Welcome to the Dominion Energy Third Quarter Earnings Conference Call. At this time, each of your line is in listen-only mode. At the conclusion of today's presentation, we'll open the floor for questions. [Operator Instructions] I would now like to turn the call over to David McFarland, Vice President, Investor Relations and Treasurer.

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. 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 Diane Leopold, Executive Vice President and Chief Operating Officer. I will now turn the call over to Steven.

Thank you, David and good morning everyone. Now, that the final transaction associated with the business review is complete, let me start by saying that we have repositioned Dominion Energy to provide compelling long-term value for shareholders, customers, and employees. Since our March 1st investor meeting, we've consistently communicated the three following priorities; one, hitting our financial plan; two, delivering offshore wind on time and on budget; and three, achieving constructive regulatory outcomes. By achieving these goals, we empower our employees to deliver on our critical mission to provide the reliable, affordable, and increasingly clean energy that powers our customers every day. On today's call, we'll address each of these areas of focus. First, hitting our financial plan. Third quarter operating earnings, as shown on Slide 3, were $0.98 per share, which for this quarter represented normal weather in our utility service areas. Third quarter GAAP results were $1.12 per share. As always, a summary of all drivers for earnings relative to the prior year period is included in Schedule 4 of the earnings release kit, and a summary of all adjustments between operating and reported results are included in Schedule 2. With nine months of 2024 financial results reported, we're narrowing our full year guidance range to $2.68 to $2.83 per share, while preserving the original guidance midpoint of $2.75. As we highlighted on the last call, fourth quarter earnings are expected to be impacted by higher-than-expected financing costs and normal course movement of operating and maintenance expense from the first half to the second half of the year. Fourth quarter earnings will also be negatively impacted by the earlier-than-planned closing of the CVOW partnership because the associated non-controlling interest hurt, net of debt reduction, is beginning earlier than we expected. Honestly, that's an assumption I'm happy to have…

Thank you, Steven and good morning. I'll start my remarks by highlighting our safety performance. As shown on Slide 6, our employee OSHA injury recordable rate for the first nine months of the year was 0.44, in line with the continued positive trend from the last two years. I commend my colleagues for their consistent focus on employee safety, which is our first core value. In late September, Hurricane Helene caused historic devastation to many communities, including within our South Carolina service area. As a result, we saw significant destruction of our infrastructure, which caused nearly 450,000 service disruptions. At its peak, Helene left nearly half of our South Carolina electric customers without power. This was the largest storm to hit our South Carolina system since Hurricane Hugo 35 years ago. Our employees, many of whom didn't have power or water themselves, worked around the clock in challenging conditions to quickly and safely restore power to our customers. They were joined by over 1,000 of our Virginia team members and partners who traveled south to lend their assistance. The restoration involved replacing over 1,000 transformers, 2,300 poles, and 7,000 spans of wire. Although we've not completed our final accounting, our preliminary estimate of restoration costs, including capital expenditures, is in the range of $100 million to $200 million. Given that costs are expected to be in excess of $100 million, we intend to work with the Office of Regulatory Staff and key stakeholders to evaluate a potential securitization of those deferred costs. We know that this storm impacted the lives of many, including our employees, and our thoughts continue to be with the families and communities that are rebuilding. I'm incredibly proud of our employees and commend all involved for their commitment to serving our customers. We've provided direct financial…

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

Hey guys, good morning.

Morning Shar.

Bob, just coming back to your comments around the Amazon deal and other potential partners. And can you just give us a bit more color on what these other conversations are? What's the timeline? Is it the same technology? Different types of SMRs? And have you had any kind of hyperscale or interest in the OSW? Thanks.

