DTE - Earnings call transcript Q4 2017

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Operator

Good day and welcome to the DTE Energy Year End 2017 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Barbara Tuckfield. Please go ahead, ma'am.

Barbara Tuckfield

Thank you, Alicia, and good morning everyone.

I Harbor to of statement started, read everyone the get Safe the on we would remind like to presentation. Before page two

President is Oleksiak, today's Please CEO; and also CFO. non-GAAP operating of Chairman and earnings presentation includes and the to Jerry Senior us to earnings, Our COO; appendix are in of Anderson, references GAAP earnings President financial With and to refer which measure. Vice provided the presentation. Peter reconciliation Norcia, operating a Gerry

We team the also the call to management have members of on during Q&A.

the turn I'll call Now over to Gerry.

Gerry Anderson

thank and us. All you, right. for Thanks morning joining Well Barb, good everyone.

in Peter, So this last year. updated will recap as will quick in customers, bit an guidance, and Q&A. highlights versus finally, also morning, wrap a who I XXXX, reform our our I will tax financial XXXX then Norcia will describe our and I turn performance our on it growth term long before am well tax on and as give on things he of provide preview will impacts XXXX, you our detail over impact and Jerry more updated up to reform DTE performance review a update to EEI of an how going then provide plan, our and of the

well; well XXXX. on So we you, we as that have I become not success as positioned only XXXX, as back confidence but a for in proud financially, many are my look be high clear lot fronts and to think we is on other very of, to will

on of So quick our I slide will XXXX, recap a beginning with accomplishments X. start in

in its was the I that the success with have of our of those our employee at through the DTE engagement and to Great know fifth that's XXXX, the Gallup's who engagement and future. worldwide strength positioned to culture. only determined earned highest the our ever top of by the is bodes in and company's Well, here year. receive employee Gallup. I remain are the the years this company XXXX of we well it, XX have at ever that healthy, hope We sixth Early In is we utility in consecutive years, Gallup believe culture receive our think tracking talked achieved Award. very me Workplace award, engagement score strongly over we X% database, ultimately that consecutive you that we early for the

simultaneously. Electric in customers Gas first second Gas level customers the employee's history. great Award ranked for one our JD We the also a also companies Power American some held priority well. discipline. number company's one the Both, very Safety of is in row. Midwest, is strong two we reasons, have We and years a focus received our with but business in produced the it's history for hit were Association for Achievement down indicator highest results of their obvious and Power's a of in as in We the trophies that study. the JD our XXXX safest This XXXX customer year in Safety time in satisfaction your

outcome is and overall the second ranking residential the in satisfaction two DTE's one, Electric our and one, customers with two, overall in in number best ranked we Gas Midwest, of satisfaction history. Additionally, combined customer

restored and And with winds we damaging the gusting investments Electric massive of leaving tested and without really effort, improving our hurricane grid XX% satisfaction during in before, two the with history, and nearly results, these and to we said customer customers days an to restoration achieving that a And mind, those we improvements liability. results, remains last XX% on force Power. in restoration continue hour, that And target our XX year, have modernizing Award. lever customers which things about in miles improvements our of Electric look we to in for our windstorm And We EEI's by are near have including I most Recovery earned made in year, us significant effort restoration off. the XX% as those paying was is grid biggest investments I storm in days, last years, XXXX, our Emergency over am of proudest. this in reliability, during recent reliability feel four effort of and back improve as storm one

wake in and knees, this to know, you experience ratings their penalty achieved Storm think and tireless of storms our product our year. regulators the put last and box testament our of in as restore history, continuous had practices. the is historic them quickly the employees our with that effort customer to that possible. event, was opposite We we a of in bring communities our also improvement the as satisfaction and customers, can industry to I highest companies in the

a put made have storm restoration of and it lot revamping We difference. into effort processes, a our

on focusing in helping slide our efforts force we to industry, and are that a the results which and O&M be cost bills is those growth communities and have work. for CI serve. that at I'm customer the We X, keep of also productivity growth, efforts moving among the to is those levels and in containment is efficiency, the to to proud, of lowest disciplines same our ability

commitment earned local exceeded for and We by spent So pure we the Midwest these supplier XXXX, with significant one Michigan to corporate billion Michigan. in investments initiative. connect, $X.X companies in the JD business us efforts ranking Power, based number citizenship making which are our Michigan the in

were XXXX all Michigan than with we as spending less a look billion when year started to $X.X of back know, this, suppliers. You I we

effort suppliers increase has So our jobs it state. and our created has in those effort, a been great seven year nearly with spending XX,XXX to

key to modernizing is bills few front; customers heavily to workload in bills has in is essentially added direction that commission. which well and fleet, if your rates on significantly Power the of say providing Michigan began one. announced of top company's that process, normally lot the setting strategic our tax a our regulatory XXXX, force in have will odds the are provide carbon be the XXXX, that and said to to invest a job passed tax It now. get its the vital constructive our reform, we Michigan's reductions issue. as to continues And commission a through, of a infrastructure. our always on your a on a added In affordability, with that break be if boost XXXX, are working constructive. emissions vein, our policy second the are how reduce you legislation issues many leadership long energy I in our on keep you significant XX% higher, costs in in constructively define and and having and working which We we XXXX, community, priorities policy ageing to But to you sustainability Michigan. job we public initiative if said, implementing Those regulatory serve a than has will their them through and term more they will environment priority from has in first a well, continue generation your regulation maintain consider will what lot by plate to group customer right customers positive a outcomes have also by efforts broad the work our that for to the on manage I XXXX, for That cases and

