Earnings call transcript Q2 2023

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Operator

Welcome to the Dominion Energy Second Quarter Earnings Conference Call. [Operator instructions] I would now like to turn the call over to David McFarland, Vice President of Investor Relations.

David McFarland

Good morning and thank you for joining today's call. Earnings materials, including today's prepared remarks contain forward-looking statements and estimates that are subject to various risks and uncertainties. Please refer to our SEC filings, including our most recent annual reports on Form 10-K and our quarterly reports on Form 10-Q for a discussion of factors that may cause results to differ from management's estimates and expectations. discuss those of recognized will that company's we from differ by morning, some our measures performance This GAAP.

contained we Reconciliation the of to release webcast calculate visit which to relations encourage the earnings slides, most to earnings are can review directly comparable our kit. kit. our GAAP financial you non-GAAP I in the measures as website as release investor measures well

President Officer; and Vice Joining Diane Chief Bob. Officer; call today's Blue, call President Senior Financial are over Steven Officer. now Vice President, Executive Chair, Chief Operating I and Bob Leopold, Ridge, to Chief turn Executive and will the

Bob Blue

Thank you, David. Good everyone. morning,

As per announced second quarter morning, reported share. operating earnings we of $X.XX this

Station, meaningfully Our address impacted prepared But status in an will by remarks. results our Millstone business later the on outages provide I'll of performance were and Power the safety of review. address both update our first, weather which mild and historically at the

wellbeing first colleagues and than work core I the recordable more people. slide X, maintain has pace to Turning best on much mindset this safety to focus that and company. It's the remarkable the the of Safety a achieve represents course was safety us necessary the practices just this our dedicated for a my page. of our of for value number our of performance. is outstanding our and commend performance on history the OSHA to injury the year in enable create X.XX, year rate first employee half

shareholders, customers, company term a the toward with and compelling of Moving other to the our employees, Business for stakeholders. now progress delivering pleased long I'm maximum value create making to repositioning Review, we're

before, ever future as I'm our for said company. the as I've As of excited

review commitments and slide shown on timeline is The on and guiding X. also identically priorities unchanged. X Our slide replicated unchanged, are

have achieving the Day which updated company. we and financial hosted third will to the with for to announcing during and listen, of outlook we engagement we among similar strategic the committed our Since reflect and We're maintaining but November, the beyond last navigate in steps, the optimal shareholders through vital. rigorously expeditiously Investor of trust business a expect rebuilding conscientiously We We an importance our result. review and provide conclude priorities. as review. level review recognition know the an of We're and review working to other quarter, commitments at inform is engaged vital that

customers, our by with annual rate We've of stakeholders positioned meaningful Dominion success company of investment Energy in the billions both of allocate framework, support earnings committed stability to to dividend. that confirmed allow to of the to We've will provide long-term relief the for capital and of to commitment of key providers. Virginia, working and We've dollars quality. collaboratively prosperity the continue the steps current citizens of ensure regulatory the and to Virginia simplify the to operating confidently taken economic improve [inaudible] customers, benefit our to

necessity of cost over without what significant absolute of service years. the last backdrop high cost sight by meeting can more on the for focus several be to achieved of we've against done continue We and customer losing And efficiencies control standards. the operational looking the

with consistent So comments. prior

by has appendix we may announcing we committed an accretive and will and excellent debt. use competitive The been process. shareholders. a own do remaining of represents result it from robust game agreement be investment reference, for This in tax, metrics Cove the that we've today's our goal our Point, billion potential that improved sell credit performance an and was credit reduce the profile and there first will in some a what highly step which of for changer. sale included cash after an area, generate to to While of the We've not interest sale as approximately toward materials an transaction taking $X.X see to our attractive which in exit

With XXXX, is the of investment export excess of cash facility, in since the inclusive of which recycled $X our approximately billion. total nearly flow well construction billion sale of the $X project cost in we've

HSR this investor the we notification We've we the today's included filed. the And both close The slides of the in request DOE expect of transaction at materials. to the have year. publish announcement time been appendix later and for the clearance

announce additional We review we events warrant work to Day as inputs business updates to advance the as Investor will finalize in continue of

address matters. turn Steven I'll over to financial With it to that,

Steven Ridge

Thank you, Good Bob. morning.

