Dte Energy Company · NYSE:DTE
Dte Energy — Credit Suisse Energy Summit 2014
34 slides from Dte Energy's conference presentation, Feb 10, 2014
Slide 1: Business Update
Business Update Peter Oleksiak – Senior Vice President and CFO February 10 - 11, 2014 Exhibit 99.1
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 The information contained herein is as of the date of this presentation. Many factors may impact forward-looking statements including, but not limited to, the following: impact of regulation by the FERC, MPSC, NRC and other applicable governmental proceedings and regulations,
Slide 3: Overview
• Overview • Long-Term Growth Update – Utilities – Non-utility businesses • Summary 3
Slide 4: DTE Energy is an integrated energy company
DTE Electric DTE Gas DTE Energy is an integrated energy company 4 Complementary Non-Utility Businesses Strong, Stable and Growing Utilities • Electric generation and distribution • 2.1 million customers • Fully regulated by Michigan Public Service Commission • Natural gas distribution • 1.2 million
Slide 5: A substantial portion of non-utility operating earnings are regulated or contracted
A substantial portion of our non-utility operating earnings are either regulated or contracted 2018 Earnings Mix • Regulated / contracted earnings consist of: • Electric and gas utilities • FERC regulated gas pipelines • Long-term contracted energy projects • Growth of 5% - 6% at utilities and 15% -
Slide 6: Our system of priorities is fundamental to how we create value
Our system of priorities is fundamental to how we create value for our investors 5% - 6% Annual EPS Growth Attractive Dividend Strong Balance Sheet 6
Slide 7: We remain committed to delivering 5% to 6% operating EPS growth
2008A 2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E 2018E $2.12 $2.24 $2.35 $2.48 $2.12 * Reconciliation to GAAP reported earnings included in the appendix We remain committed to delivering 5% to 6% operating EPS* growth (dollars) $2.83 Aspiration of over $1 billion in operating earnings by
Slide 8: DTE Energy has many catalysts for strong future growth
DTE Energy has many catalysts for strong future growth opportunities Constructive REGULATORY environment Michigan’s economic recovery Long-term non-utility growth Long-term utility growth 8
Slide 9: Taking steps to minimize the rate impact on customers
As we continue to grow, we are taking steps to minimize the rate impact on customers Lower Surcharges Structural Cost Reductions Continuous Improvement Reliability Investments Cost Pressure Environmental Investments Customer Rates Upward pressure on customer rates being minimized by cost control ini
Slide 10: Utility rate strategies minimize new rate filings and their impacts
Utility rate strategies minimize new rate filings and their impacts on our customers DTE Electric DTE Gas • Periodic rate cases to support investment profile • File mid-2014; self-implement early 2015 • Targeting to stay as close to rate neutral as possible through 2018 (vs. 2013) • ~$300 million su
Slide 11: DTE's CI capability has enabled us to lead the industry in cost management
DTE’s CI capability has enabled us to lead the industry in cost management * Source: SNL Financial, FERC Form 1; major US Electric Utilities with O&M > $800 million; excluding fuel and purchased power **Source: SNL Financial, FERC Form 2; gas distribution companies with greater than 300,000 customer
Slide 12: Utility O&M has remained flat over the past 10 years
2003A 2013E Utility O&M*, including 2013 reinvestment, has remained flat over the past 10 years (millions), pre-tax * Excludes bad debt expense, LIEEF, Energy Optimization and Renewable Energy Program $1,587 Avoided inflation ~$500 million ~$1,590 Reinvestment 12
Slide 13: Long-Term Growth Update
• Overview • Long-Term Growth Update – Utilities – Non-utility businesses • Summary 13
Slide 14: Electric utility investing $6.7 billion in three key growth areas through 2018
Our electric utility is investing $6.7 billion in three key growth areas through 2018 • Environmental requirements • $280 million in 2014 • Power plant reliability • Expanded distribution reliability program • Advanced Metering Infrastructure • $1.1 billion in 2014 • 10% renewable energy standard by
Slide 15: Plant modernization and energy policy will transform our generation mix
DTE Energy Coal Fleet (MW of Capacity) Long-term Units ~4,400 MW Potential Retirements ~2,600 MW Plant modernization and energy policy drive investments that will transform our generation mix over the next decade Expect $1.3 - $2.0 billion annual investment from 2019 to 2023 15
Slide 16: Gas utility making $1.2 billion of reliability and pipeline integrity investments
Our gas utility is making $1.2 billion of reliability and pipeline integrity investments through 2018 16 • Capital recovered through the Infrastructure Recovery Mechanism • ~4,000 miles of distribution main to be replaced • $90 million investment in 2014 • Strengthen and expand distribution system •
Slide 17: Non-utility businesses
• Overview • Long-Term Growth Update – Utilities – Non-utility businesses • Summary 17
Slide 18: Gas Storage & Pipelines is developing an asset portfolio with multiple growth platforms
