First Quartile Benchmarking Knowledge Sharing (C3) Michael Khoury Customer Research and Information June 11, 2015

First Quartile BenchmarkingKnowledge Sharing (C3)

Michael Khoury

Customer Research and Information

June 11, 2015

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Our Aspiration

The best-operated energy company in North America and a force for growth

and prosperity in the communities where we live and serve

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DTE Energy is a Michigan company

• DTE Energy Electric (founded 1903) – 2.1 million electric customers

• DTE Energy Gas (founded 1849) – 1.2 million gas customers

• Near the top of the list of investors in Michigan’s economy, every year

$7 billion of investment through 2018

$15 to $20 billion in the next decade

• 64,000 shareholders

DTE Electric

DTE Gas

We are an integrated energy provider

Complementary Non-Utility Businesses

Strong, Stable and GrowingUtilities

• Electric generation and distribution

• Fully regulated by Michigan Public Service Commission

• Natural gas transmission, storage and distribution

• Fully regulated by Michigan Public Service Commission

Gas Storage & Pipelines (GSP)

Power & Industrial Projects (P&I)

Energy Trading

Transport and store natural gas

Generate economic value and provide strategic benefits

Own and operate energy related assets

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Our electric utility is investing $6.7 billion in three key growth areas through 2018

• Environmental requirements

• $280 million in 2014

• Power plant reliability

• Expanded distribution reliability program

• Advanced Metering Infrastructure

• $1.1 billion in 2014

• 10 percent renewable energy standard by 2015

• Renewal of generation asset base

• $240 million in 2014

BaseInfrastructure

$5.6 billion

GenerationCompliance$700 million

NewGeneration$400 million

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Our executive team is aligned to support top-decile customer satisfaction

CEO & Chairman

Gerry Anderson

President & COO

Steve Kurmas

President & COO

DTE ElectricJerry Norcia

VP, Customer Service & Marketing

David Johnson

• Top-decile customer satisfaction is one of our six corporate priorities

• Our executive team, including our CEO, sits on a committee that reviews progress related to our customer satisfaction priority on a monthly basis

• Customer satisfaction metrics are cascaded from the executive level down to front-line teams

Customer Satisfaction and Service

Organizational Chart

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Customer satisfaction scorecards begin at the enterprise level, starting with the CEO

CEO & Chairman

Gerry Anderson

President & COO

Steve Kurmas

President & COO



David Johnson



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Then, it is cascaded to company presidents where performance is tracked at an organizational level

CEO & Chairman

Gerry Anderson

President & COO

Steve Kurmas

President & COO



David Johnson



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Finally, metrics are measured and managed at the Customer Service and Marketing operational level

CEO & Chairman

Gerry Anderson

President & COO

Steve Kurmas

President & COO



David Johnson



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Customer Service and Marketing’s best-operated metrics include financial, quality/operational measures in addition to customer satisfaction

Financial:

• Uncollectible Expense

• O&M

Customer Satisfaction:

• JD Power Residential Customer Satisfaction

• SBLI-Channel Satisfaction

• FCR (First Call Resolution)

Quality/Operational:

• Digital Channels and Products: Self-Service Rate and e-Bill Rate

• DPMO (Defects per million opportunities) - Rate of defects per million touches where a customers is dissatisfied

with the service they were provided for all cases. Important because it allows the enterprise to learn how to

prevent events that degrade our customers’ satisfaction

• ASA (Average Speed of Answer) without IVR

• FCR (First Call Resolution)

• MPSC complaints - Number of times a customer has filed a formal complaint with the PSC. Complaints are an

indicator for the PSC as to how we are interacting with our customers

• Call Volume (Calls per customer)

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Benchmarking allows DTE Energy to remain focused on best-in-class performance

• Building our understanding of what constitutes best-in-class performance as it relates to the customer experience within our company, amongst our utility peers and across industries

. • Identifying examples of superior performance from such sources as J.D. Power, First Quartile,

DTE’s benchmarking, Forrester, Accenture and others, we plan to understand and apply the processes and practices required to deliver high customer satisfaction and strong financial results

• We want to deliver the best customer experience, period

• Continuous improvement is one of our key levers– Benchmarking within and outside of our industry (i.e. Retail, Banking, etc.)– Creating of a culture and processes that enable employees to make improvement

a daily practice

DTE’s continuous improvement capability has enabled us to lead the industry in cost management

* Source: SNL Financial, FERC Form 1; major US Electric Utilities with O&M > $800 million; excluding fuel and purchased power ** Source: SNL Financial, FERC Form 2; gas distribution companies with greater than 300,000 customers; excluding production expense

70%

DTE0%

Avg. 25%

71%

DTE -6%

Avg. 13%

2008 to 2013 Change in O&M Costs

Electric Industry Peers*

Gas Industry Peers**

1st Quartile

2nd Quartile

3rd Quartile

4th Quartile

Successfully offset ~$300 million of inflation from 2008 to 2013

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Benchmarking is an important component of our strategic planning process called the Annual Planning Cycle (APC)

Benchmarking feeds our goal and target setting as well as scorecard development processes

• Strategic Planning is done at all levels of the organization and includes both the short- and long-term planning horizon

• DTE Energy is maturing how we use benchmarking as part of this process. Examples include:

–CAIDI- Duration of outages

–SAIFI- Frequency of outages

–# of gas leaks

–Staff role

Documents

First Quartile Benchmarking Knowledge Sharing (C3) Michael Khoury Customer Research and Information June 11, 2015