DTE Energy Stock

Hello, and thank you for standing by. My name is Lacey, and I will be your conference operator today. At this time, I would like to welcome everyone to the DTE Energy Second Quarter 2026 Earnings Conference Call.

[Operator Instructions]

I would now like to turn the call over to Matt Krupinski, Director of Investor Relations. Please go ahead.

Thank you, and good morning, 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 Joi Harris, President and CEO; and Dave Ruud, CFO. And now I'll turn it over to Joi to start our call this morning.

Thanks, Matt, and good morning, everyone, and thank you for joining us. I'm happy to be with you today. As we move through the year, our team continues to execute at

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Those crews, the contractors and our employees across DTE, who stepped up and worked long hours away from their families over the holiday weekend. Given the storm's unexpected severity and widespread damage across the Midwest, our restoration times extended beyond what we would typically target. However, our crews adjusted quickly and executed our restoration plan to support customers as safely and as quickly as possible. Importantly, areas where we have completed substantial reliability investments perform significantly better, reinforcing the value of continued grid investments and operational excellence.

While our investments are delivering measurable results, we recognize there is more work to do. After every major storm, we review our performance to identify lessons learned and strength in preparedness and restoration capabilities and customer communications to ensure we continue to build a stronger, more resilient grid for our customers.

Turning to data center. Momentum remains strong as we continue to execute across our development pipeline. The 1.4-gigawatt Oracle data center remains on track, fully approved and under construction. As we highlighted last quarter, we executed an agreement with Google to serve a 1-gigawatt data center which provides upside to our current long-term plan. The contract has been submitted to the MPSC and is progressing through the approval process.

Beyond these 2 projects, our pipeline continues to advance with ongoing discussions that position us well for future growth. As these projects move forward, they will deliver meaningful affordability benefits for our existing customers, absorbing a significant portion of fixed system costs. Our regulatory strategy is focused on delivering value while providing clear visibility for customers. We have several filings underway or planned. In addition to the Google data center contract pending approval, we are advancing both electric and gas rate cases to support critical customer-focused investments.

We filed our distribution system plan in April, outlining our 5-year road map to reliability and grid modernization. We also plan to file our next IRP later this quarter, which will provide a clear path to meet long-term generation and capacity needs. Our year-to-date earnings performance keeps us on track to reach the high end of our operating EPS guidance this year, and we are confident in our long-term operating EPS growth rate target of 6% to 8% through 2030. We continue to see a clear path to achieving the high end of our guidance range each year, driven by R&D tax credits and the flexibility they provide. As we have mentioned, the Google data center project and other data center opportunities provide upside to this plan.

Let me move to Slide 5 to highlight our continued commitment to improve reliability for our customers. We remain highly committed to our efforts to improve reliability for our customers. As I mentioned, the July storm highlighted both the value of our reliability investments and the work that remains. During the event, we found that upgraded portions of the system proved more resilient, reinforcing the importance of continued investments and identifying opportunities to further strengthen our response. Let me move through how we are approaching reliability improvement across the system.

As you can see from this slide, our strategy is grounded in 4 core pillars: each focused on reducing outage frequency and duration as well as improving overall performance. First, on technology and innovation. We're continuing to expand automation across the system. In 2025, we installed over 700 automated devices, which was about 20% over plan, and we are planning to deploy more than 500 additional devices in 2026.

This work is foundational to fully automating the distribution system by the end of the decade. Second is infrastructure resilience and hardening. We're strengthening the physical system to make it more resilient to everyday wear and increasingly extreme weather. In 2025, we completed over 200 miles of targeted hardening work along with nearly 1,000 miles of pull-top maintenance. We're ramping up this effort with plans to reach roughly 1,700 miles of maintenance work in 2026.

Third is infrastructure redesign and modernization where we are upgrading legacy portions of the grid to improve overall system performance. In 2025, we converted over 70 miles of 4.8 kV circuits to higher voltage and rebuilt more than 20 miles of sub-transmission infrastructure. We expect 2026 to represent our highest level of conversion activity yet. The fourth focus is [indiscernible] terming. We've completed our surge effort and are now focused on sustaining that progress. We're also piloting enhancements to our approach, including expanded clearing practices and new program options to further reduce outage risk.

Supporting all of these efforts, we plan to invest approximately $11 billion over the next 5 years, driving continued reliability improvements while maintaining a strong focus on customer affordability. Importantly, we're already seeing meaningful results from this strategy. While the challenging circumstances of the July storm impacted our restoration time, we have seen significant improvement in recent years. From 2023 to 2025, our outage duration improved by 90%, and we achieved our best all-weather state performance in nearly 2 decades. Across the prior 5 storms preceding July, we restored an average of 97% of customers within 24 hours and nearly 100% within 48 hours. The progress we're seeing is the result of sustained targeted investment, combined with improved processes and strong execution by our team. As a result, we are experiencing fewer outages and faster restoration for customers on average which reinforces that when we invest, it works.

I'll move to Slide 6 to provide an update on data center development. We continue to execute on opportunities that support both customer affordability and long-term growth. We have 2.4 gigawatts of executed agreement supported by contracts that are designed to protect existing customers while driving significant growth. The 1.4-gigawatt Oracle agreement is approved and included in our plan and construction is underway. The 1 gigawatt Google agreement is also advancing through the MPSC approval process and represents upside to our current long-term plan.

These first 2 projects demonstrate our ability to successfully attract and serve large customers while structuring agreements in a way that protects existing customers. Importantly, these agreements are expected to provide meaningful affordability benefits for our existing customers and with a constructive outcome in the current rate case could support a potential rate case stay out until at least 2028.

Beyond Oracle and Google, our pipeline remains strong and continues to advance. We currently see 5 to 6 gigawatts of additional opportunities, including roughly 2 gigawatts in advanced discussions with a target of reaching an additional agreement by the end of 2026. We also have another 3 to 4 gigawatts of pipeline opportunities that could develop over time. The large low tariff we filed earlier this year is moving through the approval process, which is another important step in ensuring future large load growth is managed in a disciplined way. It includes appropriate protections for existing customers that are similar to those in the Oracle and Google contracts. These opportunities provide a clear path for additional growth while reinforcing our focus on affordability, reliability and customer protection. As the pipeline advances, we see potential upside to our long-term operating EPS growth target and additional affordability benefits for our existing customers.

Let me move to Slide 7 to describe the benefits that data centers provide and discuss our continued commitment to customer affordability. These data center projects bring large steady load onto the system. These very large load customers absorb a significant portion of the fixed costs, which creates meaningful affordability benefits for existing customers. Once fully ramped, Oracle is expected to provide about $300 million of annual benefits for existing customers, while the Google data center is expected to generate roughly $1.7 billion of benefits over the life of the contract. These benefits strengthen our overall affordability position and build on our strong continuous improvement mindset we've developed across the company. Continuous improvement remains an important part of how we operate every day. It supports our ability to deliver better reliability, improved efficiency and match customer bills as we continue investing in the system.

We continue to execute our investment plan with discipline while staying highly focused on affordability for our customers. As the chart shows, our average annual bill increases over the past 5 years have remained well below both the national average and the Great Lakes region.

Technology continues to be one of the most important tools we have to create customer value. We're using advanced analytics to drive efficiencies across the business, including lowering cost, improving maintenance planning and strengthening storm response. Delivering customer-focused efficiency through technology remains a priority and is helping us offset cost pressures while improving service for our customers. At the same time, our generation transition continues to support affordability. Moving from coal to natural gas and renewables is helping reduce O&M costs over time. In addition, tax credits available under the inflation Reduction Act are helping make clean energy investments more affordable for customers while supporting our broader clean energy transition.

This focus and commitment to customer affordability continues to be reflected in our customer builds. The typical Michigan residential electric bill represents less than 2% of the median household income and our residential bills are 17% below the national average. We also continue to support our most vulnerable customers through expanded energy assistance, including millions of dollars of direct assistance and continued support of nonprofit organizations across Michigan.

Overall, we remain well positioned to continue our track record of managing affordability while making the investments needed to improve reliability, support growth and serve our customers over the long term.

Let's turn to the next slide and walk through our regulatory strategy and the benefits we are delivering to our customers. Our electric rate case supports targeted investments in reliability and grid modernization while maintaining a strong focus on affordability. The filing is primarily driven by our distribution plan aligned with the 2024 audit and focused on reducing outage frequency by 30% and cutting duration in half by 2029. We're requesting nearly $800 million of capital to be included in the IRM by 2030, supporting our most consistent infrastructure spend and reducing the need for more frequent rate cases.

As I said earlier, our data center agreements are structured to enhance affordability and protect customers. As these projects ramp, they create an opportunity to extend timing before filing our next rate case while continuing to invest in reliability. Should the Oracle load ramp faster than we have included in the electric rate case, we have proposed the regulatory mechanism to capture any excess margin and flow that benefit back to customers. Provided this regulatory mechanism is approved as filed. We would not expect to file another electric rate case until at least 2028.

Looking ahead, our IRP is expected to be filed in the third quarter this year. It will provide clear visibility into how we plan to serve growing demand, including data centers in a transparent and cost-effective manner. Altogether, we are managing a disciplined approach to growth, combining regulatory strategy, structured large load agreements and long-term planning to deliver reliability, affordability and visibility for our customers.

So to wrap up, we continue to execute on our plan, making critical infrastructure investments, staying focused on affordability for our customers delivering high-quality service to the communities we serve and driving continued strong financial performance for our investors.

With that, I'll hand it over to Dave. Dave, over to you.

Thanks, Joy. Good morning, everyone. Let me start on Slide 9 to review our second quarter financial results. Operating earnings for the quarter were $274 million. This translates into $1.32 per share. You'll find a detailed breakdown of EPS by segment, including a reconciliation to GAAP reported earnings in the appendix. I'll start the review at the top of the page with our utilities. DTE Electric earnings were $270 million for the quarter.

Earnings were $48 million lower than the second quarter of 2025. The main drivers of the variance were timing of taxes, higher rate base costs and colder weather partially offset by rate implementations. On the timing of taxes, we experienced a large positive timing variance of $62 million in the second quarter of last year due to the timing of when a renewables project was placed in service. This positive timing variance in Q2 2025 was an offset to a negative tax timing variance in the first quarter of 2025.

Starting in 2026, the impact of investment tax credits on renewal projects at DTE Electric will be recognized evenly during the year, reducing quarterly volatility, making the underlying earnings trends easier to see going forward.

Moving on to DTE Gas. Operating earnings were $10 million lower than the second quarter of 2025. The earnings variance was driven by higher rate base and O&M costs and warmer weather partially offset by IRM revenue. Let's move to DTE Vantage on the third row. Operating earnings were $45 million for the second quarter of 2026. This is a $14 million increase from 2025, driven by higher earnings in both the Custom Energy Solutions and RNG platforms. On the next row, you can see energy trading earnings were $41 million in the second quarter of 2026. This is $17 million higher than the second quarter of 2025, primarily driven by timing in the power portfolio, including a partial reversal of the timing experienced in the first quarter of this year. We remain highly confident in achieving the high end of the full year guidance range at Energy Trading. Finally, Corporate and Other was favorable $80 million relative to the second quarter of 2025, primarily due to the timing of taxes, which will reverse by end of the year, partially offset by higher interest expense.

Overall, DTE earned $1.32 per share in the second quarter of 2026, which positions us well to achieve the high end of our guidance range in 2026.

Let me move to Slide 10 to discuss our balance sheet and equity issuance plan. We continue to focus on maintaining solid balance sheet metrics. To support the significant increase to our capital investment plan that we need to execute for our customers, we are still targeting annual equity issuances of $500 million to $600 million in 2026 through 2028 with similar levels expected through 2030. We will continue to maximize the use of internal mechanisms, planning to issue up to $100 million internally.

For our remaining equity issuances, we are utilizing our equity ATM program to efficiently execute our funding plan. After pricing about $350 million of equity through forward sale agreements in the first quarter, we priced an additional $150 million in the second quarter, effectively fulfilling our equity needs for the year. The new shares won't be issued until we settle the forward sales, which is planned for the fourth quarter. Our 5-year plan fully incorporates the equity needs and continues to deliver 6% to 8% operating EPS growth and positions us to be at the high end of our guidance range here through 2030. Importantly, we remain focused on maintaining our strong investment-grade credit rating and solid balance sheet metrics as we target an FFO to debt ratio of approximately 15%.

Let me wrap up on Slide 11, then we'll open the line for questions. DTE continues to deliver strong, consistent results for all stakeholders. Our 2026 guidance range reflects 6% to 8% operating EPS growth of the 2025 guidance midpoint. We are on track to reach the high end of our operating EPS guidance this year. Our 5-year plan supports high-quality 6% to 8% long-term operating EPS growth driven by customer-focused utility investment with utility earnings comprising 93% of total earnings by 2030. We are positioned to reach the high end of our guidance range each year, supported by R&D tax credits and the flexibility they provide. The Google contract, along with additional data center opportunities represent further upside to the plan, which will be incorporated following MPSC approval expected in September of this year. Overall, we are well positioned to execute on our plan, enhancing reliability and building a stronger distribution system to reduce outage frequency and duration for our customers. We are doing so with a disciplined focus on affordability supported by multiple levers to manage customer rates, including the significant benefits driven by data center growth. We remain on track to deliver premium total shareholder returns supported by a strong balance sheet and disciplined execution of our capital investment plan.

With that, I thank you for joining us today, and we can open the line for questions.

[Operator Instructions]

Your first question comes from the line of Shar Pourreza with Wells Fargo.

Joi, I know obviously, you guys affirmed -- reaffirmed targeting an additional agreement by '26 by the end with 2 gigs in sort of advanced discussions. I guess, first, is that 2 customers and hyperscalers? And where does that deal stand today in terms of what's really left to accomplish? Is it commercial agreements or just zoning and permitting, et cetera.

Yes. Thanks for the question, Shar. And yes, we still continue to manage a pretty healthy pipeline, and we've got the 2 gigawatts. There are several customers in that mix. We have a combination of hyperscalers and co-locators in the mix. And as I've mentioned before, the way you advance in the pipeline is you have a solid land positions you either have to have a zoning or pass a zoning, and we have a combination of hyperscalers and colocators that have a path to zoning or a have a [indiscernible] only in place. Where we are right now is the commercial discussions are continuing. We are completing additional modeling with those customers to understand the load ramp. And we -- they are also working on site plan approval and in some instances, working on Zone [indiscernible]. So I'd say that things are moving in the right direction, and we feel confident in our ability to secure another agreement by the end of the year.

Got it. And that, obviously, you've been pretty open about that gets you above the 8%. I guess, how should we be thinking about the timing of a guidance update and how you're thinking about messaging around that guide is sort of that plus the way to go, so 8 plus or a step change in the range with the understanding that this is this is obviously an election year, it's a bit of a sensitive year.

Yes. So we have always said that 3 gigawatts gets us plus let's call it. So that will get us above 8. We have now have 1 gigawatt in place with Google, and that gets us solidly to 8. The way we think about giving guidance is really not getting ahead of the the regulatory process. We let that play out. And then we would update our plans accordingly in either Q3 or at EEI. And then should we secure another contract before the end of the year, we would likely refresh our plan with the fourth quarter call at that point. So that's kind of how we're thinking about it. Once we have a clear line of sight, and we understand we're going to get the approval of the contract, that's when we would update our guidance.

I guess, Joi, the question was, are you more open ended in how you want to guide? So plus after the like, let's just say, 8% and leave it open for interpretation on the top end? Or would you see a step change in the range?

