DTE Energy Company (DTE) Earnings

Management highlights

### Company Culture and Recognition - DTE employee engagement ranks in the 94th percentile globally, and the company received the Gallup Great Workplace Award for the 14th consecutive year. ### Grid Reliability Investments and Storm Response - A severe unexpected July 2026 storm impacted ~400,000 customers, causing widespread damage that extended restoration times beyond typical targets, but areas with completed reliability upgrades performed significantly better, reinforcing the value of grid investment. - The company follows a four-pillar strategy to improve grid reliability: - *Technology and innovation*: Over 700 automated devices installed in 2025 (20% over plan), with 500+ additional devices planned for 2026, working toward full distribution system automation by 2030. - *Infrastructure resilience and hardening*: Over 200 miles of targeted hardening and nearly 1,000 miles of pull-top maintenance completed in 2025, with 1,700 miles of maintenance planned for 2026. - *Infrastructure redesign and modernization*: 70+ miles of 4.8 kV circuits converted to higher voltage and 20+ miles of sub-transmission infrastructure rebuilt in 2025, with 2026 expected to be the highest year of conversion activity to date. - *Tree trimming*: Completed a large surge effort and is now piloting expanded clearing practices to further reduce outage risk. - $11 billion in total reliability-focused investment is planned over the next five years. From 2023 to 2025, average outage duration improved by 90%, and DTE achieved its best all-weather safety performance in nearly two decades. ### Data Center Development - DTE has 2.4 gigawatts of executed data center contracts: the 1.4 gigawatt Oracle project is fully approved and under construction, while the 1 gigawatt Google project is progressing through NPSC approval and represents upside to DTE's current long-term plan. - An additional 5-6 gigawatts of pipeline opportunities exist, including ~2 gigawatts in advanced discussions with a target to secure a new agreement by the end of 2026, and a further 3-4 gigawatts in earlier-stage development. - Large, steady data center load absorbs significant fixed system costs, delivering meaningful affordability benefits for existing customers: Oracle is expected to provide ~$300 million in annual benefits once fully ramped, while Google is expected to deliver ~$1.7 billion in total benefits over the life of its contract. These benefits could allow DTE to delay its next electric rate case until at least 2028. - DTE's large load tariff, which includes the same customer protection framework as the Oracle and Google contracts, is progressing through regulatory approval. ### Customer Affordability - Average annual customer bill increases over the past five years have remained below both the national average and the Great Lakes regional average. Typical Michigan residential electric bills are 17% below the national average, equal to less than 2% of median household income. - DTE uses advanced analytics to drive operational efficiencies that offset cost pressures, and the transition from coal to natural gas and renewables is reducing long-term O&M costs. Inflation Reduction Act tax credits also lower the cost of clean energy investments for customers. - DTE provides expanded energy assistance for vulnerable customers, including millions of dollars in direct support and partnerships with Michigan nonprofits. ### Regulatory Strategy - DTE's pending electric rate case requests $800 million in capital for reliability and grid modernization through 2030, targeting a 30% reduction in outage frequency and 50% reduction in outage duration by 2029. - A proposed regulatory mechanism will return any excess margin from faster-than-expected Oracle load ramping to customers, enabling a potential rate case stay-out until at least 2028 if approved. - An Integrated Resource Plan (IRP) outlining long-term generation and capacity planning will be filed in Q3 2026.

Guidance

- DTE reaffirmed its full-year 2026 operating EPS guidance, and remains on track to achieve the high end of the 2026 guidance range, supported by incremental rate relief, timing adjustments, and strong non-utility performance. - Management maintained the long-term target of 6% to 8% annual operating EPS growth through 2030, and expects to consistently reach the high end of this range annually, supported by R&D tax credits. - The approved Oracle project is already included in the current plan, while the pending Google data center project and additional future data center opportunities provide upside to the 6-8% long-term growth target. The 1 gigawatt Google project alone gets DTE solidly to the 8% upper bound, and an additional 2 gigawatts of new contracts would push growth above 8% (referred to as "8%+") - Guidance updates will only be made after relevant contracts receive regulatory approval: the Google contract approval is expected in September 2026, with a potential plan update after that, and any additional contract secured by end-2026 would see a plan update in the Q4 2026 earnings call. The 6-8% range will remain, with upside reflected as a "plus" rather than a step change to the range. - DTE plans annual equity issuances of $500 to $600 million from 2026 through 2028, with similar levels expected through 2030, and remains focused on maintaining a strong investment-grade credit rating with a target FFO to debt ratio of ~15%.

