Q2 2024 Earnings Summary
- Dominion Energy is actively exploring options to enhance the value of the Millstone nuclear asset, including being open to the idea of a co-located data center, which could unlock new revenue streams.
- Despite a temporary $0.04 EPS headwind in 2025 due to higher capacity prices, the company fully expects to overcome this challenge, reaffirming confidence in its financial guidance and growth prospects.
- The Coastal Virginia Offshore Wind (CVOW) project is making excellent progress, with confidence in achieving the installation of 70 to 100 monopiles this season, reflecting strong execution on a key renewable energy initiative.
- Dominion Energy expects a temporary $0.04 per share headwind in 2025 due to increased capacity expenses from a short generation position, which could impact financial performance.
- The cost of the Caritas offshore installation vessel has increased by $90 million, raising concerns about potential cost overruns and financial impact on the offshore wind project.
- Potential weather-related delays in offshore wind monopile installation may prevent Dominion Energy from exceeding its target range of 70 to 100 installations this season, possibly affecting project timelines.
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Capacity Shortfall Impact
Q: Will the $0.04 generation shortfall impact persist into '26 and '27?
A: Management explained the $0.04 impact from being short 2,000–3,000 MW in generation is temporary and expects it to be resolved by adding new capacity like offshore wind and Chesterfield CTs. The shortfall is due to timing between rate cases, and they anticipate recovering these costs from customers after 2025. -
Caritas Ship Cost Increase
Q: Why did Caritas ship costs rise by $90 million, and is this the final revision?
A: The cost increase is due to normal modifications needed after final turbine design completion, including hull reinforcement for towers and blade racks. Of the $90 million increase, $55 million is CapEx, and the rest is financing costs. Management is confident there will be no further increases. -
Millstone Plant Options
Q: Any updates on Millstone's potential data center colocation?
A: Management is exploring the idea of a co-located data center at Millstone and is working with multiple parties to find the best value beyond the current PPA, which covers 55% of output through late 2029. They remain open to long-term PPAs and legislative opportunities in New England. -
Offshore Progress Targets
Q: Can you exceed the 70–100 monopile target this year?
A: While they've hit 2 monopiles per day, seasonal changes may limit exceeding the top end of the 70–100 range. They are focused on installing enough pin piles to set one offshore substation and are confident in meeting their target. -
Capacity Plans and CapEx
Q: Are you considering more gas projects given resource adequacy concerns?
A: Management sees potential opportunities to increase CapEx towards the end of the plan due to demand growth. They acknowledge the need for both renewable and dispatchable generation in Virginia and will update their capital plan and IRP based on PJM forecasts. -
Customer Bill Impact
Q: How will capacity expenses affect customer bills after the auction?
A: Capacity expenses are expected to remain a very small part of customer bills. Management is focused on providing customers with the best possible rates and does not anticipate a significant impact on bills.