X,XXX The new finalize megawatt second, we our combined the to for plant. cycle is that and necessity need certificate

we plant, X,XXX come infrastructure the mentioned backfill investments carbon just reasonable just in a XXXXs. in retirement plant megawatts, our also to achieve this modernize that invest an then ago. plants, generation and in will allow to that the is And our cleaner offline improve continue I essential along I the that minute we upgrade of that and reliability finally, Outcomes and early for over So customers. outcomes. the our end-of-life described this step way case us to three renewable totaling coal with rate plan And reduction Power have Gas the need is will

So rate but we these there are do constructive with all follow outcomes there, in positions we that are are other get a position filed in I closely, cases out the proceedings often is consistent as confident case case, remain and good our know that plan. you to our

that creation; in in Now to moving value to this utility XXXX, and continue continued year. infrastructure will we as on I growth and renewing already mentioned, our invest

Our non-utility XXXX. of had businesses big in wins a number

remain on on business, the additional the and So BCF and for expansions achieved third late milestone, We Pipelines in-service made construction, we it's this our Bluestone Nexus day year. significant the horizon. on Gas, pipeline our and quarter a progress with delivery X on per pipeline in track Storage,

fleets to closed new use with also produce those for and used vehicle Ford three of in projects a host in we project same helping will on initiated achieve Industrial them XXXX business, GSP Motor Industrial Power a at XX% renewable we on systems where and to in our and the acquisitions meet and will touch build number reduction to two is promising RNG bit reduction. will gas to underway, carbon energy service of P&I, Company, later. including Power more initiatives also or a renewable In be have goals. and XXXX, sizable a operate gas advanced research which Ford's natural engineering Power true center, Jerry energy We a and nearly energy

results, So now to turn talk to guidance our our X slide let's XXXX. XXXX for financial about over and

$X.XX, allowing In us reform the a per history, will $X minute. reform original reduce billion XXXX, a were exceeded earnings in time shareholders. bit rates, marking have tax we company in in I guidance. will share further operating year detail in operating also So which exceeded for benefit And the is our Tax customer earnings. consecutive we to XXXX our ninth first that

the have growth per $X.XX guidance for also and a share year it So guidance the ago. base EPS by guidance EEI versus original increased we XXXX This November. we is X% share EPS $X.XX the the last at that XXXX provided increased that projections, to X% we a increase new provided X% to conference is our from our per earnings guidance

in plan, how per to increase of guidance to in the we wholly provide and deferred business will to year taxes utilities a said, increase mix down our the utilities base the five part the from to the early on funding higher individual is tax bills tied the plan. of color the begin latter The debt. in the $X.XX transitions years will as the non-utility the rate contribute of share equity of But the road. that additional units So businesses affect

target the in to with range the tax the five XXXX, with will get $X.XX we mentioned, Then dividend ratio increases is earnings average, reform of in we and in X% payout latter goal actually so we our per to portion share. peer our of from there as EEI, line through And then and line accretion that. at to EPS of will [indiscernible] -- finally dividends continue after grow continue our in plan, grows year to

before that on slide talk maintain our further, tax of to the to and impacts So customer X. reform want highlight do efforts about affordability, I I I

we So evidenced earlier, the customer as by efforts, rates five lower in business control our our to are well peers to and over years. ability positioned bills is our and among past mentioned continue this cost

the rates five residential over while decreased by rates Electric same over the So declined X% have by last down bills average through Electric have X% Industrial period. years. by decreased XX%. XX% XXXX, Gas have Gas bills, annual

aging have are to then through technology work add certainly these doing drive we prices on affordability the into also increasingly declining the and productivity well. deployment we of but infrastructure, Gas CI and modernization front this as disciplines used So have helped our those, increases,

customers, going savings color long along will more And that affordability tax a little way customer to the slide tax a topic. I reform, X, toward am to to speaking So this that maintaining provide to focus, from move reform of with we go want. on accrue substantial will on

our for simple, and for good good customers plain reform So our shareholders. is tax and

it affects each. So frame up let me how

then We of $XXX at pass the in and to to of tied as First, a utilities our anticipate in the annually, remeasurement on this rate on savings proceedings. additionally, $XX thing order is customers, utility good expense, plan refunding taxes of result customers. we two in a reduction the million deferred future for current to the million our tax

to now savings closely these working will regulators are our we back We with right to flow our customers. determine how tax

