DTE ENERGY CO (Form: 10-Q, Received: 10/23/2015 10:39:37)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended September 30, 2015



Commission File Number	Registrants; State of Incorporation; Address; and Telephone Number	I.R.S. Employer Identification No.
1-11607	DTE Energy Company (a Michigan corporation) One Energy Plaza Detroit, Michigan 48226-1279 313-235-4000	38-3217752

1-2198	DTE Electric Company (a Michigan corporation) One Energy Plaza Detroit, Michigan 48226-1279 313-235-4000	38-0478650

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

DTE Energy Company (DTE Energy) Yes x No o DTE Electric Company (DTE Electric) Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

DTE Energy Yes x No o DTE Electric Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



DTE Energy	Large accelerated filer x	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
			(Do not check if a smaller reporting company)
DTE Electric	Large accelerated filer o	Accelerated filer o	Non-accelerated filer x	Smaller reporting company o
			(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

DTE Energy Yes o No x DTE Electric Yes o No x

Number of shares of Common Stock outstanding at September 30, 2015 :



Registrant	Description	Shares
DTE Energy	Common Stock, without par value	179,475,625

DTE Electric	Common Stock, $10 par value, directly owned by DTE Energy	138,632,324

This combined Form 10-Q is filed separately by two registrants: DTE Energy and DTE Electric. Information contained herein relating to an individual registrant is filed by such registrant solely on its behalf. DTE Electric makes no representation as to information relating exclusively to DTE Energy.

DTE Electric, a wholly owned subsidiary of DTE Energy, meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format specified in General Instructions H(2) of Form 10-Q.

TABLE OF CONTENTS



		Page
	Definitions	1
	Filing Format	3
	Forward-Looking Statements	3
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	DTE Energy Consolidated Financial Statements (Unaudited)	6
	DTE Electric Consolidated Financial Statements (Unaudited)	12
	Combined Notes to Consolidated Financial Statements (Unaudited)	18
	Note 1 — Organization and Basis of Presentation	18
	Note 2 — Significant Accounting Policies	20
	Note 3 — New Accounting Pronouncements	22
	Note 4 — Acquisitions	23
	Note 5 — Asset Retirement Obligations	23
	Note 6 — Regulatory Matters	23
	Note 7 — Earnings Per Share	24
	Note 8 — Fair Value	24
	Note 9 — Financial and Other Derivative Instruments	32
	Note 10 — Long-Term Debt	37
	Note 11 — Short-Term Credit Arrangements and Borrowings	37
	Note 12 — Commitments and Contingencies	38
	Note 13 — Retirement Benefits and Trusteed Assets	44
	Note 14 — Stock-Based Compensation	45
	Note 15 — Segment and Related Information	46
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	49
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	63
Item 4.	Controls and Procedures	66
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	67
Item 1A.	Risk Factors	67
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	67
Item 6.	Exhibits	68
	Signatures	69

DEFINITIONS



ARO	Asset Retirement Obligation

ASU	Accounting Standards Update issued by the FASB

CFTC	U.S. Commodity Futures Trading Commission

DOE	U.S. Department of Energy

DTE Electric	DTE Electric Company (a direct wholly owned subsidiary of DTE Energy) and subsidiary companies

DTE Energy	DTE Energy Company, directly or indirectly the parent of DTE Electric, DTE Gas, and numerous non-utility subsidiaries

DTE Gas	DTE Gas Company (an indirect wholly owned subsidiary of DTE Energy) and subsidiary companies

EPA	U.S. Environmental Protection Agency

FASB	Financial Accounting Standards Board

FERC	Federal Energy Regulatory Commission

FOV	Finding of Violation

FTRs	Financial Transmission Rights are financial instruments that entitle the holder to receive payments related to costs incurred for congestion on the transmission grid.

GCR	A Gas Cost Recovery mechanism authorized by the MPSC that allows DTE Gas to recover through rates its natural gas costs

MDEQ	Michigan Department of Environmental Quality

MGP	Manufactured Gas Plant

MPSC	Michigan Public Service Commission

MTM	Mark-to-market

NAV	Net Asset Value

NEIL	Nuclear Electric Insurance Limited

NEXUS	NEXUS Gas Transmission, LLC

Non-utility	An entity that is not a public utility. Its conditions of service, prices of goods and services, and other operating related matters are not directly regulated by the MPSC.

NOV	Notice of Violation

NRC	U.S. Nuclear Regulatory Commission

PLD	City of Detroit's Public Lighting Department

Production tax credits	Tax credits as authorized under Sections 45K and 45 of the Internal Revenue Code that are designed to stimulate investment in and development of alternate fuel sources. The amount of a production tax credit can vary each year as determined by the Internal Revenue Service.

PSCR	A Power Supply Cost Recovery mechanism authorized by the MPSC that allows DTE Electric to recover through rates its fuel, fuel-related, and purchased power costs

REF	Reduced Emissions Fuel

Registrant(s)	DTE Energy and DTE Electric

Retail access	Michigan legislation provided customers the option of access to alternative suppliers for electricity and natural gas

Securitization	DTE Electric 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

DEFINITIONS



TRIA	Terrorism Risk Insurance Program Reauthorization Act of 2015

TRM	A Transitional Reconciliation Mechanism authorized by the MPSC that allows DTE Electric to recover through rates the deferred net incremental revenue requirement associated with the transition of PLD customers to DTE Electric's distribution system

VEBA	Voluntary Employees Beneficiary Association

VIE	Variable Interest Entity



Units of Measurement

Bcf	Billion cubic feet of natural gas

BTU	Heat value (energy content) of fuel

kWh	Kilowatthour of electricity

MMBtu	One million BTU

MW	Megawatt of electricity

MWh	Megawatthour of electricity

FILING FORMAT

This combined Form 10-Q is separately filed by DTE Energy and DTE Electric. Information in this combined Form 10-Q relating to each individual Registrant is filed by such Registrant on its own behalf. DTE Electric makes no representation regarding information relating to any other companies affiliated with DTE Energy other than its own subsidiaries. Neither DTE Energy, nor any of DTE Energy’s other subsidiaries (other than DTE Electric), has any obligation in respect of DTE Electric's debt securities and holders of such debt securities should not consider the financial resources or results of operations of DTE Energy nor any of DTE Energy’s other subsidiaries (other than DTE Electric and its own subsidiaries (in relevant circumstances)) in making a decision with respect to DTE Electric's debt securities. Similarly, none of DTE Electric nor any other subsidiary of DTE Energy has any obligation in respect of debt securities of DTE Energy. This combined Form 10-Q should be read in its entirety. No one section of this combined Form 10-Q deals with all aspects of the subject matter of this combined Form 10-Q. This combined Form 10-Q report should be read in conjunction with the separately filed Consolidated Financial Statements and Notes to Consolidated Financial Statements and with Management's Discussion and Analysis included in DTE Energy's 2014 Annual Report on Form 10-K and DTE Electric's 2014 Annual Report on Form 10-K.

FORWARD-LOOKING STATEMENTS

Certain information presented herein includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations and business of the Registrants. Words such as “anticipate,” “believe,” “expect,” “projected,” “aspiration,” and “goals” signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions, but rather are subject to numerous assumptions, risks and uncertainties that may cause actual future results to be materially different from those contemplated, projected, estimated, or budgeted. Many factors may impact forward-looking statements of the Registrants including, but not limited to, the following:


•	impact of regulation by the EPA, FERC, MPSC, NRC, and CFTC, as well as other applicable governmental proceedings and regulations, including any associated impact on rate structures;


•	the amount and timing of cost recovery allowed as a result of regulatory proceedings, related appeals, or new legislation, including legislative amendments and retail access programs;


•	economic conditions and population changes in the Registrants' geographic area resulting in changes in demand, customer conservation, and thefts of electricity and, for DTE Energy, natural gas;


•	environmental issues, laws, regulations, and the increasing costs of remediation and compliance, including actual and potential new federal and state requirements;


•	health, safety, financial, environmental, and regulatory risks associated with ownership and operation of nuclear facilities;


•	changes in the cost and availability of coal and other raw materials, purchased power, and natural gas;


•	the potential for losses on investments, including nuclear decommissioning and benefit plan assets and the related increases in future expense and contributions;


•	volatility in the short-term natural gas storage markets impacting third-party storage revenues related to DTE Energy;


•	volatility in commodity markets, deviations in weather, and related risks impacting the results of DTE Energy's energy trading operations;


•	access to capital markets and the results of other financing efforts which can be affected by credit agency ratings;


•	instability in capital markets which could impact availability of short and long-term financing;


•	the timing and extent of changes in interest rates;


•	the level of borrowings;


•	the potential for increased costs or delays in completion of significant construction projects;


•	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 effects of weather and other natural phenomena on operations and sales to customers, and purchases from suppliers;


•	unplanned outages;


•	the cost of protecting assets against, or damage due to, terrorism or cyber attacks;


•	employee relations and the impact of collective bargaining agreements;


•	the risk of a major safety incident at an electric distribution or generation facility and, for DTE Energy, a gas storage, transmission or distribution facility;


•	the availability, cost, coverage, and terms of insurance and stability of insurance providers;


•	cost reduction efforts and the maximization of plant and distribution system performance;


•	the effects of competition;


•	changes in and application of accounting standards and financial reporting regulations;


•	changes in federal or state laws and their interpretation with respect to regulation, energy policy, and other business issues;


•	contract disputes, binding arbitration, litigation, and related appeals; and


•	the risks discussed in the Registrants' public filings with the Securities and Exchange Commission.

New factors emerge from time to time. The Registrants cannot predict what factors may arise or how such factors may cause results to differ materially from those contained in any forward-looking statement. Any forward-looking statements speak only as of the date on which such statements are made. The Registrants undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.

THIS PAGE INTENTIONALLY LEFT BLANK

Part I — Financial Information

Item 1. Financial Statements

DTE Energy Company

Consolidated Statements of Operations (Unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(In millions, except per share amounts)
Operating Revenues	$	2,598		$	2,595		$	7,850		$	9,223

Operating Expenses
Fuel, purchased power, and gas	1,053			1,119			3,393			4,550
Operation and maintenance	817			860			2,436			2,512
Depreciation and amortization	196			293			625			855
Taxes other than income	91			86			282			268
Asset (gains) losses and impairments, net	1			(2		)	9			(10		)
	2,158			2,356			6,745			8,175
Operating Income	440			239			1,105			1,048

Other (Income) and Deductions
Interest expense	116			107			341			323
Interest income	(4		)	(2		)	(10		)	(7		)
Other income	(55		)	(55		)	(155		)	(136		)
Other expenses	17			11			36			29
	74			61			212			209
Income Before Income Taxes	366			178			893			839

Income Tax Expense	102			21			250			229

Net Income	264			157			643			610

Less: Net Income (Loss) Attributable to Noncontrolling Interests	(1		)	1			(4		)	4

Net Income Attributable to DTE Energy Company	$	265		$	156		$	647		$	606

Basic Earnings per Common Share
Net Income Attributable to DTE Energy Company	$	1.47		$	0.88		$	3.61		$	3.42

Diluted Earnings per Common Share
Net Income Attributable to DTE Energy Company	$	1.47		$	0.88		$	3.61		$	3.42

Weighted Average Common Shares Outstanding
Basic	179			177			179			177
Diluted	180			177			179			177
Dividends Declared per Common Share	$	0.73		$	0.69		$	2.11		$	2.00

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Energy Company

Consolidated Statements of Comprehensive Income (Unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(In millions)
Net Income	$	264		$	157		$	643		$	610

Other comprehensive income (loss), net of tax:
Benefit obligations, net of taxes of $2, $1, $6, and $2, respectively	3			2			9			3
Net unrealized gains on investments during the period, net of taxes of $—, $—, $—, and $—, respectively	—			—			—			1
Foreign currency translation	(2		)	(1		)	(4		)	(1		)
Other comprehensive income	1			1			5			3

Comprehensive income	265			158			648			613
Less comprehensive income (loss) attributable to noncontrolling interests	(1		)	1			(4		)	4
Comprehensive income attributable to DTE Energy Company	$	266		$	157		$	652		$	609

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Energy Company

Consolidated Statements of Financial Position (Unaudited)



	September 30,			December 31,
	2015			2014
	(In millions)
ASSETS
Current Assets
Cash and cash equivalents	$	67		$	48
Restricted cash	21			120
Accounts receivable (less allowance for doubtful accounts of $56 and $54, respectively)
Customer	1,242			1,504
Other	79			94
Inventories
Fuel and gas	533			512
Materials and supplies	307			292
Derivative assets	90			128
Regulatory assets	15			76
Other	346			313
	2,700			3,087
Investments
Nuclear decommissioning trust funds	1,199			1,241
Other	684			628
	1,883			1,869
Property
Property, plant, and equipment	28,014			26,538
Less accumulated depreciation and amortization	(10,147		)	(9,718		)
	17,867			16,820
Other Assets
Goodwill	2,018			2,018
Regulatory assets	3,719			3,651
Securitized regulatory assets	—			34
Intangible assets	89			102
Notes receivable	82			90
Derivative assets	48			44
Other	248			259
	6,204			6,198
Total Assets	$	28,654		$	27,974

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Energy Company

Consolidated Statements of Financial Position (Unaudited) — (Continued)



	September 30,			December 31,
	2015			2014
	(In millions, except shares)
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	835		$	973
Accrued interest	119			86
Dividends payable	131			122
Short-term borrowings	185			398
Current portion long-term debt, including capital leases	468			274
Derivative liabilities	56			77
Regulatory liabilities	67			153
Other	412			494
	2,273			2,577
Long-Term Debt (net of current portion)
Mortgage bonds, notes, and other	8,368			7,860
Junior subordinated debentures	480			480
Capital lease obligations	8			3
	8,856			8,343
Other Liabilities
Deferred income taxes	4,022			3,776
Regulatory liabilities	598			667
Asset retirement obligations	2,180			1,962
Unamortized investment tax credit	50			41
Derivative liabilities	27			8
Accrued pension liability	1,120			1,280
Accrued postretirement liability	302			515
Nuclear decommissioning	174			182
Other	219			281
	8,692			8,712
Commitments and Contingencies (Notes 6 and 12)

Equity
Common stock, without par value, 400,000,000 shares authorized, and 179,475,625 and 176,991,231 shares issued and outstanding, respectively	4,117			3,904
Retained earnings	4,845			4,578
Accumulated other comprehensive loss	(150		)	(155		)
Total DTE Energy Company Equity	8,812			8,327
Noncontrolling interests	21			15
Total Equity	8,833			8,342
Total Liabilities and Equity	$	28,654		$	27,974

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Energy Company

Consolidated Statements of Cash Flows (Unaudited)



	Nine Months Ended September 30,
	2015			2014
	(In millions)
Operating Activities
Net Income	$	643		$	610
Adjustments to reconcile Net Income to net cash from operating activities:
Depreciation and amortization	625			855
Nuclear fuel amortization	40			33
Allowance for equity funds used during construction	(16		)	(16		)
Deferred income taxes	251			244
Asset (gains) losses and impairments, net	9			(10		)
Changes in assets and liabilities:
Accounts receivable, net	277			273
Inventories	(36		)	(165		)
Accounts payable	(125		)	48
Accrued pension obligation	(160		)	(154		)
Accrued postretirement obligation	(213		)	(64		)
Derivative assets and liabilities	32			(56		)
Regulatory assets and liabilities	35			(211		)
Other current and noncurrent assets and liabilities	106			(89		)
Net cash from operating activities	1,468			1,298
Investing Activities
Plant and equipment expenditures — utility	(1,239		)	(1,295		)
Plant and equipment expenditures — non-utility	(162		)	(207		)
Acquisition	(241		)	—
Proceeds from sale of assets	16			36
Restricted cash for debt redemption, principally Securitization	99			62
Proceeds from sale of nuclear decommissioning trust fund assets	627			652
Investment in nuclear decommissioning trust funds	(638		)	(665		)
Other	(34		)	(40		)
Net cash used for investing activities	(1,572		)	(1,457		)
Financing Activities
Issuance of long-term debt, net of issuance costs	956			1,289
Redemption of long-term debt	(260		)	(1,222		)
Short-term borrowings, net	(213		)	522
Issuance of common stock	9			—
Repurchase of common stock	—			(52		)
Dividends on common stock	(370		)	(348		)
Other	1			(22		)
Net cash from financing activities	123			167
Net Increase in Cash and Cash Equivalents	19			8
Cash and Cash Equivalents at Beginning of Period	48			52
Cash and Cash Equivalents at End of Period	$	67		$	60

Supplemental disclosure of non-cash investing and financing activities
Plant and equipment expenditures in accounts payable	$	185		$	192

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Energy Company

Consolidated Statements of Changes in Equity (Unaudited)



							Accumulated Other Comprehensive Income (Loss)			Non-Controlling Interests
	Common Stock			Retained Earnings
	Shares	Amount		Retained Earnings									Total
	(Dollars in millions, shares in thousands)
Balance, December 31, 2014	176,991	$	3,904	$	4,578		$	(155	)	$	15		$	8,342
Net Income (Loss)	—	—		647			—			(4		)	643
Dividends declared on common stock	—	—		(379		)	—			—			(379		)
Issuance of common stock	105	9		—			—			—			9
Contribution of common stock to VEBA Trust	1,428	117		—			—			—			117
Benefit obligations, net of tax	—	—		—			9			—			9
Foreign currency translation	—	—		—			(4		)	—			(4		)
Stock-based compensation, contributions, and distributions to noncontrolling interests and other	952	87		(1		)	—			10			96
Balance, September 30, 2015	179,476	$	4,117	$	4,845		$	(150	)	$	21		$	8,833

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Electric Company

Consolidated Statements of Operations (Unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(In millions)
Operating Revenues	$	1,385		$	1,357		$	3,735		$	4,048

Operating Expenses
Fuel and purchased power	441			430			1,212			1,328
Operation and maintenance	330			351			966			1,022
Depreciation and amortization	141			238			461			695
Taxes other than income	73			66			214			202
Asset (gains) losses and impairments, net	—			—			—			(1		)
	985			1,085			2,853			3,246
Operating Income	400			272			882			802

Other (Income) and Deductions
Interest expense	66			65			196			189
Other income	(14		)	(15		)	(42		)	(45		)
Other expenses	15			11			32			26
	67			61			186			170
Income Before Income Taxes	333			211			696			632

Income Tax Expense	117			75			244			229

Net Income	$	216		$	136		$	452		$	403

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Electric Company

Consolidated Statements of Comprehensive Income (Unaudited)



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
	(In millions)
Net Income	$	216	$	136	$	452	$	403
Other comprehensive income (loss), net of tax:
Transfer of benefit obligations, net of taxes of $—, $—, $18, and $—, respectively	—		—		28		—
Benefit obligations, net of taxes of $—, $—, $—, and $—, respectively	—		1		—		—
Comprehensive income	$	216	$	137	$	480	$	403

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Electric Company

Consolidated Statements of Financial Position (Unaudited)



	September 30,			December 31,
	2015			2014
	(In millions)
ASSETS
Current Assets
Cash and cash equivalents	$	29		$	14
Restricted cash, principally Securitization	—			96
Accounts receivable (less allowance for doubtful accounts of $29, for both periods)
Customer	730			688
Affiliates	69			31
Other	38			15
Inventories
Fuel	267			269
Materials and supplies	250			231
Notes receivable
Affiliates	4			8
Other	6			8
Regulatory assets	3			46
Prepaid property tax	96			44
Other	27			31
	1,519			1,481
Investments
Nuclear decommissioning trust funds	1,199			1,241
Other	34			172
	1,233			1,413
Property
Property, plant, and equipment	21,045			19,805
Less accumulated depreciation and amortization	(7,586		)	(7,216		)
	13,459			12,589
Other Assets
Regulatory assets	3,002			2,913
Securitized regulatory assets	—			34
Intangible assets	39			37
Other	171			182
	3,212			3,166
Total Assets	$	19,423		$	18,649

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Electric Company

Consolidated Statements of Financial Position (Unaudited) — (Continued)



	September 30,		December 31,
	2015		2014
	(In millions, except shares)
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Accounts payable
Affiliates	$	41	$	60
Other	360		366
Accrued interest	68		58
Current portion long-term debt, including capital leases	153		118
Regulatory liabilities	36		150
Short-term borrowings
Affiliates	68		84
Other	46		50
Other	159		151
	931		1,037
Long-Term Debt (net of current portion)
Mortgage bonds, notes, and other	5,492		5,144
Capital lease obligations	8		—
	5,500		5,144
Other Liabilities
Deferred income taxes	3,454		3,188
Regulatory liabilities	218		245
Asset retirement obligations	2,007		1,796
Unamortized investment tax credit	45		36
Nuclear decommissioning	174		182
Accrued pension liability — affiliates	985		1,200
Accrued postretirement liability — affiliates	356		520
Other	74		105
	7,313		7,272

Commitments and Contingencies (Notes 6 and 12)

Shareholder’s Equity
Common stock, $10 par value, 400,000,000 shares authorized, and 138,632,324 shares issued and outstanding	4,086		3,786
Retained earnings	1,591		1,436
Accumulated other comprehensive income (loss)	2		(26		)
	5,679		5,196
Total Liabilities and Shareholder’s Equity	$	19,423	$	18,649

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Electric Company

Consolidated Statements of Cash Flows (Unaudited)



	Nine Months Ended September 30,
	2015			2014
	(In millions)
Operating Activities
Net Income	$	452		$	403
Adjustments to reconcile Net Income to net cash from operating activities:
Depreciation and amortization	461			695
Nuclear fuel amortization	40			33
Allowance for equity funds used during construction	(15		)	(16		)
Deferred income taxes	269			199
Changes in assets and liabilities:
Accounts receivable, net	(103		)	36
Inventories	(17		)	(38		)
Accounts payable	3			7
Accrued pension liability — affiliates	(215		)	(122		)
Accrued postretirement liability — affiliates	(164		)	(42		)
Regulatory assets and liabilities	(12		)	(163		)
Other current and noncurrent assets and liabilities	9			(113		)
Net cash from operating activities	708			879
Investing Activities
Plant and equipment expenditures	(1,045		)	(1,143		)
Acquisition	(241		)	—
Restricted cash for debt redemption, principally Securitization	96			60
Notes receivable from affiliate	4			164
Proceeds from sale of nuclear decommissioning trust fund assets	627			652
Investment in nuclear decommissioning trust funds	(638		)	(665		)
Transfer of Rabbi Trust assets to affiliate	137			—
Other	9			(16		)
Net cash used for investing activities	(1,051		)	(948		)
Financing Activities
Issuance of long-term debt, net of issuance costs	495			942
Redemption of long-term debt	(115		)	(837		)
Capital contribution by parent company	300			—
Short-term borrowings, net — other	(4		)	254
Short-term borrowings, net — affiliate	(16		)	(2		)
Dividends on common stock	(297		)	(277		)
Other	(5		)	(10		)
Net cash from financing activities	358			70
Net Increase in Cash and Cash Equivalents	15			1
Cash and Cash Equivalents at Beginning of the Period	14			27
Cash and Cash Equivalents at End of the Period	$	29		$	28

Supplemental disclosure of non-cash investing and financing activities
Plant and equipment expenditures in accounts payable	$	134		$	139

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Electric Company

Consolidated Statements of Changes in Shareholder's Equity (Unaudited)



				Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)
	Common Stock
	Shares	Amount										Total
	(Dollars in millions, shares in thousands)
Balance, December 31, 2014	138,632	$	1,386	$	2,400	$	1,436		$	(26	)	$	5,196
Net Income	—	—		—		452			—			452
Dividends declared on common stock	—	—		—		(297		)	—			(297		)
Transfer of benefit obligations, net of tax	—	—		—		—			28			28
Capital contribution by parent company	—	—		300		—			—			300
Balance, September 30, 2015	138,632	$	1,386	$	2,700	$	1,591		$	2		$	5,679

See Combined Notes to Consolidated Financial Statements (Unaudited)

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited)

Index of Combined Notes to Consolidated Financial Statements (Unaudited)

The Combined Notes to Consolidated Financial Statements (Unaudited) are a combined presentation for DTE Energy and DTE Electric. The following list indicates the Registrant(s) to which each note applies:



Note 1	Organization and Basis of Presentation	DTE Energy and DTE Electric
Note 2	Significant Accounting Policies	DTE Energy and DTE Electric
Note 3	New Accounting Pronouncements	DTE Energy and DTE Electric
Note 4	Acquisitions	DTE Energy and DTE Electric
Note 5	Asset Retirement Obligations	DTE Energy and DTE Electric
Note 6	Regulatory Matters	DTE Energy and DTE Electric
Note 7	Earnings per Share	DTE Energy
Note 8	Fair Value	DTE Energy and DTE Electric
Note 9	Financial and Other Derivative Instruments	DTE Energy and DTE Electric
Note 10	Long-Term Debt	DTE Energy and DTE Electric
Note 11	Short-Term Credit Arrangements and Borrowings	DTE Energy and DTE Electric
Note 12	Commitments and Contingencies	DTE Energy and DTE Electric
Note 13	Retirement Benefits and Trusteed Assets	DTE Energy and DTE Electric
Note 14	Stock-Based Compensation	DTE Energy and DTE Electric
Note 15	Segment and Related Information	DTE Energy

NOTE 1 — ORGANIZATION AND BASIS OF PRESENTATION

Corporate Structure

DTE Energy owns the following businesses:


•	DTE Electric is an electric utility engaged in the generation, purchase, distribution, and sale of electricity to approximately 2.1 million customers in southeastern Michigan;


•	DTE Gas is a natural gas utility engaged in the purchase, storage, transportation, distribution, and sale of natural gas to approximately 1.2 million customers throughout Michigan and the sale of storage and transportation capacity; and


•	Other businesses involved in 1) natural gas pipelines, gathering, and storage; 2) power and industrial projects; and 3) energy marketing and trading operations.

DTE Electric and DTE Gas are regulated by the MPSC. Certain activities of DTE Electric and DTE Gas, as well as various other aspects of businesses under DTE Energy are regulated by the FERC. In addition, the Registrants are regulated by other federal and state regulatory agencies including the NRC, the EPA, the MDEQ, and the CFTC.

Basis of Presentation

The Consolidated Financial Statements should be read in conjunction with the Notes to Consolidated Financial Statements included in the DTE Energy 2014 Annual Report on Form 10-K and the Notes to Consolidated Financial Statements included in the DTE Electric 2014 Annual Report on Form 10-K.

The accompanying Consolidated Financial Statements of the Registrants are prepared using accounting principles generally accepted in the United States of America. These accounting principles require management to use estimates and assumptions that impact reported amounts of assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. Actual results may differ from the Registrants' estimates.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

The Consolidated Financial Statements are unaudited, but in the Registrants' opinions include all adjustments necessary to present a fair statement of the results for the interim periods. All adjustments are of a normal recurring nature, except as otherwise disclosed in these Consolidated Financial Statements and Combined Notes to Consolidated Financial Statements. Financial results for this interim period are not necessarily indicative of results that may be expected for any other interim period or for the fiscal year ending December 31, 2015.

The information in these combined notes relates to each of the Registrants as noted in the Index of Combined Notes to Consolidated Financial Statements. However, DTE Electric does not make any representation as to information related solely to DTE Energy or the subsidiaries of DTE Energy other than itself.

Certain prior year balances for the Registrants were reclassified to match current year's financial statement presentation.

