DTE Energy Company · NYSE:DTE
DTE Energy — Conference Presentation (January 2017)
34 slides from DTE Energy's conference presentation, Jan 11, 2017
Slide 1: Business Update
Click to edit Master title style 1 Business Update January 12, 2017 EXHIBIT 99.1
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, FERC, MPSC, NRC, and CFTC, as well as other applicable governmental proceedings and regulations, including any associated impact on rate structures; t
Slide 3: 2016 was a successful year for DTE with a number of positive developments
3 2016 was a successful year for DTE with a number of positive developments Increased operating EPS* growth rate to 5% - 7% from 5% - 6% Raised targeted dividend growth rate to ~7% over next 3 years Received constructive rate order for gas utility Received final environmental impact statemen
Slide 4: Overview / Long-Term Growth Update / Summary
4 • Overview • Long-Term Growth Update • Summary
Slide 5: Growth is driven by strong, stable utilities and complementary non-utility businesses
5 Growth is driven by strong, stable utilities and complementary non-utility businesses DTE Electric • Electric generation and distribution • 2.2 million customers • Fully regulated Gas Storage & Pipelines • Transport and store natural gas • 5 pipelines, 91 Bcf of storage Power & Industrial Projects
Slide 6: Success is tied to our aspiration and continued focus on our system of priorities
6 Success is tied to our aspiration and continued focus on our system of priorities To be the best-operated energy company in North America and a force for growth and prosperity in the communities where we live and serve CUSTOMER
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: Annualized Dividend
8 (dollars per share) 2011 2016 2017 $2.35 $3.08 5-year dividend growth rate of 5.6% from 2011 - 2016 Increased dividend 7.1% for 2017 Targeting annual dividend increases of ~7% in 2018 and 2019 Phase-in payout ratio to be in-line with peer average More than 100 years of continuous dividend pa
Slide 9: DTE has consistently delivered total shareholder return above the peer average
9 DTE has consistently delivered total shareholder return above the peer average 65% 117% 216% 46% 75% 123% DTE Energy S&P 500 Utilities 10-YR 5-YR Total Shareholder Return (Bloomberg as of 12/31/16) Top quartile Total return at top quartile of S&P 500 Utilities 3-YR
Slide 10: Michigan's regulatory environment is one of the best in the country
10 Minimal regulatory lag Solid ROEs Unique recovery mechanisms Source: Barclays, March 2016 Top Tier Michigan’s regulatory environment is one of the best in the country
Slide 11: Constructive Michigan energy policy was passed by both the House and Senate
11 Constructive Michigan energy policy was passed by both the House and Senate Capacity requirement for retail open access (ROA) providers 10% ROA cap remains Certificate of Need / integrated resource plan 10-month rate case cycle 15% renewable standard by 2021 100% ownership of incremental
Slide 12: DTE Energy is well-positioned as the country transitions to new leadership
12 DTE Energy is well-positioned as the country transitions to new leadership Energy policy DTE electric generation transformation not dependent on the Clean Power Plan; replacing aging coal plants and focusing on customer reliability and affordability Proposed tax reform Reduce customer rates
Slide 13: Overview / Long-Term Growth Update / Summary
13 • Overview • Long-Term Growth Update • Summary
Slide 14: Design detailed roadmap for the transformation of our business
14 Design detailed roadmap for the transformation of our business that ties near-term work to long-term success providing 30% - 40% cost reductions over the next decade Apply continuous improvement Shift from coal to natural gas Distribution improvements Advanced metering Enhanced customer
Slide 15: 2017-2021 Capital Plan
15 2017 – 2021 Plan 2012 – 2016 Plan $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
Slide 16: Generation and distribution infrastructure replacement will improve service to customers
16 Generation and distribution infrastructure replacement will improve service to customers over the next 10 years DTE Electric Investment New generation • Retire 60% of coal fleet; replacing with clean energy Distribution infrastructure • Move electric reliability to 1st quartile Maintenance and ot
Slide 17: Gas generation and renewables will replace coal fired generation
17 Gas generation and renewables will replace coal fired generation Belle River St. Clair River Rouge Retirements* Additions* Wind / Solar Trenton New gas plant * Timing and mix is subject to change 2024 - 2030 New gas plant Wind / Solar 2017 - 2023 2017 - 2023 2024 - 2030 ~2,100 MW ~1,000 MW ~2,500
Slide 18: Significant emissions reductions have already been achieved
18 Significant emissions reductions have already been achieved and we continue on the path to clean 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 P
Slide 19: Distribution reliability investments focus on increasing customer satisfaction
