Welcome to the Dominion Energy third quarter 2026 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 for the procedure to follow if you would like to ask a question. I would now like to turn the call over to David McFarland, Senior Vice President, Investor Relations and Treasurer.
Good morning, and thank you for joining Dominion Energy's third 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, and good morning, everyone. We continue to be 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 will discuss today, we continue to demonstrate success against these priorities, extending our track record of high-quality and consistent execution. I will cover financial results in my remarks. Bob will provide updates on the NextEra Energy combination, CVOW, and other business items in his remarks. Turning first to third quarter results, as shown on slide 3. Third quarter operating earnings were $1.28 per share, including $0.05 from RNG 45Z credits and $0.05 from better-than-normal weather. Third quarter GAAP results were $1.30 per share.
A summary of earnings drivers 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 GAAP results is included in Schedule 2 of the earnings release kit. Turning now to guidance. Year-to-date operating EPS has benefited from better-than-budgeted sales, better-than-normal weather, and higher-than-expected 45Z credit income, combined with strong overall financial and operational execution.
Inclusive of conservatism for balance-of-year weather, as well as potential opportunities to de-risk future financial performance, we now expect full-year results to be in the top half of our original guidance range. We have provided year-over-year drivers for the fourth quarter in the appendix of today's materials for your reference. Additionally, we are reaffirming all other existing financial guidance provided on our fourth quarter earnings call, including credit, dividend, and long-term growth guidance. Turning to financing on slide four.
We made significant progress on our financing plan during the quarter, successfully executing several planned transactions while continuing to manage the balance sheet consistent with our robust credit guidance. In September, the Virginia State Corporation Commission approved our fuel securitization financing petition, representing a balance of approximately $900 million, helping mitigate near-term fuel-related impacts on customer bills. Turning briefly to sales. We are continuing to see strong sales in our service areas, with LTM weather-normal electric sales growth of 3.4% across DEV and DESC. In addition, all 10 of the DOM Zone's summer peak demand days have occurred in 2026, and in August, DESC set a new all-time electric peak. Turning to slide five.
Since our last update, we continue to see robust and durable demand from our differentiated, high-quality, low-risk data center customers across multiple localities in Virginia, and we are bringing these 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 approved by the Virginia State Corporation Commission in our most recent biennial review that ensures these customers continue to pay their fair share of the investments required to support their growth.
We now have over 54 GW of data center capacity in various stages of contracting, including over 12 GW of capacity contracted under electric service agreements. To put that in context, we have added over 6 GW of contracts, or 13%, since the end of last year. In conclusion, I am highly confident in our ability to deliver on our financial plan.
We have built our plan to be appropriately, but also not unreasonably, conservative to weather unforeseen challenges that may occur. With that, I will turn the call over to Bob.
Thank you, Steven. I will begin with safety on slide 6. Through September, our employee OSHA injury recordable rate was 0.41, which remains well below industry average. Safety is our first core value, and we are always focused on driving workplace injuries to zero. 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 on behalf of our customers together than we can apart. In mid-September, NextEra and Dominion announced an enhanced Virginia benefits package that puts customers first and positions the Commonwealth as a global energy leader.
That proposal doubled the duration of residential bill credits, expanded energy bill assistance by $100 million, included a $100 million workforce development fund, committed to creating at least 1,000 new jobs in the Commonwealth, building a new shareholder-funded co-headquarters tower in Richmond, and supporting Virginia companies through a $1 billion annual five-year Virginia Supplier Program. Over the longer term, customers and communities will 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. In Virginia, we have received testimony from parties which we will address through rebuttal testimony due November 2nd. Evidentiary hearings begin on November 17th, and a final order is due by January 11th of next year.
Ultimately, the State Corporation Commission will decide the case based on the record presented to it and on the legal standard, whether adequate service to the public at just and reasonable rates will not be impaired or jeopardized by the proposed transaction. Another way of thinking about this is whether the transaction will do no harm to customers. We are confident that we have met that standard. In fact, we have exceeded the standard by proposing significant benefits in terms of customer affordability, jobs in our service area, and development of needed energy resources. In South Carolina, we have received testimony from parties which we will address through rebuttal testimony due November 18th. Hearings begin on December 8th, with a final order by January 29th, 2027. In North Carolina, hearings begin on February 23rd, 2027. The timelines for each of the proceedings are shown on slide 7.
