DTE Energy sees its non-utility earnings grow

DTE Energy (NYSE:DTE) is seeing its non-utility earnings increase over time, the company said in a filing with the Securities & Exchange Commission (SEC) on Aug. 13.

While it still gets most of its earnings from its DTE Electric and DTE Gas utilities, both regulated by the Michigan Public Service Commission, a growing chunk of its income is produced by non-utility businesses.

DTE’s utility/non-utility earnings mix is currently 80/20 and will evolve to 70/30 by 2018, the company said in material compiled for an earnings presentation on Aug. 14.

The company’s non-regulated businesses are involved in transport and storage of natural gas; owning and operating energy-related assets on industrial sites; and energy trading.

DTE’s non-regulated power and industrial projects unit recently began commercial operation of a 45-MW waste wood project near Stockton, Calif. In addition, landfill gas projects of 10 MW or less are being developed in North Carolina and Los Angeles, the company said in the presentation.

Still most of the action is on the regulated front. The electric utility is spending $6.7bn in key growth areas through 2018. The utility is spending $5.6bn on base infrastructure (such as plant reliability); $700m is being spent on environmental compliance; and $400m is being spent on new generation.

The new generation expenditure includes ensuring compliance with Michigan’s renewable energy standard of 10% by 2015.

On the coal front, DTE is looking at potential retirements of 2,600 MW with 4,400 MW of long-term units to be preserved.

New natural gas and wind capacity will replace the coal retirements, DTE noted.

Meanwhile, the natural gas utility is investing $1.2bn in reliability and pipeline integrity through 2018.

DTE holds a 40% ownership interest in Vector Pipeline, which connects the Chicago, Michigan and Dawn market centers. It owns more than a 26% stake in the Millennium Pipeline serving markets in the northeast. Meanwhile, a wholly-owned subsidiary of DTE Energy is delivering Marcellus Shale gas in Pennsylvania and New York to Millennium Pipeline and Tennessee Pipeline, according to the DTE website.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.