DTE - Earnings call transcript Q3 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the DTE Energy Q3 2019 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Barbara Tuckfield. Please go ahead, madam.

Barbara Tuckfield

Thank you and good morning, everyone.

forward-looking I Harbor to of statement including reference started, read everyone the get the Safe the on to we would remind like to presentation, Before statements. Page X

to presentation. Our presentation financial Please in to to refer the earnings, earnings is reconciliation GAAP earnings a measure. of operating the operating also non-GAAP which appendix references includes provided of today’s

Senior Jerry this President and Oleksiak, morning Peter CFO. are Norcia, Vice us and With and President CEO;

start the it turn now, to to And this over call Jerry, I’ll morning.

Jerry Norcia

Barb, good morning, everyone, you our on Thanks, today. outlook provide performance of thanks This of and growth. overview give long-term update, quarter for the recap early and and to XXXX, for us early and unit XXXX for a the third thoughts morning, joining I’m a business our going the

quarter, we’ll provide outlook. EEI, Then strategies. Peter I’ll At our of Then a financial take details XXXX and review things before your on a I’ll plans XXXX review we to who provide long-term guidance over questions. early up our and growth the and equity, and turn updates to will cash, the it wrap capital, finally, deeper of

on X. start let’s So Slide

great to progress number continue fronts. a make We key of on

our financial solidly quarter results Our third on plan. track are with

Given guidance. I’m quarters experienced announcing the strength XXXX in year, EPS we three of an our the have the first operating increase to

$X.XX quarter. will few in contingency to that $X.XX. point. on to through we represents business due provide This this will at to midpoint the us is EPS more fact original guidance impressive XXXX X%, of performance a XXXX XXXX continued to Peter our the which details fourth guidance increase carry will from our increasing that in all are of was the that minutes. We build segments This and strong at growth quite front have

midstream X.X% guidance to operating increase range Today, that this XXXX to outlook this with a pleased I’m also the is say XXXX and impact we original EPS we providing guidance the the announced $X.XX. for early includes acquisition $X.XX recent earlier over our a are of of month.

Board. using announce we base are X% to growth XXXX, also that for I’m X% pleased just to increase early rate. per annualized dividend through operating approved from outlook was Longer-term than by dividend up having a DTE a higher EPS the our new new as issued is This $X.XX, for X% XXXX XXX a Energy’s dividend dividend our continues cash The history, share $X.XX. years. consistent more

Board’s signals company’s and This plan. performance and The confidence to of the increase goals. the ability the increase company’s in achieve reflects approval strong performance our consistently strategic long-term

Turning quarter. over update, our bold by note XXXX goal and have zero of carbon this goal to achieve DTE to beyond to the reduce framework by emissions existing our Electric sets XX% XXXX. go all the accomplishments to commitment to new net businesses our emissions XXXX. by recently announced carbon This business XX%

the long-term medium- Electric’s DTE are around reductions. and emission with the of consensus importance achieving scientific aligned carbon plans

and business, to committed our fully the environment. This the our is We dramatically are emissions. for to right carbon thing do reduce customers,

we provide reliable. and We is as are Michigan and to fast our much as doing as that affordable clean with as can, we energy customers State of the can

XXX recently Motors, University megawatts DTE the General Michigan, program. Ford, progressing commercial voluntary is energy committed most Additionally, its Electric Detroit renewable by including Zoo. on Over been customers, of have and

monthly renewable have their customers Additionally, portion residential committed power. a to bills XX,XXX of nearly to

with and over on the date Center last on and carbon turbines Along plant, broke a of XXXX. of in-service reduction XX% the received plan. an is also The plant already the Water year ground with We Blue progressing gas site all is natural our spring necessary our little plan, complete Energy expected permits.

renewal main we are company, our XXX miles accelerated renewed a yearend. We’ve this by program. year our on Moving complete we number gas miles and to with will already to of significant continuing progress

invest improvements, to system of plans growth, also continuing our develop are the to and including system. in program a We integrity, reliability additional to transmission support renewal