Yes, Shar, great question. Our conversations with Amazon and others have really focused around this new technology of SMR. Let me talk a little bit about that if I could. If you think about why SMRs have become prominent in the national conversation recently, it's really three reasons; one is significant demand growth, driven in large part by large users like data centers. Second, a continued focus on around-the-clock carbon-free generation to meet reliability and carbon reduction goals. And the third, a view that U.S. leadership and nuclear technology is important to national security. And if you think about it, our Virginia utility is right at the intersection of all three of those. We're obviously continuing to see significant load growth in Virginia. Our power demand forecasted to double by 2039. We have a state law in Virginia, the Virginia Clean Economy Act, that calls for a carbon-free grid by 2045 with off-ramps for reliability. And then we serve some of the most important national security and defense installations in the country, like the Pentagon, the CIA, Fort Belvoir, the Norfolk naval base. And then I might add, Virginia is arguably the most nuclear-friendly state in the United States with strong bipartisan support for next-generation nuclear initiatives. Governor Youngkin, Senators Warner and Kaine have all endorsed these efforts. They were at our Amazon announcement recently. The Virginia legislature on a very bipartisan and overwhelming basis passed legislation that allows companies to petition for cost recovery related to certain SMR project development. And then if you think about it, our state is home to significant nuclear operations, Huntington Ingalls, Newport News, BWXT, and Framatome in Lynchburg and then, of course, our long operating units at North Anna and Surry. So, if you think about that context, it's not surprising that our…

Do any of the hyperscalers have interest in offshore wind?

We've talked a little bit about them, but the focus of our conversations recently with them has been on SMRs. Remember, we've got the contracted -- I mean, the regulated CVOW that we're building now that's already -- its cost recovery is already well identified. And as we said in the prepared remarks, Shar, we've got these other two options, but we're not at a point now where we have any decisions or timelines. We're very focused in bringing CVOW in on time and on budget. So, it really would be premature to be having conversations with them about future offshore wind. And we've got the offshore wind project underway today under standard regulatory construct.

Got it. And then just lastly on the IRP filed a few weeks ago. The portfolio scenarios seem to indicate you would be somewhat of a short position in the state from a capacity standpoint. Why not add more generation to the plan at this point? Too much political sensitivity to gas in the state? Why lean on PJM so much in the plan? Thanks guys.

Yes, sure. That's a great question. We've got a lot of growth in our Virginia jurisdiction, which is really exciting. And we're -- if you look at the IRP, we're building a heck of a lot and it's across all facets of the generation portfolio. It's potentially doubling the amount of offshore wind. It's adding a substantial amount more natural gas than last year's IRP. It's adding additional solar even beyond what the Clean Economy Act calls for and also large amounts of battery storage. So, I think it would be fair to say that while we're certainly mindful of what PJM's capabilities are, we're building a heck of a lot in this plan. We'll always look for opportunities when it makes sense from a reliability and a customer affordability point of view to do more. But we feel like it's a pretty aggressive plan as it is based on a very substantial demand forecast.

Congrats, guys, on the results, really. See you in a week.

Thanks Shar.

Thank you. And we will take our next question from Nick Campanella with Barclays. Please go ahead.

Hey thanks for taking my question.

Morning Nick.

Morning. I wanted to check in on the Millstone commentary just continue on the nuclear side. You're kind of talking about finding the best value for it. It does seem like the opportunity set has expanded versus what maybe you were kind of contemplating at the Analyst Day offset there. And maybe can you just talk about like if there was to be a data center there? I believe you've already done an uprate there, but are there any options for additionality to contemplate? And how could this all come together? Thanks.

Yes. Nick, we're studying whether there is a possibility of uprates at Millstone, particularly Unit 2 there, which is the smaller of the 2 units. But as we said in our prepared remarks, there are potential options for contracted procurement in New England. There are potential options for a data center location if it can be done in a way that works for all stakeholders in Connecticut. But it's early days in terms of those conversations so we don't have more to report to you today than what we've already identified.

Okay, I appreciate that. And then just thinking through what's kind of incremental since you've outlined the Analyst Day, you filed this IRP. You've highlighted this RTEP process, which I'm sure we'll get clarity on by the fourth quarter call. And obviously, CapEx is going up, but just when you consider the balance sheet and the financing outlook and also considering that maybe some of this capital is going to be more formulaic than it has been in the past, just where do you think you can really bring rate base growth from where it stands today? Is it -- does it extend the current rate base growth or is it really kind of more additive? And I'll leave it there.

Yes, Nick, that's a great question. And we think about that a lot. So, at our March 1 Analyst Day, we were very clear that we were providing a high-quality durable operational and financial plan with targets that we expect to achieve consistently, and I put emphasis on that word, consistently. So, the plan is built on appropriately conservative assumptions. Now, we operate in premium markets in the Southeast, in Virginia and South Carolina, so we see additional opportunities that can further strengthen our position. And as you alluded to, potentially even extend the long-term growth rate. That's going to be in the later part of the plan. But we're focused on an approach that positions us to deliver predictable year-over-year results and strong performance for the long-term. So, we'll, as you noted, provide an update on our CapEx plan on the fourth quarter call just three months from now. And there, we will underscore our commitment to disciplined growth and operational excellence. But I -- the investor feedback that I have received agrees with an approach of consistent execution against the targets that we already laid out on the 1st of March.

