DTE Energy Company
Annual Report 2018

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, 2018Commission 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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during thepreceding 12 months (or for such shorter period that the registrant was required to submit 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, a 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 DTE ElectricLarge accelerated filer oAccelerated filer oNon-accelerated filer xxSmaller reporting company oEmerging growth company oIf 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 29, 2018, the aggregate market value of DTE Energy's voting and non voting common equity held by non-affiliates was approximately $18.5 billion (based on the NewYork Stock Exchange closing price on such date).Number of shares of Common Stock outstanding at January 25, 2019:Registrant Description SharesDTE Energy Common Stock, without par value 181,923,685 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 2019 Annual Meeting of Common Shareholders to be held May 9, 2019, 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 4 Forward-Looking Statements 5PART IItems 1. & 2.Business and Properties 7Item 1A.Risk Factors 20Item 1B.Unresolved Staff Comments 25Item 3.Legal Proceedings 26Item 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 146Item 9A.Controls and Procedures 146Item 9B.Other Information 146PART IIIItem 10.Directors, Executive Officers, and Corporate Governance 146Item 11.Executive Compensation 146Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 146Item 13.Certain Relationships and Related Transactions, and Director Independence 146Item 14.Principal Accountant Fees and Services 146PART IVItem 15.Exhibits and Financial Statement Schedules 148Item 16.Form 10-K Summary 158 Signatures 160DEFINITIONSAFUDC Allowance for Funds Used During Construction AGS Appalachia 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. AMV Applicable Market Value ANPR Advanced Notice of Proposed Rulemaking ARO Asset Retirement Obligation ASU Accounting Standards Update issued by the FASB CCR Coal Combustion Residuals CFTC U.S. Commodity Futures Trading Commission CON Certificate of Necessity DOE U.S. Department of Energy DTE Electric DTE Electric Company (a direct wholly-owned subsidiary of DTE Energy) and subsidiary companies DTE Energy DTE Energy Company, directly or indirectly the parent of DTE Electric, DTE Gas, and numerous non-utility subsidiaries DTE Gas DTE Gas Company (an indirect wholly-owned subsidiary of DTE Energy) and subsidiary companies EGU Electric Generating Unit ELG Effluent Limitations Guidelines EPA U.S. Environmental Protection Agency Equity units DTE Energy's 2016 equity units issued in October 2016, which were used to finance the October 1, 2016 Gas Storage andPipelines acquisition. FASB Financial Accounting Standards Board FERC Federal Energy Regulatory Commission FOV Finding of Violation FTRs Financial Transmission Rights are financial instruments that entitle the holder to receive payments related to costs incurred forcongestion on the transmission grid. GCR A Gas Cost Recovery mechanism authorized by the MPSC that allows DTE Gas to recover through rates its natural gas costs. GHGs Greenhouse gases Green Bonds A financing option to fund projects that have a positive environmental impact based upon a specified set of criteria. Theproceeds are required to be used for eligible green expenditures. IRM Infrastructure Recovery Mechanism IRS Internal Revenue Service ISO Independent System Operator LIBOR London Inter-Bank Offered Rates LLC DTE Energy Corporate Services, LLC, a subsidiary of DTE Energy MDEQ Michigan Department of Environmental Quality MGP Manufactured Gas Plant MISO Midcontinent Independent System Operator, Inc. 1DEFINITIONSMPSC Michigan Public Service Commission MTM Mark-to-market NAV Net Asset Value NEIL Nuclear Electric Insurance Limited NEXUS NEXUS Gas Transmission, LLC, a joint venture in which DTE Energy owns a 50% partnership interest. Non-utility An 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. NOV Notice of Violation NOX Nitrogen Oxides NRC U.S. Nuclear Regulatory Commission PG&E Pacific Gas and Electric Corporation PLD City of Detroit's Public Lighting Department Production tax credits Tax credits as authorized under Sections 45K and 45 of the Internal Revenue Code that are designed to stimulate investmentin and development of alternate fuel sources. The amount of a production tax credit can vary each year as determined by theIRS. PSCR A Power Supply Cost Recovery mechanism authorized by the MPSC that allows DTE Electric to recover through rates its fuel,fuel-related, and purchased power costs. RDM A Revenue Decoupling Mechanism authorized by the MPSC that is designed to minimize the impact on revenues of changesin average customer usage. REC Renewable Energy Credit REF Reduced Emissions Fuel Registrants DTE Energy and DTE Electric Retail access Michigan legislation provided customers the option of access to alternative suppliers for electricity and natural gas. RNG Renewable Natural Gas RSN Remarketable Senior Notes RTO Regional Transmission Organization SEC Securities and Exchange Commission SGG Stonewall 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. Shenango Shenango 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. SO2 Sulfur Dioxide TCJA Tax Cuts and Jobs Act of 2017 TCJA rate reductionliability Beginning January 1, 2018, as a result of the change in the corporate tax rate, DTE Electric and DTE Gas have reduced revenueand recorded an offsetting regulatory liability. Topic 606 FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, as amended TRIA Terrorism Risk Insurance Program Reauthorization Act of 2015 2DEFINITIONSTRM A 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. VEBA Voluntary Employees Beneficiary Association VIE Variable 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 electricity3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;•the operational failure of electric or gas distribution systems or infrastructure;•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;•the risk of a major safety incident;•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 incidents 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;•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 significant customers and strategic partners;5•the potential for losses on investments, including nuclear decommissioning and benefit plan assets and the related increases in future expense andcontributions;•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 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 Investor Relations Reports and Filings page of DTE Energy's website: www.dteenergy.com, as soon asreasonably practicable 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 electronically 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.Weather, economic factors, competition, energy waste reduction initiatives, and electricity prices affect sales levels to customers. DTE Electric's peakload and 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.See Note 4 to the Consolidated Financial Statements in Item 8 of the Report, "Revenue."8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 24 million tons of low-sulfur western coal and approximately 850thousand tons of Appalachian coal to be delivered from 2019 to 2022. All of these contracts have pricing schedules. DTE Electric has approximately 86% ofthe expected coal requirements for 2019 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, 2018 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 495 6,868Natural 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 1,054Renewables(e) Wind(f) 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 14Utility Scale Solar Various 2017 50 64 11,610_______________________________________(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 measured in alternating current.(b)Represents DTE Electric's 81% interest in Belle River with a total capability of 1,270 MW. See Note 7 to the Consolidated Financial Statements in Item 8 of this Report, "Jointly-Owned Utility Plant."(c)The Monroe generating plant provided 43% of DTE Electric’s total 2018 power plant generation.(d)Represents DTE Electric’s 49% interest in Ludington with a total capability of 2,151 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 481 MW of renewable power generated from wind, solar, and biomassfacilities.(f)In December 2018, DTE Electric acquired the majority of the Pine River Wind Park with a Net Generation Capacity of 161 MW located in Gratiot County, which is expected to beplaced into service in the first quarter of 2019.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 696 distribution substations with a capacity of approximately 36,661,000 kilovolt-amperes (kVA) and approximately442,700 line transformers with a capacity of approximately 32,059,000 kVA.Circuit miles of electric distribution lines owned and in service as of December 31, 2018 are shown in the following table: Circuit MilesOperating Voltage-Kilovolts (kV) Overhead Underground4.8 kV to 13.2 kV 28,498 15,25224 kV 182 68640 kV 2,306 376120 kV 61 8 31,047 16,322There 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 continuing investments in DTE Electric's primary coal generating units, a natural gas fueled combined cycle generation facility,and renewables.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 2018, 2017, and 2016 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 2019.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.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.See Note 4 to the Consolidated Financial Statements in Item 8 of the Report, "Revenue."Natural Gas SupplyDTE Gas' gas distribution system has a planned maximum daily send-out capacity of 2.4 Bcf, with approximately 66% of the volume coming fromunderground storage for 2018. 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 (Appalachian, Gulf Coast, Mid-Continent, Canada, and Michigan) under agreementsthat vary in both pricing and terms. Gas supply pricing is generally tied to the New York Mercantile Exchange and published price indices to approximatecurrent market prices combined with MPSC-approved fixed price supplies with varying terms and volumes through 2021.12DTE Gas is directly connected to interstate pipelines, providing access to most of the major natural gas supply producing regions in the Appalachian,Gulf Coast, Mid-Continent, and Canadian regions. The primary long-term transportation supply contracts at December 31, 2018 are listed below. Availability(MDth/d) ContractExpirationGreat Lakes Gas Transmission L.P.30 2022Viking Gas Transmission Company21 2022Vector Pipeline L.P. (an affiliate)20 2022ANR Pipeline Company129 2028Panhandle Eastern Pipeline Company125 2029NEXUS Pipeline (an affiliate)75 2033PropertiesDTE Gas owns distribution, storage, and transportation properties that are located in the State of Michigan. The distribution system includesapproximately 19,800 miles of distribution mains, approximately 1,305,000 service pipelines, and approximately 1,273,000 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.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 service territory. DTE Gas also partners with federal, state, and localofficials to attempt to increase the share of low-income funding allocated to DTE Gas customers.13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 waste reductionproducts and 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.PropertiesGas Storage and Pipelines holds the following properties:Property Classification % Owned Description LocationPipelines Appalachia Gathering System 100% 116-mile pipeline delivering Marcellus Shale gas to Texas Eastern Pipelineand Stonewall Gas Gathering system PA and WVBirdsboro Pipeline 100% 14-mile pipeline delivering gas supply to the Birdsboro Power Plant PABluestone Pipeline 100% 64-mile pipeline delivering Marcellus Shale gas to Millennium Pipeline andTennessee Pipeline PA and NYMichigan gathering systems 100% 590-mile pipeline system in northern Michigan MIMillennium Pipeline 26% 269-mile pipeline serving markets in the Northeast NYNEXUS Pipeline 50% 256-mile pipeline to transport Utica and Marcellus shale gas to Ohio,Michigan, and Ontario market centers OH and MIStonewall Gas Gathering 55% 68-mile pipeline connecting Appalachia Gathering System to ColumbiaPipeline WVSusquehanna gathering system 100% 203-mile pipeline delivering Southwestern Energy's Marcellus Shale gasproduction to Bluestone Pipeline PATioga Gas Gathering 100% 3-mile pipeline delivering production gas to Dominion Transmissioninterconnect PAVector Pipeline 40% 348-mile pipeline connecting Chicago, Michigan, and Ontario market centers IL, IN, MI, and OntarioStorage Washington 10 100% 75 Bcf of storage capacity MIWashington 28 50% 16 Bcf of storage capacity MI14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.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, Millennium, Birdsboro, and NEXUS Pipelines provide interstate transportation services in accordance with theirFERC-approved tariffs. In addition, NEXUS and Vector are subject to applicable laws, rules, and regulations in Canada. Gas Storage and Pipelines' gatheringand pipeline assets are subject to the rules and regulations of various state utility commissions.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 producers that support its Bluestone Pipeline, Susquehanna gathering,Tioga gathering, AGS, and SGG businesses. Gas Storage and Pipelines is evaluating new pipeline and storage investment opportunities that could includeadditional pipeline and gathering expansions, laterals, compression, and other Marcellus/Utica shale midstream development or partnering opportunities.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 and gas from renewable energy projects. This business segment provides servicesusing project assets usually located on or near the customers' premises in the steel, automotive, pulp and paper, airport, chemical, and other industries asfollows: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.15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.•Renewable Gas Recovery — Power and Industrial Projects has ownership interests in, and operates, twenty-three gas recovery sites in nine different states.The sites recover methane from landfills and agricultural businesses and convert the gas to generate electricity, replace fossil fuels in industrial andmanufacturing operations, 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 ten sites including facilities located atseven third-party owned coal-fired power plants. DTE Energy has sold membership interests in five of the facilities and entered into lease arrangementsin three of the facilities. In addition, DTE Energy has an agreement to operate an REF facility owned by an outside party located at a third-party ownedcoal-fired power plant. The facilities blend a proprietary additive with coal used in coal-fired power plants, resulting in reduced emissions of nitrogenoxide and mercury. Qualifying facilities are eligible to generate tax credits for ten years upon achieving certain criteria. The value of a tax credit isadjusted annually by an inflation factor published by the IRS. The value of the tax credit is reduced if the reference price of coal exceeds certainthresholds. The economic benefit of the REF facilities is dependent upon the generation of production tax credits.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 GenerationRenewable Gas Recovery AZ, CA, MI, NC, NY, OH, TX, UT,and WI Electric Generation and Renewable Natural GasReduced Emissions Fuel MI, OH, IL, PA, TX, and WI REF Supply16 2018 2017 2016 (In millions)Production Tax Credits Generated (Allocated to DTE Energy) REF$178 $144 $103Renewables7 6 8Renewable Gas Recovery3 3 3 $188 $153 $114RegulationCertain 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.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 renewable gas recovery facilities, renewable energy projects, and other energy 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.17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.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 that has been stayed as discussedbelow. Actual costs to comply could vary substantially. Additional costs may result as the effects of various substances on the environment are studied andgovernmental regulations are developed and implemented. DTE Electric DTE Gas Non-utility Total (In millions)Water$60 $— $— $60Contaminated and other sites10 25 — 35Coal combustion residuals and effluent limitations guidelines515 — — 515Estimated total future expenditures through 2025$585 $25 $— $610Estimated 2019 expenditures$30 $15 $— $45Estimated 2020 expenditures$60 $5 $— $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.18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 three permitted engineered coal ashstorage facilities to dispose of coal ash from coal-fired power plants and operates a number of smaller impoundments at its power plants. At certain facilities,the rule requires the installation of monitoring wells, compliance with groundwater standards, and the closure of basins at the end of the useful life of theassociated power plant. At other facilities, the rule requires ash laden waters be moved from earthen basins to steel and concrete tanks. In 2018, DTE Electricupdated its estimated expenditures to remediate accordingly. On October 12, 2018, a D.C. District Court decision became effective that may affect the timingof closure of coal ash impoundments that are not lined with an engineered liner system. In 2019, the EPA is expected to affirmatively undertake rulemakingto implement the D.C. District Court's decision that will determine any changes to DTE Electric's plans in the operations and closure of coal ashimpoundments.In November 2015, the EPA finalized effluent limitations guidelines for the steam electric power generating industry which requires additional controlsto be installed between 2018 and 2023. The initial costs to comply with this rule are under development and estimates are included in the Coal CombustionResidual and Effluent Limitations Guidelines amount in the above table.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. The final rule nullified the administrative stay but also extended the earliest compliance deadlines for the FGD wastewater and bottomash transport water until November 1, 2020 in order for the EPA to propose and finalize a new ruling. The ELG compliance requirements and final deadlinesfor bottom ash transport water and FGD wastewater, and total ELG related compliance costs will not be known until the EPA completes its reconsideration ofthe 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 SO2 andNOX. The EPA and the State of Michigan have also issued emission reduction regulations relating to ozone, fine particulate, regional haze, mercury, andother air pollution. These rules have led to emission controls on fossil-fueled power plants to reduce SO2, NOX, mercury, and other emissions. Theserulemakings could require additional controls for SO2, NOX, and other hazardous air pollutants over the next few years. DTE Electric does not anticipateadditional capital expenditures to comply with air pollution requirements through 2025, pending the 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 fossil-fuel EGUs. InFebruary 2016, the U.S. Supreme Court granted petitioners' requests for a stay of the carbon rules for existing EGUs (also known as the EPA Clean PowerPlan) pending final review by the courts. The Clean Power Plan has no legal effect while the stay is in place. In October 2017, the EPA issued a proposal torepeal the Clean Power Plan, and in August 2018 the EPA issued its proposed Affordable Clean Energy rule to replace the Clean Power Plan. In addition, inDecember 2018, the EPA issued proposed revisions to the carbon dioxide standards for new, modified or reconstructed fossil-fuel fired EGUs. The carbondioxide standard for new sources are not expected to have a material impact on DTE Electric, since DTE Electric has no plans to build new coal-firedgeneration and any potential new gas generation will be able to comply with the standards. These proposed rules do not impact DTE Energy's goal to reducecarbon emissions 30% by the early 2020s, 45% by 2030, 75% by 2040, and more than 80% by 2050.19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 10,600 employees as of December 31, 2018, of which approximately 5,200 were represented byunions. DTE Electric had approximately 4,900 employees as of December 31, 2018, of which approximately 2,800 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.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.20The Registrants' electric distribution system and DTE Energy's gas distribution system are subject to risks from their operation, which could reducerevenues, increase expenses, and have a material adverse effect on their business, financial position, and results of operations. The Registrants' electricdistribution and DTE Energy’s gas distribution systems are subject to many operational risks. These operational systems and infrastructure have been inservice for many years. Equipment, even when maintained in accordance with good utility practices, is subject to operational failure, including events thatare beyond the Registrants' control, and could require significant operation and maintenance expense or capital expenditures to operate efficiently. Becausethe Registrants’ distribution systems are interconnected with those of third parties, the operation of the Registrants’ systems could be adversely affected byunexpected or uncontrollable events occurring on the systems of such third parties.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.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, third parties, or the public. Although the Registrants have insurance coverage for many potential incidents, dependingupon the nature and severity of any incident, they could experience financial loss, damage to their reputation, and negative consequences from regulatoryagencies or other public authorities.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.Threats of cyber incidents, physical security, and terrorism could affect the Registrants' business. Issues may threaten the Registrants such as cyberincidents, physical security, or terrorism that may disrupt the Registrants' operations, and could harm the Registrants' operating results.21Information security risks have increased in recent years as a result of the proliferation of new technologies and the increased sophistication andfrequency of cyberattacks, and data security breaches. The Registrants' industry requires the continued operation of sophisticated information and controltechnology systems and network infrastructure. Despite implementation of security measures, all of the Registrants' technology systems are vulnerable todisability or failures due to cyber incidents, physical security threats, acts of war or terrorism, and other causes, as well as loss of operational control of theRegistrants' electric generation and distribution assets and, DTE Energy's gas distribution assets. If the Registrants' information technology systems were tofail and they were unable to recover in a timely way, the Registrants may be unable to fulfill critical business functions, which could have a material adverseeffect on the Registrants' business, operating results, and financial condition.Suppliers, vendors, contractors, and information technology providers have access to systems that support the Registrants’ operations and maintaincustomer and employee data. A breach of these third-party systems could adversely affect the business as if it was a breach of our own system. Also, becausethe Registrants’ generation and distribution systems are part of an interconnected system, a disruption caused by a cyber incident at another utility, electricgenerator, system operator, or commodity supplier could also adversely affect the Registrants’ businesses, 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.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 theRegistrants' 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.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. Insurance maintained by the Registrants for various nuclear-related risks may not besufficient to cover the Registrants' costs in the event of an accident or business interruption at the nuclear generating plant, which may affect the Registrants'financial performance. In addition, the Registrants' nuclear decommissioning trust fund, to finance the decommissioning of the nuclear generating plant, maynot be sufficient to fund the cost of decommissioning. A decline in market value of assets held in decommissioning trust funds due to poor investmentperformance or other factors may increase the funding requirements for these obligations. Any increase in funding requirements may have a material impacton the Registrants’ liquidity, financial position, or results of operations.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 as well as uranium for their nuclear operations. DTE Energy's access to natural gas supplies is critical toensure reliability of service for utility gas customers. DTE Energy's non-utility businesses are also dependent upon supplies and prices of energy commoditiesand services. Price fluctuations, fuel supply disruptions, and changes in transportation costs, could have a negative impact on the amounts DTE Electriccharges utility customers for electricity and DTE Gas charges utility customers for gas, and on the profitability of DTE Energy's non-utility businesses. TheRegistrants' hedging strategies and regulatory recovery mechanisms may be insufficient to mitigate the negative fluctuations in commodity supply prices intheir utility and, for DTE Energy, non-utility businesses, and the Registrants' financial performance may therefore be negatively impacted by pricefluctuations. The price of 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 waste reduction technologies, and energy storage devices.Such developments may impact the price of energy, may affect energy deliveries as customer-owned generation becomes more cost-effective, may requirefurther improvements 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. If 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.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.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.Renewable portfolio standards and energy waste reduction programs may affect the Registrants' business. The Registrants are subject to existingMichigan, and potential future, federal legislation and regulation requiring them to secure sources of renewable energy. The Registrants have complied withthe existing federal and state legislation, but do not know what requirements may be added by federal or state legislation in the future. In addition, theRegistrants expect to comply with new Michigan legislation increasing the percentage of power required to be provided by renewable energy sources. TheRegistrants cannot predict the financial impact or costs associated with complying with potential future legislation and regulations. Compliance with theserequirements can significantly increase capital expenditures and operating expenses and can negatively affect the affordability of the rates charged tocustomers.The Registrants are also required by Michigan legislation to implement energy waste reduction measures and provide energy waste reduction customerawareness and education programs. These requirements necessitate expenditures, and implementation of these programs creates the risk of reducing theRegistrants' revenues as customers decrease their energy usage. The Registrants cannot predict how these programs will impact their business and futureoperating results.24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 5,200 and DTE Electric'sapproximately 2,800 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.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, renewable gas recovery, reduced emission fuel, and gas production operations, and for the Registrants, renewable energy generation. Ifthe Registrants' production tax credits were disallowed in whole or in part as a result of an IRS audit or changes in tax law, there could be additional taxliabilities owed for previously recognized tax credits that could significantly impact the Registrants' earnings and cash flows.