Principles of Consolidation

The Registrants consolidate all majority-owned subsidiaries and investments in entities in which they have controlling influence. Non-majority owned investments are accounted for using the equity method when the Registrants are able to influence the operating policies of the investee. When the Registrants do not influence the operating policies of an investee, the cost method is used. These Consolidated Financial Statements also reflect the Registrants' proportionate interests in certain jointly-owned utility plants. The Registrants eliminate all intercompany balances and transactions.

The Registrants evaluate whether an entity is a VIE whenever reconsideration events occur. The Registrants consolidate VIEs for which they are the primary beneficiary. If a Registrant is not the primary beneficiary and an ownership interest is held, the VIE is accounted for under the equity method of accounting. When assessing the determination of the primary beneficiary, a Registrant considers all relevant facts and circumstances, including: the power, through voting or similar rights, to direct the activities of the VIE that most significantly impact the VIE's economic performance and the obligation to absorb the expected losses and/or the right to receive the expected returns of the VIE. The Registrants perform ongoing reassessments of all VIEs to determine if the primary beneficiary status has changed.

Legal entities within DTE Energy's Power and Industrial Projects segment enter into long-term contractual arrangements with customers to supply energy-related products or services. The entities are generally designed to pass-through the commodity risk associated with these contracts to the customers, with DTE Energy retaining operational and customer default risk. These entities generally are VIEs and consolidated when DTE Energy is the primary beneficiary. In addition, DTE Energy has interests in certain VIEs through which control of all significant activities is shared with partners, and therefore are accounted for under the equity method.

DTE Energy has variable interests in VIEs through certain of its long-term purchase and sale contracts. DTE Electric has variable interests in VIEs through certain of its long-term purchase contracts. As of September 30, 2015 , the carrying amount of assets and liabilities in the Registrants' Consolidated Statements of Financial Position that relate to its variable interests under long-term purchase and sale contracts are predominately related to working capital accounts and generally represent the amounts owed by or to the Registrants for the deliveries associated with the current billing cycle under the contracts. The Registrants have not provided any significant form of financial support associated with these long-term contracts. There is no significant potential exposure to loss as a result of DTE Energy's variable interests through these long-term purchase and sale contracts. In addition, there is no significant potential exposure to loss as a result of DTE Electric's variable interests through these long-term purchase contracts.

In 2001, DTE Electric financed a regulatory asset related to Fermi 2 and certain other regulatory assets through the sale of rate reduction bonds by a wholly-owned special purpose entity, Securitization. DTE Electric performed servicing activities including billing and collecting surcharge revenue for Securitization. The remaining amounts due on the rate reduction bonds were paid in March 2015. The associated regulatory assets were fully amortized by March 31, 2015. Securitization has an over-recovery of funds. DTE Electric began to return the funds to customers in September 2015. Remaining funds are expected to be returned to customers during the fourth quarter of 2015 . Subsequent to the pay-down of the bonds, Securitization is no longer a VIE but continues to be consolidated by the Registrants as a voting interest entity.

The maximum risk exposure for consolidated VIEs is reflected on the Registrants' Consolidated Statements of Financial Position. For non-consolidated VIEs, the maximum risk exposure is generally limited to its investment and amounts which it has guaranteed.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

The following table summarizes the major Consolidated Statements of Financial Position items for consolidated VIEs as of September 30, 2015 and December 31, 2014 . All assets and liabilities of a consolidated VIE are presented where it has been determined that a consolidated VIE has either (1) assets that can be used only to settle obligations of the VIE or (2) liabilities for which creditors do not have recourse to the general credit of the primary beneficiary. Securitization, included in the DTE Energy table below for December 31, 2014 , also relates to DTE Electric. VIEs, in which DTE Energy holds a majority voting interest and is the primary beneficiary, that meet the definition of a business and whose assets can be used for purposes other than the settlement of the VIE's obligations have been excluded from the table below.



	September 30, 2015		December 31, 2014
	Total		Securitization		Other		Total
	(In millions)
ASSETS
Cash and cash equivalents	$	12	$	—	$	7	$	7
Restricted cash	6		96		8		104
Accounts receivable	14		26		15		41
Inventories	43		—		67		67
Property, plant, and equipment, net	70		—		81		81
Securitized regulatory assets	—		34		—		34
Other current and long-term assets	4		1		6		7
	$	149	$	157	$	184	$	341

LIABILITIES
Accounts payable and accrued current liabilities	$	11	$	3	$	8	$	11
Current portion long-term debt, including capital leases	9		105		10		115
Current regulatory liabilities	—		32		—		32
Mortgage bonds, notes, and other	11		—		15		15
Capital lease obligations	—		—		3		3
Other current and long-term liabilities	6		9		6		15
	$	37	$	149	$	42	$	191

Amounts for DTE Energy's non-consolidated VIEs as of September 30, 2015 and December 31, 2014 are as follows:



	September 30, 2015		December 31, 2014
	(In millions)
Other investments	$	138	$	134
Notes receivable	$	15	$	15

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES

Other Income

Other income for the Registrants is recognized for non-operating income such as equity earnings, allowance for equity funds used during construction, and contract services. DTE Energy's Power & Industrial Projects segment also recognizes Other income in connection with the sale of membership interests in reduced emissions fuel facilities to investors. In exchange for the cash received, the investors will receive a portion of the economic attributes of the facilities, including income tax attributes. The transactions are not treated as a sale of membership interests for financial reporting purposes. Other income is considered earned when refined coal is produced and tax credits are generated. Power & Industrial Projects recognized approximately $24 million and $25 million of Other income for the three months ended September 30, 2015 and 2014, respectively , and approximately $64 million and $57 million of Other income for the nine months ended September 30, 2015 and 2014, respectively .

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

Changes in Accumulated Other Comprehensive Income (Loss)

For the three and nine months ended September 30, 2015 and 2014 , reclassifications out of Accumulated other comprehensive income (loss) for the Registrants were not material. Refer to Note 13 to the Consolidated Financial Statements, " Retirement Benefits and Trusteed Assets ", regarding the transfer of a portion of DTE Electric benefit obligations during the year. Changes in Accumulated other comprehensive income (loss) are presented in DTE Energy's Consolidated Statements of Changes in Equity and DTE Electric's Consolidated Statements of Changes in Shareholder's Equity.

Intangible Assets

DTE Energy has certain intangible assets relating to emission allowances, renewable energy credits and non-utility contracts as shown below:



	September 30,		December 31,
	2015		2014
	(In millions)
Emission allowances	$	1	$	1
Renewable energy credits	49		45
Contract intangible assets	109		122
	159		168
Less accumulated amortization	59		57
Intangible assets, net	100		111
Less current intangible assets	11		9
	$	89	$	102

DTE Electric has certain intangible assets relating to emission allowances and renewable energy credits as shown below:



	September 30,		December 31,
	2015		2014
	(In millions)
Emission allowances	$	1	$	1
Renewable energy credits	49		45
	50		46
Less current intangible assets	11		9
	$	39	$	37

Emission allowances and renewable energy credits are charged to expense, using average cost, as the allowances and credits are consumed in the operation of the businesses by the Registrants. DTE Energy amortizes contract intangible assets on a straight-line basis over the expected period of benefit, ranging from 1 to 26 years.

Income Taxes

The effective tax rate and unrecognized tax benefits of the Registrants are as follows:



	Effective Tax Rate								Unrecognized Tax Benefits
	Three Months Ended September 30,				Nine Months Ended September 30,				September 30,
	2015		2014		2015		2014		2015
									(In millions)
DTE Energy	28	%	12	%	28	%	27	%	$	3
DTE Electric	35	%	36	%	35	%	36	%	$	4

The increase in DTE Energy's effective tax rate for the three months ended September 30, 2015 is primarily due to higher annual forecasted production tax credits in 2014 as compared to 2015.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

The increase in DTE Energy's effective tax rate for the nine months ended September 30, 2015 is primarily due to lower production tax credits partially offset by the inclusion in 2014 of $8 million of deferred tax expense resulting from the New York state income tax reform enacted on March 31, 2014.

The decrease in DTE Electric's effective tax rate for the three and nine months ended September 30, 2015 is due primarily to higher production tax credits in 2015.

If recognized, $2 million of the unrecognized tax benefits of the Registrants would favorably impact their effective tax rates. During the 2015 third quarter, there was a decrease of $6 million of unrecognized tax benefits at DTE Energy due to the expiration of statute of limitations. The $6 million decrease did not impact tax expense because the unrecognized tax benefit was offset by a net operating loss. The Registrants do not anticipate any material changes to the unrecognized tax benefits in the next twelve months.

DTE Electric had income tax receivables with DTE Energy of $68 million and $29 million at September 30, 2015 and December 31, 2014 , respectively.

NOTE 3 — NEW ACCOUNTING PRONOUNCEMENTS

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The objectives of this ASU are to improve upon revenue recognition requirements by providing a single comprehensive model to determine the measurement of revenue and timing of recognition. The core principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. This ASU also requires expanded qualitative and quantitative disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. In July 2015, the FASB deferred implementation of the revenue standard to be effective for the first interim period within annual reporting periods beginning after December 15, 2017. The standard is to be applied retrospectively and early adoption is permitted in the preceding year. The Registrants are currently assessing the impact of this ASU on their Consolidated Financial Statements.

In February 2015, the FASB issued ASU No. 2015-02, Amendments to the Consolidation Analysis , which changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The ASU affects (1) limited partnerships and similar legal entities, (2) evaluating fees paid to a decision maker or a service provider as a variable interest, (3) the effect of fee arrangements on the primary beneficiary determination, (4) the effect of related parties on the primary beneficiary determination, and (5) certain investment funds. It is effective for the Registrants for the first interim period within annual reporting periods beginning on or after December 15, 2015 and early adoption is permitted. The Registrants are currently assessing the impact of this ASU on their Consolidated Financial Statements.

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs . This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This ASU is effective for reporting periods beginning after December 15, 2015 and interim periods therein. It is to be applied retrospectively and early adoption is permitted. The adoption of this ASU will not have a significant impact on the Registrants' Consolidated Statements of Financial Position.

In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330), Simplifying the Measurement of Inventory . The ASU replaces the current lower of cost or market test with a lower of cost or net realizable value test when cost is determined on a first-in, first-out or average cost basis. The standard is effective for public entities for annual reporting periods beginning after December 15, 2016, and interim periods therein. It is to be applied prospectively and early adoption is permitted. The ASU will not have a significant impact on the Registrants' Consolidated Statements of Financial Position.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

NOTE 4 — ACQUISITIONS

On January 21, 2015, DTE Electric closed on an acquisition of a 732 MW simple-cycle natural gas facility in Carson City, Michigan from The LS Power Group. The facility will serve to meet customer needs during periods of peak demand. DTE Electric has completed its valuation analysis to arrive at the fair value of the assets acquired. The cash consideration and total purchase price of approximately $241 million was allocated based on the underlying fair value of the assets acquired, which was primarily Property, plant, and equipment. The pro forma results of operations have not been presented for DTE Electric as the effects of the acquisition were not material to either Registrant's Consolidated Statements of Operations.

On October 1, 2015, DTE Electric closed on an acquisition of a 350 MW simple-cycle natural gas facility in East China Township, Michigan from a non-utility affiliate of DTE Energy. The facility will serve to meet customer needs during periods of peak demand. DTE Electric has completed its purchase accounting. The cash consideration and total purchase price of approximately $69 million was based on the net book value of the assets acquired, which was primarily Property, plant, and equipment. The pro forma results of operations have not been presented for DTE Electric as the effects of the acquisition were not material to its Consolidated Statements of Operations.

NOTE 5 — ASSET RETIREMENT OBLIGATIONS

A reconciliation of the ARO for the nine months ended September 30, 2015 follows:



	DTE Energy		DTE Electric
	(In millions)
Asset retirement obligations at December 31, 2014	$	1,962	$	1,796
Accretion	90		83
Revision in estimated cash flows	128		128
Asset retirement obligations at September 30, 2015	$	2,180	$	2,007

The Revision in estimated cash flows was principally attributed to the impact of the Coal Combustion Residual Rule on DTE Electric's coal ash storage facility AROs. Refer to Note 12 to the Consolidated Financial Statements, " Commitments and Contingencies ", for discussion of the implications of the Coal Combustion Residual Rule.

NOTE 6 — REGULATORY MATTERS

2014 Electric Rate Case Filing

DTE Electric filed a rate case with the MPSC on December 19, 2014 requesting an increase in base rates of $370 million based on a projected twelve-month period ending June 30, 2016. The requested increase in base rates is due primarily to an increase in net plant resulting from infrastructure investments, plant acquisitions, environmental compliance, and reliability improvement projects. The rate filing also included projected changes in sales, working capital, operation and maintenance expenses, return on equity, and capital structure. On July 1, 2015, DTE Electric realized a rate increase of $230 million consisting of $190 million of self-implemented base rate increase related to the December 19, 2014 rate request and $40 million associated with the required elimination of a credit surcharge. A final order in this rate case is expected in December 2015.

Customer Settlement

In July 2014, an industrial customer of DTE Electric filed a complaint with the MPSC alleging they had been overcharged for the period of February 2008 through March 2014, and sought payment from DTE Electric of $22 million , plus interest. In July 2015, the MPSC issued an order that found the customer is entitled to a refund in the amount of $20 million , plus interest calculated at 7% per annum, until the refund is paid in full. In July 2015, DTE Electric issued a customer refund of $25 million , inclusive of interest. Approximately $16 million of the refund obligation is expected to be recovered through the PSCR and other regulatory mechanisms. DTE Electric does not expect this order to have a material impact to its Consolidated Statements of Operations.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

NOTE 7 — EARNINGS PER SHARE

DTE Energy reports both basic and diluted earnings per share. The calculation of diluted earnings per share assumes the issuance of potentially dilutive common shares outstanding during the period from the exercise of stock options. A reconciliation of both calculations is presented in the following table for the three and nine months ended September 30 :



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
	(In millions, except per share amounts)
Basic Earnings per Share
Net Income Attributable to DTE Energy Company	$	265	$	156	$	647	$	606
Average number of common shares outstanding	179		177		179		177
Dividends declared — common shares	$	131	$	122	$	378	$	353
Dividends declared — net restricted shares	—		—		1		1
Total distributed earnings	$	131	$	122	$	379	$	354
Net Income less distributed earnings	$	134	$	34	$	268	$	252
Distributed (dividends per common share)	$	0.73	$	0.69	$	2.11	$	2.00
Undistributed	0.74		0.19		1.50		1.42
Total Basic Earnings per Common Share	$	1.47	$	0.88	$	3.61	$	3.42
Diluted Earnings per Share
Net Income Attributable to DTE Energy Company	$	265	$	156	$	647	$	606
Average number of common shares outstanding	180		177		179		177
Dividends declared — common shares	$	131	$	122	$	378	$	353
Dividends declared — net restricted shares	—		—		1		1
Total distributed earnings	$	131	$	122	$	379	$	354
Net Income less distributed earnings	$	134	$	34	$	268	$	252
Distributed (dividends per common share)	$	0.73	$	0.69	$	2.11	$	2.00
Undistributed	0.74		0.19		1.50		1.42
Total Diluted Earnings per Common Share	$	1.47	$	0.88	$	3.61	$	3.42

NOTE 8 — FAIR VALUE

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in a principal or most advantageous market. Fair value is a market-based measurement that is determined based on inputs, which refer broadly to assumptions that market participants use in pricing assets or liabilities. These inputs can be readily observable, market corroborated, or generally unobservable inputs. The Registrants make certain assumptions they believe that market participants would use in pricing assets or liabilities, including assumptions about risk, and the risks inherent in the inputs to valuation techniques. Credit risk of the Registrants and their counterparties is incorporated in the valuation of assets and liabilities through the use of credit reserves, the impact of which was immaterial at September 30, 2015 and December 31, 2014 . The Registrants believe they use valuation techniques that maximize the use of observable market-based inputs and minimize the use of unobservable inputs.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

A fair value hierarchy has been established that prioritizes the inputs to valuation techniques used to measure fair value in three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. All assets and liabilities are required to be classified in their entirety based on the lowest level of input that is significant to the fair value measurement in its entirety. Assessing the significance of a particular input may require judgment considering factors specific to the asset or liability, and may affect the valuation of the asset or liability and its placement within the fair value hierarchy. The Registrants classify fair value balances based on the fair value hierarchy defined as follows:


•	Level 1 — Consists of unadjusted quoted prices in active markets for identical assets or liabilities that the Registrants have the ability to access as of the reporting date.


•	Level 2 — Consists of inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.


•	Level 3 — Consists of unobservable inputs for assets or liabilities whose fair value is estimated based on internally developed models or methodologies using inputs that are generally less readily observable and supported by little, if any, market activity at the measurement date. Unobservable inputs are developed based on the best available information and subject to cost-benefit constraints.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

The following table presents assets and liabilities for DTE Energy measured and recorded at fair value on a recurring basis as of September 30, 2015 and December 31, 2014 :



	September 30, 2015															December 31, 2014
	Level 1			Level 2			Level 3			Netting (a)			Net Balance			Level 1			Level 2			Level 3			Netting (a)			Net Balance
	(In millions)
Assets:
Cash equivalents (b)	$	11		$	3		$	—		$	—		$	14		$	13		$	99		$	—		$	—		$	112
Nuclear decommissioning trusts	742			457			—			—			1,199			792			449			—			—			1,241
Other investments (c)	127			18			—			—			145			100			50			—			—			150
Derivative assets:
Commodity Contracts:
Natural Gas	162			87			54			(244		)	59			555			140			92			(681		)	106
Electricity	—			204			47			(179		)	72			—			295			47			(280		)	62
Other	17			—			5			(17		)	5			42			—			3			(42		)	3
Other derivative contracts (d)	—			10			—			(8		)	2			—			4			—			(3		)	1
Total derivative assets	179			301			106			(448		)	138			597			439			142			(1,006		)	172
Total	$	1,059		$	779		$	106		$	(448	)	$	1,496		$	1,502		$	1,037		$	142		$	(1,006	)	$	1,675

Liabilities:
Derivative liabilities:
Commodity Contracts:
Natural Gas	$	(195	)	$	(49	)	$	(33	)	$	249		$	(28	)	$	(578	)	$	(78	)	$	(62	)	$	679		$	(39	)
Electricity	—			(200		)	(44		)	190			(54		)	—			(290		)	(52		)	298			(44		)
Other	(13		)	(4		)	(6		)	22			(1		)	(32		)	(9		)	(4		)	45			—
Other derivative contracts (d)	—			(7		)	—			7			—			—			(5		)	—			3			(2		)
Total derivative liabilities	(208		)	(260		)	(83		)	468			(83		)	(610		)	(382		)	(118		)	1,025			(85		)
Total	$	(208	)	$	(260	)	$	(83	)	$	468		$	(83	)	$	(610	)	$	(382	)	$	(118	)	$	1,025		$	(85	)
Net Assets (Liabilities) at the end of the period	$	851		$	519		$	23		$	20		$	1,413		$	892		$	655		$	24		$	19		$	1,590
Assets:
Current	$	159		$	225		$	78		$	(358	)	$	104		$	582		$	504		$	109		$	(955	)	$	240
Noncurrent (e)	900			554			28			(90		)	1,392			920			533			33			(51		)	1,435
Total Assets	$	1,059		$	779		$	106		$	(448	)	$	1,496		$	1,502		$	1,037		$	142		$	(1,006	)	$	1,675
Liabilities:
Current	$	(160	)	$	(198	)	$	(61	)	$	363		$	(56	)	$	(572	)	$	(357	)	$	(112	)	$	964		$	(77	)
Noncurrent	(48		)	(62		)	(22		)	105			(27		)	(38		)	(25		)	(6		)	61			(8		)
Total Liabilities	$	(208	)	$	(260	)	$	(83	)	$	468		$	(83	)	$	(610	)	$	(382	)	$	(118	)	$	1,025		$	(85	)
Net Assets (Liabilities) at the end of the period	$	851		$	519		$	23		$	20		$	1,413		$	892		$	655		$	24		$	19		$	1,590

_______________________________________


(a)	Amounts represent the impact of master netting agreements that allow DTE Energy to net gain and loss positions and cash collateral held or placed with the same counterparties.

(b)

At September 30, 2015 , available-for-sale securities of $14 million included $6 million and $8 million of cash equivalents included in Restricted cash and Other investments on DTE Energy's Consolidated Statements of Financial Position, respectively. At December 31, 2014 , available-for-sale securities of $112 million , included $105 million and $7 million of cash equivalents included in Restricted cash and Other investments on DTE Energy's Consolidated Statements of Financial Position, respectively.


(c)	Excludes cash surrender value of life insurance investments.


(d)	Primarily includes foreign currency exchange contracts.


(e)	Includes $145 million and $150 million at September 30, 2015 and December 31, 2014 , respectively, of other investments that are included in DTE Energy's Consolidated Statements of Financial Position in Other investments.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

The following table presents assets for DTE Electric measured and recorded at fair value on a recurring basis as of September 30, 2015 and December 31, 2014 :



	September 30, 2015								December 31, 2014
	Level 1		Level 2		Level 3		Net Balance		Level 1		Level 2		Level 3		Net Balance
	(In millions)
Assets:
Cash equivalents (a)	$	5	$	3	$	—	$	8	$	5	$	99	$	—	$	104
Nuclear decommissioning trusts	742		457		—		1,199		792		449		—		1,241
Other investments	7		—		—		7		97		50		—		147
Derivative assets — FTRs	—		—		5		5		—		—		3		3
Total	$	754	$	460	$	5	$	1,219	$	894	$	598	$	3	$	1,495

Assets:
Current	$	5	$	3	$	5	$	13	$	5	$	99	$	3	$	107
Noncurrent	749		457		—		1,206		889		499		—		1,388
Total Assets	$	754	$	460	$	5	$	1,219	$	894	$	598	$	3	$	1,495

_______________________________________

(a)

At September 30, 2015 , available-for-sale securities of $8 million consisted of cash equivalents included in Other investments on DTE Electric's Consolidated Statements of Financial Position. At December 31, 2014 , available-for-sale securities of $104 million included $96 million and $8 million of cash equivalents included in Restricted cash and Other investments, respectively, on DTE Electric's Consolidated Statements of Financial Position.

Cash Equivalents

Cash equivalents include investments with maturities of three months or less when purchased. The cash equivalents shown in the fair value table are comprised of short-term investments and money market funds.

Nuclear Decommissioning Trusts and Other Investments

The nuclear decommissioning trusts and other investments hold debt and equity securities directly and indirectly through institutional mutual funds. Exchange-traded debt and equity securities held directly are valued using quoted market prices in actively traded markets. The institutional mutual funds hold exchange-traded equity or debt securities and are valued based on stated NAVs. Non-exchange-traded fixed income securities are valued based upon quotations available from brokers or pricing services. A primary price source is identified by asset type, class, or issue for each security. The trustee monitors prices supplied by pricing services and may use a supplemental price source or change the primary price source of a given security if the trustee determines that another price source is considered to be preferable. The Registrants have obtained an understanding of how these prices are derived, including the nature and observability of the inputs used in deriving such prices. Additionally, the Registrants selectively corroborate the fair value of securities by comparison of market-based price sources. Investment policies and procedures are determined by DTE Energy's Trust Investments Department which reports to DTE Energy's Vice President and Treasurer.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

Derivative Assets and Liabilities

Derivative assets and liabilities are comprised of physical and financial derivative contracts, including futures, forwards, options, and swaps that are both exchange-traded and over-the-counter traded contracts. Various inputs are used to value derivatives depending on the type of contract and availability of market data. Exchange-traded derivative contracts are valued using quoted prices in active markets. The Registrants consider the following criteria in determining whether a market is considered active: frequency in which pricing information is updated, variability in pricing between sources or over time, and the availability of public information. Other derivative contracts are valued based upon a variety of inputs including commodity market prices, broker quotes, interest rates, credit ratings, default rates, market-based seasonality, and basis differential factors. The Registrants monitor the prices that are supplied by brokers and pricing services and may use a supplemental price source or change the primary price source of an index if prices become unavailable or another price source is determined to be more representative of fair value. The Registrants have obtained an understanding of how these prices are derived. Additionally, the Registrants selectively corroborate the fair value of their transactions by comparison of market-based price sources. Mathematical valuation models are used for derivatives for which external market data is not readily observable, such as contracts which extend beyond the actively traded reporting period. The Registrants have established a Risk Management Committee whose responsibilities include directly or indirectly ensuring all valuation methods are applied in accordance with predefined policies. The development and maintenance of the Registrants' forward price curves has been assigned to DTE Energy's Risk Management Department, which is separate and distinct from the trading functions within DTE Energy.

The following tables present the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis for DTE Energy for the three and nine months ended September 30, 2015 and 2014 :



	Three Months Ended September 30, 2015												Three Months Ended September 30, 2014
	Natural Gas			Electricity			Other			Total			Natural Gas			Electricity			Other			Total
	(In millions)
Net Assets (Liabilities) as of June 30	$	(8	)	$	3		$	1		$	(4	)	$	(20	)	$	(27	)	$	7		$	(40	)
Transfers into Level 3 from Level 2	—			—			—			—			1			—			—			1
Transfers from Level 3 into Level 2	—			—			—			—			(4		)	—			—			(4		)
Total gains (losses):
Included in earnings	24			18			(3		)	39			(2		)	13			(1		)	10
Recorded in regulatory assets/liabilities	—			—			3			3			—			—			(3		)	(3		)
Purchases, issuances, and settlements:
Purchases	—			—			—			—			—			—			—			—
Issuances	—			—			—			—			—			—			—			—
Settlements	5			(18		)	(2		)	(15		)	(3		)	(3		)	—			(6		)
Net Assets (Liabilities) as of September 30	$	21		$	3		$	(1	)	$	23		$	(28	)	$	(17	)	$	3		$	(42	)
The amount of total gains (losses) included in Net Income attributed to the change in unrealized gains (losses) related to assets and liabilities held at September 30, 2015 and 2014 and reflected in Operating revenues and Fuel, purchased power and gas in DTE Energy's Consolidated Statements of Operations	$	18		$	(3	)	$	(3	)	$	12		$	(7	)	$	14		$	(1	)	$	6

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)



	Nine Months Ended September 30, 2015												Nine Months Ended September 30, 2014
	Natural Gas			Electricity			Other			Total			Natural Gas			Electricity			Other			Total
	(In millions)
Net Assets (Liabilities) as of December 31	$	30		$	(5	)	$	(1	)	$	24		$	(52	)	$	13		$	3		$	(36	)
Transfers into Level 3 from Level 2	—			—			—			—			—			—			—			—
Transfers from Level 3 into Level 2	—			—			—			—			2			—			—			2
Total gains (losses):
Included in earnings	(11		)	42			(5		)	26			(45		)	26			(2		)	(21		)
Recorded in regulatory assets/liabilities	—			—			14			14			—			—			9			9
Purchases, issuances, and settlements:
Purchases	—			2			—			2			—			1			—			1
Issuances	—			—			—			—			—			(2		)	—			(2		)
Settlements	2			(36		)	(9		)	(43		)	67			(55		)	(7		)	5
Net Assets (Liabilities) as of September 30	$	21		$	3		$	(1	)	$	23		$	(28	)	$	(17	)	$	3		$	(42	)
The amount of total gains (losses) included in Net Income attributed to the change in unrealized gains (losses) related to assets and liabilities held at September 30, 2015 and 2014 and reflected in Operating revenues and Fuel, purchased power and gas in DTE Energy's Consolidated Statements of Operations	$	(94	)	$	8		$	(4	)	$	(90	)	$	(23	)	$	(6	)	$	(1	)	$	(30	)

The following table presents the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis for DTE Electric for the three and nine months ended September 30, 2015 and 2014 :



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(In millions)
Net Assets as of beginning of period	$	5		$	7		$	3		$	3
Change in fair value recorded in regulatory assets/liabilities	3			(3		)	14			9
Purchases, issuances, and settlements:
Settlements	(3		)	—			(12		)	(8		)
Net Assets as of September 30	$	5		$	4		$	5		$	4
The amount of total gains (losses) included in Regulatory assets and liabilities attributed to the change in unrealized gains (losses) related to assets and liabilities held at September 30, 2015 and 2014 and reflected in DTE Electric's Consolidated Statements of Financial Position	$	1		$	(1	)	$	5		$	4

Derivatives are transferred between levels primarily due to changes in the source data used to construct price curves as a result of changes in market liquidity. Transfers in and transfers out are reflected as if they had occurred at the beginning of the period.