No, we would leave it at the plus, Shar. As we've discussed previously, we're not changing our position on that.

Your next question comes from the line of Richard Sunderland with Truist Securities.

Thank you for the time today. Turning to the regulatory efforts, I realize still a few weeks ago before staff and intervener testimony to the electric rate case. But given all the extension on data centers and the potential benefits from there you're proposing in the electric stay out. How are you thinking about positions there? Any expectations into what may come out in testimony and I guess how are you thinking about sort of the balance of the case thereafter.

Yes. testimony in the electric rate case, we'll start to see it next month. As we had proposed and previewed our case with interveners and staff the stay-out mechanism was viewed very positively. Obviously, they had to review the case in its totality. But certainly, any efforts on our part to keep rates flat is something that is of interest, and we look forward to hearing how that's being received in formal testimony. The data centers themselves, we've said all along that data center load broke on right puts downward pressure on rates, and this is just another proof point. And so we see that, that is, again, something that was viewed very favorably prefiling and we anticipate that the staff and intervenors will examine the uncertainties related to Oracle and then the mechanism that we've established in the case as a way for us to deal with those uncertainties and flow back the benefits to customers over time. So looking forward to seeing that testimony is due on August. I believe it's August 3 or 4, and that will give us a clear indication as to what we need to rebut or any additional information we need to provide.

Understood. That's very helpful. And then particularly with the regulatory front, the IRP filing coming later this quarter. How might we see the load scenarios play out in there relative to the 2 gigawatts in advanced discussions and then 3 to 4 gigawatts of additional pipeline opportunities that you've speaking to before and have outlined on Slide 6. I guess I'm curious on that and then also versus the third data center customer I talked about earlier do you see that highest scenario incorporating all of that? Or any other color you can offer before that?

Sure. Yes. We do anticipate we are going to file our IRP in Q3 of this year. And in terms of how we're managing the data centers in the IRP, the base case will be the 2 contracts that we have already signed, and then the high end will take into account our full pipeline, and then we'll have something in between. And so that's how we're looking at shaping the data center load in the IRP.

Your next question comes from the line of Jeremy Tonet with JPMorgan.

This is Diana Niles on the call for Jeremy. As it relates -- as it relates to the data center pipeline and future opportunities. Could you speak a bit to sort of conversations on the ground and conversations with local and stakeholders as it pertains to economic development.

Yes. Well, obviously, in the data centers that we have signed up are sizable, huge economic development opportunities for the state. In fact, the Oracle deal is the largest in the state's history. And Google is not far behind. We see this as a great opportunity for job growth. These are hundreds of construction jobs. In addition, the the tax base benefits that local communities can stand to realize with these types of customers in their jurisdictions. $20-plus million worth of additional tax benefits for the city of [indiscernible] and essentially Bamburin is doubling its tax base with the Google facility in its jurisdiction.

The other indicators that we're getting is this just the solid community benefits that are coming by way of these agreements. And so both Van burn and Saline have signed on to their community benefits packages and so that all flows to the community to address things that are important to them. We also see that as hyperscalers and colocators land in a particular community. They continue to expand. So you also see a build-out of adjacent industries, think of HVAC companies having more demand, electricians, other kind of supporting industries that will grow as a result of these data centers being in our backyard. So this is a great economic story for Michigan with the potential to be even bigger once we sign additional agreements.

Got it. And then looking to the Vantage data center opportunity. Could you provide the latest on progress and expectations there and any time line considerations we should keep in mind?

Sure. The development agreement that we have in place with a large data center developer in a state outside of Michigan continues to progress. Again, this is behind the meter design. And it's hundreds of megawatts. So don't think of it as a gigawatt facility. This is hundreds of megawatts. We are continuing to advance those discussions. As I mentioned previously, the counterparty has run into some permitting challenges on the ground that they're continuing to work. They also have other locations that we are in conversations with them. The equipment is already on order. So suffice it to say, it's going in 1 location or the other, but we feel really good about our relationship and the progress that we've made commercially, and we look forward to executing this progress -- project, sorry, once the permitting issue is resolved or that we have a firm and solid pathway to another location. But suffice it to say, it's still moving in a positive direction.

Your next question comes from the line of Julien Dumoulin-Smith with Jefferies.

Joi and team, nicely done again. What a great update here. Just a follow-up on the Vantage focus here real quickly, if I can. Just with respect to Oracle. I mean, obviously, there's been more focus on the credit here of late in some of the peer states. Can you talk about just the postings waterfall, if you will, just credit protection, just both in terms of any potential updates there? And just actually, just what are the post things as you think about any changes here particularly of late. Just obviously, you're probably cognizant of some of the other changes in the other states.

Yes. Thanks, Julien. This is Dave. As you said, one of the rating agencies, which is S&P downgraded Oracle's credit, still within the investment grade level. And I'll start by saying we don't expect it to have any impact on the completion or timing of the Oracle project, which is already in construction. But as you're referring, we did have, as precaution, our contract has protections we'll have additional collateral requirements at various on great triggers that continues to provide the ultimate protection for our customers and for us. We haven't disclosed the specifics of the agreement at their request, but we remain confident that the protections are there regardless of how this plays out.

Got it. So actually, you did get more post things. The quantum is not necessarily disclosed here. and more to the point you would prospectively if there's any further changes.

Right. Prospectively, we would for further changes, yes. We have good protections in there that give us the full protection from stranded asset risk for us and for our customers.

Awesome. And just to clarify earlier, I know there was some back and forth. I mean you're very confident about the 2 gigawatts in advanced negotiations here. Is that a further -- I mean, speaking of counterparties, a new hyperscale? Or is that an expansion of an existing arrangement here? And just to nitpick a little bit here about what you're looking at within those two?

There's combinations, Julien, listen, suffice it to say, we are continuing discussions with Oracle and Google, and that's always been our plan. hyperscalers and colocators that are in that 2 gigawatts are continuing to make advancements on the ground. So think of it as to new customers. But again, should Google and Oracle come to us with an expansion that they want to pursue, we would entertain that as well.

Right. So different permutations, but principally 2 new customers contemplated in that 2 gigawatt upside, just to make the point.

I wouldn't say two. I'd say it's multiple customers in that 2 gigawatts.

Even better, even better. All right. I appreciate that. And lastly, any comments about legislative reforms or balanced efforts here if you care?

Yes. Given where we are divided government and an election underway, it's not likely that there will be any legislative changes in this calendar year. We are using the time to ensure that we're educating all the candidates on our performance, where we stand in terms of build growth the data centers and what that does to affordability in a positive way and our work to improve reliability and the progress we've made and the work that is left to do.

Your next question comes from the line of Michael Lonegan with Barclays.

So beyond the 2 gigawatts of data centers in late-stage negotiations, you spoke again to the 3 to 4 gigawatts in earlier stage negotiations. Just wondering if you could share progress on those and how they've advanced and do they have potential to add incremental investment within the 5-year plan?

The 3 to 4 behind it are typically a combination of co-locators, some large, some small. And the gating item for those entities is they have to have a customer. And so many of them are working to secure a customer, typically, it would be a hyperscaler. They're also working to secure zoning and essentially is site plan. And so as they advance, they secure the customer and they secure zoning and site plans, they advance in our pipeline. And we are in the process of really just understanding their initial shape of the load based on their projections for the type of facility that they want to build and its location. And so that's where we sit with many of those entities.

That's helpful. And then just wondering if you could talk about the opportunity to further expand the electric rate case beyond '28 like in terms of what you would need to see maybe like an IRM increase and expansion, Google ramp-up, another data center. One of these are a combination. Anything you could share there would be helpful.

Certainly. We said that an expansion of the IRM, if you get to close to $1 billion, that gives you another 6 months. And then any incremental load on top of the Oracle low can add further distance between the next filing. And so this will all play out once the contract with Google is approved. And this, of course, we understand the staff and also the commission's position along with intervenors position on the IRM growth we proposed.

Your next question comes from the line of Andrew Weisel with Scotiabank.

Just a couple of follow-ups, actually. First, following up on the question about Oracle and collateral postings. Appreciate the detail on the contract. I guess the question is, looking forward, based on how quickly things went south for that counterparty, are you making any changes to your counterparty approach around protections going forward? Or do you feel confident that you've been fully protected?

The way we've structured these contracts and even in the large load tariff that is going through approval, we feel like we have the right protections that we need to protect both our customers and us, if anything that could happen on the downside. So it has some provisions in there like contracted load ramp with minimum monthly charges of 80% of the minimum billing demand. And that would be for a 10-year period or longer in some of these instances that make sure that we pay back all of the invested capital to make sure there's no stranded asset risk. So we're comfortable with with the contracts we have and with the way we're laying out the future provisions, too.

Okay. Great. Then this might just be a nuance thing, but the pipeline of additional data center opportunities, you've talked a lot about the 2 gigawatts and then the additional 3 to 4 gigawatts, but it looked like you changed the wording in the slide. The total now is 5% to 6% rather than 5%. Maybe I'm just looking too far into it, but was that meant to be a message that the opportunity in aggregate is getting bigger? Or is that just a change in the math?

It's just a change. It's the same pipeline essentially. You have people moving up and down in the pipeline, but there's no -- been no change.

Okay. Great. Then lastly, a short-term earnings number. You continue to point to the high end of the range for 2026 EPS, but you've had some challenges related to the miles first half weather than the July storm, can you maybe explain what are some of the offsets to those headwinds? Or is it just a matter of conservatism when you first set the budget as you typically do?

Andrew, we do remain highly confident that we're going to get to the high end of the full year guidance this year. We do have incremental rate relief that came in at Electric in March, and then we have an order at gas in September. In addition, there is some timing that we'll see reverse over the remainder of the year at the utilities. And then we see our nonutilities also continue to perform well, and we see that continuing through the year, too. So it gives us confidence in the full year guidance.

Your next question comes from the line of Michael Sullivan with Wolfe Research.

I wanted to just ask on the Oracle load ramp, just how you're feeling on timing there. And I think that's kind of the main driver to the stay out, getting that kind of mostly ramped next year.

Yes. Thank you for the question. The construction is proceeding as planned. We are getting all positive indicators that Oracle and related companies are on track for the fast ramp at this point. We are starting to take deliveries of our equipment that will be used to serve them. So everything is moving in the right direction. We are getting aerial shops, we are seeing visuals. And then obviously, our team is active on the ground with the construction team. So all systems are go at this point.

Okay. Okay. That's great to hear. And then I know every deal can obviously be different, but just in terms of how to think about the next one. Is the Google deal like a good template? And if you keep size apples-to-apples just in terms of like affordability benefits, supply mix or is it really those things can vary a lot depending on the specific deal that struck?

Yes, they can vary. It just depends on the ramp itself. Suffice it to say, what we see is largely an opportunity to do more renewables, more battery storage in the near term. And then towards the back end of the plan, we would leverage the results of the IRP, obviously, to dictate what the ultimate resource would be. But again, a dispatchable resource that would come in towards the tail end.

Your next question comes from the line of Anthony Crowdell with Mizuho.

Just one follow-up. Mike, earlier, you had talked about the as large load reaches advanced stages and you identified zoning, site plans, permitting, finding a customer. Could you give us some insight to what's the bottleneck? What's the more challenging part for these larger customers before they move to advanced discussions.

Yes. It's the zoning first and foremost. They've got to get the site zoned and then they can move towards site plan. So that's typically one of the gating items that the hyperscalers and co-locators have to deal with.

It's -- so it's not finding a customer, it's zoning?

Yes. You got to get zoning. I mean for co-locators, I mean they can find a customer, right? If they can -- it speed to power. So if they have a facility, they have a site, they have it zoned and it's pretty much ready to go. They will get the customer they need. It's getting that zoning that really becomes the challenge that they've got to overcome.

Your final question comes from the line of Travis Miller with Morningstar.

On IRP, aside from the data centers, renewable under plan, any other variables that we should watch for relative to what you've been talking about for the last several quarters.

No. I think those are the big things. The data center -- the IRP will be filed. The data center load will get incorporated in there the RPS will be a part of it, too. We've got to do some updates and updates to the RPS with that filing. But that's pretty much it, Travis.

Okay. Great. And then one other one on Vantage. If there are delays in that project, is that going to have an impact on either '26 or '27 earnings? I think you've noted that, that could be upside potentially. Just wondering how that relative to earnings that project.

No, that has no impact on '26. And again, the equipment is already ordered we are expecting the deliveries to happen. So it's going somewhere either at the original location or at an alternative.

That concludes our question-and-answer session. I would now like to turn the call back over to Joi Harris for closing remarks.

All right. Well, thank you, everyone. Thank you all for joining us today. I'll just close by saying we continue to execute in 2026, and we are well positioned to achieve our goals for the year. I'm very excited about our long-term plan and the opportunities ahead, and I look forward to seeing many of you on the road during the rest of the year. Have a great morning. Stay safe and stay healthy. We'll talk soon.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Thank you for standing by. My name is Liz, and I'll be your conference operator today. At this time, I would like to welcome everyone to the DTE Energy First Quarter 2026 Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to Matt Krupinski, Director of Investor Relations.

Thank you, and good morning, 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 Joi Harris, President and CEO; and Dave Ruud, CFO.

Thanks, Matt. Good morning, everyone, and thank you for joining us. I'm happy to be with you today. I'll start by saying 2026 is off to a strong start, and that momentum gives us confidence in delivering an exceptional year for all of our stakeholders. As we have said before, our success begins with our team. We have a highly engaged organization that's executing extremely well. Our team is focused on doing what's right for customers and communities. And that strong employee engagement really shows up in our performance.

A great example is our team's response to a couple of large storms we experienced in the first quarter. During a January weather event, the team restored 100% of impacted customers within 48 hours. And during the March storm, a more significant event, we restored service to over 99% of the customers within 48 hours. This kind of performance reflects the commitment, preparation and pride our employees taken their work. I'm incredibly proud of how our team continues to show up for our customers when it matters most.

We continue to execute our customer-focused capital plan that strengthens the grid and improves reliability. These investments are essential to enhance the grid to support our customers and they're being made with a clear focus on customer affordability. That focus is reflected in our recent rate case filing, where we are targeting investments that drive the highest impact while carefully balancing customer affordability. Turning to data centers. We continue to see great progress. The 1.4-gigawatt Oracle data center included in our plan is approved and construction is underway. We've also executed an agreement with Google to serve a 1-gigawatt data center. This project represents incremental upside to our current long-term plan and the contract has been submitted to the MPSC IV approval.

Beyond Oracle and Google, we continue to have constructive discussions with other potential customers. As those conversations progress, they represent additional upside to our capital plan over time. It's also important to highlight that this data center growth provides real affordability benefits to our existing customers. These large loans help spread fixed system costs over a broader base. And because these data centers use so much power, they absorb a significant portion of these costs, which will provide meaningful benefits to existing customers as these lows ramp.

As I've said, -- we are off to a great start in 2026 and well positioned to achieve the high end of our operating EPS guidance. We are confident in our long-term operating EPS growth rate target of 68% through 2030. We and we remain confident in our ability to reach the high end of our guidance range in each year, driven by R&D tax credits and the flexibility they provide. The Google data center project and other data center opportunities provide upside to this plan.

