Q2 2025 DTE Energy Co Earnings Call
Thank you for standing by. My name is Rebecca and I will be your conference operator. Today at this time I would like to welcome everyone. To the DTE Energy Q2, 2025 earnings conference call all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again, thank you. I will now turn the call over to Matt crumpy. Please begin.
Everyone before we get started, I'd like to remind you to read the Safe Harbor statement on page 2 of the presentation including the reference to forward-looking statements.
Our presentation also includes references to operating earnings, which is a non-gaap financial measure.
Please refer to the reconciliation of gaap earnings to operating earnings provided in the appendix with us. This morning are Jerry, norcia, chairman, and CEO, Joy, Harris, president, and coo and Dave, rude, Executive Vice, President, and CFO. And now, I'll turn it over to Jerry to start our call this morning.
Thanks, Matt. Good morning, everyone. And thanks for joining us. I hope everyone is having a healthy and safe year so far
This morning, we will discuss the achievements. We've made this year as we continue to deliver for all of our key. Stakeholders Joy will provide an update on our business strategy, highlighting the significant improvements. We are making to enhance reliability or our customers and the progress, we are making on renewable energy Investments supporting our path, the cleaner generation.
Joy will also provide an update on data center opportunities that provide potential upside to the plan.
And Dave will provide a financial update and wrap things up before we take your questions.
So to start, I'm sure you're all aware that I will be turning over the CEO role to Joi Harris, effective September 8th of this year.
As I'm sure that you have seen over the last few years, we have been preparing for this structured transition for some time.
I've worked with joy for over 20 years and I've been watching her to continue to deliver
and really over the liver in every role and challenge that she has taken on at DTE.
and particularly in these last couple years where she has been serving as president and coo,
She has just continued to excel in leading our company to be successful in all of our most critical areas.
So it has just become obvious to me to our board and to our entire company that Joy is ready for this role and ready to lead our company to continue to Excellence.
It has been a real honor to be DPS CEO for the last six years, and I'm extremely proud of what we have accomplished over that time.
As Joy transitions to the CEO role, I will be serving as Executive Chairman.
supporting joy and the company helping to ensure the continued success of BTE for all of our stakeholders.
I am confident that we will continue to deliver.
And we're well positioned for long-term growth with solid opportunities.
Across all of our business units.
I'll provide a brief overview of slide, 4 highlight, our key successes and the opportunities that reinforce my confidence in our continued progress towards our goals.
We have had a strong first half of 2025 and our well, positioned to meet our Targets. This year, our success is a testament to our dedicated and engaged team committed to serving our customers and communities.
As I mentioned last quarter, this year we were recognized by the Gallup organization.
For the 13th consecutive year with a great workplace award.
And our Employee Engagement ranks, in a 94th, percentile globally, among thousands of organizations.
As I've mentioned before, our high level of Employee Engagement, is our secret sauce for continued success.
We remain committed to making significant investments to enhance the grid and improve reliability for our customers. We see that these investments in process improvements deliver results.
We saw a nearly 70% Improvement in reliability in 2024 when compared to 2023.
And we continue to make progress in 2025, as we work towards our goal of reducing outages by 30%.
and the amount of time customers spend without power by 50% by 2029,
we continue to successfully execute significant investments in cleaner generation for our customers, which will continue over the next 5 years and into the next decade
Significantly, increase our solar and wind Investments, as well as battery storage.
Joy will share more details on our renewable investment strategy. Support both our voluntary program and Michigan's clean energy goals.
Our 2025 operating APS guidance is $7.99 to $7.23 and we remain well positioned to achieve the higher end of the range this year and continue to use additional favorability to extinguish backlogs that supports future years.
Our long-term operating EPS growth rate remains a 6 to 8% with 2025, original guidance, as the basis for this growth.
Tax credits from RNG projects coming into the plan. This year. We have confidence we will reach the higher end.
Of our targeted range for 2025 through 2027.
As I'm sure you are aware the budget. Bill that passed recently did extend the RNG tax credits through 2029.
This is definitely a positive for DTE. We plan to update our 5-year plan this fall, and we'll provide more detail at that time.
I'll say at this time that this gives us even more confidence that we will be able to deliver on our targets over the next 5 years and Beyond
So, I'm feeling really positive about 2025 and our position. We are in a great place to continue to achieve long-term success.
And as we have said, data center opportunities will provide upside to our current 5-year plan.
We are in a late stage discussions with multiple data centers, for significant new load. Which Joy will provide more details on shortly.
We continue to maintain a strong balance sheet and investment-grade credit ratings to support our customer focus.
Capital investment plan.
We remain committed to delivering premium shareholder returns that our investors have come to expect.
And our 2025 annualized dividend of $4.36 per share.
Aligns with our practice of providing a growing dividend consistent with EPS growth.
