DTE Energy (DTE), 21 Michigan Firms Ink Clean Energy Agreement
DTE Energy DTE recently signed a historic settlement agreement with 21 Michigan organizations concerning its 20-year CleanVision Integrated Resource Plan (IRP). The proposal concerning this IRP is currently being evaluated by the Michigan Public Service Commission for approval.
Benefits of the Agreement
The CleanVision IRP includes an investment strategy worth $11 billion in DTE’s clean energy transition over the next decade, which, in turn, is projected to reduce the future cost of clean energy transformation for its customers by $2.5 billion.
This IRP will also enable the development of more than 15,000 megawatts (MW) of renewable energy in Michigan by 2042. DTE Energy also aims to build 780 MW of energy storage through 2030, with a further goal of developing more than 1,800 MW of storage by 2042 as part of this IRP.
Apart from expanding its renewable energy portfolio, the CleanVision IRP entails the termination of the company’s coal usage by 2032, thereby surpassing its prior goal to achieve net zero carbon emissions by 2050.
In 2022, 22% of the total electricity generated by utility-scale electricity generation facilities in the United States came from renewable energy sources, as stated by the U.S. Energy Information Administration. With the entire nation rapidly shifting toward more clean energy sources, this percentage will increase.
Considering this, we may conclude that the latest agreement settled by DTE Energy will strengthen its position in the expanding U.S. renewable energy market.
Utilities’ Growing Focus on Clean Energy
To reap the benefits of America’s expanding renewable energy market, utilities such as Xcel Energy Inc. XEL, PPL Corp. PPL and Ameren Corp. AEE are also transitioning faster toward clean energy.
Xcel Energy boasts an investment plan of $1.03 billion during 2023-2027, in addition to potential incremental investment opportunities of $1.5-$3 billion during the same time frame. The approval of its Minnesota and Colorado resource plans in 2022 will add about 10,000 MW of utility-scale renewables to its portfolio and is expected to reduce carbon emissions by at least 80% by 2030.
XEL’s long-term (three- to five-year) earnings growth rate is pegged at 6.3%. The Zacks Consensus Estimate for its 2023 sales indicates an increase of 0.6% over 2022’s reported figure.
In December 2022, PPL Corp.’s subsidiary Louisville Gas and Electric Company and Kentucky Utilities Company filed with the Kentucky Public Service Commission to approve adding nearly 1,000 MW of solar generation, 125 MW of battery storage, more than 1,200 MW of combined-cycle natural gas and retiring 1,500 MW of aging coal generation to its portfolio.
PPL’s long-term earnings growth rate is 7.4%. The stock boasts a four-quarter average earnings surprise of 3.14%.
Ameren currently targets expanding its renewable portfolio by adding 2,800 MW of renewable generation by the end of 2030, 400 MW of battery storage by 2035 and a total of 4,700 MW of renewable generation and 800 MW of battery storage by 2040. In April 2023, it received approval from the Missouri Public Service Commission to acquire, upon completion, a 150-megawatt (MW) solar facility in White County, IL.
AEE’s long-term earnings growth rate is pegged at 6.4%. The Zacks Consensus Estimate for its 2023 sales indicates an increase of 1.9% over 2022’s reported figure.
Price Performance
Over the past three months, shares of DTE have lost 0.2% compared with the industry’s decline of 4.5%.
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Zacks Rank
DTE Energy currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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