DTE Energy Co.

Overview Key strengths Key risks Most of its consolidated cash flow (90%) comes from its more predictable and lower-risk, regulated electric and gas businesses. Lack of regulatory diversity makes the company primarily dependent on its Michigan regulators to sustain credit quality. We view the Michigan Public Service Commission (MPSC) as a generally supportive regulatory environment. Exposed to environmental risk related to coal-fired generation, partially offset by its carbon-reduction plan. Large customer base supports cash flow stability. Service territory is prone to localized weather events, including tornados, high winds, and ice storms. The company?s strategy to decarbonize over time could support its regulatory risk management. Negative discretionary cash flow primarily due to elevated capital spending and dividend payments indicates external funding

...DTE Energy Co. (DTE)'s electric subsidiary DTE Electric Co. (DTEE) recently filed a general rate case and expects a decision by year-end 2023. On Feb. 10, 2023, DTEE filed a rate case requesting a base rate increase of about $622 million based on a 10.25% requested return on equity (ROE). The company expects a final MPSC order by year-end 2023. This follows a November 2022 decision, where the MPSC issued an order for DTEE authorizing a $31 million rate increase, compared with the company's initial rate increase request of $388 million. Given this development, we will continue to monitor the outcome of the currently pending rate case. DTE increased its five-year capital spending plan by approximately $3 billion. We believe this spending plan is in line with the company's focus on advancing its decarbonization objectives as well as continued investments in modernizing its electric grid and distribution infrastructure. That said, this elevated spending could weaken the company's financial...

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