Dte Energy Company · NYSE:DTE
Dte Energy — AGA Financial Forum 2017
36 slides from Dte Energy's conference presentation, May 19, 2017
Slide 1: AGA Financial Forum Business Update
Click to edit Master title style EXHIBIT 99.1 AGA Financial Forum Business Update May 21-23, 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: Employee and customer focus provides a solid framework for success
6 Employee and customer focus provides a solid framework for success 6 Received Gallup’s Great Work Place Award for the 5th consecutive year Received AGA Safety Achievement Award for the 2nd year in a row Top quartile in residential customer satisfaction* for both DTE Electric and DTE Gas * J.
Slide 7: Continuous improvement has enabled us to be an industry leader in cost management
7 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 8: Michigan's regulatory environment is one of the best in the United States
8 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 9: Overview, Long-Term Growth Update, Summary
9 • Overview • Long-Term Growth Update • Summary
Slide 10: We are focused on continuing our strong financial performance
10 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 o
Slide 11: Growth through 2021 fueled by investment in utility infrastructure and generation
11 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.
Slide 12: Generation and distribution infrastructure replacement will continue to improve service
12 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 13: Transformation of our generation fleet is driven by the age of our coal plants
13 Transformation of our generation fleet is driven by the age of our coal plants and environmental regulations • Retirement of all coal plants by 2040 with capacity replaced with combination of natural gas and renewables • 75% CO2 reduction from 2005 levels by 2040; 80% reduction by 2050 • Gas-fire
Slide 14: Committed to cleaner energy; generation fleet coal-free by 2040
14 We are committed to providing cleaner energy to our customers and our generation fleet will be coal-free by 2040 Retirements* Additions* Solar * Timing and mix subject to change ** Approximately 3,500 MW natural gas and 6,000 MW renewables Natural Gas Wind Up to ~ 9,500 MW** 2017 - 2023 2024 - 20
Slide 15: DTE Electric distribution investments continue to drive reliability
15 DTE Electric distribution investments continue to drive reliability and increase customer satisfaction • 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% Infrastructure Resilience • Major investments pl
Slide 16: Infrastructure renewal and replacement improves service over the next 10 years
16 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 17: Replacing aging infrastructure achieves a fundamental shift in performance
17 Replacing aging infrastructure achieves a fundamental shift in performance, cost and productivity at DTE Gas Pipeline Integrity Meter Move Out Main Replacement • Strengthens the system - decreasing the potential for system failures • Systematically replaces poor performing unprotected main - mini
Slide 18: Investing $700 million on infrastructure replacement program
18 We are investing $700 million over the next 5 years on our infrastructure replacement program • Replacing 4,000 miles of cast iron and unprotected distribution main • Installed 140 miles in 2016 and on-track for 140 miles in 2017 • Accelerated effort cuts original pace in half, from 50 years to 2
Slide 19: We remain focused on customer affordability
19 Average Annual Residential Bill* DTE Electric We remain focused on customer affordability $1,200 $1,223 2012 2013 2014 2015 2016 2017E Average Annual Residential Bill** DTE Gas $826 $910 2012 2013 2014 2015 2016 2017E 9% * Assumes average usage per year times the average residential rate per year
Slide 20: GSP has an asset portfolio with multiple growth platforms
20 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 21: Pipeline and gathering platforms provide opportunities for long-term growth
21 Pipeline and gathering platforms provide unique opportunities and synergies for long-term growth Link* Lateral & Gathering NEXUS • Renegotiated agreement with key shipper – Significantly extends contract duration – Materially increases volumes • Strong tie with existing markets; new market access
Slide 22: GSP is focused on continued success in pipeline and gathering
22 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 projec
Slide 23: P&I operates three distinct business lines across the United States
23 P&I operates three distinct business lines across the United States Renewable Energy Industrial Energy Services Reduced Emissions Fuel (REF) • Wood-fired power plants • Convert landfill gas to energy • On-site utility services for industrial and commercial customers • Coke and pulverized coal for
Slide 24: P&I is focused on replacing REF earnings
24 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 25: Overview, Long-Term Growth Update, Summary
25 • Overview • Long-Term Growth Update • Summary
Slide 26: Summary
26 • 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 27: Appendix
27 Appendix
Slide 28: 2017 operating EPS guidance supports 5%-7% growth
28 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 29: Cash flow and capital expenditures guidance support growth target
29 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 30: Regulatory Update
30 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 31: Cash flow and balance sheet remain strong
31 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 32: Significant emissions reductions and path to cleaner energy
32 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 33: DTE Electric plans $8.4 billion of investments over the next 5 years
33 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 34: Customer reliability improved through $1.8 billion of planned investments at DTE Gas
34 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 35: Reconciliation of Other Reported to Operating Earnings
35 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 36: Use of Operating Earnings Information
36 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