Adds background and details from conference call in paragraphs 1, 4, 6 and 9
By Tanay Dhumal
Feb 17 (Reuters) - Utility DTE Energy DTE.N beat Wall Street estimates for fourth-quarter profit on Tuesday, benefiting from strong power demand, and said it expects to finalize a new data center agreement in the coming weeks.
Shares were up 1.6% at $147.29 in morning trade.
Data centers to run artificial intelligence technologies, combined with the accelerating electrification of homes and businesses, were expected to push U.S. power demand to record levels in 2026, according to the U.S. Energy Information Administration.
The company did not disclose customer or contractual details of the expected data center agreement.
The utility said it negotiated its first hyperscale data center contracts in the quarter to provide 1.4 gigawatts of load to power Oracle's ORCL.N new data center in Saline Township, Michigan, which is approved by the state regulator.
The Oracle deal would create $300 million in annual benefits for its existing customers, DTE said in a post-earnings call.
U.S. electric utilities are boosting spending on power infrastructure to meet rising data center demand, and fielding questions about rising power bills.
Last year, DTE raised its five-year capital investment plan by $6.5 billion to $36.5 billion.
CEO Joi Harris said data center contracts would be structured so that existing customers would not be burdened with the cost of powering them.
Quarterly adjusted profit from DTE's electric segment was at $211 million, up 8.2% from a year earlier, while gas segment profit was up 16.3% at $121 million.
DTE Energy serves 2.3 million electricity customers in Southeast Michigan and 1.3 million natural gas customers across the state.
The Detroit, Michigan-based utility reported an adjusted profit of $1.65 per share for the quarter ended December 31, compared with analysts' average estimate of $1.52 per share, according to data compiled by LSEG.
(Reporting by Tanay Dhumal in Bengaluru; Editing by Krishna Chandra Eluri and Sahal Muhammed)
((Tanay.Dhumal@thomsonreuters.com; Twitter: https://twitter.com/TanayDhumal;))