CEO Podcast: David Ruud, DTE Energy

Paul Krutko: Welcome to Ann Arbor SPARK’s CEO Podcasts…Conversations on Economic Opportunity. My name is Paul Krutko, and I’m the President and CEO of Ann Arbor SPARK.

Welcome to a series of conversations with key leaders from those sectors.

Today, we have the pleasure of speaking with David Ruud, SPARK’s outgoing board chair and a prominent figure in the energy sector. David currently serves as the Chief Financial Officer of DTE Energy, where he oversees the company’s financial strategy, working closely with senior leadership to drive long-term growth and value creation.

David has been with DTE since 2005, holding various leadership positions. His extensive experience spans financial, strategic, operational, and engineering domains, making him a vital asset to the company. 

As he transitions from his role as board chair of Ann Arbor SPARK, David’s insights and leadership leave a lasting impact on the region’s entrepreneurial ecosystem.

Thanks for taking the time to talk with us today, David. 

David Ruud: Thanks Paul. This is great.

Paul: So let me just dive right in. So how has your role as chair of the board impacted your perspective on economic development and innovation in the region?

David: Yeah, first Paul, I want to thank you for this opportunity to have this conversation and talk about SPARK and really the amazing work that you’re all doing there and the impact it’s having on our community. I’ve been involved in SPARK since 2015. I’ve had the opportunity to work closely with the other board members and your whole team at SPARK and it’s this congregation of people and organizations in our community that have come together. It’s really had a huge impact on economic development from a number of different ways. So we have this combination of leaders from public and government institutions, academic partners, and private companies that forms this diverse and really passionate group that’s focused on our mission of propelling the economy of the broader Ann Arbor region. And it’s all these people that’s really made the difference. And SPARK has helped to lead this through the focus on driving economic development, but also fostering the entrepreneurial opportunities and enhancing just the overall engagement of the community.

So we’ve seen a ton of success in the region that we should all be proud about how we’re advancing this community, where we can see innovation, flourishing business in a community that continues to strengthen. So at the end of April, we just had our 20th anniversary of SPARK and that really was a great opportunity to look back at everything that’s been accomplished in our region and really all the impacts SPARK has had in that. And one way we see that is through supporting the attraction and retention of some incredible companies that have chosen Ann Arbor as their home. And that just continues to contribute to the overall vibrancy here. So it’s Hyundai, Google, May Mobility, Sartorius, Wacker Chemical, KLA, Zoller, just to name a few. And you know all these, Paul, but these are industry leaders that have made substantial investments in our community and help highlight and support the appeal of Ann Arbor as just a premier destination for growth and innovation as well as research and development. It’s just an outstanding region we’re both lucky to be part of and then have a responsibility to continue to support the vibrancy and keep it going. So this region with this blend of cultural richness, the entrepreneurial spirit, and the supportive community, and the educational institutions like U of M, Eastern Michigan, and Washau Community College, we just have this unique blend of education, talent, and entrepreneurial spirit that just ranks us as a premier place to be. And SPARK has just been a huge part of driving that momentum to achieve the position we’re in.

Paul: Well, thank you. 

David: It’s been a great almost 10 years, Paul.

Paul: So one of the things that we’re very proud of is that from the very beginning, DTE has been a mission funder of Ann Arbor SPARK and also a generous sponsor of a2Tech360 and other initiatives. And I guess given your role as CFO, and I know you’re involved in the DTE Foundation, how does this corporate citizenship efforts such as community engagement, sustainability programs, how does that influence your impact at DTE and how do you see those efforts really impacting not only our regional economy but broader southeast Michigan?

David: Well, let me start by saying that DTE and personally me, we’re really proud to be involved with SPARK because it fits directly with this mission at DTE of helping all of our communities. So everyone at DTE is committed to our customers and our communities. We are really proud of the work we do to power and heat homes and businesses throughout Michigan, and we take our commitment to helping our communities really seriously. It’s one of the areas that bonds the whole team at DTE and focus our work. So our purpose statement at DTE is that we improve lives with our energy and you can see that would have a couple of different meanings. We realize the energy we produce is so vital for our customers’ daily lives, but an additional meaning for ‘we improve lives with our energy’ is for all 10,000 people at DTE is that the personal energy of every member of our team is focused on service— service to our customers and service to our communities.