Now, I'll turn it over to Joy Joy, over to you.
Thanks, Jerry, and good morning, everyone. I'll start by saying how grateful and...
Yes, it's next CEO in particular. I would like to express my appreciation to Jerry for his mentorship and friendship over the past 20 years.
Jerry has been an exceptional leader for DTE driving. The company to success year after year. And I look forward to working with him for a few more years to continue to drive value for DTE.
As I take on the role of CEO for DTE Energy, I want to emphasize that our core priorities long-term vision, and strategic goals remain unchanged.
We are committed to building on the strong foundation and momentum. We've established over the years and will continue to deliver exceptional results for our customers communities and investors
Our plan is supported by a highly engaged and dedicated Team 1. That is deeply committed to achieving best-in-class outcomes across all key priorities.
It is this shared focus and Collective energy. That fuel our continued success.
We continue to see strong growth in our utility operations driven by customer focused, Investments aimed at improving reliability and transitioning to cleaner energy.
Our solid regulatory framework provides a stable and supportive environment. For these infrastructure Investments, enabling us to move forward with confidence as we modernize our distribution system and continue our transition to cleaner energy.
Beyond our core utility business. We see transparent low-risk growth opportunities at DTE Vantage providing diversification. Both in terms of earnings and Geographic reach, while aligning with our broader strategic objectives.
We have a strong project development pipeline in place at DTE, vantage with multiple custom Energy Solutions, projects underway, including a project with Ford Motor Company which is expected to come online in 2026 and a project to build an operated 42 megawatt, combined heat and power project for a large industrial customer which is expected to begin Khan.
Construction later this year.
These projects are supported by long-term fixed fee contracts, providing solid low-risk growth opportunities in this space.
So overall, we have a robust 5-year plan in place anchored by 30 billion of customer-focused capital Investments over the next 5 years.
With more than 90% of that investment directed towards strengthening and modernizing. Our utility operations.
Additionally, we are well, positioned to meet the potential surge in demand from data centers.
This represents significant upside to our plan offering opportunities for additional investments in new generation capacity while supporting our commitment to customer affordability.
Sustainable long-term value, for all of our stakeholders.
Let me move to slide 6 to highlight progress, we are making to improve reliability.
Our investments in our grid and the process improvements we are making are driving improved reliability for our customers, with a continued emphasis on maintaining affordability.
In the first half of the year, we made significant progress in strengthening the grid. We installed more than 220 smart grid devices to help reduce outage duration and improve response time.
And conducted over 230 miles of ptop Maintenance upgrading and replacing over 1500. Utility poles enhancing system resilience
We also continued the replacement of the aging 4.8 kV system, a key step in modernizing our networks, and trimmed over 3,300 miles of trees as part of our ongoing Vegetation Management program to prevent outages.
our system was put to the test at the end of June with a record-breaking 4-day Heat Wave followed by a powerful storm that swept through our service territory with winds reaching nearly 60 MPH impacting over 55,000 customers.
During the heat waves, Our Generation Fleet performed exceptionally well meeting High customer Demand with reliability and resilience.
And our storm response was very effective restoring power to 95% of affected customers within 24 hours and nearly 100% within 48 hours.
I am grateful for the dedication of our teams, including line workers, contractors, dispatchers, and everyone involved in these restoration efforts.
Their hard work through all of this highlights the critical importance of what we do and demonstrates the incredible results we can achieve when we work together.
As I mentioned, we benefit from a constructive regulatory environment here in Michigan.
Supportive of the Investments. We need to make on behalf of our customers.
We continue to work collaboratively with our Regulators to affordably execute our distribution Investments for our customers.
Our DTE Electric rate case. Filing supports our current 5-year plan of 10 billion dollars in Grid Investments, including a request for a 1 billion dollars of distribution, spend to be included in our infrastructure recovery and mechanism by 2029
These Investments to improve reliability are also supported by the recent mpsc, electric distribution audit.
Lastly, we expect to file a DTE Gas rate case, later this year, that will be focused on continued infrastructure investment, and reliability improvements, while maintaining affordability for our customers.
Let me move to slide, 7 to provide an update on our renewable Investments and data center opportunities.
We have plans for significant investments in cleaner, generation over the next 5 years, and into the next decade and these Investments are supported by the recent settlements of our 2024 renewable energy plan filing, our long-term, integrated resource plan and Michigan's clean, energy plan.
The progress, we are making on these Investments has allowed us to Safe Harbor investment tax credits. For these renewable projects, into 2029 with the IRA Provisions, continuing to support our ability to execute these Investments affordably for our customers.
Currently, we have 2,500 megawatts of renewable generation in service, and we are building roughly 900 megawatts of renewables per year on average over the next 5 years.
Solid land positions, combined with our ability to successfully move these projects through the interconnection. And permitting processes puts us in a great position to execute our transition to cleaner energy,
We also continue to make great progress with data centers.
