January 27, 2005

 

Purpose:

The Finance Committee's primary purpose is to assist the Board of Directors of the DTE Energy Company (the "Company") in fulfilling its responsibility with respect to the policies and practices that relate to the management of the financial affairs of the Company.

General Duties:

In general, the Committee will:

  1. Review and evaluate the Company's financial policies and investment strategy.

 

  1. Review and evaluate management's plans to manage the Company's exposure to financial risk.

 

  1. Recommend dividend actions to the Board of Directors.
  2. Monitor the Company's Investment Committee's management of the pension fund and other post-retirement benefit obligations.

 

  1. Review annual financial plans and recommend financial measures relating to incentive plans.

 

  1. Review management's initial earnings guidance.

Specific Duties:

Periodically, as the Committee determines to be necessary and advisable:

  1. Review the Company's financial policies, including capitalization, credit ratings and financial risk management.

 

  1. Review the Company's financing plans, including financial transactions, credit capacity, guarantees and credit facilities.

 

  1. Approve capital spending and approve operating plan and capital expenditure projects in excess of $25 million.

 

  1. Review and evaluate management assessments of prior capital projects in excess of $25 million and update the Board of Directors.

 

  1. Review and monitor the Company's cost of capital and hurdle rates for various businesses of the Company.

 

  1. Review and evaluate existing and potential investments, including the financial soundness of potential mergers, acquisitions and dispositions.

 

  1. Review the Company's investor relations activities.

 

  1. Review and make recommendations concerning dividend policy and dividends to be declared by the Board of Directors.

 

  1. Review the strategy, the investment policies, the performance and the adequacy of funding for the Company's pension and other post-retirement obligations that are managed by the Company's Investment Committee.

 

  1. Review and evaluate the succession plan for the finance staff.

 

  1. Review other matters that may be delegated to the Committee by the Board.

 

  1. Make reports to the Board of Directors and keep the Board informed of matters that come before the Committee as the Committee believes necessary and appropriate. Advise the Board of any developments that the Committee believes should have Board consideration.

 

  1. Annually conduct a performance evaluation of itself and report results to the Board.

Authority:

  1. The Committee has the authority to perform the duties listed in this Charter, as it determines to be necessary and advisable from time to time in its business judgment.

 

  1. The Committee has the authority to retain independent outside professional advisors or experts as it deems advisable or necessary, including the sole authority to retain and terminate any such advisors or experts, to carry out its duties. The Committee shall have sole authority to approve related fees and retention terms.

Composition:

The Committee shall be comprised of three or more directors as determined by the Board of Directors. Committee members are appointed for one-year terms and can be re-appointed for additional terms.

Meetings:

The Committee shall meet as it determines to be necessary or advisable, but no fewer than four times each year. The Committee shall keep minutes or other records of its meetings.