19 Distribution reliability investments focus on increasing customer satisfaction and driving efficiencies Tree Trimming Infrastructure Redesign Infrastructure Resilience Technology Enhancements Enhanced program has resulted in a 70% reliability improvement on trimmed circuits Upgraded nearly 20% of
Slide 20: Infrastructure renewal and replacement will improve service to customers
20 Infrastructure renewal and replacement will improve service to customers over the next 10 years DTE Gas Investment NEXUS related compression Infrastructure renewal • Strengthen gas infrastructure by reducing planned main replacement cycle by half Base infrastructure • Transmission, compression, d
Slide 21: Replacing aging infrastructure ensures reliable gas service
21 Replacing aging infrastructure ensures reliable gas service and achieves a fundamental shift in performance, cost and productivity Main Replacement Pipeline Integrity Meter Move Out Systematically replaces poor performing unprotected main - minimizing leaks and improving customer satisfaction Dri
Slide 22: GSP has an asset portfolio with multiple growth platforms
22 GSP has an asset portfolio with multiple growth platforms Growth Platforms Purposefully located in the best geology in North America Bluestone Pipeline & Gathering Millennium Pipeline NEXUS Pipeline Link* Lateral & Gathering Michigan Assets Strategically located between Chicago and Dawn
Slide 23: Pipeline and gathering platforms provide unique opportunities for long-term growth
23 Pipeline and gathering platforms provide unique opportunities and synergies for long-term growth Bluestone Pipeline & Gathering • Well positioned for future expansions • Bi-directional capabilities serving pipeline constrained Northeast markets Millennium Pipeline • 0.1 Bcf/d lateral expansion 2Q
Slide 24: P&I operates three distinct business lines across the United States
24 P&I operates three distinct business lines across the United States In d u st ri a l E n e rg y Se rv ice s R e n e w a b le E n e rg y R e d u ce d Em iss io n s F u e l (R E F ) • On-site utility services for industrial and commercial customers • Coke and pulverized coal for steel customers • W
Slide 25: Focus on strategic opportunities in utility-like projects and asset acquisitions
25 Focus on strategic opportunities in utility-like projects and asset acquisitions for future growth U ti li ty -L ik e P ro ject s A sset A c q u is it io n Distinct capabilities Experience with large industrial and commercial customers History of executing utility-like long-term contracts E
Slide 26: Overview / Long-Term Growth Update / Summary
26 • Overview • Long-Term Growth Update • Summary
Slide 27: Summary
27 Summary Value driven utility investments provide an excellent customer experience while ensuring affordable rates Constructive regulatory environment and continued cost savings enable utilities to earn authorized returns Strategic and transparent growth opportunities in non-utility businesses off
Slide 28: Appendix
28 Appendix
Slide 29: A strong balance sheet remains a key priority and supports growth
29 A strong balance sheet remains a key priority and supports growth 21% 2016E 2017-2019E 52% 2016E 2017-2019E Leverage* * Debt excludes a portion of DTE Gas’ short-term debt, and considers 50% of the Junior Subordinated Notes as equity Funds from Operations** / Debt* Target 50%- 53% Target 20% + •
Slide 30: DTE Electric plans $8.4 billion of investments over the next 5 years
30 DTE Electric plans $8.4 billion of investments over the next 5 years with a focus on increasing customer reliability (millions) 2017E 2018E 2019E 2020E 2021E Distribution infrastructure New generation Maintenance and other projects* 2017E - 2021E Total $2,000 $8,400 $3,200 $3,200 $1,550 $1,550 $1
Slide 31: Customer reliability will be improved through $1.8 billion of planned investments at DTE Gas
31 Customer reliability will be improved through $1.8 billion of planned investments over the next 5 years at DTE Gas 2017E 2018E 2019E 2020E 2021E 2017E - 2021E Total Base infrastructure Main Replacement* NEXUS related $1,800 $100 $700 $1,000 $430 $380 $330 $330 $330 (millions) * Includes main rene
Slide 32: Regulatory Update – Electric and Gas
32 Regulatory Update – Electric and Gas • Self implemented general rates 3Q DTE Gas DTE Electric 2017 2016 2018+ • Final rate order and IRM ruling 4Q – $122 million rate order – 10.1% ROE • Final rate order 1Q • File rate case 2Q • Annual rate cases • Expect rate case filing 2018/2019
Slide 33: NEXUS continues to move forward with expected in service 4Q 2017
33 NEXUS continues to move forward with expected in service 4Q 2017 Natural Gas LDC Industrial Customer Power Generation Marcellus / Utica Dry Gas Core DTE Gas Vector • Contractors secured • Procurement update – Compressors ordered – Compressor air permits secured • FERC approval – FEIS received – C
Slide 34: Reconciliation of Other Reported to Operating Earnings
34 Reconciliation of Other Reported to Operating Earnings 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 represen