We are in advanced discussions with multiple hyperscalers for over 3, gigawatts of new loads and are having ongoing discussions with multiple other data center, operators for an additional 4 gigawatt.
Customers currently in advanced discussions have secured land positions, established clear zoning pathways, and have earned the backing of local communities.
And the remaining 4 gigawatts in the pipeline either have confirmed access to land or are nearing finalization of land agreements.
Load ramps up to 3, gigawatts will be met through a combination of existing generation capacity and new energy storage solutions and longer term additional data center. Loads will require incremental investments in new base load generation.
Energy storage needs will be aligned directly with data center load ramps on a 1-to-1 basis in the near term, driving incremental investments that are not included in our current 5-year capital plan.
And as we have mentioned, we continue to Target closing, our first large data center deal. By the end of this year, which we expect will ramp to at least 1 gigawatt of new load.
In addition to the growth, these data centers could generate.
They will also enhance affordability for existing customers.
And, as we have said, these data center opportunities are all upside to our current 5-year plan.
And with that, I'll turn it over to Dave to give you a financial update.
Thanks Joy. Good morning, everyone.
Let me start on slide 8, to review our second-quarter financial results.
Operating earnings for the quarter were 283 million.
This translates into $136 per share.
You can find a detailed breakdown of eps by segments, including our reconciliation to gaap reported earnings in the appendix
We'll start the review at the top of the page with their utilities.
DT electric earnings were 318 million for the quarter.
Earnings were 39 million higher than the second quarter of 2024.
The main drivers of the variance were rate implementation and timing of taxes, partially offset by higher O&M and rate-based costs, and warmer weather last year.
On the timing of taxes, I mentioned this was fairly significant. The first quarter was at -$67 million relative to 2024.
This is related to investment tax credits on 2, solar projects that went into service in the first quarter.
This timing was known and built into our plan and reverses during the balance of the year.
With $37 million reversing in the second quarter.
Moving on to DT gas.
Operating earnings were $6 million, which was $6 million lower than the second quarter of 2024.
The earnings variance was driven by higher onm and rate based costs partially offset by Cooler weather.
Let's move to DT Vantage on the third row.
Operating earnings were 31 million for the second quarter of 2025.
This is a 17 million increase from 2024 driven by RNG production tax credits.
And higher custom Energy Solutions, earnings.
We remain on track for the full year, guidance, at the TT Vantage.
On the next row, you can see energy trading or 24 million for the quarter.
We continue to experience favorability and strong margins in our contracted and hedge physical power portfolio.
Putting us in a strong position to start 2025.
On a year-to-date basis. We are currently near the high end of operating earnings guidance for this segment.
This strong performance places us in a favorable position to leverage any potential further upside across DTE.
Provide flexibility and strategic support for future years.
Finally corporate and other was unfavorable by 56 million quarter over quarter to primarily to the timing of taxes as well as higher interest expense.
as with DT electric, this tax timing will reverse during the year, and we expect to end the year in the guidance range in this segment,
Overall, DT earned $1.36 per share in the second quarter of 2025.
Which positions us well to achieve the high end of our guidance range in 2025.
Let me wrap up on slide 9, and then we will open the line for questions.
Our team remains committed to deliver for all of our stakeholders.
We are positioned to achieve the high-end of our operating EPS guidance this year.
And continue to use favorability to eliminate backlogs that will help future years.
Our 5-year capital investment plan of 30 billion dollars supports our customer focused reliability Investments and our cleaner generation Investments.
Merging data center opportunities provide potential upside to this 5-year. Capital investment in EPS growth plan.
DTE continues to be well, positioned to deliver the premium total shareholder returns their investors have come to expect.
Plan with modest Equity issuances of 0 to 100 million dollars over the next 3 years.
We remain confident in our long-term, operating EPS growth rate. Target of 6 to 8% through 2029.
With RNG tax credits providing additional confidence, we will reach the high end of our targeted range through 2027.
As Jerry mentioned, the extension of these tax credits through 2029 are positive for DTE. Giving us greater confidence in our 5-year plan, which we will be updating this fall.
With that.
I thank you for joining us today, and we can open the line for questions.
At this time, if you would like to ask a question, press star, then the number 1 on your telephone keypad will pause for just a moment to compile the Q&A roster.
Your first question comes from the line of Nicholas Campanella with Barclays.
Hey, good morning. Thanks for taking my questions. Hope everyone's doing well, and, uh, congrats on all the announcements. So, um, I just wanted to confirm, sounds like, you know, uh, line of sight to 3 gigawatts off of conversations; there's 4 more gigawatts behind that. Just what is, um, the current capacity on the system to absorb that 3 gigawatts? And I guess just what is the...