Gas Storage & Pipelines is developing an asset portfolio with multiple growth platforms Pipeline Gathering Storage 18
Slide 19: Gas Storage & Pipelines platforms drive growth through new projects and expansions
Bluestone Pipeline • 0.6 Bcf/d to Millennium and Tennessee pipelines; 0.2 Bcf/d expansion in 2014 Millennium Pipeline • 1Q 2014 0.3 Bcf/d expansion; total capacity over 0.8 Bcf/d Vector Pipeline • 1.3 Bcf/d from Chicago to Dawn, Ontario Proposed NEXUS Pipeline • 1 Bcf/d from western Marcellus and ce
Slide 20: Gas Storage & Pipelines portfolio of investment opportunities drives earnings growth
Gas Storage & Pipelines has a portfolio of investment opportunities that drive earnings growth • Bluestone lateral expansion • Millennium expansion II Continued build-out of Bluestone gathering • New project development ‒ NEXUS ‒ other gathering and pipeline expansions • Millennium expansion III 201
Slide 21: Power & Industrial Projects is focused in three key business lines
Power & Industrial Projects is focused in three key businesses lines Wood-fired Plant Cassville, WI • Fuel that reduces emissions from coal-fired plants • 9 units, 5 states • Utility contracted • Utility services at industrial sites • Coke and pulverized coal for steel customers • 37 projects, 11 st
Slide 22: Power & Industrial Projects applies a systematic approach to achieve premium returns
Power & Industrial Projects applies a systematic approach to evaluate business opportunities to achieve premium returns Limited Competition Long-Term Contracts Strong Customer Sites Focus on niche areas where we can capitalize on unique competencies Contract maturities ranging from 5 to 25 years for
Slide 23: Summary
• Overview • Long-Term Growth Update – Utilities – Non-utility businesses • Summary 23
Slide 24: Summary
Summary • Long-term plan supports continued 5% - 6% operating EPS growth • Constructive regulation, coupled with a focus on operational excellence and strong customer satisfaction, supports meaningful growth at the utilities • Solid earnings growth at non-utility businesses • Gas Storage & Pipelines
Slide 25: Contact Us
Contact Us DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 25
Slide 26: Appendix
mo DTE Energy: Appendix
Slide 27: Michigan economic indicators highlight continued growth
Michigan economic indicators highlight continued growth over the next few years 27 Michigan leads the country in new manufacturing job creation 1,144 1,578 1,912 2,252 2,429 2,366 2,574 2009 2010 2011 2012 2013E 2014E 2015E Increased Auto Production (000s) 13.4% 12.7% 10.4% 9.1% 8.7% 8.2% 7.3% 2009
Slide 28: Michigan's economy thrives on a favorable business climate
Michigan’s economy thrives on a favorable business climate 28 Competitive tax structure Flat 6% Corporate Income Tax among the lowest in the nation and has reduced business costs by 83% $150 million in incentives and assistance annually, along with an additional $100 million available to loan small
Slide 29: Energy regulation passed in 2008 established a more constructive regulatory environment
Energy regulation passed in 2008 established a more constructive regulatory environment Key components of the 2008 Energy Legislation Regulatory Structures Fully Regulated Fully Deregulated Michigan 29 Regulatory Structure Changes • File & Use Rates with 6 month self- implementation • Final order in
Slide 30: Michigan Public Service Commission
Sally Talberg Commissioner Appointed: 7/3/13 Term Ends: 7/2/19 Greg White Commissioner Appointed: 12/4/09 Term Ends: 7/2/15 Source: MPSC website - www.michigan.gov/mpsc - July 2013 • The Michigan Public Service Commission is composed of three members appointed by the Governor with the advice and con
Slide 31: DTE Coal Fleet Plans through 2020
Long-term units 4,410 MW Medium- term units 2,420 MW Pending EPA regulations 650 MW Short-term units 203 MW DTE Coal Fleet Plans through 2020 (MW of Capacity) Much of the longer-term investment will be tied to the ongoing transformation of our generation fleet Long-term units • Continued long-term i
Slide 32: DTE Electric has built or contracted approximately 890 MW of renewable energy
DTE Electric has built or contracted for approximately 890MWs of renewable energy (850MWs of wind) since 2009 32 L’Anse Warden 17 MW Biomass Baraga County Eagle Valley 3 MW Landfill Gas Oakland County Smiths Creek 3 MW Landfill Gas St. Clair County Stoney Corners 32 MW Wind Missaukee County Gratiot
Slide 33: Gas Storage & Pipelines assets have expansion opportunities
Pipeline Assets Capacity / d In-Service Millennium Pipeline 0.5 Bcf Expansion #1 and #2 0.3 Bcf 2014 Expansion #3 0.1 - 0.5 Bcf 2016+ Total Planned Capacity 0.9 - 1.3 Bcf Bluestone Pipeline (bi-directional) 0.6 Bcf Northward Expansion 0.2 Bcf 2014 Total Planned Capacity 0.8 Bcf Vector Pipeline 1.3 B
Slide 34: 2008 Reconciliation of Reported to Operating Earnings
2008 Reconciliation of Reported to Operating Earnings 2008 DTE Energy DTE Electric DTE Gas Gas Storage & Pipelines Power & Indust. Projects Energy Trading Corporate & Other Unc. Gas Prod. Syn Fuel Reported Earnings 546$ 331$ 85$ 38$ 40$ 42$ (97)$ 87$ 20$ Performance Excellence Process 6 - 4 - 1 1 -