AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 3/6 · 18/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · The operating distribution network and 2.3 million electric customers provide strong evidence of an established infrastructure advantage. Efficient scale is inferred from the network's extent; exclusive rights and comparative costs are not disclosed.
durability · 2/4 · Installed infrastructure and authorized recovery mechanisms support persistence, but actual cost disallowance and substantial future funding needs make protection conditional. Planned spending does not establish future investment recovery.
customer dependency · 2/4 · The large connected electric customer base and repeat gas demand support dependency indirectly. Gas sales were unchanged at 71 Bcf and end-user transportation increased, but switching friction and durable customer captivity are not quantified; retail supplier access exists.
erosion resilience · 2/4 · Cost recovery and reported reliability improvements offer protection, while the realized MPSC disallowance demonstrates leakage. Weather contributed to reliability improvement, and recovery delays create liquidity exposure.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Gas revenue included $47 million of cost recovery and $10 million from the infrastructure recovery mechanism, demonstrating realized recovery rather than unrestricted pricing power. Steel revenue benefited from combined demand and prices, whose separate contributions are unavailable. The requested gas base-rate increase is not an achieved increase.
retention · 2/4 · Repeat utility demand is supported indirectly by stable gas sales and higher end-user transportation volumes, alongside the established electric customer base. These are operating indicators, not measured retention rates, and total gas throughput declined.
margin resilience · 2/4 · Gas operating income increased from $298 million to $306 million despite higher gas costs, supported by recovery mechanisms. Protection is incomplete: power costs were disallowed, and non-utility results suffered litigation penalties and trading volatility. These outcomes do not establish moat from margins alone.
contractual freedom · 1/4 · The MPSC controls utility rates, recovery and service conditions. A formal request for higher gas rates demonstrates constrained pricing discretion. Cost recovery authority provides economic protection but does not confer unilateral freedom to set terms.
Predictability—
Missing exact annual revenue, free cash flow or FCF margin; operating cash flow and capex must both be reported for all five years.
Financial strength—
Missing required inputs: debtFcfGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- netDebtEbitGrade
- 0.00
- interestCoverageGrade
- 11.35
- currentRatioGrade
- 4.31
- Net debt / operating income (x)
- 10.87
- Interest coverage (x)
- 2.25
- Current ratio (x)
- 0.80
Capital allocation—
Missing required inputs: sbcRevenue, cashConversionGrade. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 6.70
- 3-year average dilution (%)
- 2.04
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Actual cash generation and infrastructure delivery support a mixed assessment. First-quarter operating cash of $906 million was below $1.314 billion of investing outflows, financing supplied $436 million, and long-term debt rose. Large planned commitments and realized cost disallowance limit confidence in investment recovery; this does not establish waste or superior capital returns.
incentive alignment · 3/4 · Actual 2025 performance-based CEO compensation, reported operating incentive results, director ownership compliance and an implemented clawback support strong alignment evidence. The assessment does not assume future awards vest or that all executives meet ownership requirements.
execution · 2/4 · Reported outage-time reductions, pipeline replacement and measured operating results demonstrate execution beyond aspirations. Weather assisted outage improvement, while the additional $112 million EES Coke litigation penalties and utility cost disallowance are realized adverse outcomes. The combined record is mixed.
governance · 3/4 · Independent committees, actual independent director executive sessions, implemented proxy access and a clawback provide strong evidence of governance practices. These mechanisms do not prove exceptional oversight effectiveness or eliminate the significance of adverse operating outcomes.
Evidence
DTE Electric owns and operates 702 distribution substations with a capacity of approximately 37,870,000 kilovolt-amperes (kVA) and approximately 456,900 line transformers with a capacity of approximately 33,770,000 kVA.
Business and Properties: distribution substations and transformers · Filed 17/02/2026
9 Table of Contents Circuit miles of electric distribution lines owned and in service as of December 31, 2025 are shown in the following table: Circuit Miles Operating Voltage-Kilovolts (kV) Overhead Underground 4.8 kV to 13.2 kV 28,555 13,650 24 kV 151 730 40 kV 2,423 416 120 kV 61 8 31,190 14,804 There are numerous interconnections that allow the interchange of electricity between DTE Electric and electricity providers external to the DTE Electric service area.
Business and Properties: distribution circuit miles · Filed 17/02/2026
Electric segment consists principally of DTE Electric, which is engaged in the generation, purchase, distribution, and sale of electricity to approximately 2.3 million residential, commercial, and industrial customers in southeastern Michigan.