Kind of Tipping Point for you to have to pull forward. The 26 p with more capacity needed or said differently. Um, when would you start to have to incur a new generation capex? Um, how many how many gigawatts thank you?
Hey Nick. Uh, thanks for the question and what an exciting time that we're talking about low growth? Uh, that's really uh, an important piece of, uh, of discussions. We're having internally with data center providers and those conversations are going quite well. So let me just recap, uh, early on, WE announced uh 2.1 gigawatts, uh, frame agreements, uh, with data center providers. And we're seeing a lot of, uh, interest in Michigan because we have excess capacity. So, that's drawn, uh, data center providers to the state. And, of course, we now have the sales and use tax exemption, so that further increases their interests. Uh, what we're seeing now is a lot of activation on the part of hyperscalers. Uh, so we've been very conservative about building out our Pipeline and allowing people to enter our pipeline companies, to enter our pipeline. Uh, they have to have land positions or line of sight to a land position and a pathway to zoning and permitting.
That's required for them to build. And So, based on just recent, intensity on the part of hyperscalers. Uh, we're seeing them make, uh, pretty nice, inroads on securing land positions and making weight their way to, uh, permitting requirements, and they're also garnering the support of the local communities, and that goes a long way in advancing them through our pipeline. So now, we see what was co-located kind of moving toward the back of the pipeline and hyperscalers, uh, consuming at least the upper portion of our Pipeline and and positioning themselves, uh, to sign uh Energy Service agreements along with storage agreements. And we're exchanging paper right now and and that paper has a little bit of red ink on it. Uh, and that's all good progress. So we're in active negotiations with large hyperscalers and we're continuing conversations with those co-locate, their load ramps. We're going to use our existing
D11 rates. So our our existing uh industrial rate to serve that load, along with storage. And the way you can think about it is uh near-term load ramps would require us to begin, uh, construction of storage assets, uh, in in 2026 and Beyond. Uh, there is some urgency on the part of the data center providers, to begin the construction of their facilities by 2028 so that they can take advantage of the sales.
As we progress through the load ramps, we'll get to a point where we have to build out more. Dispatchable, resources, larger, dispatchable resources, but that'll get all flushed out in our IRP next year. So we don't intend to pull forward the IRP. Uh, what we intend to do is serve the load near-term with our existing writers, and, uh, tariffs, and then move toward, uh, building out, uh, larger assets based on the results of the IRP.
Thanks a lot. That's really clear. Um, so I guess to to wrap that all up, I mean, you know, um, thinking about the context of the long-term Kerr, uh, load is a Tailwind. It seems like some capex and storage is coming into the plan. Uh, as soon as 2026 you just got the extension of RNG. I know you've had that communication that you're at the high end or above. Um, the EPS Kerr in 26 and 27. Just, how are you kind of thinking about it beyond that through, uh, 2029
Yeah, so where we are right now.
RNG tax.
Possibility in our plan, and it was a really positive mood to see that get extended. So that gives us additional flexibility and it gives us confidence that we can hit that high end. And so, as our plan unfolds, and we updated, uh, we're intending to update our plan toward the end of this year, and How likely in the in the third quarter call, or at EI, we'll offer up.
What our uh our plan looks like for capex and also our growth rate but we don't intend to go beyond the 68. This just gives us uh confidence that we can hit that higher end.
Thank you so much.
Your next question comes from the line of David horario with.
Morgan Stanley.
Oh hey, good morning. Thanks so much and congratulations. Congratulations. Jerry morning.
Um, I was wondering, um, maybe on the back of the OBB. Could you just frame any, um, impacts on the renewable plans? Any risk that you see from the, uh, executive order and continued uncertainty there?
Yeah, thanks David and, um, the uh, final bill, the reconciliation bill, um, really supports our 5 year plan. And what we've been able to do is, uh, say it's Harbor, our renewable Investments through into 2029 and uh, this is all positive news for our customers. Just as a reminder, we have to build these assets. Uh, it is required under the law, and we also have a very popular and successful, voluntary renewable plant, uh program. So we're going to build these renewable assets regardless. And what what? The uh Ira did is make it more affordable for customers that said
Said what we've done based on us you know just being in a position to activate very quickly. We've been able to Safe, Harbor those investment tax credits for our customers through 2029. Additionally, um the battery storage projects will continue to qualify for the investment tax credits through 2036 which is also a supportive of our plan and puts us in a really good position with the build out, we intend to do for data centers. Uh, transferability was maintained. So that's another key element that we we view as very positive. Uh so we feel really confident in what our plan, uh, entails today. And also we feel really good about uh, where we're sitting with RNG tax credits as well. Uh, the added year is an added benefit, and as I mentioned before, that gives us more flexibility and allows us, uh, to have more confidence around, hitting the high-end, uh, in terms of some of the, the executive orders, the safe harboring, we we've already
Done, uh, really insulates us from any exposure to, uh, FIAC. And so, I feel like we've got solid plans in place that remain in place through the duration of our 5-year plan. And we still have a little bit of opportunity because we have to begin construction by the end of this year. So that gives us a little more flexibility. If there are any additional tax credits that we want to secure, we may be able to do that. But all in all, I think the uh,
the final bill supports our plan and we've been able to activate to insulate ourselves from any exposure year after
Absorb, um, any, you know, volatility maybe in weather for the rest of 2025, and where do you stand, um, in terms of now looking ahead to 2026 and pulling forward, um, against some strength in earnings this year?
