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DTE Energy (DTE) Gets MPSC Nod to Enhance Gas Infrastructure

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DTE Energy DTE receives approval from the Michigan Public Service Commission (MPSC) to modernize its natural gas infrastructure. DTE will get $84 million for the same through rate increase. DTE Gas has a long history of providing safe, reliable and clean energy.

As part of the program, 200 miles of pipe will be replaced in 2022, improving services for customers in 16 communities across the state. This will also reduce greenhouse gas emissions to the extent equivalent to taking 100,000 cars off the road upon its completion in 2035.

MPSC’s decision will increase the rate by $3.18 for the average residential customer’s bill per month. However, DTE Energy’s buying strategies will save customers more than six times that amount this winter compared to the pricing of those companies that didn't settle for lower prices earlier. DTE also provides some plans to those families who struggle to pay their bills. The plans include Low Income Self-Sufficiency Plan, Winter Protection Plans, Personalized Service Protection, Residential Income Assistance Credit, Low-Income Assistance Credit and the Home Heating Credit.

CAPEX Plans

DTE Energy follows a disciplined capital spending program to maintain and upgrade the reliability of its electric utility systems. DTE Electric, a unit currently expects to make capital investments of $15 billion over the 2022-2026 period. The same includes $4 billion for base infrastructure, $8 billion for distribution infrastructure and $3 billion for cleaner generation. DTE Gas, another unit's total capital investments over the 2022-2026 period are estimated at $3.1 billion, comprising $1.5 billion for base infrastructure and $1.6 billion for gas main renewal, meter move out and pipeline integrity programs.

DTE is expected to generate 90% of its future earnings from regulated investment planned for five years. Moreover, DTE Energy maintains its long-term operating earnings growth guidance in the range of 5-7%.

Clean Energy Goals

DTE Energy is investing steadily in enhancing its renewable generation assets. Over the next 15 years, DTE Electric plans to withdraw a portion of its coal-fired generation and boost the natural gas-fired generation and renewables mix. DTE remains committed to reduce carbon emissions of its electric utility operations by 32% within 2023, 50% by 2030 and 80% by 2040 from the 2005 carbon emissions levels.

DTE Energy expanded this commitment by announcing a net-zero carbon emission goal for both DTE Electric and DTE Gas by 2050.

Other electric utilities also adopting measures to supply clean and reliable energy to their customers include Duke Energy DUK, Xcel Energy XEL and Alliant Energy LNT. While XEL carries a Zacks Rank#3 (Hold) at present, LNT and DUK hold a Zacks Rank#2 (Buy). All three stocks are planning to provide absolute clean energy by 2050.

The long-term (three-five) earnings growth rate for DUK, XEL and LNT is pegged at 5.3%, 6.4% and 6.1% each. The dividend yield of Duke Energy, Xcel Energy and Alliant Energy is3.9%, 2.7% and 2.8%, respectively, at present.

Earnings surprise of DUK, XEL and LNT for the last four quarters is 2.3%, 2.1% and 4.4% each, on average. The Zacks Consensus Estimate for 2021 earnings of Duke Energy and Alliant Energy has moved 0.2% and 1.9% up, respectively, in the past 60 days while that of Xcel Energy has remained stable.

Zacks Rank & Price Performance

In the past three months, shares of this currently Zacks Rank #3 DTE have lost 2.4% against the industry’s growth of 0.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Three Months’ Price Performance

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