The paragraph is from the Dominion Energy Fourth Quarter 2024 Earnings Conference Call. David McFarland, the Vice President of Investor Relations and Treasurer, introduces the call, mentioning the availability of earnings materials and the presence of forward-looking statements subject to risks. He notes that non-GAAP measures will be discussed, with reconciliations available in the earnings release kit on their website. Key executives, including Bob Blue, Steven Ridge, and Diane Leopold, are part of the call. Bob Blue, the Chair, President, and CEO, reflects on the company's strategic direction, highlighting five core principles: strategic simplicity, consistent financial performance, balance sheet conservatism, dividend security, and exceptional customer experience, all aimed at accountability and achieving favorable policy and regulatory outcomes.

The paragraph highlights the company's commitment to its updated plan over the past year, emphasizing the aim to rebuild trust by delivering consistent long-term results. Despite challenges like severe weather, the company reported operating earnings per share in the upper half of its guidance range for 2024. Achievements include effective storm restoration in South Carolina, positive regulatory outcomes in both Carolinas and Virginia, and progress on the Coastal Virginia offshore wind project through milestone achievements and reduced shareholder risk. The company also achieved nearly record-setting employee safety performance while advancing its strategy to meet growing energy demands. Steven Ridge will provide a financial update, noting the 2024 operating earnings were $2.77 per share, despite $0.03 negative impact from adverse weather.

The paragraph discusses the company's financial performance and future guidance. In 2024, GAAP earnings were $2.44 per share, with the fourth quarter GAAP and operating earnings at $0.15 and $0.58 per share, respectively, the latter reflecting normal weather conditions. The 2025 operating earnings guidance has been narrowed to between $3.28 and $3.52 per share, accounting for RNG 45Z credit income, with an annual operating growth forecast of 5% to 7% through 2029. This excludes the RNG credit impact due to its legislative expiration in 2027. Dividend guidance is maintained at $2.67 per share until aligned with industry payout ratios. The company has revised its 5-year capital investment forecast to $50 billion, a 16% increase, to meet growing demand and ensure reliability. Detailed disclosures are provided in the appendices of their materials.

The paragraph discusses Dominion Energy Virginia's capital increase, primarily driven by enhancements in transmission, distribution, and nuclear licenses, with 60% of this spend being eligible for regulatory recovery. The company is optimistic about their investment opportunities, especially towards the end of the decade. They maintain a conservative financial stance, ensuring low leverage and solid credit ratings to secure low costs for customers. The financing plan outlines a mix of internal cash flow and external funding, including increases in debt, hybrid, and equity issuances, with specific equity plans highlighted for 2025.

The article outlines the company's financial stability and plans for equity issuance beyond 2025, emphasizing the alignment of growth capital spending with maintaining strong credit ratings. It highlights confidence in their conservative plan despite external factors like higher interest rates. The paragraph also covers 2024 safety and affordability achievements, noting near-record safety performance and rates below national averages. Additionally, it provides updates on the Coastal Virginia Offshore Wind (CVOW) project, which is halfway to completion and expected by 2026. Supported by Virginia law, CVOW is vital for AI and cyber support in Virginia's data center market, delivering 2.6 gigawatts of power and creating significant economic and job benefits.

The paragraph details the progress and milestones of an energy project in Virginia, which has strong bipartisan support. In 2024, significant milestones have been achieved, including the successful installation of monopiles and transition pieces, with ongoing work on the export cableway and offshore substations. As of now, 130 monopiles have been loaded, with 75% either installed or awaiting installation, and most of the transition pieces have been fabricated. The project's wind turbine supplier, Siemens Gamesa, is on schedule, having already completed 8 towers, with 31 more in progress. The completion of all transition pieces is expected by October.

The paragraph discusses updates and challenges related to an offshore wind project. Blade fabrication has started, with sales production expected next month. A recent cost update revealed an increase in project costs from $9.8 billion to $10.7 billion, attributed mainly to higher network upgrade costs required by PJM due to increased demand growth. These network upgrades, which do not affect the project's construction timeline, represent the largest variable cost. Despite this, other project inputs remain within budget. Contingency plans have been refreshed to account for 5% of remaining costs. A cost-sharing settlement approved by Virginia regulators will result in a minimal increase of $0.43 per month in residential customer bills over the project's lifespan, ensuring risk is balanced between customers and shareholders.

