UNITED STATES SECURITIES AND EXCHANGE COMMISSION

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~~June 30, ~~2013~~2014

Commission file number 1-2198

The DTE Electric Company meets the conditions set forth in General Instruction H (1) (a) and (b) of Form 10-Q and is, therefore, filing this Form with the reduced disclosure format.

DTE ELECTRIC COMPANY

(Exact name of registrant as specified in its charter)



Michigan	38-0478650
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

One Energy Plaza, Detroit, Michigan	48226-1279
(Address of principal executive offices)	(Zip Code)

313-235-4000

(Registrant's telephone number, including area code)

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.

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).

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.

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

Yes o No x

All of the registrant's 138,632,324 outstanding shares of common stock are owned by DTE Energy Company.

DTE Electric Company

Quarterly Report on Form 10-Q

Quarter Ended ~~September~~June 30, ~~2013~~2014

	Page
Definitions	1
Forward-Looking Statements	2
Part I - Financial Information	3
Items 1. Financial Statements	3
Consolidated Statements of Operations (Unaudited)	3
Consolidated Statements of Comprehensive Income (Unaudited)	4
Consolidated Statements of Cash Flows (Unaudited)	5
Consolidated Statements of Financial Position (Unaudited)	6
Consolidated Statements of Changes in Shareholder's Equity (Unaudited)	8
Notes to Consolidated Financial Statements (Unaudited)	9
Item 2. Management's Narrative Analysis of Results of Operations	23
Item 4. Controls and Procedures	26
Part II - Other Information	27
Item 1. Legal Proceedings	27
Item 1A. Risk Factors	27
Item 6. Exhibits	28
Signature	29
EX-4-281
EX-12-47
EX-31-85
EX-31-86
EX-32-85
EX-32-86
EX-101.INS XBRL INSTANCE DOCUMENT
EX-101.SCH XBRL TAXONOMY EXTENSION SCHEMA
EX-101.CAL XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
EX-101.DEF XBRL TAXONOMY EXTENSION DEFINITION DATABASE
EX-101.LAB XBRL TAXONOMY EXTENSION LABEL LINKBASE
EX-101.PRE XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

TABLE OF CONTENTS



	Page
Definitions	1
Forward-Looking Statements	2
Part I - FINANCIAL INFORMATION
Items 1. Financial Statements	3
Consolidated Statements of Operations (Unaudited)	3
Consolidated Statements of Comprehensive Income (Unaudited)	4
Consolidated Statements of Cash Flows (Unaudited)	5
Consolidated Statements of Financial Position (Unaudited)	6
Consolidated Statements of Changes in Shareholder's Equity (Unaudited)	8
Notes to Consolidated Financial Statements (Unaudited)	8
Item 2. Management's Narrative Analysis of Results of Operations	24
Item 4. Controls and Procedures	26
Part II - OTHER INFORMATION
Item 1. Legal Proceedings	27
Item 1A. Risk Factors	28
Item 6. Exhibits	28
SIGNATURE	29
EX-4-282
EX-4-283
EX-12-50
EX-31-91
EX-31-92
EX-32-91
EX-32-92
EX-101.INS XBRL Instance Document
EX-101.SCH XBRL Taxonomy Extension Schema
EX-101.CAL XBRL Taxonomy Extension Calculation Linkbase
EX-101.DEF XBRL Taxonomy Extension Definition Database
EX-101.LAB XBRL Taxonomy Extension Label Linkbase
EX-101.PRE XBRL Taxonomy Extension Presentation Linkbase

DEFINITIONS

ASC		Accounting Standards Codification
Company		DTE Electric Company and any subsidiary companies
ASU		Accounting Standards Update
Customer Choice		Michigan legislation giving customers the option to choose alternative suppliers for electricity.
DTE Electric		DTE Electric Company (a direct wholly owned subsidiary of DTE Energy Company) and subsidiary companies. ~~Formerly known as The Detroit Edison Company.~~
DTE Energy		DTE Energy Company, directly or indirectly the parent of DTE Electric, DTE Gas Company and numerous non-utility subsidiaries
EPA		~~United~~U.S. ~~States~~ 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.
MCIT		Michigan Corporate Income Tax
MDEQ		Michigan Department of Environmental Quality
MISO		~~Midwest~~Midcontinent Independent System Operator ~~is an Independent System Operator and the Regional Transmission Organization serving the Midwest United States and Manitoba~~, ~~Canada~~Inc.
MPSC		Michigan Public Service Commission
NRC		United States Nuclear Regulatory Commission
NOV		Notice of Violation
NRC		U.S. Nuclear Regulatory Commission
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.
RDM		A Revenue Decoupling Mechanism authorized by the MPSC that is designed to minimize the impact on revenues of changes in average customer usage of electricity
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.
VIE		Variable Interest Entity

Units of Measurement kWh Kilowatthour of electricity ~~MW Megawatt of electricity~~ MWh Megawatthour of electricity

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 DTE Electric. 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 including, but not limited to, the following:


•	impact of regulation by the FERC, MPSC, NRC and 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 Customer Choice programs;

• ~~impact~~economic ofconditions ~~electric~~and ~~utility~~population ~~restructuring~~changes in ~~Michigan,~~our ~~including~~geographic ~~legislative~~area ~~amendments~~resulting in changes in demand, customer conservation and ~~Customer~~thefts ~~Choice~~of ~~programs~~electricity;

• economic conditions and population changes in our geographic area resulting in changes in demand, customer conservation, thefts of electricity and high levels of uncollectible accounts receivable;


•	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 and purchased power;


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


•	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 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 our public filings with the Securities and Exchange Commission.

New factors emerge from time to time. We cannot predict what factors may arise or how such factors may cause our 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. We 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.

Part I -— Financial Information

Item 1. Financial Statements

DTE Electric Company

Consolidated Statements of Operations (Unaudited)

	Three Months Ended						Nine Months Ended
	Three Months Ended June 30,						Six Months Ended June 30,
	September 30,						September 30,
	2014			2013			2014			2013
	2013			2012			2013			2012
	(In millions)
Operating Revenues	$	1,~~457~~281		$	1,~~542~~265		$	32,~~941~~691		$	42,~~029~~484
Operating Expenses
Fuel and purchased power	~~487~~400			~~543~~435			~~1,294~~898			~~1,348~~807
Operation and maintenance	~~335~~329			~~337~~343			~~1,009~~671			~~1,026~~674
Depreciation and amortization	~~233~~229			~~219~~221			~~666~~457			~~607~~433
Taxes other than income	6765			6563			~~200~~136			~~193~~133
Asset (gains) losses and reserves, net	(31		)	—1			(31		)	(1—		)
	1,119			1,164			3,166			3,173
	1,022			1,063			2,161			2,047
Operating Income	~~338~~259			~~378~~202			~~775~~530			~~856~~437
Other (Income) and Deductions
Interest expense	6861			7068			~~202~~124			~~204~~134
Other income	(1417		)	(149		)	(3830		)	(4124		)
Other expenses	78			126			1915			2712
	61			68			183			190
	52			65			109			122
Income Before Income Taxes	~~277~~207			~~310~~137			~~592~~421			~~666~~315
Income Tax Expense	9777			~~115~~47			~~206~~154			~~247~~109
Net Income	$	~~180~~130		$	~~195~~90		$	~~386~~267		$	~~419~~206

See 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,
	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013			2012
	2014		2013		2014			2013
	(In millions)
Net income	$	~~180~~130	$	~~195~~90	$	~~386~~267		$	~~419~~206
Other comprehensive income:
Other comprehensive income (loss), net of tax:
Benefit obligations, net of taxes of $—, $—, $1 and $1	1		—		2			2
Benefit obligations, net of taxes of $1, $—, $— and $—, respectively	—		1		(1		)	1
Comprehensive income	$	~~181~~130	$	~~195~~91	$	~~388~~266		$	~~421~~207

See Notes to Consolidated Financial Statements (Unaudited)

DTE Electric Company

Consolidated Statements of Cash Flows (Unaudited)

	Nine Months Ended
	Six Months Ended June 30,
	September 30,
	2014			2013
	2013			2012
	(In millions)
Operating Activities
Net income	$	~~386~~267		$	~~419~~206
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	~~666~~457			~~607~~433
Nuclear fuel amortization	2519			2517
Allowance for equity funds used during construction	(1011		)	(96		)
Deferred income taxes	~~104~~145			~~(48~~61		)
Asset (gains) losses and reserves, net	(3		)	(1		)
Changes in assets and liabilities:
Accounts receivable, net	(4014		)	(1384		)
Inventories	53(28		)	443
Accounts payable	1510			~~(55~~18		)
Regulatory assets and liabilities	302			280
Accrued pension liability — affiliates	(83		)	(134		)
Accrued pension liability — affiliates	(229		)	(43		)
Accrued postretirement liability — affiliates	(28		)	(138		)
Accrued postretirement liability — affiliates	(148		)	(91		)
Regulatory assets and liabilities	(152		)	217
Other assets	(4253		)	~~(24~~11		)
Other liabilities	(1534		)	~~171~~(27		)
Net cash from operating activities	~~1,064~~495			~~1,222~~617
Investing Activities
Plant and equipment expenditures	(~~946~~832		)	(~~855~~607		)
Restricted cash for debt redemption, principally Securitization	5812			5712
Notes receivable from affiliate	(4200		)	(~~252~~1		)
Proceeds from sale of nuclear decommissioning trust fund assets	40475			48309
Investment in nuclear decommissioning trust funds	(52483		)	(61317		)
Other Investments	(2115		)	(1315		)
Net cash used for investing activities	(~~925~~643		)	(~~1,076~~619		)
Financing Activities
Issuance of long-term debt	768			496
Issuance of long-term debt, net of issuance costs	248			371
Redemption of long-term debt	(~~491~~281		)	(~~401~~152		)
Short-term borrowings — other	~~(119~~275		)	—(34		)
Short-term borrowings — affiliate	~~(25~~97		)	1(20		)
Dividends on common stock	(~~257~~185		)	(~~229~~171		)
Other	(24		)	(32		)
Net cash used for financing activities	(126		)	(136		)
Net cash from (used for) financing activities	150			(8		)
Net Increase in Cash and Cash Equivalents	13			10
Net Increase (Decrease) in Cash and Cash Equivalents	2			(10		)
Cash and Cash Equivalents at Beginning of the Period	3027			1330
Cash and Cash Equivalents at End of the Period	$	4329		$	2320
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Supplemental disclosure of non-cash investing and financing activities
Plant and equipment expenditures in accounts payable	$	~~155~~152		$	~~120~~130

See Notes to Consolidated Financial Statements (Unaudited)

DTE Electric Company

Consolidated Statements of Financial Position (Unaudited)

	September 30,			December 31,
	June 30,			December 31,
	2013			2012
	2014			2013
	(In millions)
ASSETS
Current Assets
Cash and cash equivalents	$	4329		$	3027
Restricted cash, principally Securitization	4488			~~102~~100
Accounts receivable (less allowance for doubtful accounts of $35 and $35, respectively)
Accounts receivable (less allowance for doubtful accounts of $27 and $28, respectively)
Customer	~~766~~749			~~697~~723
Affiliates	117			524
Other	1939			6324
Inventories
Fuel	~~178~~210			~~246~~188
Materials and supplies	~~207~~221			~~193~~215
Notes receivable	2			2
Regulatory assets	42			162
Affiliates	—			200
Prepaid property taxes	89			43
Other	12			2
Other	29			34
Regulatory assets	52			13
	1,420			1,577
Other	73			68
	1,490			1,584
Investments
Nuclear decommissioning trust funds	1,~~139~~237			1,~~037~~191
Other	~~148~~167			~~133~~160
	1,287			1,170
	1,404			1,351
Property
Property, plant and equipment	1819,~~479~~276			1718,~~689~~730
Less accumulated depreciation and amortization	(67,~~971~~085		)	(6,~~717~~951		)
	11,508			10,972
	12,191			11,779
Other Assets
Regulatory assets	2,~~919~~175			32,~~348~~275
Securitized regulatory assets	~~280~~135			~~413~~231
Intangible assets	3740			3041
Notes receivable	6			3
Other	158			149
Other	145			138
	2,508			2,696
	3,387			3,932
Total Assets	$	17,593		$	17,410
Total Assets	$	17,602		$	17,651

See Notes to Consolidated Financial Statements (Unaudited)

