The Dominion Energy Third Quarter Earnings Conference Call is introduced by the Operator, who notes that the call is in listen-only mode until the Q&A session. David McFarland, the Vice President of Investor Relations and Treasurer, then begins the call by reminding listeners that the earnings materials contain forward-looking statements subject to risks and uncertainties, detailed in SEC filings. The discussion includes non-GAAP performance measures with reconciliations available in the earnings release kit. Key speakers include Bob Blue, Steven Ridge, and Diane Leopold. Steven Ridge highlights that Dominion Energy has completed its business review and is now focused on providing long-term value, meeting financial goals, delivering offshore wind projects on time and budget, and achieving favorable regulatory outcomes.

The paragraph discusses the company's financial performance and future guidance. It highlights third-quarter operating earnings of $0.98 per share and GAAP results of $1.12 per share, with details available in the earnings release kit. The company narrows its 2024 full-year guidance range to $2.68 to $2.83 per share, maintaining a midpoint of $2.75. It anticipates fourth-quarter earnings to be impacted by increased financing costs and operational expenses. An early CVOW partnership closing, seen as a positive derisking move, will slightly lower earnings. Looking ahead, the company reaffirms its 2025-2029 guidance, with 2025 earnings expected to be between $3.25 and $3.54 per share, including an RNG 45Z credit income.

The company forecasts an annual operating earnings growth rate of 5% to 7% through 2029, excluding the impact of RNG 45Z credits that expire in 2027. Variation in growth is expected due to Millstone's refueling schedule, requiring a second planned outage every three years. A capital investment forecast update will be provided in early 2025. The company successfully completed $21 billion in debt reduction initiatives, including the sale of the public service company of North Carolina and the CVOW partnership, with all regulatory approvals obtained as planned. This accomplishment was attributed to strong collaboration with counterparties and employee efforts. The company finished its 2024 financing plan with $1.2 billion VEPCO debt and $200 million ATM issuance and will look for opportunities to address 2025 financing needs.

The paragraph discusses a company's financial and operational updates. Steven mentions that they've begun 2025 guided ATM issuance by selling $200 million in shares, aiming for settlement by the end of 2025, and expresses confidence in their financial plan despite potential challenges. Robert Blue then highlights the company's strong safety performance, with a low employee OSHA injury rate, and commends the team for maintaining focus on safety. He also describes the significant impact of Hurricane Helene on their South Carolina service area, noting extensive infrastructure damage and power outages that affected nearly 450,000 customers. The restoration effort involved substantial infrastructure repairs, with preliminary cost estimates ranging from $100 million to $200 million.

The paragraph discusses the company's response to a storm, highlighting their plans to assess securitization of over $100 million in deferred costs with regulatory bodies and stakeholders. They express pride in their employees' commitment to aiding affected communities, providing financial aid to over 20 local organizations. The paragraph also provides updates on the CVOW project, noting it is on schedule and within budget. Progress includes installing 78 monopiles and laying two deepwater cables ahead of schedule. The company appreciates their partner DEME's work and mentions progress in monopile deliveries, with EEW continuing steady production.

The article discusses the progress of an offshore wind project, highlighting that all three substations are on schedule, with the first set to be shipped to Virginia soon. Transition pieces and turbine manufacturing are progressing well, with tower fabrication having commenced in June and nacelle and blade production expected to start in early 2025. A recent regulatory filing projects $640 million in annual revenue, aided by improved forecasted Renewable Energy Credit (REC) prices, which reduce the project's levelized cost of energy to $56 per megawatt hour. As of September 30th, $5.3 billion has been invested, with an anticipated total of $6 billion by the end of 2024. The project's contingency funds have decreased but remain competitive. The project is 43% complete, with major milestones outlined, including updates on the Charybdis, which has undergone successful engine load testing for crane operations.

