Dte Energy Company · NYSE:DTE
Dte Energy — EEI Financial Conference 2015
46 slides from Dte Energy's conference presentation, Nov 6, 2015
Slide 1: EEI Financial Conference November 8-10, 2015
EEI Financial Conference November 8-10, 2015 EXHIBIT 99.1
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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 EPA, FERC, MPSC, NRC and CFTC as well as other applicable governmental proceedin
Slide 3: Overview, Long-Term Growth Update, Summary
3 • Overview • Long-Term Growth Update • Summary
Slide 4: DTE Energy's growth is driven by strong, stable utilities and complementary non-utility businesses
DTE Energy’s growth is driven by strong, stable utilities and complementary non-utility businesses 4 DTE Electric Electric generation and distribution DTE Gas Natural gas transmission, storage and distribution Complementary Non-Utility Businesses Strong, Stable and Growing Utilities Fully Regulated
Slide 5: Our system of priorities is fundamental to how we create value for shareholders
Our system of priorities is fundamental to how we create value for our shareholders 5 5% - 6% Annual EPS Growth Attractive Dividend Strong Balance Sheet 5
Slide 6: Engaged employees improving customer experiences have led to strong satisfaction results
Engaged employees focusing on improving our customers’ experiences have led to strong satisfaction results J.D. Power Rank vs. Midwest Peers Note: DTE Energy received the highest numerical score in the Midwest in the proprietary J.D. Power 2015 Gas Utility Business Customer Satisfaction Study SM. Ba
Slide 7: DTE's continuous improvement capability has enabled us to lead the industry in cost management
DTE’s continuous improvement 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 > 300,00
Slide 8: 2015 operating EPS guidance and 2016 early outlook midpoints provide solid growth
Our 2015 operating EPS* guidance and 2016 early outlook midpoints provide solid growth 8 * Reconciliation to GAAP reported earnings included in the appendix (dollars per share) $3.33 $3.64 $3.75 $3.94 $4.09 $4.60 $2.12 $2.24 $2.35 $2.48 $2.62 $2.76 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2
Slide 9: DTE has consistently delivered total shareholder return above the peer average
DTE has consistently delivered total shareholder return above the peer average Source: Bloomberg (as of 9/30/15) 9 Total Shareholder Return 50% • Total return in top quartile of S&P 500 Utilities for 3, 5 and 10 years 3-YR 114% 177% 10-YR 5-YR S&P 500 Utilities DTE Energy 37% 75% 113% Top quartile
Slide 10: DTE Operating Earnings Growth
DTE Operating Earnings Growth Share Issuance Contingency DTE Operating EPS* Growth Non-Utilities 7% - 8% 5% - 6% * Reconciliation to GAAP reported earnings included in the appendix Strong growth opportunities coupled with contingency planning gives us confidence in our ability to deliver 5% to 6% op
Slide 11: Overview, Long-Term Growth Update, Summary
11 • Overview • Long-Term Growth Update • Summary
Slide 12: We will invest ~$13 billion in capital projects to drive growth through 2020
We will invest ~$13 billion in capital projects to drive growth through 2020 12 (billions) ~$13 $8.2 Distribution infrastructure, maintenance, new generation $1.6 Base investments, infrastructure renewal, NEXUS related $2.0-$2.6 Gathering investments, NEXUS, pipeline expansions $0.6-$0.9 Cogeneratio
Slide 13: The EPA's Clean Power Plan will transform the electric industry
The EPA’s Clean Power Plan has set forth significant carbon reduction goals which will transform the electric industry The most transformational policy in the history of the electric industry Will cut CO2 emissions by 32% by 2030, compared to 2005 Initial compliance plans to be submitted by Septe
Slide 14: Our generation mix shifts from coal to natural gas and renewables
Our generation mix shifts from coal to natural gas and renewables as we address the EPA’s Clean Power Plan 32% Coal Retirements 2030 Scenario ~6.7 2015 Gas / Renewables Additions ~2.2 ~2.2 ~12.3 (~3.5) ~25% 15%-30% ~15% Nuclear / Other Gas Renewables Coal ~1.2 30%-45% DTE Electric Capacity (GW) Note
Slide 15: Lansing leaders are working toward constructive energy policy reform
Lansing leaders are working toward constructive energy policy reform to enable this transformation 15 Clean 1 2 Reliable 4 Affordable 3 Flexible Governor Rick Snyder Valerie Brader Executive Director for the Michigan Agency for Energy Senator Mike Nofs Energy and Technology Committee Chair Represent
Slide 16: Work is underway to finalize energy legislation
Work is underway to finalize energy legislation 16 • House and Senate closely aligned • Key elements focus on: Retail open access and capacity requirements Integrated resource planning Renewable energy and energy efficiency Oct/Nov Nov/Dec December Revisions of committee proposals Vote on propos