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 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.25Item 3. Legal ProceedingsIn March 2018, the Trenton Channel Power Plant experienced exceedances of its mercury emission limits. The exceedances were reported to the EPAand the MDEQ. On September 12, 2018, the EPA issued a NOV. DTE Electric is currently working with the EPA to address the NOV. At this time, DTEElectric cannot predict the impact of the NOV.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 under the ticker symbol "DTE" on the New York Stock Exchange, which is the principal market for such stock.At December 31, 2018, there were 181,925,281 shares of DTE Energy common stock outstanding. These shares were held by a total of 51,338shareholders of record.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.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, 2018: Number of Securitiesto be Issued UponExercise ofOutstanding Options Weighted-AverageExercise Price ofOutstanding Options Number of SecuritiesRemaining Availablefor Future IssuanceUnder EquityCompensation PlansPlans approved by shareholders52,100 $43.30 2,897,674UNREGISTERED 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, 2018: 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 orPrograms10/01/2018 — 10/31/2018143 $110.14 — — —11/01/2018 — 11/30/2018— $— — — —12/01/2018 — 12/31/2018— $— — — —Total143 — _______________________________________(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.27COMPARISON OF CUMULATIVE FIVE YEAR TOTAL RETURNTotal Return to DTE Energy Shareholders(Includes reinvestment of dividends) Annual Return PercentageYear Ended December 31,Company/Index 2014 2015 2016 2017 2018DTE Energy Company 34.61 (3.77) 26.93 14.59 4.19S&P 500 Index 13.69 1.38 11.95 21.82 (4.39)S&P 500 Multi-Utilities Index 28.94 (1.73) 18.56 12.09 1.77 Indexed ReturnsYear Ended December 31, Base Period Company/Index 2013 2014 2015 2016 2017 2018DTE Energy Company 100.00 134.61 129.54 164.41 188.40 196.30S&P 500 Index 100.00 113.69 115.26 129.04 157.19 150.29S&P 500 Multi-Utilities Index 100.00 128.94 126.71 150.22 168.38 171.3528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). 2018 2017 2016 2015 2014 (In millions, except per share amounts)Operating Revenues$14,212 $12,607 $10,630 $10,337 $12,301Net Income Attributable to DTE Energy Company(a)$1,120 $1,134 $868 $727 $905Diluted Earnings Per Common Share$6.17 $6.32 $4.83 $4.05 $5.10Financial Information Dividends declared per share of common stock$3.60 $3.36 $3.06 $2.84 $2.69Total Assets$36,288 $33,767 $32,041 $28,662 $27,827Long-Term Debt(b)$12,134 $12,185 $11,269 $8,760 $8,271Shareholders’ equity$10,237 $9,512 $9,011 $8,772 $8,327_______________________________________(a)The 2017 results include a $105 million net income tax benefit related to the enactment of the TCJA.(b)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.EXECUTIVE OVERVIEWDTE Energy is a diversified energy company with 2018 Operating Revenues of approximately $14.2 billion and Total Assets of approximately $36.3billion. 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, 2018 2017 2016 (In millions, except per share amounts)Net Income Attributable to DTE Energy Company$1,120 $1,134 $868Diluted Earnings per Common Share$6.17 $6.32 $4.83The decrease in 2018 Net Income Attributable to DTE Energy Company was primarily due to lower earnings in the Gas Storage and Pipelines, EnergyTrading, and Corporate and Other segments, partially offset by higher earnings in the Electric, Gas, and Power and Industrial Projects segments. The 2018decrease was partially attributable to true-up adjustments for the remeasurement of deferred taxes of $21 million as the adjustments increased Income TaxExpense, of which $17 million was attributable to the regulated utilities and increased Regulatory liabilities. The increase in 2017 Net Income Attributableto DTE Energy Company was primarily due to higher earnings in the Gas Storage and Pipelines, Energy Trading, and Power and Industrial Projects segments,partially offset by lower earnings in the Corporate and Other segment. The 2017 increase was also due to $105 million of net income tax benefit related to theenactment of the TCJA.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.29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 waste reduction projects, demand response, and natural gas fueled generation. DTE Energy has already begun thetransition in the way it produces power through the continued retirement of its aging coal-fired plants. In May 2018, DTE Energy announced its plans toaccelerate its clean energy initiatives by targeting at least a 50% clean energy goal by 2030 to be achieved through a combination of investments inrenewable energy and energy waste reduction projects. Refer to the "Capital Investments" section below for 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.DTE Electric's capital investments over the 2019-2023 period are estimated at $11.3 billion comprised of $4.0 billion for capital replacements and otherprojects, $4.6 billion for distribution infrastructure, and $2.7 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 waste reduction,demand response, and natural gas fueled generation. In April 2018, DTE Electric received approval from the MPSC to build a natural gas fueled combinedcycle generation facility to provide approximately 1,100 megawatts of energy beginning in 2022. In August 2018, DTE Electric began construction on itsnatural gas fueled combined cycle generation facility. In March 2018, DTE Electric filed its 2018 Renewable Energy Plan with the MPSC proposingapproximately 1,000 additional megawatts of energy from new wind and solar projects to be completed by 2022. The MPSC had previously approved 300 ofthe 1,000 additional megawatts for wind projects in an MPSC order received in September 2016. In January 2018, DTE Electric filed with the MPSC its five-year distribution operations investment and maintenance plan to improve system reliability. DTE Electric plans to seek regulatory approval for capitalexpenditures consistent with prior ratemaking treatment. For further discussion of regulatory matters, see Note 9 to the Consolidated Financial Statements,"Regulatory Matters."DTE Gas' capital investments over the 2019-2023 period are estimated at $2.5 billion comprised of $1.2 billion for base infrastructure, and $1.3 billionfor gas main renewal, meter move out, and pipeline integrity programs. DTE Gas plans to seek regulatory approval for capital expenditures consistent withratemaking 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 2019-2023 period are estimated at $4.0 billion to $5.0 billion for gathering and pipeline investments and expansions. Power andIndustrial Projects' capital investments over the 2019-2023 period are estimated at $1.0 billion to $1.4 billion for industrial energy services and RNGprojects.30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.Air — 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, andother air pollution. These rules have led to controls on fossil-fueled power plants to reduce SO2, NOX, mercury, and other emissions. Additional rulemakingsmay occur 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 2018. DTE Electric does not anticipate additional capital expenditures through 2025.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, in 2015 the EPA finalized performance standards for emissions of carbon dioxide from new and existing EGUs. In February2016, the U.S. Supreme Court granted petitioners' requests for a stay of the carbon rules for existing EGUs (also known as the EPA Clean Power Plan) pendingfinal review by the courts. The Clean Power Plan has no legal effect while the stay is in place. On March 28, 2017, a presidential executive order was issuedon "Promoting Energy Independence and Economic Growth." The order instructs the EPA to review, and if appropriate, suspend, revise or rescind the CleanPower Plan rule. Following the issuance of this order, the federal government requested the U.S. Court of Appeals for the D.C. Circuit to hold all legalchallenges in abeyance until the review of these regulations is completed. On October 10, 2017, the EPA proposed to rescind the Clean Power Plan andannounced its intent to issue an ANPR seeking input as to whether it should replace the rule and, if so, what form it should take. In August 2018, the EPAproposed revised emission guidelines for GHGs from existing electric utility generating units. The proposed rule, named the Affordable Clean Energy (ACE)rule, is intended to replace the Clean Power Plan rule. Comments on the proposed ACE rule were due on October 31, 2018. It is not possible to determine thepotential impact of the EPA's proposed ACE rule 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.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 waste reduction initiatives, and thepotential development of market-based trading of carbon instruments which could provide new business opportunities for DTE Energy's utility and non-utility segments. At the present time, it is not possible to quantify the financial impacts of these climate related regulatory initiatives on the Registrants ortheir customers.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.31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.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 the 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.32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. 2018 2017 2016 (In millions)Net Income (Loss) Attributable to DTE Energy by Segment Electric$664 $606 $622Gas150 146 138Gas Storage and Pipelines235 275 119Power and Industrial Projects161 138 95Energy Trading39 72 (45)Corporate and Other(129) (103) (61)Net Income Attributable to DTE Energy Company$1,120 $1,134 $868ELECTRICThe 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: 2018 2017 2016 (In millions)Operating Revenues — Utility operations$5,298 $5,102 $5,225Fuel and purchased power — utility1,552 1,454 1,532Utility Margin3,746 3,648 3,693Operation and maintenance1,437 1,382 1,408Depreciation and amortization836 753 750Taxes other than income307 302 284Asset (gains) losses and impairments, net(1) — —Operating Income1,167 1,211 1,251Other (Income) and Deductions310 284 276Income Tax Expense193 321 353Net Income Attributable to DTE Energy Company$664 $606 $622See DTE Electric's Consolidated Statements of Operations in Item 8 of this Report for a complete view of its results. For an explanation of differencesbetween the Electric segment and DTE Electric's Consolidated Statements of Operations, refer to Note 20 to the Consolidated Financial Statements,"Retirement Benefits and Trusteed Assets."Utility Margin increased $98 million in 2018 and decreased $45 million in 2017. Revenues associated with certain mechanisms and surcharges areoffset by related expenses elsewhere in the Registrants' Consolidated Statements of Operations.33The following table details changes in various Utility Margin components relative to the comparable prior period: 2018 2017 (In millions)Weather$152 $(109)Implementation of new rates51 124Regulatory mechanism — TRM40 (26)PSCR disallowance in 201713 (13)Base sales(3) (26)TCJA rate reduction(156) —Other regulatory mechanisms and other1 5Increase (decrease) in Utility Margin$98 $(45) 2018 2017 2016 (In thousands of MWh)DTE Electric Sales Residential15,959 14,885 15,875Commercial17,282 17,283 17,521Industrial10,324 9,897 10,004Other221 258 264 43,786 42,323 43,664Interconnection sales(a)2,796 2,623 2,334Total DTE Electric Sales46,582 44,946 45,998 DTE Electric Deliveries Retail and wholesale43,786 42,323 43,664Electric retail access, including self-generators(b)4,737 4,820 4,936Total DTE Electric Sales and Deliveries48,523 47,143 48,600______________________________(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 increased for residential, commercial, and industrial primarily due to favorable weather in 2018.Operation and maintenance expense increased $55 million in 2018 and decreased $26 million in 2017. The increase in 2018 was primarily due toincreased uncollectible expense of $34 million due to customer billing initiatives following implementation of the new billing system, increased power plantgeneration expense of $24 million, an increase in energy waste reduction expense of $10 million to meet higher energy savings targets, partially offset bydecreased distribution operations expense of $13 million. The decrease in 2017 was primarily due to decreased power plant generation expenses of $66million, partially offset by increased storm restoration expenses of $27 million, and increased line clearance expenses of $10 million. The decrease in powerplant generation includes an increase of $6 million of costs related to the 2016 fire at a generation facility, offset by $21 million of insurance proceedsreceived in 2017.Depreciation and amortization expense increased $83 million in 2018 and increased $3 million in 2017. In 2018, the increase was primarily due to anincrease to depreciable base of $46 million and an increase of $42 million associated with the TRM, partially offset by a decrease in regulatory assetamortization of $5 million. In 2017, the increase was due to $45 million of increased expense from an increased depreciable base, partially offset by adecrease of $29 million associated with the TRM, and a decrease of $13 million in amortization of regulatory assets.34Other (Income) and Deductions increased $26 million in 2018 and increased $8 million in 2017. The increase in 2018 was primarily due to higherinterest expense of $9 million and change in investment earnings (loss of $11 million in 2018 compared to a gain of $26 million in 2017), partially offset bydecreased non-operating retirement benefits expense of $13 million and a contribution to the DTE Energy Foundation of $7 million in 2017. The increase in2017 was primarily due to higher interest expense of $10 million, lower interest income of $8 million related to a sales and use tax settlement received in2016, and a $7 million contribution to the DTE Energy Foundation, partially offset by $12 million of higher investment earnings and a $3 million decreasein Low Income Self-Sufficiency Plan (LSP) contributions to not-for-profit organizations in 2016.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 will maintain astrong focus on customers by increasing reliability and satisfaction while keeping customer rate increases affordable. Looking forward, additional factors mayimpact earnings such as weather, the outcome of regulatory proceedings, benefit plan design changes, investment returns and changes in discount rateassumptions in benefit plans and health care costs, uncertainty of legislative or regulatory actions regarding climate change, and effects of energy wastereduction programs.DTE Electric filed a rate case with the MPSC on July 6, 2018 requesting an increase in base rates of $328 million based on a projected twelve-monthperiod ending April 30, 2020. The requested increase in base rates is primarily due to an increase in net plant resulting from infrastructure investments,depreciation expense, as requested in the 2016 DTE Electric Depreciation Case Filing, and reliability improvement projects. The rate filing also requests anincrease in return on equity from 10.0% to 10.5% and includes projected changes in sales, operation and maintenance expenses, and working capital. Inaddition, the rate filing requests an Infrastructure Recovery Mechanism to recover the incremental revenue requirement associated with certain distribution,fossil generation, and nuclear generation capital expenditures through 2022. DTE Electric also included Calculation C in this filing to address all remainingissues relative to the enactment of the TCJA, which is primarily the remeasurement of deferred taxes and how the amounts deferred as Regulatory liabilitieswill flow to ratepayers. A final MPSC order in this case is expected by May 2019. Refer to Note 9 to the Consolidated Financial Statements, “RegulatoryMatters” for additional information.GASThe Gas segment consists principally of DTE Gas. Gas results are discussed below: 2018 2017 2016 (In millions)Operating Revenues — Utility operations$1,436 $1,388 $1,324Cost of gas — utility446 443 454Utility Margin990 945 870Operation and maintenance502 449 440Depreciation and amortization133 123 106Taxes other than income73 65 64Asset (gains) losses and impairments, net— — 4Operating Income282 308 256Other (Income) and Deductions65 84 41Income Tax Expense67 78 77Net Income Attributable to DTE Energy Company$150 $146 $138Utility Margin increased $45 million in 2018 and increased $75 million in 2017. 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: 2018 2017 (In millions)Weather$46 $(6)Implementation of new rates15 80Midstream storage and transportation revenues15 (5)Regulatory mechanism — RDM(3) 4TCJA rate reduction(40) —Other regulatory mechanisms and other12 2Increase in Utility Margin$45 $75 2018 2017 2016 (In Bcf)Gas Markets Gas sales135 119 116End-user transportation187 165 182 322 284 298Intermediate transportation329 260 214Total Gas sales651 544 512Operation and maintenance expense increased $53 million in 2018 and increased $9 million in 2017. The increase in 2018 was primarily due toincreased uncollectible expense of $28 million due to customer billing initiatives following implementation of a new customer billing system and higher gasoperations expenses of $22 million, which included increased investment spending and higher pipeline integrity expenses. The increase in 2017 wasprimarily due to increased corporate expenses of $3 million and increased gas operations expenses of $3 million.Depreciation and amortization expense increased $10 million in 2018 and increased $17 million in 2017. The increase in 2018 was primarily due toan increased depreciable base. The increase in 2017 was primarily due to an increased depreciable base and higher depreciation rates.Other (Income) and Deductions decreased $19 million in 2018 and increased $43 million in 2017. The decrease in 2018 was primarily due to lowercontributions to the DTE Energy Foundation and other not-for-profit organizations of $27 million, partially offset by higher net interest expense of $6million. The increase in 2017 was primarily due to increased non-operating retirement benefits expenses of $31 million, increased contributions to the DTEEnergy Foundation and other not-for-profit organizations of $7 million and higher interest expense of $5 million.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 filed its Calculation C case with the MPSC on November 16, 2018 to reduce the revenue requirement by $12 million related to the amortization ofdeferred tax remeasurement. Calculation C addresses all remaining issues relative to the enactment of the TCJA, which is primarily the remeasurement ofdeferred taxes and how the amounts deferred as Regulatory liabilities will flow to ratepayers. Refer to Note 9 to the Consolidated Financial Statements,“Regulatory Matters” for additional information.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: 2018 2017 2016 (In millions)Operating Revenues — Non-utility operations$485 $453 $302Cost of gas — Non-utility22 30 6Operation and maintenance103 83 81Depreciation and amortization82 76 45Taxes other than income8 8 4Asset (gains) losses and impairments, net— 2 —Operating Income270 254 166Other (Income) and Deductions(61) (18) (31)Income Tax Expense (Benefit)68 (30) 71Net Income263 302 126Less: Net Income Attributable to Noncontrolling Interests28 27 7Net Income Attributable to DTE Energy Company$235 $275 $119Operating Revenues — Non-utility operations increased $32 million in 2018 and increased $151 million in 2017. The increase in both periods wasprimarily due to increased pipeline and gathering volumes. The 2017 increase was also due to the acquisition of AGS and SGG in October 2016.Cost of gas — Non-utility decreased $8 million in 2018 and increased $24 million in 2017. The 2018 decrease was driven by lower physical purchasesof gas from AGS customers for resale to optimize available transportation capacity. The 2017 increase was driven by higher physical purchases of gas fromAGS customers for resale to optimize available transportation capacity.Operation and maintenance expense increased $20 million in 2018 and increased $2 million in 2017. The 2018 increase was primarily due toincreased labor related expenses and additional compression activity on the Bluestone Pipeline and Susquehanna gathering systems.Depreciation and amortization expense increased $6 million in 2018 and increased $31 million in 2017. The 2017 increase was primarily due to theacquisition of AGS and SGG in October 2016.Other (Income) and Deductions increased $43 million in 2018 and decreased $13 million in 2017. The 2018 increase was primarily due to increasedearnings from pipeline investments and a $16 million net loss on extinguishment of debt within the storage business in 2017, partially offset by higherinterest expense. The 2017 decrease was primarily due to a $16 million net loss on extinguishment of debt within the storage business and contributions tothe DTE Energy Foundation and other not-for-profit organizations, partially offset by increased earnings from pipeline investments.Income Tax Expense (Benefit) increased $98 million in 2018 and decreased $101 million in 2017. The changes were primarily driven by the $115million remeasurement of deferred tax assets and liabilities to reflect the reduction in the corporate tax rate from the enactment of the TCJA in December2017. The 2017 change was partially offset by increased tax expense on higher earnings in 2017.Net Income Attributable to Noncontrolling Interests increased $1 million in 2018 and increased $20 million in 2017. The 2017 increase was primarilydue to the acquisition of SGG in October 2016.Outlook — DTE Energy believes its long-term agreements with producers and the quality of the natural gas reserves in the Marcellus/Utica regionsoundly position the gathering systems for future revenues.NEXUS Pipeline was placed in service in in October 2018. The NEXUS Pipeline provides a transportation path for Appalachian Basin shale gas,including Utica and Marcellus shale gas, directly to consuming markets in northern Ohio, southeastern Michigan, and Dawn Ontario. DTE Energy owns a50% partnership interest in the NEXUS Pipeline with an investment balance of $1.26 billion at December 31, 2018.37On January 11, 2019, NEXUS signed an agreement to purchase Generation Pipeline, LLC, a public utility regulated by the Public Utilities Commissionof Ohio. This 23-mile pipeline system supplies gas to industrial customers in the Toledo, OH area, has existing interconnects with ANR Pipeline Companyand Panhandle Eastern Pipeline Company, and is located 4 miles away from Nexus. The transaction is expected to close in the first half of 2019 uponregulatory approvals.AGS and SGG provide a platform for midstream growth and access to further investment opportunities in the Appalachian basin, an additionalconnection to the NEXUS Pipeline which should drive incremental volumes on the NEXUS Pipeline, and producer relationships that may lead to morepartnering opportunities.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 and pipeline-quality gas from renewable energy projects. Powerand Industrial Projects results are discussed below: 2018 2017 2016 (In millions)Operating Revenues — Non-utility operations$2,204 $2,089 $1,906Fuel, purchased power, and gas — non-utility1,888 1,813 1,640Non-utility Margin316 276 266Operation and maintenance363 342 317Depreciation and amortization67 72 72Taxes other than income12 11 13Asset (gains) losses and impairments, net27 20 (1)Operating Loss(153) (169) (135)Other (Income) and Deductions(89) (63) (49)Income Taxes Benefit(7) (42) (26)Production Tax Credits(188) (153) (114) (195) (195) (140)Net Income131 89 54Less: Net Loss Attributable to Noncontrolling Interests(30) (49) (41)Net Income Attributable to DTE Energy Company$161 $138 $9538Operating Revenues — Non-utility operations increased $115 million in 2018 and increased $183 million in 2017. The changes are due to thefollowing: 2018 (In millions)Higher demand due to improved conditions in the steel business$59Higher production in the renewables business25Higher production, offset by lower coal prices in the REF business18Higher sales primarily associated with new contracts in the on-site business13 $115 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) $183Non-utility Margin increased $40 million in 2018 and increased $10 million in 2017. The changes are due to the following: 2018 (In millions)Higher production in the renewables business$20Higher sales primarily associated with new contracts in the on-site business12Higher demand due to improved conditions in the steel business8 $40 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) $10Operation and maintenance expense increased $21 million in 2018 and increased $25 million in 2017. The 2018 increase was primarily due to higherproduction in the REF business of $11 million and new contracts in the on-site business of $8 million. The 2017 increase was primarily due to an increase inmaintenance spending driven by improved conditions in the steel business of $16 million, higher maintenance and a new acquisition in the renewablesbusiness 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 Shenango plantclosure activities in the first half of 2016 of $6 million.Asset (gains) losses and impairments, net increased $7 million in 2018 from the net loss of $20 million in 2017 and decreased $21 million in 2017 fromthe net gain of $1 million in 2016. The 2018 increase was primarily due to $15 million of a liability adjustment related to contingent consideration and an $8million asset write-off associated with the renewable business in anticipation of a contract ending in 2020. The 2017 decrease was primarily due to animpairment in the REF business of $14 million and an impairment of a petroleum coke project of $6 million.39Other (Income) and Deductions increased $26 million in 2018 and increased $14 million in 2017. The 2018 increase was primarily due to higherproduction in the REF business of $20 million and decreased contributions to the DTE Energy Foundation of $4 million. The 2017 increase was primarilydue to increased equity earnings in the renewable business of $9 million and insurance settlements in the renewable and REF businesses of $6 million, offsetby increased contributions to the DTE Energy Foundation of $6 million.Income Taxes — Benefit decreased by $35 million in 2018 and increased by $16 million in 2017. The 2018 decrease was primarily due to the 2017remeasurement of deferred tax assets and liabilities to reflect the reduction in the corporate tax rate from the enactment of the TCJA in December 2017. Theincrease in 2017 was primarily due to the remeasurement of deferred tax assets and liabilities to reflect the reduction in the corporate tax rate from theenactment of the TCJA in December 2017 of $21 million, an increase due to higher pretax loss of $7 million, and a decrease due to a worthless stockdeduction associated with the Shenango closure in 2016 of $10 million.Income Taxes — Production Tax Credits increased by $35 million in 2018 and increased $39 million in 2017. The increase in both periods wasprimarily due to higher production in the REF business.Net Loss Attributable to Noncontrolling Interests decreased by $19 million in 2018 and increased by $8 million in 2017. The 2018 decrease wasprimarily due to termination of a project in the REF business. The 2017 increase was primarily due to a change in the ownership percentage in one of the REFprojects of $8 million.Outlook — Power and Industrial Projects has constructed and placed in service REF facilities at ten sites including facilities located at seven third-partyowned coal-fired power plants. DTE Energy has sold membership interests in five of the facilities and entered into lease arrangements in three of the facilities.Three REF facilities will phase out in 2019 with the remaining seven to be phased out at the end of 2021.