2,511
    
    
    
    2,862Securitized regulatory assets
    
    
    1,124
    
    
    
    1,235Intangible assets
    
    
    9
    
    
    
    9Other
    
    
    122
    
    
    
    743,766
    
    
    
    4,180Total Assets
    
    $
    14,885
    
    
    $
    14,611
  22




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The Detroit Edison Company  Consolidated Statements of Financial Position
 December 31(in Millions, Except Shares)
    
    2007
    
    
    2006Liabilities and Shareholders EquityCurrent LiabilitiesAccounts payableAffiliates
    
    $
    138
    
    
    $
    84Other
    
    
    396
    
    
    
    327Accrued interest
    
    
    77
    
    
    
    79Dividends payable
    
    
    76
    
    
    
    76Accrued vacations
    
    
    52
    
    
    
    77Short-term borrowingsAffiliates
    
    
    277
    
    
    
    Other
    
    
    406
    
    
    
    277Current portion long-term debt, including capital leases
    
    
    174
    
    
    
    142Other
    
    
    243
    
    
    
    2881,839
    
    
    
    1,350Long-Term Debt (net of current portion)Mortgage bonds, notes and other
    
    
    3,473
    
    
    
    3,515Securitization bonds
    
    
    1,065
    
    
    
    1,184Capital lease obligations
    
    
    42
    
    
    
    504,580
    
    
    
    4,749Other LiabilitiesDeferred income taxes
    
    
    1,825
    
    
    
    1,928Regulatory liabilities
    
    
    583
    
    
    
    255Asset retirement obligations
    
    
    1,160
    
    
    
    1,069Unamortized investment tax credit
    
    
    95
    
    
    
    105Nuclear decommissioning
    
    
    134
    
    
    
    119Accrued pension liability
    
    
    47
    
    
    
    364Accrued postretirement liability
    
    
    816
    
    
    
    1,055Other
    
    
    503
    
    
    
    5025,163
    
    
    
    5,397Commitments and Contingencies (Notes 4, 5 and 13)Shareholders EquityCommon stock, $10 par value, 400,000,000 shares
authorized, and 138,632,324 shares
issued and outstanding
    
    
    2,771
    
    
    
    2,596Retained earnings
    
    
    528
    
    
    
    516Accumulated other comprehensive income
    
    
    4
    
    
    
    33,303
    
    
    
    3,115Total Liabilities and Shareholders Equity
    
    $
    14,885
    
    
    $
    14,611
  23




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##### Table of Contents



The Detroit Edison Company
 
 Consolidated
Statements of Cash Flows
 Year Ended December 31(in Millions)
    
    2007
    
    
    2006
    
    
    2005Operating ActivitiesNet income
    
    $
    317
    
    
    $
    321
    
    
    $
    274Adjustments to reconcile net income to net cash from
operating activities:Depreciation and amortization
    
    
    764
    
    
    
    812
    
    
    
    640Deferred income taxes
    
    
    (111
    )
    
    
    2
    
    
    
    40Asset (gains) and reserves, net
    
    
    8
    
    
    
    (6
    )
    
    
    (26
    )Cumulative effect of accounting change
    
    
    
    
    
    
    (1
    )
    
    
    3Changes in assets and liabilities, exclusive of
changes shown separately (Note 1)
    
    
    (213
    )
    
    
    (213
    )
    
    
    98Net cash from operating activities
    
    
    765
    
    
    
    915
    
    
    
    1,029Investing ActivitiesPlant and equipment expenditures
    
    
    (809
    )
    
    
    (972
    )
    
    
    (722
    )Proceeds from sale of assets, net
    
    
    3
    
    
    
    28
    
    
    
    30Restricted cash for debt redemptions
    
    
    (3
    )
    
    
    (48
    )
    
    
    (9
    )Notes receivable from affiliate
    
    
    
    
    
    
    
    
    
    
    85Proceeds from sale of nuclear decommissioning trust
fund assets
    
    
    286
    
    
    
    253
    
    
    
    201Investment in nuclear decommissioning trust funds
    
    
    (323
    )
    
    
    (284
    )
    
    
    (235
    )Other investments
    
    
    (33
    )
    
    
    (29
    )
    
    
    (71
    )Net cash used for investing activities
    
    
    (879
    )
    
    
    (1,052
    )
    
    
    (721
    )Financing ActivitiesIssuance of long-term debt
    
    
    50
    
    
    
    314
    
    
    
    857Redemption of long-term debt
    
    
    (185
    )
    
    
    (126
    )
    
    
    (997
    )Short-term borrowings, net
    
    
    129
    
    
    
    114
    
    
    
    163Short-term borrowings from affiliate
    
    
    277
    
    
    
    
    
    
    
    Capital contribution by parent company
    
    
    175
    
    
    
    150
    
    
    
    Dividends on common stock
    
    
    (305
    )
    
    
    (305
    )
    
    
    (305
    )Other
    
    
    (7
    )
    
    
    (9
    )
    
    
    (6
    )Net cash from (used for) financing activities
    
    
    134
    
    
    
    138
    
    
    
    (288
    )Net Increase in Cash and Cash Equivalents
    
    
    20
    
    
    
    1
    
    
    
    20Cash and Cash Equivalents at Beginning of the Period
    
    
    27
    
    
    
    26
    
    
    
    6Cash and Cash Equivalents at End of the Period
    
    $
    47
    
    
    $
    27
    
    
    $
    26
  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
    
    ComprehensiveShares
    
    Amount
    
    Capital
    
    Earnings
    
    Income
    
    Total(Dollars in Millions,Shares in Thousands)Balance, December 31, 2004
    
    
    138,632
    
    
    $
    1,386
    
    
    $
    1,060
    
    
    $
    531
    
    
    $
    2
    
    
    $
    2,979Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    274
    
    
    
    
    
    
    
    274Dividends declared on
common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (305
    )
    
    
    
    
    
    
    (305
    )Balance, December 31, 2005
    
    
    138,632
    
    
    
    1,386
    
    
    
    1,060
    
    
    
    500
    
    
    
    2
    
    
    
    2,948Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    321
    
    
    
    
    
    
    
    321Dividends declared on
common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (305
    )
    
    
    
    
    
    
    (305
    )Net change in unrealized
gains on investments, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Capital contribution by
parent company
    
    
    
    
    
    
    
    
    
    
    150
    
    
    
    
    
    
    
    
    
    
    
    150Balance, 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
    
    
    $
    3,303
  (in Millions)
    
    2007
    
    
    2006
    
    
    2005Net income
    
    $
    317
    
    
    $
    321
    
    
    $
    274Other comprehensive income:Net change in unrealized gain on investments, net of tax
    
    
    1
    
    
    
    1
    
    
    
    Comprehensive income
    
    $
    318
    
    
    $
    322
    
    
    $
    274
  25




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##### Table of Contents



The Detroit Edison Company
 
 Notes to Consolidated Financial Statements
 NOTE 1  SIGNIFICANT ACCOUNTING POLICIES
 Corporate Structure
   Principles of Consolidation
  Consolidation of Variable Interest Entities, an Interpretation of
ARB No. 51.
 Basis of Presentation
  Revenues
  26




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##### Table of Contents



Comprehensive Income
  Net
    
    
    Net
    
    
    AccumulatedUnrealized
    
    
    Unrealized
    
    
    OtherGains on
    
    
    Gains on
    
    
    Comprehensive(in Millions)
    
