DTE Energy Company (DTE) — Q3 2025 Earnings Call Transcript

Thank you, and good morning, everyone. Before we get started, I'd like to remind you to read the safe harbor statement on Page 2 of the presentation, including the reference to forward-looking statements. Our presentation also includes references to operating earnings, which is a non-GAAP financial measure. Please refer to the reconciliation of GAAP earnings to operating earnings provided in the appendix. With us this morning are Joi Harris, President and CEO; and Dave Ruud, CFO. And now I'll turn it over to Joi to start our call this morning.

Thanks, Matt. Good morning, everyone, and thank you for joining us. While this is my first time leading our earnings call as CEO, I've had the privilege of engaging with many of you over the past couple of years and appreciate the dialogue. I'm off to a running start and continuing to build on the strong foundation we've established. I have a number of exciting updates to share with you today, which include highlighting the progress we're making on achieving our 2025 financial goals, providing a strong 2026 operating EPS outlook, and outlining our enhanced 5-year plan that now extends through 2030. A highlight of our strategy is the transformational growth we're seeing in data center demand. I am pleased to announce we finalized an agreement with a leading hyperscaler to support 1.4 gigawatts of data center loads. This is an exciting milestone that I'll expand on as we walk through our updated strategic plan. Aside from the 1.4 gigawatts of new load, we are still in late-stage negotiations with an additional 3 gigawatts of data center load providing potential further upside to our capital plan as we advance these negotiations. As a result of this first data center transaction and continued need to modernize our utility assets, our updated plan includes significant increases in utility investments for our customers and deliver 6% to 8% operating EPS growth through 2030. We are confident we will reach the high end of our targeted range in each year, driven by R&D tax credits and the flexibility they provide. This plan supports our continued strategic shift toward higher-quality utility earnings fueled by increased demand, continues our efforts to build the grid of the future while transitioning to cleaner generation, and demonstrates our ongoing commitment to affordability for our customers. I will share additional details of our plan over the next few slides. Dave will give an overview of our third quarter results, 2025 guidance, and 2026 early outlook, and then we will open it up for your questions. I'll start on Slide 4 by saying that we are continuing to deliver strong results in 2025 and we are well positioned to hit the high end of the guidance this year. As always, our success is a testament to our dedicated and engaged team committed to serving our customers and communities. I am extremely proud that our team was recognized by the Gallup organization for the 13th consecutive year with A Great Workplace Award, and our employee engagement ranks in the 94th percentile globally among thousands of organizations. We are well positioned to achieve the high end of our 2025 operating EPS guidance range. Looking ahead to 2026, our early outlook reflects operating EPS growth of 6% to 8% over our 2025 guidance midpoint, and we are confident in our ability to deliver at the higher end of that range. Let me move to Slide 5 to provide more details on our long-term plan. We are in an exciting time for our industry and for DTE, and we are focused on seizing the opportunity to deliver for our customers, communities, and investors. We're increasing our 5-year capital investment plan by $6.5 billion compared to the prior plan, driven by the data center transaction and the continued need to modernize our utility assets. At DTE Electric, the additional investments are strategically focused to support data center load growth, advanced cleaner generation, and to enhance distribution infrastructure that will drive continued improvements in reliability. DTE Gas is focused on system reliability and infrastructure renewal, ensuring safe, efficient service for our customers while modernizing our network. DTE Vantage will continue to prioritize investments in utility-like long-term fixed-fee contracted projects, which aligns well with our strategy to deliver stable, predictable earnings for our investors. Our investment plan supports a further strategic shift towards higher-quality utility earnings over the next 5 years, targeting utility operating earnings to increase to 93% of our overall earnings by 2030. Importantly, data center opportunities are helping drive this shift as we allocate additional capital to serve this load, which further supports affordability for our existing customers. We have incorporated a more conservative growth outlook for DTE Vantage, which is largely influenced by commodity pricing assumptions in our longer-term forecast. As part of our most recent strategic analysis, we evaluated a range of pathways to drive sustainable long-term value. This effort reinforced our conviction that leaning into our core utility business while taking a more conservative view at DTE Vantage will best position us to deliver value for our customers and for our investors. As you can see in the appendix of this presentation, the 2030 outlook for Vantage is flat to 2025 guidance. As our solid project development pipeline offsets the expected roll-off of 45Z production tax credits after 2029. We're confident this approach also positions us well for consistent future growth as we expect to continue to make progress on additional data center opportunities that will deliver upside to our base plan. Let me move to Slide 6 to highlight updates to our capital plan at DTE Electric. Our updated capital investment plan at DTE Electric provides a $6 billion increase over the prior plan driven by the data center transaction and customer-focused initiatives that align with