Welcome to the Dominion Energy First Quarter Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference call over to David McFarland, Director, Investor Relations.

Good morning, and thank you for joining today's call. 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 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; Jim Chapman, Executive Vice President, Chief Financial Officer; and Diane Leopold, Executive Vice President and Chief Operating Officer. I will now turn the call over to Jim.

Thank you, David, and good morning. Before I begin, I'll remind everyone of the extensive disclosure package and growth capital roll forward we shared on last quarter's call. We're very focused on overall execution of those plans, including extending our track record of delivering results in line with our financial guidance as we did again this quarter. I'll begin with a recap of our compelling investment proposition and again, highlight our focus on the consistent execution of our strategy. We expect to grow our earnings per share by 6.5% per year through at least 2026, based largely on our continued execution of our $37 billion 5-year growth capital program, as shown on Slide 3. As a reminder, over 85% of that capital investment is emissions reduction enabling and over 75% is rider recovery eligible. The resulting approximately 10% total shareholder return proposition is combined with an attractive pure-play state-regulated utility profile and an industry-leading ESG profile. This utility profile is centered around five premier states, as shown on Slide 4. All of these states share the philosophy that a common sense approach to energy policy and regulation puts a priority on safety, reliability, affordability and sustainability, as Bob will touch on in his remarks in just a moment. Turning to Slide 5. We see up to $73 billion of green investment opportunity across our entire footprint through 2035, nearly all of which will qualify for regulated rider recovery. We believe we offer the largest, broadest in scope, longest in duration and most visible regulated decarbonization opportunity among U.S. utilities, which, as you will hear in today's prepared remarks, is continuing to steadily transform into reality. The successful execution of this plan is already benefiting our customers, communities, the environment and our investors. Before handing it to Bob for his business…

Thank you, Jim. I'll begin with safety. As shown on Slide 9, through April of 2022, our OSHA recordable rate was 0.52. While overall results are tracking slightly higher than a year ago, they remain low relative to historical levels and substantially below industry averages. Our safety performance matters immensely to our more than 17,000 employees to their families and to the communities we serve, which is why it matters so much to me and why it is our first core value. . Now I'll turn to updates around the execution of our growth plan. Our regulated offshore wind project continues to be on schedule and on budget. Major project milestones are listed on Slide 10. As we reported earlier and as Jim mentioned, contracts for major offshore equipment suppliers were completed and signed in late 2021. These include contracts for foundations, transition pieces, substations, transportation, installation and subsea cabling and turbine supply and long-term service agreements. We've been pleased with the progress of the State rider approval review with intervener and staff testimony received, rebuttal testimony filed and a hearing scheduled to commence later this month. The final order is expected from the SEC in early August. The federal permitting process also continues and the next major milestone is receipt of the draft environmental impact statement expected in the second half of this year. A few items to reiterate here. First, offshore wind, zero fuel cost and transformational economic development and jobs benefits are needed now more than ever. The project will also propel Virginia closer to achieving its goal to become a major hub for the burgeoning offshore wind value chain up and down the country's East Coast. Second, unlike any other such project in North America, this proposed investment is 100% regulated and eligible for rider recovery…

[Operator Instructions]. Our first question will come from Shahriar Pourreza with Guggenheim Partners.

That was quite a comprehensive update there. Bob, I guess if we could start with offshore wind. There's obviously been some back and forth in the docket and the testimonies, which I think was to be expected, but maybe start there. And I'm also curious if there are any updates on the remainder of the pricing that was indexed to commodities?

Yes. So Shar, you're right. The back and forth was expected. It's a regulatory proceeding. There's always a bit ask there. What I would say though is if you look at our rebuttal testimony and we were of this view when we filed the case, but I feel even stronger as now all the testimony is in, we have a very strong case on offshore wind. The legislation, the Virginia Clean Economy Act lays out the parameters for spending that is presumed prudent and we've clearly met all of those. And we showed in our rebuttal testimony under a variety of scenarios that this project is customer beneficial, particularly when you think about the updated PJM load forecast, which shows increased sales in Virginia. So this project will help us meet that need. It will provide incredible economic benefits for the state. It is strongly supported, and we feel very comfortable with where we are on this as you recognize fully regulated offshore wind project. On pricing. Yes, as you point out, there are portions of our contracts that have some indexes. They sort of move around but we contracted late last year, as you know, on these projects. And as we said in our prepared remarks, there's no change or update to budget or schedule on offshore wind. So we're still in what we believe was a very strong position we were in when we filed the case.