earnings quarter XXXX X share. on were slide shown as operating second Our $X.XX per

we aware at range $X.XX per second of for share guidance $X.XX to of revised $X.XX XX you're to on to our a of range outages Millstone. to per quarter $X.XX June share the reflect unplanned our a impact As weather expectation and negative from

First outage last XX performance. at their in nature potential resource for despite has reliability and on both XX-year joined taken operate an was two additional headwind during headwind $X.XX quarter. With operating amounted history of outage amounted several $X.XX extended at the quarter. of safety the involved years together ensure during to PSEG which and has at these we electricity years New new to a an duration its weather. the I'll Millstone, strong thorough plant’s outages, Eric to just recently in the instituted a unplanned as Officer, uncharacteristic and after unit outages relative carbon Millstone, normal our is Nuclear Nuclear to the the unit maximum England note and Officer experienced as years zero an review Chief recently planned increase to for consistently quarter These have leadership peer including at a of prepared regard practices station are three, Senior that which who the to second to weather exemplary as an Chief the largest mildest most come. unusual to that the Carr,

market range quarter last include revised Negative timing. second the O&M factors relative positive factors tax sales weather include for absence O&M Millstone. outperformance higher rates, lower the credits and contracts year, Higher depreciation, and sales customer to modest discussed investment and lower based higher to with to higher contributed relative the guidance DEV utility as the and solar interest expense, margins of certain

of reporting our all per is activities of GAAP net results positive of includes gains impact earnings share, which between hedging in in two quarter schedule kit. included non-cash reflected unrealized $X.XX the A income operating of and economic Funds. the Second mark- Trust the to-market and results value summary Nuclear adjustments Decommissioning of release

earnings X, Review, Business given Moving pending now are full guidance. not slide guidance we providing the to year on XXXX

be per share. XXXX, quarter and expect quarter $X.XX $X.XX year's operating third earnings were to between For share. $X.XX operating we per third Last the earnings

change me key all which Let previously. walk of this of drivers the some year-over-year we've identified through of

X sale operating revenue due related $X.XX to July from reduction million approximately the effective First, is other which of interest became the related from expense that About services. to rider removal additional $X.XX variable approximately relative market approximately year to as result a $XXX a of and absence higher July half Point earnings of from help the the agreement. revenue higher $X.XX related to to quarter $X.XX higher effective X, last this rates, Cove

Approximately to This later approximately elimination investment annualized debt to sale which an from the number to $X.XX from interest expense plan basis. from doesn't parent solar impact of retirement expected $X.XX O&M approximately due outage. proceeds on year, $X.XX related fall we also nonregulated of an credits, tax capture $X.XX the this lower the estimated to and Millstone

critical quality durable me our high consistent targets if moving business Before and predictable of importance priorities, post review one even to emphasize recognize a unexpected any sales headwinds the profile review with and We growth when meeting trends, of occur. long-term earnings let financial execution.

In years. very review November, scope I’ll we and in in X% resiliency we're we described Virginia last estimates reflect updated announced our the growth prior DOM through the electric load address demand investment trends. months year. the we the of increased to May, PJM projections across opportunity forecast system. discussed XX of and X% Whether over the for as as robust per in Turning Those zone decarbonization compared slide the sales duration growth normalized in summer June term the sales next time to much real observing XX that year X, very load capital our When electric long intact.

company, many require the DEV registered new represents our we The balance operational intersection year with and Virginia a resiliency, It we expect brings expect, would to consecutive growth demanding leading demand around by full we XXXX, decarbonization, affordability will topic, my week, given an industry years delivered and opportunity for and to under performance these unprecedented that on growth high prudent and days. as our unique idea no conditions. durability quality peak records the support at come, be for X%. to Which demand It's policy capital economic our rate For the allocation our summer capital me sheet. last the for worth structure next demand drive our regulatory of likely credit. providers. of strong customers load just have strong just colleagues growth, combined And growth customers noting

commitments here. Our with them and priorities unchanged. are regard credit I'll to reiterate

