Dte Energy Company · NYSE:DTE
Dte Energy — Corporate Update (September 2018)
39 slides from Dte Energy's corporate update, Sep 5, 2018
Slide 1: Business Update September 6, 2018
EXHIBIT 99.1 Business Update September 6, 2018
Slide 2: Safe Harbor Statement
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 associate
Slide 3: Overview, Long-Term Growth Update, Summary
• Overview • Long-Term Growth Update • Summary 3
Slide 4: DTE Energy overview
DTE Energy overview Leader in ~$20B Winner market cap of 6 consecutive continuous Gallup Great Workplace Awards improvement 10,000 employees Fortune 300 company 100+ years of continuous dividend payments Top quartile in residential customer satisfaction for both DTE Electric & Michigan’s largest inv
Slide 5: Growth driven by strong, stable utilities and complementary non-utility businesses
Growth driven by strong, stable utilities and complementary non-utility businesses 75% - 80% Utility 20% - 25% Non-utility Growth driven by investments aimed at Growth driven by strategic opportunities improving reliability DTE Electric Gas Storage & Pipelines • Electric generation and • Transport,
Slide 6: Employee and customer focus provides a solid framework for success
Employee and customer focus provides a solid framework for success Employee Customer Safety Engagement Satisfaction AGA’s Safety Achievement Gallup’s Great Workplace Both utilities ranked 1st by Award Award business customers* nd th ...2 consecutive year …6 consecutive year Both utilities ranked 2nd
Slide 7: Strong track record of cost management
Strong track record of cost management is a direct result of our focus on continuous improvement Average annual percentage change in O&M costs 2008 – 2016 Electric utility* Controlling costs while improving the customer experience ✓ Continuous improvements 3% ✓ Productivity enhancements 1% ✓ DTE Pee
Slide 8: Maintaining customer affordability while investing in our utilities
Maintaining customer affordability while investing in our utilities DTE Electric 2012 2017 2012 2017 Average annual residential bill Average industrial rate DTE Gas 2012 2017 2012 2017 Average annual residential bill Average industrial rate 8
Slide 9: Michigan's regulatory environment continues to be constructive
Michigan’s regulatory environment continues to be constructive Ranking of U.S. regulatory jurisdictions* (Michigan in Tier 1) Solid regulatory climate Tier 1 6 driven by ✓ Constructive and consistent regulatory outcomes Tier 2 10 ✓ Solid ROEs ✓ Unique recovery mechanisms Tier 3 19 ✓ Focus on custome
Slide 10: Strong track record supports commitment to deliver long-term value to shareholders
Strong track record supports commitment to deliver long-term value to shareholders Total Shareholder Return DTE outperforms S&P 500 utilities 302% DTE Energy 5% - 7% S&P 500 Utilities ~3% Dividend yield* Operating EPS** 180% growth rate 7% dividend through 2022 growth rate 82% 66% through 2020*** 49
Slide 11: Overview, Long-Term Growth Update, Summary
• Overview • Long-Term Growth Update • Summary 11
Slide 12: Increased operating EPS guidance; regulatory filings progressing well
Increased operating EPS* guidance; regulatory filings progressing well • Increased 2018 operating EPS guidance midpoint by $0.35 to $6.13 – Both utilities are on track – GSP and P&I having an exceptional year • Increased 2018 cash flow guidance – Reduces future equity needs • Regulatory proceedings
Slide 13: Strong future growth supported by opportunities across all business units
Strong future growth supported by opportunities across all business units • Utilities evaluating additional investments – Voluntary renewable program for large customers – Acceleration of gas main replacement • GSP positioning for strong future growth – NEXUS construction >80% complete – Board appro
Slide 14: Growth fueled by investment in utility infrastructure and generation along with midstream
Growth fueled by investment in utility infrastructure and generation along with midstream opportunities (billions) DTE Energy Investment Electric $10.4 billion $17 Distribution infrastructure, maintenance, new generation $12 Gas $2.1 billion Base infrastructure, main renewal, NEXUS related GSP $2.8