The vessel "Charybdis," currently 93% complete, is on track for completion in early 2025, aligning with prior guidance. It will undergo sea trials and return for modifications to accommodate turbine components, with no changes to its cost or availability for the CVOW construction schedule starting next year. Additionally, strong data center growth in Virginia continues, with 14 new connections this year and 16 expected in 2024. Data center demand is being studied, with 8 gigawatts in the engineering stage and 6 gigawatts in the construction stage, indicating increased customer commitment.

The paragraph explains that customers discontinuing projects must reimburse the company for its investment. Dominion Energy has 8 gigawatts in electrical service agreements (ESAs) with customers committing to specific electricity consumption levels, which are growing. As of July 2024, data center demand is over 21 gigawatts, up from 16 gigawatts in July 2023, excluding projects still in development. The PJM DOM zone is facing significant load growth, leading to increased delivery point requests for transmission services. Since 2020, there have been 280 requests for 40 gigawatts of capacity. Dominion Energy is implementing a new process to manage these requests in order, ensuring system reliability. Demand for services remains strong despite process changes.

The paragraph discusses recent initiatives in both transmission and generation by a company involved in regional energy projects. On the transmission side, they submitted proposals in September for a collaborative project with AEP and FirstEnergy in the PJM region, where new transmission needs are expected. Although final selections won't be made until 2025, they were previously awarded projects worth $2.5 billion. On the generation side, updates include a filing for annual cost recovery in nuclear extensions at Surry and North Anna, a $600 million investment in utility-scale solar projects in Virginia, and a 2024 Integrated Resource Plan proposing diverse generation expansions. Additionally, they signed an MOU with Amazon to explore SMR technology development at North Anna.

The paragraph outlines a company’s strategy to support customer energy needs by advancing next-generation nuclear technology while managing development risks. The company is in early stages of this initiative and emphasizes collaboration with large power users. They are also exploring partnerships with others interested in similar projects. Recently, they acquired a substantial offshore wind lease from Avangrid, which adds to their existing wind generation projects. Although there are no specific timelines or costs disclosed, the company highlights its expertise and knowledge in offshore wind development, aiming to provide a competitive advantage to customers. They emphasize a comprehensive approach addressing the entire energy value chain to accommodate growing demand and drive utility rate base growth.

The paragraph discusses the company's anticipation of increased regulated capital investment opportunities towards the end of their plan, with updated capital guidance expected in early 2025. They emphasize focusing on customer affordability, system reliability, and maintaining a low-risk profile, noting that their current residential electric rates are below the U.S. average. It provides updates on regulatory proceedings in South Carolina and North Carolina: a settlement in South Carolina was approved with new rates effective September 1st, despite challenges in earning the allowed return due to regulatory lag. In North Carolina, a settlement was reached for a $37 million revenue increase based on a 9.95% return on equity and a 52.5% equity layer.

The paragraph discusses several key points related to an ongoing agreement and business activities. An agreement involves moving $9 million in annual CCR costs from base rates to a separate rider, awaiting approval. Interim rates take effect in North Carolina pending a final commission order. Millstone is highlighted as a crucial asset, providing significant carbon-free electricity in Connecticut. The company is engaging with parties in New England for potential nuclear power procurements and exploring data center collaborations in Connecticut. The overall strategy includes focusing on safety performance, affirming financial guidance, advancing an on-schedule offshore wind project, and ensuring reliable and clean energy supply. The company is committed to execution and open to questions.

In the paragraph, during a Q&A session, Shar Pourreza from Guggenheim Partners asks Robert Blue about partnerships related to Small Modular Reactors (SMRs), particularly focusing on a deal with Amazon and other potential partners. Robert Blue explains that discussions with Amazon and others emphasize the importance of SMRs due to significant demand growth from data centers, the need for carbon-free, reliable energy, and the critical role of U.S. leadership in nuclear technology for national security. He highlights Virginia's position as key due to its forecasted power demand growth, the Virginia Clean Economy Act's carbon-free grid goal by 2045, and the presence of significant national security installations. Virginia also offers strong bipartisan support for nuclear initiatives, endorsed by Governor Youngkin and Senators Warner and Kaine.

