Initiate At Hold: Future DC Load May Already Be Priced In

Research evidence excerpt

Initiate At Hold: Future DC Load May Already Be Priced In

ry storage, and

demand response. Longer term needs will require new dispatchable generation, most likely

natural gas combined-cycle assets with carbon capture, introducing a more capital-intensive

phase of investment. As a result, earnings growth is less a function of secured load and more a

function of the timing of capital deployment as defined through the IRP process.

Incremental Upside Not Yet Monetized

DTE quantifies ~3 GW of incremental load that could drive annual operating EPS growth above

8% from 2027-2030. The 1.0 GW Google contract—filed with the MPSC and expected to fully

ramp by 2028—represents a tangible component of this upside but is not yet reflected in the

current capital plan. While the growth opportunity is increasingly well-defined, its translation

into earnings remains contingent on regulatory approval and capital deployment. We believe

the market has already capitalized a portion of this incremental data center opportunity,

despite limited near-term contribution to earnings. As a result, any additional upside from

here depends less on adding incremental load, and more on accelerating conversion into rate

base. The base capital plan also does not yet include incremental investment associated with

the Google project (~$5B), implying that additional funding will be required once approved.

Management plans to fund growth with roughly 40% equity, supplemented by hybrids,

convertibles, and tax credit optimization, while maintaining credit metrics in the low single-

digit FFO/debt range. While this supports investment-grade ratings, it does introduce ongoing

dilution as a structural component of growth. DTE’s earnings trajectory is increasingly tied