our long-term strategy. A key component of this plan is new storage investment to support the increased data center load. Importantly, this incremental storage investment is fully funded by the data center customers. The plan also includes renewable investments that support the continued success of our MIGreen Power voluntary renewables program and fulfill the requirements of the legislative clean energy plan. And to ensure reliable baseload generation as we transition away from coal, we are planning the construction of a combined cycle gas turbine to replace our retiring coal plants. We are submitting a competitive bid for the 2026 Integrated Resource Plan, all-source RFP for a new CCGT to replace Monroe power plants. We're also continuing to invest in distribution infrastructure to harden the grid and improve reliability for our customers. These grid investments are already delivering results, driving a nearly 90% improvement in the duration of outages since 2023 as we make strong progress toward our goal of reducing power outages by 30% and cutting outage time in half by 2029. Our current rate case filing supports these reliability investments while remaining focused on customer affordability. This filing includes a request for approximately $1 billion in distribution spending to be included in the infrastructure recovery mechanism by 2029, which was largely supported by the MPSC staff in its recent testimony. The IRM will help drive consistent, predictable investments in grid modernization to improve reliability for our customers while also simplifying future regulatory proceedings. The order for this case is expected at the end of February. Overall, I'm thrilled about the opportunities ahead for DTE Electric. As we continue our efforts to improve reliability for our customers, transition to cleaner generation, and execute on economic development opportunities to drive load growth and support affordability for our customers. Let me move to Slide 7 to provide an update on our advancement of data center opportunities. As I mentioned, we successfully executed a significant agreement to support 1.4 gigawatts of new data center load, representing a major step forward in our utility growth strategy while also delivering meaningful affordability benefits to our existing customers. The demand is expected to ramp up over the next 2 to 3 years, giving us a clear runway to align infrastructure development and resource planning with customer needs. While we can use existing capacity to support this ramp, we'll also need to invest in new energy storage solutions to meet the full capacity requirements. Our updated plan includes nearly $2 billion of incremental energy storage investments and additional tolling agreements to support this data center load. Given our excess capacity, we will use our existing industrial tariff for this customer and combine it with an energy storage contract to support the incremental storage investment. We are including key terms in these agreements that will protect existing customers, including a 19-year power supply contract with minimum monthly charges. The data center will fund its own storage needs through a 15-year energy storage contract. These terms are important to us and our customers as we ensure the data center revenue supports the required investment to meet this new demand. We plan to submit our regulatory filing tomorrow requesting approval of the data center contract. Energy storage investments will begin ramping in 2026 to align with the projected increase in data center load. As I mentioned, we also have additional data center opportunities beyond this initial 1.4 gigawatts. We are in advanced discussions with additional hyperscalers for over 3 gigawatts of new load, and we have a pipeline of an additional 3 to 4 gigawatts behind that. We also expect longer-term growth opportunities through the expansion of these initial hyperscaler projects. The generation investments that will be needed for these additional opportunities could very well come into the back end of our 5-year plan, providing incremental capital investments above what we are laying out for you today. A key step in preparing for the development of new generation to support large data center loads is integrating these requirements into our next IRP filing, which we expect to file next year. So, a lot of great opportunities ahead of us on the data center front. We will continue to provide updates along the way as things progress. Let me move to Slide 8 to discuss our commitment to customer affordability. We have a history of executing on our investment plan with a sharp focus on customer affordability. As you can see on the chart, our average annual bill increase over the last 4 years is significantly lower than the national average and Great Lakes average. We remain committed to maintaining this focus on affordability throughout our plan. We are advancing on a number of initiatives to support affordability for our customers while continuing to invest and support our key priority. Importantly, near-term data center growth will help create substantial affordability headroom for our existing customers as we sell our excess generation. Our continuous improvement culture will ensure O&M and capital investments remain efficient. The shift from coal to natural gas and renewables also helped to further reduce O&M costs while our diverse energy mix ensures economic fuel costs for our customers. And finally, the IRA provisions support the renewable energy investments while supporting customer affordability goals. So to wrap up my comments, I will say I'm very excited about our long-term plan and the opportunities we have ahead of us to continue to deliver for all of our stakeholders, including excellent service to our customers and communities and continued strong financial performance for our investors. I'm looking forward to spending more time with many of you at EEI to discuss our updated plan. With that, I'll hand it over to Dave. Over to you, Dave.

