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1 Adjusted Net Operating Income - Total Electric and Jurisdictional Electric Schedule: C1 For The 12 Months Ended December 31, 2009 Witness: T. M. Uzenski (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) Source Deprec Regula- Property State Federal Loss/ Exhibit Fuel & and tory & Other Income Income Gain AFUDC & Adjusted No. Description A-3 Revenues Purch Pwr O&M Amort Assets Taxes Taxes Taxes on Sale Other NOI Historical Year Historical year (Per page 114 of P-521) (includes Steam) 4,452,675 1,423,314 1,323, , , ,429 55, ,173 (65) 12, , Rate Case Adjustments to Net Operating Income 5 Interest and Dividend Income 1,557 1,557 6 Income Tax Effect of Interest C ,161 (7,113) 7 Allowable Charitable Contributions C6-8 Disallowed Corporate Memberships C7 (1,894) ,158 9 Disallowed Advertising Expenses C8 (362) Interest Synchronization C10 (126) (817) MERC Operating Income C11 49,090 44,435 2, (720) (295) 2, Amortization of the Loss on Reacquired Debt C12 (3,168) (3,168) 13 Eliminate Regulatory Asset Operating Income C14 (52,662) (51,699) (57) (317) (589) 14 Eliminate Securitization Tax Revenue and Expense C15 (82,003) (69,327) (12,676) - 15 Income Tax Adjustment C (240) (445) 16 Eliminate Energy Optimization and Renewable Energy Plan C17 (15,781) (14,766) (655) (22) (118) (220) 17 Customer Interest and Debt Fee Adjustment C18 (300) (1,666) (5,059) (3,093) 18 Eliminate Executive Incentive Plan Compensation C19 (13,623) 808 4,485 8, Subtotal Rate Case Adjustments to NOI (101,356) - 13,790 1,401 (121,026) 959 (11,322) 7,936 - (6,670) Historical Year - Rate Case Adjusted 4,351,319 1,423,314 1,337, , ,388 44, ,109 (65) 5, , Normalization Adjustments 24 Weather Normalization Adjustment C13 83,059 22,993-3,564 19,776 36, Property and Other taxes C16 30,380 (1,803) (10,002) (18,575) 26 Income Tax Adjustment C16 (1,752) 3,005 (1,253) 27 Employee Incentive Plan Adjustment C20 (7,420) 440 2,443 4, Vacation Accrual Adjustment C21 17,200 (1,021) (5,663) (10,517) 29 U Rate Case Full Year Normalization Adjustment C22 2, , Subtotal Normalization Adjustments 86,037 22,993 9, ,380 (394) 10, , Adj. / Normalized Total Electric Net Operating Income 12 ME 12/31/2009 4,437,356 1,446,307 1,347, , ,768 43, ,649 (65) 5, , Jurisdictional Electric Net Operating Income 2 ME 12/31/2009 4,314,170 1,369,454 1,310, , ,010 42, ,541 (65) 4, ,135 Exhibit A-5, E-1, page 1, col (b) ln 2 lns 4+5 ln 6 ln 7 lns 8+9 ln 11 ln 12 ln 10 ln 16 ln 18 Workpaper A5E1 Support Sched 6, page 37 of 138, col (b) -ln 4 - ln 10 -ln 5-ln 11 Workpaper A5E1 Support Sched 6, page 19 of 138, col (b) ln 2 -ln2

2 Gross Revenue Conversion Factor Schedule: C2 For The Period Ending December 31, 2009 Witness: P. G. Horgan Page: 1 of 1 (a) (b) (c) No. Description Calculations December 31, Income Before Income Taxes Michigan Business Tax: Income Tax Rate % 4 Michigan Business Tax: Gross Receipts Tax Rate % 5 Composite Municipal Excise Tax Rate (1) % 6 Total State and Local Tax Rates (L3+L4+L5) % 7 8 Federal Income Tax Base (L1 - (L6*100)) Times: Federal Income Tax Rate % Federal Income Tax (L8 * L10) Income after Federal Michigan and Muni Taxes (L8 - L12) Gross Revenue Conversion Factor (L1 / L14) (1) See A-3WPC2

