DTE - Earnings call transcript Q3 2018

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Operator

Good day and welcome to the DTE Energy 2018 Third Quarter Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Barbara Tuckfield. Please go ahead.

Barbara Tuckfield

Thank you, Espie, and good morning, everyone. remind two read the of forward-looking to statement Safe reference like statements. page on the would everyone the to Harbor to I presentation, including

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

have members the to also over I'll of We morning. with our Gerry us Q&A turn management for start to now, this team the call session. And it

Gerard M. Anderson

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

EEI conference is at strategy around and dive it's we're our details plan. corner that right before want presentation, So I that into the that to the long-term growth long-term of out share going and the I to point

and we'll by your Norcia and non-utility our some then over business you recap see to year update can strategy Peter, I'd for term outlook utilities quarter, XXXX development finally provide hold color morning up detail time around outlook. additional ask longer of our given out that quarter, to lay then increased our update at that and spend So, who you performance financial we our do and for guidance taking in it Jerry third detail. a this for of will in this some segment then And that at provide discussing And that the a want early provide the your will What investment we the earnings for EEI until questions do I'll review next early our an I'll is hand guidance and year. questions. businesses. our third XXXX wrap and

slide to on X. moving So

now logged quarter mark. and three on still that having were XXXX the second quarters an description you told call, with the exceptional year of is On I that we

then, both on GSP and in Since the significantly On was we've quarter And increase we boost huge Trading on second business a Electric Company warmest Power summer the a the our call, turned share if not resulted and performance. the warmest our earnings for which $X.XX guidance a mid-year clearly call. and had in forecast record, Industrial one Energy has increased to our a strong business of that revenues.

guidance quarters. our guidance And which this, EPS midpoint so $X.XX, XXXX significant given increasing $X.XX second we're many as in is our to operating by increase

ground regulatory Center, quarter. roughly had notable Blue is we successes and third billion Water our power than reducing We combined-cycle for And April, in more which Back August, began approval also of the operational help a new construction. XX%. some in MPSC us The will goal we and Water plant. by Energy Blue received to gas in $X meet emissions carbon our natural broke

do all single be In startup in step we in efficient Michigan older the XXXXs. that fact, as represent early today and simultaneously reducing most power emissions and carbon plant plants coal-fired will the three what in our retire plant will the largest

September when constructive gas success we notable in a rate case. Another in occurred order our received

allow gas distribution that additional will our just of accelerate but that on some strengthening So, us and order, it importantly, Jerry replacement provide Norcia say I'll the will system. details to

main is we and working place think feel that feel and time the with replacement our I landed staff in spent about we Now a gas we good via appropriate. a the order plan MPSC both on lot of

at our in to non-utility on Moving NEXUS in early to we October, GSP received businesses, place approval FERC service.

another the made confident significant year in last is year, engine And a a this grow It now milestone and high-return ago will have in around And flowing play investments so Bluestone essentially for those we went example, the that of that creates and construction the the construction NEXUS And NEXUS have, very gas. began decade provide platform. role to as So, and of past that a platform low-cost, for is we growth us. October NEXUS platform the decade. and for successful we're Millennium the NEXUS GSP platforms platform on company over ahead. smoothly

P&I natural that this recently, the in XXXX gas replacing continues business earnings in space. Our XXXX. in to REF make renewable is Most the progress progress sunset and

project of we acquisition So another on this and completed year project. RNG an construction started additional the

now so, throughout a at level to well projects standards, to the with we State the gas quality as number those of U.S. California European natural standard. supply comply of total fuel federal RNG have the seven And markets including as renewable in of that a pipeline the

So One to plan of EEI of say P&I's this the I'll we're weeks. in and lot at reiterating area. long-term say we few prior a growth the we're conference. to going EPS rate operating will thing a details growth I in be review is will confirming But about just earnings X% our long-term potential overall to seeing that our X% growth at EEI

provide of next outlook in and So both XXXX. both of a as And will for slides, guidance then increase explanation early few I'll a few our mentioned, I provide over on those high-level details XXXX our additional minutes. the Peter for

been at an I slide to outset, said year. XXXX X, exceptional on turning has So the as

green the share, And the midpoint. at above You a quarter we in that's over this as call. $X.XX increase, second communicated prior guidance earlier, see an our bar page guidance $X.XX increase from $X.XX and of the increased I on the on can said

rate X% is five growth revised and guidance looking So of single the a and an in years you. the years year. X% forecast XXXX, from over EPS provide the at of decade And pattern past perspective, growth the continues exceeding $X.XX annual growth rate we over essentially historical XX.X% past it a compound our provides that our guidance growth or a two which versus meeting

strong year contributing overall. the items We have to quarter driving increase third are guidance that several this and

on weather discussed into Electric hottest. the as I of one And hot had plans, lean on favorable to business. Electric that, years XXXX. second normal those had then, an are planning since order be we We've said, weather, our we in to said, for on our investments do. experienced and XXXX in the we've but extremely to guidance weather. quarter in top We call, as developed So that the respond full-year we I came record, quarter. not hottest invest as the always weather Company able if the such plan of third for the both warm invest implemented And reflected We

additional volumes to at producer GSP across expected XXXX. really us would in favorability has XXXX Moving Bluestone and strong on that platforms And show drilling this gathering growth businesses, transport delivering drove our all year. had to in additionally, non-utility we up accelerated

prior transition into NEXUS has P&I additionally, sites. to continued We also AFUDC had REF group service. to see high our our returns its And volumes at at

at to that, is about fantastic So a is to close. wind and year year DTE shaping up we XXXX be something feel great to a of given all that is the begins