    Derivatives
    
    
    Investments
    
    
    IncomeBeginning balance
    
    $
    1
    
    
    $
    2
    
    
    $
    3Current period change
    
    
    
    
    
    
    1
    
    
    
    1Ending balance
    
    $
    1
    
    
    $
    3
    
    
    $
    4
 Cash Equivalents and Restricted Cash
  Inventories
  Property, Retirement and Maintenance, and Depreciation and Depletion
  (in Millions)
    
    2007
    
    
    2006Property, Plant and EquipmentGeneration
    
    $
    8,100
    
    
    $
    7,667Distribution
    
    
    6,272
    
    
    
    6,249Total
    
    
    14,372
    
    
    
    13,916Less Accumulated Depreciation and DepletionGeneration
    
    
    (3,539
    )
    
    
    (3,410
    )Distribution
    
    
    (2,101
    )
    
    
    (2,170
    )Total
    
    
    (5,640
    )
    
    
    (5,580
    )Net Property, Plant and Equipment
    
    $
    8,732
    
    
    $
    8,336
  27




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##### Table of Contents



Asset Retirement Obligations
 Accounting for Asset
Retirement Obligations Accounting for Conditional Asset Retirement Obligations, an
interpretation of FASB Statement No. 143
 Accounting for the
Effects of Certain Types of Regulation
   28




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##### Table of Contents



(in Millions)Asset retirement obligations at January 1, 2007
    
    $
    1,069Accretion
    
    
    71Liabilities settled
    
    
    (7
    )Revision in estimated cash flows
    
    
    37Asset retirement obligations at December 31, 2007
    
    
    1,170Less amount included in current liabilities
    
    
    (10
    )$
    1,160
  Long-Lived Assets
  Intangible
Assets
  Excise and Sales Taxes
  Deferred Debt Costs
  Insured and Uninsured Risks
  Investments in Debt and Equity Securities
  29




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##### Table of Contents



Consolidated Statement of Cash Flows
  (in Millions)
    
    2007
    
    
    2006
    
    
    2005Changes in Assets and Liabilities, Exclusive of
Changes Shown SeparatelyAccounts receivable, net
    
    $
    (163
    )
    
    $
    (36
    )
    
    $
    (45
    )Inventories
    
    
    (47
    )
    
    
    (28
    )
    
    
    (21
    )Recoverable pension and postretirement costs
    
    
    594
    
    
    
    (925
    )
    
    
    61Accrued pensions
    
    
    (330
    )
    
    
    125
    
    
    
    41Accounts payable
    
    
    73
    
    
    
    7
    
    
    
    46Accrued power supply cost recovery revenue
    
    
    41
    
    
    
    (101
    )
    
    
    (127
    )Accrued payroll
    
    
    (50
    )
    
    
    47
    
    
    
    Income taxes payable
    
    
    10
    
    
    
    16
    
    
    
    (10
    )General taxes
    
    
    4
    
    
    
    13
    
    
    
    (1
    )Risk management and trading activities
    
    
    (4
    )
    
    
    
    
    
    
    Postretirement obligation
    
    
    (239
    )
    
    
    803
    
    
    
    110Other assets
    
    
    (387
    )
    
    
    (114
    )
    
    
    (3
    )Other liabilities
    
    
    285
    
    
    
    (20
    )
    
    
    47$
    (213
    )
    
    $
    (213
    )
    
    $
    98
  (in Millions)
    
    2007
    
    2006
    
    2005Cash Paid ForInterest (excluding interest capitalized)
    
    $
    295
    
    
    $
    278
    
    
    $
    267Income taxes
    
    
    280
    
    
    
    141
    
    
    
    118Non-cash Financing ActivitySale of assets
    
    
    
    
    
    
    
    
    
    
    13
 Asset (gains) and losses, net
   Note
    
    Title2
    
    New Accounting Pronouncements4
    
    Regulatory Matters7
    
    Income Taxes12
    
    Financial and Other Derivative Instruments14
    
    Retirement Benefits and Trusteed Assets
 30




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##### Table of Contents



NOTE 2
 NEW ACCOUNTING PRONOUNCEMENTS
 Fair Value Accounting
 Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities  Including an Amendment of FASB Statement No. 115
 Offsetting Amounts Related to Certain Contracts
 Amendment of FASB Interpretation No. 39
 Business Combinations
 Business Combinations.
 31




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##### Table of Contents




    
    Recognizes and measures in its financial statements the identifiable assets acquired,
the
liabilities assumed, and any noncontrolling interest in the acquiree;
    
    Recognizes and measures the goodwill acquired in the business combination or a gain from
a
bargain purchase; and
    
    Determines what information to disclose to enable users of the financial statements to
evaluate
the nature and financial effects of the business combination.
  Noncontrolling Interests in Consolidated Financial Statements
 Noncontrolling Interests in Consolidated Financial
Statements  an Amendment of ARB No. 51.
 
    
    The ownership interests in subsidiaries held by parties other than the parent be clearly
identified, labeled, and presented in the consolidated statement of financial position
within equity, but separate from the parents equity;
    
    The amount of consolidated net income attributable to the parent and to the
noncontrolling interest be clearly identified and presented on the face of the consolidated
statement of income;
    
    Changes in a parents ownership interest while the parent retains its controlling
financial interest in its subsidiary be accounted for as equity transactions;
    
    When a subsidiary is deconsolidated, any retained noncontrolling equity investment in
the former subsidiary be initially measured at fair value. The gain or loss on the
deconsolidation of the subsidiary is measured using the fair value of any noncontrolling
equity investment rather than the carrying amount of that retained investment; and
    
    Entities provide sufficient disclosures that clearly identify and distinguish between
the interests of the parent and the interests of the noncontrolling owners.
  Stock-Based Compensation
 Share-Based
Payment,
 32




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##### Table of Contents



NOTE 3
 RESTRUCTURING
 Performance Excellence Process
     Employee Severance Costs(1)
    
    
    Other Costs
    
    
    Total Cost(in Millions)
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Costs incurred:
    
    $
    15
    
    
    $
    51
    
    
    $
    50
    
    
    $
    56
    
    
    $
    65
    
    
    $
    107Less amounts deferred or capitalized:
    
    
    15
    
    
    
    51
    
    
    
    50
    
    
    
    56
    
    
    
    65
    
    
    
    107Amount expensed
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
 
 (1)
    
    Includes corporate allocations Accounting for
Costs Associated with Exit or Disposal Activities
 NOTE 4  REGULATORY MATTERS
 Regulation
  Regulatory Assets and Liabilities
 Accounting for the Effects of Certain Types
of Regulation,
 33




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##### Table of Contents



(in Millions)
    
    2007
    
    
    2006AssetsSecuritized regulatory assets
    
    $
    1,124
    
    
    $
    1,235Recoverable income taxes related to securitized regulatory assets
    
    
    616
    
    
    
    677Recoverable pension and postretirement costs
    
    
    874
    
    
    
    1,469Asset retirement obligation
    
    
    266
    
    
    
    236Other recoverable income taxes
    
    
    94
    
    
    
    100Recoverable
costs under PA 141Excess capital expenditures
    
    
    11
    
    
    
    22Deferred Clean Air Act expenditures
    
    
    28
    
    
    