The updated Levelized Cost of Electricity (LCOE) for the CVOW project remains competitive compared to new energy generation options like solar, battery, and gas-fired generation, making it an affordable energy source for customers. Of the $900 million cost increase, $700 million is expected to be recovered through a rider and added to the rate base, pending regulatory approval. Stonepeak will bear 50% of the nonrecoverable cost increase instead of Dominion Energy shareholders. The project is on schedule, with a focus on accurate execution, and future cost revisions are expected to be minor. The Charybdis vessel is 96% complete and undergoing sea trials, expected for delivery in early 2025 within its $715 million budget. In terms of data centers, Virginia hosts the world's largest concentration, with Dominion Energy having connected about 450 centers, totaling nearly 9 gigawatts in capacity.

The paragraph discusses the significant role data centers play in DEV's sales, accounting for 26% of total sales, and their concentration in Virginia due to favorable conditions such as fiber networks, a qualified workforce, and affordable energy. DEV is expanding its infrastructure to meet the growing electricity demands from data centers in Eastern Loudoun County, Virginia, including constructing 500 kV transmission lines. The SEC has approved another 500 kV line to be completed by 2027. The PJM DOM zone is experiencing unprecedented load growth, driven by the increasing number, size, and accelerated schedules of data centers. PJM's forecast indicates peak summer load growth of about 6.3% per year over the next decade. To manage this demand, DEV has changed its process for handling new delivery point requests, organizing them into batches to deliver services efficiently.

Since communicating recent changes, customer demand has surged, as evidenced by a rise in contracted data center capacity to about 40 gigawatts by December 2024 from 21 gigawatts in July 2024, reflecting an 88% increase. This capacity is categorized into substation engineering letters, construction letters, and electrical service agreements, with obligations increasing from the first to the last stage. Notably, the demand in the substation engineering letters stage has risen by 245%, indicating substantial growth in Virginia's data center sector, partially driven by a new batch system. There are 5 gigawatts of demand in construction letters of authorization and nearly 9 gigawatts in electrical service agreements, with the latter increasing by 1 gigawatt since July 2024.

The paragraph discusses various updates from a company involved in energy contracts and transmission projects. It outlines the structure of electricity supply agreements (ESA) and highlights a joint planning agreement with AEP and FirstEnergy for transmission projects shortlisted by PJM. Dominion's share in this agreement will involve significant capital investment, increasing their annual transmission spending beyond previous forecasts. In South Carolina, energy legislation is under consideration, but the current regulatory framework poses challenges. Additionally, the Millstone facility in Connecticut is crucial for carbon-free electricity, with a portion of its output under a fixed price contract and the rest protected by a hedging program.

In 2024, Millstone achieved a capacity factor of 92%, meeting performance expectations and demonstrating a commitment to safety and operational excellence. Legislative efforts in New England, particularly Massachusetts, are focused on authorizing more nuclear power procurements, and Millstone is engaging with relevant parties for optimal outcomes. The company is considering supporting data center activities in collaboration with Connecticut stakeholders, though no timeline for announcements exists. The company has achieved near-record safety performance and reaffirmed its growth and financial guidance. CVOW is on schedule, ensuring cost-sharing benefits for customers and shareholders, while investments continue to provide reliable and clean energy. The focus remains on execution, and the floor is open for questions.

The paragraph features a discussion between Shahriar Pourreza and Robert Blue regarding the Coastal Virginia Offshore Wind (CVOW) project. Shahriar inquires about the variability, potential supplier delays, schedule flexibility, cost recovery, and future wind projects in light of CVOW 1 experiences and policy concerns. Robert Blue responds by expressing confidence in the project's current position and estimates, pending further data from PJM. He addresses the potential impact of tariffs, noting that most remaining spending is outside the U.S., mainly in Europe, with little exposure to steel or aluminum tariffs, as the components are considered finished products. Diane is mentioned as being responsible for discussing project derisking.

The paragraph discusses the complexities of applying tariffs to a project and highlights the current state of a large-scale project with a budget between $10.7 billion and $11.3 billion. The text notes that potential steel and aluminum tariffs may not impact the project, CVOW, significantly. The project has a $200 million contingency fund, with half of the costs being recoverable from customers and shared with Stonepeak. Diane Leopold explains that the project is progressing well; all permits and materials are secured, contracts are fixed-price, and fabrication and installation are on track. The project is 50% complete, with risks continually decreasing as they improve efficiency in installation processes.

The paragraph is a dialogue during a conference call where Robert Blue discusses their focus on completing a specific project on schedule and within budget, noting they have additional leases but no current capital plans for them. Shahriar Pourreza acknowledges the response. Nicholas Campanella from Barclays then inquires about an updated large number of gigawatts related to data centers, questioning if this is additional to PJM's forecasts and its impact on future plans, particularly regarding the necessary capital expenditure for transmission or generation. Robert Blue confirms that the gigawatts in question are not included in the PJM forecast and states that there is no standard rule of thumb for estimating capital needs per gigawatt.