So the is will shareholders. second in that is reform, for I point make tax it our good

this higher utilities our and $X.XX X% over in builds growth XXXX As Operating guidance. our I mentioned grow XXXX it's beginning earlier, at X% immediately accretive, time. from to earnings

will of contracts, equity rates, to us, that on may is immediately existing includes a and last the our million. of accrue tax called future to to balance higher accrue businesses, nature business order that our customer, depending I often us rolled benefit share the $X maybe at the called exposure on have and existing very may tax contracts or our project competition, fall, to own mention, non-utility the $X incremental years. have variables. accrue we that the impact three the respect benefit and non-utility for little dynamics, of $XXX And reform the With there and GSP I tax to has be for might lower we exposure billion recourse respect at on plan our upside negotiation For tax million to FERC the expect, every on contracts, over competition, lot a million, the every the its capital, EEI to an $X created. next if sheet, plan as changes is in may out With the will case of

$XXX reform, tax next modest of see need a two the together, when additional we result $XXX million put the so we the million, a as over So years. three for

in We often because sheet credit our ratings support always that equity are and know just flows, ways successful to are maintaining past. issuances been for to that cash balance we balance look have we minimize in sheet doing doing maintaining current flexibility. and strengthening you committed the said, by That we metrics that,

Now to results. to more turn our Oleksiak a Peter going you. to I talk to financial over about am over things bit Peter,

Peter Oleksiak

Thanks Gerry.

really beat in XXXX. in the Tigers. -- training down financials, even season is in at hope there off Never for there Florida, the Just motion, snow eternal is looking ground spring the odds Detroit, is just the baseball, in comment in to Detroit here one my on on springs full an and though Tigers

With the share. per on $X.XX of in as financials, XX; slide I came $X XXXX mentioned, will or earnings Gerry strong, with start billion

earnings our For share, the GAAP breakdown were the earnings detailed reference, you a segment's $XXX earnings $X.X to by or million segment, share. operating reported our in reported reconciliation $X.XX or earnings per were of can the including Overall, $X.XX growth find and per billion appendix.

million our million primarily year the Electric detail, DTE Now the starting at let implementation by driven top cooler me or earnings segments of each Electric higher $X the XXXX, lower weather the touch operating in on utility. for with new storm than were by rates. $XXX and expenses offset

variance can earnings million year-over-year our or DTE million detailed XXXX. DTE segment, higher in than more Electric Gas operating $XXX earnings were For that for find you appendix. $XX our

depreciation primarily higher this rate new related increase by was expenses driven property and offset Now by to capital. implementation, taxes

million. primarily for to in a than gathering Power is businesses the corporate expense. had is were XXXX. business, sites XXXX. volumes million million REF Pipeline to higher and were steel $XXX earnings due and $XXX earnings down incremental compared million XXXX, million was and Storage interest was of of Gas, our increase million million $XX $XX operating is related segment, Industrial growth Rounding Operating For pipeline in than to which due to million or out earnings $X higher higher earnings both unfavorable, $X This and earnings $XX segment other our or growth. full $X XXXX, This operating to XXXX. Link year trading Energy the and due higher and and

accounting target higher DTE in contains per reconciliations, per share contributed trading appendix which performance. economic company showing and share, earned standard of our both EPS. is XXXX $X.XX income Overall, economic The million $XX $X.XX in than line with trading levels. Our XXXX, energy

switch as guidance $XX Gerry Energy point in decrease tax rate expense. earlier, from businesses. two now The to a XX% other and reform, see we interest EPS how utilities. faster at we The grow utility over you the on guidance I increase from eh outlook early to XXXX the is P&I. utility rate grow plan in The outlook over Corporate XXXX, share up no due the to in will left from earnings XX%, businesses Now is mentioned also lower of instead to increase and same, earnings yield accretion low slide per capital trading. for earnings, mentioned, growth. is non-utility utility the $X.XX But than bases incremental growth. tax range benefit operating are this lower contributing due benefits driven energy equity range to will due XX; our with driven will to tax and changes EPS reforms, for the GSP our an more guidance P&I but provided guidance we Gerry by from we guidance, by end EEI. we XXXX There guidance earnings the to million $XX rate at $X.XX deferred by and $X.XX XXXX, time, increasing GSP early see change $XX trading immediate of the our the million to $X.XX, of taxes. earnings tax on $X.XX million blended will will from base $X.XX. structure Also to equity $X.XX earnings conservatively to by forecast here at will the

assumes $X.XX For benefits only. the on non-utilities, tax contracts a existing

that or So achieve forward potentially help of going on long targets we upside. non-utility provide could our share term benefits new some the deals growth tax

XXXX be appendix. for capital in found the Our cash can and guidance

XX; on our have a Now been priority. in is balance the maintaining that I'd like to move years, consistent to strong metrics balance messaging we over sheet a slide sheet

industry is the is cash that maintaining time in strong work. deliver or able accretion, balance at from to benefits One item near term, the sheet we companies way will EPS are benefitting that same metrics. the credits AMT that one As reform, the of tax

Looking EEI, million the announced fund partially equity of At years, $XXX over lower at our the of cash refund we investment four XXXX, offsets of through plan. flows $XXX which to million utilities. increase cash in needs

additional million As we a of over years. described, be an tax $XXX result next as issuing reform, Gerry will the three

is For that to to One the equity $XXX the within of reform, embedded due million. using think mechanism. calendar tax it, year about a XXXX, way $XXX issue million the additional to is is our plan trail $XXX that million

will of our sheet, credit support to debt We a are strong to in to target to metrics growing we line is XX%, maintaining with needed FFO committed and balance ratings. which XX%

will several which some additional current the next For and well us to flexibility ratings. years, our pension targets, debt funded, fully the be of our creates our in range keeps FFO within

limit good will amount We customers next for is good ways needed the of shareholders. and under the years, tax over outcome, but for look reform to equity for any three utility

to growth. to Jerry I'd producing over will go long who turn the dividend term earnings for Now like Norcia, this it and plan over

