Dte Energy Company · NYSE:DTE
Dte Energy — Corporate Update (May 2017)
32 slides from Dte Energy's corporate update, May 15, 2017
Slide 1: Business Update May 16, 2017
Click to edit Master title style EXHIBIT 99.1 Business Update May 16, 2017
Slide 2: Safe Harbor Statement
2 Safe Harbor Statement Many factors impact forward-looking statements including, but not limited to, the following: impact of regulation by the EPA, the FERC, the MPSC, the NRC, and for DTE Energy, the CFTC, as well as other applicable governmental proceedings and regulations, including any associa
Slide 3: Overview, Long-Term Growth Update, Summary
3 • Overview • Long-Term Growth Update • Summary
Slide 4: Growth is driven by strong, stable utilities and complementary non-utility businesses
4 Growth is driven by strong, stable utilities and complementary non-utility businesses DTE Electric • Electric generation and distribution • 2.2 million customers • Fully regulated Growth driven by infrastructure investments aimed at improving customer reliability Growth driven by strategic opportu
Slide 5: 2017 has started strong and we are confident in achieving our operating EPS guidance
5 * Reconciliation of operating EPS (non-GAAP) to reported earnings included in the appendix ** Includes Appalachia Gathering System (AGS) and 55% of Stonewall Gas Gathering (SGG) 2017 has started strong and we are confident in achieving our operating EPS* guidance • On track to achieve 2017 operati
Slide 6: Michigan's regulatory environment is one of the best in the United States
6 Minimal regulatory lag Solid ROEs Unique recovery mechanisms Source: Barclays, February 2017 Top Tier Michigan’s regulatory environment is one of the best in the United States
Slide 7: Overview, Long-Term Growth Update, Summary
7 • Overview • Long-Term Growth Update • Summary
Slide 8: We are focused on continuing our strong financial performance
8 Strong track record of meeting or exceeding original guidance; targeting 11th consecutive year in 2017 Operating EPS* growth target of 5% - 7% Targeting ~7% dividend increases in 2018 and 2019 * Reconciliation to GAAP reported earnings included in the appendix We are focused on continuing ou
Slide 9: Growth through 2021 fueled by investment in utility infrastructure and generation along with midstream opportunities
9 2017 – 2021 Plan 2012 – 2016 $12 billion $13.5 billion 2017 – 2021 Capital Plan Electric ................ $8.4 billion Distribution infrastructure, maintenance, new generation Gas ...................... $1.8 billion Base investments, infrastructure renewal, NEXUS related GSP ......... $2.2 to $2.8
Slide 10: Generation and distribution infrastructure replacement will continue to improve service to customers
10 Generation and distribution infrastructure replacement will continue to improve service to customers over the next 10 years DTE Electric Investment New generation • Replace coal with cleaner energy Distribution infrastructure • Move electric reliability to 1st quartile Replacement and other • Pro
Slide 11: Transformation of our generation fleet is driven by renewable energy standards and age of coal plants
11 Transformation of our generation fleet is driven by renewable energy standards and the age of our coal plants Belle River St. Clair River Rouge Retirements* Additions* Wind / Solar Trenton New gas plant * Timing and mix subject to change 2024 - 2030 New gas plant Wind / Solar 2017 - 2023 2017 - 2
Slide 12: We have already achieved significant emissions reductions and continue toward cleaner energy
12 We have already achieved significant emissions reductions and continue on the path to even cleaner energy 2005 2015 2030 CO2 Emissions 16% Reduction 2005 2015 2030 2005 2015 2030 NOX Emissions SO2 Emissions Emissions reductions are largely due to $2 billion in controls installed at Monroe Power
Slide 13: DTE Electric distribution investments continue to drive reliability and customer satisfaction
13 Infrastructure Resilience Infrastructure Redesign Technology Enhancements Upgraded nearly 20% of circuits since 2013; impact 33% of circuits by the end of 2020, improving reliability on impacted circuits by up to 70% Major investments planned at 20-25 substations by 2021 to address load growth an
Slide 14: Infrastructure renewal and replacement improves service to customers over the next 10 years
14 Infrastructure renewal and replacement improves service to customers over the next 10 years DTE Gas Investment Base infrastructure • Transmission, compression, distribution, storage Main replacement • Strengthen gas infrastructure by reducing planned main replacement cycle by half NEXUS related c
Slide 15: Main Replacement, Pipeline Integrity, Meter Move Out
15 Main Replacement Pipeline Integrity Meter Move Out Systematically replaces poor performing unprotected main - minimizing leaks and improving customer satisfaction Drives productivity - reducing manual meter reading costs Strengthens the system - decreasing the potential for system failures Replac
Slide 16: GSP has an asset portfolio with multiple growth platforms
16 GSP has an asset portfolio with multiple growth platforms Growth Platforms Purposefully located in the best geology in North America ‒ Millennium Pipeline ‒ Bluestone Pipeline & Gathering ‒ Link* Lateral & Gathering ‒ NEXUS Pipeline Michigan Assets Strategically located between Chicago and Da
