DTE - Earnings call transcript Q1 2021

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Operator

Good day and thank you for standing by. Welcome to the DTE Energy First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. now today, hand Barbara would to conference I speaker your Tuckfield. Instructions] like the to over [Operator Thank you. Please go ahead.

Barbara Tuckfield

Thank you, and good morning, everyone.

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

and Our includes the morning to earnings operating operating provided in references turn President Senior start Slater, of to earnings, non-GAAP David DTM; CFO. this Ruud, is CEO; and this President a GAAP to Dave presentation measure. reconciliation CEO-Elect Please Vice Jerry of With And and also Appendix. are Norcia, us morning. Jerry financial call the now, refer it and to President I will which to over the earnings

Jerry Norcia

update and will hope take today. everyone, David give spin wrap on safe. XXXX. joining Thanks, Slater business Ruud by healthy our start and up transaction. to good quarter thanks everyone Midstream some provide morning, staying details DTE’s Barb, I questions. provide I we will discussing And financial This before the review on off things Dave morning, and us of the is start your will a for an strong and and

So on slide let’s start four.

priorities our expect. provide our then enables before, investors to come the the discussed have DTE and us strong have community, we are to support to of customers As employees, which consistent growth

our stakeholders. was quarter this no different, all as focus of delivered Our have we for

has continued at DTE at very level. Our perform team a high to

as received award. the consecutive have ninth by this We is are year recently a great Gallup This workplace. recognized we

our safest in start We for year out extremely are XXXX. off safe an coming to ever in XXXX

helps getting to every DTE top their priority have and I is day said, success home safely As our engagement. and employee people families at safety drive our

with are to succeed and everyone our safe a is best on when they contribute and our its energy. company included, We the diversity, valued, to thrive on building that welcome focus able do welcome. committed feels feel fully towards and workplace journey. inclusion where DTE our to understand employees dedicated accelerating and helping equity We progression their people

the On reliable we to and safe deliver customer energy. front, continue

Electric price XXXX. DTE our base XXXX that for case request customers, deferral October provides rates This filing rate recently and received on until stability steady delays keeping Just XXXX. approval into its through next

you this As we order previously the affordability. delay May delay rate toward at our customer until recall, least and step received the general months. additional to extends approval five is case another stabilizing This our

savings, for Supporting has our communities of top ranked thousands DTE commitment initiatives gas of These bills top customers and efficiency Additionally, customer their J.D. where all continued energy our show efficiency to gas as satisfaction. energy the DTE electricity to one lower and ranked the excellence. the Power of serve live customer for usage and residential important nation significantly helps us. utility, through is utilities recognition both critically quartile XXXX, the in XX initiatives. while in remains service and natural and and electric energy our reducing

our most grow effort fundraising for customers. to supported to Assistance and for also recognized in-need Habitat homes. business affordable weather-proof income to Humanity for in led help Efficiency the effort keeping recently Energy Our We small was a low energy pandemic. Detroit DTE Program contributed their past

our first a are and service the across opening also technical We customers small resources satisfied business offering their with value delivered performances deliver of $X.XX communities earnings to we and systems with investors. solid across protective strong employees, city. With per for equipment, our are resilient, that engaged share quarter are We assist lines. personal all and businesses

utility, our Energy our X% XX% for midpoint. DTE capital five on pure-play as midyear is completion. investments spin deliver that operating midstream as to next growth track over $XX independent will also And continue EPS the operating we The years, to best-in-class XXXX company to X% establishes growth The the guidance billion from utilities. in X% opportunities. for basins growth. track base positions gas of our EPS significant an go spin spin original with original The natural growth, into premium DTM of with a on and that target assets guidance are with as predominantly We accretive Midstream XXXX

a initiatives. placed Have capacity. slide parks DTE Izabella I DTE wind turbines On of some parks focus three XXX which a is of the largest in Michigan. our II, quarter. will Electrics wind I XXX from with discuss and first in the on continuing accomplishments recently our total to major service, of next environmental had megawatts

of in XXXX. MIGreenPower, coming a Michigan, MIGreenPower for also Detroit-based emissions Health. renewables. companies megawatts X,XXX our The voluntary voluntary through Bedrock settlement megawatts. renewable Michigan XXX settlement This renewable includes to new with to in Trinity which XXX energy renewable nearly DTE to now expectations. a park continues These power XXX capacity exceed of that wind We service slated of commitment of a significant carbon by including few has XXX,XXX XX homes. online XXXX the megawatts with will a the power megawatts sources megawatts for of remaining State recently program, toward enough program the We reducing company filed goal and placed from the recently The is and agreement by announced sources, additions our electric being step XXXX. the high XXXX of support capacity of XX%

transition secure that in of towards work voluntary Gas company large participation State customers to three from and renewable Natural program carbon to Forward The use for customer nation’s its Michigan reduce DTE support goals Gas its Michigan’s the recent ranging gas. preservation program company this of its zero this Commission offering to also support a month fleet footprint. electrification helping initiative further natural The Michigan’s renewable We infrastructure achieved fleet components received of bonds. XX,XXX a bond including will X gas electric $X of future. strengthen approval forest The of nation development month XX% through energy construction have help towards a and to and approximately bills. fund reduce first greenhouse to in residents a support our customers over agreement forest with and XXX has businesses and announced The their carbon Balance. net carbon business for four greatest used years Public forestry an also bonds advisory emissions for the to carbon Phase customers our executed Service the Michigan assets. offsets bonds one green renewable help DTE from preserve and billion. of the of emissions education vehicles. preserve carbon that the for their past cleaner, will Gas residential renewable offering to $XX advance customers. facilities. to reached energy support programs both At has four Charging $X March, These CleanVision but electric offsets carbon offers issued include of strengthen removal solar commitments program, our megawatts The total average vehicle natural reduction progress kind program. wind only offset and also natural of sustainable Recently, energy green of helps DTE are funding that of end of Electric goal. customers with services efficiency most and completed infrastructure $X includes the gas billion program is of Michigan a save This help DTE The seven-year electric the the charging more be Michigan. offset and levels to to outreach, largest the energy the footprint. of home’s This for XXX% By to infrastructure gases, transmission not farms,

