David E. Meador - CFO and EVP Peter K.

Oleksiak - VP and Controller Nick A. Khouri - VP and Treasurer

Samantha Dennison - Credit Suisse Paul Ridzon - Keybanc Jonathan Arnold - Merrill Lynch Steve Fleishman - Catapult Management

Thank you. Good morning, and welcome this morning to our 2008 First Quarter Conference Call.

Before I get started, I encourage you to read the Safe Harbor statement on page two of our PowerPoint documents including the reference to forward-looking statements. With me today are Peter Oleksiak, our Vice President and Controller; Nick Khouri, our Vice President and Treasurer; and Lisa Muschong, our Director of Investor Relations.

Also I have other members of the management team with me this morning and I might call on them during our Q&A session. Next Monday, Gerry Anderson will be presenting at the AGA Conference.

At that time, Gerry will provide an update on our utility and non-utility growth strategy, pending Michigan legislation, and rate proceedings and other strategic update. I know that many of you have also signed up one-on-one meeting with Gerry.

Given that our focus this morning is on the first quarter results, and I encourage you to join Gerry on Monday morning at 9:00 AM for his presentation. So let's start switch over to the first quarter and let me ask… start with few comments, first on slide five.

I believe that DTE Energy is a very attractive investment as we’ve laid out for you, we expect 5% to 6% average annual growth from our two utilities over the long term. In the near term, there is slightly higher growth projections and I want to go through a couple of statistics for Detroit Edison, 2008 compared to 2007 had mid-point guidance, we've laid out almost 6% growth for Detroit Edison, but at the high end of guidance is 9% growth.

And then if you look at the 2009 early outlook that we've provided compared to 2008, that's over 11% growth year-over-year projected. In MichCon, 2008 compared to 2007 at mid-point, there is 6.7% growth and at the high-end of guidance for this year at 9.8% growth over the prior year.

And then similarly, if you look out to 2009, our early outlook is almost 6% growth, 2008 over 2007. And the numbers that I just went through, we've factored in the near-term growth opportunity for many involves [ph] and certainly was not included in the longer-term growth and profitability from a new nuclear plant.

We’ve also been careful as we invest and as we’re growing earnings to be sensitive around customer rate impacts and we are very focused on customer satisfaction and very specifically reducing any complaints that may take their way to the MPSC. And speaking of the MPSC, we feel good about our relationship with the commission.

Some examples of our collaborative environment that we are working in at the MichCon settlement that we've reached last year and then the Detroit Edison rate case where we amended the case to basically bring in some of the economics from 2009 which increased our request by $85 million and we did that by maintaining our overall timing on that case serves a very significant economic shift without having it delayed, and I think it's just another example how good the relationships are with the commission. The legislative developments have been very positive with the April 17 passing of the Michigan comprehensive energy legislation by the Michigan House.

The core legislation passed with well over two to one margin and renewable legislation was passed with a four to one margin. The legislation now moves to the Michigan Senate and staff because Detroit Edison's update that we’ll provide on Monday.

In the non-utility businesses, we completed over 1 billion of after-tax monetization and that’s from Antrim, peakers, core Barnett, and we bought back $725 million of stock and we paid down parent company debt. So we made progress on that front.

We’re still working on a P&I transaction and I know there is a lot of interest on that. The P&I transaction as we played out is completely held up by the credit markets.

There is nothing to do with the underlying transaction, which is a very attractive transaction not only to us, but also to our potential equity partner here in General Electric. We're committed to completing this transaction; however, the exact timing of this is really out of our control and it’s hard to predict how the debt markets are really going to work them.

We will get that window that we could actually close this transaction. We are actively working and our guidance has been adjusted to forecast, this is closed in the second quarter.

We’ve also provided additional information and Peter will discuss that lays out more details to show you that this is earnings neutral this year to positive, no matter when it closes. So whether this closes in second, third, fourth quarter from an earnings standpoint, this is really a non-event, and Peter will take you through that detail.