Required federal approvals have all been filed and continue to progress. We continue to expect the transaction to close in the second half of 2027. I could not be more excited about the combination of these two companies. We will continue to share updates as we progress through the regulatory process. Turning next to offshore wind on slide 8. CVOW continues to make significant progress, with the project approximately 85% complete and the fabrication of all nacelles, towers, and blades now complete.
We have installed 44 turbines, representing more than 640 MW of generating capacity, with the installation of the 45th turbine happening now. Installation continues to average approximately two days from jack-up to jack-down, consistent with our assumptions. July and August turbine installation cadence was in line with expectations, while September and October were below due to a combination of weather and Charybdis maintenance activities, which were completed earlier this month.
Importantly, these impacts were within the types of risks contemplated when we added schedule contingency last quarter. While we've utilized a portion of that contingency, our outlook has not changed. We continue to expect project completion by the end of 2027 and energization of the third and final offshore substation by year-end 2026. From a cost perspective, our current budget remains $11.65 billion, including $123 million of unused contingency. We also continue to see strong customer value. The project's LCOE remains well below the statutory threshold, as well as the range contemplated in our original filing, and we estimate CVOW will generate approximately $5 billion of fuel savings for customers during its first 10 years of operation. Our overall view of the project remains unchanged.
CVOW installation has been significantly de-risked and continues to make progress against its schedule and cost objectives while delivering significant long-term customer value. Now I'll turn to other business updates as shown on slide 10. In mid-October, we filed our Virginia Integrated Resource Plan update, which included several possible generation build portfolios designed to meet robust customer demand growth.
Relative to last year's company preferred plan, we've added and accelerated 4 GW of solar and 2 GW of battery storage. Importantly, under the company's preferred plan, we're meeting our customer needs, protecting system reliability, maintaining affordability with monthly residential electric bills forecasted to increase on average by about 2.3% annually. We continue to see a growing role for energy storage in Virginia. Our recently filed IRP is an update and represents a snapshot in time, but it already reflects a meaningful increase in storage relative to our prior plan.
Importantly, Virginia also enacted significant energy storage legislation this year that establishes substantially higher targets for both short and long duration storage. We expect storage to play an increasingly important role as use cases continue to broaden and the technology continues to advance. We're actively evaluating both short-duration battery storage and emerging long-duration technologies through the lens of reliability, affordability, and customer need. Looking longer term, the proposed combination with NextEra Energy would bring together significant capabilities and experience in energy storage. We believe that positions the combined company exceptionally well to deploy storage at scale as the technology matures and system needs evolve. Finally, on Millstone, in September, the Connecticut Department of Energy and Environmental Protection provided an update on the zero-carbon energy request for proposals, indicating that it intends to announce a decision later this year.
The facility's existing PPA has delivered tremendous value to customers, lower costs, and significantly reduced volatility. Despite being priced at the time in 2019 above prevailing price outlooks, the contract is expected to save customers over $245 million this year, including $200 million year to date, in addition to the over $200 million in savings to customers last year. Based on current forward curves, the contract is expected to save customers in Connecticut over $900 million over the 10-year life, driven by lower energy pricing. We remain focused on achieving a constructive outcome for the facility, which has delivered tremendous value and produced bill reductions for customers in Connecticut through its existing contract. We will continue to provide updates as things develop.
With that, let me summarize our remarks on slide 11 by reiterating our focus on our three top priorities: consistently achieving our financial commitments, continued achievement of major construction milestones for the Coastal Virginia Offshore Wind Project, and achieving constructive regulatory outcomes that demonstrate our ability to work cooperatively with regulators and stakeholders to deliver results that benefit both customers and shareholders. We remain committed to delivering reliable, affordable, and increasingly clean power for our customers. With that, we are ready to take your questions.
Thank you. At this time, we will open the floor for questions. If you would like to ask a question, please press the star key followed by the one key on your touch-tone phone now. If at any time you would like to remove yourself from the question queue, please press star two. Again, to ask a question at this time, please press star one now. We will take our first question from Shahriar Pourreza with Wells Fargo. Please go ahead.
Hey, guys. Good morning.
Morning, Shah.
Morning, Bob. Bob, just as we're thinking about the deal and sort of the staff, I mean, 57 conditions. I guess, can you highlight where you and the staff are kind of furthest apart? What's the deal breaker? Is it like the ring-fencing? Is it the dividend restrictions? Can you close any of these gaps before the hearings next month? Then maybe just lastly, comment on the governor's intervention, which kind of seems a little bit excessive to us. How's that dialogue going? Thanks.