Let me move to Slide 5 to highlight our improvements in reliability. We delivered meaningful reliability improvements in 2025 driven by a combination of strategic infrastructure investments, targeted process improvements and more favorable weather conditions. From 2023 to 2025, we achieved a 90% improvement in outage duration, reflecting both stronger system performance and faster restoration. We recorded our best all-weather SAIDI performance in nearly 20 years, underscoring the impact of our sustained focus on reliability and placing us in the top quartile of utilities nationwide.

Last year, we restored 99.9% of impacted customers within 48 hours, demonstrating continued improvement in storm response and operational execution. That momentum has carried into 2026 and as we continue to successfully execute our reliability strategy. Earlier, I mentioned the strong storm response our team delivered during the first quarter. That performance was on full display during the March storm when we experienced wind gust of more than 70 miles per hour for a sustained period. About 300,000 customers were impacted, and thanks to dedication and hard work of our crews, nearly all customers had power restored within 48 hours.

When we look back at a similar storm several years ago, the progress is clear. That earlier event which was a little less severe, impacted more than 750,000 customers and restoration took significantly longer. The improvements we're seeing today reflect years of targeted investments, improved processes, and the commitment of our employees. This work continues to make a meaningful difference for our customers through less frequent outages, faster restoration and improved reliability and demonstrates that when we invest, it works.

We are continuing our efforts to modernize our electric distribution system, including the installation of smart grid devices to improve outage detection and restoration times. We are also maintaining a disciplined focus on pole-top maintenance, executing a robust treatment program and advancing the ongoing rebuild of the 4.8 kV system, all of which are critical to long-term reliability. And those initiatives are already translating into measurable results. We remain on track to achieve our long-term goals of reducing the number of power outages by 30% and and cutting outage duration in half by 2029, reflecting our commitment to sustained improvement.

Let me move to Slide 6 to provide an update on data center development. We continue to make steady progress executing and finalizing contractual agreements needed to support data center growth. The Oracle contracts are approved and construction is underway. -- with load ramping over the next several years. The growth is supported by existing capacity and planned energy storage and the contracts are structured to ensure Oracle will cover the full cost of energy and capacity they need while also providing significant affordability benefits to our existing customers.

Our project with Google also continues to advance. The contracts have been filed with the MPSC for approval, and we expect their low to fully ramp by the end of 2028. The low ramp is supported by a balanced mix of resources, including renewable generation, energy storage, demand response and additional longer-term generation that will be identified through the IRP process. As a result, meeting Google's capacity needs could drive roughly $5 billion of incremental generation and storage investment through 2032. The Importantly, these investments are supported by contracts that protect existing customers. We have a 20-year power supply agreement with minimum monthly charges combined with a separate clean capacity acceleration agreement that covers renewable and storage investments. termination provisions, combined with credit and collateral requirements, are designed to protect existing customers and support affordability.

This means that Google will cover the full cost of the energy and capacity they need while also providing affordability benefits to our other customers. Beyond these 2 projects, we remain highly engaged with additional data center opportunities. We're in advanced discussions that could represent roughly 2 gigawatts of incremental load with additional projects in our pipeline that could add another 3 to 4 gigawatts over time. Importantly, we also expect additional demand as these customers continue to expand once they are on the system. Collectively, these opportunities require investment in new baseload generation, renewables and related storage with the exact resource mix and timing to be refined through the IRP process.

Overall, we see our strong pipeline continue to advance, with disciplined execution that delivers growth while remaining focused on reliability and affordability. Let me move to Slide 7 to describe the benefits these data centers provide and discuss our continued commitment to customer affordability. These data center projects bring on large steady load that helps spread fixed system costs and create meaningful affordability benefits for our existing customers. Once fully ramped, Oracle is expected to drive about $300 million of annual benefits to our existing customers, while the Google data center is expected to generate roughly $1.7 billion of benefits over the life of the contract.

These savings strengthen our affordability story, complementing the strong continuous improvement culture that we have developed over the years. Continuous improvement is part of how we operate every day. and it underpins our ability to consistently deliver strong reliability while managing customer affordability. We've executed our investment plan with discipline while remaining highly focused on affordability for our customers. As the chart illustrates, our average annual bill increases over the past 4 years have been well below the national average and the Great Lakes region. One of our biggest sources of customer value is how we're using new technologies. Advanced analytics are driving efficiencies, lowering cost and improving maintenance and storm response. Delivering customer-focused efficiencies through technology remains a top priority for our team. Our transition from coal to natural gas and renewables is also reducing O&M costs and the tax credits available under the Inflation Reduction Act helped to make our clean energy investments more affordable for customers.

Today, the typical residential electric bill represents less than 2% of the median household income, and our residential bills are 18% below the national average. We also continue to expand energy assistance for our most vulnerable customers delivering millions of dollars in energy assistance and donating significantly to support nonprofits across Michigan. Overall, we are well positioned to sustain our historical success in managing customer affordability while continuing to invest in the grid and support long-term growth.

Let's turn to the next slide and walk through our regulatory strategy and the benefits we are delivering to our customers. Our electric rate case filing is an important step in supporting customer-focused investments in system reliability and grid modernization while continuing to manage affordability.. This rate case filing is predominantly driven by our distribution infrastructure investment plan, which is squarely focused on improving reliability and consistent with the recommendations from an electric distribution audit completed in 2024. This plan is focused on achieving our goal of reducing the frequency of power outages by 30% and and cutting outage duration in half by 2029.

As part of this filing, we're requesting nearly $800 million of distribution investments to be incorporated into the IRM by 2030. This would support consistent, predictable infrastructure investments for our customers and could help delay future rate case filings. Our data center agreements are thoughtfully structured to enhance affordability and protect our customers -- as I have already highlighted, these contracts deliver significant affordability benefits with strong safeguards in place. As the loan from these projects ramp -- it creates the potential to extend the timing of our next DTE Electric rate case filing, delivering the benefits to our existing customers from these growth opportunities while we continue to invest in improving reliability.

We have proposed a regulatory mechanism in this current case to capture any excess margin from the Oracle load ramp above what we have included in our filing. If the Oracle load ramp comes online by the end of 2027, and we receive other required regulatory approvals, we will refrain from filing another rate request until at least 2028. Looking longer term, our IRP will provide clear visibility into how we will serve growing demand, including the significant data center load.

The IRP will lay out our approach meeting long-term generation and capacity needs with the filing expected in the third quarter of 2026. This is a transparent process that allows us to identify the most effective and affordable way to serve customers over time. Taken together, these efforts reflect a coordinated, disciplined approach to growth, combining thoughtful regulatory filings well-structured large load agreements and long-term resource planning to support reliability, affordability and visibility for our customers.

So to wrap up, we're off to a strong start in 2026. We're executing our plan, making critical infrastructure investments staying focused on affordability for our customers, delivering reliable, high-quality service to communities we serve and driving continued strong financial performance for our investors.

With that, I'll hand it over to Dave. Dave, over to you.

Thanks, Joi, and good morning, everyone. As Joi mentioned, 2026 is off to a really strong start, and we remain well positioned to achieve the high end of our operating EPS guidance this year. Let me start on Slide 9 to review our first quarter financial results. Operating earnings for the quarter were $407 million. This translates into $1.95 per share. You can find a detailed breakdown of EPS by segment, including a reconciliation to GAAP reported earnings in the appendix. I'll start the review at the top of the page with our utilities.

DTE Electric earnings were $218 million for the quarter. Earnings were $71 million higher than the first quarter of 2025. The main drivers of the variance were timing of taxes, rate implementation and colder weather partially offset by higher rate base and O&M costs. On the timing of taxes, if you remember, we called out a variance of negative $67 million in the first quarter of last year due to the timing of renewal projects being placed in service, which was a key driver of the variance for the quarter.

Moving on to DTE Gas. Operating earnings were $210 million, $4 million higher than the first quarter of 2025. The earnings variance was driven by colder weather and IRM revenue, partially offset by higher rate base costs. Let's move to DTE Vantage on the third row. Operating earnings were $48 million for the first quarter of 2026. This is a $9 million increase from 2025, driven by higher custom energy solutions and steel-related earnings, partially offset by lower renewable earnings.

On the next row, you can see energy trading earnings were $59 million lower than the first quarter of 2025. This was primarily driven by expected timing in the first quarter in the Power portfolio. We are highly confident in achieving the high end of the full year guidance range in Energy Trading as this timing reverses through contracted and hedge positions over the remainder of the year. Finally, Corporate and Other was unfavorable by $54 million, primarily due to the timing of taxes of $43 million and higher interest expense.

Overall, DTE earned $1.95 per share in the first quarter of 2026, which positions us well to achieve the high end of our guidance range in 2026.

Let me move to Slide 10 to discuss our balance sheet and equity issuance plan. We continue to focus on maintaining solid balance sheet metrics to support the significant increase to our capital investment plan that we need to execute for our customers. We are still targeting annual equity issuances of $500 million to $600 million in 2026 through 2028 with similar levels through 2030. We will continue to maximize the use of internal mechanisms, planning to issue up to $100 million internally. For our remaining issuances, we've established an equity ATM program to efficiently execute our funding plan. While those shares were issued under the ATM program during the first quarter, we have priced over $350 million of equity through forward sale agreements that we plan to settle later this year, which is about 2/3 of our full year target.

Our 5-year plan fully incorporates the equity needs and continues to deliver 6% to 8% operating EPS growth with a bias to the upper end of guidance each year through 2030. Importantly, -- we remain focused on maintaining our strong investment-grade credit rating and solid balance sheet metrics as we target an FFO to debt ratio of approximately 15%. Let me wrap up on Slide 11, and then we'll open the line for questions.

DTE continues to consistently deliver for all our stakeholders. Our 2026 guidance reflects operating EPS growth of 6% to 8% over our 2025 guidance midpoint and RNG tax credits give us confidence that we can deliver at the higher end of that range. Our 5-year plan provides high-quality, long-term 6% to 8% operating EPS growth through increased customer-focused utility investments, with utility operating earnings, making up 93% of our overall earnings by 2030. We are confident we will reach the high end of our guidance range each year, driven by RNG tax credits and the flexibility they provide.

As we have stated, the Google contract and additional data center opportunities provide upside to our 5-year plan that will be incorporated after the contracts have been approved by the MPSC Overall, we are well positioned to execute our plan to improve reliability for our customers and strengthen the communities we serve. We're doing so with a strong focus on affordability, supported by multiple levers to manage customer rates including the significant benefits that data centers drive for existing customers, and we remain on track to deliver the premium total shareholder returns our investors expect, supported by a strong balance sheet and disciplined execution of our capital investment plan.

With that, I thank you for joining us today, and we can open the line for questions.

[Operator Instructions]

Your first question comes from the line of Shahriar Pourreza with Wells Fargo.

Joi, I know you talked about the Google deal strengthening the 8% in the next deal, pushing you beyond 8%. I guess, first on Google and the status of the approvals. I mean, Michigan has been noisy. So I guess, how should we think about pushback given it is a contested case? What's been the feedback so far there? And what clarity would you need to put that into plan?

Well, thanks for the question, Shahriar. And the community is welcoming Google. So that makes this a really positive thing for the state. And we are seeing really, I think, positive comments in media about the Google contract. So we feel really good about what was filed. We are expecting to get an order in the September time frame, upturn be by September 10, at least that's what the contract specifies. And if you recall, the commission indicated that they're going to read the order, so there won't be a PFD.

So that was a positive signal that puts us on track for that approval by September. So the community is welcoming. The narrative has been really good on the ground, and we feel good about to secure the contract. As we've said all along, that 3 gigawatts would get us to A+. And at least as Google contract has the potential to get us to 8, but we don't want to get ahead of the approval process. We're going to let this play out over the summer and into the early part of the fall and get that approval and keep moving forward. .

Got it. Perfect. That's consistent. And then just lastly, on the next deal announcement, are you still thinking sometime in that Q3 time frame and -- could we sort of see an update of that plan and the CAGR around the EEI time frame, embedding the next deal? I guess, how do we sort of handicap the next deal timing, et cetera?

Yes. I think we are targeting before the end of the year to have, I've always been consistent about that, having something done before the end of the year. And let me just say that we've got 2 gigawatts of hyperscalers that we are in late-stage negotiations. At least 1 of them has zoning already done. So we feel really good about that, and there's a pathway to zoning for the other. So the conversations are progressing quite well. In terms of the updates that we will provide as the contract is solidified, rest assured, we'll provide updates. Our approach will be to lay out our 5-year plan, no different than prior years during our third quarter call in -- and provided that we have any information or we solidify the contract at that time, we would incorporate it. But if not, it will show up sometime thereafter. .

Okay. Perfect. Big congrats guys. That's very consistent.

Next question comes from the line of Michael Lonegan with Barclays.

So obviously, you highlighted you're pausing your -- you're potentially pausing your next electric rate case filing after the current 1 dependent on ramp-up of data center loan approval of regulatory items. So obviously, this is dependent on a constructive rate case outcome in the current case. I just wondering if you can share your assumption for a range of ROE and equity ratio outcomes in the case for that pause? And also how you're thinking about the IRM mechanism coming out of it. .

Yes. So thanks for the question. We enter every case with an expectation and belief that we'll get a constructive outcome, and that's what we've included in our planning assumptions. The investments that we have highlighted in case are all targeted towards the grid. -- which are necessary and also to transition to cleaner generation, and that's all underpinned by legislation. So we feel really good about the case that we put before the commission. The IRM is underpinned by our DSP and which is aligned with the Liberty audit that was completed in 2024. And this was a directive from the commission that we followed through on. So we feel very strongly about what we've put forward. And at least a clear understanding of how those investments are going to deliver value for our customers.

In terms of ROE, what we requested is 10.25%. And then in terms of equity layer, -- we typically have included a 51% equity in our filing. And so we'll let this play out as we always do over the course of the next several months, we'll start to see staff and intervenor testimony and that will give us indications as to whether or not we're aligned with the commission, but we feel good about where we stand today.

Great. And then you got potential pause in electric, but shifting to gas, after the current pending case, when could we expect you to file the next gas rate case?

We're going to let this case play out. We did ask for an increase in the IRM, which was supported by the staff and their testimony, which is a really positive sign. We have some other large investments that we included in this case, which were supported as well. And this is all updating our transmission system and the gas business. So that's really, really positive for us. And once we get the final order, we'll determine the next filing cadence.

Your next question comes from the line of Julien Dumoulin-Smith with Jefferies.

Can you hear me okay?

Yes.

Excellent. Well, congratulations to the Joi and the team here, really nicely done. Congrats on the continued success. Maybe just take it up where Michael left it off here. I mean what is the stat dependent on? Just to pick it up there, just in terms of the timing with Google if it's approved and comes online as planned, how does that impact the electric state here? Can you elaborate just a little bit about some of the parameters here as you think about it. Obviously, Oracle is coming online at the end of '27 here. So -- but you can talk about different pieces.

Sure. The mechanism that we filed essentially takes any excess margin above and beyond what we've incorporated in the case and pushes it into a subsequent filing where we will propose how to flow back the benefit to the customers. And that gives us the potential to stay out for multiple cycles. And if you layer on the Google contract on top of it, once it's approved, that could very well give us the opportunity to push out cases even further. So that's how we've set it up in the case, Julien, and we are looking forward to getting feedback from the commission once they've had an opportunity to fully absorb the filing.

We'll start to see testimony from staff in the next several months. And we'll have some indication as to whether or not there's good support. But generally, I think all of us are seeing that data centers are going to deliver the affordability benefits as promised. And this is a way for us to showcase it and deliver on the promise that we've made early on.

