DTE Energy Company
Annual Report 2017

Plain-text annual report

UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549______________________________________________FORM 10-KANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended December 31, 2017Commission File Number Registrants, State of Incorporation, Address, andTelephone Number I.R.S. Employer Identification No.1-11607 DTE Energy Company(a Michigan corporation)One Energy PlazaDetroit, Michigan 48226-1279313-235-4000 38-3217752 1-2198 DTE Electric Company(a Michigan corporation)One Energy PlazaDetroit, Michigan 48226-1279313-235-4000 38-0478650Securities registered pursuant to Section 12(b) of the Act:Registrant Title of Each Class Name of Exchange on which RegisteredDTE Energy Company (DTE Energy) Common stock, without par value New York Stock Exchange DTE Energy 2012 Series C 5.25% Junior Subordinated Debentures due 2062 New York Stock Exchange DTE Energy 2016 Series B 5.375% Junior Subordinated Debentures due 2076 New York Stock Exchange DTE Energy 2016 Series F 6.00% Junior Subordinated Debentures due 2076 New York Stock Exchange DTE Energy 2017 Series E 5.25% Junior Subordinated Debentures due 2077 New York Stock Exchange DTE Energy 6.50% Corporate Units New York Stock Exchange DTE Electric Company (DTE Electric) None NoneSecurities registered pursuant to Section 12(g) of the Act:DTE EnergyNoneDTE ElectricNoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.DTE EnergyYes xx No ooDTE ElectricYes xx No ooIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.DTE EnergyYes oo No xxDTE ElectricYes oo No xxIndicate 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 preceding12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.DTE EnergyYes xx No ooDTE ElectricYes xx No ooIndicate 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 andposted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).DTE EnergyYes xx No ooDTE ElectricYes xx No ooIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant'sknowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.DTE EnergyxxDTE ElectricxxIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.DTE EnergyLarge accelerated filer xxAccelerated filer oNon-accelerated filer oSmaller reporting company oEmerging growth company o (Do not check if a smallerreporting company) DTE ElectricLarge accelerated filer oAccelerated filer oNon-accelerated filer xxSmaller reporting company oEmerging growth company o (Do not check if a smallerreporting company) If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section 13(a) of the Exchange Act. ooIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).DTE EnergyYes oo No xxDTE ElectricYes oo No xxOn June 30, 2017, the aggregate market value of DTE Energy's voting and non voting common equity held by non-affiliates was approximately $18.7 billion (based on the NewYork Stock Exchange closing price on such date).Number of shares of Common Stock outstanding at January 31, 2018:Registrant Description SharesDTE Energy Common Stock, without par value 179,385,962 DTE Electric Common Stock, $10 par value, directly-owned by DTE Energy 138,632,324DOCUMENTS INCORPORATED BY REFERENCECertain information in DTE Energy's definitive Proxy Statement for its 2018 Annual Meeting of Common Shareholders to be held May 3, 2018, which will be filed with theSecurities and Exchange Commission pursuant to Regulation 14A, not later than 120 days after the end of the registrant’s fiscal year covered by this report on Form 10-K, isincorporated herein by reference to Part III (Items 10, 11, 12, 13, and 14) of this Form 10-K.This combined Form 10-K is filed separately by two registrants: DTE Energy and DTE Electric. Information contained herein relating to any individual registrant is filed by suchregistrant solely on its own behalf. DTE Electric makes no representation as to information relating exclusively to DTE Energy.DTE Electric, a wholly-owned subsidiary of DTE Energy, meets the conditions set forth in General Instructions I(1)(a) and (b) of Form 10-K and is therefore filing this form withthe reduced disclosure format specified in General Instruction I(2) of Form 10-K. TABLE OF CONTENTS Page Definitions 1 Filing Format 5 Forward-Looking Statements 5PART IItems 1. & 2.Business and Properties 7Item 1A.Risk Factors 20Item 1B.Unresolved Staff Comments 25Item 3.Legal Proceedings 25Item 4.Mine Safety Disclosures 26PART IIItem 5.Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 27Item 6.Selected Financial Data 29Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations 29Item 7A.Quantitative and Qualitative Disclosures About Market Risk 52Item 8.Financial Statements and Supplementary Data 55Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 140Item 9A.Controls and Procedures 140Item 9B.Other Information 140PART IIIItem 10.Directors, Executive Officers, and Corporate Governance 140Item 11.Executive Compensation 140Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 140Item 13.Certain Relationships and Related Transactions, and Director Independence 140Item 14.Principal Accountant Fees and Services 140PART IVItem 15.Exhibits and Financial Statement Schedules 142Item 16.Form 10-K Summary 152 Signatures 154AFUDCAllowance for Funds Used During Construction AGSAppalachia Gathering System is a midstream natural gas asset located in Pennsylvania and West Virginia. DTE Energypurchased 100% of AGS in October 2016, and this asset is part of DTE Energy's Gas Storage and Pipelines segment. AMVApplicable Market Value ANPRAdvanced Noticed of Proposed Rulemaking AROAsset Retirement Obligation ASUAccounting Standards Update issued by the FASB CCRCoal Combustion Residuals CFTCU.S. Commodity Futures Trading Commission CONCertificate of Necessity DOEU.S. Department of Energy DTE ElectricDTE Electric Company (a direct wholly-owned subsidiary of DTE Energy) and subsidiary companies DTE EnergyDTE Energy Company, directly or indirectly the parent of DTE Electric, DTE Gas, and numerous non-utility subsidiaries DTE GasDTE Gas Company (an indirect wholly-owned subsidiary of DTE Energy) and subsidiary companies EGUElectric Generating Unit ELGEffluent Limitations Guidelines EPAU.S. Environmental Protection Agency Equity UnitsDTE Energy's 2016 Equity Units issued in October 2016, which were used to finance the October 1, 2016 Gas Storage andPipelines acquisition. FASBFinancial Accounting Standards Board FERCFederal Energy Regulatory Commission FOVFinding of Violation FTRsFinancial Transmission Rights are financial instruments that entitle the holder to receive payments related to costs incurred forcongestion on the transmission grid. GCRA Gas Cost Recovery mechanism authorized by the MPSC that allows DTE Gas to recover through rates its natural gas costs. GHGsGreenhouse gases IRMInfrastructure Recovery Mechanism IRSInternal Revenue Service ISOIndependent System Operator LIBORLondon Inter-Bank Offered Rates LLCDTE Energy Corporate Services, LLC, a subsidiary of DTE Energy MDEQMichigan Department of Environmental Quality MGPManufactured Gas Plant MISOMidcontinent Independent System Operator, Inc. MPSCMichigan Public Service Commission MTMMark-to-market1 NAVNet Asset Value NEILNuclear Electric Insurance Limited NEXUSNEXUS Gas Transmission, LLC, a joint venture in which DTE Energy owns a 50% partnership interest. Non-utilityAn entity that is not a public utility. Its conditions of service, prices of goods and services, and other operating related mattersare not directly regulated by the MPSC. NOVNotice of Violation NOxNitrogen Oxides NRCU.S. Nuclear Regulatory Commission PLDCity of Detroit's Public Lighting Department Production tax creditsTax credits as authorized under Sections 45K and 45 of the Internal Revenue Code that are designed to stimulate investment inand development of alternate fuel sources. The amount of a production tax credit can vary each year as determined by the IRS. PSCRA 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. RDMA Revenue Decoupling Mechanism authorized by the MPSC that is designed to minimize the impact on revenues of changes inaverage customer usage. REFReduced Emissions Fuel RegistrantsDTE Energy and DTE Electric Retail accessMichigan legislation provided customers the option of access to alternative suppliers for electricity and natural gas. RSNRemarketable Senior Notes RTORegional Transmission Organization SECSecurities and Exchange Commission SecuritizationDTE Electric financed specific stranded costs at lower interest rates through the sale of rate reduction bonds by a wholly-ownedspecial purpose entity, The Detroit Edison Securitization Funding LLC. SGGStonewall Gas Gathering is a midstream natural gas asset located in West Virginia. DTE Energy purchased 55% of SGG inOctober 2016, and this asset is part of DTE Energy's Gas Storage and Pipelines segment. ShenangoShenango Incorporated is a coke battery plant located in Pittsburgh, PA, that was closed in January 2016 and is included in thePower and Industrial Projects segment. SO2Sulfur Dioxide TCJATax Cuts and Jobs Act of 2017 TRIATerrorism Risk Insurance Program Reauthorization Act of 2015 TRMA Transitional Reconciliation Mechanism authorized by the MPSC that allows DTE Electric to recover through rates thedeferred net incremental revenue requirement associated with the transition of PLD customers to DTE Electric's distributionsystem. VEBAVoluntary Employees Beneficiary Association VIEVariable Interest EntityUnits of Measurement BcfBillion cubic feet of natural gas BTUBritish thermal unit, heat value (energy content) of fuel kWhKilowatthour of electricity MDth/dMillion dekatherms per day MMBtuOne million BTU MWMegawatt of electricityMWhMegawatthour of electricity23THIS PAGE INTENTIONALLY LEFT BLANK4FILING FORMATThis combined Form 10-K is separately filed by DTE Energy and DTE Electric. Information in this combined Form 10-K relating to each individualRegistrant is filed by such Registrant on its own behalf. DTE Electric makes no representation regarding information relating to any other companiesaffiliated with DTE Energy other than its own subsidiaries. Neither DTE Energy, nor any of DTE Energy’s other subsidiaries (other than DTE Electric), hasany obligation in respect of DTE Electric's debt securities, and holders of such debt securities should not consider the financial resources or results ofoperations of DTE Energy nor any of DTE Energy’s other subsidiaries (other than DTE Electric and its own subsidiaries (in relevant circumstances)) inmaking a decision with respect to DTE Electric's debt securities. Similarly, none of DTE Electric nor any other subsidiary of DTE Energy has any obligationin respect of debt securities of DTE Energy. This combined Form 10-K should be read in its entirety. No one section of this combined Form 10-K deals withall aspects of the subject matter of this combined Form 10-K.FORWARD-LOOKING STATEMENTSCertain information presented herein includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995with respect to the financial condition, results of operations, and businesses of the Registrants. Words such as “anticipate,” “believe,” “expect,” “may,”“could,” “projected,” “aspiration,” “plans,” and “goals” signify forward-looking statements. Forward-looking statements are not guarantees of future resultsand conditions, but rather are subject to numerous assumptions, risks, and uncertainties that may cause actual future results to be materially different fromthose contemplated, projected, estimated, or budgeted. Many factors may impact forward-looking statements of the Registrants including, but not limited to,the following:•impact of regulation by the EPA, the FERC, the MPSC, the NRC, and for DTE Energy, the CFTC, as well as other applicable governmentalproceedings 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 legislativeamendments and retail access programs;•economic conditions and population changes in the Registrants' geographic area resulting in changes in demand, customer conservation, andthefts of electricity and, for DTE Energy, natural gas;•environmental issues, laws, regulations, and the increasing costs of remediation and compliance, including actual and potential new federal andstate requirements;•the cost of protecting assets against, or damage due to, cyber crime and terrorism;•health, safety, financial, environmental, and regulatory risks associated with ownership and operation of nuclear facilities;•volatility in the short-term natural gas storage markets impacting third-party storage revenues related to DTE Energy;•impact of volatility of prices in the oil and gas markets on DTE Energy's gas storage and pipelines operations;•impact of volatility in prices in the international steel markets on DTE Energy's power and industrial projects operations;•volatility in commodity markets, deviations in weather, and related risks impacting the results of DTE Energy's energy trading operations;•changes in the cost and availability of coal and other raw materials, purchased power, and natural gas;•advances in technology that produce power or reduce power consumption;•changes in the financial condition of DTE Energy's significant customers and strategic partners;•the potential for losses on investments, including nuclear decommissioning and benefit plan assets and the related increases in future expense andcontributions;5•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 capital 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;•employee relations and the impact of collective bargaining agreements;•the risk of a major safety incident at an electric distribution or generation facility and, for DTE Energy, a gas storage, transmission, or distributionfacility;•the availability, cost, coverage, and terms of insurance and stability of insurance providers;•cost reduction efforts and the maximization of plant and distribution system performance;•the effects of competition;•changes in and application of accounting standards and financial reporting regulations;•changes in federal or state laws and their interpretation with respect to regulation, energy policy, and other business issues;•contract disputes, binding arbitration, litigation, and related appeals; and•the risks discussed in the Registrants' public filings with the Securities and Exchange Commission.New factors emerge from time to time. The Registrants cannot predict what factors may arise or how such factors may cause results to differ materiallyfrom those contained in any forward-looking statement. Any forward-looking statements speak only as of the date on which such statements are made. TheRegistrants undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement ismade or to reflect the occurrence of unanticipated events.6Part IItems 1. and 2. Business and PropertiesGeneralIn 1995, DTE Energy incorporated in the State of Michigan. DTE Energy's utility operations consist primarily of DTE Electric and DTE Gas. DTEEnergy also has three other segments that are engaged in a variety of energy-related businesses.DTE Electric is a Michigan corporation organized in 1903 and is a wholly-owned subsidiary of DTE Energy. DTE Electric is a public utility engaged inthe generation, purchase, distribution, and sale of electricity to approximately 2.2 million customers in southeastern Michigan.DTE Gas is a Michigan corporation organized in 1898 and is a wholly-owned subsidiary of DTE Energy. DTE Gas is a public utility engaged in thepurchase, storage, transportation, distribution, and sale of natural gas to approximately 1.3 million customers throughout Michigan and the sale of storageand transportation capacity.DTE Energy's other businesses are involved in 1) natural gas pipelines, gathering, and storage; 2) power and industrial projects; and 3) energymarketing and trading operations.DTE Electric and DTE Gas are regulated by the MPSC. Certain activities of DTE Electric and DTE Gas, as well as various other aspects of businessesunder DTE Energy are regulated by the FERC. In addition, the Registrants are regulated by other federal and state regulatory agencies including the NRC, theEPA, the MDEQ, and for DTE Energy, the CFTC.The Registrants' annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and all amendments tosuch reports are available free of charge through the Investors - Reports and Filings page of DTE Energy's website: www.dteenergy.com, as soon as reasonablypracticable after they are filed with or furnished to the SEC.The DTE Energy Code of Ethics and Standards of Behavior, Board of Directors’ Mission and Guidelines, Board Committee Charters, and CategoricalStandards for Director Independence are also posted on the DTE Energy website. The information on DTE Energy’s website is not part of this report or anyother report that DTE Energy files with, or furnishes to, the SEC.Additionally, the public may read and copy any materials the Registrants file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE,Room 1580, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that fileelectronically with the SEC at www.sec.gov.Corporate StructureDTE Energy sets strategic goals, allocates resources, and evaluates performance based on the following structure. For financial information by segmentfor the last three years, see Note 22 to the Consolidated Financial Statements in Item 8 of this Report, "Segment and Related Information."Electric•The Electric segment consists principally of DTE Electric, which is engaged in the generation, purchase, distribution, and sale of electricity toapproximately 2.2 million residential, commercial, and industrial customers in southeastern Michigan.Gas•The Gas segment consists principally of DTE Gas, which is engaged in the purchase, storage, transportation, distribution, and sale of natural gas toapproximately 1.3 million residential, commercial, and industrial customers throughout Michigan and the sale of storage and transportationcapacity.7Non-utility Operations•Gas Storage and Pipelines consists of natural gas pipeline, gathering, transportation, and storage businesses.•Power and Industrial Projects is comprised primarily of projects that deliver energy and utility-type products and services to industrial,commercial, and institutional customers, produce reduced emissions fuel, and sell electricity from renewable energy projects.•Energy Trading consists of energy marketing and trading operations.Corporate and Other•Corporate and Other includes various holding company activities, holds certain non-utility debt, and holds energy-related investments.Refer to Management’s Discussion and Analysis in Item 7 of this Report for an in-depth analysis of each segment’s financial results. A description ofeach business unit follows.ELECTRICDescriptionDTE Energy's Electric segment consists principally of DTE Electric, an electric utility engaged in the generation, purchase, distribution, and sale ofelectricity to approximately 2.2 million customers in southeastern Michigan. DTE Electric is regulated by numerous federal and state governmental agencies,including, but not limited to, the MPSC, the FERC, the NRC, the EPA, and the MDEQ. Electricity is generated from fossil-fuel plants, a hydroelectric pumpedstorage plant, a nuclear plant, wind and other renewable assets and is supplemented with purchased power. The electricity is sold, or distributed through theretail access program, to three major classes of customers: residential, commercial, and industrial, throughout southeastern Michigan.Operating Revenues by Service 2017 2016 2015 (In millions)Residential$2,310 $2,477 $2,186Commercial1,758 1,754 1,701Industrial667 654 645Other(a)313 290 281Subtotal5,048 5,175 4,813Interconnection sales(b)54 50 88Electric segment Operating Revenues$5,102 $5,225 $4,901______________________________(a)Includes revenue associated with the under or over recoveries of tracking mechanisms and for 2015 deferred gain amortization of the previously reversed RDM liability.(b)Represents power that is not distributed by DTE Electric.8Weather, economic factors, competition, energy efficiency initiatives, and electricity prices affect sales levels to customers. DTE Electric's peak loadand highest total system sales generally occur during the third quarter of the year, driven by air conditioning and other cooling-related demands. DTEElectric's operations are not dependent upon a limited number of customers, and the loss of any one or a few customers would not have a material adverseeffect on the results of DTE Electric.Fuel Supply and Purchased PowerDTE Electric's power is generated from a variety of fuels and is supplemented with purchased power. DTE Electric expects to have an adequate supplyof fuel and purchased power to meet its obligation to serve customers. DTE Electric's generating capability is heavily dependent upon the availability ofcoal. Coal is purchased from various sources in different geographic areas under agreements that vary in both pricing and terms. DTE Electric expects toobtain the majority of its coal requirements through long-term contracts, with the balance to be obtained through short-term agreements and spot purchases.DTE Electric has long-term and short-term contracts for the purchase of approximately 26.7 million tons of low-sulfur western coal and approximately 1million tons of Appalachian coal to be delivered from 2018 to 2021. All of these contracts have pricing schedules. DTE Electric has approximately 94% ofthe expected coal requirements for 2018 under contract. Given the geographic diversity of supply, DTE Electric believes it can meet its expected generationrequirements. DTE Electric leases a fleet of rail cars and has the expected western and eastern coal rail requirements under contract through 2021. Contractscovering expected vessel transportation requirements for delivery of purchased coal to electric generating facilities are under contract through 2019.DTE Electric participates in the energy market through MISO. DTE Electric offers its generation in the market on a day-ahead and real-time basis andbids for power in the market to serve its load. DTE Electric is a net purchaser of power that supplements its generation capability to meet customer demandduring peak cycles or during major plant outages.9PropertiesDTE Electric owns generating facilities that are located in the State of Michigan. Substantially all of DTE Electric's property is subject to the lien of amortgage.Generating facilities owned and in service as of December 31, 2017 are shown in the following table: Location byMichiganCounty Net GenerationCapacity(a)Facility Year in Service (MW)Fossil-fueled Steam-Electric Belle River(b) St. Clair 1984 and 1985 1,034Greenwood St. Clair 1979 785Monroe(c) Monroe 1971, 1973, and 1974 3,066River Rouge Wayne 1958 272St. Clair St. Clair 1953, 1954, 1961, and 1969 1,216Trenton Channel Wayne 1968 520 6,893Natural gas and Oil-fueled Peaking Units Various 1966-1971, 1981, 1999, 2002, and 2003 2,033Nuclear-fueled Steam-Electric Fermi 2 Monroe 1988 1,141Hydroelectric Pumped Storage Ludington(d) Mason 1973 1,019Renewables(e) Wind Brookfield Wind Park Huron 2014 75Echo Wind Park Huron 2014 112Gratiot Wind Park Gratiot 2011 and 2012 102Pinnebog Wind Park Huron 2016 51Thumb Wind Project Huron and Sanilac 2012 110 450Solar Utility-Owned SolarCurrents Various 2010-2016 16Utility Scale Solar Various 2017 50 66 11,602_______________________________________(a)Represents summer net rating for all units with the exception of renewable facilities. The summer net rating is based on operating experience, the physical condition of units,environmental control limitations, and customer requirements for steam, which would otherwise be used for electric generation. Wind and solar facilities reflect name platecapacity.(b)The Belle River capability represents DTE Electric’s entitlement to 81% of the capacity and energy of the plant. See Note 7 to the Consolidated Financial Statements in Item 8 ofthis Report, "Jointly-Owned Utility Plant."(c)The Monroe generating plant provided 40% of DTE Electric’s total 2017 power plant generation.(d)Represents DTE Electric’s 49% interest in Ludington with a total capability of 2,080 MW. See Note 7 to the Consolidated Financial Statements in Item 8 of this Report, "Jointly-Owned Utility Plant."(e)In addition to the owned renewable facilities described above, DTE Electric has long-term contracts for 489 MW of renewable power generated from wind, solar, and biomassfacilities.See "Capital Investments" in Management's Discussion and Analysis in Item 7 of this Report for information regarding plant retirements and futurecapital expenditures.10DTE Electric owns and operates 692 distribution substations with a capacity of approximately 36,357,000 kilovolt-amperes (kVA) and approximately440,500 line transformers with a capacity of approximately 31,777,000 kVA.Circuit miles of electric distribution lines owned and in service as of December 31, 2017 are shown in the following table: Circuit MilesOperating Voltage-Kilovolts (kV) Overhead Underground4.8 kV to 13.2 kV 28,479 15,12224 kV 182 68940 kV 2,301 378120 kV 61 8 31,023 16,197There are numerous interconnections that allow the interchange of electricity between DTE Electric and electricity providers external to the DTEElectric service area. These interconnections are generally owned and operated by ITC Transmission, an unrelated company, and connect to neighboringenergy companies.RegulationDTE Electric is subject to the regulatory jurisdiction of various agencies, including, but not limited to, the MPSC, the FERC, and the NRC. The MPSCissues orders pertaining to rates, recovery of certain costs, including the costs of generating facilities and regulatory assets, conditions of service, accounting,and operating-related matters. DTE Electric's MPSC-approved rates charged to customers have historically been designed to allow for the recovery of costs,plus an authorized rate of return on investments. The FERC regulates DTE Electric with respect to financing authorization and wholesale electric activities.The NRC has regulatory jurisdiction over all phases of the operation, construction, licensing, and decommissioning of DTE Electric's nuclear plantoperations. DTE Electric is subject to the requirements of other regulatory agencies with respect to safety, the environment, and health.See Notes 8, 9, 12, and 18 to the Consolidated Financial Statements in Item 8 of this Report, "Asset Retirement Obligations," "Regulatory Matters,""Fair Value," and "Commitments and Contingencies."Energy Assistance ProgramsEnergy assistance programs, funded by the federal government and the State of Michigan, remain critical to DTE Electric’s ability to control itsuncollectible accounts receivable and collections expenses. DTE Electric’s uncollectible accounts receivable expense is directly affected by the level ofgovernment-funded assistance that qualifying customers receive. DTE Electric works continuously with the State of Michigan and others to determinewhether the share of funding allocated to customers is representative of the number of low-income individuals in the service territory. DTE Electric alsopartners with federal, state, and local officials to attempt to increase the share of low-income funding allocated to customers.Strategy and CompetitionDTE Electric's electrical generation operations seek to provide the energy needs of customers in a cost effective manner. With potential capacityconstraints in the MISO region, there will be increased dependency on DTE Electric's generation to provide reliable service and price stability for customers.This generation will require a large investment in DTE Electric's aging coal fleet, proposed natural gas fueled combined cycle generation facility, andrenewables.DTE Electric's distribution operations focus is on distributing energy in a safe, cost effective, and reliable manner to customers. DTE Electric seeks toincrease operational efficiencies to increase customer satisfaction at an affordable rate.11The electric retail access program in Michigan gives electric customers the option of retail access to alternative electric suppliers, subject to limits.Customers with retail access to alternative electric suppliers represented approximately 10% of retail sales in 2017, 2016, and 2015 and consisted primarilyof industrial and commercial customers. MPSC rate orders and 2008 energy legislation enacted by the State of Michigan have placed a 10% cap on the totalretail access related migration, mitigating some of the unfavorable effects of electric retail access on DTE Electric's financial performance and full servicecustomer rates. Energy legislation passed in 2016 retained the 10% retail access cap with some revisions. DTE Electric expects that customers with retailaccess to alternative electric suppliers will represent approximately 10% of retail sales in 2018.Competition in the regulated electric distribution business is primarily from the on-site generation of industrial customers and from distributedgeneration applications by industrial and commercial customers. DTE Electric does not expect significant competition for distribution to any group ofcustomers in the near term.Revenues from year to year will vary due to weather conditions, economic factors, regulatory events, and other risk factors as discussed in the “RiskFactors” in Item 1A. of this Report.GASDescriptionDTE Energy's Gas segment consists principally of DTE Gas, a natural gas utility engaged in the purchase, storage, transportation, distribution, and saleof natural gas to approximately 1.3 million residential, commercial, and industrial customers throughout Michigan, and the sale of storage and transportationcapacity.Operating Revenues by Service 2017 2016 2015 (In millions)Gas sales$1,002 $970 $1,019End-user transportation206 189 191Intermediate transportation49 50 59Other131 115 107Gas segment Operating Revenues$1,388 $1,324 $1,376•Gas sales — Includes the sale and delivery of natural gas primarily to residential and small-volume commercial and industrial customers.•End-user transportation — Gas delivery service provided primarily to large-volume commercial and industrial customers. Additionally, the service isprovided to residential customers and small-volume commercial and industrial customers who have elected to participate in the gas retail accessprogram. End-user transportation customers purchase natural gas directly from marketers, producers, or brokers and utilize DTE Gas' pipeline network totransport the gas to their facilities or homes.•Intermediate transportation — Gas delivery service is provided to producers, brokers, and other gas companies that own the natural gas, but are not theultimate consumers. Intermediate transportation customers use DTE Gas' high-pressure transportation system to transport the natural gas to storage fields,pipeline interconnections, or other locations.•Other — Includes revenues from natural gas storage, appliance maintenance, facility development, and other energy-related services.DTE Gas' natural gas sales, end-user transportation, and intermediate transportation volumes, revenues, and Net Income, are impacted by weather. Giventhe seasonal nature of the business, revenues and Net Income are concentrated in the first and fourth quarters of the calendar year. By the end of the firstquarter, the heating season is largely over, and DTE Gas typically realizes substantially reduced revenues and earnings in the second quarter, and losses in thethird quarter. The impacts of changes in annual average customer usage are minimized by the RDM.DTE Gas operations are not dependent upon a limited number of customers, and the loss of any one or a few customers would not have a materialadverse effect on the results of DTE Gas.12Natural Gas SupplyDTE Gas' gas distribution system has a planned maximum daily send-out capacity of 2.4 Bcf, with approximately 65% of the volume coming fromunderground storage for 2017. Peak-use requirements are met through utilization of storage facilities, pipeline transportation capacity, and purchased gassupplies. Because of the geographic diversity of supply and its pipeline transportation and storage capacity, DTE Gas is able to reliably meet supplyrequirements. DTE Gas believes natural gas supply and pipeline capacity will be sufficiently available to meet market demands in the foreseeable future.DTE Gas purchases natural gas supplies in the open market by contracting with producers and marketers, and maintains a diversified portfolio ofnatural gas supply contracts. Supplier, producing region, quantity, and available transportation diversify DTE Gas' natural gas supply base. Natural gassupply is obtained from various sources in different geographic areas (Gulf Coast, Mid-Continent, Canada, and Michigan) under agreements that vary in bothpricing and terms. Gas supply pricing is generally tied to the New York Mercantile Exchange and published price indices to approximate current marketprices combined with MPSC-approved fixed price supplies with varying terms and volumes through 2020.DTE Gas is directly connected to interstate pipelines, providing access to most of the major natural gas supply producing regions in the Gulf Coast,Mid-Continent, and Canadian regions. The primary long-term transportation supply contracts at December 31, 2017 are listed below. In addition, DTE Gashas contracted for 75 MDth/d of capacity on the NEXUS Pipeline, for a term of 15-years beginning with the anticipated third quarter 2018 in-service date. Availability(MDth/d) ContractExpirationGreat Lakes Gas Transmission L.P.30 2022Viking Gas Transmission Company21 2022Vector Pipeline L.P.20 2022ANR Pipeline Company204 2028Panhandle Eastern Pipeline Company125 2029PropertiesDTE Gas owns distribution, storage, and transportation properties that are located in the State of Michigan. The distribution system includesapproximately 19,500 miles of distribution mains, approximately 1,216,000 service pipelines, and approximately 1,262,000 active meters, and DTE Gasowns approximately 2,000 miles of transmission pipelines that deliver natural gas to the distribution districts and interconnect DTE Gas storage fields withthe sources of supply and the market areas.DTE Gas owns storage properties relating to four underground natural gas storage fields with an aggregate working gas storage capacity ofapproximately 139 Bcf. These facilities are important in providing reliable and cost-effective service to DTE Gas customers. In addition, DTE Gas sellsstorage services to third parties.Most of DTE Gas' distribution and transportation property is located on property owned by others and used by DTE Gas through easements, permits, orlicenses. Substantially all of DTE Gas' property is subject to the lien of a mortgage.DTE Gas leases a portion of its pipeline system to the Vector Pipeline Partnership (an affiliate) through a capital lease arrangement. See Note 17 to theConsolidated Financial Statements in Item 8 of the Report, "Capital and Operating Leases."RegulationDTE Gas is subject to the regulatory jurisdiction of the MPSC, which issues orders pertaining to rates, recovery of certain costs, including the costs ofregulatory assets, conditions of service, accounting, and operating-related matters. DTE Gas' MPSC-approved rates charged to customers have historicallybeen designed to allow for the recovery of costs, plus an authorized rate of return on investments. DTE Gas operates natural gas storage and transportationfacilities in Michigan as intrastate facilities regulated by the MPSC and provides intrastate storage and transportation services pursuant to a MPSC-approvedtariff.DTE Gas also provides interstate storage and transportation services in accordance with an Operating Statement on file with the FERC. The FERC'sjurisdiction is limited and extends to the rates, non-discriminatory requirements, and the terms and conditions applicable to storage and transportationprovided by DTE Gas in interstate markets. FERC granted DTE Gas authority to provide storage and related services in interstate commerce at market-basedrates. DTE Gas provides transportation services in interstate commerce at cost-based rates approved by the MPSC and filed with the FERC.13DTE Gas is subject to the requirements of other regulatory agencies with respect to safety, the environment, and health.See Notes 9 and 18 to the Consolidated Financial Statements in Item 8 of this Report, "Regulatory Matters" and "Commitments and Contingencies."Energy Assistance ProgramEnergy assistance programs, funded by the federal government and the State of Michigan, remain critical to DTE Gas' ability to control its uncollectibleaccounts receivable and collections expenses. DTE Gas' uncollectible accounts receivable expense is directly affected by the level of government-fundedassistance its qualifying customers receive. DTE Gas works continuously with the State of Michigan and others to determine whether the share of fundingallocated to customers is representative of the number of low-income individuals in the gas service territory. DTE Gas also partners with federal, state, andlocal officials to attempt to increase the share of low-income funding allocated to DTE Gas customers.Strategy and CompetitionDTE Gas' strategy is to ensure the safe, reliable, and cost effective delivery of natural gas service within its franchised markets in Michigan. In addition,DTE Gas is promoting the extension of its distribution system to underserved markets and the increased use of natural gas furnaces, water heaters, andappliances within its current customer base. DTE Gas continues to focus on the reduction of operating costs and the delivery of energy efficiency productsand services to its customers, making natural gas service the preferred fuel and even more affordable for its customers.Competition in the gas business primarily involves other natural gas transportation providers, as well as providers of alternative fuels and energysources. The primary focus of competition for end-user transportation is cost and reliability. Some large commercial and industrial customers have the abilityto switch to alternative fuel sources such as coal, electricity, oil, and steam. If these customers were to choose an alternative fuel source, they would not havea need for DTE Gas' end-user transportation service. DTE Gas competes against alternative fuel sources by providing competitive pricing and reliable service,supported by its storage capacity.Having an extensive transportation pipeline system has enabled marketing of DTE Gas' storage and transportation services to gas producers, marketers,distribution companies, end-user customers, and other pipeline companies. The business operates in a central geographic location with connections to majorMidwestern interstate pipelines that extend throughout the Midwest, eastern United States, and eastern Canada.DTE Gas' storage capacity is used to store natural gas for delivery to its customers, and is also sold to third parties under a variety of arrangements.Prices for storage arrangements for shorter periods are generally higher, but more volatile, than for longer periods. Prices are influenced primarily by marketconditions, weather, and natural gas pricing.GAS STORAGE AND PIPELINESDescriptionGas Storage and Pipelines owns natural gas storage fields, lateral and gathering pipeline systems, compression and surface facilities, and has ownershipinterests in interstate pipelines serving the Midwest, Ontario, and Northeast markets. The pipeline and storage assets are primarily supported by long-term,fixed-price revenue contracts.14PropertiesGas Storage and Pipelines holds the following properties:Property Classification % Owned Description LocationPipelines Appalachia Gathering System(a) 100% 114-mile pipeline delivering Marcellus Shale gas to Texas Eastern Pipelineand Stonewall Gas Gathering system PA and WVStonewall Gas Gathering(a) 55% 68-mile pipeline connecting Appalachia Gathering System to ColumbiaPipeline WVBluestone Pipeline 100% 59-mile pipeline delivering Marcellus Shale gas to Millennium Pipeline andTennessee Pipeline PA and NYSusquehanna gathering system 100% Gathering system delivering Southwestern Energy's Marcellus Shale gasproduction to Bluestone Pipeline PAVector Pipeline 40% 348-mile pipeline connecting Chicago, Michigan, and Ontario market centers IL, IN, MI, and OntarioMillennium Pipeline 26% 251-mile pipeline serving markets in the Northeast NYMichigan gathering systems 100% Gathers production gas in northern Michigan MIStorage Washington 10 100% 75 Bcf of storage capacity MIWashington 28 50% 16 Bcf of storage capacity MI_______________________________________(a)In October 2016, DTE Energy closed on an acquisition of midstream natural gas assets that are part of the Gas Storage and Pipelines segment. See Note 4 to the ConsolidatedFinancial Statements, "Acquisitions and Exit Activities," for additional information.The assets of these businesses are well integrated with other DTE Energy operations. Pursuant to an operating agreement, DTE Gas provides physicaloperations, maintenance, and technical support for the Washington 10 and 28 storage facilities and for the Michigan gathering systems.In addition, DTE Energy owns a 50% interest in the NEXUS Pipeline, a 255-mile pipeline to transport Utica and Marcellus shale gas to Ohio, Michigan,and Ontario market centers. A FERC application was filed in the fourth quarter of 2015 and was approved in August 2017. Construction has commenced withan anticipated third quarter 2018 in-service date.In May 2017, DTE Energy filed a FERC application for approval of the Birdsboro Pipeline, a 14-mile lateral to serve a new power plant inPennsylvania. DTE Energy is targeting a 2018 in-service date.RegulationGas Storage and Pipelines operates natural gas storage facilities in Michigan as intrastate facilities regulated by the MPSC, and provides intrastatestorage and related services pursuant to an MPSC-approved tariff. Gas Storage and Pipelines also provides interstate services in accordance with an OperatingStatement on file with the FERC. Vector and Millennium Pipelines provide interstate transportation services in accordance with their FERC-approved tariffs.In addition, Vector is subject to applicable laws, rules and regulations in Canada. NEXUS Pipeline, when operational, will also provide interstatetransportation services in accordance with their FERC-approved tariffs. Gas Storage and Pipelines' gathering and pipeline assets are subject to the rules andregulations of the MPSC, Pennsylvania Public Utility Commission, the West Virginia Public Service Commission, and the New York Public ServiceCommission.Strategy and CompetitionGas Storage and Pipelines expects to continue its steady growth plan by expanding existing assets, acquiring and/or developing new assets that aretypically supported with long-term customer commitments. The focus will be on opportunities in the Midwest to Northeast region to supply natural gas tomeet growing demand and displace less attractive supply from certain regions in North America. Much of the growth in demand for natural gas is expected tooccur in the eastern Canada and the northeast U.S. regions. Gas Storage and Pipelines believes that the Vector, Millennium, and NEXUS Pipelines are wellpositioned to provide access routes and low-cost expansion options to these markets due to growth in production from the Marcellus/Utica Shales inPennsylvania and West Virginia. Gas Storage and Pipelines has agreements with key Marcellus shale producers that support its Bluestone Pipeline,Susquehanna gathering, AGS, and SGG businesses. Gas Storage and Pipelines is evaluating new pipeline and storage investment opportunities that couldinclude additional pipeline and gathering expansions, laterals, compression, and other Marcellus/Utica shale midstream development or partneringopportunities.15Gas Storage and Pipelines has competition from other pipelines and storage providers. Operations are dependent upon a limited number of customers,and the loss of any one or a few customers could have a material adverse effect on the results of Gas Storage and Pipelines.POWER AND INDUSTRIAL PROJECTSDescriptionPower and Industrial Projects is comprised primarily of projects that deliver energy and utility-type products and services to industrial, commercial, andinstitutional customers, produce reduced emissions fuel, and sell electricity from renewable energy projects. This business segment provides services usingproject assets usually located on or near the customers' premises in the steel, automotive, pulp and paper, airport, chemical, and other industries as follows:Industrial Energy Services•Steel and Petroleum Coke — Power and Industrial Projects produces metallurgical coke from a coke battery with a capacity of 1.0 million tons per yearand has an investment in a second coke battery with a capacity of 1.2 million tons per year. Power and Industrial Projects also provides pulverized coaland petroleum coke to the steel, pulp and paper, and other industries.•On-Site Energy — Power and Industrial Projects provides power generation, steam production, chilled water production, wastewater treatment, andcompressed air supply to industrial customers. Power and Industrial Projects also provides utility-type services using project assets usually located on ornear the customers' premises in the automotive, airport, chemical, and other industries.Renewable Energy•Wholesale Power and Renewables — Power and Industrial Projects holds ownership interests in, and operates, five renewable generating plants with acapacity of 217 MWs. The electric output is sold under long-term power purchase agreements.•Landfill Gas Recovery — Power and Industrial Projects has ownership interests in, and operates, twenty-two landfill gas recovery sites in eight differentstates. The sites recover methane from landfills and converts the gas to generate electricity, replace fossil fuels in industrial and manufacturingoperations, or refine to pipeline-quality gas, which can then be used as vehicle fuel.Reduced Emissions Fuel•Reduced Emissions Fuel — Power and Industrial Projects has constructed and placed in service REF facilities at eleven sites including facilities locatedat eight third-party owned coal-fired power plants. DTE Energy has sold membership interests in four of the facilities and entered into lease arrangementsin three of the facilities. DTE Energy will continue to optimize these facilities by seeking investors or entering into lease arrangements for facilitiesoperating at DTE Electric and other utility sites. In addition, DTE Energy has entered into an agreement to operate an REF facility owned by an outsideparty located at a third-party owned coal-fired power plant. The facilities blend a proprietary additive with coal used in coal-fired power plants, resultingin reduced emissions of nitrogen oxide and mercury. Qualifying facilities are eligible to generate tax credits for ten years upon achieving certain criteria.The value of a tax credit is adjusted annually by an inflation factor published by the IRS. The value of the tax credit is reduced if the reference price ofcoal exceeds certain thresholds. The economic benefit of the REF facilities is dependent upon the generation of production tax credits.16Properties and OtherThe following are significant properties operated by Power and Industrial Projects:Business Areas Location Service TypeIndustrial Energy Services Steel and Petroleum Coke Pulverized Coal Operations MI Pulverized CoalCoke Production MI Metallurgical Coke SupplyOther Investment in Coke Production and Petroleum Coke IN and MS Metallurgical Coke Supply and Pulverized Petroleum CokeOn-Site Energy Automotive IN, MI, NY, and OH Electric Distribution, Chilled Water, Waste Water, Steam, Cooling TowerWater, Reverse Osmosis Water, Compressed Air, Mist, and DustCollectorsAirports MI and PA Electricity and Hot and Chilled WaterChemical Manufacturing KY and OH Electricity, Steam, Natural Gas, Compressed Air, and WastewaterConsumer Manufacturing OH Electricity, Steam, Wastewater, and SewerBusiness Park PA ElectricityHospital and University CA and IL Electricity, Steam, and Chilled WaterRenewable Energy Pulp and Paper AL Electric Generation and SteamRenewables CA and MN Electric GenerationLandfill Gas Recovery AZ, CA, MI, NC, NY, OH, TX, andUT Electric Generation and Renewable Natural GasReduced Emissions Fuel MI, OH, OK, IL, PA, TX, and WI REF Supply 2017 2016 2015 (In millions)Production Tax Credits Generated (Allocated to DTE Energy) REF$144 $103 $77Renewables6 8 11Landfill Gas Recovery3 3 3 $153 $114 $91RegulationCertain electric generating facilities within Power and Industrial Projects have market-based rate authority from the FERC to sell power. The facilitiesare subject to FERC reporting requirements and market behavior rules. Certain projects of Power and Industrial Projects are also subject to the applicablelaws, rules, and regulations related to the EPA, U.S. Department of Homeland Security, DOE, and various state utility commissions.Strategy and CompetitionPower and Industrial Projects will continue leveraging its energy-related operating experience and project management capability to develop and growits steel, on-site energy, and renewable energy businesses, and optimize the REF businesses. Power and Industrial Projects will also continue to pursueopportunities to provide asset management and operations services to third parties. There are limited competitors for Power and Industrial Projects' existingdisparate businesses who provide similar products and services. Power and Industrial Projects' operations are dependent upon a limited number of customers,and the loss of any one or a few customers could have a material adverse effect on the results of Power and Industrial Projects.Power and Industrial Projects anticipates building around its core strengths in the markets where it operates. In determining the markets in which tocompete, Power and Industrial Projects examines closely the regulatory and competitive environment, new and pending legislation, the number ofcompetitors, and its ability to achieve sustainable margins. Power and Industrial Projects plans to maximize the effectiveness of its related businesses as itexpands.17Power and Industrial Projects intends to focus on the following areas for growth:•Providing operating services to owners of on-site industrial power plants;•Acquiring and developing landfill gas recovery facilities, renewable energy projects, and other energy projects which may qualify for taxcredits;•Obtaining investors in the REF projects.ENERGY TRADINGDescriptionEnergy Trading focuses on physical and financial power and gas marketing and trading, structured transactions, enhancement of returns from its assetportfolio and optimization of contracted natural gas pipeline transportation, and storage positions. Energy Trading also provides natural gas, power, andrelated services which may include the management of associated storage and transportation contracts on the customers’ behalf and the supply or purchase ofrenewable energy credits to various customers. Energy Trading's customer base is predominantly utilities, local distribution companies, pipelines, producersand generators, and other marketing and trading companies. Energy Trading enters into derivative financial instruments as part of its marketing and hedgingactivities. These financial instruments are generally accounted for under the MTM method, which results in the recognition in earnings of unrealized gainsand losses from changes in the fair value of the derivatives. Energy Trading utilizes forwards, futures, swaps, and option contracts to mitigate risk associatedwith marketing and trading activity, as well as for proprietary trading within defined risk guidelines. Energy Trading also provides commodity riskmanagement services to the other businesses within DTE Energy.Significant portions of the Energy Trading portfolio are economically hedged. Most financial instruments and physical power and natural gas contractsare deemed derivatives; whereas, natural gas inventory, contracts for pipeline transportation, renewable energy credits, and storage assets are not derivatives.As a result, this segment will experience earnings volatility as derivatives are marked-to-market without revaluing the underlying non-derivative contractsand assets. The business’ strategy is to economically manage the price risk of these underlying non-derivative contracts and assets with futures, forwards,swaps, and options. This results in gains and losses that are recognized in different interim and annual accounting periods.RegulationEnergy Trading has market-based rate authority from the FERC to sell power and blanket authority from the FERC to sell natural gas at market prices.Energy Trading is subject to FERC reporting requirements and market behavior rules. Energy Trading is also subject to the applicable laws, rules, andregulations related to the CFTC, U.S. Department of Homeland Security, and DOE. In addition, Energy Trading is subject to applicable laws, rules, andregulations in Canada.Strategy and CompetitionDTE Energy's strategy for the Energy Trading business is to deliver value-added services to DTE Energy customers. DTE Energy seeks to manage thisbusiness in a manner complementary to the growth of DTE Energy's other business segments. Energy Trading focuses on physical marketing and theoptimization of its portfolio of energy assets. The segment competes with electric and gas marketers, financial institutions, traders, utilities, and other energyproviders. The Energy Trading business is dependent upon the availability of capital and an investment grade credit rating. DTE Energy believes it hasample available capital capacity to support Energy Trading activities. DTE Energy monitors its use of capital closely to ensure that its commitments do notexceed capacity. A material credit restriction would negatively impact Energy Trading's financial performance. Competitors with greater access to capital, orat a lower cost, may have a competitive advantage. DTE Energy has risk management and credit processes to monitor and mitigate risk.CORPORATE AND OTHERDescriptionCorporate and Other includes various holding company activities, holds certain non-utility debt, and holds energy-related investments.18ENVIRONMENTAL MATTERSThe Registrants are subject to extensive environmental regulation and expect to continue recovering environmental costs related to utility operationsthrough rates charged to customers. The following table summarizes DTE Energy's, including DTE Electric's, estimated significant future environmentalexpenditures based upon current regulations. Pending or future reconsiderations of current regulations may impact the estimated expenditures summarized inthe table below. The amounts reported in the table do not include any expenditures related to the EPA Clean Power Plan as discussed below. Actual costs tocomply could vary substantially. Additional costs may result as the effects of various substances on the environment are studied and governmentalregulations are developed and implemented. DTE Electric DTE Gas Non-utility Total (In millions)Water$35 $— $— $35Contaminated and other sites5 35 — 40Coal combustion residuals and effluent limitations guidelines295 — — 295Estimated total future expenditures through 2024$335 $35 $— $370Estimated 2018 expenditures$10 $30 $— $40Estimated 2019 expenditures$65 $— $— $65Water — The EPA finalized regulations on cooling water intake in August 2014. DTE Electric is conducting studies to determine the best technologyfor reducing the environmental impacts of the cooling water intake structures at each of its facilities. DTE Electric may be required to install technologies toreduce the impacts of the cooling water intakes.Contaminated and Other Sites — Prior to the construction of major interstate natural gas pipelines, gas for heating and other uses was manufacturedlocally from processes involving coal, coke, or oil. The facilities, which produced gas, have been designated as MGP sites. DTE Gas owns, or previouslyowned, 14 such former MGP sites. DTE Electric owns, or previously owned, three former MGP sites. DTE Energy anticipates the cost amortizationmethodology approved by the MPSC for DTE Gas, which allows DTE Gas to amortize the MGP costs over a ten-year period beginning with the yearsubsequent to the year the MGP costs were incurred, will prevent environmental costs from having a material adverse effect on DTE Energy's operations. DTEElectric believes the likelihood of a material change to the accrued amount is remote based on current knowledge of the conditions at each site.The Registrants are also in the process of cleaning up other sites where contamination is present as a result of historical and ongoing utility operations.These other sites include an engineered ash storage facility, electric distribution substations, gas pipelines, electric generating power plants, and undergroundand aboveground storage tank locations. Cleanup activities associated with these sites will be conducted over the next several years. Any significant changein assumptions, such as remediation techniques, nature and extent of contamination, and regulatory requirements, could impact the estimate of remedialaction costs for these sites and affect the Registrants' financial position and cash flows and the rates charged to their customers.Coal Combustion Residuals and Effluent Limitations Guidelines — In April 2015, the EPA published a final rule for the disposal of coal combustionresiduals, commonly known as coal ash. The rule became effective in October 2015. The rule is based on the continued listing of coal ash as a non-hazardouswaste and relies on various self-implementation design and performance standards. DTE Electric owns and operates 3 permitted engineered coal ash storagefacilities to dispose of coal ash from coal-fired power plants and operates a number of smaller impoundments at its power plants. At certain facilities, the rulerequires the installation of monitoring wells, compliance with groundwater standards, and the closure of basins at the end of the useful life of the associatedpower plant. At other facilities, the rule requires ash laden waters be moved from earthen basins to steel and concrete tanks.In November 2015, the EPA finalized effluent limitations guidelines for the steam electric power generating industry which may require additionalcontrols to be installed between 2018 and 2023. The initial costs to comply with this rule are under development and estimates are included in the CoalCombustion Residual and Effluent Limitations Guidelines amount in the above table.19On April 12, 2017, the EPA granted a petition for reconsideration of the ELG Rule. The EPA also signed an administrative stay of the ELG Rule’scompliance deadlines for fly ash transport water, bottom ash transport water, and flue gas desulfurization (FGD) wastewater, among others. On June 6, 2017,the EPA published in the Federal Register a proposed rule to postpone