Dominion Energy, Inc. · NYSE:D
Dominion Energy — Investor Day (March 2019)
126 slides from Dominion Energy's investor day presentation, Mar 25, 2019
Slide 1: Investor day general session March 25, 2019
Investor day general session March 25, 2019
Slide 2: Important note to investors
Important note to investors This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding Dominion Energy. The statements relate to, among other things, expectations, estimates and projections concerning the busines
Slide 3: Agenda
Dominion Energy Agenda CEO perspectives 1 More than a decade of repositioning 2 Dominion Energy today: What and why 3 Looking ahead CFO perspectives Concluding remarks Appendix Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 3
Slide 4: More than a decade of repositioning
1 More than a decade of repositioning Between 2007 and today (+) (-) $40B $20B $25B Regulated Regulated Unregulated capex M&A asset sales Regulated generation SCANA E&P Electric transmission Questar Merchant generation Customer growth Carolina Gas Transmission Blue Racer Midstream Resiliency enhance
Slide 5: Increased scale through regulated investment
1 More than a decade of repositioning Increased scale through regulated investment +5% CAGR $1.8B $3.4B 2006A 2019E operating earnings operating earnings +9% CAGR Adj. for sale of E&P¹ ~40% regulated ~95% regulated ¹ In 2006, the E&P segment, which was the company’s largest segment and was subsequen
Slide 6: Core values: Safety
1 More than a decade of repositioning While staying true to our core values: Safety 1.87 1.40 1.24 1.25 Peer average: 1.08 1.06¹ 0.95 0.92 0.83 0.74 0.74 0.66 0.60 0.55 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 OSHA recordable incident rate ¹ Represents the average 2018 OSHA r
Slide 7: Core values: Ethics and Excellence
1 More than a decade of repositioning While staying true to our core values Ethics Excellence 1.4M VCHEC Warren Volunteer hours Brunswick $0.3B Charitable giving 60% Increase in spend Grid with diverse Transformation suppliers & Security Act Cove Point Greensville 47% Reduction in carbon emissions N
Slide 8: Core values: One Dominion (teamwork)
1 More than a decade of repositioning While staying true to our core values: One Dominion (teamwork) Community, Environmental, Major Regulated customer, and social & projects mergers employee governance achievements Grid Cove Point Carbon & methane SCANA Transformation & liquefaction reductions Secu
Slide 9: 2018: Preparing the company for long-term success
1 More than a decade of repositioning 2018: Preparing the company for long-term success 12.5% EPS growth DPS growth 10.0% +1.7M utility customers GTSA ~$2.5B Grid Transformation & nonregulated asset sales Security Act ~$8B Ratings affirmed parent-level debt S&P / Moody’s / Fitch reductio
Slide 10: Agenda
Dominion Energy Agenda CEO perspectives 1 More than a decade of repositioning 2 Dominion Energy today: What and why 3 Looking ahead CFO perspectives Concluding remarks Appendix Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 10
Slide 11: National regulated energy infrastructure footprint
2 Dominion Energy today: What and why National regulated energy infrastructure footprint Regulated utility operations centered around 5 key states ~65—70% 2020E operating earnings Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 11
Slide 12: National regulated footprint: state regulatory rankings
2 Dominion Energy today: What and why National regulated energy infrastructure footprint State regulatory rankings¹ Top Top 50% 20% OH VA NC SC UT Legend Electric utility service territory Gas utility service territory Utility electric generation ¹ State regulatory rankings reflect the average asses
Slide 13: FERC regulated gas transmission & storage
2 Dominion Energy today: What and why National regulated energy infrastructure footprint FERC regulated / regulated-like gas transmission & storage ~25%—30% 2020E operating earnings Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 13
Slide 14: Gas transmission and storage map
2 Dominion Energy today: What and why National regulated energy infrastructure footprint Legend Natural gas pipeline Atlantic Coast Pipeline Cove Point Gas utility service territory Storage Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 14
Slide 15: Contracted generation
2 Dominion Energy today: What and why National regulated energy infrastructure footprint Contracted generation (Millstone & long- term contracted solar) Less than 10% 2020E operating earnings Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 15