X, Moving to before Peter our want overview on slide details. provide through of an you takes XXXX the I to you early outlook

XXXX share. growth earnings X% the versus for X% the $X.XX five set $X.XX so over is range. and long-term guidance. our So, between XXXX XXXX annual to to original of provides compound a is is midpoint XXXX last which the growth X% the growth X.X% provide years, early It outlook The also

year. there for below the a straightforward of is outlook $X.XX that. And revised early for $X.XX guidance the are obviously, couple Now this reasons

executed working we've and for transaction year we the And by first, million it the number So times transactions we're expect years in for NPV $XXX a a soon calls next previous mentioned our be will equity is of for that accelerate tax on flows will three and cash clearly the REF company. positive business. about

sunset. Obviously, or XXXX would when our $X.XX And also million the path equity a in doing a the share transaction and over a without lower cash the about glide transaction, will process this, year Now be we're value the transaction guidance the over accretive. company. for by earnings But that tax will beginning of $XX REF earnings the share. toward $X.XX is have

it's for the right move make. us to So just

year in to XXXX year that business, I've repeat. Additionally, there. we're GSP not our in wish on platform said but every as every be way, into XXXX and exceptionally essentially And could we was that was an counting true coming strong that

envisions more plan volumes. and gathering transitioning our transport normal So us to

plan from one. But addition, year GSP earnings our about in down XXXX. a very to which have Electric healthy underlying will this earnings AFUDC we operating will NEXUS DTE here weather transitioning growth of talk and that in few platforms, all anticipating on We're after is Peter a step in return each normal minutes. In XXXX to of investments involves our warm and also that typically in Jerry

generation GSP and utilities at gas in growth program P&I continue both Gas. assets Electric and and from renewal Norcia healthy from the the substantially As discuss, distribution DTE is asset growth Peter and And discuss opportunities work XXXX, utilities, investments Jerry will NEXUS-related will going both DTE and including grow and as at growth on good queues. main very project to to electric

our XXXX growth it about path. X% I our to feel outlook good that squarely us overall, and X% So, keeps on long-term

over I'm financial turn we'll to do we we that Peter, expect, perhaps XXXX per And typically early the to to be our as contingency, have plans. able Oleksiak going provide a And Peter you'd recent update. you. events enable if in $X.XX that, to for over As upside contingency you share years. to preserve us with have to things built outlook into

Peter B. Oleksiak

and Gerry, X. Thanks, to everyone. start like on good Yeah. slide morning, I'd

our quarter. DTE. a let about driven positive, DTE me we weather in to up is update place the into a to just did EPS year just again I now standard more one brief moment. fail and (XX:XX:XX), world to earnings baseball hot Tigers. in of GAAP something end record. closer Before detailed appendix. Red that in DTE just here onto great earnings reconciliation this Michigan. can Dodgers Slide I'll looking But remind page, by mainly I XXXs is to quarter, season reported including operating as finishing and find quick at quarter, talk are but segment, on we make third operating Sox and the you at want by third you the $XXX playoff a winning below make the the million little and earnings Detroit get our my the We in the X did breakdown quarter-over-quarter of the had

page This of than $XX me the higher driven last top largely at XXXX year. earnings the hot walk of this in and Let appendix. DTE $XXX for allow This Electric A summer for system as quarter reinvestment more the in our implementation. reliability earnings be benefit to can which year's does variance start the with customers. as hot DTE will of third quarter summer rate year-over-year our well fourth detailed is million quarter utilities. this increase the million is Electric by found

Moving down well base the were This growth page, DTE earnings expenses in XXXX. rate compared driven change $XX to by timing million year. of primarily last earnings unfavorable as Gas operating was O&M as

has gas is an Our basis operating loss typically right third in Gas utilities on track. DTE quarter, the our year-to-date

$XX a lower expected corporate out we we XXXX. XXXX. page was the Moving as Earnings third second and was seeing higher Pipeline to in down to And $XX rate That tax mentioned million Storage to last our platforms. quarter are earnings increase in and business, were quarter due call, million all the the GSP growth favorability on is play than year. in operating Gas this This quarter. across

million. the On $XX next business earnings operating the for Industrial see row, can Power the were you and

year. were earnings last $XX than quarter's million This higher

increase this those – mainly and volumes to they of sites volumes. some higher of can moving at higher where to due sites larger Now units existing achieve REF the is

and expense. our Trading up $XX with quarter $XX compared to from unfavorable had driven strong earnings on Energy last business Corporate is operating $XX Our interest last This tax the Other by reform was of page, year. year, million. And million and finally million a higher

third in DTE XXXX, the share earned third $X.XX quarter of summary, per in up share per in from $X.XX of quarter So the year. last

second the move This in the Trading. slide remarks, our update as at favorability XXXX due his this are guidance latest XX. at Gerry well on on number Energy mentioned to upfront to we Company, primarily let's guidance our time earnings XXXX is year. revision our as strong upward Electric weather Now for increasing performance

Let DTE start the me Electric. at first

this for and a the second reliability we are quarter, guided weather quarter we'll and experience our with original both our on a of this guidance significant weather The earnings we be focus customer range, of guidance to the reinvesting segment raising favorable the upside, satisfaction. amount middle greater

GSP on ranges For segments. the the you $XX the $XX midpoint segment, DTE feel feel we of Gas that million. million with for we to comfortable range of current for midpoint second both We with XXXX. current call, comfortable guidance guidance guidance raised and remember quarter the may Transitioning P&I by non-utilities, by these

the million to $X.XX. As about guidance I it is page, range year increasing quarter, mentioned EPS They're good a million their have really to we earnings feel $XX Trading new of midpoint had $X.XX, $XX the $XX Overall, of to on in solid of operating reflect Energy to third million strong prior another achieving performance. with year. $X.XX range on-track our this to