Thanks, Joi, and good morning, everyone. Let me start on Slide 9 to review our third quarter financial results. Operating earnings for the quarter were $468 million. This translates into $2.25 per share. You can find a detailed breakdown of EPS by segment, including our reconciliation to GAAP reported earnings in the appendix. I'll start the review at the top of the page with our utilities. DTE Electric earnings were $541 million for the quarter. Earnings were $104 million higher than the third quarter of 2024. The main drivers of the variance were timing of taxes and rate implementation, partially offset by higher O&M and rate base costs. The impact from the timing of taxes for the quarter was fairly significant at $63 million favorable relative to third quarter 2024. This is due to the timing of investment tax credits associated with when our solar projects are placed in service. This timing was known and built into our plan, and the remaining year-to-date timing favorability of $33 million relative to 2024 will reverse in the fourth quarter. Moving on to DTE Gas. Operating earnings were unfavorable $38 million, which is $25 million lower than the third quarter of 2024. The earnings variance was primarily driven by higher O&M and rate base costs. With our confidence that we will hit the top end of our overall DTE operating EPS guidance range this year, we've been able to unwind one-time lean operational measures and other unsustainable reductions that were implemented over the past few years at DTE Gas to counteract warmer weather. This will likely bring this segment in below its guidance range in 2025. Let me move to DTE Vantage on the third row. Operating earnings were $41 million for the third quarter of 2025. This is an $8 million increase from 2024, driven by RNG production tax credits in 2025, partially offset by lower steel-related revenues. We remain on track for the full year guidance at DTE Vantage. On the next row, you can see Energy Trading earned $23 million for the quarter. We continue to experience strong margins in our contracted and hedged physical power and gas portfolios. On a year-to-date basis, we are currently above the high end of operating earnings guidance for this segment. This strong performance places us in a favorable position to leverage any potential further upside across DTE to continue to provide flexibility for future years. Finally, Corporate and Other was unfavorable by $77 million quarter-over-quarter due primarily to the timing of taxes, which will reverse by year-end as well as higher interest expense. Overall, DTE earned $2.25 per share in the third quarter of 2025, which positions us well to achieve the high end of our guidance range in 2025. Let's move on to Slide 10 to discuss our 2026 outlook. As Joi mentioned, we are well positioned to deliver another strong year in 2026. Our 2026 early outlook range is $7.59 per share to $7.73 per share, which provides 6% to 8% growth over our 2025 guidance midpoint. And we are confident that we will deliver at the high end of the guidance range due to the flexibility that the 45Z tax credits provide. Utility growth will be driven by customer-focused investments, including distribution and cleaner generation investments at DTE Electric, and main Renewal and other infrastructure improvements at DTE Gas. DTE Vantage will see growth from the development of new custom energy solutions projects and continued contributions from RNG production tax credits. And at Energy Trading, we continue to see strength in both our structured physical power and physical gas portfolios, giving us confidence in our targets as we head into 2026. We will share additional details on 2026 during our fourth quarter call following the close of a strong 2025. Let's turn to Slide 11 to discuss our balance sheet and equity issuance plan. We continue to focus on maintaining solid balance sheet metrics. To support the significant increase to our capital investment plan that we need to execute for our customers, we've increased our planned equity issuances. We are targeting annual issuances of $500 million to $600 million in 2026 through 2028. This level of equity supports the capital that is now coming earlier in this plan relative to our prior plan. The increased equity will help fund the increase in our capital plan, including the storage investments related to our data center agreement while ensuring that we maintain a strong balance sheet. We will continue to maximize the use of internal mechanisms to issue equity, but will also incorporate manageable external issuances. Our 5-year plan fully incorporates the equity needs and continues to deliver 6% to 8% operating EPS growth with a bias toward the upper end each year through 2030. Our long-term plan also includes debt refinancing and new debt issuances. We expect to strategically utilize hybrid securities to support our financing plan, and we will continue to manage future debt issuances through interest rate hedging and other opportunities. Importantly, we continue to focus on maintaining our strong investment-grade credit rating and solid balance sheet metrics as we target an FFO to debt ratio of approximately 15%. This plan ensures that DTE continues to be well positioned to make the necessary investments for our customers while delivering the premium total shareholder returns that our investors have come to expect over the past decade with strong utility growth and a dividend growing with operating EPS. Let me wrap up on Slide 12, and then we will open the line for questions. Our team continues our commitment to deliver for all of our stakeholders. We are delivering solid results in 2025. We are on track to achieve the high end of our operating EPS guidance range, and we are confident we will achieve the high end of our 2026 early outlook, again, due to the flexibility that the 45Z tax credits provide. Our updated 5-year plan provides high-quality long-term 6% to 8% EPS growth through increased customer-focused utility investment, which increases our utility operating earnings to 93% of our overall earnings by 2030. This plan increases our 5-year capital investment by $6.5 billion over the previous plan, supported by the data center transaction and the continued need to modernize our utility assets. Additional data center opportunities provide potential upside to this 5-year capital investment and EPS growth plan. We continue to target 6% to 8% long-term operating EPS growth with 2026 operating EPS midpoint as a base for this growth. We are confident that we will reach the high end of our target range in each year, driven by RNG tax credits and the flexibility they provide. We continue to target a strong dividend that grows with operating EPS. Overall, we are well positioned to deliver the premium total shareholder returns that our investors have come to expect with a strong balance sheet that supports our capital investment plan. With that, thank you for joining us today, and I look forward to seeing many of you at EEI. We can open the line for questions.