Slide 16: Contracted generation map
2 Dominion Energy today: What and why National regulated energy infrastructure footprint Legend Contracted generation Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 16
Slide 17: 21,300 employees operating ~$100B of assets
2 Dominion Energy today: What and why National regulated energy infrastructure footprint 21,300 employees operating ~$100B of best-in-class assets across 18 states Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 17
Slide 18: Footprint across 18 states
2 Dominion Energy today: What and why National regulated energy infrastructure footprint Legend Electric utility service territory Gas utility service territory Utility electric generation Contracted generation Storage Natural gas pipeline Atlantic Coast Pipeline Cove Point Note: Dot in Texas repres
Slide 19: Asset portfolio in 2006
2 Dominion Energy today: What and why Dominion Energy’s asset portfolio in 2006 Electric Service Territory Gas Service Territory Gas Pipelines Storage Field Regulated Power Unregulated Power Oil & Gas Production LNG Import Terminal Please refer to page 2 for risks and uncertainties related to projec
Slide 20: Key company statistics
2 Dominion Energy today: What and why National regulated energy infrastructure footprint $61B $96B 21,300 7.5M 3.4M 3.3M 18 market cap assets employees customers customers customers states of (total) (elec. utility) (gas utility) operation 10,200 84,800 15,900 92,900 1.1 Tcf 31GW 11GW electric elect
Slide 21: Scale: largest U.S. utility companies
2 Dominion Energy today: What and why Scale Largest U.S. utility companies By the numbers (by market cap, $B) $96B Total assets, 5th largest 21,300 Total employees, 4th largest $61B 6.7M Utility customers, 7th largest 3.3M Gas utility customers, 6th largest 2,600 Solar MWs, 4th largest 35% Zero carb
Slide 22: Transition to lower business risk profile
2 Dominion Energy today: What and why Transition to lower business risk profile Utility Regulated Regulated end-use “like” customer Virginia/NC State regulated S. Carolina ~95% Gas LDCs Regulated/ FERC Pipelines regulated-like regulated / Storage 2020E operating regulated earnings like Cov
Slide 23: What we are and what we are not
2 Dominion Energy today: What and why Highlighting what we are and what we are not Gas Traditional midstream Transmission (e.g., WMB, KMI, EQM) & Storage Gathering & Processing Gas pipelines Terminals Assets Liquids pipelines Gas storage Utility demand-driven LNG export Gas pipelines Commodity Volum
Slide 24: Low-risk revenue profile vs. midstream
2 Dominion Energy today: What and why Highlighting what we are and what we are not ~90%+ Gas firm ~1% G&P Transmission service margin revenues1 & Storage Low-risk revenue profile. De minimus commodity ~63% ~36% Large-cap firm exposure. midstream² G&P service margin revenues1 ¹ Defined as firm servic
Slide 25: Gas networks essential to local utilities
2 Dominion Energy today: What and why Highlighting what we are and what we are not Local electric and gas utilities could not reliably serve their customers without Dominion Energy’s regionally-integrated gas transmission and storage networks OH UT/WY/ID WV VA Legend Natural gas pipeline Atlantic Co
Slide 26: Largest utility companies embracing scale
2 Dominion Energy today: What and why Strategic advantages Largest utility companies embracing scale across electric and gas — why? Scale + diversification mitigates risk Risk Large projects Regulation mitigation Climate-related impacts Public policy Gas infrastructure foundational to the
Slide 27: Electrification growing, de-carbonization accelerating
2 Dominion Energy today: What and why Strategic advantages Electrification is growing, de-carbonization is accelerating. And only natural gas infrastructure makes that possible. 2050 Up to 2015 21% 47%Electricity's 18—40% cumulative natural gas share of U.S. usage growth Electricity's share of U.S.
Slide 28: Agenda
Dominion Energy Agenda CEO perspectives 1 More than a decade of repositioning 2 Dominion Energy today: What and why 3 Looking ahead CFO perspectives Concluding remarks Appendix Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 28
Slide 29: New core value: Embrace change
3 Looking ahead New core value: Embrace change Dedicated sustainability and ESG investor meeting First of its kind in the U.S. utility industry Will address Dominion Energy’s: Sustainability and innovation initiatives Enhanced environmental commitments and disclosure Approach to engaging our c