Now I'll slide discuss segments our each transition and to XX, XXXX to early outlook on on our guidance. to revised comparison XXXX touch

gave we on mentioned, a outlook you provides from X.X% we growth EPS outlook early $X.XX original midpoint the EPS providing XXXX per Gerry call. year-end share. guidance are a As XXXX our of This

I'll before outlook range million to from on typically slide, the target over but On million this We of $XX $XX slides, Energy per the year million. Trading's $XX I for business next four move two going largest that be units, contribution mention to earnings economic business. of will I early

and is segment Corporate Our relatively Other year-over-year. flat

now, on So me let the slide me to start on first And the left-hand let of side XX. page. move

early XXXX $XXX midpoint segment million. Electric is outlook DTE Our

$XXX You XXXX X.X% for guidance. million $XXX that XXXX is Electric can growth was original midpoint of million. page over provides and our segment guidance revised outlook on guidance earnings the early current our The our original XXXX see midpoint

be normal and Now, we in outlook reinvestment by includes return significant to offset guidance, compared investment weather revised the for that and XXXX. fact, will early occurring growth, both the XXXX the distribution to normalized the generation

to the early million. page our XXXX right segment. the of on DTE outlook The midpoint at is Moving side $XXX Gas

the unchanged outlook XXXX growth million higher over is As early a which typical, from than $XXX provides growth of reminder, guidance XXXX is The midpoint guidance, is XX.X% original our earnings rate assets its to rates. growth guidance. of growth since it close helping NEXUS-related within growth lower their benefits half impact the by the to the of NEXUS-related from our customers The LDC. is overall and includes gas that

Now, to I'll the early for slide to XX non-utilities. review move outlook

again our with me Let and page Gas the left the on of business. Storage start side Pipeline

strength increases and GSP the this essentially to for an As up segment across every GSP for board. call, due XXXX the with on guidance be exceptional we on the That Original $XXX current this said quarter year represents to increase shaping was our guidance the second XX%. an million, is of million platform. $XXX of

$XXX from the but normal asset down for million, XX.X% guidance this base. revised It outlook our year's earnings at level early XXXX Our This transitions for operating principal pipe for million original accounts at GSP anticipates guidance. from impact service. is NEXUS from then up AFUDC outlook three transition be which this GSP to more XXXX $XX that from years. earnings Net volumes also in is approximately XXXX. will pretty across a positioned is to into grow two, like NEXUS typical that in earnings in

million XXXX compared guidance. Now, of $XXX early of XXXX midpoint to the we moving to P&I's right the show the side outlook page, current

a quarter of second XXXX million. raised P&I's to $XXX the call, guidance midpoint we On

due that was recall earnings higher that guidance strong should this primarily to You from the volumes. REF resulted increase

partnerships, outlook. that projects originated earnings communicated tax Power we of we to described the up adding As have lower per to around early cash wraps I year. around Gerry XXXX goal XXXX. growth the guidance XXXX are process as previously, of of our construction next on or will entering projects under which start the my $XXX and of earnings the company, also in will and from note million most flows section earnings accelerate year equity support the million That that $XX Industrial XXXX late

over Now to I'd turn a business update. to Norcia give Jerry to like

Jerry Norcia

the projects on excited progress about important very I'm across made business of Peter. have all we that our you, lines. Thank

is back we plant preserve that that a a three to is Blue we Energy to our natural our retirement XX of we essential plant just So announced well Expect add our our in both start Water power $X plants. the non-utility We and conversation the on are businesses. as This an X,XXX-megawatt momentum have move to XXXX. on lot in go positive ground on the beginning as into at utilities new as of slide an August reliability update of This with broke discuss with Company. our utilities we building Electric renewables billion. cost plant Center. toward service under gas to continue of at coal I'll

capacity As solar I We're in X,XXX March. investing second quarter $X.X to renewable Company billion on the renewable MPSC at double energy and the by call, our Electric plan wind over which XXXX, in mentioned our submitted megawatts this our to timeframe. planning involves

voluntary of we this for to the it are a supply plan on XXX megawatts XXX industrial discuss program. strong customers program wind emissions. carbon to institutional energy to the new of megawatts, part this taking looking Electric EEI, large program, our to renewable customers Company. opportunity that who for plan to expand interest we incremental by XXX will and We have renewable adding will long-term an voluntary so reduce from As At believe capacity XXX mean in we what megawatts the based are

DTE Gas, ROE received received on authorized constructive in We of Moving an we September. a order XX%. rate

as our for the or years pace received next accelerate Infrastructure approval within approximately Recovery renewal the of million over of five also We main IRM. allowing additional the $XXX This what investment we to call be Mechanism us. reduces the I'm timeframe the of program top safety years years. reliability to and complete to with about XX program the XX priorities for progress main very pleased continue replacement to from this

have the NEXUS company. important to businesses. gas. to It an our milestone is on NEXUS in on to This for non-utility our flowing update an service with feels and to update an move let's provide XX I'd start like Now, pipeline. great slide

and perseverance its this been entire to project We working time, midstream determination of organization. and speaks long startup the have for the on a

So, and a new to Pipe us safely and years on November. I will anchor a thank say moment XXX and employees in to million budget. to to important short-term segment want long-term platform come. bring early many this for to project this since of contractors our start who you investment flowing contract to volumes shipper online our help day been take around an online business will flowing tirelessly worked is all grow NEXUS has contracts of coming that

growth to detail So, more queue EEI, lot we respect GSP, at and I for future With a development can provide it at really good we'll how that feel development projects GSP. you tell about us at NEXUS but our positions you remains other strong.

