EEI Financial Conference Discussion Document

1. EEI Financial ConferenceDiscussion Document October 2004 San Diego, California

2. Safe Harbor Statement The information contained in this document is as of the date of this presentation. DTE Energy expressly disclaims any current intention to update any forward-looking statements contained in this document as a result of new information or future events or developments. Words such as “anticipate,” “believe,” “expect,” “projected” and “goals” signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various assumptions, risks and uncertainties. This presentation contains forward-looking statements about DTE Energy’s financial results and estimates of future prospects, and actual results may differ materially. Factors that may impact forward-looking statements include, but are not limited to: the effects of weather and other natural phenomena on operations and sales to customers, and purchases; economic climate and growth or decline in the geographic areas where we do business; environmental issues, laws and regulations, and the cost of remediation and compliance associated therewith; nuclear regulations and operations associated with nuclear facilities; the ability to utilize Section 29 tax credits and/or sell interests in facilities producing such credits; implementation of electric and gas Customer Choice programs; impact of electric and gas utility restructuring in Michigan, including legislative amendments; employee relations and the impact of collective bargaining agreements; unplanned outages; access to capital markets and capital market conditions and the results of other financing efforts which can be affected by credit agency ratings; the timing and extent of changes in interest rates; the level of borrowings; changes in the cost of coal and availability of coal and other raw materials, purchased power and natural gas; effects of competition; impacts of regulations by FERC, MPSC, NRC and other applicable governmental proceedings and regulations; contributions to earnings by non-regulated businesses; changes in federal, state and local tax laws and their interpretations, including the Internal Revenue Code, regulations, rulings, court proceedings and audits; the ability to recover costs through rate increases; the availability, cost, coverage and terms of insurance; the cost of protecting assets against or damage due to terrorism; changes in 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; and changes in the economic and financial viability of our suppliers, customers and trading counter parties, and the continued ability of such parties to perform their obligations to the company. This press release should also be read in conjunction with the forward-looking statements in each of DTE Energy’s, MichCon’s and Detroit Edison’s 2003 Form 10-K, and in conjunction with other SEC reports filed by DTE Energy, MichCon and Detroit Edison.

3. Consistent Business Strategy • Since 1997, DTE Energy has had a consistent business strategy: • A stable regulated utility base • Detroit Edison • MichCon • Coupled with consistent growth in our non-regulated portfolio • Inter-related businesses that leverage the knowledge and expertise developed in the regulated businesses • Anchoring this strategy is a commitment to financial discipline • Focus on value creation • Emphasis on cash flow • Growth within balance sheet limits

4. Corporate Priorities • Successful outcome in rate cases for Detroit Edison and MichCon • Achieve structural fixes to the Electric Choice program • Redeployment of synfuel cash flows • Continued growth in non-regulated business portfolio • Maintain cash and balance sheet strength

5. Rate Case ProgressDetroit Edison • We are nearing the end of Detroit Edison rate case process, and anticipate final resolution soon Interim Rate Order Granted Net Rate Increase of $152 million * Administrative Law Judge Concurs with MPSC Staff Recommendation Regarding Final Rate Relief Rate Case Filed Requested $553 million June 2004 December 2003 June 2003 December 2004 MPSC Staff Recommended $315 million Net Rate Increase * Final Rate Order Expected * Additional detail included in appendix

6. Rate Case ProgressMichCon • On September 21, MichCon received an order granting interim rate relief of $35 million • Resolution of the case is anticipated early next year MPSC Staff Recommended Interim Rate Relief of $25 million Rate Case Filed Requested $194 million Interim Rate Order Granted Relief of $35 million Final Rate Order Expected September 2004 March 2004 September 2003 March 2005 MPSC Staff Recommended Final Rate Relief of $70 million Administrative Law Judge Recommendation Expected

7. Utility Returns are Expected to Improve Detroit Edison Return on Equity (%)* 15.4% 11.5% 11.1% 11.0% • Regulatory deferrals represent an increasing portion of Detroit Edison’s earnings • With the expected resolution of the rate cases and Electric Choice, utility returns are expected to improve • Detroit Edison’s improvement will be staggered as rate caps roll off • Ultimately the utilities will be allowed to earn reasonable returns 2001 2002 2003 MPSC Staff Rec *Excludes merger related costs MichCon Return on Equity (%)* 11.0% 9.0% 5.4% 3.8% 2001 2002 2003 MPSC Staff Rec *Excludes merger related costs and GCR disallowances

