Dominion Energy, Inc. · NYSE:D
Dominion Energy — Q1 2020 Earnings Presentation
46 slides from Dominion Energy's earnings presentation, May 5, 2020
Slide 1: Q1 2020 earnings call
Coastal Virginia Offshore Wind (CVOW) pilot project components en route from Europe (April 2020) Q1 2020 earnings call May 5, 2020
Slide 2: Important note to investors
Important note to 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 busines
Slide 3: COVID assessment
COVID assessment Corporate actions taken One Dominion Energy Implemented social distancing policies More than half of workforce working remotely Following best-practices in distribution and use of PPE Expanded health and paid time off benefits Financial assistance program to provide gran
Slide 4: Operating earnings per share
Operating earnings per share Actual versus guidance ($ per share) First quarter 2020 $1.25 $1.18 $1.09 17 straight quarters of weather-normalized results Unfavorable $1.05 that meet or exceed the weather impact on midpoint of our quarterly utility earnings: guidance range ($0.09) 17 straight quarter
Slide 5: Operating earnings per share
Operating earnings per share Actual versus guidance ($ per share) Second quarter operating EPS Full-year 2020 operating EPS $4.60 $4.22 $4.25 $0.85 $0.75 No change to existing guidance $0.75 Actual: Guidance: Actual: Guidance: 2Q 2019 2Q 2020 2019 2020 (Weather-normal)¹ (Weather-normal)¹ ¹ See pages
Slide 6: Dom Zone weather-normalized load
Dom Zone weather-normalized load Daily electric sales volume vs. 2018/19 average (through end of April) 12.0% Mar 11: Coronavirus Mar 23: VA Governor issues closure of 10.0% outbreak declared a schools and non-essential businesses; pandemic by WHO bans gatherings over 10 people 8.0% 6.0% 4.0% 2.0% 0
Slide 7: Dominion Energy Virginia
Dominion Energy Virginia Operating revenue and load (2019) Rate base 45% Revenue Volume Inclusive of 41% ~40% fuel-pass- 36% ~$24B¹ throughs, Data centers: 33% ~30% of ~60% ~50% commercial of operating volume revenue Rider Non-rider decoupled 16% 15% 9% 2020 operating EPS impact for 6% 1% (full-year
Slide 8: DESC weather-normalized load
DESC weather-normalized load Daily electric sales volume vs. 2018/19 average (through end of April) Mar 11: Coronavirus 12.0% outbreak declared a vs. 2018/19 average pandemic by WHO March April 8.0% (1.2%) (9.6%) 4.0% 0.0% (4.0%) (8.0%) (12.0%) Mar 31: SC Governor issues (16.0%) Daily closure of non
Slide 9: Dominion Energy South Carolina
Dominion Energy South Carolina Electric and gas operations Operating revenue and load (2019) Rate base 45% Revenue Volume 8% Inclusive of 26% fuel-pass- $8.4B1 throughs, 36% ~50% 32% 32% 66% of operating revenue 25% Rider Electric Gas decoupled 16% 2020 operating EPS impact for 1% (full-year) change
Slide 10: Gas Distribution, Gas T&S, Contracted Generation
Gas Distribution, Gas T&S, Contracted Generation 2020E operating EPS Commentary guidance contribution Over 80% of margin is decoupled Gas Distribution Full or partial bad debt recovery in OH, UT, NC 13% Entering off-peak and shoulder seasons through fall Long-term take-or-pay contracts large
Slide 11: Liquidity
Liquidity As of May 1, 2020 Liquidity Access to capital markets March 16 March 17 March 17 $0.7 $7.8 DEI DEI DEI $1.8 $500M $400M notes $350M notes 364-day term 3.3% 3.6% loan Due 2025 Due 2027 $6.0 $5.3 ($0.7) March 19 March 31 April 1 DEI DEI DEI $900M $1.5B notes $625M 364-day supp. 3.375% 364-da
Slide 12: Long-term debt issuance plan
