DTE Energy's Unit Acquires Two Landfill Gas-to-Energy Projects

DTE Energy Company's (NYSE:DTE) subsidiary, DTE Biomass Energy, acquired two landfill gas-to-energy projects in Texas.

A Quick Glimpse of the Acquisition

The two projects include the operating Fort Bend Power Producers, LLC facility located outside Rosenberg and the Seabreeze landfill gas development project in Angleton.

The Seabreeze plant construction is expected to start next month. The Fort Bend facility was constructed in 2013 and generates enough RNG for 560 diesel transit buses annually. Both plants have significant economic and environmental benefits.

With the completion of these two acquisitions, the number of landfill gas-to-energy projects operated by DTE Energy rose to three in Texas and to five facilities enterprise-wide. These facilities are responsible for the conversion of landfill gas to pipeline-quality renewable natural gas (RNG).

Focusing on Clean Energy

The RNG produced from the landfill gas at the Fort Bend project and Seabreeze facility will be processed to make pipeline-quality standards.
The final output is a low-carbon fuel which is extremely versatile and is fully compatible with the U.S. natural gas infrastructure.

Climatic changes due to high pollution are affecting the flora and fauna and it is becoming a matter of serious concern. Therefore, all the major companies in the energy industry are trying to shift their focus on low emission fuels.

DTE Energy has extensive plans to reduce its carbon emission by almost 80% by 2050 (compared to 2005 levels). The company plans to get rid of its coal-fired units by 2040. (Read more: DTE Energy Targets Over 80% Cut in Carbon Emissions by 2050)

Peers Focusing on Alternative Energy

All the major utility service providers have emission control plans in their long-term goals.

NextEra Energy, Inc.’s (NYSE:NEE) subsidiary, Florida Power & Light Company (FPL) filed a petition with the Florida Public Service Commission (PSC), seeking permission for shutting down St. Johns River Power Park (SJRPP) by Dec 2017. SJRPP, a 1,300-megawatt (MW) coal-fired plant, is jointly owned by FLP and JEA. (Read more: NextEra Unit to Close SJRPP Coal Plant, Upgrade Fleet)

Xcel Energy (NYSE:XEL) plans to add 3,380 megawatts (MWs) of wind generation to its existing system by building 11 new wind firms in seven states. The company’s target is to invest $3.5 billion in the said project in the next five years. (Read more: Xcel Energy to Invest in Wind Energy to Lessen Emission)

Price Movement

In the last six months, shares of DTE Energy have gained 13.7% compared with the Zacks categorized Utility – Electric Power industry’s growth of 8.7%.

The company is expected to reap the benefits of disciplined capital spending program to maintain and upgrade the reliability of its electric utility systems in the upcoming quarters. The focus on expanding renewable portfolio and gradual recovery of Michigan’s economy will likely drive DTE Energy’s future performance.

Zacks Rank and Stock to Consider

DTE Energy carries a Zacks Rank #3 (Hold). A better-ranked stock in the same space is RWE AG (OTC:RWEOY) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

RWE AG's Zacks Consensus Estimate for 2017 moved up nearly 24.7% to $2.02 per share in the last 60 days.

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