The operator introduces the Dominion Energy Second Quarter Earnings Conference Call and turns it over to David McFarland, who thanks everyone for joining. He reminds listeners that the call may contain forward-looking statements and discusses non-GAAP measures. Steven Ridge then presents the second quarter results, which were $0.65 per share, with $0.03 attributed to better than normal weather. The normal operating EPS was $0.62.

The second quarter of this year saw positive factors such as improved weather and regulated investment growth, resulting in a $0.65 per share GAAP earnings. However, there was also an $0.08 year-over-year decrease due to a revenue reduction at DEV. The company reaffirmed their financial guidance for 2024 and expects better weather in July to offset previous weather impacts.

The company expects some challenges in the second half of the year, but is still on track to meet their guidance. They have reaffirmed their guidance for 2025 and anticipate annual growth of 5-7% through 2029. The recently published clearing prices for the 2025-2026 planning year base residual auction support the company's investment in various resources and infrastructure. As a vertically integrated utility, the company's capacity purchases are mostly offset by capacity revenue, so customers are not significantly impacted by higher prices. Net capacity expense only makes up about 1% of customer bills.

The company has seen potential bill drivers, such as the elimination of the regi rider, that could offset any impact of higher capacity expenses on customer bills. They will have a better understanding of the impact on bills when they file their next biennial case in March. The company expects a temporary impact from higher capacity prices in the second half of 2025, but this highlights the need for continued investment in their system. There have been no changes to the financial guidance provided on March 1. The company has made progress towards their debt reduction target, with transactions representing $21 billion already completed. They expect to close the remaining debt reduction initiatives, the sale of public service company in North Carolina and the noncontrolling equity financing by Stonepeak, in a timely manner.

The company has made significant progress in finalizing the necessary approvals and financing for the PSNC sale and the CVOW partnership. A final commission order is expected in the third quarter for the PSNC sale, and the CVOW partnership is on track to be completed by the end of the year. The company has also successfully issued $2 billion in enhanced junior subordinated notes and plans to continue issuing equity and completing debt issuance to reduce debt and lower interest expenses. Overall, the company is confident in its ability to meet its financial goals.

The post-review guidance for the company has been conservatively designed to handle unforeseen challenges, and the call is now being passed to Bob. Bob begins by discussing the company's positive safety performance and their focus on driving workplace injuries to 0. He then highlights the progress of the CVOW project, specifically the monopile installation. So far, 72 monopiles have been received and 42 have been successfully installed. The company has also welcomed a second bubble curtain vessel to help reduce installation time.

The company is making good progress towards their goal of installing 70 to 100 monopiles during the first installation season. They have also started installing scour protection for the monopiles and have received all necessary federal permits. Materials and equipment are also on track, with two out of three offshore substation topside structures completed and delivered, 33 transition pieces fabricated and 15 delivered, and all onshore underground cable manufactured. The turbines are scheduled to be installed in 2025, but the company has already gained valuable experience from a similar project in Scotland. Onshore construction activities are also on track, including work to support overhead lines, horizontal directional drills, and duct bank for the underground work.

In the last year, we have made significant progress with our regulatory filings and approvals for our project, representing $486 million in annual revenue. The project's expected LCOE remains unchanged at $73 per megawatt hour. We have invested approximately $4.5 billion to date and remain on track to spend $6 billion by the end of 2024. Our current unused contingency is $143 million, which is in line with our expectations and benchmarked competitively with other large infrastructure projects. We expect the project to be completed on budget, and it is currently 33% complete with major milestones still to come. We have also provided updates on the progress of our vessel, Charybdis, which is currently 89% complete and on track for delivery in late 2024 or early 2025.

The vessel's availability to support the CVOW construction schedule is not expected to change and the project's estimated costs have been updated to $715 million due to modifications and additional financing costs. The vessel is crucial for the growth of the offshore wind industry on the U.S. East Coast and there is strong interest in using it after the CVOW project is complete. In South Carolina, a comprehensive settlement agreement has been submitted for approval in the electric rate case, which includes a 9.94% allowed ROE and a 52.51% equity capital structure. If approved, new rates will go into effect on September 1. In regards to data centers, there is no new information to report.