Awesome. Excellent. That's what I thought. There could be a little bit of an extension factor there. especially, I suppose if you get a 1/3 to, right? Again, each 1 would incrementally push out that time line.

Yes. Load growth data center load growth will provide meaningful affordability benefits for our customers. We said that all along. And this is that projection coming to fruition.

Yes, exactly. And just -- and that's a nitpick, but to come back on the other pieces of the business, if you will, everything else. Just -- so you're guiding here to flat earnings for Vantage by 2030. How do you think about that if you layer in the data center opportunity -- is another way to just talk about the pieces that go into the 6% to 8% here. And then also separately, how do you think about the Vantage Recycling avenue here, especially as we talk about Google and a potential card here. It would seem like that's more right now than ever. But I don't want to put words in your mouth.

Yes. Vantage has a really strong pipeline of opportunities that we continue to advance. The data center opportunity with Vantage is progressing quite well. We're down to the short strokes as I like to call it. And hopefully, we will have an agreement -- a full agreement in place over the next several weeks. -- and be able to communicate this more fully to the broader community. But it's an exciting opportunity that has the potential to expand even beyond where it is. Just given the technology that we're deploying, it's transferable. So recall, this is a behind-the-meter project that is roughly 350 megawatts since there is such shortage of power across the nation, this could be a very interesting opportunity for other hyperscalers and/or co-locators that are looking to expand their footprint.

And so we've begun some preliminary just examination of where this might fit. But for right now, we're focused on the project that we have underway, and this fits nicely into the plan that we've already established. As for Vantage and recycle opportunities, -- as always, we look at Vantage and exam Vantage every year. And this business has served us well for over 20 years. That's not to say, though, that we're not always looking to create more shareholder value and so we'll examine for rotation opportunities along the way and provide you updates if anything materializes, but there's nothing imminent.

I appreciate it. We'll talk soon. All the very best.

All right. Take care.

Your next question comes from the line of Jeremy Tonet with JPMorgan. .

Thanks for the details so far. Just looking to build a little bit more if I could. For the Oracle and Google data centers, how would you frame the ramp in sales growth as these projects come online? How should we think about that over time at this point?

The ramp in '20 -- well, the ramp for Oracle in 2026 is relatively small, but it shoots up exponentially beyond 26. So they get to their full ramp over the next couple of years. Same thing with Google. Google will start out relatively small and then expand to a gigawatt by 2028. So that's how the data centers are looking to ramp over the next couple of years. .

And I guess to refine that a bit more, how do you think that compares to a minimum contracted level?

How does it compare to minimum contracted levels, .

Do you think there's the potential for a faster ramp than maybe where demand charges stay.

Oh, I see. So I think what -- the contract and which is why we've included this mechanism, the contract allows for some flexibility -- and so we won't fully know until the facility is constructed. And what I can tell you is construction is progressing as planned. There's no indication that there is a slowdown of any sort. And so we intend to see Oracle attached to the grid by the end of this year and then begin to take electrons off the grid thereafter in terms of their minimum billing demand as they are ramping, it's aligned with their load ramp.

So depending on the scale of their load ramp, and we have not published that. I don't think we've made that public for obvious reasons. But suffice it to say, so long as they stay on schedule, we see that they will be on a fast ramp. But if there is any delay, and they have that option to delay for 1 year. than the mechanism that we are proposing covers it. .

Got it. That's very helpful there. And I just wanted to turn to customer benefits, if you could, in your approaches to $300 million annual in $1.7 billion overall customer benefits from Oracle and Google contracts. Just wondering how those contracts compare if there's any differences to think about there? And really just how do you think about future deals here, bringing similar scope of benefits? Or just what are you looking for in the future?

Yes. So the Oracle contract -- because we did not have to construct anything substantial, we are only building battery storage to support the load and they're covering the full revenue requirement for that battery storage. You've got a pretty significant affordability benefit. We do have to make some additional baseload additions to our fleet to cover off Google, and that will be identified in our IRP. So the affordability benefit, while sizable, is a little less than what you see in the Oracle contract for obvious reasons. .

Got it. And how does this, I guess, inform your -- what you're looking for in any potential future agreements, I guess, as far as what the size or scale of benefits could shape up to be

Any deal that we arrive at has to provide affordability benefits for our customers. The -- that is the requirement of the law. And so our desire is to maximize that at every opportunity. And so it's going to be dependent upon the size and scale of the hyperscaler, the resources that we have to bring online to for them and their ability to flex their load over time, and that will dictate how much affordability savings that will flow to our customers.

Your next question comes from the line of Richard Sunderland with Truist Securities.

Just wanted to circle back to some of the rate case discussion. Maybe just to put a finer point on the IRM side -- do you lose an IRM outcome consistent with you're asked for the stay out? Or is it really around this newly proposed mechanism you've been discussing that's, I guess, key for staying out?

Yes. It's around the mechanism that we're proposing. But I can tell you, the IRM, we're looking to grow it to $800 million by 2029, and we have approval for '26 and '27 already. And we feel really good about the IRM potential. We've aligned it to the DSP as requested by the commission and the DSP is in firm alignment with the Liberty audit that was performed in '24. .

Got it. That's very helpful. And then there's certainly a lot of attention around the state and kind of the data center dynamic on the local level. It sounds like for you, there's really a lot of continued interest, but trying to understand if you've seen any shifting in sort of your conversations and how the projects are approaching it on their side? And I guess while we're on zoning -- for that Oracle site, is there expansion potential there without additional zoning required?

I'll answer your last question first. I think Oracle is taking up a portion of the footprint. So there is some expansion potential there. As for what we're seeing on the ground, the hyperscalers and colocators have all engaged more fully with local government and local communities. And when they do that, we see that there is more acceptance and more willingness to allow those types of companies to take up locations in those communities, Case in point, [ Venberan ] Township, and there are others. So we are feeling really good about the hyperscalers and co-locators in our pipeline. Many of them have zoning or have a pathway to zoning and they are progressing quite nicely through our pipeline because of it. .

Next question comes from the line of Bill Appicelli with UBS.

Just wanted to ask about the financing around the incremental $5 billion that you outlined here that the Google contract could drive. I mean how should we think about that? Can you just remind us on how you would finance that? And maybe back to the earlier question on capital recycling, would that pull forward some urgency or need for that? .

Bill, this is Dave. Yes, the incremental capital that would come into the plan would be partially funded with equity. So we think about 40% equity on average depending on the timing of the cash flows also use converts and hybrids to support our balance sheet as we execute those investments. And you're right before, we weren't -- we didn't have a need for equity. So it does make us think about -- are there other opportunities and ways that we can maximize value across the company by finding some asset recycling that could help. But nothing -- obviously, nothing imminent there. So right now, we just assume some more traditional funding.

Okay. And then as far as future deals, I mean, is your view to run everything through the utility and under these contracts, would there be any desire to look to do something bilateral directly with hyperscalers as opposed to running it through the utility model?

Yes. Our focus is on growing our 2 utilities. And so we're going to continue to leverage the vast assets that we have and the electric companies to serve this load and future load. .

Okay. And then just lastly, on RNG. Is there anything market conditions wise there we should focus on? Or should we just assume that you're going to be able to fully maximize the earnings potential there at RNG on the tax credits?

Yes. We have what we think are conservative assumptions in our forecast for the year at $50 million to $60 million. We are seeing now the DOE and -- the DOEs and the treasury are working through the rules right now. We think what we have is a conservative assumption right now, we're producing at a high level. So we feel like we have a good assumption there for RNG.

Okay. So is there a potential for a modest upside to that? Or is that just basically likely within that range? .

We did see some upside last year because we started with some conservative assumptions, but we're waiting to see how these rules play out before we would do anything for this year.

Your next question comes from the line of Michael Sullivan with Wolfe Research.

Maybe just following on Bill's question there. I know kind of each deal may look different in terms of resource mix, but the $5 billion of CapEx for the 1 gigawatt Google deal, is that like a decent rule of thumb for future deals? And then also the 2 gigawatts in late-stage negotiations, is that basically 2 customers of similar size? Would that be a fair assumption as well? .

I'd say, Michael, on your first question, all these deals are pretty bespoke and what they're going to be providing as far as capital and when that will flow in. This 1 has -- the Google 1 has a lot of renewables and storage as well as some baseload. So I would say they'll all be somewhat bespoke and how they'll come in over time.

And then on your second question, as far as new deals, there's an assortment of sizes in what we're looking at, but there are some that are among that scale of what we're seeing with Google One, too.

Okay. That's helpful. And then, Dave, just sticking with you, like any more color you can provide on just the trading rent for the quarter. I know you pointed to kind of some timing reversals going to still hit the high end of the segment for the year, but I think it's been a little bit since we've seen like a negative quarter just in absolute terms? Just any more color on the dynamic there would be helpful. .

Yes. The shaping that we saw in the first quarter was contemplated in our guidance that we gave in February. As you said, we do remain confident in the full year guidance and hitting the high end because we have these hedged and contracted revenues are going to play out for us. So we did experience similar shaping in '23 and '24. So we expected it. And then additionally, some of the impact we saw in the first quarter was timing, and we know that, that's going to flow back through us through the year through some contracted position. So we do remain highly confident that we're going to hit the high end of our full year guidance of trading this year.

Okay. And then just in the spirit of like some of the asset rotation questions. Any thoughts as to whether this still remains like a core business or would it be monetized at all?

Yes. Trading is a part of our core business. But again, every year, we look at the nonutility businesses and we examine whether there's additional shareholder value that we can realize. And so we'll continue to examine that. But for now trading is part of the DTE company, part of the DTE family and will remain so.

Your next question comes from the line of Andrew Weisel with Scotiabank..

Thank you for all the details, and I appreciate all the insights on a strong update. First question, on the data centers, I appreciate the credit protections that you have in place and all the specifics to you in the prepared remarks. My question is, can you remind us of the concentration from these customers first? They're obviously going to represent a major portion of your sales volumes and revenues. I want to say 40% of the total is in my mind. Is that figure, right?

And my real question is, do you have different requirements for different customers based on credit risk profiles. Would you have different protections in place or different credit or collateral requirements for Oracle versus Google and Alphabet. And what about hyperscalers that might be less high profile? Would you treat those customers differently?

So the credit protections are differ based on the strength of the counterparty. And so we examine them each separately and determine what credit protections are necessary. And then you are correct, yes, the concentration will be roughly 40% once they arrive at their full ramp. And so as we get more data centers online, we will examine their position. We'll examine the assets that we have to build on their behalf, and then we will establish the appropriate credit protections that will insulate our customers from stranded assets and also rate shop.

Okay. Could you comment Oracle specifically versus Google and Alphabet are those 2 being treated the same or differently?

I can't comment on that. That is commercial information that we have not made publicly available. But suffice it to say, we treat them accordingly.

Okay. Understood. That's fair enough. Second question, in terms of the storms, certainly impressive results in terms of the data on outage restoration and results, well done on that, very impressive. My question is, given the history of negative feedback on reliability, what kind of responses are you giving from key stakeholders like regulators, the staff, local community leaders, politicians? And on the cost side, to get those results? Were these storms more expensive than what you've historically spent in terms of prestaging and execution? Or is it more like you're being rewarded for the good investments you've been making over the past few years?

I'll answer the -- your last question first. The storms are not more expensive than prior years. And as you heard in my opening comments, similar storm actually that was less severe, resulted in 750,000 customers out. And this storm this year with 70 mile-hour wins, we only saw 300,000 customers out and we were able to get everybody back on within 48 hours. And that we are measuring at the circuit level how each circuit is performing under duress. And we can say definitively that these investments are, in fact, working. Where we've made the investments, the grid is holding up quite nicely to really extreme conditions.

Your -- the first question was around how stakeholders are responding. I would just point you to the commission and their comments on the behind-the-meter podcast, where they're pointing to the improvements that are made in the grid and how DTE is performing as a result of the investments and the work that we've done to improve our processes. We're hearing from our customers and other stakeholders that things have improved, it's noticeable, but clearly, there's more work to be done.

Our next question comes from the line of Paul Fremont with Ladenburg.

Congratulations. My first question is how much of the $5 billion of Google investment would you expect would fall into your current 5-year capital spending plan?

Yes. Paul, thanks for the question. You could assume that some of the renewables, some of the storage would fall into the 5-year. And then we would begin to ramp the base load generation toward the back end of the 5-year and then it will carry beyond the 5-year time horizon.

Right. So I would expect then that the 700-megawatt gas plant that will show up in the IRP would be mostly, if not completely beyond sort of the forecast period. Is that fair? .

Well, actually, a lot of that comes in ahead of time and preparing the site and making some of the purchases we have to make, too. So I think it will straddle the 5-year and then a little bit beyond it.

Great. And then when would you update your capital spending plan to include Google? Is that -- are you waiting for regulatory approval or --

Yes that would be yes, that will be the timing that we would likely update our plan, and we're expecting to get an order early in September. And so by the time we are with you all at EEI, we would likely be in a position to talk to you about exactly when that $5 billion shows up and then what years.

Got it. Perfect. And last question for me. Can you maybe update us a little bit about the governor's race and -- what so far any of the candidates have commented with respect to either affordability or with respect to their positions on data centers?

Yes. Yes, the field is forming. There are really 4 candidates now. The Republicans, there's a neck-and-neck race between John, James and Perry Johnson here in the state. We've got 1 Democrat in [ Joslin Benson ] and an independent in [ Mike Dugan. ] And we have been sharing our story around affordability, which is a good one. We've showcased our build growth on an absolute basis being in top decile at 5% compared to the national average, which is roughly 26%. We've talked to them about share of wallet and where we stand relative to the nation, we're at 1.8% and balance of the country is at 2%.

And we had our best reliability performance in 20 years and a really strong performance in the first quarter, as I mentioned in my opening remarks. We've talked to them about the affordability benefits that data centers offer to our customers and how we intend to flow those back. Case in point, our most recent filing. The messages have been well received. Had just recently spoke with John James, and we'll have some follow-up discussions. I've had conversations with [ Joshin Benson ] and also with [ Mike Dugan. ] Generally all support data centers. They like the load growth and the opportunities it presents for our customers in terms of affordability benefits. But we are also focused on economic development and how we can continue to bring more growth to the state.

So this has been a really constructive introduction, and we're going to continue those conversations as the race unfolds.

Next question comes from the line of Anthony Crowdell with Mizuho.

Follow-up to an earlier question on Vantage. Obviously, we read a lot in papers about just bringing your own generation interest with hyperscalers, especially in the RTO regions. Any interest in Vantage looking at opportunity in whether it's PJM or other parts of the country?

Anthony, yes, we are -- like I said, we've got to get this 1 first deal under our belt, but it is proving to be a very interesting vertical. We are seeing just the application certainly capable of serving other hyperscalers and/or co-locators in other jurisdictions. And so while we are hyper focused on closing out this first deal. We're scanning the environment to see if there's potential elsewhere and the counterparty that we're dealing with has interest beyond this first location that they're working on. So it could be a very interesting vertical like I've mentioned before. .

Great. Just the last one. The 1 gigawatt for Google expected to be fully ramped by the end of '28, what infrastructure does DT need to put in or build to reach their full ramp by -- I'm just trying to think of what needs to be on the DTE side to get to the full ramp.

Yes. To get to their full ramp, we're going to build likely renewables, battery storage -- and remember, they've also incorporated a demand response in the contract. So those assets to serve them at least near term, will fold those into our 5-year update and of course, once we solidify our IRP and then we will begin to fold in the build-out of baseload generation even further.