This provide safe to customers. be fall. to our new renewal DTE with our later our program filings main Gas’ in projects along more showcases program, described service case and rate commitment detail reliable on These will this

will gas existing and in is Now, business, for construction. currently mile midstream This strong which platform I’ll rationale, recently under set portfolio to the for and our to gathering XXX opportunities assets enable At strategic assets It of pipeline complements value the storage growth value Haynesville shareholders. announced an new a financial to non-utilities. over come. Basin. delivering acquisition assets our gathering years turn and creation, pipeline our a strong system compelling we provides GSP of our These has that and include

meeting by maintaining in is the on years. We economics sound important well stack. accelerating and energy EPS sheet transaction play X-year while we change as our climate gas mitigate supply coming balance natural strong It growth credit believe will to underpinned North high and American that in resource an seek increasingly The is a all of plan, quality demand positioned the a gas accretive, is are role achievement profile. that

in XXXX And is of this of one increase outlook. the the drivers transaction our X.X%

to we details our mix. X-year into provide how a As At are to we call, on utility the maintaining fits XX% this mentioned will EEI, on plan. we the XX% committed

let and turn Now, me Industrial. Power over to

also pipeline. had its the into win-win is farms and P&I RNG for is and dairy first from then site a processing partner directly quarter. an September processes natural the milestones into RNG raw environment. gas. nearby both farms into major biogas business Pipeline-quality interstate Converting injection opening facility. our raw We some renewable interstate of The biogas injected In announced dairy combined this

stream displaces past sustainable, overall which long-term or few provides farms help that great Capturing the this fuel greenhouse create goals. will in a energy enable space the achieve over We’ve revenue to made gasoline the gas clean, and years, its reduces footprint, the with vehicle fossil-based another diesel-fuel. gas progress P&I

good feeling in making the business So our all about really lines. we’re progress I’m of

Now, I early plan. XXXX Slide will X, on moving discuss outlook to long-term our and

earlier to be midstream this with XXXX outlook term, $X.XX. outlook operating month; acquisition longer the, impact we for of a early higher our X.X% the EPS over are mentioned, guidance EPS for base, X% and we new are X% we our as of increase growth XXXX. includes announced increasing our the will base recent the $X.XX and early I providing from guidance, This is growing the Today, This original XXXX XXXX and operating rate. through the range

segment additional the with EEI. shareholders new we provides believe near- value. details and you at when see off by We incremental long-term base, We’ll growing provide

it With our turn you on that, going give to to outlook. to share more early details I’m Peter, and over financial XXXX our results

Peter Oleksiak

everyone. Thanks, Jerry, and morning, good

I the hoping pick always the finish last Verlander. place this an next into But to Yeah, like get first on Justin find into another Detroit is that get news I year. update good last Tigers. the give they the Tigers place did year. they Before And – in I’m financials, with last draft come a

So consistently pretty financials overall, feeling are to like I’m Tigers, for looking here And the future as my DTE. it. good strong and the about

X. by attention I segment of GAAP Total will million. find in to into your turn you can and $X.XX to Slide our to results, share financial on This reported $XXX appendix. review start the me a were third detailed EPS the including quarter. per translates breakdown quarter for earnings reconciliation let for earnings the And Now the

by due Let largely top was page costs Electric to higher our DTE XXXX were the implemented million rate than the for me the with at This weather my of growth XXXX. review $XXX rates start and the cooler in base $X utilities, impact new offset of May, million earnings in quarter.

quarter on in region. XXXX one was As the a reminder, hottest the third quarters our of record of

rate lower mind, third was is were implementation. small of a driven low third million a Gas The of by volumes $XX than earnings new quarter to expenses. primarily the was base change offset O&M year. growth But partially keep in result rate portion attributed operating This as quarter. and in typically last only this DTE rate higher earnings by

on GSP to third at and page the we Storage This at have Operating $XX for volumes higher year earnings and move normalized down for last related Gas plan. Pipeline higher experienced were GSP row. earnings AFUDC across our NEXUS business million the NEXUS quarter, portfolio. the our planned the volumes than on year segment earnings Let’s and to are

of acquisitions. million third is As the versus and continue the benefit third the the see continue of GSP expansions $X XXXX. this in ramp-up, is and and quarter, performing lower the remainder the quarter the to from result, Link recent volumes of that year the impact will through a quarter to plan to we on according

third the of were is last to quarter earnings next row, quarter business Earnings this you tax are that and $XX see Industrial XXXX in REF operating the occurred lower and due our equity million fourth than the On Power $XX million. transactions of mainly the year. decrease can segment,

previously, versus communicated entered year lowers earnings we in around accelerated year REF our for equity years units As we cash projects. XXXX. to partnerships This $XX X per our million flows this $XXX and growth support around into million

quarter earnings to third compared year are business to quarter higher quarter Trading Energy Our the this last $XX with had the a earnings. power due portfolio operating higher strong of Earnings million.