Segment information: electric operations and customer count · Filed 30/04/2026
The MPSC issues orders pertaining to rates, recovery of certain costs, including the costs of generating facilities and regulatory assets, conditions of service, accounting, and operating-related matters.
Regulation: MPSC authority over rates and cost recovery · Filed 17/02/2026
Nuclear Regulatory Commission PSCR A Power Supply Cost Recovery mechanism authorized by the MPSC that allows DTE Electric to recover through rates its fuel, fuel-related, and purchased power costs PTCs Production tax credits RDM A Revenue Decoupling Mechanism authorized by the MPSC for DTE Gas that is designed to minimize the impact on revenues of changes in average customer usage REC Renewable Energy Credit REF Reduced Emissions Fuel Registrants DTE Energy and DTE Electric Retail access Michigan legislation provided customers the option of access to alternative suppliers for electricity and natural gas RPS Renewable Portfolio Standard program, which includes a mechanism authorized by the MPSC allowing DTE Electric to recover through rates its renewable energy costs RTO Regional Transmission Organization SEC Securities and Exchange Commission SO2 Sulfur Dioxide SOFR Secured Overnight Financing Rate TCJA Tax Cuts and Jobs Act of 2017, which reduced the corporate Federal income tax rate from 35% to 21% Topic 606 FASB issued ASU No.
Definitions: electricity cost recovery, gas revenue decoupling and retail access · Filed 17/02/2026
Environmental Protection Agency EWR Energy Waste Reduction program, which includes a mechanism authorized by the MPSC allowing DTE Electric and DTE Gas to recover through rates certain costs relating to energy waste reduction FASB Financial Accounting Standards Board FERC Federal Energy Regulatory Commission FGD Flue Gas Desulfurization FOV Finding of Violation FTRs Financial Transmission Rights are financial instruments that entitle the holder to receive payments related to costs incurred for congestion on the transmission grid GCR A Gas Cost Recovery mechanism authorized by the MPSC that allows DTE Gas to recover through rates its natural gas costs GHGs Greenhouse gases Interconnection sales Sales of power by DTE Electric into the energy market through MISO, generally resulting from excess generation compared to customer demand ITCs Investment tax credits MGP Manufactured Gas Plant 1 Table of Contents DEFINITIONS MISO Midcontinent Independent System Operator, Inc.
Definitions: gas cost recovery and energy waste reduction recovery · Filed 30/04/2026
Operating earnings can be reconciled to our reported earnings as set forth in the following table: 2025 Reported Earnings per Share $ 7.03 MPSC disallowance of power supply costs previously recorded 0.16 Revision in asset retirement obligations 0.22 Estimated litigation outcome regarding EES Coke Battery 0.03 Certain mark-to-market transactions (0.05) Gain on sale of equity investment (0.12) Income tax related adjustments 0.09 Operating Earnings per Share $ 7.36 Items for Shareholder Vote at this Meeting At the 2026 Annual Meeting shareholders will vote on the following proposals: PROPOSAL 1 | Elect thirteen members of the Board of Directors for one year terms ending in 2027; PROPOSAL 2 | Ratify the appointment of PricewaterhouseCoopers LLP as our independent auditors; PROPOSAL 3 | Provide a nonbinding vote to approve the Company’s executive compensation; Shareholders may vote on any other matter that properly comes before the meeting.
Performance highlights: reported earnings reconciliation and MPSC cost disallowance · Filed 12/03/2026
DTE Electric's capital investments over the 2026-2030 period are estimated at $30 billion, comprised of $11 billion for distribution infrastructure, $4 billion for base infrastructure, and $15 billion for cleaner generation including renewables.
Capital Investments: estimated 2026–2030 electric investment · Filed 30/04/2026
The Registrants are exposed to short-term cash flow or liquidity risk as a result of the time differential between actual cash settlements and regulatory rate recovery.
Market risk: timing difference between cash settlements and regulatory recovery · Filed 30/04/2026
The segment competes with electric and gas marketers, financial institutions, traders, utilities, and other energy providers.
Strategy and Competition: Energy Trading competitor categories · Filed 17/02/2026
Competitors with greater access to capital, or at a lower cost, may have a competitive advantage.