Yeah, Shah, great question. 57 conditions. A chunk of them are conditions that were ones that we had already voluntarily proposed, so I think it's important to keep that in mind. But fundamentally, as you heard from John on NextEra's call a week or so ago, we're still focused on the statutory standard, which is no harm. That's what the judges are going to follow. We'll file our rebuttal testimony on Monday. Look forward to the hearing beginning on the 17th of November. We remain confident that our position goes beyond the statutory standard, will deliver benefits, not just no harm, to Virginia customers, to employees and communities. It's going to keep our company locally led, still regulated by the SCC, fully accountable to them. John said it on their call, the judges of the SCC are going to follow the law.
That's the best that we could possibly ask for, and we look forward to presenting our rebuttal testimony on Monday.
Got it. Then just the governor, how's that dialogue going? I guess, I don't want to say behind closed doors, but is what we're seeing publicly different than what conversations you're having privately?
Well, the governor has participating as an intervenor in the case, as she is obviously entitled to do, and we welcomed her intervention. We're participating in the case through the filings that we make in the case. We obviously talk to parties as makes sense. Our focus right now is the testimony that we're filing on Monday, making sure that we're all very focused on the no harm legal standard.
Got it. Perfect. Then just lastly, just Bob and Steve, obviously we saw a little bit of a healthy drop in the LCOE to $62. Obviously, a lot of that was driven by RECs going to $38. I guess, what are you seeing in the RECs market to drive that, and is sort of $38 kind of sustainable in your view?
Shah, it's Steve. It's hard to predict the price. We obviously reflect it quarterly when we update the filing and very transparent about it. What we're seeing is a tightening of supply and demand, sort of unsurprisingly. Remember that a large portion of those RECs need to be generated by Virginia resources, and so that obviously adds an additional constraint, which pushes prices up. Remember, the way that math works is that we credit the revenue from those REC-generated sales by CVOW against the LCOE. That's why you see that price come down. But we've seen it kind of go up and down. It was a little higher, now it's back down a little lower in terms of the LCOE. I think the most important thing is we continue to believe CVOW will provide significant value to our customers.
Got it. Fantastic. Thank you, guys. We'll see you in about a week. Appreciate it.
Thank you. Our next question comes from Nicholas Campanella with Barclays. Please go ahead.
Hey, good morning.
Morning.
Maybe just keeping with the merger. Hey, maybe just keeping with the merger, similar question just on South Carolina. Any reactions to testimony there that recently came in? Is there a path forward to settle South Carolina, and any thoughts on just the bill credit, four years versus two years? Thanks.
Yeah, I give a similar answer, Nick, to the question I gave on Virginia. We're in the process, in the regulatory process there. We continue to work our way through. You all have the procedural timelines in front of you. Next step for us is for us to file our rebuttal testimony and then go into the hearing. We continue to believe that we've presented a very strong package in South Carolina the same way we did in Virginia, and we look forward to an opportunity to demonstrate that to the commission. Obviously, we work with parties in all the states and all the regulatory proceedings that we're involved in to try to find a good outcome.
Okay, thanks. Then maybe moving to Millstone. I know you're saying there's a decision here potentially by year-end in slides. Can you just remind folks of the general timeline? Do you get term and price by then, or is that just that Millstone could have been selected as part of this wider process? Maybe just a little mark to mark on those discussions. Thanks.
Hey, Nick. Yeah, we're encouraged and constructively engaged with the parties in that process. A little difficult to say with certainty as to what would be public at the end of the year. We certainly don't want to speak for or get ahead of the regulators in this case, but I do think we'll feel like we've got a little bit better sense of where that process is going by the end of the year. Then of course, as we have announcements to make, we'll be excited to make that public to folks.
All right. Thank you.
Thanks, Nick.
Thank you. Our next question is from Paul Zimbardo with Jefferies. Please go ahead.
Hey, Paul.
Mr. Zimbardo, your line is now open. We will move to our next question from Anthony Crowdell with Mizuho. Anthony, your line is now open.
How about now? Could you hear me? Sorry. Did that work?
Yes.
Yeah, that works. We were starting to get a little worried there.
I know. I think Paul's out trick-or-treating, so he's just probably getting his last candy. I'll go ahead.
We're glad to know you waited until the call was over.