    67Midwest Independent System Operator charges
    
    
    23
    
    
    
    48Electric Customer Choice implementation costs
    
    
    58
    
    
    
    78Enhanced security costs
    
    
    10
    
    
    
    13Unamortized loss on reacquired debt
    
    
    38
    
    
    
    38Accrued PSCR revenue
    
    
    75
    
    
    
    116Costs to achieve Performance Excellence Process
    
    
    146
    
    
    
    102Enterprise Business Systems costs
    
    
    26
    
    
    
    9Deferred income taxes  Michigan Business Tax
    
    
    318
    
    
    
    Other
    
    
    3
    
    
    
    32,586
    
    
    
    2,978Less amount included in current assets
    
    
    (75
    )
    
    
    (116
    )$
    2,511
    
    
    $
    2,862LiabilitiesAsset removal costs
    
    $
    218
    
    
    $
    222Accrued pension
    
    
    43
    
    
    
    33Fermi 2 refueling outage
    
    
    4
    
    
    
    16Deferred income taxes  Michigan Business Tax
    
    
    318
    
    
    
    Other
    
    
    5
    
    
    
    2588
    
    
    
    273Less amount included in current liabilities
    
    
    (5
    )
    
    
    (18
    )$
    583
    
    
    $
    255
  
    
    Securitized regulatory assets The net book balance of the Fermi 2 nuclear plant was
written off in 1998 and an equivalent regulatory asset was established. In 2001, the Fermi 2
regulatory asset and certain other regulatory assets were securitized pursuant to PA 142 and
an MPSC order. A non-bypassable securitization bond surcharge recovers the securitized
regulatory asset over a fourteen-year period ending in 2015.
    
    Recoverable income taxes related to securitized regulatory assets Receivable for the
recovery of income taxes to be paid on the non-bypassable securitization bond surcharge. A
non-bypassable securitization tax surcharge recovers the income tax over a fourteen-year
period ending 2015.
    
    Recoverable pension and postretirement costs The traditional rate setting process allows
for the recovery of pension and postretirement costs as measured by generally accepted
accounting principles.
 34




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##### Table of Contents




    
    Asset retirement obligation Asset retirement obligations were recorded pursuant to
adoption of SFAS No. 143 and FIN 47. These obligations are primarily for Fermi 2
decommissioning costs that are recovered in rates.
    
    Other recoverable income taxes Income taxes receivable from Detroit Edisons customers
representing the difference in property-related deferred income taxes receivable and amounts
previously reflected in Detroit Edisons rates.
    
    Excess capital expenditures PA 141 permits, after MPSC authorization, the recovery of and
a return on capital expenditures that exceed a base level of depreciation expense.
    
    Deferred Clean Air Act expenditures PA 141 permits, after MPSC authorization, the
recovery of and a return on Clean Air Act expenditures.
    
    Midwest Independent System Operator charges PA 141 permits, after MPSC authorization, the
recovery of and a return on charges from a regional transmission operator such as the Midwest
Independent System Operator.
    
    Electric Customer Choice implementation costs PA 141 permits, after MPSC authorization,
the recovery of and a return on costs incurred associated with the implementation of the
electric Customer Choice program.
    
    Enhanced security costs PA 609 of 2002 permits, after MPSC authorization, the recovery of
enhanced security costs for an electric generating facility.
    
    Unamortized loss on reacquired debt The unamortized discount, premium and expense related
to debt redeemed with a refinancing are deferred, amortized and recovered over the life of the
replacement issue.
    
    Accrued PSCR revenue Receivable for the temporary under-recovery of and a return on fuel
and purchased power costs incurred by Detroit Edison which are recoverable through the PSCR
mechanism.
    
    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. See Note 3.
    
    Enterprise Business Systems (EBS) costs Starting in 2006, the MPSC approved the deferral
of up to $60 million of certain EBS costs that would otherwise be expensed.
    
    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 and offsetting
regulatory assets were recorded as the impacts of the deferred tax liabilities will be
reflected in rates.
 LIABILITIES
 
    
    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.
    
    Fermi 2 refueling outage Accrued liability for refueling outage at Fermi 2 pursuant to
MPSC authorization.
    
    Deferred income taxes  Michigan Business Tax (MBT) In July 2007, the MBT was enacted by
the State of Michigan. State deferred tax assets were established and offsetting regulatory
liabilities were recorded as the impacts of the deferred tax assets will be reflected in
rates.
 MPSC Show-Cause Order
  35




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##### Table of Contents



2007 Electric Rate Case Filing
    
 
 
 
 
 
  36




---



##### Table of Contents



Regulatory Accounting Treatment for Performance Excellence Process
  Accounting for Costs Related to Enterprise Business Systems (EBS)
  37




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##### Table of Contents



Fermi 2 Enhanced Security Costs Settlement
  Reconciliation of Regulatory Asset Recovery Surcharge
  Power Supply Costs Recovery Proceedings
 2005 Plan Year
 38




---



##### Table of Contents



2006 Plan Year 
  2007 Plan Year  2
 39




---



##### Table of Contents



2008 Plan Year  2
 Other
   NOTE 5
 NUCLEAR OPERATIONS
 General
  40




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##### Table of Contents



Property Insurance
       Public Liability Insurance
  Decommissioning
  41




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##### Table of Contents



As of December 31(in Millions)
    
    2007
    
    
    2006Fermi 2
    
    $
    778
    
    
    $
    694Fermi 1
    
    
    13
    
    
    
    15Low level radioactive waste
    
    
    33
    
    
    
    31Total
    
    $
    824
    
    
    $
    740
    Year Ended December 31(in Millions)
    
    2007
    
    2006
    
    2005Realized gains
    
    $
    25
    
    
    $
    21
    
    
    $
    11Realized losses
    
    
    (17
    )
    
    
    (9
    )
    
    
    (8
    )Proceeds from sales of securities
    
    $
    286
    
    
    $
    253
    
    
    $
    201
 42




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##### Table of Contents



TotalFair
    
    
    Unrealized(in Millions)
    
    Value
    
    
    GainsAs of December 31, 2007Equity Securities
    
    $
    443
    
    
    $
    170Debt Securities
    
    
    373
    
    
    
    9Cash and Cash Equivalents
    
    
    8
    
    
    
    $
    824
    
    
    $
    179As of December 31, 2006Equity Securities
    
    $
    399
    
    
    $
    140Debt Securities
    
    
    316
    
    
    
    4Cash and Cash Equivalents
    
    
    25
    
    
    
    $
    740
    
    
    $
    144
   Nuclear Fuel Disposal Costs
  43




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NOTE 6  JOINTLY OWNED UTILITY PLANT
  LudingtonHydroelectricBelle River
    
    Pumped StorageIn-service date
    
    
    1984-1985
    
    
    
    1973Total plant capacity
    
    1,026 MW
    
    1,872 MWOwnership interest
    
    
    *
    
    
    
    49
    %Investment (in Millions)
    
    $
    1,575
    
    
    $
    164Accumulated depreciation (in Millions)
    
    $
    847
    
    
    $
    101
 
 *
    
    Detroit Edisons ownership interest is 63% in Unit No. 1, 81% of the facilities applicable
to Belle River used jointly by the
Belle River and St. Clair Power Plants and 75% in common facilities used at Unit No. 2. Belle River
  Ludington Hydroelectric Pumped Storage
  NOTE 7  INCOME TAXES
 Income Tax Summary
   (Dollars in Millions)
    