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: 2018 2017 2016 (In millions)Operating Revenues — Non-utility operations$5,557 $4,277 $2,575Purchased power and gas — non-utility5,417 4,077 2,552Non-utility Margin140 200 23Operation and maintenance75 68 63Depreciation and amortization5 5 3Taxes other than income5 4 2Operating Income (Loss)55 123 (45)Other (Income) and Deductions3 2 29Income Tax Expense (Benefit)13 49 (29)Net Income (Loss) Attributable to DTE Energy Company$39 $72 $(45)Operating Revenues — Non-utility operations and Purchased power and gas — non-utility were impacted primarily by an increase in volumes as wellas an increase in gas prices for the years ended December 31, 2018 and December 31, 2017, primarily in the gas structured strategy.40Non-utility Margin decreased $60 million in 2018 and increased $177 million in 2017. The change in both periods was primarily due to timing fromthe unrealized and realized margins presented in the following tables: 2018 (In millions)Unrealized Margins(a) Favorable results, primarily in the power trading strategy$20Unfavorable results, primarily in gas structured, and power full requirements strategies(b)(100) (80)Realized Margins(a) Favorable results, primarily in the gas structured strategy54Unfavorable results, primarily in the power full requirements strategy(c)(34) 20Decrease in Non-utility Margin$(60)_______________________________________(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 $74 million of timing related losses related to gas strategies which will reverse in future periods as the underlying contracts settle.(c)Amount includes $11 million of timing related gains related to gas strategies recognized in previous periods that reversed as the underlying contracts settled. 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.Other (Income) and Deductions increased $1 million in 2018 and decreased $27 million in 2017 due to contributions to the DTE Energy Foundation in2016.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 regulatory changes, and changes in operating rules of RTOs. Significantportions of the Energy Trading portfolio are economically hedged. Most financial instruments and physical power and natural gas contracts are deemedderivatives, whereas natural gas inventory, pipeline transportation, renewable energy credits, and storage assets are not derivatives. As a result, EnergyTrading will experience earnings volatility as derivatives are marked-to-market without revaluing the underlying non-derivative contracts and assets. EnergyTrading'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 2018 netloss of $129 million represents an increase of $26 million from the 2017 net loss of $103 million primarily due to a reduction in the corporate tax rate fromthe TCJA in December 2017, higher interest expense and increased contributions to other not-for-profit organizations, partially offset by the remeasurementof deferred tax assets and liabilities to reflect the reduction in the corporate tax rate from the enactment of the TCJA in 2017. The 2017 net loss of $103million represents an increase of $42 million from the 2016 net loss of $61 million primarily due to the remeasurement of deferred tax assets and liabilities toreflect 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 thecontribution of land and improvements to the DTE Energy Beacon Park Foundation.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 2019 will be approximately $2.4 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 2019 of approximately $3.9 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 2018 2017 2016Cash and Cash Equivalents(In millions)Cash Flow From (Used For) Operating Activities Net Income$1,118 $1,112 $834Adjustments to reconcile Net Income to Net cash from operating activities: Depreciation and amortization1,124 1,030 976Nuclear fuel amortization45 53 58Allowance for equity funds used during construction(28) (23) (21)Deferred income taxes114 196 265Asset (gains) losses and impairments, net29 38 8Working capital and other278 (289) (36)Net cash from operating activities2,680 2,117 2,084Investing Activities Plant and equipment expenditures — utility(2,439) (2,037) (1,898)Plant and equipment expenditures — non-utility(274) (213) (147)Acquisition, net of cash acquired— — (1,147)Contributions to equity method investees(637) (299) (239)Other3 (13) 41Net cash used for investing activities(3,347) (2,562) (3,390)Financing Activities Issuance of long-term debt, net of issuance costs1,432 1,398 2,035Redemption of long-term debt(105) (385) (807)Repurchase of long-term debt— — (59)Issuance of equity units, net of issuance costs— — 654Short-term borrowings, net(12) 122 —Repurchase of common stock— (51) (33)Dividends on common stock and other(620) (592) (531)Contributions from noncontrolling interests, principally REF entities53 50 114Distributions to noncontrolling interests(48) (40) (5)Other(46) (81) (9)Net cash from financing activities654 421 1,359Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash$(13) $(24) $53Cash 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 $563 million in 2018. The increase in operating cash flows reflects an increase in adjustments for non-cash and non-operating items, primarily Depreciation and amortization and working capital adjustments, partially offset by a decrease to Deferred income taxes.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 Asset (gains) losses and impairments, partially offset by a decrease to Deferredincome taxes and working capital adjustments.The change in working capital items in 2018 primarily related to increases in cash from Accounts receivable, Accrued pension liability, Derivativeassets and liabilities, and Other current and noncurrent assets and liabilities, partially offset by increases of cash used for Equity earnings of equity methodinvestees, Prepaid postretirement benefit costs, Accrued postretirement liability, and Regulatory assets and liabilities. The change in working capital items in2017 primarily related to increases of cash used for Accounts Receivable, Inventories, Accrued pension liability, Derivative assets and liabilities, Equityearnings of equity method investees, and Other current and noncurrent assets and liabilities, partially offset by increases in cash from the Accruedpostretirement liability, and Regulatory assets and liabilities.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 increased $785 million in 2018 due primarily to an increase in Plant and equipment expenditures andContributions to equity method investees, principally to NEXUS.Net cash used for investing activities decreased $828 million in 2017 due primarily to DTE Energy's 2016 acquisition of midstream natural gas assets,partially offset by increased Plant and equipment expenditures, Contributions to equity method investees, principally to NEXUS, and two acquisitions ofrenewable gas recovery sites, which are presented in Investing Activities — Other.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 targets balance sheetfinancial metrics to ensure it is consistent with the objective of a strong investment grade debt rating.Net cash from financing activities increased $233 million in 2018. The increase was primarily due to the reduction of Redemption of long-term debtand Repurchases of common stock and an increase in Issuance of long-term debt, partially offset by an increase in cash used for repayments of Short-termborrowings and an increase in Dividends on common stock.Net cash from financing activities decreased $938 million in 2017. The decrease was primarily due to a decrease in Issuances of long-term debt andequity units, Contributions from noncontrolling interests, an increase in Dividends on common stock, and Distributions to noncontrolling interests, partiallyoffset by an increase to Short-term borrowings, and a decrease to Redemptions and Repurchases of 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.DTE Energy has approximately $1.5 billion in long-term debt, including capital leases, maturing in the next twelve months. The repayment of the debtis expected to be paid through internally generated funds or the issuance of long-term debt.44DTE Energy has approximately $1.4 billion of available liquidity at December 31, 2018, consisting of cash and amounts available under unsecuredrevolving credit agreements.DTE Energy expects to issue equity up to $250 million in 2019 through the pension and other employee benefit plans, which is exclusive from anyamounts related to the Equity Units described in Note 14 to the Consolidated Financial Statements, "Long-Term Debt."At the discretion of management, and depending upon financial market conditions, DTE Energy anticipates making up to $150 million incontributions, including $100 million of DTE Electric contributions, to the qualified pension plans in 2019. DTE Energy does not anticipate making anycontributions to the other postretirement plans in 2019.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, 2018, 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 $638 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,"respectively.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, 2018: Total 2019 2020-2021 2022-2023 2024 andThereafter (In millions)Long-term debt: Mortgage bonds, notes, and other(a)$12,566 $1,495 $1,144 $1,793 $8,134Junior subordinated debentures(b)1,180 — — — 1,180Capital lease obligations11 4 7 — —Interest10,340 556 1,016 929 7,839Stock purchase contract33 33 — — —Operating leases154 42 48 19 45Electric, gas, fuel, transportation, and storage purchase obligations(c)5,509 2,216 1,465 591 1,237Long-term DTE Electric renewable energy power purchase agreements(d)(e)1,133 100 162 162 709Other long-term obligations(f)(g)(h)715 375 326 7 7Total obligations$31,641 $4,821 $4,168 $3,501 $19,151_______________________________________(a)Excludes $16 million of unamortized debt discount and $73 million of unamortized debt issuance costs.(b)Excludes $35 million of unamortized debt issuance costs.(c)Excludes amounts associated with full requirements contracts where no stated minimum purchase volume is required.(d)The agreements represent the minimum obligations 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 29% to 100%.(e)Excludes a power purchase agreement with a non-utility affiliate of DTE Energy.(f)Includes liabilities for unrecognized tax benefits of $10 million.(g)Excludes other long-term liabilities of $172 million not directly derived from contracts or other agreements.(h)At December 31, 2018, 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 31,2018 and 2017. 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 or assumed long-term growth rate approach, which incorporates the current market values of comparable entities or management'sassumptions regarding sustainable long-term growth of the reporting units, respectively. These cash flow valuations involve a number of estimates thatrequire 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, 2018 and determined that the estimated fair value of each reporting unit exceeded itscarrying value, and no impairment existed.The results of the test and key estimates that were incorporated are as follows as of the October 1, 2018 valuation date:Reporting Unit Goodwill Fair Value Reduction%(a) Discount Rate Terminal Multiple(b) Valuation Methodology(c) (In millions) Electric $1,208 35% 6% 10.0x DCF, assuming stock saleGas 743 30% 7% 12.0x DCF, assuming stock saleGas Storage and Pipelines 299 19% 7% n/a(d) DCF, assuming asset salePower and Industrial Projects(e) 26 18% 6% 9.0x DCF, assuming asset sale(f)Energy Trading 17 56% 12% n/a(g) 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 2019-2023 projected cash flows plus a calculated terminal value.(d)Due to the nature of the projected cash flows for Gas Storage and Pipelines, DTE Energy capitalized the terminal year cash flows at the weighted average cost of capital (WACC)less an assumed long-term growth rate of 3.0% in lieu of applying a terminal EBITDA multiple.(e)Power and Industrial Projects excludes the Biomass reporting unit, as this unit has no allocated goodwill.(f)Asset sales were assumed, except for Power and Industrial Projects' reduced emissions fuels projects, which assumed stock sales.(g)Due to lack of market comparable information for Energy Trading, DTE Energy capitalized the terminal year cash flows at the WACC in lieu of applying a terminal EBITDAmultiple.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 $148 million in 2018, $172 million in 2017, and $167 million in 2016. Other postretirement benefit credits were $36million in 2018, $31 million in 2017, and $111 million in 2016. Pension costs and other postretirement benefit credits for 2018 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 2019 expected long-term rate of returnon pension plan assets is based on an asset allocation assumption utilizing active investment management of 35% in equity markets, 42% in fixed incomemarkets, including long duration bonds, and 23% invested in other assets. DTE Energy's 2019 expected long-term rate of return on other postretirement planassets is based on an asset allocation assumption utilizing active investment management of 39% in equity markets, 28% in fixed income markets, and 33%invested in other assets. Because of market volatility, DTE Energy periodically reviews the asset allocation and rebalances the portfolio when consideredappropriate. DTE Energy is lowering its long-term rate of return assumption for the pension plans to 7.30% and maintaining the other postretirement plans at7.75% for 2019. DTE Energy believes these rates are reasonable assumptions for the long-term rates of return on the plans' assets for 2019 given theirrespective asset allocations and DTE's capital market expectations. DTE Energy will continue to evaluate the actuarial assumptions, including its expectedrate 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. Negative asset performance in 2018 resulted in unrecognized net losses. As of December 31,2018, DTE Energy had $248 million of cumulative losses related to investment performance in 2018 and 2017, that were not yet recognized in thecalculation of the MRV of pension assets. For the other postretirement benefit plans, DTE Energy uses fair value when determining the MRV of otherpostretirement benefit 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 4.40% for the pension and other postretirement plans at December 31, 2018 compared to 3.70% for the pension and otherpostretirement plans at December 31, 2017.DTE Energy changed the mortality assumption as of December 31, 2018 to reflect the updated MP-2018 projection scale, along with the actualexperience and credibility of each population. The mortality assumptions used at December 31, 2018 are the RP-2014 mortality table projected back to 2006using the Scale MP-2014, projected forward to 2015 using the Scale MP-2017 and projected beyond 2015 using the Scale MP-2018 with generationalprojection. The base mortality tables vary by type of plan, employee's union status and employment status, with additional adjustments to reflect the actualexperience and credibility of each population.49DTE Energy estimates the 2019 total pension costs will be approximately $100 million in 2019, compared to $148 million in 2018. The reduction intotal pension costs is primarily due to updated demographic assumptions and favorable discount rates, offset by lower asset returns. The 2019 otherpostretirement benefit credit will be approximately $45 million compared to $36 million in 2018.The health care trend rates for DTE Energy assume 6.75% for pre-65 participants and 7.25% for post-65 participants for 2019, trending down to 4.50%for both pre-65 and post-65 participants in 2031.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 2018 pension costs byapproximately $44 million. Lowering the discount rate and the salary increase assumptions by one percentage point would have increased the 2018 pensioncosts by approximately $24 million. Lowering the expected long-term rate of return on plan assets by one percentage point would have decreased the 2018other postretirement credit by approximately $18 million. Lowering the discount rate assumption by one percentage point would have decreased the 2018other postretirement credit by approximately $27 million. Lowering the health care cost trend assumptions by one percentage point would have increased theother postretirement credit for 2018 by approximately $4 million.The value of the qualified pension and other postretirement benefit plan assets was $6.0 billion at December 31, 2018 and $6.5 billion at December 31,2017. At December 31, 2018, DTE Energy's qualified pension plans were underfunded by $720 million and its other postretirement benefit plans wereoverfunded by $44 million. In 2018, the funded status of the pension plans improved as plan sponsor contributions and an increase in discount rates werepartially offset by negative asset returns. The funded status of the other postretirement benefit plans improved as an increase in discount rates and favorablehealthcare experience were partially offset by negative asset returns.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 $175 million in 2018 and $223 million in 2017. 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 $150 million in 2019 and up to $700 million over the next five years. DTE Energy did not make other postretirement benefitplan contributions in 2018 or 2017. DTE Energy does not anticipate making any contributions to its other postretirement plans in 2019 or over the next fiveyears. 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, 2018 and 2017 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, 2017$8Reclassified to realized upon settlement74Changes in fair value recorded to income(81)Amounts recorded to unrealized income(7)Changes in fair value recorded in regulatory liabilities9Change in collateral(30)Amounts recorded in Other comprehensive income, pretax(3)MTM at December 31, 2018$(23)51The table below shows the maturity of DTE Energy's MTM positions. The positions from 2022 and beyond principally represent longer tenor gasstructured transactions:Source of Fair Value 2019 2020 2021 2022 and Beyond Total Fair Value (In millions)Level 1 $4 $(1) $(1) $— $2Level 2 20 8 3 5 36Level 3 21 (7) (11) (47) (44)MTM before collateral adjustments $45 $— $(9) $(42) (6)Collateral adjustments (17)MTM at December 31, 2018 $(23)Item 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 RiskBankruptciesDTE Energy's Power and Industrial Projects segment holds ownership interests in, and operates, five generating plants that sell electric output fromrenewable sources under long-term power purchase agreements with PG&E. PG&E filed for Chapter 11 bankruptcy protection on January 29, 2019. As ofDecember 31, 2018, uncollected pre-petition accounts receivable from PG&E were approximately $12 million. Currently, PG&E has been paying amountsowed in a timely manner and its account is current. As of December 31, 2018, DTE Energy has not recorded a reserve related to the pre-petition receivables.As of December 31, 2018, the book value of long-lived assets used in producing electric output for sale to PG&E was approximately $106 million. As ofDecember 31, 2018, DTE Energy performed an impairment analysis on its long-lived assets in accordance with ASC 360, Property, Plant and Equipment.Based on its undiscounted cash flow projections, DTE Energy determined that it did not have an impairment loss as of December 31, 2018. DTE Energy’sassumptions and conclusions may change, and it could have impairment losses if any of the terms of the contracts are not honored by PG&E or the contractsare rejected through the bankruptcy process.52The Power and Industrial Projects segment also has equity investments, including a note receivable, of approximately $77 million in entities that sellpower to PG&E. DTE Energy has determined that it does not have an other than temporary decline in its equity investments as described in ASC 323,Investments-Equity Method and Joint Ventures. DTE Energy’s assumptions and conclusions may change in the future, and it could have an impairment loss ifcertain facilities are not utilized as currently anticipated or the contracts are rejected through the bankruptcy process.OtherThe 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.The following table displays the credit quality of DTE Energy's trading counterparties as of December 31, 2018: Credit ExposureBefore CashCollateral CashCollateral Net CreditExposure (In millions)Investment Grade(a) A- and Greater$348 $— $348BBB+ and BBB288 — 288BBB-49 — 49Total Investment Grade685 — 685Non-investment grade(b)3 — 3Internally Rated — investment grade(c)368 (1) 367Internally Rated — non-investment grade(d)38 (4) 34Total$1,094 $(5) $1,089_______________________________________(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 16% of the total grosscredit exposure.(b)This category includes counterparties with credit ratings that are below investment grade. The five largest counterparty exposures, combined, for this category represented 1% ofthe 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 14% 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 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, 2018, DTE Energy had a floating rate debt-to-total debt ratio of 4.3%.53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 2023.Summary of Sensitivity AnalysesSensitivity analyses were performed on the fair values of commodity contracts for DTE Energy and long-term debt obligations for the Registrants. Thecommodity contracts listed below principally relate to energy marketing and trading activities. The sensitivity analyses involved increasing and decreasingforward prices and rates at December 31, 2018 and 2017 by a hypothetical 10% and calculating the resulting change in the fair values.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 2018 2017 2018 2017 Change in the Fair Value of (In millions) Gas contracts $8 $— $(8) $— Commodity contractsPower contracts $10 $5 $(10) $(7) Commodity contractsInterest rate risk — DTE Energy $(596) $(576) $625 $581 Long-term debtInterest rate risk — DTE Electric $(277) $(246) $300 $263 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 — Revenue 85Note 5 — Goodwill 89Note 6 — Property, Plant, and Equipment 89Note 7 — Jointly-Owned Utility Plant 91Note 8 — Asset Retirement Obligations 92Note 9 — Regulatory Matters 93Note 10 — Income Taxes 98Note 11 — Earnings Per Share 102Note 12 — Fair Value 102Note 13 — Financial and Other Derivative Instruments 110Note 14 — Long-Term Debt 115Note 15 — Preferred and Preference Securities 118Note 16 — Short-Term Credit Arrangements and Borrowings 118Note 17 — Capital and Operating Leases 119Note 18 — Commitments and Contingencies 121Note 19 — Nuclear Operations 126Note 20 — Retirement Benefits and Trusteed Assets 127Note 21 — Stock-Based Compensation 138Note 22 — Segment and Related Information 141Note 23 — Related Party Transactions 143Note 24 — Supplementary Quarterly Financial Information (Unaudited) 145Financial Statement Schedule Schedule II — Valuation and Qualifying Accounts 15955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, 2018, 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, 2018. 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, 2018, 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, 2018 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, 2018 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 (the “Company”) as ofDecember 31, 2018 and 2017 , and the related consolidated statements of operations, of comprehensive income, of changes in equity and of cash flows foreach of the three years in the period ended December 31, 2018, including the related notes and schedule of valuation and qualifying accounts for each of thethree years in the period ended December 31, 2018 listed in the accompanying index (collectively referred to as the “consolidated financial statements”). Wealso have audited the Company's internal control over financial reporting as of December 31, 2018, 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, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018 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, 2018, 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.57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.