Jerry Norcia

Thank utility that productivity who about will Those to significant talk past, customers. produce Peter. of transformation higher by occur over infrastructure levels. of and us the driven years listened This you, achieving calls excellent assets while you aims to customer heard time. be have over our also for A and substantially transformation the outcomes, next our XX in our investments will the

the and construction. productivity by domestic a offers investments our this along a we fired Power fired ground early create $X as important goals We Michigan is in three Certificate in X,XXX to project is plant. customer XXXXs. the complement fuel retirement The hundreds to for decades as Power backfill natural megawatt Power of with and an are our affordable, That low renewable XXXX an to to Gas mentioned the of Gas Necessity an plant plans abundant, XX natural the will defining carbon, Electric scheduled coals billion build and Gerry be reliable source will X will MPSC jobs earlier, source, break ahead, filed Gas transformation, renewable with investments nearly the Natural during in customers. of operational guide

XXXX over up XXXX. and energy farms planning occur construct capacity are both next in X,XXX The also time. to investment will for We renewable additional megawatts of to major renewable wind

$XXX fact, million wind have investment we year. finalized for just our this In a plans

invest also and grid will company continue hardening grid Electric Our to automation. in heavily

the ongoing system. need As an there infrastructure ages, invest is modernizing to the in

renewal through very the ensuring next our and we system, we in At move pipe. a costs. focus the affordability we on and cycle. substantial XX aging them will steel over cycle As In to unprotected case, same invest we outside on our Gas, the continue be decade. accelerating of to XX from for proposed time, we Gas do this will accelerating reduced focused our productivity our and cast a main Gas iron automate At replacement to customers, distribution we last work rate increases to meters continue the DTE to year year

continue ensure to Finally, very a integrity invest in safety. of standard we and high the will public to pipeline harden system

the Now I on non-utility to on businesses XX. will slide move

Gerry our mentioned, many we had for non-utility last business As accomplishments year.

Pipelines, Our over focus platforms, growth a in pipeline. much track advancing, Nexus Gas third of the and Nexus center and quarter and on our construction saw XXXX, date. pipeline on Storage next for newest two will we our are In service expanding years the late few Link

right-of-way construct large and We laterals Industrial XXXX, both on In pipe station some finalizing horizontal of is customers. to we progressing directional clearing, Nexus continued this Link. agreements to new compressor drills progress winter. seeing Nexus and work are are construction,

capacity, also in us to Nexus' are producers plan exchanging capacity. great The and of giving this we with now discussions our are advance, We discussions confidence we told fill last you that additional to the some asset. with open late on about continue producers year, for proposals

to be in as Nexus, are well the milestones continue We we interest construction the achieving. pleased as with

what the that's any at more discussions will we to able strict as said, won't point, under out. as are consistently details intensity we information. these additional into are our construction, Since provide among capacity of the ratcheted we pipe confidentiality agreements that have remaining play Nexus seeing on this we the provide become moved be up deals and We deals, final,

attractive in capacity, in with X Bluestone with capacity started delivery at asset a So per moving Pennsylvania, At is per an asset, we on doubled capacity. milestone recently pipeline customer rate. Linked day an XXXX. day existing exciting, that BCF BCF to given pretty This achieved our this we our X.X

We are additional an BCF by per expanding in XXXX. day X.X

We also Renaissance, the precedent plant. have with newly their to connect agreement Power new lateral signed to pipeline a APV

at I So GSP all good continue progress I feel goals. track we about business, our in our made feel are to all, very and the have to we achieve on future

by Now originated I you Power our business, new of we new needed progress talked the target an slide $XX originated about in about one-third last XXXX, to and in mentioned. a achieve we growth have growth renewable we projects and In November central projects year, million that will talk of Gerry that and million XXXX. was was million that income at on Industrial the two XX; plant including already at of $XX that energy natural $XX told XXXX. originate that art EEI, of state Gas to we or

discussions. XXXX, We with and advanced good projects with also next $XX the have late well line million stage are in of we feel a that, on sight in we

two are So we this P&I end XXXX given could of projects the November, of co-generation sites five on that have told customers natural the with future in advanced we that that pursuing. Gas with may you this help well originated with, Tax may in year. we growth, discussions as we by also are thirds benefit four as also reform share projects. about growth renewable target our we Back

are for scale firming that negotiations large agreements new those are you, tell finalizing we new our we up am projects, energy along pleased project. I also to RNG While

fact Given have projects, for future good this that XXXX P&I how about start we the additional to the positioned feel growth. is and we

our I turn wrap exceeding track of XXXX a Now guidance. slide will record up. to again, over Once extended XX to original strong

balance in whom We by companies midpoint for as provides for share, reform $X.XX benefitting and deliver the sheet, of by me X% businesses returns. premium the a while per our of continue operating XXXX. this target operating EPS of to with annualized tax an will investors. industry, also Strength we base along utilities everyone growth our one XXXX our like to a customers, us that, guidance EPS with target X% of dividend joining our which shareholder new confidence strong morning. serve benefits will thank our through non-utility growth for are to that for I'd We And X%, and growth gives our increased

Alicia, up line questions. the So you for open could

Operator

[Operator Instructions].

will We of to first Lynch. Merrill America of Bank go Julien Dumoulin-Smith

Josephine Moore

you It's all? Good morning are everyone. How Josephine here.