Your last question comes from the line of [ Rene Singh ] from Bank of America.

I just had a question on the mechanism you're talking about. Obviously, you're talking about being able to capture the excess margin. Just -- is this like -- is there a precedent for this in at the Michigan PSC maybe in a different customer cost? And I guess what triggers that mechanism? And also just -- is it just the rate case that is to be approved? Or is there any other regulatory approvals that it needs to go through?

I'll answer your last question first. Yes, there will be some additional regulatory approvals. The mechanism will be punted, if you will, to a separate filing and dispositioned accordingly. Is there a precedent? I'd say, yes, we did something very similar during the Cove years when we saw increased residential load, we were able to pass those savings on to customers to defray to keep us out of rate cases, but also to defray the cost of us doing true term.

Okay. That makes sense. And then just a secondary question more on -- as you kind of go down this 5 to 6 gigawatt pipeline, and you're thinking that you kind of need more capital-intensive baseload power. How do you see the economics and the contract structure is changing -- is it more demand response from the customers? Or is it a higher contract cost? Yes, just love to hear more about that.

It could be a demand response. But like I said, these are all bespoke agreements. It's going to be a function of the size and the interest that the hyperscaler has in particular assets -- and then obviously, where they choose to locate. So we are keeping all options open and certainly very interested in solidifying a deal before the end of the year.

We have no further questions.

Thank you. Well, thank you, everyone. Thank you, everyone, for joining us today. I'll just close out by saying we are off to a great start in 2026 and we remain well positioned to achieve our goals for the year, and I'm very excited about our long-term plan and the opportunities ahead, and I look forward to seeing many of you on the road throughout the years. Have a great morning, stay healthy and stay safe. Thank you again.

Ladies and gentlemen, that concludes today's call.

Good morning, and welcome, everyone, to the DTE Energy Fourth Quarter 2025 Earnings Conference Call. Today's conference is being recorded. [Operator Instructions]

At this time, I would like to turn the conference over to Matt Krupinski, Director of Investor Relations. Please go ahead.

Thank you, and good morning, 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 Joi Harris, President and CEO; and Dave Ruud, CFO. And now I'll turn it over to Joi to start our call this morning.

Good morning, everyone, and thank you for joining us. I'm happy to be with you today, and I'm excited to talk about a very successful 2025 and our strong position for 2026 and beyond, all driven by our team's commitment to delivering best-in-class results for all of our stakeholders.

In 2025, we remain sharply focused on improving reliability, executing on our growth plan and achieving solid financial results while maintaining our commitment to affordability for our customers and I'm proud to say we've delivered exceptional results across all of these priorities. We achieved significant improvements in reliability and have made substantial progress with data centers by executing our first large agreement for 1.4 gigawatts, which will provide significant affordability benefits to our customers. We are making great progress in advancing our next data center opportunity and are expecting to reach final terms of the agreement in the coming weeks, representing significant upside to our current 5-year plan. We are very excited about this opportunity and look forward to providing more details as this project progresses.

We had another strong financial year, earnings $7.36 per share in 2025 which is above the high end of our guidance range for the year. We are well positioned to continue solid financial performance in 2026. Our 2026 guidance reflects operating EPS growth of 6% to 8% over our 2025 guidance midpoint, and we are confident in our ability to deliver at the higher end of the range, driven by RNG tax credits and DTE Vantage.

As we described on the third quarter earnings call, our updated plan includes significant increases in customer-focused utility investment and deliver 6% to 8% operating EPS growth through 2030. Again, we are confident we will reach the high end of our guidance range each year, driven by R&D tax credits and the flexibility they provide. And as we have said, we expect additional data center opportunities to provide significant upside to our capital plan with an additional 3 gigawatts of data center load in advanced discussions.

Let me move to Slide 5 to highlight our improvements in reliability and the execution of our cleaner energy transition. I'm very proud that over the past year, we continued to deliver meaningful improvements in system reliability for our customers, driven by disciplined strategic investments and tactful process improvements and more favorable weather conditions. As a result, we achieved our best all-weather [ Sadi ] performance in nearly 20 years with a nearly 90% reduction in average outage duration compared to 2023.

When storm did occur, our teams executed exceptionally well. Restoring power to 99.9% of impacted customers within 48 hours. These results demonstrate that we are firmly on track to meet our long-term reliability goals reducing the number of power outages by 30% and cutting outage duration in half by 2029. We are confident that we will achieve these reliability goals due to the continued execution of our focused four-point plan.

First, we are quickly transitioning to a smarter grid by significantly increasing the technology on our system with more than 2,200 smart devices across our distribution circuits. As we remain on track to effectively automate our entire system by 2029. Secondly, we are aggressively updating our existing infrastructure, replacing and upgrading tolls, cross arms, transform as an other pull top and substation equipment. The third focus is to rebuild significant portions of our grid, prioritizing the oldest sections that are most vulnerable have made a significant impact. Customers have experienced a 90% increase in reliability where we have executed this work. And finally, we remain heavily focused on our tree term efforts. We have trimmed over 40,000 miles of trees since 2015 as this remains one of the most effective methods to improve reliability.

We are undertaking these intense focused efforts to enhance our systems so we can deliver for our customers, and we are seeing the results that demonstrate these investments work. We have also made tremendous progress advancing our transition to cleaner energy. Last year, we placed 330 megawatts of solar projects in service with an additional 745 megawatts currently under construction. Today, we have approximately 2,500 megawatts of renewable generation online, advancing our sustainability objectives and delivering lasting value for our customers. We have a number of major projects that are on track to be completed this year, including our 220-megawatt battery storage projects located at the site of our former Trenton Channel power plant. We will also be completing the Belle River power plant conversion in 2026. We converting it from burning coal to a 1,300 megawatt natural gas peaking resource.

I am fully confident in our ability to successfully execute the significant renewable investments included in our 5-year plan. We will build around 900 megawatts of renewables on average per year over the next 5 years, and our team has built an extensive development pipeline to support this growth. We have solid land positions and deep experience moving these projects through the interconnection and permitting processes. And importantly, we have been able to safe harbor investment tax credit through 2029 to support more affordable investments for our customers.

Let me move to Slide 6 to provide more details on our long-term plan. We increased our 5-year capital investment plan by $6.5 billion compared to the prior plan, driven by investments for the first data center project and the continued need to modernize our utility assets. These additional investments are strategically focused to support data center [indiscernible] growth, advanced cleaner generation and to enhance distribution infrastructure that will drive continued improvement in reliability.

As I mentioned, we have additional data center opportunities beyond the initial 1.4 gigawatts. We are in advanced discussions with hyperscalers for over 3 gigawatts of new load, and we have a pipeline of 3 to 4 gigawatts behind that. We also expect longer-term growth opportunities through the expansion of these initial hyperscaler projects. The generation investments needed to support these additional opportunities will be additive to our current 5-year plan, providing significant incremental capital investments above the existing plan.

I'll move to Slide 7 to detail our progress on data center development. As I mentioned, we executed and received MPS approval for the contract supporting 1.4 gigawatts of new data center load and construction has started. This is an important step in our growth strategy and a benefit to our customers. These contracts include provisions that will protect existing customers, including a 19-year power supply contract with minimum monthly charges and a 15-year energy storage contract. The load will ramp over 2 to 3 years, allowing us to plan the necessary infrastructure accordingly. While existing capacity supports the near-term ramp, we are developing new energy storage to meet the full requirements, which drives nearly $2 billion of incremental storage investment, along with additional tolling agreements and the associated FCMs. These projects are progressing well to meet the customers' ramp time line.

In 2025, we advanced discussions with multiple hyperscalers, representing approximately 3 gigawatts of additional load and those conversations are progressing well. We are expecting to reach final terms of an agreement with an additional customer in the coming weeks. This next data center agreement will require a combination of new generation and storage resources providing significant capital upside to our plan. This contract will be the first step towards executing the additional 3 gigawatts of demand in late-stage negotiations which we have said could drive our operating EPS growth to over 8% later in the plan.

As we advance the related contracts and move this next project through the regulatory approval process by midyear we will provide more details on the capital upside and the impacts to our long-term plan. Although we will be filing for the approval of a large load customer tariff, we expect the next data center contract to move through the standard MPSC review process for special contracts. The agreement will provide significant benefits and protections for our customers, including meaningful affordability benefits. The agreement will also support significant investment in generation and storage. I'm looking forward to providing more updates on this project as the contracts and approvals move forward.

Beyond the 3 gigawatts that are in advanced discussions, we are engaged with multiple additional opportunities that could add another 3 to 4 gigawatts of new load, and we expect additional demand from our initial customers as they execute their plans to expand over time. To support this significant demand, we anticipate the need for new baseload generation and storage investments. We have taken steps to prepare for additional combined cycle gas turbine developments that are [ CCS ] capable, which could support up to 2.8 gigawatts of new load. Our extensive development expertise and strong land positions give us flexibility to pursue renewable and storage build-out to support these customers. These incremental generation requirements will be incorporated into our 2026 integrated resource plan filing, ensuring alignment with our long-term strategy and regulatory commitments.

Let's move to Slide 8 to discuss our commitment to customer affordability. We have a proven track record of executing our investment plan to deliver customer value while managing affordability. As the chart illustrates, our average annual bill increase over the past 4 years is well below both the national and Great Lakes region averages, and we remain fully committed to keeping affordability at the center of our strategy as we move forward. We are delivering top-tier affordability through continued superior cost management and operational excellence. We're advancing a number of initiatives designed to continue to provide value and affordability for our customers. Importantly, near-term data center growth will create substantial affordability headroom, driving $300 million of annual benefits for our existing customers once fully ramped, which is a significant savings for our customers.

Our culture of continuous improvement ensures that O&M and capital investments remain efficient and disciplined. A key area where we expect to create substantial value for our customers is through the use of new technologies. Our advanced analytics models are uncovering opportunities that will drive significant operational efficiencies that lower costs and further improve how we serve our customers. These opportunities include automating back-office work to more effectively manage preventative maintenance and storm response. Driving customer-focused efficiency through technology is a top priority for me and our entire team, and I look forward to delivering on this commitment.

In addition, the transition from coal to natural gas and renewables further reduces O&M costs while our diverse energy mix delivers stable fuel costs for our customers. And finally, the Inflation Reduction Act supports our transition to cleaner energy, helping to make these investments more affordable for customers.

Today, our residential electric bill has become less than 2% of the median household income of our customers, and our residential bills are 18% below the national average. Importantly, we continue to expand our customer assistance programs for our most vulnerable customers who we now need the most support.

In 2025, DTE helped vulnerable and income qualified customers access $125 million in energy assistance through partnerships with nonprofit agencies across Michigan, and DTE donated $15 million to the [ Heat Worn ] fund, The Salvation Army and the United Way to provide critical support to those in need across the state. All of these efforts I've described demonstrate our ongoing commitment to delivering safe and reliable energy with a clear focus on affordability for all of our customers.

With the upcoming gubernatorial election in 2026, there has been some discussion on the impact of energy costs on overall affordability in Michigan. As you can see, DTE continues to deliver meaningful, measurable value for customers while maintaining a strong focus on affordability. We will ensure that our customers and stakeholders understand the value we provide and our progress on delivering safe, affordable, reliable and cleaner energy.

So to wrap up, we had an extremely successful year in 2025 and are well positioned to deliver another great year in 2026. I'm genuinely excited about our long-term plan and the opportunities ahead to deliver for all stakeholders, including providing exceptional service to our customers and communities and driving continued strong financial performance for our investors.

With that, I'll hand it over to Dave. Dave, over to you.

Thanks, Joi, and good morning, everyone. Let me start on Slide 9 to review our 2025 financial results. Operating earnings for the year were $1.5 billion, which translate to operating EPS of $7.36 per share. This is above the high end of our 2025 guidance range. You can find a detailed breakdown of operating EPS by segment, including a reconciliation to GAAP reported earnings in the appendix.

I'll start the review at the top of the page with our utilities. DTE Electric operating earnings were approximately $1.2 billion for the year, which is $112 billion higher than 2024. The main drivers of the earnings increase were implementation of base rates weather favorability, lower storm expenses and higher earnings from our clean energy projects. This was partially offset by higher O&M and rate base costs.

Moving on to DTE Gas. Operating earnings were $295 million, $32 million higher than 2024. The earnings increase was driven by colder winter weather and implementation of new base rates partially offset by higher O&M and rate base costs. As we mentioned last quarter, O&M at DTE Gas was higher in 2025 than it was in 2024. As O&M returned to more normalized levels following onetime lean operational measures and other unsustainable reductions that were implemented over the past few years in response to the warmer weather we were experiencing.

Let's move to DTE Vantage on the third row. Vantage had another strong year in 2025 with $162 million of operating earnings. The increase from 2024 was primarily due to RNG production tax credits and new project development in the custom energy solutions space, partially offset by lower investment tax credits than in 2024 and lower steel-related earnings.

On the next row, you can see Energy Trading finished the year with operating earnings of $114 million, with strong performance in our contracted and hedged physical power and physical gas portfolios that we experienced in 2024 continued into 2025 as was expected. This resulting strong performance allowed us to leverage the favorability across the company to support future years.

Finally, Corporate and Other was unfavorable by $73 million year-over-year due primarily to higher interest expense and onetime tax items. Overall, DTE earned $7.36 per share in 2025, delivering above the high end of our 2025 original guidance range.

Let's move on to Slide 10 to discuss our 2026 outlook. As Joi mentioned, we are well positioned to deliver another strong year in 2026. Our 2026 operating EPS guidance range is $7.59 to $7.73 per share which provides 6% to 8% growth over our 2025 guidance midpoint, and we are confident that we will deliver at the high end of the guidance range. Utility growth will be driven by customer-focused investments, including distribution, and cleaner generation investments at DTE Electric and main renewal and other infrastructure improvements at DTE Gas. DTE Vantage will see growth from the development of new custom energy solutions projects and continued contributions from RNG production tax credits.

At Energy Trading, we continue to see strength in our structured physical power and physical gas portfolios giving us confidence in achieving our targets for 2026. And at Corporate and Other, the change is driven by higher interest expense as we continue to fund our valuable investments across the company.

Let's turn to Slide 11 to discuss our balance sheet and equity issuance plan. We continue to focus on maintaining solid balance sheet metrics. To support the significant increase to our capital investment plan that we need to execute for our customers, we are targeting annual equity issuances of $500 million to $600 million in 2026 through 2028, with similar levels through 2030. This level of equity supports the increased capital in our plan, including the storage investments related to our data center agreement while maintaining our strong credit metrics. We will continue to maximize the use of internal mechanisms to issue equity, but will also incorporate manageable external issuances. We have established an equity ATM program to effectively manage a portion of our total equity needs. Our 5-year plan fully incorporates these equity needs and continues to deliver 6% to 8% operating EPS growth or the bias to the upper end each year through 2030.

Our long-term plan also includes debt refinancing and new debt issuances. We expect to strategically utilize hybrid securities to support our financing plan, and we will continue to manage future debt issuances through interest rate hedging and other opportunities. Importantly, we remain focused on maintaining our strong investment-grade credit rating and solid balance sheet metrics as we target an FFO to debt ratio of approximately 15%.

Let me wrap up on Slide 12, and then we'll open the line for questions. DTE continues to consistently deliver for all our stakeholders. We delivered solid results in 2025, achieving operating earnings of $7.36 per share, which is above the high end of our guidance range. Our 2026 guidance reflects operating EPS growth of 6% to 8% over our 2025 guidance midpoint and RNG tax credit gives us confidence that we will deliver at the higher end of that range.

