DTE Gas Company Leak Management Plan American Gas Association October 14, 2014

Our approach to Gas Leaks: ensure the safety of people first and then property PRIORITIZING LEAK RESPONSE P0 (“P Zero”) = Immediate Response P1 (“P One”) = Immediate Response in the absence of a P0 leak. P2 (“P Two”) = Request for Distribution Prospect – secondary response following initial leak response by others

DTE Gas Company Leak Remediation Plan Background In Q1 2010 DTE Gas developed a leak remediation plan targeting a 1st Quartile leak inventory by year-end 2013 The plan was executed under the following constraints: Existing workforce availability (a combination of internal workforce planning and contractors) O&M and Capital budgets An increasing rate of incoming leaks due to the deterioration of our cast iron main infrastructure (8% CAGR between 2010 and 2014) A critical component of this plan was a creation of a team (Infrastructure Construction Management – ICM) whose sole focus is leak repair

Incoming Leaks 5-Year CAGR: 8% In Q1 2010 DTE Gas developed a leak remediation plan targeting a 1st Quartile leak inventory by year- end 2013 and Top Decile by 2019 2010 – 2015 leak trend Incoming Leaks 5-Year CAGR: 8% -19,765 -13,677 -18,543 -19,541 -12,727 -17,719 Inventory coming Repaired Inventory coming Repaired Inventory coming Repaired Inventory coming Repaired Inventory coming Repaired Inventory (est.) (est.) Inventory 2010 2011 2012 2013 2014 (8+4) 2015-19 Year End Leaks / Mile 0.20 0.24 0.11 0.07 0.08 0.05 Quartile Q3 Q3 Q3 Q1 Q2 D1

In 2014 due to the depth of the frost line we conducted a second cast iron survey which drove a significant increase of incoming leaks  Second Cast Iron Survey

Continuous Improvement (CI) Efforts Combined Leak Survey Cast Iron Survey Residential & Business Districts There are a high quantity of Main Repairs that exist on the leak inventory. DTE Gas Company has implemented the following improvements to reduce job standard times and increase the number of repairs completed throughout the year Multiple "Leaks" were grouped together by area and type, enabling more efficient dispatching Main Repairs are being scheduled for completion by Distribution crews that will not be interrupted by emergency work DTE Gas Company has committed to renew and/or abandon over 76 miles of Main in 2014

Main Leak Repair Cost per Repair ($) We keep monitoring our cost performance relative to our peers to ensure our leak repair work is performed efficiently… Main Leak Repair Cost per Repair ($) $6,700 $6,778 $5,060 $5,109 $4,890 $4,894 $4,639 $4,086 $3,930 $3,132 $3,173 $3,247 $2,598 $2,671 $2,679 $2,762 $1,772 $1,510 $498 $514 $309 $178 DTE GasDTE Gas Source: PSE&G Benchmarking

Emergency Response Time (minutes) and % Responses within 1 Hour …and we monitor also response time to ensure we perform in line with the rest of the industry Emergency Response Time (minutes) and % Responses within 1 Hour Emergency Reposnse Time % responses within 1 hour DTE GasDTE Gas Source: AGA Benchmarking

DTE Gas Leak Remediation Plan going forward: with our leak inventory under control, our plan now is to address our structural disadvantage With 22% of DTE Gas main unprotected (3rd Quartile in our Peer Set) we have a structural disadvantage Due to this structural disadvantage, we are among the utilities with the highest volume of leaks on main repaired annually In 2014 we have developed a plan to accelerate – effective 2016 – our Main Renewal Program (MRP): Target a 25-year replacement pace of our ~4,000 miles of unprotected main (down from 50) Mitigate the acceleration of incoming leaks driven by the degradation of our cast iron main Develop a mid-high pressure system to better serve our customers

With 22% of DTE Gas main unprotected (3rd Quartile in our Peer Set) we have a structural disadvantage DTE Gas Miles of Main by Type (2013 data) Best Operated Peer Set Comparison (% of unprotected main in 2013) 18,971 Duke OH Kansas Gas 2,419 (13%) 1st Quartile Cast Iron CMS 21.5% unprotected Indiana Gas (Coated + Bare) 1,661 (9%) NJ Natural Gas Washington Gas Laclede (Bare + Coated) 5,087 (27%) Niagara Mohawk 2nd Quartile Vectren Columbia Gas OH PECO Energy BGE 79% protected DTE Gas 3rd Quartile National Fuel Gas 9,796 (52%) Plastic Columbia Gas PA PSE&G Dominion East Ohio 4th Quartile Peoples Natural Gas Peoples Gas Light & Coke Keyspan Miles of Main

2013 Main Leaks Repaired (Leaks per mile of Main) Due to this structural disadvantage, we are among the utilities with the highest volume of leaks on main repaired annually 2013 Main Leaks Repaired (Leaks per mile of Main) DTE GasDTE Gas Source: AGA Benchmarking

Miles of Unprotected System Replacement Pace (Years) In 2014 we have developed a plan to accelerate – effective 2016 – our Main Renewal Program to be on a pace similar to the rest of the industry DTE Gas Peer Set: 2013 comparison of unprotected infrastructure vs. pace of replacement National Grid Miles of Unprotected System Significant amount of unprotected main, faster pace East Ohio Gas PSE&G DTE (160 miles/year - 2016) DTE (80 miles/year - 2014) Columbia of OH ConEd Columbia of PA Peoples Natural Gas PSC of CO Peoples Gas  CMS BG&E Vectren OH NSTAR Gas Kansas Gas PECO Energy Duke OH NJ Natural Gas Laclede  5 10 15 20 25 30 35 40 45 50 55 140 145 Replacement Pace (Years) Source: DOT / PHMSA report