Good morning, and welcome to the Dominion Energy First Quarter Earnings Conference Call. At this time, each of your lines is in a listen-only mode. At the conclusion of today’s presentation, we will open the floor for questions. Instructions will be given to the procedure to follow if you'd like to ask a question. I would now like to turn the call over to Steven Ridge, Vice President, Investor Relations.

Good morning and thank you for joining us. Earnings materials, including today's prepared remarks may 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, Q 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 the earnings conference call materials, including the earnings release kit. Joining today's call are Tom Farrell, Chairman, President and Chief Executive Officer; Jim Chapman, Executive Vice President, Chief Financial Officer and Treasurer; as well as other members of the executive management team. I'll now turn the call over to Tom.

Thanks Steven and good morning. I would like to start by expressing our gratitude for the healthcare and other front-line professionals who are engaged in a heroic effort to assist those who have been most acutely impacted by the COVID-19 pandemic. We salute their efforts with deep appreciation and express our sympathy to all those who have lost loved ones to the disease. I also want to thank our own field personnel who are performing a vital public service by literally keeping the lights on and critical energy flowing. These front-line employees are supported by thousands and thousands of others who provide equally important service to our customers. As everyone who follows Dominion knows the safety of our employees is paramount. As the pandemic began to emerge, we acted quickly to ensure that our employees were equipped to handle the impact of the virus. We've utilized our frequently drilled crisis response plans now continually supplemented by the most up-to-date health service and government recommendations. Our efforts include implementing appropriate social distancing policies and activating our remote connection infrastructure, which has enabled more than half of our workforce to operate remotely. We have followed best practices in the distribution and use of PPE. And we are extending health and paid time off benefits as well as establishing a financial assistance program for employees that provides grants up to $2,000 to employees in need. We've also donated $1 million to the American Red Cross and local nonprofits to assist directly with coronavirus relief. This is in addition to the millions of dollars we provide each year to customer assistance programs and charitable causes throughout our communities. This is the core value of One Dominion Energy in practice. While even a single case of COVID-19 is a serious concern we have been fortunate that across more than 19,000 employees in 20 states of operation, we have had very few tests positive. The majority of which are either asymptomatic or mildly symptomatic and most of whom have already returned to work. We are keeping those employees in our thoughts and we'll continue to be focused on the health and wellbeing of our entire workforce while not losing sight of our essential duty to provide reliable and affordable energy. Our thoughts are also with our customers. We are mindful of the hardships many are enduring. That is why, for example, we voluntarily suspended non-payment service disconnections and waived late fees across all our utility service territories. We will also offer our customers tools designed to assist them overcome the financial challenges they may be facing. As our state and regional economies gradually begin to reopen, we're taking preventative steps to ensure that our workplaces are safe and that our customers receive the best possible customer service. I'll now turn the call over to Jim to review our quarterly results as well as our thoughts on COVID-related impacts.

Thank you, Tom. I'll first turn to Slide 4 to report that our quarterly operating earnings per share, when adjusted for normal weather met or exceeded the midpoint of our guidance range for the 17th consecutive quarter. Our first quarter of 2020 operating earnings were $1.09 per share, which included $0.09 hurt from significantly worse than normal weather. This was the third warmest first quarter in Virginia on record. Weather-normalized result of $1.18 per share exceeded the guidance range midpoint. Recall that weather in the first quarter of last year was a $0.06 hurt, but during the following three quarters we more than overcame that and finished the year with a total weather help of $0.02. Even without adjusting for weather, this was the 17th consecutive quarter of results within our guidance range. GAAP earnings for the quarter were negative $0.34 per share. This result is driven in part by non-cash charge related to the planned early retirement of certain coal and oil-fired generating units in Virginia, consistent with the requirements of the recently enacted Virginia Clean Economy Act. The retirement of these units has been contemplated in previous versions of our integrated resource plan and was formerly announced in late March. We also had a non-cash impact attributable to unrealized losses on our nuclear decommissioning trust funds. And as a reminder, we report such unrealized gains and losses on these funds as non-operating. A summary of adjustments between operating and reported results is included in Schedule 2 of the earnings release kit. On Slide 5, we are initiating second quarter 2020 operating earnings guidance with a range of $0.75 to $0.85 per share. We're also affirming our annual guidance range of $4.25 to $4.60 per share. As usual, these ranges assume normal weather, variations from which could cause results…