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 7, 2019We have served as the Company’s auditor since 2008.58DTE Energy CompanyConsolidated Statements of Operations Year Ended December 31, 2018 2017 2016 (In millions, except per share amounts)Operating Revenues Utility operations$6,670 $6,434 $6,497Non-utility operations7,542 6,173 4,133 14,21212,60710,630 Operating Expenses Fuel, purchased power, and gas — utility1,981 1,881 1,968Fuel, purchased power, and gas — non-utility6,630 5,283 3,562Operation and maintenance2,451 2,270 2,261Depreciation and amortization1,124 1,030 976Taxes other than income405 391 370Asset (gains) losses and impairments, net27 41 7 12,618 10,896 9,144Operating Income1,594 1,711 1,486 Other (Income) and Deductions Interest expense559 536 472Interest income(12) (12) (20)Non-operating retirement benefits, net37 65 41Other income(333) (268) (207)Other expenses127 103 95 378 424 381Income Before Income Taxes1,216 1,287 1,105 Income Tax Expense98 175 271 Net Income1,118 1,112 834 Less: Net Loss Attributable to Noncontrolling Interests(2) (22) (34) Net Income Attributable to DTE Energy Company$1,120 $1,134 $868 Basic Earnings per Common Share Net Income Attributable to DTE Energy Company$6.18 $6.32 $4.84 Diluted Earnings per Common Share Net Income Attributable to DTE Energy Company$6.17 $6.32 $4.83 Weighted Average Common Shares Outstanding Basic181 179 179Diluted181 179 179See Combined Notes to Consolidated Financial Statements59DTE Energy CompanyConsolidated Statements of Comprehensive Income Year Ended December 31, 2018 2017 2016 (In millions)Net Income$1,118 $1,112 $834 Other comprehensive income (loss), net of tax: Benefit obligations, net of taxes of $2, $5, and $6, respectively8 10 11Net unrealized gains (losses) on derivatives during the period, net of taxes of $— for all periods(1) 1 —Net unrealized gains on investments during the period, net of taxes of $—, $1, and $1, respectively— 1 1Foreign currency translation(2) 1 —Other comprehensive income5 13 12 Comprehensive income1,123 1,125 846Less: Comprehensive loss attributable to noncontrolling interests(2) (22) (34)Comprehensive Income Attributable to DTE Energy Company$1,125 $1,147 $880See Combined Notes to Consolidated Financial Statements60DTE Energy CompanyConsolidated Statements of Financial Position December 31, 2018 2017 (In millions)ASSETSCurrent Assets Cash and cash equivalents$71 $66Restricted cash5 23Accounts receivable (less allowance for doubtful accounts of $91 and $49, respectively) Customer1,789 1,758Other108 98Inventories Fuel and gas406 399Materials and supplies405 380Derivative assets102 103Regulatory assets153 55Other221 199 3,260 3,081Investments Nuclear decommissioning trust funds1,378 1,492Investments in equity method investees1,771 1,073Other219 232 3,368 2,797Property Property, plant, and equipment31,810 31,424Accumulated depreciation and amortization(10,160) (10,703) 21,650 20,721Other Assets Goodwill2,293 2,293Regulatory assets4,568 3,723Intangible assets849 867Notes receivable64 73Derivative assets31 51Prepaid postretirement costs45 —Other160 161 8,010 7,168Total Assets$36,288 $33,767See Combined Notes to Consolidated Financial Statements61DTE Energy CompanyConsolidated Statements of Financial Position — (Continued) December 31, 2018 2017 (In millions, except shares)LIABILITIES AND EQUITYCurrent Liabilities Accounts payable$1,329 $1,171Accrued interest127 111Dividends payable172 158Short-term borrowings609 621Current portion long-term debt, including capital leases1,499 109Derivative liabilities67 99Regulatory liabilities126 18Other509 525 4,438 2,812Long-Term Debt (net of current portion) Mortgage bonds, notes, and other10,982 11,039Junior subordinated debentures1,145 1,145Capital lease obligations7 1 12,134 12,185Other Liabilities Deferred income taxes1,975 1,888Regulatory liabilities2,922 2,875Asset retirement obligations2,469 2,320Unamortized investment tax credit138 122Derivative liabilities89 47Accrued pension liability837 924Accrued postretirement liability— 61Nuclear decommissioning205 220Other364 323 8,999 8,780Commitments and Contingencies (Notes 9 and 18) Equity Common stock (No par value, 400,000,000 shares authorized, and 181,925,281 and 179,386,967 shares issued and outstanding atDecember 31, 2018 and December 31, 2017, respectively)4,245 3,989Retained earnings6,112 5,643Accumulated other comprehensive loss(120) (120)Total DTE Energy Company Equity10,237 9,512Noncontrolling interests480 478Total Equity10,717 9,990Total Liabilities and Equity$36,288 $33,767See Combined Notes to Consolidated Financial Statements62DTE Energy CompanyConsolidated Statements of Cash FlowsYear Ended December 31, 2018 2017 2016Operating Activities(In millions)Net Income$1,118 $1,112 $834Adjustments to reconcile Net Income to Net cash from operating activities: Depreciation and amortization1,124 1,030 976Nuclear fuel amortization45 53 58Allowance for equity funds used during construction(28) (23) (21)Deferred income taxes114 196 265Equity earnings of equity method investees(132) (102) (68)Dividends from equity method investees74 74 68Asset (gains) losses and impairments, net29 38 8Changes in assets and liabilities: Accounts receivable, net(44) (252) (226)Inventories(32) (4) 37Prepaid postretirement benefit costs(45) — —Accounts payable146 129 145Accrued pension liability(87) (228) 19Accrued postretirement liability(61) 25 (192)Derivative assets and liabilities31 (94) 126Regulatory assets and liabilities15 217 (40)Other current and noncurrent assets and liabilities413 (54) 95Net cash from operating activities2,680 2,117 2,084Investing Activities Plant and equipment expenditures — utility(2,439) (2,037) (1,898)Plant and equipment expenditures — non-utility(274) (213) (147)Acquisition, net of cash acquired— — (1,147)Proceeds from sale of nuclear decommissioning trust fund assets1,203 1,240 1,457Investment in nuclear decommissioning trust funds(1,188) (1,226) (1,463)Distributions from equity method investees9 10 11Contributions to equity method investees(637) (299) (239)Other(21) (37) 36Net cash used for investing activities(3,347) (2,562) (3,390)Financing Activities Issuance of long-term debt, net of issuance costs1,432 1,398 2,035Redemption of long-term debt(105) (385) (807)Repurchase of long-term debt— — (59)Issuance of equity units, net of issuance costs— — 654Short-term borrowings, net(12) 122 —Repurchase of common stock— (51) (33)Dividends on common stock(620) (592) (531)Contributions from noncontrolling interests, principally REF entities53 50 114Distributions to noncontrolling interests(48) (40) (5)Other(46) (81) (9)Net cash from financing activities654 421 1,359Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash(13) (24) 53Cash, Cash Equivalents, and Restricted Cash at Beginning of Period89 113 60Cash, Cash Equivalents, and Restricted Cash at End of Period$76 $89 $113 Supplemental disclosure of cash information Cash paid (received) for: Interest, net of interest capitalized$572 $495 $448Income taxes$(26) $4 $(1)Supplemental disclosure of non-cash investing and financing activities Plant and equipment expenditures in accounts payable$307 $295 $312Premium on equity units$— $— $98See 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, 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 ($3.06 per CommonShare)— — (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 390Other comprehensive income, net of tax— — — 12 — 12Stock-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 ($3.36 per CommonShare)— — (602) — — (602)Repurchase of common stock(524) (51) — — — (51)Other comprehensive income, net of tax— — — 13 — 13Stock-based compensation, net contributions fromnoncontrolling interests, and other478 10 (3) — 12 19Balance, December 31, 2017179,387 $3,989 $5,643 $(120) $478 $9,990Implementation of ASU 2016-01— — 5 (5) — —Net Income (Loss)— — 1,120 — (2) 1,118Dividends declared on common stock ($3.60 per CommonShare)— — (653) — — (653)Issuance of common stock255 26 — — — 26Contribution of common stock to pension plan1,751 175 — — — 175Other comprehensive income, net of tax— — — 5 — 5Stock-based compensation, net contributions fromnoncontrolling interests, and other532 55 (3) — 4 56Balance, December 31, 2018181,925 $4,245 $6,112 $(120) $480 $10,717See 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, 2018, 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, 2018. 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, 2018, 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, 2018 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 (the “Company”) as ofDecember 31, 2018 and 2017, and the related consolidated statements of operations, of comprehensive income, of changes in shareholder’s equity and ofcash flows for each of the three years in the period ended December 31, 2018, including the related notes and schedule of valuation and qualifying accountsfor each of the three years in the period ended December 31, 2018 listed in the accompanying index (collectively referred to as the “consolidated financialstatements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as ofDecember 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018 inconformity with accounting principles generally 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 7, 2019We have served as the Company's auditor since 2008.66DTE Electric CompanyConsolidated Statements of Operations Year Ended December 31, 2018 2017 2016 (In millions)Operating Revenues — Utility operations$5,298 $5,102 $5,225 Operating Expenses Fuel and purchased power — utility1,552 1,454 1,532Operation and maintenance1,470 1,428 1,455Depreciation and amortization836 753 750Taxes other than income307 302 284Asset (gains) losses and impairments, net(1) — — 4,164 3,937 4,021Operating Income1,134 1,165 1,204 Other (Income) and Deductions Interest expense283 274 264Interest income— — (8)Other income(83) (77) (61)Other expenses77 40 34 277 237 229Income Before Income Taxes857 928 975 Income Tax Expense193 327 353 Net Income$664 $601 $622See Combined Notes to Consolidated Financial Statements67DTE Electric CompanyConsolidated Statements of Comprehensive Income Year Ended December 31, 2018 2017 2016 (In millions)Net Income$664 $601 $622Other comprehensive income, net of tax: Net unrealized gains on investments during the period, net of taxes of $—, $1, and $—, respectively— 1 —Other comprehensive income—1—Comprehensive Income$664$602$622See Combined Notes to Consolidated Financial Statements68DTE Electric CompanyConsolidated Statements of Financial Position December 31, 2018 2017 (In millions)ASSETSCurrent Assets Cash and cash equivalents$18 $15Accounts receivable (less allowance for doubtful accounts of $53 and $31, respectively) Customer750 791Affiliates11 20Other54 37Inventories Fuel171 190Materials and supplies279 275Regulatory assets148 50Other89 68 1,520 1,446Investments Nuclear decommissioning trust funds1,378 1,492Other34 36 1,412 1,528Property Property, plant, and equipment22,747 22,972Accumulated depreciation and amortization(7,310) (7,984) 15,437 14,988Other Assets Regulatory assets3,829 3,005Intangible assets21 25Prepaid postretirement costs — affiliates189 113Other121 123 4,160 3,266Total Assets$22,529 $21,228See Combined Notes to Consolidated Financial Statements69DTE Electric CompanyConsolidated Statements of Financial Position — (Continued) December 31, 2018 2017 (In millions, except shares)LIABILITIES AND SHAREHOLDER'S EQUITYCurrent Liabilities Accounts payable Affiliates$71 $52Other441 416Accrued interest74 72Current portion long-term debt, including capital leases4 5Regulatory liabilities98 17Short-term borrowings Affiliates101 116Other149 238Other139 145 1,077 1,061Long-Term Debt (net of current portion) Mortgage bonds, notes, and other6,538 6,017Capital lease obligations7 1 6,545 6,018Other Liabilities Deferred income taxes2,246 2,088Regulatory liabilities2,171 2,137Asset retirement obligations2,271 2,125Unamortized investment tax credit137 120Nuclear decommissioning205 220Accrued pension liability — affiliates718 811Accrued postretirement liability — affiliates278 311Other88 72 8,114 7,884Commitments and Contingencies (Notes 9 and 18) Shareholder's Equity Common stock ($10 par value, 400,000,000 shares authorized, and 138,632,234 shares issued and outstanding for both periods)4,631 4,306Retained earnings2,162 1,956Accumulated other comprehensive income— 3Total Shareholder's Equity6,793 6,265Total Liabilities and Shareholder's Equity$22,529 $21,228See Combined Notes to Consolidated Financial Statements70DTE Electric CompanyConsolidated Statements of Cash Flows Year Ended December 31, 2018 2017 2016Operating Activities(In millions)Net Income$664 $601 $622Adjustments to reconcile Net Income to Net cash from operating activities: Depreciation and amortization836 753 750Nuclear fuel amortization45 53 58Allowance for equity funds used during construction(19) (18) (18)Deferred income taxes189 345 342Changes in assets and liabilities: Accounts receivable, net33 (80) (64)Inventories15 31 26Prepaid postretirement benefit costs — affiliates(76) 1 (90)Accounts payable54 (2) 59Accrued pension liability — affiliates(93) (197) 32Accrued postretirement liability — affiliates(33) 42 (38)Regulatory assets and liabilities4 202 10Other current and noncurrent assets and liabilities101 (147) (34)Net cash from operating activities1,720 1,584 1,655Investing Activities Plant and equipment expenditures(1,989) (1,574) (1,503)Proceeds from sale of nuclear decommissioning trust fund assets1,203 1,240 1,457Investment in nuclear decommissioning trust funds(1,188) (1,226) (1,463)Other(15) 18 36Net cash used for investing activities(1,989) (1,542) (1,473)Financing Activities Issuance of long-term debt, net of issuance costs519 435 355Redemption of long-term debt— (300) (10)Repurchase of long-term debt— — (59)Capital contribution by parent company325 100 120Short-term borrowings, net — affiliate(15) (1) 41Short-term borrowings, net — other(89) 176 (210)Dividends on common stock(461) (432) (420)Other(7) (18) (1)Net cash from (used for) financing activities272 (40) (184)Net Increase (Decrease) in Cash and Cash Equivalents3 2 (2)Cash and Cash Equivalents at Beginning of Period15 13 15Cash and Cash Equivalents at End of Period$18 $15 $13 Supplemental disclosure of cash information Cash paid (received) for: Interest, net of interest capitalized$283 $252 $252Income taxes$— $(16) $6Supplemental disclosure of non-cash investing and financing activities Plant and equipment expenditures in accounts payable$181 $191 $232See 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, 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)Other comprehensive income, net of tax— — — — 1 1Capital contribution by parent company— — 100 — — 100Balance, December 31, 2017138,632 $1,386 $2,920 $1,956 $3 $6,265Implementation of ASU 2016-01— — — 3 (3) —Net Income— — — 664 — 664Dividends declared on common stock— — — (461) — (461)Capital contribution by parent company— — 325 — — 325Balance, December 31, 2018138,632 $1,386 $3,245 $2,162 $— $6,793See 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 Revenue DTE Energy and DTE ElectricNote 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) services related to the gathering, transportation, and storage of natural gas; 2) power and industrial projects; and3) energy marketing and trading operations.DTE Electric and DTE Gas are regulated by the MPSC. Certain activities of DTE Electric and DTE Gas, as well as various other aspects of 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.Due to the implementation of ASU 2017-07, amounts previously included in Operation and maintenance were reclassified to Non-operating retirementbenefits, net on the Consolidated Statements of Operations. See Note 3 to the Consolidated Financial Statements, "New Accounting Pronouncements."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 aregenerally accounted 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.The Registrants have variable interests in NEXUS, which include DTE Energy's 50% ownership interest and DTE Electric's transportation servicescontract. NEXUS is a joint venture which owns a 256-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 at risk to finance its activities. The Registrants are not the primary beneficiaries, as the power to direct significantactivities is shared between the owners of the equity interests. DTE Energy accounts for its ownership interest in 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, 2018, 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, 2018, 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 for DTE Energy,in Note 18 to the Consolidated Financial Statements, "Commitments and Contingencies," related to the REF guarantees and indemnities. For non-consolidated VIEs, the maximum risk exposure of the Registrants is generally limited to their investment, notes receivable, future funding commitments, andamounts which DTE Energy has guaranteed. See Note 18 to the Consolidated Financial Statements, "Commitments and Contingencies," for further discussionof the NEXUS guarantee arrangements.The following table summarizes the major Consolidated Statements of Financial Position items for consolidated VIEs as of December 31, 2018 and2017. 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.Amounts for DTE Energy's consolidated VIEs are as follows: December 31, 2018 December 31, 2017 SGG(a) Other Total SGG(a) Other Total (In millions)ASSETS Cash and cash equivalents$25 $14 $39 $23 $14 $37Restricted cash— 5 5 — 8 8Accounts receivable9 37 46 11 42 53Inventories1 92 93 3 114 117Property, plant, and equipment, net395 46 441 400 75 475Goodwill25 — 25 25 — 25Intangible assets557 — 557 572 — 572Other current and long-term assets3 — 3 4 — 4 $1,015 $194 $1,209 $1,038 $253 $1,291 LIABILITIES Accounts payable and accrued current liabilities$3 $31 $34 $26 $47 $73Current portion long-term debt, including capital leases— — — — 4 4Mortgage bonds, notes, and other— — — — 1 1Other current and long-term liabilities9 10 19 1 16 17 $12 $41 $53 $27 $68 $95_____________________________________(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, 2018 2017 (In millions)Investments in equity method investees$1,425 $811Notes receivable$15 $17Future funding commitments$55 $598Equity 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, 2018 and 2017, 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 $59 million and $72 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 2018 2017 2018 2017 Description (In millions) Significant Equity Method Investees Gas Storage and Pipelines NEXUS Pipeline $1,260 $640 50% 50% 256-mile pipeline to transport Utica and Marcellus shalegas to Ohio, Michigan, and Ontario market centersVector Pipeline 123 115 40% 40% 348-mile pipeline connecting Chicago, Michigan, andOntario market centersMillennium Pipeline 202 124 26% 26% 269-mile pipeline serving markets in the Northeast 1,585 879 Other Equity Method Investees Other Segments 186 194 $1,771 $1,073 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."The following table presents summarized financial information of subsidiaries not consolidated and 50 percent or less owned by DTE Energy. Theamounts included in the table below represents 100% of the results of continuing operations of such entities accounted for under the equity method ofaccounting.Summarized balance sheet data is as follows: December 31, 2018 2017 (In millions)Current Assets$358 $344Non-current assets$5,101 $3,576Current Liabilities$391 $345Non-current liabilities$762 $85876DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Summarized income statement data is as follows: December 31, 2018 2017 2016 (In millions)Operating Revenues$883 $756 $767Operating Expenses$622 $561 $526Net Income$365 $254 $225NOTE 2 — SIGNIFICANT ACCOUNTING POLICIESOther 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 related to fixed non-refundable cash payments received from investors for which theearnings process is not contingent upon production of refined coal is recognized on a straight-line basis over the non-cancelable contract term as theeconomic benefit from the ownership of the facility is transferred to investors. Other income related to cash payments that is contingent upon production ofrefined coal is considered earned and recognized when the contingency regarding the timing and amount of payment is resolved, generally as refined coal isproduced and tax credits are generated.The following is a summary of DTE Energy's Other income: 2018 2017 2016 (In millions)Equity earnings of equity method investees$132 $102 $68Income from REF entities98 77 75Contract services51 19 21Allowance for equity funds used during construction28 23 21Gains from trading securities6 26 15Other18 21 7 $333 $268 $207The following is a summary of DTE Electric's Other income: 2018 2017 2016 (In millions)Contract services$51 $21 $20Allowance for equity funds used during construction19 18 18Gains from trading securities allocated from DTE Energy6 26 15Other7 12 8 $83 $77 $61For 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.The following table summarizes the changes in DTE Energy's Accumulated other comprehensive income (loss) by component(a) for the years endedDecember 31, 2018 and 2017: Net Unrealized Gain(Loss) on Derivatives Net Unrealized Gain(Loss) on Investments Benefit Obligations(b) Foreign CurrencyTranslation Total (In millions)Balance, 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)Implementation of ASU 2016-01(7) 2 — — (5)Other comprehensive loss before reclassifications(2) — (1) (2) (5)Amounts reclassified from Accumulated othercomprehensive income1 — 9 — 10Net current-period Other comprehensive income (loss)(8) 28(2)—Balance, December 31, 2018$(11) $—$(102)$(7)$(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.The following is a table that provides a reconciliation of DTE Energy's Cash and cash equivalents as well as Restricted cash reported within theConsolidated Statements of Financial Position that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows: 2018 2017 (In millions)Cash and cash equivalents$71 $66Restricted cash5 23Total cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows$76 $89ReceivablesAccounts 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 $1.0 billion at December 31, 2018 and 2017 include $264 million and $290 million of DTE Electric unbilledrevenues, respectively, included in Customer Accounts receivable.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.79DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)DTE Gas' natural gas inventory of $48 million and $29 million as of December 31, 2018 and 2017, respectively, is determined using the last-in, first-out (LIFO) method. The replacement cost of gas in inventory exceeded the LIFO cost by $113 million and $81 million at December 31, 2018 and 2017,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.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 $4 million and $15 million of expenses related to Fermi 2 refueling outages were accrued at December 31, 2018 and 2017, respectively.Amounts are accrued on a pro-rata basis, generally over an 18-month period, that coincides with scheduled refueling outages at Fermi 2. This accrual ofoutage costs matches the regulatory recovery of these costs in rates set by the MPSC. See Note 9 to the Consolidated Financial Statements, "RegulatoryMatters."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.80DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Intangible AssetsThe Registrants have certain Intangible assets as shown below: December 31, 2018 December 31, 2017 Useful Lives GrossCarryingValue AccumulatedAmortization Net CarryingValue GrossCarryingValue AccumulatedAmortization Net CarryingValue (In millions)Intangible assets subject to amortization Customer relationships25 - 40 years(a) $779 $(44) $735 $770 $(24) $746Contract intangibles6 to 26 years 159 (66) 93 168 (72) 96 938 (110) 828 938 (96) 842 DTE Electric renewable energy credits(b) 20 — 20 24 — 24DTE Electric emission allowances(b) 1 — 1 1 — 1 21 — 21 25 — 25Long-term intangible assets DTE Electric $21 $— $21 $25 $— $25DTE Energy $959 $(110) $849 $963 $(96) $867______________________________________(a)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.(b)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 2023: 2019 2020 2021 2022 2023 (In millions)Estimated amortization expense$27 $26 $25 $25 $25DTE 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 $27 million in 2018, $29 million in 2017, and $16 million in 2016.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.81DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Investments in Debt and Equity SecuritiesThe Registrants generally record investments in debt and equity securities at market value with unrealized gains or losses included in earnings.Changes in the fair value of Fermi 2 nuclear decommissioning investments are recorded as adjustments to Regulatory assets or liabilities, due to a recoverymechanism from customers. The Registrants' equity investments are reviewed for impairment each reporting period. If the assessment indicates that animpairment exists, a loss is recognized resulting in the equity investment being written down to its estimated fair value. See Note 12 of the ConsolidatedFinancial Statements, "Fair Value."DTE Energy FoundationDTE Energy's charitable contributions to the DTE Energy Foundation were $22 million, $43 million, and $26 million for the years ended December 31,2018, 2017, and 2016, 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 Title4 Revenue8 Asset Retirement Obligations9 Regulatory Matters10 Income Taxes12 Fair Value13 Financial and Other Derivative Instruments20 Retirement Benefits and Trusteed Assets21 Stock-Based CompensationNOTE 3 — NEW ACCOUNTING PRONOUNCEMENTSRecently Adopted 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 required 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 using either a fullretrospective or modified retrospective approach. The Registrants adopted the standard effective January 1, 2018, using the modified retrospective approach.Under the modified retrospective approach, the information for periods prior to the adoption date has not been restated and continues to be reported under theaccounting standards in effect for those periods. As permitted under the standard, the Registrants have elected to apply the guidance only to those contractsthat were not completed at January 1, 2018, and have elected not to restate the impacts of any contract modifications made prior to the earliest periodpresented.The adoption of the ASU did not have a significant impact on the Registrants' financial position or results of operations, but required additionaldisclosures for revenue. See Note 4 to the Consolidated Financial Statements, "Revenue."82DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)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 required that an employer report the service cost component inthe same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components ofnet benefit cost are required to be presented in the income statement separately from the service cost component and outside of income from operations. Theamendments in this update also allow only the service cost component to be eligible for capitalization when applicable. The Registrants adopted thestandard effective January 1, 2018. The standard has been applied retrospectively for the presentation of the service cost component and the othercomponents of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively for the capitalization of theservice cost component of net periodic pension cost and net periodic postretirement benefit in assets. As permitted by the standard, the Registrants have usedbenefit cost amounts disclosed for prior periods as the basis for retrospective application in the income statement. As a result of regulatory mechanisms, theimpact to the Consolidated Financial Statements was not material for the year ended December 31, 2018.In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of FinancialAssets and Financial Liabilities, as amended. The new guidance is intended to improve the recognition and measurement of financial instruments. Theguidance primarily impacts accounting for equity investments in unconsolidated entities (other than those accounted for using the equity method ofaccounting) and financial liabilities under the fair value option. The guidance requires equity investments to be generally measured at fair value, withsubsequent changes in fair value recognized in net income. The guidance requires entities to make a cumulative-effect adjustment to the Statements ofFinancial Position as of the beginning of the first reporting period in which the guidance is effective. The Registrants adopted the standard effective January1, 2018. Upon adoption, DTE Energy and DTE Electric recorded a cumulative-effect adjustment to reclassify $5 million and $3 million of unrealized gainsfrom Accumulated other comprehensive income (loss) to Retained earnings, respectively.In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC paragraphs pursuant to SEC Staff AccountingBulletin No. 118. The Amendments in this update add various SEC paragraphs pursuant to the issuance of SEC Staff Accounting Bulletin No. 118, IncomeTax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118). SAB 118 directs taxpayers to consider the implications of the TCJA as provisionalwhen 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.As described in Note 10 to the Consolidated Financial Statements, "Income Taxes," within the combined DTE Energy and DTE Electric 2017 Annual Reporton Form 10-K and in accordance with SAB 118, the Registrants recorded amounts that were considered provisional. During the year ended December 31,2018, DTE Energy and DTE Electric finalized their SAB 118 analysis and recorded true-up adjustments to the remeasurement of deferred taxes of $21 millionand $7 million, respectively. The impact of the true-up adjustments was an increase in Income Tax Expense, of which $17 million was attributable to theregulated utilities and increased Regulatory liabilities. The true-up adjustments were a result of further analysis for items subject to further consideration atDecember 31, 2017, under SAB 118 and primarily related to timing differences not recoverable from DTE Electric and DTE Gas customers.Recently Issued PronouncementsIn February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), as amended. This guidance requires a lessee to account for leases as financeor operating leases, and disclose key information about leasing arrangements. Both types of leases will result in the lessee recognizing a right-of-use asset anda corresponding lease liability on its balance sheet, with differing methodology for income statement recognition, depending on the lease classification. TheRegistrants will adopt the standard on January 1, 2019. The standard allows lessees and lessors to apply either, 1) a modified retrospective approach for leasesexisting or entered into after the beginning of the earliest comparative period in the Consolidated Financial Statements, or 2) a prospective transitionapproach for leases existing as of January 1, 2019 with a cumulative effect adjustment to be recorded to retained earnings. The Registrants will apply thestandard on a prospective basis. The Registrants will elect the package of practical expedients allowing entities to not reassess whether an agreement is alease, to carryforward the existing lease classification, and to not reassess initial direct costs associated with existing leases. These practical expedients applyto leases that commenced prior to January 1, 2019. The Registrants will also elect to exclude leases from the balance sheet that are for a period of one year orless, as well as, the practical expedient allowing entities to not evaluate land easements under the new guidance at adoption if they were not previouslyaccounted for as leases.83DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)A third-party software tool has been implemented that will assist with the initial adoption and ongoing compliance of the standard. The Registrants areimplementing new business processes, internal controls, and accounting policies. The Registrants are in the process of drafting disclosures to satisfy thestandard's requirements. In addition, the Registrants are continuing to monitor utility industry implementation guidance and interpretation. While theRegistrants expect an increase in assets and liabilities, as well as additional disclosures, they are still assessing the impact of this ASU on their ConsolidatedFinancial Statements.