And then my last point on the investment thesis is that, and it’s very important as our dividend is $2.12 per share, it is over a 5% yield, and when added to the growth that we played out for you, it provides a very attractive total shareholder return. Turning to slide six, I’ve a couple observations for the quarter.

This is a very solid quarter for all of our businesses. The utilities are both on tracker.

They are in the 11% authorized returns this year. We had strong results at Detroit Edison, including overall electric load growth, which is up year-over-year 2%, on a temperature normal basis, it's up 1.8%.

So, we're experiencing low growth there in spite of some of the economic data that you might see coming out of Michigan. We had a strong quarter in energy trading and also in Power & Industrial business, which led us to raise both the bottom and the top end of guidance, which is now $2.80 to $3.20 per share.

So with that introduction, let me turn it over to Peter.

Thanks, Dave, and good morning to everyone. I'd like to start with slide eight on first quarter earnings results.

For the quarter, DTE's operating earnings per share was $0.78. We have $14 million last year this quarter versus last year, which increased EPS $0.06 for the quarter.

I'd like to remind everyone that a reconciliation to GAAP reported earnings is contained in the appendix. Both utilities were basic contributors to this quarter's results, Edison at $0.25 and MichCon at $0.37.

The non-utility segments combined contributed $0.30. The primary driver to the non-utility quarter results was Energy Trading at $0.18 aided by realized mark-to-market margin increases in the quarter.

Our Power & Industrial and Coal and Gas Midstream segments both had solid quarters at $0.06 and $0.05, respectively. Finally, Corporate and Other was a loss of $0.14 in the quarter.

I will turn to page nine, where we can see a summary of each segment performance quarter-over-quarter. I will be covering each segment in more detail later on the presentation.

Overall, operating earnings were up $16 million for the quarter. Our utility businesses are both down from prior year, mainly driven by expense timing, which I will cover in more detail in the next two pages.

Our non-utility segments combined contribution was up $31 million with Energy Trading at $29 million of the year-over-year increase. Corporate and Other was down $5 million due to a tax benefit that we realized in 2007.

As you can see in this chart there is a mixed results quarter-over-quarter with key driver for the improved earnings coming from strong performance at Energy Trading. We still expect all segments can be meet or exceed the original guidance, and I'll cover that in a more detail later in the package.

Let us continue to slide ten and go through some details beginning with Detroit Edison. Operating earnings for Detroit Edison was $41 million, down $7 million from the prior year.

Total sales volumes are up for 2008, driven by additional new industrial customers and some overall third party growth. This increases 1.8% on a temperature normal basis.

Uncollectible reserves increased during the quarter, driven by an increase in the aging of customer receivables. We did plan an overall year-over-year increase on the uncollectible expense.

Growing rate base resulted in higher depreciation and amortization expense in 2008. For the 12-month rolling period, operating trend equity [ph] for Edison at 10%.

Moving on to page 11 in review of MichCon's performance. Operating earnings for MichCon was $59 million, down $3 million from prior year.

Weather cooperated for us. It was colder than normal in the quarter.

In addition to the colder weather, lower loss accounted for gas resulted an increased margin contribution for the quarter. Uncollectible expenses reduced range by $7 million in the current year.

As you recall, MichCon was branded on uncollectible tracker mechanism as last rate case, which allow us for revenue, offset of 90% of all uncollectible expense over the $37 million operating base rate. There is timing of the tracker recognition that's impacting this quarter's results.

We're expecting no material year-over-year impact from that collectible expense in 2008. The 12-month rolling operating return equity from MichCon is 10%, almost 11% weather normalized.

Let us turn to page 12 on the non-utility business segments. Total non-utility operating earnings for the first quarter in 2008 were $50 million compared to $19 million in the first quarter of 2007.