Slide 30: Innovation structure and projects
3 Looking ahead New core value: Embrace change Innovation team 3rd party technical Senior management (SVP + team) advisors Innovation, Technology, and Sustainability Council Board of Directors (Chaired by CEO) Behind the Off-shore Electric Marine teams throughout Solar RNG meter wind vehicles LNG De
Slide 31: Existing business segments
3 Looking ahead Existing business segments Power Power Gas Southeast Delivery Generation Infrastructure Energy Historic Dominion Energy operating segments have delivered best-in-class operational performance but more than a decade of repositioning has changed the composition of our company Please re
Slide 32: Key investor themes
3 Looking ahead Key investor themes Premium, low-risk assets in Regulated + “like” premium locations growth programs Sustainability & Clarity & Scale & diversity innovation accessibility Balanced total long-term shareholder return: Yield + growth Please refer to page 2 for risks and uncertainties re
Slide 33: Agenda
Dominion Energy Agenda CEO perspectives CFO perspectives 1 Organizing and presenting Dominion Energy 2 Growth outlook by segment 3 Consolidated financial outlook Concluding remarks Appendix Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 33
Slide 34: Transitioning to a new reporting structure
1 Organizing and presenting Dominion Energy Transitioning over time to a new structure Dominion Energy is changing its segment reporting structure These changes are intended to: Respond to investor feedback Enhance clarity and accessibility Timing Expect reporting segment transition to b
Slide 35: New segment structure
1 Organizing and presenting Dominion Energy Transitioning over time to a new structure Dominion Energy Dominion Energy Dominion Energy Dominion Energy Dominion Energy Gas Transmission South Carolina Contracted Virginia Gas Distribution & Storage (SCE&G)¹ Generation NY CT UT CT OH VA PA States of WY
Slide 36: Agenda
Dominion Energy Agenda CEO perspectives CFO perspectives 1 Organizing and presenting Dominion Energy 2 Growth outlook by segment —Dominion Energy Virginia —Dominion Energy Gas Transmission & Storage —Dominion Energy Gas Distribution —Dominion Energy South Carolina (SCE&G) —Dominion Energy Contracted
Slide 37: Dominion Energy Virginia overview
2 Dominion Energy Virginia Overview NC 10.2% % avg. allowed 2.6M $23B ROE¹ 2018 rate 2.4% 1.0% customers base 2018 Annual 51.4% weather normal customer growth avg. VA sales growth (last 5 years) allowed equity¹ Key takeaways One of the largest electric utility operating companies in the U.S. GTS
Slide 38: Typical monthly residential electric bill
2 Dominion Energy Virginia Typical monthly residential electric bill (1,000 kWh) $160 18—22% lower than U.S. average U.S. average: $140 5—10% lower than regional average $140 South Atlantic region average: $122 $120 Since 2008 Through 2028 $100 $80 2.0% Expected $60 0.9% customer bill increase less
Slide 39: Virginia five-year growth capital outlook
2 Dominion Energy Virginia Five-year growth capital outlook Customer Grid Transmission Solar growth transformation $4.3B $2.4B $1.7B $1.6B 2019—2023 2019—2023 2019—2023 2019—2023 growth capital growth capital growth capital growth capital Recovery method: Rider & base Recovery method: Recovery metho
Slide 40: Virginia five-year growth capital outlook
2 Dominion Energy Virginia Five-year growth capital outlook Nuclear Offshore Pumped Strategic relicensing wind storage undergrounding $1.2B $1.1B¹ $1.0B $0.8B 2019—2023 2019—2023 2019—2023 2019—2023 growth capital growth capital growth capital growth capital Recovery method: Recovery method: Recover
Slide 41: Virginia five-year growth capital outlook
2 Dominion Energy Virginia Five-year growth capital outlook Enviro/CT/other Strategic 7% undergrounding Transmission 5% 26% Pumped storage Renewable- 6% Environmental enabling CTs Offshore wind ~$17B $0.5B $0.5B 7% 2019—2023 2019—2023 2019—2023 Nuclear growth growth capital growth capital relicensin
Slide 42: Virginia five-year rate base growth outlook
2 Dominion Energy Virginia Five-year rate base growth outlook Significant customer benefits PLUS Strategic undergrounding on-going rate competitiveness 2% Other NC 1% 5% Generation riders 17% $32—$34B $23B 2023E 2018E rate base rate base 7%—8% Transmission VA base CAGR rider¹ 56% 19% ¹ Electric tran
Slide 43: Agenda