our meet emerge regulatory from temporary downgrade qualitative the even meaningful ability or of during review improvement and several last the time our cost to the discussed, want we've exceed credit needs As consistently strengthening. years, over over despite to We pressure. with thresholds metrics periods

most efficient and capital of As seeking sources minimize of sheet review, balance amount our any part equity the to to of capital fund we're analyzing our robust financing investments, need. while the improve external

the by improving XX maintain required post-sale by positive and strongly rating agencies we measured announcement sustainably mentioned, Cove additional expected debt frequent forward. our as engagement basis the comments Bob downgrade Moody's to exceed FFO thresholds that metrics noted Point we accretive, whom credit the ensure credit with was of the to by going meet As steps as that but transaction consolidated points, nature are highlighted our

sustainably foundation the As credit. The regulated capital create to temporary balance review significantly levels few elevated robust of objective sheet of investment the a to that also headwinds is business over years. both can and withstand next potential support the relates

call that, Bob. With I'll over to back the turn

Bob Blue

Turning to slide X.

relief start need energy the supports implementation effective to the support, the updating in by we and largest the stability term that unanimous Virginia significant long Virginia. and that fund became legislation growth execute legislation customers of electrical X. bill robust critical me July of demand rate utility segment. on provides support investments With our on our for the the new you bipartisan law Let The certainty nearly provides Virginia the reform

cessation X, annual July $XXX revenues. half results the Energy from of riders decrease a $XX customers monthly of approximately this certain As of law Dominion the million reduction typical residential nearly to that the enabled of bill. directly Roughly represent

cost of reduction the half station purchase component to other electric The that fuel the the and adjustment power of downward a comes recovers of rates power. from

The time, to unrecovered securitization for July paid per commission effect alternative allowed while it would for this adjustment about rate the fuel interim considers X, to residential securitization be month to filed abrupt off by costs over on take has amount that DEV certain customers. fuel avoid and $XX increase typical would the possible proposal arranging

about has below of We at the I bill on base. third the DEV’s the expect also its review the of track average Consider is XXXX, Since November. our inflation grown mentioned DEV’s increase year-over-year, XX.X% record previously. affordable and initiating by general X, reflected biannual which highlights facts, note July review reliability efficiently submitted total DEV our early in half in these delivered rate typical as by filing competitive XX% final the about base on rate. rates The X.X% only rates, average. less residential than of exceptionally rates order reliable I service. filing X.X% represents national operating

record the we single of We're customers our proud serve and to every do work day.

the X year. final order of expect March by next We

and Turning remains with The on on slide wind and consistent to timelines on provided. estimates previously budget XX. offshore time project the

the EIS by the continue with timeline. end work October. of Ocean decision all to the Final Energy and on Management of the support agencies end Bureau stakeholders closely to BOEM the deliver is the and record of the by We draft and the EIS September project on to Final schedule received other of from comments of

We are I'm updated contingency timely DEV for and processing continue encouraged the wind to more revenue well an the excluding costs to our wind update projects. of requirement application, our processes annual offshore our of rider. and In customers. be In received million current July, SEC requested approved than jurisdictional by offshore administration's $XXX fixed, project are XX% procurement now that underway. manufacturing the pleased

later we Port expect to In the to fact, be first monopiles delivered of the this year. Virginia

the about project despite equal having original still reserve fix and is progressed costs. significantly to contingency reserve, current Our our more

and together the do year that expect we've elsewhere Project we our project by and see billion anything around confidence despite invested we delivering we changes to billion, grow budget. not offshore on see time Taken $X.X approximately in the market, which trends date, end. in wind to $X on to

As the $XX to low LCOE filing updated value Inflation our end in per megawatt expected a range our the reminder, to Reduction the for regulatory we to account recent $XX on most based Act. of PTC

currently to and the Our expectation Jones their construction is of end change completion the by vessel the completion timely well complete, XXXX. XX% need of CVOW support to installation Act-compliant of current in our schedule, advance

of data related Four On life infrastructure on schedule additional clean other regulatory to eastern center have data XX, project we've completed continued be in to and we to completed to schedule been notable updates upgrade will of to for enable grid outcomes customers centers, continue nuclear strong series Turning XXXX. end advance transformation. on projects slide see ahead in projects a incremental extension, of power County. by the is that Loudoun increases and energy,