Coal and Gas Midstream earnings were down $4 million, due primarily to the elimination of margins related to synfuel transportation offset by $2 million of growth in our gas pipeline and storage business. Unconventional gas earnings are unchanged from 2007 as an increase in Western Barnett production, higher gas prices offset the earnings from the sale of Antrim and Core Barnett properties.

Power and Industrial earnings were up $6 million in the quarter due primarily to the accounting rules, which recorded the stopping of depreciation expense on assets that are classified as held for sale. Accounting rules also requires us the recognition of this cumulative depreciation as the projects move from a held for sales status, that I will discuss on our next page where gas will not be negligibly impacted by this potential scenario.

Finally, as highlighted earlier, Energy Trading earnings are about $29 million, driven by favorable margins from gas and power trading. Within the quarter, two-thirds of this income was realized and one-third unrealized.

Page 13 provides details on our revised guidance Dave mentioned earlier. We've raised our 2008 guidance to $448 million to $510 million of earnings or EPS of $2.80 to $3.20 per share, up $0.10 from prior guidance.

Let me highlight the changes from prior guidance. Detroit Edison earnings are now $350 million to $370 million, up $10 million on the low end of guidance.

The tightening of the lower end of the range is driven by the first quarter margin growth along with further continuous improvement related to cost reductions. For the Power & Industrial segment, we are increasing guidance to $10 million to $20 million, up from the $5 million to $10 million than the original guidance.

The new guidance assumes June monetization. The increased earnings is driven by the delay in the monetization projects within the segments, which results in more earnings for the calendar year.

We are holding total average shares in the year at 159 million. The table on the right highlights the impact if Power & Industrial monetization is not completed in October, and also the sales not completed in all of 2008.

In both scenarios, there is not a negligible impact to the guidance. Following with a strong start to 2008 using Energy Trading range to $40 million, $55 million it will contain a modest performance in the coming flow through for the year.

With that, I would like to turn the discussion over to Nick Khouri, who will cover the cash flow and capital expenditures.

Thanks, Peter, and good morning. As always, improved cash flow and balance sheet strength remained a key priority for management and Board of Directors.

It was a strong quarter for cash and the balance sheet. However, most of the year-over-year improvement was intra-year timing.

For example, net cash from the synfuels which we still expect to hit approximately $200 million this year, will swings from a large positive in the first quarter to a negative in the summer. So although the first quarter came in at strong, we are reconfirming our prior cash and capital forecast for the full year.

Page 15 shows sources and uses of cash in the first quarter of 2008 compared to the prior year. Adjusted cash from operations totaled $1 billion in the first three months of the year compared to $700 million last year.

Also in the first quarter, we successfully sold our holdings in the core Barnett region for approximately $250 million. Capital and dividends totaled $400 million in the quarter meaning we were able to pay down a significant amount of debt, but as I said, the cash picture will normalize in the remaining three quarters of the year.

Page 16 summarizes capital spending in the first quarter. As you can see, total capital spending was $329 million, slightly below the $376 million of a year ago.

Most of the year-over-year difference is timing. For the full year, we expect capital spending to be about 14% about 2007 levels, including a 20% increase at Detroit Edison.

Page 17 reconfirms cash and capital spending guidance for 2008. Cash from operations is projected to be $900 million, about the same as in 2007.

And as I mentioned, synfuel cash is phasing out, but still generating estimated $200 million this year and additional $100 million in 2009. Asset sales are expected at $1.1 billion comprised of the January sale of core properties in Barnett and the P&I monetization transaction.

Once again this year the combination of internal cash and asset sale supports further reductions in holding company debt and share repurchases. Finally, the right side of page 17 summarizes capital spending for the year.

Total capital is expected to grow to $1.5 billion this year, about 80% of the projected capital will be spent by the two utilities. Non-utility capital spending is roughly at $100 million for each of our three business segments.

And finally, we expect to end this year well within our leverage target of 50% to 52% and the ratio of cash flow to debt between 22% and 24%. With that, let me turn it back over to Dave for a wrap-up.