Yeah, David, as we said, we're in a good position right now after the second quarter. Um, I can also say we've had a warm July.
And so, we are looking for those opportunities where we can, you know, make sure we're going to have a great year in 2025, but then look for those investment opportunities that can help us in future years too. So, um, we're feeling positive on the year and our ability to hit the upper end and continue to help future years.
Great sounds good. Thanks so much. Appreciate it.
Your next question comes from the line of Jeremy Tonette with J.P. Morgan.
Hey, good morning. This is actually Aiden Kelly on for Jeremy.
Hey, hey Aiden, how are you?
Yeah, just just wanted to hone in on the data center Front again. Um, just curious to see if you could offer any like confidence level for the 3, gigawatts of hyperscale load coming online, you know, as well as the 4 gigawatts, you kind of outlined in the opening remarks.
I know you mentioned some pathways to zoning and permitting and, you know, land positions. So, it seems like some good visibility there. But I just wanted to see how you frame it in terms of, you know, a confidence level.
Yeah. So our goal is to get at least 1 gigawatt sign before the end of the year and we're making great progress toward that goal. Uh, we're in active discussions. I can tell you that, uh, I've had personal interaction with, uh, the principles at some of the, uh, data center providers. Um, these are hyperscalers, uh, large large companies that are looking to land here in Michigan. And we, we've got, you know, meetings set up yet this week, uh, to talk to additional uh, providers. So we're feeling really good about the progress that we're making. And the fact that we're exchanging terms, uh, we're getting feedback on what works for them certainly, and we, we've got some flexibility to meet their needs. I think we will have a lot more to say, on the on the third quarter call and, and by the end of the year, but certainly things are progressing in in the right fashion. And we feel really good about the progress and our feeling fairly confident that we'll get something done before the end of the year.
Understood, understood that. That's helpful. Um, I guess just on the storage. Just curious for that 1 gigabyte—gigabyte of data center, um, you know, presumably could be matched with energy storage. Like, would that be over like a 1, 3, or 5 year time frame, like at a high level?
Yeah, so think about it. I'll. I'll.
Let's just call it this gigawatt. We'll, we'll we'll meet that Demand with the excess capacity. We have, plus a storage buildout, and you can think about it as 1 for 1. So, if we bring on a gigawatt of data center load, will have to build a gigawatt of storage and to do that. Uh, we'll use the combination of uh, ppas and self-built, uh, to meet that demand. And so, the pricing that we're seeing just so you have some, some benchmarks to use is about 15 dollars a megawatt for self-build and combine the 2, both self-build and PPE ppas will be roughly about a billion dollars, uh, for every gigawatt that we bring on a storage and we'll start that construction based on the low ramps at least that we're seeing now in, um, 2026. So think about it, coming online, in 27, in increments just based on their load ramps and that
Will progress over, um, a couple of years call it. Uh, as we get further into the plan, we get out toward the, the end of our 5 year plan. The demand grows in such a way at least, as we understand it today, that we'll have to build something more substantial like a combined cycle plant with, uh, carbon capture or being carbon captured, ready. So that's how we're looking at it today and um, as the negotiations materialize and we finalize, those load ramps, we'll incorporate all of this into our IRP and the IRP process will determine the the optimal generation mix.
Understood. That's super clear. I'll leave it there. Thanks.
Your next question comes from the line of Julian Dalin Smith with Jeff.
That's again. Um, thank you maybe. Let me pick, of course. Absolutely. Um, if I can pick it up where you just left it off there because I think it was a nice Point. Um, as you think about the totality of the update to come here, right? Clearly, I, I believe the forecast hasn't really reflected the total opportunity in RNG and the extension, through 29 per your comments to neck and subsequently for your prior comments. Here, it seems like the, the battery storage opportunity, seems very much ripe in that same 27 to 29 period, but maybe if I can put a finer point on the last point, you you said a second ago
About the gas opportunity. How do you think about that? The the visibility on that piece here and the IRP and the potential to have that capex ramp in that those those tail end. Uh, you know, the 27th through 29 period, just trying to make sure I understand the different puzzle pieces that fit into kind of a third quarter or or year. End kind of update here if you think about it.