Dominion Energy Agenda CEO perspectives CFO perspectives 1 Organizing and presenting Dominion Energy 2 Growth outlook by segment —Dominion Energy Virginia —Dominion Energy Gas Transmission & Storage —Dominion Energy Gas Distribution —Dominion Energy South Carolina (SCE&G) —Dominion Energy Contracted
Slide 44: Gas Transmission & Storage overview
2 Dominion Energy Gas Transmission & Storage Overview Segments and operating income contribution Attractive business risk profile Gas ~45%— Demand-pull utility customers 50% No direct commodity exposure pipelines and storage ~7 year remaining contract life Demand-pull utility customers Cove
Slide 45: Contract life and customer mix
2 Dominion Energy Gas Transmission & Storage Overview Remaining contract life¹ Revenue mix by customer profile2 Other ~13 years U.S. utilities 18% 39% ~11 years Power gen / pipelines 80%+ 9% ~7 years demand pull by revenue Int’l utilities Low (Cove Point)3 re-contracting 34% risk Low-risk customer p
Slide 46: Gas T&S rate base and growth capital outlook
2 Dominion Energy Gas Transmission & Storage Five-year rate base and growth capital outlook Rate base ($B)¹ 2019—2023 growth capital ($B)² DETI Cove Point Import ACP Iroquois Other Base Questar DECG end-use growth 13% 32% $11.2 $3.6B $10.2 TOTAL Resiliency $8.2 21% $6.9 ACP 34% Regulated investments
Slide 47: Cove Point annual free cash flow estimate
2 Dominion Energy Gas Transmission & Storage Cove Point Annual free cash flow estimate (pre-tax, $M) Commentary 20-year take-or-pay export contracts with investment grade utility counterparties Customer profile Long-lived firm reservation $525— pipeline contracts with export $545 offtakers, powe
Slide 48: Agenda
Dominion Energy Agenda CEO perspectives CFO perspectives 1 Organizing and presenting Dominion Energy 2 Growth outlook by segment —Dominion Energy Virginia —Dominion Energy Gas Transmission & Storage —Dominion Energy Gas Distribution —Dominion Energy South Carolina (SCE&G) —Dominion Energy Contracted
Slide 49: Gas Distribution overview
2 Dominion Energy Gas Distribution Overview WV 10.1% % NC avg. OH allowed $6.9B $405M 3M average ROE¹ 2018 rate 1.4% customers annual 55% base Annual rider capex avg. customer growth UT (last 5 years) allowed equity¹ Key takeaways 6th largest gas utility in the U.S. by customers De-coupling and
Slide 50: Gas Distribution growth capital outlook
2 Dominion Energy Gas Distribution Five-year growth capital outlook Ohio Utah North Carolina Decoupled Decoupled Decoupled $1.4B $1.1B $0.8B 2019—2023 2019—2023 2019—2023 growth capital growth capital growth capital Pipeline replacement Pipeline replacement Pipeline replacement Industrial/power proj
Slide 51: Gas Distribution rate base and growth capital
2 Dominion Energy Gas Distribution Five-year rate base and growth capital outlook Rate base ($B) 2019—2023 growth capital ($B) OH NC WV UT/WY WV $10.0 7% NC 22% OH $8.1 $7.6 41% $3.5B $6.9 UT/WY 31% Customer growth and other $3.5B 42% Rider investment 2018A 2019E 2020E 2023E 58% Please refer to page
Slide 52: Agenda
Dominion Energy Agenda CEO perspectives CFO perspectives 1 Organizing and presenting Dominion Energy 2 Growth outlook by segment —Dominion Energy Virginia —Dominion Energy Gas Transmission & Storage —Dominion Energy Gas Distribution —Dominion Energy South Carolina (SCE&G) —Dominion Energy Contracted
Slide 53: Dominion Energy South Carolina overview
2 Dominion Energy South Carolina Overview Electric service territory Gas service territory Columbia Columbia Ideally positioned in Myrtle Beach state’s populous and Myrtle Beach growing regions Charleston Charleston Generation by capacity Generation by dispatch (2018) Nuclear Hydro 11% 3% Hydro Natu
Slide 54: South Carolina key takeaways
2 Dominion Energy South Carolina Overview Gas NND¹ 10.2% % avg. allowed 1.1M $8.3B ROE2 2018 rate 2.0% customers 52.2% base Annual Gas customer growth avg. (last 5 years) allowed Elec Elec equity2 Key takeaways Among the “most credit supportive” U.S. regulatory jurisdictions Strong economic and
Slide 55: South Carolina typical residential electric bill
2 Dominion Energy South Carolina Typical monthly residential electric bill (1,000 kWh) SCE&G: SCE&G: Current $160 Pre-merger announcement 11% lower than U.S. average 2% higher than regional average U.S. average: $140 $140 South Atlantic region average: $122 $120 $100 Estimated South Carolina typical
Slide 56: Approach to ownership
2 Dominion Energy South Carolina Approach to ownership Transition to capital programs Long- term 6 Renewables and enabling gas generation, resiliency investments Capital investment 5 Customer growth, AMI/grid transformation, Near-term gas distribution investment Thoughtful & effective 4 regulatory s