So obviously, the upside slide seems fairly material around incremental data center opportunities. Are the data center deals kind of are they an inflection point to rebase higher or shift that 6% to 8% CAGR? Or should we still kind of assume lengthen and strengthen? I guess, what do you need to see to revisit that guided trajectory, especially since some of it can hit the back end of the plan and you're already growing at the higher end?

Thank you for your question. We are very enthusiastic about the 1.4-gigawatt deal we currently have, and we believe we are well prepared to move forward with it. We are engaged in ongoing discussions, and as I mentioned earlier, we are working on 3 to 4 gigawatts with hyperscalers, contributing to a total pipeline of around 7 gigawatts. As we progress with these negotiations, our goal is to establish terms that we can integrate into next year's Integrated Resource Plan and identify the generating resources needed to meet that demand. This could involve a significant generating load or a mix of batteries and renewables. Our aim is to include it in our 5-year plan if feasible, which would provide us with growth opportunities beyond our current position. We are confident about the deal at hand and our capability to implement it effectively.

Okay, I understand. Is it beneficial to the 6% to 8% range? How should we approach your current guidance?

Yes. I think that is a fair assumption that it would be upside to our current 6% to 8%.

Perfect. You mentioned a more conservative outlook for Vantage due to commodity pricing. What are you observing on the energy service side? Does it make sense to sell certain assets, particularly with the upcoming equity needs starting in '26?

