Dominion Energy Inc.

Last modified by Asif Farooqui on 2023/09/28 03:42

Contents

Summary
Recent Developments
- Recent Acquisition
Financial Highlights
Company Overview
- Business Segments
References

Summary

Dominion Energy is one of the nation’s largest producers and distributors of energy.
Dominion Energy to Sell Gas Distribution Companies to Enbridge

Dominion Energy Inc. (NYSE: D, LSE: 0IC9) is an American power and energy company that supplies electricity and natural gas to customers in 15 states. The company's regulated electric utility business serves customers in Virginia, North Carolina, and South Carolina. Its regulated natural gas utility business serves customers in Utah, Idaho, Wyoming, West Virginia, Ohio, Pennsylvania, North Carolina, South Carolina, and Georgia. Dominion also has generation facilities in Indiana, Illinois, Connecticut, and Rhode Island. Dominion's electricity generation portfolio includes nuclear, natural gas, coal, solar, and wind power. The company is also a leader in the development of renewable energy projects.

Recent Developments

Dominion Energy to Sell Gas Distribution Companies to Enbridge¹

Sept. 5, 2023; Dominion Energy announced that it has concluded a robust and competitive sale process and executed three separate definitive agreements to sell its three natural gas distribution companies to Enbridge (TSX: ENB) (NYSE: ENB).

The three LDCs – The East Ohio Gas Company, Public Service Company of North Carolina, Incorporated, and Questar Gas Company along with Wexpro Company – serve about 3 million homes and businesses in Ohio, North Carolina, Utah, Wyoming, and Idaho and collectively comprise approximately 78,000 miles of natural gas distribution, transmission, gathering, and storage pipelines; more than 62 Bcf of working underground and liquefied natural gas storage capacity; and approximately 400 Bcfe of cost-of-service regulated gas reserves as of year-end 2022.

Aggregate transactions value of $14.0 billion, including the assumption of $4.6 billion of debt, represents approximately 1.5x estimated 2022 year-end rate base of $9.2 billion.

Aggregate purchase price of $9.4 billion represents approximately 16.6x estimated 2023 operating earnings of $564 million and approximately 16.7x estimated 2024 operating earnings of $561 million.

Total estimated after-tax proceeds of $8.7 billion are expected to be used to reduce parent debt in addition to the conveyance of $4.6 billion of operating company debt. The transactions are expected to improve the company's consolidated FFO to debt by approximately 3.4%.

Dominion Energy Announces Closing of Sale of Remaining Interest in Cove Point²

Sept. 1, 2023; Dominion Energy (NYSE: D) today announced closure of the sale of its 50% noncontrolling limited partnership interest in Cove Point LNG, LP, to Berkshire Hathaway Energy for $3.3 billion. In addition, Dominion Energy will receive proceeds of $0.2 billion from the settlement of related interest rate derivatives. This transaction was previously announced on July 10, 2023.

A bidirectional liquefied natural gas facility on the western shore of the Chesapeake Bay in Lusby, Md., Cove Point is served by an associated pipeline system in Virginia and Maryland and has 14.6 Bcf of onsite storage.

Recent Acquisition

In August 2022, Dominion Energy completed the sale of 100% of the equity interests in Hope to Ullico for $690 million in cash consideration, subject to customary closing adjustments.

Acquisition of Virginia Power Solar Projects

In 2020 through 2022, Virginia Power entered into and completed the acquisitions of several primarily early-stage solar development projects in Virginia, including both non-jurisdictional facilities and those expected to be recovered under Rider CE.

In 2022, Virginia Power entered into and completed the acquisitions of various solar development projects in Virginia. These projects are expected to cost a total of approximately $1.1 billion once constructed, including initial acquisition costs, and generate approximately 537 MW combined.

Acquisition of Nonregulated Solar Projects

In 2022, Dominion Energy entered into an agreement and completed the acquisition of a nonregulated solar project in Ohio. The project is expected to cost a total of $390 million once constructed, including the initial acquisition cost, and generate approximately 200 MW.

In 2020, Dominion Energy entered into agreements and completed the acquisition of various nonregulated solar projects in Ohio, South Carolina and Virginia. These projects are expected to cost a total of approximately $470 million once constructed, including the initial acquisition costs, and generate approximately 248 MW combined.

Financial Highlights

Second-Quarter 2023 Results³

Aug. 4, 2023; Dominion Energy announced unaudited net income determined in accordance with Generally Accepted Accounting Principles (reported earnings) for the three months ended June 30, 2023, of $599 million ($0.69 per share) compared with net loss of $453 million ($0.58 per share) for the same period in 2022.

