The paragraph is an introduction to the DTE Energy Company's Q4 2024 earnings conference call. It begins with the conference operator, Kate, explaining the procedures for asking questions. Matt Krupinski, Director of Investor Relations, then reminds listeners about the Safe Harbor statement and the use of non-GAAP financial measures. The main speakers for the call are introduced, including Jerry Norcia, Chairman and CEO, who highlights the successful performance in 2024 and plans for increased utility investment and transitioning to cleaner energy in 2025 and beyond.

The paragraph outlines the company's commitment to maintaining affordability for customers and achieving a 6% to 8% growth in operating EPS through 2029, aiming for the upper end from 2025 to 2027. It highlights the successful performance in 2024, driven by strong employee engagement and culture, with an operating EPS of $6.83 per share, exceeding expectations. The company has set a 2025 operating EPS guidance range of $7.09 to $7.23, aiming for the higher end of this range, supported by constructive rate orders and 45Z tax credits. The paragraph emphasizes the company's readiness for continued success and details an updated five-year plan.

The paragraph outlines a significant investment plan totaling $30 billion over five years, which is a $5 billion increase from the previous plan. This increase is aimed at enhancing reliability and transitioning to cleaner energy generation. The plan includes potential additional investments, particularly in data center opportunities. The investment is driven by the demand from the My Green Power Voluntary Renewable Program and Michigan's clean energy legislation, alongside efforts to modernize the electric grid. The company plans to shift its investment focus to utility-like projects delivering long-term earnings. The plan is expected to result in a 6% to 8% operating EPS growth, with a strong balance sheet and solid dividends.

The paragraph outlines the need for increased renewable generation investments due to the success of a voluntary renewables program and Michigan's 2023 clean energy legislation, requiring an additional $3 billion. The company has a robust development pipeline and has secured tax credits through 2027. Additionally, there's a $1 billion increase in distribution infrastructure investment over five years, leading to improved reliability, evidenced by a 70% reduction in outage duration. This effort is supported by recent rate orders and an independent audit. The company also plans to shift focus strategically to long-term fixed-fee contracted projects within its Vantage segment, which has historically provided strong earnings.

The paragraph outlines DTE Vantage's strategic shift towards utility-like projects with long-term fixed-fee contracts, bolstered by 45Z production tax credits for RNG projects until 2027. This strategy aims for a 6% to 8% EPS growth rate, with potential to exceed it due to increased demand from data center projects, including agreements totaling 2,100 megawatts. Ongoing discussions and legislative support enhance these opportunities. The company plans to incorporate new baseload generation in the 2026 IRP to support data center demand, while maintaining a focus on affordability.

The paragraph discusses DTE's achievements in maintaining customer affordability and highlights its successful strategies and improvements in 2024. The company, supported by strong cash flows and favorable policies, aims for a substantial EPS growth rate of 6% to 8%. Joi Harris notes the significant enhancements in reliability for customers, achieved through investments in smart technology and infrastructure upgrades. These efforts resulted in a 70% reduction in customer power outages, positioning DTE for continued success in 2025 and beyond.

The paragraph discusses a company's significant investments in clean energy and infrastructure. They are constructing a 220-megawatt battery storage center and currently have 2,300 megawatts of renewable energy in service, with plans for an additional 1,000 megawatts. The company is investing $24 billion over the next five years in clean energy, a $4 billion increase from previous plans, with $10 billion earmarked specifically for cleaner generation, up by $3 billion from last year. This growth is driven by their renewables program and compliance with Michigan's clean energy laws. They have secured necessary land, permits, and panels to support this expansion, with tax credits and regulatory support bolstering their efforts. Additionally, they are increasing investment in distribution infrastructure to enhance customer reliability, backed by supportive regulatory outcomes.

The electric distribution audit report confirmed that the proposed investment plan will significantly improve reliability, aiming to reduce power outages by 30% and outage time by half over five years. There are growth opportunities in Southeast Michigan, driven by data centers and economic development with major companies like General Motors and the University of Michigan investing in the area. The company is also working with economic partners and has made progress in securing tax exemptions for data center development. It is advancing discussions with data center companies, including a non-binding agreement with Switch to build a 1.4-gigawatt site on their land, expected to develop through 2032.