the wastewater per are landfill that businesses homes plant treatment powers As and to and emissions RNG, cars. heats fuel byproducts and transformed

are We start off carbon a to The reduce strong of customers be part energy to to up X,XXX future. customers program cleaner footprint. while a over ambitious with that is our create their excited vision signed will

policy net carbon driving this own Climate the and and cleaner effort electric utilities, I also deliver am emissions to its just announced public is and proud Company goal is our this of time energy. Our change XXXX defining gas issues that Midstream year. one business of zero earlier our

on to moving Now DTE’s XXXX. solid six, slide to start I will discuss

$X.XX were giving even best from opportunities share quarter, results strong, per in financial greater plan, year. us this financial $X.XX quarter XXXX create up first could year. last confidence DTE the earned our later Our the which in

EPS growth success continue deliver as a one if DTE plan well-positioned with is well so the original us, this XXXX target up setting beyond. to Longer base. on into a X% confident term, that quarter X% to XXXX operating and to And will am year, I financial for guidance we rate behind

sheet business is metrics. We solid with Midstream strong continue flows on for midyear The balance to execution. focus track and cash on the spin-off our of credit

is that team to for working I Our thank diligently them and efforts. happen their make

positions you establishes two C-Corp low also coming opportunities. DTE’s independent earnings The DTM midstream from accretive know, our businesses. as as growth operating predominantly an total organic a spin of utility the As pure-play XX% with finance spin DTE regulated as gas

investors, and most is deliver basins strong for asset positioned Just prolific to be and gas Midstream through new with for dry DTE will success the this also well-positioned base independent it’s XX a as Company in well roadshow investor process the in plan is the quarter. an progressing the with filing the review second very country. with The SEC spin Form and for the

updates Slater spin over Now business to David will Midstream for the transaction I on turn progress. the and

David Slater

good seven. start Thanks, morning, and everyone. slide on will Jerry, I

well Our Midstream executing and across assets. business first platforms has a quarter, all solid had

goal. us to and Earlier world-class sector We $XXX to is a reach in intend such an net emissions financial are DTM. to first making our our zero year of EBITDA over targets for to to sustainability of believe every million. by on this the become agenda. this a evolve XXXX, opportunity available in we a $XXX will track which time target committed range ESG to We tool also one to DTM a we companies XXXX, announce business achieve Midstream include announced targets million significant use

the establishing manner. Directors socially a committed to ensuring Additionally, environmentally operates company in is responsible and Board DTM an of

are spin Jerry we mentioned, midyear on As track execution. for

an Our the strategic independent Midstream has The create become creation positioned transformation the and advance the value. last the today. solid, been is further of business it will segment this and the opportunity leader and Midstream industry steady company provide over to C-Corp has decade to transformed

to We spin working the in initiated rating process the this XX track execution. on agencies Now diligently for been we is slide back Since as In been and March the SEC we through Form then which comment period with with well. the went let’s discussions going smoothly has have expected. midyear The turn eight. held February. very

will XX second regular Form credit expected We one quarter as will a upon the time to investor when-issued trading DTM week plan start later DTM an closing. of rating We two debt The trading Stock public on begin shares hold well. the or basis receiving to New Exchange in shares roadshow the be the weeks way York before be at raise. in second quarter. are a on

Finally the midyear. spin transaction will be executed

As for to bringing their Jerry made by commitment mentioned, employees. has and track. on of all the to day of our possible best been spin energy the each successfully team Thank dedication work you keeping executing everything and our

Now, performance. Dave to discuss I will over DTE’s Ruud it turn to financial

Dave Ruud

everyone. Thanks, morning, David. Good

on results. million. This quarter the per $X.XX were translates review financial into start operating our $XXX earnings me slide share. quarter first Let nine for to Total

to XXXX, by EPS will This the benefit our primarily higher $XXX new the in You the were $XXX Appendix. find the losses million of of weather XXXX. quarter. quarter review rate can Electric top colder earnings due breakdown Electric was in segment of GAAP first at than of experienced reconciliation XXXX. the the non-qualified reported the the for DTE including I utilities. quarter earnings implementation million with to page also detailed DTE start our and in plan first a

these after measures We variability reduce the so second see plans variability have XXXX. since quarter taken of longer we market this to in no have

that quarter. in remember losses and benefit were you the positive second XXXX, quarter in reversed of If the plan

were Moving rate earnings was The million, last higher quarter $XXX implementation DTE operating Gas, year. than first to $XX on earnings primarily by and million driven in weather colder increase new XXXX.

in to $XX This $XX the our of higher Pipelines driven page XXXX, moving the the on keep service was LEAP primarily quarter were row. the down by going Operating in earnings GSP pipeline of and business third Storage million half than million. for Gas first Let’s second the XXXX.

by year you of next and earnings last new segment can million our Power RNG $XX due see is were first quarter On the a This Industrial decrease operating projects. from row steel-related business to offset earnings $X million.

first On million, business is our with the at see quarter next row our year. operating which $XX earnings consistent last you Trading earnings can were Energy

was performance the performance quarter. both cold Together which positive extremely in Gas This positioned the the for slightly weather of Texas offset period portfolio the first in quarter. occurred in us portfolio, quarter a strong the to expectation Power this by during our in