certain applicable deadlines within the ELG rule. The final rule was published onSeptember 18, 2017, which extended the earliest compliance deadlines for the FGD wastewater and bottom ash transport until November 1, 2020 in order forthe EPA to propose and finalize a new ruling. The ELG compliance requirements, final deadlines, and compliance costs will not be known until the EPAcompletes its reconsideration of the ELG Rule.Air — DTE Electric is subject to the EPA ozone and fine particulate transport, and acid rain regulations that limit power plant emissions of sulfurdioxide and nitrogen oxides. The EPA and the State of Michigan have also issued emission reduction regulations relating to ozone, fine particulate, regionalhaze, mercury, and other air pollution. These rules have led to emission controls on fossil-fueled power plants to reduce nitrogen oxides, sulfur dioxide,mercury, and other emissions. These rulemakings could require additional controls for sulfur dioxide, nitrogen oxides, and other hazardous air pollutantsover the next few years. DTE Electric does not anticipate additional capital expenditures to comply with air pollution requirements through 2024, pendingthe results of future rulemakings.The EPA has implemented regulatory actions under the Clean Air Act to address emissions of GHGs from the utility sector and other sectors of theeconomy. Among these actions, the EPA has finalized performance standards for emissions of carbon dioxide from new and existing EGUs. The carbonstandards for new sources are not expected to have a material impact on DTE Electric, since DTE Electric has no plans to build new coal-fired generation andany potential new gas generation will be able to comply with the standards. In February 2016, the U.S. Supreme Court granted petitioners' requests for a stayof the carbon rules for existing EGUs (also known as the EPA Clean Power Plan) pending final review by the courts. The Clean Power Plan has no legal effectwhile the stay is in place. In October 2017, the EPA issued a proposal to repeal the Clean Power Plan, and a notice that it is intending to issue an ANPR thatmay create a replacement rule for the Clean Power Plan. It is not possible to determine the potential impact of the EPA's repeal, and potential replacement ofthe Clean Power Plan on existing sources at this time.Pending or future legislation or other regulatory actions could have a material impact on DTE Electric's operations and financial position and the ratescharged to its customers. Impacts include expenditures for environmental equipment beyond what is currently planned, financing costs related to additionalcapital expenditures, the purchase of emission credits from market sources, higher costs of purchased power, and the retirement of facilities where controlequipment is not economical. DTE Electric would seek to recover these incremental costs through increased rates charged to its utility customers, asauthorized by the MPSC.See Management’s Discussion and Analysis in Item 7 of this Report and Notes 8, 9, and 18 to the Consolidated Financial Statements in Item 8 of thisReport, "Asset Retirement Obligations," "Regulatory Matters," and "Commitments and Contingencies."EMPLOYEESDTE Energy and its subsidiaries had approximately 10,200 employees as of December 31, 2017, of which approximately 5,000 were represented byunions. DTE Electric had approximately 4,700 employees as of December 31, 2017, of which approximately 2,700 were represented by unions. There areseveral bargaining units for DTE Energy subsidiaries' represented employees. The majority of represented employees for both DTE Energy and DTE Electricare under contracts that expire in 2020 and 2021.Item 1A. Risk FactorsThere are various risks associated with the operations of the Registrants' utility businesses and DTE Energy's non-utility businesses. To provide aframework to understand the operating environment of the Registrants, below is a brief explanation of the more significant risks associated with theirbusinesses. Although the Registrants have tried to identify and discuss key risk factors, others could emerge in the future. Each of the following risks couldaffect performance.20The Registrants are subject to rate regulation. Electric and gas rates for the utilities are set by the MPSC and the FERC and cannot be changed withoutregulatory authorization. The Registrants may be negatively impacted by new regulations or interpretations by the MPSC, the FERC, or other regulatorybodies. The Registrants' ability to recover costs may be impacted by the time lag between the incurrence of costs and the recovery of the costs in customers'rates. Regulators also may decide to disallow recovery of certain costs in customers' rates if they determine that those costs do not meet the standards forrecovery under current governing laws and regulations. Regulators may also disagree with the Registrants' rate calculations under the various mechanismsthat are intended to mitigate the risk to their utilities related to certain aspects of the business. If the Registrants cannot agree with regulators on anappropriate reconciliation of those mechanisms, it may impact the Registrants' ability to recover certain costs through customer rates. Regulators may alsodecide to eliminate these mechanisms in future rate cases, which may make it more difficult for the Registrants to recover their costs in the rates charged tocustomers. The Registrants cannot predict what rates the MPSC will authorize in future rate cases. New legislation, regulations, or interpretations couldchange how the business operates, impact the Registrants' ability to recover costs through rates or the timing of such recovery, or require the Registrants toincur additional expenses.Changes to Michigan's electric retail access program could negatively impact the Registrants' financial performance. The State of Michigan currentlyexperiences a hybrid market, where the MPSC continues to regulate electric rates for DTE Electric customers, while alternative electric suppliers chargemarket-based rates. MPSC rate orders, and energy legislation enacted by the State of Michigan, have placed a 10% cap on the total potential retail accessmigration. However, even with the legislated 10% cap on participation, there continues to be legislative and financial risk associated with the electric retailaccess program. Electric retail access migration is sensitive to market price and full service electric price changes. The Registrants are required under currentregulation to provide full service to retail access customers that choose to return, potentially resulting in the need for additional generating capacity.Environmental laws and liability may be costly. The Registrants are subject to, and affected by, numerous environmental regulations. These regulationsgovern air emissions, water quality, wastewater discharge, and disposal of solid and hazardous waste. Compliance with these regulations can significantlyincrease capital spending, operating expenses, and plant down times, and can negatively affect the affordability of the rates charged to customers.Uncertainty around future environmental regulations creates difficulty planning long-term capital projects in the Registrants' generation fleet and, forDTE Energy's gas distribution businesses. These laws and regulations require the Registrants to seek a variety of environmental licenses, permits, inspections,and other regulatory approvals. The Registrants could be required to install expensive pollution control measures or limit or cease activities, including theretirement of certain generating plants, based on these regulations. Additionally, the Registrants may become a responsible party for environmental cleanupat sites identified by a regulatory body. The Registrants cannot predict with certainty the amount and timing of future expenditures related to environmentalmatters because of the difficulty of estimating cleanup costs. There is also uncertainty in quantifying liabilities under environmental laws that impose jointand several liability on potentially responsible parties.The Registrants may also incur liabilities as a result of potential future requirements to address climate change issues. Proposals for voluntaryinitiatives and mandatory controls are being discussed both in the United States and worldwide to reduce GHGs such as carbon dioxide, a by-product ofburning fossil fuels. If increased regulations of GHG emissions are implemented, the operations of DTE Electric's fossil-fueled generation assets may besignificantly impacted. Since there can be no assurances that environmental costs may be recovered through the regulatory process, the Registrants' financialperformance may be negatively impacted as a result of environmental matters.For DTE Energy, future environmental regulation of natural gas extraction techniques, including hydraulic fracturing, being discussed both at theUnited States federal level and by some states may affect the profitability of natural gas extraction businesses which could affect demand for, and profitabilityof, DTE Energy's gas transportation businesses.DTE Energy's non-utility businesses may not perform to its expectations. DTE Energy relies on non-utility operations for an increasing portion ofearnings. If DTE Energy's current and contemplated non-utility investments do not perform at expected levels, DTE Energy could experience diminishedearnings and a corresponding decline in shareholder value.DTE Energy relies on cash flows from subsidiaries. DTE Energy is a holding company. Cash flows from the utility and non-utility subsidiaries arerequired to pay interest expenses and dividends on DTE Energy debt and securities. Should a major subsidiary not be able to pay dividends or transfer cashflows to DTE Energy, its ability to pay interest and dividends would be restricted.21Threats of cyber crime, physical security, and terrorism could affect the Registrants' business. The Registrants may be threatened by issues such ascyber crime, physical security, or terrorism that may disrupt the Registrants' operations, and could harm the Registrants' operating results.Cyber crime, which includes the use of malware, computer viruses, and other means for disruption or unauthorized access against companies, includingthe Registrants, has increased in frequency, scope, and potential impact in recent years. The Registrants' industry requires the continued operation ofsophisticated information technology systems and network infrastructure. Despite implementation of security measures, all of the Registrants' technologysystems are vulnerable to disability or failures due to cyber crime, physical security threats, acts of war or terrorism, and other causes. If the Registrants'information technology systems were to fail and they were unable to recover in a timely way, the Registrants may be unable to fulfill critical businessfunctions, which could have a material adverse effect on the Registrants' business, operating results, and financial condition.In addition, the Registrants' generation plants and electrical distribution facilities, and DTE Energy's gas pipeline and storage facilities, in particular,may be targets of physical security threats or terrorist activities that could disrupt the Registrants' ability to produce or distribute some portion of theirproducts. The Registrants have increased security as a result of past events and may be required by regulators or by the future threat environment to makeinvestments in security that the Registrants cannot currently predict.Failure to maintain the security of personally identifiable information could adversely affect the Registrants. In connection with the Registrants'businesses, they collect and retain personally identifiable information of their customers, shareholders, and employees. Customers, shareholders, andemployees expect that the Registrants will adequately protect their personal information. The regulatory environment surrounding information security andprivacy is increasingly demanding. A significant theft, loss, or fraudulent use of customer, shareholder, employee, or Registrant data by cybercrime orotherwise, could adversely impact the Registrants' reputation, and could result in significant costs, fines, and litigation.Operation of a nuclear facility subjects the Registrants to risk. Ownership of an operating nuclear generating plant subjects the Registrants tosignificant additional risks. These risks include, among others, plant security, environmental regulation and remediation, changes in federal nuclearregulation, increased capital expenditures to meet industry requirements, and operational factors that can significantly impact the performance and cost ofoperating a nuclear facility compared to other generation options. While the Registrants maintain insurance for various nuclear-related risks, there can be noassurances that such insurance will be sufficient to cover the Registrants' costs in the event of an accident or business interruption at the nuclear generatingplant, which may affect the Registrants' financial performance. In addition, while the Registrants have a nuclear decommissioning trust fund to finance thedecommissioning of the nuclear generating plant, there can be no assurances that such fund will be sufficient to fund the cost of decommissioning. A declinein market value of assets held in decommissioning trust funds due to poor investment performance or other factors may increase the funding requirements forthese obligations. Any increase in funding requirements may have a material impact on the Registrants’ liquidity, financial position, or results of operations.Construction and capital improvements to the Registrants' power facilities, DTE Energy's distribution systems and its Gas Storage and Pipelinesbusiness subject them to risk. The Registrants are managing ongoing, and planning future, significant construction and capital improvement projects at DTEElectric's multiple power generation and distribution facilities, at DTE Energy's gas distribution system, and at DTE Energy's Gas Storage and Pipelinesbusiness. Many factors that could cause delays or increased prices for these complex projects are beyond the Registrants' control, including the cost ofmaterials and labor, subcontractor performance, timing and issuance of necessary permits or approvals (including required certificates from regulatoryagencies), construction disputes, impediments to acquiring rights-of-way or land rights on a timely basis and on acceptable terms, cost overruns, and weatherconditions. Failure to complete these projects on schedule and on budget for any reason could adversely affect the Registrants' financial performance,operations, or expected investment returns at the affected facilities, businesses and development projects.22The supply and/or price of energy commodities and/or related services may impact the Registrants' financial results. The Registrants are dependent oncoal for much of their electrical generating capacity. DTE Energy's access to natural gas supplies is critical to ensure reliability of service for utility gascustomers. DTE Energy's non-utility businesses are also dependent upon supplies and prices of energy commodities and services. Price fluctuations, fuelsupply disruptions, and changes in transportation costs, could have a negative impact on the amounts DTE Electric charges utility customers for electricityand DTE Gas charges utility customers for gas and on the profitability of DTE Energy's non-utility businesses. The Registrants have hedging strategies andregulatory recovery mechanisms in place to mitigate some of the negative fluctuations in commodity supply prices in their utility and, for DTE Energy, non-utility businesses, but there can be no assurances that the Registrants' financial performance will not be negatively impacted by price fluctuations. The priceof energy also impacts the market for DTE Energy's non-utility businesses that compete with utilities and alternative electric suppliers.The supply and/or price of other industrial raw and finished inputs and/or related services may impact the Registrants' financial results. TheRegistrants are dependent on supplies of certain commodities, such as copper and limestone, among others, and industrial materials, and services in order tomaintain day-to-day operations and maintenance of their facilities. Price fluctuations, or supply interruptions for these commodities and other items, couldhave a negative impact on the amounts charged to customers for the Registrants' utility products and, for DTE Energy, on the profitability of the non-utilitybusinesses.Emerging technologies may have a material adverse effect on the Registrants. Advances in technology that produce power or reduce powerconsumption include cost-effective renewable energy technologies, distributed generation, energy efficiency technologies, and energy storage devices. Suchdevelopments may impact the price of energy, may affect energy deliveries as customer-owned generation becomes more cost-effective, may require furtherimprovements to our distribution systems to address changing load demands, and could make portions of our electric system power supply and/ordistribution facilities obsolete prior to the end of their useful lives. Such technologies could also result in further declines in commodity prices or demand fordelivered energy. Each of these factors could materially affect the Registrants’ results of operations, cash flows, or financial position.Adverse changes in the Registrants' credit ratings may negatively affect them. Regional and national economic conditions, increased scrutiny of theenergy industry and regulatory changes, as well as changes in the Registrants' economic performance, could result in credit agencies reexamining their creditratings. While credit ratings reflect the opinions of the credit agencies issuing such ratings and may not necessarily reflect actual performance, a downgradein the Registrants' credit ratings below investment grade could restrict or discontinue their ability to access capital markets and could result in an increase intheir borrowing costs, a reduced level of capital expenditures, and could impact future earnings and cash flows. In addition, a reduction in the Registrants'credit ratings may require them to post collateral related to various physical or financially settled contracts for the purchase of energy-related commodities,products, and services, which could impact their liquidity.Poor investment performance of pension and other postretirement benefit plan assets and other factors impacting benefit plan costs couldunfavorably impact the Registrants' liquidity and results of operations. The Registrants' costs of providing non-contributory defined benefit pension plansand other postretirement benefit plans are dependent upon a number of factors, such as the rates of return on plan assets, the level of interest rates used tomeasure the required minimum funding levels of the plans, future government regulation, and the Registrants' required or voluntary contributions made tothe plans. The performance of the debt and equity markets affects the value of assets that are held in trust to satisfy future obligations under the Registrants'plans. The Registrants have significant benefit obligations and hold significant assets in trust to satisfy these obligations. These assets are subject to marketfluctuations and will yield uncertain returns, which may fall below the Registrants' projected return rates. A decline in the market value of the pension andother postretirement benefit plan assets will increase the funding requirements under the pension and other postretirement benefit plans if the actual assetreturns do not recover these declines in the foreseeable future. Additionally, the pension and other postretirement benefit plan liabilities are sensitive tochanges in interest rates. As interest rates decrease, the liabilities increase, resulting in increasing benefit expense and funding requirements. Also, if futureincreases in pension and other postretirement benefit costs as a result of reduced plan assets are not recoverable from the Registrants' utility customers, theresults of operations and financial position of the Registrants could be negatively affected. Without sustained growth in the plan investments over time toincrease the value of plan assets, the Registrants could be required to fund these plans with significant amounts of cash. Such cash funding obligations couldhave a material impact on the Registrants' cash flows, financial position, or results of operations.23The Registrants' ability to access capital markets is important. The Registrants' ability to access capital markets is important to operate their businessesand to fund capital investments. Turmoil in credit markets may constrain the Registrants' ability, as well as the ability of their subsidiaries, to issue new debt,including commercial paper, and refinance existing debt at reasonable interest rates. In addition, the level of borrowing by other energy companies, and themarket as a whole, could limit the Registrants' access to capital markets. The Registrants' long-term revolving credit facilities do not expire until 2022, butthe Registrants regularly access capital markets to refinance existing debt or fund new projects at the Registrants' utilities and DTE Energy's non-utilitybusinesses, and the Registrants cannot predict the pricing or demand for those future transactions.DTE Energy's participation in energy trading markets subjects it to risk. Events in the energy trading industry have increased the level of scrutiny onthe energy trading business and the energy industry as a whole. In certain situations, DTE Energy may be required to post collateral to support tradingoperations, which could be substantial. If access to liquidity to support trading activities is curtailed, DTE Energy could experience decreased earningspotential and cash flows. Energy trading activities take place in volatile markets and expose DTE Energy to risks related to commodity price movements,deviations in weather, and other related risks. DTE Energy's trading business routinely has speculative trading positions in the market, within strict policyguidelines DTE Energy sets, resulting from the management of DTE Energy's business portfolio. To the extent speculative trading positions exist, fluctuatingcommodity prices can improve or diminish DTE Energy's financial results and financial position. DTE Energy manages its exposure by establishing andenforcing strict risk limits and risk management procedures. During periods of extreme volatility, these risk limits and risk management procedures may notwork as planned and cannot eliminate all risks associated with these activities.DTE Energy's ability to utilize production tax credits may be limited. To reduce U.S. dependence on imported oil, the Internal Revenue Code providesproduction tax credits as an incentive for taxpayers to produce fuels and electricity from alternative sources. DTE Energy generated production tax creditsfrom coke production, landfill gas recovery, reduced emission fuel, renewable energy generation, and gas production operations. If DTE Energy's productiontax credits were disallowed in whole or in part as a result of an IRS audit or changes in tax law there could be additional tax liabilities owed for previouslyrecognized tax credits that could significantly impact DTE Energy's earnings and cash flows.Weather significantly affects operations. At both utilities, deviations from normal hot and cold weather conditions affect the Registrants' earnings andcash flows. Mild temperatures can result in decreased utilization of the Registrants' assets, lowering income and cash flows. At DTE Electric, ice storms,tornadoes, or high winds can damage the electric distribution system infrastructure and power generation facilities and require it to perform emergency repairsand incur material unplanned expenses. The expenses of storm restoration efforts may not be fully recoverable through the regulatory process. DTE Gas canexperience higher than anticipated expenses from emergency repairs on its gas distribution infrastructure required as a result of weather related issues.Unplanned power plant outages may be costly. Unforeseen maintenance may be required to safely produce electricity or comply with environmentalregulations. As a result of unforeseen maintenance, the Registrants may be required to make spot market purchases of electricity that exceed the costs ofgeneration. The Registrants' financial performance may be negatively affected if unable to recover such increased costs.Renewable portfolio standards and energy efficiency programs may affect the Registrants' business. The Registrants are subject to existing Michigan,and potential future, federal legislation and regulation requiring them to secure sources of renewable energy. The Registrants have complied with the existingfederal and state legislation, but do not know what requirements may be added by federal or state legislation in the future. In addition, the Registrants expectto comply with new Michigan legislation increasing the percentage of power required to be provided by renewable energy sources. The Registrants cannotpredict the financial impact or costs associated with complying with potential future legislation and regulations. Compliance with these requirements cansignificantly increase capital expenditures and operating expenses and can negatively affect the affordability of the rates charged to customers.The Registrants are also required by Michigan legislation to implement energy efficiency measures and provide energy efficiency customer awarenessand education programs. These requirements necessitate expenditures, and implementation of these programs creates the risk of reducing the Registrants'revenues as customers decrease their energy usage. The Registrants cannot predict how these programs will impact their business and future operating results.24Regional, national, and international economic conditions can have an unfavorable impact on the Registrants. The Registrants' utility and DTEEnergy's non-utility businesses follow the economic cycles of the customers they serve and credit risk of counterparties they do business with. Should thefinancial conditions of some of DTE Energy's significant customers deteriorate as a result of regional, national or international economic conditions, reducedvolumes of electricity and gas, and demand for energy services DTE Energy supplies, collections of accounts receivable, reductions in federal and stateenergy assistance funding, and potentially higher levels of lost gas or stolen gas and electricity could result in decreased earnings and cash flows.Failure to attract and retain key executive officers and other skilled professional and technical employees could have an adverse effect on theRegistrants’ operations. The Registrants' businesses are dependent on their ability to attract and retain skilled employees. Competition for skilled employeesin some areas is high, and the inability to attract and retain these employees could adversely affect the Registrants' business and future operating results. Inaddition, the Registrants have an aging utility workforce, and the failure of a successful transfer of knowledge and expertise could negatively impact theiroperations.A work interruption may adversely affect the Registrants. There are several bargaining units for DTE Energy's approximately 5,000 and DTE Electric'sapproximately 2,700 represented employees. The majority of represented employees are under contracts that expire in 2020 and 2021. A union choosing tostrike would have an impact on the Registrants' businesses. The Registrants are unable to predict the effect a work stoppage would have on their costs ofoperations and financial performance.If DTE Energy's goodwill becomes impaired, it may be required to record a charge to earnings. DTE Energy annually reviews the carrying value ofgoodwill associated with acquisitions it has made for impairment. Factors that may be considered for purposes of this analysis include any change incircumstances indicating that the carrying value of DTE Energy goodwill may not be recoverable, such as a decline in stock price and market capitalization,future cash flows, and slower growth rates in the industry. DTE Energy cannot predict the timing, strength, or duration of any economic slowdown orsubsequent recovery, worldwide or in the economy or markets in which it operates; however, when events or changes in circumstances indicate that thecarrying value of these assets may not be recoverable, DTE Energy may take a non-cash impairment charge, which could potentially materially impact DTEEnergy's results of operations and financial position.The Registrants' businesses have safety risks. The Registrants' electric distribution system, power plants, renewable energy equipment, and otherfacilities, and DTE Energy's gas distribution system, gas infrastructure, and other facilities, could be involved in incidents that result in injury, death, orproperty loss to employees, customers, or the public. Although the Registrants have insurance coverage for many potential incidents, depending upon thenature and severity of any incident, they could experience financial loss, damage to their reputation, and negative consequences from regulatory agencies orother public authorities.The Registrants may not be fully covered by insurance. The Registrants have a comprehensive insurance program in place to provide coverage forvarious types of risks, including catastrophic damage as a result of severe weather or other natural disasters, war, terrorism, or a combination of othersignificant unforeseen events that could impact the Registrants' operations. Economic losses might not be covered in full by insurance, or the Registrants'insurers may be unable to meet contractual obligations.Item 1B. Unresolved Staff CommentsNone.Item 3. Legal ProceedingsThe Yolo-Solano Air Quality Management District issued nine notices of violation alleging that Woodland Biomass Power, LLC, which operates arenewable wood-fired power generation facility, failed a 2016 source test that was to demonstrate compliance with the facility’s PM-10 lb/hr daily emissionpermit limit, violated NOx annual emission permit limits in 2013 and 2015 and related record keeping and reporting violations, failed a 2017 source test thatwas to demonstrate compliance with the facility’s NOx lb/hr emission permit limit, and a fugitive dust violation that occurred in 2017. On January 5, 2018,Woodland Biomass Power, LLC paid a final settlement of $525,000 to resolve all the notice of violation issues.25An FOV was issued by the EPA to DTE Electric in 2017 alleging violations related to exceedances of the mercury emission limits for the Monroe PowerPlant. DTE Electric is currently working with the EPA to address the alleged violations. At this time, DTE Electric cannot predict the impact of the finalsettlement.For more information on legal proceedings and matters related to the Registrants, see Notes 9 and 18 to the Consolidated Financial Statements in Item 8of this Report, "Regulatory Matters" and "Commitments and Contingencies," respectively.Item 4. Mine Safety DisclosuresNot applicable.26Part IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity SecuritiesDTE Energy common stock is listed on the New York Stock Exchange, which is the principal market for such stock. The following table indicates thereported high and low sales prices of DTE Energy common stock on the Composite Tape of the New York Stock Exchange and dividends declared per sharefor each quarterly period during the past two years: DividendsDeclared per ShareYear Quarter High Low 2017 First $102.96 $96.56 $0.8250 Second $111.35 $100.97 $0.8250 Third $113.71 $104.19 $0.8250 Fourth $116.74 $106.21 $0.88252016 First $91.00 $78.01 $0.7300 Second $99.13 $84.77 $0.7300 Third $100.45 $90.61 $0.7700 Fourth $99.92 $89.66 $0.8250At December 31, 2017, there were 179,386,967 shares of DTE Energy common stock outstanding. These shares were held by a total of 53,437shareholders of record.DTE Energy paid cash dividends on common stock of $592 million in 2017, $531 million in 2016, and $501 million in 2015. The amount of futuredividends will depend on DTE Energy's earnings, cash flows, financial condition, and other factors that are periodically reviewed by the DTE Energy Boardof Directors. Although there can be no assurances, DTE Energy anticipates paying dividends for the foreseeable future.All of the 138,632,234 issued and outstanding shares of DTE Electric common stock, par value $10 per share, are owned by DTE Energy, and constitute100% of the voting securities of DTE Electric. Therefore, no market exists for DTE Electric's common stock.DTE Electric paid cash dividends on common stock of $432 million in 2017, $420 million in 2016, and $395 million in 2015.For information on DTE Energy dividend restrictions, see Note 16 to the Consolidated Financial Statements in Item 8 of this Report, "Short-TermCredit Arrangements and Borrowings."All of DTE Energy's equity compensation plans that provide for the annual awarding of stock-based compensation have been approved byshareholders. For additional detail, see Note 21 to the Consolidated Financial Statements in Item 8 of this Report, "Stock-Based Compensation."See the following table for information as of December 31, 2017: Number of Securitiesto be Issued UponExercise ofOutstanding Options Weighted-AverageExercise Price ofOutstanding Options Number of SecuritiesRemaining Availablefor Future IssuanceUnder EquityCompensation PlansPlans approved by shareholders105,994 $42.95 1,437,76927UNREGISTERED SALES OF DTE ENERGY EQUITY SECURITIES AND USE OF PROCEEDSPurchases of DTE Energy Equity Securities by the Issuer and Affiliated PurchasersThe following table provides information about DTE Energy's purchases of equity securities that are registered by DTE Energy pursuant to Section 12of the Exchange Act of 1934 for the quarter ended December 31, 2017: Number of SharesPurchased(a) Average PricePaid per Share(a) Number of SharesPurchased as Part ofPublicly AnnouncedPlans or Programs Average Price Paidper Share Maximum DollarValue that MayYet Be PurchasedUnder the Plans orPrograms10/01/2017 — 10/31/20173,269 $99.19 — — —11/01/2017 — 11/30/2017— $— — — —12/01/2017 — 12/31/20171,300 $89.46 — — —Total4,569 — _______________________________________(a)Represents shares of DTE Energy common stock withheld to satisfy income tax obligations upon the vesting of restricted stock based on the price in effect at the grant date.COMPARISON OF CUMULATIVE FIVE YEAR TOTAL RETURNTotal Return to DTE Energy Shareholders(Includes reinvestment of dividends) Annual Return PercentageYear Ended December 31,Company/Index 2013 2014 2015 2016 2017DTE Energy Company 14.89 34.61 (3.77) 26.93 14.59S&P 500 Index 32.39 13.69 1.38 11.95 21.82S&P 500 Multi-Utilities Index 17.88 28.94 (1.73) 18.56 12.09 Indexed ReturnsYear Ended December 31, Base Period Company/Index 2012 2013 2014 2015 2016 2017DTE Energy Company 100 114.89 154.65 148.82 188.89 216.45S&P 500 Index 100 132.39 150.51 152.59 170.83 208.11S&P 500 Multi-Utilities Index 100 117.88 151.99 149.36 177.08 198.4928Item 6. Selected Financial DataThe following selected financial data of DTE Energy should be read in conjunction with the accompanying Management’s Discussion and Analysis inItem 7 of this Report and Combined Notes to Consolidated Financial Statements in Item 8 of this Report. This information has been omitted for DTE Electricper General Instruction I (2) (a) of Form 10-K for wholly-owned subsidiaries (reduced disclosure format). 2017 2016 2015 2014 2013 (In millions, except per share amounts)Operating Revenues$12,607 $10,630 $10,337 $12,301 $9,661Net Income Attributable to DTE Energy Company(a)$1,134 $868 $727 $905 $661Diluted Earnings Per Common Share$6.32 $4.83 $4.05 $5.10 $3.76Financial Information Dividends declared per share of common stock$3.36 $3.06 $2.84 $2.69 $2.59Total Assets(b)$33,767 $32,041 $28,662 $27,827 $25,864Long-Term Debt(b)(c)$12,185 $11,269 $8,760 $8,271 $7,143Shareholders’ equity(b)$9,512 $9,011 $8,772 $8,327 $7,921_______________________________________(a)The 2017 results include a $105 million net income tax benefit related to the enactment of the TCJA.(b)In October 2016, DTE Energy closed on an acquisition of midstream natural gas assets that are part of the Gas Storage and Pipelines segment. See Note 4 to the ConsolidatedFinancial Statements, "Acquisitions and Exit Activities," for additional information.(c)Long-Term Debt includes Capital lease obligations and excludes debt due within one year.Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe following combined discussion is separately filed by DTE Energy and DTE Electric. However, DTE Electric does not make any representations asto information related solely to DTE Energy or the subsidiaries of DTE Energy other than itself.29EXECUTIVE OVERVIEWDTE Energy is a diversified energy company with 2017 Operating Revenues of approximately $12.6 billion and Total Assets of approximately $33.8billion. DTE Energy is the parent company of DTE Electric and DTE Gas, regulated electric and natural gas utilities engaged primarily in the business ofproviding electricity and natural gas sales, distribution, and storage services throughout Michigan. DTE Energy operates three energy-related non-utilitysegments with operations throughout the United States.The following table summarizes DTE Energy's financial results: Years Ended December 31, 2017 2016 2015 (In millions, except per share amounts)Net Income Attributable to DTE Energy Company$1,134 $868 $727Diluted Earnings per Common Share$6.32 $4.83 $4.05The increase in 2017 Net Income Attributable to DTE Energy Company is primarily due to higher earnings in the Gas Storage and Pipelines, EnergyTrading, and Power and Industrial Projects segments, partially offset by lower earnings in the Corporate and Other segment. The 2017 increase is also due to$105 million of net income tax benefit related to the enactment of the TCJA. The increase in 2016 Net Income Attributable to DTE Energy Company isprimarily due to higher earnings in the Electric and Power and Industrial Projects segments.Please see detailed explanations of segment performance in the following "Results of Operations" section.DTE Energy's strategy is to achieve long-term earnings growth, a strong balance sheet, and an attractive dividend yield.DTE Energy's utilities are investing capital to improve customer reliability through investments in base infrastructure and new generation, and tocomply with environmental requirements. DTE Energy expects that planned significant capital investments will result in earnings growth. DTE Energy isfocused on executing plans to achieve operational excellence and customer satisfaction with a focus on customer affordability. DTE Energy operates in aconstructive regulatory environment and has solid relationships with its regulators.In May 2017, DTE Energy announced its plan to reduce carbon emissions. This goal will be attained by cutting carbon emissions 30% by the early2020s, 45% by 2030, 75% by 2040, and more than 80% by 2050. To achieve this reduction, DTE Energy will transition away from coal-powered sources andincorporate more renewable energy, energy efficiency, demand response, and highly-efficient natural gas fueled power plants. DTE Energy has already begunthe transition in the way it produces power through the continued retirement of its aging coal-fired plants. Refer to the "Capital Investments" section belowfor further discussion.DTE Energy has significant investments in non-utility businesses. DTE Energy employs disciplined investment criteria when assessing growthopportunities that leverage its assets, skills, and expertise, and provides diversity in earnings and geography. Specifically, DTE Energy invests in targetedenergy markets with attractive competitive dynamics where meaningful scale is in alignment with its risk profile. DTE Energy expects growth opportunitiesin the Gas Storage and Pipelines and Power and Industrial Projects segments.A key priority for DTE Energy is to maintain a strong balance sheet which facilitates access to capital markets and reasonably priced short-term andlong-term financing. Near-term growth will be funded through internally generated cash flows and the issuance of debt and equity. DTE Energy has anenterprise risk management program that, among other things, is designed to monitor and manage exposure to earnings and cash flow volatility related tocommodity price changes, interest rates, and counterparty credit risk.CAPITAL INVESTMENTSDTE Energy's utility businesses require significant capital investments to maintain and improve the electric generation and electric and natural gasdistribution infrastructure and to comply with environmental regulations and renewable energy requirements.30DTE Electric's capital investments over the 2018-2022 period are estimated at $10.4 billion comprised of $4.1 billion for capital replacements and otherprojects, $4.3 billion for distribution infrastructure, and $2.0 billion for new generation. DTE Electric has retired four coal-fired generation units at theTrenton Channel, River Rouge, and St Clair facilities and has announced plans to retire its remaining thirteen coal-fired generating units. Seven of these coal-fired generating units will be retired through 2023 at the Trenton Channel, River Rouge, and St. Clair facilities. The remaining coal-fired generating units atthe Belle River and Monroe facilities are expected to be retired by 2040. The retired facilities will be replaced with renewables, energy efficiency, demandresponse, and natural gas fueled generation. In September 2016, DTE Electric received an order from the MPSC in its amended Renewable Energy Planapproving two 150 megawatt wind projects expected to be constructed and in service between 2018 and 2020, and 25 megawatts of company-owned solarprojects which will be constructed and in service between 2019 and 2020. DTE Electric constructed and placed in service 50 megawatts of solar generation in2017. DTE Electric plans to build a natural gas fueled combined cycle generation facility to provide approximately 1,100 megawatts of energy beginning in2022. In the third quarter of 2017, DTE Electric filed a CON with the MPSC seeking approval for the planned build of this natural gas plant. On January 31,2018, DTE Electric filed its five-year distribution operations investment and maintenance plan to improve system reliability with the MPSC. DTE Electricplans to seek regulatory approval for capital expenditures consistent with prior ratemaking treatment.DTE Gas' capital investments over the 2018-2022 period are estimated at $2.1 billion comprised of $950 million for base infrastructure, $1.1 billion forgas main renewal, meter move out, and pipeline integrity programs, and $10 million for expenditures related to the NEXUS Pipeline. DTE Gas plans to seekregulatory approval in general rate case filings for base infrastructure capital expenditures consistent with prior ratemaking treatment.DTE Energy's non-utility businesses' capital investments are primarily for expansion, growth, and ongoing maintenance. Gas Storage and Pipelines'capital investments over the 2018-2022 period are estimated at $2.8 billion to $3.4 billion for gathering and pipeline investments and expansions, includingthe NEXUS Pipeline. Power and Industrial Projects' capital investments over the 2018-2022 period are estimated at $800 million to $1.2 billion forinvestments in cogeneration and on-site energy projects.ENVIRONMENTAL MATTERSThe Registrants are subject to extensive environmental regulation. Additional costs may result as the effects of various substances on the environmentare studied and governmental regulations are developed and implemented. Actual costs to comply could vary substantially. The Registrants expect tocontinue recovering environmental costs related to utility operations through rates charged to customers, as authorized by the MPSC.DTE Electric is subject to the EPA ozone and fine particulate transport and acid rain regulations that limit power plant emissions of SO2 and NOx. TheEPA and the State of Michigan have also issued emission reduction regulations relating to ozone, fine particulate, regional haze, mercury, and other airpollution. These rules have led to controls on fossil-fueled power plants to reduce NOx, SO2, mercury and other emissions. Additional rulemakings areexpected over the next few years which could require additional controls for SO2, NOx, and other hazardous air pollutants. To comply with existingrequirements, DTE Electric spent approximately $2.4 billion through 2017. DTE Electric does not anticipate additional capital expenditures through 2024.The EPA has implemented regulatory actions under the Clean Air Act to address emissions of GHGs from the utility sector and other sectors of theeconomy. Among these actions, the EPA finalized performance standards for emissions of carbon dioxide from new and existing EGUs. The carbon standardsfor new sources are not expected to have a material impact on DTE Electric since DTE Electric has no plans to build new coal-fired generation, and anypotential new gas generation will be able to comply with the applicable standards. In February 2016, the U.S. Supreme Court granted petitioners' requests fora stay of the carbon rules for existing EGUs (also known as the EPA Clean Power Plan) pending final review by the courts. The Clean Power Plan has no legaleffect while the stay is in place. On March 28, 2017, a presidential executive order was issued on "Promoting Energy Independence and Economic Growth."The order instructs the EPA to review, and if appropriate, suspend, revise or rescind the Clean Power Plan rule. Additionally, federal agencies have beendirected to conduct a review of all existing regulations that potentially burden the development and use of domestically produced energy resources.Following the issuance of this order, the federal government requested the U.S. Court of Appeals for the D.C. Circuit to hold all legal challenges in abeyanceuntil the review of these regulations is completed. On October 10, 2017, the EPA proposed to rescind the Clean Power Plan and announced its intent to issuean ANPR seeking input as to whether it should replace the rule and, if so, what form it should take. It is not possible to determine the potential impact of theEPA's repeal and possible replacement of the Clean Power Plan on existing sources at this time.31Pending or future legislation or other regulatory actions could have a material impact on DTE Electric's operations and financial position and the ratescharged to its customers. Impacts include expenditures for environmental equipment beyond what is currently planned, financing costs related to additionalcapital expenditures, the purchase of emission credits from market sources, higher costs of purchased power, and the retirement of facilities where controlequipment is not economical. DTE Electric would seek to recover these incremental costs through increased rates charged to its utility customers, asauthorized by the MPSC.Increased costs for energy produced from traditional coal-based sources due to recent, pending, and future regulatory initiatives, could also increase theeconomic viability of energy produced from renewable, natural gas fueled generation, and/or nuclear sources, energy efficiency initiatives, and the potentialdevelopment of market-based trading of carbon instruments which could provide new business opportunities for DTE Energy's utility and non-utilitysegments. At the present time, it is not possible to quantify the financial impacts of these climate related regulatory initiatives on the Registrants or theircustomers.See Items 1. and 2. Business and Properties and Note 18 to the Consolidated Financial Statements in Item 8 of this Report, "Commitments andContingencies," for further discussion of Environmental Matters.OUTLOOKThe next few years will be a period of rapid change for DTE Energy and for the energy industry. DTE Energy's strong utility base, combined with itsintegrated non-utility operations, position it well for long-term growth.Looking forward, DTE Energy will focus on several areas that are expected to improve future performance:•electric and gas customer satisfaction;•electric distribution system reliability;•new electric generation;•gas distribution system renewal;•rate competitiveness and affordability;•regulatory stability and investment recovery for the electric and gas utilities;•employee safety and engagement;•cost structure optimization across all business segments;•cash, capital, and liquidity to maintain or improve financial strength; and•investments that integrate assets and leverage skills and expertise.DTE Energy will continue to pursue opportunities to grow its businesses in a disciplined manner if it can secure opportunities that meet its strategic,financial, and risk criteria.RESULTS OF OPERATIONSManagement’s Discussion and Analysis of Financial Condition and Results of Operations includes financial information prepared in accordance withGAAP, as well as the non-GAAP financial measures, Utility Margin and Non-utility Margin, discussed below, which DTE Energy uses as measures of itsoperational performance. Generally, a non-GAAP financial measure is a numerical measure of financial performance, financial position or cash flows thatexcludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance withGAAP.DTE Energy uses Utility Margin and Non-utility Margin, non-GAAP financial measures, to assess its performance by reportable segment.32Utility Margin includes electric and gas Operating Revenues net of Fuel, purchased power, and gas expenses. The utilities’ fuel, purchased power, andnatural gas supply are passed through to customers, and therefore, result in changes to the utilities’ revenues that are comparable to changes in such expenses.As such, DTE Energy believes Utility Margin provides a meaningful basis for evaluating the utilities’ operations across periods, as it excludes the revenueeffect of fluctuations in these expenses.The Non-utility Margin relates to our Power and Industrial Projects and Energy Trading segments. For the Power and Industrial Projects segment, Non-utility Margin primarily includes Operating Revenues net of Fuel, purchased power, and gas expenses. Operating Revenues include sales of refined coal tothird parties and the affiliated Electric utility, metallurgical coke and related by-products, petroleum coke, renewable natural gas, and electricity, as well asrental income and revenues from utility-type consulting, management, and operational services. For the Energy Trading segment, Non-utility Marginincludes revenue and realized and unrealized gains and losses from physical and financial power and gas marketing, optimization, and trading activities, netof Purchased power and gas related to these activities. DTE Energy evaluates its operating performance of these non-utility businesses using the measure ofOperating Revenues net of Fuel, purchased power, and gas expenses.Utility Margin and Non-utility Margin are not measures calculated in accordance with GAAP and should be viewed as a supplement to and not asubstitute for the results of operations presented in accordance with GAAP. Utility Margin and Non-utility Margin do not intend to represent operatingincome, the most comparable GAAP measure, as an indicator of operating performance and are not necessarily comparable to similarly titled measuresreported by other companies.The following sections provide a detailed discussion of the operating performance and future outlook of DTE Energy's segments. Segment information,described below, includes intercompany revenues and expenses, and other income and deductions that are eliminated in the Consolidated FinancialStatements. 2017 2016 2015 (In millions)Net Income (Loss) Attributable to DTE Energy by Segment: Electric$606 $622 $542Gas146 138 132Gas Storage and Pipelines275 119 107Power and Industrial Projects138 95 16Energy Trading72 (45) (22)Corporate and Other(103) (61) (48)Net Income Attributable to DTE Energy Company$1,134 $868 $727ELECTRICThe Results of Operations discussion for DTE Electric is presented in a reduced disclosure format in accordance with General Instruction I (2) (a) ofForm 10-K for wholly-owned subsidiaries.The Electric segment consists principally of DTE Electric. Electric results are discussed below: 2017 2016 2015 (In millions)Operating Revenues — Utility operations$5,102 $5,225 $4,901Fuel and purchased power — utility1,454 1,532 1,573Utility Margin3,648 3,693 3,328Operation and maintenance1,428 1,455 1,344Depreciation and amortization753 750 637Taxes other than income302 284 277Operating Income1,165 1,204 1,070Other (Income) and Deductions238 229 238Income Tax Expense321 353 290Net Income Attributable to DTE Energy Company$606 $622 $542See DTE Electric's Consolidated Statements of Operations in Item 8 of this Report for a complete view of its results.33Utility Margin decreased $45 million in 2017 and increased $365 million in 2016. Revenues associated with certain mechanisms and surcharges areoffset by related expenses elsewhere in the Registrants' Consolidated Statements of Operations.The following table details changes in various Utility Margin components relative to the comparable prior period: 2017 2016 (In millions)Implementation of new rates$124 $198PSCR disallowance in 2017 and 2015, respectively(13) 19Base sales(26) 20Weather(109) 96Securitization bond and tax surcharge— 40Renewable energy program— 12Amortization of refundable revenue decoupling/deferred gain in 2015— (63)Regulatory mechanisms and other(21) 43Increase (decrease) in Utility Margin$(45) $365 2017 2016 2015 (In thousands of MWh)DTE Electric Sales Residential14,885 15,875 15,001Commercial17,283 17,521 17,192Industrial9,897 10,004 9,690Other258 264 291 42,323 43,664 42,174Interconnection sales(a)2,623 2,334 4,108Total DTE Electric Sales44,946 45,998 46,282 DTE Electric Deliveries Retail and wholesale42,323 43,664 42,174Electric retail access, including self generators(b)4,820 4,936 4,899Total DTE Electric Sales and Deliveries47,143 48,600 47,073______________________________(a)Represents power that is not distributed by DTE Electric.