    2007
    
    
    2006
    
    
    2005Income tax expense at 35% statutory rate
    
    $
    163
    
    
    $
    169
    
    
    $
    149Investment tax credits
    
    
    (7
    )
    
    
    (7
    )
    
    
    (7
    )Depreciation
    
    
    3
    
    
    
    3
    
    
    
    3Employee Stock Ownership Plan dividends
    
    
    (4
    )
    
    
    (4
    )
    
    
    (4
    )Medicare
Part D subsidy
    
    
    (4
    )
    
    
    (5
    )
    
    
    (6
    )Adjustment to deferred tax accounts
    
    
    
    
    
    
    
    
    
    
    14Other, net
    
    
    (2
    )
    
    
    6
    
    
    
    Total
    
    $
    149
    
    
    $
    162
    
    
    $
    149Effective federal income tax rate
    
    
    32.0
    %
    
    
    33.6
    %
    
    
    35.0
    %
 44




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##### Table of Contents



(in Millions)
    
    2007
    
    
    2006
    
    
    2005Current federal and other income tax expense (benefit)
    
    $
    260
    
    
    $
    160
    
    
    $
    110Deferred federal and other income tax expense
    
    
    (111
    )
    
    
    2
    
    
    
    39Total
    
    $
    149
    
    
    $
    162
    
    
    $
    149
   (in Millions)
    
    2007
    
    
    2006Property, plant and equipment
    
    $
    (1,156
    )
    
    $
    (1,209
    )Securitized regulatory assets
    
    
    (621
    )
    
    
    (670
    )Pension and benefits
    
    
    101
    
    
    
    94Other comprehensive income
    
    
    (2
    )
    
    
    (1
    )Other, net
    
    
    (176
    )
    
    
    (180
    )$
    (1,854
    )
    
    $
    (1,966
    )Deferred income tax liabilities
    
    $
    (2,662
    )
    
    $
    (2,478
    )Deferred income tax assets
    
    
    808
    
    
    
    512$
    (1,854
    )
    
    $
    (1,966
    )Current deferred income tax liabilities
(included in Current Liabilities 
Other)
    
    $
    (29
    )
    
    
    (38
    )Long term deferred income tax liabilities
    
    
    (1,825
    )
    
    
    (1,928
    )$
    (1,854
    )
    
    
    (1,966
    )
  Uncertain Tax Positions
 Accounting for Uncertainty in
Income Taxes  an interpretation of FASB Statement No. 109 (FIN 48)
 45




---



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(in Millions)Balance at January 1, 2007
    
    $
    12Additions for tax positions of prior years
    
    
    2Settlements
    
    
    (7
    )Balance at December 31, 2007
    
    $
    7
    Michigan Business Tax
   Accounting for the
Effects of Certain Types of Regulation,
 46




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##### Table of Contents



NOTE 8  LONG-TERM DEBT
  (in Millions)
    
    2007
    
    
    2006Detroit Edison Taxable Debt, Principally Secured5.9% due 2010 to 2038
    
    $
    2,305
    
    
    $
    2,267Detroit Edison Tax Exempt Revenue Bonds (2)5.3% due 2008 to 2036
    
    
    1,213
    
    
    
    1,213Other Long-Term Debt
    
    
    
    
    
    
    593,518
    
    
    
    3,539Less amount due within one year
    
    
    (45
    )
    
    
    (24
    )$
    3,473
    
    
    $
    3,515Securitization Bonds6.4% due 2008 to 2015
    
    $
    1,185
    
    
    $
    1,295Less amount due within one year
    
    
    (120
    )
    
    
    (111
    )$
    1,065
    
    
    $
    1,184
 
 (1)
    
    Weighted average interest rates as of December 31, 2007 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
  Month
    
    
    
    
    
    
    
    
    
    
    
    
    
    (in Millions)Issued
    
    Type
    
    Interest Rate
    
    Maturity
    
    AmountDecember
    
    Senior Notes (1)
    
    
    6.47
    %
    
    March 2038
    
    $
    50
 
 (1)
    
    The proceeds from the issuance were used to refinance other long-term debt and for general
corporate purposes. Debt Retirements and Redemptions
  Month
    
    
    
    
    
    
    
    
    
    
    
    
    
    (in Millions)Retired
    
    Type
    
    Interest Rate
    
    Maturity
    
    AmountDecember
    
    Other long term debt
    
    
    7.61
    %
    
    June 2011
    
    $
    47
  2013 &(in Millions)
    
    2008
    
    2009
    
    2010
    
    2011
    
    2012
    
    thereafter
    
    TotalAmount to mature
    
    $
    165
    
    
    $
    145
    
    
    $
    652
    
    
    $
    303
    
    
    $
    402
    
    
    $
    3,041
    
    
    $
    4,708
 47




---



##### Table of Contents



Cross Default Provisions
  Other
  NOTE 9
 PREFERRED SECURITIES
  NOTE 10  SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS
      48




---



##### Table of Contents



NOTE
11  CAPITAL AND OPERATING LEASES
 Lessee
  Capital
    
    
    Operating(in Millions)
    
    Leases
    
    
    Leases2008
    
    $
    11
    
    
    $
    372009
    
    
    11
    
    
    
    302010
    
    
    9
    
    
    
    232011
    
    
    7
    
    
    
    182012
    
    
    5
    
    
    
    17Thereafter
    
    
    17
    
    
    
    69Total minimum lease payments
    
    
    60
    
    
    $
    194Less imputed interest
    
    
    (10
    )Present value of net minimum lease payments
    
    
    50Less current portion
    
    
    (8
    )Non-current portion
    
    $
    42
  NOTE
12  FINANCIAL AND OTHER DERIVATIVE INSTRUMENTS
 Accounting for Derivative Instruments and Hedging Activities
 49




---



##### Table of Contents



Commodity Price Risk
  Credit Risk
   Fair Value of Other Financial Instruments
  2007
    
    2006Fair Value
    
    Carrying Value
    
    Fair Value
    
    Carrying ValueLong-Term Debt
    
    $4.8 billion
    
    $4.7 billion
    
    $5.0 billion
    
    $4.8 billion
 NOTE 13  COMMITMENTS AND CONTINGENCIES
 Environmental
 Air .
 50




---



##### Table of Contents



Water
 Contaminated Sites .
 Labor Contracts
  Purchase Commitments
   Bankruptcies
  51




---



##### Table of Contents



Other
     NOTE 14  RETIREMENT BENEFITS AND TRUSTEED ASSETS
 Adoption of SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other
Postretirement Plans
 Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans  an Amendment of FASB Statements No. 87, 88, 106, and 132(R)
  52




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##### Table of Contents



Measurement Date
  Qualified and Nonqualified Pension Plan Benefits
     Qualified Pension Plans
    
    
    Nonqualified Pension Plans(in Millions)
    
    2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005Service cost
    
    $
    49
    
    
    $
    49
    
    
    $
    53
    
    
    $
    2
    
    
    $
    2
    
    
    $
    1Interest cost
    
    
    135
    
    
    
    133
    
    
    
    130
    
    
    
    3
    
    
    
    3
    
    
    
