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Dominion Energy (D) Q3 2026: New Rates Lift Profit, Offshore Wind Lags

Editorial illustration for Dominion Energy (D) Q3 2026: New Rates Lift Profit, Offshore Wind Lags
Ddrillr ResearchOriginal research
Published 6 min read

Summary

Dominion Energy Q3 2026 operating EPS was $1.28 as new Virginia and South Carolina rates lifted profit beyond weather, while CVOW turbine installs ran at half the needed pace.

Dominion Energy (D) third-quarter 2026 earnings, disclosed on October 30, 2026 in its earnings release, 10-Q and earnings call, show new electric rates in Virginia and South Carolina turning into profit, while turbine installation at its offshore wind project fell behind the pace needed to finish on schedule [1][2]. The prior questions were whether Virginia's new rates could offset rising grid capacity costs, whether South Carolina's new rates could return that business to growth, and whether the offshore wind project could hold its schedule and cost. The first two were confirmed, as both segments grew year over year even after removing hot weather. The offshore wind cost and timetable were unchanged, but the margin for finishing on time narrowed sharply [2][3]. Third-quarter operating earnings were $1.28 per share (versus $1.06 a year earlier), and the company said it expects full-year results in the top half of its $3.45 to $3.69 guidance range [1]. Dominion expects its merger with NextEra to close in the second half of 2027 [3].

Dominion Energy is a regulated electric utility centered on Virginia, serving about 4.1 million customers in Virginia, North Carolina and South Carolina [4]. The company invests capital in power plants and the grid, then recovers that cost and earns an authorized return through approved rates and riders. In 2025, data centers accounted for 28% of Virginia Power's electricity sales [5].

Change one: Virginia's rate reset lifted profit

Dominion Energy Virginia's profit grew faster than in the second quarter. Segment net income was $862 million in the third quarter, up $183 million year over year, compared with a $121 million year-over-year increase in the second quarter [2][6]. The increase came mainly from $137 million tied to the 2025 biennial rate review and $112 million from rider equity returns, both after tax [2]. Weather added $55 million; excluding it, the increase was still about $128 million, which shows the rate reset is now reliably turning into profit.

The drag from grid capacity costs kept growing. Purchased capacity expense rose to $103 million from $32 million a year earlier, mainly because of PJM's annual capacity market, and it reduced net income by $48 million, compared with $34 million in the second quarter [2][7]. The company has not disclosed a recovery arrangement for this cost.

Sales growth this quarter came mainly from weather. Electricity delivered rose 9% while cooling degree days rose 23%; of the retail revenue increase, weather contributed $75 million and customer growth only $14 million, both before tax [2]. The 3.4% weather-normal sales growth the company cited covers Virginia and South Carolina combined over the last twelve months, so it does not represent Virginia's quarterly load growth. Data center capacity in contracting stages exceeds 54 gigawatts, including more than 12 gigawatts under electric service agreements [3].

Change two: South Carolina's new rates reversed the profit decline

Dominion Energy South Carolina returned to growth in the first full quarter of its new rates. Segment net income was $230 million, up $62 million year over year, after a $30 million year-over-year decline in the first half [2][6]. Base rate items contributed $46 million and weather $36 million; excluding weather, net income still rose about $26 million [2]. Depreciation, interest and other items together reduced profit by $36 million, and the customer count grew 1% [2].

Change three: offshore wind held its cost, but installation lagged

The 2.6-gigawatt CVOW offshore wind project held its cost and timetable this quarter. The estimated total project cost is about $11.7 billion, including $0.1 billion of contingency, unchanged from July, and no charge for costs not expected to be recovered from customers was recorded in the third quarter [8]. The company maintained its targets of energizing the third offshore substation by year-end 2026 and completing the project by the end of 2027 [3].

Installation ran at only about half the required pace. Installed turbines rose from 31 on July 31 to 44 on October 30, about 13 added in three months, whereas a straight-line pace to finish the remaining work would have needed about 26 [9][3]. Management said 14 of those 91 days were affected by weather and about 36 by installation-vessel maintenance, and that the impact stayed within contingency [3]. The remaining 132 turbines must be installed in about 425 days, or 3.2 days each, the same as the third-quarter rate on available days, leaving a buffer of 30 to 95 days [3]. If costs exceed the contingency, Virginia Power must bear 67% to 83% of the increase, which would reduce GAAP net income [10].

Conclusion

This report confirms Dominion's growth path of regulated capital multiplied by an authorized return, as new rates in both states lifted profit even after removing weather. Two limits apply to profit conversion: about $91 million of after-tax weather benefit will not repeat, and the company still bears the capacity cost. Operating cash flow for the first nine months was $4.688 billion against $8.749 billion of investing outflows, so investment still depends on outside financing [2]. Offshore wind is the only area where execution risk rose. The next tests are whether the substation is energized on time at year-end, whether winter installation approaches the planned pace and whether the cost estimate holds. Virginia's load growth needs to be rechecked in a quarter with less weather impact.

Sources

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