And Nick, I would just add, we've said, I think, in several venues and here on this call again today is I think we believe if there is bias around our capital plan, it is upward. We think that, that opportunity would probably present itself, given how long it takes to get projects planned and capital invested and deployed, it would be towards the back end of that framework of 2025 through 2029. And you mentioned balance sheet. We've worked really hard during the review to establish a balance sheet with an appropriate amount of cushion. And as new capital comes into our plan, we'll be thoughtful about how we finance that. Not all capital projects are equal. We spend a lot of time internally thinking about the speed of cash conversion. Some projects turn investment into cash flow more quickly than other projects. And we'll need a mix of those characteristics as we build our plan, but we will be very mindful about how we make sure we finance it in a way that preserves that cushion that we've worked so hard to achieve and we'll continue to have.

All right. Thanks for the thoughts today.

Thanks Nick.

Thank you. And we will take our next question from Ross Fowler with Bank of America. Please go ahead.

Morning. So, just maybe talking about South Carolina a little bit. You've obviously got the electric settlement there and the approval. How do you think about the schedule from here around legislation moving forward potentially next year? And is that sort of thoughts around economic development on one side, but also sort of, as you said kind of in your comments, Bob, there's got to be something there to sort of address regulatory lag in the state as well? And then the corollary is there, is there also a new nuclear opportunity there, an opportunity around nuclear? I mean, how do we contextualize the experience with V.C. Summer that we've been through versus there is space on that site to maybe do SMRs or something else?

Yes. So, let me start with the second part first. I think as we said publicly, we're not pursuing a restart of V.C. Summer on that -- of the new units on that site. So, more broadly though, on your question, as you know, as you referenced, the Senate Select Energy Committee is still meeting regularly to produce a companion bill to the one that the House sent over at the end of the 2024 session. Those discussions, as you know, have -- continue to center on authorization for us to partner with Sandy Cooper on a combined cycle plant there. They focus on permitting reform. And also, there have been a lot of conversations recently on regulatory lag. The original legislation talked about the financial health of the utility. And as we think about the financial health of utility, addressing regulatory lag is very important and that conversation has, I think, its focus has sharpened recently. So, we're very supportive of the work that they're doing. It's a great -- South Carolina's a great place to do business. It's the fastest-growing state in the country or certainly among them. It's a great state for business. And I think we've got great opportunities to invest there. We're going to work with policymakers to address this lag issue. It's top of mind for us. It appears to be on the minds of legislators down there, which is good. And we'll have a session coming up at the beginning of next year and see how it all sorts itself out.

Okay, Bob, thank you for that. And then maybe moving to storm recovery. Obviously, I think you guys did a phenomenal job on getting everybody back up on power that can take power after the hurricane, so congratulations to you on that. But how do I think about the schedule from here around getting cost estimates finalized, thinking about how much of that is capital versus O&M? And then remind us how the recovery mechanisms for those costs kind of work?

Yes. Before Steven answers that, I was able to spend some time down in South Carolina right after the storm, particularly in Akin County, which was the most damaged. And it was -- the damage there was significant. And I was just so proud of our team for how hard they were working and continue to work to get the lights back on for folks. And as we think about it, that's the most important part of this discussion. But I'll turn it to Steven to talk a little bit about the timing of recovery.

In South Carolina, we defer these to the balance sheet. Given the nature of the storm, the bias of that estimated cost is actually more towards capital than O&M. That's a little bit unusual for like large outage events we have in South Carolina and in Virginia. As part of our most recent settlement on the electric, we agreed with the staff that in good faith pursue potential securitization for storm costs that exceed $100 million. So, we'll have those discussions with them. And I don't have specific timing for you but we would expect this to be a constructive recovery outcome.