Finally, $X.XX primarily of $X.XX timing quarter-over-quarter, first of Corporate XXXX, per unfavorable due higher and the plan. earned Other to share per million in quarter and versus our which was net XXXX anticipated that in of XXXX. like I’d $XX taxes DTE interest. note in is Overall, change was share than much favorability to this the

improve further will Trading can in plans GSP years. for us some which the is for well in further Electric, However, of reliability our performing have XXXX opportunity invest than should to DTE XXXX positioning strengthen and for also to initiatives we customers, Energy O&M better This due future that planned. favorability our is the financial

on call open moving wrap we In will up then Now feel first we slide and summary for our up XX, I Q&A. to quarter great results. the about can

for predominantly Company an track DTM independent our we established Midstream EPS rate this growth to from investors a deliver significant our to is progressing track The and on We X% separation of midyear. X% long-term of pure-play are unlocks guidance original business to on value mid-point. and as continue This DTE spin transaction operating our for utility as gas XXXX planned are on We as Midstream with companies. opportunities. focused growth both accretive believe completion positions

to utilities rates to our specifically strategies base will innovative the on a deployed what experience. of continues investments generation to This steady continue investments during improve provide clean certainty to and customers. reliability customer-focused time team regulatory DTE customer Our necessary through for investments, infrastructure be in and focus enable The XXXX. many challenging many maintain to

equity today shareholder open targeting our solid solid X% plan XXXX. maintaining sheet come we DTE total decade. In deliver thank that, increase over of convertible our the I we have you metrics, the equity well-positioned on continue the XXXX. premium besides focus Midstream balance closing, returns spin questions. to we the have DTE joining needs to is we and maintained equity to the And continue expect our in dividend With minimal growth as We line and issuances is have minimal a dividend our business, to XXXX in in past that can with units up approach investors us for for in

Operator

[Operator Instructions] The first question is from Michael Weinstein with Credit Suisse.

Michael Weinstein

guys. morning, Good Hi.

that, about I on was mute. Sorry

Jerry Norcia

Good morning, Michael.

Michael Weinstein

Hey.

how months? you With a case, just going result the six it is be would electric the delay larger affects rate mean I the would basically say or to you filing to case case in than going delayed that are for? normally is the same rate what it in file

Jerry Norcia

I It result would to a say months. the same it’s your Michael, delayed forward test generally case, as six will well. be

We filing will be for…

Michael Weinstein

on Is emissions talks has carbon able been the utilities RNG gas up this ramping bit lately lot Yeah. see information developed? as and more exposure on a significantly Okay. about provide I -- business. be a might net do already wondering see you how business -- RNG their coming you could of to operating am reduce in you outside little are if a And RNG up basis. are do as states expand the that sites nationally you you

Jerry Norcia

Sure.

will own just on I our maybe So utility… start commenting by

Michael Weinstein

Yeah.

Jerry Norcia

essentially country month, offering the as interesting gas driven to RNG. a in to very your voluntary forestry where our we be and … a one customer. package XX% where may we it’s have that $X offset footprint of first and -- type can will we offer customers we are carbon by products both be about that a of And the program offset offering for of a

most standard, deliver from get, efforts projects our So carbon focused lots business Energy footprint unique we the in are in through see I it’s well do P&I years now to our well lower California a offsets three expanding customers. the as DTE simple calls, as of fuel have of way both very to us as of in see standard on California. payback years of RNG, Right and packaging cash Michael. happen pretty with into we low as the markets, carbon products well prior very going our mentioned renewable where fuel modest We four the carbon across gives RNG as nice that in forward. for forestry which gas country, in pipeline as our returns returns investments, a going

Michael Weinstein

Yeah. Is up the to well plans in natural maybe spending expand biodiesel? or as production fuel the infrastructure this of ramp as this -- at come gas, even all to Democrats has RNG any credit up

Jerry Norcia

have this them. wind the energy. Most But clean yet, we at not of seem and Michael. credits far to seen can I solar as another are those as at point, I details of looking targeted be for see, sources

Michael Weinstein

guidance… And is just Got on just in am is looking are is that just you. year guidance, year point this also quarter. one or part in curious unchanged -- just it’s even -- of last if the in after nice at I a the keep And initiatives lean you the at really guidance question later to lean possible the early

Jerry Norcia

What That’s really build goal. looking we strength looking XXXX. favorability we is, are our using -- yeah. for to are at first What

to XXXX next get balance more As in well as order quarterly provide we visibility updates you call. our centric as then And investing the year customer continue that the to into happen. of at in projects make we will

Michael Weinstein

quarter. good Great. Okay. Thanks Anyway Good. a lot.

Jerry Norcia

you. Thank

Operator

with Andrew question Scotiabank. is Weisel Your next from

Andrew Weisel

morning, Good everyone. Hi.

Jerry Norcia

morning, Andrew. Good

Andrew Weisel

the in any more broadly don’t Haynesville Midstream isolate impact risks if or areas, any are extreme on surprises your operational from surrounding impacting or counterparty system the issues? able Texas financial in any in that is to question first know mid-February or you My weather actually, I

Jerry Norcia

to that? do you David take want Slater

David Slater

didn’t to a of really It see We came from struggling our Andrew. days significant was economic four back three into rather facilities wellhead. perspective. at cold days the to that an the where But We challenges operational volumes the did see quickly. upstream probably those weather snap. primarily Sure, us as soon as our impact we just were producer their maintain seeing production broke or

pretty business to Midstream So modest. was impact an it from the

Andrew Weisel

XXXX the Okay. shares roadshow DTM updated the with before pretty IPO have like that we and months. or were DTE? late coming clear guidance the beyond Will When it more expect Great. outlook you for start style in the Then come trading we an can quarter you focused for in for DTM earnings will seek financially, remaining July? would utility financial second

Jerry Norcia

Dave you want Ruud do that? to take

Dave Ruud

Yeah. Consistent roadshow DTM with about at going point are the talking out be of timing as we go the to well. want we with guidance DTE to when that

as come a forward post-Midstream be post-June, we coming we our with guidance for So, -- XXXX… will forward we DTE into

Andrew Weisel

Okay.