This takes a couple of different angles at DTE. First of all, our foundation that you mentioned provides about $20 million a year, supports over 300 nonprofit community organizations in areas of jobs like economic development like we do here, but also human needs, equity and environmental support because we know that this support from our foundation is vital to our communities that we serve, to the basic human needs of these communities and can help them thrive and grow. And then our employees support all these organizations through their personal time and their volunteer time. 

Another way that we’re committed to economic development is by focusing on the spending with businesses located in our state. So we make sure that we’re investing as much as we can with businesses in our state. We have a long history of this. Last year we spent $2.7 billion with thousands of local businesses that’s created and sustained more than 12,000 jobs within our state. And since 2010, it’s been more than $21 billion. So that’s a huge way we make sure we continue to have an impact in our state. 

And then we do our supplier diversity program, which makes sure we have opportunity for businesses owned by women, minorities, veterans members of LGBTQ and disabled entrepreneurs. The last year we spent just under a billion dollars with diverse suppliers. So we’re committed to helping our communities not just in cleaner, more reliable power, but also working with local communities and vendors to create jobs, grow our communities, and improve lives in those communities. 

And that’s why we’re proud to be a mission funder for SPARK, why we’re proud to sponsor the programs and help create the engagement of the community. And Paul, it’s why I personally am proud of what we’re doing. I’m proud that I’ve been able to be part of it here at SPARK.

Paul: Yeah, it’s interesting that you point that out because I think that one of the big initiatives that the state’s been involved in over the years is the procurement of goods and services by companies inside the regional and state economy. And I’m glad you pointed that out because a lot of people don’t focus on that when they think about a company like DTE. So that’s really impressive. $2.7 billion, that’s quite an impressive number. 

David: The investments we’re making not only improving the grid, improving cleaner generation, but also by making it within our state, improving the state and helping the community survive.

Paul: Well, let’s talk about that a little bit. I want to give you the opportunity to talk about what DTE is doing to enhance the production and distribution of electricity in southeast Michigan, Ann Arbor and Washtenaw County. I know there’s lots of investments happening, so I want to give you some time to talk about some of those projects.

David: Well first thank you for that and I appreciate the opportunity to talk about the great work we’re doing at DTE. As I mentioned, we’re focused on delivering for our customers and communities. Right now, we have an incredible opportunity and an incredible responsibility to continue to provide energy that our customers want and do it in the way they want it through strengthening and rebuilding the distribution system and transitioning the way we’re generating power. And we know this is something our customers and communities expect, and we are focused on delivering that for our customers. So we’re going to build the grid of the future —one that’s safe, reliable, clean and affordable, and one that our customers here in Ann Arbor and Washtenaw County as well as all the areas we serve across Michigan can rely on and feel good about for years to come. I’m sure you’ve seen over the last 10 years, we’ve seen some intensifying weather pattern and it’s having an increasing negative impact on our electric grid. So we’re responding by accelerating the work we’re doing to strengthen, rebuild our grid, make it more reliable, and ensure that when power does go out, our customers are restored as quickly as possible. So to get more granular on this, we’re working on our plan in Washtenaw County and we’re seeing results of the work. And it’s a commitment we’re making across our organization, and it’s a commitment that is backed by unprecedented levels of investment. So in Washtenaw, over the last five years, we’ve invested over $175 million and we’re investing over $200 million in the next five years. And really it’s to accomplish our goal that we’ve set out for ourselves, which is reduce outages by 30%, and when they do happen, get people back 50% faster and do that in the next five years. So if you’ll engage me a little longer, I’ll tell you how we’re doing that too, because four main ways we’re going at this.

