DTE Energy Stays Upbeat on NEXUS Natural Gas Pipeline Completion

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Researched by Industrial Info Resources (Sugar Land, Texas)--Executives at DTE Energy Company (NYSE:DTE) (Detroit, Michigan) said Thursday they were disappointed that the NEXUS natural gas pipeline was not approved by the U.S. Federal Energy Regulatory Commission (FERC) before a quorum of commissioners was dissolved last week, but remain upbeat that the project will be approved soon. Industrial Info is tracking more than $13 billion in active DTE projects, including the Nexus pipeline, which DTE is developing with Spectra Energy Corporation (NYSE:SE) (Houston, Texas).

DTE executives discussed the company's fourth-quarter earnings results, as well as capital growth plans. Chief Operating Officer Jerry Norcia said that the company planned to make $13.5 billion in capital investments through 2021, which is up 12.5% from the prior five-year period. The company's electric business will receive $8.4 billion, while its Gas and Gas Storage & Pipelines segments will receive between $4 billion and $4.6 billion.

Much of the discussion and many of the questions during the earnings presentation centered on company's NEXUS natural gas pipeline project, which will carry natural gas from the Utica Shale in Ohio to Michigan. The project did not receive the go-ahead from FERC before commissioner Norman Bay resigned, leaving FERC without a quorum to provide regulatory approval. For more information, see February 7, 2017, article - Natural Gas Pipeline Projects Gain Last-Minute Approvals by FERC.

"On the NEXUS pipeline, we achieved a number of important milestones in 2016, including moving forward with a host of engineering and procurement activities and receiving the final environmental impact statement," said Chief Executive Officer Gerard Anderson. "We were disappointed that we didn't receive the final FERC approval for the project last Friday. We really thought that we would, because the project has its staff work complete, and it is ready to go. But what we learned is that the FERC worked through the queue they had sequentially by filing date, and they simply ran out of time on Friday at midnight before addressing NEXUS. ... Once FERC does re-establish a quorum and issues an order on NEXUS, we will move forward with construction. And we have a variety of construction scenarios that get us to a fourth-quarter 2017 in-service, and which scenario we trigger depends on the timing of the order and the construction start date." Anderson said he believed that FERC would appoint a new commissioner sooner rather than later, since this is the first time in the commission's history that it has been without a quorum to approve projects. For more information, see Industrial Info's project reports on the Ohio and Michigan sections of the NEXUS project.

Anderson discussed how legislation that was recently passed in Michigan was affecting the company's future renewable power project activity. "The legislation establishes new renewable energy standards, so there's a requirement of 12.5% by 2019 and 15% by 2021. We are well on our way to satisfying those requirements, as we already generate over 10% from renewable resources, and we added two new projects in 2016, and we have 150-megawatt wind investment approved and ready to go for 2018."

Among the renewable energy projects added in 2016 was the 45-MW Lapeer grassroot solar PV project. The project kicked off construction in the second quarter of last year and is expected to be completed by the end of the first quarter of this year. Inovateus Solar LLC (South Bend, Indiana) is acting as engineering, procurement and construction contractor on the project. The two phases of the project have a combined total investment value of $90 million. For more information, see Industrial Info's project reports on the first and second phases of the project.

The company reported net income of $131 million in fourth-quarter 2016, compared with $80 million in fourth-quarter 2015.

Other major DTE projects being tracked by Industrial Info include the addition of a 1,000-MW combined-cycle unit at the company's Belle River Power Station in China Township, Michigan. The project could begin construction in the first half of 2020 and would take about three years to complete. The project has an estimated total investment value of $850 million. For more information, see Industrial Info's project report.

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