3 Revenues Detail Schedule: C3 For The Period Ending December 31, 2009 Witness: T.M.Uzenski (a) (b) (c) No. Description Source Total Electric 1 Sales Revenue P-521 Pg 300, 10 4,114, Sales for Resale P-521 Pg 300, , Less: Provision for Rate Refunds P-521 Pg 300, 13 (104,608) 6 7 Miscellaneous Revenues P-521 Pg 300, , Total Electric Operating Revenues 4,452,675

4 Fuel and Purchased Power Schedule: C4 Historical Year 2009 Witness: T. M. Uzenski (a) (b) (c) FERC/ MPSC Historical No. Description Account Test Period 1 Power Supply Related Expenses 2 Fuel - Steam ,438 3 Allowances ,338 4 Fuel - Nuclear ,541 5 Fuel - Other 547 9,061 6 Purchased Power ,722 7 Load Dispatching 561 9,919 8 Transmission of Electricity by Others ,056 9 Regional Market Expenses , Total Power Supply Related Expenses 1,423,314

5 Income Tax Effect of Interest Schedule: C5 For The Period Ending December 31, 2009 Witness: P. G. Horgan (a) (b) (c) No. Description Source Total Electric 1 2 Electric Rate Base Exh. A-2, Sch B1 9,302, Weighted Cost of Debt (1) Exh. A-4, Sch D % 5 6 Interest Allowed in Ratemaking Formula 2 x 4 241, Interest Deduction Included in 9 Recorded Income Tax Accruals A-3WPC4 260, Interest Deduction Change 6-9 (18,555) Composite State and Muni Income Tax Rate Exh. A-3, Sch. C % Effect on Muni & State Income Tax Expense 11 x 13*(-1) Effect on Federal Taxable Income ( 11-15)*(-1) 17, Federal Income Tax Rate Exh. A-3, Sch. C2 35.0% Effect on Federal Income Expense 17 x 19 6, Total Tax Effect on Net Operating Income ( )*(-1) (7,113) (1) Includes Short and Long-Term interest plus interest on Regulatory Liability

6 Michigan Public Service Commission Case: U Allowable Charitable Contributions Schedule: C6 The Company made no contributions to the Urban Coalition during the year ending December 31, 2009

7 Michigan Public Service Commission Case No: U Disallowed Corporate Memberships Schedule: C7 (a) No. Description Amount 1 Corporate Memberships Charged to Miscellaneous 2 General Expenses 3 4 Electric Power Research Institute / Inst. Of Nuclear 5 Power / North American Electric Reliability Corp 5,279 6 Other 1,894 7 Total Corporate Memberships 7, Less: Allowable Corporate Memberships 5, Gross Disallowed Expense 1, Less: Municipal Excise Tax 3 14 Single Business Tax , Less: Federal Income Tax of 35% Net Disallowed Expense 1,158 (b)

8 Michigan Public Service Commission Case No: U Disallowed Advertising Expenses Schedule: C8 (a) No. Description Amount 1 Related to Public Health and Safety 1, Related to Explanation of Billing Practices, Rates 4 and Using Energy Wisely Other Advertising Programs Total Advertising Programs 2, Less: Allowable Items (s 1 through 6) 1, Gross Disallowed Expense Less: Municipal Excise Tax 1 15 Single Business Tax Less: Federal Income Tax of 35% Net Disallowed Expense 221 (b) Source: Company Books and Records

9 Synchronization Adjustment Schedule: C10 For The Period Ending December 31, 2009 Witness: P. G. Horgan (a) (b) (c) No. Description Source Total Electric 1 2 Total Electric Rate Base Exh. A-2, Sch B1 9,302, Weight of JDITC Reserve Exh. A-4, Sch D1 0.86% 5 6 Cost of Long-Term Debt Exh. A-4, Sch D1 5.89% 7 8 Imputed Weight of Debt Exh. A-4, Sch D % 9 10 Imputed Interest L2 x L4 x L6 x L8 2, Composite Municipal & State Income Tax Rate Exh. A-3, Sch. C2 5.13% Effect on Municipal & State Taxes Expense 10 x 12*(-1) (126) Imputed Interest Effect on Federal Taxable Income 10-14*(-1) (2,333) Federal Income Tax Rate Exh. A-3, Sch. C2 35% Imputed Effect on Federal Income Taxes 16 x 18 (817) Synchronization Tax Adjustment to Net Operating Income

