Dominion Energy, Inc. (Dominion Energy) operates as a producer and distributor of energy.
As of December 31, 2023, Dominion Energy's portfolio of assets included approximately 29.5 Gigawatt (GW) of electric generating capacity, 10,600 miles of electric transmission lines, 79,300 miles of electric distribution lines and 94,800 miles of gas distribution mains and related service facilities, which are supported by 4,000 miles of gas transmission, gathering and storage pipeline. As of December 31,...
Dominion Energy, Inc. (Dominion Energy) operates as a producer and distributor of energy.
As of December 31, 2023, Dominion Energy's portfolio of assets included approximately 29.5 Gigawatt (GW) of electric generating capacity, 10,600 miles of electric transmission lines, 79,300 miles of electric distribution lines and 94,800 miles of gas distribution mains and related service facilities, which are supported by 4,000 miles of gas transmission, gathering and storage pipeline. As of December 31, 2023, Dominion Energy operated in 15 states and serves approximately 7 million customers. Such amounts are inclusive of Dominion Energy's gas distribution operations expected to be sold to Enbridge during 2024.
In addition, Dominion Energy completed the sale in September 2023 of its remaining 50% noncontrolling partnership interest in Cove Point to BHE under the agreement entered into in July 2023. Dominion Energy continues to focus on expanding and improving its regulated electric utilities and long-term contracted businesses while transitioning to a cleaner energy future.
Dominion Energy expects approximately 90% of earnings from its primary operating segments to come from state-regulated primarily electric utility businesses. Dominion Energy's nonregulated operations consist primarily of long-term contracted electric generation operations. Dominion Energy's operations are conducted through various subsidiaries, including Dominion Energy South Carolina, Inc. (DESC) and Virginia Electric and Power Company (Virginia Power).
Virginia Power is a wholly-owned subsidiary of Dominion Energy and a regulated public utility that generates, transmits and distributes electricity for sale in Virginia and North Carolina. In Virginia, Virginia Power conducts business under the name Dominion Energy Virginia and primarily serves retail customers. In North Carolina, it conducts business under the name Dominion Energy North Carolina and serves retail customers located in the northeastern region of the state, excluding certain municipalities. In addition, Virginia Power sells and transmits electricity at wholesale prices to rural electric cooperatives, municipalities and into wholesale electricity markets. All of Virginia Power's stock is owned by Dominion Energy.
Strategy
Dominion Energy's strategy is to be a leading provider of electricity, natural gas and related services to customers primarily in the eastern region of the U.S.
Acquisition of Nonregulated Solar Projects
In 2023, Dominion Energy entered into an agreement to acquire a nonregulated solar project in Virginia and completed the acquisition in 2024.
Sale of Interest in Cove Point
In September 2023, Dominion Energy completed the sale of its 50% noncontrolling limited partnership interest in Cove Point to BHE.
Segments
Dominion Energy manages its daily operations through three primary operating segments: Dominion Energy Virginia, Dominion Energy South Carolina and Contracted Energy.
Dominion Energy also reports a Corporate and Other segment, which includes its corporate, service companies and other functions (including unallocated debt) as well as Dominion Energy's noncontrolling interest in Dominion Privatization.
Virginia Power manages its daily operations through its primary operating segment: Dominion Energy Virginia.
Dominion Energy Virginia
Dominion Energy Virginia consists of Virginia Power's regulated electric transmission, distribution and generation (regulated electric utility and its related energy supply) operations, which serve approximately 2.8 million residential, commercial, industrial and governmental customers in Virginia and North Carolina.
Virginia Power also plans to continue making progress on its ten-year plan through 2028 to transform its electric grid into a smarter, stronger and greener grid. Revenue provided by Virginia Power's electric transmission operations is based primarily on rates approved by FERC.
Virginia Power is a member of PJM, an RTO, and its electric transmission facilities are integrated into PJM wholesale electricity markets.
Regulation
Virginia Power's electric distribution and generation operations, including the rates it may charge to jurisdictional customers, as well as wholesale electric transmission rates, tariffs and terms of service, are subject to regulation by the Virginia and North Carolina Commissions as well as Federal Energy Regulatory Commission (FERC), the U.S. Nuclear Regulatory Commission (NRC), the U.S. Environmental Protection Agency (EPA), the U.S. Department of Energy (DOE), U.S. Army Corps of Engineers and other federal, state and local authorities.
Properties
CVOW Commercial Project
In September 2019, Virginia Power filed applications with PJM Interconnection, LLC (PJM) for the CVOW Commercial Project and for certain approvals and rider recovery from the Virginia Commission in 2021.