The paragraph discusses a company's recent agreements and projects, including a non-binding preliminary agreement and a recently announced University of Michigan project, which aim to add approximately 2,100 megawatts of potential new load, representing significant overall load growth. The company can quickly address this demand due to existing excess capacity but will also invest in new generation and long-term opportunities aligned with its 2026 IRP. Despite these expansions, the company remains focused on maintaining customer affordability, using efficient cost management and operational excellence. Historical data shows that their annual bill increases have remained below regional and national averages, as well as inflation rates, ensuring top-tier affordability for customers. The company's gas business also performed well in 2024, maintaining top quartile cost and operational efficiency.

The paragraph highlights DTE Gas's achievements and future plans, including being ranked number one in customer satisfaction for business natural gas service in the Midwest by J.D. Power. The company is committed to modernizing its gas transmission system, having renewed nearly 1,900 miles through 2024, with plans to invest $4 billion over the next five years to upgrade aging infrastructure. The updated five-year plan aims to enhance system reliability, support a growing renewable program, and focus on utility-like investments at DTE Vantage, targeting annual earnings growth of $20 million and 6% to 8% EPS growth. The plan also considers the impact of 45Z production tax credits and potential benefits from data center development. The paragraph concludes with David Ruud set to provide a financial update.

In 2024, DTE reported operating earnings of $1.4 billion or $6.83 per share, achieving the high end of their guidance with a 9% growth over the 2023 midpoint. DTE Electric saw a $314 million increase to $1.1 billion, driven by rate implementations, warmer weather, and lower storm expenses. DTE Gas earnings were $263 million, $31 million lower, impacted by the warmest winter in over sixty years and higher costs. DTE Vantage earned $133 million, with variances due to timing and one-time items in 2023, and benefited from higher tax credits in 2024. Energy trading earned $100 million, maintaining strong performance in physical power and gas. Corporate and other areas saw a $26 million decline due to higher interest expenses. Overall, DTE's earnings per share met the high-end expectations for 2024.

The 2025 earnings guidance for DTE indicates an operating EPS midpoint of $7.16 per share, reflecting a 7% growth from 2024. The company aims for 6% to 8% long-term growth. DTE Electric's growth relies on investments in grid reliability and cleaner energy, while DTE Gas focuses on customer-centric infrastructure improvements. DTE Vantage expects earnings from new energy solutions projects and 45Z tax credits, contributing $50 to $60 million annually from 2025 to 2027. Continued growth is anticipated at DTE Vantage from contracted projects, with $20 million in average annual earnings growth. Energy trading also shows strength, relying on favorable contracted positions. However, corporate expenses are affected by higher interest costs. Additional details on DTE Vantage’s long-term growth are available in the presentation’s appendix.

The paragraph outlines DTE's financial strategy and performance, emphasizing a strong balance sheet, minimal equity issuances until 2028, and a focus on maintaining an investment-grade credit rating. It notes the company's success in achieving high-end earnings for 2024, with plans for continued growth in earnings per share (EPS) of 6% to 8% annually through utility and non-utility investments. The updated plan includes a $5 billion increase in capital investment, primarily aimed at cleaner energy and reliability. DTE also aims to align dividend growth with EPS growth, maintaining flexibility for future years.

The company is optimistic about delivering strong shareholder returns supported by a robust balance sheet and capital investment plan. During a Q&A session, a question was raised regarding updates to the Capital Expenditure (CapEx) plan in relation to data centers. Jerry Norcia clarified that while they have agreements for 2,100 megawatts, these are not yet included in their current five-year CapEx plan. However, they anticipate upside potential as definitive agreements are made. They have excess capacity to support data center loads and aim to incorporate incremental renewables and storage, particularly towards the latter part of their five-year plan, to meet the data centers' requirements for cleaner power.

The paragraph discusses the company's five-year plan, focusing on moving from a term sheet to a definitive agreement and updating the capital plan, likely between the third and fourth quarters. David Ruud mentions that while the capital plan will be updated throughout the year, a detailed update is expected by the fourth quarter. Shar Pourreza inquires about factors affecting their growth, and Ruud responds that the company's growth is primarily driven by utility investments aimed at cleaner generation and reliability, rather than high returns from RNG projects. They have a solid $20 million annual plan for Vantage, with no assumptions on production or investment tax credits post-2027, and note significant positive developments in 2023 driven by utility CapEx plans and the 2023 IRP settlement.

The paragraph discusses a series of achievements and plans related to clean energy and infrastructure development. It highlights the completion of clean energy legislation in 2023, success in a voluntary renewables program, and a supportive audit report for their wires business in 2024. This progress led to a significant $4 billion increase in their electric capital expenditure plan over five years, aimed at enhancing earnings through long-term contracts. From 2025 to 2027, they expect to reach the higher end of their performance guidance, with flexibility to exceed it, planning beyond 2027 when current credits expire. They express confidence in their improved plan. Additionally, the discussion shifts to data center demand and its potential positive impact on load growth, investments, and customer affordability, with a conservative planning approach in place.