Thanks Jim. Amidst the turmoil of the global pandemic, our employees have been singularly focused on maintaining reliable and safe operations for the individuals and families, businesses, industries, and government agencies that we are fortunate to count as customers. We are in the public service business and our work directly impacts the lives of our customers and communities. Let me share three specific examples that occurred over just the last six weeks on opposite sides of the country and shown on Slide 15. On the morning of March 18th the Salt Lake City Valley experienced largest earthquake to occur in that region in 30 years. The 5.7 magnitude event generated nearly 1,800 service calls and 1,400 gas distribution work orders, which were both over 20 times normal. Our crews went to work immediately to address any potential safety issues to ensure reliable service to homes and businesses in the middle of the winter season. As a testament to the quality of our infrastructure and as a result of the significant investments in integrity and pipeline replacement programs authorized by our regulators, we have found zero material gas leaks across our system, as a result of the earthquake. Less than four weeks later on April, 13, 21 tornadoes touched down in South Carolina, four of which were classified as EF3 strength with winds up to 165 miles per hour, and one of which was classified as an E4 tornado with winds up to 200 miles per hour. It was the most prolific day of tornado activity in South Carolina in the last 35 years. Within 24 hours, our crews had restored 96% of the 117,000 of our customers that lost service during the storm. During the next two days, our people worked very long hours in devastated areas to finish restoring…

Thank you. And at this time, we will open the floor for questions. [Operator Instructions] And our first question comes from Shar Pourreza with Guggenheim Partners. Please go ahead.

Hey, good afternoon guys.

Good morning.

Good morning.

So good details on your CapEx projections with solar onshore wind, offshore wind post the passage of the legislation. And obviously you guys increased your capital budget for clean energy investments through your planning period. Is there anything you could point to structurally that could hinder you pulling additional spend forward as your total investment opportunity set is materially higher, i.e., bill headroom permitting. Obviously, offshore wind may have some hindrances, but how do we sort of think about further onshore or solar spend being pulled forward? So trying to get a little bit of a sense on any potential upside to the near-term plan and your current plus 5% growth trajectory, which is proving somewhat manageable?

Hey, Shar, good morning. It's Jim. Thanks for that. Yes, so what we've done here is we have not obviously done a Full Monty roll forward of all of our capital spending and addressed more holistically our long-term growth rate, et cetera. All we've done today is we've addressed an update, a roll forward for a new five year period just for three programs just within one segment. So we of course do the more holistic view less frequently, we did it in 2016, we did it in 2019, so that's not for today. So we'll find a time in the future where we will do a full walkthrough and be able to provide a little more color on other moving parts other than just these three updates on the specific spending programs within DEV.

Good, got it. So I’m like – so I guess the takeaway, and correct me if I'm wrong, if the plan is becoming much more sustainable, much more – you'll be able to fine tune that 5%-plus growth rate in time.

Yes. Keeping in mind, when we set the 5% plus growth rate, when we announced that last March, we had in our minds that this kind of spending program is going to continue or maybe increase in Virginia and elsewhere. But that's right. We'll come back and address something more holistically when we're not kind of in the midst of a global pandemic. We didn't think this is the right time.

Got it. Agreed there, by the way. So just a real quick last question on ACP. You kind of stated timely resolution to the Nationwide 12 Permit, right? Is there any more color you can provide on this? I mean, when would you start to reevaluate the timing of the resolution was pushed to a later part of the year. And then, Tom, can you just maybe elaborate a little bit more on your latest contract negotiations with customers. What's been sort of the debate? Is it – or what's been sort of the push pull? Or is it more of a focus on COVID, and that's been a bit of a slowdown. So just maybe a little bit more elaboration on the negotiations, and I'll jump back in the queue. Thanks.