Gerry Anderson

Good.

Josephine Moore

few questions this here a morning. Just

First the utilities side. on

about are As spend? were there thinking And additional the either then more plan, for, CapEx under and mechanisms five you looking upcoming recovery the opportunities from develop concurrent plan, distribution secondly that IRP regulatory the you that of on year ensure to any are could that? that any

Gerry Anderson

So I will the start with distribution plan.

We very are working Public right staff closely now. with Commission Service the

I do, are been essentially the the we expenditures a up lay is the for you process, over fact, retire we that out logic process, need have is capital this retire going think going two In years. distribution we the ramping years those. in the that is needs We five the over we have It next laid I IRP and think the system IRP a have And five to what have then out where laying you. front, on has look been or that plan those plants. so, if plant are really next -- that said for healthy before, what we Gas we to open the to with backfill coal consistent

do. renewables, will We XXXX, those and to the well. additional we that to to fully add both to price target as the something want is add us I beyond when go state renewables, will down, on continue continues expect that XX%, really but as continue up customers through our

healthy it are CapEx, honest, renew out is laid one, be executing. to that's far think as utility the we as our I additional on focused infrastructure, to have of we So amount got what work and plan has a

Peter Oleksiak

the about recovery This discussions I lay will the the This we commission on that think potential in is mechanism. are for groundwork are Peter, and and that, Josephine, also asking you definitely staff that. early the with

Josephine Moore

that then, a on just that tax just increase? curious more bit could color does volumetric if you Is little And P&I the improvements? and efficiency the on include give or also Great. side, reform, guidance

Peter Oleksiak

just is reforms. That tax

Josephine Moore

just Awesome. service, right Just to you on there moves AFUDC project? one into there shift the be as the in profile project reforms? for Okay. tax Nexus are last Is the GSP; earning and then then Nexus? on now, question how And from going about any thinking earnings the return are you

Peter Oleksiak

time, spend. earned The are you is capital AFUDC as your over doing

of them So when not in to between service, around now. it we healthy two. material be we have it for additional on work But gets lays negotiated as anything, there that is platform. targeted year-over-year, going and it you project look the it And expansions if cost we the have to at really ground put rates capital investments and change a it's the the right

Josephine Moore

Awesome. on end. much. you That's very Thank my all

Operator

will next Suisse. Michael to Credit Weinstein go We of

Michael Weinstein

Hi, morning. good

Gerry Anderson

morning Michael. Good

Michael Weinstein

you or us, what's to at extra equity, could the just for it that? Hey, $XXX a addition in the is EEI, of million method incremental the equity $XXX remind secondary, the Is it million ATM?

Gerry Anderson

So this that we will expect year, internal be mechanisms. it that

way. have would contributions the things. vast due to $XXX That internal future, we and majority play out for pension capacity year-by-year for that But varies I foreseeable in about the million other We mechanisms. think expect

Michael Weinstein

amount? incremental the Even

Gerry Anderson

Yes.

Michael Weinstein

that Okay, I And year, of got on the towards you. said this two by thirds think P&I goal? end side, you the it'd the be

Jerry Norcia

expecting. are we what That's

Michael Weinstein

completely? do long finish will it actually before How be, you think you

Jerry Norcia

Well our forecast million $XX by is XXXX. to originate the

with year in. thirds would I two this say having in well we completed are progress, So

end upside this to of see revisit We there year to at is our will that. target potential if any have the to

Gerry Anderson

start Yeah, a have it. fast gotten on we

million, opportunities keeps million we year, it really at we market talked pace last million $XX $XX into could what said be said, years will offering there we the needed. us And think this end So upside keep of But be about. that about two into year, $XX incremental some evaluating, years. to at as we the Jerry five if just the will the

Michael Weinstein

do Okay. you of industry view everybody just maybe And am day? Group your and in a now, rates speculation. to region, whole, like M&A a a these your could are with just and -- you M&A what on is There valuation now of your the activity of on right starting are on lot thoughts things? how based wondering, on and as going as rise, I remind thoughts especially the the lot what whole

Gerry Anderson

same way pretty I view it much we always have. the

to there, we have. we, out that a actually plan good added bar we high think we think would is strong So with be something what that for a

the look really reduction, you And is that you think, handful actually or all brings know, for and but efficiency of that. cost these of genuinely that I -- given need something that as and high some away pay a premiums characteristics But are more. so, you maybe could do we can't that and

say, forefront for our bar the we could ever done see So one But if put efficiency our of it through strategy great customers low premium, be was out it, at we that don't and maybe. right at for just and found a there now. high

Michael Weinstein

Okay. Thank much. very you

Gerry Anderson

you. Thank

Operator

of Guggenheim go to We Pourreza Partners. Shahriar next will

Gerry Anderson

Good morning Shahriar.