The paragraph discusses the company's plans and confidence regarding data center growth and its expected impact on load growth, projecting a 4% to 5% CAGR increase, which benefits customers. Nick Campanella asks about the company's rate filing strategy and its impact on executing plans for 2025. David Ruud expresses strong confidence in achieving the higher end of guidance for 2025. The company is already planning for 2026, indicating a stable outlook for 2025. Ruud mentions that a recent favorable order aligns with their planning, and they intend to manage capital as planned. He notes that the electric rate filing is expected in the second quarter and discusses incorporating Liberty audit findings to expand the IRM, with positive feedback from commissioners and staff.

The paragraph features a conversation between David Ruud and Rich, who is speaking on behalf of Jeremy Tonet from JPMorgan. David Ruud discusses their company's financing plans and cash flow considerations. He expresses confidence in their minimal equity plan from 2025 to 2027, driven by strong base cash flows and tax credit monetization, which helps maintain a 15%-16% FFO to debt ratio. However, due to increased capital needs in later years, there might be some equity requirements starting in 2028 to support growth. The discussion then shifts to opportunities for a project or initiative named Vantage, with David Ruud being asked to elaborate on their focus and expectations for it over the coming years.

The paragraph discusses a company's financial outlook, projecting an income growth of around $20 million annually, aligning with their historical performance of $20 to $30 million per year. The company is involved in long-term, fixed-fee utility services projects with large industrial partners and is expanding into carbon capture and storage with ethanol producers. These initiatives involve capital expenditures of $60 million to $100 million, promising returns of over 10% unlevered after tax, with no commodity risk. The company feels optimistic about their project pipeline's potential to maintain their financial targets even after tax credits expire in 2028 and 2029. The section ends with a transition to a Q&A session, introducing Julien Dumoulin-Smith from Jefferies.

The paragraph discusses the company's strategy and outlook beyond 2027, focusing on the financial and operational aspects of the Vantage project. Jerry Norcia and Dave address questions about the company's ability to sustain and grow Vantage without relying on tax credits in 2028 and 2029. They express confidence in achieving their goals due to the strong plan in place, supported by significant capital expenditures from utilities. The plan anticipates superior growth, particularly from 2025 to 2027, with potential upside from data centers, which are increasingly interested in the company's land and capacity.

In this conversation, David Ruud and Joi Harris discuss their company's long-term growth plans, emphasizing the potential for upside through definitive agreements and conservative planning without relying on tax credits. They mention a three-year equity plan with modest increases expected in 2028 and 2029. Julien Dumoulin-Smith inquires about the timeline for data center developments, considering the early stage of related legislation and potential tariff structures in neighboring states. Joi Harris expresses optimism about progressing talks and achieving more definitive agreements within the year.

The paragraph discusses an agreement with Switch and the University of Michigan for increasing power generation, including a potential added load of 2,100 megawatts for data centers. The speaker is optimistic about Michigan's prospects due to favorable conditions and legislation. They highlight the ability to meet short-term demand with existing capacity, potentially using renewables and battery storage. In the long term, they anticipate needing to expand renewables and possibly incorporate combined cycle generation with carbon capture, exploring different tariff structures as the load increases. This strategy is seen as an affordable solution for customers without requiring significant immediate investments.

The paragraph discusses the current situation and future strategies regarding tariffs for data centers and energy infrastructure. Jerry Norcia mentions the potential need for a new tariff structure that incorporates fixed volumes and demand response, especially for significant projects like building a combined cycle plant with renewable energy and battery storage. This new tariff would be long-term and have a fixed-fee arrangement to minimize customer risk. The initiative has strong support from the commission, the governor, and legislation. In a subsequent discussion, David Arcaro from Morgan Stanley asks about learnings from a recent electric rate case concerning affordability, ROE (Return on Equity), and investment mechanisms. Joi Harris responds positively, noting that the order supports their investment agenda by maintaining the ROE and equity structure and extending the IRM, a move that allows for further expansion based on the Liberty audit. The company plans to incorporate these audit findings in its next proceeding.