Long-term debt issuance plan 2020 ($ millions) Original guidance: Remaining issuances Year-to-date issuances gross issuance range¹ for year Dominion Energy Virginia $800—$1,000 $— $800—$1,000 Gas Transmission & Storage $400—$700 $— $400—$700 Gas Distribution $1,800—$2,000² $200 $1,600—$1,800 Dominio
Slide 13: Pension
Pension Consolidated funded status as of year-end1 Commentary 92% Re-measured at year-end only Discount rate proxies (long-term, all-in corporate bond yields) unchanged since year-end 2019 85% Proactive hedge strategy: Hedged portion of equity assets in early 2020; monetized at significant “in
Slide 14: Summary
Summary 17th straight quarter of weather-normalized results at or above the midpoint of our quarterly guidance range Well positioned with regard to COVID-related demand impacts but continue to monitor the situation carefully Affirming 2020 operating EPS guidance range of $4.25—$4.60 Affirmin
Slide 15: Excellence amidst turmoil
Excellence amidst turmoil Salt Lake City earthquake response (March 18) Largest earthquake in thirty years 20x+ more calls and work orders than typical Surveys found zero material gas leaks caused by earthquake across system South Carolina tornado response (April 13) Most prolific tornad
Slide 16: Virginia legislative session
Virginia legislative session Most comprehensive renewable energy mandate in the nation Will create thousands of jobs, putting Virginia to work Regional, state, and local OFFSHORE SOLAR OR ENERGY economic growth WIND ONSHORE WIND STORAGE Significant environmental 5.2GW by 2035 16.1GW by 2
Slide 17: Virginia offshore wind
Virginia offshore wind Update Capital Existing 2.6GW CVOW project on-track to meet legislated approval standards Competitive procurement/solicitation per standard procedure Est. energy cost compares favorably to legislative benchmark Qualifying construction start and completion dates Previou
Slide 18: Virginia solar and onshore wind
Virginia solar and onshore wind Update Capital Near-term commitment: 3,000MW by 2022 More than 70% (2,100MW) complete During Q1, third solar rider application approved by Commission Select legislated approval standards “Public interest” Previous 2019-23 plan: Promotion of new renewable g
Slide 19: Virginia energy storage
Virginia energy storage Update Capital Pumped-storage Engineering and environmental analysis continuing Projected in-service in late 2020s Battery-storage 16MW pilot projects approved by Commission during Q1 (~$30M) Previous 2019-23 plan: $1.0B Select legislated approval standards “Pub
Slide 20: Near-term capital investment opportunities
Near-term capital investment opportunities Dominion Energy Virginia +$4.1B +71% $9.9B $5.8B Energy storage Solar Offshore wind Investor day guidance Updated guidance 2019-2023 growth capex 2020-2024 growth capex (OSW, solar, storage) (OSW, solar, storage) Please refer to page 2 for risks and uncerta
Slide 21: Long-term capital investment opportunities
Long-term capital investment opportunities Dominion Energy Virginia Up to $16B (subject to regulatory approval) Up to $43B (subject to regulatory approval) Electric transmission Nuclear relicensing ~$24B Offshore wind Strategic undergrounding (2.6 to 5.2GW) Grid modernization Solar/onshore wind Rene
Slide 22: Dominion Energy Virginia
Dominion Energy Virginia Typical monthly residential electric bills (1,000kwh/month) Current DEV (VA) typical residential monthly bill vs. DEV future residential rates Expected to keep pace annually Virginia (4.1%) with average historic inflation South Atlantic (~3%) (1.7%) Region $237 $226 $231 U.S
Slide 23: Atlantic Coast Pipeline