Shahriar Pourreza

material. are been morning you guys reduction doing? never have X% rates tax of sort governor. reform constrained? Good guys. capital been always How somewhat Rates the So is you have from in

support the since you some or of through for seem be opportunity savings opportunity and redeploy of asked sort sort some give time tax many of of to infrastructure to the so. guys back plans, submitting commissioners, to the have various the differently, sort utilities provide you an retain from preliminary accelerate opportunities, some this so needs, not do be spending to getting into to and does savings more seem So why

Gerry Anderson

question of retain am say some you what do savings, you asking? I Shahriar? When are so mean you clear on Just the the

Shahriar Pourreza

you needs that accelerate infrastructure subsidized of sort to opportunities additional Well, of the have? some

Gerry Anderson

customers, it is reaction go that, Because this, it happy cycle, through have as to as worry our we this about, quickly. back guess keeping we to this to most the back we to said, renewal having you very infrastructure actually is have thing affordable. go that go I and reduction are

And I think as don't, you and a if the investment manage one actually is of versus that customers cycle back thing affordable go over that customers, a for lot differentiates, through and regulators look to remains. those heavy do well, how companies it their that is remain supportive. the tied whether it how they that time, you

reaction saw rates was and good, when we helps achieve targets so us our And our rate this, it for levels.

which what have that here feasible we out we capital way is that's it. the investments in works think do, infrastructure that make have in for embedded I saying, the in to been years, over very plan five laid heavy end everybody, some next the going is a Now that's

terms thinking trying upside we the upside. of that's result that we way we So it, asked, it's a That's are aid keeping the we when and things we in plan really not of about get the affordable. it, thinking a the tax some of out, are about thinking way about this, generally really have as to laid retain we are to for savings are helpful

Shahriar Pourreza

Got it.

not Got the on it. you of accelerate and least at disclose conversations the you finally of demand the on fully are to pull just opportunities push sides. of pipe? then appreciate sensitivity Gerry, to of plan, but Nexus, these the on And having the Can enough discussions. are supportive supply sort anyway But the sort the So subscribe plan. if

Jerry Norcia

fill The are. volumes that the we size certainly of the are They pipe. would discussing

Shahriar Pourreza

fill just the pipe? or pipe the Oversubscribe

Jerry Norcia

We will start with fill at first.

Shahriar Pourreza

guys. great. Okay, Thanks

Gerry Anderson

you. Thank

Operator

Arnold We will to next Bank. Deutsche Jonathan go of

Gerry Anderson

morning Jonathan. Good

Jonathan Arnold

morning Good guys.

first to of a is answered uplifts. where given the the question, tax of that unpack of how just get P&I Could my so REFs, You we -- out just the come earnings little uplift you coming moving some bit, the from? behind mechanics just proportion the

Peter Oleksiak

have is we this Jonathan, down sold portion a our from Peter. of perspective. Yes, facilities essentially we have A partnership there,

current So uplift cash we from. where that, have is that's related and to the earnings coming

by $X.XX the end that to $X.XX and the back essentially, utility, be utility to at go will that mentioned, will of accretion REF here the we replaced accretion Now plan. managed

Jonathan Arnold

steps once it effectively make the down? coming, REF piece So is you the incremental to have up because

Peter Oleksiak

REF, with benefit have with. facilities just that -- some those There partners is tax because from we

Jonathan Arnold

it's in that's the XXXX, Okay. in But the partnership? driving accounting the in what's uplift

Peter Oleksiak

XXXX, some think One by that is it, be gone, will about replaced way then but and to by that utilities.

Jonathan Arnold

Right. That is that. actually $X.XX more being incremental, than it's

Gerry Anderson

So just positions, there tax savings. to partnership some on is the add there, obviously

benefits the the transition is, other and will We where is making of we of point comes that And where that as up, benefit current obviously R&D you we that go already on projects. benefit, and on some some to through Industrial current also is shared projects a tax well so then And describing, Peter be forth. there's projects customer projects aren't projects through have type, that goes had expect contracts. I us. have Jerry future was of the and it Norcia

Jonathan Arnold

that tax charge, back. upfront on Okay, of year Can think great. and Thank a unprotected, protected tax deferred another assumed, And then detail, $XX then you $XXX I assumption you million on and just the you. have each? million you just and at an for mentioned excess then sort have that timeframe flowing it's between unpack you reduced assumed what

Peter Oleksiak

you three to is give I Maybe one is you the on different current, which going the will the is to million be proceedings, there broad be context; mentioned. going $XXX

in So to terms be customers. that proceedings give do that'd back we how of

second that bit talking are utilities, January a being But also of where a of maybe it, and So separate -- going because of to current, on year. proceeding the it of then of is normalized. rate little they There each you the is cycles. portion different for history it a for two-thirds at that the are protect There be half deferred, case on some isn't. a the we of and catch in will up that be our of precedents about, around is have to terms will X, majority Probably from there depreciation. of all good the as

the could year. in the that in of half all play out back of expect this it We proceeding

Jonathan Arnold

your not what that's you do protected? And the $XX assume then, about million, one-third in

Peter Oleksiak

the normalized. billion back billion million give over the are to million, It Gas, roughly have to Electric company, will protected customers need and unprotected. time, Despite we at we that $X.X includes to so $XXX that combined both going be $XX $X.X

Jonathan Arnold

assuming you Am being, also right? that is has that and unprotected of which third normalized. getting A that I for the are time

Peter Oleksiak

around there we that And precedents with XXXX, Commission. back the when in this is did Yes.