I'd move to our Industrial business. on Now, to and Power like

Our P&I XXXX. both in next start the XXXX, this business over These space, projects. the gas and In in in XXXX we natural two on renewable additional for industrial continues under very we active come to and the late Two projects is under XXXX. projects. RNG are projects earnings two energy at to of contributing online you and see come perform additional give RNG project and closed to in we'll progress year construction development well. projects will started a we continue area It's Ford cogeneration to details online project to In expect development the EEI. construction

P&I and projects the on As EEI. queue case to update we for growth you our is that plans at long-term very GSP, what is means will strong our of

feel in come. XXXX about up we Now, grow in for are the questions. open in our to strong growth it I I'll and and year continue on we'll All-in-all, position to great another to XX it then wrap years profile deliver up slide

earnings original we from of to the increase We year-to-date as us electric growth well shared results, strong investment for quarter the year. early have year, as reliability allowing for second XXXX XXXX the outlook posted X.X% this our and guidance. time to provide third plans remainder significantly our guidance raise a

NEXUS utilities experience. continue necessary focus reliability to investments infrastructure Our improve is in and to now on service customers. and gas to customer flowing

drives X% queues this and to confident we deliver development non-utility that returns. Our And are track shareholder premium growth healthy. X% EPS given dividend the to are that associated I'm growth total on very

he the on line Espie at Finally, will giving turn us November that And questions. for thank now, like everyone EEI our plan. open a providing long-term like to joining presentation I'd will remind to With update growth Anderson Conference this be upcoming the an it to morning. to on over I'd everyone I'll be that, XX, Gerry for where

Operator

Pourreza Thank you. Guggenheim take first. of We'll Shar

Shahriar Pourreza

Hey, guys.

Gerard M. Anderson

Good morning, Shar.

Peter B. Oleksiak

Good morning, Shar.

Jerry Norcia

morning. Good

Shahriar Pourreza

REF incremental you've tempered – equity transactions. prior needs. real your you've announced Just In tax quick on equity the obviously deals,

needs near-term? And $XXX the you're least your so, million sort for further your curious incremental this getting. of at on that temper Does viewpoints equity on in

Jerry Norcia

Shar have that that our And would... long plan. we range we in was in contemplated guidance our

Shahriar Pourreza

Okay.

Jerry Norcia

and flow monetizing ...be in. cash this getting

Shahriar Pourreza

is Can And of the sort appreciate it. Got real real that then the on guys big how update quick project the be expansion, get and given it's ahead? of fact like going tracking update you Link, it's the to we a just sort missing is us missing NEXUS. gave slides? from should Okay. top on there's obviously And on on just view that slides going, a obviously level your assume it you this from

Gerard M. Anderson

Link this Shar, is very performing well. is Gerry.

of all growing well. category comments, my fall in that mentioned into I and better-than-expected would Link our platforms as As are

You progressing asked well. about those expansions, are

asset really good about point we're at this time. in So, that

Shahriar Pourreza

we accretion you should there? your within some or XXXX Are assume there's targets for upside $X.XX

Gerard M. Anderson

than we're in than pro so that $X.XX $X.XX. prior performing – think I doing our and higher mentioned forma we're as internally meeting was calls, I internal the our performance, we're of some better our

Shahriar Pourreza

it. some provide then And on expect on-site you EEI? do just updates deal Okay, generation, the incremental there got at lastly to Ford to

Gerard M. Anderson

update projects queue well cogeneration an forecasts and as the the at for on XXXX. feels, both as really Yes. Yeah, EEI and P&I you give how developments earnings we'll RNG and that overall project the

be to when ago, you that down And had you EEI. we for out couple a obsolete, told $XX million of forecast we're together it's that's a pin So, at we'll higher. number years going we

Shahriar Pourreza

earnings. Thanks are Great. the guys Congrats. guys. backfilling It's good to see REF you

Gerard M. Anderson

you. Thank

Peter B. Oleksiak

Thanks Shar.

Operator

guys. Weinstein Credit Good our Weinstein Suisse. Michael take we'll next - question Credit Michael from morning, And Hi. Suisse Securities with LLC (USA)

Gerard M. Anderson

Michael. Hi,

Peter B. Oleksiak

Good morning.

Gerard M. Anderson

It's by are XXXX view with track record see end projects, a Hey, this Does Securities Tigers, morning. to REF three the it's on the - long put the Michael announced for Weinstein still $XX there projects Good you in to projects? closed taking million good. $XX million four the of REF second the guess LLC under anyway. construction. I year I year earnings, two you this (USA) winning of Glad still on another – guess Suisse the Detroit the Credit

Gerard M. Anderson

Those are REF, said I – Suisse you Weinstein meant Yeah. projects. mean you but Michael LLC RNG, mean (USA) Securities RNG RNG. I Credit -

Gerard M. Anderson

It Yes. least to that. on at puts us track

hit think $XX years So that we - two that. this (USA) number remaining we Securities would million the what in, well number, And but progress point, we go or have I still is there fully communicated obsolete that by are is at two-thirds on LLC that to NEXUS, Michael of sort Suisse Weinstein on third? any is Credit Got you. contracted the expect