We XXXX. continue an new transmission expected with line a kV to of in state XXX service late develop

opportunity served of and in an to investment by long term increase transmission, throughout area. growth unprecedented the electric we areas electric continue Given in service acceleration our our see transmission

resources. recently to additional will planning PJM process of is adapt of while demand and in energy such, submitted to projects cleaner resilient, able part energy As significant reliable, also transitioning to as transmission that number believe ensure increasing grid we electric the the Virginia we a

Carolina rates meet needs Turning Carolina. South electric the to XX, average of to below population on X% as South July economic Energy reliable in robust X, the the delivering and energy for safe residential slide addition customers growth DESC in are we're energy development to of proud Dominion and national

the case weeks. in testimony On complete rate natural hearings gas in phases our next we the will the regulatory front, general few and

We expect an by commission from order the October.

was electric settlement. effective is previous annual The designed Following during adjustment fuel few fuel commission all to and these approval May, eliminate the collections of under years. in

strong our strong six is communities. projects investment that XX on reliable, of see RNG, Utah. we stages and other support distribution to provide in our efforts expansion year-over-year Carolina development. business, Across we X.X% increasingly driving of X.X% gas at economic recovery On pipeline and for incurred gas injecting various in prudently customer businesses, in Finally, development continue growth attractive North all timely safe, sustainable to currently service, replacement and including of affordable service have rural of RNG gas, projects

me summarize on remarks With that, our let slide XX.

outstanding. $X.XX We performance safety was of share. Our quarter reported operating per this earnings

our continue execute meet needs business spurring our investment We new to jobs to while creating growth. and on customers’ decarbonization resiliency programs and

ensuring to purpose. the for move Energy And wind on project value offshore term with schedule on best to I'm focused Business on continues is our significant Review budget. long forward Our pace and and that shareholders. proceeding positioned Dominion is create

we're that, your to questions. With ready take

Operator

[Operator Instructions]

Guggenheim from question Partners. our with And comes Pourreza first Shar

Shar Pourreza

Bob, to just your questions Investor you obviously, of into is event you've that contingencies turn kind earnings is the there Cove? changes could my et as expectations closer ask sale cetera event? there potential we to some now think be based I we're morning. good any favorite that as guess, we processes? answered of sheet on getting for guys, will key balance sold as to Hey, Day, as be know, all one growth about still of head Or the our So rate, questions ongoing this

Bob Blue

we to Yes, change, answered. be no, expect your and Shar, would questions

possible we Day. many do Investor track eliminate we're input As to we've get by to variables our objective time on And said, the that. as as is to that

change. So no

Shar Pourreza

have the just I if seeing might all, you've given ask wind, don't to in we've you there. as guys wind you at well, had tell at point? I to good. good And mean question costs this stake us like see then around? in but blunt additional And like on but a can the Okay, locked Just offshore any it's option this, interest what been

Bob Blue

Yes, Shar.

us the business. offshore update is wind, to to business we're from the related at on there option a we've anymore it. but that as everything reviewing top review, I By the we're reviewing As bottom part of look taking said, can't throughout statute, an for and review, in business you

Shar Pourreza

kind units lastly, sort just Is this Thanks. any major another fall. talk there talk investments I with outage units, facing to the then mean, just heading one may the of you And for that And of this can you Okay. been there? like of Millstone like capital of there? obviously about in quantum issues the it be seems going some year? there's

Steven Ridge

of And then, margin performance in of quarter, very in unit, mentioned, given loss outages second with that planned the the see O&M course, fourth about was I'll this electricity period. typical regard $X.XX it sale. But in standard. planned as that about work very uncharacteristic. the fairly outage $XX producing that of I And a actually was to how there's the we'll that fall remainder hurt QX I of the take, on hurt the Steve, nothing from top during million hurt, Shar, unusual accelerate we're the And about seriously. in something we It's of there's is QX. to not quarter very, in the think taking Millstone about outage time mentioned,

high prepared capital reliability to going expect investment will we Those As going to going I discovered forward. was no of to issue forward remediate at continue going in the is massive mentioned we remarks. forward, units operate require very that that fundamental amounts there

