DTE Energy (DTE) reported first-quarter adjusted earnings of $1.95 per share, falling short of the $2.01 consensus estimate, as a $25 million loss from its energy trading unit weighed on results. Net income dropped to $247 million from $445 million in the same period last year, reflecting the trading setback despite gains in its electric and gas segments.
The Detroit-based utility reaffirmed its 2026 operating earnings guidance of $7.59 to $7.73 per share, banking on data center partnerships with Google and Oracle to drive future growth. The company has secured a deal to supply Google's planned 1-gigawatt data center in Van Buren Township, Michigan, pending approval from the Michigan Public Service Commission (MPSC). A gigawatt is enough to power roughly 750,000 homes, according to Reuters.
DTE's energy trading unit swung to an operating loss of $25 million, compared with a $34 million profit a year earlier. CFO David Ruud attributed the weakness to “expected timing” issues in the power portfolio but expressed “high confidence” in reaching the top end of full-year guidance for the segment as contracted positions mature later in 2026. In contrast, DTE Electric posted earnings of $218 million, up from $147 million, while DTE Gas edged higher to $210 million from $206 million.
President and CEO Joi Harris emphasized that data center expansion brings “real affordability benefits” by spreading fixed grid costs across more users. The Google contract is structured so that the tech giant covers all costs tied to its energy use, including generation, storage, transmission, and distribution. DTE estimates the arrangement could deliver nearly $1.7 billion in affordability benefits for existing customers over the contract's lifespan. The company also holds approval for a 1.4-gigawatt Oracle data center project already under construction.
DTE's presentation flagged that the Google load is expected to reach full ramp by late 2028, potentially spurring up to $5 billion in additional generation and storage investment through 2032. The utility is also in advanced talks with other hyperscale customers for roughly 2 gigawatts of additional demand, with another 3 to 4 gigawatts in the pipeline. This aligns with broader industry trends: U.S. power demand hit records in 2025, with further growth expected as tech firms ramp up data center construction.
However, regulatory hurdles loom. DTE's electric division has filed a $474.3 million rate increase proposal, citing investments in grid and generation projects. The MPSC is expected to rule by late February 2027. Michigan Attorney General Dana Nessel plans to oppose the 9.7% residential hike, criticizing the timing just two months after a $242.4 million rate increase was approved. Nessel called DTE's conditional pledge to hold off on further rate requests “a ransom note.”
DTE insists the current rate filing excludes data center costs and that those users will not see their bills shifted to other ratepayers. The company has pledged to refrain from submitting another electric rate request until at least 2028, contingent on its first data center project being operational by end of 2027 and securing additional approvals.
Key risks include regulatory decisions, cost recovery, commodity market swings, and potential construction delays, as outlined in DTE's SEC filings. The stock is under pressure as investors weigh the trading miss against the promise of data center-driven load growth.