Jerry Norcia

day long-term million short-term contracts flowing rolling XXX a around got approximately flow X. and under million a November our and we've day about today Well, XXX to contracts start in

on progress at filling Suisse Weinstein Credit LLC (USA) how the utilities? distribution the pretty how good - regulatory and Michael up. we're that going rate is pipe you. feeling plans, also is enhancement guess, Securities where And next filings, the the about case Got So, I next,

Jerry Norcia

Electric XX-year an completed of our program got a we program. renewal gas and the the case acceleration program we – At gas main Company from an to XX-year

very was positive. that So,

plant and investments new modernization nuclear business. Infrastructure covers also an our our a Renewal of distribution case, in the Electric to we for reliability combined-cycle build of CapEx, filed and about some billion year as well. $X covers It that's facilities. and On Mechanism our in investments It connected the

something frequency. two lots So, Staff hope we is Commission rate that conversation help we filed reduce and case things. the One had we of to about will do with that us

growth Company. allow will us customers which to for IRM lot investment will also we we a three-year around certainty our Electric filed the So, create usually it's Electric be, of Weinstein what a when efficiencies the what the drive it if XX.X% in at assume Suisse gain and plans. our plans that that outlook, a - Credit you for of lot case And because can the costs assuming for terms are What X.X% out Michael XXXX Securities of outcomes? our LLC Gas, rate of (USA) investment does early in

Gerard M. Anderson

EEI - an think, Suisse imply. We'll Michael investment Securities business and the that LLC assumptions, terms in at Credit our in on update would what of (USA) of give I you level Weinstein terms Got that you. in

you much. very Thank Okay.

Gerard M. Anderson

bet. You

Operator

And Julien of our Bank question America. next we'll take from with Dumoulin-Smith

Julien Dumoulin-Smith

Good everyone. Hey. morning,

Gerard M. Anderson

morning. Good

Jerry Norcia

Morning.

Peter B. Oleksiak

Good morning, Julien.

Julien Dumoulin-Smith

Excellent.

couple of details. to So, wanted a on follow up

for just the up volumetric to early assumed course guide wanted terms clarify, year? through what's just NEXUS, of fill it in XXXX First, on the as goes of the

Jerry Norcia

That's in now, what the But with haven't fill and forecast. contracts exact pipe to really expect we going Right long-term to our short-term we is be. disclosed essentially the volume contracts. what's our

Julien Dumoulin-Smith

Okay. All little are right. ROE to you of differently, Fair enough. Or kind bit what maybe ask a assuming?

Gerard M. Anderson

comes a from you got those with ROEs, go throughout Yeah. is And short-term in our returns, plan, reasons. asset I Julien, actually. where now ultimate give is year. we volumes long-term obvious shippers pipe's behaved, has we we course, portfolios the and all transition are some behaving, begin is like EEI. in at And behaved. like Millennium the this for add-on counterparties that has we we've said Link talk we'll don't expansions to too. is we behave evolve and asset before investments think The real longer any creates and on encouraging and the flowing juice color that to for what platform contracts. year expect by and We're then to which that term opportunities the interacting with on into But seeing of like is And will next year into next of get Volumes other right healthy the Bluestone these those continue transactions.

Jerry Norcia

north we Millennium very our drive Bluestone as saw that mean Link Millennium the with as much same these and capital. our of with happen thing, the NEXUS assets, well like that of see to and say Julien, capital. other that develop I of platforms markets investments a cost connecting The markets of expand we of we Vector, we just I our asset. we expect pipes, those well cost and would lot north and our is our asset, new enter Vector And as

Julien Dumoulin-Smith

Got at you year. earlier complementary it thinking know it. you this about been adding that the how since mean, bring in And are I point? brought up assets I up, then, had

Jerry Norcia

we're that. on working Well,

hear connecting our I are more But done path. looking about get that the if may we think of EEI. and when deliveries to customers neighboring laterals, along you expanding got we to some this at assets, we

as of we you. good things on they lots cooking NEXUS. And update So, can evolve,

Julien Dumoulin-Smith

about amount can this exist? opportunity pace, tax a into a in share latest through tapped I on tad the the separately, timeframe elaborate what's the of market about XXX out on And preempting window the run mean, it. again, cadence off? Have PTCs rolling or largely this surprising front, coming your might a But existing it's to seems point of there little give at take. the that the voluntary then, within renewables, conversations? PTC while seen it an what bit least you there grab is credits that you service, mean, separately, you the some mind still demand at out and the of Got that as then, be bit. talk like And things on I having presumably, megawatts or

Gerard M. Anderson

feels the late-stage which I and at would project initially, tax have But why use expect, a demand that and for is have beyond So, the others of megawatts. that there preserved additional you XXX discussions, ability talked both we we we're going think about sites. terms are say, very credits – in as And the lot to credits, in good. tax XXX megawatts that demand of we is I'd

what are coming forward. are those So,

equipment the transfer and business out past sites then tax pin down the to to with and So, and go real we've them we sites, done developers is through with perhaps do the will build, future And work projects in these those credit bring viability. commitments, to develop in own, whose fruition.

doing. we've we're in what industrials that's the So, emission interest institutionals encouraged been And, level of by and yeah, from reduction. carbon

XXX our And more we'll XXX into see. try so, – megawatts, we'll may the down that, beyond to we're and the going to megawatts, knock be way there work

Julien Dumoulin-Smith

side. trading Last one, detail on the

Just is levels it's looking can – from obviously, a at you expected XXXX initially. Just there you're you that locked-in up level as XXXX? the clarify,

Gerard M. Anderson

well, as about can I I a years. very one think. consistent – would say But talk recent about talk been EEI performer we'll is just it's Well, in at we thing Trading

guidance So, reality. in what doing with putting it essentially this line we're with is

the that's in see so, year. guidance And next what for you

Julien Dumoulin-Smith

you very Got right. Thank it. much. All

Gerard M. Anderson

Thank you.