Got it. And then just obviously, separately, we just saw one of your peers in the Northeast put their wind business on the block. Just -- I just want to confirm your level of interest with any offshore wind opportunities outside of your current construct.

We're a state-regulated pure-play utility, and we're interested in state-regulated projects like the one that we're doing in Virginia. That's our interest in offshore wind.

Got it. And then just real quick classic for me. Just in light of, obviously, the rising financing costs, I mean, at the parent and obviously, an extremely favorable commodity backdrop. I hate to sound like a broken record, but the backdrop for assets kind of remains really hot at this kind of a gas price environment. So any updated thoughts on Millstone in light of the current paradigm? And even co-point, just given the value of LNG assets given what we're seeing overseas. You clearly have incremental spending needs. I mean your capital growth is extremely healthy and eventually, you may need some sort of financing. So just curious on maybe the other parts of the business that may be seen as not a base or core, right?

Yes, Shar. I appreciate the fact that you -- every time we get a chance to see, you ask us about this. So that's good and I admire your consistency. And we'll give the same answer and try to be consistent as well, which is we like the assets that we have to deliver on the performance that we've laid out. We're very focused on execution. I will note specifically with Millstone, as we've been saying for some time, there's -- we think Millstone is critical to Connecticut and the region achieving its decarbonization goals. And the Connecticut legislature just overwhelmingly passed a bill proposed by Governor Lamont [ph] for -- based on his executive order for zero carbon by 2040. And as you'll recall last year, the deep -- the Department of Energy and the Environment in Connecticut did a study on meeting that 2040 goal when it was executive order and showed that cases that keep Millstone in are hugely customer beneficial. So we think that Millstone is a really solid asset that has operated very well. But overall, we like the asset mix that we've got to achieve the goals that we've set out.

Perfect. And Bob, yes, that was consistent from a couple of weeks ago.

Absolutely. Wouldn't expect anything less from you.

[Operator Instructions]. Our next question will come from Steve Fleishman with Wolfe Research.

Just the offshore wind -- just on the offshore wind, the -- should we assume this -- litigated outcome in August? Or is there any chance to settle with the parties?

Yes, Steve, as you know from our approach that we've taken on regulatory issues, if there's a way to find a constructive settlement, we're all in favor of that. This project has a litigated time line or a litigation time line that has a hearing set for a couple of weeks from now and then an order in early August. And that's obviously, the presumption on any regulated proceeding. If there were an opportunity to settle in a constructive way, we'd obviously do that. I expect you to hear that from every party to every litigated matter. But we've got a schedule and that's what we're following.

Okay. And just going to the -- that was a very helpful update on the solar project situation for the company. Just on -- do you think when you get a preliminary decision in August, either way, would that be enough information likely to be able to kind of move forward with project decisions just because kind of likely be the rough range of outcome?

Yes. We would think that would give us a very good sense.

Okay. And I'm also just curious how the C&I, the data center, those types of customers are? As you mentioned, a lot of them have ESG-type requirements and the like. Like do they seem to kind of get -- if it is a little more expensive, it just is like in terms of flexibility on that? Obviously, gas price is a lot higher, too, since this all started.

Yes, Steve. Our data center customers are very sophisticated energy buyers. They understand market dynamics. So none of this. They're obviously -- given their own clean energy goals, given the sophistication of their operations, they certainly understand what's going on in the market here.

Okay. I'll leave it there.

Our next question will come from Durgesh Chopra with Evercore ISI.

I want to second Steve's comment there on the crisp solar disclosures. I have two questions, both on that solar front. Bob, you mentioned narrowing the scope of the investigation last week. Maybe just elaborate on that as to sort of why do you think that's a positive update? And how does that impact you and others in the industry?

Yes. I mean I can't -- there's not a lot of specifics that I would say, but it just gives us more confidence as you're sort of narrowing what they're looking at. I think there was some lack of clarity on that at first and that helps. So directionally positive. I can't identify that there's a particular specific number that it changes for us.

Got it. I guess it sounds like they narrowed the scope and it seems like you feel like the items to be debated are somewhat less. Is that like...

You got it.

Got it. Okay. Understood. And then just the 2023 1-plus gigawatt sort of plan, 60% secured. How are you getting to that 60% secured? Is that because it is sort of -- the procurement there is from domestic entities? Or -- because we're hearing from some of your peers that there's a tremendous amount of tightening in the market on store panels. And given the tariff uncertainty, it's kind of hard to procure. So I'm just kind of curious as to how you get to that 60%? How do you get comfortable with that 60% number in 2023?