DTE Electric Company

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

	September 30,			December 31,
	June 30,			December 31,
	2013			2012
	2014			2013
	(In millions, except shares)
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Accounts payable
Affiliates	$	8957		$	6560
Other	~~352~~359			~~350~~424
Accrued interest	6957			61
Current portion long-term debt, including capital leases	~~501~~215			~~443~~504
Regulatory liabilities	~~192~~148			66278
Deferred income taxes	103			91
Short-term borrowings
Affiliates	55155			8058
Other	11275			~~130~~—
Other	~~180~~150			~~153~~177
	1,449			1,348
	1,519			1,653
Long-Term Debt (net of current portion)
Mortgage bonds, notes and other	4,~~639~~905			4,~~221~~540
Securitization bonds	~~105~~—			~~302~~105
Capital lease obligations	1—			14
	4,745			4,524
	4,905			4,649
Other Liabilities
Deferred income taxes	2,~~832~~937			2,~~761~~807
Regulatory liabilities	~~408~~293			~~483~~386
Asset retirement obligations	1,~~640~~717			1,~~557~~667
Unamortized investment tax credit	4337			4941
Nuclear decommissioning	~~172~~180			~~159~~178
Accrued pension liability — affiliates	~~1,138~~622			~~1,368~~705
Accrued postretirement liability — affiliates	~~638~~341			~~996~~369
Other	~~103~~107			~~103~~101
	6,974			7,476
	6,234			6,254
Commitments and Contingencies (Notes 6 and 9)
Commitments and Contingencies (Notes 7 and 10)
Shareholder’s Equity
Common stock, $10 par value, 400,000,000 shares authorized, and 138,632,324 shares issued and outstanding	3,~~196~~596			3,~~196~~596
Retained earnings	1,~~258~~356			1,~~129~~274
Accumulated other comprehensive income (loss)	(20		)	(22		)
Accumulated other comprehensive loss	(17		)	(16		)
	4,434			4,303
	4,935			4,854
Total Liabilities and Shareholder’s Equity	$	17,~~602~~593		$	17,~~651~~410

See Notes to Consolidated Financial Statements (Unaudited)

DTE Electric Company

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

				Additional					AccumulatedOther
				AdditionalPaid-inCapital					AccumulatedOtherComprehensiveLoss
	Common Stock			~~Paid-in~~		~~Retained~~RetainedEarnings			~~Comprehensive~~
	Shares	Amount		~~Capital~~		~~Earnings~~			~~Loss~~			Total
	(Dollars in millions, shares in thousands)
Balance, December 31, 2012	138,632	$	1,386	$	1,810	$	1,129		$	(22	)	$	4,303
Balance, December 31, 2013	138,632	$	1,386	$	2,210	$	1,274		$	(16	)	$	4,854
Net income	—	—		—		~~386~~267			—			~~386~~267
Dividends declared on common stock	—	—		—		(~~257~~185		)	—			(~~257~~185		)
Benefit obligations, net of tax	—	—		—		—			2(1		)	2(1		)
Balance, September 30, 2013	138,632	$	1,386	$	1,810	$	1,258		$	(20	)	$	4,434
Balance, June 30, 2014	138,632	$	1,386	$	2,210	$	1,356		$	(17	)	$	4,935

See Notes to Consolidated Financial Statements (Unaudited)

DTE Electric Company

Notes to Consolidated Financial Statements (Unaudited)

NOTE 1 — BASIS OF PRESENTATION

Corporate Structure

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 Electric is regulated by the MPSC and the FERC. In addition, we are regulated by other federal and state regulatory agencies including the NRC, the EPA and the MDEQ.

References in this ~~report~~Report to “we,” “us,” “our” or “Company” are to DTE Electric and its subsidiaries, collectively.

Basis of Presentation

These Consolidated Financial Statements should be read in conjunction with the Notes to Consolidated Financial Statements included in the ~~2012~~2013 Annual Report on Form 10-K.

The accompanying Consolidated Financial Statements 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 Company’s estimates.

The Consolidated Financial Statements are unaudited, but in the Company's opinion 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 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, ~~2013~~2014.

Certain prior year balances were reclassified to match the current year's financial statement presentation. Such revisions included an increase in the Consolidated Statements of Cash Flows line items for (i) Proceeds from sale of nuclear decommissioning trust funds, and (ii) Investment in nuclear decommissioning trust funds by $282 million for the six months ended June 30, 2013. These revisions were needed to properly state the gross purchases and sales activity in the nuclear decommissioning trust fund for the six months ended June 30, 2013. The total of Net cash used in investing activities for the six months ended June 30, 2013 was unchanged by these revisions. The revisions noted above are not deemed material, individually or in the aggregate, to the prior period consolidated financial statements.

Principles of Consolidation

The Company consolidates all majority-owned subsidiaries and investments in entities in which it has controlling influence. Non-majority owned investments are accounted for using the equity method when the Company is able to influence the operating policies of the investee. When the Company does not influence the operating policies of an investee, the cost method is used. These consolidated financial statements also reflect the Company’s proportionate interests in certain jointly owned utility plants. The Company eliminates all intercompany balances and transactions.

The Company evaluates whether an entity is a VIE whenever reconsideration events occur. The Company consolidates VIEs for which it is the primary beneficiary. If the Company 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, the Company 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 Company performs ongoing reassessments of all VIEs to determine if the primary beneficiary status has changed.

~~The~~ Company has variable interests in VIEs through certain of its long-term purchase contracts. As of September 30, 2013, the carrying amount of assets and liabilities in the Consolidated Statements of Financial Position that relate to its variable interests under long-term purchase contracts are predominately related to working capital accounts and generally represent the amounts owed by the Company for the deliveries associated with the current billing cycle under the contracts. The Company has not provided any form of financial support associated with these long-term contracts. There is no significant potential exposure to loss as a result of its variable interests through these long-term purchase contracts.8

DTE Electric Company

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

The Company has variable interests in VIEs through certain of its long-term purchase contracts. As of June 30, 2014, the carrying amount of assets and liabilities in the Consolidated Statements of Financial Position that relate to its variable interests under long-term purchase contracts are predominately related to working capital accounts and generally represent the amounts owed by the Company for the deliveries associated with the current billing cycle under the contracts. The Company has 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 its 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 performs servicing activities including billing and collecting surcharge revenue for Securitization. This entity is a VIE and is consolidated by the Company. The maximum risk exposure related to Securitization is reflected on the Company’s Consolidated Statements of Financial Position.

The following table summarizes the major balance sheet items as of ~~September~~June 30, ~~2013~~2014 and December 31, ~~2012~~2013 restricted for Securitization that are either (1) assets that can be used only to settle their obligations related to ~~the~~ Securitization or (2) liabilities for which creditors do not have recourse to the general credit of the primary beneficiary.

	September 30,		December 31,
	June 30,		December 31,
	2013		2012
	2014		2013
	(In millions)
ASSETS
Restricted cash	$	4488	$	~~102~~100
Accounts receivable	39		34
Securitized regulatory assets	~~280~~135		~~413~~231
Other assets	5		7
Other long-term assets	2		4
	$	~~368~~264	$	~~556~~369
LIABILITIES
Accounts payable and accrued current liabilities	$	25	$	117
Current portion long-term debt, including capital leases	196		177
Current portion long-term debt	201		196
Current regulatory liabilities	4841		5043
Securitization bonds	~~105~~—		~~302~~105
Other long-term liabilities	8		78
	$	~~359~~255	$	~~547~~359

As of September 30, 2013 DTE Electric had no balance in Notes receivable, related to non-consolidated VIEs and at December 31, 2012 the Company had $3 million in Notes receivable, related to non-consolidated VIEs.9

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES

Comprehensive Income

Comprehensive income is the change in common shareholder’s equity during a period from transactions and events from non-owner sources, including net income. As shown in the following tables, amounts recorded to accumulated other comprehensive loss for the three and nine months ended September 30, 2013 reflected changes in benefit obligations.

	Changes in Accumulated Other Comprehensive Loss by Component (a)
	Three Months Ended September 30, 2013
	Benefit Obligations (b)			Total
	(In millions)
Beginning balance, June 30, 2013	$	(21	)	$	(21	)
Other comprehensive income before reclassifications	—			—
Amounts reclassified from accumulated other comprehensive income	1			1
Net current-period other comprehensive income	1			1
Ending balance, September 30, 2013	$	(20	)	$	(20	)

DTE Electric Company

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

	Changes in Accumulated Other Comprehensive Loss by Component (a)
	Nine Months Ended September 30, 2013
	Benefit Obligations (b)			Total
	(In millions)
Beginning balance, December 31, 2012	$	(22	)	$	(22	)
Other comprehensive income before reclassifications	—			—
Amounts reclassified from accumulated other comprehensive income	2			2
Net current-period other comprehensive income	2			2
Ending balance, September 30, 2013	$	(20	)	$	(20	)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES

Comprehensive Income (Loss)

Comprehensive income (loss) is the change in common shareholders' equity during a period from transactions and events from non-owner sources, including net income. As shown in the following tables, amounts recorded to accumulated other comprehensive loss for the three and six months ended June 30, 2014 include unrealized gains and losses on available-for-sale securities, and changes in benefit obligations, consisting of deferred actuarial losses, prior service costs and transition amounts related to pension and other postretirement benefit plans.



	Changes in Accumulated Other Comprehensive Loss by Component (a)
	Three Months Ended June 30, 2014
	Net Unrealized Gain/(Loss) on Investments		Benefit Obligations			Total
	(In millions)
Beginning balance, March 31, 2014	$	1	$	(18	)	$	(17	)
Other comprehensive income before reclassifications	—		—			—
Amounts reclassified from Accumulated other comprehensive income	—		—			—
Net current-period other comprehensive income	—		—			—
Ending balance, June 30, 2014	$	1	$	(18	)	$	(17	)



	Changes in Accumulated Other Comprehensive Loss by Component (a)
	Six Months Ended June 30, 2014
	Net Unrealized Gain/(Loss) on Investments		Benefit Obligations			Total
	(In millions)
Beginning balance, December 31, 2013	$	1	$	(17	)	$	(16	)
Other comprehensive income before reclassifications	—		(1		)	(1		)
Amounts reclassified from Accumulated other comprehensive income	—		—			—
Net current-period other comprehensive income	—		(1		)	(1		)
Ending balance, June 30, 2014	$	1	$	(18	)	$	(17	)

_______________________________________

(a) All amounts are net of tax.

(b) The amounts reclassified from accumulated other comprehensive income are included in the computation of the net periodic pension cost (see Retirement Benefits and Trusteed Assets Note 10).

Intangible Assets

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

	September 30,		December 31,
	June 30,		December 31,
	2013		2012
	2014		2013
	(In millions)
Emission allowances	$	32	$	62
Renewable energy credits	4851		4451
	51		50
	53		53
Less current intangible assets	1413		2012
	$	3740	$	3041

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 business.

DTE Electric Company

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

Income Taxes

The Company's effective tax rate ~~from continuing operations~~ for the three months ended ~~September~~June 30, ~~2013~~2014 was 3537% ~~percent~~ as compared to 3734% ~~percent~~ for the three months ended ~~September~~June 30, ~~2012~~2013. The Company's effective tax rate ~~from continuing operations~~ for the ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014 was 3537% ~~percent~~ as compared to 3735% ~~percent~~ for the ~~nine~~six months ended ~~September~~June 30, ~~2012~~2013. The ~~decrease~~increases in the effective tax ~~rate~~rates inare ~~2013 is~~ due primarily to ~~higher~~a ~~production~~reduction ~~tax~~in ~~credits.~~the ~~DTE~~domestic ~~Electric~~production ~~had~~activities ~~an income~~ tax ~~payable of $34 million at September 30, 2013 and $13 million at December 31, 2012 due to DTE Energy~~benefit.

~~The~~DTE ~~Company~~Electric had $3an ~~million~~income oftax ~~unrecognized~~receivable ~~tax~~of ~~benefits~~$16 million at ~~September~~June 30, ~~2013,~~2014 ~~that,~~and if$23 ~~recognized,~~million ~~would~~at ~~favorably~~December ~~impact~~31, ~~its~~2013 ~~effective~~due ~~tax~~from ~~rate. The~~DTE ~~Company does not anticipate any material changes to the unrecognized tax benefits in the next twelve months~~Energy.