Yes. We are maintaining our focus on our energy service business and Vantage. We are working on a behind-the-meter project outside of Michigan for our data center, which could become a new area of interest for us. Vantage has been a valuable part of our portfolio for over 20 years, supported by a strong business development pipeline and offers good return opportunities. As always, we aim to optimize value for our shareholders. While we don’t have any immediate plans, we will keep exploring this.

Got it. Perfect. And big congrats, Joi, on your first earnings call. I know Jerry is listening. He's proud and just keep that dividend growing for him now that he's on a fixed income. Appreciate it, guys.

Thanks, Shar.

This is actually Aidan Kelly on for Jeremy. Yes. So just regarding the EPS CAGR, is the right math to think about like 2026 high end and then growing 8% off that until 2030? Or should we think about the EPS CAGR kind of being based off the midpoint each year?

So midpoint this year is the way we guide. And the 45Zs give us the potential to hit the top end of our range. And as you know, those 45Zs extend through 2029.

Got it. Okay. That's helpful. And then just on the incremental load, maybe just like how much should we think about like the load is needed to trigger a new gas plant versus just more energy storage at this point? I mean like when you look at the 7-gigawatt pipeline, how should we think about like what's needed for new base load versus just like incremental storage?

Yes. So think of it this way, any new data center load that we bring on after this 1.4 gigawatts will require additional resources. If we bring on something in the gigawatt range, it would require a combined cycle to support it. Anything lower than that, we could do a combination of either smaller CCGT and some renewables and batteries. But we'll know all of that for certain once we sign the deal and incorporate it into next year's IRP. And that will really dictate the resource requirements and the resource mix.

Congratulations again, Joi, and to the whole team here. Nicely done here, I got to say, and nicely done on firming up this contract here, as you say. Now with that said, and just to follow up on some of the last questions here, how do you think about the data center timing here? You talk about it being accretive to the plan. How do you think about the timeline for its ramp? I know that you already cautioned that it wasn't entirely clear cut. But how do you think about it being accretive versus perhaps serial and an extension of the 6 to 8? We don't mean to nitpick too much here, but I think we heard your comments earlier, and I just wanted to come back and understand when that would really start to kick in and be accretive.

Yes. You can think of it toward the tail end, given just the lead times on some of the materials and the construction cycle, Julien, you could think of it toward the back end of our plan. So call it, late 2029 into the early 2030s.

Got it. So that uptick would potentially be probably that first year really would be that 2030 timeframe. And then the question would be how sustained that elevated growth rate would be predicated on the success of the 3 gigawatts in late-stage negotiations?

Yes. And again, I'll repeat, we're going to take all of this and incorporate it into next year's IRP. And really, that will dictate not only the timing but the right resource mix, which will then drive timing of construction, lead times for materials, and such.

I am curious about the advanced stage data center pipeline. Do you have an estimate for when you expect to finalize those deals and potentially advance other projects from the earlier stage pipeline into the advanced stage pipeline? What is the pace at which some of these projects are coming together?

Yes. Thanks for the question. So we're in active negotiations, and we have been for some time. We are still settling on some key terms and ramp rates. I would envision that we would have at least an idea of the ramp and firming up some of the terms before we file next year's IRP. We're pulling that forward. That's the idea into the third quarter. So we would want to be able to understand the ramp, understand exactly when that ramp would lay out over a 5-year plan and incorporate it into our modeling so we can put it into the IRP.

Okay. Perfect. Yes, that's helpful. And then you piqued my interest with the behind-the-meter project that you're working on for Vantage for a data center. I was just wondering if you might be able to elaborate on maybe how big of a project that might be, what kind of power generation technology you're using? Any thoughts on maybe how returns stack up for that type of a project versus others in the Vantage pipeline? Yes, curious about that overall opportunity.

Yes. We're still in discussions with the data center provider. It's primary power. So it's behind the meter. You can think of that as more like CTs. And again, it's a little too early for us to give a lot of details around this deal. We haven't fully closed it yet, but it's a really good opportunity for the Vantage team and it's right down the fairway if you look at our skill set as an enterprise. So this is just a really good example of the type of projects Vantage has in the pipeline that supports their income targets, and we'll look for additional opportunities like that should they become available. We'll keep you posted, though, as things develop.

