Dominion Energy, Inc. · NYSE:D
Dominion Energy — Q3 2022 Earnings Presentation
41 slides from Dominion Energy's earnings presentation, Nov 4, 2022
Slide 1: Q3 2022 earnings call
Q3 2022 earnings call November 4, 2022
Slide 2: Important note for investors
Important note for investors This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding Dominion Energy. The statements relate to, among other things, expectations, estimates and projections concerning the busine
Slide 3: Premier state-regulated utility operations
Premier state-regulated utility operations OH VA UT NC 90% state- SC regulated utility segments Utility operations in attractive states ✓ Customer/economic growth 10%¹ ✓ “Common sense” regulation Contracted Assets ✓ Sustainability Long-term contracted zero-carbon generation and Cove Point LNG (50%)
Slide 4: Delivering value to our stakeholders
Delivering value to our stakeholders Committed to safe, reliable, affordable and sustainable energy OSHA incidents¹ Reliable – SAIDI³ Residential electric customer rate (cents per kWh)5 (65%) (10%) 1.50 20.6 134 134 (13%) (17%) 128 18.5 120 16.0 16.0 14.9 13.9 13.3 0.62 0.53 0.46 0.41 2019 2020 2021
Slide 5: Dominion Energy Initiates Business Review
Dominion Energy Initiates Business Review ▪ Reviewing value-maximizing strategic business actions, alternatives to our current business mix and capital allocation, and regulatory options which may assist customers to manage costs and provide greater predictability to our long-term, state-regulated u
Slide 6: Dominion Energy Virginia: Regulated offshore wind
Dominion Energy Virginia: Regulated offshore wind Petition to reconsider performance guarantee = filed settlement pending SCC approval DEV, OAG, Walmart, Sierra Club, and Appalachian Voices filed a settlement agreement in the company's pending petition to the SCC to reconsider the performance guaran
Slide 7: Dominion Energy Virginia: Regulated offshore wind
Dominion Energy Virginia: Regulated offshore wind Project milestones Milestone Target Petition to reconsider performance guarantee by SCC Settlement filed Draft environmental impact statement by BOEM 2H 2022 Record of Decision published by BOEM Mid 2023 Commence onshore construction Q3 2023 Commence
Slide 8: Dominion Energy Virginia: Regulated offshore wind
Dominion Energy Virginia: Regulated offshore wind Installed cost risk profile: Fixed costs as percentage of total project costs¹ ▪ Major offshore equipment released for % Fixed fabrication 0% 75% 90%+ ▪ Onshore construction contracting Fixed as of Fixed costs Rider Q3 2022 by Q1 2023¹ application su
Slide 9: Dominion Energy Virginia
Dominion Energy Virginia Select business updates ✓ 3rd CE Rider¹ filing with SCC included about 800MW solar and battery storage Clean Energy ▪ ~$1.3B in capital investment filings ▪ Expect final order by Q2 2023 ✓ Advancing electric transmission projects to bring both new and upgraded infrastructure
Slide 10: Select business updates
Select business updates ✓ Attractive customer growth ✓ Filed 2022 IRP update: Accelerated coal retirements and renewable energy Dominion Energy South ▪ Coal only generation retired by 2030 (Cope remains as dual fuel until 2035) Carolina ▪ Proposed: 3 GW+ of solar and battery storage (2026+) ▪ Propos
Slide 11: Operating earnings per share
Operating earnings per share Q3 2022: Actual versus guidance ($ per share) $1.11 $1.13 Q3 2022 (YoY drivers) $0.98 ▲ Regulated investment ▲ Sales/margins ▼ Interest expense ▼ Tax timing ▼ Share dilution Actual¹ Guidance¹ ¹ See the third quarter 2022 Earnings Release Kit for supporting information an
Slide 12: Operating earnings per share
Operating earnings per share Actual and guidance ($ per share) $1.13 Q4 2022 (YoY drivers) $0.90 $0.98 ▲ Return to normal weather ▲ Regulated investment ▲ Sales ▲ Millstone outage timing ▲ O&M/Tax timing ▼ Interest expense ▼ Share dilution Q4 '21 Guidance Q4¹ Narrowed FY 2022 operating earnings guid
Slide 13: 2023+ Operating earnings growth
2023+ Operating earnings growth Path forward; pending outcome of Business Review LT growth supported by 5-year growth capital plan of $37B focused on decarbonization with over 75% rider eligible Path to 6.5% EPS growth Core long-term drivers 2023 (YoY drivers) ✓ 5-year utility rate base CAGR of ▲Sal
Slide 14: Regulated electric sales growth
Regulated electric sales growth LTM¹ Q3 ’22 YoY weather normal sales growth² Regulated electric sales trends Residential Commerical Industrial Govt/Other Total ✓ Robust commercial load growth driven by Data 9.5% Centers 2.6% ✓ Customer growth remains strong across Virginia and South Carolina -1.4% -
