DTE Energy (NYSE:DTE) said cooler weather in 2013 pushed down earnings for its electric utility and the parent company in the second quarter.
That’s because 2012 was abnormally hot and that drove up revenue last year, the company said in a July 26 quarterly earnings call with analysts. Also July 26, DTE filed its 8-K report with the Securities and Exchange Commission (SEC).
DTE reported 2Q 2013 earnings of $105m, or 60 cents per diluted share, compared with $146m, or 86 cents per diluted share in 2012. The variance is primarily due to lower earnings at DTE Electric Co. as a result of the return to normal weather, officials said.
During the call, DTE officials suggested the much-publicized bankruptcy filing by the City of Detroit should have little if any impact on the Detroit-based utility holding company and its business units.
In response to an analyst question, officials noted that DTE recently took a write-off for a power plant that had formally provided generation for a General Motors plant.
Operating earnings for the second quarter 2013 were $109m, or 62 cents per diluted share, compared with 2012 operating earnings of $147m, or 87 cents per diluted share. Operating earnings exclude non-recurring items and discontinued operations.
DTE Energy Chairman, President and CEO Gerard Anderson said customers can expect to see a reduction in their monthly bills from the amended renewable energy plan DTE Energy recently filed with the Michigan Public Service Commission. “When this plan is approved, residential and business customer’s rates will be reduced by almost $90 million per year because we have found ways to improve the economics of wind turbines installed in recent years.”
The company also said that DTE Electric, formerly known as Detroit Edison, is making $6.4bn of capital investment through 2017.
The parent company’s power and industrial projects section is expecting to grow its renewables through completion of development projects, according to the SEC filing.
As they have done in recent analyst presentations, DTE officials touted the state’s improving economy as reflected in increased auto production, higher housing starts and lower employment rate.
DTE Executive Vice President and CFO Dave Meador said he was disappointed in the way the City of Detroit’s recently-announced bankruptcy filing has been depicted in the media. The DTE official expressed confidence that Detroit and Michigan will emerge stronger after the bankruptcy process.
The city hopes to present its bankruptcy plan to the court this fall and have it “wrapped up” this spring, DTE officials said. The city’s exiting the electric business will actually benefit DTE somewhat, the company said.
“We have every indication that we will continue to be paid,” during the bankruptcy, Meador said. Chapter 9 works somewhat differently than Chapter 11 bankruptcy, the DTE official said. The emergency manager will have more leeway to decide what bills will be paid, DTE said.
A new distribution system expansion by DTE around Detroit will occur over five-to-seven years with a capital investment estimated at $300m, company officials said.