Dominion Energy, Inc Common Stock 2026 Q2 Earnings Call

Good morning. Thank you for joining Dominion Energy's second quarter 2026 earnings 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 report 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. This morning, we will discuss some measures of our company's performance that differ from those recognized by GAAP. Reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measures, which we can calculate, are contained in the earnings release kit. I encourage you to visit our investor relations website to review webcast slides as well as the earnings release kit.

Joining today's call are Bob Blue, Chair, President, and Chief Executive Officer, Steven Ridge, Executive Vice President and Chief Financial Officer, and other members of senior management. I will now turn the call over to Steven.

Thank you, David. Good morning, everyone. Since the conclusion of the business review almost two and a half years ago, we've remained steadfastly focused on three top priorities. First, consistent achievement of our financial commitments. Second, continued achievement of major construction milestones for the Coastal Virginia Offshore Wind project. Third, constructive achievement of regulatory outcomes that demonstrate our ability to work cooperatively with regulators and stakeholders to benefit both customers and shareholders. As we'll discuss today, we continue to demonstrate success against these priorities, extending our track record of high quality and consistent execution. I'll cover financial results and demand trends in my remarks. Bob will provide updates on the NextEra Energy combination, CVOW, regulatory results, and other business items. Turning first to second quarter results, as shown on slide three. Second quarter operating earnings were $0.79 per share, which includes $0.03 of RNG 45Z credits.

A summary of earnings drivers relative to the prior year period is included in Schedule four of the earnings release kit. Second quarter GAAP results were $0.37 per share. A summary of all adjustments between operating and GAAP results is included in Schedule two of the earnings release kit. Similar to last year, we've had a strong first half, which positions us well to deliver strong full-year results. Additionally, we are reaffirming all financial guidance provided on our fourth quarter earnings call, including operating earnings, credit, dividend, and long-term growth guidance. Turning to financing on slide four. We've now completed our common equity program for 2026, consistent with our ATM guidance on the fourth quarter call. Full year 2025 and Q2 LTM FFO/D debt metrics are both above 15%, demonstrating our continuing commitment to our previously communicated credit-related targets. Turning briefly to sales. We're continuing to see strong sales in our service areas, driven by continued economic growth and data center expansion.

Notably, nine of the Dominion Zone's top 10 all-time peak days have occurred this year, including the eight highest summer peak days, which have all occurred in the last two months. We want to take a moment to acknowledge the outstanding work of our colleagues who have maintained exemplary system reliability in the face of record-setting demand and difficult weather conditions. Their commitment and dedication on behalf of our customers and communities is worthy of special recognition, even if most of them would tell you they were simply doing their job. Turning to data centers on slide five.

To put that in context, we've added over five gigawatts of contracts, or roughly 11%, since the end of last year. Since our last update, we continue to see robust and durable demand from our differentiated, high quality, low risk data center customers. Importantly, these customers consistently tell us that many of their highest value workloads need to be built and need to stay in Virginia because of the unique network density, connectivity, and ecosystem advantages that have made Virginia the world's leading data center market. We're bringing those customers onto our system in the right way, protecting existing customers from cost shifts while mitigating stranded cost risk by utilizing a large load framework that ensures these customers pay their fair share of the investments required to support their growth.

In closing, we've had a strong first half of the year, I am highly confident in our ability to deliver on our financial commitments, including our 2026 operating EPS and credit targets. Our financial plan strikes the right balance of appropriately conservative, but not unreasonably so. With that, I'll turn the call over to Bob.

Thank you, Steven. I will begin with safety on slide six.

Our employee OSHA injury recordable rate for the first half of the year was 0.36, which remains well below industry average. Safety is our first core value, and we must continue to focus relentlessly on improving our safety performance. Turning next to our announced combination with NextEra Energy. As we detailed in May, this transaction represents a truly transformational opportunity to bring together two world-class utilities with 238 years of collective industry experience to even better serve millions of regulated customers across four states. Looking ahead, we believe we can accomplish far more together than we can apart. Under the proposed terms of the merger, Dominion Energy customers would receive $2.25 billion in shareholder-funded bill credits representing meaningful customer value.

Over the longer term, customers and communities would benefit from a stronger company with the scale and capabilities to buy, build, finance, and operate critical energy infrastructure more efficiently, helping support reliability, affordability, and economic growth. Earlier this month, we filed our joint proxy statement on Form S-4, as well as our state and federal regulatory applications with the Virginia State Corporation Commission, the North Carolina Utilities Commission, and the Public Service Commission of South Carolina, as well as the Federal Energy Regulatory Commission and the Nuclear Regulatory Commission. The Virginia State Corporation Commission has now issued a procedural schedule, including evidentiary hearings beginning on November 17th. In South Carolina, the proposed scheduling order would set a hearing date of December 8th, with a final order by January 29th, 2027.

The South Carolina Senate, House, and Office of Regulatory Staff have indicated they do not object to the company's proposed schedule. We expect the commission to rule on the proposed timeline next week. The timelines for each of the proceedings are shown on slide seven. I could not be more excited about the combination of these two companies. We will continue to share updates as we progress through shareholder and regulatory processes. Turning next to offshore wind. As illustrated on slide eight, CVOW continues to achieve significant de-risking milestones, as evidenced by its 81% completion status. Let me highlight a few factors that give me great confidence in the successful completion of this project. First, supply chain. We are making excellent progress toward completing all remaining equipment, a key project milestone. 100% of nacelles, 99% of towers, and 85% of blades have now been fabricated.

Towers will be completed in the coming days, followed by final blades in October. Second, installation. As of today, we've successfully installed 31 turbines, with the installation of the 32nd currently in progress, averaging approximately two days of operations per installation from jack up to jack down, in line with our prior assumptions. It's worth noting that the 31 turbines installed to date have a capacity of more than 450 megawatts, rivaling the magnitude of some of our fossil units. We expect the third and final offshore substation to be energized by year-end, which is especially meaningful because it will signify that approximately half of project investment, adjusted for network upgrade costs, has achieved in-service status. That's a meaningful milestone toward project de-risking. Third, proof of concept. We've now successfully completed every major fabrication, construction, commissioning, and operation evolution multiple times.

This is noteworthy because we've clearly and affirmatively answered the question, will this work? Every type of component is in service and functioning as expected. Turbines, inter-array cables, substations, export cables, and onshore transmission and distribution infrastructure are all working together to provide much-needed power to our customers. In fact, in recent weeks, as we've set new demand peaks, we've done everything possible at the request of system operators to deliver the maximum possible amount of power from CVOW. In my mind, it's critical to note that CVOW is significantly different from a traditional power plant, and that we're not waiting for a final switch to be flipped to confirm proof of concept or to qualify investment for regulatory recovery. Rather, CVOW is effectively 176 individual power plants, each entering service upon completion.