Earnings

DTE Sells Vantage For About $3 Billion And Rebases 2027 Earnings, Betting On Data Centers

CEO Joi Harris calls data-center demand "once-in-a-generation" as DTE lifts its utility plan to about $44 billion.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

— 3 min read
Share
DTE Sells Vantage For About $3 Billion And Rebases 2027 Earnings, Betting On Data Centers

DTE Energy, the Michigan utility owner, is selling its non-utility Vantage business in a roughly $3 billion deal and resetting its 2027 earnings baseline lower, CEO Joi Harris told analysts on the company's Thursday earnings call. In exchange, she promised operating earnings-per-share growth above 9% after 2027, driven by data-center investment.

A lower base, a faster climb

Harris said the 2027 baseline for operating earnings is $7.59 to $7.73 a share, figured as if the sale closes at year-end 2026. The actual close is targeted for the first half of 2027, she said, and the $7.66 midpoint anchors long-term growth. She expects growth well above 9% in 2028 and 2029, and at least 9% in 2030 and 2031.

A Bank of America analyst said the path looked like about 50 cents of upfront dilution against a prior 2027 level near $8.20, and asked whether regulated growth earns a higher multiple than Vantage did. Harris answered, "Yes, you're spot on." She called data centers "once-in-a-generation opportunities" and said DTE becomes a "higher growth premium utility."

Harris said the Google contract had been expected to lift growth to 8%, and the new plan sits above that. She said the new plan crosses above the prior plan in 2029.

A $44 billion utility plan

The five-year utility investment plan now totals about $44 billion, nearly $10 billion more than the prior plan, Harris said. Roughly $39 billion goes to DTE Electric, including about $23 billion for cleaner generation.

Google's roughly $5 billion of renewables and Oracle's roughly $2 billion of battery storage make up about $7 billion of it. The Michigan regulator approved the 1-gigawatt Google contract in October, adding to the 1.4-gigawatt Oracle deal approved last year.

DTE, which runs an electric utility serving about 2.3 million customers in southeastern Michigan and a gas utility serving about 1.4 million, is selling essentially all Vantage assets except EES Coke to investors advised by JPMorgan Asset Management's Global Infrastructure Group. Vantage runs renewable natural gas projects and on-site energy services.

Where the sale proceeds go

CFO Dave Ruud said the sale cuts planned equity by about $1 billion, partly by pushing $500 million of forward-sold equity from 2026 to 2027. About $2 billion of parent-company debt maturing in 2027 will be retired. Ruud put after-tax proceeds at $2.7 billion to $2.8 billion.

Management targets about $1 billion of average annual equity issuance from 2027 through 2031 and a 7% dividend increase in 2027.

Harris said DTE wants at least one more data-center agreement by the end of 2026, from a pipeline of five to six gigawatts, about two gigawatts of it in advanced talks. She said the Oracle and Google load ramps support staying out of electric rate cases through at least 2028. She expects a regulatory order on the current electric rate case in February, with no settlement likely given over 30 intervenors.

The February order on the electric rate case will show whether regulators accept the stay-out plan that the Google and Oracle load is meant to support.

Sources

Read more