DTE Energy Company

Good day, and thank you for standing by. Welcome to the DTE Energy First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After this week's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Barbara Tuckfield. Thank you. Please go ahead.

Thank you, and good morning, everyone. Before we get started, I would like to remind you to read the Safe Harbor Statement on page two 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, President and CEO, David Slater, President and CEO-elect of DTM, and Dave Rude, Senior Vice President and CFO. And now I'll turn it over to Jerry to start the call this morning.

Thanks, Barb, and good morning, everyone, and thanks for joining us today. I hope everyone is staying healthy and safe. This morning, I'll start off by discussing DT's strong start to 2021. Then David Slater will give us some details on our midstream business and provide an update on the spin transaction. Dave Rude will provide a financial review of the quarter and wrap things up before we take your questions. So let's start on slide four. As we have discussed before, our priorities at DT are to support our employees, customers, and community. which then enables us to provide the strong, consistent growth investors have come to expect. Our focus this quarter was no different, as we have delivered for all of our stakeholders. Our team at DT has continued to perform at a very high level. We were recently recognized by Gallup as a great workplace. This is the ninth consecutive year we have received this award. We're off to an extremely safe start in 2021, coming off our safest year ever in 2020. As I have said, safety is our top priority at DTE, and getting people home safely to their families every day helps drive our success and employee engagement. We are building on our diversity, equity, and inclusion focus with employees fully dedicated to helping the company on this journey. DTE is committed to accelerating our progression towards a workplace where everyone feels valued, welcome, and able to contribute their best energy. We do understand that all people thrive and succeed when they feel included, safe, and welcome. On a customer front, we continue to deliver safe and reliable energy. Just recently, DT Electric received approval on its deferral request that delays next rate case filing until October 2021. This provides price stability for our customers, keeping base rates steady through 2021 and into 2022. As you recall, we previously received approval to delay a general rate case until May. And this order extends the delay at least five additional months. This is another step towards stabilizing our customer affordability. Additionally, DTE is ranked as one of the top 10 utilities in the nation for energy efficiency and customer savings. And J.D. Power has ranked both our electric and gas utility the top quartile for residential customer satisfaction. These initiatives and recognitions show our continued commitment to service excellence. Supporting the communities where we live and serve remains critically important to us. DTE helped thousands of vulnerable customers lower their energy bills in 2020, while significantly reducing natural gas and electricity usage through energy efficiency initiatives. Our energy efficiency assistance program was recognized for keeping energy affordable for our most in need customers. We recently contributed to Habitat for Humanity in support of their effort to weatherproof low-income homes. DTE also led a fundraising effort to help small business in Detroit grow past the pandemic. We are also offering personal protective equipment, technical assistance, and opening resources to assist small businesses across the city. With engaged employees, customers are satisfied with their service, and communities that are resilient, we deliver value for our investors. We delivered a strong first quarter with earnings of $2.44 per share and solid performances across all our business lines. We are on track to deliver 7% operating EPS growth from our 2020 original guidance midpoint. The midstream spin is on track for mid-year completion. The spin positions DT Energy as a predominantly pure play, best-in-class utility. With significant capital investments of $19 billion over the next five years, 90% of that will go into our utilities. And we continue to target our 5% to 7% operating EPS growth rate, with 2020 original guidance as the base for that growth. The SPIN also establishes DTM as an independent natural gas midstream company with assets in premium basins and accretive growth opportunities. On the next slide, I'll discuss some of our major accomplishments from the first quarter. DT is continuing to focus on our environmental initiatives. DT Electric's recently placed three wind parks in service, Isabella 1 and 2, which are the largest wind parks in Michigan. have a total of 136 turbines with 383 megawatts of capacity. We also placed the Fairbanks Wind Park in service with a capacity of 72 megawatts. DTE now has nearly 1,800 megawatts of capacity from renewable energy sources, enough to power 670,000 Michigan homes. This is a significant step toward our goal of reducing carbon emissions by 50% by 2030. The electric company recently filed a settlement agreement for voluntary renewables. The settlement includes 800 megawatts of renewable power additions, with 420 of that being slated for 2022, and the remaining 380 megawatts coming online in 2023 through 2025. These sources will support the voluntary renewable program, My Green Power, which continues to exceed our high expectations. We recently announced the commitment of a few new companies to the My Green Power program, including the state of Michigan, Bedrock, and Trinity Health. We have reached 900 megawatts of voluntary renewable commitments with large business customers and approximately 30,000 residential customers. The program is the largest of its kind in the nation and helps advance our work towards a net zero carbon emissions goal. The electric company also received approval from the Michigan Public Service Commission for phase two of its charging forward initiative to strengthen electric vehicle infrastructure in the state of Michigan. This includes customer education and outreach, fleet advisory services, and charging infrastructure components to further support electrification transition of fleet vehicles. At the end of March, the electric company completed its most recent offering of green bonds. The $1 billion bond offering will help fund the development and construction of solar and wind farms, including transmission infrastructure to support renewable energy facilities. The funding will also strengthen energy efficiency programs that help Michigan residents and businesses save energy and reduce their bills. BT Electric has issued three green bonds over the past four years for a total of $2 billion. These bonds help support our progress towards a cleaner, more sustainable energy future. BP Gas announced Clean Vision Natural Gas Balance, the nation's first program to include both carbon offsets and renewable natural gas for customers to reduce their carbon footprint. This program offers four levels of participation for customers, ranging from $4 a month to offset 25% of an average home's gas use emissions, to $16 a month to offset 100% of our carbon footprint. The carbon reduction goals are achieved with Michigan forest preservation and renewable natural gas. By helping to preserve Michigan's forests through this program, DTE customers not only support the removal of greenhouse gases, but also preserve one of Michigan's greatest natural assets, Recently, DTE Gas executed a seven-year agreement to secure forestry carbon offsets to be used for this program. As for R&G, landfill emissions and wastewater treatment plant byproducts are transformed into fuel that heats homes and powers businesses and cars. We're excited to invite customers to be part of our ambitious vision to create a cleaner energy future. The program is off to a strong start with over 2,400 customers signed up to reduce their carbon footprint. Our midstream company also announced its own 2050 net zero carbon emissions goal just earlier this year. Climate change is one of the defining public policy issues of our time, and I'm proud that this business is joining our electric and gas utilities in the effort to deliver cleaner energy. Now, moving on to slide six, I will discuss DT's solid start to 2021. Our first quarter financial results were strong, giving us even greater confidence in our 2021 financial plan, which could create invest opportunities later in the year. DT earned $2.44 per share this quarter, up 78 cents from last year. And so with one quarter behind us, I am confident that DP is well-positioned to deliver on our financial plans this year and setting up well for success into 2022 and beyond. Longer term, we'll continue to target a 5% to 7% operating EPS growth rate with 2020 original guidance as the base. We continue to focus on our balance sheet with strong cash flows and solid credit metrics. The spinoff of the midstream business is on track for mid-year execution. Our team is working diligently to make that happen, and I thank them for their efforts. As you know, this spin positions DTE as a predominantly pure play utility, with 90% of DTE's total operating earnings coming from our two regulated businesses. The spin also establishes DTM as an independent, well-financed gas midstream C-corp, with accretive organic growth opportunities. Just as DTE is well-positioned to deliver for investors, This new independent midstream company will also be positioned for success with a strong asset base and two of the most prolific dry gas basins in the country. The SPIN is progressing very well with the Form 10 filing and its standard review process with the SEC and an investor roadshow planned for the second quarter. Now I'll turn it over to David Slater for updates on the midstream business and the SPIN transaction progress.