By Amanda Durish Cook
DTE Energy reported 2015 net income of $727 million ($4.05/share), a 20% decline from 2014’s $905 million ($5.10/share). The company’s $80 million net income for the fourth quarter was off 73% from the $299 million reported a year earlier.
However, the company reported that 2015’s operating earnings, which exclude non-recurring items, certain adjustments and discontinued operations, totaled $863 million ($4.82/share), a 5.8% increase over 2014’s $816 million ($4.60/share).
The Detroit company blamed its lower 2015 earnings on non-utility business lines — power and industrial projects, natural gas pipelines, gathering and storage, and energy marketing and trading — where earnings dropped 65.6% to $101 million, due in part to a $22 million loss by the trading unit. Earnings for DTE Electric rose 3% to $542 million for the year.
Operating revenues were $10.3 billion for the year, down from $12.3 billion in 2014. At the same time, DTE trimmed operating expenses to $9.1 billion in 2015 from $10.7 billion a year earlier.
Peter Oleksiak, DTE senior vice president and CFO, said the company forecast a mild winter before the fourth quarter began and went into a “lean mode,” paring down expenses.
During a Feb. 10 conference call, DTE CEO Gerry Anderson said some gas storage and pipeline projects across the industry might be “sub-investment grade.” He said the company will monitor its own investments in gas storage and pipelines but would be open to purchasing other companies’ assets if they were offered. He said that DTE’s industrial segment lagged in 2015 because of a weak steel market, but overall he saw no problems in the balance of the company’s portfolio.
The company paid dividends of $2.84/share for the year, up from $2.69/share in 2014.
Among 2015’s bright spots, Anderson said in a press release, were the company’s completion of more than 100 reliability improvement projects and its success in meeting Michigan’s 2015 target by sourcing 10% of electricity production from renewables.
“DTE made great strides in 2015, both operationally and financially,” Anderson said. “The year brought significant improvements … contributing to the best overall reliability performance in eight years.”
Anderson said DTE would continue to focus on reliability and pledged to invest $6.5 billion in distribution infrastructure over the next 10 years. DTE also said it plans to begin construction this year on what it described as the largest utility-owned solar array east of the Mississippi, a 45-MW project in Michigan’s “thumb” region.