Dave Ruud

for XXXX. … the remainder of

Andrew Weisel

Terrific.

the what before So post-spin sense will have looks like? better start shares the of outlook standalone DTE a trading,

Dave Ruud

Yes.

Andrew Weisel

last for this from if strong access would cap regulatory like Great. constraints pace I Then may growth end one the of constraints what physical demand? decade. the sort so, thinking one potential of could of just this around middle factor, any of or land all it are Are imagine there be be seeing the decade? the business, megawatts limiting seems would continue through the renewables or don’t any if voluntary a the demand or on about program, you ceiling the Are I with at additional you really and

Jerry Norcia

don’t any other than I limitation see demand.

eat last renewables about strong that right where quickly. filing, followed for long now are we XXX renewables, I long. pretty us megawatts our you extremely tell that is -- The can positions our -- makes operate megawatts But we if those you up voluntary demand program. as settlement of XXX we incremental So

demand. limitations So I customer the than see any don’t other

Andrew Weisel

hear. for details. Okay. Thank Great the all to you

Operator

ISI. is Your from next with Durgesh question Evercore Chopra

Durgesh Chopra

Hey. Good morning, team.

you Thank taking question. for quarter. Solid my

Jerry Norcia

Good morning.

Durgesh Chopra

next team, just just I -- there’s I get quarter, just to yesterday, And and on pushing floating zero good certainly mean, XX% goal just the XX% And so the Jerry, from going your think, is is over this decade. zero big -- the less Obviously, than maybe believe by morning. I picture, around and generation essentially the on for like net now thoughts, rest want aggressive doubling administration that the of some or news the clean I Biden XXXX. currently

DTE position, is even is how How is on thoughts sector positioned. achievable? the your Just this

Jerry Norcia

carbon goals would into are that be net XX% XXXX, and say, reduction everyone heading timeframe. already Well, at XXXX XX% our we XXXX, to remind by DTE zero just by I want ort where of to of we XXXX by XX%

the I say advanced. So accelerate will DTE we well would over are I that expect would time. plan

conversations it consensus to view with we deep are into administration think be plans, as will as certainly all as DTE’s I how to we do be industry others and hope We there beneficial an and the -- we the some plan beneficial with accelerate our as which to well. Biden will

the plans determined. be process But that perhaps, aggressive. we are -- time. saw The were meeting over to to described here, yet I we also during a election very mines see So, the in think compromise

Durgesh Chopra

Excellent. you that. Thank for

Jerry Norcia

Overall, would tailwind yeah. certainly, say, DTE’s I for But, but plans. a -- overall,

Durgesh Chopra

is Just for talking up key priority to months? maybe ended, a sense this mean, we -- next and a see something follow-up, over look Just front? administration? just couple what And actually about open when the as leaders to on timing just just for to your could this how tangible thinking Biden I the quick high

Jerry Norcia

with Yeah. forward to plan Based high it’s on engagement their change. move I level climate association, industry priority our very on affects of the that would a list say,

positive there’s well. are we quite positive to something elements discussed feeling possibility a So as being are seem get that that done. The

going just in all months. are to plays need next see how several this the We to out

heading do I into there and But think here. feels probably to it we summer the something this at positive will point. fall, is while now

Durgesh Chopra

guys. Perfect. Appreciate the time you. Thank

Jerry Norcia

Thank you.

Operator

Partners. is Arnold Vertical question Jonathan next with Your from Research

Jonathan Arnold

questions. my taking for Thanks guys. morning, Good

Jerry Norcia

Good morning.

Jonathan Arnold

are remind what the you driving you sales yeah, I if you were us continuing extent just mean, the item, could benefit a much of rate then could was cases? quarterly factors and Electric that down DTE to just that maybe Gas COVID-related curious to mind upside? how mix A plan more? was upside -- -- and kind and was you at And benefit breaking what quick, and would see I the little

Jerry Norcia

Dave Ruud?

Dave Ruud

Sure. Hi, Jonathan.

it of we saw the see little the we coming As majority it was still last upside weather year. versus and a you from plans that And was look in. year. -- benefit differential DTE some a mentioned than we million -- was Was but the better We to at last we $XX the difference. negative that did rates quarter, that’s the those Electric about it new also where $XX had million

So we had last a loss quarter.

gain of taken that’s Of in to again. course, don’t the and be all XXXX going the second see that a quarter actions market then sure since we we have make to credibility

Gas, as far the year. in really throughout quarter to back trying we what negative XXXX weather. of As first from the again come we had were That’s

we and from -- rates and weather see effect. the of upside be the the rest better this into that year we would would new then So had coming

Jonathan Arnold

you rate quarter can much how on So side? helped quantify the case the the Electric

Dave Ruud

right sure I you have to the one number. on think make we can that to you get that back

Jonathan Arnold

of any Okay. mix sort on comments the And question? then the

Dave Ruud

Yeah.

down On about the were load at Electric quarter-over-quarter X%. overall sales

are and industrial we our is It But of sales we residential about up still upside were commercial X% and seeing we residential we was So -- some now. QX. as from COVID-related are up versus right seeing down before X%. X%, that discussed down -- was

the back would XXX% between what have have we have and would pre-COVID still. were So X% to and commercial the our be first pre-COVID residential of thought would XX% basically up way to about back. load where versus industrial we may X% it been Then was quarter expected in our

better So go our more that continues until thought continue work. to people residential come to we work-from-home little and than marginally usage people than we expected trend continue seeing to back a are with in longer

Jonathan Arnold

I the for And little normal then be was even disclosure in the a the Okay. to relative guidance seems Great. just CapEx start seasonality. maybe the slides. of to annual at Thank -- a adjusting you. looking on That bit slow

Just you -- thinking it? anything the there can of how to we up ramp just are and about in when you terms full plan year offer we what are

Dave Ruud

Yeah.

that there the that’s coming there. with a quarter little parks second up thing will slower quarter to -- now we capital main in catching wind in of the on was think scheduled was I be the and the and come that first was on be one will

Jonathan Arnold

I anything $XXX-odd-million there, think you base down always driving am I that? saving electric is there curious, on so about

Dave Ruud

-- just for projects are timing the of look If in our annual projects target, at up a but timing but When right of few of we capital, timing others. on the the in for when still our plan come and first ramping little quarter, No. a we is they for now. slower

Jonathan Arnold

Great. you very Thank much.