    2Expected return on plan assets
    
    
    (148
    )
    
    
    (135
    )
    
    
    (135
    )
    
    
    
    
    
    
    
    
    
    
    Amortization of:Net income
    
    
    44
    
    
    
    44
    
    
    
    50
    
    
    
    2
    
    
    
    1
    
    
    
    1Prior service cost
    
    
    6
    
    
    
    8
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    Special termination benefits
    
    
    8
    
    
    
    38
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net pension cost
    
    $
    94
    
    
    $
    137
    
    
    $
    107
    
    
    $
    7
    
    
    $
    6
    
    
    $
    4
  53




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##### Table of Contents



Qualified Pension Plans
    
    
    Nonqualified Pension Plans(in Millions)
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Other
changes in plan assets and benefit obligations recognized in regulatory assetsNet actuarial (gain)/ loss
    
    $
    (188
    )
    
    $
    N/A
    
    
    $
    1
    
    
    $
    N/AAmortization of net actuarial (gain)
    
    
    (44
    )
    
    
    N/A
    
    
    
    (1
    )
    
    
    N/APrior service cost
    
    
    1
    
    
    
    N/A
    
    
    
    
    
    
    
    N/AAmortization of prior service (credit)
    
    
    (6
    )
    
    
    N/A
    
    
    
    (1
    )
    
    
    N/ATotal recognized in regulatory assets
    
    $
    (237
    )
    
    $
    N/A
    
    
    $
    (1
    )
    
    $
    N/ATotal recognized in net periodic pension
cost and regulatory assets
    
    $
    (143
    )
    
    $
    N/A
    
    
    $
    6
    
    
    $
    N/AEstimated
amounts to be amortized from regulatory assets
into net periodic benefit cost during next fiscal yearNet actuarial loss
    
    $
    26
    
    
    $
    44
    
    
    $
    1
    
    
    $
    1Prior service cost
    
    $
    6
    
    
    $
    6
    
    
    $
    
    
    
    $
    1
   Qualified Pension Plans
    
    
    Nonqualified Pension Plans2007
    
    
    2006
    
    
    2007
    
    
    2006Accumulated benefit obligation, end of year
    
    $
    2,519
    
    
    $
    2,668
    
    
    $
    48
    
    
    $
    46Change in projected benefit obligationProjected benefit obligation, beginning of year
    
    $
    2,872
    
    
    $
    2,738
    
    
    $
    48
    
    
    $
    41Service cost
    
    
    53
    
    
    
    55
    
    
    
    2
    
    
    
    2Interest cost
    
    
    159
    
    
    
    156
    
    
    
    3
    
    
    
    3Actuarial loss/ (gain)
    
    
    (189
    )
    
    
    66
    
    
    
    
    
    
    
    5Benefits paid
    
    
    (200
    )
    
    
    (180
    )
    
    
    (3
    )
    
    
    (3
    )Plan amendments
    
    
    1
    
    
    
    (6
    )
    
    
    
    
    
    
    Special
termination benefits
    
    
    8
    
    
    
    43
    
    
    
    
    
    
    
    Projected benefit obligation, end of year
    
    $
    2,704
    
    
    $
    2,872
    
    
    $
    50
    
    
    $
    48Change in plan assetsPlan assets at fair value, beginning of year
    
    $
    2,373
    
    
    $
    2,273
    
    
    $
    
    
    
    $
    Actual return on plan assets
    
    
    246
    
    
    
    280
    
    
    
    
    
    
    
    Company contributions
    
    
    180
    
    
    
    
    
    
    
    3
    
    
    
    3Benefits paid
    
    
    (200
    )
    
    
    (180
    )
    
    
    (3
    )
    
    
    (3
    )
 54




---



##### Table of Contents



Qualified Pension Plans
    
    
    Nonqualified Pension Plans2007
    
    
    2006
    
    
    2007
    
    
    2006Plan assets at fair value, end of year
    
    $
    2,599
    
    
    $
    2,373
    
    
    $
    
    
    
    $
    Funded status of the plans, November 30
    
    $
    (105
    )
    
    $
    (499
    )
    
    $
    (50
    )
    
    $
    (48
    )December contribution
    
    
    150
    
    
    
    180
    
    
    
    
    
    
    
    Funded status, December 31
    
    $
    45
    
    
    $
    (319
    )
    
    $
    (50
    )
    
    $
    (48
    )Noncurrent assets
    
    $
    372
    
    
    $
    
    
    
    $
    
    
    
    $
    Current liabilities
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    (3
    )Noncurrent liabilities
    
    
    (327
    )
    
    
    (319
    )
    
    
    (47
    )
    
    
    (45
    )$
    45
    
    
    $
    (319
    )
    
    $
    (50
    )
    
    $
    (48
    )Amounts recognized in regulatory assetsNet actuarial loss
    
    $
    436
    
    
    $
    706
    
    
    $
    18
    
    
    $
    18Prior service cost
    
    $
    14
    
    
    $
    20
    
    
    $
    1
    
    
    $
    2
  2007
    
    2006
    
    2005Projected benefit obligationDiscount rate
    
    
    6.50
    %
    
    
    5.70
    %
    
    
    5.90
    %Rate of compensation increase
    
    
    4.00
    %
    
    
    4.00
    %
    
    
    4.00
    %Net pension costsDiscount rate
    
    
    5.70
    %
    
    
    5.90
    %
    
    
    6.00
    %Rate of compensation increase
    
    
    4.00
    %
    
    
    4.00
    %
    
    
    4.00
    %Expected long-term rate of return on Plan assets
    
    
    8.75
    %
    
    
    8.75
    %
    
    
    9.00
    %
  (in Millions)2008
    
    $
    1732009
    
    
    1782010
    
    
    1832011
    
    
    1872012
    
    
    1952013 - 2017
    
    
    1,086Total
    
    $
    2,002
  55




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2007
    
    2006
    
    TargetEquity securities
    
    
    66
    %
    
    
    68
    %
    
    
    55
    %Debt securities
    
    
    19
    
    
    
    23
    
    
    
    20Other
    
    
    15
    
    
    
    9
    
    
    
    25100
    %
    
    
    100
    %
    
    
    100
    %
  Other Postretirement Benefits
   (in Millions)
    
    2007
    
    
    2006
    
    
    2005Service cost
    
    $
    48
    
    
    $
    45
    
    
    $
    44Interest cost
    
    
    90
    
    
    
    88
    
    
    
    80Expected return on plan assets
    
    
    (54
    )
    
    
    (49
    )
    
    
    (58
    )Amortization of:Net loss
    
    
    51
    
    
    
    53
    
    
    
    44Prior service costs
    
    
    4
    
    
    
    4
    
    
    
    3Net transition obligation
    
    
    7
    
    
    
    7
    
    
    
    7Special termination benefits
    
    
    2
    
    
    
    6
    
    
    
    Net postretirement cost
    
    $
    148
    
    
    $
    154
    
    
    $
    120
 56




---



##### Table of Contents



(in Millions)
    
    2007
    
    
    2006Other changes in plan assets and APBO recognized in regulatory assetsNet actuarial (gain)
    
    $
    (216
    )
    
    $
    N/AAmortization of net actuarial (gain)
    
    
    (51
    )
    
    
    N/APrior service (credit)
    
    
    (39
    )
    
    
    N/AAmortization of prior service cost
    
    
    (4
    )
    