Slide 57: South Carolina rate base and growth capital outlook
2 Dominion Energy South Carolina Five-year rate base and growth capital outlook Rate base ($B) (ex. NND) 2019—2023 growth capital ($B) Electric Gas Gas $7.8 24% Electric $2.1B 76% $6.2 $6.4 $6.1 Electric transmission AMI 5% Grid 6% Electric transformation customer 9% growth 32% Gas customer $2.1B gr
Slide 58: Agenda
Dominion Energy Agenda CEO perspectives CFO perspectives 1 Organizing and presenting Dominion Energy 2 Growth outlook by segment —Dominion Energy Virginia —Dominion Energy Gas Transmission & Storage —Dominion Energy Gas Distribution —Dominion Energy South Carolina (SCE&G) —Dominion Energy Contracted
Slide 59: Millstone
2 Dominion Energy Contracted Generation Millstone Status update Key benefits² Standard Metric tons of CO2 prevented by Millstone hedging 8.3M every year ~45% ~16M Value of CO2 emissions prevented by $6B Millstone through 2030 MWh per year¹ 10-year Increase in regional CO2 emissions if 25%+ Millstone
Slide 60: Long-term contracted solar
2 Dominion Energy Contracted Generation Long-term contracted solar 424 10 1,124 15 to 20 year contracts with high-quality utility counterparties—limited exposure to PCG 406 ~$1B of non-recourse financing (including inaugural Green Bond issuance) 115 141 Acquired expertise benefits future utili
Slide 61: Agenda
Dominion Energy Agenda CEO perspectives CFO perspectives 1 Organizing and presenting Dominion Energy 2 Growth outlook by segment 3 Consolidated financial outlook Concluding remarks Appendix Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 61
Slide 62: Five-year rate base growth
3 Consolidated financial outlook Five-year rate base growth ~$64B Gas Transmission & Storage ~$45B Gas Distribution Gas Transmission & Storage South Carolina Gas Distribution South Carolina Virginia Virginia 2018E 2023E Please refer to page 2 for risks and uncertainties related to projections and fo
Slide 63: Five-year growth capital summary
3 Consolidated financial outlook Five-year growth capital summary Dominion Energy SC ~$26B 8% Dominion Energy VA 64% $6 Gas Distribution 14% $5 ~$26B Gas 2019—2023 Transmission growth capital $5 & Storage 14% $5 $4 2019E 2020E 2021E 2022E 2023E Total Please refer to page 2 for risks and uncertaintie
Slide 64: Credit guidance
3 Consolidated financial outlook Credit guidance Continuation of existing rating targets Recent agency actions DEI (Parent / Affirmed ratings High BBB range Downgrade threshold to 13% Consolidated) due to reduced risk profile Affirmed ratings Regulated OpCos A range Downgrade threshold to 14
Slide 65: Financing plan
3 Consolidated financial outlook Financing plan Illustrative annual sources and uses (based on average of 2019—2021) ~$7B ~($3B) Up to $300M— ~($5B) ~($7B) $300M $500M growth + maint. ~$2B+ Operating cash (-) dividends (-) investing cash (+) DRIP (+) ATM (+) debt flow flow issuance, net No marketed
Slide 66: Current financing structure
3 Consolidated financial outlook Current financing structure DEI Dominion Energy Merchant Dominion SCANA VEPCO Generation Energy Carolina Corporation Gas Holdings Gas Utility Dominion Iroquois Energy Questar Gas SCE&G Generation Pipeline (~25%) Transmission Dominion Electric Dominion Atlantic Coast
Slide 67: Alignment of financing entities and operating segments
3 Consolidated financial outlook Alignment of new financing entities and new operating segments Dominion Energy (DEI) Dominion Energy Dominion Energy Dominion Energy Dominion Energy Dominion Energy Gas Transmission South Carolina Contracted Virginia Gas Distribution & Storage (SCE&G)1 Generation Cur
Slide 68: O&M control initiatives
3 Consolidated financial outlook O&M control initiatives Illustrative flat O&M¹ Key O&M themes Expected cumulative savings of $200M+ 1 Dynamic cost cutting program through (’19-’21) vs. ~2% annual business process improvements O&M escalation Voluntary retirement program 2 Advancement of workforce
Slide 69: Dividend policy
3 Consolidated financial outlook Dividend policy 2019E dividend Dividend payout peer comparison (2019E)¹ $3B 87% Cove Point 16% free cash flow Average: 69% Supported by non- 71% Cove Point regulated / “like” operations D SO DUK PPL ED AEP SRE XEL NEE PEG ¹ Based on 2019 consensus estimates Please re
Slide 70: Dividend policy: payout ratio
