DEAR Fellow Retiree,

The mailing of our “Special Edition” Newsletter highlighting the recent DEAR settlement agreement has resulted in increased feedback from DTE retirees. The majority of the notes, letters and e-mails were very supportive and encouraging. There was, however, some concern voiced that the agreement was only for non-represented retirees and surviving spouses. Most of this concern is pointed at the premium rates paid by a represented surviving spouse. This, I believe, is the only represented healthcare cost that is higher than the non-represented community. DEAR believes that the represented surviving spouse is burdened with their current level of healthcare premium. However, DTE would expect something in return and DEAR is not in a position to address issues clearly a part of current or past Union agreements/contracts.

DEAR believes that another part of the DEAR intervention resulted in the Commission requiring that DTE externally fund Other Post Employment Benefits (OPEB) for retirees. This is important in that it addresses the DEAR concern that actual healthcare funding may have been less than the funds collected in rates for OPEB. The specific language from the Commission states, “The Company will externally fund OPEB annually, to the level authorized for ratemaking in case Number U-13808. A review of the Company's OPEB funding practices since 1994 will be included in its next general rate case. The parties understand this funding of OPEB does not change the Company's recoverable expenses.” That language does not differentiate between represented and non-represented retirees and will insure that funds collected in rates have and will continue to go into the appropriate OPEB trust account. With the next general rate case filing expected in 2007 our concerns will be addressed.

While your DEAR board is pleased with the settlement agreement we remain focused on working to protect our retiree benefits. This means we will continue to meet and work with DTE leadership and/or staff to provide for our security in retirement earned over our many years of dedicated service.

Jim

September 14, 2006