First it’s tree trimming and we do some pull top maintenance and hardening of our existing system and we’re going to rebuild a lot of the substations and the associated distribution and then automation. So a little bit on each of those. First we’re getting the trees out of the way. Majority of outages, as you’ve probably seen, are caused by tree interference. So we’ve accelerated a tree trim program that we’re in the last couple of years of that’ll get the trees out of the way. And then we’re using some advanced digital systems that both monitor and predict vegetation growth going forward so we can be more precise and efficient in our tree trimming cycles, a lot of this digital stuff that we’re doing that’s going to make this just a lot more efficient for our customers. Then we’re building out new substations and rebuilding and replacing some of the older areas of the grid, which will take our older system into a more modernized system that can withstand increased weather and wind patterns we’re seeing.

Along with that, we are continuing to underground our wires wherever possible, so we can just take weather out of the equation and then we’re strengthening our existing system through focus, work on all of our poles, transformers, crossarms, wires because we know it also has a big outage when we change these things out and strengthen what we have, which has a big impact on outages and can help withstand increasing weather variability, too. 

Then finally, we’re automating our system. So this includes things like smart grid devices called reclosers that help us quickly identify the location of damage and they can also help us reroute power so less customers are impacted. So we invested in the backbone of that system over the last five years, which was a state-of-the-art systems operations center in Detroit, and now we’re able to install these devices on our lines that can communicate with that operations center.

We’re seeing the advantages from that already and the ones we’ve installed. We’ll have 10,000 of these devices installed over the next five years, and we know all this works. We’re seeing that there’s great increase in reliability in where we do this work. So now we know we have to accelerate it. We have a definite focus on doing that here in Washtenaw County. So this will increase reliability, decrease outage times, and we’ve put a feature together now where you can see how we’re doing in your neighborhood through a new tool called the Power Improvement Map. Just make everything more transparent for our customers, doing a lot of great work and we want everyone to know and we want to know when we’re going to be in your neighborhood. 

So it’s a journey here we’re on, Paul. We have 45,000 miles of lines throughout the state, but we’re going to make this work something that can withstand the weather and we’re making the investment of our time and our capital to make sure that happens.

Paul: No, that’s fabulous. I mean, that’s a lot of investment, a lot of work getting done, a lot of people doing that work as well. So it’s a tremendous assist to the overall economy. I mean, one of the things that’s obviously important to all of your peer companies across the United States is the impact to climate change and that things are more difficult than they were in the past, and so you’re making investments to respond to that. So that’s really important.

David: And we’re not alone. This is industry-wide. We’ve seen it even this summer. We’ve seen it in other places across the country. It’s an industry-wide phenomenon and these investments in reliability, preparing the grid for EVs and new electric vehicles that will come on, other electricals on uses, and then cleaner generation. There’s a lot of investment that has to go into our grid and our power system across the country. So it’s not an isolated thing with DTE.

Paul: Do you want to take a minute to talk a little bit about the alternative generation technologies and the green power effort that you’re involved in?

David: Yeah. We’re doing a lot to transform the way that we’re generating electricity in the state right now. We have a plan to end all of our coal plant usage by 2032. So we’re replacing that with renewable, renewable, and clean generation. So we’re the biggest developer in the state for renewable generation solar wind, and we just announced our first battery storage project, a 220 megawatt battery storage project, which was at the site of one of our old coal plants. So we’re doing a lot to transform this and we’re doing it consistent with the energy legislation in the state and accelerating beyond that. So we’ve got land positions putting together a lot of new solar plants at a really intense pace to be able to make our generation as clean as possible, too. 

Paul: That’s great. So upgrading how the whole system works to distribute power, but also where the power is coming from. So that’s a really amazing story. 

So switching back to SPARK, our final two questions. Is there a specific initiative or project that SPARK has been involved in that you think is something that you are particularly proud of during your tenure with us?

David: Well, there’s a couple. There’s one I’m proud to be part of, even though I’m not that big of an influence on, it’s just our overall, our entrepreneurial services work that we do. One of the core areas that you do at SPARK or we do at SPARK is just having a huge impact on the overall entrepreneurial ecosystem and it’s building on what we have in the university, but the infrastructure that SPARK has built to help that is just amazing. And the accomplishments that has been done over the years to do that, it’s just has been just an incredible level. I think last year helped over 400 startups and had a hundred clients come through our incubator and the work there just has such a huge impact on these companies to move them from becoming an idea to established companies in our region. I’m proud to be associated with, but maybe not proud to influence as much.