(b)Represents deliveries for self generators that have purchased power from alternative energy suppliers to supplement their power requirements.DTE Electric sales decreased for residential, commercial, and industrial primarily due to favorable weather in 2016.Operation and maintenance expense decreased $27 million in 2017 and increased $111 million in 2016. The decrease in 2017 was primarily due todecreased power plant generation expenses of $66 million, partially offset by increased storm restoration expenses of $27 million, and increased lineclearance expenses of $10 million. The decrease in power plant generation expenses includes an increase of $6 million of costs related to the 2016 fire at ageneration facility, offset by $21 million of insurance proceeds received in 2017. The increase in 2016 was primarily due to increased power plant generationexpenses of $55 million related to outages, increased distribution operations expenses of $13 million, and $47 million of expenses related to the deferral ofnegative other postretirement costs pursuant to the order in DTE Electric's base rate case, received in December 2015. The increase in the power plantgeneration expenses included $19 million of costs related to a fire at a generation facility which were partially reimbursed by insurance proceeds in 2017.Depreciation and amortization expense increased $3 million in 2017 and increased $113 million in 2016. In 2017, the increase was due to $45 millionof increased expense from an increased depreciable base, partially offset by a decrease of $29 million associated with the TRM, and a decrease of $13 millionin amortization of regulatory assets. In 2016, $38 million of the increase was due to a higher depreciable base, $42 million was primarily due to the end ofSecuritization amortization in 2015, and an additional $42 million was associated with the TRM, offset by a $9 million decrease in nuclear decommissioningamortization.34Other (Income) and Deductions increased $9 million in 2017 and decreased $9 million in 2016. The increase in 2017 was primarily due to higherinterest expense of $10 million, lower interest income of $8 million related to a sales and use tax settlement received in 2016, and a $7 million contributionto the DTE Energy Foundation, partially offset by $12 million of higher investment earnings and a $3 million decrease in Low Income Self-Sufficiency Plan(LSP) contributions to not-for-profit organizations in 2016. The decrease in 2016 was primarily due to $13 million of higher investment earnings, $8 millionof interest income related to a sales and use tax settlement, offset by $3 million of LSP contributions to not-for-profit organizations, $2 million AFUDCequity, and $6 million higher interest expense.Outlook — DTE Electric will continue to move forward in its efforts to achieve operational excellence, sustain strong cash flows, and earn itsauthorized return on equity. DTE Electric expects that planned significant capital investments will result in earnings growth. DTE Electric expects tocontinue its efforts to improve productivity and decrease costs while improving customer satisfaction with consideration of customer rate affordability.Looking forward, additional factors may impact earnings such as weather, the outcome of regulatory proceedings, benefit plan design changes, investmentreturns and changes in discount rate assumptions in benefit plans and health care costs, impact of 2016 Michigan energy legislation, uncertainty oflegislative or regulatory actions regarding climate change, and effects of energy efficiency programs.DTE Electric filed a rate case with the MPSC on April 19, 2017 requesting an increase in base rates of $231 million based on a projected twelve-monthperiod ending October 31, 2018. The requested increase in base rates is primarily due to an increase in net plant resulting from infrastructure investments,environmental compliance, and reliability improvement projects. The rate filing also includes projected changes in sales, operation and maintenanceexpenses, and working capital. The rate filing also requests an increase in return on equity from 10.1% to 10.5%. On September 8, 2017, DTE Electric filed anapplication with the MPSC for a $125 million self-implemented base rate increase effective November 1, 2017. A final MPSC order in this case is expectedby April 2018.On January 19, 2018, DTE Electric filed information with the MPSC regarding the potential change in revenue requirements due to the TCJA effectiveJanuary 1, 2018, and outlined our recommended method to flow the current and deferred tax benefits of those impacts to ratepayers.GASThe Gas segment consists principally of DTE Gas. Gas results are discussed below: 2017 2016 2015 (In millions)Operating Revenues — Utility operations$1,388 $1,324 $1,376Cost of gas — utility443 454 526Utility Margin945 870 850Operation and maintenance451 411 430Depreciation and amortization123 106 104Taxes other than income65 64 62Asset (gains) losses and impairments, net— 4 —Operating Income306 285 254Other (Income) and Deductions82 70 50Income Tax Expense78 77 72Net Income Attributable to DTE Energy Company$146 $138 $132Utility Margin increased $75 million in 2017 and increased $20 million in 2016. Revenues associated with certain surcharges are offset by relatedexpenses elsewhere in DTE Energy's Consolidated Statements of Operations.35The following table details changes in various Utility Margin components relative to the comparable prior period: 2017 2016 (In millions)Implementation of new rates$80 $23Revenue decoupling mechanism4 (7)Home protection program3 4Midstream storage and transportation revenues(5) (2)Weather(6) (22)Infrastructure recovery mechanism— 12Other(1) 12Increase in Utility Margin$75 $20 2017 2016 2015 (In Bcf)Gas Markets Gas sales119 116 122End-user transportation165 182 169 284 298 291Intermediate transportation260 214 289Total Gas sales544 512 580Operation and maintenance expense increased $40 million in 2017 and decreased $19 million in 2016. The increase in 2017 was primarily due toincreased employee benefits expenses of $30 million, increased corporate expenses of $3 million, and increased gas operations expenses of $3 million. Thedecrease in 2016 was primarily due to decreased uncollectible expenses of $14 million and decreased transmission expenses of $8 million. The decreaseduncollectible expenses and transmission expenses in 2016 were primarily the result of weather-related impacts of warmer weather in 2016. Additionally, DTEGas took actions to reduce costs to partially offset the negative impacts to revenue and utility margin resulting from the warmer weather in 2016.Depreciation and amortization expense increased $17 million in 2017 and increased $2 million in 2016. The increase in 2017 was primarily due toincreased expense from an increased depreciable base and higher depreciation rates.Other (Income) and Deductions increased $12 million in 2017 and increased $20 million in 2016. The increase in 2017 was primarily due to increasedcontributions to the DTE Energy Foundation and other not-for-profit organizations of $7 million and higher interest expense of $5 million. The increase in2016 was primarily due to contributions to the DTE Energy Foundation and other not-for-profit organizations.Outlook — DTE Gas will continue to move forward in its efforts to achieve operational excellence, sustain strong cash flows, and earn its authorizedreturn on equity. DTE Gas expects that planned significant infrastructure capital investments will result in earnings growth. Looking forward, additionalfactors may impact earnings such as weather, the outcome of regulatory proceedings, benefit plan design changes, and investment returns and changes indiscount rate assumptions in benefit plans and health care costs. DTE Gas expects to continue its efforts to improve productivity and decrease costs whileimproving customer satisfaction with consideration of customer rate affordability.DTE Gas filed a rate case with the MPSC on November 22, 2017 requesting an increase in base rates of $85.1 million based on a projected twelve-month period ending September 30, 2019. The requested increase in base rates is primarily due to an increase in net plant. The rate filing also includesprojected changes in sales, operations, maintenance expenses, and working capital. The rate filing also requests an increase in return on equity from 10.1% to10.5%. A final MPSC order in this case is expected by September 2018.On January 19, 2018, DTE Gas filed information with the MPSC regarding the potential change in revenue requirements due to the TCJA effectiveJanuary 1, 2018, and outlined our recommended method to flow the current and deferred tax benefits of those impacts to ratepayers.36GAS STORAGE AND PIPELINESThe Gas Storage and Pipelines segment consists of the non-utility gas pipelines and storage businesses. Gas Storage and Pipelines results are discussedbelow: 2017 2016 2015 (In millions)Operating Revenues — Non-utility operations$453 $302 $243Cost of gas — Non-utility30 6 —Operation and maintenance83 81 58Depreciation and amortization76 45 30Taxes other than income8 4 5Asset (gains) losses and impairments, net2 — —Operating Income254 166 150Other (Income) and Deductions(18) (31) (29)Income Tax Expense (Benefit)(30) 71 70Net Income302 126 109Less: Net Income Attributable to Noncontrolling Interests27 7 2Net Income Attributable to DTE Energy Company$275 $119 $107Operating Revenues — Non-utility operations increased $151 million in 2017 and increased $59 million in 2016. The increase in both periods wasprimarily due to the acquisition of AGS and SGG in October 2016 and increased volumes on the Bluestone Pipeline and Susquehanna gathering systems.Cost of gas — Non-utility increased $24 million in 2017 and increased $6 million in 2016. The increase in both periods was primarily driven by thephysical purchase of gas from AGS customers for resale to optimize available transportation capacity.Operation and maintenance expense increased $2 million in 2017 and increased $23 million in 2016. The 2016 increase was primarily due to thetransaction costs related to the acquisition of AGS and SGG in 2016 and increased activity on the Susquehanna gathering system.Depreciation and amortization expense increased $31 million in 2017 and increased $15 million in 2016. The 2017 increase was primarily due to theacquisition of AGS and SGG in October 2016. The 2016 increase was due primarily to the acquisition of AGS and SGG and additional Bluestone andSusquehanna expansion projects placed in service.Other (Income) and Deductions decreased $13 million in 2017 and increased $2 million in 2016. The 2017 decrease was primarily due to a $16 millionnet loss on extinguishment of debt within the storage business, and contributions to the DTE Energy Foundation and other not-for-profit organizations,partially offset by increased earnings from pipeline investments. The 2016 increase was primarily due to increased earnings from pipeline investments,partially offset by increased interest expense as a result of the acquisition of AGS and SGG in 2016.Income Tax Expense (Benefit) decreased $101 million in 2017 from the expense of $71 million in 2016 and increased $1 million in 2016. The 2017decrease was primarily due to the $115 million remeasurement of deferred tax assets and liabilities to reflect the reduction in the corporate tax rate from theenactment of the TCJA in December 2017. This was partially offset by increased tax expense on higher earnings in 2017.Net Income Attributable to Noncontrolling Interests increased $20 million in 2017 and increased $5 million in 2016. The increase in both periods wasprimarily due to the acquisition of SGG in October 2016.See Note 4 to the Consolidated Financial Statements in Item 8 of this Report, "Acquisitions and Exit Activities" for discussion of the acquisition ofAGS and SGG in October 2016.Outlook — The Bluestone Pipeline and Susquehanna gathering system are being expanded with additional compression facilities and gathering linesas needed to accommodate shipper demand. DTE Energy believes its long-term agreement with Southwestern Energy Production Company and the quality ofthe natural gas reserves in the Marcellus region soundly positions Bluestone Pipeline and Susquehanna gathering system for future growth.37Progress continues on development activities on the NEXUS Pipeline, a transportation path to transport Appalachian Basin shale gas, including Uticaand Marcellus shale gas, directly to consuming markets in northern Ohio, southeastern Michigan, and Dawn Ontario. DTE Energy owns a 50% partnershipinterest in the NEXUS Pipeline. The FERC application was approved on August 25, 2017 and construction commenced in October 2017. DTE Energyanticipates a third quarter 2018 in-service date for the NEXUS Pipeline.The October 2016 acquisition of AGS and SGG provides a platform for midstream growth and access to further investment opportunities in theAppalachian basin, an additional connection to the NEXUS Pipeline which should drive incremental volumes on the NEXUS Pipeline, and a new set ofproducer relationships that may lead to more partnering opportunities.In May 2017, DTE Energy filed a FERC application for approval of the Birdsboro Pipeline, a 14-mile lateral to serve a new power plant inPennsylvania. DTE Energy is targeting a 2018 in-service date.Gas Storage and Pipelines expects to maintain its steady growth by developing an asset portfolio with multiple growth platforms through investment innew projects and expansions. Gas Storage and Pipelines will continue to look for additional investment opportunities and other storage and pipeline projectsat favorable prices.POWER AND INDUSTRIAL PROJECTSThe Power and Industrial Projects segment is comprised primarily of projects that deliver energy and utility-type products and services to industrial,commercial, and institutional customers, produce reduced emissions fuel, and sell electricity from renewable energy projects. Power and Industrial Projectsresults are discussed below: 2017 2016 2015 (In millions)Operating Revenues — Non-utility operations$2,089 $1,906 $2,224Fuel, purchased power, and gas — non-utility1,813 1,640 1,837Non-utility Margin276 266 387Operation and maintenance343 320 379Depreciation and amortization72 72 78Taxes other than income11 13 15Asset (gains) losses and impairments, net20 (1) 106Operating Loss(170) (138) (191)Other (Income) and Deductions(64) (52) (58)Income Taxes Benefit(42) (26) (49)Production Tax Credits(153) (114) (91) (195) (140) (140)Net Income89 54 7Less: Net Loss Attributable to Noncontrolling Interests(49) (41) (9)Net Income Attributable to DTE Energy Company$138 $95 $1638Operating Revenues — Non-utility operations increased $183 million in 2017 and decreased $318 million in 2016. The changes are due to thefollowing: 2017 (In millions)Higher demand due to improved conditions in the steel business$107Higher production driven by new projects, offset by lower coal prices in the REF business102Lower production and one-time recovery in 2016, offset by an acquisition in the renewables business(9)Lower sales primarily associated with expired contracts in the on-site business(17) $183 2016 (In millions)Closure of the Shenango coke battery and lower demand in the steel business$(264)Termination of a lease agreement in the REF business(40)Contract termination at a renewable power project facility, offset by a one-time revenue recovery(9)Other(5) $(318)Non-utility Margin increased $10 million in 2017 and decreased $121 million in 2016. The changes are due to the following: 2017 (In millions)Higher demand due to improved conditions in the steel business$42Lower production and one-time recovery in 2016 in the renewables business(11)Lower sales primarily associated with expired contracts in the on-site business(15)Other(6) $10 2016 (In millions)Closure of the Shenango coke battery and lower demand in the steel business$(114)Termination of a lease agreement in the REF business(12)Lower fuel costs in a renewable power project business5 $(121)Operation and maintenance expense increased $23 million in 2017 and decreased $59 million in 2016. The 2017 increase was primarily due to anincrease in maintenance spending driven by improved conditions in the steel business of $16 million, higher maintenance and a new acquisition in therenewables business of $7 million, and an increase associated with new projects in the REF business of $5 million, offset by lower spending as a result of theclosure of the Shenango coke battery in 2015 of $6 million. The 2016 decrease was primarily due to lower spending as a result of the closure of the Shenangocoke battery in 2015 of $68 million, cost control due to lower demand in the steel business, and lower spending primarily due to the closure of a renewablepower project of $4 million, partially offset by an increase associated with new projects in the REF business of $14 million.Asset (gains) losses and impairments, net decreased by $21 million in 2017 from the net gain of $1 million in 2016 and decreased by $107 million in2016 from the net loss of $106 million in 2015. The 2017 decrease was primarily due to an impairment in the REF business of $14 million and an impairmentof a petroleum coke project of $6 million. The 2016 decrease was primarily due to a loss associated with the closure of the Shenango coke battery in 2015.39Other (Income) and Deductions increased $12 million in 2017 and decreased $6 million in 2016. The 2017 increase was primarily due to increasedequity earnings in the renewable business of $9 million and insurance settlements in the renewable and REF businesses of $6 million, offset by increasedcontributions to the DTE Energy Foundation of $6 million. The 2016 decrease was primarily due to the reduction of refined coal produced at REF sites withinvestors of $9 million and lower equity earnings primarily from a renewable power project of $8 million, offset by higher contributions to the DTE EnergyFoundation and other not-for-profit organizations in 2015 of $11 million.Income Taxes — Benefit increased by $16 million in 2017 and decreased by $23 million in 2016. The 2017 increase was primarily due to theremeasurement of deferred tax assets and liabilities to reflect the reduction in the corporate tax rate from the enactment of the TCJA in December 2017 of $21million, an increase due to higher pretax loss of $7 million, and a decrease due to a worthless stock deduction associated with the Shenango closure in 2016of $10 million. The decrease in 2016 was primarily driven by a lower pretax loss of $33 million, offset by a $10 million worthless stock deduction due to theShenango closure.Income Taxes — Production Tax Credits increased by $39 million in 2017 and increased $23 million in 2016. The increase in both periods wasprimarily due to new projects in the REF business.Net Loss Attributable to Noncontrolling Interests increased by $8 million in 2017 and increased by $32 million in 2016. The 2017 increase isprimarily due to a change in the ownership percentage in one of the REF projects of $8 million. The 2016 increase consists of $27 million due to new leasearrangements and $5 million due to existing lease arrangements with investors at various REF facilities.Outlook — Power and Industrial Projects has constructed and placed in service REF facilities at eleven sites including facilities located at eight third-party owned coal-fired power plants. DTE Energy has sold membership interests in four of the facilities and entered into lease arrangements in three of thefacilities. DTE Energy will continue to optimize these facilities by seeking investors or entering into lease arrangements for facilities operating at DTEElectric and other utility sites.Power and Industrial Projects will continue to leverage its extensive energy-related operating experience and project management capability todevelop additional energy projects to serve energy intensive industrial customers.ENERGY TRADINGEnergy Trading focuses on physical and financial power and natural gas marketing and trading, structured transactions, enhancement of returns from itsasset portfolio, and optimization of contracted natural gas pipeline transportation and storage positions. Energy Trading also provides natural gas, power, andrelated services, which may include the management of associated storage and transportation contracts on the customers' behalf, and the supply or purchaseof renewable energy credits to various customers. Energy Trading results are discussed below: 2017 2016 2015 (In millions)Operating Revenues — Non-utility operations$4,277 $2,575 $2,459Purchased power and gas — non-utility4,077 2,552 2,417Non-utility Margin200 23 42Operation and maintenance68 63 67Depreciation and amortization5 3 2Taxes other than income4 2 4Operating Income (Loss)123 (45) (31)Other (Income) and Deductions2 29 6Income Tax Expense (Benefit)49 (29) (15)Net Income (Loss) Attributable to DTE Energy Company$72 $(45) $(22)Operating Revenues — Non-utility operations and Purchased power and gas — non-utility were impacted by an increase in both volumes and gasprices for the year ended December 31, 2017, primarily in the gas structured strategy. For 2016, these line items were impacted by an increase in volumes,partially offset by a decrease in gas prices, primarily in the gas structured strategy.40Non-utility Margin increased $177 million in 2017 and decreased $19 million in 2016. The change in both periods was primarily due to timing fromthe unrealized and realized margins presented in the following tables: 2017 (In millions)Unrealized Margins(a) Favorable results, primarily in gas structured and gas full requirements strategies(b)$113Unfavorable results, primarily in power and gas trading and power full requirements strategies(26) $87Realized Margins(a) Favorable results, primarily in gas structured, environmental trading and gas storage strategies(c)$103Unfavorable results, primarily in the power full requirements strategy(13) $90Increase in Non-utility Margin$177_______________________________________(a)Natural gas structured transactions typically involve a physical purchase or sale of natural gas in the future and/or natural gas basis financial instruments which are derivatives anda related non-derivative pipeline transportation contract. These gas structured transactions can result in significant earnings volatility as the derivative components are marked-to-market without revaluing the related non-derivative contracts.(b)Amount includes $113 million of timing related gains related to gas strategies which will reverse in future periods as the underlying contracts settle.(c)Amount includes $95 million of timing related losses related to gas strategies recognized in previous periods that reversed as the underlying contracts settled. 2016 (In millions)Unrealized Margins(a) Unfavorable results, primarily in gas structured, gas full requirements, gas transportation, and power trading strategies(b)$(74)Favorable results, primarily in gas trading and power full requirements strategies28 $(46)Realized Margins(a) Favorable results, primarily in power full requirements, gas full requirements, power trading, and gas structured strategies$48Unfavorable results, primarily in the gas transportation strategy(c)(21) $27Decrease in Non-utility Margin$(19)_______________________________________(a)Natural gas structured transactions typically involve a physical purchase or sale of natural gas in the future and/or natural gas basis financial instruments which are derivatives anda related non-derivative pipeline transportation contract. These gas structured transactions can result in significant earnings volatility as the derivative components are marked-to-market without revaluing the related non-derivative contracts.(b)Amount includes $46 million of timing related losses related to gas strategies which will reverse in future periods as the underlying contracts settle.(c)Amount includes $4 million of timing related gains related to gas strategies recognized in previous periods that reversed as the underlying contracts settled.Other (Income) and Deductions decreased $27 million in 2017 and increased $23 million in 2016. The change in both periods was primarily due to2016 contributions to the DTE Energy Foundation.Outlook — In the near-term, Energy Trading expects market conditions to remain challenging and the profitability of this segment may be impacted bythe volatility in commodity prices and the uncertainty of impacts associated with financial reform, regulatory changes, and changes in operating rules ofRTOs. Significant portions of the Energy Trading portfolio are economically hedged. Most financial instruments and physical power and natural gascontracts are deemed derivatives, whereas natural gas inventory, pipeline transportation, renewable energy credits, and storage assets are not derivatives. As aresult, Energy Trading will experience earnings volatility as derivatives are marked-to-market without revaluing the underlying non-derivative contracts andassets. Energy Trading's strategy is to economically manage the price risk of these underlying non-derivative contracts and assets with futures, forwards,swaps, and options. This results in gains and losses that are recognized in different interim and annual accounting periods.See also the "Fair Value" section herein and Notes 12 and 13 to the Consolidated Financial Statements in Item 8 of this Report, "Fair Value" and"Financial and Other Derivative Instruments," respectively.41CORPORATE AND OTHERCorporate and Other includes various holding company activities, holds certain non-utility debt, and holds energy-related investments. The 2017 netloss of $103 million represents an increase of $42 million from the 2016 net loss of $61 million due primarily to the remeasurement of deferred tax assets andliabilities to reflect the reduction in the corporate tax rate from the enactment of the TCJA in December 2017 resulting in income tax expense of $34 million,and the contribution of land and improvements to the DTE Energy Beacon Park Foundation. The 2016 net loss of $61 million represents an increase of $13million from the 2015 net loss of $48 million due primarily to state tax adjustments related to the Gas Storage and Pipelines acquisition and the write-off ofunamortized debt issuance costs associated with the redemption of Junior Subordinated Debentures.See Note 10 to the Consolidated Financial Statements in Item 8 of this Report, "Income Taxes."CAPITAL RESOURCES AND LIQUIDITYCash RequirementsDTE Energy uses cash to maintain and invest in the electric and natural gas utilities, to grow the non-utility businesses, to retire, and pay interest onlong-term debt, and to pay dividends. DTE Energy believes it will have sufficient internal and external capital resources to fund anticipated capital andoperating requirements. DTE Energy expects that cash from operations in 2018 will be approximately $2.0 billion. DTE Energy anticipates base level utilitycapital investments, including environmental, renewable, and energy waste reduction expenditures; expenditures for non-utility businesses; andcontributions to equity method investees in 2018 of approximately $3.6 billion. DTE Energy plans to seek regulatory approval to include utility capitalexpenditures in regulatory rate base consistent with prior treatment. Capital spending for growth of existing or new non-utility businesses will depend on theexistence of opportunities that meet strict risk-return and value creation criteria.42 2017 2016 2015Cash and Cash Equivalents(In millions)Cash Flow From (Used For) Operating Activities Net Income$1,112 $834 $720Adjustments to reconcile Net Income to Net cash from operating activities: Depreciation and amortization1,030 976 852Nuclear fuel amortization53 58 46Allowance for equity funds used during construction(23) (21) (21)Deferred income taxes196 265 237Asset (gains) losses and impairments, net38 8 107Working capital and other(289) (36) (25)Net cash from operating activities2,117 2,084 1,916Investing Activities Plant and equipment expenditures — utility(2,037) (1,898) (1,817)Plant and equipment expenditures — non-utility(213) (147) (203)Acquisition, net of cash acquired— (1,147) (241)Restricted cash for debt redemption, principally Securitization, net(2) 1 97Contributions to equity method investees(299) (239) (98)Other(13) 42 58Net cash used for investing activities(2,564) (3,388) (2,204)Financing Activities Issuance of long-term debt, net of issuance costs1,398 2,035 956Redemption of long-term debt(385) (807) (286)Repurchase of long-term debt— (59) —Issuance of equity units, net of issuance costs— 654 —Short-term borrowings, net122 — 101Repurchase of common stock(51) (33) —Dividends on common stock and other(592) (531) (501)Contributions from noncontrolling interests50 114 23Distributions to noncontrolling interests(40) (5) (8)Other(81) (9) (8)Net cash from financing activities421 1,359 277Net Increase (Decrease) in Cash and Cash Equivalents$(26) $55 $(11)Cash from Operating ActivitiesA majority of DTE Energy's operating cash flows are provided by the electric and natural gas utilities, which are significantly influenced by factorssuch as weather, electric retail access, regulatory deferrals, regulatory outcomes, economic conditions, changes in working capital, and operating costs.Cash from operations increased $33 million in 2017. The increase in operating cash flows reflects an increase in Net Income and adjustments for non-cash and non-operating items, primarily Depreciation and amortization, and Assets (gains) losses and impairments, partially offset by a decrease to Deferredincome taxes and working capital adjustments.Cash from operations increased $168 million in 2016. The increase in operating cash flows reflects an increase in Net Income and adjustments for non-cash and non-operating items, primarily Depreciation and amortization, partially offset by decreases from Asset (gains) losses and impairments, net andworking capital items.The change in working capital items in 2017 primarily related to increases of cash used for Accounts Receivable, Inventories, Accrued pensionliability, Derivative assets and liabilities, Equity earnings of equity method investees, and Other current and noncurrent assets and liabilities, partially offsetby increases in cash from the Accrued postretirement liability, and Regulatory assets and liabilities. The change in working capital items in 2016 primarilyrelated to increases in cash used for Accounts receivable, and Regulatory assets and liabilities, partially offset by increases in cash from Accounts payable,Accrued pension liability, and Accrued postretirement liability.43Cash used for Investing ActivitiesCash inflows associated with investing activities are primarily generated from the sale of assets, while cash outflows are the result of plant andequipment expenditures. In any given year, DTE Energy looks to realize cash from under-performing or non-strategic assets or matured, fully valued assets.Capital spending within the utility businesses is primarily to maintain and improve electric generation and the electric and natural gas distributioninfrastructure, and to comply with environmental regulations and renewable energy requirements.Capital spending within the non-utility businesses is primarily for ongoing maintenance, expansion, and growth. DTE Energy looks to make growthinvestments that meet strict criteria in terms of strategy, management skills, risks, and returns. All new investments are analyzed for their rates of return andcash payback on a risk adjusted basis. DTE Energy has been disciplined in how it deploys capital and will not make investments unless they meet the criteria.For new business lines, DTE Energy initially invests based on research and analysis. DTE Energy starts with a limited investment, evaluates the results, andeither expands or exits the business based on those results. In any given year, the amount of growth capital will be determined by the underlying cash flowsof DTE Energy, with a clear understanding of any potential impact on its credit ratings.Net cash used for investing activities decreased $824 million in 2017 due primarily to DTE Energy's 2016 acquisition of midstream natural gas assets,partially offset by increased capital expenditures, Contributions to equity method investees, primarily the NEXUS Pipeline as it continues to develop, andtwo acquisitions of landfill gas facilities, which are presented in Investing Activities - Other.Net cash used for investing activities increased $1.2 billion in 2016 due primarily to DTE Energy's acquisition of midstream natural gas assets, net ofcash acquired of $83 million, of $1.1 billion, as described in Note 4 to the Consolidated Financial Statements in Item 8 of this Report, "Acquisitions and ExitActivities," as well as increased Contributions to equity method investees, primarily the NEXUS Pipeline as it continues to develop.Cash from Financing ActivitiesDTE Energy relies on both short-term borrowing and long-term financing as a source of funding for capital requirements not satisfied by its operations.DTE Energy's strategy is to have a targeted debt portfolio blend of fixed and variable interest rates and maturity. DTE Energy continually evaluates itsleverage target, which is currently 50% to 54%, to ensure it is consistent with the objective of a strong investment grade debt rating.Net cash from financing activities decreased $938 million in 2017. The decrease is primarily attributable to a decrease in Issuances of long-term debtand equity units, Contributions from noncontrolling interests, an increase in Dividends on common stock, and Distributions to noncontrolling interests,partially offset by an increase to Short-term borrowings, and a decrease to Redemptions and Repurchases of long-term debt.Net cash from financing activities increased $1.1 billion in 2016. The increase is primarily attributable to increases in Issuances of long-term debt andequity units, which are partially offset by increased Redemptions of long-term debt and a decrease in Short-term borrowings. The increased issuances in 2016were primarily related to the acquisition of midstream natural gas assets. See details in the "Acquisition Financing" section of Note 14 to the ConsolidatedFinancial Statements in Item 8 of this Report, "Long-Term Debt."OutlookDTE Energy expects cash flows from operations to increase over the long-term, primarily as a result of growth from the utility and non-utilitybusinesses. Growth in the utilities is expected to be driven primarily by capital spending to maintain and improve the electric generation and electric andnatural gas distribution infrastructure and to comply with new and existing state and federal regulations that will result in additional environmental andrenewable energy investments which will increase the base from which rates are determined. Non-utility growth is expected from additional investments,primarily in the Gas Storage and Pipelines and Power and Industrial Projects segments.DTE Energy may be impacted by the timing of collection or refund of various recovery and tracking mechanisms, as a result of timing of MPSC orders.Energy prices are likely to be a source of volatility with regard to working capital requirements for the foreseeable future. DTE Energy continues its efforts toidentify opportunities to improve cash flows through working capital initiatives and maintaining flexibility in the timing and extent of long-term capitalprojects.44DTE Energy has approximately $110 million in long-term debt, including capital leases, maturing in the next twelve months. The repayment of thedebt is expected to be paid through internally generated funds or the issuance of long-term debt.DTE Energy has approximately $1.4 billion of available liquidity at December 31, 2017, consisting of cash and amounts available under unsecuredrevolving credit agreements.DTE Energy expects to issue equity up to $300 million in 2018 through the dividend reinvestment plan and pension and other employee benefit plans.At the discretion of management, and depending upon financial market conditions, DTE Energy may make contributions up to $200 million, includingcontributions from DTE Electric of $175 million, to its pension plans in 2018. DTE Energy does not anticipate making any contributions to the otherpostretirement benefit plans in 2018.Various subsidiaries and equity investees of DTE Energy have entered into contracts which contain ratings triggers and are guaranteed by DTE Energy.These contracts contain provisions which allow the counterparties to require that DTE Energy post cash or letters of credit as collateral in the event that DTEEnergy's credit rating is downgraded below investment grade. Certain of these provisions (known as "hard triggers") state specific circumstances under whichDTE Energy can be required to post collateral upon the occurrence of a credit downgrade, while other provisions (known as "soft triggers") are not as specific.For contracts with soft triggers, it is difficult to estimate the amount of collateral which may be requested by counterparties and/or which DTE Energy mayultimately be required to post. The amount of such collateral which could be requested fluctuates based on commodity prices (primarily natural gas, power,and coal) and the provisions and maturities of the underlying transactions. As of December 31, 2017, DTE Energy's contractual obligation to post collateralin the form of cash or letters of credit in the event of a downgrade to below investment grade, under both hard trigger and soft trigger provisions, wasapproximately $456 million.DTE Energy believes it will have sufficient operating flexibility, cash resources, and funding sources to maintain adequate amounts of liquidity and tomeet future operating cash and capital expenditure needs. However, virtually all of DTE Energy's businesses are capital intensive, or require access to capital,and the inability to access adequate capital could adversely impact earnings and cash flows.See Notes 9, 10, 14, 16, 18, and 20 to the Consolidated Financial Statements in Item 8 of this Report, "Regulatory Matters," "Income Taxes," "Long-Term Debt," "Short-Term Credit Arrangements and Borrowings," "Commitments and Contingencies," and "Retirement Benefits and Trusteed Assets."45Contractual ObligationsThe following table details DTE Energy's, including DTE Electric's, contractual obligations for debt redemptions, leases, purchase obligations, andother long-term obligations as of December 31, 2017: Total 2018 2019-2020 2021-2022 2023 andThereafter (In millions)Long-term debt: Mortgage bonds, notes, and other(a)$11,227 $104 $2,180 $1,078 $7,865Junior subordinated debentures(b)1,180 — — — 1,180Capital lease obligations6 5 1 — —Interest9,877 504 970 849 7,554Stock purchase contract(c)68 34 34 — —Operating leases166 40 56 22 48Electric, gas, fuel, transportation, and storage purchase obligations(d)5,713 2,162 1,421 663 1,467Long-term DTE Electric renewable energy power purchase agreements(e)(f)1,219 85 166 166 802Other long-term obligations(g)(h)(i)614 484 106 16 8Total obligations$30,070 $3,418 $4,934 $2,794 $18,924_______________________________________(a)Excludes $15 million of unamortized debt discount and $69 million of unamortized debt issuance costs.(b)Excludes $35 million of unamortized debt issuance costs.(c)Includes $2 million of interest.(d)Excludes amounts associated with full requirements contracts where no stated minimum purchase volume is required.(e)The agreements represent the minimum settlements with suppliers for renewable energy and renewable energy credits under existing contract terms which expire from 2030through 2035. DTE Electric's share of plant output ranges from 44% to 100%.(f)Excludes a power purchase agreement with a non-utility affiliate of DTE Energy.(g)Includes liabilities for unrecognized tax benefits of $10 million.(h)Excludes other long-term liabilities of $178 million not directly derived from contracts or other agreements.(i)At December 31, 2017, DTE Energy met the minimum pension funding levels required under the Employee Retirement Income Security Act of 1974 (ERISA) and the PensionProtection Act of 2006 for the defined benefit pension plans. DTE Energy may contribute more than the minimum funding requirements for the pension plans and may alsomake contributions to the other postretirement benefit plans; however, these amounts are not included in the table above as such amounts are discretionary. Planned funding levelsare disclosed in the "Capital Resources and Liquidity" and "Critical Accounting Estimates" sections herein and in Note 20 to the Consolidated Financial Statements in Item 8 of thisReport, "Retirement Benefits and Trusteed Assets."Credit RatingsCredit ratings are intended to provide banks and capital market participants with a framework for comparing the credit quality of securities and are nota recommendation to buy, sell, or hold securities. DTE Energy, DTE Electric, and DTE Gas' credit ratings affect their costs of capital and other terms offinancing, as well as their ability to access the credit and commercial paper markets. DTE Energy, DTE Electric, and DTE Gas' management believes that thecurrent credit ratings provide sufficient access to capital markets. However, disruptions in the banking and capital markets not specifically related to DTEEnergy, DTE Electric, and DTE Gas may affect their ability to access these funding sources or cause an increase in the return required by investors.As part of the normal course of business, DTE Electric, DTE Gas, and various non-utility subsidiaries of DTE Energy routinely enter into physical orfinancially settled contracts for the purchase and sale of electricity, natural gas, coal, capacity, storage, and other energy-related products and services.Certain of these contracts contain provisions which allow the counterparties to request that DTE Energy posts cash or letters of credit in the event that thesenior unsecured debt rating of DTE Energy is downgraded below investment grade. The amount of such collateral which could be requested fluctuates basedupon commodity prices and the provisions and maturities of the underlying transactions and could be substantial. Also, upon a downgrade below investmentgrade, DTE Energy, DTE Electric, and DTE Gas could have restricted access to the commercial paper market, and if DTE Energy is downgraded belowinvestment grade, the non-utility businesses, especially the Energy Trading and Power and Industrial Projects segments, could be required to restrictoperations due to a lack of available liquidity. A downgrade below investment grade could potentially increase the borrowing costs of DTE Energy, DTEElectric, and DTE Gas and their subsidiaries and may limit access to the capital markets. The impact of a downgrade will not affect DTE Energy, DTEElectric, and DTE Gas' ability to comply with existing debt covenants. While DTE Energy, DTE Electric, and DTE Gas currently do not anticipate such adowngrade, they cannot predict the outcome of current or future credit rating agency reviews.46CRITICAL ACCOUNTING ESTIMATESThe preparation of the Registrants' Consolidated Financial Statements in conformity with generally accepted accounting principles requires thatmanagement apply accounting policies and make estimates and assumptions that affect results of operations and the amounts of assets and liabilities reportedin the Consolidated Financial Statements. The Registrants' management believes that the areas described below require significant judgment in theapplication of accounting policy or in making estimates and assumptions in matters that are inherently uncertain and that may change in subsequent periods.Additional discussion of these accounting policies can be found in the Combined Notes to Consolidated Financial Statements in Item 8 of this Report.RegulationA significant portion of the Registrants' businesses are subject to regulation. This results in differences in the application of generally acceptedaccounting principles between regulated and non-regulated businesses. DTE Electric and DTE Gas are required to record regulatory assets and liabilities forcertain transactions that would have been treated as revenue or expense in non-regulated businesses. Future regulatory changes or changes in the competitiveenvironment could result in the discontinuance of this accounting treatment for regulatory assets and liabilities for some or all of the Registrants' businesses.The Registrants' management believes that currently available facts support the continued use of regulatory assets and liabilities and that all regulatory assetsand liabilities are recoverable or refundable in the current rate environment.See Note 9 to the Consolidated Financial Statements in Item 8 of this Report, "Regulatory Matters."DerivativesDerivatives are generally recorded at fair value and shown as Derivative assets or liabilities. Changes in the fair value of the derivative instruments arerecognized in earnings in the period of change. The normal purchases and normal sales exception requires, among other things, physical delivery inquantities expected to be used or sold over a reasonable period in the normal course of business. Contracts that are designated as normal purchases andnormal sales are not recorded at fair value. Substantially all of the commodity contracts entered into by DTE Electric and DTE Gas meet the criteria specifiedfor this exception.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 marketparticipants at the measurement date in a principal or most advantageous market. Fair value is a market-based measurement that is determined based oninputs, which refer broadly to assumptions that market participants use in pricing assets or liabilities. These inputs can be readily observable, marketcorroborated, or generally unobservable inputs. The Registrants make certain assumptions they believe that market participants would use in pricing assets orliabilities, including assumptions about risk, and the risks inherent in the inputs to valuation techniques. Credit risk of the Registrants and theircounterparties is incorporated in the valuation of assets and liabilities through the use of credit reserves, the impact of which was immaterial at December 31,2017 and 2016. The Registrants believe they use valuation techniques that maximize the use of observable market-based inputs and minimize the use ofunobservable inputs.The fair values the Registrants calculate for their derivatives may change significantly as inputs and assumptions are updated for new information.Actual cash returns realized on derivatives may be different from the results the Registrants estimate using models. As fair value calculations are estimatesbased largely on commodity prices, the Registrants perform sensitivity analyses on the fair values of forward contracts. See the sensitivity analysis in Item7A. of this report, "Quantitative and Qualitative Disclosures About Market Risk." See also the "Fair Value" section herein.See Notes 12 and 13 to the Consolidated Financial Statements in Item 8 of this Report, "Fair Value" and "Financial and Other Derivative Instruments,"respectively.Asset ImpairmentsGoodwillCertain of DTE Energy's reporting units have goodwill or allocated goodwill resulting from business combinations. DTE Energy performs animpairment test for each of the reporting units with goodwill annually or whenever events or circumstances indicate that the value of goodwill may beimpaired.47In performing Step 1 of the impairment test, DTE Energy compares the fair value of the reporting unit to its carrying value including goodwill. If thecarrying value including goodwill were to exceed the fair value of a reporting unit, Step 2 of the test would be performed. Step 2 of the impairment testrequires the carrying value of goodwill to be reduced to its fair value, if lower, as of the test date.For Step 1 of the test, DTE Energy estimates the reporting unit's fair value using standard valuation techniques, including techniques which useestimates of projected future results and cash flows to be generated by the reporting unit. Such techniques generally include a terminal value that utilizes anearnings multiple approach, which incorporates the current market values of comparable entities. These cash flow valuations involve a number of estimatesthat require broad assumptions and significant judgment by management regarding future performance. DTE Energy also employs market-based valuationtechniques to test the reasonableness of the indications of value for the reporting units determined under the cash flow technique.DTE Energy performs an annual impairment test each October. In between annual tests, DTE Energy monitors its estimates and assumptions regardingestimated future cash flows, including the impact of movements in market indicators in future quarters, and will update the impairment analyses if atriggering event occurs. While DTE Energy believes the assumptions are reasonable, actual results may differ from projections. To the extent projected resultsor cash flows are revised downward, the reporting unit may be required to write down all or a portion of its goodwill, which would adversely impact DTEEnergy's earnings.DTE Energy performed its annual impairment test as of October 1, 2017 and determined that the estimated fair value of each reporting unit exceeded itscarrying value, and no impairment existed. As part of the annual impairment test, DTE Energy also compared the aggregate fair value of the reporting units toits overall market capitalization. The implied premium of the aggregate fair value over market capitalization is likely attributable to an acquisition controlpremium (the price in excess of a stock's market price that investors typically pay to gain control of an entity).The results of the test and key estimates that were incorporated are as follows as of the October 1, 2017 valuation date:Reporting Unit Goodwill Fair Value Reduction%(a) Discount Rate Terminal Multiple(b) Valuation Methodology(c) (In millions) Electric $1,208 46% 6% 10.0x DCF, assuming stock saleGas 743 35% 6% 11.0x DCF, assuming stock saleGas Storage and Pipelines 299 48% 8% 11.0x DCF, assuming asset salePower and Industrial Projects(d) 26 21% 8% 10.0x DCF, assuming asset sale(e)Energy Trading 17 32% 13% n/a(f) DCF, assuming asset sale $2,293 ______________________________________(a)Percentage by which the fair value of equity of the reporting unit would need to decline to equal its carrying value, including goodwill.(b)Multiple of enterprise value (sum of debt plus equity value) to earnings before interest, taxes, depreciation, and amortization (EBITDA).(c)Discounted cash flows (DCF) incorporated 2018-2022 projected cash flows plus a calculated terminal value.(d)Power and Industrial Projects excludes the Biomass reporting unit, as this unit has no allocated goodwill.(e)Asset sales were assumed, except for Power and Industrial Projects' reduced emissions fuels projects, which assumed stock sales.(f)Due to lack of market comparable information for Energy Trading, DTE Energy capitalized the terminal year cash flows at the weighted average cost of capital (WACC) in lieu ofapplying a terminal EBITDA multiple.Long-Lived AssetsThe Registrants evaluate the carrying value of long-lived assets, excluding goodwill, when circumstances indicate that the carrying value of thoseassets may not be recoverable. Conditions that could have an adverse impact on the cash flows and fair value of the long-lived assets are deterioratingbusiness climate, condition of the asset, or plans to dispose of the asset before the end of its useful life. The review of long-lived assets for impairmentrequires significant assumptions about operating strategies and estimates of future cash flows, which require assessments of current and projected marketconditions. An impairment evaluation is based on an undiscounted cash flow analysis at the lowest level for which independent cash flows of long-livedassets can be identified from other groups of assets and liabilities. Impairment may occur when the carrying value of the asset exceeds the futureundiscounted cash flows. When the undiscounted cash flow analysis indicates a long-lived asset is not recoverable, the amount of the impairment loss isdetermined by measuring the excess of the long-lived asset over its fair value. An impairment would require the Registrants to reduce both the long-livedasset and current period earnings by the amount of the impairment, which would adversely impact their earnings.48Pension and Other Postretirement CostsDTE Energy sponsors defined benefit pension plans and other postretirement benefit plans for eligible employees of the Registrants. The measurementof the plan obligations and cost of providing benefits under these plans involve various factors, including numerous assumptions and accounting elections.When determining the various assumptions that are required, DTE Energy considers historical information as well as future expectations. The benefit costsare affected by, among other things, the actual rate of return on plan assets, the long-term expected return on plan assets, the discount rate applied to benefitobligations, the incidence of mortality, the expected remaining service period of plan participants, level of compensation and rate of compensation increases,employee age, length of service, the anticipated rate of increase of health care costs, benefit plan design changes, and the level of benefits provided toemployees and retirees. Pension and other postretirement benefit costs attributed to the segments are included with labor costs and ultimately allocated toprojects within the segments, some of which are capitalized.DTE Energy had pension costs of $172 million in 2017, $167 million in 2016, and $221 million in 2015. Other postretirement benefit credits were $31million in 2017, $111 million in 2016, and $99 million in 2015. Pension costs and other postretirement benefit credits for 2017 were calculated based uponseveral actuarial assumptions, including an expected long-term rate of return on plan assets of 7.50% for the pension plans and 7.75% for the otherpostretirement benefit plans. In developing the expected long-term rate of return assumptions, DTE Energy evaluated asset class risk and return expectations,as well as inflation assumptions. Projected returns are based on broad equity, bond, and other markets. DTE Energy's 2018 expected long-term rate of returnon pension plan assets is based on an asset allocation assumption utilizing active investment management of 40% in equity markets, 32% in fixed incomemarkets, including long duration bonds, and 28% invested in other assets. DTE Energy's 2018 expected long-term rate of return on other postretirement planassets is based on an asset allocation assumption utilizing active investment management of 40% in equity markets, 26% in fixed income markets, and 34%invested in other assets. Because of market volatility, DTE Energy periodically reviews the asset allocation and rebalances the portfolio when consideredappropriate. Given market conditions and financial market risk considerations, DTE Energy is maintaining its long-term rate of return assumptions for thepension plans and other post retirement plans at 7.50% and 7.75%, respectively for 2018. DTE Energy believes these rates are reasonable assumptions for thelong-term rate of return on the plan assets for 2018 given its investment strategy. DTE Energy will continue to evaluate the actuarial assumptions, includingits expected rate of return, at least annually.DTE Energy calculates the expected return on pension and other postretirement benefit plan assets by multiplying the expected return on plan assets bythe market-related value (MRV) of plan assets at the beginning of the year, taking into consideration anticipated contributions and benefit payments that areto be made during the year. Current accounting rules provide that the MRV of plan assets can be either fair value or a calculated value that recognizeschanges in fair value in a systematic and rational manner over not more than five years. For the pension plans, DTE Energy uses a calculated value whendetermining the MRV of the pension plan assets and recognizes changes in fair value over a three-year period. Accordingly, the future value of assets will beimpacted as previously deferred gains or losses are recognized. Positive asset performance in 2017 resulted in unrecognized net gains. As of December 31,2017, DTE Energy had $223 million of cumulative gains that remain to be recognized in the calculation of the MRV of pension assets related to investmentperformance in 2017 and 2016. For the other postretirement benefit plans, DTE Energy uses fair value when determining the MRV of other postretirementbenefit plan assets, therefore all investment gains and losses have been recognized in the calculation of MRV for these plans.The discount rate that DTE Energy utilizes for determining future pension and other postretirement benefit obligations is based on a yield curveapproach and a review of bonds that receive one of the two highest ratings given by a recognized rating agency. The yield curve approach matches projectedpension plan and other postretirement benefit payment streams with bond portfolios reflecting actual liability duration unique to the plans. The discount ratedetermined on this basis was 3.70% for the pension and other postretirement plans at December 31, 2017 compared to 4.25% for the pension and otherpostretirement plans at December 31, 2016.DTE Energy changed the mortality assumption as of December 31, 2017 to reflect the updated MP-2017 projection scale, along with the actualexperience and credibility of each population. The mortality assumptions used at December 31, 2017 are the RP-2014 mortality table, projected back to 2006using Scale MP-2014 and projected forward using Scale MP-2017 with generational projection. The base mortality tables vary by type of plan, employee'sunion status and employment status, with additional adjustments to reflect the actual experience and credibility of each population.49DTE Energy estimates the 2018 total pension costs will be approximately $150 million in 2018, compared to $172 million in 2017. The reduction intotal pension costs is primarily due to updated demographic assumptions and positive asset performance, offset by a lower discount rate. The 2018 otherpostretirement benefit credit will be approximately $30 million compared to $31 million in 2017.The health care trend rates for DTE Energy assume 6.75% for pre-65 participants and 7.25% for post-65 participants for 2018, trending down to 4.50%for both pre-65 and post-65 participants in 2030.Future actual pension and other postretirement benefit costs or credits will depend on future investment performance, changes in future discount rates,and various other factors related to plan design.Lowering the expected long-term rate of return on the plan assets by one percentage point would have increased the 2017 pension costs byapproximately $42 million. Lowering the discount rate and the salary increase assumptions by one percentage point would have increased the 2017 pensioncosts by approximately $38 million. Lowering the expected long-term rate of return on plan assets by one percentage point would have decreased the 2017other postretirement credit by approximately $18 million. Lowering the discount rate assumption by one percentage point would have decreased the 2017other postretirement credit by approximately $26 million. Lowering the health care cost trend assumptions by one percentage point would have increased theother postretirement credit for 2017 by approximately $5 million.The value of the qualified pension and other postretirement benefit plan assets was $6.5 billion at December 31, 2017 and $5.8 billion at December 31,2016. At December 31, 2017, DTE Energy's qualified pension plans were underfunded by $807 million and its other postretirement benefit plans wereunderfunded by $62 million. The 2017 funding levels improved as positive asset performance and plan sponsor contributions offset a decrease in discountrates.Pension and other postretirement costs and pension cash funding requirements may increase in future years without typical returns in the financialmarkets. DTE Energy made contributions to its qualified pension plans of $223 million in 2017 and $179 million in 2016. At the discretion of management,consistent with the Pension Protection Act of 2006, and depending upon financial market conditions, DTE Energy anticipates making contributions to itsqualified pension plans of up to $200 million in 2018 and up to $415 million over the next five years. DTE Energy did not make other postretirement benefitplan contributions in 2017 and made contributions of $20 million in 2016. DTE Energy does not anticipate making any contributions to its otherpostretirement plans in 2018 or over the next five years. The planned pension contributions will be made in cash and/or DTE Energy common stock.See Note 20 to the Consolidated Financial Statements in Item 8 of this Report, "Retirement Benefits and Trusteed Assets."Legal ReservesThe Registrants are involved in various legal proceedings, claims, and litigation arising in the ordinary course of business. The Registrants regularlyassess their liabilities and contingencies in connection with asserted or potential matters, and establish reserves when appropriate. Legal reserves are basedupon the Registrants' management’s assessment of pending and threatened legal proceedings and claims against the Registrants.Accounting for Tax ObligationsThe Registrants are required to make judgments regarding the potential tax effects of various financial transactions and results of operations in order toestimate their obligations to taxing authorities. The Registrants account for uncertain income tax positions using a benefit recognition model with a two-stepapproach, a more-likely-than-not recognition criterion, and a measurement attribute that measures the position as the largest amount of tax benefit that isgreater than 50% likely of being realized upon ultimate settlement. If the benefit does not meet the more likely than not criteria for being sustained on itstechnical merits, no benefit will be recorded. Uncertain tax positions that relate only to timing of when an item is included on a tax return are considered tohave met the recognition threshold. The Registrants also have non-income tax obligations related to property, sales and use, and employment-related taxes,and ongoing appeals related to these tax matters.50Accounting for tax obligations requires judgments, including assessing whether tax benefits are more likely than not to be sustained, and estimatingreserves for potential adverse outcomes regarding tax positions that have been taken. The Registrants also assess their ability to utilize tax attributes,including those in the form of carry-forwards, for which the benefits have already been reflected in the Consolidated Financial Statements. The Registrantsbelieve the resulting tax reserve balances as of December 31, 2017 and 2016 are appropriate. The ultimate outcome of such matters could result in favorableor unfavorable adjustments to the Registrants' Consolidated Financial Statements, and such adjustments could be material.See Note 10 to the Consolidated Financial Statements in Item 8 of this Report, "Income Taxes."NEW ACCOUNTING PRONOUNCEMENTSSee Note 3 to the Consolidated Financial Statements in Item 8 of this Report, "New Accounting Pronouncements."FAIR VALUEDerivatives are generally recorded at fair value and shown as Derivative assets or liabilities. Contracts DTE Energy typically classifies as derivativeinstruments include power, natural gas, oil, and certain coal forwards, futures, options and swaps, and foreign currency exchange contracts. Items DTE Energydoes not generally account for as derivatives include natural gas inventory, pipeline transportation contracts, renewable energy credits, and storage assets.See Notes 12 and 13 to the Consolidated Financial Statements in Item 8 of this Report, "Fair Value" and "Financial and Other Derivative Instruments,"respectively.The tables below do not include the expected earnings impact of non-derivative natural gas storage, transportation, certain power contracts, andrenewable energy credits which are subject to accrual accounting. Consequently, gains and losses from these positions may not match with the relatedphysical and financial hedging instruments in some reporting periods, resulting in volatility in the Registrants' reported period-by-period earnings; however,the financial impact of the timing differences will reverse at the time of physical delivery and/or settlement.The Registrants manage their MTM risk on a portfolio basis based upon the delivery period of their contracts and the individual components of therisks within each contract. Accordingly, the Registrants record and manage the energy purchase and sale obligations under their contracts in separatecomponents based on the commodity (e.g. electricity or natural gas), the product (e.g. electricity for delivery during peak or off-peak hours), the deliverylocation (e.g. by region), the risk profile (e.g. forward or option), and the delivery period (e.g. by month and year).The Registrants have established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value in three broadlevels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and thelowest priority to unobservable inputs (Level 3). For further discussion of the fair value hierarchy, see Note 12 to the Consolidated Financial Statements inItem 8 of this Report, "Fair Value."The following table provides details on changes in DTE Energy's MTM net asset (or liability) position: Total (In millions)MTM at December 31, 2016$(86)Reclassified to realized upon settlement(52)Changes in fair value recorded to income128Amounts recorded to unrealized income76Changes in fair value recorded in regulatory liabilities25Change in collateral(7)MTM at December 31, 2017$851The table below shows the maturity of DTE Energy's MTM positions. The positions from 2021 and beyond principally represent longer tenor gasstructured transactions:Source of Fair Value 2018 2019 2020 2021 and Beyond Total Fair Value (In millions)Level 1 $3 $3 $(1) $2 $7Level 2 (16) 6 4 3 (3)Level 3 (5) 10 1 (15) (9)MTM before collateral adjustments $(18) $19 $4 $(10) (5)Collateral adjustments 13MTM at December 31, 2017 $8Item 7A. Quantitative and Qualitative Disclosures About Market RiskMarket Price RiskThe Electric and Gas businesses have commodity price risk, primarily related to the purchases of coal, natural gas, uranium, and electricity. However,the Registrants do not bear significant exposure to earnings risk, as such changes are included in the PSCR and GCR regulatory rate-recovery mechanisms. Inaddition, changes in the price of natural gas can impact the valuation of lost and stolen gas, storage sales, and transportation services revenue at the Gassegment. The Gas segment manages its market price risk related to storage sales revenue primarily through the sale of long-term storage contracts. TheRegistrants are exposed to short-term cash flow or liquidity risk as a result of the time differential between actual cash settlements and regulatory raterecovery.DTE Energy's Gas Storage and Pipelines segment has exposure to natural gas price fluctuations which impact the pricing for natural gas storage,gathering, and transportation. DTE Energy manages its exposure through the use of short, medium, and long-term storage, gathering, and transportationcontracts.DTE Energy's Power and Industrial Projects business segment is subject to electricity, natural gas, and coal product price risk. DTE Energy manages itsexposure to commodity price risk through the use of long-term contracts.DTE Energy's Energy Trading business segment has exposure to electricity, natural gas, coal, crude oil, heating oil, and foreign currency exchangeprice fluctuations. These risks are managed by the energy marketing and trading operations through the use of forward energy, capacity, storage, options, andfutures contracts, within pre-determined risk parameters.Credit RiskThe Registrants regularly review contingent matters relating to customers and their contracts and record provisions for amounts considered at risk ofprobable loss in the allowance for doubtful accounts. The Registrants believe their accrued amounts are adequate for probable loss.Trading ActivitiesDTE Energy is exposed to credit risk through trading activities. Credit risk is the potential loss that may result if the trading counterparties fail to meettheir contractual obligations. DTE Energy utilizes both external and internal credit assessments when determining the credit quality of trading counterparties.52The following table displays the credit quality of DTE Energy's trading counterparties as of December 31, 2017: Credit ExposureBefore CashCollateral CashCollateral Net CreditExposure (In millions)Investment Grade(a) A- and Greater$226 $— $226BBB+ and BBB265 — 265BBB-65 — 65Total Investment Grade556 — 556Non-investment grade(b)6 — 6Internally Rated — investment grade(c)295 (1) 294Internally Rated — non-investment grade(d)20 (2) 18Total$877 $(3) $874_______________________________________(a)This category includes counterparties with minimum credit ratings of Baa3 assigned by Moody’s Investors Service (Moody’s) or BBB- assigned by Standard & Poor’s RatingGroup, a division of McGraw-Hill Companies, Inc. (Standard & Poor’s). The five largest counterparty exposures, combined, for this category represented approximately 15% ofthe total gross credit exposure.