Dte Energy Company · NYSE:DTE
Dte Energy — Investor Presentation (January 2015)
39 slides from Dte Energy's investor presentation, Jan 8, 2015
Slide 1: Business Update January 8-9, 2015
Business Update January 8 - 9, 2015 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, CFTC and other applicable governmental proceedings and regula
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 business strategy is fundamental to how we create value for our investors
5% - 6% Annual EPS Growth Attractive Dividend Strong Balance Sheet Our business strategy is fundamental to how we create value for our investors 5 Utility growth plan driven by infrastructure investments Strategic, transparent, low-risk growth opportunities in non-utility businesses provide dive
Slide 6: DTE has consistently delivered total shareholder return above the peer average
DTE has consistently delivered total shareholder return above the peer average * As of December 31, 2014 Source: Thomson Reuters DTE Energy’s Total Shareholder Return Percentile Ranking Among S&P 500 Utilities 4th Quartile 3rd Quartile 2nd Quartile 1st Quartile 6 77% 90% 87% 1 YR 3 YR 5 YR
Slide 7: Strong earnings growth opportunities give confidence in 5%-6% operating EPS growth
Our strong earnings growth opportunities coupled with our contingency planning gives us confidence in our ability to deliver 5% – 6% operating EPS* growth Utility Earnings Growth Non-Utility Earnings Growth DTE Earnings Growth Share Dilution Contingency DTE EPS Growth Non-Utilities 5% - 7% 5% - 6% U
Slide 8: We remain committed to delivering 5% to 6% operating EPS growth
* Reconciliation to GAAP reported earnings included in the appendix (dollars per share) We remain committed to delivering 5% to 6% operating EPS* growth $2.83 $3.33 $3.64 $3.75 $3.94 $4.09 $2.12 $2.12 $2.24 $2.35 $2.48 $2.62 $2.76 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 EPS Divid
Slide 9: Overview, Long-Term Growth Update, Summary
9 • Overview • Long-Term Growth Update • Summary
Slide 10: Michigan's regulatory environment is viewed as very constructive
Michigan’s regulatory environment is viewed as very constructive; we work hard to earn this every day Source: Standard & Poor’s, January 2014 MI 10
Slide 11: 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 greater
Slide 12: DTE will be transforming its generation mix by replacing coal with natural gas and renewables
DTE will be transforming its generation mix by replacing coal with natural gas and renewables Generation Output 2014 2030 Scenario* Gas / Renewables Coal Nuclear / other ~70% ~30% ~50% ~20% ~20% ~10% * Ultimate timing and mix of generation impacted by MISO capacity requirements and Michigan and EPA
Slide 13: Our electric utility is investing $7.5 billion in three key areas through 2019
Our electric utility is investing $7.5 billion in three key areas through 2019 $5.7 billion Distribution infrastructure renewal Power plant reliability Compliance Gas plant acquisition Generation asset base renewal $1.4 billion $400 million $7.5 billion Targeting 5% - 6% growth Base Infrastructure N
Slide 14: Generation replacement will significantly increase DTE Electric's investment over the next 10 years
Generation replacement will significantly increase DTE Electric’s investment over the next 10 years DTE Electric Total Investment ~$7.5 ~$9.0 2015-2019 2020-2024 ~$6.0 2010-2014 New generation investment (billions) 14
Slide 15: DTE filed its electric rate case in December 2014
DTE filed its electric rate case in December 2014 15 Plant additions Working capital O&M Sales / revenues Return and capital structure Other (millions) Electric Base Rate Increase Total rate increase • First electric general rate case in over 4 years • Anticipate self- implementation on or after Jul
Slide 16: Increase in filed electric rates are offset by surcharge reductions and securitization roll off
Increase in filed electric rates are offset by surcharge reductions and securitization roll off 16 Residential Commercial Large Industrial 2015 general rates and cost of service implementation 2014 surcharge reductions and 2015 securitization roll-off Total rate change from 2013 (%) New rates Offset
Slide 17: 2015 will be a year of stepped up activity on energy policy and rate cases
Self implement general rates 3Q 2015 2015 will be a year of stepped up activity as we work through Michigan energy policy and electric rate cases 17 General rate case filed 4Q 2014 Cost of service rates filed 3Q 2014 Cost of service rates order 2Q 2015 Energy policy review 2014 2015 Legislation to t
Slide 18: Our gas utility is making $1.6 billion of reliability and infrastructure investments through 2019
Our gas utility is making $1.6 billion of reliability and infrastructure investments through 2019 Strengthen and expand infrastructure Main renewal, meter move-out and pipeline integrity Compression Targeting 7% - 8% growth Base Infrastructure Infrastructure Renewal Nexus Related Total $825 million
Slide 19: Expanding to 160 miles per year by 2018 would reduce main replacement cycle by half
Expanding to 160 miles per year by 2018 would reduce our planned main replacement cycle by approximately half ~$80 Investment* (millions) Miles ~80 miles ~$130 ~160 miles Key Components of Expanded Infrastructure Recovery Mechanism (IRM) Filing** Increase annual investment ~$50 million beginning J
Slide 20: Gas Storage & Pipelines is developing an asset portfolio with multiple growth platforms
Gas Storage & Pipelines is developing an asset portfolio with multiple growth platforms DTE Gas DTE Storage Proposed NEXUS Pipeline Marcellus Shale Bluestone Gathering System Bluestone Pipeline Utica Shale Michigan Gathering 20