Operator

take we'll next ISI. Gordon Evercore with from our question And Greg

Gerard M. Anderson

Greg. Hey,

Greg Gordon

very the record are of the GS&P. that, In remarkable next Could assumed earnings an year been Thanks. please contribution more impressive. do system? questions. building you track elaborate Good on you what has here, on decline guys your year morning. on you in Couple have this situation Really volume

other would appreciated. Anything Given, your I online flows the basis. on I with are an pipes – does understand of moving volumes, on can system you that now your much do be coming or Atlantic have perhaps the be that interim us Sunrise to are now normalization that off to producers needed the system presumed, guess, help do they to

Jerry Norcia

above Gathering expected. performed expected Sure. We we saw That Millennium was market Chicago increased assets is than huge Dawn value throughput well. and better target performed on our then a which contributor and include volumes. pipe. our Bluestone Susquehanna our performed across a and all Vector to of platforms. And assets our Link than discretionary our terms Storage as better Even basis like would in

So, reasons. Greg, it was platforms and across for various it was all the

on them do you that use but of touched to people markets conditions think places our looking for also throughput. market platforms of drove saw send I different for gas, evolve need the in their some incremental so, other to one we

consider thought it be a we case. we So, to than higher expected what would

Gerard M. Anderson

too... here. all there It's in cylinders was weather I mean,

Jerry Norcia

Right. Yeah.

Gerard M. Anderson

weather to since lot we normal summer projected than weather. certainly of we that have strong, meet a with projected demand ...either stronger flow was

I more we aggressive would told than drilling that producer that we was be. had it thought think you we

that of but we not on asset-by-asset more platforms. pinpointing we it's like – expected. on year. that. we wouldn't It around aggressive was was plans come, conditions And it drilling or don't build outperformance other may It prudent to coming pipes say it's repeated think weather, we're sort projecting repeated volume storage just next outperformance, drilling, anything so, various that aggressive warm I to than aren't better these

Greg Gordon

across So, built Gerry, the you the of here to would contingency as it a idea contingency there's fair business that talk be in as say, about well?

Gerard M. Anderson

future told hard philosophy; anything did it's deliver you have the if every just wrong. with Well, the go year overall don't try contingency. you. some we've come and have the that things a in to to in I for uncertainty has business company into We room

accrue time in conditions that but do. I hope tell. typical so will you. that emerge we And will been So, years, That's yes, to contingency recent

Greg Gordon

last question. Thanks. One

You mentioned – system. and I'm course due about in sure you'll give us an update opportunities the expansion on

additional the explicitly value might is and but processing, the consider You proposition? mention didn't part at that you what of for right assume should gathering potential that I

Gerard M. Anderson

we right look those. we'll certainly get the If at deal,

itself. looking the extensions yeah, smaller across gathering lateral, platforms investments board, potentially GSP say and are mainline, I'd gathering we're So, the at to the out that in

Greg Gordon

And then processing assets or no?

Gerard M. Anderson

processing if know be. You need

ours, we out. Michigan It if very producers, of familiar a So, We've by focus with the in for certainly we'd them decades. hasn't are but it one many needed of been done take those.

Greg Gordon

Okay. Thanks.

to forward Looking at seeing you EEI.

Gerard M. Anderson

Thanks.

as You well.

Operator

next Citigroup. from with our Praful question take we'll Mehta And

Praful Mehta

Hi, guys. good on a Congrats quarter.

Gerard M. Anderson

it. Appreciate Thank you.

Peter B. Oleksiak

morning. Good

Praful Mehta

Good morning.

tax start maybe the So, piece. equity with

didn't the profile? Just deal with So, you generally of the are attribute? tax this what that utilize these investors flows kind this product? pulled do for If that understand cash tax of tax I early what guess wanted buying kind who're your could returns deal, to equity how flow is seeing you forward equity have cash how are you early and you equity related tax

Peter B. Oleksiak

over cash that away kept a I'd The seen – from would XXXXs. we are these, we Yeah. Peter. right decade is on This if credits have account late flows say the probably XXXXs, about probably have would in the

us for it So, sense cash made to that pull really forward.

Gerard M. Anderson

we've know, you projects a a as around number – got of been We've these while. for

monetize credits to out, quite sense goes and being the from as into ownership, pull is forward. why get which for current it the use deeper So, to them pushed us makes we of now our

Praful Mehta

complete like No Yeah. sounds it that makes sense.

terms equity that in needs right? it your So, your not tax deal, is reduce the did in you'd of equity contemplated already that plan, because

Peter B. Oleksiak

correct. is That

Gerard M. Anderson

We knew...

Praful Mehta

you. got I

Gerard M. Anderson

We tax do and plan do to anticipated these equity the we would that transaction.

working across we we that think been were them. that on have I So, this signaling year

very now we're so, getting close. And

Praful Mehta

that you plate GSP the as that terms the at potential know on then, acquisitions build-out of have that you And the something acquisitions, well? on now side. on or looking in still enough. I with Fair would had mentioned Is do were earlier look have opportunity platform M&A your that the at you or you there you're as radar NEXUS is the that

Gerard M. Anderson

we in looking a M&A And assets is at we're that on with Yeah. the great couple have fact, plate. of interest now. right

as had just enough you We that we'll the sizable soon a as I well that call, strong got the diligence. we on quite might on deep there second couple diligence provide So, say we can a will on, was. as There updates the entering were of close. what think and into with something have us confident that we transaction I EEI was if found quarter kind geology you in one, at sensed to of on we're be able. can those we that the due wasn't we But along that deep for underlying due geology. been

look not look, was could and I back discipline proud price. They we really our this constructed, lower so, at our great, ought at team. other price came a And this to assets, doesn't investment fit get at and of is and it but said, if it deal we

that there just the ones. but visible that of probably at assets And interesting on out a public. are to way, so, we're couple there we more and I'll it one, are from put than did move looking

Praful Mehta

glad That's the to very color Good interesting. of discipline. Thanks hear and so guys. much,

Gerard M. Anderson

you. Thank

Operator

Paul our KeyBanc. with from Ridzon take we'll next And question

Paul T. Ridzon

Good morning, guys.