Okay. Thanks Steve. And maybe 1 last 1 for me back to the MOU with Amazon and I appreciate you can't give us any details here. But just remind us, there's rate structures in Virginia like we have had under the offshore wind where other non-utilities can put capital in. And I believe it's up to 80% of the capital for a project. And is that something that you're kind of referencing with your build-on transfer potential comments?

Yes, I'm not exactly sure what you're talking to on the 80%. And the investment in offshore or offshore wind project was specifically authorized by legislation in 2023. But there are certainly opportunities for special contract rates with customers or special tariffs. So, that may be a possibility here. But really beyond that and beyond the principles that I talked about earlier, there's not a lot more I can add at this stage.

Okay, understood. Thank you.

Thanks Ross.

Thank you. And we will take our next question from Jeremy Tonet with JPMorgan. Please go ahead.

Hi, good morning.

Morning Jeremy.

It's Jeremy Tonet from JPMorgan. Just quick ones, if you could. A lot of good detail here. For the latest REC value in CVOW's LCOE here, can you walk through the factors driving the revision and how that -- how sensitive that assumption is to load growth and renewable additions in the future? Just wanted to see, I guess, what we should be thinking here?

Yes, Jeremy, that's a really good question. So, obviously, we saw a very substantial move in the LCOE for CVOW. And we highlighted the driver for that, which is higher expected REC pricing. And when you think about the LCOE calculation, we created that metric to be able to compare it to the reference legislative cap, which is a combustion turbine, which in 2017 dollars is $125 per megawatt hour. And so let me walk through the three components in that calc, so you can think about how that number may move. So, the first is a sort of fairly straightforward revenue requirement associated with cost of service buildup, so it's depreciation, maintenance, property taxes as applicable. It's return on capital, both the financing for the debt as well as the return on equity. So, that's pretty straightforward. And we've given sensitivity to say, hey, if interest rates are financing up or down, here's how the LCOE would change. We've given sensitivities if capital goes up or down. So, that would all impact that. That's all pretty straightforward. The next is PTCs or ITCs. It's PTCs because that's the best for customers. But we credit against that cost of service, the PTC value, which I think makes sense and anticipate huge changes there. We do have a sensitivity for capacity factor, which would affect the denominator and also the amount of PTC, and we've shared that sensitivity as well. The last item is this REC value. So, under a renewable portfolio standard, which the Virginia Clean Economy Act established in Virginia, just like RPS standards in other states, that legislation effectively gives credit to a renewable generation resource to put it closer to being on level playing field with a non-renewable resource. And so in the absence of this project,…

Got it. That's very helpful. Thank you for that. And maybe going back to transmission for a little bit more, if I could. For PJM's open window, can you expand a bit more on the opportunity through your joint projects with AEP and FirstEnergy there. Just really how these projects fit within PJ's transmission system today as it stands and as load growth continues here. Thinking about also as well, I guess, further route, you mentioned opportunities in the back half of the plan. Any additional thoughts on the cadence of when that could come to fruition?

Yes Jeremy. As we described in our remarks, we submitted these proposals in early October in PJM's latest open window process. And there's growth happening throughout PJM and the opportunity to do something innovative like this with AEP and FirstEnergy, we believe really we're leveraging the expertise of our incredible transmission group, AEP's incredible transmission group, FE's incredible transmission group, to get the most cost-effective solutions as demand is growing. And we're going to -- we've been talking about this for a while, need additional transmission in order to remain reliable to be able to work with those companies to do something a little bit different, we think, makes a lot of sense. It could represent additional CapEx above the March 1 plan if the projects are ultimately awarded by PJM, but those projects are currently under review. They're in the early stages of development. We don't anticipate selection by PJM until the first quarter of next year. So, it is hard for us at this stage to tell you what the cadence of CapEx or the amount of CapEx would be, given we're waiting more from PJM. But I would just leave you with that we expect this open window could be as big, if not even bigger than last year's, which was, as I mentioned, 150 for us, 150 transmission projects totaling $2.5 billion.

Got it, fair enough. I shouldn't get too ahead of myself here. Real quick last one, if I could. Just as far as it relates to the call on generation today, given all this load growth. If you could provide any updated thoughts on how this could or maybe doesn't impact coal plant retirement timelines in general? And at the same time, these EPA regs as it relates to CCS for natural gas plants. Just wondering, any thoughts there on how that impacts your thought process?