    
    N/AAmortization of transition (asset)
    
    
    (7
    )
    
    
    N/ATotal recognized in regulatory assets
    
    $
    (317
    )
    
    $
    N/ATotal recognized in net periodic pension cost and regulatory assets
    
    $
    (169
    )
    
    $
    N/AEstimated amounts to be amortized from regulatory assets into net
periodic benefit cost during next fiscal yearNet actuarial loss
    
    $
    27
    
    
    $
    50Prior service cost
    
    $
    2
    
    
    $
    4Net transition obligation
    
    $
    2
    
    
    $
    6
   (in Millions)
    
    2007
    
    
    2006Change in accumulated post retirement benefit obligation during the yearAccumulated postretirement benefit obligation, beginning of year
    
    $
    1,660
    
    
    $
    1,525Service cost
    
    
    48
    
    
    
    45Interest cost
    
    
    90
    
    
    
    88Plan amendments
    
    
    (39
    )
    
    
    2Actuarial (gain)/ loss
    
    
    (214
    )
    
    
    63Benefits paid
    
    
    (73
    )
    
    
    (70
    )Special termination benefits
    
    
    2
    
    
    
    6Medicare Part D
    
    
    5
    
    
    
    1Accumulated postretirement benefit obligation , end of year
    
    $
    1,479
    
    
    $
    1,660Change in plan assets during the yearPlan assets at fair value, beginning of year
    
    $
    636
    
    
    $
    581Actual return on plan assets
    
    
    56
    
    
    
    70Company contributions
    
    
    36
    
    
    
    40Benefits paid
    
    
    (70
    )
    
    
    (55
    )Plan assets at fair value, end of year
    
    $
    658
    
    
    $
    636
 57




---



##### Table of Contents



(in Millions)
    
    2007
    
    
    2006Funded status of the Plans, as of November 30
    
    $
    (821
    )
    
    $
    (1,024
    )December adjustment
    
    
    5
    
    
    
    (31
    )Funded status, as of December 31
    
    $
    (816
    )
    
    $
    (1,055
    )Non-current liabilities
    
    $
    (816
    )
    
    $
    (1,055
    )Amounts Recognized in Regulatory AssetsNet actuarial loss
    
    $
    391
    
    
    $
    659Prior service cost
    
    $
    3
    
    
    $
    24Net transition obligation
    
    $
    11
    
    
    $
    40
  2007
    
    2006
    
    2005Projected Benefit ObligationDiscount rate
    
    
    6.50
    %
    
    
    5.70
    %
    
    
    5.90
    %Net Benefit CostsDiscount rate
    
    
    5.70
    %
    
    
    5.90
    %
    
    
    6.00
    %Expected long-term rate of return on Plan assets
    
    
    8.75
    %
    
    
    8.75
    %
    
    
    9.00
    %Health care trend rate pre-65
    
    
    8.00
    %
    
    
    9.00
    %
    
    
    9.00
    %Health care trend rate post-65
    
    
    7.00
    %
    
    
    8.00
    %
    
    
    8.00
    %Ultimate health care trend rate
    
    
    5.00
    %
    
    
    5.00
    %
    
    
    5.00
    %Year in which ultimate reached
    
    
    2011
    
    
    
    2011
    
    
    
    2011
   (in Millions)2008
    
    $
    912009
    
    
    982010
    
    
    1032011
    
    
    1072012
    
    
    1112013 - 2017
    
    
    599Total
    
    $
    1,109
  58




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2007
    
    2006
    
    TargetEquity securities
    
    
    68
    %
    
    
    68
    %
    
    
    55
    %Debt securities
    
    
    20
    
    
    
    25
    
    
    
    20Other
    
    
    12
    
    
    
    7
    
    
    
    25100
    %
    
    
    100
    %
    
    
    100
    %
   (in Millions)2008
    
    $
    42009
    
    
    42010
    
    
    42011
    
    
    42012
    
    
    52013 - 2017
    
    
    26Total
    
    $
    47
 NOTE
15  RELATED PARTY TRANSACTIONS
  59




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(in Millions)
    
    2007
    
    2006
    
    2005RevenuesEnergy sales
    
    $
    
    
    
    $
    46
    
    
    $
    192Other services
    
    
    5
    
    
    
    5
    
    
    
    5Shared capital assets
    
    
    21
    
    
    
    13
    
    
    
    14CostsPower purchases
    
    
    3
    
    
    
    35
    
    
    
    102Other services and interest
    
    
    6
    
    
    
    3
    
    
    
    7Corporate expenses (net)
    
    
    331
    
    
    
    (86
    )
    
    
    (97
    )OtherDividends declared
    
    
    305
    
    
    
    305
    
    
    
    305Dividends paid
    
    
    305
    
    
    
    305
    
    
    
    305Capital contribution
    
    
    175
    
    
    
    150
    
    
    
    
 December 31,(in Millions)
    
    2007
    
    2006AssetsAccounts receivable
    
    $
    3
    
    
    $
    19Liabilities & EquityAccounts payable
    
    
    138
    
    
    
    84Short-term borrowings
    
    
    277
    
    
    
    Other liabilities ( pension obligations)
    
    
    327
    
    
    
    295Dividends payable
    
    
    76
    
    
    
    76
  NOTE 16  SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
 First
    
    Second
    
    Third
    
    Fourth(in Millions)
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter(1)
    
    Year2007Operating Revenues
    
    $
    1,094
    
    
    $
    1,210
    
    
    $
    1,403
    
    
    $
    1,193
    
    
    $
    4,900Operating Income
    
    
    131
    
    
    
    162
    
    
    
    227
    
    
    
    223
    
    
    
    743Net Income
    
    
    40
    
    
    
    60
    
    
    
    107
    
    
    
    110
    
    
    
    3172006Operating Revenues
    
    
    1,050
    
    
    
    1,175
    
    
    
    1,460
    
    
    
    1,052
    
    
    
    4,737Operating Income
    
    
    161
    
    
    
    164
    
    
    
    270
    
    
    
    181
    
    
    
    776Net Income
    
    
    59
    
    
    
    57
    
    
    
    138
    
    
    
    67
    
    
    
    321
 60




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##### Table of Contents



(1)
    
    In the fourth quarter of 2007, Detroit Edison recorded adjustments that increased
operating income by $27 million ($18 million after-tax) to correct prior amounts. These
adjustments were primarily to record property, plant and equipment and deferred CTA costs for
expenditures that had been expensed in earlier quarters of 2007,
including $14 million ($9 million after-tax) expensed in
the second quarter of 2007. 
 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
  2007
    
    
    2006Audit fees (1)
    
    $
    1,275,216
    
    
    $
    1,652,619Audit-related fees (2)(3)
    
    
    6,179
    
    
    
    35,750Total
    
    $
    1,281,395
    
    
    $
    1,688,369
 
 (1)
    
    Represents the aggregrate fees for the audits of Detroit
Edisons annual financial statements 61




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##### Table of Contents



and for the reviews of the financial statements included in
Detroit Edisons Quarterly Reports on Form 10-Q. 2006 fees
include procedures performed to audit internal control over financial
reporting of consolidated DTE Energy. Such fees in 2007 were incurred
by DTE Energy and indirectly allocated to Detroit Edison through overheads.(2)
    
    Represents the aggregrate fees billed for audit-related
services. The fees
above exclude certain fees charged to DTE Energy that are indirectly
allocated to Detroit Edison through overheads.   Part IV
 
 Item 15.
    