Thanks, Nick. Let me wrap up on slide 18.

We believe we made a strong case for DTE Energy as a very good investment. We played out our growth plans and we believe we have the right focus on high customer satisfaction.

We also have a constructive regulatory and legislative environment and we're hopeful that we'll see legislation passed by mid-year this year. Gerry Anderson, as I mentioned will provide an update on Monday on our growth, regulatory legislative, and strategic plans, and Jerry Norcia will be with him also, and Jerry will provide an update on MichCon, as well as our midstream gas storage and pipeline business.

Additionally, Gerry and Tony will provide comments at our annual shareholder meeting on May 15th at 10 AM and that will be webcast and I encourage you to listen to that also. And with that, we will now open it up for questions.

Question and Answer

Good morning.

Good morning.

Can you guys talk about some of the cost cutting measures that you've achieved at Detroit Edison and MichCon and the ability to essentially more of that going forward?

Look if you went back to 2005, we were looking at the capital investments we were making, and we initiated at that time our performance excellence plan which was a company wide initiative that had multiple years, this is the last year of the benefits of that. And we are on track to deliver $330 million of reductions in O&M and capital and fuel cost savings.

In the process, we also reduced MichCon and corporate support headcount by 12%, which went down from a little over 10,000 to 9,000 employees. And I would just offer that we are realizing that this is going to be a way a life for us as we go into a very large capital spend period over many years that we have to make sure that not only we’re satisfying our customers, but that our cost profile is right.

So, every group in the company has been asked to go through benchmarking and target getting to first quartile in terms of cost and performance, and we have initiatives all around the company right now that are looking at opportunities, everything from strategic procurement to productivity improvements in our field operations to fleet operations. So, we've done a lot and we think there is more opportunity there and just again view that as something that we are going to have to do on a regular basis as we, what I describe earn our right to rate increases, we have to make sure we have done everything that we could do to help our customers.

Great, thanks. And then with respect to coal inventories, where do you guys currently stand, and what's your hedge position for the next few years?

Well, in terms of coal, we are... we’ve contract this in advance and we are 100% procured for 2008.

Usually the way we run this, we are two-thirds procured for 2009 and a third for 2010. And so we buy in advance plus we have long-term rail contracts that are in place till 2011.

So, we believe that we've done a good job in smoothing some of the market volatility that would eventually flow through to our customers.

Great. Thanks very much.

Peter, I don't know if you mentioned the trailing 12 Detroit Edison weather norm ROE, was that the same as the 10% that you cited?

The 10%--

[inaudible].

Yes. The 10% was a natural, the weather normalized at a 9%.

Okay. Thank you.

Good morning.

Hi Jonathan.

Just, I'd like to ask a little more granularity around what was... what drove the trading results and then also as CEO you're not looking at an annual number materially above the quarter.

Is there... are some of these mark-to-market gains going to reverse during the year?

How should we think around that assumption?

Well, the… I'll start and I'll get some help here. Trading is a business because of the mark-to-market and on accounting basis it has been difficult to project the actual amount even though over the years as we watch their ability to perform we have taken up annually our guidance, and this year our guidance was taken up a little bit more.

For the quarter, two-thirds of the earnings in the quarter are realized earnings and that said we… they could be on track for a good year, but you never know in this business because of potential mark-to-market movement that could come up later in the year. So, what you saw is still even not as very strong quarter and even this month and another strong month, we only took up the high end of guidance modestly.

And we think that's the right thing to do and as the year plays out, we'll see how second and third quarter come in, but they are doing great and we think it's the right thing to do to be conservative in terms of guidance until we see more of the year play out.

Okay. So Dave, you say two-thirds was from realized.

The one-third that was from unrealized, is that likely to reverse and if so on what time frame? I know there is the kind of mark-to-market gains that stay or roll over next year or within this year?

Yes. Why, don’t you, Jeff Joel [ph] is with us, he is our Director of Risk Management, he would have perspective on that.