The company is investing in utility infrastructure to meet public policy goals and accommodate demand growth, especially in Virginia where the state was recently named the top state for business. They expect sales growth in 2024 and have seen an increase in data center connections. The company is also taking steps to ensure their system remains reliable and resilient, with plans for new transmission lines and infrastructure in Northern Virginia.

PJM's latest open window for investment is expected to be significant due to the need to accommodate data center growth in Northern Virginia and beyond. The company is working with various stakeholders to expedite critical projects and is committed to finding solutions that support customers and the region's growth. This includes assessing backup fuel and exploring renewable energy options like offshore wind and small modular reactors. The company believes there may be opportunities for additional regulated capital investment in the future, and will consider these opportunities with a focus on customer affordability, system reliability, and their low-risk profile. A new IRP will be filed in October.

The previous year's IRP took into account load growth and investment in generation and transmission to keep customer bills below 3%. This year's IRP will also consider PJM DOM zone load projections. Cost allocation for data centers has been a topic of interest, but the company regularly reviews and adjusts rates to ensure fair and reasonable distribution of costs among customer classes. There has been a significant reallocation of transmission costs from residential customers to larger energy users, reflecting the increasing presence of data centers on the system. The company also regularly assesses cost allocation and rate design to ensure equitable sharing of costs across rate classes.

The company has a strong history of working with data center customers and is committed to supporting them in the future. The safety performance was excellent this quarter, but they are still striving for zero injuries. The company reaffirmed their financial guidance and reported that their offshore wind project is on track and on budget. They are focused on making investments to provide reliable, affordable, and clean energy for their customers and are determined to deliver on their promises. The floor is now open for questions, and the first question is about the progress of the offshore project. The company has been able to hit their target of two monopiles per day and may exceed the top end of their target range for the year. However, they may not be able to maintain this pace as the weather changes. They are confident in their target range of 70 to 100 and are also considering the need to install offshore substations during this season.

The speaker discusses the team's performance and confidence in their projected range of 70 to 100. They also address the recent breakout in the Dominion zone and how it will affect their capacity plans for the forthcoming IRP. They will update their capital plan and IRP annually and remain focused on meeting customer demand and investing in distribution, transmission, and generation in Virginia to support the state's business growth.

During a Q&A session, Nicholas Campanella from Barclays asked Robert Blue about the impact of the upcoming auction on the company's short generation for next year. Blue explained that there is a natural hedge in place where the company's owned generation is bidding into the capacity market and receiving a high price, which offsets the cost of procuring additional capacity to meet their load obligations. However, there is a short position between organic generation and load, which is typically satisfied through imports from PJM. This short position will result in a small hurt in the second half of 2025, but going forward, it will be addressed through rate cases.

The company was unable to include the expected cost of an auction in their recent biennial filing, which means they cannot change rates until the end of 2025. This will result in a temporary leakage of costs for seven months, which will be recovered from customers through base rates. The company sees this as a signal for the need for more regulated investment to elongate their growth rate. The company plans to become self-sufficient in the future, but for now, the financial impact is temporary.

The speaker explains that the increase in costs for the Charybdis shift is due to normal modifications and not a scope change. The majority of the increase is for CapEx, with the rest being associated financing costs. The company has worked with a consortium of banks to minimize the impact on financing costs. The overall increase is not significant and will have a minimal impact on 2025 costs.

Jeremy Tonet asks about the possibility of a data center colocation at Millstone and how the company is navigating stakeholder sensitivities. Robert Blue explains that they are actively exploring options for Millstone beyond their current contract and are open to the idea of a co-located data center. They are also aware of potential stakeholder concerns and are looking for options that make sense for all parties involved. Blue declines to comment on the ISA protest in front of FERC.

Jeremy Tonet asks Steven Ridge about the potential impact on customer bills after the recent auction. Ridge explains that they try not to think about customer bills based on isolated drivers and instead focus on a holistic approach. He mentions the elimination of the regi rider, which was $3-4 a month, and states that they will come back to the commission in March with a high priority on customer bills. Ridge cannot give specific information, but assures that the impact will not be significant. The conference call then concludes.

This summary was generated with AI and may contain some inaccuracies.