Operator

question is Steve Research. Your next with Fleishman Wolfe from

Steve Fleishman

Hi. got morning. have a… Good Yeah. I

Jerry Norcia

Good morning, Steve.

Steve Fleishman

Hey, Jerry.

GSMP you tracking maybe Could what’s is ahead mentioned plan. think I that, you Just of say that? driving

Jerry Norcia

David, take Sure. do you that? want to

David Slater

I isn’t call one It’s item a assets. all can. the just is quarter-over-quarter modest big leaping across I’d that little Then Steve, out. platforms, across first I running driver this would blush think, any generally Sure. the quarter. platforms, modestly there I plan just say service and ahead of the the across all

Steve Fleishman

GSMP, as maybe The beyond there? drives I look obviously what kind also XXXX color of beyond Okay. DTE Midstream. a And you little then of for -- growth XXXX when which will you could be guess growth, give

David Slater

different and no mean really we think it’s will call than shared in the are have we at Steve, then past. our I out, I what footprint. what Yeah. our I Appalachian looking Haynesville footprints

are We those good in both sitting basins. of locations really in

do right know, And pipeline really just on sitting And markets incremental with resource as to incremental activity in you of some all those seeing are now. the country. us that business. assets of opportunity we the assets are some the country in around connections some in We mud and to lay have around the the and give best best [ph]

assets. fill would and growth I as to accretive expect we that organic expect continue So see around to in those

Steve Fleishman

Okay. there? we actuals Midstream? is that know, for be just And so in Are any just there primarily projections for the historical going to just DTE Form information XX,

David Slater

as in past for you standalone also is, see kind a of three years the pro this will financials, you going year see standalone audited and see will quarter will you kind you financials see and a the to of there what Steve, a standalone. forma year are full of also the first

So to which an the you that’s be look will have becomes will it in what public, when at. opportunity package we

Steve Fleishman

last Okay. business, that your for a Great. measure? have or other one RNG expects handy you what I within business quick just guide whatever do the question, have terms in of earnings XXXX

Jerry Norcia

has Steve, between a you RNG cogen But is at progressing been $XX new half P&I. income the new we broken of think that That’s have business years from each it last or perspective. been four the out how have cogen. We And this and generation other say we about recall, about over we has haven’t been more our half if our of I’d way million years. three -- and to development year RNG or the landing it been

Steve Fleishman

Thanks Great. so Okay. much.

Jerry Norcia

Thank you.

Operator

from Your Partners. next Shar Guggenheim question with is Pourreza

Constantine Lednev

team. here Shar calling Constantine for Good morning, congratulations… in actually and It’s

Jerry Norcia

Good Con. morning,

Constantine Lednev

Good the quarter. …for morning.

Jerry Norcia

you. Thank

Constantine Lednev

A and value the was thinking on and appreciate platform kind kind the potentially of that And of of spin about color of the of quick kind the business GSP the of the organically. both the follow-up provided. unlocking just kind growing

some improving of and are that a kind for the through know of the of looking of update potentially you And strategy just on XX% how view has and like post-spin? before at just growth you some evolved re-contracting XXXX NEXUS kind kind on announcement? If light kind to of can the GSP CAGR commodity opportunities, conditions, on in of curious updated

Jerry Norcia

David.

David Slater

Yeah. Sure. that. can I take

call for what agenda we I in past talked segment. have as in this investment will capital terms the our So is of

at this this changing kind a what that able and leading at But provide seeing I the forward. strong approach and we to look more and of as not little as going the, We will the be we to be I visibility going call all Midstream year DTM compare standalone rate granularity a year-over-year call the will to we view on deliver like got as spin, sector. this if year year actually -- growth will are I just year-over-year. us what proxy, just a growth sector We

DTM as and the So to forward in the detail portfolio shortly look can. I about more you forward talking specific to as soon And is strong healthy. view we

Constantine Lednev

I on kind a post-spin of two-part a on, have unregulated And of Excellent. kind maybe exposure. follow-up the

that that Does shrinking away impact that’s DTE remains the of given activity of some kind scale within of or need kind of mean RemainCo? of just Just post-spin? for commodity the Energy business businesses move Trading the the

Jerry Norcia

well So, being small two sector will be a utility any And our Trading portfolios. as to from from for based of where RNG. utility million flow operation, help manage comes expect and our of positions that great some provides and there, generates $XX don’t any growth a cash as us, us cogeneration they around market will growth insights in, quite business earnings our of just million businesses remainder, and lines, some also about come XX% cogen, from a It’s to with our forward We of XX% our $XX our in non-utility RNG us as anywhere company. the are manage we but as non-utility. as non-utility going market of from some that risk well

So grow it’s expect to to it way. don’t a small it will continue we and business. We run that

Constantine Lednev

just up. with segment federal strictly RNG of [ph] offering ramping expand kind kind the of on a RNGP and you P&I carbon And hydrogen potentially follow-up value or kind maybe et opportunities capture, I looking chain, the of cetera? at local the Are decarbonization efforts short think the

Jerry Norcia

are line. That’s we investment and -- on RNG well would where at are, opportunities returns the At say, really in nice from as that I time. this point primarily focused business

starting a capture. As we understand carbon lot more, more understand to to start about we are

in promising. that at is future that look very opportunity. seems will But to again the be an Hydrogen into We time. certainly, early, at this somewhat as point but

utilities, how see will we of our and play non-utility come perhaps, to opportunities. both into can more and business those So our

Constantine Lednev

time for in jump I Thank and queue. Thanks. Excellent. back your you will

Operator

Karp question is Sophie with next from KeyBanc. Your

Sophie Karp

Hi. taking question. Good my Thank you morning. for

Jerry Norcia

Good morning.