(b)This category includes counterparties with credit ratings that are below investment grade. The five largest counterparty exposures, combined, for this category representedapproximately 1% of the total gross credit exposure.(c)This category includes counterparties that have not been rated by Moody’s or Standard & Poor’s, but are considered investment grade based on DTE Energy’s evaluation of thecounterparty’s creditworthiness. The five largest counterparty exposures, combined, for this category represented approximately 12% of the total gross credit exposure.(d)This category includes counterparties that have not been rated by Moody’s or Standard & Poor’s, and are considered non-investment grade based on DTE Energy’s evaluation ofthe counterparty’s creditworthiness. The five largest counterparty exposures, combined, for this category represented approximately 2% of the total gross credit exposure.OtherThe Registrants engage in business with customers that are non-investment grade. The Registrants closely monitor the credit ratings of these customersand, when deemed necessary and permitted under the tariffs, request collateral or guarantees from such customers to secure their obligations.Interest Rate RiskDTE Energy is subject to interest rate risk in connection with the issuance of debt. In order to manage interest costs, DTE Energy may use treasury locksand interest rate swap agreements. DTE Energy's exposure to interest rate risk arises primarily from changes in U.S. Treasury rates, commercial paper rates, andLIBOR. As of December 31, 2017, DTE Energy had a floating rate debt-to-total debt ratio of approximately 4.8%.Foreign Currency Exchange RiskDTE Energy has foreign currency exchange risk arising from market price fluctuations associated with fixed priced contracts. These contracts aredenominated in Canadian dollars and are primarily for the purchase and sale of natural gas and power, as well as for long-term transportation capacity. Tolimit DTE Energy's exposure to foreign currency exchange fluctuations, DTE Energy has entered into a series of foreign currency exchange forward contractsthrough June 2022.Summary of Sensitivity AnalysesThe Registrants performed sensitivity analyses on the fair values of commodity contracts and long-term debt obligations. The commodity contractslisted below principally relate to energy marketing and trading activities. The sensitivity analyses involved increasing and decreasing forward prices andrates at December 31, 2017 and 2016 by a hypothetical 10% and calculating the resulting change in the fair values.53The results of the sensitivity analyses: Assuming a10% Increase in Prices/Rates Assuming a10% Decrease in Prices/Rates As of December 31, As of December 31, Activity 2017 2016 2017 2016 Change in the Fair Value of (In millions) Gas contracts $— $14 $— $(14) Commodity contractsPower contracts $5 $18 $(7) $(18) Commodity contractsInterest rate risk — DTE Energy $(576) $(529) $581 $510 Long-term debtInterest rate risk — DTE Electric $(246) $(235) $263 $252 Long-term debtFor further discussion of market risk, see Management's Discussion and Analysis in Item 7 of this Report and Note 13 to the Consolidated FinancialStatements in Item 8 of this Report, "Financial and Other Derivative Instruments."54Item 8. Financial Statements and Supplementary DataThe following Consolidated Financial Statements and financial statement schedules are included herein: PageDTE Energy — Controls and Procedures 56DTE Energy — Report of Independent Registered Public Accounting Firm 57DTE Energy — Consolidated Statements of Operations 59DTE Energy — Consolidated Statements of Comprehensive Income 60DTE Energy — Consolidated Statements of Financial Position 61DTE Energy — Consolidated Statements of Cash Flows 63DTE Energy — Consolidated Statements of Changes in Equity 64DTE Electric — Controls and Procedures 65DTE Electric — Report of Independent Registered Public Accounting Firm 66DTE Electric — Consolidated Statements of Operations 67DTE Electric — Consolidated Statements of Comprehensive Income 68DTE Electric — Consolidated Statements of Financial Position 69DTE Electric — Consolidated Statements of Cash Flows 71DTE Electric — Consolidated Statements of Changes in Shareholder's Equity 72Combined Notes to Consolidated Financial Statements 73Note 1 — Organization and Basis of Presentation 73Note 2 — Significant Accounting Policies 77Note 3 — New Accounting Pronouncements 82Note 4 — Acquisitions and Exit Activities 83Note 5 — Goodwill 85Note 6 — Property, Plant, and Equipment 86Note 7 — Jointly-Owned Utility Plant 88Note 8 — Asset Retirement Obligations 88Note 9 — Regulatory Matters 89Note 10 — Income Taxes 93Note 11 — Earnings Per Share 97Note 12 — Fair Value 98Note 13 — Financial and Other Derivative Instruments 105Note 14 — Long-Term Debt 110Note 15 — Preferred and Preference Securities 113Note 16 — Short-Term Credit Arrangements and Borrowings 113Note 17 — Capital and Operating Leases 114Note 18 — Commitments and Contingencies 115Note 19 — Nuclear Operations 120Note 20 — Retirement Benefits and Trusteed Assets 122Note 21 — Stock-Based Compensation 132Note 22 — Segment and Related Information 135Note 23 — Related Party Transactions 137Note 24 — Supplementary Quarterly Financial Information (Unaudited) 139Financial Statement Schedule Schedule II — Valuation and Qualifying Accounts 15355DTE Energy — Controls and Procedures(a) Evaluation of disclosure controls and proceduresManagement of DTE Energy carried out an evaluation, under the supervision and with the participation of DTE Energy's Chief Executive Officer (CEO)and Chief Financial Officer (CFO), of the effectiveness of the design and operation of DTE Energy's disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2017, which is the end of the period covered by this report. Based on this evaluation, DTEEnergy's CEO and CFO have concluded that such disclosure controls and procedures are effective in providing reasonable assurance that informationrequired to be disclosed by DTE Energy in reports that it files or submits under the Exchange Act (i) is recorded, processed, summarized, and reported withinthe time periods specified in the U.S. Securities and Exchange Commission's rules and forms and (ii) is accumulated and communicated to DTE Energy'smanagement, including its CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Due to the inherent limitations in theeffectiveness of any disclosure controls and procedures, management cannot provide absolute assurance that the objectives of its disclosure controls andprocedures will be attained.(b) Management’s report on internal control over financial reportingManagement of DTE Energy is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined inExchange Act Rules 13a-15(f) and 15d-15(f). Internal control over financial reporting is a process designed by, or under the supervision of, DTE Energy'sCEO and CFO, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degreeof compliance with the policies or procedures may deteriorate.Management of DTE Energy has assessed the effectiveness of DTE Energy’s internal control over financial reporting as of December 31, 2017. Inmaking this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 COSO) inInternal Control - Integrated Framework. Based on this assessment, management concluded that, as of December 31, 2017, DTE Energy’s internal controlover financial reporting was effective based on those criteria.The effectiveness of DTE Energy’s internal control over financial reporting as of December 31, 2017 has been audited by PricewaterhouseCoopers LLP,an independent registered public accounting firm who also audited DTE Energy’s financial statements, as stated in their report which appears herein.(c) Changes in internal control over financial reportingThere have been no changes in DTE Energy's internal control over financial reporting during the quarter ended December 31, 2017 that have materiallyaffected, or are reasonably likely to materially affect, DTE Energy's internal control over financial reporting.56REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Board of Directors and Shareholders ofDTE Energy CompanyOpinions on the Financial Statements and Internal Control over Financial ReportingWe have audited the accompanying consolidated statements of financial position of DTE Energy Company and its subsidiaries as of December 31, 2017 and2016, and the related consolidated statements of operations, of comprehensive income, of changes in equity and of cash flows for each of the three years inthe period ended December 31, 2017, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the periodended December 31, 2017 listed in the accompanying index (collectively referred to as the “consolidated financial statements”). We also have audited theCompany's internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as ofDecember 31, 2017 and 2016, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2017 inconformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all materialrespects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework(2013) issued by the COSO.Basis for OpinionsThe Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, andfor its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Controlover Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internalcontrol over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board(United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internalcontrol over financial reporting was maintained in all material respects.Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financialstatements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles usedand significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internalcontrol over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weaknessexists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performingsuch other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.Definition and Limitations of Internal Control over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal controlover financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.57Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate./s/ PricewaterhouseCoopers LLPDetroit, MichiganFebruary 16, 2018We have served as the Company’s auditor since 2008.58DTE Energy CompanyConsolidated Statements of Operations Year Ended December 31, 2017 2016 2015 (In millions, except per share amounts)Operating Revenues Utility operations$6,434 $6,497 $6,238Non-utility operations6,173 4,133 4,099 12,60710,63010,337 Operating Expenses Fuel, purchased power, and gas — utility1,881 1,968 2,081Fuel, purchased power, and gas — non-utility5,283 3,562 3,481Operation and maintenance2,335 2,302 2,214Depreciation and amortization1,030 976 852Taxes other than income391 370 364Asset (gains) losses and impairments, net41 7 106 10,961 9,185 9,098Operating Income1,646 1,445 1,239 Other (Income) and Deductions Interest expense536 472 450Interest income(12) (20) (13)Other income(268) (207) (209)Other expenses103 95 61 359 340 289Income Before Income Taxes1,287 1,105 950 Income Tax Expense175 271 230 Net Income1,112 834 720 Less: Net Loss Attributable to Noncontrolling Interests(22) (34) (7) Net Income Attributable to DTE Energy Company$1,134 $868 $727 Basic Earnings per Common Share Net Income Attributable to DTE Energy Company$6.32 $4.84 $4.05 Diluted Earnings per Common Share Net Income Attributable to DTE Energy Company$6.32 $4.83 $4.05 Weighted Average Common Shares Outstanding Basic179 179 179Diluted179 179 179Dividends Declared per Common Share$3.36 $3.06 $2.84See Combined Notes to Consolidated Financial Statements59DTE Energy CompanyConsolidated Statements of Comprehensive Income Year Ended December 31, 2017 2016 2015 (In millions)Net Income$1,112 $834 $720 Other comprehensive income (loss), net of tax: Benefit obligations, net of taxes of $5, $6, and $8, respectively10 11 13Net unrealized gains on derivatives during the period, net of taxes of $—, $—, and $—, respectively1 — —Net unrealized gains on investments during the period, net of taxes of $1, $1, and $—, respectively1 1 1Foreign currency translation1 — (4)Other comprehensive income13 12 10 Comprehensive income1,125 846 730Less: Comprehensive loss attributable to noncontrolling interests(22) (34) (7)Comprehensive Income Attributable to DTE Energy Company$1,147 $880 $737See Combined Notes to Consolidated Financial Statements60DTE Energy CompanyConsolidated Statements of Financial Position December 31, 2017 2016 (In millions)ASSETSCurrent Assets Cash and cash equivalents$66 $92Restricted cash23 21Accounts receivable (less allowance for doubtful accounts of $49 and $41, respectively) Customer1,758 1,522Other98 71Inventories Fuel and gas399 416Materials and supplies380 356Derivative assets103 47Regulatory assets55 42Other199 195 3,081 2,762Investments Nuclear decommissioning trust funds1,492 1,320Investments in equity method investees1,073 752Other232 201 2,797 2,273Property Property, plant, and equipment31,424 30,029Accumulated depreciation and amortization(10,703) (10,299) 20,721 19,730Other Assets Goodwill2,293 2,286Regulatory assets3,723 3,871Intangible assets867 842Notes receivable73 73Derivative assets51 34Other161 170 7,168 7,276Total Assets$33,767 $32,041See Combined Notes to Consolidated Financial Statements61DTE Energy CompanyConsolidated Statements of Financial Position — (Continued) December 31, 2017 2016 (In millions, except shares)LIABILITIES AND EQUITYCurrent Liabilities Accounts payable$1,171 $1,079Accrued interest111 96Dividends payable158 148Short-term borrowings621 499Current portion long-term debt, including capital leases109 14Derivative liabilities99 69Regulatory liabilities18 34Other525 498 2,812 2,437Long-Term Debt (net of current portion) Mortgage bonds, notes, and other11,039 10,506Junior subordinated debentures1,145 756Capital lease obligations1 7 12,185 11,269Other Liabilities Deferred income taxes1,888 4,162Regulatory liabilities2,875 555Asset retirement obligations2,320 2,197Unamortized investment tax credit122 93Derivative liabilities47 98Accrued pension liability924 1,152Accrued postretirement liability61 36Nuclear decommissioning220 194Other323 349 8,780 8,836Commitments and Contingencies (Notes 9 and 18) Equity Common stock, without par value, 400,000,000 shares authorized, and 179,386,967 and 179,432,581 shares issued andoutstanding, respectively3,989 4,030Retained earnings5,643 5,114Accumulated other comprehensive loss(120) (133)Total DTE Energy Company Equity9,512 9,011Noncontrolling interests478 488Total Equity9,990 9,499Total Liabilities and Equity$33,767 $32,041See Combined Notes to Consolidated Financial Statements62DTE Energy CompanyConsolidated Statements of Cash FlowsYear Ended December 31, 2017 2016 2015Operating Activities(In millions)Net Income$1,112 $834 $720Adjustments to reconcile Net Income to Net cash from operating activities: Depreciation and amortization1,030 976 852Nuclear fuel amortization53 58 46Allowance for equity funds used during construction(23) (21) (21)Deferred income taxes196 265 237Equity earnings of equity method investees(102) (68) (66)Dividends from equity method investees74 68 64Asset (gains) losses and impairments, net38 8 107Changes in assets and liabilities: Accounts receivable, net(252) (226) 259Inventories(4) 37 1Accounts payable129 145 (158)Accrued pension liability(228) 19 (147)Accrued postretirement liability25 (192) (287)Derivative assets and liabilities(94) 126 47Regulatory assets and liabilities217 (40) 85Other current and noncurrent assets and liabilities(54) 95 177Net cash from operating activities2,117 2,084 1,916Investing Activities Plant and equipment expenditures — utility(2,037) (1,898) (1,817)Plant and equipment expenditures — non-utility(213) (147) (203)Acquisition, net of cash acquired— (1,147) (241)Restricted cash for debt redemption, principally Securitization, net(2) 1 97Proceeds from sale of nuclear decommissioning trust fund assets1,240 1,457 885Investment in nuclear decommissioning trust funds(1,226) (1,463) (898)Distributions from equity method investees10 11 19Contributions to equity method investees(299) (239) (98)Other(37) 37 52Net cash used for investing activities(2,564) (3,388) (2,204)Financing Activities Issuance of long-term debt, net of issuance costs1,398 2,035 956Redemption of long-term debt(385) (807) (286)Repurchase of long-term debt— (59) —Issuance of equity units, net of issuance costs— 654 —Short-term borrowings, net122 — 101Repurchase of common stock(51) (33) —Dividends on common stock(592) (531) (501)Contributions from noncontrolling interests50 114 23Distributions to noncontrolling interests(40) (5) (8)Other(81) (9) (8)Net cash from financing activities421 1,359 277Net Increase (Decrease) in Cash and Cash Equivalents(26) 55 (11)Cash and Cash Equivalents at Beginning of Period92 37 48Cash and Cash Equivalents at End of Period$66 $92 $37 Supplemental disclosure of cash information Cash paid (received) for: Interest, net of interest capitalized$495 $448 $428Income taxes$4 $(1) $14Supplemental disclosure of non-cash investing and financing activities Plant and equipment expenditures in accounts payable$295 $312 $207Premium on equity units$— $98 $—See Combined Notes to Consolidated Financial Statements63DTE Energy CompanyConsolidated Statements of Changes in Equity RetainedEarnings Accumulated OtherComprehensiveIncome (Loss) NoncontrollingInterests Common Stock Shares Amount Total (Dollars in millions, shares in thousands)Balance, December 31, 2014176,991 $3,904 $4,578 $(155) $15 $8,342Net Income (Loss)— — 727 — (7) 720Dividends declared on common stock— — (510) — — (510)Issuance of common stock105 9 — — — 9Contribution of common stock to pension plan1,428 117 — — — 117Benefit obligations, net of tax— — — 13 — 13Net change in unrealized gains on investments, net of tax— — — 1 — 1Foreign currency translation— — — (4) — (4)Stock-based compensation, net contributions fromnoncontrolling interests, and other946 93 (1) — 15 107Balance, December 31, 2015179,470 $4,123 $4,794 $(145) $23 $8,795Implementation of ASU 2016-09— — 3 — — 3Net Income (Loss)— — 868 — (34) 834Dividends declared on common stock— — (548) — — (548)Repurchase of common stock(394) (33) — — — (33)Premium on equity units— (98) — — — (98)Issuance costs of equity units— (18) — — — (18)Acquisition of SGG— — — — 390 390Benefit obligations, net of tax— — — 11 — 11Net change in unrealized gains on investments, net of tax— — — 1 — 1Stock-based compensation, net contributions fromnoncontrolling interests, and other357 56 (3) — 109 162Balance, December 31, 2016179,433 $4,030 $5,114 $(133) $488 $9,499Net Income (Loss)— — 1,134 — (22) 1,112Dividends declared on common stock— — (602) — — (602)Repurchase of common stock(524) (51) — — — (51)Benefit obligations, net of tax— — — 10 — 10Net change in unrealized gains on derivatives, net of tax— — — 1 — 1Net change in unrealized gains on investments, net of tax— — — 1 — 1Foreign currency translation— — — 1 — 1Stock-based compensation, net contributions fromnoncontrolling interests, and other478 10 (3) — 12 19Balance, December 31, 2017179,387 $3,989 $5,643 $(120) $478 $9,990See Combined Notes to Consolidated Financial Statements64DTE Electric — Controls and Procedures(a) Evaluation of disclosure controls and proceduresManagement of DTE Electric carried out an evaluation, under the supervision and with the participation of DTE Electric’s Chief Executive Officer(CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of DTE Electric’s disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2017, which is the end of the period covered by this report. Based on this evaluation, DTEElectric’s CEO and CFO have concluded that such disclosure controls and procedures are effective in providing reasonable assurance that informationrequired to be disclosed by DTE Electric in reports that it files or submits under the Exchange Act (i) is recorded, processed, summarized, and reported withinthe time periods specified in the U.S. Securities and Exchange Commission's rules and forms and (ii) is accumulated and communicated to DTE Electric’smanagement, including its CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Due to the inherent limitations in theeffectiveness of any disclosure controls and procedures, management cannot provide absolute assurance that the objectives of its disclosure controls andprocedures will be attained.(b) Management’s report on internal control over financial reportingManagement of DTE Electric is responsible for establishing and maintaining adequate internal control over financial reporting as such term is definedin Exchange Act Rules 13a-15(f) and 15d-15(f). Internal control over financial reporting is a process designed by, or under the supervision of, DTE Electric'sCEO and CFO, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degreeof compliance with the policies or procedures may deteriorate.Management of DTE Electric has assessed the effectiveness of DTE Electric’s internal control over financial reporting as of December 31, 2017. Inmaking this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 COSO) inInternal Control - Integrated Framework. Based on this assessment, management concluded that, as of December 31, 2017, DTE Electric’s internal controlover financial reporting was effective based on those criteria.This annual report does not include an audit report of DTE Electric’s independent registered public accounting firm regarding internal control overfinancial reporting. Management’s report was not subject to audit by DTE Electric’s independent registered public accounting firm pursuant to rules of theSecurities and Exchange Commission that permit DTE Electric to provide only management’s report in this annual report.(c) Changes in internal control over financial reportingThere have been no changes in DTE Electric’s internal control over financial reporting during the quarter ended December 31, 2017 that havematerially affected, or are reasonably likely to materially affect, DTE Electric’s internal control over financial reporting.65REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Board of Directors and Shareholder ofDTE Electric CompanyOpinion on the Financial StatementsWe have audited the accompanying consolidated statements of financial position of DTE Electric Company and its subsidiaries as of December 31, 2017 and2016, and the related consolidated statements of operations, of comprehensive income, of changes in equity and of cash flows for each of the three years inthe period ended December 31, 2017, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the periodended December 31, 2017 listed in the accompanying index (collectively referred to as the “consolidated financial statements”). In our opinion, theconsolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and theresults of their operations and their cash flows for each of the three years in the period ended December 31, 2017 in conformity with accounting principlesgenerally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error orfraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits weare required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness ofthe Company's internal control over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud,and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosuresin the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion./s/ PricewaterhouseCoopers LLPDetroit, MichiganFebruary 16, 2018We have served as the Company's auditor since 2008.66DTE Electric CompanyConsolidated Statements of Operations Year Ended December 31, 2017 2016 2015 (In millions)Operating Revenues — Utility operations$5,102 $5,225 $4,900 Operating Expenses Fuel and purchased power — utility1,454 1,532 1,574Operation and maintenance1,428 1,455 1,342Depreciation and amortization753 750 633Taxes other than income302 284 277 3,937 4,021 3,826Operating Income1,165 1,204 1,074 Other (Income) and Deductions Interest expense274 264 258Interest income— (8) —Other income(77) (61) (60)Other expenses40 34 40 237 229 238Income Before Income Taxes928 975 836 Income Tax Expense327 353 292 Net Income$601 $622 $544See Combined Notes to Consolidated Financial Statements67DTE Electric CompanyConsolidated Statements of Comprehensive Income Year Ended December 31, 2017 2016 2015 (In millions)Net Income$601 $622 $544Other comprehensive income, net of tax: Transfer of benefit obligations, net of taxes of $18 in 2015— — 27Net unrealized gains on investments during the period, net of taxes of $1, $—, and $—, respectively1 — 1Other comprehensive income1—28Comprehensive Income$602$622$572See Combined Notes to Consolidated Financial Statements68DTE Electric CompanyConsolidated Statements of Financial Position December 31, 2017 2016 (In millions)ASSETSCurrent Assets Cash and cash equivalents$15 $13Accounts receivable (less allowance for doubtful accounts of $31 and $25, respectively) Customer791 728Affiliates20 12Other37 29Inventories Fuel190 225Materials and supplies275 271Regulatory assets50 36Other68 63 1,446 1,377Investments Nuclear decommissioning trust funds1,492 1,320Other36 36 1,528 1,356Property Property, plant, and equipment22,972 22,094Accumulated depreciation and amortization(7,984) (7,721) 14,988 14,373Other Assets Regulatory assets3,005 3,113Intangible assets25 31Prepaid postretirement costs — affiliates113 114Other123 125 3,266 3,383Total Assets$21,228 $20,489See Combined Notes to Consolidated Financial Statements69DTE Electric CompanyConsolidated Statements of Financial Position — (Continued) December 31, 2017 2016 (In millions, except shares)LIABILITIES AND SHAREHOLDER'S EQUITYCurrent Liabilities Accounts payable Affiliates$52 $58Other416 452Accrued interest72 65Current portion long-term debt, including capital leases5 6Regulatory liabilities17 27Short-term borrowings Affiliates116 117Other238 62Other145 146 1,061 933Long-Term Debt (net of current portion) Mortgage bonds, notes, and other6,017 5,878Capital lease obligations1 7 6,018 5,885Other Liabilities Deferred income taxes2,088 3,793Regulatory liabilities2,137 229Asset retirement obligations2,125 2,012Unamortized investment tax credit120 90Nuclear decommissioning220 194Accrued pension liability — affiliates811 1,008Accrued postretirement liability — affiliates311 269Other72 81 7,884 7,676Commitments and Contingencies (Notes 9 and 18) Shareholder's Equity Common stock, $10 par value, 400,000,000 shares authorized, and 138,632,324 shares issued and outstanding4,306 4,206Retained earnings1,956 1,787Accumulated other comprehensive income3 2Total Shareholder's Equity6,265 5,995Total Liabilities and Shareholder's Equity$21,228 $20,489See Combined Notes to Consolidated Financial Statements70DTE Electric CompanyConsolidated Statements of Cash Flows Year Ended December 31, 2017 2016 2015Operating Activities(In millions)Net Income$601 $622 $544Adjustments to reconcile Net Income to Net cash from operating activities: Depreciation and amortization753 750 633Nuclear fuel amortization53 58 46Allowance for equity funds used during construction(18) (18) (20)Deferred income taxes345 342 320Changes in assets and liabilities: Accounts receivable, net(80) (64) 33Inventories31 26 (22)Prepaid postretirement benefit costs — affiliates1 (90) (24)Accounts payable(2) 59 (46)Accrued pension liability — affiliates(197) 32 (224)Accrued postretirement liability — affiliates42 (38) (213)Regulatory assets and liabilities202 10 65Other current and noncurrent assets and liabilities(147) (34) 58Net cash from operating activities1,584 1,655 1,150Investing Activities Plant and equipment expenditures(1,574) (1,503) (1,545)Acquisitions— — (310)Restricted cash for debt redemption, principally Securitization, net— — 96Proceeds from sale of nuclear decommissioning trust fund assets1,240 1,457 885Investment in nuclear decommissioning trust funds(1,226) (1,463) (898)Transfer of Rabbi Trust assets to affiliate— — 137Other18 36 14Net cash used for investing activities(1,542) (1,473) (1,621)Financing Activities Issuance of long-term debt, net of issuance costs435 355 495Redemption of long-term debt(300) (10) (135)Repurchase of long-term debt— (59) —Capital contribution by parent company100 120 300Short-term borrowings, net — affiliate(1) 41 (8)Short-term borrowings, net — other176 (210) 222Dividends on common stock(432) (420) (395)Other(18) (1) (7)Net cash from (used for) financing activities(40) (184) 472Net Increase (Decrease) in Cash and Cash Equivalents2 (2) 1Cash and Cash Equivalents at Beginning of Period13 15 14Cash and Cash Equivalents at End of Period$15 $13 $15 Supplemental disclosure of cash information Cash paid (received) for: Interest, net of interest capitalized$252 $252 $244Income taxes$(16) $6 $(53)Supplemental disclosure of non-cash investing and financing activities Plant and equipment expenditures in accounts payable$191 $232 $150See Combined Notes to Consolidated Financial Statements71DTE Electric CompanyConsolidated Statements of Changes in Shareholder's Equity Additional Paid-in Capital RetainedEarnings Accumulated OtherComprehensive Income(Loss) Common Stock Shares Amount Total (Dollars in millions, shares in thousands)Balance, December 31, 2014138,632 $1,386 $2,400 $1,436 $(26) $5,196Net Income— — — 544 — 544Dividends declared on common stock— — — (395) — (395)Transfer of benefit obligations, net of tax— — — — 27 27Net change in unrealized gains on investments, net of tax— — — — 1 1Capital contribution by parent company— — 300 — — 300Balance, December 31, 2015138,632 $1,386 $2,700 $1,585 $2 $5,673Net Income— — — 622 — 622Dividends declared on common stock— — — (420) — (420)Capital contribution by parent company— — 120 — — 120Balance, December 31, 2016138,632 $1,386 $2,820 $1,787 $2 $5,995Net Income— — — 601 — 601Dividends declared on common stock— — — (432) — (432)Net change in unrealized gains on investments, net of tax— — — — 1 1Capital contribution by parent company— — 100 — — 100Balance, December 31, 2017138,632 $1,386 $2,920 $1,956 $3 $6,265See Combined Notes to Consolidated Financial Statements72DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial StatementsIndex of Combined Notes to Consolidated Financial StatementsThe Combined Notes to Consolidated Financial Statements are a combined presentation for DTE Energy and DTE Electric. The following list indicatesthe Registrant(s) to which each note applies:Note 1 Organization and Basis of Presentation DTE Energy and DTE ElectricNote 2 Significant Accounting Policies DTE Energy and DTE ElectricNote 3 New Accounting Pronouncements DTE Energy and DTE ElectricNote 4 Acquisitions and Exit Activities DTE EnergyNote 5 Goodwill DTE EnergyNote 6 Property, Plant, and Equipment DTE Energy and DTE ElectricNote 7 Jointly-Owned Utility Plant DTE Energy and DTE ElectricNote 8 Asset Retirement Obligations DTE Energy and DTE ElectricNote 9 Regulatory Matters DTE Energy and DTE ElectricNote 10 Income Taxes DTE Energy and DTE ElectricNote 11 Earnings Per Share DTE EnergyNote 12 Fair Value DTE Energy and DTE ElectricNote 13 Financial and Other Derivative Instruments DTE Energy and DTE ElectricNote 14 Long-Term Debt DTE Energy and DTE ElectricNote 15 Preferred and Preference Securities DTE Energy and DTE ElectricNote 16 Short-Term Credit Arrangements and Borrowings DTE Energy and DTE ElectricNote 17 Capital and Operating Leases DTE Energy and DTE ElectricNote 18 Commitments and Contingencies DTE Energy and DTE ElectricNote 19 Nuclear Operations DTE Energy and DTE ElectricNote 20 Retirement Benefits and Trusteed Assets DTE Energy and DTE ElectricNote 21 Stock-Based Compensation DTE Energy and DTE ElectricNote 22 Segment and Related Information DTE EnergyNote 23 Related Party Transactions DTE ElectricNote 24 Supplementary Quarterly Financial Information (Unaudited) DTE Energy and DTE ElectricNOTE 1 — ORGANIZATION AND BASIS OF PRESENTATIONCorporate StructureDTE Energy owns the following businesses:•DTE Electric is a public utility engaged in the generation, purchase, distribution, and sale of electricity to approximately 2.2 million customers insoutheastern Michigan;•DTE Gas is a public utility engaged in the purchase, storage, transportation, distribution, and sale of natural gas to approximately 1.3 millioncustomers throughout Michigan and the sale of storage and transportation capacity; and•Other businesses involved in 1) natural gas pipelines, gathering, and storage; 2) power and industrial projects; and 3) energy marketing andtrading operations.DTE Electric and DTE Gas are regulated by the MPSC. Certain activities of DTE Electric and DTE Gas, as well as various other aspects of businessesunder DTE Energy are regulated by the FERC. In addition, the Registrants are regulated by other federal and state regulatory agencies including the NRC, theEPA, the MDEQ, and for DTE Energy, the CFTC.73DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Basis of PresentationThe accompanying Consolidated Financial Statements of the Registrants are prepared using accounting principles generally accepted in the UnitedStates of America. These accounting principles require management to use estimates and assumptions that impact reported amounts of assets, liabilities,revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results may differ from the Registrants' estimates.The information in these combined notes relates to each of the Registrants as noted in the Index of Combined Notes to Consolidated FinancialStatements. However, DTE Electric does not make any representation as to information related solely to DTE Energy or the subsidiaries of DTE Energy otherthan itself.Certain prior year balances for the Registrants were reclassified to match the current year's Consolidated Financial Statements presentation.Principles of ConsolidationThe Registrants consolidate all majority-owned subsidiaries and investments in entities in which they have controlling influence. Non-majority ownedinvestments are accounted for using the equity method when the Registrants are able to significantly influence the operating policies of the investee. Whenthe Registrants do not influence the operating policies of an investee, the cost method is used. These Consolidated Financial Statements also reflect theRegistrants' proportionate interests in certain jointly-owned utility plants. The Registrants eliminate all intercompany balances and transactions.The Registrants evaluate whether an entity is a VIE whenever reconsideration events occur. The Registrants consolidate VIEs for which they are theprimary beneficiary. If a Registrant is not the primary beneficiary and an ownership interest is held, the VIE is accounted for under the equity method ofaccounting. When assessing the determination of the primary beneficiary, a Registrant considers all relevant facts and circumstances, including: the power,through voting or similar rights, to direct the activities of the VIE that most significantly impact the VIE's economic performance and the obligation to absorbthe expected losses and/or the right to receive the expected returns of the VIE. The Registrants perform ongoing reassessments of all VIEs to determine if theprimary beneficiary status has changed.Legal entities within DTE Energy's Power and Industrial Projects segment enter into long-term contractual arrangements with customers to supplyenergy-related products or services. The entities are generally designed to pass-through the commodity risk associated with these contracts to the customers,with DTE Energy retaining operational and customer default risk. These entities generally are VIEs and consolidated when DTE Energy is the primarybeneficiary. In addition, DTE Energy has interests in certain VIEs through which control of all significant activities is shared with partners, and therefore areaccounted for under the equity method.DTE Energy owns a 55% interest in SGG, which owns and operates midstream natural gas assets. SGG has contracts through which certain constructionrisk is designed to pass-through to the customers, with DTE Energy retaining operational and customer default risk. SGG is a VIE with DTE Energy as theprimary beneficiary. See Note 4 to the Consolidated Financial Statements, "Acquisitions and Exit Activities," for more information.The Registrants hold variable interests in NEXUS, including a 50% ownership interest. NEXUS is a joint venture which is in the process of constructinga 255-mile pipeline to transport Utica and Marcellus shale gas to Ohio, Michigan, and Ontario market centers. NEXUS is a VIE as it has insufficient equity atrisk to finance its activities. The Registrants are not the primary beneficiaries, as the power to direct significant activities is shared between the owners of theequity interests. DTE Energy accounts for NEXUS under the equity method.The Registrants hold ownership interests in certain limited partnerships. The limited partnerships include investment funds which support regionaldevelopment and economic growth, as well as, an operational business providing energy-related products. These entities are generally VIEs as a result ofcertain characteristics of the limited partnership voting rights. The ownership interests are accounted for under the equity method as the Registrants are notthe primary beneficiaries.74DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)DTE Energy has variable interests in VIEs through certain of its long-term purchase and sale contracts. DTE Electric has variable interests in VIEsthrough certain of its long-term purchase contracts. As of December 31, 2017, the carrying amount of assets and liabilities in DTE Energy's ConsolidatedStatements of Financial Position that relate to its variable interests under long-term purchase and sale contracts are predominantly related to working capitalaccounts and generally represent the amounts owed by or to DTE Energy for the deliveries associated with the current billing cycle under the contracts. As ofDecember 31, 2017, the carrying amount of assets and liabilities in DTE Electric's Consolidated Statements of Financial Position that relate to its variableinterests under long-term purchase contracts are predominantly related to working capital accounts and generally represent the amounts owed by DTEElectric for the deliveries associated with the current billing cycle under the contracts. The Registrants have not provided any significant form of financialsupport associated with these long-term contracts. There is no significant potential exposure to loss as a result of DTE Energy's variable interests throughthese long-term purchase and sale contracts. In addition, there is no significant potential exposure to loss as a result of DTE Electric's variable intereststhrough these long-term purchase contracts.The maximum risk exposure for consolidated VIEs is reflected on the Registrants' Consolidated Statements of Financial Position and in Note 18 to theConsolidated Financial Statements, "Commitments and Contingencies," related to the REF guarantees and indemnities. For non-consolidated VIEs, themaximum risk exposure of the Registrants is generally limited to their investment, notes receivable, future funding commitments, and amounts which DTEEnergy has guaranteed. See Note 18 to the Consolidated Financial Statements, "Commitments and Contingencies," for further discussion of the NEXUSguarantee arrangements.The following table summarizes the major Consolidated Statements of Financial Position items for consolidated VIEs as of December 31, 2017 and2016. All assets and liabilities of a consolidated VIE are presented where it has been determined that a consolidated VIE has either (1) assets that can be usedonly to settle obligations of the VIE or (2) liabilities for which creditors do not have recourse to the general credit of the primary beneficiary. VIEs, in whichDTE Energy holds a majority voting interest and is the primary beneficiary, that meet the definition of a business and whose assets can be used for purposesother than the settlement of the VIE's obligations have been excluded from the table below. December 31, 2017 December 31, 2016 SGG(a) Other Total SGG(a) Other Total (In millions)ASSETS Cash and cash equivalents$23 $14 $37 $36 $27 $63Restricted cash— 8 8 — 7 7Accounts receivable11 42 53 8 34 42Inventories3 114 117 3 112 115Property, plant, and equipment, net400 75 475 398 76 474Goodwill25 — 25 17 — 17Intangible assets572 — 572 586 — 586Other current and long-term assets4 — 4 1 1 2 $1,038 $253 $1,291 $1,049 $257 $1,306 LIABILITIES Accounts payable and accrued current liabilities$26 $47 $73 $19 $32 $51Current portion long-term debt, including capital leases— 4 4 — 5 5Mortgage bonds, notes, and other— 1 1 — 5 5Other current and long-term liabilities1 16 17 2 15 17 $27 $68 $95 $21 $57 $78_____________________________________(a)Amounts shown are 100% of SGG's assets and liabilities, of which DTE Energy owns 55%.75DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Amounts for DTE Energy's non-consolidated VIEs are as follows: December 31, 2017 December 31, 2016 (In millions)Investments in equity method investees$811 $509Notes receivable$17 $15Future funding commitments$598 $692Equity Method InvestmentsInvestments in non-consolidated affiliates that are not controlled by the Registrants, but over which they have significant influence, are accounted forusing the equity method. Certain of the equity method investees are also considered VIEs and disclosed in the non-consolidated VIEs table above. AtDecember 31, 2017 and 2016, DTE Energy's share of the underlying equity in the net assets of the investees exceeded the carrying amounts of Investments inequity method investees by $72 million and $73 million, respectively. The difference is being amortized over the life of the underlying assets.DTE Energy equity method investees are described below: Investments % Owned Segment 2017 2016 2017 2016 Description (In millions) Significant Equity Method Investees Gas Storage and Pipelines NEXUS Pipeline $640 $322 50% 50% A 255-mile pipeline under construction to transport Uticaand Marcellus shale gas to Ohio, Michigan, and Ontariomarket centersVector Pipeline 115 100 40% 40% 348-mile pipeline connecting Chicago, Michigan, andOntario market centersMillennium Pipeline 124 116 26% 26% 251-mile pipeline serving markets in the Northeast 879 538 Other Equity Method Investees Other Segments 194 214 $1,073 $752 The balances in Other Equity Method Investees are individually insignificant and are primarily from the Power and Industrial Projects segment. Theseinvestments are comprised of projects that deliver energy and utility-type products and services to an industrial customer, sell electricity from renewableenergy projects under long-term power purchase agreements, and produce and sell metallurgical coke.For further information by segment, see Note 22 to the Consolidated Financial Statements, "Segment and Related Information."76DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)NOTE 2 — SIGNIFICANT ACCOUNTING POLICIESRevenuesThe Registrants' revenues from the sale and delivery of electricity, and DTE Energy's revenues from the sale, delivery, and storage of natural gas arerecognized as services are provided. DTE Electric and DTE Gas record revenues for electricity and gas provided but unbilled at the end of each month. Ratesfor DTE Electric and DTE Gas include provisions to adjust billings for fluctuations in fuel and purchased power costs, cost of natural gas, and certain othercosts. Revenues are adjusted for differences between actual costs subject to reconciliation and the amounts billed in current rates. Under or over recoveredrevenues related to these cost recovery mechanisms are included in Regulatory assets or liabilities on the Registrants' Consolidated Statements of FinancialPosition and are recovered or returned to customers through adjustments to the billing factors.For further discussion of recovery mechanisms authorized by the MPSC, see Note 9 to the Consolidated Financial Statements, "Regulatory Matters."DTE Energy's non-utility businesses recognize revenues as services are provided and products are delivered. For discussion of derivative contracts, seeNote 13 to the Consolidated Financial Statements, "Financial and Other Derivative Instruments."Other IncomeOther income for the Registrants is recognized for non-operating income such as equity earnings of equity method investees, allowance for equity fundsused during construction, contract services, and gains (losses) from trading securities. DTE Energy's Power and Industrial Projects segment also recognizesOther income in connection with the sale of membership interests in reduced emissions fuel facilities to investors. In exchange for the cash received, theinvestors will receive a portion of the economic attributes of the facilities, including income tax attributes. The transactions are not treated as a sale ofmembership interests for financial reporting purposes. Other income is considered earned when refined coal is produced and tax credits are generated.The following is a summary of DTE Energy's Other income: 2017 2016 2015 (In millions)Equity earnings of equity method investees$102 $68 $66Income from REF entities77 75 83Gains from trading securities26 15 1Allowance for equity funds used during construction23 21 21Contract services19 21 27Other21 7 11 $268 $207 $209The following is a summary of DTE Electric's Other income: 2017 2016 2015 (In millions)Gains from trading securities allocated from DTE Energy$26 $15 $1Contract services21 20 27Allowance for equity funds used during construction18 18 20Equity earnings of equity method investees1 2 2Other11 6 10 $77 $61 $60For information on equity earnings of equity method investees by segment, see Note 22 to the Consolidated Financial Statements, "Segment andRelated Information."77DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Accounting for ISO TransactionsDTE Electric participates in the energy market through MISO. MISO requires that DTE Electric submit hourly day-ahead, real-time, and FTR bids andoffers for energy at locations across the MISO region. DTE Electric accounts for MISO transactions on a net hourly basis in each of the day-ahead, real-time,and FTR markets and net transactions across all MISO energy market locations. In any single hour DTE Electric records net purchases in Fuel, purchasedpower, and gas — utility and net sales in Operating Revenues — Utility operations on the Registrants' Consolidated Statements of Operations.The Energy Trading segment participates in the energy markets through various ISOs and RTOs. These markets require that Energy Trading submitshourly day-ahead, real-time bids and offers for energy at locations across each region. Energy Trading submits bids in the annual and monthly auctionrevenue rights and FTR auctions to the RTOs. Energy Trading accounts for these transactions on a net hourly basis for the day-ahead, real-time, and FTRmarkets. These transactions are related to trading contracts which, if derivatives, are presented on a net basis in Operating Revenues — Non-utility operations,and if non-derivatives, the realized gains and losses for sales are recorded in Operating Revenues — Non-utility operations and purchases are recorded inFuel, purchased power, and gas — non-utility in the DTE Energy Consolidated Statements of Operations.DTE Electric and Energy Trading record accruals for future net purchases adjustments based on historical experience, and reconcile accruals to actualcosts when invoices are received from MISO and other ISOs and RTOs.Changes in Accumulated Other 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. The amounts recorded to Accumulated other comprehensive income (loss) for the Registrants include unrealized gains and losses onavailable-for-sale securities and changes in benefit obligations, consisting of deferred actuarial losses and prior service costs. The amounts recorded toAccumulated other comprehensive income (loss) relating solely to DTE Energy also include unrealized gains and losses from derivatives accounted for ascash flow hedges, DTE Energy's interest in other comprehensive income of equity investees which comprise the net unrealized gains and losses oninvestments, and foreign currency translation adjustments. Refer to Note 20 to the Consolidated Financial Statements, "Retirement Benefits and TrusteedAssets," regarding the transfer of a portion of DTE Electric benefit obligations in 2015.The following table summarizes the changes in DTE Energy's Accumulated other comprehensive income (loss) by component(a) for the years endedDecember 31, 2017 and 2016: Net Unrealized Gain(Loss) on Derivatives Net Unrealized Gain(Loss) on Investments Benefit Obligations(b) Foreign CurrencyTranslation Total (In millions)Balance, December 31, 2015$(4) $(4) $(131) $(6) $(145)Other comprehensive loss before reclassifications— — (3) — (3)Amounts reclassified from Accumulated othercomprehensive income— 1 14 — 15Net current-period Other comprehensive income— 111—12Balance, December 31, 2016$(4) $(3)$(120)$(6)$(133)Other comprehensive income (loss) beforereclassifications— 1 (3) 1 (1)Amounts reclassified from Accumulated othercomprehensive income1 — 13 — 14Net current-period Other comprehensive income1 110113Balance, December 31, 2017$(3) $(2)$(110)$(5)$(120)______________________________________(a)All amounts are net of tax, except for Foreign currency translation.