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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2003

Commission file number 1-11607

DTE ENERGY COMPANY

313-235-4000
(Registrant’s telephone number, including area code)

Indicate 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 (Exchange Act) during the preceding 12 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.

Yes   [X]   No  [  ]

Indicate by check mark whether the registrant is an accelerated filer as defined in Rule 12b-2 of the Exchange Act.

Yes   [X]   No  [  ]

At April 30, 2003, 167,974,053 shares of DTE Energy’s Common Stock, substantially all held by non-affiliates, were outstanding.

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DTE ENERGY COMPANY

QUARTERLY REPORT ON FORM 10-Q
QUARTER ENDED MARCH 31, 2003

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DEFINITIONS

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FORWARD-LOOKING STATEMENTS

Certain information presented herein includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve certain risks and uncertainties that may cause actual future results to differ materially from those contemplated, projected, estimated or budgeted in such forward-looking statements. There are many factors that may impact forward-looking statements including, but not limited to, the following:

•		the effects of weather and other natural phenomena on operations and sales to customers;
•		economic climate and growth in the geographic areas where we do business;
•		environmental issues, including changes in the climate, and regulations;
•		nuclear regulations and risks associated with nuclear operations;
•		ability to utilize Section 29 tax credits or sell interests in facilities producing such credits;
•		implementation of Customer Choice programs;
•		implementation of electric and gas utility restructuring in Michigan;
•		employee relations;
•		unplanned outages;
•		capital market conditions and access to capital markets and 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 fuel, purchased power and natural gas;
•		effects of competition;
•		impact of FERC and MPSC proceedings and regulations;
•		contributions to earnings by non-regulated businesses;
•		changes in federal or state tax laws and their interpretations, including the code, regulations, rulings, court proceedings and audits;
•		ability to recover costs through rates for regulated businesses;
•		property insurance;
•		the cost of protecting assets against or damage due to terrorism; and
•		changes in accounting standards and financial reporting regulations.

New factors emerge from time to time. We cannot predict what factors may arise or how such factors may cause our results to differ materially from those contained in any forward-looking statement. Any forward-looking statement speaks only as of the date on which such statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.

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DTE ENERGY COMPANY
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Our earnings for the 2003 first quarter were $155 million, or $.92 per diluted share, compared to earnings of $200 million, or $1.24 per diluted share, for the 2002 first quarter. The comparability of earnings was impacted by the sale of our transmission business, International Transmission Company (ITC), and the adoption of two new accounting rules in the 2003 first quarter. Upon selling ITC in February 2003, we classified this business as a discontinued operation. Earnings from this discontinued business totaled $74 million in the 2003 first quarter, primarily due to a $69 million net of tax gain recorded on the sale. As required by generally accepted accounting principles, we adopted new accounting rules for asset retirement obligations and energy trading activities as discussed in Note 2. The cumulative effect of adopting these new accounting rules reduced 2003 first quarter earnings by $27 million.

Excluding discontinued operations and the cumulative effect of accounting changes, our earnings from continuing operations for the 2003 first quarter were $108 million, or $.64 per diluted share, compared to earnings of $192 million, or $1.19 per diluted share, for the 2002 first quarter. Results for the current quarter were affected by several other significant items impacting comparability as detailed below which reduced earnings by $70 million, or $.42 per diluted share. Also impacting the comparison were higher non-regulated earnings, colder weather, higher pension and postretirement health care costs, and increased fuel, purchased power and gas costs.

(1)		DTE Energy realized additional margins as a result of the change in accounting for energy trading activities (Note 2).
(2)		The Detroit Edison steam heating business was sold in January 2003 (Note 3).
(3)		MichCon established a reserve for the potential disallowance of procured gas costs (Note 4).
(4)		DTE Energy used a portion of the proceeds from the ITC sale to fund the DTE Energy Foundation.
(5)		Quarterly tax adjustment to normalize DTE Energy’s effective tax rate. Annual results are not affected.

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As discussed in DTE Energy’s 2002 Annual Report on Form 10-K, we operate our business through nine reportable segments. The following tables and related discussion depict the operations of each of these segments.

(1)

Includes Corporate & Other.