There were no transfers between Levels 1 and 2 for the Registrants during the three and nine months ended September 30, 2015 and 2014 , and there were no transfers from or into Level 3 for DTE Electric during the same periods.

The following table presents the unobservable inputs related to DTE Energy's Level 3 assets and liabilities as of September 30, 2015 :



	September 30, 2015
Commodity Contracts	Derivative Assets		Derivative Liabilities			Valuation Techniques	Unobservable Input	Range						Weighted Average
	(In millions)
Natural Gas	$	54	$	(33	)	Discounted Cash Flow	Forward basis price (per MMBtu)	$	(1.73	) —	$	6.57	/MMBtu	$	(0.11	)/MMBtu
Electricity	$	47	$	(44	)	Discounted Cash Flow	Forward basis price (per MWh)	$	(8	) —	$	15	/MWh	$	1	/MWh

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

The following table presents the unobservable inputs related to DTE Energy's Level 3 assets and liabilities as of December 31, 2014 :



	December 31, 2014
Commodity Contracts	Derivative Assets		Derivative Liabilities			Valuation Techniques	Unobservable Input	Range						Weighted Average
	(In millions)
Natural Gas	$	92	$	(62	)	Discounted Cash Flow	Forward basis price (per MMBtu)	$	(2.28	) —	$	7.83	/MMBtu	$	(0.22	)/MMBtu
Electricity	$	47	$	(52	)	Discounted Cash Flow	Forward basis price (per MWh)	$	(14	) —	$	15	/MWh	$	4	/MWh

The unobservable inputs used in the fair value measurement of the electricity and natural gas commodity types consist of inputs that are less observable due in part to lack of available broker quotes, supported by little, if any, market activity at the measurement date or are based on internally developed models. Certain basis prices (i.e., the difference in pricing between two locations) included in the valuation of natural gas and electricity contracts were deemed unobservable.

The inputs listed above would have a direct impact on the fair values of the above security types if they were adjusted. A significant increase (decrease) in the basis price would result in a higher (lower) fair value for long positions, with offsetting impacts to short positions.

Fair Value of Financial Instruments

The fair value of financial instruments included in the table below is determined by using quoted market prices when available. When quoted prices are not available, pricing services may be used to determine the fair value with reference to observable interest rate indexes. The Registrants have obtained an understanding of how the fair values are derived. The Registrants also selectively corroborate the fair value of their transactions by comparison of market-based price sources. Discounted cash flow analyses based upon estimated current borrowing rates are also used to determine fair value when quoted market prices are not available. The fair values of notes receivable, excluding capital leases, are estimated using discounted cash flow techniques that incorporate market interest rates as well as assumptions about the remaining life of the loans and credit risk. Depending on the information available, other valuation techniques may be used that rely on internal assumptions and models. Valuation policies and procedures for the Registrants are determined by DTE Energy's Treasury Department which reports to DTE Energy's Vice President and Treasurer.

The following table presents the carrying amount and fair value of financial instruments for DTE Energy as of September 30, 2015 and December 31, 2014 :



	September 30, 2015								December 31, 2014
	Carrying		Fair Value						Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3		Amount		Level 1		Level 2		Level 3
	(In millions)
Notes receivable, excluding capital leases	$	34	$	—	$	—	$	34	$	41	$	—	$	—	$	41
Dividends payable	$	131	$	131	$	—	$	—	$	122	$	122	$	—	$	—
Short-term borrowings	$	185	$	—	$	185	$	—	$	398	$	—	$	398	$	—
Long-term debt, excluding capital leases	$	9,310	$	480	$	8,289	$	1,186	$	8,606	$	489	$	8,308	$	706

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

The following table presents the carrying amount and fair value of financial instruments for DTE Electric as of September 30, 2015 and December 31, 2014 :



	September 30, 2015								December 31, 2014
	Carrying		Fair Value						Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3		Amount		Level 1		Level 2		Level 3
	(In millions)
Notes receivable, excluding capital leases	$	6	$	—	$	—	$	6	$	12	$	—	$	—	$	12
Notes receivable — affiliates	$	4	$	—	$	—	$	4	$	8	$	—	$	—	$	8
Short-term borrowings — affiliates	$	68	$	—	$	—	$	68	$	84	$	—	$	—	$	84
Short-term borrowings — other	$	46	$	—	$	46	$	—	50		$	—	$	50	$	—
Long-term debt, excluding capital leases	$	5,644	$	—	$	5,496	$	562	$	5,259	$	—	$	5,341	$	496

For further fair value information on financial and derivative instruments see Note 9 to the Consolidated Financial Statements, " Financial and Other Derivative Instruments ".

Nuclear Decommissioning Trust Funds

DTE Electric has a legal obligation to decommission its nuclear power plants following the expiration of their operating licenses. This obligation is reflected as an ARO on the Registrants' Consolidated Statements of Financial Position. Rates approved by the MPSC provide for the recovery of decommissioning costs of Fermi 2 and the disposal of low-level radioactive waste. DTE Electric is continuing to fund FERC jurisdictional amounts for decommissioning even though explicit provisions are not included in FERC rates. See Note 5 to the Consolidated Financial Statements, " Asset Retirement Obligations ".

The following table summarizes DTE Electric's fair value of the nuclear decommissioning trust fund assets:



	September 30, 2015		December 31, 2014
	(In millions)
Fermi 2	$	1,175	$	1,221
Fermi 1	3		3
Low-level radioactive waste	21		17
Total	$	1,199	$	1,241

The costs of securities sold are determined on the basis of specific identification. The following table sets forth DTE Electric's gains and losses and proceeds from the sale of securities by the nuclear decommissioning trust funds:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(In millions)
Realized gains	$	8		$	8		$	30		$	24
Realized losses	$	(10	)	$	(3	)	$	(23	)	$	(14	)
Proceeds from sales of securities	$	187		$	177		$	627		$	652

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

Realized gains and losses from the sale of securities for the Fermi 2 and the low-level radioactive waste funds are recorded to the Regulatory asset and Nuclear decommissioning liability. The following table sets forth DTE Electric's fair value and unrealized gains and losses for the nuclear decommissioning trust funds:



	September 30, 2015							December 31, 2014
	Fair Value		Unrealized Gains		Unrealized Losses			Fair Value		Unrealized Gains		Unrealized Losses
	(In millions)
Equity securities	$	708	$	169	$	(74	)	$	756	$	204	$	(39	)
Debt securities	484		18		(2		)	474		21		(2		)
Cash and cash equivalents	7		—		—			11		—		—
	$	1,199	$	187	$	(76	)	$	1,241	$	225	$	(41	)

The debt securities at September 30, 2015 and December 31, 2014 had an average maturity of approximately 6 and 7 years , respectively. Securities held in the nuclear decommissioning trust funds are classified as available-for-sale. As DTE Electric does not have the ability to hold impaired investments for a period of time sufficient to allow for the anticipated recovery of market value, all unrealized losses are considered to be other-than-temporary impairments.

Unrealized losses incurred by the Fermi 2 trust are recognized as a Regulatory asset.

Other Securities

At September 30, 2015 and December 31, 2014 , the Registrants' securities were comprised primarily of money market and equity securities. There were no unrealized losses on available-for-sale securities which were reclassified out of Other comprehensive income and realized into Net Income for DTE Energy or DTE Electric during the three and nine months ended September 30, 2015 and 2014 . Losses related to trading securities held at September 30, 2015 were $2 million and gains related to trading securities held at September 30, 2014 were $9 million , respectively, for DTE Energy, including $2 million of losses and $8 million of gains, respectively, relating to DTE Electric. The trading gains or losses related to the Rabbi Trust assets are allocated from DTE Energy to DTE Electric.

NOTE 9 — FINANCIAL AND OTHER DERIVATIVE INSTRUMENTS

The Registrants recognize all derivatives at their fair value as Derivative assets or liabilities on their respective Consolidated Statements of Financial Position unless they qualify for certain scope exceptions, including the normal purchases and normal sales exception. Further, derivatives that qualify and are designated for hedge accounting are classified as either hedges of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge); or as hedges of the fair value of a recognized asset or liability or of an unrecognized firm commitment (fair value hedge). For cash flow hedges, the portion of the derivative gain or loss that is effective in offsetting the change in the value of the underlying exposure is deferred in Accumulated other comprehensive income and later reclassified into earnings when the underlying transaction occurs. Gains or losses from the ineffective portion of cash flow hedges are recognized in earnings immediately. For fair value hedges, changes in fair values for the derivative and hedged item are recognized in earnings each period. For derivatives that do not qualify or are not designated for hedge accounting, changes in fair value are recognized in earnings each period.

The Registrants’ primary market risk exposure is associated with commodity prices, credit, and interest rates. The Registrants have risk management policies to monitor and manage market risks. The Registrants use derivative instruments to manage some of the exposure. DTE Energy uses derivative instruments for trading purposes in its Energy Trading segment. Contracts classified as derivative instruments include electricity, natural gas, oil, certain coal forwards, futures, options, and swaps, and foreign currency exchange contracts. Items not classified as derivatives include natural gas inventory, pipeline transportation contracts, renewable energy credits, and natural gas storage assets.

DTE Electric — DTE Electric generates, purchases, distributes, and sells electricity. DTE Electric uses forward energy contracts to manage changes in the price of electricity and fuel. Substantially all of these contracts meet the normal purchases and normal sales exception and are therefore accounted for under the accrual method. Other derivative contracts are MTM and recoverable through the PSCR mechanism when settled. This results in the deferral of unrealized gains and losses as Regulatory assets or liabilities until realized.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

DTE Gas — DTE Gas purchases, stores, transports, distributes and sells natural gas, and sells storage and transportation capacity. DTE Gas has fixed-priced contracts for portions of its expected natural gas supply requirements through March 2018. Substantially all of these contracts meet the normal purchases and normal sales exception and are therefore accounted for under the accrual method. DTE Gas may also sell forward transportation and storage capacity contracts. Forward transportation and storage contracts are generally not derivatives and are therefore accounted for under the accrual method.

Gas Storage and Pipelines — This segment is primarily engaged in services related to the transportation and storage of natural gas. Primarily fixed-priced contracts are used in the marketing and management of transportation and storage services. Generally these contracts are not derivatives and are therefore accounted for under the accrual method.

Power and Industrial Projects — This segment manages and operates energy and pulverized coal projects, coke batteries, reduced emissions fuel projects, landfill gas recovery, and power generation assets. Primarily fixed-price contracts are used in the marketing and management of the segment assets. These contracts are generally not derivatives and are therefore accounted for under the accrual method.

Energy Trading — Commodity Price Risk — Energy Trading markets and trades electricity, natural gas physical products, and energy financial instruments, and provides energy and asset management services utilizing energy commodity derivative instruments. Forwards, futures, options, and swap agreements are used to manage exposure to the risk of market price and volume fluctuations in its operations. These derivatives are accounted for by recording changes in fair value to earnings unless hedge accounting criteria are met.

Energy Trading — Foreign Currency Exchange Risk — Energy Trading has foreign currency exchange forward contracts to economically hedge fixed Canadian dollar commitments existing under natural gas and power purchase and sale contracts and natural gas transportation contracts. DTE Energy enters into these contracts to mitigate price volatility with respect to fluctuations of the Canadian dollar relative to the U.S. dollar. These derivatives are accounted for by recording changes in fair value to earnings unless hedge accounting criteria are met.

Corporate and Other — Interest Rate Risk — DTE Energy may use interest rate swaps, treasury locks, and other derivatives to hedge the risk associated with interest rate market volatility.

Credit Risk — DTE Energy maintains credit policies that significantly minimize overall credit risk. These policies include an evaluation of potential customers’ and counterparties’ financial condition, credit rating, collateral requirements, or other credit enhancements such as letters of credit or guarantees. DTE Energy generally uses standardized agreements that allow the netting of positive and negative transactions associated with a single counterparty. DTE Energy maintains a provision for credit losses based on factors surrounding the credit risk of its customers, historical trends, and other information. Based on DTE Energy's credit policies and its September 30, 2015 provision for credit losses, DTE Energy’s exposure to counterparty nonperformance is not expected to have a material adverse effect on DTE Energy's Consolidated Financial Statements.

Derivative Activities

DTE Energy manages its MTM risk on a portfolio basis based upon the delivery period of its contracts and the individual components of the risks within each contract. Accordingly, it records and manages the energy purchase and sale obligations under its contracts in separate components based on the commodity (e.g. electricity or natural gas), the product (e.g. electricity for delivery during peak or off-peak hours), the delivery location (e.g. by region), the risk profile (e.g. forward or option), and the delivery period (e.g. by month and year). The following describes the categories of activities represented by their operating characteristics and key risks:

•

Asset Optimization — Represents derivative activity associated with assets owned and contracted by DTE Energy, including forward natural gas purchases and sales, natural gas transportation, and storage capacity. Changes in the value of derivatives in this category typically economically offset changes in the value of underlying non-derivative positions, which do not qualify for fair value accounting. The difference in accounting treatment of derivatives in this category and the underlying non-derivative positions can result in significant earnings volatility.


•	Marketing and Origination — Represents derivative activity transacted by originating substantially hedged positions with wholesale energy marketers, producers, end users, utilities, retail aggregators, and alternative energy suppliers.


•	Fundamentals Based Trading — Represents derivative activity transacted with the intent of taking a view, capturing market price changes, or putting capital at risk. This activity is speculative in nature as opposed to hedging an existing exposure.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)


•	Other — Includes derivative activity at DTE Electric related to FTRs. Changes in the value of derivative contracts at DTE Electric are recorded as Derivative assets or liabilities, with an offset to Regulatory assets or liabilities as the settlement value of these contracts will be included in the PSCR mechanism when realized.

The following table presents the fair value of derivative instruments as of September 30, 2015 and December 31, 2014 for DTE Energy:



	September 30, 2015					December 31, 2014
	Derivative Assets		Derivative Liabilities			Derivative Assets		Derivative Liabilities
	(In millions)
Derivatives not designated as hedging instruments:
Foreign currency exchange contracts	$	10	$	(7	)	$	4	$	(5	)
Commodity Contracts:
Natural Gas	303		(277		)	787		(718		)
Electricity	251		(244		)	342		(342		)
Other	22		(23		)	45		(45		)
Total derivatives not designated as hedging instruments:	$	586	$	(551	)	$	1,178	$	(1,110	)
Total derivatives:
Current	$	448	$	(419	)	$	1,083	$	(1,041	)
Noncurrent	138		(132		)	95		(69		)
Total derivatives	$	586	$	(551	)	$	1,178	$	(1,110	)

The following table presents the fair value of derivative instruments as of September 30, 2015 and December 31, 2014 for DTE Electric:



	September 30, 2015		December 31, 2014
	(In millions)
FTRs — Other current assets	$	5	$	3
Total derivatives not designated as hedging instrument	$	5	$	3

Certain of DTE Energy's derivative positions are subject to netting arrangements which provide for offsetting of asset and liability positions as well as related cash collateral. Such netting arrangements generally do not have restrictions. Under such netting arrangements, DTE Energy offsets the fair value of derivative instruments with cash collateral received or paid for those contracts executed with the same counterparty, which reduces DTE Energy's total assets and liabilities. Cash collateral is allocated between the fair value of derivative instruments and customer accounts receivable and payable with the same counterparty on a pro rata basis to the extent there is exposure. Any cash collateral remaining, after the exposure is netted to zero, is reflected in accounts receivable and accounts payable as collateral paid or received, respectively.

DTE Energy also provides and receives collateral in the form of letters of credit which can be offset against net derivative assets and liabilities as well as accounts receivable and payable. DTE Energy had no letters of credit outstanding at September 30, 2015 and $7 million in letters of credit at December 31, 2014 , which could be used to offset net derivative liabilities. Letters of credit received from third parties which could be used to offset net derivative assets were $1 million and $5 million at September 30, 2015 and December 31, 2014 , respectively. Such balances of letters of credit are excluded from the tables below and are not netted with the recognized assets and liabilities in DTE Energy's Consolidated Statements of Financial Position.

For contracts with certain clearing agents the fair value of derivative instruments is netted against realized positions with the net balance reflected as either 1) a derivative asset or liability or 2) an account receivable or payable. Other than certain clearing agents, accounts receivable and accounts payable that are subject to netting arrangements have not been offset against the fair value of derivative assets and liabilities. Certain contracts that have netting arrangements have not been offset in DTE Energy's Consolidated Statements of Financial Position. The impact of netting these derivative instruments and cash collateral related to such contracts is not material. Only the gross amounts for these derivative instruments are included in the table below.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

For DTE Energy, the total cash collateral posted, net of cash collateral received, was $27 million and $61 million as of September 30, 2015 and December 31, 2014 , respectively. As of September 30, 2015 , derivative assets and derivative liabilities are shown net of cash collateral of $1 million and $21 million , respectively. As of December 31, 2014 , there was no cash collateral related to unrealized positions to net against derivative assets while derivative liabilities are shown net of cash collateral of $19 million . DTE Energy recorded cash collateral paid of $8 million and cash collateral received of $1 million not related to unrealized derivative positions as of September 30, 2015 . DTE Energy recorded cash collateral paid of $44 million and cash collateral received of $2 million not related to unrealized derivative positions as of December 31, 2014 . These amounts are included in accounts receivable and accounts payable and are recorded net by counterparty.

The following table presents the netting offsets of derivative assets and liabilities for DTE Energy at September 30, 2015 and December 31, 2014 :



	September 30, 2015									December 31, 2014
	Gross Amounts of Recognized Assets (Liabilities)			Gross Amounts Offset in the Consolidated Statements of Financial Position			Net Amounts of Assets (Liabilities) Presented in the Consolidated Statements of Financial Position			Gross Amounts of Recognized Assets (Liabilities)			Gross Amounts Offset in the Consolidated Statements of Financial Position			Net Amounts of Assets (Liabilities) Presented in the Consolidated Statements of Financial Position
	(In millions)
Derivative assets:
Commodity Contracts:
Natural Gas	$	303		$	(244	)	$	59		$	787		$	(681	)	$	106
Electricity	251			(179		)	72			342			(280		)	62
Other	22			(17		)	5			45			(42		)	3
Other derivative contracts (a)	10			(8		)	2			4			(3		)	1
Total derivative assets	$	586		$	(448	)	$	138		$	1,178		$	(1,006	)	$	172

Derivative liabilities:
Commodity Contracts:
Natural Gas	$	(277	)	$	249		$	(28	)	$	(718	)	$	679		$	(39	)
Electricity	(244		)	190			(54		)	(342		)	298			(44		)
Other	(23		)	22			(1		)	(45		)	45			—
Other derivative contracts (a)	(7		)	7			—			(5		)	3			(2		)
Total derivative liabilities	$	(551	)	$	468		$	(83	)	$	(1,110	)	$	1,025		$	(85	)

_______________________________________


(a)	Primarily includes foreign currency exchange contracts.

The following table presents the netting offsets of derivative assets and liabilities showing the reconciliation of derivative instruments to DTE Energy's Consolidated Statements of Financial Position at September 30, 2015 and December 31, 2014 :



	September 30, 2015												December 31, 2014
	Derivative Assets						Derivative Liabilities						Derivative Assets						Derivative Liabilities
	Current			Noncurrent			Current			Noncurrent			Current			Noncurrent			Current			Noncurrent
	(In millions)
Total fair value of derivatives	$	448		$	138		$	(419	)	$	(132	)	$	1,083		$	95		$	(1,041	)	$	(69	)
Counterparty netting	(358		)	(89		)	358			89			(955		)	(51		)	955			51
Collateral adjustment	—			(1		)	5			16			—			—			9			10
Total derivatives as reported	$	90		$	48		$	(56	)	$	(27	)	$	128		$	44		$	(77	)	$	(8	)

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

The effect of derivatives not designated as hedging instruments on DTE Energy's Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and 2014 for DTE Energy is as follows:



Derivatives not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivatives	Gain (Loss) Recognized in Income on Derivatives for the Three Months Ended September 30,						Gain (Loss) Recognized in Income on Derivatives for the Nine Months Ended September 30,
Derivatives not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivatives	2015			2014			2015			2014
		(In millions)
Foreign currency exchange contracts	Operating Revenue	$	1		$	(1	)	$	2		$	(2	)
Commodity Contracts:
Natural Gas	Operating Revenue	55			(38		)	(75		)	(10		)
Natural Gas	Fuel, purchased power, and gas	(24		)	12			9			23
Electricity	Operating Revenue	14			12			60			100
Other	Operating Revenue	(4		)	(1		)	(4		)	(5		)
Total		$	42		$	(16	)	$	(8	)	$	106

Revenues and energy costs related to trading contracts are presented on a net basis in DTE Energy's Consolidated Statements of Operations. Commodity derivatives used for trading purposes, and financial non-trading commodity derivatives, are accounted for using the MTM method with unrealized and realized gains and losses recorded in Operating revenues. Non-trading physical commodity sale and purchase derivative contracts are generally accounted for using the MTM method with unrealized and realized gains and losses for sales recorded in Operating revenue and purchases recorded in Fuel, purchased power, and gas.

The following represents the cumulative gross volume of DTE Energy's derivative contracts outstanding as of September 30, 2015 :



Commodity		Number of Units
Natural Gas (MMBtu)		1,083,436,935
Electricity (MWh)		22,421,752
Oil (Gallons)		23,520,000
Foreign Currency Exchange (Canadian dollars)		42,420,220

Various subsidiaries of DTE Energy have entered into contracts which contain ratings triggers and are guaranteed by DTE Energy. These contracts contain provisions which allow the counterparties to require that DTE Energy post cash or letters of credit as collateral in the event that DTE Energy’s credit rating is downgraded below investment grade. Certain of these provisions (known as “hard triggers”) state specific circumstances under which DTE Energy can be required to post collateral upon the occurrence of a credit downgrade, while other provisions (known as “soft triggers”) are not as specific. For contracts with soft triggers, it is difficult to estimate the amount of collateral which may be requested by counterparties and/or which DTE Energy may ultimately be required to post. The amount of such collateral which could be requested fluctuates based on commodity prices (primarily natural gas, power and coal) and the provisions and maturities of the underlying transactions. As of September 30, 2015 , DTE Energy's contractual obligation to post collateral in the form of cash or letters of credit in the event of a downgrade to below investment grade, under both hard trigger and soft trigger provisions, was approximately $420 million .

As of September 30, 2015 , DTE Energy had approximately $516 million of derivatives in net liability positions, for which hard triggers exist. There is no collateral that has been posted against such liabilities, including cash and letters of credit. Associated derivative net asset positions for which contractual offset exists were approximately $430 million . The net remaining amount of approximately $85 million is derived from the $420 million noted above.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

NOTE 10 — LONG-TERM DEBT

Debt Issuances

In 2015 , the following debt was issued:



Company	Month	Type	Interest Rate	Maturity	Amount
					(In millions)
DTE Electric	March	Mortgage Bonds (a)	3.70%	2045	$	500
DTE Energy	June	Senior Notes (b)	3.30%	2022	300
DTE Gas	August	Mortgage Bonds (c)	3.35%	2027	40
DTE Gas	August	Mortgage Bonds (c)	4.21%	2045	125
					$	965

_______________________________________


(a)	Proceeds were used for the redemption of long-term debt, for the repayment of short-term borrowings, and for general corporate purposes.


(b)	Proceeds were used for general corporate purposes.


(c)	Proceeds were used for the redemption of long-term debt and for general corporate purposes.

Debt Redemptions

In 2015 , the following debt was redeemed:



Company	Month	Type	Interest Rate	Maturity	Amount
					(In millions)
DTE Electric	March	Securitization Bonds	6.62%	2015	$	105
DTE Electric	March	Mortgage Bonds	7.904%	2016	10
DTE Gas	September	Senior Notes	5.94%	2015	140
DTE Energy	Various	Other Long Term Debt	Various	2015	5
					$	260

NOTE 11 — SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS

DTE Energy and its wholly owned subsidiaries, DTE Electric and DTE Gas, have unsecured revolving credit agreements that can be used for general corporate borrowings, but are intended to provide liquidity support for each of the companies’ commercial paper programs. Borrowings under the facilities are available at prevailing short-term interest rates. Additionally, DTE Energy has other facilities to support letter of credit issuance.

In August 2015, the DTE Energy unsecured letter of credit facility expired. In September 2015, DTE Energy entered into a new, $70 million , two year unsecured letter of credit facility. The facility has the same financial covenants as DTE Energy's unsecured revolving credit facilities.

The agreements require DTE Energy, DTE Electric, and DTE Gas to maintain a total funded debt to capitalization ratio of no more than 0.65 to 1. In the agreements, “total funded debt” means all indebtedness of each respective company and their consolidated subsidiaries, including capital lease obligations, hedge agreements, and guarantees of third parties’ debt, but excluding contingent obligations, nonrecourse and junior subordinated debt, and certain equity-linked securities and, except for calculations at the end of the second quarter, certain DTE Gas short-term debt. “Capitalization” means the sum of (a) total funded debt plus (b) “consolidated net worth”, which is equal to consolidated total stockholders’ equity of each respective company and their consolidated subsidiaries (excluding pension effects under certain FASB statements), as determined in accordance with accounting principles generally accepted in the United States of America. At September 30, 2015 , the total funded debt to total capitalization ratios for DTE Energy, DTE Electric, and DTE Gas were 0.50 to 1, 0.50 to 1, and 0.48 to 1, respectively, and are in compliance with this financial covenant.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

The availability under the facilities in place at September 30, 2015 is shown in the following table:



	DTE Energy		DTE Electric		DTE Gas		Total
	(In millions)
Unsecured letter of credit facility, expiring in February 2017	$	100	$	—	$	—	$	100
Unsecured letter of credit facility, expiring in September 2017	70		—		—		70
Unsecured revolving credit facility, expiring April 2020	1,200		400		300		1,900
	1,370		400		300		2,070
Amounts outstanding at September 30, 2015:
Commercial paper issuances	11		46		128		185
Letters of credit	185		—		—		185
	196		46		128		370
Net availability at September 30, 2015	$	1,174	$	354	$	172	$	1,700

DTE Energy has other outstanding letters of credit which are not included in the above described facilities totaling approximately $20 million which are used for various corporate purposes.