Slide 15: DTE Electric overview
DTE Electric overview Upgrading Transitioning to distribution lines cleaner energy DTE Electric service territory $16.5B ~11,000 2017 rate megawatt system 2.2M base capacity customers $10.4B Founded 5-year capital plan 1886 (2018-2022) 15
Slide 16: Generation and distribution infrastructure replacement will continue to improve service
Generation and distribution infrastructure replacement will continue to improve service (billions) DTE Electric Investment New generation Transitioning generation portfolio to more sustainable energy $10.4 Distribution infrastructure $7.8 Progress to best in class in reliability Base infrastructure
Slide 17: Committed to generating cleaner energy for our customers
Committed to generating cleaner energy for our customers Carbon emissions reduction goals* Doubling renewable capacity -30% over the next 5 years -45% -75% >-80% 2005 ~2022 2030 2040 2050 50% clean energy by 2030 25% renewables by 2030 >80% carbon reduction by 2050 17 * CO2 percentage reductions fro
Slide 18: Replacing coal with renewables and natural gas
Replacing coal with renewables and natural gas Planned Retirements (~6,400 MW) River St. Trenton Belle Monroe Rouge Clair Channel River 2020 2030 2040 2050 Planned Additions (~7,500 MW*) 2018-2022 1,000 MW Additional renewables capacity (TBD) 2018-2022 15 MW 2022 Additional natural gas capacity (TBD
Slide 19: Increasing reliability and customer satisfaction with distribution investments
Increasing reliability and customer satisfaction with distribution investments Infrastructure Improves circuit reliability resilience Addresses substation load growth Infrastructure and aging infrastructure redesign Technology Targets 100% remote monitoring enhancement Tree Improves distribution rel
Slide 20: DTE Gas overview
DTE Gas overview Renewing 4,000 miles of cast iron and unprotected distribution main DTE Gas service territory $2.1B 139 Bcf 5-year capital plan storage 1.3M (2018-2022) capacity customers Founded $4.0B 2017 rate base 1849 19,000 miles distribution main 20
Slide 21: Improving service to customers through infrastructure renewal and replacement
Improving service to customers through infrastructure renewal and replacement (billions) DTE Gas Investment NEXUS related Compression $2.1 Infrastructure renewal Proposing accelerated 15 year main renewal cycle $1.6 Base infrastructure Transmission, compression, distribution, storage 2013 - 2017 201
Slide 22: Replacing aging infrastructure achieves a fundamental shift in performance
Replacing aging infrastructure achieves a fundamental shift in performance, cost and productivity Minimizes leaks - reducing costs and improving customer Main satisfaction - Filed proposal to increase renewal pace of main renewal Reduces manual meter reading - improving operational Meter efficiencie
Slide 23: GSP overview
GSP overview 5 pipelines, 1,600 miles ??? of pipe and Transport, store gathering lines and gather natural gas $2.8B – $3.4B 91 Bcf 5-year capital plan of storage (2018-2022) Serves markets in Midwest, Northeast, Mid-Atlantic, and Southeast 23
Slide 24: Expanding strategic footprint in the most prolific dry gas geology
Expanding strategic footprint in the most prolific dry gas geology in the country Michigan Northeast Gathering Ontario Market Bluestone Birdsboro Midwest Link Lateral & Gathering Mid-Atlantic & LNG Southeast Gulf 24
Slide 25: GSP has an asset portfolio with multiple growth platforms
GSP has an asset portfolio with multiple growth platforms Millennium Pipeline (26.25%) 0.8 Bcf/d • 0.1 Bcf/d expansion 4Q18 • 0.2 Bcf/d expansion 2H18 • Firm capacity/demand-based contracts Bluestone Pipeline & Gathering 1.2 Bcf/d • Bi-directional pipe • Firm capacity/demand-based contracts • Gather
Slide 26: GSP is focused on continued success