Atlantic Coast Pipeline Update Appalachian Biological Buckingham Nationwide Twelve Trail Opinion County Permit Agency U.S. Fish and U.S. Forest Service VA Air Control Board U.S. Army Corps of Engineers Wildlife Service Supreme Court oral Keystone ruling impacts Status argument: In process In process
Slide 24: Summary
Summary Outstanding Q1 safety performance; on-track to set new company annual record Achieved weather-normalized operating earnings that exceeded the midpoint of our guidance range for the 17th consecutive quarter Affirmed 2020 operating EPS guidance of $4.25—$4.60 Confirmed EPS growth expec
Slide 25: Appendix
Appendix Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 25
Slide 26: Operating earnings per share
Operating earnings per share Track-record of successful execution Weather normalized operating EPS vs. guidance Upper end guidance Guidance midpoint Lower end guidance 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q
Slide 27: Operating segments
Operating segments Summary Dominion Energy Gas Transmission Dominion Energy Contracted Gas Distribution Virginia & Storage South Carolina Generation NY CT UT CT OH PA States of VA WY OH MD ID WV SC CA IN WV WY operation NC UT CO VA NC UT Southeast SC NC U.S. GA 2020E operating ~45% ~25% ~15% ~10% ~5
Slide 28: Segment-level disclosure
Segment-level disclosure Operating earnings per share guidance 2020E guidance Q1 actual¹ 2020E contribution by segment² Dominion Energy Contracted Dominion Energy Virginia $2.22—$2.40 $0.58 Virginia Generation 5% 47% Gas Transmission & Storage $1.12—$1.21 $0.26 Gas Transmission & Storage 24% Gas Dis
Slide 29: Atlantic Coast Pipeline
Atlantic Coast Pipeline Select updates Financial update Capex to date (total project)¹ $3.6B Project-level $1.8B debt AFUDC 14% equity rate Expected EPS contribution: “Mid- to high- teen” 2020 cents per share Ownership Expected EPS contribution: ~20—25 cents 2022² per share (full-year in-service) DU
Slide 30: Atlantic Coast Pipeline
Atlantic Coast Pipeline Permit summary Reflects judicial solution to Appalachian Trail crossing Assumed Permit/authorization Agency Current status resolution (timing) U.S. Fish & Wildlife Service Vacated Reissuance Biological Opinion (USFWS) (July 2019) (1H 2020) Timely resolution of U.S. Army Corps
Slide 31: State utility customers
State utility customers Segment summary as of 3/31/2020 State summary 3 months ended Customers March 31 3/31/2020 (M) DE ‘18-’20 CAGR South Carolina DE Virginia 1.1% 2.7 1.1M Gas Distribution 17% 3.0M DE South Carolina 2.2% 1.1 44% Electric 1.7% 0.7 Gas 3.2% 0.4 6.8M Gas Distribution 1.5% 3.0 state
Slide 32: Weather
Weather After-tax impact ($M) Q1 Q2 Q3 Q4 2020 QTD Dominion Energy ($58) — — — ($58) Virginia2 Versus normal¹ Dominion Energy (9) — — — (9) South Carolina3 Gas Distribution4 (5) — — — (5) Total ($72) — — — ($72) Q1 Q2 Q3 Q4 2020 QTD Dominion Energy ($26) — — — ($26) Virginia2 Versus prior year¹ Domi
Slide 33: Weather
Weather Degree days Quarter ended 3/31 2020 2019 Actual 1,518 1,892 Heating Normal 1,990 1,988 Dominion Energy Virginia Actual 14 5 Cooling Electric Normal 5 4 Actual 578 660 Heating Dominion Energy South Normal 801 814 Carolina Actual 5 0 Cooling Normal 0 0 Actual 578 660 SC Normal 801 814 Actual 2
Slide 34: Contracted Generation
Contracted Generation 2020 Millstone hedge position Millstone hedging as of April 2020 17% open 2.6M MWh 56% long-term 15.4M contracted MWh in 8.7M MWh 2020 $49.99 27% hedged 4.2M MWh $39.55 ~83% of 2020 volumes de-risked at volume weighted average price of $46.60 Please refer to page 2 for risks an