Yes. The fuller mark-to-market is, and again it is going to be market dependent.

So it's not necessarily tied to timing around the asset hedging that you may have seen in the previous years. There is some of that in there, but there is also a mix of just pure market open positions that are going to fluctuate with the market.

Okay. Thanks a lot.

Okay.

Yes. Hi, Good morning.

Good morning.

Just had a quick question on the tracker for the uncollectibles. Could you, I guess, just walk through again and I guess you're saying that it's more of a timing issue for both of the gas and the electric utilities, is that right?

The gas utilities, this is Peter, the gas utility is they have the tracker and the electric utility does not have a tracker. And as I mentioned in my talking points we have a certain amount of base rate of $37 million, anything over that we essentially get to put a revenue offset and so, the way they… the accounting works to revise sales and I talked about expenses now we do, we're seeing some timing issues that will reverse out.

Essentially, year-over-year we're expecting such way flat flow through on our collectible expense for our gas utility.

Okay. And then on the electric side, I guess, the system that you monitor are going forward in terms of whether or not they used to continues to rise or.

Well, Michigan has been under economic pressure for several years, and hopefully we're all coming at towards the end of this, but for a long time. People refer to it as a one state recession.

So, if you went back several years ago, we saw pressure in both businesses, and as Peter said MichCon has the tracker, Edison doesn't. We worked this issue hard and we anticipated a slightly higher bad debt expense or reserve adjustment when we gave our guidance for Edison and we don't have a concern for the year, but it's certainly something that we have to be very vigilant on and stay on every single day, every single month, and so I don't see it as a risk to the guidance or forecast at this time.

Okay. Thank you.

Sure.

Yes, hi. A couple of questions, first, on the P&I, the guidance you're giving, is that include, I think you mentioned that you're not depreciating the entity any more?

Right. When you categorize an asset as held for sale, the accounting rules have you...

once you do that and meets the requirements for a one-year period. You basically suspend depreciation and amort.

Okay. So, if you looked at, for example, your guidance for half-year, I guess and what would that be if you were depreciating at in a normal way?

Depreciation would be about $6 million a quarter.

Pre-tax is $3 million, about $4 million after-tax.

$4 million per quarter.

Right. We stopped much in the fourth quarter last year.

Okay. Okay.

And just--

The way this works, and, Steve, just to be clear with people, we wanted to show this way. So there just wasn't a misunderstanding that the favorability year-to-date, business is doing well and out of that favorability as the result of this business held, asset held, asset held for sale and then, if you ever doing this and you run into that one-year window and the assets still held for sale, but you would have to actually reverse that out.

So, if that ever happened in this calendar year you would reverse out. It's neutral to the year, but then there was just also happened in the last quarter of last year.

So, we would have to reverse out the $6 million from the fourth quarter 2007 but even without the business is doing well and offset even doing that claw-back on depreciation and amort, we’d still be earnings neutral.

Steve, it is near… laid out was called normal 2008 sale. We assume that accumulated depreciation actually all come backs in, you can see that's essentially neutral in the guidance we are putting out.

Okay. I think I understand that.

And just to clarify your comments on timing of completing the sale, you're assuming in this guidance end of Q2 but you really you're not, you don't know when, that's not a forecast of timing at this point.

Right. I think we've learned that none of us can determine exactly how the credit markets are going to behave and...

Right.

When the window opens up and I don't want to be disingenuous and say like come out with a statement that says, 'hey, this is going to close in the second quarter when it's all dependent on really the markets'.

Right. And, okay.

And at the same time, we just wanted to make sure that everyone understood the math. So by providing the math for multiple quarters, I'm also not saying that this is going to slip to the third or fourth quarter.

We just wanted to make it really clear that no matter when this closes or even if it didn't close this year from an earnings standpoint, this is a non-event.

Okay. And how long is the client agreement goes through?

With?

With GE.