(b)The amounts reclassified from Accumulated other comprehensive income (loss) are included in the computation of the net periodic pension and other postretirement benefit costs(see Note 20 to the Consolidated Financial Statements "Retirement Benefits and Trusteed Assets").78DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Cash, Cash Equivalents, and Restricted CashCash and cash equivalents include cash on hand, cash in banks, and temporary investments purchased with remaining maturities of three months orless. Restricted cash consists of funds held to satisfy requirements of certain debt and DTE Energy partnership operating agreements. Restricted cashdesignated for interest and principal payments within one year is classified as a Current Asset.ReceivablesAccounts receivable are primarily composed of trade receivables and unbilled revenue. The Registrants' Accounts receivable are stated at net realizablevalue.The allowance for doubtful accounts for DTE Electric and DTE Gas is generally calculated using the aging approach that utilizes rates developed inreserve studies. DTE Electric and DTE Gas establish an allowance for uncollectible accounts based on historical losses and management’s assessment ofexisting economic conditions, customer trends, and other factors. Customer accounts are generally considered delinquent if the amount billed is not receivedby the due date, which is typically in 21 days, however, factors such as assistance programs may delay aggressive action. DTE Electric and DTE Gas assesslate payment fees on trade receivables based on past-due terms with customers. Customer accounts are written off when collection efforts have beenexhausted. The time period for write-off is 150 days after service has been terminated.The customer allowance for doubtful accounts for DTE Energy's other businesses is calculated based on specific review of probable future collectionsbased on receivable balances generally in excess of 30 days.DTE Energy unbilled revenues of $1 billion and $814 million, including $290 million and $267 million of DTE Electric unbilled revenues, areincluded in Customer Accounts receivable at December 31, 2017 and 2016, respectively.Notes ReceivableNotes receivable, or financing receivables, for DTE Energy are primarily comprised of capital lease receivables and loans and are included in Notesreceivable and Other current assets on DTE Energy’s Consolidated Statements of Financial Position. Notes receivable, or financing receivables, for DTEElectric are primarily comprised of loans.Notes receivable are typically considered delinquent when payment is not received for periods ranging from 60 to 120 days. The Registrants ceaseaccruing interest (nonaccrual status), consider a note receivable impaired, and establish an allowance for credit loss when it is probable that all principal andinterest amounts due will not be collected in accordance with the contractual terms of the note receivable. Cash payments received on nonaccrual status notesreceivable, that do not bring the account contractually current, are first applied to contractually owed past due interest, with any remainder applied toprincipal. Accrual of interest is generally resumed when the note receivable becomes contractually current.In determining the allowance for credit losses for notes receivable, the Registrants consider the historical payment experience and other factors that areexpected to have a specific impact on the counterparty’s ability to pay. In addition, the Registrants monitor the credit ratings of the counterparties fromwhich they have notes receivable.InventoriesInventory related to utility operations is generally valued at average cost. Inventory related to non-utility operations is valued at the lower of cost ornet realizable value.DTE Gas' natural gas inventory of $29 million and $45 million as of December 31, 2017 and 2016, respectively, is determined using the last-in, first-out (LIFO) method. The replacement cost of gas in inventory exceeded the LIFO cost by $81 million and $132 million at December 31, 2017 and 2016,respectively.Property, Retirement and Maintenance, and Depreciation and AmortizationProperty is stated at cost and includes construction-related labor, materials, overheads, and AFUDC for utility property. The cost of utility propertiesretired is charged to accumulated depreciation. Expenditures for maintenance and repairs are charged to expense when incurred, except for outage-relatedmaintenance repairs for Fermi 2.Utility property at DTE Electric and DTE Gas is depreciated over its estimated useful life using straight-line rates approved by the MPSC.79DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)DTE Energy's non-utility property is depreciated over its estimated useful life using the straight-line method.Depreciation and amortization expense also includes the amortization of certain regulatory assets for the Registrants.Approximately $15 million and $27 million of expenses related to Fermi 2 refueling outages were accrued at December 31, 2017 and 2016,respectively. Amounts are accrued on a pro-rata basis, generally over an 18-month period, that coincides with scheduled refueling outages at Fermi 2. Thisaccrual of outage costs matches the regulatory recovery of these costs in rates set by the MPSC. See Note 9 to the Consolidated Financial Statements,"Regulatory Matters."The cost of nuclear fuel is capitalized. The amortization of nuclear fuel is included within Fuel, purchased power, and gas — utility in the DTE EnergyConsolidated Statements of Operations, and Fuel and purchased power in the DTE Electric Consolidated Statements of Operations, and is recorded using theunits-of-production method.See Note 6 to the Consolidated Financial Statements, "Property, Plant, and Equipment."Long-Lived AssetsLong-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not berecoverable. If the carrying amount of the asset exceeds the expected undiscounted future cash flows generated by the asset, an impairment loss is recognizedresulting in the asset being written down to its estimated fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value, lesscosts to sell.Intangible AssetsThe Registrants have certain Intangible assets as shown below: December 31, 2017 December 31, 2016 Useful Lives GrossCarryingValue AccumulatedAmortization Net CarryingValue GrossCarryingValue AccumulatedAmortization Net CarryingValue (In millions)Intangible assets subject to amortization Customer relationships(a)40 years(b) $770 $(24) $746 $770 $(5) $765Contract intangibles6 to 26 years 168 (72) 96 111 (65) 46 938 (96) 842 881 (70) 811 DTE Electric renewable energy credits(c) 24 — 24 30 — 30DTE Electric emission allowances(c) 1 — 1 1 — 1 25 — 25 31 — 31Long-term intangible assets DTE Electric $25 $— $25 $31 $— $31DTE Energy $963 $(96) $867 $912 $(70) $842______________________________________(a)In October 2016, DTE Energy acquired midstream natural gas assets that are part of the Gas Storage and Pipelines segment. The intangible assets recorded as a result of theacquisition pertain to existing customer relationships. See Note 4 to the Consolidated Financial Statements, "Acquisitions and Exit Activities," for additional information.(b)The useful life of the customer relationship intangible assets is based on the number of years in which the assets are expected to economically contribute to the business. Theexpected economic benefit incorporates existing customer contracts and expected renewal rates based on the estimated volume and production lives of gas resources in the region.(c)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.The following table summarizes DTE Energy's estimated customer relationship and contract intangible amortization expense expected to be recognizedduring each year through 2022: 2018 2019 2020 2021 2022 (In millions)Estimated amortization expense$26 $26 $25 $25 $2580DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)DTE Energy amortizes customer relationship and contract intangible assets on a straight-line basis over the expected period of benefit. DTE Energy'sIntangible assets amortization expense was $29 million in 2017, $16 million in 2016, and $11 million in 2015.Excise and Sales TaxesThe Registrants record the billing of excise and sales taxes as a receivable with an offsetting payable to the applicable taxing authority, with no netimpact on the Registrants’ Consolidated Statements of Operations.Deferred Debt CostsThe costs related to the issuance of long-term debt are deferred and amortized over the life of each debt issue. The deferred amounts are included as adirect deduction from the carrying amount of each debt issue in Mortgage bonds, notes, and other and Junior subordinated debentures on DTE Energy'sConsolidated Statements of Financial Position and in Mortgage bonds, notes, and other on DTE Electric's Consolidated Statements of Financial Position. Inaccordance with MPSC regulations applicable to DTE Energy’s electric and gas utilities, the unamortized discount, premium, and expense related to utilitydebt redeemed with a refinancing are amortized over the life of the replacement issue. Discount, premium, and expense on early redemptions of debtassociated with DTE Energy's non-utility operations are charged to earnings.Investments in Debt and Equity SecuritiesThe Registrants generally classify investments in debt and equity securities as either trading or available-for-sale and have recorded such investmentsat market value with unrealized gains or losses included in earnings or in Other comprehensive income or loss, respectively. Changes in the fair value ofFermi 2 nuclear decommissioning investments are recorded as adjustments to Regulatory assets or liabilities, due to a recovery mechanism from customers.The Registrants' equity investments are reviewed for impairment each reporting period. If the assessment indicates that the impairment is other thantemporary, a loss is recognized resulting in the equity investment being written down to its estimated fair value. See Note 12 of the Consolidated FinancialStatements, "Fair Value."Government GrantsGrants are recognized when there is reasonable assurance that the grant will be received and that any conditions associated with the grant will be met.When grants are received related to Property, plant, and equipment, the Registrants reduce the cost of the assets on their Consolidated Statements of FinancialPosition, resulting in lower depreciation expense over the life of the associated asset. Grants received related to expenses are reflected as a reduction of theassociated expense in the period in which the expense is incurred.DTE Energy FoundationDTE Energy's charitable contributions to the DTE Energy Foundation were $43 million, $26 million, and $12 million for the years ended December 31,2017, 2016, and 2015, respectively. The DTE Energy Foundation is a non-consolidated not-for-profit private foundation, the purpose of which is tocontribute to and assist charitable organizations.Other Accounting PoliciesSee the following notes for other accounting policies impacting the Registrants’ Consolidated Financial Statements:Note Title8 Asset Retirement Obligations9 Regulatory Matters10 Income Taxes12 Fair Value13 Financial and Other Derivative Instruments20 Retirement Benefits and Trusteed Assets21 Stock-Based Compensation81DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)NOTE 3 — NEW ACCOUNTING PRONOUNCEMENTSRecently Issued PronouncementsIn May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), as amended. The objectives of this ASU are toimprove upon revenue recognition requirements by providing a single comprehensive model to determine the measurement of revenue and timing ofrecognition. 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 entityexpects to be entitled to in exchange for those goods or services. This ASU also requires expanded qualitative and quantitative disclosures regarding thenature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. The standard is to be applied retrospectively. TheRegistrants will adopt the standard effective January 1, 2018 using the modified retrospective approach. The Registrants have substantially completed theassessment of the amended ASU's impact, on their Consolidated Financial Statements. The ASU will not significantly affect the Registrants' financial positionor results of operations. The Registrants will continue to monitor the impact of the ASU on existing revenue recognition internal controls, policies, andprocedures. Industry-related issues being vetted through the final stages of the American Institute of Certified Public Accountants' Power and UtilitiesIndustry Task Force process, which are not expected to have a significant impact on the Registrants, will continue to be monitored. The ASU will result inadditional disclosures for revenue compared to the current guidance. Accordingly, the Registrants are evaluating information that would be useful for users ofthe Consolidated Financial Statements.In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), a replacement of Leases (Topic 840). This guidance requires a lessee toaccount for leases as finance or operating leases, and include disclosure of key information about leasing arrangements. Both types of leases will result in thelessee recognizing a right-of-use asset and a corresponding lease liability on its balance sheet, with differing methodology for income statement recognition.For lessors, the standard modifies the classification criteria and the accounting for sales-type and direct financing leases. Entities will classify leases todetermine how to recognize lease-related revenue and expense. This standard is effective for public entities for fiscal years, and interim periods within thoseyears, beginning after December 15, 2018, and early adoption is permitted. The Registrants do not plan to early adopt the standard. A modified retrospectiveapproach is required for leases existing or entered into after the beginning of the earliest comparative period in the Consolidated Financial Statements, withcertain practical expedients permitted. The Registrants expect an increase in assets and liabilities, as well as additional disclosures, however, they arecurrently assessing the impact of this ASU on their Consolidated Financial Statements. This assessment includes monitoring unresolved utility industryimplementation guidance. The Registrants have conducted outreach activities across their lines of business and have begun implementation of a third-partysoftware tool that will assist with the initial adoption and ongoing compliance.In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments. The amendments in this update replace the incurred loss impairment methodology in current generally accepted accounting principles with amethodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit lossestimates. Entities will apply the new guidance as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period inwhich the guidance is adopted. The ASU is effective for the Registrants beginning after December 15, 2019, and interim periods therein. Early adoption ispermitted. The Registrants are currently assessing the impact of this standard on their Consolidated Financial Statements.In March 2017, the FASB issued ASU No. 2017-07, Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net PeriodicPension Cost and Net Periodic Postretirement Benefit Cost. The amendments in this update require that an employer report the service cost component in thesame line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of netbenefit cost are required to be presented in the income statement separately from the service cost component and outside income from operations. Theamendments in this update also allow only the service cost component to be eligible for capitalization when applicable. The standard will be appliedretrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirementbenefit cost in the income statement and prospectively for the capitalization of the service cost component of net periodic pension cost and net periodicpostretirement benefit in assets. The ASU is effective for the Registrants for fiscal years, and interim periods within those years, beginning after December 15,2017, and early adoption is permitted. The Registrants will adopt the standard effective January 1, 2018. The components of net periodic benefit costs(credits) for pension benefits and other postretirement benefits are disclosed in Note 20 to the Consolidated Financial Statements, "Retirement Benefits andTrusteed Assets." The ASU will not have a significant impact on the Registrants' Consolidated Financial Statements.82DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of CertainTax Effects from Accumulated Other Comprehensive Income. The amendments in this update allow a reclassification from accumulated other comprehensiveincome to retained earnings for stranded tax effects resulting from the TCJA. The amendments in this update also require entities to disclose their accountingpolicy for releasing income tax effects from accumulated other comprehensive income. The ASU is effective for the Registrants for fiscal years beginningafter December 15, 2018, and interim periods therein. Early adoption is permitted. The Registrants are currently assessing the impact of this standard on theirConsolidated Financial Statements.NOTE 4 — ACQUISITIONS AND EXIT ACTIVITIESGas Storage and Pipelines AcquisitionEffective October 1, 2016, DTE Energy closed on the purchase of midstream natural gas assets in support of the strategy to continue to grow and earncompetitive returns for shareholders. DTE Energy purchased 100% of AGS, located in Pennsylvania and West Virginia, and 40% of SGG, located in WestVirginia, from M3 Midstream. In addition, DTE Energy purchased 15% of SGG from Vega Energy Partners, resulting in 55% total ownership of SGG by DTEEnergy.Consideration transferred for the entities acquired was approximately $1.2 billion paid in cash and the assumption of SGG debt of $204 million. The$204 million of debt was comprised of DTE Energy's 55% interest in SGG of $112 million and 45% related to noncontrolling interest partners of $92 million.The acquisition was financed through the issuance of Equity Units and Senior Notes. These entities are part of DTE Energy's Gas Storage and Pipelinessegment which owns and manages a network of natural gas gathering, transmission, and storage facilities servicing the Midwest, Ontario, and Northeastmarkets. SGG has been deemed to be a VIE, and DTE Energy is the primary beneficiary. Thus, SGG's assets and liabilities are included in DTE Energy'sConsolidated Statements of Financial Position. See Note 1 to the Consolidated Financial Statements, "Organization and Basis of Presentation," for moreinformation.DTE Energy applied purchase accounting to the acquired entities. The excess purchase price over the fair value of net assets acquired was classified asgoodwill. September 30, 2017 marked the expiration of the one-year period from the acquisition to revise the fair value of assets acquired and liabilitiesassumed. As a result, the purchase accounting adjustments through September 30, 2017 contributed approximately $7 million of additional goodwill. Thefactors contributing to the recognition of goodwill were based on various strategic benefits that are expected to be realized from the AGS and SGGacquisition. The acquisition provides DTE Energy with a platform for midstream growth and access to further investment opportunities in the Appalachianbasin, an additional connection to the NEXUS Pipeline which should drive incremental volumes on the NEXUS Pipeline, and a new set of producerrelationships that may lead to more partnering opportunities. The goodwill is expected to be deductible for income tax purposes.83DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The final allocation of the purchase price was based on estimated fair values of the AGS and SGG assets acquired and liabilities assumed at the date ofacquisition, October 1, 2016. The components of the final purchase price allocation, inclusive of purchase accounting adjustments, are as follows: (In millions)Assets Cash$83Accounts receivable24Inventory6Property, plant, and equipment, net719Goodwill275Customer relationship intangibles770Other current assets1 $1,878Liabilities Accounts payable$19Other current liabilities11Long-term debt204Other long-term liabilities20 $254Less: Noncontrolling interest392Total cash consideration$1,232The intangible assets recorded as a result of the acquisition pertain to existing customer relationships, which were valued at approximately $770million as of the acquisition date. The fair value of the intangible assets acquired was estimated by applying the income approach. The income approach wasbased upon discounted projected future cash flows attributable to the existing contracts and agreements. The fair value measurement was based on significantunobservable inputs, including management estimates and assumptions, and thus represents a Level 3 measurement, pursuant to the applicable accountingguidance. Key estimates and inputs included revenue and expense projections and discount rates based on the risks associated with the entities. Theintangible assets are amortized on a straight-line basis over a period of 40 years, which is based on the number of years the assets are expected toeconomically contribute to the business. The expected economic benefit incorporates existing customer contracts with a weighted-average amortization lifeof 10 years and expected renewal rates, based on the estimated volume and production lives of gas resources in the region.The fair value of the noncontrolling interest in the table above was derived based on the purchase price DTE Energy paid for the 55% interest in SGG.DTE Energy evaluated pre-acquisition contingencies relating to the purchase that existed as of the acquisition date. Based on the evaluation, DTEEnergy determined that $30 million of certain pre-acquisition contingencies, related to repairing existing rights-of-way, were probable in nature andestimable as of the acquisition date. Accordingly, DTE Energy recorded its best estimates for these contingencies as part of purchase accounting, which areincluded in the Other current and long-term liabilities in the purchase price allocation table above.DTE Energy incurred $15 million of direct transaction costs for the year ended December 31, 2016. These costs were primarily related to advisory feesand included in Operation and maintenance in DTE Energy's 2016 Consolidated Statements of Operations.DTE Energy's 2016 Consolidated Statements of Operations included Operating Revenues — Non-utility operations of $39 million and Net Income of$4 million associated with the acquired entities for the three-month period following the acquisition date, excluding the $15 million transaction costsdescribed above. The pro forma financial information was not presented for DTE Energy because the effects of the acquisition were not material to theConsolidated Statements of Operations.84DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Exit ActivitiesOn December 17, 2015, DTE Energy announced the closure of the Shenango coke battery plant in response to a sharp downturn in the North Americansteel industry. The plant, which was included in the Power and Industrial Projects segment, is located in Pittsburgh, PA. As a result of the closure, DTE Energyrecorded a one-time pre-tax non-cash impairment charge of $111 million. The charge included $96 million to fully impair the long-lived assets, employeeseverance expenses related to the workforce reduction of approximately 170 employees for $3 million, and other expenses, including write downs ofinventory, of $12 million. DTE Energy's coke production has been shifted to a larger, more efficient coke battery plant in the Power and Industrial Projectssegment. Production of coke from the Shenango coke battery plant ceased in January 2016.A summary of the charges in the Consolidated Statements of Operations resulting from DTE Energy's exit activities is shown below: 2015 (In millions)Fuel, purchased power, and gas — non-utility$5Operation and maintenance10Asset (gains) losses and impairments, net96Total exit activity charges$111As of December 31, 2017, DTE Energy had approximately $1 million accrued related to these exit activities and expects future cash payments of thisremaining balance to be made in 2018. DTE Energy does not anticipate incurring significant additional expenses, including required environmentalremediation costs, in connection with the closure.NOTE 5 — GOODWILLDTE Energy has goodwill resulting from business combinations.The following is the summary of change in the carrying amount of goodwill for the years ended December 31: 2017 2016 (In millions)Balance as of January 1$2,286 $2,018Goodwill attributable to Gas Storage and Pipelines acquisition7 268Balance at December 31$2,293 $2,286Refer to Note 4 to the Consolidated Financial Statements, "Acquisitions and Exit Activities," for additional information related to the acquisition.85DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)NOTE 6 — PROPERTY, PLANT, AND EQUIPMENTThe following is a summary of Property, plant, and equipment by classification as of December 31: 2017 2016Property, plant, and equipment(In millions)DTE Electric Generation$12,166 $11,990Distribution8,637 8,134Other2,169 1,970Total DTE Electric22,97222,094DTE Gas Distribution3,523 3,382Storage533 503Transmission and other1,118 925Total DTE Gas5,174 4,810Non-utility and other3,278 3,125Total DTE Energy31,424 30,029Accumulated depreciation and amortization DTE Electric Generation(4,403) (4,364)Distribution(2,914) (2,769)Other(667) (588)Total DTE Electric(7,984) (7,721)DTE Gas Distribution(1,238) (1,198)Storage(159) (152)Transmission and other(384) (370)Total DTE Gas(1,781) (1,720)Non-utility and other(938) (858)Total DTE Energy(10,703) (10,299)Net DTE Energy Property, plant, and equipment$20,721 $19,730Net DTE Electric Property, plant, and equipment$14,988 $14,373The following is a summary of the Registrants' AFUDC and interest capitalized for the years ended December 31: DTE Energy DTE Electric 2017 2016 2017 2016 (In millions)Allowance for debt funds used during construction and interest capitalized$13 $10 $8 $8Allowance for equity funds used during construction23 21 18 18Total$36 $31 $26 $26The composite depreciation rate for DTE Electric was approximately 3.6% in 2017 and 3.5% in 2016 and 2015. The composite depreciation rate forDTE Gas was 2.7%, 2.4%, and 2.6% in 2017, 2016, and 2015, respectively. The average estimated useful life for each major class of utility Property, plant,and equipment as of December 31, 2017 follows: Estimated Useful Lives in YearsUtility Generation Distribution StorageDTE Electric 40 41 N/ADTE Gas N/A 50 5386DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The estimated useful lives for DTE Electric's Other utility assets range from 4 to 62 years, while the estimated useful lives for DTE Gas' Transmissionand other utility assets range from 5 to 70 years. The estimated useful lives for major classes of DTE Energy's non-utility assets and facilities range from 3 to83 years.The following is a summary of Depreciation and amortization expense for DTE Energy: 2017 2016 2015 (In millions)Property, plant, and equipment$865 $783 $740Regulatory assets and liabilities165 193 150Securitized regulatory assets(a)— — (38) $1,030 $976 $852_______________________________________(a)Securitization surcharges ended in December 2014 with remaining over recovery refunded to customers in 2015. Securitization bonds were paid and Securitization regulatoryassets amortization was completed in 2015. The $38 million credit represents the final adjustments to close out the Securitization program.The following is a summary of Depreciation and amortization expense for DTE Electric: 2017 2016 2015 (In millions)Property, plant, and equipment$620 $582 $545Regulatory assets and liabilities133 168 126Securitized regulatory assets(a)— — (38) $753 $750 $633_______________________________________(a)Securitization surcharges ended in December 2014 with remaining over recovery refunded to customers in 2015. Securitization bonds were paid and Securitization regulatoryassets amortization was completed in 2015. The $38 million credit represents the final adjustments to close out the Securitization program.Capitalized software costs are classified as Property, plant, and equipment and the related amortization is included in accumulated depreciation andamortization on the Registrants' Consolidated Financial Statements. The Registrants capitalize the costs associated with computer software developed orobtained for use in their businesses. The Registrants amortize capitalized software costs on a straight-line basis over the expected period of benefit, rangingfrom 3 to 15 years for DTE Energy and 4 to 15 years for DTE Electric.The following balances for capitalized software relate to DTE Energy: Year Ended December 31, 2017 2016 2015 (In millions)Amortization expense of capitalized software$101 $89 $98Gross carrying value of capitalized software$890 $715 Accumulated amortization of capitalized software$500 $435 The following balances for capitalized software relate to DTE Electric: Year Ended December 31, 2017 2016 2015 (In millions)Amortization expense of capitalized software$93 $83 $80Gross carrying value of capitalized software$774 $610 Accumulated amortization of capitalized software$423 $365 87DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Property under capital leases for the Registrants is as follows: DTE Energy DTE Electric 2017 2016 2017 2016 (In millions)Gross property under capital leases$44 $44 $18 $18Accumulated amortization of property under capital leases$38 $32 $12 $6NOTE 7 — JOINTLY-OWNED UTILITY PLANTDTE Electric has joint ownership interest in two power plants, Belle River and Ludington Hydroelectric Pumped Storage. DTE Electric’s share of directexpenses of the jointly-owned plants are included in Fuel, purchased power, and gas — utility and Operation and maintenance expenses in the DTE EnergyConsolidated Statements of Operations and Fuel and purchased power— utility and Operation and maintenance expenses in the DTE Electric ConsolidatedStatements of Operations.Ownership information of the two utility plants as of December 31, 2017 was as follows: Belle River LudingtonHydroelectricPumped StorageIn-service date1984-1985 1973Total plant capacity1,270 MW 2,080 MWOwnership interest(a) 49%Investment in Property, plant, and equipment (in millions)$1,814 $559Accumulated depreciation (in millions)$1,060 $188_______________________________________(a)DTE Electric's ownership interest is 63% in Unit No. 1, 81% of the facilities applicable to Belle River used jointly by the Belle River and St. Clair Power Plants and 75% incommon facilities used at Unit No. 2.Belle RiverThe Michigan Public Power Agency (MPPA) has an ownership interest in Belle River Unit No. 1 and other related facilities. The MPPA is entitled to19% of the total capacity and energy of the plant and is responsible for the same percentage of the plant’s operation, maintenance, and capital improvementcosts.Ludington Hydroelectric Pumped StorageConsumers Energy Company has an ownership interest in the Ludington Hydroelectric Pumped Storage Plant. Consumers Energy is entitled to 51% ofthe total capacity and energy of the plant and is responsible for the same percentage of the plant’s operation, maintenance, and capital improvement costs.NOTE 8 — ASSET RETIREMENT OBLIGATIONSDTE Electric has a legal retirement obligation for the decommissioning costs for its Fermi 1 and Fermi 2 nuclear plants, dismantlement of facilitieslocated on leased property, and various other operations. DTE Electric has conditional retirement obligations for asbestos and PCB removal at certain of itspower plants and various distribution equipment. DTE Gas has conditional retirement obligations for gas pipelines, certain service centers, compressor andgate stations. The Registrants recognize such obligations as liabilities at fair market value when they are incurred, which generally is at the time theassociated assets are placed in service. Fair value is measured using expected future cash outflows discounted at the Registrants' credit-adjusted risk-free rate.For its utility operations, the Registrants recognize in the Consolidated Statements of Operations removal costs in accordance with regulatory treatment. Anydifferences between costs recognized related to asset retirement and those reflected in rates are recognized as either a Regulatory asset or liability on theConsolidated Statements of Financial Position.88DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)If a reasonable estimate of fair value cannot be made in the period in which the retirement obligation is incurred, such as for assets with indeterminatelives, the liability is recognized when a reasonable estimate of fair value can be made. Natural gas storage system and certain other distribution assets for DTEGas and substations, manholes, and certain other distribution assets for DTE Electric have an indeterminate life. Therefore, no liability has been recorded forthese assets.A reconciliation of the asset retirement obligations for 2017 follows: DTE Energy DTE Electric (In millions)Asset retirement obligations at December 31, 2016$2,197 $2,012Accretion131 120Liabilities incurred2 1Liabilities settled(6) (2)Revision in estimated cash flows(4) (6)Asset retirement obligations at December 31, 2017$2,320 $2,125Approximately $1.9 billion of the asset retirement obligations represent nuclear decommissioning liabilities that are funded through a surcharge toelectric customers over the life of the Fermi 2 nuclear plant. The NRC has jurisdiction over the decommissioning of nuclear power plants and requiresminimum decommissioning funding based upon a formula. The MPSC and FERC regulate the recovery of costs of decommissioning nuclear power plantsand both require the use of external trust funds to finance the decommissioning of Fermi 2. Rates approved by the MPSC provide for the recovery ofdecommissioning costs of Fermi 2 and the disposal of low-level radioactive waste. DTE Electric believes the MPSC collections will be adequate to fund theestimated cost of decommissioning. The decommissioning assets, anticipated earnings thereon, and future revenues from decommissioning collections willbe used to decommission Fermi 2. DTE Electric expects the liabilities to be reduced to zero at the conclusion of the decommissioning activities. If amountsremain in the trust funds for Fermi 2 following the completion of the decommissioning activities, those amounts will be disbursed based on rulings by theMPSC and FERC.A portion of the funds recovered through the Fermi 2 decommissioning surcharge and deposited in external trust accounts is designated for the removalof non-radioactive assets and returning the site to greenfield. This removal and greenfielding is not considered a legal liability. Therefore, it is not includedin the asset retirement obligation, but is reflected as the Nuclear decommissioning liability. The decommissioning of Fermi 1 is funded by DTE Electric.Contributions to the Fermi 1 trust are discretionary. For additional discussion of Nuclear decommissioning trust fund assets, see Note 12 to the ConsolidatedFinancial Statements, "Fair Value."NOTE 9 — REGULATORY MATTERSRegulationDTE Electric and DTE Gas are subject to the regulatory jurisdiction of the MPSC, which issues orders pertaining to rates, recovery of certain costs,including the costs of generating facilities and regulatory assets, conditions of service, accounting, and operating-related matters. DTE Electric is alsoregulated by the FERC with respect to financing authorization and wholesale electric activities. Regulation results in differences in the application ofgenerally accepted accounting principles between regulated and non-regulated businesses.The Registrants are unable to predict the outcome of the unresolved regulatory matters discussed herein. Resolution of these matters is dependent uponfuture MPSC orders and appeals, which may materially impact the Consolidated Financial Statements of the Registrants.89DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Regulatory Assets and LiabilitiesDTE Electric and DTE Gas are required to record Regulatory assets and liabilities for certain transactions that would have been treated as revenue orexpense in non-regulated businesses. Continued applicability of regulatory accounting treatment requires that rates be designed to recover specific costs ofproviding regulated services and be charged to and collected from customers. Future regulatory changes or changes in the competitive environment couldresult in the discontinuance of this accounting treatment for Regulatory assets and liabilities for some or all of the Registrants' businesses and may require thewrite-off of the portion of any Regulatory asset or liability that was no longer probable of recovery through regulated rates. Management believes thatcurrently available facts support the continued use of Regulatory assets and liabilities and that all Regulatory assets and liabilities are recoverable orrefundable in the current regulatory environment.The following are balances and a brief description of the Registrants' Regulatory assets and liabilities at December 31: DTE Energy DTE Electric 2017 2016 2017 2016Assets(In millions)Recoverable pension and other postretirement costs Pension$2,000 $2,159 $1,502 $1,642Other postretirement costs278 286 211 207Asset retirement obligation569 613 569 613Removal costs asset299 193 299 193Recoverable Michigan income taxes213 231 171 187Deferred environmental costs75 78 — —Unamortized loss on reacquired debt65 59 46 39Transitional Reconciliation Mechanism46 30 46 30Customer360 deferred costs45 33 45 33Recoverable income taxes related to AFUDC equity41 59 35 53Other recoverable income taxes26 57 26 57Nuclear Performance Evaluation and Review Committee Tracker22 — 22 —Accrued PSCR/GCR revenue17 22 17 19Other82 93 66 76 3,778 3,913 3,055 3,149Less amount included in Current Assets(55) (42) (50) (36) $3,723 $3,871 $3,005 $3,113 DTE Energy DTE Electric 2017 2016 2017 2016Liabilities(In millions)Refundable federal income taxes$2,384 $— $1,946 $—Removal costs liability265 266 — —Renewable energy112 145 112 145Negative other postretirement offset80 56 67 55Negative pension offset21 36 — —Fermi 2 refueling outage15 27 15 27Refundable self-implemented rates2 27 2 27Other14 32 12 2 2,893 589 2,154 256Less amount included in Current Liabilities(18) (34) (17) (27) $2,875 $555 $2,137 $22990DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)As noted below, certain Regulatory assets for which costs have been incurred have been included (or are expected to be included, for costs incurredsubsequent to the most recently approved rate case) in DTE Electric's or DTE Gas' rate base, thereby providing a return on invested costs (except as noted).Certain other regulatory assets are not included in rate base but accrue recoverable carrying charges until surcharges to collect the assets are billed. CertainRegulatory assets do not result from cash expenditures and therefore do not represent investments included in rate base or have offsetting liabilities thatreduce rate base.ASSETS•Recoverable pension and other postretirement costs — Accounting standards for pension and other postretirement benefit costs require, amongother things, the recognition in Other comprehensive income of the actuarial gains or losses and the prior service costs that arise during the periodbut that are not immediately recognized as components of net periodic benefit costs. DTE Electric and DTE Gas record the impact of actuarial gainsor losses and prior service costs as a Regulatory asset since the traditional rate setting process allows for the recovery of pension and otherpostretirement costs. The asset will reverse as the deferred items are amortized and recognized as components of net periodic benefit costs.(a) •Asset retirement obligation — This obligation is for Fermi 2 decommissioning costs. The asset captures the timing differences between expenserecognition and current recovery in rates and will reverse over the remaining life of the related plant.(a) •Removal costs asset — Receivable for the recovery of asset removal expenditures in excess of amounts collected from customers.(a) •Recoverable Michigan income taxes — The State of Michigan enacted a corporate income tax resulting in the establishment of state deferred taxliabilities for DTE Energy's utilities. Offsetting Regulatory assets were also recorded as the impacts of the deferred tax liabilities will be reflected inrates as the related taxable temporary differences reverse and flow through current income tax expense.•Deferred environmental costs — The MPSC approved the deferral of investigation and remediation costs associated with DTE Gas' former MGPsites. Amortization of deferred costs is over a ten-year period beginning in the year after costs were incurred, with recovery (net of any insuranceproceeds) through base rate filings.(a) •Unamortized loss on reacquired debt — The unamortized discount, premium, and expense related to debt redeemed with a refinancing are deferred,amortized, and recovered over the life of the replacement issue.•Transitional Reconciliation Mechanism — The MPSC approved the recovery of the deferred net incremental revenue requirement associated withthe transition of PLD customers to DTE Electric's distribution system, effective July 1, 2014. Annual reconciliations will be filed and surcharges willbe implemented to recover approved amounts.•Customer360 deferred costs — The MPSC approved the deferral and amortization of certain costs associated with implementing Customer360,which is an integrated software application that enables improved interface among customer service, billing, meter reading, credit and collections,device management, account management, and retail access. Amortization of deferred costs over a 15-year amortization period began after thebilling system was put into operation during the second quarter of 2017.•Recoverable income taxes related to AFUDC equity — Accounting standards for income taxes require recognition of a deferred tax liability for theequity component of AFUDC. A regulatory asset is required for the future increase in taxes payable related to the equity component of AFUDC thatwill be recovered from customers through future rates over the remaining life of the related plant.•Other recoverable income taxes — Income taxes receivable from DTE Electric's customers representing the difference in property-related deferredincome taxes and amounts previously reflected in DTE Electric's rates. This asset will reverse over the remaining life of the related plant.•Nuclear Performance Evaluation and Review Committee Tracker — Deferral and amortization of certain costs associated with oversight and reviewof DTE Electric's nuclear power generation program, including safety and regulatory compliance, nuclear leadership, nuclear facilities, as well asoperation and financial performance, pursuant to the MPSC authorization. The approved five-year amortization period began January 1, 2018, withrecovery (net of carrying costs) through base rate filings.91DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)•Accrued PSCR/GCR revenue — Receivable for the temporary under-recovery of and carrying costs on fuel and purchased power costs incurred byDTE Electric which are recoverable through the PSCR mechanism and temporary under-recovery of and carrying costs on gas costs incurred by DTEGas which are recoverable through the GCR mechanism.________________________________________________(a)Regulatory assets not earning a return or accruing carrying charges.LIABILITIES•Refundable federal income taxes — DTE Electric and DTE Gas' remeasurement of deferred taxes due to the enactment of the TCJA, which reflectsthe net impact of the tax rate change on cumulative temporary differences expected to reverse after the effective date of January 1, 2018. Refer to"2017 Tax Reform" section below for additional information.•Removal costs liability — The amount collected from customers for the funding of future asset removal activities.•Renewable energy — Amounts collected in rates in excess of renewable energy expenditures.•Negative other postretirement offset — DTE Electric and DTE Gas' negative other postretirement costs are not included as a reduction to theirauthorized rates; therefore, DTE Electric and DTE Gas are accruing a Regulatory liability to eliminate the impact on earnings of the negative otherpostretirement expense accrual. The Regulatory liabilities will reverse to the extent DTE Electric and DTE Gas' other postretirement expense ispositive in future years.•Negative pension offset — DTE Gas' negative pension costs are not included as a reduction to its authorized rates; therefore, DTE Gas is accruing aRegulatory liability to eliminate the impact on earnings of the negative pension expense accrued. This Regulatory liability will reverse to the extentDTE Gas' pension expense is positive in future years.•Fermi 2 refueling outage — Accrued liability for refueling outage at Fermi 2 pursuant to MPSC authorization.•Refundable self-implemented rates — Amounts refundable to customers for base rates implemented from August 1, 2016 to December 31, 2016 inexcess of amounts authorized in the January 2017 DTE Electric rate order from the MPSC.2016 Electric Rate Case FilingDTE Electric filed a rate case with the MPSC on February 1, 2016 requesting an increase in base rates of $344 million based on a projected twelve-month period ending July 31, 2017. On August 1, 2016, DTE Electric self-implemented a base rate increase of $245 million. On January 31, 2017, the MPSCissued an order approving an annual revenue increase of $184 million for service rendered on or after February 7, 2017. The MPSC authorized a return onequity of 10.1%. On April 28, 2017, DTE Electric filed to refund its customers their pro-rata share of the revenue collected through the self-implementationsurcharge in effect from August 1, 2016 through February 7, 2017. On September 15, 2017, the MPSC approved a settlement authorizing DTE Electric torefund its customers $38.5 million of the self-implementation surcharge during the months of October through December 2017. DTE Electric has refunded themajority of the settlement liability as of December 31, 2017.2017 Electric Rate Case FilingDTE Electric filed a rate case with the MPSC on April 19, 2017 requesting an increase in base rates of $231 million based on a projected twelve-monthperiod ending October 31, 2018. The requested increase in base rates is primarily due to an increase in net plant resulting from infrastructure investments,environmental compliance, and reliability improvement projects. The rate filing also includes projected changes in sales, operation and maintenanceexpenses, and working capital. The rate filing also requests an increase in return on equity from 10.1% to 10.5%. To mitigate the impact to its customersresulting from ASU No. 2017-07, Compensation — Retirement Benefits (Topic 715), DTE Electric suggested regulatory accounting treatment for the pensionand postretirement cost components previously included as capital overhead. If the MPSC adopts DTE Electric's suggestion, the rate request will be reduced.For further discussion of ASU No. 2017-07, see Note 3 to the Consolidated Financial Statements, "New Accounting Pronouncements." On November 1, 2017,DTE Electric self-implemented a base rate increase of $125 million. A final MPSC order in this case is expected by April 2018.92DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)PSCR ProceedingsThe PSCR process is designed to allow DTE Electric to recover all of its power supply costs if incurred under reasonable and prudent policies andpractices. DTE Electric's power supply costs include fuel and related transportation costs, purchased and net interchange power costs, NOx and SO2 emissionallowances costs, urea costs, transmission costs, MISO, and other related costs. The MPSC reviews these costs, policies, and practices for prudence in annualplan and reconciliation filings.2015 PSCR Year — In March 2016, DTE Electric filed its 2015 PSCR reconciliation that included the recovery of approximately $13 million of costsrelated to the pass through of a billing adjustment associated with a previous MPSC ordered customer refund. On July 12, 2017, the MPSC issued an orderthat disallowed recovery of this 2015 PSCR billing adjustment pass through of approximately $16 million, inclusive of interest. DTE Electric recorded theimpact of the disallowance in the second quarter of 2017 and filed a claim of appeal with the Michigan Court of Appeals in August 2017.Certificate of NecessityOn July 31, 2017, DTE Electric filed a request for authority to build a 1,100 megawatt natural gas fueled combined cycle generation facility at DTEElectric's Belle River Power Plant. DTE Electric requested the MPSC to issue three CONs for the following: (1) power supplied by the proposed project isneeded, (2) the size, fuel type, and other design characteristics of the proposed project represent the most reasonable and prudent means of meeting the powerneed, and (3) the estimated capital costs of $989 million for the proposed project will be recoverable in rates from DTE Electric's customers. DTE Electricexpects an order in this proceeding from the MPSC by April 27, 2018.2017 Gas Rate Case FilingDTE Gas filed a rate case with the MPSC on November 22, 2017 requesting an increase in base rates of $85.1 million based on a projected twelve-monthperiod ending September 30, 2019. The requested increase in base rates is primarily due to an increase in net plant. The rate filing also includes projectedchanges in sales, operations, maintenance expenses, and working capital. The rate filing also requests an increase in return on equity from 10.1% to 10.5%.To mitigate the impact to its customers resulting from ASU No. 2017-07, Compensation — Retirement Benefits (Topic 715), DTE Gas suggested regulatoryaccounting treatment for the pension and postretirement cost components previously included as capital overhead. If the MPSC adopts DTE Gas' suggestion,the rate request will be reduced. For further discussion of ASU No. 2017-07, see Note 3 to the Consolidated Financial Statements, "New AccountingPronouncements." A final MPSC order in this case is expected by September 2018.2017 Tax ReformOn December 27, 2017, the MPSC issued an order to consider changes in the rates of all Michigan rate-regulated utilities to reflect the effects of thefederal TCJA. On January 19, 2018, DTE Electric and DTE Gas filed information with the MPSC regarding the potential change in revenue requirements dueto the TCJA effective January 1, 2018, and outlined our recommended method to flow the current and deferred tax benefits of those impacts to ratepayers.NOTE 10 — INCOME TAXESIncome Tax SummaryDTE Energy files a consolidated federal income tax return. DTE Electric is a part of the consolidated federal income tax return of DTE Energy. DTEEnergy and its subsidiaries file consolidated and/or separate company income tax returns in various states and localities, including a consolidated return inthe State of Michigan. DTE Electric is part of the Michigan consolidated income tax return of DTE Energy. The federal, state and local income tax expensefor DTE Electric is determined on an individual company basis with no allocation of tax expenses or benefits from other affiliates of DTE Energy. DTEElectric had income tax receivables with DTE Energy of $12 million and $9 million at December 31, 2017 and 2016, respectively.93DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The Registrants' total Income Tax Expense varied from the statutory federal income tax rate for the following reasons: 2017 2016 2015DTE Energy(In millions)Income Before Income Taxes$1,287 $1,105 $950Income tax expense at 35% statutory rate$450 $387 $333Production tax credits(189) (145) (122)Investment tax credits(4) (5) (7)Depreciation(4) (4) (4)Noncontrolling interests8 12 2AFUDC equity(18) (10) (8)Employee Stock Ownership Plan dividends(5) (5) (5)Stock based compensation(14) — —Subsidiary stock loss— (10) —State and local income taxes, net of federal benefit51 58 35Enactment of the Tax Cuts and Jobs Act(105) — —Other, net5 (7) 6Income Tax Expense$175 $271 $230Effective income tax rate13.6% 24.5% 24.2% 2017 2016 2015DTE Electric(In millions)Income Before Income Taxes$928 $975 $836Income tax expense at 35% statutory rate$325 $341 $293Production tax credits(36) (30) (31)Investment tax credits(4) (4) (5)Depreciation3 3 3AFUDC equity(5) (6) (7)Employee Stock Ownership Plan dividends(3) (3) (3)State and local income taxes, net of federal benefit48 56 43Other, net(1) (4) (1)Income Tax Expense$327 $353 $292Effective income tax rate35.2% 36.2% 34.9%Components of the Registrants' Income Tax Expense were as follows: 2017 2016 2015DTE Energy(In millions)Current income tax expense (benefit) Federal$(22) $(1) $(3)State and other income tax1 7 (4)Total current income taxes(21) 6 (7)Deferred income tax expense Federal118 184 178State and other income tax78 81 59Total deferred income taxes196 265 237$175 $271 $23094DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued) 2017 2016 2015DTE Electric(In millions)Current income tax expense (benefit) Federal$(17) $— $(26)State and other income tax(1) 11 (2)Total current income taxes(18) 11 (28)Deferred income tax expense Federal270 268 252State and other income tax75 74 68Total deferred income taxes345 342 320$327 $353 $292Deferred tax assets and liabilities are recognized for the estimated future tax effect of temporary differences between the tax basis of assets or liabilitiesand the reported amounts in the Consolidated Financial Statements. Consistent with the original establishment of these deferred tax liabilities (assets), norecognition of these non-cash transactions have been reflected in the Consolidated Statements of Cash Flows.The Registrants' deferred tax assets (liabilities) were comprised of the following at December 31: DTE Energy DTE Electric 2017 2016 2017 2016 (In millions)Property, plant, and equipment$(3,276) $(4,880) $(2,698) $(3,819)Regulatory assets and liabilities(94) (879) (31) (778)Tax credit carry-forwards947 643 193 116Pension and benefits334 643 302 518Federal net operating loss carry-forward83 190 47 42State and local net operating loss carry-forwards70 59 5 1Investments in equity method investees(82) (119) — —Other170 217 94 127 (1,848) (4,126) (2,088) (3,793)Less valuation allowance(40) (36) — —Long-term deferred income tax liabilities$(1,888) $(4,162) $(2,088) $(3,793) Deferred income tax assets$1,814 $1,463 $830 $569Deferred income tax liabilities(3,702) (5,625) (2,918) (4,362) $(1,888) $(4,162) $(2,088) $(3,793)Tax credit carry-forwards for DTE Energy include $640 million of general business credits that expire from 2034 through 2037 and $307 million ofalternative minimum tax credits that will be refundable over the next four years. The alternative minimum tax credits are production tax credits earned priorto 2006 but not utilized. The majority of these alternative minimum tax credits were generated from projects that had received a private letter ruling (PLR)from the IRS. These PLRs provide assurance as to the appropriateness of using these credits to offset taxable income, however, these tax credits are subject toIRS audit and adjustment. No valuation allowance is required for the tax credits carry-forward deferred tax asset.DTE Energy has a federal net operating loss carry-forward of $397 million as of December 31, 2017, which will expire from 2035 through 2037. Novaluation allowance is required for the federal net operating loss deferred tax asset.DTE Energy has state and local deferred tax assets related to net operating loss carry-forwards of $70 million and $59 million at December 31, 2017 and2016, respectively. The state and local net operating loss carry-forwards expire from 2018 through 2037. DTE Energy has recorded valuation allowances atDecember 31, 2017 and 2016 of approximately $40 million and $36 million, respectively, with respect to these deferred tax assets. In assessing therealizability of deferred tax assets, DTE Energy considers whether it is more likely than not that some portion or all of the deferred tax assets will not berealized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which thosetemporary differences become deductible.95DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Tax credit carry-forwards for DTE Electric include $193 million of general business credits that expire from 2035 through 2037. No valuationallowance is required for the tax credits carry-forward deferred tax asset.DTE Electric has a federal net operating loss carry-forward of $226 million as of December 31, 2017, which will expire in 2035. No valuation allowanceis required for the federal net operating loss deferred tax asset.DTE Electric has state and local deferred tax assets related to net operating loss carry-forwards of $5 million at December 31, 2017, while there was $1million state and local deferred tax asset related to net operating loss carry-forwards at December 31, 2016. No valuation allowance is required for DTEElectric's state and local net operating loss carry-forwards.The above tables exclude unamortized investment tax credits that are shown separately on the Registrants' Consolidated Statements of FinancialPosition. Investment tax credits are deferred and amortized to income over the average life of the related property.Tax Cuts and Jobs ActOn December 22, 2017, the TCJA was enacted reducing the corporate income tax rate from 35% to 21%, effective January 1, 2018. As a result of theenactment, the deferred tax assets and liabilities were remeasured to reflect the impact of the TCJA on the cumulative temporary differences expected toreverse after the effective date. The net impact of this remeasurement was a decrease in deferred tax liabilities of $2.56 billion, of which $2.45 billion wasattributable to regulated utilities and offset to regulatory assets and liabilities. This regulatory treatment is consistent with prior precedent set by the MPSCfrom previous tax law changes. The remaining $105 million was attributable to the non-utility entities and was recognized as a net reduction to income taxexpense in 2017.On December 22, 2017, the SEC issued guidance under Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts andJobs Act (SAB 118), directing taxpayers to consider the implications of the TCJA as provisional when it does not have the necessary information available,prepared, or analyzed in reasonable detail to complete its accounting for the change in the tax law. The amounts above represent our best estimate based oninterpretations of the TCJA. In accordance with SAB 118, the amounts recorded are considered provisional and will continue to be analyzed throughout2018, which may result in additional changes.Uncertain Tax PositionsA reconciliation of the beginning and ending amount of unrecognized tax benefits for the Registrants is as follows: 2017 2016 2015DTE Energy(In millions)Balance at January 1$10 $3 $9Additions for tax positions of prior years— 7 —Lapse of statute of limitations— — (6)Balance at December 31$10 $10 $3 2017 2016 2015DTE Electric(In millions)Balance at January 1$13 $4 $4Additions for tax positions of prior years— 9 —Balance at December 31$13 $13 $4DTE Energy had $8 million of unrecognized tax benefits at December 31, 2017 and 2016 that, if recognized, would favorably impact its effective taxrate. DTE Energy does not anticipate any material decrease in unrecognized tax benefits in the next twelve months.DTE Electric had $10 million of unrecognized tax benefits at December 31, 2017 and 2016 that, if recognized, would favorably impact its effective taxrate. DTE Electric does not anticipate any material decrease in unrecognized tax benefits in the next twelve months.96DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The Registrants recognize interest and penalties pertaining to income taxes in Interest expense and Other expenses, respectively, on their ConsolidatedStatements of Operations.Accrued interest pertaining to income taxes for DTE Energy totaled $3 million at December 31, 2017 and 2016. DTE Energy recognized interestexpense related to income taxes of a nominal amount in 2017, $2 million in 2016, and a nominal amount in 2015. DTE Energy had accrued no penaltiespertaining to income taxes.Accrued interest pertaining to income taxes for DTE Electric totaled $4 million at December 31, 2017 and 2016. DTE Electric recognized interestexpense related to income taxes of a nominal amount in 2017, $3 million in 2016, and a nominal amount in 2015. DTE Electric had accrued no penaltiespertaining to income taxes.In 2017, DTE Energy, including DTE Electric, settled a federal tax audit for the 2015 tax year. DTE Energy's federal income tax returns for 2016 andsubsequent years remain subject to examination by the IRS. DTE Energy's Michigan Business Tax and Michigan Corporate Income Tax returns for the year2008 and subsequent years remain subject to examination by the State of Michigan. DTE Energy also files tax returns in numerous state and localjurisdictions with varying statutes of limitation.NOTE 11 — EARNINGS PER SHAREBasic earnings per share is calculated by dividing the net income, adjusted for income allocated to participating securities, by the weighted averagenumber of common shares outstanding during the period. Diluted earnings per share reflect the dilution that would occur if any potentially dilutiveinstruments were exercised or converted into common shares. DTE Energy's participating securities are restricted shares under the stock incentive programthat contain rights to receive non-forfeitable dividends. Equity units, performance shares, and stock options do not receive cash dividends; as such, theseawards are not considered participating securities. For additional information, see Notes 14 and 21 to Consolidated Financial Statements, "Long-Term Debt"and "Stock-Based Compensation," respectively.The following is a reconciliation of DTE Energy's basic and diluted income per share calculation for the years ended December 31: 2017 2016 2015 (In millions, except per share amounts)Basic Earnings per Share Net Income Attributable to DTE Energy Company$1,134 $868 $727Less: Allocation of earnings to net restricted stock awards(2) (2) (2)Net income available to common shareholders — basic$1,132 $866 $725 Average number of common shares outstanding179 179 179Basic Earnings per Common Share$6.32 $4.84 $4.05 Diluted Earnings per Share Net Income Attributable to DTE Energy Company$1,134 $868 $727Less: Allocation of earnings to net restricted stock awards(2) (2) (2)Net income available to common shareholders — diluted$1,132 $866 $725 Average number of common shares outstanding179 179 179Diluted Earnings per Common Share(a)$6.32 $4.83 $4.05_______________________________________(a)The 2016 Equity Units excluded from the calculation of diluted EPS were approximately 6 million and 7.1 million for the years ended December 31, 2017 and 2016,respectively, as the dilutive stock price threshold was not met. For more information, see Note 14 to the Consolidated Financial Statements, "Long-Term Debt."97DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)NOTE 12 — FAIR VALUEFair 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 marketparticipants at the measurement date in a principal or most advantageous market. Fair value is a market-based measurement that is determined based oninputs, which refer broadly to assumptions that market participants use in pricing assets or liabilities. These inputs can be readily observable, marketcorroborated, or generally unobservable inputs. The Registrants make certain assumptions they believe that market participants would use in pricing assets orliabilities, including assumptions about risk, and the risks inherent in the inputs to valuation techniques. Credit risk of the Registrants and theircounterparties is incorporated in the valuation of assets and liabilities through the use of credit reserves, the impact of which was immaterial at December 31,2017 and 2016. The Registrants believe they use valuation techniques that maximize the use of observable market-based inputs and minimize the use ofunobservable 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 fairvalue hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority tounobservable 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 andliabilities 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 theasset or liability and its placement within the fair value hierarchy. The Registrants classify fair value balances based on the fair value hierarchy defined asfollows:•Level 1 — Consists of unadjusted quoted prices in active markets for identical assets or liabilities that the Registrants have the ability to access asof 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 indirectlyobservable 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 ormethodologies 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.98DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The following table presents assets and liabilities for DTE Energy measured and recorded at fair value on a recurring basis: December 31, 2017 December 31, 2016 Level 1 Level 2 Level 3 Other(a) Netting(b) NetBalance Level 1 Level 2 Level 3 Netting(b) Net Balance (In millions)Assets: Cash equivalents(c)$16 $3 $— $— $— $19 $14 $3 $— $— $17Nuclear decommissioning trusts Equity securities978 — — — — 978 887 — — — 887Fixed income securities18 477 — — — 495 11 414 — — 425Private equity securities— — — 5 — 5 — — — — —Cash equivalents14 — — — — 14 8 — — — 8Other investments(d) Equity securities118 — — — — 118 104 — — — 104Fixed income securities72 — — — — 72 58 — — — 58Cash equivalents4 — — — — 4 3 — — — 3Derivative assets: Commodity Contracts: Natural Gas148 112 97 — (256) 101 216 79 53 (306) 42Electricity— 243 42 — (241) 44 — 154 39 (157) 36Other— — 9 — — 9 — — 2 — 2Foreign currency exchange contracts— 1 — — (1) — — 6 — (5) 1Total derivative assets148 356 148 — (498) 154 216 239 94 (468) 81Total$1,368 $836 $148 $5 $(498) $1,859 $1,301 $656 $94 $(468) $1,583 Liabilities: Derivative liabilities: Commodity Contracts: Natural Gas$(141) $(111) $(126) $— $263 $(115) $(226) $(86) $(149) $321 $(140)Electricity— (245) (30) — 246 (29) — (159) (30) 163 (26)Other— — (1) — 1 — — — (3) 2 (1)Foreign currency exchange contracts— (3) — — 1 (2) — (3) — 3 —Total derivative liabilities(141) (359) (157) — 511 (146) (226) (248) (182) 489 (167)Total$(141) $(359) $(157) $— $511 $(146) $(226) $(248) $(182) $489 $(167)Net Assets (Liabilities) at end of period$1,227 $477 $(9) $5 $13 $1,713 $1,075 $408 $(88) $21 $1,416Assets: Current$157 $298 $104 $— $(437) $122 $205 $199 $60 $(400) $64Noncurrent1,211 538 44 5 (61) 1,737 1,096 457 34 (68) 1,519Total Assets$1,368 $836 $148 $5 $(498) $1,859 $1,301 $656 $94 $(468) $1,583Liabilities: Current$(137) $(313) $(108) $— $459 $(99) $(203) $(211) $(79) $424 $(69)Noncurrent(4) (46) (49) — 52 (47) (23) (37) (103) 65 (98)Total Liabilities$(141) $(359) $(157) $— $511 $(146) $(226) $(248) $(182) $489 $(167)Net Assets (Liabilities) at end of period$1,227 $477 $(9) $5 $13 $1,713 $1,075 $408 $(88) $21 $1,416_______________________________________(a)Amounts represent assets valued at NAV as a practical expedient for fair value.