DTE Electric Securitization Funding III LLC issued $600,461,000 of Senior Secured Securitization Bonds, Series 2026A, on November 12, 2026. The bonds were issued pursuant to an Indenture and Series Supplement, dated the same day, and offered under a Prospectus dated November 3, 2026.
The issuance is linked to a financing order issued by the Michigan Public Service Commission (MPSC) on August 6, 2026. The order authorized the recovery of qualified costs through securitization bonds, with the total amount capped at $600.5 million. The funds are intended to cover the retirement of coal handling assets at the Belle River generating facility, the cessation of operations at DTE Electric’s wholly owned subsidiary Midwest Energy Resources Company (MERC), and costs associated with a tree trimming surge regulatory asset.
The specific breakdown of the $600.5 million includes $236.7 million for the remaining net book value of Belle River coal handling assets, $16.0 million for unrecovered MERC costs, $340.2 million for the tree trimming regulatory asset, and $7.5 million for other qualified costs.
Under the terms of the financing order, the MPSC affirmed that it would not reduce, impair, postpone, or terminate the securitization charges authorized by the order. The State of Michigan has pledged to the bondholders that it will not take action that would impair the value of the securitization property or the charges until the bonds are fully paid. DTE Electric filed an application for the financing order with the MPSC on May 8, 2026, and unconditionally accepted all conditions and limitations requested by the commission on September 9, 2026.
Legal counsel Hunton Andrews Kurth LLP provided an opinion regarding the constitutional protections for bondholders. The firm concluded that the State Pledge constitutes a contractual relationship that could be challenged under the U.S. Constitution’s Contract Clause if the state were to impair the bonds' value without a legitimate public purpose. Additionally, the opinion stated that the State would be required to pay just compensation under the Takings Clause if it repealed or amended the statute in a way that constituted a taking of the bondholders' property interests.