Slide 15: Best-in-class O&M control
Best-in-class O&M control Electric non-fuel O&M per sales ($/MWh) $200 Top quartile D¹ Peer² $/MWh Electric non-fuel O&M Lower is better $0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 D Ranking: 4th 3rd 3rd 2nd 2nd 1st 2nd 4th 2nd 2nd Note: Source of data is FERC Form 1 for respective annual p
Slide 16: Fixed income
Fixed income Interest rate exposure: D in-line with large-cap utility peers Three-year rate exposure (i.e., fixed rate maturities + variable rate debt) as a percentage of total debt 24% 25% Flexibility to mitigate using up to ~$9B of interest rate derivatives ▪ D’s rate exposure is split roughly 50/
Slide 17: Dominion Energy's affordability relative to national utility averages
Dominion Energy’s affordability relative to the national utility averages: Average residential electric and gas customer bills as % of median household income¹ DEV’s and DESC’s affordability has improved Dominion Energy by 10% and 14% more than the national electric Gas Distribution’s affordability
Slide 18: Fuel cost impacts
Fuel cost impacts Actively managing fuel recovery with a focus on customer impacts Latest fuel clause Under-recovered Commentary increase as % bill¹ balance (Sept. 2022) ▪ 12-M fuel clause to reset to current forecast and true-up prior year DEV – Virginia 7%² $1.4B ▪ Adjustment: 36-M recovery of unr
Slide 19: Fundamental changes to business risk and financial risk profile
Fundamental changes to business risk and financial risk profile History of improving metrics and lower thresholds State-regulated CFO pre-WC / debt Peer Baa2 rated utilities thresholds utility contribution³ Recent Moody’s threshold changes for D: ~15%² 90% ▪ SCANA merger (2019): Downgrade threshold
Slide 20: Summary
Summary ✓ Safety remains our top priority as our first core value ✓ Delivered earnings above the midpoint of our quarterly guidance range ✓ Narrowed 2022 EPS guidance to $4.03 to $4.18 ✓ Executing an industry-leading regulated decarbonization investment opportunity to benefit of all stakeholders ✓ F
Slide 21: Appendix
Appendix 21 83 \\\y
Slide 22: Operating segments
Operating segments Summary State-regulated utility operations Dominion Energy Dominion Energy Contracted Gas Distribution Virginia South Carolina Assets O CT VA H ID W O States of operation Y SC H Southeastern UT NC & Mid- UT Atlantic U.S. NC 2022E operating ~57% ~18% ~14% ~10% earnings contribution
Slide 23: Industry leading ESG profile achieving net zero by 2050
Industry leading ESG profile Committed to safe, reliable, affordable and sustainable energy and achieving net zero by 2050 Environment Social Governance 70% reduction 44% reduction OSHA recordable rate³ Board refreshment in Scope 1 CO2e emissions¹ 40% by 2026 7 new directors since 2016 diverse workf
Slide 24: Third-party ESG assessments
Third-party ESG assessments Dominion Energy’s independent 3rd party scoring reflects best-in-class ESG performance Dominion Energy Sector average “Leadership “Leadership Lower score = better “Trendsetter” ✓ 94 band” band” “Leader” ✓ A- ✓ A- AA 31 83 B B 25 A CDP—Climate CDP—Water MSCI Sustainaly
Slide 25: Environment Net Zero
Environment Material emissions reductions as zero-carbon generation displaces emitting technologies Owned generation dispatch (MWh) Enterprise-wide CO2e¹ by fuel type² Coal Gas Zero-carbon 44%↓ 45% 48% ~70%— 69% ~99% zero & 80%↓ 4% 76% low Net Zero 40% emitting 47% 29% 23% 12% 3 Baseline 2021A 2035E
Slide 26: Investing in support of our clean-energy profile
Investing in support of our clean-energy profile Five-year growth capital ~$37B 59% $22B Zero-carbon generation & energy storage¹ ~87% Emissions reduction and 18% $7B Electric grid transformation² enabling investments 10% $3B Gas distribution modernization / RNG 13% $5B Customer growth & other 2022
Slide 27: Decarbonization initiatives extend beyond 5-year plan
Decarbonization initiatives extend beyond 5-year plan Benefits customers, communities, environment Gas distribution modernization / RNG Nuclear life Electric grid transformation Up to $8B ~$73B Up to $15B Emissions Energy extension reduction and storage Up to $4B¹ enabling Solar Up to $4B Offshore U
Slide 28: Dominion Energy Virginia: Regulated offshore wind
Dominion Energy Virginia: Regulated offshore wind Experienced partners Wind turbine Offshore Transport & Monopiles Transition pieces generators substations install Note: Illustration not to scale 28