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 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.In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework — Changes to the DisclosureRequirements for Fair Value Measurement. The amendments in this update modify the disclosure requirements on fair value measurements in Topic 820. TheASU is effective for the Registrants for fiscal years beginning after December 15, 2019, and interim periods therein. Early adoption is permitted. TheRegistrants are currently assessing the impact of this standard on their Consolidated Financial Statements.In August 2018, the FASB issued ASU No. 2018-14, Compensation — Retirement Benefits — Defined Benefit Plans (Subtopic 715-20): DisclosureFramework — Changes to the Disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendmentsin this update modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The ASU is effective forthe Registrants for fiscal years ending after December 15, 2020. Early adoption is permitted. The Registrants are currently assessing the impact of thisstandard on their Consolidated Financial Statements.In August 2018, the FASB issued ASU No. 2018-15, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Customer'sAccounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. The amendments in this update align therequirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizingimplementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The ASU iseffective for the Registrants for fiscal years beginning after December 15, 2019, and interim periods therein. Early adoption is permitted. The Registrants arecurrently assessing the impact of this standard on their Consolidated Financial Statements.In October 2018, the FASB issued ASU No. 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for VariableInterest Entities. The amendments in this update modify the requirements for determining whether a decision-making fee is a variable interest and requirereporting entities to consider indirect interests held through related parties under common control on a proportional basis. The ASU is effective for theRegistrants for fiscal years beginning after December 15, 2019, and interim periods therein. Early adoption is permitted. The Registrants are currentlyassessing the impact of this standard on their Consolidated Financial Statements.84DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)NOTE 4 — REVENUESignificant Accounting PolicyUpon the adoption of Topic 606, revenue is measured based upon the consideration specified in a contract with a customer at the time whenperformance obligations are satisfied. Under Topic 606, a performance obligation is a promise in a contract to transfer a distinct good or service or a series ofdistinct goods or services to the customer. The Registrants recognize revenue when performance obligations are satisfied by transferring control over aproduct or service to a customer. The Registrants have determined control to be transferred when the product is delivered or the service is provided to thecustomer. For the year ended December 31, 2018, recognition of revenue for the Registrants subsequent to the adoption of Topic 606 is substantially similarin amount and approach to that prior to adoption.Rates for DTE Electric and DTE Gas include provisions to adjust billings for fluctuations in fuel and purchased power costs, cost of natural gas, andcertain other costs. Revenues are adjusted for differences between actual costs subject to reconciliation and the amounts billed in current rates. Under or overrecovered revenues related to these cost recovery mechanisms are included in Regulatory assets or liabilities on the Registrants' Consolidated Statements ofFinancial Position and are recovered or returned to customers through adjustments to the billing factors.For discussion of derivative contracts, see Note 13 to the Consolidated Financial Statements, "Financial and Other Derivative Instruments."Disaggregation of RevenueThe following is a summary of revenues disaggregated by segment for DTE Energy: 2018 (In millions)Electric(a) Residential$2,494Commercial1,794Industrial690Other320Total Electric operating revenues(b)$5,298 Gas Gas sales$1,055End User Transportation232Intermediate Transportation58Other91Total Gas operating revenues(c)$1,436 Other segment operating revenues Gas Storage and Pipelines$485Power and Industrial Projects(d)$2,204Energy Trading(e)$5,557_______________________________________(a)Revenues under the Electric segment generally represent those of DTE Electric.(b)Includes $21 million under Alternative Revenue Programs and $20 million of other revenues, which are both outside the scope of Topic 606 for the year ended December 31,2018.(c)Includes $2 million under Alternative Revenue Programs and $7 million of other revenues, which are both outside the scope of Topic 606 for the year ended December 31, 2018.(d)Includes revenues outside the scope of Topic 606 primarily related to $125 million of contracts accounted for as leases for the year ended December 31, 2018.(e)Includes revenues outside the scope of Topic 606 primarily related to $4.5 billion of derivatives for the year ended December 31, 2018.85DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Nature of Goods and ServicesThe following is a description of principal activities, separated by reportable segments, from which DTE Energy generates revenue. For more detailedinformation about reportable segments, see Note 22 to the Consolidated Financial Statements, “Segment and Related Information.”The Registrants have contracts with customers which may contain more than one performance obligation. When more than one performance obligationexists in a contract, the consideration under the contract is allocated to the performance obligations based on the relative standalone selling price. DTEEnergy generally determines standalone selling prices based on the prices charged to customers or the use of the adjusted market assessment approach. Theadjusted market assessment approach involves the evaluation of the market in which DTE Energy sells goods or services and estimating the price that acustomer in that market would be willing to pay.Under Topic 606, when a customer simultaneously receives and consumes the product or service provided, revenue is considered to be recognizedover time. Alternatively, if it is determined that the criteria for recognition of revenue over time is not met, the revenue is considered to be recognized at apoint in time.ElectricElectric consists principally of DTE Electric. Electric revenues are primarily comprised of the supply and delivery of electricity, and related capacity.Revenues are primarily associated with cancelable contracts, with the exception of certain long-term contracts with commercial and industrial customers.Revenues, including estimated unbilled amounts, are generally recognized over time based upon volumes delivered or through the passage of time ratablybased upon providing a stand-ready service. The Registrants have determined that the above methods represent a faithful depiction of the transfer of controlto the customer. Unbilled revenues are typically determined utilizing approved tariff rates and estimated meter volumes. Estimated unbilled amountsrecognized in revenue are subject to adjustment in the following reporting period as actual volumes by customer class are known. Revenues are typicallysubject to tariff rates based upon customer class and type of service, and are billed and received monthly. Tariff rates are determined by the MPSC on a perunit or monthly basis.GasGas consists principally of DTE Gas. Gas revenues are primarily comprised of the supply and delivery of natural gas, and other services includingstorage, transportation, and appliance maintenance. Revenues are primarily associated with cancelable contracts with the exception of certain long-termcontracts with commercial and industrial customers. Revenues, including estimated unbilled amounts, are generally recognized over time based uponvolumes delivered or through the passage of time ratably based upon providing a stand-ready service. DTE Energy has determined that the above methodsrepresent a faithful depiction of the transfer of control to the customer. Unbilled revenues are typically determined using both estimated meter volumes andestimated usage based upon the number of unbilled days and historical temperatures. Estimated unbilled amounts recognized in revenue are subject toadjustment in the following reporting period as actual volumes by customer class and service type are known. Revenues are typically subject to tariff rates orother rates subject to regulatory oversight and are billed and received monthly. Tariff rates are determined by the MPSC on a per unit or monthly basis.Gas Storage and PipelinesGas Storage and Pipelines revenues generally consist of services related to the gathering, transportation, and storage of natural gas. Contracts areprimarily long-term in nature. Revenues, including estimated unbilled amounts, are generally recognized over time based upon services provided or throughthe passage of time ratably based upon providing a stand-ready service. DTE Energy has determined that the above methods represent a faithful depiction ofthe transfer of control to the customer. Revenues are typically billed and received monthly. Pricing for such revenues may consist of demand rates,commodity rates, transportation rates, and other associated fees. Consideration may consist of both fixed and variable components. Generally, uncertaintiesin the variable consideration components are resolved and revenues are known at the time of recognition.Power and Industrial ProjectsPower and Industrial Projects revenues include contracts accounted for as leases which are outside of the scope of Topic 606. For performanceobligations within the scope of Topic 606, the timing of revenue recognition is dependent upon when control over the associated product or service istransferred.86DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Revenues at Power and Industrial Projects, within the scope of Topic 606, generally consist of sales of refined coal, coal, blast furnace coke, coke ovengas, electricity, equipment maintenance services, and other energy related products and services. Revenues, including estimated unbilled amounts, for thesale of blast furnace coke are generally recognized at a point in time when the product is delivered, which represents the transfer of control to the customer.Other revenues are generally recognized over time based upon services provided or through the passage of time ratably based upon providing a stand-readyservice. DTE Energy has determined that the above methods represent a faithful depiction of the transfer of control to the customer. Market based pricingstructures exist in such contracts including adjustments for consumer price or other indices. Consideration may consist of both fixed and variablecomponents. Generally, uncertainties in the variable consideration components are resolved and revenues are known at the time of recognition. Billing termsvary and are generally monthly with payment terms typically within 30 days following billing.Energy TradingEnergy Trading revenues consist primarily of derivative contracts outside of the scope of Topic 606. For performance obligations within the scope ofTopic 606, the timing of revenue recognition is dependent upon when control over the associated product or service is transferred.Revenues, including estimated unbilled amounts, within the scope of Topic 606 arising from the sale of natural gas, electricity, power capacity, andother energy related products are generally recognized over time based upon volumes delivered or through the passage of time ratably based upon providinga stand-ready service. DTE Energy has determined that the above methods represent a faithful depiction of the transfer of control to the customer. Revenuesare known at the time of recognition. Payment for the aforementioned revenues is generally due from customers in the month following delivery.Revenues associated with RECs are recognized at a point in time when control of the RECs are transferred to the customer which is deemed to be whenthe subject RECs are entered for transfer to the customer in the applicable regulatory tracking system. Revenues associated with RECs under a wholesale fullrequirements power contract are deferred until control has been transferred. The deferred revenues represent a contract liability for which payment has beenreceived and the amounts have been estimated using the adjusted market assessment approach. With the exception of RECs, generally all other performanceobligations associated with wholesale full requirements power contracts are satisfied over time in conjunction with the delivery of power. At the time poweris delivered, DTE Energy may not have control over the RECs as the RECs are not self-generated and may not yet have been procured resulting in deferredrevenues.Deferred RevenueThe following is a summary of deferred revenue activity: DTE Energy (In millions)Beginning Balance, January 1, 2018$56Increases due to cash received or receivable, excluding amounts recognized as revenue during the period48Revenue recognized that was included in the deferred revenue balance at the beginning of the period(30)Ending Balance, December 31, 2018$74The deferred revenues at DTE Energy generally represent amounts paid by or receivable from customers for which the associated performanceobligation has not yet been satisfied.Deferred revenues include amounts associated with REC performance obligations under certain wholesale full requirements power contracts. Deferredrevenues associated with RECs are recognized as revenue when control of the RECs has transferred.Other performance obligations associated with deferred revenues include providing products and services related to customer prepayments. Deferredrevenues associated with these products and services are recognized when control has transferred to the customer.87DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The following table represents deferred revenue amounts for DTE Energy that are expected to be recognized as revenue in future periods: DTE Energy (In millions)2019$46202012021520227202352024 and thereafter10 $74Transaction Price Allocated to the Remaining Performance ObligationsIn accordance with optional exemptions available under Topic 606, the Registrants did not disclose the value of unsatisfied performance obligationsfor (1) contracts with an original expected length of one year or less, (2) with the exception of fixed consideration, contracts for which revenue is recognizedat the amount to which the Registrants have the right to invoice for goods provided and services performed, and (3) contracts for which variableconsideration relates entirely to an unsatisfied performance obligation.Such contracts consist of varying types of performance obligations across the segments, including the supply and delivery of energy related productsand services. Contracts with variable volumes and/or variable pricing, including those with pricing provisions tied to a consumer price or other index, havealso been excluded as the related consideration under the contract is variable at inception of the contract. Contract lengths vary from cancelable to multi-year.The Registrants expect to recognize revenue for the following amounts related to fixed consideration associated with remaining performanceobligations in each of the future periods noted: DTE Energy DTE Electric (In millions)2019$267 $82020263 —2021219 —2022172 —2023139 —2024 and thereafter658 — $1,718 $8Other MattersDTE Energy and DTE Electric have recognized charges of $140 million and $85 million related to expense recognized for estimated uncollectibleaccounts receivable for the year ended December 31, 2018, respectively.88DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)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: 2018 2017 (In millions)Balance as of January 1$2,293 $2,286Goodwill attributable to Gas Storage and Pipelines 2016 acquisition of AGS and SGG— 7Balance at December 31$2,293 $2,293NOTE 6 — PROPERTY, PLANT, AND EQUIPMENTThe following is a summary of Property, plant, and equipment by classification as of December 31: 2018 2017Property, plant, and equipment(In millions)DTE Electric Generation$11,027 $12,166Distribution9,153 8,637Other2,567 2,169Total DTE Electric22,74722,972DTE Gas Distribution3,823 3,523Storage548 533Transmission and other1,204 1,118Total DTE Gas5,575 5,174Non-utility and other3,488 3,278Total DTE Energy31,810 31,424Accumulated depreciation and amortization DTE Electric Generation(3,609) (4,403)Distribution(2,974) (2,914)Other(727) (667)Total DTE Electric(7,310) (7,984)DTE Gas Distribution(1,283) (1,238)Storage(165) (159)Transmission and other(404) (384)Total DTE Gas(1,852) (1,781)Non-utility and other(998) (938)Total DTE Energy(10,160) (10,703)Net DTE Energy Property, plant, and equipment$21,650 $20,721Net DTE Electric Property, plant, and equipment$15,437 $14,98889DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The following is a summary of the Registrants' AFUDC and interest capitalized for the years ended December 31: DTE Energy DTE Electric 2018 2017 2018 2017 (In millions)Allowance for debt funds used during construction and interest capitalized$15 $13 $9 $8Allowance for equity funds used during construction28 23 19 18Total$43 $36 $28 $26The composite depreciation rate for DTE Electric was approximately 3.7%, 3.6%, and 3.5% in 2018, 2017 and 2016, respectively. The compositedepreciation rate for DTE Gas was 2.7%, in 2018 and 2017, and 2.4% in 2016. The average estimated useful life for each major class of utility Property, plant,and equipment as of December 31, 2018 follows: Estimated Useful Lives in YearsUtility Generation Distribution StorageDTE Electric 40 41 N/ADTE Gas N/A 50 53The estimated useful lives for DTE Electric's Other utility assets range from 3 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: 2018 2017 2016 (In millions)Property, plant, and equipment$912 $865 $783Regulatory assets and liabilities212 165 193 $1,124 $1,030 $976The following is a summary of Depreciation and amortization expense for DTE Electric: 2018 2017 2016 (In millions)Property, plant, and equipment$657 $620 $582Regulatory assets and liabilities179 133 168 $836 $753 $750Capitalized 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 1 to 15 years for DTE Energy and 3 to 15 years for DTE Electric.The following balances for capitalized software relate to DTE Energy: Year Ended December 31, 2018 2017 2016 (In millions)Amortization expense of capitalized software$108 $101 $89Gross carrying value of capitalized software$905 $890 Accumulated amortization of capitalized software$534 $500 90DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The following balances for capitalized software relate to DTE Electric: Year Ended December 31, 2018 2017 2016 (In millions)Amortization expense of capitalized software$101 $93 $83Gross carrying value of capitalized software$799 $774 Accumulated amortization of capitalized software$463 $423 DTE Energy is the lessor under certain operating leases for energy facilities and related equipment. Property under operating leases for DTE Energy isas follows: DTE Energy 2018 2017 (In millions)Gross property under operating leases$447 $327Accumulated amortization of property under operating leases$148 $108The Registrants are the lessee under certain capital leases related to software and information technology related equipment. Property under capitalleases for the Registrants is as follows: DTE Energy DTE Electric 2018 2017 2018 2017 (In millions)Gross property under capital leases$18 $44 $18 $18Accumulated amortization of property under capital leases$7 $38 $7 $12NOTE 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.DTE Electric's ownership information of the two utility plants as of December 31, 2018 was as follows: Belle River LudingtonHydroelectricPumped StorageIn-service date1984-1985 1973Ownership interest81% 49%Investment in Property, plant, and equipment (in millions)$1,819 $586Accumulated depreciation (in millions)$1,068 $187Belle RiverThe Michigan Public Power Agency (MPPA) has ownership interests in Belle River Unit No. 1 and other related facilities. The MPPA is entitled to 19%of the total capacity and energy of the plant and is responsible for the same percentage of the plant’s operation, maintenance, and capital improvement costs.91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.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 2018 follows: DTE Energy DTE Electric (In millions)Asset retirement obligations at December 31, 2017$2,320 $2,125Accretion140 129Liabilities incurred27 27Liabilities settled(16) (8)Revision in estimated cash flows(2) (2)Asset retirement obligations at December 31, 2018$2,469 $2,271Approximately $2.0 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."92DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)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.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.93DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The following are balances and a brief description of the Registrants' Regulatory assets and liabilities at December 31: DTE Energy DTE Electric 2018 2017 2018 2017Assets(In millions)Recoverable pension and other postretirement costs Pension$1,961 $2,000 $1,476 $1,502Other postretirement costs213 278 121 211Asset retirement obligation778 569 778 569Recoverable undepreciated costs on retiring plants630 — 630 —Removal costs asset407 299 407 299Recoverable Michigan income taxes201 213 161 171Accrued PSCR/GCR revenue116 17 116 17Deferred environmental costs69 75 — —Unamortized loss on reacquired debt60 65 43 46Recoverable income taxes related to AFUDC equity51 41 41 35Energy Waste Reduction incentive49 39 39 30Nuclear Performance Evaluation and Review Committee Tracker43 22 43 22Customer360 deferred costs42 45 42 45Other recoverable income taxes23 26 23 26Transitional Reconciliation Mechanism21 46 21 46Other57 43 36 36 4,721 3,778 3,977 3,055Less amount included in Current Assets(153) (55) (148) (50) $4,568 $3,723 $3,829 $3,005 DTE Energy DTE Electric 2018 2017 2018 2017Liabilities(In millions)Refundable federal income taxes$2,410 $2,384 $1,958 $1,946Removal costs liability253 265 — —TCJA rate reduction liability118 — 93 —Negative other postretirement offset101 80 79 67Renewable energy86 112 86 112Refundable self-implemented rates26 2 26 2Negative pension offset9 21 — —Fermi 2 refueling outage4 15 4 15Other41 14 23 12 3,048 2,893 2,269 2,154Less amount included in Current Liabilities(126) (18) (98) (17) $2,922 $2,875 $2,171 $2,137As 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.94DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)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) •Recoverable undepreciated costs on retiring plants — Deferral of estimated remaining balances associated with coal power plants expected to beretired within the 2020 to 2023 time-frame.•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.•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.•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.•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.•Energy Waste Reduction incentive — DTE Electric and DTE Gas operate MPSC approved energy waste reduction programs designed to reduceoverall energy usage by their customers. The utilities are eligible to earn an incentive by exceeding statutory savings targets. The utilities haveconsistently exceeded the savings targets and recognize the incentive as a regulatory asset in the period earned.(a) •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.•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 2017.95DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)•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.•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.________________________________________________(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.•TCJA rate reduction liability — Due to the change in the corporate Federal income tax rate from 35% to 21%, DTE Electric and DTE Gas reducedrates charged to customers during 2018. A regulatory liability equal to the difference between revenues billed based on a 35% rate, and revenuesbased on a 21% rate, was accrued for the period January 1, 2018 through the date the lower rates were implemented. The refund of the liability willcommence on January 1, 2019 through June 30, 2019.•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.•Renewable energy — Amounts collected in rates in excess of renewable energy expenditures.•Refundable self-implemented rates — Amounts refundable to customers for base rates implemented from November 1, 2017 to May 1, 2018 inexcess of amounts authorized in the June 2018 DTE Electric rate order from the MPSC.•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.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. On November 1, 2017, DTE Electric self-implemented a base rate increase of $125 million. On April 18, 2018, the MPSCissued an order approving an annual revenue increase of $65.2 million for service rendered on or after May 1, 2018. The MPSC authorized a return on equityof 10.0%. On June 28, 2018, the MPSC issued an order on a rehearing granting in part and denying in part, petitions for rehearings of DTE Electric and otherintervenors. As a result, the approved addition to base rates increased from $65.2 million to $74.4 million. In August 2018, DTE Electric filed to refund itscustomers $26.2 million, inclusive of interest, based on their pro rata share of the revenue collected through the self-implementation surcharge in effect fromNovember 1, 2017 to May 1, 2018. DTE Electric has recorded a refund liability as of December 31, 2018.96DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)2018 Electric Rate Case FilingDTE Electric filed a rate case with the MPSC on July 6, 2018 requesting an increase in base rates of $328 million based on a projected twelve-monthperiod ending April 30, 2020. The requested increase in base rates is primarily due to an increase in net plant resulting from infrastructure investments,depreciation expense, as requested in the 2016 DTE Electric Depreciation Case Filing, and reliability improvement projects. The rate filing also requests anincrease in return on equity from 10.0% to 10.5% and includes projected changes in sales, operation and maintenance expenses, and working capital. Inaddition, the rate filing requests an Infrastructure Recovery Mechanism to recover the incremental revenue requirement associated with certain distribution,fossil generation, and nuclear generation capital expenditures through 2022. Finally, as noted in the 2017 Tax Reform section below, DTE Electric addressedCalculation C in this filing. A final MPSC order in this case is expected by May 2019.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. The MPSC issuedan order April 27, 2018 approving DTE Electric's request for the three CONs with recoverable amounts through rates up to $951.8 million. In August 2018,DTE Electric began construction on its natural gas fueled combined cycle generation facility.2016 DTE Electric Depreciation Case FilingDTE Electric filed a depreciation case with the MPSC on November 1, 2016 requesting an increase in depreciation rates for plant in service balances asof December 31, 2015. The MPSC issued an order on December 6, 2018 authorizing DTE Electric to increase its depreciation rates from 3.06% to 3.72%. Thenew rates will be effective upon a final order in DTE Electric's 2018 rate case filing expected by May 2019.2017 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-month period ending September 30, 2019. The requested increase in base rates was primarily due to an increase in net plant. The rate filing also requested anincrease in return on equity from 10.1% to 10.5% and included projected changes in sales, operations and maintenance expenses, and working capital. OnMay 24, 2018, DTE Gas reduced its initial requested increase in base rates to $38.1 million, primarily due to the effects of the TCJA on the original request.On September 13, 2018, the MPSC issued an order approving an annual revenue increase of $9 million for services rendered on or after October 1, 2018. TheMPSC authorized a return on equity of 10.0%. Refer to the 2017 Tax Reform section below for further detail regarding the impact of the TCJA Credit A filingfor DTE Gas.