Strategy and Competition: potential competitor capital advantage · Filed 17/02/2026
Gas results and outlook are discussed below: Three Months Ended March 31, 2026 2025 (In millions) Operating Revenues — Utility operations $ 932 $ 876 Operating Expenses Cost of gas — utility 378 331 Operation and maintenance 152 156 Depreciation and amortization 58 54 Taxes other than income 38 37 626 578 Operating Income 306 298 Other (Income) and Deductions 33 29 Income Tax Expense 63 63 Net Income Attributable to DTE Energy Company $ 210 $ 206 58 Table of Contents Operating Revenues — Utility operations increased $56 million in the three months ended March 31, 2026.
Gas results: revenue, expenses and operating income comparisons · Filed 30/04/2026
Revenues associated with certain mechanisms and surcharges, including recovery of the cost of gas, are offset by related expenses elsewhere in DTE Energy's Consolidated Statements of Operations.
Gas results: recovery revenues offset by related expenses · Filed 30/04/2026
The increase was due to the following: Three Months (In millions) Gas Cost Recovery $ 47 Midstream storage and transportation revenues 11 Infrastructure recovery mechanism 10 Weather 6 Regulatory mechanism — EWR (6) Normalized base sales (10) Other (2) $ 56 Revenue results are impacted by changes in sales volumes, which are summarized in the table below: Three Months Ended March 31, 2026 2025 (In Bcf) Gas Markets Gas sales 71 71 End-user transportation 52 48 123 119 Intermediate transportation 152 164 Total 275 283 Cost of gas — utility expense increased $47 million in the three months ended March 31, 2026.
Gas results: revenue drivers and comparative sales volumes · Filed 30/04/2026
DTE Gas filed a rate case with the MPSC on November 13, 2025 requesting a net increase in base rates of $163 million based on a projected twelve-month period ending September 30, 2027, and an increase in return on equity from 9.8% to 10.25%.
Gas outlook: requested base-rate increase and return on equity · Filed 30/04/2026
The increase was due to the following: Three Months (In millions) Higher demand and prices in the Steel business $ 42 New project in the On-site business 3 Lower sales in the Renewables business (8) Other 2 $ 39 Fuel, purchased power, and gas — non-utility expense increased $34 million in the three months ended March 31, 2026.
DTE Vantage results: demand and price contribution to revenue · Filed 30/04/2026
The increase was primarily due to additional litigation penalties in the Steel business relating to the EES Coke judgment of $112 million and higher costs in the Renewables business of $5 million.
DTE Vantage results: additional EES Coke litigation penalties · Filed 30/04/2026
Three Months Ended March 31, 2026 2025 (In millions) Cash, Cash Equivalents, and Restricted Cash at Beginning of Period $ 250 $ 88 Net cash from operating activities 906 1,020 Net cash used for investing activities (1,314) (968) Net cash from (used for) financing activities 436 (50) Net Increase in Cash, Cash Equivalents, and Restricted Cash 28 2 Cash, Cash Equivalents, and Restricted Cash at End of Period $ 278 $ 90 Cash from Operating Activities A majority of DTE Energy's operating cash flows are provided by the electric and natural gas utilities, which are significantly influenced by factors such as weather, electric retail access, regulatory deferrals, regulatory outcomes, economic conditions, changes in working capital, and operating costs.
Cash flows: operating, investing and financing cash movements · Filed 30/04/2026
33 Table of Contents DTE Energy Company — DTE Electric Company Combined Notes to Consolidated Financial Statements (Unaudited) — (Continued) Fair Value of Financial Instruments The following table presents the carrying amount and fair value of financial instruments for DTE Energy: March 31, 2026 December 31, 2025 Carrying Fair Value Carrying Fair Value Amount Level 1 Level 2 Level 3 Amount Level 1 Level 2 Level 3 (In millions) Notes receivable(a), excluding lessor finance leases $ 1,513 $ — $ — $ 1,500 $ 1,453 $ — $ — $ 1,482 Short-term borrowings $ — $ — $ — $ — $ 882 $ — $ 882 $ — Notes payable(b) $ 22 $ — $ — $ 22 $ 28 $ — $ — $ 28 Long-term debt(c) $ 26,695 $ 1,234 $ 22,634 $ 1,225 $ 25,123 $ 1,285 $ 21,204 $ 1,351 _______________________________________ (a)Current portion included in Current Assets — Other on DTE Energy's Consolidated Statements of Financial Position.