Yes. Jeremy, first, I'm impressed that you asked us many questions when you aren't the only person in the queue. Well done. But let me say on the question of EPA regulations and fossil retirements. First of all, you can -- both those questions are really addressed in the IRP that we just filed. So, it's a 15-year look and you can see there's no fossil retirements in the IRP planning horizon precisely because of the load growth we've been talking about and the load growth that's identified in the IRP. So, no expectation, as that document exists today, as everything that we see today, that we would be retiring any fossil units in the next a decade and a half. And then as to the new EPA regulations, we actually ran scenarios in the IRP with and without those EPA regulations and it did not swing that much what we're building. So, we're going to sort of keep working through the regulations. They're obviously being litigated. But when we ran the models for the IRP, not a huge change between with and without those new EPA RECs.

Got it. Thank you for that. I'll have to think of more questions for next time. Thank you.

Thanks Jeremy.

Thank you. And we will take our next question from Anthony Crowdell with Mizuho. Please go ahead.

Hey good morning team, unlike Jeremy, I just have one question. And kind of off of Nick's question, so honestly, if you say we answered it with Nick's question, that's fine. Nick, I thought, was focused more on the rate base growth story and maybe updating that. Obviously, new you saw utilities revising earnings growth rates. I'm just curious on what's the calculus, sort of what do you guys look at when you evaluate your financial plan? Whether it's something like sustainable or not, like about whether it's your visions on rate base growth, and I'm actually leaning more towards like an earnings growth number. And again, feel free to say you answered it in Nick's question.

We largely answered it in Nick's question, but we'll let Steven offer up a little bit more.

Anthony, I think it's a very good question. It's very topical, given calls this season. And I guess the way I would describe it is we put out -- as Bob mentioned, we put out a financial plan on March 1st that we feel very confident in our ability to consistently meet. To the extent that we see continued tailwinds in this -- among the various drivers we've talked about, which is very, very strong load growth and more opportunities to deploy capital and strong regulatory regimes. Every year we put out an update, we're going to be thinking about what the right plan looks like. For us, we think achieving consistently high-quality, predictable, low-risk earnings is the number one objective of our financial plan. And to the extent that we are in a position to do something better, either from a rate base growth perspective or from an earnings growth perspective, we'll consider that very carefully, making sure we're not doing something that's going to jeopardize our ability to deliver on that consistent, predictable, high-quality, low-risk earnings trajectory. And we'll make sure we finance it in a way that preserves that framework as well. So, it's kind of a little bit of a non-answer, which is sort of -- we'll evaluate that every year when we come out with our updated plan or revised, refreshed capital outlook. We obviously have some tailwinds like a number of folks in the industry but we feel really good about the plan we put out on March 1st.

Great. Thanks for taking my question. That’s all.

Thank you. And we will take our next question from Carly Davenport with Goldman Sachs. Please go ahead.

Hey, good morning. Thanks so much for taking my question. Just wanted to ask a follow-up on Jeremy's question on the IRP and the EPA regulations. So, it looks like there's still a fair bit of gas, including combined cycle units in that plan. So, just to confirm based on your comments, that does take into account the cost of potentially fitting those assets with CCS technology?

No, it doesn't take into account the cost of fitting them with CCS, but it does take into account the capacity factor limits within those regulations. So, as we've said, we don't think that CCS is adequately demonstrated. That's obviously going to be a subject of litigation with EPA. But the plan that we put out takes into account the regulations by just adjusting for the capacity factor.

Got it, okay. I appreciate the clarification. That's super helpful. And then maybe just 1 quick follow-up, a high-level question as you think about the opportunities surrounding SMRs. As you think about potential timing to commercialization of that technology, I know you've got the 2034 kind of starting date in the IRP. Is that sort of indicative of your views on when you think you could see sort of scaled commercialization of SMRs? Or just any broad views on kind of the timing from that perspective would be helpful?

Yes, the IRP does reflect our view on timing. So, again, we're going to stick with the principles I outlined. But assuming that we achieve those, what we think is feasible would be and the timelines that we put in the IRP.

Great. Thank you so much for the color.

Thank you. This concludes our question-and-answer session, so I'll turn it back to Bob Blue for closing remarks.

Thanks everyone for taking time to join the call today. Everybody, enjoy the rest of your day, your weekend, and we'll see you at EEI. Thanks very much.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.