Jonathan Arnold

Great.

Okay. Thanks guys.

Gerry Anderson

you. Thank

Operator

go We Ridzon Paul KeyBanc. next to of will

Gerry Anderson

Paul. morning Good

Paul Ridzon

Good morning.

inclusive I just unreg, think question, answered is the $X.XX you at that but $X.XX is my correct? of the

Gerry Anderson

Correct.

Paul Ridzon

Okay.

Gerry Anderson

Yeah, we slow the immediate $X.XX, and that's correct. as build $X.XX five Should we through to years. a then an get play

Paul Ridzon

Slow $X.XX? build from to $X.XX

Gerry Anderson

Correct.

Paul Ridzon

strip at And the when utilities, tax that just first like then, think there about is should no How earnings, revenues? resolution commission. you at quarter forward, know, of looking kind the report issues you reserved out -- of just we

Peter Oleksiak

from accounting That an It's perspective. is a correct. regulatory liability,

will we earlier. that to our balance proceedings customers these So on be the to that get putting through I various sheet described back

Paul Ridzon

on all Thanks. solid and rating I guidance, have. and Congratulations that's a year

Gerry Anderson

you. Thank

Operator

We Research. will next Fleishman to go Steve of Wolfe

Gerry Anderson

Steve. Hey

Steve Fleishman

good everyone, Gerry, morning. Hey

XXXX, of so the clarifying in trading. rate to just X% question, that obviously growth first The number guidance. So X% off X.XX% includes in the

And that, just when X%. giving you want giving if we So to -- that, that are I you take including to assume you are and of trading throughout are out kind period. you the X% of kind exclude quote

Gerry Anderson

include. But do we

growing trading for are So up percent we total. of a couple number, of the total our

Steve Fleishman

Okay.

a businesses little you it's guess, that not in but assuming probably small I -- quicker? growing So in the thing, theory, it's a probably growth are ex-trading fact are and

Gerry Anderson

Could growth doesn't be, million in it do it's math, little the swing few dollars, in when a so growth. I we you might do mean, a the trading. just see much

Steve Fleishman

Okay.

Gerry Anderson

they use have done. equity, them are to we $XX their cash can of for a role. that's that year what looking -- So we $XX reduce It's million to million

Steve Fleishman

And improvement this to projects Is the tax shared segment? in with on in slide customers. on the P&I clarify, future just Okay. the in then economics, non-utility bullet may be the the mainly

Gerry Anderson

think I it's both.

about is If variables has determining them of every the one you competitive how return and that capitals. of lots are think dynamics, logically into they opportunity. come project -- for many it, your competing on But opportunities

split in, and see low lot higher a lower, in the At is one there cases you I best of need, a will at that if So value. competition serve to play competition, might be really think high the have share. suited might and the we are you presumably, that out share a

our we and will will it, that to be achievement. I value tax lot in a think we our not So play see on conservative try projects us of future and future projections. help But into

Steve Fleishman

an you are to you'd share not projects, of impact kind where some? talking on But non-utility current

Gerry Anderson

of with already get are that in ones that. the obviously and will The hand in are negotiated existing place, benefit contracts

Steve Fleishman

from how where a out amount only not about CMS. Okay. And the been, that, just was decent down have can explanation and you than Electric bit you but ROE, think are the a then, in for I like ALJ to is with also talk lower outcome? case, a and they feeling little X/X the which What you your came

Gerry Anderson

when of commentary that rate We that have over our it's our see said, proceedings our probably we am a set the back are have we the our of or not Gas that I cases, the feel to set venue. there you on for front will and case, to ROE year. and are you have constructive get what put positions But filed are most that, unusual for we leave to what lower out of than plan support Steve, and from in for. proceedings going an constructive we so year, in I active that the But going all if ROE watched outcomes out Electric

Steve Fleishman

slowly the And question, business, lot demand you could that just last have resolved. increasing, we maybe to just in but Okay. are talk have get trends Midstream Obviously bottlenecks a high starting production, level, to then we seeing? more you Gas

business? worried like business? the pricing opportunity much what grow Just strategically supply, or too are and about to to thinking you you the of next you see a lot still do Are