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 their recommended method to flow the current and deferred tax benefits of those impacts to ratepayers.On February 22, 2018, the MPSC issued an order in this case requiring utilities, including DTE Electric and DTE Gas, to follow a 3-step approach ofcredits and calculations. The first step is to establish Credit A, through contested cases. Credit A is a going-forward tax credit to reflect the reduction of thecorporate tax rate from 35% to 21%. DTE Gas submitted its Credit A filing on March 28, 2018, reflecting a reduction in revenues of $38.2 million. The MPSCapproved the $38.2 million reduction on May 30, 2018, effective July 1, 2018. With approval of the DTE Gas Rate Order on September 13, 2018, effectiveOctober 1, 2018, this separate Credit A was terminated. DTE Electric filed its Credit A application on May 18, 2018, reflecting a reduction in revenues of$157 million. On July 24, 2018, the MPSC issued an order approving a settlement in DTE Electric's Credit A filing reflecting a reduction in revenues of $157million. Rates reflecting this reduction were effective August 1, 2018.97DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The second step is to establish Credit B, through contested cases. Credit B is a backward-looking tax credit to reflect the reduction of the corporate rateof 35% to 21%, for the period January 1, 2018 up to the date Credit A is implemented. The Credit B filing is required within sixty days after Credit A isimplemented. For Credit B, DTE Electric and DTE Gas have been deferring the impact of the reduction to the corporate tax rate since January 1, 2018. DTEGas submitted its Credit B filing on July 30, 2018, reflecting a $25 million refund effective January 2019 through June 2019. On October 24, 2018, theMPSC issued an order approving the refund in DTE Gas' Credit B filing. DTE Electric submitted its Credit B filing on September 21, 2018, reflecting a $93million refund effective January 2019 through June 2019. On December 20, 2018, the MPSC issued an order approving the $93 million refund, inclusive ofinterest, in DTE Electric's Credit B filing, which commenced on January 1, 2019 through June 30, 2019.The third step is to perform Calculation C to address all remaining issues relative to the new tax law, which is primarily the remeasurement of deferredtaxes and how the amounts deferred as Regulatory liabilities will flow to ratepayers. DTE Gas filed its Calculation C case on November 16, 2018 to reducethe revenue requirement by $12 million related to the amortization of deferred tax remeasurement. DTE Electric addressed Calculation C in its general ratecase filed July 6, 2018.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 $8 million and $12 million at December 31, 2018 and 2017, respectively.The Registrants' total Income Tax Expense varied from the statutory federal income tax rate for the following reasons: 2018 2017 2016DTE Energy(In millions)Income Before Income Taxes$1,216 $1,287 $1,105Income tax expense at statutory rate - 21% in 2018 - 35% in 2017 and 2016$255 $450 $387Production tax credits(223) (189) (145)Investment tax credits(4) (4) (5)Depreciation2 (4) (4)Noncontrolling interests2 8 12AFUDC equity(14) (18) (10)Employee Stock Ownership Plan dividends(3) (5) (5)Stock based compensation(3) (14) —Subsidiary stock loss— — (10)State and local income taxes, net of federal benefit60 51 58Enactment of the Tax Cuts and Jobs Act21 (105) —Other, net5 5 (7)Income Tax Expense$98 $175 $271Effective income tax rate8.1% 13.6% 24.5%98DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued) 2018 2017 2016DTE Electric(In millions)Income Before Income Taxes$857 $928 $975Income tax expense at statutory rate - 21% in 2018 - 35% in 2017 and 2016$180 $325 $341Production tax credits(35) (36) (30)Investment tax credits(3) (4) (4)Depreciation2 3 3AFUDC equity(3) (5) (6)Employee Stock Ownership Plan dividends(2) (3) (3)State and local income taxes, net of federal benefit49 48 56Enactment of the Tax Cuts and Jobs Act7 — —Other, net(2) (1) (4)Income Tax Expense$193 $327 $353Effective income tax rate22.5% 35.2% 36.2%Components of the Registrants' Income Tax Expense were as follows: 2018 2017 2016DTE Energy(In millions)Current income tax expense (benefit) Federal$(17) $(22) $(1)State and other income tax1 1 7Total current income taxes(16) (21) 6Deferred income tax expense Federal38 118 184State and other income tax76 78 81Total deferred income taxes114 196 265$98 $175 $271 2018 2017 2016DTE Electric(In millions)Current income tax expense (benefit) Federal$— $(17) $—State and other income tax4 (1) 11Total current income taxes4 (18) 11Deferred income tax expense Federal131 270 268State and other income tax58 75 74Total deferred income taxes189 345 342$193 $327 $353Deferred tax assets and liabilities are recognized for the estimated future tax effect of temporary differences between the tax basis of assets or liabilitiesand the reported amounts in the Registrant's Consolidated Financial Statements. Consistent with the original establishment of these deferred tax liabilities(assets), no recognition of these non-cash transactions have been reflected in the Consolidated Statements of Cash Flows.99DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The Registrants' deferred tax assets (liabilities) were comprised of the following at December 31: DTE Energy DTE Electric 2018 2017 2018 2017 (In millions)Property, plant, and equipment$(3,462) $(3,276) $(2,840) $(2,698)Regulatory assets and liabilities(54) (94) (3) (31)Tax credit carry-forwards1,178 947 250 193Pension and benefits311 334 258 302Federal net operating loss carry-forward117 83 2 47State and local net operating loss carry-forwards59 70 1 5Investments in equity method investees(216) (82) (1) —Other125 170 87 94 (1,942) (1,848) (2,246) (2,088)Less valuation allowance(33) (40) — —Long-term deferred income tax liabilities$(1,975) $(1,888) $(2,246) $(2,088) Deferred income tax assets$2,021 $1,814 $855 $830Deferred income tax liabilities(3,996) (3,702) (3,101) (2,918) $(1,975) $(1,888) $(2,246) $(2,088)Tax credit carry-forwards for DTE Energy include $871 million of general business credits that expire from 2034 through 2038 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 $555 million as of December 31, 2018. The net operating loss carry-forwards generated in2015 and 2016 will expire from 2035 through 2036, and the net operating loss carry-forward generated in 2018 will be carried forward indefinitely. 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 $59 million and $70 million at December 31, 2018 and2017, respectively. The state and local net operating loss carry-forwards expire from 2019 through 2038. DTE Energy has recorded valuation allowances atDecember 31, 2018 and 2017 of approximately $33 million and $40 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.Tax credit carry-forwards for DTE Electric include $250 million of general business credits that expire from 2035 through 2038. No valuationallowance is required for the tax credits carry-forward deferred tax asset.DTE Electric has a federal net operating loss carry-forward of $11 million as of December 31, 2018, 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 $1 million at December 31, 2018, while there was $5million state and local deferred tax asset related to net operating loss carry-forwards at December 31, 2017. 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.100DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)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. Refer to Note 3 to the Consolidated Financial Statements,"New Accounting Pronouncements," for a description of true-up adjustments to the remeasurement of deferred taxes recorded in 2018.Uncertain Tax PositionsA reconciliation of the beginning and ending amount of unrecognized tax benefits for the Registrants is as follows: 2018 2017 2016DTE Energy(In millions)Balance at January 1$10 $10 $3Additions for tax positions of prior years— — 7Balance at December 31$10 $10 $10 2018 2017 2016DTE Electric(In millions)Balance at January 1$13 $13 $4Additions for tax positions of prior years— — 9Balance at December 31$13 $13 $13DTE Energy had $8 million of unrecognized tax benefits at December 31, 2018 and 2017 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, 2018 and 2017 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.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 $4 million and $3 million at December 31, 2018 and 2017, respectively. DTEEnergy recognized interest expense related to income taxes of $1 million in 2018, a nominal amount in 2017, and $2 million in 2016. DTE Energy hadaccrued no penalties pertaining to income taxes.Accrued interest pertaining to income taxes for DTE Electric totaled $5 million and $4 million at December 31, 2018 and 2017, respectively. DTEElectric recognized interest expense related to income taxes of $1 million in 2018, a nominal amount in 2017, and $3 million in 2016. DTE Electric hadaccrued no penalties pertaining to income taxes.In 2018, DTE Energy, including DTE Electric, settled a federal tax audit for the 2016 tax year. DTE Energy's federal income tax returns for 2017 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.101DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)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: 2018 2017 2016 (In millions, except per share amounts)Basic Earnings per Share Net Income Attributable to DTE Energy Company$1,120 $1,134 $868Less: Allocation of earnings to net restricted stock awards(2) (2) (2)Net income available to common shareholders — basic$1,118 $1,132 $866 Average number of common shares outstanding — basic181 179 179Basic Earnings per Common Share$6.18 $6.32 $4.84 Diluted Earnings per Share Net Income Attributable to DTE Energy Company$1,120 $1,134 $868Less: Allocation of earnings to net restricted stock awards(2) (2) (2)Net income available to common shareholders — diluted$1,118 $1,132 $866 Average number of common shares outstanding — diluted181 179 179Diluted Earnings per Common Share(a)$6.17 $6.32 $4.83_______________________________________(a)The 2016 Equity Units excluded from the calculation of diluted EPS were approximately 6.3 million for the years ended December 31, 2018 and 2017 as the dilutive stock pricethreshold was not met. For more information, see Note 14 to the Consolidated Financial Statements, "Long-Term Debt."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 31,2018 and 2017. The Registrants believe they use valuation techniques that maximize the use of observable market-based inputs and minimize the use ofunobservable inputs.102DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)A fair value hierarchy has been established that prioritizes the inputs to valuation techniques used to measure fair value in three broad levels. The 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.103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(a): December 31, 2018 December 31, 2017 Level 1 Level 2 Level 3 Other(b) Netting(c) NetBalance Level 1 Level 2 Level 3 Other(b) Netting(c) Net Balance (In millions)Assets Cash equivalents(d)$16 $2 $— $— $— $18 $16 $3 $— $— $— $19Nuclear decommissioningtrusts Equity securities851 — — — — 851 978 — — — — 978Fixed income securities12 490 — — — 502 18 477 — — — 495Private equity and other— — — 20 — 20 — — — 5 — 5Cash equivalents5 — — — — 5 14 — — — — 14Other investments(e) Equity securities110 — — — — 110 118 — — — — 118Fixed income securities69 — — — — 69 72 — — — — 72Cash equivalents4 — — — — 4 4 — — — — 4Derivative assets: Commodity Contracts: Natural Gas199 87 63 — (277) 72 148 112 97 — (256) 101Electricity— 247 56 — (252) 51 — 243 42 — (241) 44Other— — 7 — (1) 6 — — 9 — — 9Foreign currency exchangecontracts— 4 — — — 4 — 1 — — (1) —Total derivative assets199 338 126 — (530) 133 148 356 148 — (498) 154Total$1,266 $830 $126 $20 $(530) $1,712 $1,368 $836 $148 $5 $(498) $1,859 Liabilities Derivative liabilities: Commodity Contracts: Natural Gas$(197) $(71) $(112) $— $272 $(108) $(141) $(111) $(126) $— $263 $(115)Electricity— (227) (58) — 240 (45) — (245) (30) — 246 (29)Other— (1) — — 1 — — — (1) — 1 —Interest rate contracts— (3) — — — (3) — — — — — —Foreign currency exchangecontracts— — — — — — — (3) — — 1 (2)Total derivative liabilities(197) (302) (170) — 513 (156) (141) (359) (157) — 511 (146)Total$(197) $(302) $(170) $— $513 $(156) $(141) $(359) $(157) $— $511 $(146)Net Assets (Liabilities) at endof period$1,069 $528 $(44) $20 $(17) $1,556 $1,227 $477 $(9) $5 $13 $1,713Assets Current$212 $273 $96 $— $(461) $120 $157 $298 $104 $— $(437) $122Noncurrent1,054 557 30 20 (69) 1,592 1,211 538 44 5 (61) 1,737Total Assets$1,266 $830 $126 $20 $(530) $1,712 $1,368 $836 $148 $5 $(498) $1,859Liabilities Current$(191) $(251) $(76) $— $451 $(67) $(137) $(313) $(108) $— $459 $(99)Noncurrent(6) (51) (94) — 62 (89) (4) (46) (49) — 52 (47)Total Liabilities$(197) $(302) $(170) $— $513 $(156) $(141) $(359) $(157) $— $511 $(146)Net Assets (Liabilities) at endof period$1,069 $528 $(44) $20 $(17) $1,556 $1,227 $477 $(9) $5 $13 $1,713_______________________________________(a)See footnotes on following page.104DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)_______________________________________(b)Amounts represent assets valued at NAV as a practical expedient for fair value.(c)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.(d)At December 31, 2018, the $18 million consisted of $3 million, $5 million, and $10 million of cash equivalents included in Cash and Cash equivalents, Restricted cash, and Otherinvestments on DTE Energy's Consolidated Statements of Financial Position, respectively. At December 31, 2017, the $19 million consisted of $8 million and $11 million of cashequivalents included in Restricted cash and Other investments on DTE Energy's Consolidated Statements of Financial Position, respectively.(e)Excludes cash surrender value of life insurance investments.The following table presents assets for DTE Electric measured and recorded at fair value on a recurring basis: December 31, 2018 December 31, 2017 Level 1 Level 2 Level 3 Other(a) NetBalance Level 1 Level 2 Level 3 OtherNetBalance (In millions)Assets Cash equivalents(b)$8 $2 $— $— $10 $8 $3 $— $—$11Nuclear decommissioning trusts Equity securities851 — — — 851 978 — — —978Fixed income securities12 490 — — 502 18 477 — —495Private equity and other— — — 20 20 — — — 55Cash equivalents5 — — — 5 14 — — —14Other investments Equity securities10 — — — 10 11 — — —11Derivative assets — FTRs— — 6 — 6 — — 9 —9Total$886 $492 $6 $20 $1,404 $1,029 $480 $9 $5$1,523 Assets Current$8 $2 $6 $— $16 $8 $3 $9 $—$20Noncurrent878 490 — 20 1,388 1,021 477 — 51,503Total Assets$886 $492 $6 $20 $1,404 $1,029 $480 $9 $5$1,523_______________________________________(a)Amounts represent assets valued at NAV as a practical expedient for fair value.(b)At December 31, 2018, the $10 million consisted of cash equivalents included in Other investments on DTE Electric's Consolidated Statements of Financial Position. AtDecember 31, 2017, the $11 million consisted of cash equivalents included in Other investments on DTE Electric's Consolidated Statements 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 commingled funds. Otherassets such as private equity investments are used to enhance long-term returns while improving portfolio diversification. All pricing for private equityinvestments in this category are classified as NAV assets. Exchange-traded debt and equity securities held directly are valued using quoted market prices inactively traded markets. Non-exchange traded fixed income securities are valued based upon quotations available from brokers or pricing services.Commingled funds that hold exchange-traded equity or debt securities (exchange and non-exchange traded) and are valued based on publicly availableNAVs. 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 usea supplemental price source or change the primary price source of a given security if the trustee determines that another price source is considered preferable.The Registrants have obtained an understanding of how these prices are derived, including the nature and observability of the inputs used in deriving suchprices. Investment policies and procedures are determined by DTE Energy's Trust Investments Department which reports to DTE Energy's Vice President andTreasurer.105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: Year Ended December 31, 2018 Year Ended December 31, 2017 NaturalGas Electricity Other Total NaturalGas Electricity Other Total (In millions)Net Assets (Liabilities) as of January 1$(29) $12 $8 $(9) $(96) $9 $(1) $(88)Transfers into Level 3 from Level 2— — — — — — — —Transfers from Level 3 into Level 2(3) — — (3) — — — —Total gains (losses) Included in earnings(146) 29 1 (116) (29) 109 2 82Recorded in Regulatory liabilities— — 9 9 — — 25 25Purchases, issuances, and settlements: Purchases— — — — — — — —Issuances— — — — — — — —Settlements129 (43) (11) 75 96 (106) (18) (28)Net Assets (Liabilities) as of December 31$(49) $(2) $7 $(44) $(29) $12 $8 $(9)The amount of total gains (losses) included in Net Incomeattributed to the change in unrealized gains (losses) relatedto assets and liabilities held at December 31, 2018 and 2017and reflected in Operating Revenues — Non-utilityoperations and Fuel, purchased power, and gas — non-utility in DTE Energy's Consolidated Statements ofOperations$(119) $15 $(16) $(120) $(30) $50 $1 $21106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: Year Ended December 31, 2018 2017 (In millions)Net Assets as of January 1$9 $2Change in fair value recorded in Regulatory liabilities9 25Purchases, issuances, and settlements: Settlements(12) (18)Net Assets as of December 31$6 $9The 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, 2018 and 2017 and reflected in DTE Electric's Consolidated Statements of FinancialPosition$6 $9Derivatives 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, 2018 and 2017, 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: December 31, 2018 CommodityContracts DerivativeAssets DerivativeLiabilities ValuationTechniques Unobservable Input Range Weighted Average (In millions) Natural Gas $63 $(112) DiscountedCash Flow Forward basis price (per MMBtu) $(2.15)— $5.59/MMBtu $(0.1)/MMBtuElectricity $56 $(58) DiscountedCash Flow Forward basis price (per MWh) $(7)— $9/MWh $1/MWh 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/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.107DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Fair Value of Financial InstrumentsThe following table presents the carrying amount and fair value of financial instruments for DTE Energy: December 31, 2018 December 31, 2017 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$40 $— $— $40 $38 $— $— $38Dividends payable$172 $172 $— $— $158 $158 $— $—Short-term borrowings$609 $— $609 $— $621 $— $621 $—Notes payable — Other(b), excluding capital leases$41 $— $— $41 $12 $— $— $12Long-term debt(c)$13,622 $1,796 $10,712 $1,317 $12,288 $1,939 $10,571 $764_______________________________________(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, and issuance costs. Excludes Capital lease obligations.The following table presents the carrying amount and fair value of financial instruments for DTE Electric: December 31, 2018 December 31, 2017 Carrying Fair Value Carrying Fair Value Amount Level 1 Level 2 Level 3 Amount Level 1 Level 2 Level 3 (In millions)Notes receivable, excluding capital leases$6 $— $— $6 $— $— $— $—Short-term borrowings — affiliates$101 $— $101 $116 $— $— $116Short-term borrowings — other$149 $— $149 $— 238 $— $238 $—Notes payable — Other(a), excluding capital leases$21 $— $— $21 $2 $— $— $2Long-term debt(b)$6,538 $— $6,552 $161 $6,017 $— $6,441 $171_______________________________________(a)Included in Current Liabilities — Other and Other Liabilities — Other on DTE Electric's Consolidated Statements of Financial Position.(b)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."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, 2018 2017 (In millions)Fermi 2$1,372 $1,475Fermi 13 3Low-level radioactive waste3 14$1,378 $1,492108DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The 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, 2018 2017 2016 (In millions)Realized gains$65 $83 $74Realized losses$(42) $(29) $(63)Proceeds from sale of securities$1,203 $1,240 $1,457Realized gains and losses from the sale of securities and unrealized gains and losses incurred by the Fermi 2 trust are recorded to the Regulatory assetand Nuclear decommissioning liability. Realized gains and losses from the sale of securities and unrealized gains and losses on the low-level radioactivewaste 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, 2018 December 31, 2017 FairValue UnrealizedGains Unrealized Losses FairValue UnrealizedGains Unrealized Losses (In millions)Equity securities$851 $235 $(79) $978 $320 $(32)Fixed income securities502 7 (8) 495 13 (3)Private equity and other20 — — 5 — —Cash equivalents5 — — 14 — — $1,378 $242$(87) $1,492 $333$(35)The following table summarizes the fair value of the fixed income securities held in nuclear decommissioning trust funds by contractual maturity: December 31, 2018 (In millions)Due within one year$29Due after one through five years89Due after five through ten years113Due after ten years271 $502Other SecuritiesAt December 31, 2018 and 2017, the Registrants' securities, included in Other investments on the Consolidated Statements of Financial Position, werecomprised primarily of money market and equity securities. Net losses related to equity securities held at December 31, 2018 were $11 million and net gainsrelated to equity securities held at December 31, 2017 and 2016 were $26 million, and $15 million, respectively, for the Registrants. Gains or losses related tothe Rabbi Trust assets are allocated from DTE Energy to DTE Electric.109DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)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 contracts to manage changes in the priceof electricity and fuel. Substantially all of these contracts meet the normal purchases and normal sales exception and are therefore accounted for under theaccrual method. Other derivative contracts are MTM and recoverable through the PSCR mechanism when settled. This results in the deferral of unrealizedgains 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 2021. 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, renewable gas recovery, and power generation assets. Primarily fixed-price contracts are used in the marketing and management of the segmentassets. These contracts are generally not derivatives and are therefore accounted for under the accrual method.Energy Trading — Commodity Price Risk — Energy Trading markets and trades electricity, natural gas physical products, and energy 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.110DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)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, 2018 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.111DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The following table presents the fair value of derivative instruments for DTE Energy: December 31, 2018 December 31, 2017 DerivativeAssets DerivativeLiabilities DerivativeAssets DerivativeLiabilities (In millions)Derivatives designated as hedging instruments Interest rate contracts$— $(3) $— $—Derivatives not designated as hedging instruments Commodity contracts Natural gas$349 $(380) $357 $(378)Electricity303 (285) 285 (275)Other7 (1) 9 (1)Foreign currency exchange contracts4 — 1 (3)Total derivatives not designated as hedging instruments$663 $(666) $652 $(657) Current$563 $(518) $540 $(558)Noncurrent100 (151) 112 (99)Total derivatives$663 $(669) $652 $(657)The following table presents the fair value of derivative instruments for DTE Electric: December 31, 2018 2017 (In millions)FTRs — Other current assets$6 $9Total derivatives not designated as hedging instruments$6 $9Certain 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 outstanding at December 31, 2018 and 2017, whichcould be used to offset net Derivative liabilities. Letters of credit received from third parties which could be used to offset net Derivative assets were $8million and $4 million at December 31, 2018 and 2017, respectively. Such balances of letters of credit are excluded from the tables below and are not nettedwith 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.112DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)For DTE Energy, the total cash collateral received, net of cash collateral posted, was $13 million as of December 31, 2018. DTE Energy had $28 milliontotal cash collateral posted, net of cash collateral received, as of December 31, 2017. DTE Energy had $17 million of cash collateral related to unrealizedpositions to net against Derivative assets and no cash collateral related to unrealized positions to net against Derivative liabilities as of December 31, 2018.DTE Energy had $9 million of cash collateral related to unrealized positions to net against Derivative assets while Derivative liabilities are shown net of cashcollateral of $22 million as of December 31, 2017. DTE Energy recorded cash collateral paid of $10 million and cash collateral received of $6 million notrelated to unrealized derivative positions as of December 31, 2018. DTE Energy recorded cash collateral paid of $18 million and cash collateral received of$3 million not related to unrealized derivative positions as of December 31, 2017. These amounts are included in Accounts receivable and Accounts payableand are recorded net by counterparty.The following table presents the netting offsets of Derivative assets and liabilities for DTE Energy: December 31, 2018 December 31, 2017 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$349 $(277) $72 $357 $(256) $101Electricity303 (252) 51 285 (241) 44Other7 (1) 6 9 — 9Foreign currency exchange contracts4 — 4 1 (1) —Total derivative assets$663 $(530) $133 $652 $(498) $154 Derivative liabilities Commodity contracts Natural gas$(380) $272 $(108) $(378) $263 $(115)Electricity(285) 240 (45) (275) 246 (29)Other(1) 1 — (1) 1 —Interest rate contracts(3) — (3) — — —Foreign currency exchange contracts— — — (3) 1 (2)Total derivative liabilities$(669) $513 $(156) $(657) $511 $(146)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: December 31, 2018 December 31, 2017 Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities Current Noncurrent Current Noncurrent Current Noncurrent Current Noncurrent (In millions)Total fair value of derivatives$563 $100 $(518) $(151) $540 $112 $(558) $(99)Counterparty netting(451) (62) 451 62 (437) (52) 437 52Collateral adjustment(10) (7) — — — (9) 22 —Total derivatives as reported$102 $31 $(67) $(89) $103 $51 $(99) $(47)113DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The effect of derivatives not designated as hedging instruments on DTE Energy's Consolidated Statements of Operations is as follows: Location of Gain (Loss) Recognized in Income onDerivatives Gain (Loss) Recognized in Income on Derivatives forYears Ended December 31, 2018 2017 2016 (In millions)Derivatives not Designated as Hedging Instruments Commodity contracts Natural gas Operating Revenues — Non-utility operations $(42) $(74) $(153)Natural gas Fuel, purchased power, and gas — non-utility (94) 97 (2)Electricity Operating Revenues — Non-utility operations 49 105 43Other Operating Revenues — Non-utility operations (1) 2 5Foreign currency exchange contracts Operating Revenues — Non-utility operations 7 (2) (2)Total $(81) $128 $(109)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, 2018:Commodity Number of UnitsNatural Gas (MMBtu) 2,171,541,994Electricity (MWh) 36,163,761Foreign Currency Exchange (Canadian dollars) 101,975,644Various 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, 2018, 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, was $638million.As of December 31, 2018, DTE Energy had $541 million of derivatives in net liability positions, for which hard triggers exist. There is no collateral thathas been posted against such liabilities, including cash and letters of credit. Associated derivative net asset positions for which contractual offset exists were$495 million. The net remaining amount of $46 million is derived from the $638 million noted above.114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 2018 2017 (In millions)Mortgage bonds, notes, and other DTE Energy Debt, Unsecured3.2% 2019 — 2033 $4,425 $3,825DTE Electric Taxable Debt, Principally Secured4.3% 2020 — 2048 6,280 5,755DTE Electric Tax-Exempt Revenue Bonds(b)4.3% 2020 — 2030 310 310DTE Gas Taxable Debt, Principally Secured4.5% 2019 — 2048 1,550 1,330Other Long-Term Debt, including Non-Recourse Debt 1 7 12,566 11,227Unamortized debt discount and premium, net (16) (15)Unamortized debt issuance costs (73) (69)Long-term debt due within one year (1,495) (104) $10,982 $11,039Junior Subordinated Debentures Subordinated Debentures5.5% 2062 — 2077 $1,180 $1,180Unamortized debt issuance costs (35) (35) $1,145 $1,145_______________________________________(a)Weighted average interest rate as of December 31, 2018.