3 Consolidated financial outlook Dividend policy Payout ratio Low 70s% 70% 87% over time $3.67 $3.34 $3.04 $2.80 Original guidance of 10% DPS growth 2018—2020 15 years of DPS increases 2016A 2017A 2018A 2019E 2020 + beyond Dividends per share Note: Dividend declarations subject to board approval Ple
Slide 71: Operating earnings per share growth
3 Consolidated financial outlook Operating earnings per share growth Original guidance $3.65 6%—8% CAGR 2017 midpoint 2018A 2019E 2020E 2021E 2022E 2023E Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 71
Slide 72: Operating earnings per share growth
3 Consolidated financial outlook Operating earnings per share growth Strong Original 2018 guidance results $4.05 $3.65 6%—8% CAGR 2017 midpoint 2018A 2019E 2020E 2021E 2022E 2023E ¹ 12.5% growth measured off of 2017 actual operating EPS of $3.60 Please refer to page 2 for risks and uncertainties rel
Slide 73: Operating earnings per share growth
3 Consolidated financial outlook Operating earnings per share growth 2019 & 2020 guidance issued $4.05— $4.05 $4.40 $3.65 6.7% CAGR (within original 6%—8% range) 2017 midpoint 2018A 2019E 2020E 2021E 2022E 2023E ¹ 12.5% growth measured off of 2017 actual operating EPS of $3.60 ² 5.6% growth based on
Slide 74: Operating earnings per share growth
3 Consolidated financial outlook Operating earnings per share growth 2019 & 2020 guidance issued $4.05— $4.05 $4.40 $3.65 ~5% per year 6.7% CAGR (within original 6%—8% range) 2017 midpoint 2018A 2019E 2020E 2021E 2022E 2023E ¹ 12.5% growth measured off of 2017 actual operating EPS of $3.60 ² 5.6% gr
Slide 75: Operating earnings per share growth
3 Consolidated financial outlook Operating earnings per share growth 5%+ post-2020 $4.05— $4.05 $4.40 $3.65 ~5% per year 5%+ 6.7% CAGR (within original 6%—8% range) 2017 midpoint 2018A 2019E 2020E 2021E 2022E 2023E ¹ 12.5% growth measured off of 2017 actual operating EPS of $3.60 ² 5.6% growth based
Slide 76: Agenda
Dominion Energy Agenda CEO perspectives CFO perspectives Concluding remarks Appendix Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 76
Slide 77: Atlantic Coast Pipeline status update
Atlantic Coast Pipeline Status update and illustrative timeline USFWS & ACP Recommence briefs submitted Oral arguments Expected order at least partial to 4th Circuit construction Biological opinion May 9 ~90 days (tentative schedule) after oral arguments By end of Q3 Challenges are focused on 4
Slide 78: Atlantic Coast Pipeline status update
Atlantic Coast Pipeline Status update and illustrative timeline File appeal to the U.S. Supreme SCOTUS agrees to Arguments Recommence Expected Court full hear appeal before SCOTUS order (“SCOTUS”) construction Appalachian Trail crossing By end of Soon Q2 Late 2019 Early 2020 Q2 2020 thereafter Exp
Slide 79: Reflections on select jurisdictions: scorecard
Reflections on select jurisdictions Scorecard Above average¹ North South Virginia Ohio Utah Carolina Carolina Top states for business #4 #15 #3 #9 (2018) Best states for business #4 #20 #2 #1 #15 (2018) Unemployment rate #6 #12 #14 (Jan. 2019) Population growth #22 #1 #12 #10 (2013-18) GDP growth (2
Slide 80: Reflections on select jurisdictions: key themes
Reflections on select jurisdictions Key themes Virginia Utah North Carolina Legislative session Growth, innovation & Significantly increased Rural broadband entrepreneurship footprint in #1 best state Vertical integration: #2 best state to start a new for doing business Coal ash, aggregation busines
Slide 81: Key takeaways
Key takeaways A straight-forward and compelling business profile ~65%—70% ~25%—30% state regulated FERC-regulated / utilities regulated-like gas transmission Premium assets Operating earnings & storage in premium Not traditional locations “midstream” Less than 10% long-term contracted generation Ple
Slide 82: Key takeaways
Key takeaways A straight-forward and compelling business profile Premium, low risk assets in Regulated + “like” premium locations growth programs (~$26B five-year growth capital (~95% regulated / regulated-like earnings) across premium, low risk assets) Sustainability & Clarity & Scale & diversity (
Slide 83: Agenda
Dominion Energy Agenda CEO perspectives CFO perspectives Concluding remarks Appendix Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 83
Slide 84: Governance: Board of Directors
Dominion Energy Governance: Board of Directors Thomas F. Farrell, II John W. Harris Mark J. Kington Robert H. Spilman, Jr. Helen E. Dragas Chairman since 2007 Director since 1999 Director since 2005 Director since 2009 Director since 2010 Director since 2005 Michael E. Szymanczyk Pamela J. Royal, M.