Slide 21: Gas Storage & Pipelines platforms drive growth through new projects and expansions
Gas Storage & Pipelines platforms drive growth through new projects and expansions Pipeline Platform Gathering Platform Storage Platform 21 • Bluestone Pipeline • Millennium Pipeline • Vector Pipeline • Proposed NEXUS Pipeline • Bluestone Gathering • Michigan Gathering • 91 Bcf of working capacity •
Slide 22: Expanding gathering footprint in the Marcellus shale
Expanding gathering footprint in the Marcellus shale • Executed agreement to expand relationship with Southwestern Energy in November 2014 ‒ Increases gathering area and assets by 50% ‒ Increases volumes on Bluestone lateral • Pace of gathering development may drive acceleration of earnings growth N
Slide 23: NEXUS continues to move forward to bring Utica and Southwest Marcellus gas to markets
NEXUS continues to move forward to bring Utica and Southwest Marcellus gas to Michigan, Chicago and Ontario markets • Agreements executed with LDC’s and several key shippers; additional discussions underway • Capacity 1.5 Bcf/day; scalable up to 2 Bcf/d • DTE’s expected investment is $700 million to
Slide 24: Vector Pipeline is evaluating expansion opportunities to provide increased capacity
Vector Pipeline is evaluating expansion opportunities to provide increased capacity • Binding open season completed; discussions with key shippers are progressing • Goal of open season: ‒ Recontracting current capacity ‒ Incremental expansion opportunities • Expected in-service date 4Q 2017 DTE Gas
Slide 25: Power & Industrial Projects is focused in three key business lines
Power & Industrial Projects (P&I) is focused in three key business lines across the country Industrial Energy Services Renewable Energy Reduced Emissions Fuel 25
Slide 26: Each business line is pursuing new opportunities contributing to P&I's growth
Each business line is pursuing new opportunities contributing to P&I’s growth aspirations • On-site energy and utility services for industrial, commercial and institutional customers • Long-term growth from existing expansions, greenfield projects and acquisitions • Wood-fired power plants and landf
Slide 27: Overview, Long-Term Growth Update, Summary
• Overview • Long-Term Growth Update • Summary 27
Slide 28: Summary
Summary • Proven track record of premium returns • Targeting 5% to 6% operating EPS growth and parallel dividend growth • Constructive regulation, coupled with a focus on operational excellence and strong customer satisfaction, supports meaningful growth at the utilities • Utility growth driven by g
Slide 29: Contact Us
Contact Us DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 29
Slide 30: Appendix
Appendix oe DTE Energy:
Slide 31: Our utilities continue to move toward best in class in customer satisfaction
Our utilities continue to move toward best in class in customer satisfaction Source: JD Power JD Power Gas Utility Residential Gas Customer Satisfaction Ranking Midwest Region: Large Segment #1 2006 2012 2013 2014 G a s JD Power Electric Utility Residential Electric Customer Satisfaction Ranking Mid
Slide 32: Michigan economic indicators highlight continued growth over the next few years
Michigan economic indicators highlight continued growth over the next few years 32 7.1% 13.4% 8.8% 7.4% 6.7% 6.5% 6.3% 6.1% 2007 2009 2013 2014E 2015E 2016E 2017E 2018E 420 366 408 414 423 429 435 442 2007 2009 2013 2014E 2015E 2016E 2017E 2018E (billons) 2,295 1,144 2,433 2,244 2,435 2,551 2,756 2,
Slide 33: Michigan economy continues to improve
Michigan economy continues to improve Michigan most improved Pro-Business state AMERICAN ECONOMIC DEVELOPMENT INSTITUTE with Pollina Corp. Real Estate Michigan leads nation in manufacturing job growth Michigan is moving up in ranking of competitive states… …and continues to receive positive recognit
Slide 34: City of Detroit's exit out of bankruptcy is a positive step toward economic recovery
City of Detroit’s exit out of bankruptcy is a positive step toward economic recovery 34 • In December 2014, the City of Detroit exited out of Chapter 9 bankruptcy • Plan approved to cut substantial portion of city’s debt obligation and to invest into essential services • Mayor Duggan focused on impr
Slide 35: The Michigan Public Service Commission is the state regulator for electric and gas utilities
The Michigan Public Service Commission (MPSC) is the state regulator for electric and gas utilities Source: MPSC website - www.michigan.gov/mpsc 35 Sally Talberg Commissioner Appointed: 7/3/13 Term Ends: 7/2/19 Greg White Commissioner Appointed: 12/4/09 Term Ends: 7/2/15 • The MPSC establishes fair
Slide 36: Recovery of DTE Gas capital investments will require periodic rate cases
Recovery of DTE Gas capital investments will require periodic rate cases • Expect next general rate case filing in 2016/2017 • Target to keep annualized rate increases in low single digits Capital Investment and Recovery 2015 - 2019 Infrastructure recovery mechanism Base rates (depreciation) Custome
Slide 37: Gas Storage & Pipelines assets have expansion opportunities to accommodate increased demand
Gas Storage & Pipelines assets have expansion opportunities to accommodate increased demand Pipeline Assets Capacity Bcf/ d In-Service Millennium Pipeline 0.8 Future Expansion (planning phase) 0.2 - 0.5 2017 + Total Planned Capacity 1.0 - 1.3 Bluestone Pipeline (bi-directional) 0.6 Expansion #1 0.2
Slide 38: 2008-2013 Full Year Reconciliation of Reported to Operating Earnings
2008 – 2013 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 39: Reconciliation of Other Reported to Operating Earnings
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 meas