DTE Electric went to the market earlier this month with its first issue of Green Bonds and the offering was well received by environmental and other investors. The bonds will inject additional financing into DTE Electric’s renewable energy infrastructure and energy efficiency programs in Michigan. The $525 million Green Bond offering was the first by an investment-grade energy company in Michigan and the fifth nationwide by an investment-grade energy company. The Green Bonds were issued on April 30 and DTE Electric received proceeds from the bond offering within a week.
“We’re proud to be among the first energy companies to offer this green investment option,” said Gerry Anderson, chairman and CEO of DTE Energy. The company typically issues about $500 million in bonds annually to finance projects such as infrastructure upgrades. DTE Electric’s Green Bonds, maturing over 30 years and paying investors an annual interest return of 4.05 percent, will add financial horsepower to the company’s drive to meet a state of Michigan requirement to generate 15 percent of its power through renewable energy by 2021 while also fueling the company’s commitment to reduce carbon emissions by more than 80 percent by 2050.
The institutional investors purchasing DTE’s Green Bonds include mutual funds, banks, pension funds and insurance companies wishing to diversify their portfolios and those of their individual investors by adding bonds with a solid rate of return and low risk. DTE Electric’s Green Bonds proved to have the added appeal of enabling investors to put their money behind a strategic transition to market-proven renewable power sources and energy efficiency efforts by a major energy company.
The $525 million received through the bond issue can be flexibly allocated to environmentally-friendly projects including DTE solar and wind installations operating from May 2016 forward such as the Lapeer Solar Park – among the largest east of the Mississippi, the Pinnebog Wind Park in Huron County, and the Pine River Wind Park now being constructed in Gratiot and Isabella Counties. Bond proceeds can also fund power transmission infrastructures connecting its renewable energy facilities to the power grid as well as the expansion of DTE’s renewable power generation capacity. In addition, bond proceeds can support DTE Electric’s residential and commercial energy efficiency programs, which in 2016 saved customers nearly $600 million in energy costs.
As Michigan’s largest producer of renewable energy with 31 solar arrays and 13 wind parks, more than 10 percent of the energy DTE Electric uses to supply electricity comes from these energy resources. In the years ahead about half of the energy DTE Electric produces will come from zero-emitting resources including solar and wind. The company has driven investment of more than $2 billion in solar arrays and wind parks which now provide enough clean energy to power 450,000 homes.