DTE Energy Company

Bella, and I will be your conference operator today. At this time, I would like to welcome everyone to DTE Energy Q1 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, then the number one on your telephone keypad. To withdraw your question, press star again. I would now like to turn the conference over to Matt Krupinski, Director of Investor Relations. You may begin.

Thank you, and good morning, everyone. Before we get started, I'd 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, 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, and good morning, everyone, and thanks for joining us. I hope everyone is having a healthy and safe year so far. This morning, I 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 the significant progress we are making to improve reliability for our customers while maintaining affordability. Additionally, she'll provide updates on our renewable energy investment that supports our path to cleaner generation and data center opportunities that provide potential upside. And Dave will provide a financial update and wrap things up before we take your questions. Let me start on slide four. We've had a strong start to 2025 and are well positioned to meet our targets this year. Our success is a testament to our dedicated and engaged team committing to serving our customers and our communities. 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 the 94th percentile globally amongst 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 the important investments to enhance the grid and improve reliability for our customers. As we are committed to reducing power outages by 30% and counting outage time in half in the next five years. As we continue to make these significant investments in automating and strengthening our grid, we see that the investments are working. We told you earlier this year that investments and reliability helped achieve a 70% improvement in time customer spent without power in 2024. And that metric has improved another 60% year to date versus last year. We are also performing above our aggressive targets for our operational metrics, including reliability and plant performance. In addition, Our team supported our neighboring utilities to help restore power outside of our service area after a historic ice storm wreaked havoc in that region at the end of March. I know the state, utilities, and their customers are very grateful for our assistance. We remain committed to investing in the communities where we live and serve to support Michigan's economy and employment opportunities. In 2024, DTE invested $3.3 billion with Michigan businesses creating and sustaining more than 14,000 jobs across the state. Last year, DTE invested $1 billion with certified diverse suppliers and nearly $1 billion with companies based in our home city of Detroit. As I said at the beginning of my remarks, we're off to a strong start this year and are well positioned to achieve our 2025 targets. Our 2025 operating EPS guidance range is $7.09 to $7.23, with a midpoint of $7.16 per share, which provides 7% growth over the 2024 original guidance midpoint. And we remained well positioned to achieve the higher end of our EPS guidance range this year. Our long-term EPS growth rate target remains at 6% to 8%, with 2025 original guidance as the base for this growth. And as I mentioned on our year-end call, we have a 45Z production tax credit for R&G projects coming into the plan this year through 2027. Providing confidence, we will reach the higher end of our growth rate 2025 through 2027 with flexibility to exceed the high end of our guidance or support future years. So I'm feeling really positive about 2025 and the position we're in to continue to achieve long-term success. And regarding tariffs, we don't see much of an impact this year or in our long-term plan. 80% of our capital plan is with service providers. It would not be impacted by tariffs. Of the remaining material spend, we have been working closely with domestic suppliers and have built inventory that mitigates most of the tariff exposure. Obviously, we'll see how all this plays out, and we are closely monitoring the situation. In summary, our tariff exposure is manageable at 1% to 2% of our capital plan. and we continue to work with suppliers to further mitigate that exposure. We continue to maintain a strong balance sheet and investment-grade credit ratings to support our customer-focused capital investment plan. We remain committed to deliver premium shareholder returns that our investors have come to expect, and our 2025 annual dividend of $4.36 per share aligns with our practice of providing a growing dividend as we continue to deliver EPS growth. Now let's turn to slide five to provide an overview of the progress we are making on our growth plan. We are building on the great progress that we made last year across all our business units so far this year. Starting at DTE Electric, we continue to enhance our reliability efforts following significant progress in 2024. We plan to increase our efforts on all fronts in 2025, including the continued deployment of smart grid devices, upgrading existing infrastructure, replacing the 4.8 KV system and trimming trees. We follow the rate case, providing support for our customer-focused capital investment plan that will allow us to further improve reliability and focus on grid modernization while minimizing the impact on customer bills. We are making great progress with data centers, having executed non-binding agreements with three different parties for projects totaling 2,100 megawatts We are also actively engaged in discussions with additional opportunities, working with several hyperscalers and co-locators on opportunities within our service territory. This work will drive affordability for our customers and provide additional upside to our plan through renewable energy and storage investments. At DD Gas, we continue to progress on our main renewal program as we modernize the gas transmission and distribution systems. Over the years, we have made significant investments into this program and realized timely recovery of these investments through the well-established infrastructure recovery mechanism. We completed nearly 2,000 miles since the IRM began, which is about half of the total miles set to be renewed. At DTE Vantage, we continue to advance custom energy solutions projects, along with our RNG and carbon capture and sequestration projects. One project to highlight is a Ford Motor Company custom energy solutions project that is in construction. This project will provide central utility plant services to Ford's facility in Marshall, Michigan, and is underpinned by a long-term fixed fee contract with no commodity risks. We expect commercial operation to begin next year. We are also progressing on another customer energy solutions project, a 42-megawatt combined heat and power project which will serve a large industrial customer and is expected to begin construction later this year. And we continue to have a strong development pipeline behind these projects that support future growth. Before I turn it over to Joy, I just want to highlight on the next slide how Michigan continues to be a great place for economic development. Michigan continues to attract many large companies, particularly in Southeast Michigan, for the benefit of our state and our residents. A number of large companies, including General Motors, Henry Ford Health, and the University of Michigan are making significant investments in our service territory, providing significant economic development and providing thousands of jobs. Michigan is an attractive state for data center opportunities, particularly after legislation for the sales and use tax exemption was passed. And as we've discussed, data center development will support customer affordability. Just to highlight a few data points that show the strength of Michigan's economy, a number of economic indicators show positive growth the first quarter of 2025 versus the first quarter of 2024, including housing permits are up nearly 10%, real estate GDP is up 2.6%, and payroll employment up nearly 1%. We are seeing customer growth in our service territory with both residential and commercial customer accounts up over a half a percent in the first quarter this year versus last year. There is a lot of economic development in Michigan, and the business climate here is an attractive one to support the investments that will fuel significant growth for the state. So to wrap up my comments, I'll just say I'm very excited about our start in 2025 and how we are well positioned to continue to deliver for our customers, communities, and investors now and into the future. Now I'll turn it over to Joy. Joy, over to you.