Yeah. What is the different capex items.
yeah, so the
a combined cycle plan would be toward the tail end of our 5 year plan and into the next phase of our plan. Uh, we would have to go through uh the significant. Uh well the certificate of need process which is really a part of the IRP in order to bring on a combined cycle. Plan, uh, as you know, the q's are building. So we're getting ourselves in the queue. We're already in the MSO Q uh, for at least uh, 1 plant and potentially 2, and that's to serve.
Our existing load, uh, we're, we're still intending to retire Monroe at the end of 2032. And so, therefore, we've got to get in the queue and got to, we've got to ready ourselves in advance of us, uh, filing the IRP. So, the timing doesn't exactly match up. All that said, uh, we continue to, uh, prepare as if we are going to bring on uh ccgt at that time and establish the right relationships with EPC contractors and also with turbine providers. So if you want to think about the storage, think about the storage coming into the plan, beginning in 2026, in increments, and then toward the very tail, end of the plan that would result in us uh bringing on capital for a combined cycle plan.
Got it. Excellent. And then just to understand the the ramp right here, I mean obviously you're talking about a gigawatt of of both conveniently increment, the load and opportunity to serve is there potential that you you kind of accelerate though that incremental you talked to me, you talked about with the 7 I think implied gigawatts of of opportunity here. How do you think about the timing of that?
Um sort of Feathering in is that principally at the tail end or beyond the plan? Or is there a potential that you actually are ramping up even more? So we say multiple parallel data centers um to achieve more than a gigawatt and and is that conceivable given the um generation, mix and and planning cycle we just described
Well, Julian, let me just say it this way. Um, the negotiations are ongoing and a, a point of negotiation is really understanding the low ramp, so we've got early near-term ideas around what that low ramp? Exactly. Looks like for for at least a few of the hyperscalers and we're still continuing those discussions. So, serving where we have a short is really early on. In the plan is really how how we uh support the load. We bring on the storage to support the load during those periods. But until we get a final deal done, we don't know definitively what those little ramps look. Like that's still a point of negotiation and so I don't want to get too far over our skis and and articulate to you that, you know, we're going to ramp and a gigawatt this year and a gigawatt next year. I can't say that definitively. What I do know is at least what we're seeing right now across multiple data center providers, we've got at least a gigawatt worth of opportunity,
That we will have to support near term.
Look forward to that update. All right, oh to clarify on that Julian a little bit. This is Dave, you know, with the additional storage it gives us a little more of the excess generation that we've been talking about. So we're able to use that storage to to reach some of those capacity positions. And so we do have more than a gigawatt of uh availability as we bring the storage on to support that. Yeah, it's a
One for one. So a gigawatt of storage essentially makes one gigawatt almost two gigawatts.
Hey, thanks for that clarification. I appreciate it.
your next question comes from the line of Andrew weasel with Scott, a bank
Area. Now enjoy your board clearly like the literature.
It is a financial question, but the company is generally been very conservative. Uh, your your DTE reputation is 1 of under promising and overd delivering and I think the philosophy serves you well. But my question is, how how are you thinking about that philosophy? I think I heard you say that you're not expecting to grow EPS faster than the high end of 6 to 8%. So maybe that's sort of ends as if I'd love to hear how you're thinking about that. General attitude, I know you. You you've clearly alluded to an updated in a few months, but how do you think about that philosophy?
Yeah, I I feel like I've learned from the best to, to make sure that we we always deliver for our, our stakeholders including our shareholders. And so, we want to make sure that we have a high degree of confidence in our plans, and we have the requisite flexibility in those plans to be consistent and delivered, consistently, uh, for our shareholders. So, at this point, I think we've got a solid plan in place and we're incorporating, what we believe is flexibility in that plan so that we can continue to deliver right on top of what we promised.
Okay, very good. Um, next one, I think we'll get your 10-Q later today. But can you let us know, did you issue any equity during the quarter? And Dave, I think you reiterated the $0 to $100 million per year. How are you thinking about the long-term outlook? I guess the positive side, you've got tax credits from the OBV, and the maybe negative side, from a financing perspective, upside to capex. How do you think of those as kind of maybe washing out?
Yeah, Andrew, we we did a we have a little bit of back. We did that comes in kind of RA throughout the years. So there's some of that, but it's within that 0 to 100 million. We you we um, issue through kind of internal mechanisms and at 0 to 100 that is from uh, 25 to 27 in our expectation and our base plan, and then, um, you know, we did say after 27, we see some incremental Equity that would come in even in our base plan, that's, you know, 200 to 300 million, more out there in those in those years.
But to your question on, if we bring in some additional Capital, um, we would have to look at some additional Equity or Equity like products to continue to be at our 15% ffo to debt. But, you know, as you know, this is good equity and would be um associated with the increased growth that we would see with that as well.
Right. And that's something you'll give more details on in a few months.
