DTE Energy's capital expenditure plan is increased, but the fourth-quarter profits are lower due to lower rates

DTE Energy increased its five-year plan for capital expenditures by $5 billion, on Thursday. The utility had posted a decline in the fourth quarter profit due to lower electricity prices.

U.S. utilities are increasing their capital expenditure plans in order to upgrade the electric grid and lines to meet the needs of power-hungry industries.

DTE announced that it will spend $30 billion in its five-year plan to improve grid stability and transition to cleaner energy. DTE said that the plan could also support incremental data center investments.

Joi Harris, DTE's President and Chief Operating Officer (COO), said: "We continue working with a variety of hyperscalers to explore opportunities in our service area."

The utility has signed nonbinding agreements to bring approximately 2,100 megawatts worth of new potential load onto its grid over the next few years.

The company's shares were up by 2% to $126.68.

Its net income, however, fell to $292 millions in the fourth quarter, from $419million a year ago, due to a 20% drop in operating earnings in its electric segment.

Regulations regulate utilities to establish the price that customers will pay for natural gas and electricity. DTE filed a rate case in order to reduce the cost of electricity production.

After the rate case was implemented in November, the utility saved approximately $300 million on fuel and transportation costs. It also reduced residential electricity rates by about $5 per month.

DTE's operating earnings are expected to range from $7.09 per share to $7.23, which is lower than the analysts' estimates of $7.20. This data was compiled by LSEG. (Reporting from Vallari Srivastava in Bengaluru and Pooja menon; editing by Krishna Chandra Eluri.)

(source: Reuters)