Thanks, Shar. I’ll talk – I’ll answer the first part of your first question. Diane will answer your second question. So the key dates for us is, as we said, is the tree cutting season, which runs through the end of – through March of next year. We need 10 weeks or so of tree cutting period, 10, 12 weeks to complete what we need to – you need to keep in mind, we already have 250 miles of trees cut on this 600 mile pipeline, and not every single mile has trees on it. Actually 100s of miles do not. So that's the real key for us is getting into that tree cutting season. So we'll see what happens. A lot of people were quite surprised by the judge's decision. And there's a lot of – I think you should expect to see a lot of a mickey briefs being filed pointing out – I mean, what he talked about was all forms of utility infrastructure, not just an oil pipeline in Montana, it was every single utility infrastructure program in the country. So it seems like maybe a strong action by the judge, maybe not completely justified by the case put forward. So we'll have to just have to see how that goes. Of course, you can go to the 9th circuit after that, things – but we'll judge that as it goes along. On the second part of your question, I'll turn it over to Diane Leopold.

Okay. Good morning, and I believe your question was related to the customer negotiations. And if I'm not answering, let me know. But the customer negotiations are complete. They have been finalized throughout the quarter. So the rate and all the other terms and conditions have been complete to ensure that there is a fair rate of return for the project, and it balances customer needs and customer costs.

Got it. Any change in the return assumptions that's material to disclose?

No.

Excellent. Thanks guys. Congrats, it’s a very resilient plan. Congrats.

Thank you.

Thanks, Shar.

Thank you. Moving on to our next question. This comes from Steve Fleishman with Wolfe Research. Please go ahead, sir.

Thanks, good morning and hope all of you are doing well. Jim, I’m looking forward to the Full Monty roll forward.

Thank you, Steve.

But just maybe to fill that picture in a little bit. The – any color on kind of financing need changes with a higher capital plan? Maybe that would come with the roll forward, but how should we think about that?

Yes. I think that’s fair. That will come with the roll forward, but we're outlining here spending plans that are large, but over a 15 year time period. So when it comes to financing, we're going to continue our process of giving that one year and sometimes multiple years in advance. There's no change in the near term. Certainly no change this year, but we'll revisit what the financing mix will be kind of across the board as we do a more holistic update. I would note, though, for the avoidance of doubt that for these programs, we've talked about under the VCEA, all the financing will be at DEV, so a VEPCO legal entity. So we're not considering project financings or other things like that. It will be a mix of regular way of financing at VEPCO. But more to come when we provide more holistic updates.

Okay. And then, maybe kind of a, bit of a specific, but also a high-level question for Tom. So just the whole picture of Virginia with this plan, obviously seems to be very very green, clean, sustainable focused program. So maybe you could just give a little color on kind of the whole – what the state is trying to do with this? And kind of the view of you in the context of the state? And then specifically, this part of the plan, the new plan on the Jones Act vessel, just any color on how that would work and fit into – maybe fit into kind of this whole Virginia plan?

Sure, Steve. So the – just to refresh everybody on the state of Virginia politics, for the first time, and I think it's 30 years in this session of the general assembly, we had elections last year. We're always off [here] [ph] for our state legislature, both in the Senate and the house of delegates. And for the first time, it's in either 20 or 30 years, I don’t remember which – how many decades. You had democratic party in charge of both houses plus the executive branch. And there was a lot of interest among the new members of the House and Senate to advance a number of policies on many fronts, not just in energy. There was all sorts of legislation around gun rights, for example, and a variety of other things, minimum wage, et cetera. And there had been an effort – we had worked for years with a number of groups to – on solar in particular, and how to make sure that, that came into Virginia in an efficient, cost-effective way. And we worked with a wide variety of the policymakers to ensure that these goals are achievable and still affordable for our customers. And you can see from our IRP that was filed last week, that we expect, even with this spending plan, our plan B under the IRP is the most likely plan, at least we think it is, the most likely plan. Others will weigh in, of course. We'll run at a little bit – right around traditional inflated rates of inflation. And we've joined RGGI and our rates, well, when you now compare our rates to the RGGI sates, we're 40% lower than the average RGGI state, we're half of the highest RGGI state. And so there's a lot of room in there for us to stay extremely competitive. So Steve, I think overall, from a big picture view. It was part of an overall effort across many different parts of policymaking to have a more progressive outlook as those policymakers would call it, a more progressive outlook on a variety of factors. Your second question had to do with vessel, which I'll turn it over to Bob Blue.