(b)Amounts represent the impact of master netting agreements that allow DTE Energy to net gain and loss positions and cash collateral held or placed with the same counterparties.(c)At December 31, 2017, available-for-sale securities of $19 million included $8 million and $11 million of cash equivalents included in Restricted cash and Other investments onDTE Energy's Consolidated Statements of Financial Position, respectively. At December 31, 2016, available-for-sale securities of $17 million, included $7 million and $10 millionof cash equivalents included in Restricted cash and Other investments on DTE Energy's Consolidated Statements of Financial Position, respectively.(d)Excludes cash surrender value of life insurance investments.99DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The following table presents assets for DTE Electric measured and recorded at fair value on a recurring basis: December 31, 2017 December 31, 2016 Level 1 Level 2 Level 3 Other(a) NetBalance Level 1 Level 2 Level 3 NetBalance (In millions)Assets: Cash equivalents(b)$8 $3 $— $— $11 $8 $3 $— $11Nuclear decommissioning trusts Equity securities978 — — — 978 887 — — 887Fixed income securities18 477 — — 495 11 414 — 425Private equity securities— — — 5 5 — — — —Cash equivalents14 — — — 14 8 — — 8Other investments Equity securities11 — — — 11 9 — — 9Derivative assets — FTRs— — 9 — 9 — — 2 2Total$1,029 $480 $9 $5 $1,523 $923 $417 $2 $1,342 Assets: Current$8 $3 $9 $— $20 $8 $3 $2 $13Noncurrent1,021 477 — 5 1,503 915 414 — 1,329Total Assets$1,029 $480 $9 $5 $1,523 $923 $417 $2 $1,342_______________________________________(a)Amounts represent assets valued at NAV as a practical expedient for fair value.(b)At December 31, 2017, available-for-sale securities of $11 million consisted of cash equivalents included in Other investments on DTE Electric's Consolidated Statements ofFinancial Position. At December 31, 2016, available-for-sale securities of $11 million consisted of cash equivalents included in Other investments on DTE Electric's ConsolidatedStatements of Financial Position.Cash EquivalentsCash equivalents include investments with maturities of three months or less when purchased. The cash equivalents shown in the fair value table arecomprised of short-term investments and money market funds.Nuclear Decommissioning Trusts and Other InvestmentsThe nuclear decommissioning trusts and other investments hold debt and equity securities directly and indirectly through institutional mutual fundsand commingled funds. Other assets such as private market investments are used to enhance long-term returns while improving portfolio diversification. Allpricing for investments in this category are classified as NAV assets. Exchange-traded debt and equity securities held directly are valued using quoted marketprices in actively traded markets. Non-exchange-traded fixed income securities are valued based upon quotations available from brokers or pricing services.The institutional mutual funds hold exchange-traded equity or debt securities (exchange and non-exchange traded) and are valued based on publiclyavailable NAVs. A primary price source is identified by asset type, class, or issue for each security. The trustee monitors prices supplied by pricing servicesand may use a supplemental price source or change the primary price source of a given security if the trustee determines that another price source isconsidered preferable. The Registrants have obtained an understanding of how these prices are derived, including the nature and observability of the inputsused in deriving such prices. Additionally, the Registrants selectively corroborate the fair value of securities by comparison of market-based price sources.Investment policies and procedures are determined by DTE Energy's Trust Investments Department which reports to DTE Energy's Vice President andTreasurer.100DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Derivative Assets and LiabilitiesDerivative assets and liabilities are comprised of physical and financial derivative contracts, including futures, forwards, options, and swaps that areboth exchange-traded and over-the-counter traded contracts. Various inputs are used to value derivatives depending on the type of contract and availabilityof market data. Exchange-traded derivative contracts are valued using quoted prices in active markets. The Registrants consider the following criteria indetermining 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, brokerquotes, interest rates, credit ratings, default rates, market-based seasonality, and basis differential factors. The Registrants monitor the prices that are suppliedby brokers and pricing services and may use a supplemental price source or change the primary price source of an index if prices become unavailable oranother price source is determined to be more representative of fair value. The Registrants have obtained an understanding of how these prices are derived.Additionally, the Registrants selectively corroborate the fair value of their transactions by comparison of market-based price sources. Mathematical valuationmodels are used for derivatives for which external market data is not readily observable, such as contracts which extend beyond the actively traded reportingperiod. The Registrants have established a Risk Management Committee whose responsibilities include directly or indirectly ensuring all valuation methodsare applied in accordance with predefined policies. The development and maintenance of the Registrants' forward price curves has been assigned to DTEEnergy's Risk Management Department, which is separate and distinct from the trading functions within DTE Energy.The following table presents the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis for DTE Energy forthe years ended December 31, 2017 and 2016: Year Ended December 31, 2017 Year Ended December 31, 2016 NaturalGas Electricity Other Total NaturalGas Electricity Other Total (In millions)Net Assets (Liabilities) as of January 1$(96) $9 $(1) $(88) $(5) $6 $(5) $(4)Transfers into Level 3 from Level 2— — — — — — — —Transfers from Level 3 into Level 2— — — — — — — —Total gains (losses) Included in earnings(29) 109 2 82 (159) (2) 1 (160)Recorded in Regulatory liabilities— — 25 25 — — 6 6Purchases, issuances, and settlements: Purchases— — — — — 1 — 1Settlements96 (106) (18) (28) 68 4 (3) 69Net Assets (Liabilities) as of December 31$(29) $12 $8 $(9) $(96) $9 $(1) $(88)The amount of total gains (losses) included in Net Incomeattributed to the change in unrealized gains (losses) relatedto assets and liabilities held at December 31, 2017 and2016 and reflected in Operating Revenues — Non-utilityoperations and Fuel, purchased power, and gas — non-utility in DTE Energy's Consolidated Statements ofOperations$(30) $50 $1 $21 $(166) $7 $2 $(157)101DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The following table presents the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis for DTE Electric forthe years ended December 31, 2017 and 2016: Year Ended December 31, 2017 2016 (In millions)Net Assets as of January 1$2 $3Change in fair value recorded in Regulatory liabilities25 6Purchases, issuances, and settlements: Settlements(18) (7)Net Assets as of December 31$9 $2The amount of total gains (losses) included in Regulatory liabilities attributed to the change in unrealized gains (losses) related toassets and liabilities held at December 31, 2017 and 2016 and reflected in DTE Electric's Consolidated Statements of FinancialPosition$9 $2Derivatives are transferred between levels primarily due to changes in the source data used to construct price curves as a result of changes in marketliquidity. Transfers in and transfers out are reflected as if they had occurred at the beginning of the period.There were no transfers between Levels 1 and 2 for the Registrants during the years ended December 31, 2017 and 2016, and there were no transfersfrom or into Level 3 for DTE Electric during the same periods.The following tables present the unobservable inputs related to DTE Energy's Level 3 assets and liabilities as of December 31, 2017 and 2016: December 31, 2017 CommodityContracts DerivativeAssets DerivativeLiabilities ValuationTechniques Unobservable Input Range Weighted Average (In millions) Natural Gas $97 $(126) DiscountedCash Flow Forward basis price (per MMBtu) $(1.10)— $9.75/MMBtu $(0.03)/MMBtuElectricity $42 $(30) DiscountedCash Flow Forward basis price (per MWh) $(5)— $15/MWh $2/MWh December 31, 2016 CommodityContracts DerivativeAssets DerivativeLiabilities ValuationTechniques Unobservable Input Range Weighted Average (In millions) Natural Gas $53 $(149) DiscountedCash Flow Forward basis price (per MMBtu) $(1.00)— $7.90/MMBtu $(0.05)/MMBtuElectricity $39 $(30) DiscountedCash Flow Forward basis price (per MWh) $(6)— $12/MWh $1/MWhThe unobservable inputs used in the fair value measurement of the electricity and natural gas commodity types consist of inputs that are less observabledue in part to lack of available broker quotes, supported by little, if any, market activity at the measurement date or are based on internally developedmodels. Certain basis prices (i.e., the difference in pricing between two locations) included in the valuation of natural gas and electricity contracts weredeemed unobservable.The inputs listed above would have a direct impact on the fair values of the above security types if they were adjusted. A significant increase (decrease)in the basis price would result in a higher (lower) fair value for long positions, with offsetting impacts to short positions.102DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Fair Value of Financial InstrumentsThe fair value of financial instruments included in the table below is determined by using quoted market prices when available. When quoted prices arenot available, pricing services may be used to determine the fair value with reference to observable interest rate indexes. The Registrants have obtained anunderstanding of how the fair values are derived. The Registrants also selectively corroborate the fair value of their transactions by comparison of market-based price sources. Discounted cash flow analyses based upon estimated current borrowing rates are also used to determine fair value when quoted marketprices are not available. The fair values of notes receivable, excluding capital leases, and notes payable are generally estimated using discounted cash flowtechniques that incorporate market interest rates as well as assumptions about the remaining life of the loans and credit risk. Depending on the informationavailable, other valuation techniques may be used that rely on internal assumptions and models. Valuation policies and procedures for the Registrants aredetermined by DTE Energy's Treasury Department which reports to DTE Energy's Vice President and Treasurer and DTE Energy's Controller's Departmentwhich reports to DTE Energy's Vice President, Controller, and Chief Accounting Officer.The following table presents the carrying amount and fair value of financial instruments for DTE Energy as of December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Carrying Fair Value Carrying Fair Value Amount Level 1 Level 2 Level 3 Amount Level 1 Level 2 Level 3 (In millions)Notes receivable(a), excluding capital leases$38 $— $— $38 $36 $— $— $36Dividends payable$158 $158 $— $— $148 $148 $— $—Short-term borrowings$621 $— $621 $— $499 $— $499 $—Notes payable — Other(b), excluding capital leases$12 $— $— $12 $17 $— $— $17Long-term debt(c)$12,288 $1,939 $10,571 $764 $11,270 $1,465 $9,384 $1,056_______________________________________(a)Current portion included in Current Assets — Other on DTE Energy's Consolidated Statements of Financial Position.(b)Included in Current Liabilities — Other and Other Liabilities — Other on DTE Energy's Consolidated Statements of Financial Position.(c)Includes debt due within one year, unamortized debt discounts, premiums, and issuance costs. Excludes Capital lease obligations.The following table presents the carrying amount and fair value of financial instruments for DTE Electric as of December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Carrying Fair Value Carrying Fair Value Amount Level 1 Level 2 Level 3 Amount Level 1 Level 2 Level 3 (In millions)Notes receivable(a), excluding capital leases$— $— $— $— $5 $— $— $5Short-term borrowings — affiliates$116 $— $— $116 $117 $— $— $117Short-term borrowings — other$238 $— $238 $— 62 $— $62 $—Notes payable — Other(b), excluding capital leases$2 $— $— $2 $6 $— $— $6Long-term debt(c)$6,017 $— $6,441 $171 $5,878 $— $6,026 $264_______________________________________(a)Current portion included in Current Assets — Other on DTE Electric's Consolidated Statements of Financial Position.(b)Included in Current Liabilities — Other and Other Liabilities — Other on DTE Electric's Consolidated Statements of Financial Position.(c)Includes debt due within one year, unamortized debt discounts, and issuance costs. Excludes Capital lease obligations.For further fair value information on financial and derivative instruments, see Note 13 to the Consolidated Financial Statements, "Financial and OtherDerivative Instruments."103DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Nuclear Decommissioning Trust FundsDTE Electric has a legal obligation to decommission its nuclear power plants following the expiration of its operating licenses. This obligation isreflected as an Asset retirement obligation on DTE Electric's Consolidated Statements of Financial Position. Rates approved by the MPSC provide for therecovery of decommissioning costs of Fermi 2 and the disposal of low-level radioactive waste. See Note 8 to the Consolidated Financial Statements, "AssetRetirement Obligations."The following table summarizes DTE Electric's fair value of the nuclear decommissioning trust fund assets: December 31, 2017 December 31, 2016 (In millions)Fermi 2$1,475 $1,291Fermi 13 3Low-level radioactive waste14 26$1,492 $1,320The costs of securities sold are determined on the basis of specific identification. The following table sets forth DTE Electric's gains and losses andproceeds from the sale of securities by the nuclear decommissioning trust funds: Year Ended December 31, 2017 2016 2015 (In millions)Realized gains$83 $74 $39Realized losses$(29) $(63) $(33)Proceeds from sale of securities$1,240 $1,457 $885Realized gains and losses from the sale of securities for Fermi 2 are recorded to the Regulatory asset and Nuclear decommissioning liability. Realizedgains and losses from the sale of securities for low-level radioactive waste funds are recorded to the Nuclear decommissioning liability.The following table sets forth DTE Electric's fair value and unrealized gains and losses for the nuclear decommissioning trust funds: December 31, 2017 December 31, 2016 FairValue UnrealizedGains Unrealized Losses FairValue UnrealizedGains Unrealized Losses (In millions)Equity securities$978 $320 $(32) $887 $222 $(46)Fixed income securities495 13 (3) 425 11 (5)Private equity securities5 — — — — —Cash equivalents14 — — 8 — — $1,492 $333$(35) $1,320 $233$(51)The following table summarizes the fair value of the fixed income securities held in nuclear decommissioning trust funds by contractual maturity: December 31, 2017 (In millions)Due within one year$23Due after one through five years102Due after five through ten years115Due after ten years255 $495104DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Securities held in the Nuclear decommissioning trust funds are classified as available-for-sale. As DTE Electric does not have the ability to holdimpaired 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 and Nuclear decommissioning liability. Unrealized losses on thelow-level radioactive waste funds are recognized as a Nuclear decommissioning liability.Other SecuritiesAt December 31, 2017 and 2016, the Registrants' securities were comprised primarily of money market and equity securities. There were no unrealizedlosses on available-for-sale securities which were reclassified out of Other comprehensive income (loss) and realized into Net Income for DTE Energy or DTEElectric during the years ended December 31, 2017 and 2016. Gains related to trading securities held at December 31, 2017, 2016, and 2015 were $26million, $15 million, and $1 million, respectively, for the Registrants. The trading gains or losses related to the Rabbi Trust assets, included in Otherinvestments at DTE Energy, are allocated from DTE Energy to DTE Electric.NOTE 13 — FINANCIAL AND OTHER DERIVATIVE INSTRUMENTSThe Registrants recognize all derivatives at their fair value as Derivative assets or liabilities on their respective Consolidated Statements of FinancialPosition unless they qualify for certain scope exceptions, including the normal purchases and normal sales exception. Further, derivatives that qualify and aredesignated 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 arecognized 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 (fairvalue 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 exposureis deferred in Accumulated other comprehensive income (loss) and later reclassified into earnings when the underlying transaction occurs. Gains or lossesfrom the ineffective portion of cash flow hedges are recognized in earnings immediately. For fair value hedges, changes in fair values for the derivative andhedged item are recognized in earnings each period. For derivatives that do not qualify or are not designated for hedge accounting, changes in fair value arerecognized in earnings each period.The Registrants' primary market risk exposure is associated with commodity prices, credit, and interest rates. The Registrants have risk managementpolicies to monitor and manage market risks. The Registrants use derivative instruments to manage some of the exposure. DTE Energy uses derivativeinstruments for trading purposes in its Energy Trading segment. Contracts classified as derivative instruments include electricity, natural gas, oil, certain coalforwards, futures, options, swaps, and foreign currency exchange contracts. Items not classified as derivatives include natural gas inventory, pipelinetransportation contracts, renewable energy credits, and natural gas storage assets.DTE Electric — DTE Electric generates, purchases, distributes, and sells electricity. DTE Electric uses forward energy contracts to manage changes inthe price of electricity and fuel. Substantially all of these contracts meet the normal purchases and normal sales exception and are therefore accounted forunder the accrual method. Other derivative contracts are MTM and recoverable through the PSCR mechanism when settled. This results in the deferral ofunrealized gains and losses as Regulatory assets or liabilities until realized.DTE Gas — DTE Gas purchases, stores, transports, distributes and sells natural gas, and sells storage and transportation capacity. DTE Gas has fixed-priced contracts for portions of its expected natural gas supply requirements through March 2020. Substantially all of these contracts meet the normalpurchases and normal sales exception and are therefore accounted for under the accrual method. DTE Gas may also sell forward transportation and storagecapacity contracts. Forward transportation and storage contracts are generally not derivatives and are therefore accounted for under the accrual method.Gas Storage and Pipelines — This segment is primarily engaged in services related to the gathering, transportation, and storage of natural gas.Primarily fixed-priced contracts are used in the marketing and management of transportation and storage services. Generally, these contracts are notderivatives and are therefore accounted for under the accrual method.Power and Industrial Projects — This segment manages and operates energy and pulverized coal projects, a coke battery, reduced emissions fuelprojects, landfill gas recovery, and power generation assets. Primarily fixed-price contracts are used in the marketing and management of the segment assets.These contracts are generally not derivatives and are therefore accounted for under the accrual method.105DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Energy Trading — Commodity Price Risk — Energy Trading markets and trades electricity, natural gas physical products, and energy financialinstruments, and provides energy and asset management services utilizing energy commodity derivative instruments. Forwards, futures, options, and swapagreements are used to manage exposure to the risk of market price and volume fluctuations in its operations. These derivatives are accounted for byrecording changes in fair value to earnings unless hedge accounting criteria are met.Energy Trading — Foreign Currency Exchange Risk — Energy Trading has foreign currency exchange forward contracts to economically hedge fixedCanadian dollar commitments existing under natural gas and power purchase and sale contracts and natural gas transportation contracts. Energy Tradingenters into these contracts to mitigate price volatility with respect to fluctuations of the Canadian dollar relative to the U.S. dollar. These derivatives areaccounted for by recording changes in fair value to earnings unless hedge accounting criteria are met.Corporate and Other — Interest Rate Risk — DTE Energy may use interest rate swaps, treasury locks, and other derivatives to hedge the risk associatedwith interest rate market volatility.Credit Risk — DTE Energy maintains credit policies that significantly minimize overall credit risk. These policies include an evaluation of potentialcustomers’ and counterparties’ financial condition, including the viability of underlying productive assets, credit rating, collateral requirements, or othercredit enhancements such as letters of credit or guarantees. DTE Energy generally uses standardized agreements that allow the netting of positive andnegative transactions associated with a single counterparty. DTE Energy maintains a provision for credit losses based on factors surrounding the credit risk ofits customers, historical trends, and other information. Based on DTE Energy's credit policies and its December 31, 2017 provision for credit losses, DTEEnergy’s exposure to counterparty nonperformance is not expected to have a material adverse effect on DTE Energy's Consolidated Financial Statements.Derivative ActivitiesDTE Energy manages its MTM risk on a portfolio basis based upon the delivery period of its contracts and the individual components of the riskswithin each contract. Accordingly, it records and manages the energy purchase and sale obligations under its contracts in separate components based on thecommodity (e.g. electricity or natural gas), the product (e.g. electricity for delivery during peak or off-peak hours), the delivery location (e.g. by region), therisk profile (e.g. forward or option), and the delivery period (e.g. by month and year). The following describes the categories of activities represented by theiroperating characteristics and key risks:•Asset Optimization — Represents derivative activity associated with assets owned and contracted by DTE Energy, including forward natural gaspurchases and sales, natural gas transportation, and storage capacity. Changes in the value of derivatives in this category typically economicallyoffset changes in the value of underlying non-derivative positions, which do not qualify for fair value accounting. The difference in accountingtreatment of derivatives in this category and the underlying non-derivative positions can result in significant earnings volatility.•Marketing and Origination — Represents derivative activity transacted by originating substantially hedged positions with wholesale energymarketers, producers, end-users, utilities, retail aggregators, and alternative energy suppliers.•Fundamentals Based Trading — Represents derivative activity transacted with the intent of taking a view, capturing market price changes, orputting capital at risk. This activity is speculative in nature as opposed to hedging an existing exposure.•Other — Includes derivative activity at DTE Electric related to FTRs. Changes in the value of derivative contracts at DTE Electric are recorded asDerivative assets or liabilities, with an offset to Regulatory assets or liabilities as the settlement value of these contracts will be included in thePSCR mechanism when realized.106DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The following table presents the fair value of derivative instruments as of December 31, 2017 and 2016 for DTE Energy: December 31, 2017 December 31, 2016 DerivativeAssets DerivativeLiabilities DerivativeAssets DerivativeLiabilities (In millions)Derivatives not designated as hedging instruments: Commodity Contracts: Natural Gas$357 $(378) $348 $(461)Electricity285 (275) 193 (189)Other9 (1) 2 (3)Foreign currency exchange contracts1 (3) 6 (3)Total derivatives not designated as hedging instrument$652 $(657) $549 $(656) Current$540 $(558) $447 $(493)Noncurrent112 (99) 102 (163)Total derivatives$652 $(657) $549 $(656)The following table presents the fair value of derivative instruments as of December 31, 2017 and 2016 for DTE Electric: December 31, 2017 2016 (In millions)FTRs — Other current assets$9 $2Total derivatives not designated as hedging instruments$9 $2Certain of DTE Energy's derivative positions are subject to netting arrangements which provide for offsetting of asset and liability positions as well asrelated cash collateral. Such netting arrangements generally do not have restrictions. Under such netting arrangements, DTE Energy offsets the fair value ofderivative instruments with cash collateral received or paid for those contracts executed with the same counterparty, which reduces DTE Energy's TotalAssets and Liabilities. Cash collateral is allocated between the fair value of derivative instruments and customer accounts receivable and payable with thesame counterparty on a pro-rata basis to the extent there is exposure. Any cash collateral remaining, after the exposure is netted to zero, is reflected inAccounts receivable and Accounts payable as collateral paid or received, respectively.DTE Energy also provides and receives collateral in the form of letters of credit which can be offset against net Derivative assets and liabilities as wellas Accounts receivable and payable. DTE Energy had issued letters of credit of approximately $4 million and $2 million outstanding at December 31, 2017and 2016, respectively, which could be used to offset net Derivative liabilities. Letters of credit received from third parties which could be used to offset netDerivative assets were $4 million and $2 million at December 31, 2017 and 2016, respectively. Such balances of letters of credit are excluded from the tablesbelow and are not netted with the recognized assets and liabilities in DTE Energy's Consolidated Statements of Financial Position.For contracts with certain clearing agents, the fair value of derivative instruments is netted against realized positions with the net balance reflected aseither 1) a Derivative asset or liability or 2) an Account receivable or payable. Other than certain clearing agents, Accounts receivable and Accounts payablethat are subject to netting arrangements have not been offset against the fair value of Derivative assets and liabilities.For DTE Energy, the total cash collateral posted, net of cash collateral received, was $28 million and $34 million as of December 31, 2017 and 2016,respectively. DTE Energy had $9 million of cash collateral related to unrealized positions to net against Derivative assets while Derivative liabilities areshown net of cash collateral of $22 million as of December 31, 2017. DTE Energy had $7 million of cash collateral related to unrealized positions to netagainst Derivative assets while Derivative liabilities are shown net of cash collateral of $28 million as of December 31, 2016. DTE Energy recorded cashcollateral paid of $18 million and cash collateral received of $3 million not related to unrealized derivative positions as of December 31, 2017. DTE Energyrecorded cash collateral paid of $18 million and cash collateral received of $5 million not related to unrealized derivative positions as of December 31, 2016.These amounts are included in Accounts receivable and Accounts payable and are recorded net by counterparty.107DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The following table presents the netting offsets of Derivative assets and liabilities for DTE Energy at December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Gross Amounts ofRecognized Assets(Liabilities) Gross AmountsOffset in theConsolidatedStatements ofFinancial Position Net Amounts of Assets(Liabilities) Presentedin the ConsolidatedStatements ofFinancial Position Gross Amounts ofRecognized Assets(Liabilities) Gross AmountsOffset in theConsolidatedStatements ofFinancial Position Net Amounts of Assets(Liabilities) Presentedin the ConsolidatedStatements ofFinancial Position (In millions)Derivative assets: Commodity Contracts: Natural Gas$357 $(256) $101 $348 $(306) $42Electricity285 (241) 44 193 (157) 36Other9 — 9 2 — 2Foreign currency exchange contracts1 (1) — 6 (5) 1Total derivative assets$652 $(498) $154 $549 $(468) $81 Derivative liabilities: Commodity Contracts: Natural Gas$(378) $263 $(115) $(461) $321 $(140)Electricity(275) 246 (29) (189) 163 (26)Other(1) 1 — (3) 2 (1)Foreign currency exchange contracts(3) 1 (2) (3) 3 —Total derivative liabilities$(657) $511 $(146) $(656) $489 $(167)The following table presents the netting offsets of Derivative assets and liabilities showing the reconciliation of derivative instruments to DTE Energy'sConsolidated Statements of Financial Position at December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities Current Noncurrent Current Noncurrent Current Noncurrent Current Noncurrent (In millions)Total fair value of derivatives$540 $112 $(558) $(99) $447 $102 $(493) $(163)Counterparty netting(437) (52) 437 52 (396) (65) 396 65Collateral adjustment— (9) 22 — (4) (3) 28 —Total derivatives as reported$103 $51 $(99) $(47) $47 $34 $(69) $(98)The effect of derivatives not designated as hedging instruments on DTE Energy's Consolidated Statements of Operations for years ended December 31,2017 and 2016 is as follows: Location of Gain (Loss) Recognized in Income onDerivatives Gain (Loss) Recognized in Income onDerivatives for Years Ended December 31,Derivatives not Designated as Hedging Instruments 2017 2016 (In millions)Commodity Contracts: Natural Gas Operating Revenues — Non-utility operations $(74) $(153)Natural Gas Fuel, purchased power, and gas — non-utility 97 (2)Electricity Operating Revenues — Non-utility operations 105 43Other Operating Revenues — Non-utility operations 2 5Foreign currency exchange contracts Operating Revenues — Non-utility operations (2) (2)Total $128 $(109)108DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Revenues and energy costs related to trading contracts are presented on a net basis in DTE Energy's Consolidated Statements of Operations.Commodity derivatives used for trading purposes, and financial non-trading commodity derivatives, are accounted for using the MTM method withunrealized and realized gains and losses recorded in Operating Revenues — Non-utility operations. Non-trading physical commodity sale and purchasederivative contracts are generally accounted for using the MTM method with unrealized and realized gains and losses for sales recorded in OperatingRevenues — Non-utility operations and purchases recorded in Fuel, purchased power, and gas — non-utility.The following represents the cumulative gross volume of DTE Energy's derivative contracts outstanding as of December 31, 2017:Commodity Number of UnitsNatural Gas (MMBtu) 1,822,796,301Electricity (MWh) 29,715,268Foreign Currency Exchange (Canadian dollars) 108,023,948Various subsidiaries of DTE Energy have entered into contracts which contain ratings triggers and are guaranteed by DTE Energy. These contractscontain provisions which allow the counterparties to require that DTE Energy post cash or letters of credit as collateral in the event that DTE Energy’s creditrating is downgraded below investment grade. Certain of these provisions (known as “hard triggers”) state specific circumstances under which DTE Energycan be required to post collateral upon the occurrence of a credit downgrade, while other provisions (known as “soft triggers”) are not as specific. Forcontracts with soft triggers, it is difficult to estimate the amount of collateral which may be requested by counterparties and/or which DTE Energy mayultimately be required to post. The amount of such collateral which could be requested fluctuates based on commodity prices (primarily natural gas, power,and coal) and the provisions and maturities of the underlying transactions. As of December 31, 2017, DTE Energy's contractual obligation to post collateralin the form of cash or letters of credit in the event of a downgrade to below investment grade, under both hard trigger and soft trigger provisions, wasapproximately $456 million.As of December 31, 2017, DTE Energy had approximately $535 million of derivatives in net liability positions, for which hard triggers exist. There isno collateral that has been posted against such liabilities, including cash and letters of credit. Associated derivative net asset positions for which contractualoffset exists were approximately $468 million. The net remaining amount of approximately $67 million is derived from the $456 million noted above.109DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)NOTE 14 — LONG-TERM DEBTLong-Term DebtDTE Energy's long-term debt outstanding and weighted average interest rates of debt outstanding at December 31 were: Interest Rate(a) Maturity Date 2017 2016 (In millions)Mortgage bonds, notes, and other DTE Energy Debt, Unsecured3.1% 2019 — 2033 $3,825 $3,325DTE Electric Taxable Debt, Principally Secured4.3% 2020 — 2047 5,755 5,615DTE Electric Tax-Exempt Revenue Bonds(b)4.3% 2020 — 2030 310 310DTE Gas Taxable Debt, Principally Secured4.8% 2018 — 2047 1,330 1,250Other Long-Term Debt, including Non-Recourse Debt 7 92 11,227 10,592Unamortized debt discount and premium, net (15) (10)Unamortized debt issuance costs (69) (67)Long-term debt due within one year (104) (9) $11,039 $10,506Junior Subordinated Debentures Subordinated Debentures5.5% 2062 — 2077 $1,180 $780Unamortized debt issuance costs (35) (24) $1,145 $756_______________________________________(a)Weighted average interest rate as of December 31, 2017.(b)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.DTE Electric's long-term debt outstanding and weighted average interest rates of debt outstanding at December 31 were: Interest Rate(a) Maturity Date 2017 2016 (In millions)Mortgage bonds, notes, and other Taxable Debt, Principally Secured4.3% 2020 — 2047 $5,755 $5,615Tax-Exempt Revenue Bonds(b)4.3% 2020 — 2030 310 310 6,065 5,925Unamortized debt discount (10) (10)Unamortized debt issuance costs (38) (37) $6,017 $5,878_______________________________________(a)Weighted average interest rate as of December 31, 2017.(b)Tax-Exempt Revenue Bonds are issued by a public body that loans the proceeds to DTE Electric on terms substantially mirroring the Revenue Bonds.110DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Debt IssuancesIn 2017, the following debt was issued:Company Month Type Interest Rate Maturity Date Amount (In millions)DTE Energy March Senior Notes(a) 3.80% 2027 $500DTE Electric August General and Refunding Mortgage Bonds(b) 3.75% 2047 440DTE Gas September First Mortgage Bonds(a) 3.08% 2029 40DTE Gas September First Mortgage Bonds(a) 3.75% 2047 40DTE Energy November Junior Subordinated Debentures(a) 5.25% 2077 400 $1,420_______________________________________(a)Proceeds were used for repayment of short-term borrowings and general corporate purposes.(b)Proceeds were used to repay $300 million of DTE Electric's 2008 series G 5.60% Senior Notes due on June 15, 2018, for the repayment of short-term borrowings and generalcorporate purposes.Debt RedemptionsIn 2017, the following debt was redeemed:Company Month Type Interest Rate Maturity Date Amount (In millions)DTE Electric August Senior Notes 5.60% 2018 $300DTE Energy September Secured Note(a) 7.29% 2029 77DTE Energy Various Other Long-Term Debt Various 2017 8 $385_______________________________________(a)DTE Energy's Gas Storage and Pipelines segment recognized a $16 million net loss on extinguishment of debt associated with early repayment, consisting of $20 million of earlyredemption premiums and $4 million of unamortized debt premiums. The loss is reflected in Other (Income) and Deductions — Interest Expense on the Consolidated Statementsof Operations.The following table shows the Registrants' scheduled debt maturities, excluding any unamortized discount or premium on debt: 2018 2019 2020 2021 2022 2023 andThereafter Total (In millions)DTE Energy(a)$104 $1,497 $683 $462 $616 $9,045 $12,407DTE Electric$— $— $632 $462 $316 $4,655 $6,065_______________________________________(a)Amounts include DTE Electric's scheduled debt maturities.111DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Junior Subordinated DebenturesAt December 31, 2017, DTE Energy had the following Junior Subordinated Debentures: Interest Rate Maturity Date Amount (In millions)2012 Series C5.25% 2062 $2002016 Series B5.375% 2076 3002016 Series F6.00% 2076 2802017 Series E5.25% 2077 400 $1,180DTE Energy has the right to defer interest payments on the debt securities. Should DTE Energy exercise this right, it cannot declare or pay dividendson, or redeem, purchase or acquire, any of its capital stock during the deferral period. Any deferred interest payments will bear additional interest at the rateassociated with the related debt issue. As of December 31, 2017, no interest payments have been deferred on the debt securities.Cross Default ProvisionsSubstantially all of the net utility properties of DTE Electric and DTE Gas are subject to the lien of mortgages. Should DTE Electric or DTE Gas fail totimely pay their indebtedness under these mortgages, such failure may create cross defaults in the indebtedness of DTE Energy.Acquisition FinancingEffective October 1, 2016, DTE Energy closed on the purchase of midstream natural gas assets. The acquisition was financed through the issuance ofEquity Units and Senior Notes. See Note 4 to the Consolidated Financial Statements, "Acquisitions and Exit Activities," for more information on theacquisition.In October 2016, DTE issued $675 million of Equity Units. Each Equity Unit has a stated amount of $50, initially in the form of a Corporate Unit, iscomprised of (i) a forward purchase contract to buy DTE Energy common stock (stock purchase contract) and (ii) a 1/20 undivided beneficial ownershipinterest in $1,000 principal amount of DTE Energy’s 2016 Series C 1.5% RSNs due 2024. The RSN debt instruments and the stock purchase contract equityinstruments are deemed to be separate instruments as the investor may trade the RSNs separately from the stock purchase contracts and may also settle thestock purchase contracts separately. The Corporate Units are listed on the New York Stock Exchange under the symbol DTV.The stock purchase contract obligates the holder to purchase from DTE Energy on the settlement date, October 1, 2019, for a price of $50 per stockpurchase contract, the following number of shares of DTE Energy’s common stock, subject to anti-dilution adjustments:•if the AMV of DTE Energy’s common stock, which is the average volume-weighted average price of DTE Energy’s common stock for the tradingdays during the 20 consecutive scheduled trading day period ending on the third scheduled trading day immediately preceding the stock purchasecontract settlement date, is equal to or greater than $116.31, 0.4299 shares of common stock;•if the AMV is less than $116.31 but greater than $93.05, a number of shares of common stock equal to $50 divided by the AMV, rounded to thenearest 1/10,000th of a share; and•if the AMV is less than or equal to $93.05, 0.5373 shares of common stock.The RSNs bear interest at a rate of 1.5% per year, payable quarterly, and mature on October 1, 2024. The RSNs will be remarketed in 2019. If thisremarketing is successful, the interest rate on the RSNs will be reset, and thereafter interest will be payable semi-annually at the reset rate. If there is nosuccessful remarketing, the interest rate on the RSNs will not be reset, and the holders of the RSNs will have the right to put the RSNs to DTE Energy at aprice equal to 100% of the principal amount, and the proceeds of the put right will be deemed to have been applied against the holders’ obligation under thestock purchase contracts. DTE Energy may also redeem, in whole or in part, the RSNs in the event of a failed final remarketing.112DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)On January 1, 2017, DTE Energy began paying the stock purchase contract holders quarterly contract adjustment payments at a rate of 5% per year ofthe stated amount of $50 per Equity Unit, or $2.50 per year. The present value of the future contract adjustment payments of $98 million was recorded as areduction of shareholders’ equity, offset by the stock purchase contract liability. The stock purchase contract liability is included in Current Liabilities —Other and Other Liabilities — Other on DTE Energy’s Consolidated Statements of Financial Position. Interest payments on the RSNs are recorded as interestexpense and stock purchase contract payments are charged against the liability. Accretion of the stock purchase contract liability is recorded as imputedinterest expense. The treasury stock method is used to compute diluted EPS for the stock purchase contract. Under the treasury stock method, the stockpurchase contract will only have a dilutive effect when the settlement rate is based on the market value of DTE’s common stock that is greater than $116.31(the threshold appreciation price). At December 31, 2017, the stock purchase price contract was anti-dilutive and, therefore, not included in the computationof diluted earnings per share. If payments for the stock purchase contract are deferred, DTE Energy may not make any cash distributions related to its capitalstock, including dividends, redemptions, repurchases, liquidation payments or guarantee payments. Also, during the deferral period, DTE Energy may notmake any payments on or redeem or repurchase any debt securities that are equal in right of payment with, or subordinated to, the RSNs.Until settlement of the stock purchase contracts, the shares of stock underlying each contract are not outstanding. Under the terms of the stock purchasecontracts, assuming no anti-dilution or other adjustments, DTE Energy will issue between 5.8 million and 7.3 million shares of its common stock in October2019. A total of 9 million shares of DTE Energy’s common stock have been reserved for issuance in connection with the stock purchase contracts.Selected information about DTE Energy’s 2016 Equity Units is presented below:Issuance Date Units Issued Total NetProceeds Total Long-Term Debt RSN AnnualInterest Rate Stock PurchaseContractAnnual Rate Stock PurchaseSettlement Date Stock PurchaseContractLiability(a) RSN MaturityDate(In millions, except interest rates)10/5/2016 13.5 $654 $675 1.5% 5.0% 10/1/2019 $98 10/1/2024_______________________________________(a)Payments of $32 million were made in 2017. The stock purchase contract liability was $66 million and $98 million at December 31, 2017 and 2016, respectively, exclusive ofinterest.In October 2016, DTE Energy issued $400 million of 2016 Series D 1.50% Senior Notes due 2019 and $600 million of Series E 2.85% Senior Notes due2026. The proceeds from the Senior Notes were used for the acquisition and general corporate purposes.NOTE 15 — PREFERRED AND PREFERENCE SECURITIESAs of December 31, 2017, the amount of authorized and unissued stock is as follows:Company Type of Stock Par Value Shares AuthorizedDTE Energy Preferred $— 5,000,000DTE Electric Preferred $100 6,747,484DTE Electric Preference $1 30,000,000DTE Gas Preferred $1 7,000,000DTE Gas Preference $1 4,000,000NOTE 16 — SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGSDTE Energy, DTE Electric, and DTE Gas have unsecured revolving credit agreements that can be used for general corporate borrowings, but areintended to provide liquidity support for each of the companies’ commercial paper programs. Borrowings under the revolvers are available at prevailingshort-term interest rates. Additionally, DTE Energy has other facilities to support letter of credit issuance.113DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The agreements require DTE Energy, DTE Electric, and DTE Gas to maintain a total funded debt to capitalization ratio of no more than 0.65 to 1. In theagreements, “total funded debt” means all indebtedness of each respective company and their consolidated subsidiaries, including capital lease obligations,hedge agreements, and guarantees of third parties’ debt, but excluding contingent obligations, nonrecourse and junior subordinated debt, and certain equity-linked securities and, except for calculations at the end of the second quarter, certain DTE Gas short-term debt. “Capitalization” means the sum of (a) totalfunded debt plus (b) “consolidated net worth,” which is equal to consolidated total equity of each respective company and their consolidated subsidiaries(excluding pension effects under certain FASB statements), as determined in accordance with accounting principles generally accepted in the United Statesof America. At December 31, 2017, the total funded debt to total capitalization ratios for DTE Energy, DTE Electric, and DTE Gas were 0.54 to 1, 0.50 to 1,and 0.48 to 1, respectively, and were in compliance with this financial covenant.The availability under the facilities in place at December 31, 2017 is shown in the following table: DTE Energy DTE Electric DTE Gas Total (In millions)Unsecured letter of credit facility, expiring in February 2019$150 $— $— $150Unsecured letter of credit facility, expiring in September 201970 — — 70Unsecured revolving credit facility, expiring April 20221,200 400 300 1,900 1,420 400 300 2,120Amounts outstanding at December 31, 2017 Commercial paper issuances83 238 300 621Letters of credit124 — — 124 207 238 300 745Net availability at December 31, 2017$1,213 $162 $— $1,375DTE Energy has approximately $9 million of other outstanding letters of credit which are used for various corporate purposes and are not included inthe facilities described above.The weighted average interest rate for short-term borrowings was 1.9% and 0.9% at December 31, 2017 and 2016, respectively, for DTE Energy. Theweighted average interest rate for short-term borrowings was 1.5% and 0.8% at December 31, 2017 and 2016, respectively, for DTE Electric.In conjunction with maintaining certain exchange traded risk management positions, DTE Energy may be required to post collateral with its clearingagent. DTE Energy has a demand financing agreement for up to $100 million with its clearing agent. The agreement, as amended, also allows for up to $50million of additional margin financing provided that DTE Energy posts a letter of credit for the incremental amount and allows the right of setoff with postedcollateral. At December 31, 2017, the capacity under this facility was $100 million. The amount outstanding under this agreement was $56 million and $50million at December 31, 2017 and 2016, respectively, and was fully offset by the posted collateral.Dividend RestrictionsCertain of DTE Energy’s credit facilities contain a provision requiring DTE Energy to maintain a total funded debt to capitalization ratio, as defined inthe agreements, of no more than 0.65 to 1, which has the effect of limiting the amount of dividends DTE Energy can pay in order to maintain compliance withthis provision. At December 31, 2017, the effect of this provision was to restrict the payment of approximately $1.8 billion of Retained earnings totaling $5.6billion. There are no other effective limitations with respect to DTE Energy’s ability to pay dividends.NOTE 17 — CAPITAL AND OPERATING LEASESLessee — Operating Lease — The Registrants lease various assets under operating leases, including coal railcars, office buildings, a warehouse,computers, vehicles, and other equipment. The lease arrangements expire at various dates through 2046.114DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The Registrants' future minimum lease payments under non-cancelable operating leases at December 31, 2017 were: DTE Energy DTE Electric (In millions)2018$40 $15201934 14202022 9202113 920229 62022 and thereafter48 38Total minimum lease payments$166 $91Rental expense for DTE Energy operating leases was $51 million in 2017 and $43 million in 2016 and 2015, including rental expense for DTE Electricoperating leases of $28 million in 2017, $28 million in 2016, and $32 million in 2015.Lessor — Capital Lease — DTE Energy leases a portion of its pipeline system to the Vector Pipeline through a capital lease contract that expires in2020, with renewal options extending for five years. DTE Energy owns a 40% interest in the Vector Pipeline. In addition, DTE Energy has two energyservices agreements, for which a portion of are accounted for as capital leases. These agreements were extended during the year and expire in 2019 and 2026.The components of DTE Energy's net investment in capital leases at December 31, 2017, were as follows: DTE Energy (In millions)2018$13201910202092021—2022—2023 and thereafter1Total minimum future lease receipts33Residual value of leased pipeline40Less unearned income(15)Net investment in capital lease58Less current portion(7) $51NOTE 18 — COMMITMENTS AND CONTINGENCIESEnvironmentalDTE ElectricAir — DTE Electric is subject to the EPA ozone and fine particulate transport and acid rain regulations that limit power plant emissions of SO2 andNOx. The EPA and the State of Michigan have also issued emission reduction regulations relating to ozone, fine particulate, regional haze, mercury, and otherair pollution. These rules have led to controls on fossil-fueled power plants to reduce SO2, NOx, mercury, and other emissions. Additional rulemakings mayoccur over the next few years which could require additional controls for SO2, NOx, and other hazardous air pollutants.115DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The Cross State Air Pollution Rule (CSAPR), required further reductions of SO2 and NOx emissions beginning in January 2015. On September 7, 2016,the EPA finalized an update to the CSAPR ozone season program by issuing the CSAPR Update Rule. This rule is expected to reduce summertime (May -September) NOx emissions from power plants in 22 states in the eastern half of the U.S., including DTE Electric facilities. The CSAPR Update Rule isintended to reduce air quality impacts of the interstate transport of air pollution on downwind areas' ability to meet the 2008 ozone National Ambient AirQuality Standards implementing power sector emission budgets and NOx allowance trading programs. DTE Electric expects to meet its obligations underCSAPR. DTE Electric does not expect this rule to have a material effect on its compliance program.The EPA proposed revised air quality standards for ground level ozone in November 2014 and specifically requested comments on the form and levelof the ozone standards. The standards were finalized in October 2015. The State of Michigan recommended to the EPA in October 2016 which areas of thestate are not attaining the new standard. In November 2017, the EPA completed the majority of the United States attainment/unclassifiable area designations.The Registrants expect the EPA to complete the remaining designations, including the non-attainment area designations with the 2015 ozone standards bythe first quarter in 2018. DTE Electric cannot predict the financial impact of the revised ozone standards at this time.In July 2009, DTE Energy received a NOV/FOV from the EPA alleging, among other things, that five DTE Electric power plants violated New SourcePerformance standards, Prevention of Significant Deterioration requirements, and operating permit requirements under the Clean Air Act. In June 2010, theEPA 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 receiveda supplemental NOV from the EPA relating to the July 2009 NOV/FOV. The supplemental NOV alleged additional violations relating to the New SourceReview 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 ofMichigan 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. InAugust 2011, the U.S. District Court judge granted DTE Energy's motion for summary judgment in the civil case, dismissing the case and entering judgmentin favor of DTE Energy and DTE Electric. In October 2011, the EPA filed a Notice of Appeal to the Court of Appeals for the Sixth Circuit. In March 2013, theCourt of Appeals remanded the case to the U.S. District Court for review of the procedural component of the New Source Review notification requirements. InSeptember 2013, the EPA filed a motion seeking leave to amend their complaint regarding the June 2010 NOV/FOV adding additional claims related tooutage work performed at the Trenton Channel and Belle River Power Plants as well as additional claims related to work performed at the Monroe PowerPlant. In March 2014, the U.S. District Court judge again granted DTE Energy's motion for summary judgment dismissing the civil case related to MonroeUnit 2. In April 2014, the U.S. District Court judge granted motions filed by the EPA and the Sierra Club to amend their