The Company had $3 million of unrecognized tax benefits at June 30, 2014, that, if recognized, would favorably impact its effective tax rate. The Company does not anticipate any material changes to the unrecognized tax benefits in the next twelve months.

Stock-Based Compensation

The Company received an allocation of costs from DTE Energy associated with stock-based compensation of $10 million and $1219 million for the three months ended ~~September~~June 30, ~~2013~~2014 and ~~September 30~~2013, ~~2012,~~ respectively, while such allocation was $4329 million and $3233 million for the ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014 and ~~September 30~~2013, ~~2012,~~ respectively.

NOTE 3 — NEW ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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. The revenue standard is effective for the first interim period within annual reporting periods beginning after December 15, 2016 and is to be applied retrospectively. Early adoption is not permitted. The Company is currently assessing the impact of this ASU on its consolidated financial statements.

NOTE 4 — 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 Company makes certain assumptions it believes 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 Company and its counterparties is incorporated in the valuation of assets and liabilities through the use of credit reserves, the impact of which was immaterial at June 30, 2014 and December 31, 2013. The Company believes it uses valuation techniques that maximize the use of observable market-based inputs and minimize the use of unobservable inputs.

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 Company classifies 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 Company has the ability to access as of the reporting date.

DTE Electric Company

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

NOTE 3 — 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 Company makes certain assumptions it believes 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 Company and its 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, 2013 and December 31, 2012. The Company believes it uses valuation techniques that maximize the use of observable market-based inputs and minimize the use of unobservable inputs.

• Level 1 — Consists of unadjusted quoted prices in active markets for identical assets or liabilities that the Company has 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.

The following table presents assets measured and recorded at fair value on a recurring basis as of ~~September~~June 30, ~~2013~~2014 and December 31, ~~2012~~2013:

	September 30, 2013								December 31, 2012
	June 30, 2014								December 31, 2013
	Level 1		Level 2		Level 3		Net Balance		Level 1		Level 2		Level 3		Net Balance
	(In millions)
Assets:
Cash equivalents (a)	$	—5	$	6196	$	—	$	61101	$	—2	$	~~116~~114	$	—	$	116
Nuclear decommissioning trusts	~~757~~798		~~382~~439		—		1,~~139~~237		~~694~~779		~~343~~412		—		1,~~037~~191
Other investments (b)	7492		4850		—		~~122~~142		6491		44		—		~~108~~135
Derivative assets — FTRs	—		—		57		57		—		—		13		13
Total	$	~~831~~895	$	~~491~~585	$	57	$	1,~~327~~487	$	~~758~~872	$	~~503~~570	$	13	$	1,~~262~~445
Assets:
Current	$	—5	$	6196	$	57	$	66108	$	—2	$	~~116~~114	$	13	$	~~117~~119
Noncurrent	~~831~~890		~~430~~489		—		1,~~261~~379		~~758~~870		~~387~~456		—		1,~~145~~326
Total Assets	$	~~831~~895	$	~~491~~585	$	57	$	1,~~327~~487	$	~~758~~872	$	~~503~~570	$	13	$	1,~~262~~445

_______________________________________

(a) At ~~September~~June 30, ~~2013~~2014, available-for-sale securities of $61101 million, included $4488 million and $1713 million of cash equivalents included in Restricted cash and Other investments, respectively, on the Consolidated Statements of Financial Position. At December 31, ~~2012~~2013, available-for-sale securities of $116 million, included $~~102~~100 million and $1416 million of cash equivalents included in Restricted cash and Other investments, respectively, on the Consolidated Statements of Financial Position.

(b) Available-for-sale equity securities at ~~September~~both June 30, ~~2013~~2014 and December 31, ~~2012~~2013 of $67 million ~~and $5 million, respectively,~~ are included in Other investments on the Consolidated Statements of Financial Position.

Cash Equivalents

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 net asset values (NAV). 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 Company has obtained an understanding of how these prices are derived, including the nature and observability of the inputs used in deriving such prices. Additionally, the Company selectively corroborates the fair value of securities by comparison of market-based price sources. Investment policies and procedures are determined by the Company's Trust Investments Department which reports to the Company's Vice President and Treasurer.

DTE Electric Company

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

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. The fair values of the shares in these investments are based upon observable market prices for similar securities and, therefore, have been categorized as Level 2 in the fair value hierarchy.

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 which hold exchange-traded equity or debt securities are valued based on the underlying securities, using quoted prices in actively traded markets. 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 Company has obtained an understanding of how these prices are derived, including the nature and observability of the inputs used in deriving such prices. Additionally, the Company selectively corroborates the fair value of securities by comparison of market-based price sources. Investment policies and procedures are determined by the Company's Trust Investments Department which reports to the Company's Vice President and Treasurer.

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 Company considers 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 Company monitors 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 Company has obtained an understanding of how these prices are derived. Additionally, the Company selectively corroborates the fair value of its 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 Company has 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 our forward price curves has been assigned to our Risk Management Department, which is separate and distinct from the trading functions within the Company.

The following table presents the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis for the three and ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014 and ~~2012~~2013:

	Three Months EndedSeptember 30,						Nine Months EndedSeptember 30,
	Three Months EndedJune 30,						Six Months EndedJune 30,
	2013			2012			2013			2012
	2014			2013			2014			2013
	(In millions)
Net Assets as of beginning of the period	$	21		$	21		$	13		$	1
Change in fair value recorded in regulatory assets/liabilities	37			73			711			124
Purchases, issuances and settlements:
Settlements	—(1		)	(72		)	(37		)	(113		)
Net Assets as of September 30	$	5		$	2		$	5		$	2
Net Assets as of June 30	$	7		$	2		$	7		$	2
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, 2013 and September 30, 2012	$	3		$	1		$	5		$	2
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 June 30, 2014 and 2013	$	7		$	2		$	7		$	2

No transfers between Levels 1, 2 or 3 occurred in the three and ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014 and ~~September 30, 2012~~2013.

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 Company has obtained an understanding of how the fair values are derived. The Company also selectively corroborates the fair value of its 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 are determined by the Company's Treasury Department which reports to the Company's Vice President and Treasurer.

DTE Electric Company

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

~~Fair~~The ~~Value~~following table presents the carrying amount and fair value of ~~Financial~~financial ~~Instruments~~instruments as of June 30, 2014 and December 31, 2013:



	June 30, 2014								December 31, 2013
	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	$	13	$	—	$	—	$	13	$	10	$	—	$	—	$	10
Notes receivable — affiliates	$	—	$	—	$	—	$	—	$	200	$	—	$	—	$	200
Short-term borrowings — affiliates	$	155	$	—	$	—	$	155	$	58	$	—	$	—	$	58
Short-term borrowings — other	$	275	$	—	$	275	$	—	—		$	—	$	—	$	—
Long-term debt, excluding capital leases	$	5,116	$	—	$	5,233	$	352	$	5,146	$	—	$	5,253	$	136

The following table presents the carrying amount and fair value of financial instruments as of September 30, 2013 and December 31, 2012:

	September 30, 2013								December 31, 2012
	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	$	8	$	—	$	—	$	8	$	5	$	—	$	—	$	5
Short-term borrowings — affiliates	55		—		—		55		80		—		—		80
Short-term borrowings — other	11		—		11		—		130		—		130		—
Long-term debt	5,245		—		5,163		426		4,963		—		5,021		620

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 asset retirement obligation on the 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.

The following table summarizes the fair value of the nuclear decommissioning trust fund assets:

	September 30,		December 31,
	June 30,		December 31,
	2013		2012
	2014		2013
	(In millions)
Fermi 2	$	1,~~120~~214	$	1,~~021~~172
Fermi 1	3		3
Low-level radioactive waste	1620		1316
Total	$	1,~~139~~237	$	1,~~037~~191

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

	Three Months EndedSeptember 30,						Nine Months EndedSeptember 30,
	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	2014			2013			2014			2013
	(In millions)
Realized gains	$	117		$	711		$	3016		$	2119
Realized losses	~~(11~~$	(4	)	(6$	(7	)	~~(25~~$	(11	)	~~(17~~$	(14	)
Proceeds from sales of securities	13$	204		12$	173		40$	475		48$	309

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 the fair value and unrealized gains for the nuclear decommissioning trust funds:



	June 30, 2014				December 31, 2013
	Fair Value		Unrealized Gains		Fair Value		Unrealized Gains
	(In millions)
Equity securities	$	762	$	220	$	730	$	201
Debt securities	462		19		442		12
Cash and cash equivalents	13		—		19		—
	$	1,237	$	239	$	1,191	$	213

The debt securities at June 30, 2014 and December 31, 2013 had an average maturity of approximately 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.

DTE Electric Company

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

~~Realized~~Unrealized ~~gains~~losses incurred by the Fermi 2 trust are recognized as a Regulatory asset. DTE Electric recognized $28 million and $31 million of unrealized losses ~~from~~as ~~the~~Regulatory ~~sale~~assets ofat ~~securities~~June ~~for~~30, 2014 and December 31, 2013, respectively. Since the decommissioning of Fermi 21 ~~and~~is ~~the~~funded ~~low-level~~by ~~radioactive~~DTE ~~waste~~Electric ~~funds~~rather ~~are~~than ~~recorded~~through toa ~~the~~regulatory ~~Regulatory~~recovery ~~asset~~mechanism, ~~and~~there ~~Nuclear~~is ~~decommissioning~~no ~~liability~~corresponding regulatory asset treatment. ~~The~~Therefore, ~~following~~unrealized ~~table~~losses ~~sets~~incurred ~~forth~~by the ~~fair~~Fermi ~~value~~1 ~~and~~trust are recognized in earnings immediately. There were no unrealized ~~gains~~losses ~~for~~recognized in the ~~nuclear~~three ~~decommissioning~~and ~~trust~~six ~~funds:~~months ended June 30, 2014 and 2013 for Fermi 1.

	September 30, 2013				December 31, 2012
	Fair		Unrealized		Fair		Unrealized
	Value		Gains		Value		Gains
	(In millions)
Equity securities	$	732	$	195	$	631	$	122
Debt securities	395		17		399		27
Cash and cash equivalents	12		—		7		—
	$	1,139	$	212	$	1,037	$	149

The debt securities at both September 30, 2013 and December 31, 2012 had an average maturity of approximately 7 and 6 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. DTE Electric recognized $38 million and $44 million of unrealized losses as Regulatory assets at September 30, 2013 and December 31, 2012, respectively. Since the decommissioning of Fermi 1 is funded by DTE Electric rather than through a regulatory recovery mechanism, there is no corresponding regulatory asset treatment. Therefore, unrealized losses incurred by the Fermi 1 trust are recognized in earnings immediately. There were no unrealized losses recognized in the three and nine months ended September 30, 2013 and September 30, 2012 for Fermi 1.

Other Securities

At ~~September~~June 30, ~~2013~~2014 and December 31, ~~2012~~2013, the securities were comprised primarily of money market and equity securities. During the ~~quarter~~three and six months ended ~~September~~June 30, ~~2013~~2014 and ~~the year ended December 31~~2013, ~~2012~~ no amounts of unrealized losses on available-for-sale securities were reclassified out of other comprehensive income and realized into net income for the periods. Gains related to trading securities held at ~~September~~June 30, ~~2013~~2014 and ~~September~~2013 ~~30, 2012~~ were $127 million and $98 million, respectively.

NOTE 45 — FINANCIAL AND OTHER DERIVATIVE INSTRUMENTS

The Company recognizes all derivatives at their fair value as Derivative ~~Assets~~assets or ~~Liabilities~~liabilities on the 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 ~~and~~or losses from the ineffective portion of ~~any~~cash ~~hedge~~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 Company's primary market risk exposure is associated with commodity prices, credit and interest rates. The Company has risk management policies to monitor and manage market risks. The Company uses derivative instruments to manage some of the exposure. 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 sales exemption 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.

The following table presents the fair value of derivative instruments as of June 30, 2014 and December 31, 2013:



	June 30,		December 31,
	2014		2013
	(In millions)
FTRs — Other current assets	$	7	$	3
Total derivatives not designated as hedging instrument	$	7	$	3

DTE Electric Company

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

~~The~~NOTE ~~following~~6 ~~table~~— ~~presents~~ASSET ~~the~~RETIREMENT ~~fair value of derivative instruments as of September 30, 2013 and December 31, 2012:~~OBLIGATIONS

	September 30,		December 31,
	2013		2012
	(In millions)
FTRs — Other current assets	$	5	$	1
Total derivatives not designated as hedging instrument	$	5	$	1

A reconciliation of the asset retirement obligations for the six months ended June 30, 2014 follows:

The effects of derivative instruments recoverable through the PSCR mechanism when realized on the Consolidated Statements of Financial Position were $3 million and $7 million in gains related to FTRs recognized in Regulatory liabilities for the three and nine months ended September 30, 2013, respectively.