8. Corporate Priorities • Successful outcome in rate cases for Detroit Edison and MichCon • Achieve structural fixes to the Electric Choice program • Redeployment of synfuel cash flow • Continued growth in non-regulated business portfolio • Maintain cash and balance sheet strength

9. 10,000 8,000 6,000 4,000 2,000 0 Jan 2004 Mar 2004 Apr 2004 Dec 2003 June 2004 Aug 2004 Aug 2003 Nov 2003 May 2004 May 2003 July 2004 Sep 2004 Feb 2004 Choice Sales Levels have Flattened, but Margin Loss Remains an Important Issue Detroit Edison Electric Choice Program Annualized Sales (Gwh) • The interim order implemented a transition charge and eliminated Choice credits • Wholesale market price increases earlier this year reduced savings for prospective Choice customers • Some customers are reluctant to switch pending the issuance of the final rate order • Choice sales volumes have stabilized as: • some lower margin customers have returned • some margin deterioration persists as high margin (rate subsidy) customers continue to leave for Choice

10. Paths to Reforming Electric Choice Issue Status Update Desired Outcome • Class-specific Choice transition charges requested in main rate case • Plan to file rate de-skewing case • Rate redesign included in proposed legislation Remove cross-subsidies between rate classes Rate de-skew • Class-specific Choice transition charges requested in main rate case • Specific calculation of transition charges included in proposed legislation Recover revenue lost as customers with skewed rates go to Choice Class-specific transition charges • Plan to file rate de-skewing case • Rate unbundling included in proposed legislation Design rates to delineate the cost of service Rate unbundling • Fair return to service provisions and equal responsibility for low-income programs addressed in main rate case • Level playing field initiatives included in proposed legislation Remove inconsistent rules that provide marketers an unfair advantage Level playing field initiatives

11. Path to Reforming Electric Choice: Legislative Update • SB1331 – Core Bill • SB1332 – Increasing Reliability • SB1333 – Low-Income Assistance • SB 1334 – Special Rates for Schools • SB 1335 – Cost of Mandated Environmental Upgrades • SB 1336 – Securitization • In addition to aggressively pursuing regulatory resolution for these issues, DTE is supporting recently-introduced legislation: • On July 1, six bills were introduced to amend Michigan Public Acts 141 & 142 • The overall purpose of the bills is to create a fair Electric Choice program and to codify certain policy issues • The Michigan Senate held 13 hearings and 5 workgroup meetings on this issue; the bills could move out of the Senate Energy & Technology Committee in early November

12. Corporate Priorities • Successful outcome in rate cases for Detroit Edison and MichCon • Achieve structural fixes to the Electric Choice program • Redeployment of synfuel cash flow • Continued growth in non-regulated business portfolio • Maintain cash and balance sheet strength

13. Synfuel Overview • DTE Energy’s synfuel business developed from our expertise with coal and coke batteries • The synfuel portfolio has contributed substantially to net income since its inception • We believe that current industry issues are facility specific and should not impact us • We have IRS determination letters at our six EarthCo facilities • Audits successfully completed at four facilities (two EarthCo, two Covol) • Reconfirming PLRs attained on two recently sold facilities Synfuel Net Income $190-210 $ millions $197 $136 $31 $3 2000 2001 2002 2003 2004E

14. The Sale of our Synfuel Facilities Will Provide Significant Cash Flows Expected Net Cash Flow from Synfuels ($US millions) • We are selling our interests in these facilities in order to optimize the cash generated • Through Q2 we have sold 81% of 2004 capacity • We expect to close two additional transactions in the fourth quarter representing ~10% of capacity • Through 2008 our synfuel business is expected to generate substantial net income and approximately $1.8 billion in net cash flow $485 $455 $380 $265 $190 ($200) 2003A 2004E 2005E 2006E 2007E 2008E Expected Net Income from Synfuels ($US millions) $200-230 $200-230 $200-230 $190-210 $197 $0 2003A 2004E 2005E 2006E 2007E 2008E

