Jerry Norcia
Chairman, President & Chief Executive Officer at DTE Energy
Thanks, Barbara, and good morning everyone and thanks for joining us. This morning I'll discuss the achievements we have made so far this year, provide an update on our plans to achieve our 2023 targets and give an overview on robust opportunities in our long-term plan. Dave will provide a financial update and wrap things up before we take your questions.
Let me start on Slide 4 to discuss the storms we experienced in the first quarter, starting with the worst ice storm in nearly 50 years, which was immediately followed by a major snowstorm. We understand the impact to customers during power outages and our team worked around-the-clock to get the power back on safely. I want to express my appreciation to all of our DTE employees for their tireless efforts, along with our labor and community partners and the many others who supported our restoration efforts. It was all-hands-on deck at DTE for these two large storms.
We had our frontline working through dangerous ice and snowstorm conditions, restoring power and conducting damage assessments. We also had our office staff in the field, ensuring public safety from downed wires. Our gas team was going door-to-door checking on thousands of seniors and vulnerable customers to make sure they were okay. Our call-center agents worked tirelessly to provide customers the latest information and escalate emergency matters.
I'm really proud and grateful for how our teams showed up for our customers by keeping each other and our communities safe. Our Foundation also showed up in a big way by contributing $3 million to replenish food pantries and reaching out through United Way to provide low-income customers with food vouchers at local grocery stores. We remain committed to supporting and delivering for all of our stakeholders, including employees, customers, communities and shareholders.
I always say that employee engagement drives our success and is the secret sauce at DTE. And our team continues to operate at top-decile engagement levels as measured by the Gallup organization. I am excited to say we were recently recognized for this top engagement by earning the Gallup Great Workplace Award for the 11th consecutive year. In our effort to continue supporting our communities, we partnered with one of the country's largest African-American and woman-owned energy efficiency companies to launch the Energy Efficiency Academy. The Academy provides training and placement for good paying jobs, building a pipeline of talent that will help make our customers' homes more energy-efficient.
And on the investor front we are executing on our plan to achieve our 2023 guidance and our long-term financial growth. As you know, we are facing additional headwinds with the warm weather and the severe storms I mentioned. The team has made excellent progress on the cost management work and we continue to find savings with our continuous improvement efforts and one-time initiatives across our portfolio of businesses. We are well positioned to continue to deliver the strong performance and premium growth that DTE is known for, with long-term operating EPS growth of 6% to 8%.
Let's turn to Slide 5 and discuss the extreme weather events that continue to increase in frequency. As you are aware, Michigan's weather has dramatically changed in recent years with storms that were once considered historic seemingly becoming the new normal. Earlier this year we experienced the most challenging two-week storm period we have ever faced as a company. The first storm that rolled through was the largest ice storm in our area in 50 years. It was followed by a heavy wet snow event the following week.
As I mentioned, the ice storm was a very significant event. And having 80% to 90% or the vast majority of our system hold-up extremely well through the storm is really attributed to the investments we have made in a grid so far. We've invested $5.5 billion over the last five years to rebuild poles, wires, transformers and substations. We have also invested over $800 million in tree trimming over the last five years and we see great results from these investments.
It is important that we continue to implement our learnings from these storms and we are implementing a plan that will be bolder in our approach to reducing the impact of these more intense weather events. We need to provide safe, reliable, affordable energy. Our customers expect this from us and we have the same expectation. And this can only be achieved through infrastructure investments. We agree with all of our stakeholders that we must work together to do more and we must do it faster.
Having a resilient grid is critical to providing safe and reliable electricity, as well as enabling transportation electrification and achieving statewide decarbonization, as well as promoting economic development. We have been ramping up our strategic investments to prepare the system for the challenges and opportunities ahead. We know that the investments are having a positive impact and we are looking at ways to accelerate our efforts, while maintaining customer affordability.
In communities where DTE completed, some of our most focused work on the grid's more challenged infrastructure, customers experienced up to a 70% improvement in reliability. Significant long-term investment is needed to prepare our infrastructure for extreme weather and for increased demand from electrification and economic development. Our focus is to continue to make strategic investments in our grid.