Yeah, that yeah, we'll put all that together. When we show our new capital plan, you know we'll we'll Define how we're going to. How we're going to finance that as well.
Okay, great. And during the quarter was there any activity?
Uh it it's just a little bit that comes in rate I believe from the internal mechanisms we use.
But nothing, you know, nothing public.
Okay, very good. And one last one. If I can during the call, forgive me if I missed it, but I don't think you said anything about wind. There was a lot of focus on solar, storage, and gas. How are you thinking about opportunities for wind? Whether that would be new build or potentially repowering.
Yeah, we're examining when uh we we currently have some wind assets that would might be eligible for repowering. Uh, but we're we're right now we're focused on uh, building out solar and that's where we have the greatest opportunity but we have not uh, closed the door completely on when that sets.
Is there a reason there's such a preference for 1 over the other?
Just the amount of land that's required based on the land that we have. And uh, the receptiveness to wind also is a key driver, right now, solar more communities are more receptive to solar buildout in their, in their areas. So that's really why we've we've pivoted to uh, solar for the most part, the economics are a little better as well.
Okay, that's very helpful. Thank you.
Your next question comes from the line of Sophie Carp with KeyBank.
Hi, good morning, thank you for taking my question and congratulations to, uh, joy and Jerry and now on a good quarter as well.
The customers, you know, um, you know, the industry keeps talking about savings that can be, um, accrued to retail customers. How should we, um, start thinking about that, like, for every gigawatt of data center additions, x amount of revenue requirement is displaced? Or is there a good rule of thumb yet, given your framework?
Well, I put it to you this way. Um, just based on what we announced. Previously, the 2.1 gigawatts, I believe that increases the load over that 5 year time Horizon by about 40%
Uh, so you can think of that as Headroom on, uh, rate growth for for existing customers.
So effectively, we could take that kind of net out the cost of...
Uh, investment that's needed to serve those additions. Then that would be, uh, cost savings to customers.
Yeah. Actually, for the initial investment that we bring on, there's not much additional capital investment we have to bring on. The storage will be paid for by the data centers, and really, you get the advantage because these data centers operate at a 90% load factor while our systems operate at about a 50% load factor. So, it really provides a lot of affordability just by using our base industrial rate, which provides a lot of affordability for our base customers.
Got it. This is very helpful. Thank you. And then any color you could share on how the electric rate case is going.
Yeah, Sophie, we are still in audit and discovery.
And we're getting about, you know, the amount of questions that we would anticipate given the size and scale of the case. And the fact that we're looking to expand the ERM and grow it to a billion dollars over the next couple of years, uh, so, uh, the line of questioning is is, as you would think it's all around, you know, system, reliability, and, and what we've been able to deliver and how our plans align with the, the Liberty audit, which we feel. We're in a really good position to to answer those questions and provide compelling testimony. We will, uh, hear back from interveners and staff. Uh, next month. So we'll get, uh, staff and intervener testimony on August 22nd. And that'll be our first indication as to whether or not, we're completely aligned with staff. Or there's still some explanation that's required and likewise, we'll understand what interveners think of our plan and how we can engage them in discussions, uh, to potentially pursue a settlement. Uh, but that's where we stand right now. The people
PFD is expected in December, kind of mid-December, and then we'll get a final order in February.
Got it. Thank you. It's all for me. I appreciate the answers.
Your next question comes from the line of Anthony Codell with Mizuho Securities.
Hey, good morning, Joy. Uh, good morning, Jerry. Congrats to both of you.
Morning, thank you.
Hey, just one quick question. I'm wondering, Joy. Um,
You know it's very early in your, uh, ten year, but any legislative or regulatory goals or processes you're hoping to accomplish early on in your tenure, or that you're putting on your to-do list of maybe?
You know, whether it's a decoupling mechanism or something to the legislature that you're focused on right now.
Yeah, right now. Um,
Very heavily on the ERM we that is proven. We've used the ERM in the gas business uh for a number of years now and that, uh, delivered the value for the customers and it's also helped keep us out of regulatory proceedings for multiple years. And so, our focus is growing, the electric ERM and we've included that in the case. And that that's the biggest thing, uh, for us, uh, right now on the regulatory front and we think we've, we've laid a good foundation for that.
And the Liberty audit supports it. So that's where I'm going to focus my attention. As we see testimony from the staff and interveners, we'll make sure that they understand the benefits of the expansion of the ERM going forward.
Great. And then, if I could just take another crack, maybe at an earlier question, you were very clear on the 6% to 8%.
You know the earnings growth rate. You see, like, your intention to stay there, um, but.
Did you include, if you do get some of the, you know, the large load customers, the data centers, I mean,
Are you still seeing yourself at the 6 to 8%? And I know that's going forward, and I know that you haven't, you know, a lot of it still. The nearing formalization of an agreement, but just I guess how rigid is that 6 to 8%? Even if you get this 7 gigawatts on.
