Buried Treasure: How Dominion Energy's Underground Power Initiative is Transforming Grid Resilience and Driving Shareholder Value

Dominion Energy's Strategic Underground Program (SUP) is not merely an infrastructure upgrade—it's a masterstroke in operational resilience. By systematically relocating outage-prone overhead power lines underground, the utility giant is redefining grid reliability, slashing customer downtime, and positioning itself as a long-term value generator for shareholders. Let's dissect how this initiative transforms risk, cost structures, and growth potential.

The Resilience Revolution: Data-Driven Outage Reduction

Dominion's SUP has already converted 2,500 miles of Virginia's most vulnerable power lines to underground systems since its 2014 launch, with a 2030 target of 4,000 miles. The results are staggering: outage durations in upgraded areas have plummeted from 11 hours to just 2 minutes during storms. This isn't incremental improvement—it's a paradigm shift.

Storm-related outages often trigger regulatory scrutiny and customer backlash. Dominion's ability to stabilize power delivery during extreme weather positions it as a low-risk investment in an era of climate volatility. The program's focus on data-driven prioritization—targeting lines with the highest outage frequency due to tree damage—ensures every dollar spent maximizes resilience. Historically, however, market sentiment has been volatile: during hurricane seasons from 2018–2023, a buy-and-hold strategy yielded a total return of -34.51%, with a maximum drawdown of -77.27%, reflecting short-term investor skepticism. Yet Dominion's long-term operational improvements—such as reducing outage durations by 98%—suggest the market's reaction may have overlooked the program's structural benefits.

The Cost Equation: Savings Multiply Across the Value Chain

Reducing outage durations isn't just about convenience—it's about hard economics. Each hour of restored power during a storm prevents millions in lost productivity for businesses and households. Dominion's analysis estimates that fully implementing SUP could avoid $1.2 billion in outage-related economic losses annually in Virginia alone.

But the financial upside extends beyond customer savings:
1. Regulatory Stability: By proactively hardening infrastructure, Dominion minimizes the likelihood of punitive rate caps or fines post-disaster.
2. Cost Recovery Mechanisms: Virginia's legislative framework allows Dominion to recover program costs via a regulatory rider, ensuring steady cash flows without diluting dividends.
3. Equity-Driven Strategy: The program's focus on outage data—not socioeconomic factors—ensures marginalized communities benefit equally, reducing social license risks.

Dominion's 5–7% annual EPS growth target through 2029 is underpinned by this disciplined approach, with 2025 operating earnings already projected at $3.28–$3.52 per share, a 15% increase from 2024.

Legislative Leverage: Shifting Costs to High-Wattage Users

Dominion is pioneering a cost-sharing revolution in Virginia's Loudoun County, where data centers consume 25% of the grid's capacity. By advocating for legislation to shift undergrounding costs for high-voltage lines from all ratepayers to these large users, Dominion avoids diluting shareholder returns.

The $1 billion+ Route 7 project exemplifies this strategy: data centers pay a premium for resilient infrastructure, while residential customers avoid disproportionate costs. This model could be replicated nationwide, unlocking new revenue streams while maintaining affordability for households.

The Equity Angle: Resilience Without Bias

Critics often question whether infrastructure upgrades favor wealthier communities. Dominion's data-centric approach ensures equity:
- Outage Frequency > Income: Priority is based solely on historical outage data, not zip codes.
- Community Engagement: High satisfaction rates (despite 20–25% of projects delayed by easement disputes) reflect proactive communication, including property restoration guarantees and AR previews of infrastructure.

This strategy not only avoids regulatory headaches but also builds long-term trust—a critical asset for utilities in an era of public skepticism.

The Bottom Line: A Foundation for Decade-Long Growth

Dominion's underground initiative is a multi-decade growth engine:
- Short-Term: Immediate outage reduction boosts customer satisfaction and regulatory goodwill.
- Medium-Term: Expansion into North Carolina (200–300 miles) and Mainfeeder Hardening (1,000 miles of pole replacements by 2030) diversify revenue streams.
- Long-Term: Legislative wins like Loudoun County's cost-sharing model could redefine utility funding frameworks nationwide.

Invest Now: The Case for Immediate Action

Dominion Energy's underground power initiative is a textbook example of value creation through operational excellence. With 5–7% EPS growth baked into its 2025–2029 roadmap, a AA- credit rating, and legislative tailwinds, this utility is primed to thrive.

Act now while the program's benefits are still underappreciated by the market. The buried lines may be out of sight—but the returns will be anything but.

Invest with the confidence that resilience breeds returns.