performance. reconciliations, having company and plan guidance. are showing contains our solid with earnings in economic year. is The appendix Our economic another trading trading energy and accounting line Year-to-date on standard both

compared Other to this And taxes. third Corporate was finally, $XX the primarily quarter was year last the million due and this to and timing of year unfavorable

per third quarter DTE in So earned $X.XX overall, the XXXX. share of

guidance. on we mentioned, earnings our move to XXXX Jerry Slide are Let’s X. increasing

DTE remember, we the year. this you and second this As Gas second quarter increased DTE the we so both Electric provided on at guidance call, increase is

DTE segments in We weather, Power really favorability the than and and of with is strong coming the segment, quarter. increased in, achieving Energy experiencing We’re favorable are Electric P&I we guidance how in in all XXXX due warmer confident Industrial, Electric the REF Trading in units is the normal strong about third so to good is strength came benefitting and range. optimization Energy earnings particular the Trading. in from feel

outlook. transition to Now I’ll XXXX to our discuss early

EPS are that per XXXX On the of The X.X% outlook share. slide, right growth providing EPS the provides of original of midpoint midpoint side $X.XX guidance. early outlook XXXX early this from we

segment economic we year-over-year to our be X Trading’s for converted target when and but equity. million, to drivers, that Other this to the our On early business typically X if slides to lower the with XXXX Corporate the and next Also, converts returns million this the a which outlook are $XX business. the I’ll they is equity to over range Energy grows on for range $XX in XXXX contribution steady I’ll going operating largest mention on state of slides, interest the discuss I move those earnings units,

left the page. on me now let’s let Slide X. move And start side – of to hand the So on I’ll

Our XXXX will generation Longer Electric early X.X% term, early The outlook distribution the Electric growth. provides segment outlook to midpoint original guidance. continue million. is growth segment This $XXX XXXX DTE X%. earnings and of for X% by over grow to includes investment

right midpoint original guidance. is the of $XXX side our early hand DTE of Gas $XXX to the midpoint original million, the the outlook earnings Moving X% million, guidance of page was segment early growth outlook XXXX of XXXX XXXX provides at the the

year-over-year we grow X% is line Longer segment X% expect for renewal our Gas of of end to our term, this the target with growth DTE to So increase rate. by the driven Gas accelerated and our long-term in main continuation higher the is at growth program.

XXXX. starting early review and Again, outlook for Now increases our was on $XXX of million the Slide the Pipeline segment for this left on Storage to our business, hand and move on our $XXX Gas XXXX non-utilities. to in guidance original page for side to million the XX

That segment be Haynesville would annual an midstream essentially is to XX%. our Now approximately so increase GSP the to increase Basin. mainly the And we of in increase said we’ve into XX%, this represents prolific accelerated acquisition growth previously, of the due assets XXXX. the earnings

Pipeline, XXXX. be of active Now market what been in at LEAP conditions acquiring new build seeing, in we’re course, additional the We’ve Link growth strong rate. we an and GSP and had and whole Blue allow to will All another growth an and will company Union the to these GSP XX% year XXXX, planning SGG, year higher objectives Generation to a at contribute assets. the rebase in expect platforms us XXXX these stake given in the carefully

page. of moving side right the Now into

value cash additional it We’ve few equity for REF Our flows for in higher XXXX units secured generate to years, years doing replace This new reducing segment needs. projects earnings the versus and work last income sunsets. drive This XXXX. that P&I as we’ve will over segment we is company. million and strong been the is from to earnings $XX REF continues X the originate when the increase fully next

sunsets will look these mix. portfolio, to As our when REF remain we’ll end segment XX% of within that out XXXX, to confident occur utility the REF backfill total you between be non-utilities well the and of to targeted and the we XX% X

As a earnings bringing you X build can see lift are XXXX. these here non-utilities in of

update few We will weeks. detailed EEI be providing in a a at

Slide to on Now XX balance cover sheet. the to

internal issue here million in – to of already of financing, $XXX $XXX equity a total expect $XXX acquisition mechanisms. been We XXXX, of including million equity in issued through million and has

using mechanism. the including XXXX, years of convertible to And internal will units XXXX issuing equity billion to equity be to in we we XXXX, billion million equity, $X.X will acquisition. For issuing be X of related $XXX the $X

for for find midstream and due capital are you cash and For updated XXXX, the in and the the guidance to appendix. in cash our investment – this new year can capital guidance increasing we the our assets,

rating one S&P. We notch very us. above X which risk strong important and profile, strong BBB excellent S&P a a business Fitch have to credit agencies, are all at with an and Moody’s is is

have agencies strong a with transaction maintain We and to midstream credit rating. expect recent reviewed all our