Sophie Karp

the plans but with business. just Electric the A about the in wanted I already, to discussed guys check qualified been double lot has

think that about So, that measures measure, is like, that you when we assets in say what you that that? you clarify can you or took accounting Is going mean to volatility in it those means? diversified plans the does reduce forward, it -- that how segment should differently an

Jerry Norcia

Ruud? Dave

Dave Ruud

main did assets Sure. Yeah. there thing up we we The matched and our is, liabilities. our

matched the little that variability a take any seeing there and on so we too. in will any that the of the size So, plan the will past limited of the we side bit one and on movement be away other, were market

that movements second the the we were So these we of losses going the confident in first are will see that quarter XXXX past XXXX, second in market are to the see come that not quarter of you back where quarter.

Sophie Karp

something Thank other you to the your of we bit projects then in distribution full year. little question as catching ratable year the for a to compared Very would How on Right. should that might what was the throughout to to about And my it that’s is looks the up guidance guidance that you. think -- am of have sorry, Is year do or that it close quarters helpful. P&I the I one? business, envisioned last of think there? we GSP something business. three like a It electric

Jerry Norcia

a we and more hit I I I Maybe Dave give concerned But P&I this are we about tell not to targets start will little all. year. expect then let at will you fully its details. that can

balance good So, on the do progress about shed of light the more year. feeling and the want to targets this? real for little you the Dave,

David Slater

Yeah.

little are next of those bit come the and projects benefit few in In the some a what right. see us. quarters new RNG the of better RNG of we projects You for some is

and And the so are guidance. full that we in coming back confident meeting year

Sophie Karp

all That’s you. Thank Terrific. had. I

Operator

with Your Insoo next Goldman from question is Kim Sachs.

Insoo Kim

in the the One, we and P&I businesses, Thank on as about the growth -- utility the going well when of over you. Two RNG. couple questions. with RemainCo the as think both

expect still sheet, utility over XX%-plus five the On level? to the at of we a the be the balance business years next

Jerry Norcia

Absolutely. Yes. We do.

Insoo Kim

obviously in the of this little infrastructure to proposed is might just early, a increase bit Biden but fund potential the then the be rates. tax part And that Understood. payment

this past ago an and have place effect. years gone a We through of few as in -- the industry the cycle that’s plan goes into assuming just

thoughts growth? Just in of base especially and terms rate your cash end base rate or any on initial

Jerry Norcia

we I new the Well, plan. expect be don’t growth to Certainly, by our impacted trajectory start. will

at at this to to time on at manage. do that affordability some rates and Dave you we be add pressure want point will But will all? manageable. put all Ruud, think We in that the to have utilities that of we will

Dave Ruud

reduction high tax we the think Yeah. reduction. could rate When XX% I in Jerry, a XXXX, level. -- that the that’s saw we was right

a Now off increase little X.X% in X% it’s looking about our see that increase would bit could lag as like, position taxes rates. book a would because come we what is taxes. the and Also, Biden cash about saying it would cash improve

improve to have to rates, the by as to we clean wouldn’t we the do capital it there said, transition. and But our on So X%. Jerry continue customer right, a improve increase would is plans work key debt our to liability to structure FFO as continue so cost X.X% it would our offset in to on impact energy

Insoo Kim

my general already O&M I a this just a you if am perspective potential or And but have using multiyear picking it. -- Got into be should is apologies and more? we over that period, got for from or guidance there opportunity it,

Jerry Norcia

Dave?

Dave Ruud

Yeah. right. All

We trying are our continuing one to and plans of it’s inflation well manage to our O&M forward. it and keep below going

for are needed on we an capital it’s guidance definitely can long-term customers. area for where our we But going opportunities increased haven’t to that’s make sure We infrastructure that O&M and that. have given continue to

Jerry Norcia

if basis. our O&M decade, will plans continuous think also quite absolute over on distinctive in a look had low last where very the O&M performance an been our at you have the you increases that, have we improvement we industry see with I no to

Insoo Kim

you Thank Understood. much. so

Operator

is Crowdell question Anthony Mizuho. from Your next with

Anthony Crowdell

Dave. Jerry. Good Hey. Good morning, morning,

Jerry Norcia

Good morning. Anthony. morning, Good

Dave Ruud

Anthony. Hey,

Anthony Crowdell

great on Hi. out on Jerry, multiple Jerry’s with call dates. multiple a swapping the move

either Just, the utility is renewables process the thought think or in two One in the mostly, regulated what’s utility. Is there you quick I believe of megawatts talked just I regulated the any business? that’s about to thought guess I renewables. all if not questions. X,XXX P&I -- or growing for renewables

Jerry Norcia

have a to continue our certainly, Well, our effort businesses. renewables significant regulated we in increase to position got