This is Diane Leopold. So our 2023 projects are really all under contract. And for 60% of them, we know where our panels are coming from and we know definitively that 60% are not subject to this particular review given the four countries that are under review. So it doesn't mean that the 40% definitely are affected by it, but we do have contracts for our 2023 projects and 60% of them are secured from areas not in this investigation.

Okay. That's very helpful color. I appreciate that.

Our next question will come from Jeremy Tonet with JPMorgan.

Just want to keep going with the solar a little bit here. And I know you guys provide a lot of great details, so thank you for that. But just picking up, I guess, in your conversations with key stakeholders here, especially the commission. Since the start of the DOC investigation just wondering if you could provide a bit more color on how that's going? And do you anticipate the next clean energy filing in 2022? Or are those following in 2023 to differ from the latest clean energy filing? And really, how is the commission viewing the higher solar costs relative to other means of generation at this point?

Yes, Jeremy, I'll start and Diane could add any color, if necessary. But if you look, our CE2, Clean Energy II filing that was just approved was slightly higher prices than our Clean Energy I filing that had been approved a year before. And we'll file again for our third round later this year. And that was approved. The commission looked at the cost inputs associated with that and approved that filing. So we're not -- we have not had specific conversations with the commission about this, but we'll -- we file the next round of solar, it will be on a similar kind of scale as what we filed before. And to the extent that there are some additional cost pressures, we'll show why they're there. I do think it's important to understand that we've got a statute in Virginia, the Clean Economy Act, that calls for us to file for solar every year and hit those targets that are set out in the statute. And I think there's an understanding by all the parties there. And we still see solar as a very good value for our customers as we think about the overall clean energy transition. So we'll do the next filing. We're obviously well underway with working through the pieces of that. We'll have that filing done later this year, but we're still very much on track.

Got it. That's very helpful there. And then just pivoting here towards the hope gas. Just want to see if there's any updates that you could provide us there in the process or any expectations, if anything's changed or just on track at this point?

Jeremy, that process is very much on track. It's going well. We cleared the HSR hurdle already. We are in the process of discussing that and doing a load of filings with the Western Commission. So far, that seems to be progressing well, and we very much expect closing by the end of the year.

Got it. That's very helpful. I'll leave it there.

Our next question will come from Paul Zimbardo with Bank of America.

I definitely can pass on the solar question. Thanks for the details there. On your commentary about O&M, I was curious, what does the pension performance been year-to-date? And are you thinking there could be a benefit or a headwind for '23 when you factor in the asset performance and also changes to the discount rate?

Well, good question. We've heard that come up from a few of our peers this earnings season. It's interesting because our take -- our view is that it's too early to tell. Here we are at the end of Q1, yes, assets are down. So discount rates are up. So we just don't think it's meaningful to make a determination on what that's going to mean for the 12/31 remeasurement date for all that. A little more color though. We -- at year-end, we're at about 110% funded status. And based on rough math, mark-to-market today, assets are down a little bit, returns are down, discount rates are up, we still think it's in that same 110% range. But of course, for the natural pension expense for next year and beyond, first of all, it's only really mark-to-market at one time, which is 12/31, so some time to go in the year before we get there. And then both those elements, of course, factor in. If assets are down, of course, that's a hurt to pension expense, more pension expense. And the corollary is that if discount rates and interest rates are up, it's a help. So we've seen those two things really offset so far on the rough mark-to-market through the first 4 months -- 3 or 4 months. But really, it's just too early to be able to tell much. What really matters where we are at the end of the year.

Okay. Great. And then a bigger picture, longer-term question, if I could? I noticed there's a fair amount of storm damage in the quarter and also last year as well. Are there any kind of initiatives, whether capital or O&M that you can take to kind of preemptively mitigate some of this like more strategic undergrounding or other avenues such as that?

Yes. Certainly, things that we look at. Obviously, we have a grid transformation program underway. That'll be a decade long. Strategic undergrounding is an important part of that, being able to sectionalize lines more quickly and isolate faults and restore service without as much human intervention will be part of it. Some of the just basics of bigger poles, stronger conductor will also help. So yes, we've got programs underway that we will continue and always look for ways that we can cost effectively strengthen our system for customers.

Thank you, ladies and gentlemen. This concludes today's event. Thank you for joining us. You may now disconnect.