I just have one quick question. You guys gave us great clarity on CVOW. You're continuing to de-risk it. I think you're 85% complete. I think maybe it's more of a sector-wide question. The sector's now approaching some large generating project construction. You guys have clearly plowed through this project, which is maybe one of the bigger ones going across the country. I guess, how should investors think about execution risks across the sector as we're starting to see utilities pursue larger generating units? You guys have plowed through it, you continue to de-risk it, but I don't know if it's lessons learned or something, or what would you tell us we should focus on as you guys are successful with CVOW and we're seeing now other utilities go down this path?
Yeah, that's a great question, Anthony, and I wouldn't limit our experience just to CVOW. It hasn't been that long since we finished some sizable combined cycles here in Virginia. Our focus is having an experienced project construction team that is working with contractors that we have familiarity with. They know the risks to look at. Our board has become quite comfortable asking us questions about the risks that we should be focused on. Not surprisingly, those line up often around, what are your potential labor constraints? How's the supply chain look? Having familiarity with all of that is really valuable.
At least in our case, we're comforted by the fact that we have an experienced team that has handled big projects, not just on the gen side, by the way, but on the transmission side of the house as well, because we've done an awful lot of that work over the last few years. To put that experienced team combined with strong counterparties where we have confidence in the supply chain. Then finally, familiarity with the permitting process. I think we all know that there can be challenges in these projects when permits get off track, and so having the relationships necessary in order to work your way through the permitting process is critical as well.
That's all I had. Thanks so much, guys. I'll see you at EEI.
Thanks, Anthony.
Thank you. Our next question is from Carly Davenport with Goldman Sachs. Please go ahead.
Hey, good morning. Thanks so much for taking the questions. Maybe just to go back to CVOW, appreciate the time from jack-up to jack-down is tracking in line with your expectations. I guess, could you just help us think about the other items that can impact the overall timing, and how you expect those to trend as we look over the next few months, just as we think about weather, et cetera, moving towards the end of the year?
Yeah, beyond the jack-up to jack-down time, other factors that we think about that we've identified are weather, maintenance, transit, and load-out time. We've made assumptions regarding weather. We don't have the ability to control that, obviously. On the other items, our load-out times continue to improve. Our transit times are defined by where we're going on the project, and I think the team has put together a very good schedule to minimize those transit times so that we are putting turbines up close to each other rather than crisscrossing across the project. And maintenance is a factor that we put in, and everything gets a little bit better as we move along. So, if you think about, Carly, when everything we've done on this project, we get quite a bit faster as we go along. Just give you a few statistics on the installation time.
Our first 10 turbines took an average of 69 hours each to install. The next 25 took an average of 45 hours, so it's a 35% improvement. The most recent nine averaged 38 hours, which is a 45% improvement to the first 10. So, we're improving on the installations of turbines the same way we improved our timing on monopiles, the same way we improved our timing on transition pieces. As I mentioned, we continue to get faster on the turns at port. Obviously, we don't do as many of those because we're loading four turbines each time, but we're getting faster with that as well. I think our plan is good on transit time and any maintenance we have to do. If we've done it before, it'll be faster the next time we do it, as we found going along.
Carly, I think it's a really fair question. If I can put some numbers around what I think you're asking about, in addition to the great answer Bob just provided. If you think about the last three months, we had about 91 days in that period. 14 were impacted by weather and about 36 by the vessel maintenance we've described, which means we installed about 13 turbines over about 41 available days, which equates to about 3.2 calendar days per turbine, which again, is a little higher than the two because that doesn't include transit. Looking forward, we have about 425 calendar days left through the end of 2027 to install the remaining 132 turbines, which by coincidence, also 3.2 days per turbine.
I think what's important to note, as Bob just mentioned, is the timing for the jack-up and jack-down, even though our base assumption is two days, as he just mentioned, our most recent nine have been closer to a day and a half. If you were at a day and a half, you'd be able to do the remaining turbine installation in about 200 days. If you stayed at two days per turbine, you'd be 265. We expect about 33 of those load-outs at the port, each take about four days, or 130 days in total. So, if you put all that together, 427 days, 265 days for turbine installation, 130 days for port turns, that leaves somewhere between 30 and 95 days for weather, maintenance, and if you need more time for some of the more difficult locations for turbine installation.
So, I think that gives folks a little bit of a sense of sort of how much contingency is in the plan from a timing perspective, and that's what gives us that confidence, in addition to what Bob described, which is, as we go through the various iterations of construction, it gets faster every single time.
Great. That's incredibly helpful context. Thank you for that. The follow-up is just a housekeeping item. It looks like just for the Q4 drivers, O&M has shifted from being a drag to a help. Anything in particular that you flag as driving that, and is there any read-through on that into 2027 O&M trends with that in mind?
