DTE Energy Co. - 5.25% DB REDEEM 01/12/2077 USD 25

Strong 1Q26 results; high-end guidance viewed as achievable - Operating EPS: $1.95/share (Operating earnings $407m) in Q1 2026. - By segment (operating earnings): - DTE Electric: $218m, +$71m YoY (timing of taxes/rate implementation/colder weather; partly offset by higher rate base & O&M). - DTE Gas: $210m, +$4m YoY (colder weather + IRM revenue; partly offset by higher rate base costs). - DTE Vantage: $48m, +$9m YoY (higher custom energy solutions & steel; partly offset by lower renewable earnings). - Energy Trading: $59m lower YoY due to timing of the power portfolio; management said timing reverses later in the year and confidence remains for high-end full-year guidance. - 2026 outlook: Management reiterated operating EPS growth of 6%–8% vs. 2025 midpoint, with confidence to hit high end, aided by RNG (renewable natural gas) tax credits.

Reliability improvement story remains central (and supports customer value) - During storm response, crews restored service very quickly: - January weather event: 100% of impacted customers restored within 48 hours. - March storm: >99% restored within 48 hours (≈300,000 customers impacted; 70+ mph gusts sustained). - Major reliability progress: - 90% improvement in outage duration from 2023–2025. - Best all-weather SAIDI performance in ~20 years, placing DTE in the top quartile nationwide. - Goal tracking: reduce number of power outages by 30% and cut outage duration in half by 2029. - Ongoing grid modernization: smart grid/outage detection, pole-top maintenance, treatment program, and rebuilding the 4.8 kV system.

Data center growth = upside + affordability benefits, but approval/timing is a key execution risk - Oracle (1.4 GW): Approved; construction underway; load ramp over next several years. - Oracle is expected to deliver about $300m annual benefits to existing customers once ramped. - Google (1.0 GW): Contract filed for MPSC approval; management expects order by ~Sept (no PFD per their commentary). - Google expected to ramp by end of 2028. - Management frames this as potentially increasing beyond “8” in long-term plan (they cited Google as strengthening operating EPS growth), but they emphasized not to get ahead of approval. - Incremental investment implication: Google could drive roughly $5b of generation/storage investment through 2032 (resource mix includes renewables, storage, demand response, and longer-term generation via IRP). - Affordability mechanism: Contracts designed so Google covers full energy/capacity costs and provide affordability benefits to other customers; load ramps spread fixed system costs over a larger base.