The paragraph discusses the positive impact of investments on customer benefits, specifically in improving service reliability and reducing outage frequency and duration. The company is aligning its distribution grid plan with its goals to achieve these improvements. Jerry Norcia highlights the company's strong performance in maintaining low bill growth compared to the industry and regional neighbors, emphasizing affordability as a non-issue for regulators due to their effective cost management. Joi Harris adds that a recent rate order reduced costs for customers by offsetting increases with a $300 million reduction in power supply cost recovery, demonstrating efforts to keep bills affordable.

The paragraph is a conversation involving several speakers discussing the data center activity and rate base growth. Joi Harris mentions a pipeline of about three gigawatts in data centers, with up to a gigawatt of near-term excess capacity still available. The company plans to add generation as needed. David Arcaro finds this update helpful. Michael Sullivan asks about rate base growth, which David Ruud states is around 8%. Sullivan also inquires about the mechanics of the 45Z's and its impact on Vantage's year-over-year performance. Ruud explains that while the 45Z's provide flexibility, Vantage experiences variability as new projects and associated investment tax credits come online.

The paragraph discusses future project plans and financial forecasts for a company. In 2024, the company anticipates benefits from new projects and investment tax credits, but does not expect the same level of activity in 2025. They plan for projects to resume in 2026 and 2027 for continued investment tax credits, but the forecast beyond 2027 does not include these credits. In response to a question from Michael Sullivan, David Ruud confirms the company aims for a 15% FFO to debt ratio in 2024. Andrew Weisel then asks about the 2026 Integrated Resource Plan (IRP) and tariffs. Joi Harris explains the IRP will be filed at the end of 2026, with results expected by late 2027 or early 2028. Changes in tariff structures will involve working with the commission and can occur outside of rate cases.

The paragraph discusses plans related to data centers and earnings growth, emphasizing the need for fixed-fee, long-term contracts to protect existing customers while introducing new generation models. Andrew Weisel seeks clarification on earning growth strategies, particularly regarding the RNG tax credits and potential earnings growth from 2025-2027 and beyond. Jerry Norcia explains the intention to commit to the high end of guidance in those years while maintaining flexibility to adapt to changes and secure future growth, highlighting the importance of adjusting plans as needed to ensure high-quality shareholder returns.

The paragraph involves a discussion about a company's financial strategy and projections. Jerry Norcia explains that they don't rely on tax credits to meet their financial targets for 2028 and 2029 and aim to maintain flexibility in managing expenses. He emphasizes a strategy of underpromising and overdelivering, a philosophy appreciated by Andrew Weisel. Bill Appicelli from UBS aligns with this perspective and discusses the company's comfort with a long-term EPS growth rate of 6% to 8% beyond 2025, even without the continuation of tax credits. Jerry Norcia mentions that while they have opportunities for incremental capital expenditure, particularly with data centers, their current focus is shaping agreements in this sector for growth between 2025 and 2027.

In the paragraph, Bill Appicelli seeks clarification on the regularity of rate case filings for the company. Joi Harris indicates that for the electric sector, the regular cadence of filings can be assumed based on ongoing investments, with the possibility of increasing intervals between filings depending on the expansion of the Investment Recovery Mechanism (IRM). Jerry Norcia expresses a preference for a return to a two to three-year timeframe between rate cases if outcomes stabilize. Joi Harris notes that expanding the IRM requires alignment with the Michigan Public Service Commission (MPSC) staff and commissioners, using findings from the Liberty audit to guide the incorporation of units and projects in the plan. The audit supports their current plan for achieving reliability improvements over five years. The paragraph concludes with closing remarks and a transition to a new question from Travis Miller.

The paragraph is a segment from an investor call discussing capital expenditure (CapEx) plans, regulatory approval, and potential financial implications. Joi Harris mentions that they previously filed for CapEx expansion plans ranging from $590 million to $720 million, with pole top maintenance identified as an area for increased investment and potential upside. They are working to align plans before the next rate case filing. Travis Miller acknowledges the discussion, and then the conversation shifts to Paul Fremont, who asks about significant tax credit contributions in 2024 related to a Ford project. David Ruud confirms the Ford project is associated with tax benefits, specifically identifying over $50 million in Investment Tax Credit (ITC). Following this, Ryan Levine inquires about a potential tariff for data centers.

In the paragraph, Joi Harris discusses the potential need for a new tariff filing as the load grows, which might eventually require additional infrastructure beyond current generation capabilities. The focus will be on integrating best practices from other areas and learnings from the state. Ryan Levine thanks Joi for the response, and then Jerry Norcia concludes the call by expressing optimism about future plans for 2025 and beyond. The call is then ended by the operator.

This summary was generated with AI and may contain some inaccuracies.