Gerard M. Anderson

Paul. morning Good

Peter B. Oleksiak

Paul. morning, Good

Paul T. Ridzon

so it least of in the the on can at Congratulations many park. out quarter. hit Peter, Detroit

Peter B. Oleksiak

true. that's Yeah. Yeah,

Paul T. Ridzon

your you is refresh our at capacity Can one-third filling the just forecast for NEXUS? What memories.

Jerry Norcia

we're with contracts. well way on our short-term now, Right

I million around to long-term start as mentioned, contracts will flow of flowing day contracts, Xst short-term which speak. already about got total XXX day million we've about the And are As on pipe, and November. we our the a and a XXX in

Paul T. Ridzon

of see do between firm? of term, kind split longer and kind XXX% excess you But capacity the what

Jerry Norcia

Well, the small our to they'll a very contracts (XX:XX). of exception total be XX all capacity amount with firm of

it'll into short term think two time that and that And in to long term contracts things. One will contracts nature of whether contracts pipe. do the So, start is move long-term expand they're be on. in some what we'll we'll or those deliver is over I short-term nature firm also evolve

Gerard M. Anderson

no new that – prior flows really this in measure expect there's really So, fill up calls and news short-term on pipe that. significant on we've we're seeing the said we with and to

work And feed on fact, expect to over is In as assets out increases, long-term in said likely team next as that short together. volumes to as team service shippers. the to the pipe increase transitioning that call. put those expected longer-term the contracts, and play the those the And short-term of the are process will mid-year to volumes year, then will we our a we Enbridge our upstream deliver lot of

Paul T. Ridzon

mostly are should flows pull, these there seasonality? pushed market be Because little than rather

Gerard M. Anderson

it attractive says know Michigan way. don't producing from I and that the market volumes now a spread Well, to I'd Actually, just healthy the if characterize an regions, there's right are that flowing. that very it's which given

Paul T. Ridzon

is to And a of of X%? then a what lot You base numbers. out the clarification, X% threw the just

Gerard M. Anderson

So, can for off early outlook of XXXX. you our it take

Paul T. Ridzon

much. very you Thank

Gerard M. Anderson

You're welcome.

Operator

question next from Jonathan our we'll And Arnold take with Deutsche Bank.

Jonathan Philip Arnold

Hi. morning, Good guys.

Gerard M. Anderson

Morning.

Jerry Norcia

Morning.

Peter B. Oleksiak

Morning Jonathan.

Jonathan Philip Arnold

we back if your longer But term about? you ones contracts, not are I coming know what are term my when just I'm say just short-term Paul wrong. main NEXUS, years on talking asked question. Because XX

or term, kind term you short very is that middle? of is So, say when curious, in short something the just that

Jerry Norcia

– term. short-term they'll are contracts, think short term rage from I to short Jonathan, ranged our very medium

some be So, be – them of of could them months, some be years. there'll could

consider help it'll multi-year So, move that's in that's contracts to those – we forward. pipe be I near combination think of we we'll a term the fill transition will term, the and as what what short then

Jonathan Philip Arnold

Okay.

Gerard M. Anderson

that basin And the you both XXXX the to We to go up. is it's – we both is projected when producers XXXX, in approach line timeframe. previously those short capacity talked want and think I the basin.

so... some Xs, to that's top on XX, in, could push some market you of you year long other said those longer longer Xs, the so, shorter get excuse about XX that's may Jerry in bring bring think as some that that. your you discussions then than be some But XXXX might shippers mean, as have contracts. And transacting an could your of the into active term be generally, some And shippers shippers. and you out why going anchor to I we it's as term anchored

Jonathan Philip Arnold

Okay.

Gerard M. Anderson

of year. ...but immediately the sort And it into will transitioned we've pipe active come be in I contracts to next seen I the just think flows term that year being described. the multi-year an

Jonathan Philip Arnold

XXXX quarter mean last and shorter you the want you would XXXX. early thought to didn't XX-year wrong, pipe I of in you if adamant or were that that long-term than with the rest late you go I'm the not contract out pretty that term close

seem be just I in here. trying So, to you what what do changing shifted that saying the environment to understand you're

Gerard M. Anderson

that typical. underlying that. is actually, you with on in XX-year come said shippers your do drive we typical the or No, I balance. you anchor but for term, look think not What's contracts to That's don't XX we

tightens who Now, may get shippers. we coming it but long people if the the substantially are XX for be basin to in after anchor pretty XX would

to the hand, the – expect be to very short-term don't it do On in we we expect market. other

built That's We portfolio. expect typical a out as Xs, Xs, for it Xs, sorts perhaps to X be in that we things. those of XXs, its pipe

Jonathan Philip Arnold

Link. clarify the And on just talking scale think, I I I can similar, on then opportunities When about side And M&A were talked you you Okay. a to lastly didn't heard that last but other pass, of those also or are in quarter, on looking GSP? in now at things. Are that scale they scale? type you of different say a they come you're kind to