15. Redeployment of Synfuel Cash • The redeployment of the synfuel cash will be consistent with our overall investment strategy. Options include: • Pay down a portion of parent company debt • New business opportunities that meet our value creation objectives • If suitable investments are not found, we will consider re-purchasing shares • When considering our options, two issues are at the forefront • What is the best way to replace the value implicit in the stock that is tied to synfuel cash flow? • Given the finite nature of the synfuel cash flows, what are our balance sheet targets in 2008 – post synfuel cash flows?

16. Corporate Priorities • Successful outcome in rate cases for Detroit Edison and MichCon • Achieve structural fixes to the Electric Choice program • Redeployment of synfuel cash flow • Continued growth in non-regulated business portfolio • Maintain cash and balance sheet strength

17. DTE Energy’s Approach to Non-Regulated Businesses Has Produced Solid Growth Non-Regulated Net Income ($ millions) • Build around unique DTE Energy strengths • Pursue closely inter-related niche businesses • Seek sound, lower-risk businesses with opportunities for additional value creation • Focus where competition is manageable • Build outward from regional base of strength • Build around broad portfolio, not a single platform $215- $255 $228 $205 $162 $84 $68 2004E 1999 2000 2001 2002 2003 Reconciliation to reported earnings included in the Appendix

18. Non-Regulated Opportunities Focus in Three Areas • On-site energy projects • Steel-related projects • Power generation with services • Waste coal recovery 1. Power & Industrial Projects • Michigan gas production • Shale and coalbed methane • Landfill gas 2. Unconventional Gas Production • Coal transportation & marketing • Gas pipelines & storage • Energy marketing & trading 3. Fuel Transportation & Marketing

19. Historical Non-Regulated Business Returns $ Millions * Return on capital is not generally used as a metric for trading operations

20. Corporate Priorities • Successful outcome in rate cases for Detroit Edison and MichCon • Achieve structural fixes to the Electric Choice program • Redeployment of synfuel cash flow • Continued growth in non-regulated business portfolio • Maintain cash and balance sheet strength

21. Cash Flow and Balance Sheet Strength • Balance sheet and cash flow strength remain a key goal for DTE • Debt and leverage is declining • Leverage of 49%* at the end of Q2 2004 vs. 52%* last year • Cash from operations is strengthening as synfuels provide significant cash inflow • We are spending capital very conservatively until regulatory relief is received • Continued improvement in net cash is dependent on successful resolution of rate cases * Excludes securitization debt, MichCon short-term debt and quasi-equity instruments, calculation included in the appendix

22. Summary • DTE Energy is a strong company with a consistent, successful business strategy • Successful rate case outcomes and fixing the Electric Choice program remain our top corporate priorities, with resolution expected in the near future • 2004 will be a transition year for the utilities, but we expect an eventual return to traditional earnings levels • Synfuel cash flows will be redeployed in a well-managed, balanced manner • Our non-regulated businesses continue to perform well • The balance sheet and liquidity position remain strong; we’ll manage our growth capital carefully

23. APPENDIX

24. Long-Term SynfuelNet Cash Flow Outlook ($ millions) 2004E 2005E 2006E 2007E 2008E 15.6 19 19 19 - Production (millions of tons) Tax Credits Generated from Sold $416 $520 $525 $530 - Facilities - $190-210 $200-230 $200-230 $200-230 Net Income Cash Flow $190 $290 Synfuel Cash Flow $365 $375 $135 Tax Credit Carryforward 90 - 120 80 130 Utilized* $190 $380 $485 $455 $265 Net Cash Flow Using 2004- 2008 Net Cash Flow and a discount rate between 6-9% produces a per share value between $8-9 * Includes annual tax credits generated from ongoing minority interest ownership