And then secondly, if I could do one more, Paul, just like the marketing team at SPARK, which really is everybody, just continues to promote the region as such an area of innovation, that it is really impressive too. And I’ll give the example of the a2Tech360 that will come in September. It’s a week of these tech-related events that create connections between companies and entrepreneurs in Ann Arbor and the broader region. And it really just helps Ann Arbor be recognized as one of these great places to work with a vibrant community ecosystem. And it’s one of the examples of what SPARK does just to make this an incredible community. So I’m proud to be associated with both those parts of SPARK as well.

Paul: Well that’s great. So we are not letting you go. The past chair plays a significant role in the overall leadership of the organization and as that continues, I mean, I asked you about things that you may have been associated with over the years. Is there anything you’re looking specifically forward to that we’re involved in now? 

David: There’s a couple of these, too. One that SPARK has recently gotten involved in is the child care coalition initiative, which is a good example of how SPARK is also a convener to help solve problems that the community faces. In this case, finding a holistic way to tackle one of the big barriers that affects workforce participation and quality of life here. So SPARK, by having this impact or this way of being able to get everyone and convene people within our community, they’re in a unique position to have all these constituents come together and try to identify and work some solutions to the child care challenges we have. The second one is a little closer to DTE. So at our last SPARK strategic board offsite, remember we identified one of the ways we could be impactful was to improve and support sustainability in our region. And I think that SPARK and DTE are in an incredible position to work together to help advance this within the state.

So like we talked about, we’re investing tens of billions of dollars over the next 10 years in solar, wind, and storage and moving away from coal plants to become more sustainable. Additionally, we offer a voluntary renewable program at DTE where customers can sign up and receive green power and increments up to a hundred percent, and it’s incremental to that renewables plan. So we build renewables to support that. We currently have the largest voluntary renewable program in the country— two and a half gigawatts. So it’s all large customers across the state, a lot of the big universities, and then a hundred thousand residential customers that have chosen to take their power this way. So we think by continuing to offer and build that, what we’re doing with our existing generation, what we would do with voluntary, we support electrical charging infrastructure, which can help move towards EV away from internal combustion engines. And then even in our natural gas, we offer carbon offsets to work that. So we think we continue to work with businesses and residents within the Ann Arbor region to work on sustainability. And I think SPARK, again is in a good place to help us and work together with the community to do that.

Paul: It’s one of those things when we are talking to companies about coming here, one of the things that they’re interested in is what are we doing around the issues of sustainability and where does the power come from and those kinds of things. So it is top of mind for companies making investment decisions and bringing other kinds of jobs here. 

And the one thing I thought I would highlight too, in terms of this, what’s moving forward is you were involved as chair as we updated our strategic plan, and one of the things that the leadership and the board decided was that we needed to play a role in community in terms of being a convener, sometimes supporting initiatives, sometimes bringing ideas and things to the table and bringing other people around to work on it. So that was one of the things that I think was really great about your leadership is that we moved from the specifics of economic development into the notion that the environment around where jobs and investment happens is equally important. So I think that was another thing that I’d highlight that was really important in your time as chair.

David: We’re in a unique position with the leaders that we have across the region that come together to be able to have this impact. And again, it’s in a position to do it and we should feel that responsibility to do that for our community.

Paul: Yeah. Well, again, I want to thank you for your time as chair and as I said, you’re going to continue to be involved in the leadership and so we’re looking forward to that over the next years coming up. 

So I want to thank you for talking with us today.

David: Thank you, Paul. It’s always, always great to catch up and I’m glad to be part of SPARK for an additional three years. It’s been a great three years as chair and being involved in SPARK up to this point. I’m really proud of the work that the team there does. Proud of the work the board does, and I’m proud to continue to be part of it. So thanks for this opportunity.

Paul: Thank you. Well, I want to thank our audience for listening and learning more about those leaders and organizations working hard to create the Ann Arbor region’s economic future. These conversations are brought to you by Ann Arbor SPARK. For more information about Ann Arbor SPARK, you can find us at the web at annarborusa.org. We’re also on Facebook, Instagram, and LinkedIn.