	(In millions)
Asset retirement obligations at December 31, 2013	$	1,667
Accretion	51
Liabilities incurred	7
Liabilities settled	(3		)
Revision in estimated cash flows	(5		)
Asset retirement obligations at June 30, 2014	$	1,717

~~The~~NOTE ~~following~~7 ~~represents~~— ~~the~~REGULATORY ~~cumulative gross volume of derivative contracts outstanding as of September 30, 2013:~~MATTERS

Commodity	Number of Units
FTRs (MWh)	72,875

Refundable Revenue Decoupling/ Deferred Gain Amortization

~~NOTE~~In 5September —2012, ~~ASSET~~the ~~RETIREMENT~~MPSC ~~OBLIGATIONS~~approved DTE Electric's accounting application to defer for future amortization the gain resulting from the reversal of the Company's $127 million regulatory liability associated with the operation of the RDM. The approved application provided for the amortization of the regulatory liability to income, at a monthly rate of approximately $10.6 million, beginning January 2014. On April 1, 2014, the MPSC approved DTE Electric's accounting application to suspend the amortization of the RDM regulatory liability as of June 30, 2014 and to complete the amortization over the period January 2015 to June 2015. If DTE Electric's base rates are increased prior to July 1, 2015, the Company will cease amortization and refund to customers the remaining unamortized balance of the regulatory liability.

A reconciliation of the asset retirement obligations for the nine months ended September 30, 2013 follows:

	(In millions)
Asset retirement obligations at December 31, 2012	$	1,557
Accretion	72
Revision in estimated cash flows	13
Liabilities settled	(2		)
Asset retirement obligations at September 30, 2013	$	1,640

NOTE 6 — REGULATORY MATTERS

Transition of the City of Detroit's Public Lighting Department's (PLD) Customers to DTE Electric's Distribution System

Accounting Authority

On June 28, 2013, DTE Electric filed an application for accounting authority to defer certain costs associated with the transition of the City of Detroit's PLD customers to the DTE Electric distribution system over a five to seven year system conversion period. The Company requested authority to defer as a regulatory asset, all net incremental revenue requirement associated with the transition. The net incremental revenue requirement includes costs to install meters and attach customers; system and customer facility upgrades and repairs; and the difference between DTE Electric's tariff rates and any transitional rates approved in the future. On July 11, 2013, the MPSC approved DTE Electric's request to defer, for accounting purposes, the net incremental revenue requirement.

The approval excludes the request to defer the difference between DTE Electric's tariff rates and any transitional rates that might be approved by the MPSC in the future. The MPSC will address proposed rates and recovery matters in a future contested proceeding. As the accounting order did not provide a regulatory recovery mechanism, a regulatory asset will not be recognized until a regulatory recovery mechanism is put into place and the recovery of the regulatory asset becomes probable.

Transitional Reconciliation Mechanism (TRM)

On July 19, 2013, DTE Electric filed its TRM application proposing a transitional tariff option for certain former PLD customers and a modified line extension provision. The application also ~~proposes~~proposed a recovery mechanism for the deferred net incremental revenue requirement ~~described~~associated ~~above~~with the transition. The ~~application~~net ~~further~~incremental ~~discusses~~revenue ~~that~~requirement includes costs to install meters and attach customers; system and customer facility upgrades and repairs; and the difference between DTE Electric's ~~will~~tariff berates ~~requesting~~and ~~recovery,~~any transitional rates approved in ~~subsequent~~the ~~PSCR~~future. On ~~cases~~May 13, of2014, the MPSC approved the TRM as requested and also ordered DTE Electric to include in the TRM the PLD transmission delivery service costs incurred while DTE Electric is temporarily relying upon PLD to operate and maintain PLD's system during the system conversion period. IfThe ~~the~~meter ~~MPSC~~installation ~~determines~~phase ~~that~~of the ~~transmission~~transition ~~costs~~was ~~are~~completed ~~not~~in ~~recoverable~~June in2014. On ~~the~~July ~~PSCR~~1, ~~the~~2014, ~~Company~~former ~~requested~~PLD ~~recovery~~customers asbecame ~~part~~customers of ~~the~~DTE ~~TRM~~Electric.

PSCR Proceedings

The PSCR process is designed to allow DTE Electric to recover all of its power supply costs if incurred under reasonable and prudent policies and practices. DTE Electric's power supply costs include fuel and related transportation costs, purchased and net interchange power costs, nitrogen oxide and sulfur dioxide emission allowances costs, urea costs, transmission costs and MISO costs. The MPSC reviews these costs, policies and practices for prudence in annual plan and reconciliation filings.

2012 PSCR Year — In March 2013, DTE Electric filed the 2012 PSCR reconciliation calculating a net under-recovery of approximately $87 million that includes an under-recovery of approximately $148 million for the 2011 PSCR year. The reconciliation includes purchased power costs related to the manual shutdown of our Fermi 2 nuclear power plant in June 2012 caused by the failure of one of the plant's two non-safety related feed-water pumps. The plant was restarted on July 30, 2012, which restored production to nominal 68% of full capacity. In September 2013, the repair to the plant was completed and production was returned to full capacity. DTE Electric was able to purchase sufficient power from MISO to continue to provide uninterrupted service to our customers. Certain intervenors in the reconciliation case have challenged the recovery of up to $32 million of the Fermi-related purchased power costs. Resolution of this matter is expected by late 2014 or early 2015.

DTE Electric Company

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

~~2009~~NOTE ~~Electric~~8 ~~Rate~~— ~~Case Filing~~ LONG-TERM ~~Court of Appeals Remand to MPSC~~DEBT

In April 2012, the Michigan Court of Appeals (COA) issued a decision relating to an appeal of the January 2010 MPSC rate order in DTE Electric's January 2009 rate case filing. The COA found that the record of evidence in the January 2010 rate order was insufficient to support the MPSC's authorization to recover costs for the advanced metering infrastructure (AMI) program and remanded this matter to the MPSC. On October 17, 2013, the MPSC issued an order affirming the approximately $8 million rate increase authorized in the MPSC's January 2010 rate order for the AMI program and further concluded that the evidence presented after remand supports the authorized cost recovery.

2010 Electric Rate Case Filing - Court of Appeals Decision

In July 2013, the COA issued a decision relating to an appeal of the October 2011 MPSC order in DTE Electric's October 2010 rate case filing. The COA found that the record of evidence in the 2010 rate case order was insufficient to support the MPSC's authorization to recover costs for the AMI program and remanded this matter to the MPSC. The MPSC had approved $55 million of the average rate base related to the AMI program in the October 2011 order. DTE Electric is currently operating its AMI program pursuant to the MPSC's approval set forth in its October 20, 2011 order. On August 29, 2013, the MPSC reopened the 2010 electric rate case for the limited purpose of addressing the COA's opinion on AMI. The Company is unable to predict the outcome of this matter or the timing of its resolution.

Power Supply Cost Recovery Proceedings

2012 PSCR Year - In March 2013, DTE Electric filed the 2012 PSCR reconciliation calculating a net under-recovery of approximately $87 million that includes an under-recovery of approximately $148 million for the 2011 PSCR year. The reconciliation includes approximately $30 million of purchased power costs related to the manual shutdown of our Fermi 2 nuclear power plant in June 2012 caused by the failure of one of the plant's two non-safety related feed-water pumps. The plant was restarted on July 30, 2012 which restored production to nominal 68% of full capacity. In September 2013, the repair to the plant was completed and production was returned to full capacity. We were able to purchase sufficient power from MISO to continue to provide uninterrupted service to our customers. Certain intervenors in the reconciliation case have challenged the recovery of some or all of the Fermi-related purchased power costs. Resolution of this matter is expected in 2014.

Low Income Energy Assistance Fund (LIEAF)

On July 1, 2013, Michigan Public Act 95 was signed into law and created the LIEAF. The legislation allows the use of a LIEAF funding factor to be determined by the MPSC and assessed on all customer classes of Michigan electric utilities to fund the LIEAF. On July 29, 2013, the MPSC adopted a funding factor of $0.99 per meter per month for all Michigan electric utilities that are participating in the program, including DTE Electric, effective with the September 2013 billing month. The surcharge billed by DTE Electric is remitted to the State of Michigan for subsequent distribution through a grant process to social service agencies and utilities to assist low income customers.

NOTE 7 — LONG-TERM DEBT

Debt Issuances

In 2014, the following debt was issued:

In 2013, the following debt was issued:



Month	Type	Interest Rate	Maturity	Amount
				(In millions)
June	Mortgage Bonds (a)	3.77%	2026	$	100
June	Mortgage Bonds (a)	4.60%	2044	150
				$	250

Month	Type	Interest Rate	Maturity	Amount
				(In millions)
March	Mortgage Bonds (a)	4.00%	2043	$	375
August	Mortgage Bonds (a)	3.65%	2024	400
				$	775

_______________________________________

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

In July 2014, DTE Electric issued $350 million of 3.375% mortgage bonds due 2025 and $350 million of 4.30% mortgage bonds due 2044. Proceeds will be used for redemption of DTE Electric long-term debt, for the repayment of short-term borrowings and for general corporate purposes.

Debt Redemptions

In 2014, the following debt was redeemed:



Month	Type	Interest Rate	Maturity	Amount
				(In millions)
March	Mortgage Bonds	Various	2014	$	13
March	Securitization Bonds	6.62%	2014	100
April	Tax Exempt Revenue Bonds (a)	2.35%	2024	31
April	Tax Exempt Revenue Bonds (a)	4.65%	2028	32
June	Tax Exempt Revenue Bonds (a)	4.875%	2029	36
June	Tax Exempt Revenue Bonds (a)	6.00%	2036	69
				$	281

_______________________________________


(a)	DTE Electric Tax Exempt Revenue Bonds are issued by a public body that loans proceeds to DTE Electric on terms substantially mirroring the Tax Exempt Revenue Bonds.

In June 2014, DTE Electric called for redemption $200 million of 4.80% senior notes due in February 2015 to be redeemed in July 2014 and $60 million of 5.25% tax exempt revenue bonds due in August 2029 to be redeemed in August 2014.

NOTE 9 — SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS

DTE Electric has a $300 million unsecured revolving credit agreement with a syndicate of 19 banks that can be used for general corporate borrowings, but is intended to provide liquidity support for the Company's commercial paper program. No one bank provides more than 8.7% of the commitment in the facility. Borrowings under the facility are available at prevailing short-term interest rates. The facility will expire in April 2018. At June 30, 2014, there was $275 million outstanding against the facility, while there were no amounts outstanding against the facility at December 31, 2013.

The agreement requires the Company to maintain a total funded debt to capitalization ratio of no more than 0.65 to 1. In the agreement, “total funded debt” means all indebtedness of the Company and its consolidated subsidiaries, including capital lease obligations, hedge agreements and guarantees of third parties' debt, but excluding contingent obligations and nonrecourse and junior subordinated debt. “Capitalization” means the sum of (a) total funded debt plus (b) “consolidated net worth,” which is equal to consolidated total stockholders' equity of the Company and its 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 June 30, 2014, the total funded debt to total capitalization ratio for DTE Electric was 0.52 to 1 and is in compliance with this financial covenant.

DTE Electric Company

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

~~Debt~~NOTE ~~Redemptions~~10 — COMMITMENTS AND CONTINGENCIES

In 2013, the following debt was redeemed:

Month	Type	Interest Rate	Maturity	Amount
				(In millions)
March	Securitization Bonds	6.42%	2013	$	88
March	Tax Exempt Revenue Bonds (a)	5.30%	2030	51
April	Other Long-Term Debt	Various	2013	13
September	Securitization Bonds	6.62%	2015	89
September	Senior Notes	6.40%	2013	250
				$	491

_____________________________

(a) DTE Electric Tax Exempt Revenue Bonds are issued by a public body that loans the proceeds to DTE Electric on terms substantially mirroring the Revenue Bonds.

