UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the Quarterly Period ended September 30, 2004

Commission file number 333-51066

The registrant meets the conditions set forth in General Instruction H(1) (a) and (b) of Form 10-Q and is, therefore, filing this Form with the reduced disclosure format.

THE DETROIT EDISON SECURITIZATION FUNDING LLC

(Exact name of registrant as specified in its charter)


Michigan		38-0478650
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)


2000 2^nd Avenue, Detroit, Michigan		48226-1279
(Address of principal executive offices)		(Zip Code)

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 [ ]		No [X]

THE DETROIT EDISON SECURITIZATION FUNDING LLC

QUARTERLY REPORT ON FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2004

TABLE OF CONTENTS


	PAGE
	NUMBER
FORWARD-LOOKING STATEMENTS		3
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Statement of Operations		5
Statement of Financial Position		6
Statement of Cash Flows		7
Statement of Member’s Equity		8
Notes to Financial Statements		9
Report of Independent Registered Public Accounting Firm		10
Item 2. Management’s Narrative Analysis of the Results of Operations		3
PART II – OTHER INFORMATION
Item 6. Exhibits		11
SIGNATURE		12
EXHIBIT INDEX		13
Chief Executive Officer Section 906 Certification
Chief Financial Officer Section 906 Certification
Monthly Servicer Certificate dated July 15, 2004
Monthly Servicer Certificate dated August 16, 2004
Monthly Servicer Certificate dated September 13, 2004
Semi-Annual Servicer Certificate dated August 27, 2004

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. Securitization bondholders may suffer payment delays or losses if The Detroit Edison Securitization Funding LLC’s (Company’s) assets are not sufficient to pay interest or the scheduled principal of the securitization bonds. Funds for payments are dependent upon the Securitization Property and the right to collect the securitization surcharge over a period limited to 15 years pursuant to a Michigan statute. In addition, collections are dependent on the level of The Detroit Edison Company (Detroit Edison) electric deliveries to customers.

MANAGEMENT’S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS

The Results of Operations discussion for the Company is presented in accordance with General Instruction H(2) (a) of Form 10-Q.

The Company is a special purpose entity established by Detroit Edison to recover certain qualified costs, called Securitization Property by Michigan statute. The qualified costs primarily represent Detroit Edison’s unamortized investment in the 1,150 Megawatt Fermi 2 nuclear power plant that was classified as a regulatory asset. On March 9, 2001, the Company issued securitization bonds and used the net proceeds to purchase the Securitization Property from Detroit Edison. The Company receives surcharge revenues that are intended to recover its costs and service its debt. Amortization expense associated with the Securitization Property is adjusted as necessary so that expenses equal revenues and interest income.

For the three-month period ended September 30, 2004, the Company earned $49,307,000 in surcharge revenues and $183,000 in interest income compared to $46,965,000 in surcharge revenues and $179,000 in interest income for the three-month period ended September 30, 2003. The increase in surcharge revenues is due to an increase in surcharge rates, partially offset by lower electricity sales by Detroit Edison. Amortization expense consists of amortization of the Securitization Property, overcollateralization fee, and over-recovery of securitization surcharge. The amortization expense for the three-month periods ended September 30, 2004 and 2003 was $24,968,000 and $21,456,000, respectively. The increase in amortization expense reflects the adjustment needed to have revenues and interest income equal expenses. The higher amount was primarily attributable to the increase in surcharge revenues and decrease in interest expense. During the 2004 three-month period, the Company also incurred interest expense of $23,813,000, amortization of debt issuance costs of $389,000, and servicing and administrative fees of $281,000 compared to interest expense of $25,017,000, amortization of debt issuance costs of $367,000, and servicing and administrative fees of $280,000 for the 2003 three-month period.

