DTE Energy Co. Q3 FY2024 earnings call

• Strong 2024 performance with confidence in delivering 2024 operating EPS guidance and positioning for 2025 and beyond.
• Progress in regulatory proceedings for DTE Gas and DTE Electric, with constructive outcomes expected in November and January respectively.
• Reliability improvements: August storm restoration saw 65% of customers restored in 24 hours and 95% in 48 hours; smart grid technology prevented over 9,000 power interruptions and avoided over 3.6 million outage minutes by Q3.
• Community support: Employees spent 5,000 hours volunteering, and team helped with hurricane relief; energy efficiency program installed 1,000 free AC units for low-income customers.
• Employee engagement: Ranked 94th percentile globally in employee engagement, and recognized as Best Place to Work for disability inclusion and Health and Well-being.
• Renewables build-out: DTE Electric broke ground on three new solar parks and has three under construction, adding 800 MW to renewable portfolio; MIGreenPower has 2,500 MW subscribed with nearly 100,000 residential customers.
• Gas main renewal program: Progressing on modernizing gas transmission and distribution systems.

DTE Electric: Earnings were $437 million for the quarter, $169 million higher than Q3 2023. Drivers included base rates, warmer weather, lower storm expenses, and tax timing, partially offset by higher rate base costs. DTE Gas: Operating earnings were unfavorable $8 million vs Q3 2023, driven by higher rate base costs and normalized O&M, partially offset by increased revenue from IRM. DTE Vantage: Operating earnings were $33 million in Q3 2024, a $23 million decrease from 2023 due to timing and one-time items, but new projects ramping up in Q4. Energy Trading: Earnings were $25 million in Q3, with strong performance in contract and hedged physical power and gas portfolios. Corporate and Other: Favorable by $30 million quarter-over-quarter due to tax timing, reversing through the year.

• Confident in delivering 2024 operating EPS guidance. Long-term operating EPS growth target of 6%-8%.
• Updated five-year plan to be provided on year-end call, continuing customer-focused investments in grid reliability and cleaner generation.
• DTE is well-positioned to achieve full-year operating EPS guidance in 2024 and deliver strong results in 2025 and beyond.

Q: Shar Pourreza asked about system needs prompting reconsideration of CapEx, generation needs, and funding.

A: Gerardo Norcia mentioned incremental investment in generation due to voluntary renewables subscription and clean energy legislation, and Joi Harris discussed reprioritizing capital plans while mindful of affordability.

Q: Durgesh Chopra asked about performance-based rule-making docket.

A: Joi Harris said commission prepared final straw dog with seven metrics, staff's position is constructive, and they await commission response to finalize PBR.

Q: Jeremy Tonet asked about RNG, custom solutions, and carbon capture.

A: David Ruud mentioned RNG project coming online, custom energy solutions supported by IRA, and CCS projects advancing.

Q: Nick Campanella asked about load growth and data center bill.

A: Gerardo Norcia said forecast is flat demand growth, sales and use tax bill passed House and expected in lame duck session, with capacity to connect data center load soon.

Q: Michael Sullivan asked about rate case cadence and trading segment.

A: David Ruud said no big reversal expected in Q4 for trading, with favorable contracts and three-year power contracts providing optimism.

Q: Travis Miller asked about audit pathway.

A: Joi Harris said they'll file responses in mid-November, with no formal end to process and findings incorporated into future proceedings.