Detroit Edison, a subsidiary of DTE Energy Company (DTE), and enXco Service Corporation (“eSC”) have entered into a multi-year agreement under which eSC will provide complete operations and maintenance (O&M) services for the Gratiot Wind Project.
As per the terms of the O&M agreement, eSC will provide complete O&M services for the turbines, project oversight, and 24/7 remote monitoring from its Operations Control Center.
enXco Service Corporation is an EDF Energies Nouvelles Company that develops, constructs, owns, operates and manages renewable energy projects throughout the United States. enXco is an industry leader that provides O&M services to more than 5,000 turbines nationwide representing 4,800 MW of wind energy.
DTE Energy along with Invenergy Wind began construction of the 212.8MW Gratiot County wind project in the US state of Michigan in September 2011. The wind project is being constructed by Livonia, Michigan-based Aristeo Construction. Invenergy and its affiliated companies develop, own and operate large-scale renewable and other clean energy generation facilities in North America and Europe.
Once operational, Gratiot, a 133-wind turbine, wind power project, will generate enough clean, renewable energy to power more than 50,000 Michigan homes. Gratiot Wind, an affiliate of Invenergy, will own 69 of the wind turbines and General Electric Company (GE) will own the balance 64 MW turbines.
DTE Energy will own and operate approximately half of the wind farm and purchase the remaining power from Invenergy under a 20-year power purchase agreement. The wind project will help DTE Energy meet Michigan's renewable energy goals.
DTE Energy’s regulated electric and gas utilities in Michigan generate a relatively stable and growing earnings stream. Additionally, the company is focused on improving its cost structure and directing capital investments toward renewable generation, utility infrastructure and environmental compliance assets. There are also plans to monetize its Barnett Shale assets, which would alleviate the need for external borrowings.
However, we believe these factors are already priced in the current valuation, leaving little room for any upside. Also, we are concerned about the unfavorable macro backdrop, lower demand for electricity, the dismal Michigan economy and pending regulatory cases. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.
Michigan-based DTE Energy Company is a holding company with subsidiaries engaged in regulated and unregulated energy businesses. Detroit Edison Company and Michigan Consolidated Gas Company are its largest regulated subsidiaries. DTE Energy also has four non-utility segments engaged in a variety of energy-related business. DTE Energy’s unregulated businesses include gas pipelines and storage, unconventional gas exploration, development and production; power and industrial projects and coal transportation and marketing, and energy marketing and trading operations.
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