NOTE 8 — SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS

DTE Electric has a $300 million unsecured revolving credit agreement with a syndicate of 19 banks that can be used for general corporate borrowings, but is intended to provide liquidity support for the Company's commercial paper program. No one bank provides more than 8.7% of the commitment in the facility. Borrowings under the facility are available at prevailing short-term interest rates. The facility will expire in April 2018. At September 30, 2013, there was $11 million outstanding against the facility, while there was $130 million outstanding against the facility at December 31, 2012.

The agreement requires the Company to maintain a total funded debt to capitalization ratio of no more than 0.65 to 1. In the agreement, “total funded debt” means all indebtedness of the Company and its consolidated subsidiaries, including capital lease obligations, hedge agreements and guarantees of third parties' debt, but excluding contingent obligations and nonrecourse and junior subordinated debt. “Capitalization” means the sum of (a) total funded debt plus (b) “consolidated net worth,” which is equal to consolidated total stockholders' equity of the Company and its 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, 2013, the total funded debt to total capitalization ratio for DTE Electric was 0.53 to 1 and is in compliance with this financial covenant.

NOTE 9 — COMMITMENTS AND CONTINGENCIES

Environmental

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. 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 have led to additional controls on fossil-fueled power plants to reduce nitrogen oxide, sulfur dioxide, mercury and other emissions. To comply with these requirements, DTE Electric ~~has~~ spent approximately $~~1.9~~2 billion through ~~2012~~2013. The Company estimates DTE Electric will make capital expenditures of approximately $~~190~~280 million in ~~2013~~2014 and up to approximately $1.82 billion of additional capital expenditures through 2021 based on current regulations. Further, additional rulemakings are expected over the next few years which could require additional controls for sulfur dioxide, nitrogen oxides and other hazardous air pollutants. The Cross State Air Pollution Rule (CSAPR), finalized in July 2011, required further reductions of sulfur dioxide and nitrogen oxides emissions beginning in 2012. On December 30, 2011, the U.S. Court of Appeals for the District of Columbia (D.C.) Circuit (Court of Appeals) granted the motions to stay the rule, leaving DTE Electric temporarily subject to the previously existing Clean Air Interstate Rule (CAIR). On August 21, 2012, the Court of Appeals issued its decision, vacating CSAPR and leaving CAIR in place. The EPA's petition seeking a rehearing of the ~~U.S.~~ Court of Appeals' decision regarding the CSAPR was denied on January 24, 2013. On June 24, 2013, the U.S. Supreme Court granted EPA's petition ~~asking~~for a review of the Court toof ~~review~~Appeals' decision on CSAPR. On April 29, 2014, the DU.CS. ~~Circuit~~Supreme Court issued its ruling reversing the Court of Appeals's stay decision onand ~~CSAPR~~remanding the case for further proceedings. AThe ~~ruling~~EPA byhas ~~the~~since ~~Supreme~~requested the Court isof ~~not~~Appeals ~~expected~~to ~~before~~lift ~~2014~~the stay on CSAPR and proposed that phase one of the rule would start effective January 2015. Notwithstanding the ~~appeal~~U.S. ~~filed~~Supreme ~~with~~Court ~~the~~remand ~~Supreme~~decision and potential decision by the Court of Appeals to lift the stay, DTE Electric expects to meet its obligations under CSAPR beginning in 2015. Furthermore, the EPA and a number of states, including Michigan, have started working on the framework of revised CSAPR regulations which wemay ~~anticipate~~still to be proposed in the next few years to address other challenges to the existing CSAPR regulations. DTE Electric will continue to monitor these developments and adjust its compliance strategy accordingly.

The Mercury and Air Toxics Standard (MATS) rule, formerly known as the Electric Generating Unit Maximum Achievable Control Technology (EGU MACT) Rule was finalized on December 16, 2011. The MATS rule requires reductions of mercury and other hazardous air pollutants beginning in April 2015, with a potential extension to April 2016. DTE Electric has requested and been granted compliance date extensions for all relevant units to April 2016. DTE Electric has tested technologies to determine technological and economic feasibility as MATS compliance alternatives to Flue Gas Desulfurization (FGD) systems. Implementation of Dry Sorbent Injection (DSI) and Activated Carbon Injection (ACI) technologies will allow several units that would not have been economical for FGD installations to continue operation in compliance with MATS.

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.

DTE Electric Company

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

~~The~~In ~~Mercury~~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 ~~Air~~DTE ~~Toxics~~Electric, ~~Standard~~related ~~(MATS)~~to ~~rule~~the June 2010 NOV/FOV and the outage work performed at Unit 2 of the Monroe Power Plant, ~~formerly~~but ~~known~~not asrelating to the July 2009 NOV/FOV. Among other relief, the EPA requested the court to require DTE Electric ~~Generating~~to install and operate the best available control technology at Unit ~~Maximum~~2 ~~Achievable~~of ~~Control~~the ~~Technology~~Monroe Power Plant. Further, the EPA requested the court to issue a preliminary injunction to require DTE Electric to (~~EGU~~i) ~~MACT~~begin the process of obtaining the necessary permits for the Monroe Unit 2 modification and (ii) ~~Rule~~offset ~~was~~the ~~finalized~~pollution onfrom ~~December~~Monroe 16Unit 2 through emissions reductions from DTE Electric's fleet of coal-fired power plants until the new control equipment is operating. On August 23, 2011, the U. ~~The~~S. ~~MATS~~District ~~rule~~Court ~~requires~~judge ~~reductions~~granted ofDTE ~~mercury~~Energy's ~~and~~motion ~~other~~for ~~hazardous~~summary ~~air~~judgment ~~pollutants~~in ~~beginning~~the civil case, dismissing the case and entering judgment in ~~April~~favor ~~2015~~of DTE Energy and DTE Electric. On October 20, ~~with~~2011, the EPA caused to be filed a ~~potential~~Notice ~~extension~~of Appeal to ~~April~~the ~~2016~~U.S. Court of Appeals for the Sixth Circuit. ~~DTE~~On ~~Electric~~March ~~has~~28, ~~requested~~2013, ~~and~~the ~~been~~Court ~~granted~~of ~~compliance~~Appeals ~~date~~remanded ~~extensions~~the case to the U.S. District Court for ~~some~~review ~~units~~of tothe ~~April~~procedural ~~2016~~component of the New Source Review notification requirements. ~~DTE~~On ~~Electric~~September ~~has~~3, ~~tested~~2013, ~~technologies~~the EPA caused to ~~determine~~be ~~technological~~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 ~~economic~~Belle ~~feasibility~~River power plants as ~~MATS~~well ~~compliance~~as ~~alternatives~~additional claims related to ~~Flue~~work ~~Gas~~performed ~~Desulfurization~~at ~~(FGD)~~the ~~systems~~Monroe Power Plant. In ~~Implementation~~addition, ofthe ~~Dry~~Sierra ~~Sorbent~~Club ~~Injection~~caused ~~(DSI)~~to ~~and~~be ~~Activated~~filed ~~Carbon~~a ~~Injection~~motion ~~(ACI)~~to ~~technologies~~add ~~will~~a ~~allow~~claim ~~several~~regarding ~~units~~the ~~that~~River ~~would~~Rouge ~~not~~Power ~~have~~Plant. On ~~been~~March ~~economical~~3, 2014, the U.S. District Court judge granted again DTE Energy's motion for ~~FGD~~summary ~~installations~~judgment dismissing the civil case related to ~~continue~~Monroe ~~operation~~Unit in2. On ~~compliance~~April ~~with~~3, ~~MATS~~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 River Rouge Unit 3. On June 30, 2014, the EPA filed a motion requesting certification for appeal of the March 3, 2014 summary judgment decision.

~~In July 2009,~~ DTE Energy ~~received~~and aDTE ~~Notice~~Electric ofbelieve ~~Violation/Finding~~that ofall ~~Violation (NOV/FOV) from~~ the ~~EPA~~plants ~~alleging,~~and ~~among~~generating ~~other~~units ~~things,~~identified ~~that~~by ~~five~~the ~~DTE~~EPA ~~Electric~~and ~~power~~the ~~plants~~Sierra ~~violated~~Club ~~New~~have ~~Source~~complied ~~Performance~~with ~~standards,~~all ~~Prevention~~applicable offederal ~~Significant~~environmental ~~Deterioration~~regulations. Depending ~~requirements,~~upon ~~and operating permit requirements under~~ the ~~Clean~~outcome ~~Air~~of ~~Act. In~~discussions ~~June~~with ~~2010,~~ the EPA ~~issued~~regarding athe ~~NOV~~two NOVs/~~FOV~~FOVs, ~~making~~DTE ~~similar~~Electric ~~allegations~~could ~~related~~be required to ainstall ~~project~~additional ~~and~~pollution ~~outage~~control equipment at ~~Unit~~some 2or all of the ~~Monroe~~power ~~Power~~plants ~~Plant. In~~in ~~March 2013~~question, ~~DTE~~implement ~~Energy~~early ~~received~~retirement aof ~~supplemental~~facilities ~~NOV~~where ~~from~~control ~~the~~equipment ~~EPA~~is ~~relating~~not toeconomical, ~~the~~engage ~~July~~in ~~2009~~supplemental ~~NOV~~environmental programs, and/~~FOV~~or pay fines. The ~~supplemental~~Company ~~NOV~~cannot ~~alleged~~predict ~~additional~~the ~~violations~~financial ~~relating~~impact toor ~~the~~outcome ~~New~~of ~~Source~~this ~~Review~~matter, ~~provisions~~or ~~under~~ the ~~Clean~~timing ~~Air~~of ~~Act,~~its ~~among other things~~resolution.

In ~~August~~March ~~2010~~2013, the ~~U.S.~~Sierra ~~Department~~Club offiled ~~Justice,~~suit atagainst ~~the~~DTE ~~request~~Electric ofalleging ~~the~~violations ~~EPA,~~of ~~brought a civil suit in~~ the ~~U.S. District~~Clean ~~Court~~Air ~~for~~Act ~~the~~at ~~Eastern~~four ~~District~~ of ~~Michigan against~~ DTE ~~Energy and DTE~~ Electric,'s ~~related~~coal-fired topower ~~the~~plants. The ~~June~~plaintiffs ~~2010~~allege ~~NOV/FOV~~1,499 ~~and~~six-minute ~~the~~periods ~~outage~~of ~~work~~excess ~~performed~~opacity ~~at Unit 2~~ of ~~the~~air ~~Monroe~~emissions ~~Power~~from ~~Plant,~~2007-2012 ~~but~~at ~~not~~those ~~relating to the July 2009 NOV/FOV~~facilities. ~~Among~~The ~~other~~suit ~~relief,~~asks ~~the~~that ~~EPA requested~~ the court toenjoin ~~require~~the ~~DTE~~Company ~~Electric~~from tooperating ~~install and operate~~ the ~~best~~power ~~available~~plants ~~control~~except ~~technology~~in atcomplete ~~Unit~~compliance 2with ofapplicable ~~the~~laws ~~Monroe~~and ~~Power~~permit ~~Plant. Further~~requirements, ~~the~~pay ~~EPA~~civil ~~requested~~penalties, ~~the~~conduct ~~court~~beneficial toenvironmental ~~issue~~mitigation aprojects, ~~preliminary~~pay ~~injunction~~attorney tofees and require ~~DTE Electric to (i) begin~~ the ~~process~~installation of ~~obtaining~~any ~~the~~ necessary ~~permits~~pollution ~~for~~controls ~~the~~or ~~Monroe~~to ~~Unit~~convert ~~2 modification~~ and/or ~~(ii) offset~~operate the ~~pollution~~plants' ~~from~~boilers ~~Monroe~~on ~~Unit~~natural 2gas ~~through~~to ~~emissions~~avoid ~~reductions~~additional ~~from~~violations ~~DTE~~and ~~Electric's~~to ~~fleet of coal~~off-~~fired~~set ~~power~~historic ~~plants~~unlawful ~~until the new control equipment is operating~~emissions. OnIn ~~August~~December 232013, ~~2011,~~a ~~the~~ U.S. District Court judge ~~granted~~issued ~~DTE~~an ~~Energy's~~order ~~motion for summary judgment in the civil case~~dismissing, ~~dismissing~~without ~~the case and entering judgment in favor of DTE Energy and DTE Electric. On October 20~~prejudice, ~~2011,~~ the ~~EPA~~plaintiff's ~~caused~~complaint toallowing bethem ~~filed a Notice of Appeal~~ to ~~the~~file ~~U.S.~~an ~~Court~~amended ofcomplaint ~~Appeals~~by ~~for~~January ~~the~~17, ~~Sixth Circuit~~2014. OnThe ~~March~~order ~~28,~~dismissing ~~2013,~~ the ~~Court~~complaint ofresulted ~~Appeals~~from ~~remanded~~a ~~the~~considerable ~~case~~number toof ~~the~~plaintiff's ~~U.S.~~claims ~~District~~being ~~Court~~time ~~for~~barred ~~review~~based ofon the ~~procedural~~statute ~~component~~ of ~~the New Source Review notification requirements~~limitations. On ~~September~~January 317, ~~2013~~2014, the ~~EPA~~plaintiffs ~~caused to be~~ filed aan ~~motion~~amended ~~seeking leave to amend their~~ complaint ~~regarding~~for the ~~June~~period ~~2010~~January ~~NOV/FOV~~13, ~~adding~~2008 ~~additional~~- ~~claims~~June ~~related~~30, to2012, ~~outage~~reducing ~~work performed at~~ the ~~Trenton~~total ~~Channel~~number ~~and~~of ~~Belle~~six-minute ~~River~~periods ~~power~~from ~~plants~~1,499 asto ~~well~~1,139. DTE asElectric ~~additional~~filed ~~claims~~an ~~related~~answer to ~~work~~the ~~performed~~amended atcomplaint ~~the~~on ~~Monroe~~March ~~Power~~11, ~~Plant~~2014. InThe ~~addition,~~resolution ~~the~~of ~~Sierra~~this ~~Club~~matter ~~caused~~is tonot beexpected ~~filed a motion~~ to ~~add~~have a ~~claim~~material ~~regarding~~effect ~~the~~on ~~River Rouge Power Plant. The EPA and Sierra Club motions are currently pending with~~ the U.Company's S.operations ~~District~~or ~~Court~~financial ~~Judge~~statements.

