Jerry Norcia
Chairman and Chief Executive Officer at DTE Energy
Thanks, Barb, and good morning, everyone, and thanks for joining us. I hope everyone is having a healthy and safe year so far. This morning I'll give you a recap on the accomplishments we achieved in 2023 and provide highlights on how we are well positioned for 2024 and beyond. Dave will provide a financial update and wrap things up before we take your questions.
As you know, 2023 was a challenging year for DTE, as we face significant headwinds from an unprecedented combination of weather and storm activity. I am very proud that our company came together to face these headwinds and execute on our plan that offset the majority of the challenges. We achieved operating earnings per share of $5.73 in 2023. This was a result of overcoming $300 million of the approximately $400 million of headwinds that we faced.
In the appendix, we included a summary of the headwinds and the onetime actions we took in 2023. As I said during the year, the fact that we were able to offset most of the challenges we faced while maintaining service excellence is a clear indication of our highly engaged team and our commitment to operating excellence. I couldn't be prouder of our team's effort in 2023 and our commitment to deliver for all of our stakeholders will continue into 2024 and beyond.
This engagement of our team at DTE was recognized with our 11th consecutive Gallup Great Workplace Award. DTE was also recognized as one of Metro Detroit's Best and Brightest Companies to Work For, as well as one of Time Magazine's Best Companies for Future Leaders. We continue to address our customers' most vital needs by investing heavily in our utilities to rebuild our aging infrastructure, improve reliability and support the transition to cleaner generation.
There have been a number of developments that support our customer-focused investment agenda, including the filing of our distribution grid plan that provides a road map to improve reliability and automation of our system and our integrated resource plan that outlines our investment in Michigan's Cleaner Energy Future, while remaining very focused on customer affordability.
In 2023, we made strides on our reliability improvement goals. I'll go over this in more detail on next slide, but I can tell you that our efforts in this area are working. In circuits where upgrades were completed in the first half of 2023, customers experienced 33% fewer outages during the second half of the year compared to the second half of 2022. Also supporting our investment agenda is the constructive electric rate case order we received in December.
During the first half of this year, we expect to file our next electric rate case, which will underpin the continued investments in system reliability, grid modernization and cleaner generation. We also recently filed a rate case at DTE Gas to support important investments necessary to continue to renew our gas infrastructure, which will minimize leaks and reduce costs. So you can see that we continue to invest heavily in our utilities in 2023.
DTE Electric invested $3.1 billion on continued improvements in reliability and cleaner energy generation for our customers, while DTE Gas invested nearly $750 million on infrastructure and main renewal improvements.
Reinvesting in utility infrastructure to drive reliability improvements far exceeds cash generated from operations, demonstrating our commitment to improving reliability for our customers.
Another significant event in 2023 was the passing of new clean energy legislation in Michigan that the Governor signed in November. The synergy policy creates a very clear road map for the development of additional solar, wind and storage assets that is generally consistent with the accelerated renewables build and cleaner generation path that we laid out in our IRP filing. This investment is supported by the Inflation Reduction Act that includes provisions, which reduced the cost of investments in our system, and we pass all of these benefits along to our customers.
Our effort to maintain affordability for our customers has been demonstrated over the last four years. Based on the outcome of our last rate order, the average annual growth of our residential electric bill is just over 1% since 2020, compared to a national average annual increase of over 6%. This is supported by a $300 million reduction in our fuel and purchased power costs that went into effect last December to lower customer bills. Through this significant reduction, along with our long history of cost savings through continuous improvement, we will continue to effectively manage affordability for our customers.
On the community front, DTE was honored to be named to the Civic 50 for the sixth consecutive year. This award presented by Points of Light, recognizes the most community-minded companies in the nation. I am proud that our team continues to put the communities we serve at the forefront each and every day in our decision making.
We have a robust investment agenda of $25 billion over the next five years, which is a $2 billion increase over the prior plan, and we have a 10-year capital plan of over $50 billion. 95% of our capital will be invested at our two utilities. Investments in our non-utility businesses are strategically focused on our customers' needs and align with our clean energy initiatives.
Our 2024 operating EPS guidance midpoint provides 7% growth from our 2023 original guidance midpoint. Our long-term operating EPS growth remains at 6% to 8%, with 2023 original guidance as the base of that growth, and our 2024 annualized dividend of $4.08 per share is consistent with our practice of growing dividends in line with our operating EPS.
Importantly, we will continue to have a strong balance sheet and investment-grade credit ratings to support this customer-focused capital investment plan.
Now let's turn to Slide 5. At DTE Electric, our significant capital investment plan is focused on building the grid of the future for our customers, and supporting the transition to cleaner generation. Our recently filed distribution grid plan outlines our path to build the grid of the future. This plan includes the transition to a smart grid with full automation within five years, resulting in less frequent and shorter outages for our customers. We are also investing $9 billion on distribution infrastructure over the next five years, targeting reliability improvements of more than 60%.
During 2023, DTE Electric focused on improving the reliability of over 400 of our most challenging circuits, including trimming more than 5,000 miles of trees, installing more than 200 automated reclosers, and maintaining our extensive network of electric infrastructure, including replacing pull-top equipment in over 3,500 utility poles. We are continuing to accelerate our Tree Trimming program. We are also continuing our accelerated preventative maintenance by upgrading more than 10,000 miles of infrastructure with over 1,300 miles upgraded in 2023.
Finally, we are accelerating the rebuild of our 4.8 KV system and pursuing undergrounding. We did experience a large storm in January, and our team came together to achieve one of the fastest restorations for a storm of this size. The $2 billion increase in our DTE Electric five-year plan is driven by investment and cleaner generation that is supported by the IRP, recently passed energy legislation and our voluntary renewables program. Accelerating this investment provides more affordable energy for customers over the long term. Our voluntary renewables program is still exceeding our high expectations.
As I mentioned last year, the National Renewable Energy Laboratory recognized DTE as having the largest green tariff program in the country, fulfilling more load under contracted subscriptions than any other program.
Now let's turn to Slide 6. At DTE Gas, we are planning to invest $3.7 billion over the next five years to upgrade and replace our aging infrastructure. Over the years, we have made significant progress and recovered investment through our infrastructure recovery mechanism. Since the program began, we have renewed over 1,700 main miles and plan to complete over 200 more miles in 2024.
Our natural gas balance program also continues to grow with over 13,000 customers currently subscribed. The program offers ways for customers to manage their carbon footprint through carbon offsets with our forestry partners in Northern Michigan as well as renewable natural gas.
And now let's discuss the opportunities at DTE Vantage on Slide 7. At DTE Vantage, we are planning to invest between $1 billion to $1.5 billion over the next five years. We continue to advance custom energy solutions, RNG and carbon capture and sequestration projects. One project that we'll highlight is the expansion of a long-term fixed fee custom energy solutions agreement with Ford Motor Company to build, own and operate and maintain the central utility plant and distribution infrastructure serving its facility in Tennessee.
In addition to the utility generation infrastructure, we will also provide distribution of hot and chilled water, steam, natural gas and electricity, domestic and sanitary water along with HVAC equipment and a wastewater treatment facility. Projects that are organic expansions like this one are attractive to us, given the long-term relationships, strong sites and a utility-like structure. This project, combined with other projects helps position us for future growth.
Our development pipeline advantage remains strong. The IRA improves decarbonization opportunities as enhanced tax credits allow our projects to be more economic, including carbon capture, RNG and combined heat and power projects. The RNG market growth continues and is supported by the federal renewable fuel standard and California's low carbon fuel standard.
With that, I'll turn it over to Dave to give you a financial update. Dave, over to you.