I have a question regarding the rate case in the ERM. What potential advantages could arise for investment if more favorable regulations and decisions are made, particularly concerning the capital outlook for that mechanism?

Yes. So just to give clarity, the IRM, the investments are already in our plan. What we did hear back from the staff was strong support for the investment profile that we laid out in the case and the pace. So our intent, though, is to continue to grow the IRM in future cases. So in this case, we requested up to $1 billion beginning in 2027. And what we were really happy to hear the staff support even a pull forward. So they did pull out maybe $200 million of the pull out maintenance and suggested that that should get incorporated into our existing IRM in 2026. So that would be incremental IRM spend that would show up next year should we get that final ruling in 2026 in February. So again, it just showcases that we're aligned with the staff on the type of investments we need to make to improve reliability and the pace.

Okay. Great. And then just taking a step back, I mean, when we think about the broader growth rate through 2030, just to be clear, when you guys say bias to the upper end, that's with the plan as it stands here today? Or would that need to require some additional capital to push you to the upper end? Or I just want to clarify that? Or would that be then to the points made earlier, upside to the plan overall?

That 6% to 8% through 2030 is our plan that we've laid out here today. And we say we have a bias to the upper end in each year, again, in that plan due to the 45Z tax credits and the flexibility that they provide. Joi talked about the additional opportunities we have with additional data centers that would drive some additional upside to that plan.

I just wanted to pick right up on that last question, Dave. So in 2030, when the 45Zs go away, what is it that pushes you to the high end? Or is there like some way you can continue to book those a year beyond the expiration? Or just a little more color on that would be helpful.

Yes. We see flexibility with these 45Zs. This year, we've found ways to bring some expenses forward to support future years. The positive impact from 2029 is also aiding us in 2030, positioning us well to reach the higher end when we move forward.

Okay. That's really helpful. And then another one for you, Dave. I think in the past, you may have all pointed to more of like a 15% to 16% FFO to debt range and looks like now just 15%. Any color on what's going on there?

Well, I'll just say, Mike, we have got great growth opportunity in our utility as we're doing this work that Joi described for reliability and cleaner generation also at the data center. So we're comfortable targeting this 15% range continues to give us the right cushion over the thresholds that we think. And it puts us in a really good place, remain committed to having a good balance sheet. And we're working with the rating agencies to ensure they fully understand our financing plan, really our strong cash flows, too, and they'll be comfortable with it going forward.

Okay. And one last quick one. Just the $2.5 billion for CCGT investment, I think you're building a 1.5-gigawatt plant. Is that the full amount? Or are you not capturing the full investment in the 5-year and the plant itself could cost a little more than that? Because that just seems a little on the lower end, I would have thought of what a combined cycle would cost.

Yes. It trails into '31, so beyond the 5 years.

Dave, a question for you first. You mentioned that at gas, you're unwinding some cost-cutting efforts from the past few years. I know that as a company, you're masterful about being nimble with O&M expenses, but I thought that was typically more short term, like within a year, maybe 2. So I'm a little surprised to hear you talk about it over a multiyear period. Can you discuss some examples of what might be included in there? What type of actions you're referring to? And then as we look to '26 and beyond, how should we think about the O&M outlook for the gas business?

Yes. We have allowed some of the maintenance backlogs to accumulate, and we are addressing a lot of that this year. This is just one example of the typical activities we engage in at the gas company. We were ahead of our plan before the warmer weather, which gave us opportunities to ease our maintenance efforts, specifically regarding non-emergent maintenance backlog. This year, we are working to get back on track and return to our normal maintenance run rate and other expenses.

And Andrew, I'll say like on our ability to be nimble, like we had a couple of years of warmer weather at gas. And so that did extend over a couple of years, but it still shows that we're able to balance things across our business to make sure we do everything to hit the numbers.

Okay. Great. And that is part of the outlook?