S&P and take business rating their revised outcome we Moody’s so strong has BaaX, there. and did will a which in current some rating. S&P. on profile, falls BBB indicated Moody’s action that our great with hold a line to a also has Fitch risk the excellent

both sheet We will the agencies. of cushion have balance plenty with ratings of

maintain credit rating. XXXX investment-grade section a on guidance early wraps XXXX to Our the strong That and to my continue is up outlook. goal earnings

Now to wrap back over it up. I’m going things to turn Jerry to

Jerry Norcia

for by of and over increase, pattern the Thanks, expect for up we guidance a up line is exceeding up to our Peter. guidance Slide shaping on evidenced XXXX our I’ll as and wrap open XX a strong questions. be then decade. continue so original year

year. can EPS from You acquisition. another by rate side’s for strong XXXX at EPS our The operating next with growth guidance. is continued tell X are X.X% of planning outlook provides at and XXXX our $X.XX a year utilities, of near-term our units, from midpoint early accretion from driven that growth we XXXX The our business the P&I our strong growth at recent performance midstream all business development healthy original GSP

what For more we anticipated. XXXX, GSP’s double had is growth than

of to continue as outlook X% to forward, X% growth that EPS XXXX growth. target Going we a will with the base

in dividend Our strategic the increase for plan. and XXXX our company’s performance long-term confidence X% demonstrates

necessary reliability Our utilities continue specifically to investments, customer focus on the and infrastructure for improve investments experience. to

us for Our position continue non-utilities long-term growth. to

our Finally, I the feel have we over delivered continue to decade. premium great to deliver the returns about past shareholder ability total

morning. the I’d up And line like Sergey, questions. joining us for you And, everyone with thank this for can open to that,

Operator

Mehta from Thank the go you, Our question sir. Instructions] comes Praful Please [Operator of line of ahead. first Citi.

Praful Mehta

Thanks so much. guys. Hi,

Jerry Norcia

Good morning.

Peter Oleksiak

morning. Good

Praful Mehta

morning. Good

in on XXXX I’m Slide you’re million assuming XXXX first, what equity of billion just mandatory XXXX, pointed out $X $X.X billion to maybe in So starting with approximately you $XXX XX, converts? to that the the including

Peter Oleksiak

the be It $X include approximately billion $X.X the the will They does to acquisition, $X billion mandatory billion converts. related but to converts. those do include

Praful Mehta

you Okay. additional guidance equity the Got you. XXXX. And includes XXXX in is provide, all $XXX million an That’s helpful. of that that

I just understand share So, you’re to that that XXXX wanted guide. for using count the

Jerry Norcia

issuing be issuing we we Yes, here that we And disclosed. we year in previously next will the will XXXX. $XXX in that million be XXXX, million have $XXX

Praful Mehta

I just to want I credit Got guess. you. And just finally, the on stay theme,

guess, to need from that Do to a in equity you issue kind concerns? a there additional clearly particular moves see some scenario here? expect satisfy the issue business? you rating to of equity of additional Do kind is forward the mentioned business agencies of any agency couple You expressed I how any the where need concern.

Jerry Norcia

targeting The and No, I business do particular, excellent BBB not. risk S&P in really profile, rating, strong our were we that.

and we that with profile. gives we are happy have rating lot that even outcome. – a cushion current So within actually, of very us It

with Moody’s line of they as recognize do not did issue S&P. Moody’s the in equity. converts A fall the part is with

have was of with lot as the took, rating, but reasons a we well. their that cushion action one new So of behind the they

So, we’re point. where feeling rating with really at at agencies the we’re good this

Praful Mehta

Thanks All much so guys. right, great.

Operator

Merrill ahead. comes go Our of next Julien Please America Dumoulin-Smith Lynch. question from Bank of

Julien Dumoulin-Smith

Hey, morning good team.