In conjunction with maintaining certain exchange traded risk management positions, DTE Energy may be required to post cash collateral with its clearing agent. DTE Energy has a demand financing agreement for up to $100 million with its clearing agent. The agreement, as amended, also allows for up to $50 million of additional margin financing provided that DTE Energy posts a letter of credit for the incremental amount. At September 30, 2015 , a $25 million letter of credit was in place, raising the capacity under this facility to $125 million . The $25 million letter of credit is included in the table above. The amount outstanding under this agreement was $70 million and $37 million at September 30, 2015 and December 31, 2014 , respectively.

NOTE 12 — COMMITMENTS AND CONTINGENCIES

Environmental

DTE Electric

Air — DTE Electric is subject to the EPA ozone and fine particulate transport and acid rain regulations that limit power plant emissions of sulfur dioxide and nitrogen oxides. The EPA and the State of Michigan have issued emission reduction regulations relating to ozone, fine particulate, regional haze, mercury, and other air pollution. These rules have led to controls on fossil-fueled power plants to reduce nitrogen oxide, sulfur dioxide, mercury and other emissions. Additional rulemakings are expected over the next few years which could require additional controls for sulfur dioxide, nitrogen oxides and hazardous air pollutants.

The Cross State Air Pollution Rule (CSAPR), required further reductions of sulfur dioxide and nitrogen oxides emissions beginning in January 2015. DTE Electric expects to meet its obligations under CSAPR. However, portions of CSAPR are being reviewed by the Court of Appeals for the D.C. District and any financial impact related to this review cannot be predicted at this time.

The Mercury and Air Toxics Standards (MATS) rule, formerly known as the Electric Generating Unit Maximum Achievable Control Technology (EGU MACT) Rule was finalized in December 2011. The MATS rule requires reductions of mercury and other hazardous air pollutants beginning in April 2015. DTE Electric has requested and been granted compliance date extensions for all relevant units to April 2016. DTE Electric has tested several technologies as MATS compliance alternatives to Flue Gas Desulfurization (FGD) systems to determine technological and economic feasibility. Dry Sorbent Injection (DSI) and Activated Carbon Injection (ACI) technologies were deemed feasible and their implementation will allow units that would not have been economical for FGD installations to continue operation in compliance with MATS. In November 2014, the U.S. Supreme Court agreed to review a challenge to the MATS rule based on a narrowly focused question of how the EPA considered costs in regulating air pollutants emitted by electric utilities. In June 2015, the U.S. Supreme Court reversed the decision of the Court of Appeals for the D.C. District and remanded the MATS rule to the Court of Appeals for further consideration based on their decision that the EPA must consider costs prior to deciding to regulate under the provisions of the Clean Air Act. DTE Electric does not expect this decision to have a material effect on its compliance plans at this time.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

The EPA proposed revised air quality standards for ground level ozone in November 2014 and specifically requested comments on the form and level of the ozone standards. The standards were finalized on October 1, 2015. DTE Electric cannot predict the financial impact of the revised ozone standards at this time.

In July 2009, DTE Energy received a NOV/FOV from the EPA alleging, among other things, that five DTE Electric power plants violated New Source Performance standards, Prevention of Significant Deterioration requirements, and operating permit requirements under the Clean Air Act. In June 2010, the EPA issued a NOV/FOV making similar allegations related to a project and outage at Unit 2 of the Monroe Power Plant. In March 2013, DTE Energy received a supplemental NOV from the EPA relating to the July 2009 NOV/FOV. The supplemental NOV alleged additional violations relating to the New Source Review provisions under the Clean Air Act, among other things.

In August 2010, the U.S. Department of Justice, at the request of the EPA, brought a civil suit in the U.S. District Court for the Eastern District of Michigan against DTE Energy and DTE Electric, related to the June 2010 NOV/FOV and the outage work performed at Unit 2 of the Monroe Power Plant, but not relating to the July 2009 NOV/FOV. Among other relief, the EPA requested the court to require DTE Electric to install and operate the best available control technology at Unit 2 of the Monroe Power Plant. Further, the EPA requested the court to issue a preliminary injunction to require DTE Electric to (i) begin the process of obtaining the necessary permits for the Monroe Unit 2 modification and (ii) offset the pollution from Monroe Unit 2 through emissions reductions from DTE Electric's fleet of coal-fired power plants until the new control equipment is operating. In August 2011, the U.S. District Court judge granted DTE Energy's motion for summary judgment in the civil case, dismissing the case and entering judgment in favor of DTE Energy and DTE Electric. In October 2011, the EPA caused to be filed a Notice of Appeal to the Court of Appeals for the Sixth Circuit. In March 2013, the Court of Appeals remanded the case to the U.S. District Court for review of the procedural component of the New Source Review notification requirements. In September 2013, the EPA caused to be filed a motion seeking leave to amend their complaint regarding the June 2010 NOV/FOV adding additional claims related to outage work performed at the Trenton Channel and Belle River power plants as well as additional claims related to work performed at the Monroe Power Plant. In addition, the Sierra Club caused to be filed a motion to add a claim regarding the River Rouge Power Plant. In March 2014, the U.S. District Court judge granted again DTE Energy's motion for summary judgment dismissing the civil case related to Monroe Unit 2. In April 2014, the U.S. District Court judge granted motions filed by the EPA and the Sierra Club to amend their New Source Review complaint adding additional claims for Monroe Units 1, 2 and 3, Belle River Units 1 and 2, Trenton Channel Unit 9 and denied the claims related to River Rouge Power Plant that were brought by the Sierra Club. In June 2014, the EPA filed a motion requesting certification for appeal of the March 2014 summary judgment decision. In October 2014, the EPA and the U.S. Department of Justice filed the anticipated notice of appeal of the U.S. District Court judge's dismissal of the Monroe Unit 2 case. The amended New Source Review claims are all stayed until the appeal is resolved by the Court of Appeals for the Sixth Circuit. Oral arguments for the appeal are scheduled for December 2015.

The Registrants believe that the plants and generating units identified by the EPA and the Sierra Club have complied with all applicable federal environmental regulations. Depending upon the outcome of discussions with the EPA regarding the two NOVs/FOVs, DTE Electric could be required to install additional pollution control equipment at some or all of the power plants in question, implement early retirement of facilities where control equipment is not economical, engage in supplemental environmental programs, and/or pay fines. The Registrants cannot predict the financial impact or outcome of this matter, or the timing of its resolution.

To comply with air pollution requirements, DTE Electric spent approximately $2.2 billion through 2014 . DTE Electric estimates making capital expenditures of approximately $100 million in 2015 and approximately $50 million of additional capital expenditures in 2016 based on current regulations.

Water — In response to an EPA regulation, DTE Electric would be required to examine alternatives for reducing the environmental impacts of the cooling water intake structures at several of its facilities. Based on the results of completed studies and expected future studies, DTE Electric may be required to install technologies to reduce the impacts of the water intake structures. A final rule was issued in May 2014. The final rule specifies a time period exceeding three years to complete studies to determine the type of technology needed to reduce impacts to fish. Final compliance for the installation of any required technology will be determined by each state on a case by case basis. DTE Electric is currently evaluating the compliance options and working with the State of Michigan on evaluating whether any controls are needed. These evaluations/studies may require modifications to some existing intake structures. It is not possible to quantify the impact of this rulemaking at this time.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

In April 2013, the EPA proposed revised steam electric effluent guidelines regulating wastewater streams from coal-fired power plants including multiple possible options for compliance. The rules were finalized on September 30, 2015 and are expected to be effective by the end of 2015. It is not possible at this time to quantify the impacts of the final rules.

Contaminated and Other Sites — Prior to the construction of major interstate natural gas pipelines, gas for heating and other uses was manufactured locally from processes involving coal, coke or oil. The facilities, which produced gas, have been designated as MGP sites. DTE Electric conducted remedial investigations at contaminated sites, including three former MGP sites. The investigations have revealed contamination related to the by-products of gas manufacturing at each MGP site. In addition to the MGP sites, DTE Electric is also in the process of cleaning up other contaminated sites, including the area surrounding an ash landfill, electrical distribution substations, electric generating power plants, and underground and aboveground storage tank locations. The findings of these investigations indicated that the estimated cost to remediate these sites is expected to be incurred over the next several years. At September 30, 2015 and December 31, 2014 , DTE Electric had $9 million and $10 million accrued for remediation, respectively. Any change in assumptions, such as remediation techniques, nature and extent of contamination and regulatory requirements, could impact the estimate of remedial action costs for the sites and affect DTE Electric’s financial position and cash flows. DTE Electric believes the likelihood of a material change to the accrued amount is remote based on current knowledge of the conditions at each site.

Coal Combustion Residual Rule — In April 2015, the EPA published a final rule for the disposal of coal combustion residuals, commonly known as coal ash. The rule becomes effective in October 2015. The rule is based on the continued listing of coal ash as a non-hazardous waste and relies on various self-implementation design and performance standards. DTE Electric owns and operates three permitted engineered coal ash storage facilities to dispose of coal ash from coal-fired power plants and operates a number of smaller impoundments at its power plants. At certain facilities, the rule requires the installation of monitoring wells, compliance with groundwater standards and the closure of basins at the end of the useful life of the associated power plant. At other facilities, the rule requires ash laden waters be moved from earthen basins to steel and concrete tanks. Costs associated with the building of new facilities over the next seven years are estimated to be approximately $190 million . See Note 5 to the Consolidated Financial Statements, " Asset Retirement Obligations ", for estimated costs of closure of old facilities.

DTE Gas

Contaminated and Other Sites — DTE Gas owns or previously owned, 14 former MGP sites. Investigations have revealed contamination related to the by-products of gas manufacturing at each site. Cleanup of five of the MGP sites is complete and the sites are closed. DTE Gas has also completed partial closure of two additional sites. Cleanup activities associated with the remaining sites will continue over the next several years. The MPSC has established a cost deferral and rate recovery mechanism for investigation and remediation costs incurred at former MGP sites. In addition to the MGP sites, DTE Gas is also in the process of cleaning up other contaminated sites, including gate stations, gas pipeline releases and underground storage tank locations. As of September 30, 2015 and December 31, 2014 , DTE Gas had $23 million and $24 million accrued for remediation, respectively. Any change in assumptions, such as remediation techniques, nature and extent of contamination and regulatory requirements, could impact the estimate of remedial action costs for the sites and affect DTE Gas’s financial position and cash flows. DTE Gas anticipates the cost amortization methodology approved by the MPSC, which allows for amortization of the MGP costs over a ten -year period beginning with the year subsequent to the year the MGP costs were incurred, will prevent environmental costs from having a material adverse impact on DTE Gas’s results of operations.

Non-utility

DTE Energy’s non-utility businesses are subject to a number of environmental laws and regulations dealing with the protection of the environment from various pollutants.

The Michigan coke battery facility received and responded to information requests from the EPA that resulted in the issuance of a NOV in June 2007 alleging potential maximum achievable control technologies and new source review violations. The EPA is in the process of reviewing DTE Energy’s position of demonstrated compliance and has not initiated escalated enforcement. At this time, DTE Energy cannot predict the impact of this issue. Furthermore, the Michigan coke battery facility is the subject of an investigation by the MDEQ concerning visible emissions readings that resulted from DTE Energy self reporting to MDEQ questionable activities by an employee of a contractor hired by DTE Energy to perform the visible emissions readings. At this time, DTE Energy cannot predict the impact of this investigation.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

DTE Energy received two NOVs from the Pennsylvania Department of Environmental Protection (PADEP) in 2010 alleging violations of the permit for the Pennsylvania coke battery facility in connection with coal pile storm water runoff. DTE Energy settled the alleged violations by implementing best management practices to address the issues and repair/upgrade their wastewater treatment plant. DTE Energy received a construction permit to upgrade its existing waste water treatment system and is currently seeking a permit from the PADEP to further upgrade its wastewater treatment technology to biological treatment. DTE Energy spent approximately $1 million on the existing waste water treatment system to comply with existing water discharge requirements and to upgrade its coal pile storm water runoff management program. DTE Energy expects to also spend up to an additional $15 million over the next few years to complete its upgrade of the treatment technology to biological treatment in order to meet future regulatory requirements and gain other operational improvement savings.

DTE Energy received an NOV from the Allegheny County (PA) Health Department pertaining to excessive opacity readings from fugitive sources in excess of its standards for the Pennsylvania coke battery facility. Fugitive sources at the plant are in full compliance with the applicable Federal Opacity Standards. DTE Energy agreed to a Consent Order and Agreement with Allegheny County pursuant to which DTE Energy paid a fine of $300,000 and will spend $300,000 for a supplemental environmental project. In May 2014, the Group Against Smog & Pollution (GASP) filed a complaint alleging that DTE Energy's coke battery facility in Pennsylvania was in violation of visible emissions limits under the Federal Clean Air Act and/or Article XXI of the Allegheny County (PA) Health Department's Rules and Regulations. DTE Energy believed that the GASP suit was without merit and filed a motion to dismiss in July 2014. In March 2015, the U.S. District Court granted DTE Energy's motion for dismissal. In April 2015, GASP filed a notice of appeal. At the present time, DTE Energy cannot predict the financial impact or outcome of this matter, or the timing of its resolution.

Other

In 2010, the EPA finalized a new 1 -hour sulfur dioxide ambient air quality standard that requires states to submit plans for non-attainment areas to be in compliance by 2018. Michigan's non-attainment area includes DTE Energy facilities in southwest Detroit and areas of Wayne County. Modeling runs by the MDEQ suggest that emission reductions may be required by significant sources of sulfur dioxide emissions in these areas, including DTE Electric power plants and DTE Energy's Michigan coke battery facility. As part of the state implementation plan process, DTE Energy has worked with MDEQ to develop air permits reflecting significant SO2 emission reductions that, in combination with other non-DTE Energy sources emission reduction startegies, will help the State attain the standard and sustain its attainment. Since several non-DTE Energy sources are also part of the proposed compliance plan, DTE Energy is unable to determine the full impact of the final required emissions reductions at this time.

Nuclear Operations

Property Insurance

DTE Electric maintains property insurance policies specifically for the Fermi 2 plant. These policies cover such items as replacement power and property damage. NEIL is the primary supplier of the insurance policies.

DTE Electric maintains a policy for extra expenses, including replacement power costs necessitated by Fermi 2’s unavailability due to an insured event. This policy has a 12-week waiting period and provides an aggregate $490 million of coverage over a three -year period.

DTE Electric has $1.5 billion in primary coverage and $1.25 billion of excess coverage for stabilization, decontamination, debris removal, repair and/or replacement of property and decommissioning. The combined coverage limit for total property damage is $2.75 billion . The total limit for property damage for non-nuclear events is $2 billion and an aggregate of $328 million of coverage for extra expenses over a two -year period.

On January 13, 2015, the Terrorism Risk Insurance Program Reauthorization Act of 2015 was signed, extending TRIA through December 31, 2020. For multiple terrorism losses caused by acts of terrorism not covered under the TRIA occurring within one year after the first loss from terrorism, the NEIL policies would make available to all insured entities up to $3.2 billion , plus any amounts recovered from reinsurance, government indemnity, or other sources to cover losses.

Under NEIL policies, DTE Electric could be liable for maximum assessments of up to approximately $46 million per event if the loss associated with any one event at any nuclear plant should exceed the accumulated funds available to NEIL.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

Public Liability Insurance

As required by federal law, DTE Electric maintains $375 million of public liability insurance for a nuclear incident. For liabilities arising from a terrorist act outside the scope of TRIA, the policy is subject to one industry aggregate limit of $300 million . Further, under the Price-Anderson Amendments Act of 2005, deferred premium charges up to $127 million could be levied against each licensed nuclear facility, but not more than $19 million per year per facility. Thus, deferred premium charges could be levied against all owners of licensed nuclear facilities in the event of a nuclear incident at any of these facilities.

Nuclear Fuel Disposal Costs

In accordance with the Federal Nuclear Waste Policy Act of 1982, DTE Electric has a contract with the DOE for the future storage and disposal of spent nuclear fuel from Fermi 2 that required DTE Electric to pay the DOE a fee of 1 mill per kWh of Fermi 2 electricity generated and sold. The fee was a component of nuclear fuel expense. The DOE's Yucca Mountain Nuclear Waste Repository program for the acceptance and disposal of spent nuclear fuel was terminated in 2011. DTE Electric is a party in the litigation against the DOE for both past and future costs associated with the DOE's failure to accept spent nuclear fuel under the timetable set forth in the Federal Nuclear Waste Policy Act of 1982. In July 2012, DTE Electric executed a settlement agreement with the federal government for costs associated with the DOE's delay in acceptance of spent nuclear fuel from Fermi 2 for permanent storage. The settlement agreement, including extensions, provides for a claims process and payment of delay-related costs experienced by DTE Electric through 2016. DTE Electric's claims are being settled and paid on a timely basis. The settlement proceeds reduce the cost of the dry cask storage facility assets and provide reimbursement for related operating expenses. The 1 mill per kWh DOE fee was reduced to zero effective May 16, 2014.

DTE Electric currently employs a spent nuclear fuel storage strategy utilizing a fuel pool and a newly completed dry cask storage facility. The dry cask storage facility is expected to provide sufficient spent fuel storage capability for the life of the plant as defined by the original operating license.

The federal government continues to maintain its legal obligation to accept spent nuclear fuel from Fermi 2 for permanent storage. Issues relating to long-term waste disposal policy and to the disposition of funds contributed by DTE Electric ratepayers to the federal waste fund await future governmental action.

Synthetic Fuel Guarantees

DTE Energy discontinued the operations of its synthetic fuel production facilities throughout the United States as of December 31, 2007. DTE Energy provided certain guarantees and indemnities in conjunction with the sales of interests in its synfuel facilities. The guarantees cover potential commercial, environmental, oil price and tax-related obligations and will survive until 90 days after expiration of all applicable statutes of limitations. DTE Energy estimates that its maximum potential liability under these guarantees at September 30, 2015 is approximately $850 million . Payment under these guarantees is considered remote.

REF Guarantees

DTE Energy has provided certain guarantees and indemnities in conjunction with the sales of interests in or lease of its REF facilities. The guarantees cover potential commercial, environmental, and tax-related obligations and will survive until 90 days after expiration of all applicable statutes of limitations. DTE Energy estimates that its maximum potential liability under these guarantees at September 30, 2015 is approximately $238 million . Payment under these guarantees is considered remote.

Other Guarantees

In certain limited circumstances, the Registrants enter into contractual guarantees. The Registrants may guarantee another entity’s obligation in the event it fails to perform and may provide guarantees in certain indemnification agreements. Finally, the Registrants may provide indirect guarantees for the indebtedness of others. DTE Energy’s guarantees are not individually material with maximum potential payments totaling $66 million at September 30, 2015 . Payment under these guarantees is considered remote.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

DTE Energy is periodically required to obtain performance surety bonds in support of obligations to various governmental entities and other companies in connection with its operations. As of September 30, 2015 , DTE Energy had approximately $49 million of performance bonds outstanding. In the event that such bonds are called for nonperformance, DTE Energy would be obligated to reimburse the issuer of the performance bond. DTE Energy is released from the performance bonds as the contractual performance is completed and does not believe that a material amount of any currently outstanding performance bonds will be called.

Labor Contracts

There are several bargaining units for DTE Energy's approximately 4,900 represented employees, including DTE Electric's approximately 2,600 represented employees. The majority of the represented employees are under contracts that expire in 2016 and 2017.

Purchase Commitments

As of September 30, 2015 , the Registrants were party to numerous long-term purchase commitments relating to a variety of goods and services required for their businesses. These agreements primarily consist of fuel supply commitments and renewable energy contracts for the Registrants, as well as energy trading contracts for DTE Energy. DTE Energy estimates that these commitments will be approximately $7.4 billion from 2015 through 2051 . DTE Electric estimates that these commitments will be approximately $2.2 billion from 2015 through 2033 . In addition, the Registrants have made certain commitments in connection with 2015 annual capital expenditures and contributions to equity method investees that are expected to be up to $2.5 billion for DTE Energy and $1.8 billion for DTE Electric.

Bankruptcies

Certain of the Registrants' customers and suppliers have filed for bankruptcy protection under the U.S. Bankruptcy Code. The Registrants regularly review contingent matters relating to these customers and suppliers and their purchase and sale contracts and record provisions for amounts considered at risk of probable loss. The Registrants believe their accrued amounts are adequate for probable loss.

Michigan Sales and Use Tax Litigation

In 2010, the Michigan Department of Treasury finalized a sales and use tax audit of DTE Electric for the period from January 2003 to September 2006. It determined that DTE Electric’s electric distribution equipment was not eligible for an industrial-processing exemption and therefore was subject to the use tax. DTE Electric paid the tax for the period under audit and filed a claim in the Michigan Court of Claims disputing the tax determination. DTE Electric has continued to apply the industrial-processing exemption for the years subsequent to 2006.

The Michigan Court of Claims found in favor of DTE Electric, and that determination was subsequently appealed to the Michigan Supreme Court. In July 2015, the Michigan Supreme Court issued an opinion finding that DTE Electric was eligible for a partial industrial-processing exemption on its electric distribution equipment based on the proportion of exempt use of that equipment. The Supreme Court reversed the lower court decision in part and remanded the case to the Michigan Court of Claims. DTE Electric expects this issue and the timing of any potential tax refunds or assessments to be resolved not later than 2016. DTE Electric considers the likelihood of a material unfavorable outcome to be remote.

Other Contingencies

The Registrants are involved in certain other legal, regulatory, administrative, and environmental proceedings before various courts, arbitration panels and governmental agencies concerning claims arising in the ordinary course of business. These proceedings include certain contract disputes, additional environmental reviews and investigations, audits, inquiries from various regulators, and pending judicial matters. The Registrants cannot predict the final disposition of such proceedings. The Registrants regularly review legal matters and record provisions for claims that they can estimate and are considered probable of loss. The resolution of these pending proceedings is not expected to have a material effect on the Registrants' operations or financial statements in the periods they are resolved.

For a discussion of contingencies related to regulatory matters and derivatives see Notes 6 and 9 to the Consolidated Financial Statements, " Regulatory Matters " and " Financial and Other Derivative Instruments ", respectively.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

NOTE 13 — RETIREMENT BENEFITS AND TRUSTEED ASSETS

The following table details the components of net periodic benefit costs for pension benefits and other postretirement benefits for DTE Energy:



	Pension Benefits						Other Postretirement Benefits
	2015			2014			2015			2014
Three Months Ended September 30,	(In millions)
Service cost	$	27		$	19		$	8		$	8
Interest cost	52			54			20			22
Expected return on plan assets	(74		)	(69		)	(33		)	(31		)
Amortization of:
Net actuarial loss	51			42			10			4
Prior service credit	—			—			(31		)	(36		)
Net periodic benefit cost (credit)	$	56		$	46		$	(26	)	$	(33	)



	Pension Benefits						Other Postretirement Benefits
	2015			2014			2015			2014
Nine Months Ended September 30,	(In millions)
Service cost	$	76		$	62		$	25		$	26
Interest cost	158			159			61			67
Expected return on plan assets	(222		)	(205		)	(98		)	(92		)
Amortization of:
Net actuarial loss	154			118			32			15
Prior service credit	—			—			(94		)	(108		)
Net periodic benefit cost (credit)	$	166		$	134		$	(74	)	$	(92	)

The following table details the components of net periodic benefit costs for pension benefits and other postretirement benefits for DTE Electric:



	Pension Benefits						Other Postretirement Benefits
	2015			2014			2015			2014
Three Months Ended September 30,	(In millions)
Service cost	$	21		$	14		$	6		$	6
Interest cost	39			41			15			17
Expected return on plan assets	(53		)	(48		)	(23		)	(21		)
Amortization of:
Net actuarial loss	36			30			8			3
Prior service credit	—			—			(24		)	(27		)
Net periodic benefit cost (credit)	$	43		$	37		$	(18	)	$	(22	)



	Pension Benefits						Other Postretirement Benefits
	2015			2014			2015			2014
Nine Months Ended September 30,	(In millions)
Service cost	$	59		$	48		$	19		$	19
Interest cost	120			121			46			51
Expected return on plan assets	(158		)	(145		)	(68		)	(63		)
Amortization of:
Net actuarial loss	110			83			24			11
Prior service cost (credit)	1			1			(71		)	(82		)
Net periodic benefit cost (credit)	$	132		$	108		$	(50	)	$	(64	)

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

Pension and Other Postretirement Contributions

During the first nine months of 2015 , DTE Energy made cash contributions of $175 million , including contributions from DTE Electric of $145 million , to its pension plans.

During 2015 , DTE Energy contributed the following amounts of DTE Energy common stock to the DTE Energy Company Master VEBA Trust for funding its other postretirement benefit plans:



Date	Number of Shares	Price per Share	Amount
			(In millions)
February 17, 2015	1,427,835	$81.91	$	117
			$	117

The above contribution was made on behalf of DTE Electric, who paid DTE Energy cash consideration of $117 million in February 2015.

During 2015 , DTE Energy also made cash contributions of $24 million , through contributions from DTE Gas, to the Master VEBA Trust for its other postretirement benefit plans. At the discretion of management, DTE Energy may make up to $60 million of additional contributions from DTE Electric to its other postretirement benefit plans in 2015 .

Plan Changes

In 2015, certain executive retirement benefit plans were amended to transfer the obligation for benefits as attributed to DTE Energy Corporate Services, LLC (LLC), a subsidiary of DTE Energy. The related plan liabilities were transferred from DTE Electric and DTE Gas to LLC. The related Rabbi Trust assets were also transferred to DTE Energy from DTE Electric.

NOTE 14 — STOCK-BASED COMPENSATION

The following table summarizes the components of stock-based compensation for DTE Energy:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
	(In millions)
Stock-based compensation expense	$	12	$	22	$	32	$	72
Tax benefit	$	5	$	8	$	13	$	27
Stock-based compensation cost capitalized in Property, plant, and equipment	$	2	$	4	$	5	$	11

Stock Options

The following table summarizes DTE Energy's stock option activity for the nine months ended September 30, 2015 :



	Number of Options		Weighted Average Exercise Price		Aggregate Intrinsic Value (In millions)
Options outstanding at December 31, 2014	444,278		$	43.56
Exercised	(178,017	)	$	45.07
Forfeited or expired	(3,979	)	$	44.72
Options outstanding and exercisable at September 30, 2015	262,282		$	42.52	$	9

As of September 30, 2015 , the weighted average remaining contractual life for the exercisable shares is 3.05 years . As of September 30, 2015 , all options were vested.

The intrinsic value of options exercised for the nine months ended September 30, 2015 and 2014 was $7 million for both periods. No option expense was recognized for the nine months ended September 30, 2015 and 2014, respectively .

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

Restricted Stock Awards

The following table summarizes DTE Energy’s restricted stock awards activity for the nine months ended September 30, 2015 :



	Restricted Stock		Weighted Average Grant Date Fair Value
Balance at December 31, 2014	416,318		$	62.82
Grants	143,800		$	83.44
Forfeitures	(8,975	)	$	73.62
Vested and issued	(158,920	)	$	55.36
Balance at September 30, 2015	392,223		$	73.15

Performance Share Awards

Performance shares awarded under the plan are for a specified number of shares of DTE Energy common stock that entitle the holder to receive a cash payment, shares of DTE Energy common stock or a combination thereof. The final value of the award is determined by the achievement of certain performance objectives and market conditions. The awards vest at the end of a specified period, usually three years . Awards granted in 2014 and 2015 were primarily deemed to be equity awards. The DTE Energy stock price and number of probable shares attributable to market conditions for such equity awards are fair valued only at the grant date. Performance shares awarded prior to 2014 are liability awards and are remeasured to fair value at each reporting period.

