May 18, Kavita Kale Executive Secretary Michigan Public Service Commission 7109 West Saginaw Highway Lansing, MI 48917

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1 DTE Electric Company One Energy Plaza, 688 WCB Detroit, MI Andrea Hayden (313) May 18, 2018 Kavita Kale Executive Secretary Michigan Public Service Commission 7109 West Saginaw Highway Lansing, MI RE: In the matter on the Commission s own motion, to consider changes in the rates of all the Michigan rate-regulated electric, steam, and natural Electric utilities to reflect the effects on the federal Tax Cuts and Jobs Act of 2017: DTE Electric Company files an application for determination of Credit A as described in order U Dear Ms. Kale: Attached for electronic filing in the above referenced matter is DTE Electric Company s Application and Direct Testimony and Exhibits of Timothy A. Bloch, Kelly A. Holmes, Kenneth D. Johnston, Thomas W. Lacey, Kenneth L. Slater, Theresa M. Uzenski, Michael A. Williams, and Sherri L. Wisniewski. Also attached is the Proof of Service. Very truly yours, AH/rsf Enclosures cc: Service List Andrea Hayden

2 STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION In the matter on the Commission s own ) motion, to consider changes in the rates ) of all the Michigan rate-regulated ) electric, steam, and natural Electric utilities ) to reflect the effects of the federal Tax ) Case No. U Cuts and Jobs Act of 2017: ) DTE ELECTRIC COMPANY files an ) Application for determination of Credit A ) described in order U ) APPLICATION DTE ELECTRIC COMPANY (DTE Electric, the Company, or Applicant) files this Application pursuant to the Michigan Public Service Commission s (MPSC or Commission) order issued on February 22, 2018, in Case No. U (U Order), for determination of Credit A as described in the order. In support of this Application, DTE Electric states: 1. DTE Electric is a corporation organized and existing under and by virtue of the laws of the State of Michigan, with its principal office at One Energy Plaza, Detroit, Michigan DTE Electric is a wholly-owned subsidiary of DTE Energy Company supplying retail electric service to customers located in Southeast Michigan. The Company is a public utility and Electric Provider (as defined under MCL (a)(i)) with more than 1,000,000 retail customers in Michigan and is therefore subject to the jurisdiction of the Commission. 2. DTE Electric is currently providing service to its retail electric customers under rates, terms and conditions established in the Commission s order issued on April 18, 2018 in Case No. U that approved general rate relief and other associated matters. These rates were implemented effective for service rendered on or after May 1,

3 3. As stated in the U Order, the Tax Cuts and Jobs Act of 2017, Pub. L. No , 131 Stat (TCJA) was signed into law on December 22, The TCJA contains provisions reducing the corporate tax rate and revising the federal tax structure. These new federal requirements affect the current tax expense and deferred tax accounting methods used by corporations, including utilities. Most of the provisions of the TCJA went into effect on January 1, As further stated in the U Order, to ensure that all utilities account for these changes in a similar manner, on December 27, 2017, the Commission issued an order in Case No. U directing the captioned utilities and interested persons to file comments regarding the calculation of the change in revenue requirements and disposition of benefits of those impacts to ratepayers. 5. In its comments filed in Case No. U-18494, the Commission Staff proposed a three-step approach to addressing the tax law change: Credit A, Credit B, and Calculation C. 6. After consideration of the comments filed in Case No. U-18484, the Commission issued the U Order adopting the Commission Staff s three-step approach. 7. Credit A is the going-forward tax credit, that would be determined in a contested case pursuant to an application filed by each utility no later than March 30, 2018, with the exception of certain utilities including DTE Electric. DTE Electric was required by the Order to file its Credit A application no later than 30 days after a final order issued in Case No. U-18255, or May 18, Accordingly, DTE Electric timely files this Application pursuant to the U Order for determination of Credit A. Consistent with the filing requirements of the U Order and in support of this Application, DTE Electric provides the accompanying testimony and exhibits for the following witnesses: Timothy A. Bloch, Kelly A. Holmes, Kenneth D. Johnston, Thomas W. Lacey, Kenneth L. Slater, Theresa M. Uzenski, Michael A. Williams, and Sherri L. Wisniewski. 2

4 WHEREFORE, Applicant requests that the Commission: A. Accept this Application and accompanying testimony and exhibits for filing; B. Give such notice to interested parties as may be required by statute or the Commission s rules; C. Establish a date, place and time for a prehearing conference; D. Conduct a hearing on this Application to approve the determination of Credit A for Applicant s customers as described in the accompanying testimony and exhibits; E. Enter its Order acknowledging that the Applicant has satisfied all of the directives of the U Order; F. Enter an Order approving the Applicant s proposal to amend certain customer rate schedules and proposed tariff changes; G. Grant Applicant such further additional relief and authority as the Commission may deem necessary, suitable and appropriate. DTE ELECTRIC COMPANY BY: Attorney for DTE Electric Company Andrea E. Hayden (P71976) One Energy Plaza, 688 WCB Detroit, Michigan (313) DATED: May 18,

5 STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION In the matter on the Commission s own ) motion, to consider changes in the rates ) of all the Michigan rate-regulated ) electric, steam, and natural Electric utilities ) to reflect the effects of the federal Tax ) Case No. U Cuts and Jobs Act of 2017: ) DTE ELECTRIC COMPANY files ) an application for determination of Credit A ) as described in order U ) STATE OF MICHIGAN ) ) ss. COUNTY OF WAYNE ) PROOF OF SERVICE ESTELLA BRANSON, being duly sworn, deposes and says that on the 18 th day of May, 2018, she served a copy of DTE Electric Company s Application for determination of Credit A as described in order U along with the Direct Testimony and Exhibits of Witnesses, via electronic mail upon the persons listed on the attached service list. Subscribed and sworn to before me this 18 th day of May, ESTELLA BRANSON Lorri A. Hanner, Notary Public Wayne County, Michigan My Commission Expires: Acting in Wayne County 1

6 MPSC STAFF Steve Hughey Spencer Sattler MPSC Staff 7109 W. Saginaw Hwy.- 3rd Floor Lansing, MI MPSC Case No. U SERVICE LIST