In March 2022, the Virginia Commission approved Virginia Power's application filed in December 2021 for approval of a lease contract with an affiliated entity for the use of a Jones Act compliant offshore wind installation vessel under development. In April 2022, Virginia Power filed an application with the North Carolina Commission for approval of the same lease contract and received approval in January 2023. In January 2023, Virginia Power entered into the lease contract with commencement of the 20-month lease term in August 2025.
Virginia Power commenced major onshore construction activities in November 2023 following the receipt of a record of decision from BOEM in October 2023 for construction of the CVOW Commercial Project. In January 2024, Virginia Power received the final approval from BOEM authorizing offshore construction and necessary permits from the U.S. Army Corps of Engineers for offshore construction. As a result, Virginia Power anticipates commencing major offshore construction activities in the first half of 2024. The project is expected to be placed in service by the end of 2026. Virginia Power expects to incur approximately 80% of the project costs from 2023 through 2025. In February 2024, Virginia Power entered into an agreement to sell a 50% noncontrolling interest in the CVOW Commercial Project to Stonepeak through the formation of OSWP. The CVOW Commercial Project is vital for Virginia Power to meet the renewable energy portfolio standard established in the VCEA and is consistent with the criteria within the VCEA for the construction of an offshore wind facility deemed to be in the public interest as well as the guidelines facilitating cost recovery.
Electric Generation and Storage Projects
In addition, Virginia Power is developing, financing and constructing new generation capacity as well as seeking license extensions on zero carbon nuclear generation facilities to meet its renewable generation targets and growing electricity demand within its service territory.
Virginia Power has received a 20-year extension of the operating licenses for its two units at Surry and has commenced the process to extend the operating licenses for its two units at North Anna.
Virginia Power continues to consider the construction of a third nuclear unit at a site located at North Anna.
Virginia Power is considering the construction of a hydroelectric pumped storage facility in Southwest Virginia.
Virginia Power is considering the construction of simple cycle combustion turbines in Virginia for reliability purposes.
Electric Transmission and Distribution Projects
Virginia Power continues to invest in transmission projects that are a part of PJM's RTEP process which focus on reliability improvements and replacement of aging infrastructure.
Sources of Energy Supply
Virginia Power uses a variety of fuels to power its electric generation fleet and purchases power for utility system load requirements and to satisfy physical forward sale requirements.
Nuclear Fuel-Virginia Power primarily utilizes long-term contracts to support its nuclear fuel requirements. Worldwide market conditions are continuously evaluated to ensure a range of supply options at reasonable prices which are dependent on the market environment.
Fossil Fuel- Virginia Power primarily utilizes natural gas and coal in its fossil fuel plants. All recent fossil fuel plant construction involves natural gas generation.
Virginia Power's natural gas and oil supply is obtained from various sources including purchases from major and independent producers in the Mid-Continent and Gulf Coast regions, purchases from local producers in the Appalachian area and Marcellus and Utica regions, purchases from gas marketers and withdrawals from underground storage fields owned by third parties.
Virginia Power's coal supply is obtained through long-term contracts and short-term spot agreements from domestic suppliers.
Biomass- Virginia Power's biomass supply is obtained through long-term contracts and short-term spot agreements from local suppliers.
Purchased Power- Virginia Power purchases electricity from the PJM spot market and through power purchase agreements with other suppliers to provide for utility system load requirements.
Seasonality
Virginia Power's earnings vary seasonally as a result of the impact of changes in temperature, the impact of storms and other catastrophic weather events, and the availability of alternative sources for heating on demand by residential and commercial customers. Generally, the demand for electricity peaks during the summer and winter months to meet cooling and heating needs, respectively.
Nuclear Decommissioning
Virginia Power has a total of four licensed, operating nuclear reactors at Surry and North Anna in Virginia.
Decommissioning involves the decontamination and removal of radioactive contaminants from a nuclear power station once operations have ceased, in accordance with standards established by the NRC.
Under the operating licenses, Virginia Power is scheduled to decommission the Surry and North Anna units during the period 2038 to 2112. NRC regulations allow licensees to apply for extension of an operating license in up to 20-year increments. In 2021, Virginia Power was granted an additional 20 years for its operating licenses for the two units at Surry. Under these license extensions, the two units will be allowed to generate electricity through 2052 and 2053. In 2020, Virginia Power submitted a license renewal application for the two units at North Anna. Under this renewal application, the two units will be allowed to generate electricity through 2058 and 2060, if approved.
