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DTE Energy Expands Renewable Assets

Zacks Equity Research

DTE Energy Company (DTE) announced that it has acquired the 75-megawatt (MW) Pheasant Run II wind park from a subsidiary of NextEra Energy Resources LLC, a unit of NextEra Energy, Inc. (NEE). The wind park is located in Huron County, OH. Later, the facility will be known as the Brookfield Wind Park.

NextEra Energy Resources’ subsidiary will continue to own and run the 75-MW Pheasant Run I wind facility. DTE Energy will purchase the output from the wind park.

DTE Energy continues to diversify its power generation mix by expanding the renewable asset base. In first-quarter 2014, the company’s unit DTE Electric invested $5 million under its renewable ventures. In Mar 2014, the company completed a construction project to convert a closed coal-fired power plant to a biomass fuel-fired facility. On Mar 3, 2014, DTE Energy selected 122 solar projects in the third offering for the expansion of its SolarCurrents customer-owned pilot program.

Within the 2014 to 2018 time span, DTE Energy plans to invest $400 million, including $240 million in 2014, for renewable energy and energy efficiency projects. A steady focus on expansion of renewable properties will help the company to achieve the government’s renewable goal.

Apart from DTE Energy, other utility providers like NRG Energy, Inc. (NRG) and Exelon Corporation (EXC) are investing substantially to construct and upgrade their renewable utility infrastructure to comply with stricter regulations.

Recently, the Obama administration rolled out its plan to curb carbon emissions from power plants by 30% by 2030. The rule is expected to come into effect next year.

We believe that DTE Energy is well-positioned to meet the government mandates, as it is focusing more on expanding its renewable power generation capacity.

DTE Energy maintains a stable liquidity position. As of Mar 31, 2014, the company had a cash balance of $98 million and available liquidity of $1,500 million under the unsecured revolving credit agreements. A strong financial position supports DTE Energy’s systematic investments in renewable growth ventures.

DTE Energy currently has a Zacks Rank #3 (Hold).

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