    Exhibits and Financial Statement Schedules
  (1)
    
    Consolidated financial statements. See Item 8  Financial Statements and Supplementary
Data.(2)
    
    Financial statement schedule. See Item 8  Financial Statements and Supplementary Data.(3)
    
    Exhibits.
 (i)
    
    Exhibits filed herewith.
 12-28
    
    Computation of Ratio of Earnings to Fixed Charges.23-20
    
    Consent of Deloitte & Touche LLP.31-37
    
    Chief Executive Officer Section 302 Form 10-K Certification of Periodic Report.31-38
    
    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 J.P. Morgan Trust Company, National Association, 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
 62




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##### Table of Contents



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 J.P. Morgan Trust
Company, National Association, 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 J.P. Morgan Trust Company,
National Association, 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 J.P. Morgan Trust Company,
National Association, 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 J.P. Morgan Trust Company,
National Association, 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 J.P. Morgan Trust Company,
National Association, 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 J.P. Morgan Trust Company,
National Association, 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 J.P. Morgan Trust Company,
National Association, 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 April 1, 1991, to the
Mortgage and Deed of Trust, dated as of October 1, 1924, between
The Detroit Edison Company and J.P. Morgan Trust Company,
National Association, as successor trustee (Exhibit 4-15 to
Form 10-K for the year ended December 31, 1995). (1991 Series AP)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 J.P. Morgan Trust Company, National
Association, as successor trustee
 63




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##### Table of Contents



(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 J.P. Morgan Trust Company, National
Association, 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 J.P. Morgan Trust Company,
National Association, 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 J.P. Morgan Trust Company,
National Association, as successor trustee (Exhibit 4-215 to
Form 10-K for the year ended December 31, 2000). (amendment)Supplemental Indenture, dated as of June 30, 1993, to the
Mortgage and Deed of Trust, dated as of October 1, 1924, between
The Detroit Edison Company and J.P. Morgan Trust Company,
National Association, as successor trustee (Exhibit 4-216 to Form
10-K for the year ended December 31, 2000). (1993 Series AP)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 J.P. Morgan Trust Company,
National Association, 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 J.P. Morgan Trust Company,
National Association, 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 J.P. Morgan Trust Company,
National Association, as successor trustee (Exhibit 4-222 to
Form 10-Q for the quarter ended March 31, 2001). (2001 Series AP)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 J.P. Morgan Trust Company, National Association, 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
 64




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##### Table of Contents



J.P. Morgan Trust Company,
National Association, 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 J.P. Morgan Trust Company,
National Association, 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 J.P. Morgan Trust Company,
National Association, 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 J.P. Morgan Trust Company,
National Association, 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 J.P. Morgan Trust Company,
National Association, 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 J.P. Morgan Trust Company,
National Association, 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 J.P. Morgan Trust Company,
National Association, 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 J.P. Morgan Trust Company, National
Association, 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 J.P. Morgan Trust Company, National
Association, as successor trustee (Exhibit 4.3 to Registration
Statement on Form S-4 (File No. 333-123926)). (2005 Series AR and
BR)
 65




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##### Table of Contents



Supplemental Indenture, dated as of August 1, 2005, to the
Mortgage and Deed of Trust, dated as of October 1, 1924, between
The Detroit Edison Company and J.P. Morgan Trust Company,
National Association, as successor trustee (Exhibit 4.2 to Form
8-K dated August 17, 2005). (2005 Series DT)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 J.P. Morgan Trust Company,
National Association, 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 J.P. Morgan Trust Company, National
Association, as successor trustee (Exhibit 4-248 to Form 10-Q for
the quarter ended September 30, 2005). (2005 Series E)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 J.P. Morgan Trust Company, National
Association, 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, 2006, to the
Mortgage and Deed of Trust, dated as of October 1, 1924, between
The Detroit Edison Company and J.P. Morgan Trust Company,
National Association, as successor trustee (Exhibit 4.2 to Form
8-K dated December 8, 2006). (2006 Series CT)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 J.P. Morgan Trust Company,
National Association, as successor trustee (Exhibit 4.2 to Form
8-K dated December 18, 2007). (2007 Series A)4(b)
    
    Collateral Trust Indenture, dated as of June 30, 1993, between
The Detroit Edison Company and J.P. Morgan Trust Company,
National Association, as successor trustee (Exhibit 4-152 to
Registration Statement (File No. 33-50325)).4(c)
    
    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 J.P. Morgan Trust Company,
National Association, as successor trustee (Exhibit 4-229 to Form
10-Q for the quarter ended September 30, 2001). (5.050% Senior
Notes due 2005 and 6.125% Senior Notes due 2010)4(d)
    
    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 J.P. Morgan Trust Company,
National Association, 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)4(e)
    
    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 J.P. Morgan Trust Company,
National Association, as successor trustee (Exhibit 4-233 to Form
10-Q for the quarter ended March 31,
 66




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##### Table of Contents



2003). (5.45% Senior Notes
due 2032 and 5.25% Senior Notes due 2032)4(f)
    
    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 J.P. Morgan Trust Company,
National Association, as successor trustee (Exhibit 4-236 to Form
10-Q for the quarter ended September 30, 2003). (5 1/2% Senior
Notes due 2030)4(g)
    
    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 J.P. Morgan Trust Company,
National Association, 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)4(h)
    
    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 J.P. Morgan Trust Company,
National Association, 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)4(i)
    
    Sixteenth Supplemental Indenture, dated as of April 1, 2005, to
the Collateral Trust Indenture, dated as of June 30, 1993,
between The Detroit Edison Company and J.P. Morgan Trust Company,
National Association, as successor trustee (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)4(j)
    
    Seventeenth Supplemental Indenture, dated as of August 1, 2005,
to the Collateral Trust Indenture, dated as of June 30, 1993
between The Detroit Edison Company and J.P. Morgan Trust Company,
National Association, as successor trustee (Exhibit 4.1 to Form
8-K dated August 17, 2005). (2005 Series DT Variable Rate Senior
Notes due 2029)4(k)
    
    Eighteenth Supplemental Indenture, dated as of September 15,
2005, to the Collateral Trust Indenture, dated as of June 30,
1993, between The Detroit Edison Company and J.P. Morgan Trust
Company, National Association, as successor trustee (Exhibit 4.1
to Form 8-K dated September 29, 2005). (2005 Series C 5.19%
Senior Notes due October 1, 2023)4(l)
    
    Nineteenth Supplemental Indenture, dated as of September 30,
2005, to the Collateral Trust Indenture, dated as of June 30,
1993, between The Detroit Edison Company and J.P. Morgan Trust
Company, National Association, as successor trustee (Exhibit
4-247 to Form 10-Q for the quarter ended September 30, 2005).
(2005 Series E 5.70% Senior Notes due 2037)4(m)
    
    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 J.P. Morgan Trust Company,
National Association, as successor trustee (Exhibit 4-249 to Form
10-Q for the quarter ended June 30, 2006). (2006 Series A Senior
Notes due 2036)
 67




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##### Table of Contents



4(n)
    