Slide 17: Electric generation and infrastructure renewal will significantly increase investment
Electric generation and infrastructure renewal will significantly increase investment in the decade ahead 32% DTE Electric Total Investment ~$8.2 ~$9.7 2016-2020 2021-2025 ~$7.1 2011-2015 New generation (billions) Distribution infrastructure 17 Maintenance and other projects
Slide 18: We enter this period of heavy investment with sharp declines in business rates
We enter this period of heavy investment with sharp declines in business rates 18 15%* Large Industrial Customers 9%* Commercial Customers • $600 million of surcharge reductions in 2014 and 2015 • Business cost of service rates implemented in 2015 • These reductions are after $230 million July self-
Slide 19: Investment in our gas utility will increase significantly over the next 5 years
Investment in our gas utility will increase significantly over the next 5 years 19 2011-2015 2016-2020 ~$1.1 ~$1.6 DTE Gas Total Investment (billions) Base infrastructure Infrastructure renewal NEXUS related
Slide 20: DTE Gas system will be expanded to support the proposed NEXUS interconnection
The DTE Gas system will be expanded to support the proposed NEXUS interconnection • $200 million of NEXUS related investment at DTE Gas through 2017 • Spend primarily for additional compression • Supported by long-term transport agreement with NEXUS DTE Gas service area NEXUS DTE Gas 20
Slide 21: Expanding main replacement would cut the planned renewal timeline in half
Expanding main replacement to 160 miles per year would cut the planned renewal timeline in half ~$80 Investment (millions) Miles ~80 miles ~$130 ~160 miles Current Gas Renewal Plan (50 years) Proposed Gas Renewal Plan (25 years) Investment* (millions) Miles * Consists of main replacement (~$99m), me
Slide 22: Gas Storage & Pipelines is developing an asset portfolio with multiple growth platforms
Gas Storage & Pipelines is developing an asset portfolio with multiple growth platforms 22 Proposed NEXUS Pipeline Michigan Gathering DTE Gas DTE Storage Marcellus Shale Utica Shale Bluestone Pipeline Bluestone Gathering System
Slide 23: NEXUS project is nearing next major milestone with FERC filing
NEXUS project is nearing next major milestone with FERC filing later this year 23 Right of way, field work, design, planning • 50% ownership with Spectra Energy • 1.5 Bcf/d pipeline • ~250 miles of pipe • DTE expected investment of $1 billion 2014 2015 2016 2017 2018 Construction Commercial operatio
Slide 24: Gas Storage & Pipelines is targeting operating earnings of $170 million by 2020
2014A 2015E 2016E 2017E 2018E 2019E 2020E * Reconciliation to GAAP reported earnings included in the appendix Pipeline Platform** Gathering Platform Storage Platform New Project Development (Other gathering and pipeline expansions) ~$170 $85 $45 $15 $25 ** Includes NEXUS at 50% ownership $82 $95 - $
Slide 25: Power & Industrial Projects operates within three distinct business lines
Power & Industrial Projects (P&I) operates within three distinct business lines DTW Airport, Michigan Gallia Fuels Project, Ohio Mt. Poso Waste Wood Project, California • On-site utility services for industrial and commercial customers • Coke and pulverized coal for steel customers • Wood-fired powe
Slide 26: P&I serves its customers from sites in states
P&I serves its customers from 69 sites in 17 states 26 Industrial Energy Services Renewable Energy Reduced Emissions Fuel
Slide 27: P&I's new project growth will offset reduced emissions fuel expirations in 2020
P&I’s new project growth will offset reduced emissions fuel expirations in 2020 2014A 2015E 2016E 2017E 2018E 2019E 2020E ~$105 $30 $50 $60 ($65) $30 New Project Development / Acquisitions Renewable Energy Reduced Emissions Fuel Industrial Energy Services Corporate allocations, interest, overheads $
Slide 28: Overview, Long-Term Growth Update, Summary
28 • Overview • Long-Term Growth Update • Summary
Slide 29: Summary
• Proven track record of premium returns • Targeting 5% to 6% operating EPS* growth and parallel dividend growth – Our 2016 early outlook midpoint of $4.93 EPS* represents 7% growth from original 2015 guidance midpoint – This year we increased our annual dividend 16 cents to $2.92 per share, a 5.8%
Slide 30: Detroit is in the midst of a revitalization
Detroit is in the midst of a revitalization 30 DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030
Slide 31: DTE Energy
DTE Energy
Slide 32: We are confident our growth plan will deliver value to our shareholders
We are confident our growth plan will deliver value to our shareholders 32 ** Compared to S&P 500 utilities. Source: Bloomberg 2015 operating EPS Guidance midpoint $4.78 total DTE $4.69 growth segments 2016 operating EPS early outlook midpoint $4.93 Providing 5% - 6% growth Significant capital inves