Our 5-year plan provides high-quality, long-term 6% to 8% operating EPS growth through increased customer-focused utility investments with utility operating earnings making up 93% of our overall earnings by 2030. Our capital investment plan increased by $6.5 billion over our previous plan to $36.5 billion over the 5-year period. This increase is driven by the recent data center transaction and the continued need to modernize our utility assets and provide cleaner generation. We are confident we will reach the high end of our guidance range in each year, driven by RNG tax credits and the flexibility they provide. Additional data center opportunities will provide upside to this 5-year capital investment and operating EPS growth plan. Overall...

[Operator Instructions] We'll go first to Shar Pourreza at Wells Fargo.

So just to build a little bit on the prepared. So obviously, the data center announcement is on schedule. It sounds like it will come with material CapEx and accretive to earnings. And obviously, Joi, you mentioned it's a significant upside in your prepared. Can you just maybe elaborate as we're thinking about the 6% to 8% that's been out there? Could this sort of new customer actually step function change the trajectory or lengthen and strength in the top end? Or do you need to see more deals materialize before revising the longer-term projections?

Yes. As we included in the deck Shar, and we said all along that 3 gigawatts of incremental data center load would take our compound annual growth rate above between 27% and 30%. This additional data center, which is a part of that 3, we believe will take us to at least 8 in that time frame. And so the capital will begin coming into the plan in the 2027 time frame and continue from there. So we feel really great about our 6 to 8 and the potential that this -- we have to reach the high end each year with our current plan and this new data center would have the opportunity to take the compound annual growth rate between 27 and 30 to 8 and then anything above that approaching that 3 gigawatts gets us 8 plus.

Okay. That's helpful clarity there. And then just do you think you'll see the third deal announced by Q3 EEI time frame?

Yes, we're working on the second deal. So we got to get that one nailed down, and we're continuing discussions with the hyperscalers. And we are working hard to see if we can get yet another deal behind that one. But the way this will work out with the second deal and any deals that we achieved in that time frame. We would update our plans and then potentially give you all some indication in Q2. We're going to use the standard process for approval of the contracts associated with this deal. So that will play out over the course of the summer.

And we've got to let that process play out. But we figured by Q2, at the latest Q3, we'd be able to communicate how much capital we'd be putting in our plan and, of course, have detailed conversations at EEI.

Got it. Perfect. And then just lastly, I mean, obviously, there's been some data center pushbacks in Michigan and some of the surrounding states. And obviously, we saw one data center pull out despite having sort of an assigned ESA. I guess any specific lessons learned Joi around the Oracle process. And just remind us if you need final MPSC approval to count this load in the IRP or just final terms?

Yes. So we recognize the concerns that have been raised by some of the large data center projects. And we've been really clear that for our customers, reliability always comes first and we're always working on affordability. That said, in all of our discussions with the data centers, we've made it clear that these contracts have to be structured in a way that the revenues fully support their load and cover all the associated costs. So at no time, will our customers be burdened with the cost of bringing on new data centers.

And if you recall, obviously, this Oracle deal gives our existing customers $300 million annually of affordability benefits once they reach the full ramp. We're encouraging the data center developers to become more engaged at the local level. And that's where we think that this -- the concerns can be best addressed so we're seeing projects that are making its way through zoning and also site plans, which tells us the right conversations are happening. But again, we remain committed to transparency, collaborations and really protecting the interest of our communities and our customers along the way.

As for do we need to see that get approved in the IRP? Or do we need to see this get approved by the commission? Yes, we'd have to get the approval from the commission before we would add this into our plan. Data center load is but one of many inputs that we intend to incorporate into our Q3 IRP filing.

We'll move next to Michael Lonegan at Barclays.

So to piggyback on that pushback question on data centers. Obviously, Michigan is seeing a significant number of moratoriums in local communities. Just wondering if any of the potential projects in your pipeline are located in any of these areas with a moratorium if you see any risk to advancing these projects or delays?

The contract that we are working on right now, we don't see any potential delays. Let me just say the moratorium -- some of the moratoriums that you're hearing about the communities are not suitable for large load data centers to begin with. So there really is no impact to the pipeline. The folks that we've been talking to have land positions. Some have made it through the zoning process already and are working on site plans. And like I said before, they're engaging the local communities, and we believe that's the game changer and really sifting the sentiment so that the communities understand the benefits that they will realize want these data centers land in the backyard.

Great. And then secondly for me. So obviously, affordability is a concern across the country, but particularly a lot of rhetoric from the midterm election candidates in Michigan talking about rate freezes and the like. In this context, how are you feeling about heading into the final decision in your electric rate case? What gives you confidence you will land a constructive outcome there?

I'll tell you that we always put affordability as the governor for our growth plans and our investments and affordability remains top of mind for us which is why as we make these investments, we're trying to keep the bills as low as possible and deliver the reliability improvements and then continue our work to transition to cleaner generation. We've seen support of our investments in the staff testimony in particular, they supported the expansion of the IRM to roughly $1 billion over the next couple of years. And in fact, they even recommended that we pulled forward $200 million worth of pull-top maintenance into 2026.

So we feel really good about the prospects for a constructive outcome. There the staff position was generally at what we expected. And we are waiting -- anxiously awaiting the 19th, so we can have a full view of their support. But at this point, we know that affordability is top of mind, and we're going to work hard to make sure that our customers, particularly those that need, get the support and these investments continue to deliver value.

We'll move next to Julien Dumoulin-Smith at Jefferies.

It's Ivana Ergovic for Julien. I just had a question, given the utility CapEx increases and financing needs. How -- and especially if you are expecting additional couple of megawatts -- gigawatt of load, how does that change the thought process on asset rotations and monetization for Vantage?

Yes. So Vantage has served us well for over 20 years, and they continue to have a very strong development pipeline. In fact, we've got data center opportunities that we're looking to close out in the near term here that really represents a really nice vertical in light of the tightness that exists in the market all across the country. That said, we are always looking to deliver value for our shareholders. And we have really big investments that we have to make in our utilities. And you've seen that we've made the strategic shift where we're doubling down in our utilities and holding Vantage essentially flat.

But they've got a really solid growth pipeline that we want to continue to explore, particularly around data centers. And as always, we'll continue to examine opportunities to deliver value for our shareholders.

Next, we'll go to David Arcaro at Morgan Stanley.

Maybe just to follow up on that Vantage opportunity you just mentioned Joi. I was just curious if you could give any other details around how big of a potential data center project Vantage is going after here? What's kind of the profile of the different opportunities that you're seeing, is this on-site power behind-the-meter type power project?

Yes. Yes, David, it is behind the meter, primary power. Think of it as several hundred megawatts of load, and we see these types of opportunities across the country. In fact, when we started this work, I thought it was going to be the unicorn. And clearly, it is not. So there is a pipeline that the team is exploring. We are looking to close out the discussions with the counterparty still too early, but we're down to some final terms that we're ironing out. Really excited about it. And the team has come up with, I think, a very creative solution that could be applied to other similarly situated colocators across the country. So it could be a differentiator for us.

Okay. Excellent. And is that an opportunity that you'd be able to kind of quantify in terms of the CapEx investment here also similar to the other regulated data center opportunity for a CapEx addition midyear?

Yes. That will be the ideal time to give you an update on the capital for that particular investment, yes.

Okay. Great. Got it. Then I was just wondering if you could comment on -- we've seen some very widely varying ALJ recommendations when it comes to ROEs in Michigan. I was wondering if you could give your latest perspective on how do you interpret the latest recommendation, the 8.2% ROE that we saw recently just feedback or what you're expecting from the commission in terms of overall direction of travel with regard to regulation and ROEs in the state?

Yes. If you recall, the Chair of the commission has already stated that ROEs are where he would like to see them given the macroeconomics and that they felt appropriate so we're anticipating that in our case, we will see our ROE remain flat.

And if you recall, the ALJ in our case, even recommended a [ 9.9 ] ROE. So I think we feel really good about our position. And I believe that given the current borrowing costs, the recommendation for [ 82 ] ROE is simply not a reasonable benchmark under these conditions. But like I said, we've gotten all the positive indicators that we could possibly hope for in our case, and we'll know for sure on Thursday.

We'll go next to Michael Sullivan at Wolfe Research.

I wanted to ask on just the resource planning for some of these incremental load opportunities that you have, particularly with regards to new gas. Can you -- it sounds like you got a couple gigawatts in the hopper on top of what's planned to replace Monroe. But yes, can you just square like the timing of when you think you can get new gas to serve some of these load opportunities?

Yes. So just given some of the lead times, we've taken steps to get in the [ MISO Q ] and put down payments on turbines. So that we are well positioned towards the tail end of our plan to bring on the replacement of Monroe and address any other new load that may come into our plans. That said, the IRP will be the ultimate determinant of the resource mix that is required to serve new load. And that process will begin in Q3 when we file our next case. But I will tell you from our last run of our IRP, we know that we have to have a large dispatchable [ 24/7 ] resource once Monroe retires which is why we've set ourselves up for CCGT that's [ CCS ] capable, and we'll begin the work of vetting that with interveners, stakeholders as we file our IRP.

Okay. Great. Maybe this one is for Dave. Just given some of the weather to start the year and volatility in power prices across the country, are we potentially looking at another year of trading outperformance? Or any color you can give there?

As we saw Trading had a great year in '25 as we saw some of those good margins continue in gas and power. And we do see some of that -- because some of those contracts are 1 to 3 years, some of that continues into 2026. We're still -- we guide to the $50 million to $60 million for Trading but there are some tailwinds, as you mentioned, based on some of the contracts that we've had in place that are fully structured and hedged through the year.

Okay. And if I could just sneak one more in, sticking to you, Dave. Just remind us how much incremental equity as a percent of increased CapEx general rule of thumb?

Yes. Any incremental equity we bring in is approximately 40% of the CapEx that we would have. That always will vary in some of the years based on the timing of the cash flows and tax credits. But over time, it does work out to about 40% of equity for the additional capital [indiscernible].

And next, we'll move to Travis Miller at Morningstar.

The answer to that question just brought up another quick question for me and then I add my original question. But on that 40% of equity. Is that in line? If we tie that to the data center contracts, is that in line with the way the data center financing portion of the contract is? Or is that extra leverage relative to the data center contract, if that makes sense?

Well, I think for the capital we would bring in 40% of that we would see as equity. I don't follow the data center contract part of that. But I think as we brought the capital in, it would be 40% would be equity over time.

Okay. I was just tying back to the implied return on capital within the data center contract, but that makes sense. Okay. original question was, how does the data center growth impact your rate case cadence do you think, over the next 4, 5 years with the ramps coming on. Any change to that since it sounds like a lot of the CapEx is covered in that data center contract ourselves.

Yes. I mean this will have to play out over time. Listen, the biggest way for us to stay ad rate cases is to grow the IRM. That's the biggest lever that we have before us. And we're continuing to work that with commission staff and they seem supportive of at least our first go-round of expanding the IRM. And of course, as we bring on data center load that gives us more opportunities as well to potentially look at putting distance in rate cases.

Next, we'll move to Anthony Crowdell at Mizuho.

Congrats on the quarter quickly, just where did you end the year on FFO to debt?

Yes. We ended the year at 15 -- almost 15.5%, 15.4% FFO to debt.

And then just Joi or Dave, I know Dave gets upset when I don't ask him the question. Just you have big gubernatorial races going on there. I think there's 10 candidates, just any conversations, any color you could have on DTE's position with the large slate of candidates.

Yes. Well, let me start by saying DTE is always committed to a bipartisan approach from policymaking, which means we've had strong relationships on both sides of the aisle and really durable policies. Obviously, affordability is a top question on the campaign trail, and we take it very seriously for obvious reasons. What we're seeing in the latest round of data is that Americans clearly are concerned about cost of groceries, health care, housing and utilities in that order. And as you've heard in my opening remarks, we're ramping up our outreach to candidates. We're delivering solid focused messages around our achievements, particularly as it relates to reliability and the fact that DTE Electric build growth since 2021 has been top decile at only 3% when the national average is at more like 24%. These investments are working, and that also drives down the emerging costs related to storms. And we had the best year we've had in 20 years for reliability.

Lastly, we talked to them about the things that we're doing to protect the most valuable around us, and that's advocating for energy assistance but the biggest lever we have to address affordability is economic development that comes with low growth done right. And case in point, the Oracle deal is going to yield $300 million worth of affordability benefits once they reach their full ramp. That's the kind of conversation that we're having. These are the solutions that we want to address among other things. And I think the candidates are receiving the message well, and we're going to continue those conversations as the elections unfold.

Great. And then hopefully, just one last one. I don't know if you could comment on it. I didn't believe the Michigan Attorney General was looking to have the Public Service Commission looking to some of the data center special contracts. Do you know if there's a timing or a deadline on when they -- the commission will get back to the Attorney General?

Yes, there's a 21-day period, I believe that the commission has to file their response to the Attorney General's request.

And that concludes our Q&A session. I will now turn the conference call back over to Joi Harris for closing remarks.

Well, thank you, everyone, for joining us today. I'll close by saying that DTE had a great year in 2025 and is well positioned to achieve our goals in 2026. I'm super excited about our long-term plan. and the opportunities ahead, and I look forward to seeing many of you on the road throughout the year. Have a great morning, stay healthy and safe.

And this concludes today's conference call. Thank you for your participation. You may now disconnect.

Hello, and thank you for standing by. My name is Bella, and I will be your conference operator today. At this time, I would like to welcome everyone to DTE Energy Q3 2025 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Matt Krupinski, Director of Investor Relations. You may --

Thank you, and good morning, 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 Joi Harris, President and CEO; and Dave Ruud, CFO. And now I'll turn it over to Joi to start our call this morning.

Thanks, Matt. Good morning, everyone, and thank you for joining us. While this is my first time leading our earnings call as CEO, I've had the privilege of engaging with many of you over the past couple of years and appreciate the dialogue. I'm off to a running start and continuing to build on the strong foundation we've established.

I have a number of exciting updates to share with you today, which include highlighting the progress we're making on achieving our 2025 financial goals, providing a strong 2026 operating EPS outlook and outlining our enhanced 5-year plan that now extends through 2030.

A highlight of our strategy is the transformational growth we're seeing in data center demand. I am pleased to announce we finalized an agreement with a leading hyperscaler to support 1.4 gigawatts of data center loads. This is an exciting milestone that I'll expand on as we walk through our updated strategic plan.

Aside from the 1.4 gigawatts of new load, we are still in late-stage negotiations with an additional 3 gigawatts of data center load providing potential further upside to our capital plan as we advance these negotiations.

As a result of this first data center transaction and continued need to modernize our utility assets, our updated plan includes significant increases in utility investments for our customers and deliver 6% to 8% operating EPS growth through 2030.

We are confident we will reach the high end of our targeted range in each year, driven by R&D tax credits and the flexibility they provide. This plan supports our continued strategic shift toward higher-quality utility earnings fueled by increased demand, continues our efforts to build the grid of the future while transitioning to a cleaner generation and demonstrates our ongoing commitment to affordability for our customers.

I will share additional details of our plan over the next few slides. Dave will give an overview of our third quarter results 2025 guidance and 2026 early outlook, and then we will open it up for your questions.