Yes, the operations and maintenance for gas is a normal run rate that we would typically expect. As usual, we incorporate some flexibility to adjust if necessary or to invest if we experience colder than normal temperatures.

Okay. I understand. Joi, in your remarks, you mentioned that the 1.4 gigawatts of new data center load could provide significant affordability benefits to current customers. However, you also mentioned the need to protect them. Can you clarify whether you expect the new data centers and this particular agreement to keep residential customer rates or monthly bills stable, or even reduce them? Also, how will this affect the flow through? Will it be handled through rate cases or the industrial tariff? How will this work for existing customers?

Yes. This is great for existing customers because we don't have to build anything substantial to support the load. We're using our excess capacity to support the load and building batteries on top of it just for peak shaving purposes. And the customers get that full benefit. So it will show up in the form of a lower ask over our next rate case cycle. So customers will get that flow through in that form. In terms of the protections, the contract terms protect our customers from stranded assets or rate shock over a period of time when we're serving the customers, the data center customers that is.

Thank you very much and congrats.

Thank you.

Hope all is well. I just wanted to follow up 2 quick cleanups. One to Mike's question earlier on the FFO to debt, Dave. As Vantage becomes a smaller and smaller portion of the company's earnings mix, any conversation with the agencies of an improved or a lower downgrade threshold?

We are in constant communication with the rating agencies. I think at this moment, given our numerous utility-like projects at Vantage, it's uncertain if this will result in lower thresholds. However, we will continue those discussions as we move further in that direction.

And the current threshold is 14% or 15%?

It's down around 14%. It varies based on how the rating agency measures it relative to our performance, but it's more in the range of 13% to 14%.

Great. And then one of the earlier questions, I think Bill was asking on the IRM mechanism. You highlighted, I think, staff is $1.2 billion. I guess just is the cadence of spend, if you could just talk about that? And then also, the company previously or historically would file maybe an electric case every maybe 12 to 24 months. Does that stretch out the filings, the frequency of the filings?

Yes, the IRM is set at $1 billion starting in 2027. We have an existing IRM that will begin to ramp up in 2027 and will increase to $1 billion over three years. We've structured this so that we can start to see that investment grow and make adjustments based on performance. In our next filing, we plan to update it and potentially increase the amount further. Regarding whether this will prevent us from entering rate cases, as it currently stands, it may allow us to delay a rate case by about six to eight months. As the investment continues to grow, that delay will extend further.

Great. Joi, such an improvement versus Jerry. Great move.

Thanks, Anthony.

I guess my first question is regarding the junior subordinated debt you mentioned. Is that intended as a replacement for or in addition to the planned annual equity issuance?

Yes. We do expect to have some junior sub that comes within our plan. We're going to look at that strategically, but that would be additional to the equity that is laid out. What we've laid out is what we would need to do for true equity issuances of $500 million to $600 million.

Great. And then on the CCGT, what is the cost per kW that we should assume for the CCGT?

Well, we're seeing ranges. So right now, it's roughly $2,500, and we're still updating our estimates. We'll know for certain once we get the finalization of our RFPs and see what is coming out. We've got the IRPs for our power island, but there's still some additional work. But that's our initial estimate at this point.

Great. Regarding turbine availability, if you secure the 3 gigawatts that you're in advanced stage negotiation for, what time frame do you anticipate for acquiring the turbines?

Yes. Well, we're actually in the queue for our turbines that we want to bring on to replace Monroe only. And that CCGT we have in the plan, it only supports the retirement of Monroe and has nothing to do with data centers. If we want to bring on another CCGT to support data centers, we're still seeing a 3- to 4-year time line for at least 1 gigawatt and above. There is some flexibility we're seeing for smaller turbines. It just depends on how big of a data center load we're trying to serve and when the ramp kind of gets to the top end. So we'll flesh all of this out in next year's IRP and again, pick the right resource mix to support the load.

So I guess, just theoretically, if some of the 3 gigawatts were to be finalized, if their need were sort of before that 3- to 4-year time line, you would serve that load potentially through purchase power? Or how would that work?