Slide 33: We are reaffirming our 2015 operating EPS guidance and 2016 early outlook
We are reaffirming our 2015 operating EPS* guidance and 2016 early outlook (millions, except EPS) 33 * Reconciliation to GAAP reported earnings included in the appendix ** Total DTE Energy excluding Energy Trading 2015 Guidance 2016 Early Outlook 3Q 2015 YTD DTE Electric DTE Gas Gas Storage & Pipeli
Slide 34: We recently revised our 2015 cash flow and capital expenditures guidance
We recently revised our 2015 cash flow and capital expenditures guidance 34 * Includes impact of ~$200 million of equity issued for employee benefit programs (billions) (millions) ** Includes Main renewal / Meter Move-out / Pipeline Integrity Cash Flow Summary Capital Expenditures Summary Prior Guid
Slide 35: A strong balance sheet remains a key priority and supports our growth
A strong balance sheet remains a key priority and supports our growth 35 * Debt excludes securitization, a portion of DTE Gas’ short-term debt, and considers 50% of the Junior Subordinated Notes as equity ** FFO (Funds from Operations) is calculated using operating earnings 25% 21% 2014 2015E 2016-2
Slide 36: Michigan's economy continues to improve
Michigan’s economy continues to improve 36 Source: IHS 8.5% 7.1% 5.5% 5.4% 5.3% 2013 2014 2015E 2016E 2017E 15.1 15.8 17.6 19.7 21.9 2013 2014 2015E 2016E 2017E Unemployment Rate Housing Start Ups (000s) Detroit Metro #8 in number of new or expansion projects* Lowest Michigan unemployment since 2001
Slide 37: The Michigan Public Service Commission is the state regulator
The Michigan Public Service Commission (MPSC) is the state regulator for electric and gas utilities Sally Talberg Commissioner Appointed: 7/3/13 Term Ends: 7/2/19 Norm Saari Commissioner Appointed: 8/2/15 Term Ends: 7/2/21 Source: State of Michigan website - www.michigan.gov/ • The MPSC establishes
Slide 38: DTE regulatory filing timeline
DTE regulatory filing timeline DTE Gas • Filed expanded Infrastructure Recovery Mechanism (IRM) 2015 • Filed cost of service rates and general rate case DTE Electric 2014 2016 • Business cost of service rates implemented 3Q15 • Self implement general rates 3Q15 • Final rate order 4Q15 • Expect rate
Slide 39: Coal retirements will commence and then accelerate after 2020
Coal retirements will commence in the 5 year window and then accelerate after 2020 32% 2015 2016 - 2020 2021 - 2025 ~1,825 MW ~125 MW ~550 MW 2026 - 2030 ~1,000 MW DTE Coal Retirement Timeline (Scenario*) * Estimated amounts. Timing and mix of generation impacted by MISO capacity requirements and Mi
Slide 40: DTE Electric plans $8.2 billion of investments over the next 5 years
DTE Electric plans $8.2 billion of investments over the next 5 years 2015E 2016E 2017E 2018E 2019E 2020E Distribution infrastructure New generation Maintenance and other projects* 2016E - 2020E Total ~$14.5B ~$19.4B YE Rate Base** ~$663M ~$888M Depreciation * Includes power reliability, existing gen
Slide 41: DTE Gas plans $1.6 billion of investments over the next 5 years
DTE Gas plans $1.6 billion of investments over the next 5 years 2015E 2016E 2017E 2018E 2019E 2020E 2016E - 2020E Total Base infrastructure Infrastructure renewal* NEXUS related $1,600 $200 $650 $750 ~$3.3B ~$4.5B - $4.6B YE Rate Base** ~$102M ~$136M Depreciation ** Includes working capital (million
Slide 42: Gas Storage & Pipelines operates projects within asset platforms
Gas Storage & Pipelines operates projects within 3 asset platforms • Bluestone Pipeline • Millennium Pipeline • Vector Pipeline • Proposed NEXUS Pipeline • Bluestone Gathering • Michigan Gathering • 91 Bcf of working capacity • Strategically located between Chicago and Dawn trading hubs Pipeline Pla
Slide 43: Gas Storage & Pipelines assets have expansion opportunities
Gas Storage & Pipelines assets have expansion opportunities to accommodate increased demand Pipeline Assets Capacity Bcf/ d In-Service Millennium Pipeline 0.8 Expansion #1 0.2+ 4Q 2017 Total Planned Capacity ~1.0 Bluestone Pipeline (bi-directional)* 0.9 Expansion #3 0.1 2Q 2016 Total Planned Capacit
Slide 44: Third Quarter 2015 and September YTD Reconciliation of Reported to Operating Earnings
Third Quarter 2015 and September YTD Reconciliation of Reported to Operating Earnings 44 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 earnin
Slide 45: 2009 – 2014 Full Year Reconciliation of Reported to Operating Earnings
2009 – 2014 Full Year Reconciliation of 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
Slide 46: Use of Operating Earnings Information
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 measurement for external communications with analysts and i