Segment performance

1. DTElectric: Operating earnings of $270 million for Q2 2026, a $48 million decrease year-over-year (YoY). The decline was driven by a large positive tax timing variance in Q2 2025 that did not repeat, higher rate-based costs, and colder weather, partially offset by recent rate implementation. Starting in 2026, investment tax credit for renewables projects will be recognized evenly across quarters to reduce earnings volatility. 2. DT Gas: Operating earnings were $10 million lower than Q2 2025. The decline stemmed from higher rate base and operating and maintenance (O&M) costs, plus warmer weather, partially offset by incremental IRM revenue. 3. DT Vantage: Operating earnings of $45 million for Q2 2026, a $14 million increase YoY, driven by higher earnings across both custom energy solutions and R&G platforms. 4. Energy Trading: Operating earnings of $41 million for Q2 2026, a $17 million increase YoY, primarily due to timing adjustments in the power portfolio (including a partial reversal of timing impacts from Q1 2026). 5. Corporate and other: $18 million favorable variance vs Q2 2025, primarily due to favorable tax timing (expected to reverse by year-end), partially offset by higher interest expense. Total company operating earnings for Q2 2026 were $274 million, equal to $1.32 per share. Utility earnings are projected to comprise 93% of total earnings by 2030.

Risks & headwinds

- Extreme weather events like the July 2026 storm can cause widespread unexpected outages and extended restoration times, even with advance preparation, highlighting the ongoing need for further grid investment and preparedness improvements. - Data center contracts require regulatory approval, and there is uncertainty around the outcome of pending approvals for the Google data center contract, DTE's large load tariff, and the proposed electric rate case stay-out mechanism. - Early and mid-stage data center projects face bottlenecks primarily related to local zoning and permitting approval, which can delay project timelines and progress. - Counterparty credit risk exists for large data center projects; while DTE has contractual collateral protection in place, further credit downgrades of major counterparties like Oracle could create uncertainty. - Legislative and regulatory changes related to energy policy are possible following upcoming elections, which could impact DTE's business and planning.

Analyst Q&A

• Q: The 2 gigawatts of advanced data center discussions include a target for an additional agreement by end-2026. Is this composed of multiple new customers, and what is the current status of commercial and regulatory progress? When will guidance be updated for this upside, and will you change the 6-8% growth range?

  A: The 2 gigawatts includes multiple customers, a mix of hyperscalers and co-locators, with all projects having either zoning or a clear path to zoning. Commercial discussions are ongoing, customers are working through site plan and permitting, and management remains confident an agreement will be secured by year-end. Guidance updates will only come after regulatory approval of contracts: any update for Google will happen in Q3 or at EEI after its September approval, and an additional contract would see an update in Q4. Management will leave the 6-8% range intact and label upside as "8%+", no step change to the range.

• Q: How are stakeholders responding to your proposed electric rate case stay-out enabled by data center benefits, and how will data center pipeline growth be incorporated into the upcoming Q3 IRP?

  A: Pre-filing conversations with regulators and intervenors have been very positive for the stay-out mechanism, as extending the period between rate cases keeps customer rates flat, which is a high priority for stakeholders. For the IRP, the base case will include only the already-signed Oracle and Google contracts, the high-end scenario will incorporate DTE's full 5-6 gigawatt total pipeline, and there will be an intermediate scenario between the two.

• Q: Following S&P's recent credit downgrade of Oracle, what credit and collateral protections are in place for the Oracle project, and are you changing your counterparty protection framework for future contracts?

  A: The downgrade leaves Oracle still investment-grade, and DTE does not expect any impact on the Oracle project's construction or timeline. The contract has predefined additional collateral requirements tied to downgrade triggers that fully protect DTE and its customers from stranded asset risk, and additional collateral has already been posted following the downgrade. DTE's existing contract structure, which includes minimum monthly charges for 10+ years to recover all invested capital, already has sufficient protections, so no changes are needed for future agreements.

• Q: What is the latest update on the out-of-state DT Vantage behind-the-meter data center project, and could delays impact 2026 or 2027 earnings?

  A: The hundreds-of-megawatts project is progressing well commercially, and all required equipment has already been ordered. The counterparty is currently resolving local permitting delays at the original site, and is also evaluating alternative locations. The project will move forward at one of the sites, and any delays have no impact on 2026 earnings, with limited material impact expected for 2027.

• Q: What is the primary bottleneck for early-stage data center projects moving into advanced discussions, beyond the 2 gigawatts in advanced talks?

  A: The primary bottleneck for all early-stage projects, especially for co-locators, is securing local zoning approval for the data center site. Once zoning is secured and site plans are approved, co-locators are typically able to secure end customer commitments relatively quickly, so zoning is the biggest hurdle to advancing in the pipeline.