Water — In response to an EPA regulation, DTE Electric ~~believes~~would ~~that~~be ~~the~~required ~~plants~~to ~~identified~~examine byalternatives ~~the~~for ~~EPA,~~reducing ~~including~~the ~~Unit~~environmental 2impacts of the ~~Monroe~~cooling ~~Power~~water ~~Plant,~~intake ~~have~~structures ~~complied~~at ~~with~~several ~~all~~of ~~applicable~~its ~~federal environmental regulations~~facilities. ~~Depending~~Based ~~upon~~on the ~~outcome~~results of ~~discussions~~completed ~~with~~studies ~~the~~and ~~EPA~~expected ~~regarding~~future ~~the two NOVs/FOVs~~studies, DTE Electric ~~could~~may be required to install ~~additional~~technologies ~~pollution~~to ~~control~~reduce ~~equipment~~the atimpacts ~~some~~of orthe ~~all~~water ofintake ~~the~~structures. The ~~power~~initial ~~plants~~rule published in ~~question~~2004 was subsequently remanded and a proposed rule published in 2011. The final rule was issued on May 19, ~~implement~~2014. The ~~early~~final ~~retirement~~rule specifies a time period exceeding three years to complete studies to determine the type of ~~facilities~~technology ~~where~~needed ~~control~~to ~~equipment~~reduce isimpacts ~~not~~to ~~economical,~~fish. Final ~~engage~~compliance infor ~~supplemental~~the ~~environmental~~installation ~~programs,~~of ~~and/or~~the ~~pay~~required ~~fines~~technology will be determined by each state on a case by case basis. ~~The~~We ~~Company~~are ~~cannot~~currently ~~predict~~evaluating the ~~financial~~compliance ~~impact~~options orand ~~outcome~~working with the State of ~~this~~Michigan ~~matter,~~on orevaluating whether any controls are needed. These evaluations/studies may require modifications to some existing intake structures. It is not possible to quantify the ~~timing~~impact of ~~its~~this ~~resolution~~rulemaking at this time.

On ~~March~~April 1319, 2013, the ~~Sierra~~EPA ~~Club~~proposed ~~filed~~revised ~~suit~~steam ~~against~~electric ~~DTE~~effluent ~~Electric~~guidelines ~~alleging~~regulating ~~violations~~wastewater ofstreams ~~the~~from ~~Clean Air Act at four of DTE Electric's~~ coal-fired power plants~~. The~~ ~~plaintiffs~~including ~~allege~~multiple ~~1,499~~possible ~~6-minute~~options ~~periods~~for ~~of excess opacity of air emissions from 2007-2012 at those facilities~~compliance. The ~~suit~~rules ~~asks~~are ~~that~~expected ~~the~~to ~~court~~be ~~enjoin~~finalized ~~the~~by ~~Company~~September ~~from~~2015. DTE ~~operating~~Electric ~~the~~has ~~power~~provided ~~plants~~comments except in complete compliance with applicable laws and permit requirements, pay civil penalties, conduct beneficial environmental mitigation projects, pay attorney fees and require the installation of any necessary pollution controls or to ~~convert and/or operate~~ the ~~plants' boilers on natural gas to avoid additional violations and to off-set historic unlawful emissions~~EPA. ~~The~~However, ~~resolution~~it ~~of this matter~~ is not ~~expected~~possible toat ~~have~~this atime ~~material~~to ~~effect~~quantify on the ~~Company's~~impacts ~~operations~~of orthese ~~financial~~developing ~~statements~~requirements.

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. The initial rule published in 2004 was subsequently remanded and a proposed rule published in 2011. The proposed rule specified an eight year compliance timeline. In July 2012, the EPA announced that a notice of its final action on the rule will be issued in June 2013. On June 27, 2013, the EPA announced an agreement to extend the deadline for issuance of the final rule until November 4, 2013. On April 19, 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 are expected to be finalized by May 2014. DTE Electric has provided comments to the EPA. However, it is not possible at this time to quantify the impacts of these developing requirements.

DTE Electric Company

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

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 manufactured gas plant (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, the Company 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~~June 30, ~~2013~~2014 and at December 31, ~~2012~~2013, the Company had $98 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 the Company’s financial position and cash flows. The Company believes ~~that~~ the likelihood of a ~~materially~~material ~~greater~~change ~~liability~~to ~~than~~ the accrued amount is remote based on current knowledge of the conditions at each site.

DTE Electric owns and operates athree permitted engineered ash storage ~~facility~~facilities ~~at the Monroe Power Plant~~ to dispose of fly ash from the coal fired power ~~plant~~plants. The EPA has published proposed rules to regulate coal ash under the authority of the Resources Conservation and Recovery Act (RCRA). The proposed rule published in June 2010 contains two primary regulatory options to regulate coal ash residue. The EPA is currently considering either designating coal ash as a “Hazardous Waste” as defined by RCRA or regulating coal ash as non-hazardous waste under RCRA. Agencies and legislatures have urged the EPA to regulate coal ash as a non-hazardous waste. If the EPA designates coal ash as a hazardous waste, the agency could apply some, or all, of the disposal and reuse standards that have been applied to other existing hazardous wastes to disposal and reuse of coal ash. Some of the regulatory actions currently being contemplated could have a significant impact on our operations and financial position and the rates we charge our customers. The rules are expected to be finalized by December 2014. It is not possible to quantify the impact of those expected rulemakings at this time.

Other

In ~~March~~December ~~2011~~2012, the EPA finalized a new set of regulations regarding the identification of non-hazardous secondary materials that are considered solid waste, industrial boiler and process heater maximum achievable control technologies (IBMACT) for major and area sources, and commercial/industrial solid waste incinerator new source performance standard and emission guidelines (CISWI). ~~The~~Capital ~~effective~~costs ~~dates~~for ofpollution ~~the~~controls ~~major source IBMACT~~ and CISWI regulations were stayed and a re-proposal was issued by the EPA in December 2011. Final IBMACT and CISWI were issued by the EPA in December 2012. The Company is developing compliance plans to upgrade /or ~~convert existing industrial boilers to natural gas and to perform required energy assessments in compliance with the applicable new standards. Capital costs for the~~ boiler conversions and the expenses for the one-time energy assessments are not expected to be material.

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 2017. Michigan's non-attainment area includes DTE Electric facilities in southwest Detroit and areas of Wayne County. Preliminary 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. The state implementation plan process is in the information gathering stage, and ~~any required emission reductions for~~ DTE Electric ~~sources~~is unable to ~~meet~~estimate ~~the~~any ~~standard~~required ~~cannot~~emissions bereductions ~~estimated~~at ~~currently~~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. The Nuclear Electric Insurance Limited (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, subject to a $1 million deductible. The total limit for property damage for non-nuclear events is $2 billion and an aggregate of $327 million of coverage for extra expenses over a two-year period.

DTE Electric Company

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

DTE Electric has $500 million in primary coverage and $2.25 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, subject to a $1 million deductible. As of April 1, 2013, the total limit for property damage for non-nuclear events is $1.8 billion and an aggregate of $327 million of coverage for extra expenses over a two-year period.

In 2007, the Terrorism Risk Insurance Extension Act of 2005 (TRIA) was extended through December 31, 2014. A major change in the extension is the inclusion of “domestic” acts of terrorism in the definition of covered or “certified” acts. 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 the NEIL policies, DTE Electric could be liable for maximum assessments of up to approximately $3435 million per event if the loss associated with any one event at any ~~insured~~ nuclear plant should exceed the accumulated funds available to NEIL.

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 $127.3 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 U.S. Department of Energy (DOE) for the future storage and disposal of spent nuclear fuel from Fermi 2~~. DTE~~ ~~Electric~~that isrequired ~~obligated~~DTE Electric to pay the DOE a fee of 1 mill per kWh of Fermi 2 electricity generated and sold. The fee is 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 currently employs a spent nuclear fuel storage strategy utilizing a fuel pool. The Company continues to develop its on-site dry cask storage facility and ~~anticipates~~has scheduled the initial offload from the spent fuel pool in 2014. 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.

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 ~~provided~~agreement, ~~for~~including aextensions, ~~payment~~provides offor ~~approximately~~a ~~$48~~claims ~~million,~~process ~~received~~and inpayment ~~August~~of ~~2012, for~~ delay-related costs experienced by DTE Electric through ~~2010, and a claims process for submittal of delay-related costs from 2011 through 2013~~2016. DTE Electric has begun the claims process and ~~all~~ claims ~~submitted~~are ~~have~~being ~~been~~settled ~~accepted~~and paid on a timely basis. The settlement proceeds ~~reduced~~reduce the cost of the dry cask storage facility assets~~. In~~ ~~February~~and ~~2013,~~provide ~~the~~reimbursement ~~U.S. Court of Appeals~~ for ~~the~~related ~~District~~operating ~~of Columbia granted a motion to reopen the fee adequacy litigation to review the DOE's latest fee adequacy report which was released in January 2013~~expenses. ~~DTE Electric will continue to pay fees to the U.S. government's nuclear waste fund pending further action by the D.C. Circuit.~~ 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.

In February 2013, the U.S. Court of Appeals for the District of Columbia (COA) granted a motion to reopen the fee adequacy litigation to review the DOE's latest fee adequacy report which was released in January 2013. In November 2013, the COA issued a decision ordering the DOE to submit a proposal to Congress to reduce the nuclear waste fee to zero until the DOE enacts an alternative nuclear waste management plan. In January 2014, the DOE submitted such a proposal to Congress that was scheduled to take effect in 90 legislative calendar days, absent legislative action to the contrary. Simultaneously, the DOE filed a petition for rehearing of the November 2013 decision with the COA. In March 2014, the COA denied DOE's petition for rehearing. The 1 mill per kWh fee was reduced to zero effective May 16, 2014.

Guarantees

In certain limited circumstances, the Company enters into contractual guarantees. The Company may guarantee another entity’s obligation in the event it fails to perform. The Company may provide guarantees in certain indemnification agreements. Finally, the Company may provide indirect guarantees for the indebtedness of others.

DTE Electric Company

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

Labor Contracts

~~Our~~There ~~contract~~are ~~with~~several a bargaining ~~unit~~units for the ~~majority~~Company's ofapproximately ~~our~~2,600 represented employees ~~was due to expire in June 2013~~. ~~Early~~The ~~negotiations~~majority ~~resulted~~of inthe arepresented ~~new~~employees ~~contract~~are ~~that~~under ~~became~~contracts ~~effective~~that ~~in March 2013. The new contract will~~ expire in ~~June~~2016 and 2017.