Jerry Norcia

Julien. Hey,

Peter Oleksiak

morning. Good

Julien Dumoulin-Smith

That’s just Howdy. to you think quick times week, transaction clarify got you a a Perhaps, the a that? how off back X-year run just XXXX, that of mean, can multiple, again, to first-off $X.XX last and think just XX business, help outlook you about rate if the – do I about I’ve follow. to as in follow-up to reconcile I back the just XXXX, the think do growth come that, here. about the come that of growth organic to how

Jerry Norcia

Well, X.X% mentioned, we then forward I X% reestablished transaction the that think, growth, as as the the XXXX the Julien, long-term. XXXX the to base first supports And thing for going XXXX. we’ve over is X% growth

providing So, and in term only GSP. we the not XXXX certainly long as lift, all uplift we view XXXX, over an plan that the filled have provided needs but growth the transaction well at a as

Peter Oleksiak

I in feeling well with in as particular, rate we’re growth this think going on add segment just really forward. to the good

talking will we achieving about tell in more can we’re EEI XXXX, I detail and that more than have disclosure there a going be you to out though of be that. at this. previous We

Julien Dumoulin-Smith

connections. disclosures weeks. else in GSP? But thinking know want what ahead about you just couple I the on out here planning getting Got of NEXUS we’re to talked been think perspective, as there I the it? What perhaps about are clarify, perhaps about GSP you a are And other it, capital, that okay. Link expansion But and a the just before, from laterals, thinking you investments have about generator coming up

Jerry Norcia

growth, then in growth if grow this as It well as bulk X% from and again the certainly over the our to XXXX growth there, in high X% you repeat X% business our of segment utilities, growth is well supports investment by the that going XXXX. rate that. detail P&I X strong GSP, Julien, investments X% and forget let’s as And to the we’ll over not from utilities, X.X% support that EEI. base other off I’ll provide the lot XXXX Well, transaction into growth at those high more our from the and a GSP, growth rates as new base, lock will

Peter Oleksiak

looking now, platforms great Yeah, we we will, acquisitions. segment have in new this not particular, in and any growth we’re so big some for

a we of So, lot opportunities. have

few there. You in question just your mentioned a

Link asset, of this now Union and So and a give NEXUS, Blue to here lot going new but between growth updates and LEAP we’ll more have we’re opportunities, EEI. at organic

Julien Dumoulin-Smith

a looks Got off it talk ex it. transaction, mean, XX% growth even a If for XXXX base clarify GSP. early that? implies you the quickly the the Can say, what’s driving you growth about I healthy mean like type I degree XXXX seems can it of like outlook, number? latest as it pretty I

Jerry Norcia

Well, significant two things, is providing year. accretion mentioned, transaction, the next as we

So, filling objective portion GSP market conditions. it GSP, very in also planning at we’re tell a of carefully growth balance you but for light is I platform the of of of the can the

Julien Dumoulin-Smith

specific and though, Nothing that’s for next year.

Jerry Norcia

next for That’s year.

Peter Oleksiak

That’s year, for correct. next

Jerry Norcia

So closely we’re very working producers. the all with

will very our It that. careful. be be reflect So plans – in

Julien Dumoulin-Smith

couple forward in and Well, you it. Got hear see Cheers. right. I a All guys to look of weeks. more

Operator

our from Michael take next ahead. now question Wolfe Sullivan of Research. Please will go We

Michael Sullivan

Hey, good morning.

Peter Oleksiak

Good morning.

Jerry Norcia

morning. Good

Michael Sullivan

Yeah.

question. first, that follow-up wanted on to last So just I

the Link were base any the just that as give Generation to upping – is that the doing? the the And did. then also what us of anticipating? sort business stacks you think base to is just the transaction there more business kind how you up what previously of, how can and is you stake And Pipe, ex growing in I midstream So detail

Jerry Norcia

at meet look and to drives growth all say growth Well, us X% our XX% year-over-year, if up GSP you year-over-year what that that to corporate and growth X.X% lift our our can at corporately, us a those growth our – XX% X% overall, with in along nicely really the and utility. segment, we investments long-term is allowed that of sets

the it So platform, repeat of very light of I’ll I conditions. we our carefully platforms, next typically are balance in but tell we describe is market planning what year the for each that don’t can you,

So that the growth XX% year-over-year. reflects X.X% supports our and

Michael Sullivan

that Okay, around when P&I. just you thanks. will those And acquired any color a was that much recently units then the switching give REF contribution of How you Can roll mentioned? and towards over XXXX to off?