Dominion Energy South Carolina
Dominion Energy South Carolina consists of DESC's generation, transmission and distribution of electricity to approximately 0.8 million customers in the central, southern and southwestern portions of South Carolina and the distribution of natural gas to approximately 0.4 million residential, commercial and industrial customers in South Carolina.
DESC's electric transmission operations serve its electric distribution operations as well as certain wholesale customers. Revenue provided by such electric transmission operations is based on a FERC-approved formula rate mechanism under DESC's open access transmission tariff or based on retail rates established by the South Carolina Commission.
Revenue provided by DESC's electric generation operations is primarily derived from the sale of electricity generated by its utility generation assets and is based on rates established by the South Carolina Commission.
Revenue provided by DESC's natural gas distribution operations primarily results from rates established by the South Carolina Commission.
DESC is a member of the Carolinas Reserve Sharing Group, one of several geographic divisions within the SERC. The SERC is one of seven regional entities with delegated authority from NERC for the purpose of proposing and enforcing reliability standards approved by NERC. In addition, DESC also participates in the SEEM platform, which became operational in November 2022.
Regulation
DESC's electric distribution service, including the rates it may charge to jurisdictional customers, is subject to regulation by the South Carolina Commission. DESC's electric generation operations are subject to regulation by the South Carolina Commission, FERC, NRC, EPA, DOE, U.S. Army Corps of Engineers and other federal, state and local authorities. DESC's electric transmission service is primarily regulated by FERC and the DOE. DESC's gas distribution operations are subject to regulation by the South Carolina Commission, as well as PHMSA, the U.S. Department of Transportation and the South Carolina Office of Regulatory Staff for enforcement of federal and state pipeline safety requirements.
Properties
DESC has the following significant projects under construction or development to better serve customers or expand its service offerings within its service territory:
In 2020, DESC began the upgrade of its electric and gas systems to an AMI whereby smart meters will be installed throughout its service area. As of December 31, 2023, DESC has completed the installation of approximately 976,000 of the planned 1.1 million smart meters.
In January 2022, DESC committed to a plan to retire certain existing gas combustion turbine facilities.
To maintain reliability, DESC commenced development in 2023 of a wastewater treatment facility at its Williams facility. The project will allow DESC to comply with the effluent limitation guidelines and is expected to be placed in service by the end of 2025.
In February 2024, DESC received approval from the South Carolina Commission to provide electric services to two large industrial customers which will require development of new electric transmission facilities.
Sources of Energy Supply
DESC uses a variety of fuels to power its electric generation fleet and purchases power for utility system load requirements.
Natural gas- DESC purchases natural gas under contracts with producers and marketers on both a short-term and long-term basis at market-based prices. The gas is delivered to DESC through firm transportation agreements with various counterparties, which expire between 2024 and 2084.
Coal- DESC primarily obtains coal through short-term and long-term contracts with suppliers located in eastern Kentucky, Tennessee, Virginia and West Virginia that will expire at various times throughout 2024 and 2026. Spot market purchases may occur when needed or when prices are believed to be favorable.
Nuclear- DESC primarily utilizes long-term contracts to support its nuclear fuel requirements. DESC, for itself and as agent for Santee Cooper, and Westinghouse are parties to a fuel alliance agreement and contracts for fuel fabrication and related services. Under these contracts, DESC supplies enriched products to Westinghouse, who in turn supplies nuclear fuel assemblies for Summer. Westinghouse is DESC's exclusive provider of such fuel assemblies on a cost-plus basis. The fuel assemblies to be delivered under the contracts are expected to supply the nuclear fuel requirements through 2036.
In addition, DESC has contracts covering its nuclear fuel needs for uranium, conversion services and enrichment services. These contracts have varying expiration dates through 2032.
Seasonality
DESC's electric business earnings vary seasonally as a result of the impact of changes in temperature, the impact of storms and other catastrophic weather events and the availability of alternative sources for heating on demand by residential and commercial customers.
DESC's gas distribution and storage business earnings vary seasonally as a result of the impact of changes in temperature on demand by residential and commercial customers for gas to meet heating needs. The majority of these earnings are generated during the heating season, which is generally from November to March; however, South Carolina has certain rate mechanisms designed to reduce the impact of weather-related fluctuations.
Nuclear Decommissioning
DESC has a two-thirds interest in one licensed, operating nuclear reactor at Summer in South Carolina.
Decommissioning involves the decontamination and removal of radioactive contaminants from a nuclear power station once operations have ceased, in accordance with standards established by the NRC.