Hey, good morning, Steve. I would put the vessel in the context, not just of Virginia, which Tom did a nice job of describing, but in the entire East Coast. If you look from New England all the way down to Virginia, there are a host of offshore wind projects in various stages of development. All of those projects are looking for a Jones Act solution for installation, ours among them. So we're excited to be a leader in a consortium of potential infrastructure investors, other participants in the industry on a vessel that will allow the installation of larger turbines compliant with the Jones Act. So we think that project fits very nicely into the context of what we're seeing in terms of offshore wind development off the East Coast.

And just would that be in Virginia?

Sorry. Sorry about that. Just when it comes to the profile of that vessel, just to clarify, that will be fully contracted long-term profile. And we don't have a number for our planned percentage ownership. We will be an owner through our contracted generation segment. But we expect infrastructure style returns from that. Business profile and therefore, expect interest from infrastructure investors and other industry participants to co-fund that project. Thank you.

Interesting. Okay, great. Thank you.

Thanks Steve.

Thank you. Our next question comes from Michael Weinstein with Credit Suisse. Please go ahead, sir.

Hi, guys.

Good morning.

Good morning. Sorry about that. The Jones Act vessel, is that going to be part – is the cost of that, the investment, is that part of the cost of the offshore wind going forward? Is that included in the CapEx profile for that?

No. Michael, good question. It's not. The amount, which is to be determined, will be invested. Our stake will be invested through our contracted generation segment, not in DEV and not part of the capital spend we outlined for offshore wind.

Right. And what is the timing of – it looks like about another 2.6 gigawatts of offshore wind that you're planning on over the next 15 years, what's the timing of the second 2.6 gigawatts, is that clearly after the first 2.6?

Yes. Absolutely, still to be determined where that might be. If you look at our IRP, we show that coming in 2034. But it will be after our initial project, which Tom described, that we would expect to be in service into 2026.

And I apologize if you mentioned this before, but also the timing of investments in storage, battery storage. Is that – how has that pays out going forward? Are you waiting for any specific technological improvements before you begin to put significant capital into that?

Yes. It's Bob again. No, I wouldn't say we're waiting for specific technological improvements. As you know, we have a mandate in the statute by 2035, we would expect to pay storage out during that period. It will take us a few years before we start layering it in. But again, if you look at the IRP, this is obviously generic storage. We don't have specific projects scoped out at this point, but we start layering it in around 2026 is when you would see that start to go into service based on the models we're describing here.

And one last question about data centers. Data center load is up. Is that – that's on current data centers actually running at – they're just running at higher capacities. I guess it's probably from work at home that you're – sort of your…

Yes. Again, it's Bob. The answer to that is yes. So they're ramping. There's a ramp rate with data centers. We would usually see them start to hit a peak later in the year, but they're peaking earlier this year. I don't know. You could surmise, it's related to what's going on with the pandemic and more broadly, but we just know it's happening.

Are you aware of any plans to expand and build more data centers as a result, like maybe more than would have been built prior to the crisis?

Yes. We've had strong data center growth in our service territory for some time and expected strong data center growth for some time to come. And we have seen no slowdown in that at all. Would expect very strong data center growth going forward.

All right, thank you very much.

Thank you.

Thank you. And our next question is from Durgesh Chopra with Evercore ISI. Please go ahead.

Hey, good morning, guys. Thanks for taking my questions.

Good morning.

Sorry if I missed this, but just Virginia, obviously looking pretty strong here at South Carolina, what are you assuming in the 2020 guide as decline trends for the rest of the year?

I didn't hear the last part of the question.

Yes. Durgesh, we couldn't hear quite the last part of your question.

What was the assumption of what for 2020?

The South Carolina demand decline trends in your 2020 guidance.