The following table summarizes DTE Energy’s performance share activity for the nine months ended September 30, 2015 :



	Performance Shares		Weighted Average Grant Date Fair Value
Balance at December 31, 2014	1,554,697		$	69.32
Grants	454,654		$	83.86
Forfeitures	(37,112	)	$	75.90
Payouts	(532,700	)	$	—
Balance at September 30, 2015	1,439,539		$	75.80

Unrecognized Compensation Costs

As of September 30, 2015 , DTE Energy had $60 million of total unrecognized compensation cost related to non-vested stock incentive plan arrangements. That cost is expected to be recognized over a weighted-average period of 1.23 years .

Allocated Stock-Based Compensation

DTE Electric received an allocation of costs from DTE Energy associated with stock-based compensation of $7 million and $14 million for the three months ended September 30, 2015 and 2014 , respectively while such allocation was $20 million and $43 million for the nine months ended September 30, 2015 and 2014, respectively .

NOTE 15 — SEGMENT AND RELATED INFORMATION

DTE Energy sets strategic goals, allocates resources, and evaluates performance based on the following structure:

Electric segment consists principally of DTE Electric, which is engaged in the generation, purchase, distribution, and sale of electricity to approximately 2.1 million residential, commercial, and industrial customers in southeastern Michigan.

Gas segment consists principally of DTE Gas, which is engaged in the purchase, storage, transportation, distribution, and sale of natural gas to approximately 1.2 million residential, commercial, and industrial customers throughout Michigan and the sale of storage and transportation capacity.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

Gas Storage and Pipelines consists of natural gas pipeline, gathering, and storage businesses.

Power and Industrial Projects is comprised primarily of projects that deliver energy and utility-type products and services to industrial, commercial, and institutional customers; produce REF; and sell electricity from renewable energy projects.

Energy Trading consists of energy marketing and trading operations.

Corporate and Other includes various holding company activities and holds certain non-utility debt and energy-related investments.

The federal income tax provisions or benefits of DTE Energy’s subsidiaries are determined on an individual company basis and recognize the tax benefit of tax credits and net operating losses, if applicable. The state and local income tax provisions of the utility subsidiaries are determined on an individual company basis and recognize the tax benefit of various tax credits and net operating losses, if applicable. The subsidiaries record federal, state, and local income taxes payable to or receivable from DTE Energy based on the federal, state, and local tax provisions of each company.

Inter-segment billing for goods and services exchanged between segments is based upon tariffed or market-based prices of the provider and primarily consists of the sale of reduced emissions fuel, power sales, and natural gas sales in the following segments:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
	(In millions)
Inter-segment Revenues
Electric	$	9	$	8	$	27	$	22
Gas	1		1		2		5
Gas Storage and Pipelines	1		1		7		9
Power and Industrial Projects	204		211		599		593
Energy Trading	7		8		23		24
Corporate and Other	1		1		2		2
	$	223	$	230	$	660	$	655

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued)

Financial data of the DTE Energy business segments follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(In millions)
Operating Revenues
Electric	$	1,386		$	1,358		$	3,737		$	4,049
Gas	153			149			1,018			1,182
Gas Storage and Pipelines	61			49			175			146
Power and Industrial Projects	585			605			1,708			1,703
Energy Trading	635			664			1,870			2,797
Corporate and Other	1			—			2			1
Reconciliation and Eliminations	(223		)	(230		)	(660		)	(655		)
Total	$	2,598		$	2,595		$	7,850		$	9,223



Net Income (Loss) Attributable to DTE Energy by Segment:
Electric	$	214		$	135		$	449		$	400
Gas	(11		)	(16		)	93			109
Gas Storage and Pipelines	27			20			79			59
Power and Industrial Projects	32			38			73			66
Energy Trading	12			(22		)	—			6
Corporate and Other	(9		)	1			(47		)	(34		)
Net Income Attributable to DTE Energy Company	$	265		$	156		$	647		$	606

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following combined discussion is separately filed by DTE Energy and DTE Electric. However, DTE Electric does not make any representation as to information related solely to DTE Energy or the subsidiaries of DTE Energy other than itself.

OVERVIEW

DTE Energy is a diversified energy company and is the parent company of DTE Electric and DTE Gas, regulated electric and natural gas utilities engaged primarily in the business of providing electricity and natural gas sales, distribution, and storage services throughout Michigan. DTE Energy operates three energy-related non-utility segments with operations throughout the United States.

Net Income attributable to DTE Energy in the third quarter of 2015 was $265 million , or $1.47 per diluted share, compared to Net Income attributable to DTE Energy of $156 million , or $0.88 per diluted share, in the third quarter of 2014 . Net Income attributable to DTE Energy in the nine months ended September 30, 2015 was $647 million , or $3.61 per diluted share, compared to Net Income attributable to DTE Energy of $606 million , or $3.42 per diluted share, in the nine months ended September 30, 2014 . The increase in Net Income in the third quarter is primarily due to increased earnings in the Electric and Energy Trading segments. The increase in Net Income for the nine months ended September 30, 2015 is primarily due to increased earnings in the Electric and Gas Storage and Pipelines segments, partially offset by decreased earnings in the Gas segment.

Please see detailed explanations of segment performance in the following Results of Operations section.

DTE Energy's strategy is to achieve long-term earnings growth, a strong balance sheet, and an attractive dividend yield.

DTE Energy's utilities' growth will be driven by base infrastructure, new generation, and environmental compliance capital investments. DTE Energy is focused on executing plans to achieve operational excellence and customer satisfaction with a focus on customer affordability. DTE Energy operates in a constructive regulatory environment and has solid relationships with its regulators.

DTE Energy has significant investments in non-utility businesses. DTE Energy employs disciplined investment criteria when assessing growth opportunities that leverage its assets, skills, and expertise and provides diversity in earnings and geography. Specifically, DTE Energy invests in targeted energy markets with attractive competitive dynamics where meaningful scale is in alignment with its risk profile. DTE Energy expects growth opportunities in the Gas Storage and Pipelines and Power and Industrial Projects segments.

A key priority for DTE Energy is to maintain a strong balance sheet which facilitates access to capital markets and reasonably priced short-term and long-term financing. Near-term growth will be funded through internally generated cash flows and the issuance of debt. DTE Energy has an enterprise risk management program that, among other things, is designed to monitor and manage exposure to earnings and cash flow volatility related to commodity price changes, interest rates, and counterparty credit risk.

CAPITAL INVESTMENTS

DTE Energy's utility businesses require significant capital investments to maintain and improve the electric generation and electric and natural gas distribution infrastructure and to comply with environmental regulations and renewable energy requirements.

DTE Electric's capital investments over the 2016-2020 period are estimated at $8.2 billion comprised of $3.8 billion for maintenance and other projects, $3.2 billion for distribution infrastructure, and $1.2 billion for new generation. Over the next fifteen years, DTE Electric plans to retire a portion of its coal-fired generation and to increase the proportion of its generation mix attributable to natural gas-fired generation and renewables. DTE Electric has acquired two natural gas facilities in 2015, as described in Note 4 to the Consolidated Financial Statements, " Acquisitions ". DTE Electric plans to seek regulatory approval in general rate case filings and renewable energy plan filings for capital expenditures consistent with prior ratemaking treatment.

DTE Gas's capital investments over the 2016-2020 period are estimated at $1.6 billion comprised of $750 million for base infrastructure, $650 million for gas main renewal, meter move out, and pipeline integrity programs, and $200 million for expenditures related to the NEXUS pipeline. In April 2013, the MPSC issued an order approving an infrastructure recovery mechanism for DTE Gas and authorized the recovery of the cost of service related to $77 million of annual investment in its gas main renewal, meter move out, and pipeline integrity programs. In November 2014, DTE Gas filed an application with the MPSC for approval of an increased infrastructure recovery mechanism surcharge to recover an additional $47 million of annual capital expenditures for its gas main renewal program. DTE Gas plans to seek regulatory approval in general rate case filings for base infrastructure capital expenditures consistent with prior ratemaking treatment.

DTE Energy's non-utility businesses capital investments are primarily for expansion, growth, and ongoing maintenance. Gas Storage and Pipelines's capital investments over the 2016-2020 period are estimated at $2.0 billion to $2.6 billion for gathering and pipeline investments and expansions, including the NEXUS pipeline. Power and Industrial Projects's capital investments over the 2016-2020 period are estimated at $600 million to $900 million for investments in cogeneration and on-site energy projects.

ENVIRONMENTAL MATTERS

The Registrants are subject to extensive environmental regulation. Additional costs may result as the effects of various substances on the environment are studied and governmental regulations are developed and implemented. Actual costs to comply could vary substantially. The Registrants expect to continue recovering environmental costs related to utility operations through rates charged to customers.

DTE Electric is subject to the EPA ozone and fine particulate transport and acid rain regulations that limit power plant emissions of sulfur dioxide and nitrogen oxides. Since 2005, the EPA and the State of Michigan have issued additional emission reduction regulations relating to ozone, fine particulate, regional haze, mercury, and other air pollution. These rules will lead to additional emission controls on fossil-fueled power plants to reduce nitrogen oxide, sulfur dioxide, acid gases, particulate matter, and mercury emissions. To comply with these requirements, DTE Electric spent approximately $2.2 billion through 2014 . It is estimated that DTE Electric will make capital expenditures of approximately $100 million in 2015 and approximately $50 million of additional capital expenditures in 2016 based on current regulations.

As directed by a June 2013 Presidential Memorandum, the EPA is implementing regulatory actions under the Clean Air Act to address emissions of greenhouse gases (GHGs) from the utility sector and other sectors of the economy. Among these actions, in August 2015, the EPA finalized performance standards for emissions of carbon dioxide from new and existing electric generating units (EGUs). The carbon performance standards, known as the Clean Power Plan (CPP), require states to meet emission reduction targets from existing fossil-fueled EGUs beginning in 2022. The EPA has finalized interim standards applicable from 2022 to 2029 leading to emission standards to be achieved in 2030. States must submit initial compliance plans in September 2016, but may request an extension to submit a final compliance plan by September 2018. States that fail to submit a plan or that do not meet EPA criteria for a complete plan will be subject to a federal plan that was proposed by the EPA with the final CPP.

The Registrants are working with the State of Michigan and other stakeholders to shape the CPP compliance plan for Michigan. The final carbon standards for new sources are not expected to have a material impact on the Registrants, since the Registrants have no plans to build new coal-fired generation. At the present time, it is not possible to determine the potential impact of the final performance standards for existing power plants due to the multitude of options available to states for compliance that require careful analysis and input from numerous stakeholders. Pending or future legislation or other regulatory actions could have a material impact on the Registrants' operations and financial position and the rates the Registrants charge its customers. Impacts include expenditures for environmental equipment beyond what is currently planned, financing costs related to additional capital expenditures, the purchase of emission credits from market sources, higher costs of purchased power, and the retirement of facilities where control equipment is not economical. The Registrants would seek to recover these incremental costs through increased rates charged to its utility customers as authorized by the MPSC.

Increased costs for energy produced from traditional coal-based sources due to recent, pending, and future regulatory initiatives, could also increase the economic viability of energy produced from renewable, natural gas-fired generation, and/or nuclear sources, of energy efficiency initiatives, and of the potential development of market-based trading of carbon instruments which could provide new business opportunities for DTE Energy's utility and non-utility segments. At the present time, it is not possible to quantify the financial impacts of these climate related regulatory initiatives on the Registrants or their customers.

For further discussion of environmental matters see Note 12 to the Consolidated Financial Statements, " Commitments and Contingencies ".

OUTLOOK

The next few years will be a period of rapid change for DTE Energy and for the energy industry. DTE Energy's strong utility base, combined with its integrated non-utility operations, position it well for long-term growth.

Looking forward, DTE Energy will focus on several areas that are expected to improve future performance:


•	electric and gas customer satisfaction;


•	electric reliability;


•	rate competitiveness and affordability;


•	regulatory stability and investment recovery for the electric and gas utilities;


•	growth of utility asset base;


•	employee engagement;


•	cost structure optimization across all business segments;


•	cash, capital, and liquidity to maintain or improve financial strength; and


•	investments that integrate assets and leverage skills and expertise.

DTE Energy will continue to pursue opportunities to grow its businesses in a disciplined manner if it can secure opportunities that meet its strategic, financial, and risk criteria.

RESULTS OF OPERATIONS

The following sections provide a detailed discussion of the operating performance and future outlook of DTE Energy's segments.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(In millions)
Net Income (Loss) Attributable to DTE Energy by Segment:
Electric	$	214		$	135		$	449		$	400
Gas	(11		)	(16		)	93			109
Gas Storage and Pipelines	27			20			79			59
Power and Industrial Projects	32			38			73			66
Energy Trading	12			(22		)	—			6
Corporate and Other	(9		)	1			(47		)	(34		)
Net Income Attributable to DTE Energy Company	$	265		$	156		$	647		$	606

ELECTRIC

The Results of Operations discussion for DTE Electric is presented in a reduced disclosure format in accordance with General Instruction H(2) of Form 10-Q.

The Electric segment consists principally of DTE Electric. Results for Electric segment with a reconciliation to DTE Electric are discussed below:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
	(In millions)
Operating Revenues	$	1,386	$	1,358	$	3,737	$	4,049
Fuel and purchased power	441		430		1,212		1,328
Gross Margin	945		928		2,525		2,721
Operation and maintenance	333		352		969		1,023
Depreciation and amortization	142		239		465		699
Taxes other than income	73		67		214		203
Asset (gains) losses and impairments, net	—		—		—		(1		)
Operating Income	397		270		877		797
Other (Income) and Deductions	67		61		186		170
Income Tax Expense	116		74		242		227
Segment Net Income Attributable to DTE Energy Company	$	214	$	135	$	449	$	400
Reconciliation of Segment Net Income Attributable to DTE Energy Company to DTE Electric Net Income	2		1		3		3
DTE Electric Net Income Attributable to DTE Energy Company	$	216	$	136	$	452	$	403

See DTE Electric's Consolidated Statement of Operations for a complete view of its results.

Gross Margin increased $17 million and decreased $196 million in the three and nine months ended September 30, 2015 , respectively. Revenues associated with certain mechanisms and surcharges are offset by related expenses elsewhere in the Registrants' Consolidated Statements of Operations.

The following table details changes in various gross margin components relative to the comparable prior period:



	Three Months			Nine Months
	(In millions)
Securitization bond and tax surcharge	$	(126	)	$	(297	)
Base sales, inclusive of weather effect	79			54
PSCR disallowance	—			(19		)
July 2015 rate self-implementation	53			53
Regulatory mechanisms and other	11			13
Increase (decrease) in Electric segment gross margin	$	17		$	(196	)
Reconciliation of Electric segment gross margin to DTE Electric gross margin	—			(1		)
Decrease in DTE Electric gross margin	$	17		$	(197	)



	Three Months Ended September 30,		Nine Months Ended September 30,
	2015	2014	2015	2014
	(In thousands of MWh)
DTE Electric Sales
Residential	4,511	3,932	11,687	11,362
Commercial	4,665	4,541	13,102	12,757
Industrial	2,277	2,710	7,275	7,765
Other	62	62	209	438
	11,515	11,245	32,273	32,322
Interconnection sales (a)	958	1,416	3,603	2,513
Total DTE Electric Sales	12,473	12,661	35,876	34,835

DTE Electric Deliveries
Retail and wholesale	11,515	11,245	32,273	32,322
Electric retail access, including self generators (b)	1,263	1,334	3,749	3,838
Total DTE Electric Sales and Deliveries	12,778	12,579	36,022	36,160

______________________________


(a)	Represents power that is not distributed by DTE Electric.


(b)	Represents deliveries for self generators who have purchased power from alternative energy suppliers to supplement their power requirements.

DTE Electric residential and commercial sales increased due primarily to favorable weather, while industrial sales decreased due primarily to lower steel customer load.

Operation and maintenance expense decreased $19 million and $54 million in the three and nine months ended September 30, 2015 , respectively. The decrease in the third quarter was due primarily to decreased restoration and line clearance expenses of $32 million, partially offset by increased power plant generation expenses of $10 million and increased employee benefits of $4 million. The decrease in the nine month period was due primarily to decreased restoration and line clearance expenses of $55 million and decreased power plant generation expenses of $18 million, partially offset by $19 million of expenses related to the transition of PLD customers to DTE Electric's distribution system effective July 1, 2014. The MPSC approved a TRM that provides for recovery of the deferred net incremental revenue requirement associated with the transition that is reflected in the Depreciation and amortization line in DTE Energy's and DTE Electric's Consolidated Statements of Operations.

Depreciation and amortization expense decreased $97 million and $234 million in the three and nine months ended September 30, 2015 , respectively. The decrease in the third quarter was due primarily to a decrease in amortization of regulatory assets related to Securitization of $114 million, partially offset by $15 million of increased expenses due to an increased depreciable base and $2 million associated with the TRM. The decrease in the nine month period was due primarily to a decrease in amortization of regulatory assets related to Securitization of $269 million and $17 million associated with the TRM, partially offset by $52 million of increased expenses due to an increased depreciable base.

Other (Income) and Deductions increased $6 million and $16 million in the three and nine months ended September 30, 2015 , respectively. The increases were due primarily to higher interest expenses and lower investment earnings.

Outlook — DTE Electric will continue to move forward in its efforts to achieve operational excellence, sustained strong cash flows, and earn its authorized return on equity. DTE Electric expects that planned significant capital investments will result in earnings growth. Looking forward, additional factors may impact earnings such as weather, the outcome of regulatory proceedings, benefit plan design changes, investment returns and changes in discount rate assumptions in benefit plans and health care costs, uncertainty of legislative or regulatory actions regarding climate change and electric retail access, and effects of energy efficiency programs. DTE Electric residential and commercial sales have increased due primarily to improved economic activity and have been substantially offset by energy efficiency measures taken by our customers. DTE Electric expects to continue its efforts to improve productivity and decrease costs while improving customer satisfaction with consideration of customer rate affordability.

On December 19, 2014, DTE Electric filed a rate case with the MPSC requesting an increase in base rates of $370 million based on a projected twelve month period ending June 30, 2016. On July 1, 2015, DTE Electric realized a rate increase of $230 million consisting of $190 million of self-implemented base rate increase related to the December 19, 2014 rate request and $40 million associated with the required elimination of a credit surcharge. A final order in this rate case is expected in December 2015.

GAS

The Gas segment consists principally of DTE Gas. Gas results are discussed below:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015		2014
	(In millions)
Operating Revenues	$	153		$	149		$	1,018	$	1,182
Cost of gas	19			13			387		521
Gross Margin	134			136			631		661
Operation and maintenance	101			112			323		337
Depreciation and amortization	25			25			76		73
Taxes other than income	13			13			49		46
Operating Income (Loss)	(5		)	(14		)	183		205
Other (Income) Deductions	13			11			38		34
Income Tax Expense (Benefit)	(7		)	(9		)	52		62
Net Income (Loss) Attributable to DTE Energy Company	$	(11	)	$	(16	)	$	93	$	109

Gross Margin decreased $2 million and $30 million in the three and nine months ended September 30, 2015 , respectively. Revenues associated with certain surcharges are offset by related expenses elsewhere in DTE Energy's Consolidated Statements of Operations.

The following table details changes in various gross margin components relative to the comparable prior period:



	Three Months			Nine Months
	(In millions)
Weather	$	(2	)	$	(25	)
Midstream storage and transportation revenues	(1		)	(13		)
Infrastructure recovery mechanism	3			9
Other	(2		)	(1		)
Decrease in gross margin	$	(2	)	$	(30	)



	Three Months Ended September 30,		Nine Months Ended September 30,
	2015	2014	2015	2014
Gas Markets (in Bcf)
Gas sales	7	9	92	97
End user transportation	33	28	130	122
	40	37	222	219
Intermediate transportation	64	70	226	244
	104	107	448	463

Operation and maintenance expense decreased $11 million and $14 million in the three and nine months ended September 30, 2015 , respectively. The decrease in the third quarter was due primarily to decreased benefit expenses of $6 million, decreased gas operations expenses of $2 million, decreased transmission expenses of $2 million and decreased energy optimization expenses of $1 million. The decrease in the nine month period was due primarily to decreased gas operations expenses of $9 million, decreased employee benefits expenses of $7 million, decreased transmission expenses of $4 million, decreased uncollectible expenses of $2 million, partially offset by increased corporate administrative expenses of $6 million and increased energy optimization expenses of $2 million.

Outlook — DTE Gas will continue to move forward in its efforts to achieve operational excellence, sustained strong cash flows, and earn its authorized return on equity. DTE Gas expects that planned significant infrastructure capital investments will result in earnings growth. Looking forward, additional factors may impact earnings such as weather, the outcome of regulatory proceedings, benefit plan design changes, and investment returns and changes in discount rate assumptions in benefit plans and health care costs. DTE Gas expects to continue its efforts to improve productivity and decrease costs while improving customer satisfaction with consideration of customer rate affordability.

GAS STORAGE AND PIPELINES

The Gas Storage and Pipelines segment consists of the non-utility gas pipelines and storage businesses. Gas Storage and Pipelines results are discussed below:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(In millions)
Operating Revenues	$	61		$	49		$	175		$	146
Operation and maintenance	14			11			39			32
Depreciation and amortization	8			9			22			25
Taxes other than income	1			1			3			3
Operating Income	38			28			111			86
Other (Income) and Deductions	(8		)	(6		)	(22		)	(14		)
Income Tax Expense	18			13			52			39
Net Income	28			21			81			61
Net Income Attributable to Noncontrolling Interests	1			1			2			2
Net Income Attributable to DTE Energy Company	$	27		$	20		$	79		$	59

Operating Revenues increased $12 million and $29 million in the three and nine months ended September 30, 2015 , respectively. The increases were due primarily to increased volumes on the Bluestone pipeline and Susquehanna gathering systems, partially offset by decreased gas storage revenues which were higher in early 2014 due to weather favorability.

Operation and maintenance expenses increased $3 million and $7 million in the three and nine months ended September 30, 2015 , respectively. The increases were due primarily to increased activity on the Bluestone and Susquehanna projects and increased gas storage operations expense.

Other (Income) and Deductions increased $8 million in the nine months ended September 30, 2015 . The increase was due to increased earnings from pipeline investments. In 2014 , the earnings from one pipeline investment were negatively impacted by a higher revenue deferral for depreciation collected in FERC-approved tariff rates in excess of depreciation expense.

Outlook — DTE Energy's Gas Storage and Pipelines business expects to maintain its steady growth by developing an asset portfolio with multiple growth platforms through investment in new projects and expansions. Gas Storage and Pipelines will continue to look for additional investment opportunities and other storage and pipeline projects at favorable prices. The capacity expansion of Bluestone lateral pipeline in Susquehanna County, Pennsylvania and Broome County, New York, is progressing as planned. Expansion activities completed in 2015 include a second compressor facility and approximately six miles of additional pipeline loop to accommodate increased shipper demand. Through Gas Storage and Pipeline's long term agreement with Southwestern Energy Production Company, DTE Energy believes Bluestone lateral and Susquehanna gathering system are strategically positioned for future growth of the Marcellus shale.

Progress continues on preliminary development activities on the NEXUS pipeline, a transportation path to transport Appalachian Basin shale gas, including Utica and Marcellus shale gas, directly to consuming markets in northern Ohio, southeastern Michigan, and Dawn Ontario. DTE Energy owns a 50% partnership interest in the NEXUS pipeline. A FERC application is expected to be filed in the fourth quarter of 2015 with an estimated in service date in the fourth quarter of 2017.

POWER AND INDUSTRIAL PROJECTS

The Power and Industrial Projects segment is comprised primarily of projects that deliver energy and utility-type products and services to industrial, commercial, and institutional customers; produce REF, and sell electricity from renewable energy projects. Power and Industrial Projects results are discussed below:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(In millions)
Operating Revenues	$	585		$	605		$	1,708		$	1,703
Operation and maintenance	569			591			1,687			1,695
Depreciation and amortization	20			19			60			56
Taxes other than income	3			4			12			12
Asset (gains) losses and impairments, net	1			(3		)	9			(10		)
Operating Loss	(8		)	(6		)	(60		)	(50		)
Other (Income) and Deductions	(20		)	(24		)	(54		)	(45		)
Income Taxes
Expense (Benefit)	5			8			(2		)	(2		)
Production Tax Credits	(23		)	(29		)	(71		)	(72		)
	(18		)	(21		)	(73		)	(74		)
Net Income	30			39			67			69
Net Income (Loss) Attributable to Noncontrolling Interests	(2		)	1			(6		)	3
Net Income Attributable to DTE Energy Company	$	32		$	38		$	73		$	66

Operating Revenues decreased $20 million and increased $5 million in the three and nine months ended September 30, 2015 , respectively. The decrease in the third quarter was due primarily to lower coal prices associated with the REF and steel businesses of $18 million, and lower generation associated with renewable projects of $3 million. The increase in the nine month period was due primarily to an increase in volumes from REF projects of $32 million and higher price and volume related to landfill gas projects of $6 million, partially offset by lower coal prices associated with the steel business of $19 million and a decrease primarily due to lower natural gas prices and volumes associated with on-site energy projects of $14 million.

Operation and maintenance expense decreased $22 million and $8 million in the three and nine months ended September 30, 2015 , respectively. The decrease in the third quarter was due primarily to lower coal prices associated with the REF and steel businesses of $18 million, and lower fuel price and generation associated with renewable projects of $5 million, partially offset by increased maintenance at the Michigan coke battery facility of $4 million. The decrease in the nine month period was due primarily to lower coal prices of $19 million and lower maintenance expenses of $3 million associated with the steel business, lower natural gas prices and volumes associated with the on-site energy projects of $16 million, and lower fuel price and generation associated with renewable projects of $3 million, partially offset by an increase in volumes from REF projects of $32 million.

Asset (gains) losses and impairments, net decreased by $4 million and $19 million in the three and nine months ended September 30, 2015 , respectively. The decrease in the third quarter was due primarily to the maturation of a steel-related installment sales contract. The decrease in the nine month period was due primarily to asset impairments resulting from contract terminations, partially offset by gains associated with the sale of landfill gas projects.

Other (Income) and Deductions decreased by $4 million and increased by $9 million in the three and nine months ended September 30, 2015 , respectively. The increase in the nine month period was due primarily to higher volumes of refined coal produced at REF sites with investors and higher equity earnings at various projects.

Production Tax Credits decreased by $6 million and $1 million in the three and nine months ended September 30, 2015 , respectively, due primarily to the reduction of ownership interests in REF projects.

Outlook — Power and Industrial Projects has constructed and placed in service REF facilities at eight sites including facilities located at five third party owned coal-fired power plants. DTE Energy has sold membership interests in four of the facilities and entered into a lease arrangement in one facility. DTE Energy will continue to optimize these facilities by seeking investors or entering into lease arrangements for facilities operating at DTE Electric and other utility sites. DTE Energy agreed to relocate underutilized facilities to a third-party owned coal-fired power plant. The new site is expected to be operational in the fourth quarter of 2015. In addition, DTE Energy has entered into an agreement to operate an REF facility owned by an outside party located at a third-party owned coal-fired power plant.