For the nine-month period ended September 30, 2004, the Company earned $137,980,000 in surcharge revenues and $451,000 in interest income compared to $132,046,000 in surcharge revenues and $622,000 in interest income for the nine-month period ended September 30, 2003. The increase in surcharge revenues is due to changes in surcharge rates, partially offset by lower electricity sales by Detroit Edison. The amortization expense for the nine-month periods ended September 30, 2004 and 2003 was $64,120,000 and $54,815,000, respectively. The increase in

amortization expense reflects the adjustment needed to have revenues and interest income equal expenses. The higher amount was primarily attributable to the increase in surcharge revenues and decrease in interest expense. During the 2004 nine-month period, the Company also incurred interest expense of $72,254,000, amortization of debt issuance costs of $1,146,000, and servicing and administrative fees of $844,000 compared to interest expense of $75,835,000, amortization of debt issuance costs of $1,110,000, and servicing and administrative fees of $843,000 for the 2003 nine-month period.

Detroit Edison, as Servicer, collects a surcharge from its customers for the benefit of the Company and the Securitization bondholders. The surcharge is adjusted annually to provide sufficient funds for timely payments related to the securitization bonds. This surcharge rate was modified to $0.00374 per kilowatthour (kWh) on March 1, 2004 compared to $0.00336 per kWh that became effective March 1, 2003.

THE DETROIT EDISON SECURITIZATION FUNDING LLC

STATEMENT OF OPERATIONS (Unaudited)


	Three Months Ended						Nine Months Ended
	September 30						September 30
(in Thousands)	2004			2003			2004			2003
Operating Revenues	$	49,307		$	46,965		$	137,980		$	132,046

Operating Expenses
Amortization expense		24,968			21,456			64,120			54,815
Servicing and administrative fees		281			280			844			843
Other		39			24			67			65

		25,288			21,760			65,031			55,723

Operating Income		24,019			25,205			72,949			76,323

Interest Expense and Other
Interest expense		23,813			25,017			72,254			75,835
Interest income		(183	)		(179	)		(451	)		(622	)
Amortization of debt issuance costs		389			367			1,146			1,110

		24,019			25,205			72,949			76,323

Net Income	$	—		$	—		$	—		$	—

See Notes to Financial Statements (Unaudited)

THE DETROIT EDISON SECURITIZATION FUNDING LLC

STATEMENT OF FINANCIAL POSITION


	September 30
	2004		December 31
(in Thousands)	(Unaudited)		2003
ASSETS
Current Assets
Restricted cash	$	23,897	$	79,447
Accounts receivable		30,222		22,193
Accrued unbilled revenues		7,925		9,225

		62,044		110,865

Securitized Regulatory Assets
Securitization property, less accumulated amortization of $257,543 and $192,473, respectively		1,462,172		1,527,243

Other Assets
Unamortized bond issuance cost, less accumulated amortization of $4,535 and $3,390, respectively		25,750		26,895

	$	1,549,966	$	1,665,003

LIABILITIES AND MEMBER’S EQUITY
Current Liabilities
Accrued interest	$	7,816	$	32,894
Accounts payable to member		94		375
Current portion of securitization bonds payable		96,349		88,727
Securitization reserve		34,845		36,265

		139,104		158,261

Non-Current Liabilities and Deferred Credits
Securitization bonds payable		1,399,872		1,496,221
Other		2,240		1,771

		1,402,112		1,497,992

Member’s Equity		8,750		8,750

	$	1,549,966	$	1,665,003

See Notes to Financial Statements (Unaudited)

THE DETROIT EDISON SECURITIZATION FUNDING LLC

STATEMENT OF CASH FLOWS (Unaudited)


	Nine Months Ended
	September 30
(in Thousands)	2004			2003
Operating Activities
Net income	$	—		$	—
Adjustments to reconcile net income to net cash from operating activities:
Amortization		65,265			57,523
Changes in current assets and liabilities:
Accounts receivable and accrued unbilled revenues		(6,729	)		(1,890	)
Interest payable		(25,052	)		(26,213	)
Accounts payable to member		(307	)		(280	)