Purchase Commitments

As of ~~September~~June 30, ~~2013~~2014, the Company was party to numerous long-term purchase commitments relating to a variety of goods and services required for the Company’s business. These agreements primarily consist of fuel supply commitments, renewable energy contracts and energy trading contracts. The Company estimates that these commitments will be approximately $2.63 billion from ~~2013~~2014 through ~~2034~~2033.

The Company also estimates that ~~2013~~2014 capital expenditures will be approximately $1.56 billion. The Company has made certain commitments in connection with expected capital expenditures.

Bankruptcies

The Company purchases and sells electricity from and to governmental entities and numerous companies operating in the steel, automotive, energy, retail and other industries. Certain of its customers have filed for bankruptcy protection under the U.S. Bankruptcy Code. The Company regularly reviews contingent matters relating to these customers and its purchase and sale contracts and records provisions for amounts considered at risk of probable loss. The Company believes its accrued amounts are adequate for probable loss.

The Company provides services to the city of Detroit, Michigan (Detroit). Detroit filed for Chapter 9 bankruptcy protection on July 18, 2013. The Company had pre-petition accounts receivable of approximately $20 million outstanding as of the bankruptcy filing date. Detroit has been paying amounts owed in a timely manner and its accounts are substantially current. The Company does not expect Detroit's bankruptcy filing to have a material impact on its financial results.

Other Contingencies

The Company is 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 Company cannot predict the final disposition of such proceedings. The Company regularly reviews legal matters and records provisions for claims that it can estimate and are considered probable of loss. The resolution of these pending proceedings is not expected to have a material effect on the Company’s operations or financial statements in the periods they are resolved.

See Note 67 for a discussion of contingencies related to ~~Regulatory~~regulatory ~~Matters~~matters.

NOTE 1011 — RETIREMENT BENEFITS AND TRUSTEED ASSETS

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

	Pension Benefits						Other Postretirement Benefits
	2013			2012			2013			2012
	2014			2013			2014			2013
Three Months Ended September 30	(In millions)
Three Months Ended June 30	(In millions)
Service cost	$	17		$	1519		$	6		$	119
Interest cost	3640			3837			1617			2316
Expected return on plan assets	(4549		)	(4147		)	(1821		)	(1519		)
Amortization of:
Net actuarial loss	3926			3336			125			1612
Prior service cost (credit)	1			—			(2728		)	(428		)
Net periodic benefit cost (credit)	$	4835		$	45		$	(1121	)	$	31(10	)

DTE Electric Company

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

	Pension Benefits						Other Postretirement Benefits
	2013			2012			2013			2012
	2014			2013			2014			2013
Nine Months Ended September 30	(In millions)
Six Months Ended June 30	(In millions)
Service cost	$	5534		$	4838		$	2713		$	3821
Interest cost	~~109~~80			~~116~~73			5034			6934
Expected return on plan assets	(~~138~~97		)	(~~124~~93		)	(5542		)	(4637		)
Amortization of:
Net actuarial loss	~~111~~53			9372			368			4424
Prior service cost (credit)	1			—			(7255		)	(1245		)
Net transition liability	—			—			—			1
Net periodic benefit cost (credit)	$	71		$	90		$	(42	)	$	(3	)
Settlements	—			2			—			—
Net periodic benefit cost (credit)	$	138		$	135		$	(14	)	$	94

Pension and Other Postretirement Contributions

During the first ~~nine~~six months of ~~2013~~2014, the Company contributed $~~250~~100 million to its pension plans~~, including contributions of DTE Energy common stock of $200 million~~. At the discretion of management, and depending upon financial market conditions, the Company may make up to an additional $2545 million contribution to its pension plans in ~~2013~~2014.

~~In January 2013, the Company contributed $120 million to its other postretirement benefit plans.~~ At the discretion of management, the Company may make up to ana ~~additional~~ $120 million contribution to its other postretirement benefit plans in ~~2013~~2014.

~~Re-Measurement~~ ~~of Other Postretirement Benefit Obligation~~23

In March 2013, the Company reached an agreement on a new four-year labor contract with certain represented employees. As a term of the agreement, the Company replaced sponsored retiree medical, prescription drug and dental coverage for future Medicare eligible retirees with a Retiree Health Care Allowance (RHCA) account of $3,250 per year. The modification in retiree health coverage will reduce future postretirement benefit costs.

Based on the impact of such benefit cost savings on the financial statements, the Company re-measured its retiree health plan as of March 31, 2013. In performing the re-measurement, the Company updated its significant actuarial assumptions, including an adjustment to the discount rate from 4.15% at December 31, 2012 to 4.30% at March 31, 2013. Plan assets were also updated to reflect fair value as of the re-measurement date. As a result of the re-measurement, the accumulated postretirement benefit obligation (APBO) was reduced by $192 million. The Company's Accrued postretirement benefit liability - affiliates at March 31, 2013 was $661 million as compared to $996 million at December 31, 2012, a reduction of $335 million. The reduction reflects the impact of the re-measurement of the plan, January 2013 plan contributions and recognition of first quarter 2013 postretirement benefit costs and benefit payments.

Beginning April 2013, net postretirement benefit costs were recorded based on the updated actuarial assumptions and benefit changes resulting from the new labor contracts. As a result of the re-measurement, fiscal year 2013 postretirement benefit costs are expected to decrease by approximately $51 million to an annual net benefit of approximately $23 million.

Item 2. Management’s Narrative Analysis of Results of Operations

The Management’s Narrative Analysis of Results of Operations discussion for DTE Electric is presented in accordance with General Instruction H (2) (a) of Form 10-Q.

DTE Electric's results for the three and ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014 as compared to the comparable ~~2012~~2013 period are discussed below:



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
	(In millions)
Operating revenues	$	1,281		$	1,265		$	2,691		$	2,484
Fuel and purchased power	400			435			898			807
Gross margin	881			830			1,793			1,677
Operation and maintenance	329			343			671			674
Depreciation and amortization	229			221			457			433
Taxes other than income	65			63			136			133
Asset (gains) losses and reserves, net	(1		)	1			(1		)	—
Operating Income	259			202			530			437
Other (Income) and Deductions	52			65			109			122
Income Tax Expense	77			47			154			109
Net Income	$	130		$	90		$	267		$	206
Operating Income as a Percentage of Operating Revenues	20		%	16		%	20		%	18		%

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	(In millions)
Operating revenues	$	1,457		$	1,542		$	3,941		$	4,029
Fuel and purchased power	487			543			1,294			1,348
Gross margin	970			999			2,647			2,681
Operation and maintenance	335			337			1,009			1,026
Depreciation and amortization	233			219			666			607
Taxes other than income	67			65			200			193
Asset (gains) losses and reserves, net	(3		)	—			(3		)	(1		)
Operating Income	338			378			775			856
Other (Income) and Deductions	61			68			183			190
Income Tax Expense	97			115			206			247
Net Income	$	180		$	195		$	386		$	419
Operating Income as a Percentage of Operating Revenues	23		%	25		%	20		%	21		%

Gross margin increased $51 million and $116 million in the three and six months ended June 30, 2014, respectively. Revenues associated with certain tracking mechanisms and surcharges are offset by related expenses elsewhere in the Consolidated Statements of Operations.

Gross margin decreased $29 million and $34 million in the three and nine months ended September 30, 2013, respectively. Revenues associated with certain tracking mechanisms and surcharges are offset by related expenses elsewhere in the Consolidated Statement of Operations.

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

	Three Months			~~Nine~~Six Months
	(In millions)
Base sales, inclusive of weather effect	$	(46	)	$	(58	)
Amortization of refundable revenue decoupling/deferred gain	$	32		$	63
Securitization bond and tax surcharge	5			29
Base sales, inclusive of weather effect	10			26
Renewable energy program	12			20
Securitization bond and tax surcharge	—			8
Low income energy assistance surcharge	—			(20		)
Renewable energy program	6			11
Regulatory mechanisms and other	—			(5		)
Low income energy assistance surcharge	6			13
Decrease in gross margin	$	(29	)	$	(34	)
Regulatory mechanisms and other	(3		)	(5		)
Increase in gross margin	$	51		$	116

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2013	2012	2013	2012
	(In thousands of MWh)
Electric Sales
Residential	4,401	4,894	11,600	12,180
Commercial	4,504	4,602	12,585	12,734
Industrial	2,635	2,707	7,746	7,645
Other	233	238	701	717
	11,773	12,441	32,632	33,276
Interconnection sales (a)	711	441	2,276	1,827
Total Electric Sales	12,484	12,882	34,908	35,103
Electric Deliveries
Retail and Wholesale	11,773	12,441	32,632	33,276
Electric Customer Choice, including self generators (b)	1,393	1,372	3,940	3,938
Total Electric Sales and Deliveries	13,166	13,813	36,572	37,214



	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2014	2013	2014	2013
	(In thousands of MWh)
Electric Sales
Residential	3,452	3,345	7,430	7,199
Commercial	4,168	4,158	8,216	8,081
Industrial	2,554	2,675	5,055	5,111
Other	171	216	376	468
	10,345	10,394	21,077	20,859
Interconnection sales (a)	479	792	1,097	1,565
Total Electric Sales	10,824	11,186	22,174	22,424

Electric Deliveries
Retail and Wholesale	10,345	10,394	21,077	20,859
Electric Customer Choice, including self generators (b)	1,237	1,287	2,504	2,547
Total Electric Sales and Deliveries	11,582	11,681	23,581	23,406

_______________________________________

(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.

Operation and maintenance expense decreased $14 million and $3 million in the three and six months ended June 30, 2014, respectively. The decrease in the second quarter was due primarily to lower employee benefit expenses of $24 million and $12 million of reinvestment expenses in 2013, partially offset by higher storm restoration expenses of $9 million, increased low income energy assistance of $7 million and higher power plant generation expenses for planned outages of $5 million. The decrease in the six-month period was primarily due to lower employee benefit expenses of $46 million and $12 million of reinvestment expenses in 2013, partially offset by higher power plant generation expenses of $35 million, increased low income energy assistance of $13 million, higher storm restoration expenses of $4 million and higher energy optimization and renewable energy expenses of $4 million.

~~Operation~~Depreciation and ~~maintenance~~amortization expense ~~decreased~~increased $2 8 million and $1724 million in the three and ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014, respectively. The ~~decrease~~increase in the ~~third~~second quarter was due ~~primarily~~ to ~~lower~~higher ~~employee~~amortization ~~benefit expenses~~ of ~~$21~~regulatory ~~million~~assets ~~and lower distribution operations expenses~~ of $45 million, ~~partially~~primarily ~~offset~~related byto ~~higher corporate administrative expenses of $11 million~~Securitization, ~~higher restoration~~ and ~~line clearance expenses of~~ $43 million, ~~increased energy optimization and renewable energy expenses~~ of ~~$4 million,~~ increased ~~uncollectible~~expense ~~expenses~~due ofto $2a ~~million~~higher ~~and~~depreciable ~~increased low income energy assistance expenses of $2 million~~base. The ~~decrease~~increase in the ~~nine~~six-month period was ~~primarily~~ due to ~~lower~~higher ~~employee~~amortization ~~benefit expenses~~ of ~~$52~~regulatory ~~million,~~assets ~~decreased low income energy assistance expenses~~ of $1816 million ~~and lower power plant generation expenses of $2 million~~, ~~partially~~primarily ~~offset~~related byto ~~higher corporate administrative expenses of $22 million~~Securitization, ~~higher energy optimization~~ and ~~renewable energy expenses of~~ $128 million, ~~increased uncollectible expenses~~ of ~~$11 million, higher restoration and line clearance expenses of $7 million and~~ increased ~~distribution~~expense ~~operations~~due ~~expenses~~to ofa $4higher ~~million.~~depreciable base.

~~Depreciation~~Other (income) and ~~amortization~~deductions ~~expense~~were ~~increased~~lower ~~$14~~by ~~million and~~ $5913 million in each of the three and ~~nine~~six months periods ended ~~September~~June 30, ~~2013, respectively~~2014. The ~~increase~~decrease in the ~~third~~second quarter was due primarily to ~~higher~~lower ~~amortization~~interest ofexpense ~~regulatory assets of $11 million~~ and $3higher ~~million~~investment ofearnings, ~~increased~~while ~~expense~~the ~~due~~decrease ~~to a higher depreciable base. The increase~~ in the ~~nine~~six-month period was due toprimarily ~~$45 million of higher amortization of regulatory assets and $14 million of increased expense due~~ to alower ~~higher~~interest ~~depreciable base~~expense.