DTE Energy expects sustained production levels of metallurgical coke and pulverized coal supplied to steel industry customers for 2015. Substantially all of the metallurgical coke margin is maintained under long-term contracts. We are currently negotiating the extension of one of these contracts which expires at the end of 2015. A recent downturn in the steel industry in the United States will likely negatively impact the volume and pricing of metallurgical coke sales in 2016. The segment has five renewable power generation facilities in operation. One of these renewable facilities will be ceasing operations and closing the plant in the fourth quarter of 2015. On-site energy services will continue to be delivered in accordance with the terms of long-term contracts. DTE Energy will continue to look for additional investment opportunities and other energy projects at favorable prices.

Power and Industrial Projects will continue to leverage its extensive energy-related operating experience and project management capability to develop additional energy projects to serve energy intensive industrial customers.

ENERGY TRADING

Energy Trading focuses on physical and financial power and natural gas marketing and trading, structured transactions, enhancement of returns from DTE Energy’s asset portfolio, and optimization of contracted natural gas pipeline transportation and storage, and generating capacity positions. Energy Trading also provides natural gas, power, and related services, which may include the management of associated storage and transportation contracts on the customers’ behalf, and the supply or purchase of renewable energy credits to various customers. Energy Trading results are discussed below:



	Three Months Ended September 30,					Nine Months Ended September 30,
	2015		2014			2015			2014
	(In millions)
Operating Revenues	$	635	$	664		$	1,870		$	2,797
Fuel, purchased power, and gas	597		679			1,813			2,728
Gross Margin	38		(15		)	57			69
Operation and maintenance	17		19			51			51
Depreciation and amortization	1		1			1			1
Taxes other than income	—		—			3			3
Operating Income (Loss)	20		(35		)	2			14
Other (Income) and Deductions	1		1			3			5
Income Tax Expense (Benefit)	7		(14		)	(1		)	3
Net Income (Loss) Attributable to DTE Energy Company	$	12	$	(22	)	$	—		$	6

Operating Revenues and Fuel, purchased power, and gas were impacted by a decrease in gas prices, partially offset by an increase in volumes, primarily in Energy Trading's gas structured strategy in the three and nine months ended September 30, 2015 .

Gross margin increased $53 million and decreased $12 million in the three and nine months ended September 30, 2015 , respectively. The increase in the third quarter was due to an increase in unrealized margins of $60 million, partially offset by a decrease in realized margins of $7 million. The increase in unrealized margins of $60 million is due to favorable results of $88 million, primarily in the gas structured, power full requirements, and gas storage strategies, partially offset by unfavorable results of $28 million, primarily in the power and gas trading strategies. The decrease in realized margins of $7 million is due to unfavorable results of $25 million, primarily in the power full requirements strategy, partially offset by favorable results of $18 million, primarily in the gas and power trading strategies.

The decrease in the nine month period was due to a decrease in realized margins of $76 million, partially offset by an increase in unrealized margins of $64 million. The decrease in realized margins of $76 million is due to unfavorable results of $155 million, primarily in the gas structured, and power trading strategies, partially offset by favorable results of $79 million, primarily in the power full requirements strategy. The increase in unrealized margins of $64 million is due to favorable results of $69 million, primarily in the gas structured and gas transportation strategies, partially offset by unfavorable results of $5 million, primarily in the gas trading strategy.

During the first quarter of 2015 we experienced slightly colder than normal weather conditions on average in the gas and power markets we serve, unlike the extreme weather conditions in the Midwest and Northeast we experienced in the first quarter of 2014. Consequently, this led to less favorable results in our gas asset optimization strategies due to lower gas prices as compared to 2014, partially offset by lower realized losses from our power full requirements strategy as compared to 2014.

Natural gas structured transactions typically involve a physical purchase or sale of natural gas in the future and/or natural gas basis financial instruments which are derivatives and a related non-derivative pipeline transportation contract. These gas structured transactions can result in significant earnings volatility as the derivative components are marked-to-market without revaluing the related non-derivative contracts. Included in the favorable unrealized results of $88 million in the three months ended September 30, 2015 are timing related gains and losses related to gas strategies of $68 million. The timing related items of $68 million include the variance of timing losses of $40 million in the third quarter of 2014, and timing gains of $28 million in the third quarter of 2015 which will reverse in future periods as the underlying contracts settle. Included in the unfavorable realized results of $25 million in the three months ended September 30, 2015 are timing related gains related to gas strategies of $6 million recognized in previous years that reversed as the underlying contracts were settled.

Included in the unfavorable realized results of $155 million in the nine months ended September 30, 2015 are timing related gains and losses related to gas strategies of $91 million recognized in previous years that reversed as the underlying contracts settled. The timing related items of $91 million are comprised of a reversal of timing related losses of $58 million in 2014, and a reversal of timing gains of $33 million in 2015. Included in the favorable unrealized results of $69 million in the nine months ended September 30, 2015, are timing related gains related to gas strategies of $43 million. The timing related items of $43 million are the variance of timing losses of $50 million in 2014 and $7 million in 2015 which will reverse in future periods as the underlying contracts settle.

Outlook — In the near-term, Energy Trading expects market conditions to remain challenging and the profitability of this segment may be impacted by the volatility in commodity prices and the uncertainty of impacts associated with financial reform, regulatory changes, and changes in operating rules of regional transmission organizations.

The Energy Trading portfolio includes financial instruments, physical commodity contracts, and natural gas inventory, as well as contracted natural gas pipeline transportation and storage and generation capacity positions. Energy Trading also provides natural gas, power, and related services, which may include the management of associated storage and transportation contracts on the customers' behalf, and the supply or purchase of renewable energy credits to various customers. Significant portions of the Energy Trading portfolio are economically hedged. Most financial instruments and physical power and natural gas contracts are deemed derivatives, whereas natural gas inventory, pipeline transportation, renewable energy credits, and storage assets are not derivatives. As a result, DTE Energy will experience earnings volatility as derivatives are marked-to-market without revaluing the underlying non-derivative contracts and assets. Energy Trading's strategy is to economically manage the price risk of these underlying non-derivative contracts and assets with futures, forwards, swaps, and options. This results in gains and losses that are recognized in different interim and annual accounting periods.

See Notes 8 and 9 to the Consolidated Financial Statements, " Fair Value " and " Financial and Other Derivative Instruments ", respectively.

CORPORATE AND OTHER

Corporate and Other includes various holding company activities and holds certain non-utility debt and energy-related investments. The net loss of $9 million and the net loss of $47 million in the three and nine months ended September 30, 2015 , respectively, represents an increase of $10 million and an increase of $13 million , respectively, from the net income of $1 million and net loss of $34 million in the comparable 2014 periods. The increased losses were primarily due to income tax adjustments, higher interest costs, and higher benefit costs, partially offset, in the nine-month period, by lower deferred tax expense due to the impact of New York state income tax reform recorded in March 2014.

CAPITAL RESOURCES AND LIQUIDITY

Cash Requirements

DTE Energy uses cash to maintain and expand the electric and natural gas utilities and to grow the non-utility businesses, retire and pay interest on long-term debt, and pay dividends. DTE Energy believes it will have sufficient internal and external capital resources to fund anticipated capital and operating requirements. DTE Energy expects that cash from operations in 2015 will be approximately $1.8 billion, comparable to the 2014 level. DTE Energy anticipates base level utility capital investments, environmental, renewable and energy optimization expenditures, expenditures for non-utility businesses, and contributions to equity method investees in 2015 of up to approximately $2.5 billion . DTE Energy plans to seek regulatory approval to include utility capital expenditures in regulatory rate base consistent with prior treatment. Capital spending for growth of existing or new non-utility businesses will depend on the existence of opportunities that meet strict risk-return and value creation criteria.



	Nine Months Ended September 30,
	2015			2014
Cash and Cash Equivalents	(In millions)
Cash Flow From (Used For)
Operating Activities:
Net Income	$	643		$	610
Adjustments to reconcile Net Income to Net cash from operating activities:
Depreciation and amortization	625			855
Nuclear fuel amortization	40			33
Allowance for equity funds used during construction	(16		)	(16		)
Deferred income taxes	251			244
Asset (gains) losses and impairments, net	9			(10		)
Working capital and other	(84		)	(418		)
Net cash from operating activities	1,468			1,298
Investing Activities:
Plant and equipment expenditures — utility	(1,239		)	(1,295		)
Plant and equipment expenditures — non-utility	(162		)	(207		)
Acquisition	(241		)	—
Proceeds from sale of assets	16			36
Other	54			9
Net cash used for investing activities	(1,572		)	(1,457		)
Financing Activities:
Issuance of long-term debt, net of issuance costs	956			1,289
Redemption of long-term debt	(260		)	(1,222		)
Short-term borrowings, net	(213		)	522
Issuance of common stock	9			—
Repurchase of common stock	—			(52		)
Dividends on common stock and other	(369		)	(370		)
Net cash from financing activities	123			167
Net Increase in Cash and Cash Equivalents	$	19		$	8

Cash from Operating Activities

A majority of DTE Energy's operating cash flow is provided by the electric and natural gas utilities, which are significantly influenced by factors such as weather, electric retail access, regulatory deferrals, regulatory outcomes, economic conditions, changes in working capital, and operating costs.

Cash from operations in the nine months ended September 30, 2015 increased by $170 million compared to the nine months ended September 30, 2014 . The operating cash flow comparison reflects an increase in cash from working capital items, partially offset by decreased Net Income after adjusting for non-cash and non-operating items (primarily depreciation and amortization, nuclear fuel amortization, deferred income taxes, and asset impairments).

Cash used for Investing Activities

Cash inflows associated with investing activities are primarily generated from the sale of assets, while cash outflows are the result of plant and equipment expenditures and acquisitions. In any given year, DTE Energy looks to realize cash from under-performing or non-strategic assets or matured fully valued assets.

Capital spending within the utility businesses is primarily to maintain and improve the electric generation and electric and natural gas distribution infrastructure, and to comply with environmental regulations and renewable energy requirements.

Capital spending within the non-utility businesses is primarily for ongoing maintenance, expansion, and growth. DTE Energy looks to make growth investments that meet strict criteria in terms of strategy, management skills, risks, and returns. All new investments are analyzed for their rates of return and cash payback on a risk adjusted basis. DTE Energy has been disciplined in how it deploys capital and will not make investments unless they meet the criteria. For new business lines, DTE Energy initially invests based on research and analysis. DTE Energy starts with a limited investment, evaluates the results, and either expands or exits the business based on those results. In any given year, the amount of growth capital will be determined by the underlying cash flows of DTE Energy with a clear understanding of any potential impact on its credit ratings.

Net cash used for investing activities increased by $115 million in 2015 due to the acquisition described in Note 4 to the Consolidated Financial Statements, " Acquisitions ", and decreased proceeds from the sale of assets, partially offset by decreased capital expenditures by the utility and non-utility businesses and the decrease in restricted cash for the redemption of Securitization bonds.

Cash from Financing Activities

DTE Energy relies on both short-term borrowing and long-term financing as a source of funding for capital requirements not satisfied by its operations.

DTE Energy's strategy is to have a targeted debt portfolio blend of fixed and variable interest rates and maturity. DTE Energy continually evaluates its leverage target, which is currently 50% to 53%, to ensure it is consistent with the objective of a strong investment grade debt rating.

Net cash from financing activities decreased by $44 million in 2015 due primarily to decreased issuances of long-term debt, decreased short-term borrowings, and increased dividends on common stock, partially offset by decreased redemptions of long-term debt and decreased repurchases of common stock.

Outlook

DTE Energy expects cash flow from operations to increase over the long-term primarily as a result of growth from the utility and non-utility businesses. Growth in the utilities is expected to be driven primarily by capital spending to maintain and improve the electric generation and electric and natural gas distribution infrastructure and to comply with new and existing state and federal regulations that will result in additional environmental and renewable energy investments which will increase the base from which rates are determined. Non-utility growth is expected from additional investments primarily in the Gas Storage and Pipelines and Power and Industrial Projects segments.

DTE Energy may be impacted by the timing of collection or refund of various recovery and tracking mechanisms as a result of timing of MPSC orders. Energy prices are likely to be a source of volatility with regard to working capital requirements for the foreseeable future. DTE Energy continues its efforts to identify opportunities to improve cash flow through working capital initiatives and maintaining flexibility in the timing and extent of long-term capital projects.

DTE Energy has approximately $470 million in long-term debt maturing in the next twelve months. The repayment of the debt is expected to be paid through internally generated funds or the issuance of long-term debt.

DTE Energy has approximately $1.8 billion of available liquidity at September 30, 2015 , consisting of cash and amounts available under unsecured revolving credit agreements.

During the first nine months of 2015 , DTE Energy made cash contributions of $175 million , including contributions from DTE Electric of $145 million, to its pension plans.

During the first nine months of 2015, DTE Energy made cash contributions of $24 million, through contributions from DTE Gas, to its other postretirement benefit plans. In February 2015, DTE Energy contributed approximately $117 million of DTE Energy common stock to the DTE Energy Company Master VEBA Trust for its other postretirement benefit plans. The stock contribution was made on behalf of DTE Electric, who paid DTE Energy cash consideration of $117 million. At the discretion of management, DTE Energy may make up to $60 million of additional contributions from DTE Electric to its other postretirement benefit plans in 2015 .

Various subsidiaries of DTE Energy have entered into contracts which contain ratings triggers and are guaranteed by DTE Energy. These contracts contain provisions which allow the counterparties to require that DTE Energy post cash or letters of credit as collateral in the event that DTE Energy’s credit rating is downgraded below investment grade. Certain of these provisions (known as “hard triggers”) state specific circumstances under which DTE Energy can be required to post collateral upon the occurrence of a credit downgrade, while other provisions (known as “soft triggers”) are not as specific. For contracts with soft triggers, it is difficult to estimate the amount of collateral which may be requested by counterparties and/or which DTE Energy may ultimately be required to post. The amount of such collateral which could be requested fluctuates based on commodity prices (primarily natural gas, power, and coal) and the provisions and maturities of the underlying transactions. As of September 30, 2015 , DTE Energy's contractual obligation to post collateral in the form of cash or letter of credit in the event of a downgrade to below investment grade, under both hard trigger and soft trigger provisions, was approximately $420 million .

DTE Energy believes it will have sufficient operating flexibility, cash resources, and funding sources to maintain adequate amounts of liquidity and to meet future operating cash and capital expenditure needs. However, virtually all of DTE Energy's businesses are capital intensive, or require access to capital, and the inability to access adequate capital could adversely impact earnings and cash flows.

See Notes 6, 10, 11 and 12 to the Consolidated Financial Statements, " Regulatory Matters ", " Long-Term Debt ", " Short-Term Credit Arrangements and Borrowings ", and " Commitments and Contingencies ", respectively.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 3 to the Consolidated Financial Statements, " New Accounting Pronouncements ".

FAIR VALUE

Derivatives are generally recorded at fair value and shown as Derivative assets or liabilities. Contracts DTE Energy typically classifies as derivative instruments include power, natural gas, oil, and certain coal forwards, futures, options and swaps, and foreign currency exchange contracts. Items DTE Energy does not generally account for as derivatives include natural gas inventory, pipeline transportation contracts, renewable energy credits, and storage assets. See Notes 8 and 9 to the Consolidated Financial Statements, " Fair Value " and " Financial and Other Derivative Instruments ", respectively.

The tables below do not include the expected earnings impact of non-derivative natural gas storage, transportation, certain power contracts, and renewable energy credits which are subject to accrual accounting. Consequently, gains and losses from these positions may not match with the related physical and financial hedging instruments in some reporting periods, resulting in volatility in the Registrants' reported period-by-period earnings; however, the financial impact of the timing differences will reverse at the time of physical delivery and/or settlement.

The Registrants manage their MTM risk on a portfolio basis based upon the delivery period of their contracts and the individual components of the risks within each contract. Accordingly, the Registrants record and manage the energy purchase and sale obligations under their contracts in separate components based on the commodity (e.g. electricity or natural gas), the product (e.g. electricity for delivery during peak or off-peak hours), the delivery location (e.g. by region), the risk profile (e.g. forward or option), and the delivery period (e.g. by month and year).

The Registrants have established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value in three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). For further discussion of the fair value hierarchy, see Note 8 to Consolidated Financial Statements, " Fair Value ".

The following tables provide details on changes in the Registrants' MTM net asset (or liability) position for the nine months ended September 30, 2015 :



	Total
	(In millions)
MTM at December 31, 2014	$	87
Reclassified to realized upon settlement	(38		)
Changes in fair value recorded to income	(8		)
Amounts recorded to unrealized income	(46		)
Changes in fair value recorded in regulatory liabilities	14
Change in collateral held by (for) others	1
Option premiums paid (received) and other	(1		)
MTM at September 30, 2015	$	55

The table below shows the maturity of the the Registrants' MTM positions. The positions from 2018 and beyond principally represent longer tenor gas structured transactions:



Source of Fair Value	2015			2016			2017			2018 and Beyond		Total Fair Value
	(In millions)
Level 1	$	(8	)	$	(10	)	$	(12	)	$	1	$	(29	)
Level 2	8			25			3			5		41
Level 3	—			15			7			1		23
MTM before collateral adjustments	$	—		$	30		$	(2	)	$	7	35
Collateral adjustments												20
MTM at September 30, 2015												$	55

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market Price Risk

The Electric and Gas businesses have commodity price risk, primarily related to the purchases of coal, natural gas, uranium, and electricity. However, the Registrants do not bear significant exposure to earnings risk as such changes are included in the PSCR and GCR regulatory rate-recovery mechanisms. In addition, changes in the price of natural gas can impact the valuation of lost and stolen gas, storage sales, and transportation services revenue at the Gas segment. The Gas segment manages its market price risk related to storage sales revenue primarily through the sale of long-term storage contracts. The Registrants are exposed to short-term cash flow or liquidity risk as a result of the time differential between actual cash settlements and regulatory rate recovery.

DTE Energy's Gas Storage and Pipelines business segment has exposure to natural gas price fluctuations which impact the pricing for natural gas storage and transportation. DTE Energy manages its exposure through the use of short, medium, and long-term storage and transportation contracts.

DTE Energy's Power and Industrial Projects business segment is subject to electricity and natural gas product price risk. DTE Energy manages its exposure to commodity price risk through the use of long-term contracts.

DTE Energy's Energy Trading business segment has exposure to electricity, natural gas, coal, crude oil, heating oil, and foreign currency exchange price fluctuations. These risks are managed by the energy marketing and trading operations through the use of forward energy, capacity, storage, options, and futures contracts, within pre-determined risk parameters.

Credit Risk

Bankruptcies

Trading Activities

DTE Energy is exposed to credit risk through trading activities. Credit risk is the potential loss that may result if the trading counterparties fail to meet their contractual obligations. DTE Energy utilizes both external and internal credit assessments when determining the credit quality of trading counterparties.

The following table displays the credit quality of DTE Energy's trading counterparties as of September 30, 2015 :



	Credit Exposure Before Cash Collateral		Cash Collateral			Net Credit Exposure
	(In millions)
Investment Grade (a)
A− and Greater	$	122	$	(1	)	$	121
BBB+ and BBB	264		—			264
BBB−	50		—			50
Total Investment Grade	436		(1		)	435
Non-investment grade (b)	3		—			3
Internally Rated — investment grade (c)	193		—			193
Internally Rated — non-investment grade (d)	13		(1		)	12
Total	$	645	$	(2	)	$	643

_______________________________________


(a)	This category includes counterparties with minimum credit ratings of Baa3 assigned by Moody’s Investors Service (Moody’s) or BBB- assigned by Standard & Poor’s Rating Group, a division of McGraw-Hill Companies, Inc. (Standard & Poor’s). The five largest counterparty exposures, combined, for this category represented approximately 24% of the total gross credit exposure.


(b)	This category includes counterparties with credit ratings that are below investment grade. The five largest counterparty exposures, combined, for this category represented less than 1% of the total gross credit exposure.


(c)	This category includes counterparties that have not been rated by Moody’s or Standard & Poor’s, but are considered investment grade based on DTE Energy’s evaluation of the counterparty’s creditworthiness. The five largest counterparty exposures, combined, for this category represented approximately 13% of the total gross credit exposure.


(d)	This category includes counterparties that have not been rated by Moody’s or Standard & Poor’s, and are considered non-investment grade based on DTE Energy’s evaluation of the counterparty’s creditworthiness. The five largest counterparty exposures, combined, for this category represented approximately 2% of the total gross credit exposure.

Other

The Registrants engage in business with customers that are non-investment grade. The Registrants closely monitor the credit ratings of these customers and, when deemed necessary and permitted under our tariffs, request collateral or guarantees from such customers to secure their obligations.

Interest Rate Risk

DTE Energy is subject to interest rate risk in connection with the issuance of debt. In order to manage interest costs, DTE Energy may use treasury locks and interest rate swap agreements. DTE Energy's exposure to interest rate risk arises primarily from changes in U.S. Treasury rates, commercial paper rates and London Inter-Bank Offered Rates (LIBOR). As of September 30, 2015 , DTE Energy had a floating rate debt-to-total debt ratio of approximately 0.1% .

Foreign Currency Exchange Risk

DTE Energy has foreign currency exchange risk arising from market price fluctuations associated with fixed priced contracts. These contracts are denominated in Canadian dollars and are primarily for the purchase and sale of natural gas and power as well as for long-term transportation capacity. To limit DTE Energy's exposure to foreign currency exchange fluctuations, DTE Energy has entered into a series of foreign currency exchange forward contracts through December 2019 .

Summary of Sensitivity Analyses

The Registrants performed sensitivity analyses on the fair values of commodity contracts, long-term debt obligations, and foreign currency exchange forward contracts. The commodity contracts and foreign currency exchange risk listed below principally relate to energy marketing and trading activities. The sensitivity analysis involved increasing and decreasing forward prices and rates at September 30, 2015 and 2014 by a hypothetical 10% and calculating the resulting change in the fair values.

The results of the sensitivity analysis calculations as of September 30, 2015 and 2014 :



	Assuming a 10% Increase in Prices/Rates						Assuming a 10% Decrease in Prices/Rates
	As of September 30,						As of September 30,
Activity	2015			2014			2015			2014		Change in the Fair Value of
	(In millions)
Natural gas contracts	$	(3	)	$	(25	)	$	3		$	26	Commodity contracts
Electricity contracts	$	14		$	(2	)	$	(12	)	$	1	Commodity contracts
Oil contracts	$	2		$	—		$	(2	)	$	—	Commodity contracts
Interest rate risk	$	(371	)	$	(327	)	$	395		$	346	Long-term debt

For further discussion of market risk, see Note 9 to the Consolidated Financial Statements, " Financial and Other Derivative Instruments ".

Item 4. Controls and Procedures

DTE Energy

(a) Evaluation of disclosure controls and procedures

Management of DTE Energy carried out an evaluation, under the supervision and with the participation of DTE Energy's Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of DTE Energy's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2015 , which is the end of the period covered by this report. Based on this evaluation, DTE Energy's CEO and CFO have concluded that such disclosure controls and procedures are effective in providing reasonable assurance that information required to be disclosed by DTE Energy in reports that it files or submits under the Exchange Act (i) is recorded, processed, summarized, and reported within the time periods specified in the U.S. Securities and Exchange Commission's rules and forms and (ii) is accumulated and communicated to DTE Energy's management, including its CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Due to the inherent limitations in the effectiveness of any disclosure controls and procedures, management cannot provide absolute assurance that the objectives of its disclosure controls and procedures will be attained.

(b) Changes in internal control over financial reporting

There have been no changes in DTE Energy's internal control over financial reporting during the quarter ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, DTE Energy's internal control over financial reporting.

DTE Electric

(a) Evaluation of disclosure controls and procedures

Management of DTE Electric carried out an evaluation, under the supervision and with the participation of DTE Electric's Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of DTE Electric's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2015 , which is the end of the period covered by this report. Based on this evaluation, DTE Electric's CEO and CFO have concluded that such disclosure controls and procedures are effective in providing reasonable assurance that information required to be disclosed by DTE Electric in reports that it files or submits under the Exchange Act (i) is recorded, processed, summarized, and reported within the time periods specified in the U.S. Securities and Exchange Commission's rules and forms and (ii) is accumulated and communicated to DTE Electric's management, including its CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Due to the inherent limitations in the effectiveness of any disclosure controls and procedures, management cannot provide absolute assurance that the objectives of its disclosure controls and procedures will be attained.

(b) Changes in internal control over financial reporting

There have been no changes in DTE Electric's internal control over financial reporting during the quarter ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, DTE Electric's internal control over financial reporting.

Part II — Other Information

Item 1. Legal Proceeding s

For more information on material legal proceedings and matters related to the Registrants, see Notes 6 and 12 , to the Consolidated Financial Statements, " Regulatory Matters " and " Commitments and Contingencies ", respectively.

Item 1A. Risk Factors

There are various risks associated with the operations of the Registrants' businesses. To provide a framework to understand the operating environment of the Registrants, a brief explanation of the more significant risks associated with the Registrants' businesses is provided in Part 1, Item 1A. Risk Factors in DTE Energy's 2014 Annual Report on Form 10-K and Part 1, Item 1A. Risk Factors in DTE Electric's 2014 Annual Report on Form 10-K. Although the Registrants have tried to identify and discuss key risk factors, others could emerge in the future.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about DTE Energy purchases of equity securities that are registered by DTE Energy pursuant to Section 12 of the Exchange Act of 1934 for the quarter ended September 30, 2015 :



	Number of Shares Purchased (a)	Average Price Paid per Share (a)		Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Average Price Paid per Share	Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs
07/01/2015 — 07/31/2015	1,889	$	74.86	—	—	—
08/01/2015 — 08/31/2015	—	$	—	—	—	—
09/01/2015 — 09/30/2015	2,299	$	72.63	—	—	—
Total	4,188			—

_______________________________________


(a)	Represents shares of DTE Energy common stock withheld to satisfy income tax obligations upon the vesting of restricted stock based on the price in effect at the grant date.

Item 6. Exhibits



Exhibit Number	Description	DTE Energy	DTE Electric

	(i) Exhibits filed herewith:

4.292	Forty-Sixth Supplemental Indenture, dated as of August 1, 2015 to Indenture of Mortgage and Deed of Trust dated as of March 1, 1944 between DTE Gas Company and Citibank, N.A. (2015 First Mortgage Bonds Series C and D)	X

12.64	Computation of Ratio of Earnings to Fixed Charges		X

31.105	Chief Executive Officer Section 302 Form 10-Q Certification of Periodic Report	X

31.106	Chief Financial Officer Section 302 Form 10-Q Certification of Periodic Report	X

31.107	Chief Executive Officer Section 302 Form 10-Q Certification of Periodic Report		X

31.108	Chief Financial Officer Section 302 Form 10-Q Certification of Periodic Report		X

99.58	Fourth Amendment to the Amendment and Restatement of Master Trust Agreement for the DTE Energy Company Master Plan Trust between DTE Energy Corporate Services, LLC and DTE Energy Investment Committee and JP Morgan Chase Bank, N.A. dated as of November 28, 2014	X

99.59	Fifth Amendment to the Amendment and Restatement of Master Trust Agreement for the DTE Energy Company Master Plan Trust between DTE Energy Corporate Services, LLC and DTE Energy Investment Committee and Great-West Trust Company, LLC dated as of August 7, 2015	X

101.INS	XBRL Instance Document	X	X

101.SCH	XBRL Taxonomy Extension Schema	X	X

101.CAL	XBRL Taxonomy Extension Calculation Linkbase	X	X

101.DEF	XBRL Taxonomy Extension Definition Database	X	X

101.LAB	XBRL Taxonomy Extension Label Linkbase	X	X

101.PRE	XBRL Taxonomy Extension Presentation Linkbase	X	X

	(ii) Exhibits furnished herewith:

32.105	Chief Executive Officer Section 906 Form 10-Q Certification of Periodic Report	X

32.106	Chief Financial Officer Section 906 Form 10-Q Certification of Periodic Report	X

32.107	Chief Executive Officer Section 906 Form 10-Q Certification of Periodic Report		X

32.108	Chief Financial Officer Section 906 Form 10-Q Certification of Periodic Report		X

	(iii) Exhibits incorporated by reference:

3.13	Amended Bylaws of DTE Energy Company, as amended through September 17, 2015 (Exhibit 3.1 to Form 8-K dated September 17, 2015)	X

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized. The signature for each undersigned Registrant shall be deemed to relate only to matters having reference to such Registrant and any subsidiaries thereof.