The paragraph discusses Virginia's involvement in nuclear operations and the potential for advancing small modular reactor (SMR) technology. The Virginia legislature passed bipartisan legislation allowing companies to recoup costs related to SMR project development. Significant interest from large customers like Amazon in nuclear technology, in combination with other clean energy sources like offshore wind and battery storage, is noted. An RFP was issued to evaluate suitable technologies, and the financial structuring with interested parties, like Amazon, is crucial to mitigating risks. Amazon has shown interest in funding such projects, and the ideal structure will address the risk of pioneering technology.

The paragraph discusses Dominion Energy's commitment to managing cost overrun risks to protect their balance sheet and business risk profile, highlighting an agreement with Amazon and interest in small modular reactors (SMRs). Robert Blue mentions their focus on the regulated CVOW offshore wind project, ensuring it remains on time and budget, while currently not engaging in future offshore wind discussions. Shar Pourreza inquires about the recent IRP, questioning the decision to rely heavily on PJM for capacity rather than adding more generation, particularly natural gas, due to political sensitivity. Robert Blue responds by emphasizing significant growth in Virginia, including plans to potentially double offshore wind capacity and increase natural gas generation.

The paragraph covers a discussion between Nick Campanella from Barclays and Robert Blue regarding developments at the Millstone nuclear facility. Robert Blue mentions their plans to explore potential uprates at Millstone, particularly Unit 2, and the possibility of contracting procurement opportunities or establishing a data center in New England, contingent on approvals and agreements among stakeholders in Connecticut. These considerations are still in the early stages, and there is no additional information to provide at this moment.

The paragraph discusses the company's strategic focus on consistent and predictable growth, emphasizing their financial and operational plan introduced previously on March 1. Robert Blue acknowledges incremental developments like the IRP and RTEP processes and expresses confidence in extending the long-term growth rate, particularly in premium markets in Virginia and South Carolina. The company's approach relies on conservative assumptions, and they are committed to disciplined growth and operational excellence. An update on their CapEx plan will be provided in the fourth-quarter call, reinforcing their commitment to meeting established targets consistently as agreed by investor feedback.

In the paragraph, Steven Ridge and Nick Campanella discuss the company's capital plan, emphasizing the potential for upward bias in their capital investments, particularly towards the end of their planning framework (2025-2029). Ridge highlights efforts to maintain a robust balance sheet with a cushion, ensuring thoughtful financing for new capital projects. He stresses the importance of considering cash conversion speeds and a mix of project characteristics in their planning. Nick Campanella acknowledges these points with thanks. Ross Fowler from Bank of America asks about their operations in South Carolina, specifically regarding the electric settlement and legislative schedules. He inquires about addressing regulatory lag and potential opportunities in nuclear energy, referring to past experiences with V.C.

The paragraph centers on a discussion led by Robert Blue about the future energy plans for South Carolina, particularly in relation to the V.C. Summer site. Blue confirms that they are not planning to restart new units at the site but are considering other opportunities, such as partnering with Sandy Cooper for a combined cycle plant. The discussion also involves ongoing legislative efforts, particularly focusing on permitting reform and addressing regulatory lag to ensure the financial health of utilities. Blue expresses strong support for these efforts and highlights South Carolina's attractiveness for business. Ross Fowler then acknowledges the successful storm recovery efforts and inquires about the development of cost estimates and the capital versus operating and maintenance expenses following a hurricane.

In the discussion, Robert Blue emphasizes the significant damage caused by a storm in Akin County, South Carolina, and commends the team's efforts in restoring power. Steven Ridge explains that storm-related costs in South Carolina are deferred to the balance sheet, with a focus on capital expenses rather than operational costs. He mentions an agreement to explore securitization for storm costs exceeding $100 million, aiming for a constructive recovery outcome. Ross Fowler asks about the rate structures in Virginia, referencing an MOU with Amazon and potential investment opportunities in offshore wind projects. Robert Blue clarifies that while the 80% capital investment figure isn't specifically recognized, special contract rates with customers or special tariffs could be possibilities due to legislation in 2023.