Jerry Norcia

units it that existing new in at some and sunsetting. with some acquire here redeploy did those we sites, late did we the summer, Yeah, units where were

year-over-year. think So REF The is way about flat flat. is to is, REF

So $XX and chunk the units few that a around really over equity contribute the REF been helps additional reduce we’ve million over of it the X growth over is seeing of next in years. doing the will last years, years. couple the nice is next cash really about These origination we’re needs really which

Michael Sullivan

the those ones roll off, that Okay. acquired? And you when do new just

Jerry Norcia

The ones time. the as sunset as of end at They the all Yeah. all in XXXX. new is that existing well point

Michael Sullivan

Great.

Okay. much. you very Thank

Operator

question next from Weil. comes Our ahead. Andrew Scotia Weisel Please Howard of go

Andrew Weisel

Hey, everybody. morning, good

Peter Oleksiak

Good morning.

Jerry Norcia

Good morning, Andrew.

Andrew Weisel

dividend dividend one. today. about the a change How policy, with – talked of come the shift mix we earnings forward? next from the do the going year’s about that nice updates quick dividend policy there coming you credit Obviously, the XX% one increase is about all earlier? from forward, My given non-utilities, is Just to think question and any going

Jerry Norcia

in it grow continue but as will going and earnings able forward. how in earnings we’ll said provide have we to with But little more a typically, be to color certainly EEI dividends at on it maintain that with growth, be to will look that in detail line line Well, growth. our will

Peter Oleksiak

changed haven’t Andrew. With Yeah, earnings growth. really we that philosophy,

Andrew Weisel

Okay.

will forward policy then? continue going same the So

Peter Oleksiak

That’s Yes. correct.

Jerry Norcia

correct. That’s

Andrew Weisel

Okay, great. had. That’s you. I all Thank

Operator

Shahriar Pourreza go Partners. of comes Our Please next ahead. Guggenheim question from

Shahriar Pourreza

guys. Hey,

Jerry Norcia

Hey, good morning, Shahriar.

Peter Oleksiak

morning. Good

Shahriar Pourreza

the of light a you that mean I Is in And the asset apologize, conditions, comment just to I that? that. tied on second XX.X% around made by that The planning includes what – can jumped just a like you market is so you that specific in late. producer. elaborate

little what a So that? just I’m kind on can mean of curious bit by touch you you if

Jerry Norcia

operating in a environment. certainly, all our at we’re Well, low Shahriar. we’re platform, price And looking

business the conditions continue we forecasting this in carefully time. with are segment things XX% improve, conversations this at planning partners, But If of point this and conditions. we as in of earnings growth light in our our business change. we’re these discussions certainly, market market for line So could

help our we very comfortable In addition of which growth us portfolio, a to deliver feel balance X.X% the year-over-year. will

Shahriar Pourreza

tied financial quality credit the actual producers, or but So conditions to of which… pricing of really more this isn’t a environment,

Jerry Norcia

Both pricing production. and Yes, that’s correct.

Shahriar Pourreza

Okay. look as market And There these a you contracts, you’ll an of remain they a then NEXUS. remains to short-term Got contract Or kind still that within do of guys it. at just at that’s under of that contracts. it, Is is obviously, term? what the portion tenure opportunity is longer dictate these to conditions, actually – continue there that contracts? are

Jerry Norcia

Sure.

in to started the out than past. We terming have see seen we’ve in longer interest and

So signal slightly the longer-term. there desire market that we encouraging as contract is somewhat from an find that to

so direction. to our in portfolio contract we And continue move excess in that

So we are signal seeing positive there.

Shahriar Pourreza

predicated the as signals Got delay seeing longer-term the as one. of Is let existing projects? last you is are just And pipe that you it. that ask Got one far me on contracts, it. X

Jerry Norcia

Certainly, that an continues be could we the think to this point Appalachia production in time. course, impact. grow of And, having in at

So creating more of interest. we a factors was believe it’s those combination that

Shahriar Pourreza

Perfect. Thanks, guys. Congrats.

Operator

Thank you.

line ahead. the Macquarie. from comes of question Angie Please next of Storozynski Our go

Angie Storozynski

RIN go renewable will view prices And prices. if a I in those about guidance? mean, and just Most I question wondering, how my asked guys I’m questions type and your have of Good where investments. your morning. XXXX But gas have decline and of in depicted plans been it’s being a we’ve you answered. seen this natural sharp have

Peter Oleksiak

standard from California to the and the in that the for investments value you thank gasoline essentially displace RNG in So The fuel bulk comes most of low of in from asset our dairy that are question. exists markets. sector, from and returns carbon that diesel the CNG

attractive forecast RIN We a attractive these our decline forms But returns. have also seen very which very small recover recently. have but to it seen and these still remain for it a LCFS investments, and pricings, portion the they start in with assets we assets the of

outlook, believe do volume be it’s how line asked, for supply to They’ll And we’re will why in Our recovery the with the RINs. how starting you somewhat that about I in looking. the feel see we a the available. Feel issue EPA obligation. pricing that’s more of whatever that’s

Angie Storozynski

you. Great. Thank

Operator

of next Sophie KeyBanc. go question Our from Karp comes Please ahead.