Operating earnings for the three months ended June 30, 2023, were $468 million ($0.53 per share), compared to operating earnings of $658 million ($0.77 per share) for the same period in 2022.

Company Overview

Dominion Energy, headquartered in Richmond, Virginia and incorporated in Virginia in 1983, is one of the nation’s largest producers and distributors of energy. Dominion Energy is committed to safely delivering sustainable, reliable and affordable energy and achieving net zero carbon and methane emissions by 2050. Dominion Energy’s strategy is to be a leading sustainable provider of electricity, natural gas and related services to customers primarily in the eastern and Rocky Mountain regions of the U.S. As of December 31, 2022, Dominion Energy’s portfolio of assets includes approximately 31.0 GW of electric generating capacity, 10,600 miles of electric transmission lines, 78,500 miles of electric distribution lines and 93,500 miles of gas distribution mains and related service facilities, which are supported by 4,000 miles of gas transmission, gathering and storage pipeline. As of December 31, 2022, Dominion Energy operates in 15 states and serves approximately 7 million customers.⁴

Dominion Energy currently expects approximately 90% of earnings from its primary operating segments to come from stateregulated electric and natural gas utility businesses. Dominion Energy’s nonregulated operations consist primarily of long-term contracted electric generation operations and its investment in Cove Point. Dominion Energy’s operations are conducted through various subsidiaries, including DESC and Virginia Power.

Virginia Power, headquartered in Richmond, Virginia and incorporated in Virginia in 1909 as a Virginia public service corporation, is a wholly-owned subsidiary of Dominion Energy and a regulated public utility that generates, transmits and distributes electricity for sale in Virginia and North Carolina.

Business Segments

Dominion Energy manages its daily operations through four primary operating segments: Dominion Energy Virginia, Gas Distribution, Dominion Energy South Carolina and Contracted Assets.

Dominion Energy Virginia

Dominion Energy Virginia is substantially composed of Virginia Power’s regulated electric transmission, distribution (including customer service) and generation (regulated electric utility and its related energy supply) operations, which serve approximately 2.7 million residential, commercial, industrial and governmental customers in Virginia and North Carolina.

Dominion Energy Virginia’s previously announced growth capital plan includes spending approximately $27 billion from 2022 through 2026 to construct new generation capacity, including the CVOW Commercial Project, to meet its renewable generation targets and growing electricity demand within its service territory in order to maintain reliability and regulatory compliance and to upgrade or add new transmission lines, distribution lines, substations, and other facilities, as well as maintain existing generation capacity.

Gas Distribution

Gas Distribution includes Dominion Energy’s regulated natural gas sales, transportation, gathering, storage and distribution operations in Ohio, North Carolina, Utah, southwestern Wyoming and southeastern Idaho (through East Ohio, PSNC and Questar Gas) which collectively serve approximately 3.0 million residential, commercial and industrial customers. Gas Distribution also includes nonregulated renewable natural gas facilities in operation and under development, including Dominion Energy’s investment in Align RNG.

Gas Distribution’s previously announced growth capital plan includes spending approximately $5 billion from 2022 through 2026 to upgrade existing or add new infrastructure to meet growing energy needs and retain reliability within its service territory as well as investments in renewable natural gas infrastructure projects. Planned capital spending is driven by infrastructure needs from a growing customer base in states with expanding economies, replacing aging assets for reliability, safety and sustainability and meeting demands for natural gas to support the transition from more carbon intensive fuels.

Dominion Energy South Carolina

Dominion Energy South Carolina is comprised of DESC’s generation, transmission and distribution of electricity to approximately 782,000 customers in the central, southern and southwestern portions of South Carolina and the distribution of natural gas to approximately 435,000 residential, commercial and industrial customers in South Carolina.

Dominion Energy South Carolina’s previously announced growth capital plan includes spending approximately $2 billion from 2022 through 2026 to upgrade existing or add new infrastructure to meet growing energy needs within its service territory and maintain reliability.

Contracted Assets

Contracted Assets includes the operations of Millstone, and associated energy marketing and price risk activities, Dominion Energy’s nonregulated long-term contracted renewable electric generation fleet, solar generation facility development operations and Dominion Energy’s 50% noncontrolling interest in Cove Point. Contracted Assets’ previously announced growth capital plan includes spending approximately $3 billion from 2022 through 2026 to expand its renewable generation fleet.

Contracted Assets derives its earnings primarily from Dominion Energy’s nonregulated generation assets, including associated capacity and ancillary services, and from its noncontrolling interest in Cove Point. Variability in earnings provided by Millstone relates to changes in market-based prices received for electricity and capacity as well as the timing, duration and costs of scheduled and unscheduled outages.