ENERGY RESOURCES

Power Generation

The power generation plants of Detroit Edison comprise our regulated power generation business. Detroit Edison’s numerous fossil plants, hydroelectric pumped storage plant and its nuclear plant generate

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electricity that is sold principally throughout Michigan and the Midwest to residential, commercial, industrial and wholesale customers.

Power Generation earnings declined $36 million during the 2003 first quarter reflecting lower gross margins due to higher fuel and purchased power costs and lost margins from customers participating in the electric Customer Choice program. The higher purchased power costs reflect unfavorable energy market prices in 2003 and lower plant availability. As a result of the electric Customer Choice program, Detroit Edison lost 9% of retail sales in the 2003 first quarter. To partially offset the impact of these lost margins, Detroit Edison recorded a $6 million regulatory asset representing stranded costs that are recoverable under Michigan legislation. The lower earnings were also attributed to higher operation and maintenance expense due to the timing of employee pension and health care benefit costs and expenses due to the timing of the planned reliability and maintenance work done to improve the production and availability of the generation fleet.

System output and average fuel and purchased power costs were as follows:

	(1)		Represents fuel costs associated with power plants.
	(2)		The average purchased power amounts include hedging activities.

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Outlook – We expect electric restructuring to continue resulting in increased customer choice in the retail electric generation business. As a result of customers choosing to participate in the electric Customer Choice program, Detroit Edison lost 6% of retail sales in 2002 and estimates losing 10% to 13% of such sales in 2003. Unrecovered generation fixed costs due to electric Customer Choice are allowed for future recovery under Michigan legislation. As a result, Detroit Edison recorded a regulatory asset relating to stranded costs during the first quarter of 2003 and anticipates recording additional regulatory assets during the balance of 2003. The regulatory asset will be subject to review by the MPSC in future regulatory proceedings, and we cannot predict the outcome of this matter. See Note 4 – Regulatory Matters.

The June 2000 Michigan legislation imposed a rate freeze for all classes of customers through 2003. In addition, the MPSC determined that adjusting rates for changes in fuel and purchased power through continuance of the Power Supply Cost Recovery (PSCR) clause would be inconsistent with the rate freeze, therefore the MPSC suspended the PSCR clause. It is unclear at this time whether the PSCR clause will be suspended beyond 2003. Detroit Edison expects to file a rate case in the second quarter of 2003 addressing this and other issues.

Future operating results are expected to vary as a result of factors such as regulatory proceedings, weather, changes in economic conditions and the level of customer participation in the electric Customer Choice program.

Energy Services

Energy Services is comprised of Coal-Based Fuels, On-Site Energy Projects and Merchant Generation. Coal-Based Fuels operations include producing synthetic fuel from nine synfuel plants and producing coke from three coke battery plants. Both processes generate tax credits under Section 29 of the Internal Revenue Code. Synfuel-related Section 29 tax credits expire in 2007. Section 29 tax credits for two of our three coke batteries expired at the end of 2002 with the third expiring in 2007. On-Site Energy Projects include pulverized coal injection, generation, steam production, chilled water production, wastewater treatment and compressed air. Merchant Generation owns and operates four gas-fired peaking electric generating plants and develops and acquires gas and coal-fired generation.

Energy Services earnings increased $19 million for the 2003 first quarter reflecting higher synfuel production. Four new synfuel facilities became operational during the latter part of 2002, resulting in significantly higher operating revenues and expenses. Synfuel projects generate operating losses, which are offset by the resulting tax credits. The income tax benefit includes tax credits actually earned based on synfuel production. The level of tax credits has been adjusted at Corporate & Other in order that the DTE Energy consolidated income tax expense during the quarter reflects the estimated calendar year effective rate.

Outlook - Energy Services’ strategy is to continue leveraging our extensive energy-related operating experience, and project management capability to develop and grow the on-site energy and merchant

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generating businesses. We continue to evaluate opportunities to sell interests in some or all of our synfuel plants. Sales of interests in synfuel projects allow us to accelerate cash flow while maintaining a stable net income base.

We have received favorable private letter rulings from the Internal Revenue Service (IRS) on 7 of our 9 synfuel plants and expect the remaining two in 2003. The IRS has temporarily stopped issuing synfuel-related private letter rulings pending their review of issues concerning chemical change which is the basis for earning Section 29 credits. The IRS has historically not challenged credits where the taxpayer operates consistent with its private letter rulings. We believe our synthetic fuel plants operate in accordance with the private letter rulings.