Slide 17: Link Lateral & Gathering and NEXUS Pipeline growth platforms
17 Link* Lateral & Gathering • Renegotiated agreement with key shipper – Significantly extends contract duration – Materially increases volumes • Strong tie with existing markets; new market access to Gulf and Mid-Atlantic / LNG exports • Expansion potential over 1.0 Bcf/d NEXUS Pipeline and gatheri
Slide 18: GSP is focused on continued success in pipeline and gathering
18 GSP is focused on continued success in pipeline and gathering • Earnings growth driven by both pipeline and gathering platforms • Continuing platform growth • Pursuing additional investment opportunities Near-Term • Growth drivers – Further development of Link Lateral & Gathering – NEXUS project
Slide 19: P&I operates three distinct business lines across the United States
19 P&I operates three distinct business lines across the United States Industrial Energy Services Renewable Energy Reduced Emissions Fuel (REF) • On-site utility services for industrial and commercial customers • Coke and pulverized coal for steel customers • Wood-fired power plants • Convert landfi
Slide 20: P&I is focused on replacing REF earnings
20 P&I is focused on replacing REF earnings Near-Term • Closed on two landfill gas projects • Finalize combined heat and power project • Pursue additional investment opportunities Long-Term Operating earnings* 2016 Actual $95 million 2017 Guidance $90-100 million Operating earnings 2021 Target $100-
Slide 21: Overview, Long-Term Growth Update, Summary
21 • Overview • Long-Term Growth Update • Summary
Slide 22: Summary
22 • Strong start to year gives us confidence we will achieve our 2017 operating EPS* guidance • Utility growth plan driven by infrastructure investments focused on improving reliability and the customer experience • Strategic and sustainable growth in non-utility businesses continues • Continue to
Slide 23: Appendix
23 Appendix
Slide 24: 2017 operating EPS guidance supports 5%-7% growth
24 2017 Guidance DTE Electric DTE Gas Gas Storage & Pipelines Power & Industrial Projects Corporate & Other Growth segments** Growth segments operating EPS Energy Trading DTE Energy Operating EPS Avg. Shares Outstanding $610 - $624 143 - 151 140 - 150 90 - 100 (64) - (60) $919 - $965 $5.12 - $5.38 $
Slide 25: Cash flow and capital expenditures guidance support growth target
25 2016 Actual 2017 Guidance DTE Electric Distribution infrastructure $567 $690 New generation 131 45 Replacement & other 805 725 $1,503 $1,460 DTE Gas Base infrastructure $177 $200 NEXUS related 94 90 Main replacement 124 145 $395 $435 Non-Utility $1,533 $900 - $1,100 Total $3,431 $2,795 - $2,995 2
Slide 26: Regulatory Update
26 DTE Gas DTE Electric • Expect rate case filing in 1-2 years • 4Q 2016 order (U-17999) – $122 million – 10.1% ROE • Annual rate cases 2018+ • 1Q 2017 order (U-18014) – $184 million – 10.1% ROE • Filed rate case April 19, 2017 (U-18255) – Requested rate recovery: $231 million – Test year: November
Slide 27: Continuous improvement has enabled us to be an industry leader in cost management
27 Continuous improvement has enabled us to be an industry leader in cost management * Source: SNL Financial, FERC Form 1; major US Electric Utilities with O&M greater than $800 million; excluding fuel and purchased power ** Source: SNL Financial, FERC Form 2; gas distribution companies with greater
Slide 28: Cash flow and balance sheet remain strong
28 21% 2016 2017-2019E 51% 2016 2017-2019E Leverage* Funds from Operations** / Debt* Target 50% - 53% Target 20% + Cash flow and balance sheet remain strong * Debt excludes a portion of DTE Gas’ short-term debt and considers 50% of the junior subordinated notes and 100% of the convertible equity uni
Slide 29: DTE Electric plans $8.4 billion of investments over the next 5 years
29 DTE Electric plans $8.4 billion of investments over the next 5 years with a focus on increasing customer reliability * Includes power reliability, existing generation maintenance, AMI, Ludington expansion and other investments ** Includes working capital and rate base associated with surcharges T
Slide 30: Customer reliability improved through $1.8 billion of planned investments at DTE Gas
30 Customer reliability will be improved through $1.8 billion of planned investments over the next 5 years at DTE Gas 2016A 2017E 2018E 2019E 2020E 2021E 2017E - 2021E Total Base infrastructure Main replacement* NEXUS related $1,800 $100 $700 $1,000 $3.7B ~$5.1B - $5.2B YE Rate Base** $104M ~$154M D
Slide 31: Reconciliation of Other Reported to Operating Earnings
31 Reconciliation of Other Reported to Operating Earnings Use of Operating Earnings Information – DTE Energy management believes that operating earnings provide a more meaningful representation of the company’s earnings from ongoing operations and uses operating earnings as the primary performance m
Slide 32: Use of Operating Earnings Information
32 Use of Operating Earnings Information – Operating earnings exclude non-recurring items, certain mark-to- market adjustments and discontinued operations. DTE Energy management believes that operating earnings provide a more meaningful representation of the company’s earnings from ongoing operation