10 MERC Operating Income Schedule: C11 For The Period Ending December 31, 2009 Witness: M. Hoffman (a) (b) (c) (d) Consolidation No. Description Amount Adjustment Total 1 REVENUES 2 Transshipment Services 3 Detroit Edison (26,634) 26, Third Party Dock Services 33,011 33, ,377 26,634 33, Net Coal & Transportation Sales 16,079 16, TOTAL REVENUE 22,456 26,634 49, EXPENSES 12 Net Site Operating Expenses 14,385 (14,385) 0 13 Administrative 3,416 3, Depreciation 2,056 2, Property Taxes State Taxes (720) (720) 17 Federal Income Taxes 18 Current Deferred (361) (361) Fuel Handling Expense 0 41,019 41, TOTAL EXPENSES 19,801 26,634 46, Net Operating Income Adjustment 2, , Third Party Revenues: 28 Third Party Dock Services 33, Net Coal & Transportation Sales 16, Total Third Party Revenues 49, Other Revenue 33 Equity Earnings of Venture Fuels 2, Other Revenue (29) 35 Total Other Revenue 2, Net Site Operating Expenses 38 Site Operating Expenses 16, Less Total Other Revenue (2,139) 40 Net Site Operating Expenses 14, Net Other Expenses 43 Total MERC Expenses 19, Interest Charges 2, Less Net Site Operating Expenses (14,385) 46 Total Net Other Expenses 8,071 Detroit Edison Revenue is calculated to set MERC Net Income to zero (0). Fuel Clause = Net Site Operating Expenses ($14385) less Third Party Revenues Fuel Handling = Total MERC Expenses ($19801) plus Interest Charges ($2655) less Remove Intercompany Transaction = Third Party Revenues ($49090) less Fuel Net Site Operating Expenses = Site Operating Expense ($16553) less Equity

11 Amortization of the Loss on Reacquired Debt Schedule: C12 (a) No. Description Amount 1 Amortization of Loss on Reacquired Debt 3,168 (b) Note: This item is displayed gross of tax since the tax deduction is included in the calculation of tax expense which is part of operating income.

12 Weather Normalization Adjustment Schedule: C13 (a) (b) (c) (d) (e) (f) (g) (h) PSCR GWH Base PSCR Under / Total PSCR No. Sales Revenue Revenue (Recovery) Revenue Cost Margin 1 Residential (593) (66,584) 3,037 (651) (64,198) (16,680) (47,518) 2 Commercial Secondary (120) (12,159) 631 (134) (11,662) (3,350) (8,312) 3 Commercial Primary (61) (4,378) (99) 68 (4,409) (1,654) (2,755) 4 Industrial (43) (3,299) 614 (105) (2,790) (1,309) (1,481) 5 Total (817) (86,420) 4,183 (822) (83,059) (22,993) (60,066) Less: Municipal Excise Tax (110) 9 Michigan Business Tax (3,454) 10 (56,502) 11 Less: Federal Income Tax of 35% (19,776) 12 Net change in Net Operating Income (36,726) Source: Company Books and Records

13 Eliminate Regulatory Asset Operating Income Schedule: C14 (a) No. Description Amount 1 Recorded as Net Operating Income 2 Revenue 52,662 3 Less: RAAP / GAAP Adjustment 0 4 Less: Amortization of deferred cost 51, Pre-tax Less: Municipal Excise Tax 2 9 Michigan Business Tax Less: Federal Income Tax of 35% Net Operating Income Adjustment 589 (b)

14 Eliminate Securitization Tax Revenue and Expense Schedule: C15 No. (a) Description (b) Amount 1 Revenue 82, Less: Amort Expense 69, Pre-tax 12, Less: Municipal Excise Tax 23 8 Michigan Business Tax 12, Less: Federal Income Tax of 35% Net Operating Income Adjustment 0 Source: Company Books and Records