I'll start on Slide 4 by saying that we are continuing to deliver strong results in 2025 and we are well positioned to hit the high end of the guidance this year. As always, our success is a testament to our dedicated and engaged team committed to serving our customers and communities. I am extremely proud that our team was recognized by the Gallup organization for the 13th consecutive year with A Great Workplace Award and our employee engagement ranks in the 94 percentile globally among thousands of organizations.

We are well positioned to achieve the high end of our 2025 operating EPS guidance range. Looking ahead to 2026, our early outlook reflects operating EPS growth of 6% to 8% over our 2025 guidance midpoint, and we are confident in our ability to deliver at the higher end of that range.

Let me move to Slide 5 to provide more details on our long-term plan. We are in an exciting time for our industry and for DTE and we are focused on seizing the opportunity to deliver for our customers, communities and investors. We're increasing our 5-year capital investment plan by $6.5 billion compared to the prior plan, driven by the data center transaction and the continued need to modernize our utility assets. At DTE Electric, the additional investments are strategically focused to support data center low growth, advanced cleaner generation and to enhance distribution infrastructure that will drive continued improvements in reliability.

DTE Gas is focused on system reliability and infrastructure renewal, ensuring safe, efficient service for our customers while modernizing our network. DTE Vantage will continue to prioritize investments in utility-like long-term fixed-fee contracted projects, which aligns well with our strategy to deliver stable, predictable earnings for our investors.

Our investment plan supports a further strategic shift towards higher-quality utility earnings over the next 5 years, targeting utility operating earnings to increase to 93% of our overall earnings by 2030. Importantly, data center opportunities are helping drive this shift as we allocate additional capital to serve this load, which further supports affordability for our existing customers.

We have incorporated a more conservative growth outlook for DTE Vantage, which is largely influenced by commodity pricing assumptions in our longer-term forecast. As part of our most recent strategic analysis, we evaluated a range of pathways to drive sustainable long-term value. This effort reinforced our conviction that leaning into our core utility business, while taking a more conservative view at DTE Vantage will best position us to deliver value for our customers and for our investors.

As you can see in the appendix of this presentation, the 2030 outlook for Vantage is flat to 2025 guidance. as our solid project development pipeline offset the expected roll-off of 45Z production tax credits after 2029. We're confident this approach also positions us well for consistent future growth as we expect to continue to make progress on additional data center opportunities that will deliver upside to our base plan.

Let me move to Slide 6 to highlight updates to our capital plan at DTE Electric. Our updated capital investment plan at DTE Electric provides a $6 billion increase over the prior plan driven by the data center transaction and customer-focused initiatives that align with our long-term strategy. A key component of this plan is new storage investment to support the increased data center load. Importantly, this incremental storage investment is fully funded by the data center customers.

The plan also includes renewable investments that support the continued success of our migraine power voluntary renewables program and fulfill the requirements of the legislative clean energy plan. And to ensure reliable baseload generation as we transition away from coal, we are planning the construction of a combined cycle gas turbine to replace our retiring coal plants.

We are submitting a competitive bid for the 2026 Integrated Resource Plan, all-source RFP for a new [ CCGT ] to replace Monroe power plants. We're also continuing to invest in distribution infrastructure to harden the grid and improve reliability for our customers. These grid investments are already delivering results, driving a nearly 90% improvement in the duration of outages since 2023 as we make strong progress toward our goal of reducing power outages by 30% and cutting outage time in half by 2029.

Our current rate case filing supports these reliability investments while remaining focused on customer affordability. This filing includes a request for approximately $1 billion in distribution spending to be included in the infrastructure recovery mechanism by 2029 which was largely supported by the MPSC staff in its recent testimony.

The IRM will help drive consistent, predictable investments in grid modernization to improve reliability for our customers, while also simplifying future regulatory proceedings. The order for this case is expected at the end of February.

Overall, I'm thrilled about the opportunities ahead for DTE Electric, as we continue our efforts to improve reliability for our customers, transition to cleaner generation and execute on economic development opportunities to drive low growth and support affordability for our customers.

Let me move to Slide 7 to provide an update on our advancement of data center opportunities. As I mentioned, we successfully executed a significant agreement to support 1.4 gigawatts of new data center load, representing a major step forward in our utility growth strategy while also delivering meaningful affordability benefits to our existing customers.

The demand is expected to ramp up over the next 2 to 3 years, giving us a clear runway to align infrastructure development and resource planning with customer needs. While we can use existing capacity to support this ramp, we'll also need to invest in new energy storage solutions to meet the full capacity requirements. Our updated plan includes nearly $2 billion of incremental energy storage investments and additional tolling agreements to support this data center mode.

Given our excess capacity, we will use our existing industrial tariff for this customer and combine it with an energy storage contract to support the incremental storage investment. We are including key terms in these agreements that will protect existing customers, including a 19-year power supply contract with minimum monthly charges.

The data center will fund its own storage needs through a 15-year energy storage contract. These terms are important to us and our customers as we ensure the data center revenue support the required investment to meet this new demand. We plan to submit our regulatory filing tomorrow requesting approval of the data center contract.

Energy storage investments will begin ramping in 2026 to align with the projected increase in data center load. As I mentioned, we also have additional data center opportunities beyond this initial 1.4 gigawatts. We are in advanced discussions with additional hyperscalers for over 3 gigawatts of new load, and we have a pipeline of an additional 3 to 4 gigawatts behind that.

We also expect longer-term growth opportunities through the expansion of these initial hyperscaler projects. The generation investments that will be needed these additional opportunities could very well come into the back end of our 5-year plan, providing incremental capital investments above what we are laying out for you today.

A key step in preparing for the development of new generation to support large data center loads is integrating these requirements into our next IRP filing, which we expect to file next year. So a lot of great opportunities ahead of us on the data center front. We will continue to provide updates along the way as things progress.

Let me move to Slide 8 to discuss our commitment to customer affordability. We have a history of executing on our investment plan with a sharp focus on customer affordability. As you can see on the chart, our average annual bill increase over the last 4 years is significantly lower than the national average and Great Lakes average. We remain committed to maintaining this focus on affordability throughout our plan.

We are advancing on a number of initiatives to support affordability for our customers while continuing to invest and support our key priority. Importantly, near-term data center growth will help create substantial affordability headroom for our existing customers as we sell our excess generation. Our continuous improvement culture will ensure O&M and capital investments remain efficient.

The shift from coal to natural gas and renewables also helped to further reduce O&M costs while our diverse energy mix ensures economic fuel costs for our customers. And finally, the IRA provisions support the renewable energy investments while supporting customer affordability goals.

So to wrap up my comments, I'll say I'm very excited about our long-term plan and the opportunities we have ahead of us to continue to deliver for all of our stakeholders, including excellent service to our customers and communities and continued strong financial performance for our investors. I'm looking forward to spending more time with many of you at EEI to discuss our updated plan. With that, I'll hand it over to Dave. Over to you, Dave.

Thanks, Joi, and good morning, everyone. Let me start on Slide 9 to review our third quarter financial results.

Operating earnings for the quarter were $468 million. This translates into $2.25 per share. You can find a detailed breakdown of EPS by segment, including our reconciliation to GAAP reported earnings in the appendix. I'll start the review at the top of the page with our utilities.

DTE Electric earnings were $541 million for the quarter. Earnings were $104 million higher than the third quarter of 2024. The main drivers of the variance were timing of taxes and rate implementation, partially offset by higher O&M and rate base costs. The impact from the timing of taxes in the quarter was fairly significant at $63 million favorable relative to third quarter 2024. This is due to the timing of investment tax credits associated with when our solar projects are placed in service. This timing was known and built into our plan and the remaining year-to-date timing favorability of $33 million relative to 2024 or reversed in the fourth quarter.

Moving on to DTE Gas. Operating earnings were unfavorable $38 million, which is $25 million lower than the third quarter of 2024. The earnings variance was primarily driven by higher O&M and rate base costs. With our confidence that we will hit the top end of our overall DTE operating EPS guidance range this year, we've been able to unwind onetime lean operational measures and other unsustainable reductions that were implemented over the past few years at DTE Gas to counteract warmer weather. This will likely bring this segment in below its guidance range in 2025.

Let me move to DTE Vantage on the third row. Operating earnings were $41 million for the third quarter of 2025. This is an $8 million increase from 2024, driven by RNG production tax spreads in 2025, partially offset by lower steel-related revenues. We remain on track for the full year guidance of DTE Vantage.

On the next row, you can see Energy Trading earned $23 million for the quarter. We continue to experience strong margins in our contracted and hedged physical power and gas portfolios. On a year-to-date basis, we are currently above 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 to continue to provide flexibility for future years.

Finally, Corporate and Other was unfavorable by $77 million quarter-over-quarter, due primarily to the timing of taxes, which will reverse by year-end as well as higher interest expense. Overall, DTE earned $2.25 per share in the third quarter of 2025, which positions us well to achieve the high end of our guidance range in 2025.

Let's move on to Slide 10 to discuss our 2026 outlook. As Joi mentioned, we are well positioned to deliver another strong year in 2026. Our 2026 early outlook range $7.59 per share to $7.73 per share, which provides 6% to 8% growth over our 2025 guidance midpoint. We are confident that we will deliver at the high end of the guidance range due to the flexibility that the 45Z tax credits provide.

Utility growth will be driven by customer-focused investments, including distribution, and cleaner generation investments at DTE Electric and main renewal and other infrastructure improvements in DTE Gas. DTE Vantage will see growth from the development of new custom energy solutions projects and continued contributions from RNG production tax credits. And at Energy Trading, we continue to see strength in both our structured physical power and physical gas portfolios giving us confidence in our targets as we head into 2026. We will share additional details on 2026 during our fourth quarter call following the close of a strong 2025.

Let's turn to Slide 11 to discuss our balance sheet and equity issuance plan. We continue to focus on maintaining solid balance sheet metrics. To support the significant increase to our capital investment plan that we need to execute for our customers, we've increased our planned equity issuance.

We are targeting annual issuances of $500 million to $600 million in 2026 through 2028. This level of equity supports the capital but is now coming earlier in this plan relative to our prior plan. The increased equity will help fund the increase in our capital plan, including the storage investments related to our data center agreement while ensuring that we maintain a strong balance sheet.

We will continue to maximize the use of internal mechanism to issue equity, but will also incorporate manageable external issuances. Our 5-year plan fully incorporates the equity needs and continues to deliver 6% to 8% operating EPS growth with a bias toward the upper end each year through 2030.

Our long-term plan also includes debt refinancing and new debt issuances. We expect to strategically utilize hybrid securities to support our financing plan and we will continue to manage future debt issuances through interest rate hedging and other opportunities. Importantly, we continue to focus on maintaining our strong investment-grade credit rating and solid balance sheet metrics, as we target an FFO to debt ratio of approximately 15%.

This plan ensures that DTE continues to be well positioned to make the necessary investments for our customers while delivering the premium total shareholder returns that our investors have come to expect over the past decade with strong utility growth and a dividend growing with operating EPS.

Let me wrap up on Slide 12, and then we will open the line for questions. Our team continues our commitment to deliver for all of our stakeholders. We are delivering solid results in 2025 and we are on track to achieve the high end of our operating EPS guidance range, and we are confident we will achieve the high end of our 2026 early outlook, again, due to the flexibility that the 45Z tax credits provide.

Our updated 5-year plan provides high-quality, long-term 6% to 8% EPS growth through increased customer-focused utility investment, which increases our utility operating earnings to 93% of our overall earnings by 2030. This plan increases our 5-year capital investment by $6.5 billion over the previous plan, supported by the data center transaction and a continued need to modernize our utility assets. Additional data center opportunities provide potential upside to this 5-year capital investment and EPS growth plan.

We continue to target 6% to 8% long-term operating EPS growth with 2026 operating EPS midpoint as a base for this growth. We are confident that we will reach the high end of our target range each year driven by RNG tax credits and the flexibility they provide. And we continue to target a strong dividend that grows with operating EPS.

Overall, we are well positioned to deliver the premium total shareholder returns that our investors have come to expect with a strong balance sheet that supports our capital investment plan. With that, thank you for joining us today and look forward to seeing many of you at EEI. We can open the line for questions.

[Operator Instructions]. Your first question comes from the line of Shar Pourreza with Wells Fargo.

So obviously, the upside slide, it seems fairly material around incremental data center opportunities. are the data center deals kind of -- are they an inflection point to rebase higher shift that 6 to 8 CAGR? Or should we still kind of assume lengthen and strengthen?

I guess what do you need to see to revisit that guided trajectory, especially since some of it can hit the back end of the plan and you're already growing at the higher end?

Yes, we're really excited about the first 1.4 gigawatt deal we have on the table, and we'll feel well positioned to execute on that. We're continuing conversations. As I mentioned in the intro, we've got 4 gigawatts -- well, 3 to 4 gigawatts that we're continuing to work with hyperscalers with a total pipeline of roughly [ 7 ].

That said, as we are advancing these negotiations, our intent would be to find terms that we can then and the ramp that we can then incorporate into our next year's IRP and then determine the generating resource to support that load. It could be a large generating load or a combination of batteries and renewables but the intent would be to get it into the 5-year plan, if at all possible, and that would give us growth opportunities above and beyond where we are today. So we feel really good about the deal we have on the table and our ability to execute on it.

Okay. Got it. But just, I guess, just to -- is it accretive to the [ 6% to 8%], I guess, how do we sort of think about how you currently guide?

Yes. I think that is a fair assumption that it would be upside to our current [ 6 to 8 ].

Perfect. And then just -- I know obviously, you noted a more conservative outlook for Vantage due to commodity pricing. But I guess what are you seeing on the energy service side? And does it make sense to monetize certain assets, especially with the inflection of equity needs starting in '26?

Yes. We're continuing our focus on our energy service business line and Vantage. We're working on behind the meter project, in fact, outside the state of Michigan for a data center. And that could be an additional vertical that we pursue but Vantage has been a really great part of our portfolio for over 20 years with a really strong BD pipeline and opportunities for really good returns. So -- but as always, we look for ways to optimize value for shareholders. We don't have anything imminent right now, but it's something that we'll continue to [indiscernible].

Got it. Perfect. And big congrats, Joi on your first earnings call. I know [ Jerry ] is listening, he's proud and just keep that dividend growing from now that he's on a fixed income. Appreciate it, guys.

And your next question comes from the line of Jeremy Tonet with JPMorgan.

This is actually Aidan Kelly on for Jeremy. Yes. So just regarding the EPS CAGR, is the right math to think about like 2026 high end and then growing 8%, 8% of that until 2030? Or should we think about the EPS CAGR kind of being based off the midpoint each year?

So midpoint here is the way we guide. And the 4 to 5 give us the potential to upsize the top end of our price. And as you know, those 45Z extend through 2029.

Got it. Okay. That's helpful. And then just on the incremental load, maybe just like how much should we think about like the load is needed to trigger a new gas plant versus just more energy storage at this point? I mean like when you look at the 7 gigawatt pipeline, how should we think about like what's needed for new baseload versus just like incremental storage?

Yes. So think of it this way. Any new data center load that we bring on after this 1.4 gigawatts will require additional resources. If we bring on something in the gigawatt range, it would require a combined cycle to support it. Anything lower than that we could do a combination of either smaller and some renewables and batteries. But we'll know all of that for certain once we sign the deal and incorporate it into next year's IRP and that will really dictate the resource requirements and the resource mix.

Your next question comes from the line of Julien Dumoulin-Smith with Jefferies.

Congratulations against Joi and to the whole team here. Nicely done here, I got to say and nicely done on firming up this contract here, as you say.