New Source Review complaintadding additional claims for Monroe Units 1, 2, and 3, Belle River Units 1 and 2, and Trenton Channel Unit 9. In October 2014, the EPA and the U.S.Department of Justice filed a notice of appeal of the U.S. District Court judge's dismissal of the Monroe Unit 2 case. The amended New Source Review claimswere all stayed pending resolution of the appeal by the Court of Appeals for the Sixth Circuit. On January 10, 2017, a divided panel of the Court reversed thedecision of the U.S. District Court. On May 8, 2017, DTE Energy and DTE Electric filed a motion to stay the mandate pending filing of a petition for writ ofcertiorari with the U.S. Supreme Court. The Sixth Circuit granted the motion on May 16, 2017, staying the claims in the U.S. District Court until the U.S.Supreme Court disposes of the case. DTE Electric and DTE Energy filed a petition for writ of certiorari on July 31, 2017. On December 11, 2017, the U.S.Supreme Court denied certiorari. As a result of the Supreme Court electing not to review the matter, the case was sent back to the U.S. District Court for furtherproceedings. The Registrants are in discussion with the EPA regarding this matter.The Registrants believe that the plants and generating units identified by the EPA and the Sierra Club have complied with all applicable federalenvironmental regulations. Depending upon the outcome of the litigation and further discussions with the EPA regarding the two NOVs/FOVs, DTE Electriccould be required to install additional pollution control equipment at some or all of the power plants in question, implement early retirement of facilitieswhere control equipment is not economical, engage in supplemental environmental programs, and/or pay fines. The Registrants cannot predict the financialimpact or outcome of this matter, or the timing of its resolution.116DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The EPA has implemented regulatory actions under the Clean Air Act to address emissions of GHGs from the utility sector and other sectors of theeconomy. Among these actions, the EPA finalized performance standards for emissions of carbon dioxide from new and existing EGUs. The carbon standardsfor new sources are not expected to have a material impact on DTE Electric, since DTE Electric has no plans to build new coal-fired generation and anypotential new gas generation will be able to comply with the standards. In February 2016, the U.S. Supreme Court granted petitioners' requests for a stay ofthe carbon rules for existing EGUs (also known as the EPA Clean Power Plan) pending final review by the courts. The Clean Power Plan has no legal effectwhile the stay is in place. On March 28, 2017, a presidential executive order was issued on "Promoting Energy Independence and Economic Growth." Theorder instructs the EPA to review, and if appropriate, suspend, revise or rescind the Clean Power Plan rule. Additionally, federal agencies have been directedto conduct a review of all existing regulations that potentially burden the development and use of domestically produced energy resources. Following theissuance of this order, the federal government requested the U.S. Court of Appeals for the D.C. Circuit to hold all legal challenges in abeyance until thereview of these regulations is completed. On October 10, 2017, the EPA proposed to rescind the Clean Power Plan and announced its intent to issue an ANPRseeking input as to whether it should replace the rule and, if so, what form it should take. It is not possible to determine the potential impact of the EPA'srepeal and possible replacement of the Clean Power Plan on existing sources at this time.Pending or future legislation or other regulatory actions could have a material impact on DTE Electric's operations and financial position and the ratescharged to its customers. Impacts include expenditures for environmental equipment beyond what is currently planned, financing costs related to additionalcapital expenditures, the purchase of emission credits from market sources, higher costs of purchased power, and the retirement of facilities where controlequipment is not economical. DTE Electric would seek to recover these incremental costs through increased rates charged to its utility customers, asauthorized by the MPSC.To comply with air pollution requirements, DTE Electric spent approximately $2.4 billion through 2017. DTE Electric does not anticipate additionalcapital expenditures through 2024.Water — In response to an EPA regulation, DTE Electric was required to examine alternatives for reducing the environmental impacts of the coolingwater intake structures at several of its facilities. Based on the results of completed studies and expected future studies, DTE Electric may be required toinstall technologies to reduce the impacts of the water intake structures. A final rule became effective in October 2015. The final rule requires studies to becompleted and submitted as part of the National Pollutant Discharge Elimination System (NPDES) permit application process to determine the type oftechnology needed to reduce impacts to fish. DTE Electric has initiated the process of completing the required studies. Final compliance for the installationof any required technology will be determined by each state on a case by case, site specific basis. DTE Electric is currently evaluating the compliance optionsand working with the State of Michigan on evaluating whether any controls are needed. These evaluations/studies may require modifications to someexisting intake structures. It is not possible to quantify the impact of this rulemaking at this time.Contaminated and Other Sites — Prior to the construction of major interstate natural gas pipelines, gas for heating and other uses was manufacturedlocally from processes involving coal, coke, or oil. The facilities, which produced gas, have been designated as MGP sites. DTE Electric conducted remedialinvestigations at contaminated sites, including three former MGP sites. The investigations have revealed contamination related to the by-products of gasmanufacturing at each MGP site. In addition to the MGP sites, DTE Electric is also in the process of cleaning up other contaminated sites, including the areasurrounding 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. AtDecember 31, 2017 and 2016, DTE Electric had $6 million and $8 million accrued for remediation, respectively. Any change in assumptions, such asremediation techniques, nature and extent of contamination, and regulatory requirements, could impact the estimate of remedial action costs for the sites andaffect DTE Electric’s financial position and cash flows. DTE Electric believes the likelihood of a material change to the accrued amount is remote based oncurrent knowledge of the conditions at each site.Coal Combustion Residuals and Effluent Limitations Guidelines — A final EPA rule for the disposal of coal combustion residuals, commonly knownas coal ash, became effective in October 2015, and was revised in October 2016. In September 2017, the EPA indicated that it intends to reconsider certainprovisions of the CCR Rule, but the nature and timing of such a reconsideration is unknown. DTE Electric owns and operates three permitted engineered coalash storage facilities to dispose of coal ash from coal-fired power plants and operates a number of smaller impoundments at its power plants. CCR obligationsvary based on plant life, but include the installation of monitoring wells, compliance with groundwater standards, and the closure of landfills and basins atthe end of the useful life of the associated power plant or as a basin becomes inactive.117DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)In November 2015, the EPA finalized the ELG Rule for the steam electric power generating industry which may require additional controls to beinstalled between 2018 and 2023. Compliance schedules for individual facilities and individual waste streams are determined through issuance of newwastewater permits by the State of Michigan. The State of Michigan has issued a National Pollutant Discharge Elimination System permit for the Belle RiverPower Plant establishing a compliance deadline of December 31, 2021. No new permits have been issued for other facilities, consequently no compliancetimelines have been established. Under the current rule, certain ELG requirements would be required to be performed in conjunction with the CCR. Over thenext six years, to comply with the ELG requirements of the November 2015 rules and for the CRR requirements, costs associated with the building of newfacilities or installation of controls are estimated to be approximately $295 million.On April 12, 2017, the EPA granted a petition for reconsideration of the ELG Rule. The EPA also signed an administrative stay of the ELG Rule’scompliance deadlines for fly ash transport water, bottom ash transport water, and flue gas desulfurization (FGD) wastewater, among others. On June 6, 2017,the EPA published in the Federal Register a proposed rule to postpone certain applicable deadlines within the ELG rule. The final rule was published onSeptember 18, 2017, which extended the earliest compliance deadlines for the FGD wastewater and bottom ash transport until November 1, 2020 in order forthe EPA to propose and finalize a new ruling. The ELG compliance requirements, final deadlines, and compliance costs will not be known until the EPAcompletes its reconsideration of the ELG Rule.DTE GasContaminated and Other Sites — DTE Gas owns or previously owned, 14 former MGP sites. Investigations have revealed contamination related to theby-products of gas manufacturing at each site. Cleanup of six of the MGP sites is complete and the sites are closed. DTE Gas has also completed partialclosure of six additional sites. Cleanup activities associated with the remaining sites will continue over the next several years. The MPSC has established acost deferral and rate recovery mechanism for investigation and remediation costs incurred at former MGP sites. In addition to the MGP sites, DTE Gas is alsoin the process of cleaning up other contaminated sites, including gate stations, gas pipeline releases, and underground storage tank locations. As ofDecember 31, 2017 and 2016, DTE Gas had $41 million and $43 million accrued for remediation, respectively. Any change in assumptions, such asremediation techniques, nature and extent of contamination, and regulatory requirements, could impact the estimate of remedial action costs for the sites andaffect DTE Gas' financial position and cash flows. DTE Gas anticipates the cost amortization methodology approved by the MPSC, which allows foramortization of the MGP costs over a ten-year period beginning with the year subsequent to the year the MGP costs were incurred, will preventenvironmental costs from having a material adverse impact on DTE Gas' results of operations.Non-utilityDTE Energy's non-utility businesses are subject to a number of environmental laws and regulations dealing with the protection of the environment fromvarious pollutants.OtherIn 2010, the EPA finalized a new one-hour SO2 ambient air quality standard that requires states to submit plans and associated timelines for non-attainment areas that demonstrate attainment with the new SO2 standard in phases. Phase 1 addresses non-attainment areas designated based on ambientmonitoring data. Phase 2 addresses non-attainment areas with large sources of SO2 and modeled concentrations exceeding the National Ambient Air QualityStandards for SO2. Phase 3 addresses smaller sources of SO2 with modeled or monitored exceedances of the new SO2 standard.Michigan's Phase 1 non-attainment area includes DTE Energy facilities in southwest Detroit and areas of Wayne County. Modeling runs by the MDEQsuggest that emission reductions may be required by significant sources of SO2 emissions in these areas, including DTE Electric power plants and DTEEnergy's Michigan coke battery facility. As part of the state implementation plan process, DTE Energy has worked with the MDEQ to develop air permitsreflecting significant SO2 emission reductions that, in combination with other non-DTE Energy sources' emission reduction strategies, will help the stateattain the standard and sustain its attainment. Since several non-DTE Energy sources are also part of the proposed compliance plan, DTE Energy is unable todetermine the full impact of the final required emissions reductions at this time.Michigan's Phase 2 non-attainment area includes DTE Electric facilities in St. Clair County. State implementation plans (SIPs) for Phase 2 areasdescribing the control strategy and timeline for demonstrating compliance with the new SO2 standard are due to the EPA by April 2018. DTE Energy iscurrently working with the MDEQ to develop the required SIP. DTE Energy is unable to determine the full impact of the SIP strategy, as it is currently underdevelopment.118DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Synthetic Fuel GuaranteesDTE Energy discontinued the operations of its synthetic fuel production facilities throughout the United States as of December 31, 2007. DTE Energyprovided certain guarantees and indemnities in conjunction with the sales of interests in its synfuel facilities. The guarantees cover potential commercial,environmental, oil price, and tax-related obligations that will survive until 90 days after expiration of all applicable statutes of limitations. DTE Energyestimates that its maximum potential liability under these guarantees at December 31, 2017 was approximately $620 million. Payment under theseguarantees is considered remote.REF GuaranteesDTE Energy has provided certain guarantees and indemnities in conjunction with the sales of interests in or lease of its REF facilities. The guaranteescover potential commercial, environmental, and tax-related obligations that will survive until 90 days after expiration of all applicable statutes of limitations.DTE Energy estimates that its maximum potential liability under these guarantees at December 31, 2017 was approximately $386 million. Payment underthese guarantees is considered remote.NEXUS GuaranteesNEXUS entered into certain 15-year capacity lease agreements for the transportation of natural gas with DTE Gas and Texas Eastern Transmission, LP,an unrelated third party. Pursuant to the terms of those agreements, in December 2016, DTE Energy executed separate guarantee agreements with DTE Gasand Texas Eastern Transmission, LP, with maximum potential payments totaling $80 million and $10 million at December 31, 2017, respectively; eachrepresenting 50% of all payment obligations due and payable by NEXUS. Should NEXUS fail to perform under the terms of those agreements, DTE Energy isrequired to perform on its behalf. Each guarantee terminates at the earlier of (i) such time as all of the guaranteed obligations have been fully performed, or (ii)two months following the end of the primary term of the capacity lease agreements. Subsequent to the NEXUS in-service date, the amount of each guaranteedecreases annually as payments are made by NEXUS to each of the aforementioned counterparties. Payments under these guarantees are considered remote.Other GuaranteesIn certain limited circumstances, the Registrants enter into contractual guarantees. The Registrants may guarantee another entity’s obligation in theevent it fails to perform and may provide guarantees in certain indemnification agreements. Finally, the Registrants may provide indirect guarantees for theindebtedness of others. DTE Energy’s guarantees are not individually material with maximum potential payments totaling $55 million at December 31, 2017.Payment under these guarantees is considered remote.DTE Energy is periodically required to obtain performance surety bonds in support of obligations to various governmental entities and othercompanies in connection with its operations. As of December 31, 2017, DTE Energy had approximately $58 million of performance bonds outstanding. Inthe event that such bonds are called for nonperformance, DTE Energy would be obligated to reimburse the issuer of the performance bond. DTE Energy isreleased from the performance bonds as the contractual performance is completed and does not believe that a material amount of any currently outstandingperformance bonds will be called.Labor ContractsThere are several bargaining units for DTE Energy subsidiaries' approximate 5,000 represented employees, including DTE Electric's approximate 2,700represented employees. The majority of the represented employees are under contracts that expire in 2020 and 2021.119DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Purchase CommitmentsAs of December 31, 2017, the Registrants were party to numerous long-term purchase commitments relating to a variety of goods and services requiredfor their businesses. These agreements primarily consist of fuel supply commitments and renewable energy contracts for the Registrants, as well as energytrading contracts for DTE Energy. The Registrants estimate the following commitments from 2018 through 2051 for DTE Energy, and 2018 through 2033 forDTE Electric, as detailed in the following table: DTE Energy DTE Electric (In millions)2018$2,731 $93020191,045 3202020638 1922021474 1492022371 882023 and thereafter2,277 820 $7,536 $2,499Utility capital expenditures, expenditures for non-utility businesses, and contributions to equity method investees will be approximately $3.6 billionand $1.9 billion in 2018 for DTE Energy and DTE Electric, respectively. The Registrants have made certain commitments in connection with the estimated2018 annual capital expenditures and contributions to equity method investees.Other ContingenciesThe Registrants are involved in certain other legal, regulatory, administrative, and environmental proceedings before various courts, arbitration panels,and governmental agencies concerning claims arising in the ordinary course of business. These proceedings include certain contract disputes, additionalenvironmental reviews and investigations, audits, inquiries from various regulators, and pending judicial matters. The Registrants cannot predict the finaldisposition of such proceedings. The Registrants regularly review legal matters and record provisions for claims that they can estimate and are consideredprobable of loss. The resolution of these pending proceedings is not expected to have a material effect on the Registrants' Consolidated Financial Statementsin the periods they are resolved.For a discussion of contingencies related to regulatory matters and derivatives, see Notes 9 and 13 to the Consolidated Financial Statements,"Regulatory Matters" and "Financial and Other Derivative Instruments," respectively.NOTE 19 — NUCLEAR OPERATIONSProperty InsuranceDTE Electric maintains property insurance policies specifically for the Fermi 2 plant. These policies cover such items as replacement power andproperty damage. NEIL is the primary supplier of the insurance policies.DTE Electric maintains a policy for extra expenses, including replacement power costs necessitated by Fermi 2’s unavailability due to an insured event.This policy has a 12-week waiting period and provides an aggregate $490 million of coverage over a three-year period.DTE Electric has $1.5 billion in primary coverage and $1.25 billion of excess coverage for stabilization, decontamination, debris removal, repair and/orreplacement of property, and decommissioning. The combined coverage limit for total property damage is $2.75 billion. The total limit for property damagefor non-nuclear events is $2 billion and an aggregate of $328 million of coverage for extra expenses over a two-year period.On January 13, 2015, the Terrorism Risk Insurance Program Reauthorization Act of 2015 was signed, extending TRIA through December 31, 2020. Formultiple terrorism losses caused by acts of terrorism not covered under the TRIA occurring within one year after the first loss from terrorism, the NEIL policieswould make available to all insured entities up to $3.2 billion, plus any amounts recovered from reinsurance, government indemnity, or other sources tocover losses.120DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Under NEIL policies, DTE Electric could be liable for maximum assessments of up to approximately $47 million per event if the loss associated withany one event at any nuclear plant should exceed the accumulated funds available to NEIL.Public Liability InsuranceAs required by federal law, DTE Electric maintains $450 million of public liability insurance for a nuclear incident. For liabilities arising from aterrorist act outside the scope of TRIA, the policy is subject to one industry aggregate limit of $300 million. Further, under the Price-Anderson AmendmentsAct of 2005, deferred premium charges up to $127 million could be levied against each licensed nuclear facility, but not more than $19 million per year perfacility. Thus, deferred premium charges could be levied against all owners of licensed nuclear facilities in the event of a nuclear incident at any of thesefacilities.Nuclear Fuel Disposal CostsIn accordance with the Federal Nuclear Waste Policy Act of 1982, DTE Electric has a contract with the DOE for the future storage and disposal of spentnuclear fuel from Fermi 2 that required DTE Electric to pay the DOE a fee of 1 mill per kWh of Fermi 2 electricity generated and sold. The fee was acomponent of nuclear fuel expense. The 1 mill per kWh DOE fee was reduced to zero effective May 16, 2014.The DOE's Yucca Mountain Nuclear Waste Repository program for the acceptance and disposal of spent nuclear fuel was terminated in 2011. DTEElectric 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 thetimetable set forth in the Federal Nuclear Waste Policy Act of 1982. In July 2012, DTE Electric executed a settlement agreement with the federal governmentfor costs associated with the DOE's delay in acceptance of spent nuclear fuel from Fermi 2 for permanent storage. The settlement agreement, includingextensions, provides for a claims process and payment of delay-related costs experienced by DTE Electric through 2019. DTE Electric's claims are beingsettled and paid on a timely basis. The settlement proceeds reduce the cost of the dry cask storage facility assets and provide reimbursement for relatedoperating expenses.DTE Electric currently employs a spent nuclear fuel storage strategy utilizing a fuel pool and a dry cask storage facility. The spent nuclear fuel storagestrategy is expected to provide sufficient spent fuel storage capability for the life of the plant as defined by the original operating license.The federal government continues to maintain its legal obligation to accept spent nuclear fuel from Fermi 2 for permanent storage. Issues relating tolong-term waste disposal policy and to the disposition of funds contributed by DTE Electric ratepayers to the federal waste fund await future governmentalaction.121DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)NOTE 20 — RETIREMENT BENEFITS AND TRUSTEED ASSETSDTE Energy's subsidiary, DTE Energy Corporate Services, LLC (LLC), sponsors defined benefit pension plans and other postretirement plans coveringsubstantially all employees of the Registrants.The table below represents the pension and other postretirement benefit plans which employees of each Registrant participated at December 31, 2017: Registrants DTE Energy DTE ElectricQualified Pension Plans DTE Energy Company Retirement PlanX XDTE Gas Company Retirement Plan for Employees Covered by Collective Bargaining AgreementsX Shenango Inc. Pension PlanX Nonqualified Pension Plans DTE Energy Company Supplemental Retirement PlanX XDTE Energy Company Executive Supplemental Retirement Plan(a)X XDTE Energy Company Supplemental Severance Benefit PlanX Other Postretirement Benefit Plans The DTE Energy Company Comprehensive Non-Health Welfare PlanX XThe DTE Energy Company Comprehensive Retiree Group Health Care PlanX XDTE Supplemental Retiree Benefit PlanX XDTE Energy Company Retiree Reimbursement Arrangement PlanX X_____________________________________(a)Sponsored by the DTE Energy subsidiary, DTE Energy Holding Company.DTE Electric participates in various plans that provide pension and other postretirement benefits for DTE Energy and its affiliates. The plans aresponsored by the LLC. DTE Electric accounts for its participation in DTE Energy's qualified and nonqualified pension plans by applying multiemployeraccounting. DTE Electric accounts for its participation in other postretirement benefit plans by applying multiple-employer accounting. Withinmultiemployer and multiple-employer plans, participants pool plan assets for investment purposes and to reduce the cost of plan administration. The primarydifference between plan types is assets contributed in multiemployer plans can be used to provide benefits for all participating employers, while assetscontributed within a multiple-employer plan are restricted for use by the contributing employer. Plan participants of all plans are solely DTE Energy andaffiliate employees.Pension Plan BenefitsDTE Energy has qualified defined benefit retirement plans for eligible represented and non-represented employees. The plans are noncontributory andprovide traditional retirement benefits based on the employee's years of benefit service, average final compensation, and age at retirement. In addition, certainrepresented and non-represented employees are covered under cash balance provisions that determine benefits on annual employer contributions and interestcredits. DTE Energy also maintains supplemental nonqualified, noncontributory, retirement benefit plans for selected management employees. These plansprovide for benefits that supplement those provided by DTE Energy’s other retirement plans.122DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Net pension cost for DTE Energy includes the following components: 2017 2016 2015 (In millions)Service cost$92 $92 $100Interest cost214 219 210Expected return on plan assets(311) (309) (296)Amortization of: Net actuarial loss176 164 205Prior service cost1 1 —Other— — 2Net pension cost$172 $167 $221 2017 2016 (In millions)Other changes in plan assets and benefit obligations recognized in Regulatory assets and Other comprehensive income (loss) Net actuarial loss$27 $197Amortization of net actuarial loss(176) (164)Prior service cost (credit)(11) 7Amortization of prior service cost(1) (1)Total recognized in Regulatory assets and Other comprehensive income (loss)$(161) $39Total recognized in net periodic pension cost, Regulatory assets, and Other comprehensive income (loss)$11 $206Estimated amounts to be amortized from Regulatory assets and Accumulated other comprehensive income (loss) into netperiodic benefit cost during next fiscal year Net actuarial loss$178 $172Prior service cost$— $1123DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The following table reconciles the obligations, assets, and funded status of the plans as well as the amounts recognized as prepaid pension cost orpension liability in DTE Energy's Consolidated Statements of Financial Position at December 31: DTE Energy 2017 2016 (In millions)Accumulated benefit obligation, end of year$5,149 $4,753Change in projected benefit obligation Projected benefit obligation, beginning of year$5,171 $4,971Service cost92 92Interest cost214 219Plan amendments(11) 7Actuarial loss391 141Benefits paid(281) (259)Projected benefit obligation, end of year$5,576 $5,171Change in plan assets Plan assets at fair value, beginning of year$4,012 $3,832Actual return on plan assets674 253Company contributions231 186Benefits paid(281) (259)Plan assets at fair value, end of year$4,636 $4,012Funded status$(940) $(1,159)Amount recorded as: Current liabilities$(16) $(7)Noncurrent liabilities(924) (1,152) $(940) $(1,159)Amounts recognized in Accumulated other comprehensive income (loss), pre-tax Net actuarial loss$163 $163Prior service cost6 8 $169 $171Amounts recognized in Regulatory assets(a) Net actuarial loss$2,014 $2,163Prior service credit(14) (4) $2,000 $2,159______________________________________(a)See Note 9 to the Consolidated Financial Statements, "Regulatory Matters."The Registrants' policy is to fund pension costs by contributing amounts consistent with the provisions of the Pension Protection Act of 2006, andadditional amounts when it deems appropriate. The following table provides cash contributions to the qualified pension plans as of December 31: 2017 2016 2015 (In millions)DTE Energy$223 $179 $177DTE Electric185 145 145At the discretion of management, and depending upon financial market conditions, DTE Energy anticipates making up to $200 million incontributions, including $175 million of DTE Electric contributions, to the qualified pension plans in 2018.124DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)DTE Energy's subsidiaries are responsible for their share of qualified and nonqualified pension benefit costs. DTE Electric's allocated portion ofpension benefit costs included in capital expenditures and operating and maintenance expense were $136 million for the years ended December 31, 2017 and2016, and $176 million for the year ended December 31, 2015. These amounts include recognized contractual termination benefit charges, curtailment gains,and settlement charges.At December 31, 2017, the benefits related to DTE Energy's qualified and nonqualified pension plans expected to be paid in each of the next five yearsand in the aggregate for the five fiscal years thereafter are as follows: (In millions)2018$29920193012020316202131720223232023-20271,692Total$3,248Assumptions used in determining the projected benefit obligation and net pension costs of DTE Energy are: 2017 2016 2015Projected benefit obligation Discount rate3.70% 4.25% 4.50%Rate of compensation increase4.98% 4.65% 4.65%Net pension costs Discount rate4.25% 4.50% 4.12%Rate of compensation increase4.65% 4.65% 4.65%Expected long-term rate of return on plan assets7.50% 7.75% 7.75%DTE Energy employs a formal process in determining the long-term rate of return for various asset classes. Management reviews historic financialmarket risks and returns and long-term historic relationships between the asset classes of equities, fixed income, and other assets, consistent with the widelyaccepted capital market principle that asset classes with higher volatility generate a greater return over the long-term. Current market factors such as inflation,interest rates, asset class risks, and asset class returns are evaluated and considered before long-term capital market assumptions are determined. The long-termportfolio return is also established employing a consistent formal process, with due consideration of diversification, active investment management, andrebalancing. Peer data is reviewed to check for reasonableness. As a result of this process, the Registrants have long-term rate of return assumptions for thepension plans of 7.50% and other postretirement benefit plans of 7.75% for 2018. The Registrants believe these rates are a reasonable assumption for thelong-term rate of return on plan assets for 2018 given the current investment strategy.DTE Energy employs a total return investment approach whereby a mix of equities, fixed income, and other investments are used to maximize the long-term return on plan assets consistent with prudent levels of risk, with consideration given to the liquidity needs of the plan. Risk tolerance is establishedthrough consideration of future plan cash flows, plan funded status, and corporate financial considerations. The investment portfolio contains a diversifiedblend of equity, fixed income, and other investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks, growth and valuestocks, and large and small market capitalizations. Fixed income securities generally include market duration bonds of companies from diversified industries,mortgage-backed securities, non-U.S. securities, bank loans, and U.S. Treasuries. Pension assets include long duration U.S. government and diversifiedcorporate bonds intended to partially mitigate liability volatility caused by changes in discount rates. Other assets, such as private markets and hedge funds,are used to enhance long-term returns while improving portfolio diversification. Derivatives may be utilized in a risk controlled manner, to potentiallyincrease the portfolio beyond the market value of invested assets and/or reduce portfolio investment risk. Investment risk is measured and monitored on anongoing basis through annual liability measurements, periodic asset/liability studies, and quarterly investment portfolio reviews.125DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Target allocations for DTE Energy's pension plan assets as of December 31, 2017 are listed below:U.S. Large Capitalization (Cap) Equity Securities18%U.S. Small Cap and Mid Cap Equity Securities5Non-U.S. Equity Securities17Fixed Income Securities32Hedge Funds and Similar Investments20Private Equity and Other8 100%The following tables provide the fair value measurement amounts for DTE Energy's pension plan assets at December 31, 2017 and 2016(a): December 31, 2017 December 31, 2016 Level 1 Level 2 Other(b) Total Level 1 Level 2 Other(b) Total (In millions)DTE Energy asset category: Short-term Investments(c)$— $114 $— $114 $— $22 $— $22Equity Securities U.S. Large Cap(d)821 5 — 826 875 5 — 880U.S. Small Cap and Mid Cap(e)229 5 — 234 229 3 — 232Non-U.S.(f)529 13 280 822 479 18 269 766Fixed Income Securities(g)1 1,453 — 1,454 1 1,037 52 1,090Hedge Funds and SimilarInvestments(h)265 — 593 858 231 — 578 809Private Equity and Other(i)— — 328 328 — — 213 213Securities Lending(j)(53) (13) — (66) (53) (25) — (78)Securities Lending Collateral(j)53 13 — 66 53 25 — 78DTE Energy Total$1,845 $1,590 $1,201 $4,636 $1,815 $1,085 $1,112 $4,012_______________________________________(a)For a description of levels within the fair value hierarchy, see Note 12 to the Consolidated Financial Statements, "Fair Value."(b)Amounts represent assets valued at NAV as a practical expedient for fair value.(c)This category predominantly represents certain short-term fixed income securities and money market investments that are managed in separate accounts or commingled funds.Pricing for investments in this category are obtained from quoted prices in actively traded markets or valuations from brokers or pricing services.(d)This category represents portfolios of large capitalization domestic equities. Investments in this category are exchange-traded securities whereby unadjusted quote prices can beobtained.(e)This category represents portfolios of small and medium capitalization domestic equities. Investments in this category are exchange-traded securities whereby unadjusted quoteprices can be obtained.(f)This category primarily consists of portfolios of non-U.S. developed and emerging market equities. Investments in this category are exchange-traded securities wherebyunadjusted quote prices can be obtained. Exchange-traded securities held in a commingled fund are classified as NAV assets.(g)This category includes corporate bonds from diversified industries, U.S. Treasuries, and mortgage-backed securities. Pricing for investments in this category is obtained fromquoted prices in actively traded markets and quotations from broker or pricing services. Non-exchange traded securities and exchange-traded securities held in commingled fundsare classified as NAV assets.(h)This category utilizes a diversified group of strategies that attempt to capture financial market inefficiencies and includes publicly traded mutual funds, commingled funds andlimited partnership funds. Pricing for mutual funds in this category is obtained from quoted prices in actively traded markets. Commingled funds or limited partnership funds areclassified as NAV assets.(i)This category includes a diversified group of funds and strategies that primarily invests in private equity partnerships. This category also includes investments in timber andprivate mezzanine debt. All pricing for investments in this category are classified as NAV assets.(j)DTE Energy has a securities lending program with a third-party agent. The program allows the agent to lend certain securities from DTE Energy's pension trusts to selectedentities against receipt of collateral (in the form of cash) as provided for and determined in accordance with their securities lending agency agreements.126DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The pension trust holds debt and equity securities directly and indirectly through commingled funds and institutional mutual funds. Exchange-tradeddebt and equity securities held directly are valued using quoted market prices in actively traded markets. The commingled funds and institutional mutualfunds hold exchange-traded equity or debt securities and are valued based on stated NAVs. Non-exchange traded fixed income securities are valued by thetrustee 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 thetrustee challenges an assigned price and determines that another price source is considered preferable. DTE Energy has obtained an understanding of howthese prices are derived, including the nature and observability of the inputs used in deriving such prices. Additionally, DTE Energy selectively corroboratesthe fair value of securities by comparison of market-based price sources.There were no significant transfers between Level 2 and Level 1 in the years ended December 31, 2017 and 2016 for DTE Energy.Other Postretirement BenefitsThe Registrants participate in defined benefit plans sponsored by the LLC that provide certain other postretirement health care and life insurancebenefits for employees who are eligible for these benefits. The Registrants' policy is to fund certain trusts to meet its other postretirement benefit obligations.Separate qualified VEBA and other benefit trusts exist. DTE Energy did not make any contributions to these trusts during 2017 and does not anticipatemaking any contributions to the trusts in 2018.DTE Energy and DTE Electric offer a defined contribution VEBA for eligible represented and non-represented employees, in lieu of defined benefitpost-employment health care benefits. The Registrants allocate a fixed amount per year to an account in a defined contribution VEBA for each employee.These accounts are managed either by the Registrant (for non-represented and certain represented groups) or by the Utility Workers of America for Local 223employees. DTE Energy contributions to the VEBA for these accounts were $8 million in 2017, $6 million in 2016, and $5 million in 2015, including DTEElectric contributions of $3 million in 2017, 2016, and 2015.The Registrants also contribute a fixed amount to a Retiree Reimbursement Account, for certain current and future non-represented and representedretirees, spouses, and surviving spouses when the youngest of the retiree's covered household becomes eligible for Medicare Part A based on age. The amountof the annual allocation to each participant is determined by the employee's retirement date, and increases each year for each eligible participant at the lowerof the rate of medical inflation or 2%.127DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Net other postretirement credit for DTE Energy includes the following components: 2017 2016 2015 (In millions)Service cost$27 $27 $34Interest cost73 80 81Expected return on plan assets(130) (129) (131)Amortization of: Net actuarial loss13 30 43Prior service credit(14) (118) (126)Other— (1) —Net other postretirement credit$(31) $(111) $(99) 2017 2016 (In millions)Other changes in plan assets and accumulated postretirement benefit obligation recognized in Regulatory assets and Othercomprehensive income (loss) Net actuarial gain$(21) $(68)Amortization of net actuarial loss(13) (30)Prior service credit(1) —Amortization of prior service credit14 119Total recognized in Regulatory assets and Other comprehensive income (loss)$(21) $21Total recognized in net periodic benefit cost, Regulatory assets, and Other comprehensive income (loss)$(52) $(90)Estimated amounts to be amortized from Regulatory assets and Accumulated other comprehensive income (loss) into netperiodic benefit cost during next fiscal year Net actuarial loss$11 $16Prior service credit$(1) $(14)Net other postretirement credit for DTE Electric includes the following components: 2017 2016 2015 (In millions)Service cost$20 $20 $25Interest cost56 61 62Expected return on plan assets(90) (90) (90)Amortization of: Net actuarial loss8 21 31Prior service credit(10) (89) (95)Net other postretirement credit$(16) $(77) $(67) 2017 2016 (In millions)Other changes in plan assets and accumulated postretirement benefit obligation recognized in Regulatory assets Net actuarial (gain) loss$2 $(59)Amortization of net actuarial loss(8) (21)Amortization of prior service credit10 89Total recognized in Regulatory assets$4 $9Total recognized in net periodic benefit cost and Regulatory assets$(12) $(68)Estimated amounts to be amortized from Regulatory assets into net periodic benefit cost during next fiscal year Net actuarial loss$8 $10Prior service credit$— $(10)128DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The following table reconciles the obligations, assets, and funded status of the plans including amounts recorded as Accrued postretirement liability inthe Registrants' Consolidated Statements of Financial Position at December 31: DTE Energy DTE Electric 2017 2016 2017 2016 (In millions)Change in accumulated postretirement benefit obligation Accumulated postretirement benefit obligation, beginning of year$1,795 $1,846 $1,373 $1,414Service cost27 27 20 20Interest cost73 80 56 61Actuarial (gain) loss101 (75) 84 (62)Benefits paid(86) (83) (63) (60)Accumulated postretirement benefit obligation, end of year$1,910 $1,795 $1,470 $1,373Change in plan assets Plan assets at fair value, beginning of year$1,758 $1,617 $1,218 $1,131Actual return on plan assets252 122 172 87Company contributions— 20 — —Benefits paid(162) (1) (118) —Plan assets at fair value, end of year$1,848 $1,758 $1,272 $1,218Funded status$(62) $(37) $(198) $(155)Amount recorded as: Noncurrent assets$— $— $113 $114Current liabilities(1) (1) — —Noncurrent liabilities(61) (36) (311) (269) $(62) $(37) $(198) $(155)Amounts recognized in Accumulated other comprehensive income (loss), pre-tax Net actuarial (gain) loss$(1) $12 $— $— $(1) $12 $— $—Amounts recognized in Regulatory assets(a) Net actuarial loss$279 $300 $211 $217Prior service credit(1) (14) — (10) $278 $286 $211 $207______________________________________(a)See Note 9 to the Consolidated Financial Statements, "Regulatory Matters."At December 31, 2017, the benefits expected to be paid, including prescription drug benefits, in each of the next five years and in the aggregate for thefive fiscal years thereafter for the Registrants are as follows: DTE Energy DTE Electric (In millions)2018$94 $73201999 772020103 802021105 822022108 842023-2027567 437Total$1,076 $833129DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Assumptions used in determining the accumulated postretirement benefit obligation and net other postretirement benefit costs of the Registrants are: 2017 2016 2015Accumulated postretirement benefit obligation Discount rate3.70% 4.25% 4.50%Health care trend rate pre- and post- 656.75 / 7.25% 6.50 / 6.75% 6.25 / 6.75%Ultimate health care trend rate4.50% 4.50% 4.50%Year in which ultimate reached pre- and post- 652030 2028 2027Other postretirement benefit costs Discount rate4.25% 4.50% 4.10%Expected long-term rate of return on plan assets7.75% 8.00% 8.00%Health care trend rate pre- and post- 656.50 / 6.75% 6.25 / 6.75% 7.50 / 6.50%Ultimate health care trend rate4.50% 4.50% 4.50%Year in which ultimate reached pre- and post- 652028 2027 2025 / 2024A one percentage point increase in health care cost trend rates would have increased the total service cost and interest cost components of benefit costsfor DTE Energy by $5 million, including $4 million for DTE Electric, in 2017 and would have increased the accumulated benefit obligation for DTE Energyby $97 million, including $72 million for DTE Electric, at December 31, 2017. A one percentage point decrease in the health care cost trend rates would havedecreased the total service and interest cost components of benefit costs for DTE Energy by $4 million, including $3 million for DTE Electric, in 2017 andwould have decreased the accumulated benefit obligation for DTE Energy by $84 million, including $63 million for DTE Electric, at December 31, 2017.The process used in determining the long-term rate of return for assets and the investment approach for the other postretirement benefit plans is similarto those previously described for the pension plans.Target allocations for the Registrants' other postretirement benefit plan assets as of December 31, 2017 are listed below:U.S. Large Cap Equity Securities16%U.S. Small Cap and Mid Cap Equity Securities4Non-U.S. Equity Securities20Fixed Income Securities26Hedge Funds and Similar Investments20Private Equity and Other14 100%130DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The following tables provide the fair value measurement amounts for the Registrants' other postretirement benefit plan assets at December 31, 2017and 2016(a): December 31, 2017 December 31, 2016 Level 1 Level 2 Other(b) Total Level 1 Level 2 Other(b) TotalDTE Energy asset category:(In millions)Short-term Investments(c)$13 $2 $— $15 $39 $1 $— $40Equity Securities U.S. Large Cap(d)284 — — 284 284 — — 284U.S. Small Cap and Mid Cap(e)131 — — 131 156 — — 156Non-U.S.(f)288 1 77 366 262 1 61 324Fixed Income Securities(g)29 324 130 483 15 299 125 439Hedge Funds and SimilarInvestments(h)116 — 219 335 114 — 224 338Private Equity and Other(i)— — 234 234 — — 177 177Securities Lending(j)(39) (1) — (40) (28) (3) — (31)Securities Lending Collateral(j)39 1 — 40 28 3 — 31DTE Energy Total$861 $327 $660 $1,848 $870 $301 $587 $1,758 DTE Electric asset category: Short-term Investments(c)$9 $1 $— $10 $28 $1 $— $29Equity Securities U.S. Large Cap(d)195 — — 195 195 — — 195U.S. Small Cap and Mid Cap(e)91 — — 91 109 — — 109Non-U.S.(f)200 1 52 253 182 1 41 224Fixed Income Securities(g)20 218 92 330 10 203 90 303Hedge Funds and SimilarInvestments(h)80 — 150 230 80 — 154 234Private Equity and Other(i)— — 163 163 — — 124 124Securities Lending(j)(27) (1) — (28) (20) (1) — (21)Securities Lending Collateral(j)27 1 — 28 20 1 — 21DTE Electric Total$595 $220 $457 $1,272 $604 $205 $409 $1,218_______________________________________(a)For a description of levels within the fair value hierarchy see Note 12 to the Consolidated Financial Statements, "Fair Value."(b)Amounts represent assets valued at NAV as a practical expedient for fair value.(c)This category predominantly represents certain short-term fixed income securities and money market investments that are managed in separate accounts or commingled funds.Pricing for investments in this category are obtained from quoted prices in actively traded markets or valuations from brokers or pricing services.(d)This category represents portfolios of large capitalization domestic equities. Investments in this category are exchange-traded securities whereby unadjusted quote prices can beobtained.(e)This category represents portfolios of small and medium capitalization domestic equities. Investments in this category are exchange-traded securities whereby unadjusted quoteprices can be obtained.(f)This category primarily consists of portfolios of non-U.S. developed and emerging market equities. Investments in this category are exchange-traded securities wherebyunadjusted quote prices can be obtained. Exchange-traded securities held in a commingled fund are classified as NAV assets.(g)This category includes corporate bonds from diversified industries, U.S. Treasuries, bank loans, and mortgage backed securities. Pricing for investments in this category isobtained from quoted prices in actively traded markets and quotations from broker or pricing services. Non-exchange traded securities and exchange-traded securities held incommingled funds are classified as NAV assets.(h)This category utilizes a diversified group of strategies that attempt to capture financial market inefficiencies and includes publicly traded mutual funds, commingled funds andlimited partnership funds. Pricing for mutual funds in this category is obtained from quoted prices in actively traded markets. Commingled funds and limited partnership fundsare classified as NAV assets.(i)This category includes a diversified group of funds and strategies that primarily invests in private equity partnerships. This category also includes investments in timber andprivate mezzanine debt. All investments in this category are classified as NAV assets.(j)The Registrants have a securities lending program with a third-party agent. The program allows the agent to lend certain securities from the Registrants' VEBA trust to selectedentities against receipt of collateral (in the form of cash) as provided for and determined in accordance with their securities lending agency agreements.131DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The DTE Energy Company Master VEBA Trust holds debt and equity securities directly and indirectly through commingled funds and institutionalmutual funds. Exchange-traded debt and equity securities held directly are valued using quoted market prices in actively traded markets. The commingledfunds and institutional mutual funds hold exchange-traded equity or debt securities and are valued based on NAVs. Non-exchange traded fixed incomesecurities are valued by the trustee 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 pricesource of a given security if the trustee challenges an assigned price and determines that another price source is considered preferable. The Registrants haveobtained an understanding of how these prices are derived, including the nature and observability of the inputs used in deriving such prices. Additionally,the Registrants selectively corroborate the fair values of securities by comparison of market-based price sources.There were no significant transfers between Level 2 and Level 1 in the years ended December 31, 2017 and 2016 for either of the Registrants.Defined Contribution PlansThe Registrants also sponsor defined contribution retirement savings plans. Participation in one of these plans is available to substantially allrepresented and non-represented employees. For substantially all employees, the Registrants match employee contributions up to certain predefined limitsbased upon eligible compensation and the employee’s contribution rate. Additionally, for eligible represented and non-represented employees who do notparticipate in the Pension Plans, the Registrants annually contribute an amount equivalent to 4% (8% for certain DTE Gas represented employees) of anemployee's eligible pay to the employee's defined contribution retirement savings plan. For DTE Energy, the cost of these plans was $57 million, $51million, and $49 million for the years ended December 31, 2017, 2016, and 2015, respectively. For DTE Electric, the cost of these plans was $27 million forthe year ended December 31, 2017, and $23 million for the years ended December 31, 2016 and 2015.Plan ChangesIn 2015, certain executive retirement benefit plans were amended to transfer the obligation for benefits as attributed to the LLC. The related planliabilities were transferred from DTE Electric and DTE Gas to the LLC and DTE Energy. The related Rabbi Trust assets were also transferred to DTE Energyfrom DTE Electric.NOTE 21 — STOCK-BASED COMPENSATIONDTE Energy’s stock incentive program permits the grant of incentive stock options, non-qualifying stock options, stock awards, performance shares,and performance units to employees and members of its Board of Directors. As a result of a stock award, a settlement of an award of performance shares, or byexercise of a participant’s stock option, DTE Energy may deliver common stock from its authorized but unissued common stock and/or from outstandingcommon stock acquired by or on behalf of DTE Energy in the name of the participant. Key provisions of the stock incentive program are:•Authorized limit is 14,500,000 shares of common stock;•Prohibits the grant of a stock option with an exercise price that is less than the fair market value of DTE Energy’s stock on the date of thegrant; and•Imposes the following award limits to a single participant in a single calendar year, (1) options for more than 500,000 shares of common stock;(2) stock awards for more than 150,000 shares of common stock; (3) performance share awards for more than 300,000 shares of common stock(based on the maximum payout under the award); or (4) more than 1,000,000 performance units, which have a face amount of $1.00 each.DTE Energy records compensation expense at fair value over the vesting period for all awards it grants.132DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The following table summarizes the components of stock-based compensation for DTE Energy: 2017 2016 2015 (In millions)Stock-based compensation expense$58 $61 $34Tax benefit$23 $24 $13Stock-based compensation cost capitalized in Property, plant, and equipment$9 $10 $5Stock OptionsOptions are exercisable according to the terms of the individual stock option award agreements and expire ten years after the date of the grant. Theoption exercise price equals the fair value of the stock on the date that the option was granted. Stock options vest ratably over a three-year period.The following table summarizes DTE Energy's stock option activity for the year ended December 31, 2017: Number of Options Weighted AverageExercise Price Aggregate IntrinsicValue(In millions)Options outstanding and exercisable at December 31, 2016171,517 $41.59 Exercised(65,523) $39.37 Options outstanding and exercisable at December 31, 2017105,994 $42.95 $7As of December 31, 2017, the weighted average remaining contractual life for the exercisable shares is 2.05 years. As of December 31, 2017, all optionswere vested. No options vested during 2017.There were no options granted during 2017, 2016, or 2015. The intrinsic value of options exercised for the years ended December 31, 2017 and 2016was $4 million. The intrinsic value of options for the year ended December 31, 2015 was $7 million. No option expense was recognized for 2017, 2016, or2015.The number, weighted average exercise price, and weighted average remaining contractual life of DTE Energy options outstanding as of December 31,2017 were as follows:Range of Exercise Prices Number of Options Weighted Average Exercise Price Weighted AverageRemaining Contractual Life (Years)$27.00 — $38.00 6,194 $27.70 1.16$38.01 — $42.00 2,300 $41.79 0.15$42.01 — $45.00 97,500 $43.95 2.15 105,994 $42.95 2.05Restricted Stock AwardsStock awards granted under the plan are restricted for varying periods, generally for three years. Participants have all rights of a shareholder with respectto a stock award, including the right to receive dividends and vote the shares. Prior to vesting in stock awards, the participant: (i) may not sell, transfer,pledge, exchange, or otherwise dispose of shares; (ii) shall not retain custody of the share certificates; and (iii) will deliver to DTE Energy a stock power withrespect to each stock award upon request.The stock awards are recorded at cost that approximates fair value on the date of grant. The cost is amortized to compensation expense over the vestingperiod.133DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Stock award activity for DTE Energy for the years ended December 31 was: 2017 2016 2015Fair value of awards vested (in millions)$10 $9 $9Restricted common shares awarded136,825 145,240 144,300Weighted average market price of shares awarded$99.53 $87.28 $83.43Compensation cost charged against income (in millions)$11 $11 $10The following table summarizes DTE Energy’s restricted stock awards activity for the year ended December 31, 2017: RestrictedStock Weighted AverageGrant DateFair ValueBalance at December 31, 2016385,285 $80.10Grants136,825 $99.53Forfeitures(11,745) $90.24Vested and issued(144,601) $72.08Balance at December 31, 2017365,764 $90.26Performance Share AwardsPerformance shares awarded under the plan are for a specified number of shares of DTE Energy common stock that entitle the holder to receive a cashpayment, shares of DTE Energy common stock, or a combination thereof. The final value of the award is determined by the achievement of certainperformance objectives and market conditions. The awards vest at the end of a specified period, usually three years. Awards granted in 2017, 2016, and 2015were primarily deemed to be equity awards. The DTE Energy stock price and number of probable shares attributable to market conditions for such equityawards are fair valued only at the grant date. DTE Energy accounts for performance share awards by accruing compensation expense over the vesting periodbased on: (i) the number of shares expected to be paid which is based on the probable achievement of performance objectives; and (ii) the closing stock pricemarket value. The settlement of the award is based on the closing price at the settlement date.DTE Energy recorded compensation expense for performance share awards as follows: 2017 2016 2015 (In millions)Compensation expense$47 $50 $24Cash settlements(a)$15 $7 $13Stock settlements(a)$66 $38 $71_______________________________________(a)Sum of cash and stock settlements approximates the intrinsic value of the awards.During the vesting period, the recipient of a performance share award has no shareholder rights. During the period beginning on the date theperformance shares are awarded and ending on the certification date of the performance objectives, the number of performance shares awarded will beincreased, assuming full dividend reinvestment at the fair market value on the dividend payment date. The cumulative number of performance shares will beadjusted to determine the final payment based on the performance objectives achieved. Performance share awards are nontransferable and are subject to riskof forfeiture.134DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The following table summarizes DTE Energy’s performance share activity for the period ended December 31, 2017: Performance Shares Weighted AverageGrant DateFair ValueBalance at December 31, 20161,392,512 $79.97Grants494,688 $98.47Forfeitures(49,547) $87.12Payouts(513,252) $70.60Balance at December 31, 20171,324,401 $90.31Unrecognized Compensation CostsAs of December 31, 2017, DTE Energy's total unrecognized compensation cost related to non-vested stock incentive plan arrangements and theweighted average recognition period was as follows: UnrecognizedCompensationCost Weighted Averageto be Recognized (In millions) (In years)Stock awards$13 1.12Performance shares51 1.11 $64 1.11Allocated Stock-Based CompensationDTE Electric received an allocation of costs from DTE Energy associated with stock-based