Financial instruments: debt balances at March 31, 2026 and December 31, 2025 · Filed 30/04/2026
These enhancements, combined with strategic planning, process improvements and less extreme weather, enabled us to restore power faster than ever before during storms, reducing outage time by 67% from 2024 and 90% from 2023.
Shareholder letter: outage-time improvement and weather contribution · Filed 12/03/2026
The team replaced more than 180 miles of aging pipelines and achieved the fastest leak response time in our company’s history.
Shareholder letter: pipeline replacement and leak response · Filed 12/03/2026
Paul: Measures Weight Threshold Target Maximum Result Payout Weighted Average Payout Financial Performance: DTE Electric Operating Earnings 15% $1,192 $1,212 $1,232 $1,217 125.0 % 18.75 % DTE Electric Cash from Operations ($millions) 15% $2,564 $2,849 $3,134 $2,843 98.4 % 14.76 % DTE Energy Adjusted Operating Earnings Per Share 10% $7.09 $7.16 $7.23 $7.36 200.0 % 20.00 % Customer Satisfaction: Net Promoter Score (NPS) 15% 31 34 37 35 133.3 % 20.00 % Safety & Engagement: DTE Electric OSHA Recordable Incident Rate 5% 0.71 0.57 0.48 0.54 133.3 % 6.67 % DTE Energy High Energy Serious Injury or Fatality 5% 3 2 0 0 200.0 % 10.00 % DTE Electric Employee Engagement– Gallup 5% 4.17 4.27 4.42 4.35 153.3 % 7.67 % Utility Operating Excellence Index: Storm Customers Restored in 48 Hours 10% 90 % 95 % 99 % 99 % 200.0 % 20.00 % CEMI4 % of Customers 10% 11.0 % 8.5 % 6.0 % 6.98 % 160.8 % 16.08 % Generation Availability 5% 82.7 % 84.7 % 86.7 % 85.0 % 115.0 % 5.75 % Nuclear On-Line Reliability Loss Factor (ORLF) 5% 1.4 % 0.9 % 0.5 % 0.12 % 200.0 % 10.00 % Total 100% 149.68 % The measures in the above table are defined below: DTE Electric Operating Earnings: DTE Electric operating earnings.
Executive compensation: 2025 operating measures, results and incentive payouts · Filed 12/03/2026
As of December 31, 2025, all directors met the initial common stock ownership requirement and all those directors who have served as a director for at least five years after their initial election fulfilled the five-year requirement.
Director compensation: actual stock ownership requirement compliance · Filed 12/03/2026
For 2025, 69% of our President and Chief Executive Officer’s compensation was performance-based or “variable, at-risk”—none of which is reflected in the rates of our customers.
Executive compensation: actual 2025 CEO performance-based compensation mix · Filed 12/03/2026
The Board has implemented a “clawback” policy enabling the Company to recover incentive-based compensation awarded to current or former executives.
Executive compensation: implemented clawback policy · Filed 12/03/2026
■All Board committees are composed exclusively of independent directors.
Corporate governance: independent committee composition · Filed 12/03/2026
■Independent directors met in executive sessions chaired by the Lead Independent Director at seven of the eight 2025 Board meetings.
Corporate governance: independent director executive sessions during 2025 · Filed 12/03/2026
■We have implemented a proxy access provision, which makes it possible for a group of shareholders meeting certain criteria to nominate and include in the Company’s proxy materials a candidate for the Board.
Corporate governance: implemented proxy access · Filed 12/03/2026
61 Table of Contents Operating Income (Loss) changed $189 million for the three months ended March 31, 2026, which includes a $74 million unfavorable change in timing related gains and losses primarily related to gas strategies that will reverse in future periods as the underlying contracts settle.
Energy Trading results: operating income change and timing-related losses · Filed 30/04/2026
Three Months Ended March 31, 2026 2025 (In millions) Net Income (Loss) Attributable to DTE Energy by Segment Electric segment $ 218 $ 123 Gas segment 210 206 DTE Vantage segment (59) 39 Energy Trading segment (78) 67 Corporate and Other (44) 10 Net Income Attributable to DTE Energy Company $ 247 $ 445 ELECTRIC SEGMENT The Results of Operations discussion for DTE Electric is presented in a reduced disclosure format in accordance with General Instruction H(2) of Form 10-Q.
Results of Operations: comparative segment net income · Filed 30/04/2026
