DOMINION ENERGY, INC Q4 FY2024 earnings call

Key Points

• Bob Blue highlighted the company's 5 key tenets and progress over the year, including achieving operating earnings in the top half of guidance despite weather headwinds, successful storm restoration in South Carolina, positive regulatory outcomes, and derisking of the Coastal Virginia Offshore Wind (CVOW) project.
• Steven Ridge provided financial updates, narrowing 2025 operating earnings per share guidance to $3.28 to $3.52 (midpoint $3.40), reaffirming annual operating earnings growth guidance 5% to 7% through 2029, updating 5-year capital forecast to $50 billion (16% increase), and reaffirming dividend maintenance until payout ratio aligns with industry.
• Diane Leopold discussed CVOW project progress, including 50% completion, fabrication and installation updates, and derisking efforts.

Other Highlights

• Coastal Virginia Offshore Wind project is 50% complete, with ongoing construction and manufacturing progress. Cost increase from $9.8B to $10.7B due to PJM network upgrade cost underestimation, but 80% of cost increase eligible for recovery.
• Virginia data centers continue to grow significantly, with 40 gigawatts in various stages of contracting as of December 2024, up from 21 gigawatts in July 2024.
• Transmission business joint planning agreement with AEP and FirstEnergy shortlisted projects, leading to $1B incremental capital spend in 5-year plan.
• Millstone facility provides over 90% of Connecticut's carbon-free electricity, with fixed-price contracts and hedging program derisking remaining output.

Full year 2024 operating earnings were $2.77 per share in the top half of guidance, with GAAP earnings at $2.44 per share. Fourth quarter operating earnings were $0.58 per share, and GAAP earnings were $0.15 per share. Data centers represent approximately 26% of total sales for Dominion Energy Virginia (DEV).

• Narrowed 2025 operating earnings per share guidance to $3.28 to $3.52 per share, inclusive of RNG 45Z credit income, with midpoint $3.40.
• Reaffirmed annual operating earnings growth guidance of 5% to 7% through 2029 up to 2025 midpoint $3.30 (excluding RNG 45Z credit income).
• Updated 5-year capital forecast from 2025 through 2029 to $50 billion, a 16% increase from prior guidance.
• Reaffirmed dividend will be maintained at $2.67 per share annually until payout ratio aligns with utility industry standards.

• CVOW cost increase disappointment due to PJM network upgrade costs being lower than initially estimated.
• South Carolina regulatory framework creates regulatory lag, making it hard to earn lab return compared to neighboring jurisdictions.
• Potential tariffs on CVOW components, though finished components are unlikely to be subject to tariffs as per previous orders.

Q: Shar Pourreza asked about CVOW variability, supplier deliveries, schedule flexibility, tariffs, and future wind projects.

A: Robert Blue and Diane Leopold responded, stating CVOW is in a good position with confidence in estimates, tariffs too early to assess, and focus on current project.

Q: Nicholas Campanella inquired about Virginia data center gigawatts, time line, and Millstone data center opportunities.

A: Robert Blue and Steven Ridge responded, noting significant data center growth in Virginia, infrastructure built to serve demand, and Millstone's data center opportunities discussed with stakeholders.

Q: Jeremy Tonet asked about Virginia data center stakeholder reactions, bill headroom.

A: Robert Blue responded, stating policymakers support data center build out for economic benefits, and data center growth spreads costs, aiding bill headroom.

Q: David Arcaro asked about offshore wind executive order impact on CVOW, data center pipeline crystallizing.

A: Robert Blue and Steven Ridge responded, stating CVOW not impacted by executive order, and data center pipeline showing bullish signs with high conversion rates from earlier stages.

Q: Anthony Crowdell asked about data center project transition time lines.

A: Steven Ridge responded, mentioning transition from substation engineering to ESA typically takes 4 to 7 years.

Q: David Paz asked about earned returns in outlook, CapEx on V.C Summer.

A: Steven Ridge responded, stating DEV expects allowed returns, South Carolina has regulatory lag with under earning, and no CapEx on V.C Summer.