DTE Energy Company

Good day and thank you for standing by. Welcome to the DTE Energy second quarter 2021 earnings conference call. At this time, our participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Robert Tuckfield. Please go ahead.

Thank you and good morning, everyone. Before we get started, I would like to remind everyone 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, and Dave Rue, 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 recap our performance for the second quarter, then Dave will provide a financial review of the quarter and wrap things up before we take your questions. Let's start on slide four. We are making great progress this year at DT for our team, our customers, and our communities, positioning us to deliver for our investors. This progress has produced a strong second quarter and positions us well for continued growth. Our distinctive team of 10,000 plus employees continues to be recognized for our engagement by Gallup with our ninth consecutive Great Workplace Award. continue to build on this strength with our focus on diversity equity and inclusion to create an even better workplace for all our employees where everyone feels valued welcome and able to contribute their best energy our company celebrated june 10th together last month with a series of virtual meetings we paid tribute to this important day with local community partners a number of employees offered reflections on what the day means to them personally Overall, it was a great way to come together and honor this significant holiday. We understand that all people thrive and succeed when they feel included and welcome. We continue to focus on service excellence for our customers and delivering clean, safe, and reliable energy as we continue our clean energy transformation. BT Electric received approval from the NPSC to further expand the voluntary renewable program, My Green Power. while also making it even more affordable, including increased access for low-income customers. Additionally, we partnered with Ford Motor Company to install new rooftop solar and battery storage technology at the Ford Research and Engineering Center. The array includes an integrated battery storage system and will be used to power newly installed electric vehicle chargers. This can generate over 1,100 megawatt hours of clean energy. We also continue to support the communities where we live and serve. We were also recognized by Points of Light for the fourth consecutive year as one of the Civic 50. This award highlights DT as one of the top 50 community-minded companies nationwide in corporate citizenship. We also launched the Tree Trim Academy to create 200 high-paying jobs in Detroit. DT has a need for tree trimmers, and the community has a need for good high quality jobs. It will also help us continue to improve electric reliability as trees account for over 70% of our customer outages. On the investor front, we completed the spin of the midstream business. Now BTE Midstream is a standalone company and BTE Energy is a predominantly pure plain utility with 90% of operating earnings coming from our utilities. The transaction went very smoothly and was well received by all stakeholders. We didn't miss a beat on a very strategic transaction, and many said we made it look easy. Many thanks to the BTE team and our advisors that made this effort a great success for our employees and our investors. We delivered a strong second quarter with earnings of $1.70 per share, and we are raising our 2021 operating earnings guidance and continue to pay a strong dividend. Let's turn to slide five. BT is continuing to deliver successful operating results. At BT Electric, we made another significant step toward our goal in reducing carbon emissions as we retired the River Rouge Power Plant in the second quarter. For over 60 years, Michigan. River Rouge is one of the three coal-fired power plants ETE is retiring by the end of 2022, which is an integral part of our company's clean energy transformation. We continue to look at ways to accelerate our coal fleet retirements and potentially file our updated IRP before September of 2023. We continue to expand on our voluntary renewable program, which is exceeding our high expectations. In the first quarter, we announced the commitment of new customers to My Green Power, including the state of Michigan, Bedrock, and Trinity Health. During the second quarter, we signed up a number of new large customers, including Detroit Diesel, which is now one of our largest voluntary renewable customers. The program continues to grow at an impressive rate. So far, we've reached 950 megawatts of voluntary renewable commitments with large business customers and approximately 35,000 residential customers. We have an additional 400 megawatts in the very advanced stages of discussion with future customers. My Green Power is one of the largest voluntary renewable programs in the nation and helps advance our work toward our net zero carbon emission goal. while helping our customers meet their decarbonization goals. We have made progress with our expedited tree trimming program, which is greatly improving reliability for our customers and have received Michigan Public Service Commission approval to securitize the tree trimming costs along with costs associated with the River Rouge power plant retirement. At DP Gas, we're on track to achieve net zero greenhouse gas emissions by 2050. We began the second phase of construction on our major transmission renewal project in Northern Michigan in June. The project includes the installation of a new pipeline, as well as facility modification work, which will reduce the risk of significant customer outages. The project is on track to be in service by the first quarter of next year. Last quarter, we announced our new Clean Vision Natural Gas Balance Program, This program provides the opportunity for customers to purchase both carbon offsets and renewable natural gas to enable them to reduce their carbon footprint. We are proud of how fast the program is growing. Currently, we have over 3,000 customers subscribed, and we are looking forward to seeing it become as successful as our voluntary renewable program at BT Electric. On our power and industrial business, we continue to add new projects, as we began construction on a new R&G facility on a large dairy farm in South Dakota. This will be P&I's largest dairy R&G project to date. The project will directly inject R&G into the Northern Natural Gas System for sale into the California transportation fuels market. The facility is expected to be in service in the third quarter of 2022. There are also advanced discussions on several new industrial energy and RNG projects. We'll provide updates on these as they progress. P&I was also recognized by the Association of Union Contractors with the 2020 Project of the Year Award for the Ford-Dearborn cogeneration project. Overall, I am extremely proud of the team's accomplishments. Now, moving on to slide six. As I said, we've had a very strong start to 2021. We are raising our operating earnings guidance midpoint from $5.51 per share to $5.77 per share, moving our year-over-year growth in operating EPS guidance from 7.4% to a robust 12.5%. We are able to use some of this favorability to position the company to continue to deliver in future years. We mentioned in Q1, we were deep into planning for 2022 in a great level of detail. With all of this work, we feel great about achieving a smooth 5% to 7% growth trajectory into 2022 and through the five-year plan. You're not going to see any surprise from us in our growth rate in 2022, in spite of the RAF roll-off and the converts coming due. 90% of our future operating earnings will be from our two regulated utilities, but we have a large investment agenda with $17 billion of capital investment in our five-year plan, focused on clean energy and customer reliability. Overall, we feel very confident with our performance in 2021 and our future operational and financial performance. Now I'll turn it over to Dave to discuss DT's financial performance. Dave, over to you.