Let's turn to Slide 6 to discuss some of these opportunities. We have invested heavily in our electric grid over the years, focusing on hardening infrastructure, replacing aging equipment and completely rebuilding parts of the grid that originated back in the early 1900s. You can see from the data that in areas where we make these investments we see reliability improvements. But to see the type of dramatic improvement we all want across our entire system, we must do more.
We will invest $9 billion in the grid over the next five years to further harden the system through a focused strategy. First, we'll continue to invest in enhanced tree trimming. We know that the majority of customer outages are due to trees contacting wires. We also know that areas where trees are trimmed performed significantly better than those not trimmed. Second, we will continue preventative maintenance and hardening on the existing infrastructure and continue updating the electric grid, specifically poles, wires and other equipment that makes the system more reliable and more resilient.
Third, we will accelerate the complete rebuild of the other sections of our infrastructure. In some instances, it will make sense to pursue the undergrounding of our distribution system. In our most recent rate case, we requested two undergrounding pilots. Since the early 1970s, new construction has been developed with underground wires. With a third of our system now underground, there is a significant opportunity to continue this important work on our electrical system and drive down the cost of undergrounding.
Lastly, we will accelerate our work to achieve the full automation of the electric grid, which will fundamentally reduce the duration of outages. Our distribution plan filed with the MPSC in 2021 envision this happening on the same timeline as the grid rebuilt, but the automation work must be accelerated to improve the performance of the grid for our customers in the near term. With our recent investments in the advanced distribution management system and our new system operation center being complete, we can now bring smart grid technologies into the field, which will enable us to more quickly and efficiently isolated outages on a circuit so the impact of an outage can be minimized.
Our goal is to fully automate the grid within five to six years. Increasing investment in our system is something we have done consistently over the years. We know how important these investments are to provide clean and reliable power to our customers and we will continue to evaluate opportunities to accelerate investments while maintaining affordability.
Now let's turn to slide 7. We are making great progress at each of our business units this year. At DTE Electric, the IRP and rate case proceedings continue to progress. We began settlement discussions on the IRP, which are very constructive and we continue with the audit and discovery process in the rate case. We recently announced the Meridian Wind Park is now operational. This is Michigan's largest wind park, spanning three townships. The 225-megawatt wind park has 77 wind turbines and generates enough clean energy to power more than 70,000 homes.
DTE Electric continued its progress on the highly successful voluntary renewables program, with the recent addition of a 20-year contract with Toyota. We are seeing some promising ongoing economic development in the state, which will continue to drive growth in our service territory. Henry Ford Health System is planning a $2.5 billion investment in Detroit for a hospital expansion, research facility and neighborhood redevelopment in Detroit's new center area. The University of Michigan and the Ilitch organization announced a commitment for a $1.5 billion investment for an innovation campus that will bring research and innovation firms together. These developments will take place across downtown Detroit, including a development adjacent to our headquarters.
We also expect to see a meaningful pick up in the potential domestic manufacturing within critical supply-chain areas, including solar manufacturing and battery storage in order to comply with and benefit from domestic content requirements under the IRA. Such energy-intensive manufacturing businesses should translate into higher load growth in our service territory. A recent example of this is our Next Energy EV battery maker that is located in our service territory. And GM is investing $4 billion to convert its Orion township assembly plant to produce full-size electric pickup trucks. These developments will directly support our ability to deploy more capital while mitigating customer rate impacts, by bringing a potential increase of 50 megawatts of new demand on our system.
More broadly, this is also a positive for our Vantage business which has expertise in providing customized energy solutions for commercial and industrial customers. We are seeing increased activity and potential in this business line.
Moving to DTE Gas, we completed over 70 miles of main renewal with a target of completing over 200 miles by the end of the year with continued progress on accelerating the modernization of the gas transmission system. Another major accomplishment for our gas company is the completion of the final phase of a major transmission renewable project in Northern Michigan. This project included the installation of new pipe and facilities modification work to provide supply redundancy for a growing market. DTE Vantage, with a new RNG project and a custom energy solutions project in-service, and we continue to progress on our growth plan, driven by a strong development pipeline in both RNG conversions and large custom energy solutions projects.
With that, I'll turn it over to Dave to give you a financial update. Dave, over to you.