As the sale of interests in synfuel plants usually requires the reconfirming of the private letter ruling, the timing and number of our synfuel sales could be influenced by the IRS’ resumption of issuing new and reconfirming existing private letter rulings. Given the complexities of the issues we can not predict the outcome of the ultimate action of the IRS on this issue.

Energy Marketing & Trading

Energy Marketing & Trading consists of the electric and gas marketing and trading operations of DTE Energy Trading Company and CoEnergy Trading Company. Energy Marketing & Trading focuses on physical power marketing and structured transactions, as well as the enhancement of returns from DTE Energy’s power plants, natural gas pipelines and storage assets. To this end, Energy Marketing & Trading enters into forwards, futures, swaps and option contracts as part of its trading strategy.

Energy Marketing & Trading earnings increased $26 million in the 2003 first quarter from the comparable 2002 period due to increased mark-to-market gains and realized margins on the delivery of power and natural gas. By utilizing our portfolio of power plants, pipelines and storage assets, we were able to profit in the 2003 first quarter from greater pricing variability in the energy trading market.

The improved operating earnings also include the effect of changing our accounting for gas inventory. Through December 2002, our physical gas in storage was marked to the current spot price under fair value accounting rules. To comply with new accounting requirements resulting from the rescission of Emerging Issues Task Force (EITF) Issue No. 98-10, “Accounting for Contracts Involved in Energy Trading and Risk Management Activities,” we changed to the average cost method for our gas inventories, effective January 2003. As a result of discontinuing the application of the fair value method to our gas inventories, we recorded a cumulative effect of accounting change that reduced earnings in January 2003 (Note 2). The effect of the accounting change was offset as a significant portion of the revalued gas inventory was sold in the 2003 first quarter, thereby increasing gross margins.

Outlook – Energy Marketing & Trading will seek to gradually expand this business in a manner consistent with and complementary to the growth of our other business segments. Gas storage and transportation capacity enhances its ability to provide reliable and custom-tailored bundled services to large-volume end users and utilities. This capacity, coupled with the synergies from DTE Energy’s other businesses, positions the segment to capitalize on opportunities for expansion of its market base.

Significant portions of the Energy Marketing & Trading portfolio, although economically hedged, include a combination of derivative financial instruments as well as inventory, owned assets and certain capacity contracts that are not considered derivatives. As a result, Energy Marketing & Trading will experience earnings volatility as derivatives are marked-to-market without revaluing the underlying nonderivative contracts and assets.

ENERGY DISTRIBUTION

Power Distribution

Power Distribution includes the electric distribution services of Detroit Edison. Power Distribution distributes electricity generated by Energy Resources and alternative electric suppliers to Detroit Edison’s 2.1 million customers.

Power Distribution earnings decreased $31 million during the 2003 first quarter due to a net of tax loss of $14 million on the sale of our unprofitable steam heating business (Note 3) and to higher operation and maintenance expenses, partially offset by higher operating revenues. The increased operation and maintenance expenses are attributable to higher employee pension and healthcare benefit costs and increased costs associated with customer service process improvements, partially offset by lower storm expenses in the 2003 first quarter as compared to the 2002 first quarter.

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Outlook – Regulated electric system deliveries are expected to continue to increase in 2003 due to continued territory and economic growth. Operating results are expected to vary as a result of various external factors such as weather, changes in economic conditions and the severity and frequency of storms. As previously discussed, Detroit Edison expects to file a rate case in the second quarter of 2003 to address future operating costs and other issues.

In April 2003, a catastrophic ice storm in our service territory resulted in over 400,000 customers losing power and more than 3,300 downed power lines. Restoration expenses will reduce second quarter 2003 net of tax earnings by approximately $15 million. We expect the impact of the storm will be partially offset by the avoidance of other costs throughout the remainder of the year.

Non-regulated

Non-regulated Energy Distribution operations consist primarily of DTE Energy Technologies that markets and distributes a portfolio of distributed generation products, provides application engineering, and monitors and manages generation system operations.

Non-regulated losses increased $1 million during the 2003 first quarter from the comparable 2002 period.

