DTE Energy Company DTE recently announced that the Michigan Public Service Commission (MPSC) has sanctioned its Renewable Energy Plan, thereby enabling the company to bring online an additional 353 megawatts (MW) of wind and solar projects by 2022. On completion of these projects, the company will be able to light up 620,000 homes with clean energy.
The authority has also approved the company’s regulatory plans to keep its electric rates stable till 2022 in a bid to support customers tackling the effects of the coronavirus pandemic. Per the terms of the plan, DTE Energy will consistently invest in infrastructure and tree trimming programs.
Investments Amid COVID-19
DTE Energy has always followed a disciplined capital spending program to maintain and upgrade the reliability of its electric utility systems. However, the coronavirus outbreak, which hit U.S. economic activities in March 2020 and thereafter, dealt a hard blow tooverall electricity demand owing to factory shutdowns in the majority of manufacturing industries. Although rapid increase in work-from-home trends boosted residential electricity demand, it was not sufficient enough to neutralize or outweigh industrial electricity demand. This, in turn, hurt operational results for utilities.
To support its customers during such crisis, DTE Energy reduced bill in June-July period, by a total of $30-$40 million. On top of that, its latest plan to keep its current electric rates stable till 2022 indicates the company’s solid financial position and is praiseworthy. Notably, DTE Energy’s cash and cash equivalents at the end of first quarter 2020 was $552 million compared with $93 million at the end of 2019.
Such solid cash balance should enable its major subsidiary, DTE Electric to duly achieve its capital investment target of $12 billion over the 2020-2024 period.
Renewable Energy & Utilities
To mitigate the deadly effects of climate change, in the United States, utilities are increasingly adopting renewable energy sources to produce electricity, with wind and solar energy gaining popularity in particular. Per the latest forecast made by the U.S. Energy Information Administration (EIA), electricity generation from renewable energy sources are expected to rise from 17% in 2019 to 20% in 2020 and to 22% in 2021, primarily driven by projected additions to wind and solar generating capacity.
Therefore, DTE Energy’s latest approved Renewable Energy Plan plays a vital role in this forecast. Moreover the strategy will enable the company to fulfil its plan of generating electricity from renewable energy for 15% of its customers by 2021. Looking ahead, DTE Energy is committed to achieve its net zero carbon emission target by 2050.
Another utility Xcel Energy XEL aims to achieve 80% carbon reduction by 2030 and 100% carbon-free electricity by 2050. Likewise, CMS Energy CMS aims to reduce carbon emissions from its power plants by more than 90% by 2040.
American Electric Power AEP aims on reducing carbon dioxide emissions by 80% by 2050.
Price Performance & Zacks Rank
Shares of this Zacks Rank #2 (Buy) have lost 18.9% in a year compared with the industry’s 8.1% decline. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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