15 Tax Normalization Adjustments to the Historic Period Schedule: C16 ($000) Witness: M. Lewis Page: 1 of 1 (a) (b) (c) (d) (e) (f) (g) (h) (i) Property and Other Taxes State Inome Tax FIT Total No. Acct Descr Reverse SBT Adjustment Reverse Property Tax Settlement Impact of SBT and Property Tax Adjustments Adjustment for Apportionment and Gross Receipts Tax Reverse Return to Accrual Adjustment Federal Impact of State Adjustments Reverse Return to Accrual Adjustment Net Operating Income Adjustment 1 2 Rate Case Adjustment 3 4 Apportionment and gross receipts tax - 5 Inc tax operat inc Federal (409.1 ) - Federal (240) Inc tax operat inc Federal (409.1 ) - State 685 (685) 7 Total (240) - (445) Normalization Adjustments Property and Other Tax 13 Noninc taxes op inc ,946 (30,380) 14 Inc tax operat inc Federal (409.1 ) - Federal (10,002) 10, Inc tax operat inc Federal (409.1 ) - State (1,803) 1, Total ,946 (1,803) - - (10,002) - (18,575) Income Tax Adjustments 19 Inc tax operat inc Federal (409.1 ) - Federal ,287 (12,900) 20 Inc tax operat inc Federal (409.1 ) - State (1,752) 1, Prov for DFIT op inc (108,400) 108, Prov for DFIT Cr OID 98,505 (98,505) 23 Total (1,752) 613 2,392 (1,253)

16 Eliminate Renewable Energy Program and Energy Optimization Schedule: C17 (a) (b) (c) (d) No. Description Optimizatio n Renewable Energy Program Amount 1 Revenues 13,656 2,125 15,781 2 Operations and Maintenance 12,991 1,775 14,766 3 DD&A Short Term Interest Long Term Interest Less: Composite Municipal and State Income Tax Current FIT Def Tax Net Income

17 Adjustment of Customer Deposit Interest and Commitment Fees Schedule: C18 No. (a) Description (b) Amount 1 External Debt - Fees and s of credit Fees 3, Interest Expense Other - Customer Deposits 1, Subtotal Pre-Tax 5,059 6 Less: Composite Municipal and State Income Tax ,759 8 Less: Federal Tax 35% 1, Total 3,093 Source: page 340a, Other Interest, P-521 filing for 12/31/2009

18 Executive Incentive Compensation Elimination Schedule: C19 (a) (b) (c) No. Description Amount Reference 1 Executives' Incentive Compensation 13,623 1/, 2/ 2 3 Less: Composite Municipal and State Income Tax * 5.93% ,815 1 less Less: Federal Tax 35% 4,485 5 * 35% 8 9 Net Operating Income Adjustment 8,330 5 less 7 1/ Per Company Book and Records 2/ Sponsored by Witness Brudzynski

19 Employee Incentive Plan Normalization Adjustment Schedule: C20 (a) (b) (c) No. Description Amount Reference Employee Incentive Plan Expense 56,120 1/, 2/ 2 3 Incentive Plan Accrual at 100% Expense 48,700 1/, 2/ 4 5 Accrual over 100% Expense 7,420 1 less Less: Composite Municipal and State Income Tax * 5.93% 8 9 6,980 5 less Less: Federal Tax 35% 2,443 9 * 35% Net Operating Income Adjustment 4,537 9 less 11 1/ Per Company Book and Records 2/ Sponsored by Witness Brudzynski

20 Non Represented Vacation Normalization Schedule: C21 No. (a) Description (b) Amount 1 Annual Vacation accrual (month Adjustment 17, Less: Composite Municipal and State Income Tax 1, , Less: Federal Income 35 % 5, Net Operating Income Adjustment 10,517 Source: Company Books and Records

21 Rate Case Implementaion Normalization Schedule: C22 No. (a) Description (b) Amount 1 Annual Rate impact of Order U / 83, Effective date of U / 1/14/ Days of rate relief missing in Rate relief normalization (13 days / 365 * annual Impact) 2,978 6 Less: Composite Municipal and State Income Tax , Less: Federal Income 35 % Net Operating Income Adjustment 1,821 1/ Source: U-15244

Historical Year Historical Year (page 114 of P-521) 5,211,499 1,524,457 1,455, , ,812 43,194 85, ,521 - (1) 859,550

Historical Year Historical Year (page 114 of P-521) 5,211,499 1,524,457 1,455, , ,812 43,194 85, ,521 - (1) 859,550 Adjusted Net Operating Income Schedule: C1 For the 12 Months Ended December 31, 2016 Witness: T. M. Uzenski (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) Deprec State & Local Federal Source Fuel & and Property