Slide 35: Environmental
Environmental Generation by fuel type Electric generation mix (MWH) 2005 2018 2019 2005 2018 2019 Coal 52% 17% 12% Nuclear 36% 39% 42% Natural Gas 7% 39% 42% Petroleum 4% <1% 0% Biomass, Hydro, 1% 5% 5% Solar, Wind Note: 2005 and 2018 historical data pro forma for SCANA. All data excludes Bath Count
Slide 36: Environmental
Environmental Generation portfolio 2019 owned electric generation capacity (MW) Solar ~27,100 ~27,100 ~1,800 MW MW MW Total by fuel Total by segment Solar portfolio Natural gas 40% DE Virginia 69% Contracted Gen 69% Nuclear 22% DE South Carolina 19% DE VA – PPA 20% Coal 20% Contracted Gen 12% DE VA
Slide 37: Environmental
Environmental Carbon and methane emission reductions Carbon emissions (million metric tons)¹ Methane emissions (thousand metric tons)² 74.3 122.8 24% reduction 93.1 47% reduction 39.3 Nearly 2x better than industry average 2005 2018 2010 2018 ¹ Pro forma for legacy SCANA generation assets (2005 and
Slide 38: Environmental
Environmental Coal-fired generation Coal-fired generation as percent of Coal-fired generation as percent of company-wide generation output (MWh)¹ company-wide generation capacity (MW)¹ 52% 35% 20% 12% 2005A 2019A 2005A 2019A As of year-end 2019: Coal-fired generation as percent of company-wide inves
Slide 39: Environmental
Environmental 1Q 2020 Solar portfolio Capacity summary: By segment Approximate values In service In development Total Dominion Energy Virginia¹ 560 MW 1,450 MW 2,010 MW Contracted Generation 1,270 MW 620 MW 1,890 MW Total 1,830 MW 2,070 MW 3,900 MW Capacity summary: By geography Approximate values I
Slide 40: Environmental
Environmental Highlighted ESG statistics 2019 reporting year, unless noted Safety: 0.62 OSHA recordable incident rate Carbon emissions intensity: 0.275 metric tons/MWh1 Fresh water withdrawals (consumptive): 0.0000001 billion liters/MWh1 Methane emissions: 63,620 metric tons1,2 Supplier di
Slide 41: Fixed income
Fixed income 2020 remaining long-term debt maturities $ billions $2.0 100% of remaining maturities occur during 2H 2020 $— $— May June 2H 2020 Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 41
Slide 42: Fixed income
Fixed income Schedule of debt maturities ($ millions, as of March 31, 2020) Dominion Energy, Inc. & Subsidiaries Financing Segment Due Date Entity DE Virginia DE GT&S DE Gas Dist DE SC DE C Gen Corp & Other Total 2020 6.25% Medium Term Notes 04/01/20 SCANA - - - - - 170 170 2.579% Junior Subordinate
Slide 43: Fixed income
Fixed income Schedule of debt maturities continued ($ millions, as of March 31, 2020) Dominion Energy, Inc. & Subsidiaries Financing Segment Due Date Entity DE Virginia DE GT&S DE Gas Dist DE SC DE C Gen Corp & Other Total 2023 2.45% 2019 Series B Private Placement Senior Notes 01/15/23 DEI - - - -
Slide 44: Fixed income
Fixed income Schedule of long-term debt ($ millions, preliminary & unaudited) Segment Financing Entity Description Maturity Weighted Avg. Rate Short-term at 3/31/2020 Long-term at 3/31/2020 DE Virginia VEPCO Unsecured Senior Notes, fixed rates 2022-2049 4.27% $ - $ 11,789 DE Virginia VEPCO Tax-Exemp
Slide 45: Fixed income
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 46: Fixed income
Fixed income Credit ratings (cont’d) DESC Moody’s S&P Fitch Corporate/Issuer Baa2 BBB+ BBB First Mortgage Bonds A3 A A- Short-Term/Commercial Paper P-2 A-2 F2 Outlook Stable Stable Positive PSNC Moody’s S&P Fitch Corporate/Issuer Baa1 BBB+ BBB Senior Unsecured Debt Securities Baa1 BBB+ BBB+ Outlook