~~Income~~Outlook — ~~tax~~We ~~expense~~continue ~~decreased~~to ~~$18~~move ~~million~~forward ~~and~~in ~~$41~~our ~~million~~efforts into ~~the~~achieve ~~three~~operational excellence, sustained strong cash flows and ~~nine~~earn ~~months~~our ~~ended~~authorized ~~September~~return 30on equity. We expect that our planned significant capital investments will result in earnings growth. Looking forward, ~~2013~~additional factors may impact earnings such as weather, ~~respectively~~the outcome of regulatory proceedings, ~~due~~benefit toplan ~~lower~~design ~~pre-tax~~changes, ~~income~~investment returns and achanges ~~decrease~~in discount rate assumptions in ~~the~~benefit ~~effective~~plans ~~income~~and ~~tax~~health ~~rate~~care ~~primarily~~costs, ~~due~~and uncertainty of legislative or regulatory actions regarding climate change and electric choice. We expect to ~~higher~~continue ~~production~~our ~~tax~~efforts ~~credits~~to improve productivity and decrease our costs while improving customer satisfaction with consideration of customer rate affordability.

~~Outlook —~~In WeMay ~~continue to move forward in our efforts to achieve operational excellence~~2014, ~~sustained~~the ~~strong~~Company ~~cash~~filed ~~flows~~an ~~and~~application ~~earn~~with ~~our~~the ~~authorized~~NRC ~~return~~requesting ona ~~equity. We~~renewal ~~expect~~of ~~that~~the ~~our~~license ~~planned~~for ~~significant~~its ~~environmental~~Fermi ~~and~~2 ~~renewable~~nuclear ~~expenditures~~power ~~will result in earnings growth~~plant. ~~Looking~~The ~~forward,~~Company ~~additional~~has ~~factors~~requested ~~may~~a ~~impact~~20-year ~~earnings~~extension ~~such as weather, the outcome~~ of ~~regulatory~~its ~~proceedings,~~original ~~benefit~~license ~~plan~~due ~~design~~to ~~changes,~~expire ~~investment returns and changes~~ in ~~discount rate assumptions in benefit plans and health care costs, and uncertainty of legislative or regulatory actions regarding climate change and electric choice~~2025. ~~We expect to continue our efforts to improve productivity and decrease our costs while improving customer satisfaction with consideration of customer rate affordability.~~

In June 2013, the City of Detroit announced a transition of its Public Lighting Department's customers to the DTE Electric distribution system over a five to seven year system conversion period. See Note 6 of the Notes to Consolidated Financial Statements.

Climate regulation and/or legislation has been proposed and discussed within the U.S. Congress and the EPA. The EPA is implementing regulatory actions under the Clean Air Act to address emissions of greenhouse gases (GHGs). EPA regulation of GHGs requires the best available control technology (BACT) for new major sources or modifications to existing major sources that cause significant increases in GHG emissions. In June 2012, the EPA proposed new source performance standards for carbon dioxide emissions from new fossil-fueled power plants. These new source performance standards were re-proposed on September 20, 2013, under a presidential directive issued on June 25, 2013. Under the same presidential directive, the EPA is expected to propose performance standards for carbon dioxide emissions from existing and modified plants by June 1, 2014 and issue final standards by June 1, 2015. DTE Energy will be an active participant in working with the EPA and other stakeholders to shape the final performance standards for new and existing power plants. The standards for new sources are not expected to have a material impact on the Company. It is not possible to determine the potential impact of future regulations on existing sources at this time. Pending or future legislation or other regulatory actions could have a material impact on our operations and financial position and the rates we charge our customers. Impacts include expenditures for environmental equipment beyond what is currently planned, financing costs related to additional capital expenditures, the purchase of emission offsets from market sources and the retirement of facilities where control equipment is not economical. We would seek to recover these incremental costs through increased rates charged to our utility customers. Increased costs for energy produced from traditional sources could also increase the economic viability of energy produced from renewable and/or nuclear sources and energy efficiency initiatives and the development of market-based trading of carbon offsets providing business opportunities for our utility and non-utility segments. It is not possible to quantify these impacts on DTE Electric or its customers at this time.

Climate regulation and/or legislation has been proposed and discussed within the U.S. Congress and the EPA. The EPA is implementing regulatory actions under the Clean Air Act to address emissions of greenhouse gases (GHGs). EPA regulation of GHGs requires the best available control technology (BACT) for new major sources or modifications to existing major sources that cause significant increases in GHG emissions. In June 2012, the EPA proposed new source performance standards for carbon dioxide emissions from new fossil-fueled power plants. These new source performance standards were re-proposed on September 20, 2013, under a presidential directive issued on June 25, 2013. Under the same presidential directive, the EPA proposed performance standards for carbon dioxide emissions from existing, reconstructed and modified plants on June 2, 2014 and plans to issue a final standard by July 2015. DTE Electric is an active participant in working with the EPA and other stakeholders to shape the final performance standards for new and existing power plants. The standards for new sources are not expected to have a material impact on the Company. It is not possible to determine the potential impact of future regulations on existing sources at this time. Pending or future legislation or other regulatory actions could have a material impact on our operations and financial position and the rates we charge our 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 and the retirement of facilities where control equipment is not economical. We would seek to recover these incremental costs through increased rates charged to our utility customers as authorized by the MPSC. Increased costs for energy produced from traditional coal-based sources could also increase the economic viability of energy produced from renewable and/or nuclear sources, from energy efficiency initiatives, and from the potential development of market-based trading of carbon offsets which could provide new business opportunities. A June 23, 2014 U.S. Supreme Court decision on the EPA’s authority to regulate greenhouse gas emissions under permitting programs of the Clean Air Act is expected to have little effect on DTE Electric since the Supreme Court's decision upholds the EPA’s authority to regulate GHGs at sources that are already subject to permitting due to emissions of conventional pollutants. In addition, the Supreme Court's ruling does not affect the EPA’s current proposed carbon performance standards at new or existing power plants. At the present time, it is not possible to quantify the financial impacts of these climate related legislative or regulatory initiatives on DTE Electric or its customers.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 3 of the Notes to Consolidated Financial Statements.

Item 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures

Management of the Company 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 the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of ~~September~~June 30, ~~2013~~2014, which is the end of the period covered by this report. Based on this evaluation, the Company'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 the Company 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 SEC's rules and forms and (ii) is accumulated and communicated to the Company'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 the Company's internal control over financial reporting during the quarter ended ~~September~~June 30, ~~2013~~2014 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Part II - Other Information

Item 1. Legal Proceedings

In July 2009, DTE Energy received a ~~Notice of Violation/Finding of Violation (~~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. On August 23, 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. On October 20, 2011, the EPA caused to be filed a Notice of Appeal to the U.S. Court of Appeals for the Sixth Circuit. On March 28, 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. On September 3, 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. ~~The~~On ~~EPA~~March ~~and~~3, ~~Sierra~~2014, ~~Club~~the ~~motions~~U.S. ~~are~~District ~~currently~~Court ~~pending~~judge ~~with~~granted again DTE Energy's motion for summary judgment dismissing the Ucivil case related to Monroe Unit 2. On April 3, 2014, the U.S. District Court ~~Judge~~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 River Rouge Unit 3. On June 30, 2014, the EPA filed a motion requesting certification for appeal of the March 3, 2014 summary judgment decision.

DTE Energy and DTE Electric believe that all the plants and generating units identified by the EPA, ~~including~~and ~~Unit 2 of~~ the ~~Monroe~~Sierra ~~Power~~Club ~~Plant,~~ 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 Company cannot predict the financial impact or outcome of this matter, or the timing of its resolution.

OnIn March ~~13,~~ 2013, the Sierra Club filed suit against DTE Energy and DTE Electric alleging violations of the Clean Air Act at four of DTE Electric's coal-fired power plants. The plaintiffs allege 1,499 6-minute periods of excess opacity of air emissions from 2007-2012 at those facilities. The suit asks that the court enjoin DTE Energy and DTE Electric from operating the power plants except in complete compliance with applicable laws and permit requirements, pay civil penalties, conduct beneficial environmental mitigation projects, pay attorney fees and require the installation of any necessary pollution controls or to convert and/or operate the plants' boilers on natural gas to avoid additional violations and to off-set historic unlawful emissions. In December 2013, a U.S. District Court judge issued an order dismissing, without prejudice, the plaintiff's complaint allowing them to file an amended complaint by January 17, 2014. The order dismissing the complaint resulted from a considerable number of plaintiff's claims being time barred based on the statute of limitations. On January 17, 2014, the plaintiffs filed an amended complaint for the period January 13, 2008 - June 30, 2012, reducing the total number of 6-minute periods from 1,499 to 1,139. DTE Energy and DTE Electric filed an answer to the amended complaint on March 11, 2014. The resolution of this matter is not expected to have a material effect on the Company's operations or financial statements.

For additional discussion on legal matters, see Notes 67 and 910 of the Notes to Consolidated Financial Statements.

Item 1A. Risk Factors

There are various risks associated with the operations of DTE Electric. To provide a framework to understand the operating environment of DTE Electric, we have provided a brief explanation of the more significant risks associated with our businesses in Part 1, Item 1A. Risk Factors in the Company's 2012 Form 10-K. Although we have tried to identify and discuss key risk factors, others could emerge in the future. In addition to the risk factors set forth in our 10-K, the following updated risk could affect our performance.

AItem ~~work interruption may adversely affect us~~1A. Risk Unions represent approximately 2,700 of our employees. The labor contract that covers the majority of our represented employees was due to expire in June 2013. Early negotiations resulted in a new contract that became effective in March 2013. The new contract will expire in June 2017. A union choosing to strike would have an impact on our business. We are unable to predict the effect a work stoppage would have on our costs of operation and financial performance.Factors

There are various risks associated with the operations of DTE Electric. To provide a framework to understand the operating environment of DTE Electric, we have provided a brief explanation of the more significant risks associated with our businesses in Part 1, Item 1A. Risk Factors in the Company's 2013 Form 10-K. Although we have tried to identify and discuss key risk factors, others could emerge in the future.

Item 6. Exhibits

		(i) Exhibits filed herewith:
4-281		Supplemental Indenture, dated as of August 1, 2013, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between DTE Electric Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (2013 Series B)
4-282		Supplemental Indenture, dated as of June 1, 2014, to the Mortgage and Deed of Trust dated as of October 1, 1924, between DTE Electric Company and The Bank of New York Mellon, N.A., as successor trustee. (2014 Series A and B)
12-47		Computation of Ratio of Earnings to Fixed Charges
4-283		Supplemental Indenture, dated as of July 1, 2014, to the Mortgage and Deed of Trust dated as of October 1, 1924, between DTE Electric Company and The Bank of New York Mellon, N.A., as successor trustee. (2014 Series D and E)
31-85		Chief Executive Officer Section 302 Form 10-Q Certification of Periodic Report
12-50		Computation of Ratio of Earnings to Fixed Charges
31-86		Chief Financial Officer Section 302 Form 10-Q Certification of Periodic Report
31-91		Chief Executive Officer Section 302 Form 10-Q Certification of Periodic Report
31-92		Chief Financial Officer Section 302 Form 10-Q Certification of Periodic Report
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema
101.CAL		XBRL Taxonomy Extension Calculation Linkbase
101.DEF		XBRL Taxonomy Extension Definition Database
101.LAB		XBRL Taxonomy Extension Label Linkbase
101.PRE		XBRL Taxonomy Extension Presentation Linkbase

		(ii) Exhibits furnished herewith:
32-85		Chief Executive Officer Section 906 Form 10-Q Certification of Periodic Report
32-91		Chief Executive Officer Section 906 Form 10-Q Certification of Periodic Report
32-86		Chief Financial Officer Section 906 Form 10-Q Certification of Periodic Report
32-92		Chief Financial Officer Section 906 Form 10-Q Certification of Periodic Report

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

		DTE ELECTRIC COMPANY
		(Registrant)
Date: October 25, 2013	By	/s/ DONNA M. ENGLAND
Date: July 25, 2014	By	/s/ DONNA M. ENGLAND
		Donna M. EnglandChief Accounting Officer(Principal Accounting Officer)

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