Yeah, so I would say that, uh,
The 5 year plan that we laid out we intend to stay in that 68% beyond that. Uh, there's a lot that can happen that we've got a reconcile and it's 2 early, uh, for us to say definitively, what we might look like beyond our 5 year plan. So um, as we have always done, we will look to continue to deliver value for all of our stakeholders and minimize any kind of risk that we see in our plan and use the flexibility to deliver smooth and reliable results going forward.
Great. Thanks for taking my questions.
Yeah, just to add to that. I I think Joy hit it, hit on, As We Roll Up, the new plan. I think we'll, we'll provide new guidance. We don't want to do this piece meal. So I, as all of this comes together and continues to come together, we'll reevaluate where we're at.
Thanks again, Jerry. Glad you stepped up. There we were, unsure if you were just already, you know, on the golf course.
I'm here.
You know, big.
We lost, we lost. We lost you.
He's keeping us on track, Anthony.
Your next question comes from the line of Paul Freeman with Ladenburg.
Hey, thank you very much. Uh, and congratulations, I guess. Uh, first question given that we're halfway through the year, uh, can you give us? Uh, um, an idea as to whether you would expect uh additional uh, data center announcements, uh, to be a third quarter or a fourth quarter of that.
Morning Paul. Uh, Our intention is to have a deal done by the end of the year and we're really making nice progress near-term. Uh, as I mentioned before, we have received feedback from the data center providers on, you know, contractual language both in the esa and right now, we're really focused on solidifying, the storage contracts. So we understand that the buildout, uh, that we'll have to do to support the load. So Our intention is to have a really good indicator by the third quarter and finalize, have a final deal in Hand by the end of the year.
And then in terms of corporate and other, you're showing sort of 56 million uh, uh, negative change, uh, in the quarter. Um, how much of that is the timing of tax that's expected to reverse, uh, by the end of the year.
Yeah, a lot of that is the timing of taxes. We're on track, um, you know, that will all reverse. We're on track to meet our full-year guidance for that segment throughout the year.
Okay, so that's like $0.27, just by itself. Okay, yeah, um,
And then, last question for me. Uh, when the Treasury guidelines come out later in August, um, what are you expecting with respect to, uh, how they look at?
Say, uh, the definition of, uh, Safe Harbor.
Yeah. So
the way that we
Begin construction and safe harbor. Language has existed in this form in the treasury, guidance for, for over a decade and we've relied on that uh, for for years. So, in terms of what we anticipate, we don't we don't necessarily anticipate, they're being in a reversal of those guidelines but what we've done is, is insulated ourselves, uh, based on our understanding of what it means today and we made our purchase
This is and secured our Safe Harbor assets well in advance of the law being propagated. So, we feel good about our position. We started in 2024 and right before the law passed.
Uh, we were able to safe harbor additional, uh, renewable assets at that time.
And then, uh, excuse me, one last one. Uh, when you rebase, uh, if you remain within the 6 to 8,
Um, could any particular year be above sort of the the 8% that you've?
Uh, that you're currently, uh, at the high end.
And, uh, we'll give you a better better View. And, uh, um, what we plan to do at this point, we're everything is based off. You know, the guidance original, uh, 2024 guidance growth rate, uh, in our current 5-year plan. So we, uh, we give you a lot more insight on that at EI or third quarter.
I appreciate it. Thank you so much. Thank you.
Ladies and gentlemen, there are no further questions. I will now turn the call back over to Jerry Murcia for closing remarks.
Well, thank you everyone for joining us today. Um, you can see that, uh, you know, DT is firing on all cylinders. I'm really proud, uh, the accomplishments of the team has made so far this year, uh, especially in the areas of, uh, you know, we've got this really high levels of Employee Engagement as I mentioned, which is our secret sauce, uh, the grids operating extremely well. Uh, and all the Investments. As Joy loves to say is, uh, Investments are are working and are making a fundamental difference. I also want to congratulate our power plant operators, and leaders who uh, really ran through a heat wave here, flawlessly and had fur me our nuclear plant. Specifically we've been recognized by the industry uh as 1 of the best-in-class plants from an operating, Excellence perspective. And of course our gas team is not going out of the park and whether uh nice colder than normal weather and that's working well and financially. Uh, we're going to hit our high-end guidance and we're building in favor of
Ability. But we're going to use that extinguished backlog, and prepare ourselves for 2026 and beyond. I'll just close by saying it's been a true honor to serve you and, as Anna's DT CEO, Joi Harris is an exceptional leader who will continue to execute the DT strategic plans with excellence.
And that's her specialty is operating excellence. And that's what we need. I look forward to staying connected with you, my role as executive chairman over the next few years and, uh, DT is in great hands with joy.
And she'll Drive success for this company. So have a great morning, stay healthy and stay safe.
Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
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