CONTRACTED ENERGY
Contracted Energy includes the operations of Millstone, and associated energy marketing and price risk activities, and Dominion Energy's nonregulated long-term contracted renewable electric generation fleet. Contracted Energy also includes nonregulated renewable natural gas facilities in operation and under development, including Dominion Energy's investment in Align RNG.
Dominion Energy's nonregulated generation fleet includes solar generation facilities in operation or development in five states, including Virginia. The output of these facilities is sold under long-term power purchase agreements with terms generally ranging from 15 to 25 years.
Properties
Dominion Energy Virginia
Virginia Power has approximately 6,700 miles of electric transmission lines of 69 kV or more located in North Carolina, Virginia and West Virginia. Portions of Virginia Power's electric transmission lines cross national parks and forests under permits entitling the federal government to use, at specified charges, any surplus capacity that may exist in these lines. While Virginia Power owns and maintains its electric transmission facilities, they are a part of PJM, which coordinates the planning, operation, emergency assistance and exchange of capacity and energy for such facilities.
In addition, Virginia Power's electric distribution network includes approximately 60,300 miles of distribution lines, exclusive of service level lines, in Virginia and North Carolina. The grants for most of its electric lines contain rights-of-way that have been obtained from the apparent owners of real estate, but underlying titles have not been examined. In addition, Virginia Power owns 484 substations.
Dominion Energy South Carolina
DESC has approximately 3,900 miles and 19,000 miles of electric transmission and distribution lines, respectively, exclusive of service level lines, in South Carolina. The grants for most of DESC's electric lines contain rights-of-way that have been obtained from the apparent owners of real estate, but underlying property titles have not been examined. In addition, DESC owns 457 substations.
DESC's natural gas system includes approximately 18,800 miles of distribution mains and related service facilities, which are supported by approximately 400 miles of transmission pipeline.
DESC owns two LNG facilities, one located near Charleston, South Carolina, and the other in Salley, South Carolina. The Charleston facility can store the liquefied equivalent of approximately 1.0 bcf of natural gas, can regasify approximately 6% of its storage capacity per day and can liquefy less than 1% of its storage capacity per day. The Salley facility can store the liquefied equivalent of approximately 0.9 bcf of natural gas and can regasify approximately 10% of its storage capacity per day.
Corporate and Other
The operations included in the East Ohio, PSNC and Questar Gas Transactions are located in Ohio, North Carolina, Utah, southwestern Wyoming and southeastern Idaho. This network includes approximately 76,000 miles of distribution mains and related service facilities which are supported by approximately 3,600 miles of transmission, gathering and storage pipeline. The right-of-way grants for many natural gas pipelines have been obtained from the actual owners of real estate, as underlying titles have been examined.
East Ohio's integrated underground storage facilities have more than 60 bcf of working gas capacity to serve base and peak demand. PSNC owns one LNG facility that stores the liquefied equivalent of 1.0 bcf of natural gas, can regasify approximately 10% of its storage capacity per day and can liquefy less than 1% of its storage capacity per day. Questar Gas also owns one LNG facility that stores the liquefied equivalent of 1.2 bcf of natural gas, can regasify approximately 12% of its storage capacity per day and can liquefy less than 1% of its storage capacity per day.
Dominion Energy also owns various solar facilities, primarily at schools in Virginia, with an aggregate generation capacity of 27 MW.
Non-Utility Renewable Natural Gas-In 2019, Dominion Energy announced the formation of a strategic alliance with Vanguard Renewables in collaboration with the Dairy Farmers of America to capture methane from dairy farms and convert it into pipeline quality natural gas. As of December 31, 2023, 21 dairy renewable natural gas facilities were under construction in Colorado, Nevada, Idaho, Georgia, Kansas, Texas and New Mexico. These facilities are expected to be placed in service in 2024 and 2025.
Investments
Align RNG-In November 2018, Dominion Energy announced the formation of Align RNG, an equal partnership with Smithfield Foods, Inc. As of December 31, 2023, Align RNG had four projects under construction in North Carolina, Arizona and Virginia. These facilities are expected to be placed in service in 2024 through 2027.
Leasing Arrangement
In 2020, Dominion Energy signed an agreement (subsequently amended in December 2022 and May 2023) with a lessor to complete construction of and lease a Jones Act compliant offshore wind installation vessel. This vessel is designed to handle current turbine technologies as well as next generation turbines. The project is expected to be completed in late 2024 or early 2025. The initial lease term will commence once construction is substantially complete and the vessel is delivered and will mature in November 2027.
Seasonality
Sales of electricity for Contracted Energy are subject to seasonal variation as a result of the weather, partially mitigated by the Millstone 2019 power purchase agreements.