(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 2018 2017 (In millions)Mortgage bonds, notes, and other Taxable Debt, Principally Secured4.3% 2020 — 2048 $6,280 $5,755Tax-Exempt Revenue Bonds(b)4.3% 2020 — 2030 310 310 6,590 6,065Unamortized debt discount (11) (10)Unamortized debt issuance costs (41) (38) $6,538 $6,017_______________________________________(a)Weighted average interest rate as of December 31, 2018.(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.115DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Debt IssuancesIn 2018, the following debt was issued:Company Month Type Interest Rate Maturity Date Amount (In millions)DTE Electric May Mortgage Bonds(a) 4.05% 2048 $525DTE Energy August Senior Notes(b) 3.70% 2023 600DTE Gas August Mortgage Bonds(b) 3.81% 2028 195DTE Gas August Mortgage Bonds(b) 4.14% 2048 125 $1,445_______________________________________(a)Bonds were issued as Green Bonds and the proceeds will be used to finance expenditures for solar and wind energy, payments under power purchase agreements for solar andwind energy, and energy optimization programs.(b)Proceeds were used for the repayment of short-term borrowings and general corporate purposes.Debt RedemptionsIn 2018, the following debt was redeemed:Company Month Type Interest Rate Maturity Date Amount (In millions)DTE Gas April Senior Notes 6.04% 2018 $100DTE Energy Various Other Long-Term Debt Various 2018 5 $105The following table shows the Registrants' scheduled debt maturities, excluding any unamortized discount or premium on debt: 2019 2020 2021 2022 2023 2024 andThereafter Total (In millions)DTE Energy(a)$1,495 $682 $462 $616 $1,177 $9,314 $13,746DTE Electric$— $632 $462 $316 $202 $4,978 $6,590_______________________________________(a)Amounts include DTE Electric's scheduled debt maturities.Junior Subordinated DebenturesAt December 31, 2018, 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, 2018, no interest payments have been deferred on the debt securities.116DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)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. DTE Energy purchased 100% of AGS, located inPennsylvania and West Virginia, and 40% of SGG, located in West Virginia, from M3 Midstream. In addition, DTE Energy purchased 15% of SGG from VegaEnergy Partners, resulting in 55% total ownership of SGG by DTE Energy. The acquisition was financed through the issuance of Equity Units and SeniorNotes.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.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, 2018, 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.117DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)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 $33 million and $32 million were made in 2018 and 2017, respectively. The stock purchase contract liability, exclusive of interest, was $33 million and $66 millionat December 31, 2018 and 2017, respectively.NOTE 15 — PREFERRED AND PREFERENCE SECURITIESAs of December 31, 2018, 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.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, 2018, the total funded debt to total capitalization ratios for DTE Energy, DTE Electric, and DTE Gas were 0.55 to 1, 0.50 to 1,and 0.48 to 1, respectively, and were in compliance with this financial covenant.118DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The availability under the facilities in place at December 31, 2018 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, 2018 Commercial paper issuances271 149 189 609Letters of credit168 — — 168 439 149 189 777Net availability at December 31, 2018$981 $251 $111 $1,343DTE Energy has $9 million of other outstanding letters of credit which are used for various corporate purposes and are not included in the facilitiesdescribed above.The weighted average interest rate for short-term borrowings was 2.9% and 1.9% at December 31, 2018 and 2017, respectively, for DTE Energy. Theweighted average interest rate for short-term borrowings was 2.9% and 1.5% at December 31, 2018 and 2017, 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, 2018, the capacity under this facility was $125 million. The amount outstanding under this agreement was $93 million and $56million at December 31, 2018 and 2017, 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, 2018, the effect of this provision was to restrict the payment of approximately $2.4 billion of Retained earnings totaling $6.1billion. There are no other effective limitations with respect to DTE Energy’s ability to pay dividends.NOTE 17 — CAPITAL AND OPERATING LEASESLesseeOperating 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 2051 and 2046 for DTE Energy and DTE Electric, respectively.119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, 2018 were: DTE Energy DTE Electric (In millions)2019$42 $17202030 12202118 10202211 720238 52024 and thereafter45 29Total minimum lease payments$154 $80Rental expense for DTE Energy operating leases was $44 million in 2018, $51 million in 2017, and $43 million in 2016, including rental expense forDTE Electric operating leases of $18 million in 2018 and $28 million in 2017 and 2016.LessorOperating Lease — DTE Energy leases various assets under operating leases for energy facilities and related equipment. DTE Energy's minimum futurerental revenues under non-cancelable operating leases as of December 31, 2018 were: DTE Energy (In millions)2019$662020662021642022202023202024 and thereafter196Total minimum future rental revenue under non-cancelable operating leases$432The amounts listed above do not include contingent rentals associated with the leased assets. DTE Energy had contingent rental revenues of $107million, $91 million, and $101 million in 2018, 2017, and 2016, respectively.Capital Lease — DTE Energy leases a portion of its pipeline system to the Vector Pipeline through a capital lease contract that expires in 2020, withrenewal options extending for five years. DTE Energy owns a 40% interest in the Vector Pipeline. In addition, DTE Energy has two energy servicesagreements, for which a portion of are accounted for as capital leases. These agreements expire in 2019 and 2026.The components of DTE Energy's net investment in capital leases at December 31, 2018, were as follows: DTE Energy (In millions)2019$10202092021—2022—2023—2024 and thereafter1Total minimum future lease receipts20Residual value of leased pipeline40Less unearned income(9)Net investment in capital lease51Less current portion(5) $46120DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)NOTE 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, andother air pollution. These rules have led to controls on fossil-fueled power plants to reduce SO2, NOX, mercury, and other emissions. Additional rulemakingsmay occur over the next few years which could require additional controls for SO2, NOX, and other hazardous air pollutants.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. On April 30, 2018, the EPA finalized the state of Michigan's recommended non-attainment designation for southeastMichigan. The State is required to develop and implement a plan to address the southeast Michigan ozone non-attainment area by 2021. DTE Electric cannotpredict the financial impact of the State's plan to address the ozone non-attainment area 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 and on June 14, 2018 the case was stayed pending settlement negotiations. The proceedings at the District Court remain stayed while the partiesdiscuss potential resolution of the 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.121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, in 2015 the EPA finalized performance standards for emissions of carbon dioxide from new and existing fossil-fuel firedEGUs. In February 2016, the U.S. Supreme Court granted petitioners' requests for a stay of the carbon rules for existing EGUs (also known as the EPA CleanPower Plan) pending final review by the courts. The Clean Power Plan has no legal effect while the stay is in place. On March 28, 2017, a presidentialexecutive 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. 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 abeyance until the review of these regulations is completed. On October 10, 2017, the EPA proposed to rescind theClean Power Plan and in August 2018, the EPA proposed revised emission guidelines for GHGs from existing electric utility generating units. This proposedrule, named the Affordable Clean Energy (ACE) rule, is intended to replace the Clean Power Plan rule. In addition, in December 2018, the EPA issuedproposed revisions to the carbon dioxide performance standards for new, modified, or reconstructed fossil-fuel fired EGUs. The carbon standards for newsources are not expected to have a material impact on DTE Electric, since DTE Electric has no plans to build new coal-fired generation and any potential newgas generation will be able to comply with the standards. These proposed rules do not impact DTE Energy's goal to reduce carbon emissions 30% by the early2020s, 45% by 2030, 75% by 2040, and more than 80% by 2050.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 2018. DTE Electric does not anticipate additionalcapital expenditures through 2025.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 2014. 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, 2018 and 2017, DTE Electric had $7 million and $6 million, respectively, accrued for remediation. 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 and July 2018. Additionally, a D.C. District Court Decision on August 21,2018 (effective October 12, 2018) may affect the timing of closure of coal ash impoundments that are not lined with an engineered liner system. In 2019, theEPA is expected to affirmatively undertake rulemaking to implement the D.C. District Court's decision that will determine any changes to DTE Electric'splans in the operation and closure of coal ash impoundments.122DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)At the State level, legislation was signed by the Governor in December 2018. The bill provides for a CCR program to be regulated in Michigan onceapproval is requested and received from the EPA.DTE Electric owns and operates three permitted engineered coal ash storage facilities to dispose of coal ash from coal-fired power plants and operates anumber of smaller impoundments at its power plants. CCR obligations vary based on plant life, but include the installation of monitoring wells, compliancewith groundwater standards, and the closure of landfills and basins at the end of the useful life of the associated power plant or as a basin becomes inactive.Under the current CCR rules and uncertainty regarding the D.C. District Court decision, capital costs and timing associated with the building of new CCRfacilities or retirement of existing CCR facilities are being evaluated.In November 2015, the EPA finalized the ELG Rule for the steam electric power generating industry which requires additional controls to be installedbetween 2018 and 2023. Compliance schedules for individual facilities and individual waste streams are determined through issuance of new NationalPollutant Discharge Elimination System (NPDES) permits by the State of Michigan. The State of Michigan has issued a NPDES permit for the Belle RiverPower Plant establishing a compliance deadline of December 31, 2021. No new permits that would require ELG compliance have been issued for otherfacilities, consequently no compliance timelines have been established.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. The final rule nullified the administrative stay but also extended the earliest compliance deadlines for the FGD wastewater and bottomash transport water until November 1, 2020 in order for the EPA to propose and finalize a new ruling. The ELG compliance requirements and final deadlinesfor bottom ash transport water and FGD wastewater, and total ELG related compliance costs will not be known until the EPA completes its reconsideration ofthe ELG Rule.Over the next six years, to comply with the November 2015 ELG requirements and CCR requirements, costs associated with the building of newfacilities or installation of controls are estimated to be approximately $565 million.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, 2018 and 2017, DTE Gas had $25 million and $41 million, respectively, accrued for remediation. 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.123DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)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 plan (SIP) submittal and EPAapproval describing the control strategy and timeline for demonstrating compliance with the new SO2 standard is the next step in the process and is expectedto be completed by the end of 2019. DTE Energy is currently working with the MDEQ to develop the required SIP. DTE Energy is unable to determine thefull impact of the SIP strategy.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, 2018 was approximately $400 million. Payment under theseguarantees are 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, 2018 was $359 million. Payments under these guaranteesare 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 $242 million and $377 million at December 31, 2018, respectively; eachrepresenting 50% of all payment obligations due and payable by NEXUS. Each guarantee terminates at the earlier of (i) such time as all of the guaranteedobligations have been fully performed, or (ii) two months following the end of the primary term of the capacity lease agreements. In October 2018, NEXUSPipeline was placed in service. The amount of each guarantee decreases annually as payments are made by NEXUS to each of the aforementionedcounterparties.NEXUS also entered into certain 15-year capacity lease agreements for the transportation of natural gas with Vector, an equity method investee of DTEEnergy. Pursuant to the terms of those agreements, in October 2018, DTE Energy executed a guarantee agreement with Vector, with a maximum potentialpayment totaling $7 million at December 31, 2018, representing 50% of the first-year payment obligations due and payable by NEXUS. The guaranteeterminates at the earlier of (i) such time as all of the guaranteed obligations have been fully performed or (ii) 15 years from the date DTE Energy entered intothe guarantee.Should NEXUS fail to perform under the terms of these agreements, DTE Energy is required to perform on its behalf. Payments under these guaranteesare 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 $64 million at December 31, 2018.Payments under these guarantees are considered remote.124DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)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, 2018, DTE Energy had $76 million of performance bonds outstanding. In the event thatsuch bonds are called for nonperformance, DTE Energy would be obligated to reimburse the issuer of the performance bond. DTE Energy is released from theperformance bonds as the contractual performance is completed and does not believe that a material amount of any currently outstanding performance bondswill be called.Labor ContractsThere are several bargaining units for DTE Energy subsidiaries' approximate 5,200 represented employees, including DTE Electric's approximate 2,800represented employees. The majority of the represented employees are under contracts that expire in 2020 and 2021.Purchase CommitmentsAs of December 31, 2018, 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 2019 through 2051 for DTE Energy, and 2019 through 2039 forDTE Electric, as detailed in the following table: DTE Energy DTE Electric (In millions)2019$2,691 $77720201,311 5412021632 1712022409 882023351 852024 and thereafter1,953 737 $7,347 $2,399Utility capital expenditures, expenditures for non-utility businesses, and contributions to equity method investees will be approximately $3.9 billionand $2.2 billion in 2019 for DTE Energy and DTE Electric, respectively. The Registrants have made certain commitments in connection with the estimated2019 annual capital expenditures and contributions to equity method investees.BankruptciesDTE Energy's Power and Industrial Projects segment holds ownership interests in, and operates, five generating plants that sell electric output fromrenewable sources under long-term power purchase agreements with PG&E. PG&E filed for Chapter 11 bankruptcy protection on January 29, 2019. As ofDecember 31, 2018, uncollected pre-petition accounts receivable from PG&E were approximately $12 million. Currently, PG&E has been paying amountsowed in a timely manner and its account is current. As of December 31, 2018, DTE Energy has not recorded a reserve related to the pre-petition receivables.As of December 31, 2018, the book value of long-lived assets used in producing electric output for sale to PG&E was approximately $106 million. As ofDecember 31, 2018, DTE Energy performed an impairment analysis on its long-lived assets in accordance with ASC 360, Property, Plant and Equipment.Based on its undiscounted cash flow projections, DTE Energy determined that it did not have an impairment loss as of December 31, 2018. DTE Energy’sassumptions and conclusions may change, and it could have impairment losses if any of the terms of the contracts are not honored by PG&E or the contractsare rejected through the bankruptcy process.The Power and Industrial Projects segment also has equity investments, including a note receivable, of approximately $77 million in entities that sellpower to PG&E. DTE Energy has determined that it does not have an other than temporary decline in its equity investments as described in ASC 323,Investments-Equity Method and Joint Ventures. DTE Energy’s assumptions and conclusions may change in the future, and it could have an impairment loss ifcertain facilities are not utilized as currently anticipated or the contracts are rejected through the bankruptcy process.125DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)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 $2.0 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.Under NEIL policies, DTE Electric could be liable for maximum assessments of up to $41 million per event if the loss associated with any one event atany 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 $138 million could be levied against each licensed nuclear facility, but not more than $20 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, 2014.126DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)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.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 coveringcertain employees of the Registrants.The table below represents the pension and other postretirement benefit plans of each Registrant at December 31, 2018: 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.127DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)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. As a result of multiemployer accounting treatment,capitalized costs associated with these plans are reflected in Property, plant, and equipment in DTE Electric's Consolidated Statements of Financial Position.The same capitalized costs are reflected as Regulatory assets and liabilities in DTE Energy's Consolidated Statements of Financial Position. In addition, theservice cost and non-service cost components are presented in Operation and maintenance in DTE Electric's Consolidated Statements of Operations. Thesame non-service cost components are presented in Other (Income) and Deductions — Non-operating retirement benefits, net in DTE Energy's ConsolidatedStatements of Operations. Plan participants of all plans are solely DTE Energy and affiliate participants.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 certain management employees. These plansprovide for benefits that supplement those provided by DTE Energy’s other retirement plans.Net pension cost for DTE Energy includes the following components: 2018 2017 2016 (In millions)Service cost$99 $92 $92Interest cost202 214 219Expected return on plan assets(329) (311) (309)Amortization of: Net actuarial loss176 176 164Prior service cost— 1 1Net pension cost$148 $172 $167 2018 2017 (In millions)Other changes in plan assets and benefit obligations recognized in Regulatory assets and Other comprehensive income (loss) Net actuarial loss$125 $27Amortization of net actuarial loss(176) (176)Prior service credit— (11)Amortization of prior service cost— (1)Total recognized in Regulatory assets and Other comprehensive income (loss)$(51) $(161)Total recognized in net periodic pension cost, Regulatory assets, and Other comprehensive income (loss)$97 $11Estimated amounts to be amortized from Regulatory assets and Accumulated other comprehensive income (loss) into netperiodic benefit cost during next fiscal year Net actuarial loss$131 $178Prior service cost$1 $—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 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 2018 2017 (In millions)Accumulated benefit obligation, end of year$4,779 $5,149Change in projected benefit obligation Projected benefit obligation, beginning of year$5,576 $5,171Service cost99 92Interest cost202 214Plan amendments— (11)Actuarial (gain) loss(438) 391Benefits paid(315) (281)Projected benefit obligation, end of year$5,124 $5,576Change in plan assets Plan assets at fair value, beginning of year$4,636 $4,012Actual return on plan assets(233) 674Company contributions185 231Benefits paid(315) (281)Plan assets at fair value, end of year$4,273 $4,636Funded status$(851) $(940)Amount recorded as: Current liabilities$(14) $(16)Noncurrent liabilities(837) (924) $(851) $(940)Amounts recognized in Accumulated other comprehensive income (loss), pre-tax Net actuarial loss$152 $163Prior service cost5 6 $157 $169Amounts recognized in Regulatory assets(a) Net actuarial loss$1,973 $2,014Prior service credit(12) (14) $1,961 $2,000______________________________________(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 contributions to the qualified pension plans in: 2018 2017 2016 (In millions)DTE Energy$175 $223 $179DTE Electric175 185 145129DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)During 2018, DTE Energy contributed the following amounts of DTE Energy common stock to the DTE Energy Company Affiliates Employee BenefitPlans Master Trust:Date Number of Shares Price per Share Amount (In millions)March 7, 2018 1,751,401 $99.92 $175The above contribution was made on behalf of DTE Electric, for which DTE Electric paid DTE Energy cash consideration of $175 million in March2018.At the discretion of management, and depending upon financial market conditions, DTE Energy anticipates making up to $150 million incontributions, including $100 million of DTE Electric contributions, to the qualified pension plans in 2019.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 $120 million for the year ended December 31, 2018 and$136 million for the years ended December 31, 2017 and 2016. These amounts include recognized contractual termination benefit charges, curtailment gains,and settlement charges.At December 31, 2018, 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)2019$31120203172021317202232320233322024-20281,713Total$3,313Assumptions used in determining the projected benefit obligation and net pension costs of DTE Energy are: 2018 2017 2016Projected benefit obligation Discount rate4.40% 3.70% 4.25%Rate of compensation increase4.98% 4.98% 4.65%Net pension costs Discount rate3.70% 4.25% 4.50%Rate of compensation increase4.98% 4.65% 4.65%Expected long-term rate of return on plan assets7.50% 7.50% 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 7.30% and other postretirement benefit plans of 7.75% for 2019. The Registrants believe these rates are a reasonable assumption for thelong-term rate of return on plan assets for 2019 given the current investment strategy.130DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The DTE Energy Company Affiliates Employee Benefit Plans Master Trust employs a liability driven investment program whereby the characteristicsof plan liabilities are considered when determining investment policy. Risk tolerance is established through consideration of future plan cash flows, planfunded status, and corporate financial considerations. The investment portfolio contains a diversified blend of equity, fixed income, and other investments.Furthermore, equity investments are diversified across U.S. and non-U.S. stocks and large and small market capitalizations. Fixed income investmentsgenerally include U.S. Treasuries, other governmental debt, diversified corporate bonds, bank loans, and mortgage-backed securities. Other investments areused to enhance long-term returns while improving portfolio diversification. Derivatives may be utilized in a risk controlled manner, to potentially increasethe portfolio beyond the market value of invested assets and/or reduce portfolio investment risk. Investment risk is measured and monitored on an ongoingbasis through annual liability measurements, periodic asset/liability studies, and quarterly investment portfolio reviews.Target allocations for DTE Energy's pension plan assets as of December 31, 2018 are listed below:U.S. Large Capitalization (Cap) Equity Securities16%U.S. Small Cap and Mid Cap Equity Securities4Non-U.S. Equity Securities15Fixed Income Securities42Hedge Funds and Similar Investments15Private Equity and Other8 100%131DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The following tables provide the fair value measurement amounts for DTE Energy's pension plan assets at December 31, 2018 and 2017(a): December 31, 2018 December 31, 2017 Level 1 Level 2 Other(b) Total Level 1 Level 2 Other(b) Total (In millions)DTE Energy asset category: Short-term Investments(c)$— $27 $— $27 $— $114 $— $114Equity Securities U.S. Large Cap(d)606 3 — 609 821 5 — 826U.S. Small Cap and Mid Cap(e)123 1 — 124 229 5 — 234Non-U.S.(f)337 9 240 586 529 13 280 822Fixed Income Securities(g)6 1,892 — 1,898 1 1,453 — 1,454Hedge Funds and Similar Investments(h)88 — 542 630 265 — 593 858Private Equity and Other(i)— — 399 399 — — 328 328Securities Lending(j)(22) (8) — (30) (53) (13) — (66)Securities Lending Collateral(j)22 8 — 30 53 13 — 66DTE Energy Total$1,160 $1,932 $1,181 $4,273 $1,845 $1,590 $1,201 $4,636_______________________________________(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 quoted 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 quotedprices 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 quoted 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, other governmental debt, bank loans, and mortgage-backed securities. Pricing for investmentsin this category is obtained from quoted prices in actively traded markets and quotations from broker or pricing services.