    Twenty-First Supplemental Indenture, dated as of December 1,
2006, 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 8, 2006). (2006 Series CT Variable Rate Senior
Notes due 2036)4(o)
    
    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)4(p)
    
    Trust Agreement of Detroit Edison Trust I. (Exhibit 4.9 to
Registration Statement on Form S-3 (File No. 333-100000))4(q)
    
    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)
    
    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(c)
    
    Form of Amendment No.1 to
The Detroit Edison
Companys Five-Year Credit
Agreement, dated as of
January 10, 2007, 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 January 10, 2007).10(d)
    
    Form of Second Amended and
Restated 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 10.2 to Form 8-K
dated October 17, 2005)10(e)
    
    Form of Amendment No. 1. to
Second Amended and Restated
Five-Year Credit Agreement
dated as of January 10,
2007, 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 10.2 to Form 8-K
dated January 10, 2007).10(f)
    
    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)
 68




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##### Table of Contents



10(g)
    
    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(h)
    
    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(i)
    
    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(j)
    
    Executive Post-Employment
Income Arrangement, dated
March 27, 1989, between The
Detroit Edison Company and
S. Martin Taylor. (Exhibit
10-22 to Form 10-Q for the
quarter ended March 31,
1998)10(k)
    
    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(l)
    
    Executive Vehicle Plan of
The Detroit Edison Company,
dated as of September 1,
1999. (Exhibit 10-41 to
Form 10-Q for the quarter
ended March 31, 2001)10(m)
    
    Loan Agreement dated as of
December 1, 2006 between
The Detroit Edison Company
and the Michigan Strategic
Fund (Exhibit 10.1 to Form
8-K dated December 8, 2006)10(n)
    
    Amended and Restated Trade
Receivables Purchase and
Sale Agreement among
Detroit Edison, CAFCO,
Citibank and Citicorp,
individually and as Agent
dated March 9, 2001
(Exhibit 99-43 to Form 10-Q
dated March 31, 2001)10(o)
    
    Amendment No. 1 dated as of
January 17, 2003 to the
Amended and Restated Trade
Receivables Purchase and
Sale Agreement among
Detroit Edison, CAFCO,
Citibank and Citicorp,
individually and as Agent
dated March 9, 2001, as
amended (Exhibit 10-41 to
Form 10-K for the year
ended December 31, 2006)10(p)
    
    Amendment No. 2 dated as of
May 28, 2003 to the Amended
and Restated Trade
Receivables Purchase and
Sale Agreement among
Detroit Edison, CAFCO,
Citibank and Citicorp,
individually and as Agent
dated March 9, 2001, as
amended (Exhibit 99-12 to
Form 10-Q dated June 30,
2003)10(q)
    
    Amendment No. 3 dated as of
February 25, 2004 to the
Amended and Restated Trade
Receivables Purchase and
Sale Agreement among
Detroit Edison, CAFCO,
Citibank and Citicorp,
individually and as Agent
dated March 9, 2001, as
amended (Exhibit 99-16 to
Form 10-Q dated March 31,
2004)10(r)
    
    Amendment No. 4 dated as of
January 20, 2005 to the
Amended and Restated Trade
Receivables Purchase and
Sale Agreement among
Detroit Edison, CAFCO,
Citibank and Citicorp,
individually and as Agent
dated March 9, 2001,
 69




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##### Table of Contents



as
amended (Exhibit 99-18 to
Form 10-K dated December
31, 2004)10(s)
    
    Amendment No. 5 dated as of
January 18, 2007 to the
Amended and Restated Trade
Receivables Purchase and
Sale Agreement among
Detroit Edison, CAFCO,
Citibank and Citicorp,
individually and as Agent
dated March 9, 2001, as
amended (Exhibit 10-42 to
Form 10-K for the year
ended December 31, 2006)10(t)
    
    Amendment No. 6 dated as of
January 18, 2007 to the
Amended and Restated Trade
Receivables Purchase and
Sale Agreement among
Detroit Edison, CAFCO,
Citibank and Citicorp,
individually and as Agent
dated March 9, 2001, as
amended (Exhibit 10-01 to
Form 8-K dated January 18,
2007)10(u)
    
    Amendment No. 7 dated as of January 17, 2008 to the Amended and Restated Trade
Receivables Purchase and Sale Agreement among Detroit Edison, CAFCO, Citibank and
Citicorp, individually and as Agent dated March 9, 2001, as
amended. (Exhibit 10-1 to Form 8-K dated January 17, 2008)99(a)
    
    Belle River Participation
Agreement, dated as of
December 1, 1982, between
The Detroit Edison Company
and Michigan Public Power
Agency. (Exhibit 28-5 to
Registration Statement
No. 2-81501)99(b)
    
    Belle River Transmission
Ownership and Operating
Agreement, dated as of
December 1, 1982, between
The Detroit Edison Company
and Michigan Public Power
Agency. (Exhibit 28-6 to
Registration Statement No.
2-81501)99(c)
    
    Inter-Creditor Agreement,
dated as of March 9, 2001,
among Citicorp North
America, Inc., Citibank,
N.A., The Bank of New York,
The Detroit Edison
Securitization Funding LLC
and The Detroit Edison
Company. (Exhibit 99-41 to
Form 10-Q for the quarter
ended March 31, 2001)
 (iii)
    
    Exhibits furnished herewith.
 32-37
    
    Chief Executive Officer
Section 906 Form 10-K
Certification of Periodic
Report.32-38
    
    Chief Financial Officer
Section 906 Form 10-K
Certification of Periodic
Report.
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##### Table of Contents



The Detroit Edison Company
 
 Schedule II  Valuation and Qualifying Accounts
 Year
Ended December 31(in Millions)
    
    2007
    
    
    2006
    
    
    2005Allowance for Doubtful Accounts (shown as
deduction from accounts receivable in
the consolidated statements of financial
position)Balance at Beginning of Period
    
    $
    72
    
    
    $
    54
    
    
    $
    55Additions:Charged to costs and expenses
    
    
    63
    
    
    
    53
    
    
    
    41Charged to other accounts (1)
    
    
    4
    
    
    
    3
    
    
    
    4Deductions (2)
    
    
    (46
    )
    
    
    (38
    )
    
    
    (46
    )Balance At End of Period
    
    $
    93
    
    
    $
    72
    
    
    $
    54
 
 (1)
    
    Collection of accounts previously written off.(2)
    
    Non-collectible accounts written off. 71




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##### Table of Contents



Signatures
  THE DETROIT EDISON COMPANY
(Registrant)Date: March 17, 2008
    
    By
    
    /s/ PETER B. OLEKSIAKPeter B. OleksiakVice President and Controller, andChief Accounting Officer
  By
    
    /s/ ANTHONY F. EARLEY, JR.
    
    By
    
    /s/ PETER B. OLEKSIAKAnthony F. Earley, Jr.
    
    
    
    Peter B. OleksiakChairman of the Board and
    
    
    
    Vice President and Controller, andChief Executive Officer
    
    
    
    Chief Accounting OfficerBy
    
    /s/ SANDRA KAY ENNIS
    
    By
    
    /s/ DAVID E. MEADORSandra Kay Ennis
    
    
    
    David E. MeadorDirector and Corporate Secretary
    
    
    
    Director, Executive Vice Presidentand Chief Financial OfficerByBruce D. PetersonDirectorDate: March 17, 2008
 72