Net cash from operating activities		33,177			29,140

Investing Activities
Restricted cash		55,550			59,126

Net cash from investing activities		55,550			59,126

Financing Activities
Payment of securitization bonds		(88,727	)		(88,266	)

Net cash used for financing activities		(88,727	)		(88,266	)

Net Increase in Cash and Cash Equivalents		—			—
Cash and Cash Equivalents at Beginning of the Period		—			—

Cash and Cash Equivalents at End of the Period	$	—		$	—

Supplementary Cash Flow Information
Interest paid	$	97,306		$	102,049

See Notes to Financial Statements (Unaudited)

THE DETROIT EDISON SECURITIZATION FUNDING LLC

STATEMENT OF MEMBER’S EQUITY (Unaudited)


	Nine Months Ended
	September 30
(in Thousands)	2004		2003
Balance beginning of period	$	8,750	$	8,750

Balance end of period	$	8,750	$	8,750

See Notes to Financial Statements (Unaudited)

THE DETROIT EDISON SECURITIZATION FUNDING LLC

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 – GENERAL

The financial statements included herein should be read in conjunction with the notes to financial statements contained in the 2003 Annual Report on Form 10-K.

The accompanying financial statements are prepared using accounting principles generally accepted in the United States of America. These accounting principles require management to use estimates and assumptions that impact reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

The financial statements are unaudited, but in the opinion of the Company, include all adjustments necessary for a fair statement of the results for the interim periods. Financial results for this interim period are not necessarily indicative of results that may be expected for any other interim period or for the fiscal year.

NOTE 2 — LONG-TERM DEBT

The Company retired $46,214,000 of securitization bonds during the first quarter of 2004 and $42,513,000 of securitization bonds during the third quarter of 2004.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Managers of
The Detroit Edison Securitization Funding LLC

We have reviewed the accompanying condensed statement of financial position of The Detroit Edison Securitization Funding LLC as of September 30, 2004, and the related condensed statement of operations for the three-month and nine-month periods ended September 30, 2004 and 2003, and the condensed statements of cash flows and member’s equity for the nine-month periods ended September 30, 2004 and 2003. These interim financial statements are the responsibility of The Detroit Edison Securitization Funding LLC’s management.

We conducted our reviews in accordance with standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such condensed interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the statement of financial position of The Detroit Edison Securitization Funding LLC as of December 31, 2003, and the related statements of operations, cash flows and member’s equity for the year then ended (not presented herein); and in our report dated March 1, 2004, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying condensed statement of financial position as of December 31, 2003 is fairly stated, in all material respects, in relation to the statement of financial position from which it has been derived.

/S/ DELOITTE & TOUCHE LLP

Detroit, Michigan
November 4, 2004

OTHER INFORMATION

Item 6. Exhibits


Exhibit
Number		Description
Filed:
99-54		Monthly Servicer Certificate dated July 15, 2004

99-55		Monthly Servicer Certificate dated August 16, 2004

99-56		Monthly Servicer Certificate dated September 13, 2004

99-57		Semi-Annual Servicer Certificate dated August 27, 2004

Furnished:
32-11		Chief Executive Officer Section 906 Certification of Periodic Report

32-12		Chief Financial Officer Section 906 Certification of Periodic Report

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		THE DETROIT EDISON
		SECURITIZATION FUNDING LLC

Date: November 4, 2004		/s/ DANIEL G. BRUDZYNSKI

		Daniel G. Brudzynski
		Controller

EXHIBIT INDEX


Exhibit
Number		Description
32-11		Chief Executive Officer Section 906 Certification of Periodic Report

32-12		Chief Financial Officer Section 906 Certification of Periodic Report

99-54		Monthly Servicer Certificate dated July 15, 2004

99-55		Monthly Servicer Certificate dated August 16, 2004

99-56		Monthly Servicer Certificate dated September 13, 2004

99-57		Semi-Annual Servicer Certificate dated August 27, 2004

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

DETROIT EDISON SECURITIZATION FUNDING LLC 10-Q