(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 real estate andprivate 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 trust to selected entitiesagainst receipt of collateral (in the form of cash) as provided for and determined in accordance with their securities lending agency agreements.The pension trust holds debt and equity securities directly and indirectly through commingled funds. Exchange-traded debt and equity securities helddirectly are valued using quoted market prices in actively traded markets. The commingled funds hold exchange-traded equity or debt securities and arevalued based on stated NAVs. Non-exchange traded fixed income securities are valued by the trustee based upon quotations available from brokers or pricingservices. A primary price source is identified by asset type, class, or issue for each security. The trustee monitors prices supplied by pricing services and mayuse a supplemental price source or change the primary price source of a given security if the trustee challenges an assigned price and determines that anotherprice source is considered preferable. DTE Energy has obtained an understanding of how these prices are derived, including the nature and observability ofthe inputs used in deriving such prices.There were no significant transfers between Level 2 and Level 1 in the years ended December 31, 2018 and 2017 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.DTE Energy did not make any contributions to these trusts during 2018 and does not anticipate making any contributions to the trusts in 2019.132DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)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 $11 million in 2018, $8 million in 2017, and $6 million in 2016, including DTEElectric contributions of $5 million in 2018, 2017, and 2016.The Registrants also contribute a fixed amount to a Retiree Reimbursement Account, for certain non-represented and represented retirees, spouses, andsurviving spouses when the youngest of the retiree's covered household becomes eligible for Medicare Part A based on age. The amount of the annualallocation to each participant is determined by the employee's retirement date, and increases each year for each eligible participant at the lower of the rate ofmedical inflation or 2%.Net other postretirement credit for DTE Energy includes the following components: 2018 2017 2016 (In millions)Service cost$27 $27 $27Interest cost69 73 80Expected return on plan assets(143) (130) (129)Amortization of: Net actuarial loss11 13 30Prior service credit— (14) (118)Other— — (1)Net other postretirement credit$(36) $(31) $(111) 2018 2017 (In millions)Other changes in plan assets and accumulated postretirement benefit obligation recognized in Regulatory assets and Othercomprehensive income (loss) Net actuarial gain$(8) $(21)Amortization of net actuarial loss(11) (13)Prior service credit(44) (1)Amortization of prior service credit— 14Total recognized in Regulatory assets and Other comprehensive income (loss)$(63) $(21)Total recognized in net periodic benefit cost, Regulatory assets, and Other comprehensive income (loss)$(99) $(52)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$12 $11Prior service credit$(9) $(1)Net other postretirement credit for DTE Electric includes the following components: 2018 2017 2016 (In millions)Service cost$20 $20 $20Interest cost53 56 61Expected return on plan assets(98) (90) (90)Amortization of: Net actuarial loss8 8 21Prior service credit— (10) (89)Net other postretirement credit$(17) $(16) $(77)133DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued) 2018 2017 (In millions)Other changes in plan assets and accumulated postretirement benefit obligation recognized in Regulatory assets Net actuarial (gain) loss$(46) $2Amortization of net actuarial loss(8) (8)Amortization of prior service (cost) credit(35) 10Total recognized in Regulatory assets$(89) $4Total recognized in net periodic benefit cost and Regulatory assets$(106) $(12)Estimated amounts to be amortized from Regulatory assets into net periodic benefit cost during next fiscal year Net actuarial loss$5 $8Prior service credit$(7) $—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 2018 2017 2018 2017 (In millions)Change in accumulated postretirement benefit obligation Accumulated postretirement benefit obligation, beginning of year$1,910 $1,795 $1,470 $1,373Service cost27 27 20 20Interest cost69 73 53 56Plan amendments(44) — (35) —Actuarial (gain) loss(227) 101 (196) 84Benefits paid(90) (86) (65) (63)Accumulated postretirement benefit obligation, end of year$1,645 $1,910 $1,247 $1,470Change in plan assets Plan assets at fair value, beginning of year$1,848 $1,758 $1,272 $1,218Actual return on plan assets(75) 252 (52) 172Benefits paid(84) (162) (62) (118)Plan assets at fair value, end of year$1,689 $1,848 $1,158 $1,272Funded status$44 $(62) $(89) $(198)Amount recorded as: Noncurrent assets$45 $— $189 $113Current liabilities(1) (1) — —Noncurrent liabilities— (61) (278) (311) $44 $(62) $(89) $(198)Amounts recognized in Accumulated other comprehensive income (loss), pre-tax Net actuarial (gain) loss$1 $(1) $— $— $1 $(1) $— $—Amounts recognized in Regulatory assets(a) Net actuarial loss$257 $279 $156 $211Prior service credit(44) (1) (35) — $213 $278 $121 $211______________________________________(a)See Note 9 to the Consolidated Financial Statements, "Regulatory Matters."134DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)At December 31, 2018, 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)2019$88 $66202092 70202196 732022100 752023102 772024-2028532 402Total$1,010 $763Assumptions used in determining the accumulated postretirement benefit obligation and net other postretirement benefit costs of the Registrants are: 2018 2017 2016Accumulated postretirement benefit obligation Discount rate4.40% 3.70% 4.25%Health care trend rate pre- and post- 656.75 / 7.25% 6.75 / 7.25% 6.50 / 6.75%Ultimate health care trend rate4.50% 4.50% 4.50%Year in which ultimate reached pre- and post- 652031 2030 2028Other postretirement benefit costs Discount rate3.70% 4.25% 4.50%Expected long-term rate of return on plan assets7.75% 7.75% 8.00%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 2027A 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 $4 million, including $3 million for DTE Electric, in 2018 and would have increased the accumulated benefit obligation for DTE Energyby $72 million, including $51 million for DTE Electric, at December 31, 2018. 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 2018 andwould have decreased the accumulated benefit obligation for DTE Energy by $63 million, including $45 million for DTE Electric, at December 31, 2018.The process used in determining the long-term rate of return on assets for the other postretirement benefit plans is similar to that previously describedfor the pension plans.The DTE Energy Master VEBA Trust employs a total return investment approach. The investment portfolio contains a diversified blend of equity, fixedincome, and other investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks and large and small market capitalizations.Fixed income investments generally include U.S. Treasuries, other governmental debt, diversified corporate bonds, bank loans, and mortgage-backedsecurities. Other investments are used to enhance long-term returns while improving portfolio diversification. Derivatives may be utilized in a risk controlledmanner to potentially increase the portfolio beyond the market value of invested assets and/or reduce portfolio investment risk. Investment risk is measuredand monitored on an ongoing basis through annual liability measurements, periodic asset/liability studies, and quarterly investment portfolio reviews.135DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Target allocations for the Registrants' other postretirement benefit plan assets as of December 31, 2018 are listed below:U.S. Large Cap Equity Securities16%U.S. Small Cap and Mid Cap Equity Securities4Non-U.S. Equity Securities19Fixed Income Securities28Hedge Funds and Similar Investments19Private Equity and Other14 100%136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, 2018and 2017(a): December 31, 2018 December 31, 2017 Level 1 Level 2 Other(b) Total Level 1 Level 2 Other(b) TotalDTE Energy asset category:(In millions)Short-term Investments(c)$14 $2 $— $16 $13 $2 $— $15Equity Securities U.S. Large Cap(d)225 — — 225 284 — — 284U.S. Small Cap and Mid Cap(e)75 — — 75 131 — — 131Non-U.S.(f)234 — 67 301 288 1 77 366Fixed Income Securities(g)11 350 130 491 29 324 130 483Hedge Funds and SimilarInvestments(h)97 — 203 300 116 — 219 335Private Equity and Other(i)— — 281 281 — — 234 234Securities Lending(j)(21) (1) — (22) (39) (1) — (40)Securities Lending Collateral(j)21 1 — 22 39 1 — 40DTE Energy Total$656 $352 $681 $1,689 $861 $327 $660 $1,848 DTE Electric asset category: Short-term Investments(c)$10 $1 $— $11 $9 $1 $— $10Equity Securities U.S. Large Cap(d)154 — — 154 195 — — 195U.S. Small Cap and Mid Cap(e)52 — — 52 91 — — 91Non-U.S.(f)163 — 45 208 200 1 52 253Fixed Income Securities(g)7 232 92 331 20 218 92 330Hedge Funds and SimilarInvestments(h)68 — 139 207 80 — 150 230Private Equity and Other(i)— — 195 195 — — 163 163Securities Lending(j)(15) — — (15) (27) (1) — (28)Securities Lending Collateral(j)15 — — 15 27 1 — 28DTE Electric Total$454 $233 $471 $1,158 $595 $220 $457 $1,272_______________________________________(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 quoted 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 quotedprices 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 quoted 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, other governmental debt, bank loans, and mortgage backed securities. Pricing for investmentsin this category is obtained from quoted prices in actively traded markets and quotations from broker or pricing services. Non-exchange traded securities and exchange-tradedsecurities held in commingled 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 real estate andprivate 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.137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. Exchange-tradeddebt and equity securities held directly are valued using quoted market prices in actively traded markets. The commingled funds hold exchange-tradedequity or debt securities and are valued based on NAVs. Non-exchange traded fixed income securities are valued by the trustee based upon quotationsavailable from brokers or pricing services. A primary price source is identified by asset type, class, or issue for each security. The trustee monitors pricessupplied by pricing services and may use a supplemental price source or change the primary price source of a given security if the trustee challenges anassigned price and determines that another price source is considered preferable. The Registrants have obtained an understanding of how these prices arederived, including the nature and observability of the inputs used in deriving such prices.There were no significant transfers between Level 2 and Level 1 in the years ended December 31, 2018 and 2017 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 $61 million, $57million, and $51 million for the years ended December 31, 2018, 2017, and 2016, respectively. For DTE Electric, the cost of these plans was $29 million, $27million, and $23 million for the years ended December 31, 2018, 2017, and 2016.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 16,500,000 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.The following table summarizes the components of stock-based compensation for DTE Energy: 2018 2017 2016 (In millions)Stock-based compensation expense$64 $58 $61Tax benefit$13 $23 $24Stock-based compensation cost capitalized in Property, plant, and equipment$11 $9 $10138DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Stock 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, 2018: Number of Options Weighted AverageExercise Price Aggregate IntrinsicValue(In millions)Options outstanding and exercisable at December 31, 2017105,994 $42.95 Exercised(53,894) $42.62 Options outstanding and exercisable at December 31, 201852,100 $43.30 $4As of December 31, 2018, the weighted average remaining contractual life for the exercisable shares is 1.11 years. As of December 31, 2018, all optionswere vested. No options vested during 2018.There were no options granted during 2018, 2017, or 2016. The intrinsic value of options exercised for the years ended December 31, 2018 was $4million. The intrinsic value of options for the years ended December 31, 2017 and 2016 was $4 million. No option expense was recognized for 2018, 2017, or2016.The number, weighted average exercise price, and weighted average remaining contractual life of DTE Energy options outstanding as of December 31,2018 were as follows:Range of Exercise Prices Number of Options Weighted Average Exercise Price Weighted AverageRemaining Contractual Life (Years)$27.00 — $38.00 2,100 $27.70 0.16$42.01 — $45.00 50,000 $43.95 1.15 52,100 $43.30 1.11Restricted 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.Stock award activity for DTE Energy for the years ended December 31 was: 2018 2017 2016Fair value of awards vested (in millions)$11 $10 $9Restricted common shares awarded109,393 136,825 145,240Weighted average market price of shares awarded$105.80 $99.53 $87.28Compensation cost charged against income (in millions)$11 $11 $11139DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)The following table summarizes DTE Energy’s restricted stock awards activity for the year ended December 31, 2018: RestrictedStock Weighted AverageGrant DateFair ValueBalance at December 31, 2017365,764 $90.26Grants109,393 $105.80Forfeitures(21,939) $98.59Vested and issued(125,813) $85.24Balance at December 31, 2018327,405 $96.79Performance 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 2018, 2017, and 2016were 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: 2018 2017 2016 (In millions)Compensation expense$53 $47 $50Cash settlements(a)$13 $15 $7Stock settlements(a)$39 $66 $38_______________________________________(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.The following table summarizes DTE Energy’s performance share activity for the period ended December 31, 2018: Performance Shares Weighted AverageGrant DateFair ValueBalance at December 31, 20171,324,401 $90.31Grants437,508 $105.64Forfeitures(56,435) $96.02Payouts(418,788) $84.84Balance at December 31, 20181,286,686 $97.17140DTE Energy Company — DTE Electric CompanyCombined Notes to Consolidated Financial Statements — (Continued)Unrecognized Compensation CostsAs of December 31, 2018, 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$12 1.03Performance shares59 1.04 $71 1.04Allocated Stock-Based CompensationDTE Electric received an allocation of costs from DTE Energy associated with stock-based compensation. DTE Electric's allocation for 2018, 2017, and2016 for stock-based compensation expense was $38 million, $34 million, and $38 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 is primarily engaged in services related to the gathering, transportation, and storage of natural gas.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 and pipeline-quality gas 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.141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, 2018 2017 2016 (In millions)Electric$52 $48 $43Gas12 8 9Gas Storage and Pipelines36 42 9Power and Industrial Projects642 569 602Energy Trading27 35 39Corporate and Other2 2 2 $771 $704 $704Financial data of DTE Energy's business segments follows: Electric Gas Gas Storageand Pipelines Power andIndustrialProjects EnergyTrading Corporate andOther ReclassificationsandEliminations Total (In millions)2018 Operating Revenues — Utility operations$5,298 1,436 — — — — (64) $6,670Operating Revenues — Non-utility operations$— — 485 2,204 5,557 3 (707) $7,542Depreciation and amortization$836 133 82 67 5 1 — $1,124Interest expense$283 70 68 31 6 220 (119) $559Interest income$— (6) (9) (9) (3) (104) 119 $(12)Equity in earnings of equity method investees$— 2 123 3 — 4 — $132Income Tax Expense (Benefit)$193 67 68 (195) 13 (48) — $98Net Income (Loss) Attributable to DTE EnergyCompany$664 150 235 161 39 (129) — $1,120Investment in equity method investees$7 12 1,585 134 — 33 — $1,771Capital expenditures and acquisitions$1,979 460 176 91 5 2 — $2,713Goodwill$1,208 743 299 26 17 — — $2,293Total Assets$22,501 5,378 3,161 495 909 6,153 (2,309) $36,288142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)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)$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. 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) $32,041NOTE 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.143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: 2018 2017 2016 (In millions)Revenues Energy sales$9 $9 $10Other services$(4) $(4) $(1)Shared capital assets$43 $39 $33Costs Fuel and purchased power$7 $6 $10Other services and interest$33 $(2) $(1)Corporate expenses, net$377 $370 $370Other Dividends declared$461 $432 $420Dividends paid$461 $432 $420Capital contribution from DTE Energy$325 $100 $120DTE 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, 2018 and 2017.There were no contributions by DTE Electric to the DTE Energy Foundation for the years ended December 31, 2018 and 2016. DTE Electric's charitablecontributions to the DTE Energy Foundation was $7 million for the year ended December 31, 2017. 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 Title1 Organization and Basis of Presentation20 Retirement Benefits and Trusteed Assets21 Stock-Based Compensation144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)2018 Operating Revenues$3,753 $3,159 $3,550 $3,750 $14,212Operating Income$504 $329 $429 $332 $1,594Net Income Attributable to DTE Energy Company$361 $234 $334 $191 $1,120Basic Earnings per Share$2.01 $1.29 $1.84 $1.05 $6.18Diluted Earnings per Share$2.00 $1.29 $1.84 $1.05 $6.172017 Operating Revenues$3,236 $2,855 $3,245 $3,271 $12,607Operating Income(a)$585 $320 $434 $372 $1,711Net Income Attributable to DTE Energy Company(b)$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 $6.32_____________________________________(a)Pursuant to the implementation of ASU 2017-07, amounts previously included in Operating Income — Operation and maintenance were reclassified to Other (Income) andDeductions — Non-operating retirement benefits, net on DTE Energy's Consolidated Statements of Operations.(b)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)2018 Operating Revenues$1,205 $1,276 $1,521 $1,296 $5,298Operating Income$253 $269 $444 $168 $1,134Net Income$140 $163 $305 $56 $6642017 Operating Revenues$1,175 $1,218 $1,434 $1,275 $5,102Operating Income$217 $272 $395 $281 $1,165Net Income$106 $138 $219 $138 $601145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 2019 Annual Meeting of Shareholders to be held May 9, 2019. 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.146DTE ElectricFor the years ended December 31, 2018 and 2017, 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, 2018 and2017, respectively, and fees billed for other services rendered by PwC during those periods. 2018 2017Audit fees(a)$1,393,500 $1,428,500Audit-related fees(b)52,000 12,000Total$1,445,500 $1,440,500_______________________________________(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.147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: 21.14 Subsidiaries of DTE Energy X 23.36 Consent of PricewaterhouseCoopers LLP X 23.37 Consent of PricewaterhouseCoopers LLP X 31.157 Chief Executive Officer Section 302 Form 10-K Certification of Periodic Report X 31.158 Chief Financial Officer Section 302 Form 10-K Certification of Periodic Report X 31.159 Chief Executive Officer Section 302 Form 10-K Certification of Periodic Report X 31.160 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: 32.157 Chief Executive Officer Section 906 Form 10-K Certification of Periodic Report X 32.158 Chief Financial Officer Section 906 Form 10-K Certification of Periodic Report X 32.159 Chief Executive Officer Section 906 Form 10-K Certification of Periodic Report X 32.160 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 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 148ExhibitNumber Description DTEEnergy DTEElectric 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 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 Supplemental Indenture dated as of August 1, 2018, to the Amended and Restated Indenture, dated as of April9, 1924, between DTE Energy Company and The Bank of New York Mellon Trust Company, N.A., as successortrustee (Exhibit 4-301 to DTE Energy’s Form 10-Q for the quarter ended September 30, 2018). (2018 Series D) X 149ExhibitNumber Description DTEEnergy DTEElectric 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: 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) 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) 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) 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) 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) 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) 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 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 150ExhibitNumber Description DTEEnergy DTEElectric 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 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 151ExhibitNumber Description DTEEnergy DTEElectric 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 Supplemental Indenture dated as of May 1, 2018, 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 4-299 to DTE Energy’s Form 10-Q for the quarter ended June 30, 2018). (2018 Series A) 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: 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 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 152ExhibitNumber Description DTEEnergy DTEElectric 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-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 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 153ExhibitNumber Description DTEEnergy DTEElectric 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 Forty-ninth Supplemental Indenture dated as of August 1, 2018, to Indenture of Mortgage and Deed of Trust,dated as of March 1, 1944, between DTE Gas Company and Citibank, N.A., trustee (Exhibit 4-300 to DTEEnergy’s Form 10-Q for the quarter ended September 30, 2018). (2018 Series B and C) 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: 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 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 154ExhibitNumber Description DTEEnergy DTEElectric 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, David E.Meador, Gerardo Norcia, Peter B. Oleksiak, Bruce D. Peterson, and non-employee Directors (Exhibit 10-1 toDTE 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) 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) DTE Energy Company Long-Term Incentive Plan Amended and Restated Effective May 3, 2018 (Exhibit 4-3to DTE Energy's Form S-8 filed on June 27, 2018) 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 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 155ExhibitNumber Description DTEEnergy DTEElectric 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 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 156ExhibitNumber Description DTEEnergy DTEElectric 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, Trevor F. Lauer, David E. Meador, Peter B. Oleksiak, Gerardo Norcia and 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 157Item 16. Form 10-K SummaryNone.158DTE Energy CompanySchedule II — Valuation and Qualifying Accounts Year Ending December 31, 2018 2017 2016 (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$49 $41 $49Additions: Charged to costs and expenses140 80 78Charged to other accounts(a)55 26 18Deductions(b)(153) (98) (104)Balance at End of Period$91 $49 $41_______________________________________(a)Collection of accounts previously written off.(b)Uncollectible accounts written off.DTE Electric CompanySchedule II — Valuation and Qualifying Accounts Year Ending December 31, 2018 2017 2016 (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$31 $25 $28Additions: Charged to costs and expenses85 55 49Charged to other accounts(a)36 14 8Deductions(b)(99) (63) (60)Balance at End of Period$53 $31 $25_______________________________________(a)Collection of accounts previously written off.(b)Uncollectible accounts written off.159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 7, 2019Pursuant 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/ RUTH G. SHAW Jeffrey A. JewellVice President, Controller, and Chief Accounting Officer(Principal Accounting Officer) Ruth G. Shaw, Director By:/S/ DAVID A. BRANDON By:/S/ ROBERT C. SKAGGS, JR. David A. Brandon, Director Robert C. Skaggs, Jr., Director By:/S/ W. FRANK FOUNTAIN, JR. By:/S/ DAVID A. THOMAS W. Frank Fountain, Jr., Director David A. Thomas, Director By:/S/ CHARLES G. MCCLURE JR. By:/S/ JAMES H. VANDENBERGHE Charles G. McClure Jr., Director James H. Vandenberghe, Director By:/S/ GAIL J. MCGOVERN By:/S/ VALERIE M. WILLIAMS Gail J. McGovern, Director Valerie M. Williams, Director By:/S/ MARK A. MURRAY Mark A. Murray, Director By:/S/ JAMES B. NICHOLSON James B. Nicholson, Director Date: February 7, 2019160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 7, 2019Pursuant 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, Chief Financial Officer, and Director (Principal Financial Officer) By:/S/ JEFFREY A. JEWELL By:/S/ BRUCE D. PETERSON Jeffrey A. JewellVice President, Controller, and Chief Accounting Officer(Principal Accounting Officer) Bruce D. Peterson, Director By:/S/ LISA A. MUSCHONG Lisa A. Muschong, Director Date: February 7, 2019Supplemental 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, 2018.161Exhibit 21.14SUBSIDIARIES OF DTE ENERGY COMPANYDTE Energy Company’s principal subsidiaries as of December 31, 2018 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 Pipeline Company Michigan4.DTE Gas Enterprises, LLC Michigan5.DTE Gas Company Michigan6.DTE Energy Resources, LLC Delaware7.DTE Gas Holdings, Inc. Michigan8.DTE Energy Services, Inc. MichiganExhibit 23.36CONSENT 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, 333-199746 and 333-225917) of DTE Energy Company of our report dated February 7, 2019 relating to the financial statements,financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K./s/ PricewaterhouseCoopers LLPDetroit, MichiganFebruary 7, 2019Exhibit 23.37CONSENT 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 7, 2019 relating to the financial statements and financial statement schedule, which appears in this Form 10-K./s/ PricewaterhouseCoopers LLPDetroit, MichiganFebruary 7, 2019Exhibit 31.157FORM 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 7, 2019Gerard M. AndersonChairman of the Board andChief Executive Officer of DTE Energy Company Exhibit 31.158FORM 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 7, 2019Peter B. OleksiakSenior Vice President andChief Financial Officer of DTE Energy Company Exhibit 31.159FORM 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 7, 2019Gerard M. AndersonChairman of the Board andChief Executive Officer of DTE Electric Company Exhibit 31.160FORM 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 7, 2019Peter B. OleksiakSenior Vice President andChief Financial Officer of DTE Electric Company Exhibit 32.157CERTIFICATION 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, 2018, 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 7, 2019/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 32.158CERTIFICATION 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, 2018, 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 7, 2019/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 32.159CERTIFICATION 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, 2018, 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 7, 2019/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 32.160CERTIFICATION 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, 2018, 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 7, 2019/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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