GSP is focused on continued success Growth Plan • Continuing progress on NEXUS Operating earnings* ‒ Construction >80% complete 2022 target ‒ On budget and on schedule for late 3Q in-service $280 - $290 million ‒ HDDs and mainline welding complete Capital investment • Executing on Link 2018 - 2022 ‒
Slide 27: P&I overview
P&I overview Geographic diversity Industrial energy services, renewable energy, and reduced emissions fuel $0.8B – $1.2B 5-year capital plan (2018-2022) Leading developer of energy related businesses in North America 191 MW renewable plant capacity 27
Slide 28: Capitalizing on growth opportunities in our key business areas
Capitalizing on growth opportunities in our key business areas Finalized new large combined Industrial energy heat and power (CHP) project and continuing to develop services strong queue of opportunities Constructing new project in Renewable Wisconsin and in advanced discussions on several others en
Slide 29: P&I is focused on progress toward long-term growth
P&I is focused on progress toward long-term growth • Continued development of industrial energy projects Growth Plan ‒ Initial stages of construction on Ford Motor Operating earnings* Company complex 2022 target ‒ Finalizing agreement on large industrial $65 - $75 million cogeneration project ‒ Purs
Slide 30: Overview, Long-Term Growth Update, Summary
• Overview • Long-Term Growth Update • Summary 30
Slide 31: Summary
Summary • Increased 2018 operating EPS* and cash guidance given strong financial performance • Targeting 5% - 7% operating EPS growth through 2022 • Driving utility growth through infrastructure investments focused on improving reliability and the customer experience • Continuing strategic and susta
Slide 32: Appendix
es DTE Energy Appendix
Slide 33: Increased 2018 operating EPS guidance midpoint by $0.35, or 6%
Increased 2018 operating EPS* guidance midpoint by $0.35, or 6% (millions, except EPS) Original Revised Guidance Guidance DTE Electric $648 - $662 $648 - $662 DTE Gas 152 - 160 152 - 160 Gas Storage & Pipelines 185 - 195 225 - 235 Power & Industrial Projects 115 - 135 155 - 170 Corporate & Other (10
Slide 34: 2018 cash flow and capital expenditures guidance
2018 cash flow and capital expenditures guidance (billions) (millions) Cash Flow Capital Expenditures 2018 2018 Guidance Guidance Cash From Operations* $2.2 DTE Electric Base Infrastructure $750 Capital Expenditures (3.6) New Generation 340 Free Cash Flow ($1.4) Distribution Infrastructure 810 $1,90
Slide 35: Maintaining strong cash flow and balance sheet
Maintaining strong cash flow and balance sheet Leverage* Target 50% - 54% • Issue equity of $700 million in 2018-2020 51% ‒ $250 million in 2018 using internal mechanisms ‒ Strong cash flows this year reduces equity needs 2017 2018-2020E • $1.6 billion of available liquidity at June 30, 2018 Funds f
Slide 36: Utility regulatory update
Utility regulatory update DTE Electric DTE Gas • General rate case - filed July 2018 (U-20162) • General rate case - November 2017 (U-18999) – Effective: May 2019 – Prior to tax reform, requested rate – Rate recovery: $328 million recovery: $85 million ($57 million net of infrastructure recovery mec
Slide 37: Accelerating plans to produce cleaner energy and targeting at least 50% clean energy by 2030
Accelerating plans to produce cleaner energy and targeting at least 50% clean energy by 2030 ~280 DTE owned Generation mix wind turbines in- 1% 2% 10% service with 65 more 20% 2% 25% - Renewables 30% expected in 2018 24% 20% - Natural gas 25% 77% Nuclear & other 64% 20% 30% Coal 2005 2017 2030* Over
Slide 38: Both utilities increase customer reliability with investment plans over the next 5 years
Both utilities increase customer reliability with investment plans over the next 5 years (millions) DTE Electric DTE Gas Targeting 6% - 7% rate base growth Targeting 7% - 8% rate base growth $10,400 $2,100 $10 NEXUS related $2,000 New generation Main $1,140 renewal $4,300 Distribution infrastructure
Slide 39: Reconciliation of reported to operating earnings (non-GAAP)
Reconciliation of reported to operating earnings (non-GAAP) 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 repres