Got it. Durgesh, sorry. We were having some technical difficulties. I got you. So what are our assumptions there? So yes, a couple of things. We're obviously, in Virginia, not a material impact yet, but we are seeing now these steps get underway, economic reopening in Virginia and South Carolina. South Carolina, kind of announced yesterday, so modest steps underway. But we are not expecting like an immediate snapback. That's not the assumption that backs our guidance. We're expecting that, that will slowly recover through late summer. So when it comes to our guidance, we've obviously reaffirmed the annual guidance and long-term. But there are a couple of gives and takes there. So one is weather, not to your question, but we had $0.09 of weather hurt. So the rest of the year, like last year, we expect to make up some of the ground we lost in the first quarter home weather. Virginia, as you mentioned, no impact, and we'd expect the same and then in South Carolina, we expect that the loads bottomed out, and then we're going to – again, going to see that gradual recovery through late summer.

Got it. Thank you so much. And just a quick follow-up on financing costs. So just can you quantify for us or just versus plan? What – you've done a ton of financing here. So what's the impact versus on financing costs versus the plan you had in place at the beginning of the year?

Yes, Durgesh, good question because our financing plan, while intact on a full year basis, is a little bit modified because we accelerated a number of our financings into that March time period I talked about in my prepared remarks. So this financing cost for the year is something we're watching pretty closely. And I don't have a specific number for you, but a little bit of color. Obviously, we raised $5 billion earlier than we otherwise would have some of that short-term debt. But some of that just replaces what already would have been in our plan commercial paper. And as one example, one of those short-term financings, one year financings that come to mind that we did in that period was at LIBOR plus 50 with no fees. So kind of not too far off where CP would have been anyway. So not a big driver. And now as you look forward from here, the markets have recovered in dramatic fashion, as you know, the fixed income market. And the issuance rates from here on out for the next three quarters the way it looks right now is they're even lower all-in than they were in January. So we had a little bit of pressure from doing things earlier within our plan than we would have expected otherwise. But now we expect probably to make some of that up as rates have – all-in rates have decreased.

Got it, thanks so much, guys. And the detailed disclosure by segment on COVID is super helpful. Congratulations on a solid print and appreciate all the disclosure.

Thank you, Durgesh.

Thank you.

Thank you. And our next question comes from Jeremy Tonet with JP Morgan. Please go ahead.

Hi, good morning.

Good morning.

Just want to follow-up on ACP. A bit more here on ACP. Thanks for all the color that you provided so far. Just want to clarify, I guess, do you need Nationwide 12 Permit for FERC approval to restart construction here? And are there any other potential hurdles for FERC here that you see?

This is Diane Leopold. So obviously, we need to have our major permits in place for the majority of linear construction but again, as Tom said before, the key thing that we're really watching with respect to our forecast is a productive tree felling season between November and March. So while there is in the Nationwide 12, you do not need to have that for hand felling of trees. It is not a regulated activity under the Army Corps Nationwide 12 Permit. So subject to FERC approval, we may be able to begin hand felling trees through the season. We would look to have that for full ramping up of linear construction.

Got it. Understood. Thanks for that. And then just sticking with ACP here, what factors could impact project cost and timing between now and the tree felling window? Or just do you have a line of sight at current estimates as long as permits are in place prior to November?

Yes. The range of forecast that we have given that has not changed since the last quarter, has a wide range of scenarios that is not materially impacted again so long as we have a productive tree felling season this winter.

Got it, great. I’ll leave it there. Thanks for taking my questions.

Thank you. And our final question comes from James Thalacker with BMO Capital Markets. Please go ahead, sir.

Thank you for the time. Can you guys hear me?

Yes, good morning.

Yes, good morning.

Just maybe just to pivot a little bit to the other regulated businesses. I know that you guys had delayed the rate filing for Dominion Energy in South Carolina. But I was as you kind of pushed that off into the fall and kind of given what's been going on, I guess, with demand trends, do you guys see an opportunity maybe to propose something a little bit more formulaic down there or maybe try and see if you could do a rate plan that includes decoupling as part of that proposal?

I don't – we're still, of course, in the process of developing the plan. But right now, the schedule would call for us to file notice on July 15 and file the case actually in August. We expect that to happen at this point, barring some other developments. But we're still developing that rate case, and we'll see how it comes together and when we file the notice.

Great, thanks for the time, guys.

Thank you.

Thank you. And this does conclude this morning's conference call. You may disconnect your lines, and enjoy your day.