No, Carly, nothing specific. We obviously reevaluate those drivers quarter by quarter to reflect the latest perspective on the forecast. I would say we gave our guidance to be in the top half, and I think I put in my prepared remarks that that includes some conservatism around November and December weather, as well as potential opportunities to de-risk financial performance. So, we're going to have that lever available to us as we go out to the last two months of the year to make sure we land solidly where our guidance is, updated guidance, but also take steps necessary to de-risk future years.
Very clear. Thank you so much for the time.
Thank you. Our next question comes from Paul Zimbardo with Jefferies. Your line is now open.
Hi. I'm back. I think Anthony was ringing my doorbell trick-or-treating.
Good to hear from you, Paul.
Yeah, thank you very much, and I appreciate there's a lot of math in that last answer. Hopefully an easier one. Could you describe the nuclear upgrade opportunities, more so the regulated fleet, but also the unregulated asset, and just kind of where you are in exploring some of these potential expansions?
Yeah, Paul, good question. We've got some limited opportunities, we think, at Millstone, as we've discussed before. The regulated fleet, we've done a lot of upgrade work over the years. Our focus at the regulated fleet is the investments necessary for subsequent license renewal. We're extending the lives of those plants for another 20 years. So, that's really where the work is going on right now. We always look for opportunities for upgrades where it makes sense, we can do it safely within the appropriate safety margin.
Okay. Understood that. Then one last on kind of Virginia and the new IRP. I think you mentioned the 4 GW and 2 GW of incremental pull forward. Just if you could frame, like, what could that do to the capital plan, the rate base growth? Any kind of color you could provide there would be helpful. Thank you.
Yeah, absolutely, Paul. If you look at 2025's IRP relative to the latest IRP, it effectively, through 2034, increases the battery on the system by about four times. For instance, in the 2025 IRP, 2030 through 2034, battery was 850 MW. In the 2026 update, it is 3.3 GW. Think about the capital cycle around that is about a two-year timeframe where you are spending that capital leading up to the actual COD. Obviously, as we roll forward and pick up 2031 in our five-year plan, we will be picking up one additional year of not just what the existing battery capital opportunity was, but actually this enhanced battery capital opportunity. We framed that as every gigawatt being sort of $2.5 billion- $3 billion of opportunity. Keep in mind, some of the IRP would be under a PPA structure.
Obviously, we would not include that in our rate base, but the majority of it is under self-build, consistent with the Virginia Clean Economy Act. I think as we think about roll forward, there is a very meaningful opportunity for capital enhancement in order to comply with the legislative and policy intent of the state.
Okay. No, thank you. That is very clear and comprehensive. Thank you.
Thank you. We will take our next question from Nick Amicucci with Evercore ISI.
Hey, good morning, guys. Sorry, I did want to just kind of revert back to the merger quickly, if I could. Because there was one point of contention just within the SCC's staff testimony there, and I just wanted to kind of clarify it to understand it, I guess. Just as we think about the ring-fencing and the bankruptcy-remote special purpose vehicle, I guess, what are they really looking for there? I understand kind of the protection for Dominion, but just, I guess, how does that structure kind of How should we think about that structure?
Yeah, totally understand why you'd ask that question. But as I mentioned, we're working our way through the regulatory process now, which involves filing rebuttal testimony on Monday, and then a hearing just a few weeks away. We're going to continue to present what we think is a very strong package through that regulatory process. But I can hope you understand why I wouldn't want to be getting into the details of that on the Friday before we file our rebuttal testimony.
Very fair. Very fair. Then, just wanted to think through to just the funding requirement. As we think about that as we move into 2027, just how much flexibility exists if we have some load kind of acceleration and a potential delay in any closing?
Are you asking, Nick, about sort of where our 2027 financing needs might be and how that could be impacted?
Yeah, if we think about it specifically on the equity issuance side.
Yeah. When we did our call in the fourth quarter, we gave a five-year look, and we indicated that, at least from an equity perspective, it was very back-end loaded in sort of the last couple of years of our plan. I do not want to get out ahead of our sort of updates to the forecast, but generally speaking, we were seeing 2027 and 2028 as relatively lighter equity years. And I have not seen anything which suggests that would be necessarily different.
Great. Thanks.
You bet. Thank you.
Thank you. This concludes our question and answer session. I will turn it back to Bob Blue for closing remarks.
Thanks, everybody, for taking the time to join the call today. Enjoy the rest of the day. Thanks.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.