Operator

comes our from Jeremy next question And JPMorgan. with Tonet

Jeremy Tonet

of year-to-date you and a and wondering we me far the overall, results help any thoughts I XQ out you as next with business guide for trajectory in it's me earnings to what look could year-over-year. ‘XX? down just XQ so kind revert was could seems I if morning. could trajectory a other good bit wondering guess like with, flat Hi, as if and bit year-over-year if at It just is year share

Steven Ridge

That's Thanks good for question. Hey, Steve. really that. Jeremy,

let our So we've third results of the company's results roll-in think are that consolidated the And parts just year and I very say post model. transparent which the it the we impact we're that see for provide Day, me on to changed Investor is key the drivers expense, including review start direction very I around us. as But much in that understand delivered to earnings very of to going that that going make to rider we've this we challenging forecast. XXXX with the transition quarter, does I earnings much. outlook, to a intend categories buildup more a review, be to at have have and initiation since growth clear DEV those major including tried don't and XXXX would interest

So potential as we full interest of guidance, I we would cognizant And But going that haven't address we're earnings how of of what the news going good company the community's given we mentioned. to and Day. as in comprehensive year the very the that be is be. to part is Investor investment say we're

Jeremy Tonet

Maybe regulators rate will Virginia. being that. to in sense, Virginia tuned in get DEV from the there? you're makes we a is reduction it, this able and more looking in check stakeholders everything the on trying to stay then with reaction commentary Just approved, the Got temperature if what for rearview point, offer to at now

Bob Blue

pretty as rate a Yes, positive are about people expect, would reduction. you

as over look last you of the of years, regulatory history our our you strong and if approval believe, clean regulatory license, big reliability worked of I with if of in mentioned outcomes we energy in process stakeholders renewal the And projects. few remarks, of in the approval you at well prepared subsequent at the that think high. transmission variety see We've, outcomes. is the Virginia, look picture, approval new investment, I think I achieved programs, our

when substantially are Our be regulators. competitive of front very That's you're a national below average. rates the place good in your to

Operator

with from Goldman Sachs. next question And our Davenport comes Carly

Carly Davenport

you're the just feel of in seeing that capture to in growth you pretty side. forward? good Virginia? forecasts about maybe of XXXX in just seems you of that Want But your the Thanks PJM's forecasts think on Do for the as kind taking beyond. questions. peak for sales electric morning. context going about do start And think the Hey, how like demand off XXXX. in Virginia kind you like it's It line growth and for accurately

Bob Blue

year, talking over their we seeing what forecasts, And terms a last of robust. to is over is this that expect in prepared interest growth reflected And remarks, years on line there's in spent next abating. our see just more what years, territory. sales the course we're we described, customers centers. PJM We've seeing in in our more demand believe in time robust lot and we're we of from the evidence can of growth that were with no interest. strong of data that But this we we the data would as recent center which few service seeing is few We're most kind

And forecast of would pretty is we like. PJM future what say will look so expect, reflective I the the

Carly Davenport

up kind life of Great, wanted initial potential program provided the on then maybe that's you you what in touch a just And $X.X could of about investments talk nuclear other that that just follow appreciate kind just then and helpful. Virginia Can included all billion? on updates like? are the extension phases what that of, program. to And look

Bob Blue

some that at you're that We additional included North Anna strong expect operate give put in reliable if it. and overall filings. to There be years. variety able XX be big at early We've for are fiber we is we've in that in Yes, we $X to years. for of of will piping but And inlay other you call a large $X.X small programs. Surrey many position have of an post that of got investment, is to be that in billion looking and that the it billion. quite a a us them and be a to for lot of billion so many, a our host sort A can chunk will specific projects, will stations more what's at the $X detail example put allow for carbon

Operator

This conference you. this conclude morning's Thank call. does

disconnect You enjoy And your lines. may your now day.

Dominion Energy (D) 4 Aug 232023 Q2 Earnings call transcript