Outlook – DTE Energy Technologies expects to continue the expansion of its product portfolios and support capabilities in North America and the development of marketing relationships in other parts of the

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world. We plan to develop and launch new products in 2003 that are critical to our plan to increase revenues and generate operating profits by 2004.

ENERGY GAS

Gas Distribution

Gas Distribution operations include gas distribution services primarily provided by MichCon, our gas utility that purchases, stores and distributes natural gas to 1.2 million residential, commercial and industrial customers located throughout Michigan.

Gas Distribution earnings increased $5 million during the 2003 first quarter due primarily to higher operating revenues, which were partially offset by increased operation and maintenance expenses. Higher operating revenues were attributed to colder than normal weather, partially offset by a $26.5 million reserve for the potential disallowance in gas costs pursuant to a March 2003 MPSC order in MichCon’s 2002 GCR plan case. See Note 4 – Regulatory Matters – Gas Industry Restructuring. Increased operation and maintenance expenses were attributed to higher employee pension and health care benefit costs and increased costs associated with customer service process improvements. The income tax provision was favorably affected by an increase in the amortization of tax benefits previously deferred in accordance with MPSC regulations.

Outlook – We expect gas restructuring to continue resulting in increased customer choice in the gas sales business. In December 2001, the MPSC issued an order that continues the gas Customer Choice program on a permanent and expanding basis beginning with the conclusion of the three-year temporary program on March 31, 2002. Beginning in April 2003, up to approximately 60% of customers can participate and beginning April 2004, all 1.2 million of MichCon’s gas customers could choose to participate. Since MichCon continues to transport and deliver the gas to the participating customer premises at prices comparable to margins earned on gas sales, customers switching to other suppliers have little impact on MichCon’s earnings. As of March 2003, approximately 160,000 customers were participating in the gas Customer Choice program.

As a result of the continued increase in operating costs, MichCon expects to file a rate case in the latter half of 2003.

Future operating results are expected to vary as a result of factors such as regulatory proceedings, weather and changes in economic conditions.

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Non-regulated

Non-regulated operations include the gas and oil production business, and the gas Pipelines & Processing business. Our production business produces gas from proven reserves owned in northern Michigan and sells the gas to the Energy Marketing & Trading segment. Pipelines & Processing has partnership interests in two interstate transmission pipelines, seven carbon dioxide processing facilities and a natural gas storage field, as well as contract rights to another natural gas storage field. The assets of these businesses are primarily supported and optimized by the Energy Marketing & Trading segment.

Non-regulated earnings increased $2 million during the 2003 first quarter from the comparable 2002 period.

Outlook – We expect to further develop our gas production properties in northern Michigan and our pipelines, processing and storage assets to support other DTE Energy businesses. Additionally, we expect to continue exploring opportunities in the coal bed methane gas production business to leverage our production, coal and low cost operating capabilities, skills and experience.

CORPORATE & OTHER

Corporate & Other earnings decreased $68 million for the 2003 first quarter reflecting a $45 million unfavorable adjustment and a $11 million favorable adjustment to normalize the effective income tax rate for the first quarter of 2003 and 2002, respectively. The income tax provisions of the segments are determined on a stand alone basis. Corporate & Other records necessary adjustments in order that the consolidated income tax expense during the quarter reflects the estimated calendar year effective rate. The first quarter of 2003 pre-tax earnings were also affected by a $15 million cash contribution to the DTE Energy Foundation which was funded with proceeds received from the sale of ITC (Note 3).

CAPITAL RESOURCES AND LIQUIDITY

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Operating Activities

Net cash from operating activities increased $126 million during the 2003 first quarter as compared to the same 2002 period. The increase reflects a $188 million improvement in working capital and other requirements, partially offset by a decline of $62 million in net income, after adjusting for non-cash items (depreciation, depletion and amortization and deferred taxes). The improvement in working capital requirements reflects an increase in accounts payable balances in 2003 and a reduction in fuel and gas inventories. These improvements were partially offset by higher accounts receivable balances and a $222 million cash contribution to our pension plan in 2003.

Investing Activities

Net cash relating to investing activities improved $739 million in the 2003 first quarter as compared to the same 2002 period primarily due to the sale of ITC and lower cash contractually designated for debt service.