Gerard M. Anderson

looking Yeah. we one we're The but on analogous to Link, to at is Link. very was is now, smaller the two analogous one passed and one

Jonathan Philip Arnold

Okay. very much. Thank you

Gerard M. Anderson

you. Thank

Operator

from And we'll guys. Andrew Andrew Scotia Capital take Thanks. Weisel Good question (USA), next Weil. Howard morning, our with Scotia - Inc. Weisel

Peter B. Oleksiak

look morning Scotia million. higher question million at Quick a of weather, than plus guidance. original $XXX (USA), that Good on Andrew. Weisel Inc. I suggest much would the Andrew Electric $XXX number If the the Capital guidance -

delta else accelerating a obviously O&Ms seems seeing to of I'm anything there, you call $XX big But as for often. which about You're million reinvestments? out

Peter B. Oleksiak

the had our to operations. due Scotia we customers improve new Weisel was from half I invest About well were in And as say in to that $XX comes installed. half - Capital other pre-tax would of hot Andrew that storm continue system what with that (USA), systems and sometimes million we incremental to our as weather, we service investment expense pull-forwards Inc.

Thanks. Okay.

Gerard M. Anderson

a XXX, when rise then And, fall away bring So, have year we and Andrew called some year. seen expected and some pull platform, this - of as Weisel those. storms, typical, Customer Scotia and the big (USA), expenses we're new you that in first your Capital in customer forwards, Inc. we've

you the Okay. this the you would how five-year discussion start of so distribution that at on side, Then, plan also far filed describe Electric the the around year?

Gerard M. Anderson

with in particular, people for detail our those. levels investment We the met but were up in and working extensively there rationale the Commission future both the Staff Commissioners, about future and plans

that that IRM basis this it's so, way. was the really And on it three-year described filing made. I

lot be would think relook on like and Commission a capital there that years. every of is case that the year, that. are every is entirely system or And off to looked annual are And at the two I reinvestment cycle. a an the, things reason more forces in because high, a everything that rate of basis. driven for it expenditures It's three in sensibly there's lot waste but the at

your we've that And a of to I goal to process staff done think a sense case hard them. you system and get And unnecessary, it rate are investments position frequency. is us filing the or best to power makes you're a in in So, know to there's those known you're if so, that necessary make front investing items? distribution in is makes plant, plant the you're with that sense with invest mutual them going to rate to lot going to cases that this really in or drive rationalize work work nuclear why of and your our

growth comparable EPS the benefits XXXX to be non-utility adjusted therefore with so, Weisel XXXX. guidance. XXXX be reform that (USA), transaction growth Scotia hopeful using the say we're a Capital you you XXXX we'll that reform businesses then, land the tax assume meets to Very spot - Fair Would be that for XXXX it the for underlying in the the tax needs. quantified awash in lastly, earlier the in good. And showed tax would Inc. Andrew that impact? the equity both maybe and would year, from to fair original And benefits year-over-year REF

Peter B. Oleksiak

more. Yeah. the (XX:XX:XX) call, a reform question effect guidance original our year-end little maybe tax But that. put bit at was Andrew, XXXX understand the on we your in which

baked original was that So, guidance. that into

Inc. XXXX - comparable to both your (USA), comparable Weisel to Scotia if of So, original that question. not I'm the terms it the was guidance tax nature early in Andrew Thank reflecting Capital you. is of Yes, outlook is it was. sure reform. But the

Operator

final Orrill And we'll question UBS. Gregg our from take with

Gregg Orrill

Electric, and else technology details plant but you there? if efficiency asked building X,XXX is at maybe the important you. around you Mostly the that could comment and thank Yeah, you're on megawatts DTE and just that think answered, anything

Jerry Norcia

in natural so great That's going X,XXX plant units located megawatts. be We're receiving are, existing in St. community. Clair will our gas-fired River about support be to Belle a combined-cycle, coal that from the It location. where it's local

so in of around that, GE it's to on is addition the In at terms efficiencies, GE turbine. it X,XXX latest heat rate the turbines,

the So those details. level high are

Gregg Orrill

Okay. Thank you.

Gerard M. Anderson

that Thank last you. our With question. is I'm it understanding

performance year, just that. also really the I'll at this feel utilities EEI forward increases that that on about being good appreciate year to updates at providing recent you on undergo reiterate, five deliver the we're position investments our I our that able indicate our our year past we to the in will we've really plan. everybody the and and been to businesses two really call. non-utility continue great And over in guidance a So, the look I years. years, you We're think XX plan on and

for call. see at thanks we Francisco the So, joining San you all and will

Operator

thank you your And that for concludes participation. today's presentation. We

disconnect. now may You

Barbara Tuckfield	DTE Energy Co.
Gerard M. Anderson	DTE Energy Co.
Peter B. Oleksiak	DTE Energy Co.
Jerry Norcia	DTE Energy Co.
Shahriar Pourreza	Guggenheim Securities LLC
Michael Weinstein	Credit Suisse Securities (NYSE:USA) LLC
Julien Dumoulin-Smith	Bank of America Merrill Lynch
Greg Gordon	Evercore ISI
Praful Mehta	Citigroup Global Markets, Inc.
Paul T. Ridzon	KeyBanc Capital Markets, Inc.
Jonathan Philip Arnold	Deutsche Bank Securities, Inc.
Andrew Weisel	Scotia Capital (USA), Inc.
Gregg Orrill	UBS Securities LLC

DTE Energy (DTE) 24 Oct 182018 Q3 Earnings call transcript