compensation. DTE Electric's allocation for 2017, 2016, and2015 for stock-based compensation expense was approximately $34 million, $38 million, and $21 million, respectively.NOTE 22 — SEGMENT AND RELATED INFORMATIONDTE Energy sets strategic goals, allocates resources, and evaluates performance based on the following structure:Electric segment consists principally of DTE Electric, which is engaged in the generation, purchase, distribution, and sale of electricity toapproximately 2.2 million residential, commercial, and industrial customers in southeastern Michigan.Gas segment consists principally of DTE Gas, which is engaged in the purchase, storage, transportation, distribution, and sale of natural gas toapproximately 1.3 million residential, commercial, and industrial customers throughout Michigan and the sale of storage and transportation capacity.Gas Storage and Pipelines consists of natural gas pipeline, gathering, and storage businesses.Power and Industrial Projects is comprised primarily of projects that deliver energy and utility-type products and services to industrial, commercial,and institutional customers, produce reduced emissions fuel, and sell electricity from renewable energy projects.Energy Trading consists of energy marketing and trading operations.Corporate and Other includes various holding company activities, holds certain non-utility debt, and holds energy-related investments.The federal income tax provisions or benefits of DTE Energy’s subsidiaries are determined on an individual company basis and recognize the taxbenefit of tax credits and net operating losses, if applicable. The state and local income tax provisions of the utility subsidiaries are determined on anindividual company basis and recognize the tax benefit of various tax credits and net operating losses, if applicable. The subsidiaries record federal, state,and local income taxes payable to or receivable from DTE Energy based on the federal, state, and local tax provisions of each company.135DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Inter-segment billing for goods and services exchanged between segments is based upon tariffed or market-based prices of the provider and primarilyconsists of the sale of reduced emissions fuel, power sales, and natural gas sales in the following segments: Year Ended December 31, 2017 2016 2015 (In millions)Electric$48 $43 $36Gas8 9 3Gas Storage and Pipelines42 9 8Power and Industrial Projects569 602 785Energy Trading35 39 32Corporate and Other2 2 4 $704 $704 $868Financial data of DTE Energy's business segments follows: Electric Gas Gas Storageand Pipelines Power andIndustrialProjects EnergyTrading Corporate andOther ReclassificationsandEliminations Total (In millions)2017 Operating Revenues — Utility operations$5,102 1,388 — — — — (56) $6,434Operating Revenues — Non-utility operations$— — 453 2,089 4,277 2 (648) $6,173Depreciation and amortization$753 123 76 72 5 1 — $1,030Interest expense$274 65 77 29 5 192 (106) $536Interest income$— (7) (14) (7) (2) (88) 106 $(12)Equity in earnings of equity method investees$1 2 90 9 — — — $102Income Tax Expense (Benefit)(a)$321 78 (30) (195) 49 (48) — $175Net Income (Loss) Attributable to DTE EnergyCompany$606 146 275 138 72 (103) — $1,134Investment in equity method investees$7 11 879 150 — 26 — $1,073Capital expenditures and acquisitions$1,574 463 137 56 7 13 — $2,250Goodwill$1,208 743 299 26 17 — — $2,293Total Assets$21,163 5,072 2,594 593 725 5,324 (1,704) $33,767_____________________________________(a)Includes Income Tax Expense (Benefit) of $(5) million, $(115) million, $(21) million, $2 million, and $34 million for Electric — non-utility, Gas Storage and Pipelines, Powerand Industrial Projects, Energy Trading, and Corporate and Other, respectively, related to the enactment of the TCJA.136DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued) Electric Gas Gas Storageand Pipelines Power andIndustrialProjects EnergyTrading Corporate andOther ReclassificationsandEliminations Total (In millions)2016 Operating Revenues — Utility operations$5,225 1,324 — — — — (52) $6,497Operating Revenues — Non-utility operations$— — 302 1,906 2,575 2 (652) $4,133Depreciation and amortization$750 106 45 72 3 — — $976Interest expense$264 60 39 32 6 148 (77) $472Interest income$(8) (6) (9) (8) (1) (65) 77 $(20)Equity in earnings of equity method investees$2 6 60 — — — — $68Income Tax Expense (Benefit)$353 77 71 (140) (29) (61) — $271Net Income (Loss) Attributable to DTE EnergyCompany$622 138 119 95 (45) (61) — $868Investment in equity method investees$11 10 538 166 — 27 — $752Capital expenditures and acquisitions$1,503 395 1,322 39 7 3 — $3,269Goodwill$1,208 743 292 26 17 — — $2,286Total Assets$20,417 4,729 2,417 683 660 4,648 (1,513) $32,041 Electric Gas Gas Storageand Pipelines Power andIndustrialProjects EnergyTrading Corporate andOther ReclassificationsandEliminations Total (In millions)2015 Operating Revenues — Utility operations$4,901 1,376 — — — — (39) $6,238Operating Revenues — Non-utility operations$— — 243 2,224 2,459 2 (829) $4,099Depreciation and amortization$637 104 30 78 2 1 — $852Interest expense$258 62 24 32 6 132 (64) $450Interest income$— (7) (8) (8) (2) (52) 64 $(13)Equity in earnings of equity method investees$2 6 47 8 — 3 — $66Income Tax Expense (Benefit)$290 72 70 (140) (15) (47) — $230Net Income (Loss) Attributable to DTE EnergyCompany$542 132 107 16 (22) (48) — $727Investment in equity method investees$10 9 296 183 — 16 — $514Capital expenditures and acquisitions$1,785 273 161 36 6 — — $2,261Goodwill$1,208 743 24 26 17 — — $2,018Total Assets$19,503 4,294 1,047 860 590 3,496 (1,128) $28,662NOTE 23 — RELATED PARTY TRANSACTIONSDTE Electric has agreements with affiliated companies to sell energy for resale, purchase fuel and power, provide fuel supply services, and providepower plant operation and maintenance services. DTE Electric has agreements with certain DTE Energy affiliates where DTE Electric charges the affiliates fortheir use of the shared capital assets of DTE Electric. A shared services company accumulates various corporate support services expenses and charges varioussubsidiaries of DTE Energy, including DTE Electric. DTE Electric records federal, state, and local income taxes payable to or receivable from DTE Energybased on its federal, state, and local tax provisions.137DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The following is a summary of DTE Electric's transactions with affiliated companies: 2017 2016 2015 (In millions)Revenues Energy sales$9 $10 $2Other services$(4) $(1) $6Shared capital assets$39 $33 $33Costs Fuel and purchased power$6 $10 $9Other services and interest$(2) $(1) $2Corporate expenses, net$370 $370 $334Other Dividends declared$432 $420 $395Dividends paid$432 $420 $395Capital contribution from DTE Energy$100 $120 $300DTE Electric's Accounts receivable and Accounts payable related to Affiliates are payable upon demand and are generally settled in cash within amonthly business cycle. Notes receivable and Short-term borrowings related to Affiliates are subject to a credit agreement with DTE Energy whereby short-term excess cash or cash shortfalls are remitted to or funded by DTE Energy. This credit arrangement involves the charge and payment of interest at market-based rates. Refer to DTE Electric's Consolidated Statements of Financial Position for affiliate balances at December 31, 2017 and 2016.DTE Electric's charitable contributions to the DTE Energy Foundation was $7 million for the the year ended December 31, 2017. There were nocontributions by DTE Electric to the DTE Energy Foundation for the years ended December 31, 2016 and 2015. The DTE Energy Foundation is a non-consolidated not-for-profit private foundation, the purpose of which is to contribute and assist charitable organizations.See the following notes for other related party transactions impacting DTE Electric’s Consolidated Financial Statements:Note Title20 Retirement Benefits and Trusteed Assets21 Stock-Based Compensation138DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)NOTE 24 — SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION (UNAUDITED)DTE EnergyQuarterly earnings per share may not equal full year totals, since quarterly computations are based on weighted average common shares outstandingduring each quarter. FirstQuarter SecondQuarter ThirdQuarter FourthQuarter Year (In millions, except per share amounts)2017 Operating Revenues$3,236 $2,855 $3,245 $3,271 $12,607Operating Income$569 $303 $418 $356 $1,646Net Income Attributable to DTE Energy Company(a)$400 $177 $270 $287 $1,134Basic Earnings per Share$2.23 $0.99 $1.51 $1.60 $6.32Diluted Earnings per Share$2.23 $0.99 $1.51 $1.60 $6.322016 Operating Revenues$2,566 $2,262 $2,928 $2,874 $10,630Operating Income$381 $256 $507 $301 $1,445Net Income Attributable to DTE Energy Company$247 $152 $338 $131 $868Basic Earnings per Share$1.38 $0.84 $1.88 $0.73 $4.84Diluted Earnings per Share$1.37 $0.84 $1.88 $0.73 $4.83_____________________________________(a)Includes a net Income Tax Benefit of $(105) million related to the enactment of the TCJA in the fourth quarter.DTE Electric FirstQuarter SecondQuarter ThirdQuarter FourthQuarter Year (In millions)2017 Operating Revenues$1,175 $1,218 $1,434 $1,275 $5,102Operating Income$217 $272 $395 $281 $1,165Net Income$106 $138 $219 $138 $6012016 Operating Revenues$1,153 $1,215 $1,608 $1,249 $5,225Operating Income$245 $265 $501 $193 $1,204Net Income$127 $135 $285 $75 $622139Item 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureNone.Item 9A. Controls and ProceduresSee Item 8. Financial Statements and Supplementary Data for management’s evaluation of the Registrants' disclosure controls and procedures, theirreport on internal control over financial reporting, and their conclusion on changes in internal control over financial reporting.Item 9B. Other InformationNone.Part IIIItem 10. Directors, Executive Officers, and Corporate GovernanceItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related Transactions, and Director IndependenceDTE ElectricInformation required of DTE Electric by Part III (Items 10, 11, 12, and 13) of this Form 10-K is omitted per General Instruction I (2) (c) of Form 10-K forwholly-owned subsidiaries (reduced disclosure format).Item 14. Principal Accountant Fees and ServicesDTE EnergyInformation required of DTE Energy by Part III (Items 10, 11, 12, 13, and 14) of this Form 10-K is incorporated by reference from DTE Energy’sdefinitive Proxy Statement for its 2018 Annual Meeting of Shareholders to be held May 3, 2018. The Proxy Statement will be filed with the SEC, pursuant toRegulation 14A, not later than 120 days after the end of DTE Energy's fiscal year covered by this report on Form 10-K, all of which information is herebyincorporated by reference in, and made part of, this Form 10-K.140DTE ElectricFor the years ended December 31, 2017 and 2016, professional services were performed by PricewaterhouseCoopers LLP (PwC). The following tablepresents fees for professional services rendered by PwC for the audit of DTE Electric’s annual financial statements for the years ended December 31, 2017 and2016, respectively, and fees billed for other services rendered by PwC during those periods. 2017 2016Audit fees(a)$1,428,500 $1,330,268Audit-related fees(b)12,000 12,000Total$1,440,500 $1,342,268_______________________________________(a)Represents the aggregate fees for the audits of DTE Electric’s annual financial statements included in the Annual Reports on Form 10-K and for the reviews of the financialstatements included in the Quarterly Reports on Form 10-Q.(b)Represents the aggregate fees billed for audit-related services for various attest services.The above listed fees were pre-approved by the DTE Energy Audit Committee. Prior to engagement, the DTE Energy Audit Committee pre-approvesthese services by category of service. The DTE Energy Audit Committee may delegate to the chair of the Audit Committee, or to one or more otherdesignated members of the Audit Committee, the authority to grant pre-approvals of all permitted services or classes of these permitted services to beprovided by the independent auditor up to, but not exceeding, a pre-defined limit. The decision of the designated member to pre-approve a permitted servicewill be reported to the DTE Energy Audit Committee at the next scheduled meeting.141Part IVItem 15. Exhibits and Financial Statement SchedulesA.The following documents are filed as part of this Annual Report on Form 10-K.(1)Consolidated Financial Statements. See “Item 8 — Financial Statements and Supplementary Data.”(2)Financial statement schedule. See “Item 8 — Financial Statements and Supplementary Data.”(3)Exhibits.ExhibitNumber Description DTEEnergy DTEElectric (i) Exhibits filed herewith: 12.81 Computation of Ratio of Earnings to Fixed Charges X 12.82 Computation of Ratio of Earnings to Fixed Charges X 21.13 Subsidiaries of DTE Energy X 23.34 Consent of PricewaterhouseCoopers LLP X 23.35 Consent of PricewaterhouseCoopers LLP X 31.141 Chief Executive Officer Section 302 Form 10-K Certification of Periodic Report X 31.142 Chief Financial Officer Section 302 Form 10-K Certification of Periodic Report X 31.143 Chief Executive Officer Section 302 Form 10-K Certification of Periodic Report X 31.144 Chief Financial Officer Section 302 Form 10-K Certification of Periodic Report X 101.INS XBRL Instance Document X X 101.SCH XBRL Taxonomy Extension Schema X X 101.CAL XBRL Taxonomy Extension Calculation Linkbase X X 101.DEF XBRL Taxonomy Extension Definition Database X X 101.LAB XBRL Taxonomy Extension Label Linkbase X X 101.PRE XBRL Taxonomy Extension Presentation Linkbase X X (ii) Exhibits furnished herewith: 32.141 Chief Executive Officer Section 906 Form 10-K Certification of Periodic Report X 32.142 Chief Financial Officer Section 906 Form 10-K Certification of Periodic Report X 32.143 Chief Executive Officer Section 906 Form 10-K Certification of Periodic Report X 32.144 Chief Financial Officer Section 906 Form 10-K Certification of Periodic Report X (iii) Exhibits incorporated by reference: Certain exhibits listed below refer to "The Detroit Edison Company" and "Michigan Consolidated Gas Company" and were effective prior to the change toDTE Electric Company and DTE Gas Company, respectively, effective January 1, 2013. 3(a) Amended Bylaws of DTE Energy Company, as amended through September 17, 2015 (Exhibit 3.1 to DTEEnergy’s Form 8-K dated September 17, 2015). X 3(b) Amended and Restated Articles of Incorporation of DTE Energy Company, dated December 13, 1995 and asamended from time to time (Exhibit 3-1 to DTE Energy’s Form 8-K dated May 6, 2010). X 142ExhibitNumber Description DTEEnergy DTEElectric 3(c) Articles of Incorporation of DTE Electric Company, as amended effective January 1, 2013. (Exhibit 3-1 to DTEElectric's Form 8-K filed January 2, 2013). X 3(d) Bylaws of The Detroit Edison Company, as amended through September 22, 1999. (Exhibit 3-14 to DTEElectric's Form 10-Q for the quarter ended September 30, 1999). X 4(a) Amended and Restated Indenture, dated as of April 9, 2001, between DTE Energy Company and The Bank ofNew York, as trustee (Exhibit 4.1 to Registration Statement on Form S-3 (File No. 333-58834)) and indenturessupplemental thereto, dated as of dates indicated below, and filed as exhibits to the filings set forth below: X Supplemental Indenture, dated as of April 1, 2003, between DTE Energy Company and The Bank of New York,as trustee (Exhibit 4(o) to DTE Energy’s Form 10-Q for the quarter ended March 31, 2003). (2003 Series A 63/8% Senior Notes due 2033) X Supplemental Indenture, dated as of September 1, 2012, between DTE Energy Company and The Bank of NewYork Mellon Trust Company, N.A., as successor trustee (Exhibit 4-275 to DTE Energy’s Form 8-K datedOctober 1, 2012). (2012 Series C 5.25% Junior Subordinated Debentures due 2062) X Supplemental Indenture, dated as of December 1, 2013, between DTE Energy and The Bank of New YorkMellon Trust Company, N.A., as successor trustee (Exhibit 4-282 to DTE Energy’s Form 10-K for the yearended December 31, 2013). (2013 Series F Senior Notes due 2023) X Supplemental Indenture, dated as of May 1, 2014, between DTE Energy Company and The Bank of New YorkMellon Trust Company, N.A., as successor trustee (Exhibit 4-284 to DTE Energy’s Form 10-Q for the quarterended June 30, 2014). (2014 Series C due 2024) X Supplemental Indenture, dated as of November 1, 2014, between DTE Energy Company and The Bank of NewYork Mellon Trust Company, N.A., as successor trustee (Exhibit 4-287 to DTE Energy’s Form 10-K for the yearended December 31, 2014). (2014 Series G due 2019) X Supplemental Indenture, dated as of May 15, 2016, between DTE Energy Company and The Bank of NewYork Mellon Trust Company, N.A., as successor trustee (Exhibit 4.1 to DTE Energy’s Form 8-K dated May 27,2016). (2016 Series B) X Supplemental Indenture, dated as of June 1, 2016, between DTE Energy Company and The Bank of New YorkMellon Trust Company, N.A., as successor trustee (Exhibit 4-294 to DTE Energy’s Form 10-Q for the quarterended June 30, 2016). (2015 Series BR) X Supplemental Indenture, dated as of September 1, 2016, to the Amended and Restated Indenture, dated as ofApril 9, 2001, by and between DTE Energy Company and The Bank of New York Mellon Trust Company,N.A., as successor trustee (Exhibit 4.1 to DTE Energy's Form 8-K dated October 5, 2016). (2016 Series C) X Supplemental Indenture, dated as of October 1, 2016, to the Amended and Restated Indenture, dated as of April9, 2001, by and between DTE Energy Company and The Bank of New York Mellon Trust Company, N.A., assuccessor trustee (Exhibit 4.2 to DTE Energy’s Form 8-K dated October 5, 2016). (2016 Series D and E) X Supplemental Indenture, dated as of December 1, 2016, to the Amended and Restated Indenture, dated as ofApril 9, 2001, by and between DTE Energy Company and The Bank of New York Mellon Trust Company,N.A., as successor trustee (Exhibit 4.1 to DTE Energy’s Form 8-K dated December 7, 2016). (2016 Series F) X Supplemental Indenture, dated as of March 1, 2017 to the Amended and Restated Indenture, dated as of April9, 2001, by and between DTE Energy Company and The Bank of New York Mellon Trust Company, N.A., assuccessor trustee (Exhibit 4-298 to DTE Energy's Form 10-Q for the quarter ended March 31, 2017). (2017Series A) X 143ExhibitNumber Description DTEEnergy DTEElectric Supplemental Indenture, dated as of November 1, 2017, to the Amended and Restated Indenture, dated as ofApril 9, 2001, by and between DTE Energy Company and The Bank of New York Mellon Trust Company,N.A., as successor trustee (Exhibit 4.1 to DTE Energy's Form 8-K dated November 17, 2017). (2017 Series E) X 4(b) Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bankof New York Mellon Trust Company, N.A., as successor trustee (Exhibit B-1 to Detroit Edison's RegistrationStatement on Form A-2 (File No. 2-1630)) and indentures supplemental thereto, dated as of dates indicatedbelow, and filed as exhibits to the filings set forth below: (P) X X Supplemental Indenture, dated as of December 1, 1940, to the Mortgage and Deed of Trust, dated as ofOctober 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company,N.A., as successor trustee (Exhibit B-14 to Detroit Edison's Registration Statement on Form A-2 (File No. 2-4609)). (amendment) (P) X X Supplemental Indenture, dated as of September 1, 1947, to the Mortgage and Deed of Trust, dated as ofOctober 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company,N.A., as successor trustee (Exhibit B-20 to Detroit Edison's Registration Statement on Form S-1 (File No. 2-7136)). (amendment) (P) X X Supplemental Indenture, dated as of March 1, 1950, to the Mortgage and Deed of Trust, dated as of October 1,1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., assuccessor trustee (Exhibit B-22 to Detroit Edison's Registration Statement on Form S-1 (File No. 2-8290)).(amendment) (P) X X Supplemental Indenture, dated as of November 15, 1951, to the Mortgage and Deed of Trust, dated as ofOctober 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company,N.A., as successor trustee (Exhibit B-23 to Detroit Edison's Registration Statement on Form S-1 (File No. 2-9226)). (amendment) (P) X X Supplemental Indenture, dated as of August 15, 1957, to the Mortgage and Deed of Trust, dated as ofOctober 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company,N.A., as successor trustee (Exhibit 3-B-30 to Detroit Edison's Form 8-K dated September 11, 1957).(amendment) (P) X X Supplemental Indenture, dated as of December 1, 1966, to the Mortgage and Deed of Trust, dated as ofOctober 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company,N.A., as successor trustee (Exhibit 2-B-32 to Detroit Edison's Registration Statement on Form S-9 (File No. 2-25664)). (amendment) (P) X X Supplemental Indenture, dated as of May 1, 1991, to the Mortgage and Deed of Trust, dated as of October 1,1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., assuccessor trustee (Exhibit 4-178 to Detroit Edison's Form 10-K for the year ended December 31, 1996). (1991Series CP) X X Supplemental Indenture, dated as of May 15, 1991, to the Mortgage and Deed of Trust, dated as of October 1,1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., assuccessor trustee (Exhibit 4-179 to Detroit Edison's Form 10-K for the year ended December 31, 1996). (1991Series DP) X X Supplemental Indenture, dated as of February 29, 1992, to the Mortgage and Deed of Trust, dated as of October1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., assuccessor trustee (Exhibit 4-187 to Detroit Edison's Form 10-Q for the quarter ended March 31, 1998). (1992Series AP) X X Supplemental Indenture, dated as of April 26, 1993, to the Mortgage and Deed of Trust, dated as of October 1,1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., assuccessor trustee (Exhibit 4-215 to Detroit Edison's Form 10-K for the year ended December 31, 2000).(amendment) X X 144ExhibitNumber Description DTEEnergy DTEElectric Supplemental Indenture, dated as of September 17, 2002, to the Mortgage and Deed of Trust, dated as ofOctober 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company,N.A., as successor trustee (Exhibit 4.1 to Detroit Edison's Registration Statement on Form S-3 (File No. 333-100000)). (amendment and successor trustee) X X Supplemental Indenture, dated as of October 15, 2002, to the Mortgage and Deed of Trust, dated as ofOctober 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company,N.A., as successor trustee (Exhibit 4-230 to Detroit Edison's Form 10-Q for the quarter ended September 30,2002). (2002 Series B) X X Supplemental Indenture, dated as of April 1, 2005, to the Mortgage and Deed of Trust, dated as of October 1,1924, between Detroit Edison and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4.3 to Detroit Edison's Registration Statement on Form S-4 (File No. 333-123926)). (2005 Series BR) X X Supplemental Indenture, dated as of September 15, 2005, to the Mortgage and Deed of Trust, dated as ofOctober 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company,N.A., as successor trustee (Exhibit 4.2 to Detroit Edison's Form 8-K dated September 29, 2005). (2005 Series C) X X Supplemental Indenture, dated as of September 30, 2005, to the Mortgage and Deed of Trust, dated as ofOctober 1, 1924, between Detroit Edison and The Bank of New York Mellon Trust Company, N.A., assuccessor trustee (Exhibit 4-248 to Detroit Edison's Form 10-Q for the quarter ended September 30, 2005).(2005 Series E) X X Supplemental Indenture, dated as of May 15, 2006, to the Mortgage and Deed of Trust, dated as of October 1,1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., assuccessor trustee (Exhibit 4-250 to Detroit Edison's Form 10-Q for the quarter ended June 30, 2006). (2006Series A) X X Supplemental Indenture, dated as of December 1, 2007, to the Mortgage and Deed of Trust, dated as of October1, 1924, between The Detroit Edison Company and J.P. Morgan Trust Company, National Association, assuccessor trustee (Exhibit 4.2 to Detroit Edison's Form 8-K dated December 18, 2007). (2007 Series A) X X Supplemental Indenture, dated as of May 1, 2008 to Mortgage and Deed of Trust, dated as of October 1, 1924between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successortrustee (Exhibit 4-253 to Detroit Edison's Form 10-Q for the quarter ended June 30, 2008). (2008 Series ET) X X Supplemental Indenture, dated as of July 1, 2008 to Mortgage and Deed of Trust, dated as of October 1, 1924between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successortrustee (Exhibit 4-257 to Detroit Edison's Form 10-Q for the quarter ended June 30, 2008). (2008 Series KT) X X Supplemental Indenture, dated as of August 1, 2010, to the Mortgage and Deed of Trust, dated as of October 1,1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., assuccessor trustee (Exhibit 4-269 to Detroit Edison's Form 10-Q for the quarter ended September 30, 2010).(2010 Series B) X X Supplemental Indenture, dated as of September 1, 2010, to the Mortgage and Deed of Trust, dated as ofOctober 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company,N.A., as successor trustee (Exhibit 4-271 to Detroit Edison's Form 10-Q for the quarter ended September 30,2010). (2010 Series A) X X Supplemental Indenture, dated as of May 15, 2011, to the Mortgage and Deed of Trust, dated as of October 1,1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A. assuccessor trustee (Exhibit 4-275 to Detroit Edison's Form 10-Q for the quarter ended June 30, 2011). (2011Series B) X X Supplemental Indenture, dated as of August 1, 2011, to the Mortgage and Deed of Trust, dated as of October 1,1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A. assuccessor trustee (Exhibit 4-276 to Detroit Edison's Form 10-Q for the quarter ended September 30, 2011).(2011 Series GT) X X 145ExhibitNumber Description DTEEnergy DTEElectric Supplemental Indenture, dated as of August 15, 2011, to the Mortgage and Deed of Trust, dated as of October1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A. assuccessor trustee (Exhibit 4-277 to Detroit Edison's Form 10-Q for the quarter ended September 30, 2011).(2011 Series D, 2011 Series E, 2011 Series F) X X Supplemental Indenture, dated as of September 1, 2011, to the Mortgage and Deed of Trust, dated as ofOctober 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company,N.A. as successor trustee (Exhibit 4-278 to Detroit Edison's Form 10-Q for the quarter ended September 30,2011). (2011 Series H) X X Supplemental Indenture dated as of June 20, 2012, to the Mortgage and Deed of Trust, dated as of October 1,1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., assuccessor trustee (Exhibit 4-279 to Detroit Edison's Form 10-Q for the quarter ended June 30, 2012). (2012Series A and B) X X Supplemental Indenture, dated as of March 15, 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, N.A., as successor trustee (Exhibit4-280 to DTE Electric Form 10-Q for the quarter ended March 31, 2013). (2013 Series A) X X 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 successortrustee (Exhibit 4-281 to DTE Electric’s Form 10-Q for the quarter ended September 30, 2013). (2013 Series B) X X 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 (Exhibit4-282 to DTE Electric's Form 10-Q for the quarter ended June 30, 2014). (2014 Series A and B) X X 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 (Exhibit4-283 to DTE Electric's Form 10-Q for the quarter ended June 30, 2014). (2014 Series D and E) X X Supplemental Indenture, dated as of March 1, 2015, 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 successortrustee. (Exhibit 4-289 to DTE Electric's Form 10-Q for the quarter ended March 31, 2015). (2015 Series A) X X Supplemental Indenture, dated as of May 1, 2016, 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 successortrustee. (Exhibit 4-293 to DTE Electric's Form 10-Q for the quarter ended June 30, 2016). (2016 Series A) X X Supplemental Indenture, dated as of August 1, 2017, 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 successortrustee. (Exhibit 10-107 to DTE Electric's Form 10-Q for the quarter ended September 30, 2017). (2017 SeriesB) X X 4(c) Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank ofNew York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-152 to Detroit Edison's RegistrationStatement (File No. 33-50325)) and indentures supplemental thereto, dated as of dates indicated below, andfiled as exhibits to the filings set forth below: (P) X X Tenth Supplemental Indenture, dated as of October 23, 2002, to the Collateral Trust Indenture, dated as ofJune 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company,N.A., as successor trustee (Exhibit 4-231 to Detroit Edison's Form 10-Q for the quarter ended September 30,2002). (6.35% Senior Notes due 2032) X X 146ExhibitNumber Description DTEEnergy DTEElectric Sixteenth Supplemental Indenture, dated as of April 1, 2005, to the Collateral Trust Indenture, dated as ofJune 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company,N.A., as successor trustee (Exhibit 4.1 to Detroit Edison's Registration Statement on Form S-4 (File No. 333-123926)). (2005 Series BR 5.45% Senior Notes due 2035) X X Eighteenth Supplemental Indenture, dated as of September 15, 2005, to the Collateral Trust Indenture, dated asof June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company,N.A., as successor trustee (Exhibit 4.1 to Detroit Edison's Form 8-K dated September 29, 2005). (2005 Series C5.19% Senior Notes due October 1, 2023) X X Nineteenth Supplemental Indenture, dated as of September 30, 2005, to the Collateral Trust Indenture, dated asof June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company,N.A., as successor trustee (Exhibit 4-247 to Detroit Edison's Form 10-Q for the quarter ended September 30,2005). (2005 Series E 5.70% Senior Notes due 2037) X X Twentieth Supplemental Indenture, dated as of May 15, 2006, to the Collateral Trust Indenture dated as ofJune 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company,N.A., as successor trustee (Exhibit 4-249 to Detroit Edison's Form 10-Q for the quarter ended June 30, 2006).(2006 Series A Senior Notes due 2036) X X Twenty-second Supplemental Indenture, dated as of December 1, 2007, to the Collateral Trust Indenture, datedas of June 30, 1993, between The Detroit Edison Company and The Bank of New York MellonTrust Company, N.A., as successor trustee (Exhibit 4.1 to Detroit Edison's Form 8-K dated December 18, 2007).(2007 Series A Senior Notes due 2038) X X Twenty-fourth Supplemental Indenture, dated as of May 1, 2008 to the Collateral Trust Indenture, dated as ofJune 30, 1993 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A.as successor trustee (Exhibit 4-254 to Detroit Edison's Form 10-Q for the quarter ended June 30, 2008). (2008Series ET Variable Rate Senior Notes due 2029) X X Twenty-fifth Supplemental Indenture, dated as of June 1, 2008 to the Collateral Trust Indenture, dated as ofJune 30, 1993 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A.,as successor trustee (Exhibit 4-256 to Detroit Edison's Form 10-Q for the quarter ended June 30, 2008). (2008Series G 5.60% Senior Notes due 2018) X X Twenty-sixth Supplemental Indenture, dated as of July 1, 2008 to the Collateral Trust Indenture, dated as ofJune 30, 1993 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A.,as successor trustee (Exhibit 4-258 to Detroit Edison's Form 10-Q for the quarter ended June 30, 2008). (2008Series KT Variable Rate Senior Notes due 2020) X X Thirty-first Supplemental Indenture, dated as of August 1, 2010 to the Collateral Trust Indenture, dated as ofJune 1, 1993 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A.,as successor trustee (Exhibit 4-270 to Detroit Edison's Form 10-Q for the quarter ended September 30, 2010).(2010 Series B 3.45% Senior Notes due 2020) X X Thirty-second Supplemental Indenture, dated as of September 1, 2010, between The Detroit Edison Companyand The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-272 to DetroitEdison's Form 10-Q for the quarter ended September 30, 2010). (2010 Series A 4.89% Senior Notes due 2020) X X 4(d) Indenture dated as of June 1, 1998 between Michigan Consolidated Gas Company and Citibank, N.A., astrustee, related to Senior Debt Securities (Exhibit 4-1 to Michigan Consolidated Gas Company RegistrationStatement on Form S-3 (File No. 333-63370)) and indentures supplemental thereto, dated as of dates indicatedbelow, and filed as exhibits to the filings set forth below: X 147ExhibitNumber Description DTEEnergy DTEElectric Fourth Supplemental Indenture dated as of February 15, 2003, to the Indenture dated as of June 1, 1998between Michigan Consolidated Gas Company and Citibank, N.A., trustee (Exhibit 4-3 to MichiganConsolidated Gas Company Form 10-Q for the quarter ended March 31, 2003). (5.70% Senior Notes, 2003Series A due 2033) X Fifth Supplemental Indenture dated as of October 1, 2004, to the Indenture dated as of June 1, 1998 betweenMichigan Consolidated Gas Company and Citibank, N.A., trustee (Exhibit 4-6 to Michigan Consolidated GasCompany Form 10-Q for the quarter ended September 31, 2004). (5.00% Senior Notes, 2004 Series E due 2019) X Sixth Supplemental Indenture dated as of April 1, 2008, to the Indenture dated as of June 1, 1998 betweenMichigan Consolidated Gas Company and Citibank, N.A., trustee (Exhibit 4-241 to DTE Energy’s Form 10-Qfor the quarter ended March 31, 2008). (6.04% Senior Notes, 2008 Series B due 2018 and 6.44% Senior Notes,2008 Series C due 2023) X Seventh Supplemental Indenture, dated as of June 1, 2008 to Indenture dated as of June 1, 1998 betweenMichigan Consolidated Gas Company and Citibank, N.A., trustee (Exhibit 4-243 to DTE Energy’s Form 10-Qfor the quarter ended June 30, 2008). (6.78% Senior Notes, 2008 Series F due 2028) X Eighth Supplemental Indenture, dated as of August 1, 2008 to Indenture dated as of June 1, 1998 betweenMichigan Consolidated Gas Company and Citibank, N.A., trustee (Exhibit 4-251 to DTE Energy’s Form 10-Qfor the quarter ended September 30, 2008). (6.36% Senior Notes, 2008 Series I due 2020) X 4(e) Indenture of Mortgage and Deed of Trust dated as of March 1, 1944 (Exhibit 7-D to Michigan ConsolidatedGas Company Registration Statement No. 2-5252) and indentures supplemental thereto, dated as of datesindicated below, and filed as exhibits to the filings set forth below: (P) X Thirty-seventh Supplemental Indenture dated as of February 15, 2003 to Indenture of Mortgage and Deed ofTrust dated as of March 1, 1944 between Michigan Consolidated Gas Company and Citibank, N.A., trustee(Exhibit 4-4 to Michigan Consolidated Gas Company Form 10-Q for the quarter ended March 31, 2003).(5.70% collateral bonds due 2033) X Thirty-eighth Supplemental Indenture dated as of October 1, 2004 to Indenture of Mortgage and Deed of Trustdated as of March 1, 1944 between Michigan Consolidated Gas Company and Citibank, N.A., trustee(Exhibit 4-5 to Michigan Consolidated Gas Company Form 10-Q for the quarter ended September 31, 2004).(2004 Series E collateral bonds) X Thirty-ninth Supplemental Indenture, dated as of April 1, 2008 to Indenture of Mortgage and Deed of Trustdated as of March 1, 1944 between Michigan Consolidated Gas Company and Citibank, N.A., trustee(Exhibit 4-240 to DTE Energy’s Form 10-Q for the quarter ended March 31, 2008). (2008 Series B and CCollateral Bonds) X Fortieth Supplemental Indenture, dated as of June 1, 2008 to Indenture of Mortgage and Deed of Trust dated asof March 1, 1944 between Michigan Consolidated Gas Company and Citibank, N.A., trustee (Exhibit 4-242 toDTE Energy’s Form 10-Q for the quarter ended June 30, 2008). (2008 Series F Collateral Bonds) X Forty-first Supplemental Indenture, dated as of August 1, 2008 to Indenture of Mortgage and Deed of Trustdated as of March 1, 1944 between Michigan Consolidated Gas Company and Citibank, N.A., trustee(Exhibit 4-250 to DTE Energy’s Form 10-Q for the quarter ended September 30, 2008). (2008 Series ICollateral Bonds) X Forty-third Supplemental Indenture, dated as of December 1, 2012 to Indenture of Mortgage and Deed of Trustdated as of March 1, 1944 between Michigan Consolidated Gas Company and Citibank, N.A., trustee (Exhibit4-279 to DTE Energy’s Form 10-K for the year ended December 31, 2012). (2012 First Mortgage Bonds SeriesD) X 148ExhibitNumber Description DTEEnergy DTEElectric Forty-fourth Supplemental Indenture, dated as of December 1, 2013 to Indenture of Mortgage and Deed ofTrust dated March 1, 1944 between DTE Gas Company and Citibank, N.A., (Exhibit 4-283 to DTE Energy’sForm 10-K for the year ended December 31, 2013). (2013 First Mortgage Bonds Series C, D, and E) X Forty-fifth Supplemental Indenture, dated as of December 1, 2014 to Indenture of Mortgage and Deed of Trustdated as of March 1, 1944 between DTE Gas Company and Citibank, N.A. (Exhibit 4-288 to DTE Energy’sForm 10-K for the year ended December 31, 2014). (2014 First Mortgage Bonds Series F) X Forty-sixth Supplemental Indenture, dated as of August 1, 2015 to Indenture of Mortgage and Deed of Trustdated as of March 1, 1944 between DTE Gas Company and Citibank, N.A. (Exhibit 4-292 to DTE Energy’sForm 10-Q for the quarter ended September 30, 2015). (2015 First Mortgage Bonds Series C and D) X Forty-seventh Supplemental Indenture, dated as of December 1, 2016 to Indenture of Mortgage and Deed ofTrust dated as of March 1, 1944 between DTE Gas Company and Citibank, N.A. (Exhibit 4-297 to DTEEnergy’s Form 10-K for the year ended December 31, 2016). (2016 First Mortgage Bonds Series G) X Forty-eight Supplemental Indenture, dated as of September 1, 2017 to Indenture of Mortgage and Deed ofTrust dated as of March 1, 1944 between DTE Gas Company and Citibank, N.A. (Exhibit 10-108 to DTEEnergy’s Form 10-Q for the quarter ended September 30, 2017). (2017 First Mortgage Bonds Series C and D) X 10(a) Form of Indemnification Agreement between DTE Energy Company and each of Gerard M. Anderson, StevenE. Kurmas, David E. Meador, Gerardo Norcia, Peter B. Oleksiak, Bruce D. Peterson, and non-employeeDirectors (Exhibit 10-1 to DTE Energy’s Form 8-K dated December 6, 2007) X 10(b) Certain arrangements pertaining to the employment of Gerard M. Anderson with The Detroit Edison Company,dated October 6, 1993 (Exhibit 10-48 to The Detroit Edison Company's Form 10-K for the year endedDecember 31, 1993) (P) X X 10(c) Certain arrangements pertaining to the employment of David E. Meador with The Detroit Edison Company,dated January 14, 1997 (Exhibit 10-5 to The Detroit Edison Company’s Form 10-K for the year endedDecember 31, 1996) X X 10(d) Certain arrangements pertaining to the employment of Bruce D. Peterson, dated May 22, 2002 (Exhibit 10-48to DTE Energy’s Form 10-Q for the quarter ended June 30, 2002) X 10(e) DTE Energy Company Annual Incentive Plan (Exhibit 10-44 to DTE Energy’s Form 10-Q for the quarter endedMarch 31, 2001) X 10(f) Amended and Restated DTE Energy Company Long-Term Incentive Plan (as Amended February 6, 2014)(Exhibit 10-88 to DTE Energy’s Form 10-Q for the quarter ended March 31, 2014) X First Amendment to DTE Energy Company Long-Term Incentive Plan Amended and Restated Effective May 1,2014, dated as of February 4, 2016 (Exhibit 10.99 to DTE Energy's Form 10-K for the year ended December 31,2015) X 10(g) DTE Energy Company Retirement Plan for Non-Employee Directors' Fees (as Amended and Restated effectiveas of December 31, 1998) (Exhibit 10-31 to DTE Energy’s Form 10-K for the year ended December 31, 1998) X 10(h) The Detroit Edison Company Supplemental Long-Term Disability Plan, dated January 27, 1997 (Exhibit 10-4to The Detroit Edison Company’s Form 10-K for the year ended December 31, 1996) X X 10(i) Description of Executive Life Insurance Plan (Exhibit 10-47 to DTE Energy’s Form 10-Q for the quarter endedJune 30, 2002) X 10(j) DTE Energy Affiliates Nonqualified Plans Master Trust, effective as of August 15, 2013 (Exhibit 10-87 to DTEEnergy’s Form 10-Q for the quarter ended September 30, 2013) X 149ExhibitNumber Description DTEEnergy DTEElectric First Amendment to DTE Energy Affiliates Nonqualified Plans Master Trust, effective as of March 15, 2015(Exhibit 10-94 to DTE Energy’s Form 10-Q for the quarter ended March 15, 2015) X 10(k) Form of Director Restricted Stock Agreement (Exhibit 10.1 to DTE Energy’s Form 8-K dated June 23, 2005) X 10(l) Form of Director Restricted Stock Agreement pursuant to the DTE Energy Company Long-Term Incentive Plan(Exhibit 10.1 to DTE Energy’s Form 8-K dated June 29, 2006) X 10(m) DTE Energy Company Executive Supplemental Retirement Plan as Amended and Restated, effective as ofJanuary 1, 2005 (Exhibit 10.75 to DTE Energy’s Form 10-K for the year ended December 31, 2008) X First Amendment to the DTE Energy Company Executive Supplemental Retirement Plan (Amended andRestated Effective January 1, 2005) dated as of December 2, 2009 (Exhibit 10.1 to DTE Energy’s Form 8-Kdated December 8, 2009) X Second Amendment to the DTE Energy Company Executive Supplemental Retirement Plan (Amended andRestated Effective January 1, 2005) dated as of May 5, 2011 (Exhibit 10.80 to DTE Energy’s Form 10-Q for thequarter ended March 31, 2012) X Third Amendment to the DTE Energy Company Executive Supplemental Retirement Plan (Amended andRestated Effective January 1, 2005) dated as of February 3, 2016 (Exhibit 10.96 to DTE Energy's Form 10-Kfor the year ended December 31, 2015) X 10(n) DTE Energy Company Supplemental Retirement Plan as Amended and Restated, effective as of January 1,2005 (Exhibit 10.76 to DTE Energy’s Form 10-K for the year ended December 31, 2008) X First Amendment to the DTE Energy Company Supplemental Retirement Plan (Amended and Restated,effective as of January 1, 2005) dated as of March 19, 2013 (Exhibit 10.92 to Form DTE Energy’s 10-K for theyear ended December 31, 2014) X Second Amendment to the DTE Energy Company Supplemental Retirement Plan (Amended and Restated,effective as of January 1, 2005) dated as of November 11, 2014 (Exhibit 10.93 to DTE Energy’s Form 10-K forthe year ended December 31, 2014) X 10(o) DTE Energy Company Supplemental Savings Plan as Amended and Restated, effective as of January 1, 2005(Exhibit 10.77 to DTE Energy’s Form 10-K for the year ended December 31, 2008) X Second Amendment to the DTE Energy Supplemental Savings Plan dated as of November 13, 2012 (Exhibit10.81 to DTE Energy’s Form 10-K for the year ended December 31, 2012) X 10(p) DTE Energy Company Executive Deferred Compensation Plan as Amended and Restated, effective as ofJanuary 1, 2005 (Exhibit 10.78 to DTE Energy’s Form 10-K for the year ended December 31, 2008) X First Amendment to DTE Energy Company Executive Deferred Compensation Plan as Amended and Restated,effective as of January 1, 2005, dated as of February 4, 2016 (Exhibit 10.98 to DTE Energy’s Form 10-K for theyear ended December 31, 2015) X 10(q) DTE Energy Company Plan for Deferring the Payment of Directors' Fees as Amended and Restated, effective asof January 1, 2005 (Exhibit 10.79 to DTE Energy’s Form 10-K for the year ended December 31, 2008) X First Amendment, dated as of June 25, 2015, to the DTE Energy Company Plan for Deferring the Payment ofDirectors’ Fees (as Amended and Restated effective as of January 1, 2005) (Exhibit 10.95 to DTE Energy’sForm 10-Q for the quarter ended June 30, 2015) X 10(r) DTE Energy Company Deferred Stock Compensation Plan for Non-Employee Directors as Amended andRestated, effective January 1, 2005 (Exhibit 10.80 to DTE Energy’s Form 10-K for the year endedDecember 31, 2008) X 150ExhibitNumber Description DTEEnergy DTEElectric 10(s) Form of Third Amended and Restated DTE Energy Company Five-Year Credit Agreement, dated as of October21, 2011 and amended and restated as of April 16, 2015, by and among DTE Energy Company, the lendersparty thereto, Citibank, N.A., as Administrative Agent, and Barclays Bank PLC, The Bank of Nova Scotia andJPMorgan Chase Bank, N.A. as Co-Syndication Agents (Exhibit 10.01 to DTE Energy Company's Form 8-Kfiled on April 21, 2015) X Request for Extension of Termination Date, dated as of April 16, 2017, to the Third Amended and RestatedFive-Year Credit Agreement, dated as of October 21, 2011, amended and restated as of April 5, 2013, andamended and restated as of April 16, 2015, by and among DTE Energy, the lenders party thereto, Citibank,N.A., as Administrative Agent, and Barclays Bank PLC, The Bank of Nova Scotia and JPMorgan Chase Bank,N.A, as Co-Syndication Agents (Exhibit 10.104 to DTE Energy’s Form 10-Q for the quarter ended June 30,2017) X 10(t) Form of Third Amended and Restated DTE Gas Company Five-Year Credit Agreement, dated as of October 21,2011 and amended and restated as of April 16, 2015, by and among DTE Gas Company, the lenders partythereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and Barclays Bank PLC, Citibank, N.A., andBank of America, N.A., as Co-Syndication Agents (Exhibit 10.02 to DTE Energy Company's Form 8-K filed onApril 21, 2015) X Request for Extension of Termination Date, dated as of April 16, 2017, to the Third Amended and RestatedFive-Year Credit Agreement, dated as of October 21, 2011, amended and restated as of April 5, 2013, andamended and restated as of April 16, 2015, by and among DTE Gas the lenders party thereto, JPMorgan ChaseBank, N.A., as Administrative Agent, and Barclays Bank PLC, Citibank, N.A. and Bank of America, N.A., asCo-Syndication Agents (Exhibit 10.105 to DTE Energy’s Form 10-Q for the quarter ended June 30, 2017) X 10(u) Form of Third Amended and Restated DTE Electric Company Five-Year Credit Agreement, dated as of October21, 2011 and amended and restated as of April 16, 2015, by and among DTE Electric Company, the lendersparty thereto, Barclays Bank PLC, as Administrative Agent, and Citibank N.A., JPMorgan Chase Bank, N.A.,and Wells Fargo Bank, National Association as Co-Syndication Agents (Exhibit 10.01 to DTE EnergyCompany's and DTE Electric Company's Form 8-K filed on April 21, 2015) X X Request for Extension of Termination Date, dated as of April 16, 2017, to the Third Amended and RestatedFive-Year Credit Agreement, dated as of October 21, 2011, amended and restated as of April 5, 2013, andfurther amended and restated as of April 16, 2015, by and among DTE Electric Company, the lenders partythereto, Barclays Bank PLC., as Administrative Agent, and Citibank, N.A., JPMorgan Chase Bank, N.A. andWells Fargo Bank, National Association as Co-Syndication Agents (Exhibit 10.106 to DTE Energy’s and DTEElectric Company's Form 10-Q for the quarter ended June 30, 2017) X X 10(v) Form of Change-in-Control Agreement, dated as of March 3, 2014, between DTE Energy Company and each ofGerard M. Anderson, Steven E. Kurmas, Trevor F. Lauer, David E. Meador, Peter B. Oleksiak, Gerardo Norciaand Bruce D. Peterson (Exhibit 10.1 to DTE Energy Company’s Form 8-K filed on March 3, 2014) X 10(w) Form of Change-In-Control Severance Agreement dated as of July 1, 2014, between DTE Energy Company andeach of Jeffrey A. Jewell, Lisa A. Muschong, David Ruud, David Slater and Mark W. Stiers (Exhibit 10-91 toDTE Energy’s Form 10-Q for the quarter ended June 30, 2014) X 10(x) First Amendment to DTE Energy Company Executive Performance Plan Effective May 7, 2015, dated as ofFebruary 3, 2016 (Exhibit 10.97 to DTE Energy's Form 10-K for the year ended December 31, 2015) X 151Item 16. Form 10-K SummaryNone.152DTE Energy CompanySchedule II — Valuation and Qualifying Accounts Year Ending December 31, 2017 2016 2015 (In millions)Allowance for Doubtful Accounts (shown as deduction from Accounts receivable in DTE Energy'sConsolidated Statements of Financial Position) Balance at Beginning of Period$41 $49 $54Additions: Charged to costs and expenses80 78 93Charged to other accounts(a)26 18 14Deductions(b)(98) (104) (112)Balance at End of Period$49 $41 $49_______________________________________(a)Collection of accounts previously written off.(b)Uncollectible accounts written off.DTE Electric CompanySchedule II — Valuation and Qualifying Accounts Year Ending December 31, 2017 2016 2015 (In millions)Allowance for Doubtful Accounts (shown as deduction from Accounts receivable in DTE Electric'sConsolidated Statements of Financial Position) Balance at Beginning of Period$25 $28 $29Additions: Charged to costs and expenses55 49 51Charged to other accounts(a)14 8 6Deductions(b)(63) (60) (58)Balance at End of Period$31 $25 $28_______________________________________(a)Collection of accounts previously written off.(b)Uncollectible accounts written off.153SignaturesPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, DTE Energy Company has duly caused this report to besigned on its behalf by the undersigned, thereunto duly authorized. DTE ENERGY COMPANY (Registrant) By: /S/ GERARD M. ANDERSON Gerard M. AndersonChairman of the Board andChief Executive OfficerDate: February 16, 2018Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of DTEEnergy Company and in the capacities and on the date indicated.By:/S/ GERARD M. ANDERSON By:/S/ PETER B. OLEKSIAK Gerard M. AndersonChairman of the Board,Chief Executive Officer, and Director(Principal Executive Officer) Peter B. OleksiakSenior Vice President and Chief Financial Officer (Principal Financial Officer) By:/S/ JEFFREY A. JEWELL By:/S/ CHARLES W. PRYOR, JR. Jeffrey A. JewellVice President, Controller, and Chief Accounting Officer(Principal Accounting Officer) Charles W. Pryor, Jr., Director By:/S/ DAVID A. BRANDON By:/S/ JOSUE ROBLES, JR. David A. Brandon, Director Josue Robles, Jr., Director By:/S/ W. FRANK FOUNTAIN, JR. By:/S/ RUTH G. SHAW W. Frank Fountain, Jr., Director Ruth G. Shaw, Director By:/S/ CHARLES G. MCCLURE JR. By:/S/ ROBERT C. SKAGGS, JR. Charles G. McClure Jr., Director Robert C. Skaggs, Jr., Director By:/S/ GAIL J. MCGOVERN By:/S/ DAVID A. THOMAS Gail J. McGovern, Director David A. Thomas, Director By:/S/ MARK A. MURRAY By:/S/ JAMES H. VANDENBERGHE Mark A. Murray, Director James H. Vandenberghe, Director By:/S/ JAMES B. NICHOLSON James B. Nicholson, Director Date: February 16, 2018154SignaturesPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, DTE Electric Company has duly caused this report to besigned on its behalf by the undersigned, thereunto duly authorized. DTE ELECTRIC COMPANY (Registrant) By:/S/ GERARD M. ANDERSON Gerard M. AndersonChairman of the Board andChief Executive OfficerDate: February 16, 2018Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of DTEElectric Company and in the capacities and on the date indicated.By:/S/ GERARD M. ANDERSON By:/S/ PETER B. OLEKSIAK Gerard M. AndersonChairman of the Board,Chief Executive Officer, and Director(Principal Executive Officer) Peter B. OleksiakSenior Vice President and Chief Financial Officer (Principal Financial Officer) By:/S/ JEFFREY A. JEWELL By:/S/ LISA A. MUSCHONG Jeffrey A. JewellVice President, Controller, and Chief Accounting Officer(Principal Accounting Officer) Lisa A. Muschong, Director By:/S/ DAVID E. MEADOR By:/S/ BRUCE D. PETERSON David E. Meador, Director Bruce D. Peterson, DirectorDate: February 16, 2018Supplemental Information to be Furnished with Reports Filed Pursuant to Section 15(d) of the Securities Exchange Act of 1934 by Registrants Which HaveNot Registered Securities Pursuant to Section 12 of the Securities Exchange Act of 1934.No annual report, proxy statement, form of proxy, or other proxy soliciting material has been sent to security holders of DTE Electric Company during theperiod covered by this Annual Report on Form 10-K for the fiscal year ended December 31, 2017.155Exhibit 12.81DTE Energy CompanyComputation of Ratio of Earnings to Fixed Charges Year Ended December 31, 2017 2016 2015 2014 2013 (In millions)Earnings: Pretax earnings$1,287 $1,105 $950 $1,275 $922Adjustments to earnings(a)(19) 23 (3) (15) (26)Fixed charges561 493 473 453 461Net earnings$1,829 $1,621 $1,420 $1,713 $1,357 Fixed Charges: Interest expense(b)$531 $468 $446 $424 $432Adjustments to fixed charges(c)30 25 27 29 29Fixed charges$561 $493 $473 $453 $461 Ratio of earnings to fixed charges3.26 3.29 3.00 3.78 2.94_______________________________________(a)Adjustments include the removal of the impact of earnings from non-consolidated entities and the inclusion of capitalized interest costs.(b)Includes interest on uncertain tax positions.(c)Adjustments include the interest element of rentals where determinable plus 1/3 of rental expense where no readily defined interest element can be determined and capitalizedinterest costs.Exhibit 12.82DTE Electric CompanyComputation of Ratio of Earnings to Fixed Charges Year Ended December 31, 2017 2016 2015 2014 2013 (In millions)Earnings: Pretax earnings$928 $975 $836 $830 $741Adjustments to earnings(a)(9) (8) (11) (11) (7)Fixed charges288 278 277 267 281Net earnings$1,207 $1,245 $1,102 $1,086 $1,015 Fixed Charges: Interest expense(b)$271 $261 $255 $247 $264Adjustments to fixed charges(c)17 17 22 20 17Fixed charges$288 $278 $277 $267 $281 Ratio of earnings to fixed charges4.19 4.48 3.98 4.07 3.61_______________________________________(a)Adjustments include the removal of the impact of earnings from non-consolidated entities and the inclusion of capitalized interest costs.(b)Includes interest on uncertain tax positions.(c)Adjustments include the interest element of rentals where determinable plus 1/3 of rental expense where no readily defined interest element can be determined and capitalizedinterest costs.Exhibit 21.13SUBSIDIARIES OF DTE ENERGY COMPANYDTE Energy Company’s principal subsidiaries as of December 31, 2017 are listed below. All other subsidiaries, if considered in the aggregate as asingle subsidiary, would not constitute a significant subsidiary.Subsidiary State of Incorporation1.DTE Electric Company Michigan2.DTE Enterprises, Inc. Michigan3.DTE Gas Enterprises, LLC Michigan4.DTE Pipeline Company Michigan5.DTE Gas Company Michigan6.DTE Energy Resources, LLC DelawareExhibit 23.34CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-157769 and 333-210556) and Form S-8 (No. 333-202343, 333-133645, and 333-199746) of DTE Energy Company of our report dated February 16, 2018 relating to the financial statements, financialstatement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K./s/ PricewaterhouseCoopers LLPDetroit, MichiganFebruary 16, 2018Exhibit 23.35CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 333-210556-01) of DTE Electric Company of our reportdated February 16, 2018 relating to the financial statements and financial statement schedule, which appears in this Form 10-K./s/ PricewaterhouseCoopers LLPDetroit, MichiganFebruary 16, 2018Exhibit 31.141FORM 10-K CERTIFICATIONI, Gerard M. Anderson, certify that:1.I have reviewed this Annual Report on Form 10-K of DTE Energy Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likelyto materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting./S/ GERARD M. ANDERSONDate:February 16, 2018Gerard M. AndersonChairman of the Board andChief Executive Officer of DTE Energy Company Exhibit 31.142FORM 10-K CERTIFICATIONI, Peter B. Oleksiak, certify that:1.I have reviewed this Annual Report on Form 10-K of DTE Energy Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likelyto materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting./S/ PETER B. OLEKSIAKDate:February 16, 2018Peter B. OleksiakSenior Vice President andChief Financial Officer of DTE Energy Company Exhibit 31.143FORM 10-K CERTIFICATIONI, Gerard M. Anderson, certify that:1.I have reviewed this Annual Report on Form 10-K of DTE Electric Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likelyto materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting./S/ GERARD M. ANDERSONDate:February 16, 2018Gerard M. AndersonChairman of the Board andChief Executive Officer of DTE Electric Company Exhibit 31.144FORM 10-K CERTIFICATIONI, Peter B. Oleksiak, certify that:1.I have reviewed this Annual Report on Form 10-K of DTE Electric Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likelyto materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting./S/ PETER B. OLEKSIAKDate:February 16, 2018Peter B. OleksiakSenior Vice President andChief Financial Officer of DTE Electric Company Exhibit 32.141CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report on Form 10-K of DTE Energy Company for the year ended December 31, 2017, as filed with the Securities andExchange Commission on the date hereof (the “Report”), I, Gerard M. Anderson, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of DTE EnergyCompany.Date:February 16, 2018/S/ GERARD M. ANDERSON Gerard M. AndersonChairman of the Board andChief Executive Officer of DTE Energy Company A signed original of this written statement required by Section 906 has been provided to DTE Energy Company and will be retained by DTE EnergyCompany and furnished to the Securities and Exchange Commission or its staff upon request.Exhibit 32.142CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report on Form 10-K of DTE Energy Company for the year ended December 31, 2017, as filed with the Securities andExchange Commission on the date hereof (the “Report”), I, Peter B. Oleksiak, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of DTE EnergyCompany.Date:February 16, 2018/S/ PETER B. OLEKSIAK Peter B. OleksiakSenior Vice President andChief Financial Officer of DTE Energy Company A signed original of this written statement required by Section 906 has been provided to DTE Energy Company and will be retained by DTE EnergyCompany and furnished to the Securities and Exchange Commission or its staff upon request.Exhibit 32.143CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report on Form 10-K of DTE Electric Company for the year ended December 31, 2017, as filed with the Securities andExchange Commission on the date hereof (the “Report”), I, Gerard M. Anderson, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of DTE ElectricCompany.Date:February 16, 2018/S/ GERARD M. ANDERSON Gerard M. AndersonChairman of the Board andChief Executive Officer of DTE Electric Company A signed original of this written statement required by Section 906 has been provided to DTE Electric Company and will be retained by DTE ElectricCompany and furnished to the Securities and Exchange Commission or its staff upon request.Exhibit 32.144CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report on Form 10-K of DTE Electric Company for the year ended December 31, 2017, as filed with the Securities andExchange Commission on the date hereof (the “Report”), I, Peter B. Oleksiak, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of DTE ElectricCompany.Date:February 16, 2018/S/ PETER B. OLEKSIAK Peter B. OleksiakSenior Vice President andChief Financial Officer of DTE Electric Company A signed original of this written statement required by Section 906 has been provided to DTE Electric Company and will be retained by DTE ElectricCompany and furnished to the Securities and Exchange Commission or its staff upon request.

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