Sophie Karp

Hi, good morning.

Jerry Norcia

Good morning, Sophie.

Sophie Karp

so [Technical about come on announced fair Difficulty] at earlier, growth real and other to think segment, when the the this from you of $X.XX organic wanted from just this that the midstream quick that back rest time? the deal? to comes call opportunities you talked accretion XXXX $X.XX Is the about question, the the to as

Jerry Norcia

that about Part Yeah. that a that’s good it. of thinking Yeah, way for XX%. Actually the includes of X.X% XX% sure.

Sophie Karp

$X.XX you mean?

Jerry Norcia

Yeah, Yeah. $X.XX.

Sophie Karp

Okay. to more And dig then, into Thank a little I you. wanted earnings. utility

with away impacts way there’s the roughly year? implementation a is long-term unusual flat Electric stripped understand rate completely, it, rate. you’re And So the is line we you have of would being I last projecting? there something that this within of grown that if that weather DTE And year-over-year in been describe growth, kind volatility course, rate your, this in weather the year of, and year. sort But the

Jerry Norcia

year last in of one we’ve Michigan in We hottest was here Yeah, – on had region. – that’s here record had the correct. the

segment. away, year weather we and this rate it So that the over normalize at had was that weather this much from million, that higher. you will take year, kind away growth, in you expect take that X% of with last year line $XX base to look we million, positive That X% of, when be this but was $XX the

Sophie Karp

All right. Thank you.

Operator

Sachs. David of from comes go Goldman question next ahead. Our Fishman Please

David Fishman

morning. good Hey,

Jerry Norcia

morning. Good

David Fishman

for that I where related is couple that on just effectively demand CapEx. Just I and expectation to your to there $XXX that when this acquisition a Haynesville and based know the going of happening? thinking back you be? and expansions on the growth. apologize call is part based wondering, something I if But about the Union about ago. growth its guarantees just But Or you LEAP was million, think the the million growth Blue of $XXX think on said you weeks will

Jerry Norcia

the of all with growth Actually, is contracted Indigo. fully

that months. contracted million $XXX billion we XX about other XX over the plus approximately million $XXX talked the next the fully to so $X And growth is about

David Fishman

Okay.

already So that’s place the and contracts for you achieved? be have something in will that

Jerry Norcia

Yes. That’s correct.

David Fishman

going the then back And equity Okay. to guidance.

million you that do discussed or a kind then is bit, says that Is then its little of year about million And getting if to $XXX but internally. this billion think million the you needed? do you $X.X every of to it equity internally you the to $XXX level I are around – end able can to $X $XXX that So billion, billion convert? midpoint $X higher and of of to

Jerry Norcia

David is few should which lot be up years, that. Yes, do years funding away for into going a next million able doing pension, few we a million, our to $XXX the that of were from to $XXX

David Fishman

And potentially then side looking contracts, they last likely alluding maybe there, NEXUS? on is like pipeline or which generation you double-digits? little you’re they are who would those would other years they’re and us or are to contract in it NEXUS, But the there I think, bit are mean, some also I you looking good. thinking parties, remind just kind term question, to a about my be to, the Okay. if out of connecting kind of what those off-taker And look then, were X or be into them, contract a are producer if the contracts, – it also could with

Jerry Norcia

length, a remind with gives The long-term the NEXUS its it very contracts. Well, do just provide approximately million with nicely return that the for years connect of XX long-term are pipe accretion. everyone, to day to own pipeline. we they to pipe XXX stands with have NEXUS. about charges. in nice miles very asset will million XXX a outlet But plan to on of proximal And own, to demand its us contracts, is several that contracted And and piece And so pipeline. it pipeline, nice just again, generation to is that repeat,

David Fishman

Okay, great. you. appreciate again. congrats Thank it I and

Operator

Our Fremont of next Paul go Mizuho. question ahead. from comes Please

Anthony Crowdell

guys. morning good Hey, Crowdell. It’s Anthony

Jerry Norcia

Anthony. Hey,

Peter Oleksiak

morning, Good Anthony.