Date:	October 23, 2015
			DTE ENERGY COMPANY

		By:	/S/DONNA M. ENGLAND
			Donna M. England Chief Accounting Officer
			(Duly Authorized Officer)


			DTE ELECTRIC COMPANY

		By:	/S/DONNA M. ENGLAND
			Donna M. England Chief Accounting Officer
			(Duly Authorized Officer)

EXHIBIT 4.292

FORTY-SIXTH

SUPPLEMENTAL INDENTURE

INDENTURE OF MORTGAGE AND

DEED OF TRUST

DATED AS OF MARCH 1, 1944

AS RESTATED IN

PART II OF THE TWENTY-NINTH

SUPPLEMENTAL INDENTURE DATED AS OF JULY 15, 1989

WHICH BECAME EFFECTIVE ON APRIL 1, 1994

DTE GAS COMPANY

formerly known as

Michigan Consolidated Gas Company

CITIBANK, N.A.,

TRUSTEE

DATED AS OF AUGUST 1, 2015

CREATING TWO ISSUES OF FIRST MORTGAGE BONDS,

DESIGNATED AS

2015 SERIES C BONDS

2015 SERIES D BONDS

DTE GAS COMPANY

FORTY-SIXTH SUPPLEMENTAL INDENTURE

DATED AS OF AUGUST 1, 2015

SUPPLEMENTAL TO INDENTURE OF MORTGAGE

AND DEED OF TRUST

DATED AS OF MARCH 1, 1944

TABLE OF CONTENTS

PAGE

ARTICLE I ESTABLISHMENT OF AN ISSUE OF FIRST MORTGAGE BONDS, OF the SERIES DESIGNATED AND DISTINGUISHED AS “2015 SERIES C BONDS” 5

SECTION 1 5

SECTION 2 5

SECTION 3 7

SECTION 4 14

SECTION 5 15

ARTICLE II ESTABLISHMENT OF AN ISSUE OF FIRST MORTGAGE BONDS, OF the SERIES DESIGNATED AND DISTINGUISHED AS “2015 SERIES D BONDS” 16

SECTION 1 16

SECTION 2 16

SECTION 3 18

SECTION 4 25

SECTION 5 26

ARTICLE III ISSUE OF BONDS 27

ARTICLE IV THE TRUSTEE 27

ARTICLE V RECORDING AND FILING OF SUPPLEMENTAL INDENTURE DATED AS OF DECEMBER 1, 2014 27

ARTICLE VI RECORDING OF AFFIDAVIT OF FACTS AFFECTING REAL PROPERTY 29

ARTICLE VII MISCELLANEOUS PROVISIONS 29

THIS FORTY-SIXTH SUPPLEMENTAL INDENTURE, dated as of the 1st day of August, 2015, between DTE GAS COMPANY, formerly known as Michigan Consolidated Gas Company, a corporation duly organized and existing under and by virtue of the laws of the State of Michigan (hereinafter called the “Company”), having its principal place of business at One Energy Plaza, Detroit, Michigan, 48226 and CITIBANK, N.A., a national banking association incorporated and existing under and by virtue of the laws of the United States of America, having an office at 388 Greenwich Street in the Borough of Manhattan, the City of New York, New York, 10013 as successor trustee (hereinafter with its predecessors as trustee called the “Mortgage Trustee” or the “Trustee”):

WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture of Mortgage and Deed of Trust (the “Original Indenture”), dated as of March 1, 1944;

WHEREAS, the Company has heretofore executed and delivered to the Trustee the Twenty-ninth Supplemental Indenture, which became effective April 1, 1994, to provide for the modification and restatement of the Original Indenture as previously amended (as so amended, supplemented and modified the “Indenture”), and to secure the Company's First Mortgage Bonds, unlimited in aggregate principal amount except as therein otherwise provided, issued pursuant to the:

Thirtieth Supplemental Indenture, dated as of September 1, 1991;

Thirty-first Supplemental Indenture, dated as of December 15, 1991;

Thirty-second Supplemental Indenture, dated as of January 5, 1993;

Thirty-third Supplemental Indenture, dated as of May 1, 1995;

Thirty-fourth Supplemental Indenture, dated as of November 1, 1996;

Thirty-fifth Supplemental Indenture, dated as of June 18, 1998;

Thirty-sixth Supplemental Indenture, dated as of August 15, 2001;

Thirty-seventh Supplemental Indenture, dated as of February 15, 2003;

Thirty-eighth Supplemental Indenture, dated as of October 1, 2004;

Thirty-ninth Supplemental Indenture, dated as of April 1, 2008;

Fortieth Supplemental Indenture, dated as of June 1, 2008;

Forty-first Supplemental Indenture, dated as of August 1, 2008;

Forty-second Supplemental Indenture, dated as of December 1, 2008;

Forty-third Supplemental Indenture, dated as of December 1, 2012;

Forty-fourth Supplemental Indenture, dated as of December 1, 2013; and

Forty-fifth Supplemental Indenture, dated as of December 1, 2014;

WHEREAS, at the date hereof there were outstanding First Mortgage Bonds of the Company issued under the Indenture, of 12 series in the principal amounts set forth below (including Collateral Bonds):



Designation of Series	Amount Initially Issued		Amount Outstanding
First Mortgage Bonds

2012 Series D First Mortgage Bonds		$70,000,000		$70,000,000
2013 Series C First Mortgage Bonds		$50,000,000		$50,000,000
2013 Series D First Mortgage Bonds		$70,000,000		$70,000,000
2013 Series E First Mortgage Bonds		$50,000,000		$50,000,000
2014 Series F First Mortgage Bonds		$150,000,000		$150,000,000

Collateral Bonds
(Senior Notes)

5.70% Collateral Bonds due 2033		$200,000,000		$200,000,000
2004 Series E Collateral Bonds		$120,000,000		$120,000,000
2008 Series B Collateral Bonds		$100,000,000		$100,000,000
2008 Series C Collateral Bonds		$25,000,000		$25,000,000
2008 Series F Collateral Bonds		$75,000,000		$75,000,000
2008 Series H Collateral Bonds		$140,000,000		$140,000,000
2008 Series I Collateral Bonds		$50,000,000		$50,000,000

WHEREAS, the Company desires in and by this Supplemental Indenture to establish two series of bonds to be issued under the Indenture designated and distinguished as 2015 Series C Bonds and 2015 Series D Bonds (herein collectively sometimes called the “Bonds”), to designate the terms thereof, to specify the particulars necessary to describe and define the same and to specify such other provisions and agreements in respect thereof as are in the Indenture provided or permitted; and

WHEREAS, all the conditions and requirements necessary to make this Supplemental Indenture, when duly executed and delivered, a valid, binding and legal instrument in accordance with its terms and for the purposes herein expressed, have been done, performed and fulfilled, and the execution and delivery of this Supplemental Indenture in the form and with the terms hereof have been in all respects duly authorized;

NOW, THEREFORE, in consideration of the premises and in further consideration of the sum of One Dollar in lawful money of the United States of America paid to the Company by the

Trustee at or before the execution and delivery of this Forty-sixth Supplemental Indenture, the receipt whereof is hereby acknowledged, and of other good and valuable consideration, it is agreed by and between the Company and the Trustee as follows:

ARTICLE I
ESTABLISHMENT OF AN ISSUE OF
FIRST MORTGAGE BONDS, OF THE SERIES
DESIGNATED AND DISTINGUISHED AS “2015 SERIES C BONDS”

SECTION 1

There is hereby established a series of bonds to be issued under and secured by the Indenture, to be known as “First Mortgage Bonds,” designated and distinguished as “2015 Series C Bonds” of the Company. The 2015 Series C Bonds shall be limited in aggregate principal amount to $40,000,000 except as provided in Article II of the Indenture and in this Supplemental Indenture with respect to transfers, exchanges and replacements of the 2015 Series C Bonds. The 2015 Series C Bonds shall be registered bonds without coupons and shall be dated as of the date of the authentication thereof by the Trustee.

The 2015 Series C Bonds shall mature on the 1st day of September, 2027 (subject to earlier redemption, as provided herein), shall bear interest at the rate of 3.35% per annum, payable semi-annually on the 1st day of March and September of each year and at maturity (each an “2015 Series C Interest Payment Date”), beginning on March 1, 2016. The principal, Make-Whole Amount (as defined below), if any, and interest on the 2015 Series C Bonds shall be payable in lawful money of the United States of America; the place where such principal and Make-Whole Amount, if any, shall be payable shall be the corporate trust office of the Trustee in the Borough of Manhattan, the City of New York, New York, and the place where such interest shall be payable shall be the office or agency of the Company in said Borough of Manhattan, the City of New York, New York. The 2015 Series C Bonds shall have such other terms as set forth in the form of 2015 Series C Bond provided in Section 3.

SECTION 2

The 2015 Series C Bonds shall be subject to redemption at the option of the Company, in whole at any time or in part from time to time (any such date of redemption, a “2015 Series C Redemption Date”), at the applicable redemption price (“2015 Series C Redemption Price”) set forth below.

At any time prior to June 1, 2027 (the “2015 Series C Par Call Date”), the 2015 Series C Redemption Price will be equal to 100% of the principal amount of the 2015 Series C Bonds to be redeemed on the 2015 Series C Redemption Date together with the Make-Whole Amount (as defined

in the form of 2015 Series C Bond provided in Section 3), if any, plus, in each case, accrued and unpaid interest thereon to the 2015 Series C Redemption Date.

At any time on or after the 2015 Series C Par Call Date, the 2015 Series C Redemption Price will be equal to 100% of the principal amount of the bonds of 2015 Series C to be redeemed plus accrued and unpaid interest thereon to the redemption date.

Notwithstanding the foregoing, installments of interest on the 2015 Series C Bonds that are due and payable on 2015 Series C Interest Payment Dates falling on or prior to the 2015 Series C Redemption Date will be payable on the 2015 Series C Interest Payment Date to the registered holders as of the close of business on the relevant record date.

Notice of redemption shall be given to the holders of the 2015 Series C Bonds to be redeemed not more than 60 nor less than 30 days prior to the 2015 Series C Redemption Date, as provided in Section 4.05 of the Indenture. Each such notice shall specify such optional 2015 Series C Redemption Date, the aggregate principal amount of the 2015 Series C Bonds to be redeemed on such date, the principal amount of each 2015 Series C Bond held by such holder to be redeemed, and the interest to be paid on the 2015 Series C Redemption Date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a senior financial officer of the Company as to the estimated Make-Whole Amount due in connection with such redemption (calculated as if the date of such notice were the date of the redemption), setting forth the details of such computation. The Make-Whole Amount shall be determined by the Company two Business Days prior to the applicable 2015 Series C Redemption Date and the Company shall deliver to holders of the 2015 Series C Bonds and to the Trustee a certificate of a senior financial officer specifying the calculation of such Make-Whole Amount as of the 2015 Series C Redemption Date.

If the 2015 Series C Bonds are only partially redeemed by the Company, the Trustee shall select which 2015 Series C Bonds are to be redeemed pro rata among all of the 2015 Series C Bonds at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof and otherwise in accordance with the terms of the Indenture. In the event of redemption of the 2015 Series C Bonds in part only, a new 2015 Series C Bond or 2015 Series C Bonds for the unredeemed portion will be issued in the name or names of the holders thereof upon the surrender or cancellation thereof.

If money sufficient to pay the applicable the 2015 Series C Redemption Price with respect to the 2015 Series C Bonds to be redeemed on the applicable 2015 Series C Redemption Date, together with accrued interest to the 2015 Series C Redemption Date, is deposited with the Trustee

on or before the related 2015 Series C Redemption Date and certain other conditions are satisfied, then the 2015 Series C Bonds to be redeemed shall no longer be secured by, or entitled to any lien or benefit of, the Indenture as provided by Section 4.04 of the Indenture.

The 2015 Series C Bonds will not be entitled to any sinking fund and will not be redeemable other than as provided in this Section 2 and the form of 2015 Series C Bond provided in Section 3.

SECTION 3

The 2015 Series C Bonds shall be registered bonds without coupons. The Trustee shall be the registrar and paying agent for the 2015 Series C Bonds, which duties it hereby accepts. The 2015 Series C Bonds may be issued in minimum denominations of $100,000 or any integral multiple of $1,000 in excess thereof.

The forms of 2015 Series C Bonds shall be substantially as follows:

[FORM OF DTE GAS COMPANY 3.35% FIRST MORTGAGE BONDS 2015 SERIES C DUE 2027]

PPN:

No. R-___ $_________________

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES. IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AS THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

DTE GAS COMPANY

3.35% MORTGAGE BONDS

2015 SERIES C DUE 2027

Principal Amount: $____________

Authorized Denomination: $100,000 or any integral multiple of $1,000 in excess thereof.

Regular Record Date: close of business on the 15th calendar day (whether or not a Business Day) prior to the relevant Interest Payment Date

Original Issue Date: August 27, 2015

Stated Maturity: September 1, 2027

Interest Payment Dates: March 1 and September 1 of each year, beginning March 1, 2016.

Interest Rate: 3.35% per annum

DTE GAS COMPANY (hereinafter called the “Company”), a corporation of the State of Michigan, for value received, hereby promises to pay to ___________, or registered assigns, the sum of _________ Dollars ($_________) on the Stated Maturity specified above, in the coin or currency of the United States of America, and to pay interest thereon from the Original Issue Date specified above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on each Interest Payment Date as specified above, commencing on March 1, 2016 and on the Stated Maturity at the Interest Rate per annum specified above until the principal hereof is paid or made available for payment, and on any overdue principal and Make-Whole Amount (defined below) and, to the extent lawful, on any overdue installment of interest. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the person in whose name this bond is registered at the close of business on the Regular Record Date as specified above next preceding such Interest Payment Date; provided that any interest payable at Stated Maturity or on a Redemption Date (defined below) will be paid to the person to whom principal is payable. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the holder on such Regular Record Date and may either be paid to the person in whose name this bond is registered at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to holders of bonds of this series not less than 10 days prior to such special record date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the bonds of this series shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Indenture.

Payments of interest on this bond will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for this bond shall be computed and paid on the basis of a 360-day year consisting of twelve 30-day months. The Company shall pay interest on overdue principal and Make-Whole Amount, if any, and, to the extent lawful, on overdue installments of interest at the rate per annum borne by this bond. In the event that any Interest Payment Date, Redemption Date or Stated Maturity is not a Business Day, then the required payment of principal, Make-Whole Amount, if any, and interest will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay). “Business Day” means any day other than a day on which banking institutions in the State of New York or the State of Michigan are authorized or obligated pursuant to law or executive order to close.

Payment of principal of, Make-Whole Amount, if any, and interest on the bonds of this series shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of principal, Make-Whole Amount, if any, and interest due at the Stated Maturity or earlier redemption of such bonds shall be made at the office of the Trustee upon surrender of such bonds to the Trustee, and (ii) payments of interest shall be made, at the option of the Company, subject to such surrender where applicable, (A) by check mailed to the address of the person entitled thereto as such address shall appear in the bond register of the Trustee maintained for such purpose or (B) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least fourteen (14) days prior to the date for payment by the person entitled thereto. Notwithstanding the foregoing, so long as any bond is held by an Institutional Investor (as defined in the Bond Purchase Agreement referenced below), payment of principal, Make-Whole Amount, if any, and interest on the bonds held by such holder shall be made in the manner specified in the Bond Purchase Agreement dated as of August 19, 2015 among the Company and the purchasers party thereto.

The bonds represented by this certificate, of the series hereinafter specified, are bonds of the Company (herein called the “bonds”) known as its “First Mortgage Bonds,” issued and to be issued in one or more series under, and all equally and ratably secured by, an Indenture of Mortgage and Deed of Trust dated as of March 1, 1944, duly executed by the Company to Citibank, N.A., successor trustee (“Trustee”), as restated in Part II of the Twenty-ninth Supplemental Indenture dated as of July 15, 1989, which became effective on April 1, 1994, to which indenture and all indentures supplemental thereto executed on and after July 15, 1989 reference is hereby made for a description of the property mortgaged and pledged, the nature and extent of the security, the terms and conditions upon which the bonds are, and are to be, issued and secured, and the rights of the holders of the bonds and of the Trustee in respect of such security (which indenture and all indentures supplemental thereto, including the Forty-sixth Supplemental Indenture dated as of August 1, 2015 referred to below, are hereinafter collectively called the “Indenture”). As provided in the Indenture, the bonds may be issued thereunder for various principal sums and are issuable in series, which may mature at different times, may bear interest at different rates and may otherwise vary as therein provided. The bonds represented by this certificate are part of a series designated “3.35% First Mortgage Bonds 2015 Series C” (herein called the “Bonds”), created by the Forty-sixth Supplemental Indenture dated as of August 1, 2015 as provided for in said Indenture.

With the consent of the Company and to the extent permitted by and as provided in the Indenture, the rights and obligations of the Company, the rights and obligations of the holders of the Bonds, and the terms and provisions of the Indenture may be modified or altered by such affirmative vote or votes of the holders of the Bonds then outstanding as are specified in the Indenture.

the holders of the Bonds the Make-Whole Amount on the Bonds, if any, determined as of the date the Bonds shall have been declared due and payable.

No recourse shall be had for the payment of the principal of, Make-Whole Amount, if any, or the interest on, the Bonds, or for any claim based hereon or otherwise in respect of the Bonds or the Indenture, against any incorporator, stockholder, director or officer, past, present or future, of the Company, as such, or any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution, statute or otherwise, of incorporators, stockholders, directors or officers being waived and released by the owner hereof by the acceptance of the Bonds, and as part of the consideration for the issue thereof, and being likewise waived and released pursuant to the Indenture and the Senior Indenture.

This Bond shall be subject to redemption at the option of the Company, in whole at any time or in part from time to time (any such date of optional redemption, a “Redemption Date”), at the applicable redemption price (“Redemption Price”) set forth below.

At any time prior to June 1, 2027 (the “Par Call Date”), the Redemption Price will be equal to 100% of the principal amount of the Bonds to be redeemed on the Redemption Date together with the Make-Whole Amount (as defined below), if any, plus, in each case, accrued and unpaid interest thereon to the Redemption Date.

At any time on or after the Par Call Date, the Redemption Price will be equal to 100% of the principal amount of the bonds of 2015 Series C to be redeemed plus accrued and unpaid interest thereon to the redemption date.

Notwithstanding the foregoing, installments of interest on the Bonds that are due and payable on Interest Payment Dates falling on or prior to a Redemption Date will be payable on the Interest Payment Date to the registered Holders as of the close of business on the relevant Record Date.

“Make-Whole Amount” means, with respect to any Bond, a premium in an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Bond over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero. If the Settlement Date is prior to the Par Call Date, the Make-Whole Amount with respect to any Called Principal of a Bond shall be determined as if the Stated Maturity of such Bond were the Par Call Date; provided that the Make-Whole Amount shall in no event be less than zero. For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:

“Called Principal” means, with respect to a Bond, the principal of the Bond that is to be redeemed on a Redemption Date or has become or is declared to be immediately due and payable pursuant to Section 9.01 of the Indenture, as the context requires.

“Discounted Value” means, with respect to the Called Principal of a Bond, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Bond is payable) equal to the Reinvestment Yield with respect to such Called Principal.

“Reinvestment Yield” means, with respect to the Called Principal of a Bond, 0.5% (50 basis points) over the yield to maturity implied by (i) the yields reported, as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “PX-1” (or such other display as may replace Page PX-1), on Bloomberg Financial Markets for the most recently issued, actively traded on-the-run, benchmark U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable (including by way of interpolation), the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. Such implied yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (b) interpolating linearly on a straight line basis between (1) the most recently issued, actively traded on-the-run, benchmark U.S. Treasury security with the maturity closest to and greater than the Remaining Average Life and (2) the most recently issued, actively traded on-the-run, benchmark U.S. Treasury security with the maturity closest to and less than the Remaining Average Life. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Bond.

“Remaining Average Life” means, with respect to any Called Principal, the number of years obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years, computed on the basis of a 360-day year composed of twelve 30-day months and calculated to two decimal places, that will elapse between the Settlement Date with respect to such Called Principal and the Stated Maturity (or, if redeemed prior to the Par Call Date, the Par Call Date) of such Remaining Scheduled Payment.

“Remaining Scheduled Payments” means, with respect to the Called Principal of a Bond, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its Stated Maturity (or, if redeemed prior to the Par Call Date, the Par Call Date), provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Bond, then the amount of the next succeeding scheduled interest payment will be reduced

by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date.

“Settlement Date” means, with respect to the Called Principal of a Bond, the Redemption Date on which such Called Principal is to be redeemed or has become or is declared to be immediately due and payable pursuant to Section 9.01 of the Indenture as the context requires.

Notice of redemption shall be given to the holders of the Bonds to be redeemed not more than 60 nor less than 30 days prior to the Redemption Date, as provided in Section 4.05 of the Indenture. Each such notice shall specify such Redemption Date, the aggregate principal amount of the Bonds to be redeemed on such date, the principal amount of each Bond held by such holder to be redeemed, and the interest to be paid on the Redemption Date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a senior financial officer of the Company as to the estimated Make-Whole Amount due in connection with such redemption (calculated as if the date of such notice were the date of the redemption), setting forth the details of such computation. The Make-Whole Amount shall be determined by the Company two Business Days prior to the applicable Redemption Date and the Company shall deliver to holders of the Bonds and to the Trustee a certificate of a senior financial officer specifying the calculation of such Make-Whole Amount as of the Redemption Date.

Subject to the limitations of Section 4.07 of the Indenture, the notice of redemption may state that it is subject to the receipt of the redemption moneys by the Trustee on or before the Redemption Date, and that such notice shall be of no effect unless such moneys are so received on or before such date; a notice of redemption so conditioned shall be of no force or effect if such money is not so received and, in such event, the Company shall not be required to redeem this Bond.

If the Bonds are only partially redeemed by the Company, the Trustee shall select which Bonds are to be redeemed pro rata among all of the Bonds at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof and otherwise in accordance with the terms of the Indenture. In the event of redemption of the Bonds in part only, a new Bond or Bonds for the unredeemed portion will be issued in the name or names of the holders thereof upon the surrender or cancellation thereof.

If money sufficient to pay the applicable Redemption Price with respect to the Bonds to be redeemed on the applicable Redemption Date, together with accrued interest to the Redemption Date, is deposited with the Trustee on or before the related Redemption Date and certain other conditions are satisfied, then the Bonds to be redeemed shall no longer be secured by, or entitled to any lien or benefit of, the Indenture as provided by Section 4.04 of the Indenture.

The Indenture contains terms, provisions and conditions relating to the consolidation or merger of the Company with or into, and the conveyance, or other transfer or lease, subject to the lien of the Indenture, of the trust estate to, another corporation, to the assumption by such other corporation, in certain circumstances, of the obligations of the Company under the Indenture and

on the Bonds and to the succession of such other corporation in certain circumstances, to the powers and rights of the Company under the Indenture.

The Indenture contains provisions for defeasance at any time of the entire indebtedness of the Bonds or certain covenants with respect thereto upon compliance by the Company with certain conditions set forth therein.

This Bond shall not be valid or become obligatory for any purpose unless and until the certificate of authentication hereon shall have been manually executed by the Trustee or its successor in trust under the Indenture.

IN WITNESS WHEREOF, DTE GAS COMPANY has caused this certificate to be executed under its name with the signature of its duly authorized Officer, under its corporate seal, which may be a facsimile, attested with the signature of its Corporate Secretary.

Dated:

DTE GAS COMPANY

By:______________________________

Attest:

By:______________________

CERTIFICATE OF AUTHENTICATION

The bonds represented by this certificate constitute Bonds of the series designated and described in the within-mentioned Indenture.

CITIBANK, N.A., as Trustee

By:_________________________________

Authorized Officer

Dated:

[End of 2015 Series C Bond Form]

SECTION 4

Each certificate evidencing the 2015 Series C Bonds (and all 2015 Series C Bonds issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form (each defined term in the legend being defined as such for purposes of the legend only):

The 2015 Series C Bonds shall be exchangeable upon surrender thereof at the corporate trust office of the Trustee in the Borough of Manhattan, the City of New York, New York, for registered bonds of the same aggregate principal amount and other terms, but of different authorized denomination or denominations, such exchanges to be made without service charge (except for any stamp tax or other governmental charge).

When 2015 Series C Bonds are presented to the Trustee with a request (i) to register the transfer of such 2015 Series C Bonds; or (ii) to exchange such 2015 Series C Bonds for 2015 Series C Bonds of the same series of any authorized denominations of the same aggregate principal amount and Stated Maturity, the Trustee shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, that the 2015 Series C Bonds surrendered for transfer or exchange: (A) shall be duly endorsed or be accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Trustee, duly executed by the holder thereof or his attorney duly authorized in writing; and (B) are accompanied

by the following additional information and documents, as applicable: (x) if such 2015 Series C Bonds are being delivered to the Company by a holder for registration in the name of such holder, without transfer, a certification from such holder to that effect; or (y) if such 2015 Series C Bonds are being transferred to the Company, a certification to that effect; or (z) if such 2015 Series C Bonds are being transferred pursuant to an exemption from registration in accordance with Rule 144 under the Securities Act or in reliance upon another exemption from the registration requirements of the Securities Act, (i) a certification to that effect and (ii) if the Company so requests, other evidence reasonably satisfactory to it as to the compliance with the restrictions set forth in the legend set forth above.

Every 2015 Series C Bond so surrendered shall be accompanied by a proper transfer power duly executed by the registered owner or by a duly authorized attorney transferring such 2015 Series C Bond to the Company, and the signature to such transfer power shall be guaranteed to the satisfaction of the Trustee. All 2015 Series C Bonds so surrendered shall be forthwith canceled and delivered to or upon the order of the Company. All 2015 Series C Bonds executed, authenticated and delivered in exchange for 2015 Series C Bonds so surrendered shall be valid obligations of the Company, evidencing the same debt as the 2015 Series C Bonds surrendered, and shall be secured by the same lien and be entitled to the same benefits and protection as the 2015 Series C Bonds in exchange for which they are executed, authenticated and delivered.

The Company shall not be required to make any such exchange or any registration of transfer after the 2015 Series C Bond so presented for exchange or registration of transfer, or any portion thereof, has been called for redemption and notice thereof given to the registered owner.

SECTION 5

Pending the preparation of definitive 2015 Series C Bonds, the Company may from time to time execute, and upon its written order, the Trustee shall authenticate and deliver, in lieu of such definitive 2015 Series C Bonds and subject to the same provisions, limitations and conditions, one or more temporary 2015 Series C Bonds, in registered form, of any denomination specified in the written order of the Company for the authentication and delivery thereof, and with such omissions, insertions and variations as may be determined by the Board of Directors of the Company. Such temporary 2015 Series C Bonds shall be substantially of the tenor of the 2015 Series C Bonds to be issued as herein before recited.