Slide 85: Governance: Board refreshment and diversity
Dominion Energy Governance: Board refreshment and diversity Productive mix of age and tenure Board diversity a focus Age Mix Board Tenure Diverse 66 – 71 8 – 11 Years 11+ Years (4 Directors) (3 Directors) (2 Directors) (3 Directors) 46% Under 60 Average Other Dominion Energy under 60 (6 Directors) T
Slide 86: Governance: Diverse Board expertise
Dominion Energy Governance: Diverse Board expertise Percent of Directors with significant expertise in strategic areas Corporate leadership 100% Experienced leaders capable of overseeing execution of strategy and challenging Corporate governance 100% management team Financial 100% Critical skills gi
Slide 87: Governance: Board committees
Dominion Energy Governance: Board committees demonstrate robust oversight Compensation, Sustainability and Governance and Finance and Risk Corporate Audit Nominating Oversight Responsibility Evaluates Oversees financial Oversees performance Oversees integrity of compensation policies, includ
Slide 88: Governance: Executive management team
Dominion Energy Governance: Executive management team Thomas F. Farrell, II Robert M. Blue James R. Chapman Paul D. Koonce Chairman, President Executive Vice Executive Vice Executive Vice and Chief Executive President and President, Chief President and Officer President and CEO – Financial Officer P
Slide 89: Governance: Executive compensation highlights
Dominion Energy Governance: Executive compensation program highlights Program emphasizes variable incentive pay tied to challenging performance goals CEO: 90% of annual direct compensation opportunities tied to performance or stock-based Average officer: 76% of annual direct compensation oppor
Slide 90: Governance: Executive stock ownership
Dominion Energy Governance: Executive management stock ownership 8.0x Dominion Energy Industry peers Large-cap peers¹ 6.0x 6.0x 5.0x 4.0x 3.0x 3.0x 3.0x 2.5x 2.0x 2.0x 1.0x CEO Executive VP Senior VP Vice President Higher than average officer stock ownership guidelines effectively align management w
Slide 91: Environment: New emissions reduction targets
Dominion Energy Environment: New emissions reduction targets Intensity targets announced in Dec. 2018 Supplemental March 2019 emissions targets 60% 55% 80% reduction in reduction in reduction in carbon intensity by carbon carbon 2030 (vs. 2000) emissions by emissions by 2030 (vs. 2005) 2050 (vs. 200
Slide 92: Environment: ESG reporting and disclosure
Dominion Energy Environment: Committed to robust ESG reporting and disclosure Enhanced disclosures Status Reporting Standard Dominion Energy Sustainability and Online and Corporate Responsibility Report available now Edison Electric Institute (EEI) and American Gas Association (AGA) ESG/Sustaina
Slide 93: Environment: Generation by fuel
Dominion Energy Environment: Generation (MWh) across company by fuel 2007A 2017A 1% 2% 4% 46% 15% Coal Gas Nuclear Renewable 43% 42% Other 37% 9% Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 93
Slide 94: Virginia profile
Dominion Energy Virginia Profile Electric Legacy A6 Dominion VA base / Strategic Transmission Generation Energy Total5 Other¹ Undergrounding rider2 riders3 North Carolina4 Rate base $13.1 $3.9 $22.9 $4.4 $1.0 $0.4 ($B) Authorized 51.4%6 52.1% 51.4% 51.8% 51.4% 51.4%5 equity % Allowed 10.0%6 11.4%7 9
Slide 95: Virginia legacy A6 generation riders
Dominion Energy Virginia Profile—Legacy A6 generation riders Bear Warren VCHEC Biomass Brunswick Greensville US-2 Solar Total Garden County Rate base1 $0.3 $0.6 $1.0 $1.1 $0.1 $0.7 $0.1 $3.9 ($B) Authorized 51.4% 51.4% 51.4% 51.4% 51.4% 51.4% 51.4% 51.4% equity % Allowed 9.2%— 10.2% 10.2% 10.2% 9.2%
Slide 96: Virginia three-year capital summary
Dominion Energy Virginia Three-year capital summary $B 2019E 2020E 2021E Growth $2.3 $3.2 $3.4 Maintenance 0.7 0.6 0.7 Nuclear fuel 0.2 0.2 0.2 Total $3.2 $4.0 $4.3 Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 96
Slide 97: Virginia rate base reconciliation
Dominion Energy Virginia Rate base reconciliation Illustrative only $B 2018E Dominion Energy Virginia rate base $22.9 (+) growth capital 16.6 (+) maintenance capital 3.4 (+) DD&A (6.9) (+) tax-related adjustments (1.4) (+) PPA solar capital (excl. from rate base)¹ (1.4) (+) other² (1.2)—0.8 2023E Do
Slide 98: Grid Transformation and Security Act
Dominion Energy Virginia Grid Transformation and Security Act Passed Virginia General Assembly in Feb 2018 with nearly 70% (bipartisan) support, signed by governor Four key takeaways: Provides a clear path for a more sustainable energy future Immediate savings to customers (~$400M tax reform/
Slide 99: GTSA impacts and review periods