Nuclear Decommissioning
Dominion Energy has two licensed, operating nuclear reactors at Millstone in Connecticut. Dominion Energy intends to seek approval of 20-year license extensions for both Units 2 and 3, which would allow these units to generate electricity through 2055 and 2065, respectively. A third Millstone unit ceased operations before Dominion Energy acquired the power station.
As part of Dominion Energy's acquisition of Millstone, it acquired decommissioning funds for the related units. Dominion Energy believes that the decommissioning funds and their expected earnings will be sufficient to cover expected decommissioning costs for the Millstone units. Dominion Energy will continue to monitor these trusts to ensure they meet the NRC minimum financial assurance requirements, which may include, if needed, the use of parent company guarantees, surety bonding or other financial instruments recognized by the NRC. The most recent site-specific study completed for Millstone was performed in 2019.
Corporate and Other Segment-Dominion Energy
Dominion Energy's Corporate and Other segment includes its corporate, service company and other functions (including unallocated debt) as well as its noncontrolling interest in Dominion Privatization.
Dominion Energy's regulated natural gas sales, transportation, gathering, storage and distribution operations included in the East Ohio, PSNC and Questar Gas Transactions operate in Ohio, North Carolina, Utah, southwestern Wyoming and southeastern Idaho and collectively serve approximately 3.0 million residential, commercial and industrial customers. Earnings for East Ohio, PSNC and Questar Gas primarily result from rates established by the Ohio, North Carolina, Utah, Wyoming and Idaho Commissions.
Dominion Energy owns a 50% noncontrolling interest in Dominion Privatization, a partnership with Patriot, which maintains and operates electric and gas distribution infrastructure under service concession arrangements with certain U.S. military installations in Pennsylvania, South Carolina, Texas, Washington D.C. and Virginia.
Dominion Energy owns a 53% noncontrolling interest in Atlantic Coast Pipeline. In July 2020, as a result of the continued permitting delays, growing legal uncertainties and the need to incur significant capital expenditures to maintain project timing before such uncertainties could be resolved, Dominion Energy and Duke Energy announced the cancellation of the Atlantic Coast Pipeline Project.
Regulations
The Companies are subject to regulation by various federal, state and local authorities, including the state commissions of Virginia, North Carolina, South Carolina, Ohio, Utah, Wyoming and Idaho, SEC, FERC, EPA, DOE, PHMSA, NRC, U.S. Army Corps of Engineers and the U.S. Department of Transportation.
Questar Gas (Questar Gas Company, doing business as Dominion Energy Utah, Dominion Energy Wyoming and Dominion Energy Idaho) is subject to regulation of rates and other aspects of its business by the Utah, Wyoming and Idaho Commissions. East Ohio is subject to regulation of rates and other aspects of its business by the Ohio Commission. PSNC (Public Service Company of North Carolina, Incorporated, doing business as Dominion Energy North Carolina) is subject to regulation of rates and other aspects of its business by the North Carolina Commission. DESC is subject to regulation of rates and other aspects of its natural gas distribution service by the South Carolina Commission. Virginia Power purchases and, under its market-based rate authority, sells electricity in the PJM wholesale market and to wholesale purchasers in Virginia and North Carolina. Dominion Energy's nonregulated generators sell electricity in the PJM, CAISO and ISO New England (ISO-NE) wholesale markets, and to wholesale purchasers in the states of Virginia, North Carolina, Ohio, Connecticut, California and South Carolina, under Dominion Energy's market-based sales tariffs authorized by FERC or pursuant to FERC authority to sell as a qualified facility. DESC may make wholesale sales at market-based rates outside its balancing authority pursuant to its market-based sales tariff authorized by the Federal Energy Regulatory Commission (FERC). In addition, DESC (The legal entity, Dominion Energy South Carolina, Inc., one or more of its consolidated entities or operating segment, or the entirety of Dominion Energy South Carolina, Inc. and its consolidated entities) has FERC approved tariffs to sell wholesale power at capped rates based on its embedded cost of generation.
Dominion Energy is subject to various federal and state laws and implementing regulations governing the management, storage, treatment, reuse and disposal of waste materials and hazardous substances, including the Resource Conservation and Recovery Act of 1976, CERCLA, the Emergency Planning and Community Right-to-Know Act of 1986 and the Toxic Substances Control Act of 1976.
History
The company was incorporated in Virginia in 1983. The company was formerly known as Dominion Resources, Inc. and changed its name to Dominion Energy, Inc. in 2017.