If any such temporary 2015 Series C Bonds shall at any time be so authenticated and delivered in lieu of definitive 2015 Series C Bonds, the Company shall upon request at its own expense prepare, execute and deliver to the Trustee and thereupon, upon the presentation and surrender of temporary 2015 Series C Bonds, the Trustee shall authenticate and deliver in exchange therefor, without charge to the holder, definitive Bonds of the same series and other terms, if any, and for the same principal sum in the aggregate as the temporary 2015 Series C Bonds surrendered. All temporary 2015 Series C Bonds so surrendered shall be forthwith canceled by the Trustee and

delivered to or upon the order of the Company. Until exchanged for definitive 2015 Series C Bonds the temporary 2015 Series C Bonds shall in all respects be entitled to the lien and security of the Indenture and all supplemental indentures.

ARTICLE II
ESTABLISHMENT OF AN ISSUE OF
FIRST MORTGAGE BONDS, OF THE SERIES
DESIGNATED AND DISTINGUISHED AS “2015 SERIES D BONDS”

SECTION 1

There is hereby established a series of bonds to be issued under and secured by the Indenture, to be known as “First Mortgage Bonds,” designated and distinguished as “2015 Series D Bonds” of the Company. The 2015 Series D Bonds shall be limited in aggregate principal amount to $125,000,000 except as provided in Article II of the Indenture and in this Supplemental Indenture with respect to transfers, exchanges and replacements of the 2015 Series D Bonds. The 2015 Series D Bonds shall be registered bonds without coupons and shall be dated as of the date of the authentication thereof by the Trustee.

The 2015 Series D Bonds shall mature on the 1st day of September, 2045 (subject to earlier redemption, as provided herein), shall bear interest at the rate of 4.21% per annum, payable semi-annually on the 1st day of March and September of each year and at maturity (each an “2015 Series D Interest Payment Date”), beginning on March 1, 2016. The principal, Make-Whole Amount (as defined below), if any, and interest on the 2015 Series D Bonds shall be payable in lawful money of the United States of America; the place where such principal and Make-Whole Amount, if any, shall be payable shall be the corporate trust office of the Trustee in the Borough of Manhattan, the City of New York, New York, and the place where such interest shall be payable shall be the office or agency of the Company in said Borough of Manhattan, the City of New York, New York. The 2015 Series D Bonds shall have such other terms as set forth in the form of 2015 Series D Bond provided in Section 3.

SECTION 2

The 2015 Series D Bonds shall be subject to redemption at the option of the Company, in whole at any time or in part from time to time (any such date of redemption, a “2015 Series D Redemption Date”), at the applicable redemption price (“2015 Series D Redemption Price”) set forth below.

At any time prior to March 1, 2045 (the “2015 Series D Par Call Date”), the 2015 Series D Redemption Price will be equal to 100% of the principal amount of the 2015 Series D Bonds to be redeemed on the 2015 Series D Redemption Date together with the Make-Whole Amount (as defined

in the form of 2015 Series D Bond provided in Section 3), if any, plus, in each case, accrued and unpaid interest thereon to the 2015 Series D Redemption Date.

At any time on or after the 2015 Series D Par Call Date, the 2015 Series D Redemption Price will be equal to 100% of the principal amount of the bonds of 2015 Series D to be redeemed plus accrued and unpaid interest thereon to the redemption date.

Notwithstanding the foregoing, installments of interest on the 2015 Series D Bonds that are due and payable on 2015 Series D Interest Payment Dates falling on or prior to the 2015 Series D Redemption Date will be payable on the 2015 Series D Interest Payment Date to the registered holders as of the close of business on the relevant record date.

Notice of redemption shall be given to the holders of the 2015 Series D Bonds to be redeemed not more than 60 nor less than 30 days prior to the 2015 Series D Redemption Date, as provided in Section 4.05 of the Indenture. Each such notice shall specify such optional 2015 Series D Redemption Date, the aggregate principal amount of the 2015 Series D Bonds to be redeemed on such date, the principal amount of each 2015 Series D Bond held by such holder to be redeemed, and the interest to be paid on the 2015 Series D Redemption Date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a senior financial officer of the Company as to the estimated Make-Whole Amount due in connection with such redemption (calculated as if the date of such notice were the date of the redemption), setting forth the details of such computation. The Make-Whole Amount shall be determined by the Company two Business Days prior to the applicable 2015 Series D Redemption Date and the Company shall deliver to holders of the 2015 Series D Bonds and to the Trustee a certificate of a senior financial officer specifying the calculation of such Make-Whole Amount as of the 2015 Series D Redemption Date.

If the 2015 Series D Bonds are only partially redeemed by the Company, the Trustee shall select which 2015 Series D Bonds are to be redeemed pro rata among all of the 2015 Series D Bonds at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof and otherwise in accordance with the terms of the Indenture. In the event of redemption of the 2015 Series D Bonds in part only, a new 2015 Series D Bond or 2015 Series D Bonds for the unredeemed portion will be issued in the name or names of the holders thereof upon the surrender or cancellation thereof.

If money sufficient to pay the applicable the 2015 Series D Redemption Price with respect to the 2015 Series D Bonds to be redeemed on the applicable 2015 Series D Redemption Date, together with accrued interest to the 2015 Series D Redemption Date, is deposited with the Trustee

on or before the related 2015 Series D Redemption Date and certain other conditions are satisfied, then the 2015 Series D Bonds to be redeemed shall no longer be secured by, or entitled to any lien or benefit of, the Indenture as provided by Section 4.04 of the Indenture.

The 2015 Series D Bonds will not be entitled to any sinking fund and will not be redeemable other than as provided in this Section 2 and the form of 2015 Series D Bond provided in Section 3.

SECTION 3

The 2015 Series D Bonds shall be registered bonds without coupons. The Trustee shall be the registrar and paying agent for the 2015 Series D Bonds, which duties it hereby accepts. The 2015 Series D Bonds may be issued in minimum denominations of $100,000 or any integral multiple of $1,000 in excess thereof.

The forms of 2015 Series D Bonds shall be substantially as follows:

[FORM OF DTE GAS COMPANY 4.21% FIRST MORTGAGE BONDS 2015 SERIES D DUE 2045]

PPN:

No. R-___ $_________________

DTE GAS COMPANY

4.21% MORTGAGE BONDS

2015 SERIES D DUE 2045

Principal Amount: $____________

Authorized Denomination: $100,000 or any integral multiple of $1,000 in excess thereof.

Regular Record Date: close of business on the 15th calendar day (whether or not a Business Day) prior to the relevant Interest Payment Date

Original Issue Date: August 27, 2015

Stated Maturity: September 1, 2045

Interest Payment Dates: March 1 and September 1 of each year, beginning March 1, 2016.

Interest Rate: 4.21% per annum

any day other than a day on which banking institutions in the State of New York or the State of Michigan are authorized or obligated pursuant to law or executive order to close.

The bonds represented by this certificate, of the series hereinafter specified, are bonds of the Company (herein called the “bonds”) known as its “First Mortgage Bonds,” issued and to be issued in one or more series under, and all equally and ratably secured by, an Indenture of Mortgage and Deed of Trust dated as of March 1, 1944, duly executed by the Company to Citibank, N.A., successor trustee (“Trustee”), as restated in Part II of the Twenty-ninth Supplemental Indenture dated as of July 15, 1989, which became effective on April 1, 1994, to which indenture and all indentures supplemental thereto executed on and after July 15, 1989 reference is hereby made for a description of the property mortgaged and pledged, the nature and extent of the security, the terms and conditions upon which the bonds are, and are to be, issued and secured, and the rights of the holders of the bonds and of the Trustee in respect of such security (which indenture and all indentures supplemental thereto, including the Forty-sixth Supplemental Indenture dated as of August 1, 2015 referred to below, are hereinafter collectively called the “Indenture”). As provided in the Indenture, the bonds may be issued thereunder for various principal sums and are issuable in series, which may mature at different times, may bear interest at different rates and may otherwise vary as therein provided. The bonds represented by this certificate are part of a series designated “4.21% First Mortgage Bonds 2015 Series D” (herein called the “Bonds”), created by the Forty-sixth Supplemental Indenture dated as of August 1, 2015 as provided for in said Indenture.

In case an Event of Default as defined in the Indenture shall occur, the principal of the Bonds may become or be declared due and payable in the manner, with the effect, and subject to the conditions provided in the Indenture. Upon any such declaration, the Company shall also pay to the holders of the Bonds the Make-Whole Amount on the Bonds, if any, determined as of the date the Bonds shall have been declared due and payable.

At any time prior to March 1, 2045 (the “Par Call Date”), the Redemption Price will be equal to 100% of the principal amount of the Bonds to be redeemed on the Redemption Date together with the Make-Whole Amount (as defined below), if any, plus, in each case, accrued and unpaid interest thereon to the Redemption Date.

At any time on or after the Par Call Date, the Redemption Price will be equal to 100% of the principal amount of the bonds of 2015 Series D to be redeemed plus accrued and unpaid interest thereon to the redemption date.

to its Stated Maturity (or, if redeemed prior to the Par Call Date, the Par Call Date), provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Bond, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date.

Dated:

DTE GAS COMPANY

By:______________________________

Attest:

By:______________________

CERTIFICATE OF AUTHENTICATION

The bonds represented by this certificate constitute Bonds of the series designated and described in the within-mentioned Indenture.

CITIBANK, N.A., as Trustee

By:_________________________________

Authorized Officer

Dated:

[End of 2015 Series D Bond Form]

SECTION 4

Each certificate evidencing the 2015 Series D Bonds (and all 2015 Series D Bonds issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form (each defined term in the legend being defined as such for purposes of the legend only):

The 2015 Series D Bonds shall be exchangeable upon surrender thereof at the corporate trust office of the Trustee in the Borough of Manhattan, the City of New York, New York, for registered bonds of the same aggregate principal amount and other terms, but of different authorized denomination or denominations, such exchanges to be made without service charge (except for any stamp tax or other governmental charge).

When 2015 Series D Bonds are presented to the Trustee with a request (i) to register the transfer of such 2015 Series D Bonds; or (ii) to exchange such 2015 Series D Bonds for 2015 Series D Bonds of the same series of any authorized denominations of the same aggregate principal amount and Stated Maturity, the Trustee shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, that the 2015 Series D Bonds surrendered for transfer or exchange: (A) shall be duly endorsed or be accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Trustee, duly executed by the holder thereof or his attorney duly authorized in writing; and (B) are accompanied by the following additional information and documents, as applicable: (x) if such 2015 Series D Bonds are being delivered to the Company by a holder for registration in the name of such holder, without transfer, a certification from such holder to that effect; or (y) if such 2015 Series D Bonds

are being transferred to the Company, a certification to that effect; or (z) if such 2015 Series D Bonds are being transferred pursuant to an exemption from registration in accordance with Rule 144 under the Securities Act or in reliance upon another exemption from the registration requirements of the Securities Act, (i) a certification to that effect and (ii) if the Company so requests, other evidence reasonably satisfactory to it as to the compliance with the restrictions set forth in the legend set forth above.

Every 2015 Series D Bond so surrendered shall be accompanied by a proper transfer power duly executed by the registered owner or by a duly authorized attorney transferring such 2015 Series D Bond to the Company, and the signature to such transfer power shall be guaranteed to the satisfaction of the Trustee. All 2015 Series D Bonds so surrendered shall be forthwith canceled and delivered to or upon the order of the Company. All 2015 Series D Bonds executed, authenticated and delivered in exchange for 2015 Series D Bonds so surrendered shall be valid obligations of the Company, evidencing the same debt as the 2015 Series D Bonds surrendered, and shall be secured by the same lien and be entitled to the same benefits and protection as the 2015 Series D Bonds in exchange for which they are executed, authenticated and delivered.

The Company shall not be required to make any such exchange or any registration of transfer after the 2015 Series D Bond so presented for exchange or registration of transfer, or any portion thereof, has been called for redemption and notice thereof given to the registered owner.

SECTION 5

Pending the preparation of definitive 2015 Series D Bonds, the Company may from time to time execute, and upon its written order, the Trustee shall authenticate and deliver, in lieu of such definitive 2015 Series D Bonds and subject to the same provisions, limitations and conditions, one or more temporary 2015 Series D Bonds, in registered form, of any denomination specified in the written order of the Company for the authentication and delivery thereof, and with such omissions, insertions and variations as may be determined by the Board of Directors of the Company. Such temporary 2015 Series D Bonds shall be substantially of the tenor of the 2015 Series D Bonds to be issued as herein before recited.

If any such temporary 2015 Series D Bonds shall at any time be so authenticated and delivered in lieu of definitive 2015 Series D Bonds, the Company shall upon request at its own expense prepare, execute and deliver to the Trustee and thereupon, upon the presentation and surrender of temporary 2015 Series D Bonds, the Trustee shall authenticate and deliver in exchange therefor, without charge to the holder, definitive Bonds of the same series and other terms, if any, and for the same principal sum in the aggregate as the temporary 2015 Series D Bonds surrendered. All temporary 2015 Series D Bonds so surrendered shall be forthwith canceled by the Trustee and delivered to or upon the order of the Company. Until exchanged for definitive 2015 Series D Bonds the temporary 2015 Series D Bonds shall in all respects be entitled to the lien and security of the Indenture and all supplemental indentures.

ARTICLE III
ISSUE OF BONDS

The 2015 Series C Bonds and Series D Bonds in the aggregate principal amount of $40,000,000 and $125,000,000, respectively, may be executed, authenticated and delivered from time to time as permitted by the provisions of the Indenture, including with respect to exchange and replacement of bonds.

ARTICLE IV
THE TRUSTEE

The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or the due execution hereof by the Company, or for or in respect of the recitals and statements contained herein, all of which recitals and statements are made solely by the Company.

Except as herein otherwise provided, no duties, responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustee by reason of this Supplemental Indenture other than as set forth in the Indenture and this Supplemental Indenture as executed and accepted on behalf of the Trustee, subject to all the terms and conditions set forth in the Indenture, as fully to all intents as if the same were herein set forth at length.

ARTICLE V
RECORDING AND FILING OF SUPPLEMENTAL INDENTURE
DATED AS OF DECEMBER 1, 2014

Pursuant to the terms and provisions of the Original Indenture, a Supplemental Indenture dated as of December 1, 2014 providing for the terms of First Mortgage Bonds to be issued thereunder designated as 2014 Series F Mortgage Bonds has heretofore been entered into between the Company and the Trustee and has been filed in the Office of the Secretary of State of Michigan as a financing statement on December 18, 2014 (Filing No. 2014179380-9) and has been recorded as a real estate mortgage in the offices of the respective Register of Deeds of certain counties in the State of Michigan, as follows:



COUNTY	RECORDED	LIBER/ INSTRUMENT NO.	PAGE
Alcona County Register of Deeds	12/17/14	512	240
Alger County Register of Deeds	12/17/14	MI 201402423
Alpena County Register of Deeds	12/17/14	505	342
Antrim County Register of Deeds	12/17/14	854	1792



COUNTY	RECORDED	LIBER/ INSTRUMENT NO.	PAGE
Arenac County Register of Deeds	12/18/14	201404181
Barry County Register of Deeds	12/17/14	2014-011786
Benzie County Register of Deeds	12/17/14	2014R - 05072
Charlevoix County Register of Deeds	12/22/14	1082	912
Cheboygan County Register of Deeds	12/17/14	1272	885
Chippewa County Register of Deeds	12/17/14	1195	588
Clare County Register of Deeds	12/17/14	1275	294
Clinton County Register of Deeds	12/17/14	5222592
Crawford County Register of Deeds	1/5/15	720	714
Delta County Register of Deeds	12/17/14	1120	893
Dickinson County Register of Deeds	12/17/14	GL 811	54
Emmet County Register of Deeds	12/17/14	1172	359
Gladwin County Register of Deeds	12/17/14	1038	342
Grand Traverse County Register of Deeds	12/17/14	2014R - 21005
Gratiot County Register of Deeds	12/17/14	966	1140
Ionia County Register of Deeds	12/17/14	636	1802
Iosco County Register of Deeds	12/17/14	1121	441
Iron County Register of Deeds	1/8/15	648	306
Isabella County Register of Deeds	12/17/14	1686	357
Jackson County Register of Deeds	12/22/14	2046	166
Kalkaska County Register of Deeds	12/22/14	3122606
Kent County Register of Deeds	1/12/15	20150112-0003024
Lake County Register of Deeds	12/22/14	374	1181
Leelanau County Register of Deeds	1/8/15	1218	556
Lenawee County Register of Deeds	12/17/14	2499	247
Livingston County Register of Deeds	1/8/15	2015R - 000664
Macomb County Register of Deeds	12/23/14	23167	759
Manistee County Register of Deeds	12/17/14	2014R006260
Marquette County Register of Deeds	12/17/14	2014R - 11724
Mason County Register of Deeds	12/17/14	2014R06485
Mecosta County Register of Deeds	12/17/14	850	956
Menominee County Register of Deeds	12/17/14	757	938
Missaukee County Register of Deeds	12/17/14	2014-04127
Monroe County Register of Deeds	1/8/15	2015R00502
Montcalm County Register of Deeds	1/8/15	2015R-00220
Montmorency County Register of Deeds	12/17/14	345	427
Muskegon County Register of Deeds	12/17/14	4039	615



COUNTY	RECORDED	LIBER/ INSTRUMENT NO.	PAGE
Newaygo County Register of Deeds	12/17/14	456	4931
Oakland County Register of Deeds	12/18/14	47706	259
Oceana County Register of Deeds	12/17/14	2014	19920
Ogemaw County Register of Deeds	12/17/14	3125281
Osceola County Register of Deeds	12/17/14	939	223
Oscoda County Register of Deeds	12/17/14	214-02945
Otsego County Register of Deeds	12/17/14	1363	753
Ottawa County Register of Deeds	12/18/14	2014-0044928
Presque Isle County Register of Deeds	12/17/14	558	130
Roscommon County Register of Deeds	12/19/14	1145	2278
St. Clair County Register of Deeds	12/18/14	4563	657
Saginaw County Register of Deeds	12/17/14	2797	22
Shiawassee County Register of Deeds	12/17/14	1205	612
Washtenaw County Register of Deeds	12/17/14	5071	342
Wayne County Register of Deeds	1/9/15	51964	1462
Wexford County Register of Deeds	12/17/14	672	2943

ARTICLE VI
RECORDING OF AFFIDAVIT OF FACTS AFFECTING REAL PROPERTY

An Affidavit of Facts Affecting Real Property dated February 11, 2013 (the “Affidavit”) has been recorded in the offices of the respective Registers of Deeds of certain counties in the State of Michigan. The Affidavit, signed by the Company’s then President and Chief Operating Officer, was given pursuant to MCL 565.451a to give notice of the fact that pursuant to a joint resolution of the Company’s sole shareholder and its board of directors, the Company amended its articles of incorporation effective January 1, 2013 to change its name from MICHIGAN CONSOLIDATED GAS COMPANY to DTE GAS COMPANY.

ARTICLE VII
MISCELLANEOUS PROVISIONS

Except insofar as herein otherwise expressly provided, all the provisions, terms and conditions of the Indenture shall be deemed to be incorporated in, and made a part of, this Forty-sixth Supplemental Indenture, and the Twenty-ninth Supplemental Indenture dated as of July 15, 1989, as supplemented by the Thirtieth Supplemental Indenture dated as of September 1, 1991, by the Thirty-first Supplemental Indenture dated as of December 15, 1991, by the Thirty-second Supplemental Indenture dated as of January 5, 1993, by the Thirty-third Supplemental Indenture dated as of May 1, 1995, by the Thirty-fourth Supplemental Indenture dated as of November 1,

1996, by the Thirty-fifth Supplemental Indenture dated as of June 18, 1998, by the Thirty-sixth Supplemental Indenture dated as of August 15, 2001, by the Thirty-seventh Supplemental Indenture dated as of February 15, 2003, by the Thirty-eighth Supplemental Indenture dated as of October 1, 2004, by the Thirty-ninth Supplemental Indenture dated as of April 1, 2008, by the Fortieth Supplemental Indenture dated as of June 1, 2008, by the Forty-first Supplemental Indenture dated as of August 1, 2008, by the Forty-second Supplemental Indenture dated as of December 1, 2008, by the Forty-third Supplemental Indenture dated as of December 1, 2012, by the Forty-fourth Supplemental Indenture dated as of December 1, 2013, by the Forty-fifth Supplemental Indenture dated as of December 1, 2014 and by this Supplemental Indenture is in all respects ratified and confirmed; and the Indenture and said Supplemental Indentures shall be read, taken and construed as one and the same instrument.

Except to the extent specifically provided therein, no provision of this Supplemental Indenture or any future supplemental indenture is intended to modify, and the parties do hereby adopt and confirm, the provisions of Section 318(c) of the Trust Indenture Act, which amend and supersede provisions of the Indenture in effect prior to November 15, 1990.

Nothing in this Supplemental Indenture is intended, or shall be construed, to give to any person or corporation, other than the parties hereto and the holders of Bonds issued and to be issued under and secured by the Indenture, any legal or equitable right, remedy or claim under or in respect of this Supplemental Indenture, or under any covenant, condition or provision herein contained, all the covenants, conditions and provisions of this Supplemental Indenture being intended to be, and being, for the sole and exclusive benefit of the parties hereto and of the holders of bonds issued and to be issued under the Indenture and secured thereby.

All covenants, promises and agreements in this Supplemental Indenture contained by or on behalf of the Company shall bind its successors and assigns whether so expressed or not.

This Supplemental Indenture may be executed in any number of counterparts, and each of such counterparts when so executed shall be deemed to be an original; but all such counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, DTE GAS COMPANY has caused this Supplemental Indenture to be executed by its duly authorized Officer, and its corporate seal to be hereunto affixed, and Citibank, N.A., as Trustee as aforesaid, has caused the same to be executed by one of its authorized signatories and its corporate seal to be hereunto affixed, on the respective dates of their acknowledgments hereinafter set forth, as of the date and year first above written.

DTE GAS COMPANY

By: /s/EDWARD J. SOLOMON

Edward J. Solomon

Assistant Treasurer

Signed, sealed, acknowledged and
delivered by DTE GAS COMPANY in the presence of:

/s/ANDREW HAYNER
Andrew Hayner

/s/KATHLEEN HIER

Kathleen Hier

State of Michigan }

} ss.

County of Wayne }

The foregoing instrument was acknowledged before me this 26th day of August, 2015, by Edward J. Solomon, as Assistant Treasurer, of DTE Gas Company, a Michigan corporation, on behalf of the corporation.

/s/JENNIFER EVANS

Jennifer Evans

Notary Public, Wayne County, MI

Acting in Wayne County, MI

My Commission Expires: December 28, 2016

CITIBANK, N.A., as Trustee

By: /s/ JENNIFER McCOURT

Name: Jennifer McCourt

Its: Vice President

Signed, sealed, acknowledged and
delivered by CITIBANK, N.A.
in the presence of:

/s/ CIRINO EMANUELE

Name: Cirino Emanuele

Vice President

/s/ANTHONY BAUSA

Name: Anthony Bausa

Vice President

State of New York }

} ss.

County of New York }

The foregoing instrument was acknowledged before me this 20th day of August, 2015, by Jennifer McCourt, as Vice President of Citibank, N.A., a national banking association, on behalf of the association, as Trustee, as in said instrument described.

/s/ NOREEN SANTOS
Notary Public, State of New York
No. 01SA6228750
Qualified in Nassau County

Certificate Filed in New York County

Commission Expires: September 27, 2018

This instrument was drafted by:

Andrew Hayner

DTE Energy

One Energy Plaza, 688WCB

Detroit, MI 48226

When recorded return to:

Andrew Hayner

DTE Energy
One Energy Plaza, 688WCB

Detroit, MI 48226

Exhibit 12.64

DTE Electric Company

Computation of Ratio of Earnings to Fixed Charges



	Nine Months Ended			Year Ended December 31,
	September 30, 2015			2014			2013			2012			2011			2010
	(In millions)
Earnings:
Pretax earnings	$	696		$	830		$	741		$	768		$	704		$	711
Adjustments	(8		)	(11		)	(7		)	(7		)	(2		)	(4		)
Fixed charges	208			267			281			286			310			328
Net earnings	$	896		$	1,086		$	1,015		$	1,047		$	1,012		$	1,035

Fixed Charges:
Interest expense	$	194		$	247		$	264		$	269		$	287		$	310
Adjustments	14			20			17			17			23			18
Fixed charges	$	208		$	267		$	281		$	286		$	310		$	328

Ratio of earnings to fixed charges	4.31			4.07			3.61			3.66			3.26			3.16

Exhibit 31.105

FORM 10-Q CERTIFICATION

I, Gerard M. Anderson, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of DTE Energy Company;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):


a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



/S/ GERARD M. ANDERSON	Date:	October 23, 2015
Gerard M. Anderson Chairman of the Board and Chief Executive Officer of DTE Energy Company

Exhibit 31.106

FORM 10-Q CERTIFICATION

I, Peter B. Oleksiak, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of DTE Energy Company;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):


a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



/S/ PETER B. OLEKSIAK	Date:	October 23, 2015
Peter B. Oleksiak Senior Vice President and Chief Financial Officer of DTE Energy Company

Exhibit 31.107

FORM 10-Q CERTIFICATION

I, Gerard M. Anderson, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of DTE Electric Company;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):


a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



/S/ GERARD M. ANDERSON	Date:	October 23, 2015
Gerard M. Anderson Chairman of the Board and Chief Executive Officer of DTE Electric Company

Exhibit 31.108

FORM 10-Q CERTIFICATION

I, Peter B. Oleksiak, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of DTE Electric Company;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):


a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



/S/ PETER B. OLEKSIAK	Date:	October 23, 2015
Peter B. Oleksiak Senior Vice President and Chief Financial Officer of DTE Electric Company

Exhibit 32.105

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of DTE Energy Company (the “Company”) for the quarter ended September 30, 2015 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gerard M. Anderson, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:


(1)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date:	October 23, 2015	/S/ GERARD M. ANDERSON
		Gerard M. Anderson Chairman of the Board and Chief Executive Officer of DTE Energy Company

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.106

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of DTE Energy Company (the “Company”) for the quarter ended September 30, 2015 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Peter B. Oleksiak, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:


(1)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date:	October 23, 2015	/S/ PETER B. OLEKSIAK
		Peter B. Oleksiak Senior Vice President and Chief Financial Officer of DTE Energy Company

Exhibit 32.107

CERTIFICATION PURSUANT TO

18 U. S. C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of DTE Electric Company (the “Company”) for the quarter ended September 30, 2015 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gerard M. Anderson, certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:


(1)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date:	October 23, 2015	/S/ GERARD M. ANDERSON
		Gerard M. Anderson Chairman of the Board and Chief Executive Officer of DTE Electric Company

Exhibit 32.108

CERTIFICATION PURSUANT TO

18 U. S. C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of DTE Electric Company (the “Company”) for the quarter ended September 30, 2015 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Peter B. Oleksiak, certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:


(1)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date:	October 23, 2015	/S/ PETER B. OLEKSIAK
		Peter B. Oleksiak Senior Vice President and Chief Financial Officer of DTE Electric Company