Calm Weather Eases Profits for DTE Energy in Second-Quarter 2013, but Marcellus Shale Among Bright Spots

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Researched by Industrial Info Resources (Sugar Land, Texas)--DTE Energy Company (NYSE:DTE) (Detroit, Michigan), a diversified energy company that generates most of its power in Michigan, reported overall profit declines for the second quarter of 2013, mostly due to strong revenues in the same period last year that resulted from exceptionally hot weather. Net income was reported to be $105 million, a 28.08% decrease from second-quarter 2012.

Total operating revenues stood at $2.23 million, a 10.53% increase. When compared with record-setting temperatures in second-quarter 2012, residential electric sales declined 7% and commercial electric sales declined 2%. Industrial electric sales increased 4%, but this accounts for the lowest number of gigawatt-hours of the three. Overall sales in DTE's gas utility, however, saw a 23% increase.

DTE executives say that they expect their residential and business customers to pay about $90 million less per year on their monthly bills, following the company's recent filing with the Michigan Public Service Commission for an amended renewable energy plan. Executives say the savings come from efficiency improvements in installed wind turbines.

Industrial Info is tracking more than $12 billion in active projects involving DTE, including $1.2 billion in sulfur-dioxide (SO2) unit retrofits at a coal-fired power station in Monroe, Michigan. The two projects, valued at $600 million each, involve installing wet flue gas desulfurization scrubbers onto coal Babcock & Wilcox (NYSE:BWC) opposed-fired dry bottom boilers, as well as a limestone handling system, vessels, absorbers, dampers, pumps, an injection system, sprayers. they also will include structural and boiler modifications. The retrofits on the 817-megawatt (MW) Unit 1 and the 822-MW Unit 2 are expected to be completed in the third quarter of 2014.

Industrial Info also is tracking the constructing of the 112-MW grassroot Echo Wind Park in Elkton, Michigan. The project involves utilizing 70 General Electric (NYSE:GE) wind turbine generators of 1.6 MW each, plus auxiliary equipment, to provide renewable energy to Michigan's grid. Barton Malow Company (Southfield, Michigan) was selected as the engineering, procurement and construction contractor. The project is expected to be completed in the first quarter of 2014.

"Our growth plans at both utilities are robust, with DTE electric's growth driven by operational investments, mandated environmental controls, and renewable energy," said David Meador, the executive vice president and chief financial officer of DTE, in a conference call. "At DTE gas, growth is driven by infrastructure investments and meter relocation."

DTE executives pointed to $364 million that the company spent on Michigan-based suppliers in the first half of 2013, which was $76 million more than had been budgeted. As part of its commitment to the Pure Michigan Business Connect program, DTE expects $750 million in incremental spending with Michigan-based suppliers by the end of the year.

The company's electric utility expects to see $6.4 billion in capital investment through 2017, while the gas utility expects $1 billion in capital investment in the same period. The gas utility expects to recover $400 million through an infrastructure recovery mechanism.

Meador said in the conference call that DTE's gas storage and pipeline business has three asset platforms: the storage & vector platform, the Marcellus Shale platform, and the emerging Utica platform. "We're on track with our $1 billion to $1.3 billion investment in this segment over the next five years, and it's going to be significantly tied to the developments in the Marcellus platform," he said. "Our work is progressing very well in the Marcellus Shale, and we're optimistic about our growth with the Bluestone pipeline and gathering system, where we see very positive developments."

Capital investment in the Bluestone system recently was increased from $500 million to $650 million.

For more information, visit Industrial Info's North American Power Project Database and North American Industrial Manufacturing Project Database.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.