The paragraph discusses the significant demand for data centers in Northern Virginia, particularly in Loudoun County, where there is still room for capacity expansion. The discussion includes ongoing projects, such as two 500 KV lines adding 6 gigawatts of capacity. Data center expansion is spreading from Loudoun County to neighboring areas and Richmond Metro. The focus is on delivering reliable, affordable, and clean energy to meet this demand. Additionally, Nicholas Campanella asks about the expansion prospects at Millstone and whether large customer contracts would require colocated facilities. Robert Blue responds that while there is no specific timeline, additionality is not necessary for potential large user customers.

The paragraph discusses the focus on data center expansion in Virginia, highlighting the economic benefits such as lower property taxes due to increased tax revenue from data centers. Policymakers in Virginia, including Governor Youngkin, emphasize making Virginia a tech hub. The expansion is seen positively as it spreads costs over a larger customer base, potentially aiding with customer bill headroom. There are ongoing discussions about whether data centers contribute their fair share and if other customer classes are subsidizing them, a debate common since the start of utility regulation.

The paragraph discusses a biennial review process in Virginia, with expectations that a forthcoming review in March will address data center growth issues in the state. Robert Blue expresses confidence that the commission will make decisions benefiting both customers and the Virginia economy. Jeremy Tonet asks about stakeholder engagement beyond affordability, considering Virginia's regulatory processes. Blue mentions plans for a straightforward rate case focusing on reliability and affordability, noting that Virginia's electricity rates are below regional and national averages. He highlights a constructive environment ahead of the case, anticipating a November outcome without any unusual complexities. An operator then moves the discussion to a question from David Arcaro about offshore wind.

The paragraph discusses the potential impact of an executive order on offshore wind projects, specifically the Coastal Virginia Offshore Wind (CVOW) project. Robert Blue expresses confidence that the executive order won't affect CVOW, citing its compliance with federal permits, alignment with energy goals, and importance to Virginia's economy and energy strategy. He emphasizes its role in powering the growing data center market and its bipartisan support. It also mentions Secretary Bergum's commitment to continuing projects that are sensible and legally backed. David Arcaro then inquires about the data center pipeline growth and whether PJM's 2034 forecast will need to increase, questioning potential constraints on connecting data centers to the system.

In the paragraph, Robert Blue expresses confidence in the increasing demand for data centers, particularly in Virginia, emphasizing their long-standing experience and understanding of data center customer needs. He notes their infrastructure development efforts to support this growth. Steven Ridge adds that the PJM forecast might underestimate future demand due to backward-looking data, but expects many projects to convert and continue supporting growth. He suggests there's strong potential for continued investment in a stable environment. Anthony Crowdell then asks for a timeline on project transitions through stages, to which Steven Ridge indicates they've provided updated guidance to customers.

The paragraph discusses a shift from a cereal to a cluster or batch approach in a power project process, which extends the timeline from initial stages to signing the ESA and taking power delivery to 4 to 7 years. This timeline can be affected by the specific needs and locations of the projects. No specific guidance is given for translating the 26 gigawatts into the CLOA or ESA stages. In response to a question from Anthony Crowdell, Steven Ridge notes that there's no specific guidance due to the bespoke nature of the projects. Later, in response to David Paz's question about assumed earned returns and potential lag in different regions, Ridge indicates that specific guidance hasn't been provided, particularly in areas like DEV where investments usually earn at their allowed rates.

The paragraph discusses the financial performance and strategy of a company related to its allowed returns and rate case processes, particularly in South Carolina. It mentions that the company is working to achieve its allowed returns for 2023, making adjustments for items like fossil retirement amortizations. However, in South Carolina, the backward-looking rate case process might result in under-earning initially, estimated between 80 to 90 basis points, and 100 to 200 basis points on average during the rate case cycle. The company is focusing on closing this gap by engaging with stakeholders and considering mechanisms such as legislation or more frequent rate cases. Additionally, the mention of a $4-billion-plus capital expenditure plan does not include any investment in the Summer 2 or 3 projects, as the company is not participating in these initiatives.

The paragraph summarizes the conclusion of a conference call. A participant clarifies that a $7 billion capital increase is unrelated to V.C. Summer. The operator announces the end of the question-and-answer session, and Robert Blue thanks attendees before the call officially concludes.

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