Dominion Energy Third Quarter 2026 Earnings Conference Call - DOMINION ENERGY INC

Explicit Guidance:

• FY2026 full-year operating EPS expected to land in the top half of the original guidance range, driven by better-than-budgeted sales, favorable weather (YTD), and higher 45Z credits, with conservatism applied for the balance of year weather.
• Reaffirmation of all existing financial guidance (credit metrics, dividend, and long-term growth rates) previously issued on the Q4 earnings call.
• Dividend and Credit Metrics: Maintaining robust credit guidance and dividend commitments; specific numerical targets remain unchanged from prior guidance.

Business-Segment Outlook:

• Data Centers: Robust demand for low-risk data center customers in Virginia; backlog stands at >54 GW (including >12 GW under electric service agreements), up >13% (6 GW) since year-end 2025.
• Virginia IRP: Company preferred plan includes accelerating/adding 4 GW of solar and 2 GW of battery storage by 2030 (vs. 2025 plan), with system battery capacity projected to increase 4x by 2034.
• Cost Impact: Monthly residential electric bills forecast to rise ~2.3% annually under the preferred plan.
• Energy Storage: Expect growing role for storage (short and long-duration) driven by Virginia legislation and improved reliability; projected capital opportunity of $2.5–3.0 billion per GW for self-build projects.
• Millstone (CT): Existing PPA expected to save customers ~$245M in 2026 ($200M YTD) and ~$900M over its 10-year life; final decision on zero-carbon RFP anticipated later this year.

Market and Competitive Outlook:

• Sales: Last Twelve Months (LTM) weather-normal electric sales growth of 3.4% across Dominion East Ohio (DEV) and Dominion South Carolina (DESC); all 10 summer peak demand days in 2026 have occurred, with DESC setting a new all-time peak in August.
• Offshore Wind (CVOW): Project 85% complete; 44 turbines installed (640+ MW), with 45th installation ongoing. Current installation cadence averages ~2 days (jack-up to jack-down); efficiency improving (recent 9 turbines averaged 38 hours vs. 69 hours for first 10).
• Construction Efficiency: Projecting ability to install remaining 132 turbines by end-2027 within 3.22 days per turbine on average, utilizing ~30–95 days of contingency for weather/maintenance in the remaining 425 calendar days.
• LCOE: Levelized Cost of Energy for CVOW estimated at $62/MWh, driven by RECs at $38/MWh; LCOE remains well below statutory thresholds.

Macro / Industry Outlook:

• Regulatory Timelines (NextEra Merger):
  • Virginia: Rebuttal testimony filed Nov 2nd; hearings begin Nov 17th; Final Order due Jan 11, 2027.
  • South Carolina: Rebuttal testimony filed Nov 18th; hearings begin Dec 8th; Final Order due Jan 29, 2027.
  • North Carolina: Hearings begin Feb 23, 2026.
• Transaction Closing: Expect the NextEra-Dominion combination to close in the second half of 2027.
• Fuel Securitization: Virginia SCC approved ~$900M fuel securitization in September to mitigate near-term fuel cost impacts on customer bills.
• RECs: Subject to tightening supply/demand constraints for Virginia-generated RECs, creating pricing volatility but supporting value for CVOW.

Strategic Initiatives:

• NextEra Combination: Transformational transaction leveraging 238 years of combined experience; enhanced Virginia benefits package includes $1B annual supplier program, $100M workforce fund, and 1,000+ new jobs.
• CVOW Construction: Project completion targeted by end of 2027; third/final offshore substation energization targeted by end of 2026.
• Nuclear: Focus on subsequent license renewals (extending lives by 20 years) for regulated fleet; limited opportunities for upgrades at Millstone.
• Infrastructure: Building new shareholder-funded co-headquarters tower in Richmond; expanding battery storage capabilities in the combined entity.

Risks and Headwinds to Outlook:

• Weather: Contingency used for September/October wind weather delays; conservatism built into FY2026 EPS guidance for Nov/Dec weather.
• Regulatory Uncertainty: 57 conditions of approval for NextEra merger remain under review; potential gaps on "ring fencing," bankruptcy remote SPVs, and dividend restrictions to be addressed via rebuttal testimony.
• Supply Chain/Labor: Sector-wide execution risks noted regarding labor constraints, supply chain availability, and permitting delays for large-scale generation projects.
• Cost Contingency: CVOW budget remains $11.65B (including $123M unused contingency); risks within contemplated parameters but remain a monitoring factor.

Management Tone on the Future:

• Confidence: High confidence in delivering financial plan; describes FY2026 guidance as "appropriately but not unreasonably conservative."
• Merger Sentiment: Leadership expresses excitement and confidence that the combination exceeds the statutory "no harm" standard, offering benefits beyond mere stability.
• Operational Maturity: Emphasis on de-risking CVOW through learning curves (35-45% efficiency improvements in turbine installation), experienced teams, and strong counterparty relationships.
• Conservatism: Deliberate inclusion of "opportunities to de-risk future financial performance" in current guidance to ensure solid delivery.

Miscellaneous:

• Safety: YTD OSHA recordable rate of 0.41 (well below industry average).
• Millstone Savings: Existing 2019 PPA has already delivered ~$200M+ in savings in 2025 and continues to provide bill reductions.
• Virginia Legislation: Enacted significant energy storage legislation establishing higher targets for short and long-duration storage.