Yes. The way that we're going to address these contracts is really get a sense of how quickly they want to ramp and then use the IRP modeling to tell us what is the optimal resource mix to support that load. It could be a combination of renewables and battery storage, similar to what we're doing with the deal that we have on the table, or it could require a CCGT. Still too early to say. All of that will get fleshed out as we finalize the negotiations and incorporate it into the IRP next year.

Great. And then last question for me. You're looking at potentially higher trading contributions in '25. Can you give us a sense of how much? And will next year's trading contribution be sort of back at the 50 to 60 level that it was this year?

Right, Paul, Trading is having a really good year. We're seeing these strong margins. We talked about both gas and physical power portfolio, again, structured and hedged. Right now, our year-to-date is above the range, and that's given us some flexibility across our business. We don't plan for earnings to continue at that pace. We put in the $50 million to $60 million, as you mentioned. However, because some of these contracts are longer term, we do see some favorability that could come into '26, but we don't forecast that long term. We forecast around the 50 to 60 still.

So lots of questions ahead of me. But can you give me a sense of the 1.5 gig or the current data center contract that you just finalized 1.4 and then the additional contracts in the works. I mean, how do they compare versus the load that you currently serve? Yes, like a percentage-wise, how big of an impact is it?

Yes. So the 1.4 increases our load by 25%. So that should give you a sense of what an additional gigawatt could equate to if we were able to bring it on.

Yes, that puts it in perspective. Regarding Vantage, I understand you're redirecting investments towards a higher multiple business, which makes sense. However, it's surprising to see fewer growth opportunities for Vantage, especially considering the apparent surge in behind-the-meter generation, like cogen being such a hot investment right now. Omni's appeal comes from being behind the meter and its role in power generation. You did mention some pressures related to commodity prices, but I'm surprised to see a lower growth rate projected for that business.

Yes, Angie, we are going to keep working on the BD pipeline. The first deal we are trying to secure will help us determine if this is a vertical we can further pursue. This is outside of Michigan, and we are increasingly hearing that data center providers are interested in the behind-the-meter option. So, as you mentioned, we will continue to focus on this and ensure we have the capability to execute. We have finalized a design that provides redundancy, which we believe will make us an attractive option for data centers looking for this type of solution.

Okay. And Dave, could you comment on growth expectations for your dividend in this new higher CapEx environment?

Yes, Andrew, we're going to continue to revisit the dividend growth. We said in our prepared remarks, we're going to grow them with our operating EPS. And right now, we're in a payout ratio that's right in the midpoint of our peers. But we're going to continue to look at that and make sure that it supports both growth and what our investors prefer here.

Very good. Congrats, thank you.

Thank you.

Just want to confirm the cash flow and earnings mix here over the next couple of years. So do you hear it correctly, the ramp comes for this data center, the ramp comes next year. And then there's really no incremental capital that you would fund because they're funding the storage, right? So cash flow and earnings should be pretty close at least over the next 1 to 2 years as this data center contract ramps up. Is that correct?

Well, we're investing in the storage to fund the storage assets. And then we'll be getting the cash flows from the ramp, which does ramp up really quick. But we will be investing in those storage assets. And that's why one of the reasons why we're pulling some of our capital forward and needing some of this additional equity.

Okay. Okay. And that would be over a short period of time though, right?

Yes, short periods, a few years time.

And what size is the storage? Investment? Not dollars, but how many gigawatts or megawatts?

We're planning on a gigawatt of storage and will utilize tolling agreements. In alignment with our IRP settlements, we'll construct two-thirds of what's needed and use tolling agreements for the remaining one-third, which will qualify for the FCM.

Thank you, everyone, for joining us today. I want to emphasize that DTE is having a strong year in 2025, and we are well positioned for 2026. I am excited about our long-term plan and the opportunities that lie ahead. I look forward to seeing many of you at EEI in just over a couple of weeks. Thank you all for being here today. Have a great morning, stay safe, and be healthy.