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DTE Expects Michigan Certificate Soon for $1B Gas-Fired Power Plant

DTE Energy Co. said Wednesday it expects an order from the Michigan Public Service Commission (MPSC) on the certificate of necessity filed last year for a $1 billion natural gas-fired power plant it wants to build in St. Clair County.

CEO Gerard Anderson said during a first quarter earnings call management expects a “constructive outcome” when regulators issue the order. Pending regulatory approval, the company expects to break ground next year on the large facility as part of plans to retire three coal-fired power plants in the state by 2023 and add more gas and renewables to its generating portfolio.

The plant, which is planned for East China Township, would be capable of powering 850,000 homes in 2022 when it’s scheduled to begin operations.

“Natural gas-fired plants will be a critical part of our power generation capacity in the decades ahead,” said COO Jerry Norcia. The company plans to eventually generate three-quarters of its electricity with renewable resources and gas-fired plants. Management said, however, that the company doesn’t see the need for another new gas-fired facility until the end of the 2020s.

The company also filed plans with the MPSC during the first quarter to double its renewable energy capacity by the early 2020s. It has proposed an additional 1,000 MW of electricity from wind and solar that would cost about $1.7 billion if approved by state regulators. Both the renewable resources and the new gas-fired facility are part of the company’s plans to reduce carbon emissions by 30% by the early 2020s and by more than 80% by 2050.

DTE serves 2.2 million electricity customers and another 1.3 million natural gas customers in Michigan. Its portfolio also consists of natural gas transmission pipelines, gathering and storage. Anderson said earnings from the gas storage and pipeline business “are running hot.”

The 1.5 Bcf/d Nexus Gas Transmission project, a joint venture of Enbridge Inc. and DTE, remains on track, “with several construction milestones achieved” and an in-service date of 3Q2018 still in sight, Anderson said. Nexus would move Appalachian shale gas to markets in the Midwest and Canada.

DTE also has a stake in Millennium Pipeline Co. LLC, along with TransCanada Corp. and National Grid. Anderson added that Millennium’s Valley Lateral project remains on track to enter service later this year.

New York denied Valley Lateral a water quality certificate last year, which jeopardized the project. The company later challenged that decision successfully before federal regulators, allowing the pipeline to go forward. It would supply a gas-fired power plant in the state. 

DTE reported first quarter earnings of $361 million ($2.00/share), compared to net income of $400 million ($2.23) in the year-ago period. The period’s earnings were primarily driven by the company’s utilities.

The gas storage and pipelines business reported earnings of $62 million for the first quarter, or $17 million more than year-ago earnings. CFO Peter Oleksiak said the pipeline segment’s earnings were driven partly by a lower tax rate and increased gathering and transport volumes, mainly from the company’s Bluestone Gathering system in northeast Pennsylvania.

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