DTE Energy Company

Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the DTE Energy Q4 2024 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 with the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Matt Kropinski, Director of Investor Relations. 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 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 gap 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. We have a lot of positive updates to share with you today. including a recap of a very successful year in 2024, which has positioned us well for strong performance in 2025. We will also provide an overview of our long-term plan that includes significant utility investment increases that we need to execute for our customers as we continue to build the grid of the future and transition to cleaner generation. This plan also demonstrates our ongoing commitment to affordability for our customers. continuing our 6% to 8% operating EPS growth target through 2029 with bias to at least the upper end of the growth rate 2025 through 2027. Joy will provide additional details on our long-term plan, and Dave will provide updates on our financials, including our 2024 performance and guidance for 2025, and then we will open it up for your questions. Let me start on slide four. I'll start by saying again that we had a very successful year in 2024, and this success is driven by a team that consistently delivers as a result of our strong culture. Last year, we were recognized by the Gallup organization for the 12th consecutive year with a great workplace award, and our employee engagement ranks in the 94th percentile globally amongst thousands of organizations. As I've said before, our high level of employee engagement is our secret sauce for continued success. We achieved operating EPS of $6.83 per share, delivering at the high end of our guidance and providing over 9% growth over the 2023 original guidance midpoint. And we received a constructive rate order at DTE Electric last month. This all positions us well for another successful year in 2025. Our 2025 operating EPS guidance range is $709 to $7.23, with a midpoint of $7.16 per share, which provides 7% growth over the 2024 original guidance midpoint and will be the reference point for our long-term growth. And we are currently positioned to achieve the higher end of our EPS guidance range this year. As we have said, the 45Z tax credits give us additional strength in our plan, providing confidence we will reach the higher end of our growth rate, 25 through 27, and provide flexibility to exceed the high end or support future years. And today, I'm really excited to talk to you about our updated five-year plan. Our plan is supported by a significant investment of $30 billion over the next five years, a $5 billion increase from our previous plan, primarily driven by the investments we need to make to improve reliability and transition cleaner generation at our utilities. Additionally, we have the potential for incremental investment above this $30 billion as we continue to make progress working on data center opportunities. We will update you as we progress towards definitive agreements. This $5 billion increase is a significant increase to our capital plan and is driven by the need to build out renewables to meet the increased demand from the success of our My Green Power Voluntary Renewable Program, and to support Michigan's clean energy legislation, as well as the need to continue to invest to improve reliability for our customers as we continue our efforts to update and modernize our electric grid. And with this heavy customer-focused investment in our utilities that we have been contemplating since 2023 due to the IRP settlement and the clean energy legislation that passed in 2023, we are strategically shifting the focus of our DTE Vantage investments the projects that are more utility-like and deliver solid long-term contracted earnings. I'll go over our plan more on the next slide, but what I'll tell you is that altogether this plan delivers even higher quality long-term 68% operating EPS growth with the 2025 guidance midpoint as the base for this growth and provides flexibility and potential upside throughout the plan. DTE continues to be well-positioned to deliver the premium total shareholder return that our investors have come to expect with a strong balance sheet that supports our future capital investment plan and a solid dividend that grows consistent with operating EPS. Now let's turn to slide five to provide an overview of our updated long-term plan. Let me start by highlighting some of the opportunities that we have in front of us that have led to this plan. We've seen increased requirements for renewable generation investments above what was presented in our previous plan. This increase is driven by the continued success of our voluntary renewables program and our 2023 IRP settlement, which was supported by Michigan's clean energy legislation also enacted in 2023. Together, this drives a significant need for increased investment in our voluntary and legislated renewable programs requiring over $3 billion of incremental clean energy investment from our prior plan. And we are well positioned to execute these renewable investments with a solid long-term development pipeline in place, providing clear line of sight on panels, land positions, and permitting. And we've also been able to safe harbor investment tax credits for these investments through 2027. Along with this increased investment in cleaner generation, this plan also increases our five-year distribution infrastructure investment by $1 billion. We have made great progress in improving reliability for our customers. We saw a 70% reduction in the duration of outages last year due to our work on the grid and less storm activity, which Joy will talk about more. And these investments ensure that we continue this progress consistent with our communicated plan and customer expectations. It is important to note that this commitment to improve distribution reliability is supported by the electric rate order we received last month and the independent audit of our electric distribution system as directed by the Michigan Public Service Commission last year. As we saw this significant need to increase utility investment, we also saw an opportunity to strategically shift our advantage focus to more long-term fixed fee contracted projects. Vantage is a segment that has provided a solid earnings profile over the years and complements our utility businesses well. In recent years, we have had strong contributions from both our R&G and customer energy solutions business. With the increased customer focused investment at our utilities, we are aligning our project development at DTE Vantage to focus more on utility-like projects that provide a high quality earnings profile with fixed fee long-term contracts. And as I mentioned earlier, We have 45Z production tax credits for our RNG projects coming into the plan this year through 2027. Providing confidence, we will reach the higher end of our growth rate, 25 through 27, and also provide flexibility to exceed the high end of our guidance or support future years. And the increased need for customer focused investment on our utilities and utility-like growth advantage gives us confidence we are delivering a long-term plan that provides a higher quality, long-term 68% EPS growth rate. We also have potential upside to this updated investment plan and our 68% EPS growth rate, driven by potential demand growth at DT Electric to serve data center opportunities in our service area. Along with the switch in University of Michigan projects we recently announced for a total of 1,500 megawatts, we have signed another non-binding preliminary agreement with an additional party, bringing a total for the three agreements to approximately 2,100 megawatts of potential new load. We are also in discussions with multiple parties for additional opportunities beyond those that I just described. Our success in championing the data center legislation with the full support of the governor who has signed the bills into law and bipartisan support has helped intensify these discussions. We have some existing capacity to serve the incremental load from these data centers. but will likely need to build additional capacity in the near term. And we will look to our 2026 IRP to incorporate new baseload generation to support new data center load. Importantly, as we execute this plan, we will continue to focus on maintaining customer affordability. DTE has a top-tier track record in maintaining customer affordability, which Joy will highlight shortly, that will continue through our plan. And our strong cash flows, supportive energy policy, and a constructive regulatory environment continue to support our customer-focused investment plan. I'll close out my remarks by saying how proud I am of our team in delivering great results in 2024 for our customers and our investors. We are positioned to hit the higher end of our guidance this year with lots of dry powder in the plan. And I feel great about the opportunities we have in front of us to continue this success. with a higher quality annual operating EPS growth rate of 6-8% and with multiple opportunities to drive the growth beyond this 6-8% EPS growth rate. Now I'll turn it over to Joy to give an overview of our accomplishments and opportunities. Joy, over to you.