25. Synfuel Portfolio Yearly Production Ownership Interest as of 6/30/2004 Recently Completed Field Audit Determination Letter Capacity Manufacturer (000 tons) Sold Facilities Belews Creek 1% EarthCo Yes No 3,080 Buckeye (2) 1% EarthCo 6,080 Yes No Clover 5% EarthCo 2,640 Yes Yes Yes Smith Branch 1% EarthCo 2,750 Yes Yes No Sold in Q2 2004 Indy Coke 20% EarthCo 2,640 No No Red Mountain 2% Covol 1,800 18,990 Retained Facilities River Hill 100% Covol 1,577 No Yes No Utah 100% Covol 2,000 Yes 3,577

26. Lost Margin and PA 141 Regulatory Assets 2004 • At the end of Q2, Choice volume was ~9,400 GWh • Total regulatory assets booked in Q2 were $29M • Regulatory asset for Choice lost margin will continue in 2004, given the small transition charge in interim order • Remaining PA 141 regulatory assets will be booked only for capped customers 2003 ($ millions, pre-tax) Q1 Q2 Q3 Q4 Total Q1 Q2 $20 $25 $35 $40 $120 $50 $58 Choice Lost Margin Regulatory Assets Choice Regulatory Asset $6 $6 $8 $38 $58 $25 $19 Choice Implementation Costs 4 3 4 10 21 4 2 Environmental Compliance 14 9 10 10 43 4 6 2 2 5 9 18 4 3 Other $26 $20 $27 $67 $140 $37 $29 Total Regulatory Assets

27. Key Electric Choice Statistics ($ millions) Calendar Year Statistics: 2001 2002 2003 2004E Choice Volumes - Calendar Year (Gwh) 1,085 2,990 6,200 9,000-9,500 % of Total Load 2% 6% 12% 18% Calendar Year margin loss (pre tax) $15 $50 $120 $200-220 Calendar Year margin loss (after tax) $10 $33 $78 $130-143 Year over Year margin loss (after tax) $23 $45 $85-98 Choice PA141 Regulatory Asset (pre tax) $10 $58 TBD Choice PA141 Regulatory Asset (after tax) $7 $38 TBD Choice Transition Charge TBD Bundled Price Increase TBD Choice Income Impact with regulatory asset offset (after tax) $26 $40 Year End "Run Rate" Statistics: Choice Volumes - Year end rate annualized (Gwh) 1,200 3,600 9,000 TBD % of Total Load 2% 7% 17% TBD Year end "exit" margin annualized loss (pre tax) $65 $190 TBD Year end "exit" margin annualized loss (after tax) $42 $124 TBD

28. MPSC Staff Filing on Final Rates and MPSC Interim Rate Order * * Based on revised MPSC Staff testimony (Aldrich) filed March 18, 2004, which increased the recommendation by $20M from the original filing

29. DTE Energy 2004 Cash Flows 2004E ($ millions) 2003A Low High • Cash flows in 2004, similar to net income, are uncertain. Final results depend on: • Timing and amount of rate relief • Electric Choice • Timing of synfuel sales • The cash initiative successfully implemented in 2003 will continue this year, with a minimum goal of internally funding the dividend • Leverage is expected to remain at the low end of our range Cash from Operations $950 $800 $1,050 Synfuel Production Payment* 89 175 225 Adjusted Cash from Operations $1,039 $975 $1,275 Capital Expenditures (751) (750) (1,060) Cash Improvement Initiative 100 100 Asset Sales 40 40 669 Dividends (346) (353) (353) $2 Cash Flow $611 $12 * Accounted for as ‘investing activity’

30. DTE EnergyCapital Expenditures Capital Expenditures (2004 Based on Rate Case Filings) • Based on utility rate case filings, 2004 capital expenditures will be approximately $1B • These capital expenditures are largely incurred at the two regulated utilities • We intend to match actual 2004 capital spending with available cash flows. Until utility rate cases are resolved, capital spending will remain at 2003 levels ($ millions) 2003A 2004E Detroit Edison $516 $672 NOx 64 38 MichCon 98 139 Non Regulated & Corporate* 211 73 Total $1,060 $751 * 2004 includes $55M of corporate capital