I expect have of five renewables to our utility. in and we got $X billion mentioned, megawatts we think, I voluntary years lined next invest XXX the electric renewables inside regulated up as over about

renewable first niche after-tax we as with As our to business, in mover -- really unlevered far really where resource growth demand projects I we four RNG see originate and lucrative lucrative we and IRRs in the nothing as as mentioned, And that a for were of teams. years, that to space very non-utility three product. that nice but play years see a cash become the simple a continue paybacks and has

it we and pretty So to there are how position grow. excited about continues our

Anthony Crowdell

you guess. How contributes impact would hey, or company’s the touches how balance as, it Okay. it’s an returns really to the or are really And act with project then balancing hey, such green you targets kind in that? lower. threshold it’s net less the benefit or do do last but the target, there and response, returns of I on economic this the a a but of Is zero zero how project, of, net your maybe renewable the really, handle what’s

Jerry Norcia

of regulated structure. and XX/XX return, attract right all X.X% inside utility now, renewable our debt rate Well, the a electric of equity our regulated investments

see through a voluntary customers are lots on -- continue customer make manner. impact What premium trying that of manage the very and it’s for to in accretive us pay to sure to So program these we in a is slight we there’s projects opportunity these rates. no our that projects are to renewable finance order

our for both a customers our investors. So, win-win sort of and

Anthony Crowdell

business What about the in unregulated then?

Jerry Norcia

those we business, returns, as unregulated the and are will the seeing as we In nice continue deploy we returns, see long capital. to

As are cash mentioned, the are and unleveraged simple in -- around to I returns the teens are after-tax our four years years. three paybacks

So year $X $X modest. nice we business a building are of from And like to our projects, mentioned there’s -- the generating to investments continue that small income of Yeah, as with million projects types that’s new in. will can are be parameters are from as line steady for long and get RNG stream of we million I level those a net anywhere we invest us.

Anthony Crowdell

and great my the quarter. on taking job questions Great. Thanks for

Jerry Norcia

Thank you, Anthony.

Operator

question next is Bank America. Your from with Julien of Dumoulin-Smith

Julien Dumoulin-Smith

for teams. time. the Hi. Thanks morning, Good Hey.

Jerry Norcia

Good morning.

Julien Dumoulin-Smith

forward reflected guidance go to the as here I If you back targets guys if But can about bit in? the kind earlier. do can have million you a to that But here. times. about million play looking just conversation. back you have. reflected other RNG. little on comment earlier little just press are -- your there there year want comments states what’s $XX I opportunities against this I to has cleanup up It of What and I perhaps a reset into hey, think your a against heard come baked assumptions to understand other to to few $XX I RNG per come just want at I want

Jerry Norcia

I the -- IR business last have overall. terms in if guidance million targets to we P&I I in income for $XXX if you correctly, Ruud, We meeting XXXX our And for timeframe. think in that $XXX are Dave recall million -- at provided business of we the

Julien Dumoulin-Smith

Yeah.

Dave Ruud

it’s million other within year. That’s right. ESG $XX A development income to continued but kind of space look new historical business. grow RNG, lot within to opportunities net cogen at and that the a continuing of our also And that of of to

Julien Dumoulin-Smith

reconciling say, this or keeping is how let you me do are the is that opportunities against exist emerging that phrase keep then California me you small it? about want let you outside about -- those this want all perhaps slightly to we should you something that that opportunity Then to whatever you behind that, to instance? within differently. small your keep RNG willing grow comments into may When energy something think of trading about Do small organically for earlier think parameters

Jerry Norcia

XX%-XX%, Well, start watch at I keep way, our utilities to non-utilities trying so pursue and we Julien both we grow. our as our mix are will this we will

something higher with and mentioned with price our and RNG Right utilities. have Could with And feels more and a of in that XX-year now then and have pursue we I like to come in think good great split right, XX-year sort utility it returns, comes seeing like and in cogen type we cogen terms are perhaps feels P&I continue projects agreements, capital which mixing. will and timeframe we will even that do RNG, deployment dominant returns I The utility been. commitments between hot play sort of RNG -- us. shorter really to We watch. investments more basis as but become it’s to and like pretty projects of a have and

Julien Dumoulin-Smith

years? the even XX%-XX% maybe the the GSP the latitude Right. of point But within is that that mix you out strip still business, in you have side forward if

Jerry Norcia

I we DTM out think the of Midstream. took spin into the that account or XX%-XX% there put

deploy as billion utilities mix and we capital, about into going is looking the $XX our about Julien, at, P&I. going So we billion $X are into that

plan of capital feel how kind and planning how now. a we -- allocate that gives So that’s right plan to we you are base our

Julien Dumoulin-Smith

Okay.

it right. Okay. All Excellent. guys. I will leave there. Thanks,

Operator

with is Your question Angie Global. Seaport next Storozynski from

Angie Storozynski

Thank you.

metrics your spin-off, it me given the profile, the in looks at will with of the that Midstream realize to very improvement credit I utilities. own -- and to you So the are look that beyond risk but FFO XX% was about growth you plenty your have of busy the that. strong, But seemingly opportunities guys business looking credit profile and all, the I just then just that

regulated transactions on side So, was credit M&A and this? some take metrics under strong would wondering typically support that just your what’s utility I

Jerry Norcia

value value we book our we grow on which Angie, get to plan always a of the And a a way your our to And shareholders. front from multiple book platform, looking are organically. for is in good reasons $XX of in growth of for one are focused create organic accelerate. the got our our -- primarily we value We and is perspective. get opportunities plan billion the current platforms that that, most you that really see around a We shareholders have morning. being to accretive company us, base value

are that So create Having our us focus value certainly, said accretive that. at open could all and thing the to Angie, assets for that, point can it’s But our there’s it’s investors, we not if in the primary become to available most always time. we do.

Angie Storozynski

to But have mean, assets, I preference about that electric versus How electric you to do any comments as gas? transmission any effect?