Financing Activities

Net cash used for financing activities increased $667 million during the 2003 first quarter as compared to the same 2002 period due to higher redemptions of long-term debt and a reduction of short-term borrowings primarily from the use of the proceeds of the ITC sale.

In February 2003, MichCon issued $200 million of 5.7% senior notes due in March 2033. The proceeds were used for debt redemption and general corporate purposes.

In April 2003, DTE Energy issued $400 million of 6-3/8% senior notes due in April 2033. In conjunction with this issuance, DTE Energy exchanged $100 million principal amount of existing Enterprises debt due April 2008. The proceeds will be used for debt redemption and general corporate purposes.

ENVIRONMENTAL MATTERS

EPA ozone transport regulations and final new air quality standards relating to ozone and particulate air pollution will continue to impact us. Detroit Edison spent approximately $488 million through March 2003 and estimates that it will incur approximately $300 to $400 million of future capital expenditures over the next five to eight years to comply with the existing air quality standards. We expect to file a rate case during 2003 to securitize costs we have incurred to comply with these standards.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 2 – New Accounting Pronouncements for discussion of new accounting pronouncements.

FAIR VALUE OF CONTRACTS

The following disclosures are voluntary and have been developed through efforts of the Committee of Chief Risk Officers (CCRO), a committee of chief risk officers from companies active in both physical and financial energy trading and marketing. We believe the disclosures provide enhanced transparency of the activities and position of our Energy Trading & Marketing segment.

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Roll-Forward of Mark-to-Market Energy Contract Net Assets

The following tables provide details on changes in our mark-to-market (MTM) net asset or (liability) position during 2003.

(1)		“Proprietary Trading” represents derivative activity transacted with the intent of capturing profits on forward price movements.
(2)		“Structured Contracts” represent derivative activity transacted with the intent to capture profits by originating substantially hedged positions with wholesale energy marketers, utilities, retail aggregators and end-users. Although transactions are generally executed with a buyer and seller simultaneously, some positions remain open until a suitable offsetting trade can be executed.
(3)		“Owned Assets” represent derivative activity associated with assets owned by DTE Energy, including forward sales of gas production and trades associated with owned transportation and storage capacity. Derivatives are generally executed with the intent of locking in and optimizing profits without creating additional risk.
(4)		Excludes the cumulative effect adjustment associated with the change in accounting for gas inventory (Note 2).

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Maturity of Fair Value of MTM Energy Contract Net Assets

Effective January 1, 2003, we fully reserve all unrealized gains and losses related to periods beyond the liquid trading time frame. Our intent is to recognize mark-to-market activity only when pricing data is obtained from active quotes and published indexes.

The table below shows the maturity of the MTM positions of our energy contracts.

Quantitative and Qualitative Disclosures About Market Risk

Commodity Price Risk

DTE Energy has commodity price risk arising from market price fluctuations in conjunction with the anticipated purchase of electricity to meet its obligations during periods of peak demand. We also are exposed to the risk of market price fluctuations on gas sale and purchase contracts, gas production and gas inventories. To limit our exposure to commodity price fluctuations, we have entered into a series of electricity and gas futures, forwards, option and swap contracts.

Interest Rate Risk

DTE Energy is subject to interest rate risk in connection with the issuance of debt and preferred securities. In order to manage interest costs, we use treasury locks and interest rate swap agreements. Our exposure to interest rate risk arises primarily from changes in U.S. Treasury rates, commercial paper rates and London Inter-Bank Offered Rates (LIBOR). There was no material change in interest rate risk during the first quarter of 2003.

Summary of Sensitivity Analysis

We performed a sensitivity analysis calculating the impact of changes in fair values utilizing applicable forward commodity rates if they occurred at March 31, 2003:

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CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in the Exchange Act Rules 13a – 14(c) and 15d – 14(d)) as of a date within 90 days before the filing of this quarterly report, and have concluded that, as of the Evaluation Date, such controls and procedures were effective at ensuring that required information will be disclosed on a timely basis in reports filed under the Exchange Act.

(b) Changes in internal controls

There have been no significant changes (including corrective actions with regard to significant deficiencies or material weaknesses) in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the Evaluation Date referenced in paragraph (a) above.

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DTE ENERGY COMPANY
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)