Dominion Energy's Q4 2024: Unraveling Contradictions in Offshore Wind Projects and Data Center Growth
Earnings DecryptWednesday, Feb 12, 2025 2:01 pm ET
3min read
These are the key contradictions discussed in Dominion Energy's latest 2024Q4 earnings call, specifically including: Offshore Wind Project Variability, Data Center Growth Impact, and Data Center Pipeline Growth and Rate Design:
Financial Performance and Earnings:
- Dominion Energy reported operating earnings per share in the top half of its guidance range for 2024, despite $0.03 of worse than normal weather.
- The company achieved an operating earnings per share of $2.77 for the full year and $0.58 per share in the fourth quarter.
- This outcome was driven by weather headwinds and successful storm restoration efforts.
Offshore Wind Project Update:
- The Coastal Virginia Offshore Wind project is now 50% complete and on schedule for completion in 2026.
- The cost increase for the project was from $9.8 billion to $10.7 billion, primarily due to higher network upgrade costs by PJM.
- The increase in costs is partly offset by cost sharing and risk sharing measures, with 50% of non-recoverable costs borne by the investor Stonepeak.
Data Center Investment and Load Growth:
- Virginia hosts the world's largest data center concentration, with 450 data centers connected, representing nearly 9 gigawatts of capacity.
- Dominion Energy expects 40 gigawatts in data center contracted capacity, a 19 gigawatts increase since July 2024.
- This growth is driven by demand for reliable and affordable energy supply, supported by increased transmission infrastructure investments.
Capital Investment and Regulatory Approaches:
- The company updated its five-year capital forecast from $40 billion to $50 billion, a 16% increase from prior guidance.
- Approximately 80% of the increase is at Dominion Energy Virginia, driven by higher transmission, distribution, and nuclear renewal spend.
- The increased investment is aimed at ensuring reliability amid growing demand and is supported by regulatory recovery mechanisms.
Financial Performance and Earnings:
- Dominion Energy reported operating earnings per share in the top half of its guidance range for 2024, despite $0.03 of worse than normal weather.
- The company achieved an operating earnings per share of $2.77 for the full year and $0.58 per share in the fourth quarter.
- This outcome was driven by weather headwinds and successful storm restoration efforts.
Offshore Wind Project Update:
- The Coastal Virginia Offshore Wind project is now 50% complete and on schedule for completion in 2026.
- The cost increase for the project was from $9.8 billion to $10.7 billion, primarily due to higher network upgrade costs by PJM.
- The increase in costs is partly offset by cost sharing and risk sharing measures, with 50% of non-recoverable costs borne by the investor Stonepeak.
Data Center Investment and Load Growth:
- Virginia hosts the world's largest data center concentration, with 450 data centers connected, representing nearly 9 gigawatts of capacity.
- Dominion Energy expects 40 gigawatts in data center contracted capacity, a 19 gigawatts increase since July 2024.
- This growth is driven by demand for reliable and affordable energy supply, supported by increased transmission infrastructure investments.
Capital Investment and Regulatory Approaches:
- The company updated its five-year capital forecast from $40 billion to $50 billion, a 16% increase from prior guidance.
- Approximately 80% of the increase is at Dominion Energy Virginia, driven by higher transmission, distribution, and nuclear renewal spend.
- The increased investment is aimed at ensuring reliability amid growing demand and is supported by regulatory recovery mechanisms.
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