Jerry Norcia

you and see on Utica, a kind Marcellus Midwest, of connected markets East to very the markets as slate tied which and we current world our to of Coast proximal as Midwest, the sort can to, with assets well is age shift resource use class Certainly, in the is are use Gas as see generation. our out, you over these going coal time, plants natural see pipeline Nexus fundamental from for pointed from of as to to a our what plants

see Nexus. well for connected well as already additional asset, very as as regions to with which Nexus. I bode well strong Nexus, the serve we are that Link I to going for So that will is growth demand growth bolt-on projects as the in our supply think And strong

in story strong really a see I our future. So

a continues supply I of market what export North in will the think be Gas the natural also, the Gas growing for of I think America. outlet be to industry, in evolution an natural

both I capture overall, that well influence positioned the region, in to its Midstream is supply So Great and with business, our Lakes growth, of suite demand. will, feel you if

Gerry Anderson

you down hit just as production a you and think up on with there, our up in that; definitely to their mentioned, where is we we any to output Pennsylvania, years, next Nexus, I is we We a be to just Nexus double the the in to operations scaling there, come one if region couple interesting position the things are the is, likely a of Millennium, us. with assets. record there on more position level pulled there to, and had rapidly, capacity. growing And go there. path producers our add of Steve, producer got for Bluestone Link only year, for last out

that capacity zone are right the doesn't out or to working option, very up are exist make production. now, region, in We for But we pipe. of long, sure out as fill the as scales that of we it up

Steve Fleishman

Thank you. Okay.

Gerry Anderson

Thank you.

Operator

to Macquarie. Storozynski of will go next We Angie

Angie Storozynski

Nexus. to I you. actually wanted on Thank follow-up

I heard you. thank your So explanations,

of with contracts Industrial existing the the for for Nexus? are expansions or capacity Now facility customers

Peter Oleksiak

both. be will They

Angie Storozynski

be can a [indiscernible] type And this willing to from me industry give Gas? contracts sense is, -- you would sign that what of

Peter Oleksiak

once we we be agreements, at moment, But the disclose Angie, happy can't. that. I'd to execute this

Angie Storozynski

Rover's pipe. is on Okay. yours. And subscribed, lower not little separately like for It like seems than Rover pricing your fully and for seems demand it again, bit still capacity is a drillers' the

advantage So versus driller the to for Rover? pipe be what would a choose your

Jerry Norcia

are Rover. very Rover's think than conversation let that, Well rates ours. you lower before be I I And me and are clear, rates with not had this our have competitive

greater in we much addition with our have And much in the So significant market that, market happy along -- way. the got that significant access or pipeline. more are we to position

we starting that those the demand of of and centers, got all counterparties. discussions having already are large XX interconnects, with with some are into play immediately, we are to We interconnects building have that

about we feel very pipe. this So good filling

Angie Storozynski

for Okay. largely does by when segment, income short basically the net the term XXXX you range us is And year-over-year GSP then for or contracts? term contract, lastly, account the for filled long the delta show it incremental

Gerry Anderson

on Are term Nexus you other pipes? contracts about asking long or

Angie Storozynski

and end mean, will and the the mean, well. XXXX net to I contribute I as of pipes they income? between year, now to materialize other

Gerry Anderson

into service goes it since materially, year. the not Nexus so late in

for other really positions. relevant XXXX. do growing And not the have pipes it's So

position there. growing a in Link mentioned we example, For

contribute Now time be into, come that Bluestone. growing some, will going are to could but take a to little over

for of projections time and years, in XXXX isn't really are on both account. that growth taking be contracts those have the Nexus, sort and So the future of we XXXX But for sorts material. contracts enough to into just those

Angie Storozynski

you. Thank Okay.

Operator

We will Charles to Fishman go Morningstar. of next

Charles Fishman

Good morning. tax phase-outs hear towards I this, am any assuming that, reform? since the REF has with timing comments the changed didn't of not I

Peter Oleksiak

It has not.

Charles Fishman

you then is to getting project the end assuming. a the second And to by was that's agreement on announce? the new I way the to of what the is an two of forward did say expansion you question that goal or that of intend thirds year, Okay, your P&I,

Jerry Norcia

an to are these project to we are R&D close project Industrial other the region. looking energy agreement very looking that with are at currently, one and finalize finalize the with we projects Well agreements in -- --

Gerry Anderson

number with late a cogen projects discussions development. and of for guess an counterparty, say have We example, stage is the of just Industrial one -- very I we'd

that So mean, we is likelihood them the year that's of I were like -- forward went a way project ago the going [indiscernible]. I at think point, it's forward high. this

an we So have RNG new those projects. of of then got those got we finalized. think each behind more one have And about that of those, we

Charles Fishman

where facility co-generation in you big project to the similar for mix, a still coming is that and a these complex? there are Ford, build there So out projects Industrial are a

Gerry Anderson

correct. That's

Charles Fishman

you. all That's Okay. had. I Thank

Gerry Anderson

Thank you.

Operator

to or for have this At the like closing time speakers the back to would questions. for That any call we I is additional comments. our over all turn time,

Gerry Anderson

the very thanks great the I and about our I positive, as feel way look, for up wrapped said you was XXXX. we much XXXX us feel outset, this Hope at Well morning. joining that position at

up look to future discussions. us. we of in I for year, are forward year really this for lined think good Thanks and we joining describing you all that to another

Operator

That We your participation. does you thank for for conclude today. conference our

DTE Energy (DTE) 16 Feb 182017 Q4 Earnings call transcript