Slide 29: Northern Virginia boasts the largest data center market in the world
Dominion Energy Virginia Northern Virginia boasts the largest data center market in the world¹ Loudoun County² Data center development in Virginia Data Center Alley ✓ Connectivity to world class fiber networks ✓ Attractive business climate ✓ Access to largest data center workforce (U.S.) Washington
Slide 30: Regulated electric sales by class
Regulated electric sales by class 2022E operating EPS impact for 1% (full year) change in electric sales Dominion Energy Virginia: Dominion Energy South Carolina: Weather normal regulated electric sales (2022E) Weather normal regulated electric sales (2022E) Data centers: 44% ~21% of total DEV volum
Slide 31: Customer-elected rates: MBR/SCR
Dominion Energy Virginia Customer-elected rates: MBR/SCR¹ Since 2016, MBR/SCR sales volumes have grown and now represent ~12% of DEV’s total weather-normal sales volumes; given this load growth and the recent PJM market price volatility, we have provided additional disclosures related to these high-
Slide 32: Contracted Assets
Contracted Assets 2022E – 2024E Millstone energy position 1% open 0.2M MWh 17% open 45% hedged 42% hedged 2.8M MWh 7.1M MWh 6.5M MWh $36.78 $47.90 29% hedged 4.8M MWh $66.30 15.8M 15.7M 16.6M MWh in MWh in MWh in 2022E¹ 2023E² 2024E 55% long-term 57% long-term 54% long-term contracted contracted con
Slide 33: Inflation Reduction Act of 2022
Inflation Reduction Act of 2022 Summary of key tax provisions¹ ▪ 10+ years of full-value credits for onshore/offshore wind, solar, stand-alone storage, hydrogen, and after 2024 other zero-emissions facilities ▪ Expansion of ITC to include biogas (RNG) for projects starting construction before 2025 ▪
Slide 34: Customers
Customers State-regulated utilities Segment summary as of 9/30/2022 State summary Three months ended DE Customers September 30 South Carolina 9/30/2022 (M) Gas Distribution ‘20-’22 CAGR 1.2M 3.0M 17% DE Virginia 1.1% 2.7 43% DE South Carolina 2.2% 1.2 Electric 1.6% 0.8 Gas 3.3% 0.4 6.9M state utilit
Slide 35: Electric weather degree days
Weather Degree days Quarter ended 9/30 Nine months ended 9/30 2022 2021 2022 2021 Actual 17 0 2,209 2,174 Heating Normal 6 10 2,270 2,271 Dominion Energy Virginia Actual 1,222 1,176 1,735 1,696 Cooling Electric Normal 1,196 1,114 1,718 1,608 Actual 0 0 783 839 Heating Dominion Energy South Normal 0
Slide 36: Weather after-tax impacts
Weather After-tax impacts ($M) Q1 Q2 Q3 Q4 2022 YTD Dominion Energy Virginia2 $4 ($10) $10 – $4 Versus normal¹ Dominion Energy South 4 5 (11) – (1) Carolina3 Gas Distribution4 1 0 0 – 1 Total $9 ($4) ($0) – $4 Q1 Q2 Q3 Q4 2022 YTD Dominion Energy Virginia2 $14 ($7) ($6) – $1 Versus prior year¹ Domin
Slide 37: Fixed income: Credit Ratings
Fixed income Credit Ratings Dominion Energy, Inc. Moody’s S&P Fitch Corporate/Issuer Baa2 BBB+ BBB+ Senior Unsecured Debt Securities Baa2 BBB BBB+ Junior Subordinated Notes Baa3 BBB BBB Enhanced Junior Subordinated Notes Baa3 BBB- BBB- Preferred Stock Ba1 BBB- BBB- Short-Term/Commercial Paper P-2 A-
Slide 38: Fixed income: Credit Ratings (cont'd)
Fixed income Credit Ratings (cont’d) East Ohio Gas Co. Moody’s S&P Fitch Corporate/Issuer A2 BBB+ A- Senior Unsecured Debt Securities A2 BBB+ A Outlook Stable Stable Negative DESC Moody’s S&P Fitch Corporate/Issuer Baa2 BBB+ A- First Mortgage Bonds A3 A A+ Short-Term/Commercial Paper P-2 A-2 F2 Outl
Slide 39: Fixed income: long-term debt schedule
Fixed income Preliminary and unaudited schedule of long-term debt as of September 30, 2022 ($M) Segment Financing Entity Description Maturity Weighted Avg. Rate Short-term at 9/30/2022 Long-term at 9/30/2022 DE Virginia VEPCO Unsecured Senior Notes, fixed rates 2023-2052 3.99% $700 $14,435 DE Virgin
Slide 40: Fixed income: debt maturities
Fixed income Schedule of debt maturities as of September 30, 2022 ($M) Financing Segment Due Date Entity DE Virginia Gas Dist DE SC Con Assets Corp & Other Total 2022 Term Loan Credit Agreement (variable) 10/15/22 DECPH - - - 35 - 35 2022 Total - - - 35 - 35 2023 2.45% 2019 Series B Private Placemen
Slide 41: Fixed income: debt maturities
Fixed income Schedule of debt maturities as of September 30, 2022 ($M) Financing Segment Due Date Entity DE Virginia Gas Dist DE SC Con Assets Corp & Other Total 2025 3.30% 2020 Series A Senior Notes 03/15/25 DEI - - - - 400 400 3.10% 2015 Series A Senior Notes 05/15/25 VEPCO 350 - - - - 350 1.30% 2