31. DTE EnergyCurrent Credit Ratings • Negative outlook from Moody’s and S&P reflects concerns over: • Rate case outcomes • Electric choice program and need for change • Cash flow metrics should start improving with impact of rate cases and synfuel monetization Current Ratings S&P Moody's Fitch A, B B DTE Energy BBB+ Baa2 BBB B B Detroit Edison A- A3 A- B C MichCon BBB+ A2 A Last action 11/7/2003 1/28/2004 11/10/2003 • Corporate Credit Rating • Negative Outlook • C) Under review for possible downgrade

32. Calculation of Leverage DTE Energy Debt/Equity Calculation As of June 30, 2004 ($ millions) short-term borrowings $490 current portion LTD + cap leases 340 long-term debt 5,672 securitization bonds 1,446 capital leases 71 less QUIDS (385) less MichCon short-term debt - less securitization debt, including current portion (1,539) Total debt $6,095 Trust preferred $289 QUIDS 385 Mandatory convertible 181 Total preferred/ other $855 Equity $5,489 Total cap $12,439 Debt 49.0% Preferred stock 6.9% Common shareholders' equity 44.1% Total 100.0%

33. 2003 Reconciliation of Operating Earnings to Reported Earnings Use of Operating Earnings Information – DTE Energy management believes that operating earnings provide a more meaningful representation of the company’s earnings from ongoing operations and uses operating earnings as the primary performance measurement for external communications with analysts and investors. Internally, DTE Energy uses operating earnings to measure performance against budget and to report to the Board of Directors. Operating Earnings to Reported Earnings Reconciliation Earnings Per Share Net Income ($ millions) DTE Energy DTE Energy Regulated Regulated Non- Holding Full Year 2003 Consolidated Consolidated Electric Gas Regulated Company Operating 3.09 521 282 46 228 (35) Blackout Costs (0.10) (16) (16) Adjustment of EITF 98-10 accounting change (Flowback) 0.10 16 16 Loss on sale of steam heating business (0.08) (14) (14) Disallowance of gas costs (0.10) (17) (17) Contribution to DTE Energy Foundation (0.06) (10) (10) Adjustment for discontinued operations of ITC 0.03 5 5 Gain on sale of ITC 0.37 63 63 Asset retirement obligations (SFAS 143) (0.07) (11) (6) (1) (4) Adjustment of EITF 98-10 accounting change (cumulative effect) (0.09) (16) (16) Reported 3.09 521 314 28 224 (45)

34. Reconciliation of YTD (Through June) Operating Earnings to Reported Earnings Use of Operating Earnings Information – DTE Energy management believes that operating earnings provide a more meaningful representation of the company’s earnings from ongoing operations and uses operating earnings as the primary performance measurement for external communications with analysts and investors. Internally, DTE Energy uses operating earnings to measure performance against budget and to report to the Board of Directors. Diluted Earnings Per Share (in millions, except per share amounts) Net Income DTE Energy DTE Energy Regulated Regulated Non- Holding YTD 2003 Consolidated Consolidated Electric Gas Regulated Company $1.47 $248 $65 $68 $146 ($31) Operating Earnings Unusual Items (0.90) (152) (152) Tax credit driven normalization Loss on Sale of Steam Heating (0.08) (14) (14) Business Contribution to DTE Energy (0.06) (10) (10) Foundation (0.10) (17) (17) Disallowance of Gas Costs Energy Trading Activities (EITF 98-10 0.09 16 16 flowback) Discontinued Operations 0.43 72 International Transmission Company Cumulative Effect of Accounting Change Asset Retirement Obligations (FAS (0.07) (11) 143) Energy Trading Activities (EITF 98-10 (0.09) (16) implementation $0.69 $116 $51 $51 $162 ($193) Reported Earnings Diluted Earnings Per Share Net Income DTE Energy DTE Energy Regulated Regulated Non- Holding YTD 2004 Consolidated Consolidated Electric Gas Regulated Company $1.13 $194 $52 $33 $92 $17 Operating Earnings One-Time Items 0.28 48 Adjustment for contract termination/adjustment 48 (0.06) (10) (10) Tax credit driven normalization Discontinued Operations Impairment Loss (Southern Missouri (0.04) (7) Gas Company) $1.31 $225 $52 $33 $140 $7 Reported Earnings