Anthony Crowdell

Hi.

charges the difference if you if and help one then actual of just could just have second, You this you And – you call minimum competitiveness may two addressed with the weeks understand me also maybe is confident between commitment Haynesville? on makes ago. the charge. demand But what on volume the

Peter Oleksiak

of the proposed start through along let’s all And that with had opportunity we So X,XXX the after reserve whereby the sub are we review at consultants. is XX you, with did strong, of years X that this to the tell felt can available least that prices. transaction locations. Haynesville. ourselves drilling analysis, competitiveness there And drilling $X We at extremely their we of resource

So that’s one.

don’t great the the Number enjoy. the very with those And other to basis creates pipeline Gulf large markets. power a proximity being constructed, resource markets, interconnectivity emerging markets two, including the industrial, and LNG advantage basins that provides Coast is

three, of quality that and of package the we with resource resource, nice basis positioning of high a create the cash provides So resource, growing the markets, the with returns flows. interconnectivity advantage, felt really and which it the of strong the

this for are But essentially we’re that they a same just call and it including In a charge. in MVCs it the nature. building pipeline in that business charges demand minimum the of commitment. they monthly are And the thing. they terms demand equivalent charges, pipeline are in volume MVCs essentially asset, demand businesses, call they gathering our

Anthony Crowdell

question. Great, thanks. taking for Thanks my

Peter Oleksiak

Thank you.

Operator

Gregg Orrill UBS. ahead. go of question comes from Please Our next

Gregg Orrill

you. issuing thank acquisition converts you’ve the are and if related Apologize said new this when? you Yes, to much how but already, in

Peter Oleksiak

$X billion. about issuing here billion. but be the we’re finalize it approximately we’ll will exact going to amount And shortly, $X dollar be Yeah,

Gregg Orrill

And when would that be?

Peter Oleksiak

fourth December. early transaction quarter. to be We in close the here this It want will

to at and So the we’re looking market be then. between it and going working but now conditions, be will

Gregg Orrill

Peter. you, Thank

Peter Oleksiak

Yeah.

Operator

ahead. from of Our Fishman Research. go next Morningstar question comes Charles Please

Charles Fishman

one only have left. I Good morning.

hear P&I you update on segment, didn’t On talk industrial I any give any the projects. or

had that to something talk about can wait now? the was is you the or you you I Ford think for want EEI complex? Or last the with anything one

Jerry Norcia

with, we co-gens year. them were We signed with the Ontario we to – two yet One then at And in a commercial a public co-gen have arrangement haven’t about, customer Stelco, purchase their X were Facility. secured a facility. We co-gen this we Works we long-term also signed essentially Erie with purchase agreement a we have that Lake disclosed develop that facility.

their operating And industrial lastly, correctional to an with operate we County facility Wayne services assets. for signed agreement their

In we in this projects to two also closed that, RNG addition Wisconsin year.

and the this origination which pursuing that co-gens to target approximately two we three RNG $XX us year. projects, are gives be million So,

Charles Fishman

co-gen outlook somewhat these have, that price gas of projects, a little is for that people tailwind guess, a I So, bearish bit correct?

Jerry Norcia

at And factors. really continue rates and an continues produce creates be low to that typically are between host power fact Yeah, customers to that electric there have won widen gas electric two as to And gas steam are prices attractive opportunity have for well. electric a large the spread need. two levels. usually secondly, One that continue is and rise, to the so

Charles Fishman

has when where it’s a need thermal the you So opportunities? is see that customer

Jerry Norcia

Yes.

Charles Fishman

Got it.

Okay.

Jerry Norcia

a very make thermal high a Those co-gens electricity large is attractive. two There need. and need factors

Charles Fishman

you. Thank it. got Okay,

Operator

Thank you. to Norcia or like And any closing turn would the Jerry to now over remarks. back call for additional I

Jerry Norcia

our line. each for very to describe again another joining X-year many weeks, to in Well, you of more EEI up year. look up at detail business in will successful seeing is growth strategies XXXX I’ll our thanking we and the by forward where a be wrap We call. outlook everyone shaping for few

describe to story continue one in shareholder strong detail. premium be deliver also into that We’ll the returns. strategies our financing a will DTE more and dividend future will

So thanks for great and us have day. a joining again

Operator

That conference Thank you will may for Ladies and disconnect. you. Thank gentlemen, call. your today’s now conclude participation. you

DTE Energy (DTE) 28 Oct 192019 Q3 Earnings call transcript