Now with that said, and just to follow up on some of the last questions here, how do you think about the data center timing here? You talked about it being accretive to the plan. How do you think about the time line for its ramp? I know that you already cautioned that it was an entirely clear cut. But how do you think about it being accretive versus perhaps cereal and an extension of the 6% to 8%? We don't mean to pick too much here, but I think we heard your comments earlier. I just wanted to come back and understand when that would really start to kick in and be accretive.

Yes. You can think of it towards the tail end, given just the lead times on some of the materials and the construction cycle, Julien, you could think of it towards the back end of our plan, so call it late 2029 into the early 2030s.

Got it. So that uptick would potentially be probably that first year really would be that 2030 time frame. And then the question would be how sustained that elevated growth rate would be predicated on the success of the 3 gigawatts in late-stage negotiations?

Yes. And again, I'll repeat. We're going to take all of this and incorporate it into next year's IRP. And really, that will dictate not only the timing but the right resource mix, which will then drive timing of construction, lead times for materials and such.

Right. In your owned versus a contracted piece, et cetera, et cetera.

Exactly.

Your next question comes from the line of David Arcaro with Morgan Stanley.

I was wondering just on the advanced stage data center pipeline. Is there any rough timing for when you'd expect the potential to finalize those deals and bring them forward or advance other projects maybe into the -- from the earlier stage pipeline into the advanced stage pipeline? What's the pace of crystallization of some of the projects?

Yes. Thanks for the question. So we're in active negotiations, and we have been for some time. We are still settling on some key terms and ramp rates. I would envision that we would have at least an idea of the ramp and firming up some of the terms before we file next year's IRP. We're pulling that forward. That's the idea into the third quarter. So we would want to be able to understand the ramp, understand exactly when that ramp would lay out over a 5-year plan and incorporate it into our modeling, so we can put it into the IRP.

Okay. Perfect. Yes, that's helpful. And then you piqued my interest with the behind-the-meter project that you're working on for Vantage for a data center. I was just wondering if you might be able to elaborate on maybe how big of a project that might be, what kind of power generation technology you're using -- any thoughts on maybe how returns stack up for that type of a project versus others in the Vantage pipeline. Curious about that overall opportunity.

Yes. We're still in discussions with the data center provider. It's primary power, so it's behind the meter. You can think of that as more like CTs. And again, it's a little too early for us to give a lot of details around this deal. We haven't fully closed it yet, but it's a really good opportunity for the Vantage team and it's right down the fairway if you look at our skill set as an enterprise. So this is just a really good example of the type of projects Vantage has in the pipeline that supports their income targets, and we'll look for additional opportunities like that should they become available. We'll keep you posted though, as things develop.

Your next question comes from the line of Bill Appicelli with UBS.

Just a question around the rate case in the ERM. I guess, what is the potential upside for investment there? Should more supportive regulation and decisions coming your way around the -- in terms of the capital outlook on that mechanism?

Yes. So just to give clarity, the IRM, the investments are already in our plan. What we did hear back from the staff was a strong support for the investment profile that we laid out in the case and the pace. So the -- our intent though is to continue to grow the IRM in future cases. So in this case, we requested up to $1 billion beginning in 2027. And what we were really happy to hear the staff support even a pull forward. So they did pull out maybe $200 million of the pull out maintenance and suggested that, that should get incorporated into our existing IRM in 2026.

So that will be incremental IRM spend that would show up next year should we get that final ruling in 2026 in February. So again, it just showcases that we're aligned with the staff on the type of investments we need to make to improve reliability and the pace.

Okay. Great. And then just taking a step back, I mean, when we think about the broader growth rate through 2030, just to be clear, when you guys say bias to the upper end, that's with the plan as it stands here today? Or would that need to require some additional capital to push you to the upper end or I just want to clarify that? Or would that be then to the point made earlier, upside to the plan overall?

That 6% to 8% through 2030 is our plan that we've laid out here today. And we say we have a bias to the upper end in each year, again, in that plan due to the 45Z tax credits and flexibility that they provide. Joi talked about the additional opportunities we have with additional data centers that would drive some additional upside to that plan.

Okay. So then when we talk about the through 2030, which is post the tax credits, when you talk about the bias to the upper end, extending out that far, that reflects just the capital plan as it stands today.

Yes. We see -- when we get to 2030, because of the 45Z also, you have flexibility year-to-year. So we think there's opportunity in 2030 to hit the upper end that year 2 of the 6% to 8% range.

Your next question comes from the line of Michael Sullivan with Wolfe Research.

Just wanted to pick right up on that last question, Dave. So in 2030, when the 45Z go away, what is it that pushes you to the high end? Or is there like some way you can continue to book those a year beyond exploration? Or just a little more color on that would be helpful.

Yes.What we see with these 45Z is flexibility, right? So we've been able to -- as we've done this year, is find ways to pull forward some expenses to help future years. And we just see that favorability from 2029 and helping us in 2030 as well to be able to be in a good position to reach the higher end when we get out there, too.

Okay. That's really helpful. And then another one for you, Dave. I think in the past, you may have all pointed to more of like a 15% to 16% FFO to debt range and it looks like now just 15%. Any color on what what's going on there?

Well, I'll just say, Michael, we have got great growth opportunity in our utility as we're doing this work that Jay described for reliability and cleaner generation also the data centers. So we're comfortable targeting this 15% range continues to give us the right cushion over the thresholds that we think.

And it puts us in a really good place, remain committed to having a good balance sheet and we're working with the rating agencies to ensure they fully understand our financing plan, really our strong cash flows, too, and they'll be comfortable with it going forward.

Okay. And one last quick one. Just the $2.5 billion for [ CCGT ] investment, I think you're building a 1.5 gigawatt plant. Is that the full amount? Or are you not capturing the full investment in the 5-year and the plant itself could cost a little more than that because that just seems a little on the lower end, I would have thought of what a combined cycle would cost?

Yes. It trails into 31. So beyond the 5-year.

Your next question comes from the line of Andrew Weisel with Goshen.

Dave, a question for you first. You mentioned that at gas, you're unwinding some cost-cutting efforts from the past few years. I know that as a company, you're masterful about being nimble with O&M expenses, but I thought that was typically more short term, like within the year, maybe too. So I'm a little surprised to hear you talk about it over a multiyear period.

Can you discuss some examples of what might be included in there? What type of actions you're referring to? And then as we look to '26 and beyond, how should we think about the O&M outlook for the gas business?

Yes. We've essentially let some of the backlog, maintenance backlogs we allow those to rise and we're unwinding a lot of that this year. So that's just an example of some of the things that we typically do in the gas company. And we were ahead of plan when -- before we saw warmer weather, so we had some opportunities to relax our maintenance efforts, and this is non-emergent maintenance backlog. And this year, we're just getting back on track. We're getting back to our normal run rate for maintenance and other expenses.

And Andrew, I'll say like on our ability to be nimble, like we had a couple of years of warmer weather at gas. And so that did extend over a couple of years, but it's still shows that we're able to balance things across our business to make sure we do everything to hit the numbers.

Okay. Great. And that is part of the outlook?

The outlook for Gas?

We think about O&M -- yes, the outlook for O&M at gas going forward?

Yes. The O&M for gas. This is -- I think this is a normal run rate that we would typically see. And then as usual, we build in some flexibility where we can lean if we need to or invest, should we see colder than normal temperatures.

Okay. Got it. And then, Joi, in your prepared remarks, I want to ask about affordability a bit. I think you said the 1.4 gigawatts of new data center load should bring meaningful affordability benefits the existing customers. But then you also talked about protecting them.

So I'm just wondering, can you give more specific -- are you expecting the new data centers and this specific deal to be neutral to residential customer rates or monthly bills or deflationary? And how will that impact flow through? Will that go through rate cases or through the industrial tariff? How is that going to work for existing customers?

Yes. This is great for existing customers because we don't have to build anything substantial to support the load. We're using our excess capacity to support the load and building batteries on top of it just for peak shaving purposes and the customers get that full benefit.

So it will show up in the form of a lower ask over our next rate case cycle. So customers will get that flow through in that form. In terms of the protections, the contract terms protect our customers from stranded assets or rate shock over a period of time when we're serving the customers, the data center customers that is.

Your next question comes from the line of Anthony Croda with Mizuho.

I just wanted to follow up 2 quick cleanups. Mike's question earlier on the FFO to debt, Dave. As Vantage becomes a smaller and smaller portion of the company's earnings mix, any conversation with the agencies of and improved or lower downgrade threshold.

We are in constant communication with the rating agencies. I think right now -- and because we have a lot of really utility-like projects Advantage, I don't know if that will lead to lower thresholds, but we will continue those conversations because we will be moving more into that going forward as well.

And the current threshold is 14% or 15%?

It's down around 14%. It depend the rating agency depends on the way they measure it also relative to how we do, but more in the 13% to 14%.

Great. And then one of the earlier questions, I think Bill was asking on the IRM mechanism. You highlighted, I think staff is $1.2 billion. I guess just is the cadence of spend, if you could just talk about that? And then also the company previously or historically would file maybe an electric case every maybe 12 to 24 months, does that stretch out the filings, the frequency of the filings?

Yes. So the way the IRM is $1 billion. It starts in 2027. We have an existing IRM, but it starts to ramp up in our filing in 2027 and grows to $1 billion over 3 years. And the way that we've laid this out we would start to see that investment grow and make adjustments along the way based on performance.

So in our next filing, we will look to update it. and increase it even further. You asked about will that keep us out of rate cases. Where we have it right now, we will give us maybe 6 to 8 months' worth of, I think, benefit that we could push out a rate case for that period of time. As it continues to grow, that time will lengthen.

Your next question comes from the line of Paul Fremont with Ladenburg.

I guess my first question is the junior subordinated debt you talk about, is that instead of or in addition to the planned equity annual issuance of equity?

Yes. We do expect to have some junior sub that comes within our plan. We're going to look at that strategically, but that would be that would be additional to the equity that is laid out. What we've laid out is what we would need to do for true equity issuances of $500 million to $600 million.

Right. And then on the [ CCGT], what is the cost per KW that we should assume for the [ CCGT]?

Well, we're seeing ranges. So right now, it's roughly $2,500, and we're still updating our estimates. We'll know for certain once we get the finalization of our RFPs and see what is coming out. We've got the IRPs for our [ Palm Island ] but there's still some additional work. But that's our initial estimate at this point.

Great. And then turbine availability, if you get the 3 gigawatts that you're in advanced stage negotiation, do you see what time frame do you see sort of being able to get turbines?

Yes. Well, we're actually in the queue for our turbines that we want to bring on to replace Monroe only. And that CCGT we have in the plan, it only supports the retirement of Monroe. It has nothing to do with data centers. If we want to bring on another CCGT to support data centers, we're still seeing a 3- to 4-year time line for at least 1 gigawatt and above.

There is some flexibility we're seeing for smaller turbines. It just depends on how big a data center low are trying to serve and when the ramp kind of gets to the top end. So we'll flesh all of this out in next year's IRP and again, pick the right resource mix to support the loads.

I guess, just theoretically, if some of the 3 gigawatts were to be finalized, if their need were sort of before that 3- to 4-year time line, you would serve that load potentially through purchase power? Or how would that work?

Yes. The way that we're going to address these contracts is really get a sense of how quickly they want to ramp and then use the IRP modeling to tell us what is the optimal resource mix to support that load. It could be a combination of renewables and battery storage, similar to what we're doing with this -- the deal that we have on the table or it could require, still too early to say. All of that will get fleshed out as we finalize the negotiations and incorporate it into the IRP next year.

Great. And then last question for me. You're looking at potentially higher trading contributions in '25. Can you give us a sense of how much? And will next year's trading contribution be sort of back at the 50 to 60 level that it was this year?

Right, Paul, trading is having a really good year. We're seeing these strong margins. We talked about both gas and physical power portfolio, again, structured and hedged. Right now, our year-to-date is above the range, and that's given us some flexibility across our business.

We don't plan for earnings to continue at that pace. We put in the [ 50 to 60], as you mentioned. However, because some of these contracts are longer term, we do see some favorability that could come into '26, but we don't forecast that long term. We forecast around the [ 50 to 60 ] still.

Your next question comes from the line of Angie Storozynski with Seaport.

So a lot of questions ahead of me. But can you give me a sense, the 1.5 gigs or the can data center contract that you just finalized 1.4 and then the additional contracts in the works. I mean how do they compare versus the load that you currently serve? Yes, like percentage-wise, how big of an [indiscernible] is?

Yes. So the 1.4 increases are low by 25%. So that should give you a sense of what an additional gigawatt could equate to if we were able to bring it on.

Yes. I mean, yes, that puts it in perspective. Now on Vantage, I understand that you're shifting investments towards basically a higher multiple business, which makes sense. But it's -- I would -- it's kind of surprising to see that there is less of growth opportunities for Vantage in this day and age where you have this seeing an explosion of behind-the-meter generation, like [ cogen ] seems to be such a hot investment right now [ as ] only because it's behind the meter, if it's only because it's time to power. So again, you did mention some commodity price pressures, but I'm a little bit surprised to see the lower growth CAGR for that business.

Yes, Angie, we're going to continue to work the BD pipeline there. And this first deal that we're getting at least trying to get under our belt would inform if this is a vertical that we can pursue further. And again, this is outside of the state of Michigan.

We're hearing more and more that this behind the meter option is something that data center providers want to pursue. And so to your point, we're going to keep working it and ensure that we've got the execution capability. We've settled on a design, we think that works that gives the redundancy. So we think that could position us to be really attractive to data centers that are looking to pursue this type of solution.

Okay. And Dave, could you comment on growth expectations for your dividend in this new higher CapEx environment?

Yes, Angie, we're going to continue to revisit the dividend growth. We said in our prepared remarks that we're going to grow them with our operating EPS. And right now, we're in a payout ratio that's right in the midpoint of our peers. But we're going to continue to look at that and make sure that it supports both growth and what our investors prefer here.

Your last question comes from the line of Travis Miller with Morningstar.

Just want to confirm the cash flow and earnings mix here over the next couple of years. So you hear correct the ramp comes for this data center. The ramp comes next year. And then there's really no incremental capital that you would fund because they're funding the storage, right? So cash flow and earnings should be pretty close, at least over the next 1 to 2 years as this data center contract ramps up? Is that correct?

Well, we're investing the storage to fund the storage assets, and then we'll be getting the cash flows from the ramp, which does ramp up really quick. But we will be investing in those storage assets. And that's why one of the reasons why we're pulling some of our capital forward and need some of this additional equity.

Okay. Okay. [ No be ] over a short period of time, though, right?

Yes, short periods, few years time.

Okay. And what size is the storage? Investment? Not dollars, but how many gigawatts or --

It's a gigawatt of storage and then we're going to use tolling agreements. So in accordance with our IRP settlements, we are going to build 2/3 of the requirement, and then we're going to use tolling agreements for the other 3, which are -- we'll get the FCM on the tolling agreement.

There are no questions at this time.

Thank you, everyone, for joining us today. I'll just close out by saying DTE continues to have a really strong year in 2025 and we are well positioned for 2026. And I am just really excited about our long-term plan and the opportunities ahead, and I look forward to seeing many of you at EEI in just over a couple of weeks. So thank you all for joining us today. Have a great morning. Stay safe and be healthy.

Ladies and gentlemen, that concludes today's call. Thank you all for joining, and you may now disconnect. Everyone, have a great day.