The paragraph features a discussion between Jeremy Tonet from JPMorgan and Steven Ridge about recent changes in the Levelized Cost of Energy (LCOE) for the Coastal Virginia Offshore Wind (CVOW) project. Ridge explains that the LCOE has increased primarily due to higher expected pricing for Renewable Energy Certificates (RECs). He outlines the components of the LCOE calculation, which include a revenue requirement made up of costs like depreciation, maintenance, property taxes, financing and return on equity. He also mentions that Production Tax Credits (PTCs) are applied to offset these costs, and highlights how interest rate changes, capital costs, and other factors could affect the LCOE.

The paragraph discusses the impact of renewable energy credits (RECs) and legislative standards on the value of the CVOW project in Virginia. Under the Virginia Clean Economy Act, renewable generation resources are given credit, helping them compete with non-renewable resources. Customers would need to procure RECs if the CVOW project is absent. The demand for RECs increases due to rising legislative requirements, with 75% needing to be Virginia-based by 2025. This demand, combined with market dynamics, is pushing REC prices higher, thus increasing the project's value, although future market prices remain uncertain.

The paragraph discusses a presentation to regulators about the impact of renewable energy credits (REC) on projects, emphasizing a strong regulated framework for offshore wind that benefits customers. Jeremy Tonet asks about transmission opportunities, particularly with PJM's open window and joint projects with AEP and FirstEnergy. Robert Blue responds, highlighting proposals submitted in October and the collaboration with AEP and FirstEnergy to create innovative, cost-effective transmission solutions to meet increasing demand and maintain reliability.

The paragraph discusses the potential for additional capital expenditures (CapEx) if certain projects under review by PJM (a regional transmission organization) are awarded. The selection of these projects is anticipated by the first quarter of the following year. Although the exact CapEx amount is uncertain, there's an expectation that it could surpass last year's $2.5 billion for 150 transmission projects. Jeremy Tonet inquires about how load growth affects coal plant retirement timelines and EPA regulations for natural gas plants. Robert Blue responds that, according to their recently filed Integrated Resource Plan (IRP), there are no planned fossil fuel retirements over the next 15 years due to load growth. Furthermore, new EPA regulations have been considered in their planning scenarios but don't significantly alter their construction plans.

The paragraph is a discussion about financial planning and growth strategies in a utility company context. Anthony Crowdell from Mizuho asks about the company's approach to evaluating their financial plan, particularly in terms of sustainable earnings growth and rate base growth. Robert Blue refers to a previous response but allows Steven Ridge to provide further clarification. Steven explains that they released a financial plan they are confident in, highlighting that strong load growth, capital deployment opportunities, and regulatory support are key factors influencing their strategy. The company aims to achieve high-quality, predictable, low-risk earnings, and they reassess their plan annually to ensure it is aligned with these objectives.

The paragraph discusses a company's approach to growth, emphasizing a cautious decision-making process to ensure consistent, predictable, high-quality, low-risk earnings. Although they acknowledge industry tailwinds, they are confident in their current plan. Anthony Crowdell thanks them and yields to Carly Davenport from Goldman Sachs, who inquires about the inclusion of CCS technology costs in their plan concerning gas units and EPA regulations. Robert Blue clarifies that the plan accounts for capacity factor limits but not CCS technology costs. They believe CCS is not adequately demonstrated, which will be litigated with the EPA. Davenport appreciates the clarification and asks a follow-up question on opportunities related to SMRs.

In the paragraph, during a discussion about the timing for the commercialization of SMRs (Small Modular Reactors), Robert Blue confirms that the timelines outlined in the IRP (Integrated Resource Plan), targeting a starting date of 2034, reflect their views on feasible timing. Carly Davenport thanks him for the information, and the operator concludes the Q&A session. Robert Blue then gives closing remarks, thanking participants and mentioning an upcoming event at EEI. The conference is then concluded by the operator.

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