There is actually not an agreement right now. And we--

It's... you already test a period of walk away.

So it's comp off.

Right, but--

Right. Okay.

But in my color commentary and that was... you would know that the agreement expire because the teams are working as closely and as intensively as they were--

Got you.

Next October.

Okay. Two other quick questions, first in trading, could you be a little more specific on kind of just generally how you're making the money in the business, I mean, are you playing spreads of gas or you… what are the things you are doing to make money?

I think the first point just being in an extremely competitive business, I think we're reluctant to get under too much details. They have various books of business.

So they have... there are power book, we have a transmission book.

We have natural gas positions in, which are also positions around pipes and storage and they're doing very well on the natural gas markets right now. From year to year, this, if you have switch book of business is driving profits, it's shifted from year to year.

But right now, it tends to be more in the natural gas side of the business.

Okay. And then finally on Detroit Edison, the utility, could you give a little more color on what you are seeing in the local economy?

There is a slide in the back on the pack on load growth. So I think one of the things for GE, we're trying to point out to people that we have conservatively planned for...

it's slide 21. We've conservatively planned for a flat load growth even though the Michigan 21st century plan have projected longer-term that you see load growth in the 1% to 2%, but we wanted to show that even with Michigan in a deeper recession what's been experienced in the rest of the country, we're actually still experiencing load growth.

And we know that the auto industry is going through a restructuring that'll play out over several years here and we're hopeful that this will pick up, but we did, if you look quarter-over-quarter, you see on a weather normal basis for Edison you're seeing a 1.8% load growth. So, we're still seeing very modest load growth, which we think is positive.

The other place that the economy shows up as we talked about was in bad debt expense, we have the tracker at MichCon and we work both of those, doesn't matter if we have a tracker or not, we’re working both of those pretty vigilantly to make sure that we keep that expense contained.

Okay. Thank you very much.

Okay. Thanks, Steve.

Good morning. Thank you for taking my call.

Just a couple of quick questions here, could you give us an update on potential status and timing of an AMI pilot later on in this year?

Sure. Hi, Mark.

The AMI pilot is getting underway right now. We have approved a pilot for space is 10,000 homes and we’re looking at this just like other companies to make sure that we understand technology and the interface with the billing systems that we understand things like security...

but then also that we understand the economics. Because our view is that with all of the capital that we have to do that we don't have a choice on, this is something that from a customers standpoint, it has to pay for itself.

So part of our pilot is the economic analysis to say that you'll really get the offset that you believe you are going to get in terms of not having to read the meter all the way to automatic connects and disconnects, there is a variety of ways that this offsets current costs and their cost structure. So, we're just getting underway in that pilot right now and we're really treating it like that that we will not make a decision to deploy until after we get the results from that pilot and this is actually a second phase pilot.

Could you give us a sense of how long the evaluation process will go on the technology and potential sizing on a secondary phases of the pilot?

It's a one-year pilot, and I think that… what we were thinking right now is 10,000 homes per se, it's 25,000 second phase and we want to make sure that the pilots designed in a way that we stress tested technology and then we stress tested the economics of this two before we would go into a full deployment.

Okay. Great.

Thanks very much.

Thank you.

I don't know if you discussed it, I had to step away, but can you kind of give your expectations on timing of something out of the… your Michigan Senate.

Gerry Anderson will talk more on Monday, but right now we're hopeful that we'll give this mid-year Senate or Paterson, who chairs the Senate Energy & Technology Committee has said that his goal was to have something on the governor’s desk by the 4th of July. And that's I think kind of a earmark target, here we know there is a summer recess and I think there is a lot of energy being put into this issue right now to say, what's the process, what's the timetable and milestones to get us to a mid-year passage of legislation.

Thank you.

Thanks.

Thank you. And again thanks for joining us on the call and as I pointed out, I encourage you to visit Gerry Anderson and Jerry Norcia on Monday morning at AGA at 9 AM.

Thanks, and have a good day.