Jerry Norcia

and we Sure. I been has in our changed the last really focused electric years investments. on couple views are -- probably of

as right focus capital in renewable think in electric are block well at investment plan if very and electric the wires and heavy wires both primarily our you renewables as I space, look it’s now.

deployed more So regulated in -- opportunity more renewables if capital the we those were had renewables. wires we spaces and were we deploy to to and two -- do

Angie Storozynski

follow-up, increasing or is as that program expectations your versus renewables be you just And given to your that ahead other that offsets would before -- Okay. expectations, at earnings voluntary stated what of seems a rate is that the growth you just Electric of it compensated? some have it growth DTE you the the had about based

Jerry Norcia

I with will our pleasantly what at we put deployment. Certainly, of number, fall last we to Angie. program. -- you updated will growth are that that, have next at we as five I we billion Yeah. over But move continue $X years we and tell the capital this update surprised renewables forward, I seeing is been

commercial as just and flies we available And signing our are a with appetite soon thousands it a large have and supply the customers very now up As industrials even sitting were for we have month this. customers strong shelf on off residential residential at of level. customers right customers our XX,XXX every about

appealing So to it a be very seems product.

billion more expect But do grow. got continue in investments to on So we I these come see $X to to right it. that, we the as have plan but now

Angie Storozynski

you. Thank Okay.

Operator

Ryan Levine is question with next Your from Citi.

Ryan Levine

morning. Good

Jerry Norcia

morning. Good

Ryan Levine

you the any and seeing more in in last How are there? opportunities months the Haynesville few developments meaningful commercial is development the progressed

Jerry Norcia

assets Otherwise But seeing around Haynesville some that and this. would actually in projects the highly will opportunities I are small Sure. we nice lots because David he of this some problems. answer having question Slater and phone accretive. take doing are is

successful. David have mover volumes platform as a yet, first a export well of evolve but Haynesville as the the were with XXX-mile very in I Coast, fact LNG the that Nothing opportunity northern to part takes pipeline very XX-inch team large in and significant have his a that So that Gulf building markets in got markets. quite the as we we think been we the

are see a ground can with project discussions the we to shippers So various get off in if there. we

pipelines very But would economic as a encouraging can you know because be accretive. I say and early. it’s So expanding new also

Ryan Levine

around of position? one or there And there other you approach different take And may credit in any any then change that post-spin deal pro the realized you XX% risks? is just had appetite forma taking tax past highlighted. for that maybe the is structuring the else But in in Great. spin on terms RNG, change given threshold

Jerry Norcia

asked this say I markets, your RNG So would about question. hopefully, you this answering and certainly is that

hedge trading our financial us. and using those company that’s that for markets is are what doing instruments We

where we So, hedge. taking a are approach we portfolio

also We term and then contracts for market. of to the some have open we it leave fixed price

So with the markets LCFS markets. approach portfolio are that’s taking we and both RFS the in the RNG,

Ryan Levine

company But that of the you would utility forma Okay. pro risk for take would less more you the the in be deal, look to managing? any more duration or light focus

Jerry Norcia

look length contracts. in Certainly. We always for our

we what it. how that’s we -- approach So that’s

up We also But look our better get to will a give portfolio for contracts. we a approach. in return length

Ryan Levine

Appreciate it. Thank Okay. you.

Jerry Norcia

Thank you.

Operator

Tonet Your next Jeremy with question is JPMorgan. from

Jeremy Tonet

Good morning. Hi.

Jerry Norcia

Good morning.

Jeremy Tonet

if slice come a back Just kind want maybe. it of to I bit little GSP to could differently

point? overall business with piece how should the landed at seasonality For due there would the think about the for this guidance strength first and the beat seasonality quarter, you to handily and we

Jerry Norcia

Well, new David mentioned fact the brand the in which primary a by comments, strength, that last as came that service his was driven pipeline, pipeline the LEAP into was August.

was last the was not We full wasn’t of that because impact on year-over-year, are see under our first LEAP to in the -- financials construction. portfolio, in quarter year, starting of the it

our the platforms of those all that XX-inch XXX-mile we have in-service first as that’s what And two that’s the predominantly we and favorability we mentioned, into service. moderate quarter year-over-year. put got that created of factors. So then favorability got from But we the primary pipeline year-over-year, lift

Jeremy Tonet

Got it.

the So overall GSP? our no seasonality of to for business think

Jerry Norcia

Typically, we don’t get seasonality in that business.

which plan starting from know addition the we as do That’s platform in higher extra somewhat to the that little the platforms than we in likely a And online. LEAP came to play to conservatively plans. out -- expected. and our on you We little that pipeline, due are that’s -- have investment getting is all contingency juice big -- we a blowing a

Jeremy Tonet

as it. to in? you Separately, the make to could Just projects sufficient think, you initiatives as Do of the side? capture see to carbon economic? were what develop how could that, see for pace with Midstream you Got the Midstream, alluding how capture discuss these written a the trying I XXQs before carbon for advanced

Jerry Norcia

you about and California, if that think to in interesting returns. a But create helpful. more is little XXQ XXQ LCFS starts

projects. types to that’s little across what we so, as would see say, are more to And the I of juice going these need country for

on. will customers burden it are that for a to otherwise, So, sign create significant looking

have it it really positive while And federal California, credit to customers more So depends guess, looks than other all on is support. do secondly, and -- there tax I states. in both state regimes do this. the Certainly, more

Jeremy Tonet

Got helpful. That’s Thank you. it.

Operator

like this there At further call time, Jerry Norcia would to the for to I any no are over closing turn questions. remarks.

Jerry Norcia

Well, want working and you, I successful we and close are successful by thank I putting thank just a to strong the are really will about on and XXXX us first that today. joining beyond. feeling of we saying really and had together XXXX very quarter remainder for DTE busy a everyone

safe. So I morning healthy and everyone great stay has hope a and

Operator

call. today’s Thank for participating. you concludes This conference

You may now disconnect.

DTE Energy (DTE) 27 Apr 212021 Q1 Earnings call transcript