Dominion Energy Virginia Grid Transformation and Security Act Impacts Period Review Comments (if any) Maximum allowable revenue First 2017—2020 2021 2022 decrease through end of second Triennial triennial = $50M (no earlier than 2022) Current allowed ROE of 10% on Second base rate operations with 70
Slide 100: GTSA period expenses and reinvestment reserve
Dominion Energy Virginia Grid Transformation and Security Act Reinvestment reserve Period expenses (“CCRO”) GTSA modifies regulatory calculation of Incentive to deploy additional capital towards earnings to match GAAP accounting renewables and grid modernization without impacting base customer b
Slide 101: GTSA summary
Dominion Energy Virginia Grid Transformation and Security Act GTSA summary SB 1355 Coastal Virginia Strategic Grid Environmental Utility solar Coal ash off-shore wind undergrounding transformation rider 2 turbine (12MW) Undergrounding Enhanced Upgrades to coal- Recycling and Regulated, Description o
Slide 102: Virginia asset portfolio
Dominion Energy Virginia Asset portfolio Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 102
Slide 103: Virginia asset portfolio
Dominion Energy Virginia Asset portfolio Fuel Summer Fuel Summer Plant Location Type Capacity (MW) Plant Location Type Capacity (MW) Surry Surry, VA Nuclear 1,676 Chesapeake CT Chesapeake, VA Oil 51 North Anna Mineral, VA Nuclear 1,672 Low Moor CT Covington, VA Oil 48 Mt. Storm Mt. Storm, WV Coal 1,
Slide 104: Gas Transmission & Storage profile
Dominion Energy Gas Transmission & Storage Profile Questar DETI DECG Iroquois2 CP Pipeline Total Pipelines1 Rate base $3.23 $1.0 $0.5 $0.3 $0.64 $5.6 ($B) Annual 8,740,000 7,880,000 810,000 1,600,000 1,800,000 20,830,000 capacity (Dth/d) % contracted 90% 95% 99% 90% 99% 94% demand Storage (bcf) 756
Slide 105: Gas T&S three-year capital summary
Dominion Energy Gas Transmission & Storage Three-year capital summary $B 2019E 2020E 2021E Growth¹ $0.9 $0.9 $0.5 Maintenance 0.3 0.3 0.3 Total $1.2 $1.3 $0.8 1 Includes Dominion’s expected equity contribution for ACP, excludes debt funded capital at the project level Please refer to page 2 for risk
Slide 106: ACP: Clear and compelling customer need
Dominion Energy Gas Transmission & Storage ACP: Clear and compelling customer need Customer affidavits “Given the need for additional natural gas transportation capacity, a further delay in the completion of the ACP project will increase our reliance on a single pipeline” “Access to the transpor
Slide 107: Gas Distribution profile
Dominion Energy Gas Distribution Profile Utah and Ohio North Carolina West Virginia Total Wyoming Rate base $3.3 $2.1 $1.3 $0.2 $6.9 ($B) Authorized 51.3% 63.4%¹ 52.0% 45.9%² 55.0%³ equity % Allowed ROE 10.4% 10.0%¹ 9.7% 9.5% 10.1%³ Customers 1.2M 1.1M 0.6M 0.1M 3.0M Notes: ¹ Weighted average of UT,
Slide 108: Gas Distribution three-year capital summary
Dominion Energy Gas Distribution Three-year capital summary $B 2019E 2020E 2021E Growth $0.7 $0.7 $0.7 Maintenance 0.3 0.2 0.2 Total $1.0 $0.9 $1.0 Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 108
Slide 109: Gas Distribution rate base reconciliation
Dominion Energy Gas Distribution Rate base reconciliation Illustrative only $B 2018E Dominion Energy Gas Distribution rate base $6.9 (+) growth capital 3.5 (+) maintenance capital 1.3 (+) DD&A (2.0) (+) tax-related adjustments (0.1) (+) other 0.5 2023E Dominion Energy Gas Distribution rate base $10.
Slide 110: South Carolina profile
Dominion Energy South Carolina Profile SCE&G: SCE&G: SCE&G: Total Electric Gas Capital Cost Rider Rate base $0.6 $2.3¹ $5.4 $8.3 ($B) Authorized 52.2% 49.8% 52.8% 52.2%² equity % Allowed ROE 10.3% 10.3% 9.9% 10.2%² Customers 0.7M 0.4M — 1.1M Notes: ¹ $2.8B net of $0.5B net DTL ² Rate base weighed av
Slide 111: South Carolina three-year capital summary
Dominion Energy South Carolina Three-year capital summary $B 2019E 2020E 2021E Growth $0.2 $0.3 $0.3 Maintenance 0.2 0.3 0.3 Nuclear fuel 0.1 0.1 0.1 Total $0.6 $0.7 $0.8 Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 111
Slide 112: South Carolina rate base reconciliation
Dominion Energy South Carolina Rate base reconciliation Illustrative only $B 2018E Dominion Energy South Carolina rate base $6.1 (+) growth capital 2.1 (+) maintenance capital 1.5 (+) DD&A (1.6) (+) tax-related adjustments and other (0.3) 2023E Dominion Energy South Carolina rate base $7.8 Please re
Slide 113: Capital cost rider
Dominion Energy South Carolina Capital cost rider The capital cost rider was approved under terms of the South Carolina PSC merger approval Allows recovery of and return on ~$2.8B of New Nuclear Development costs Rate base of $2.3B accounting for net DTL Approved terms fixed for 20 years Aut
Slide 114: South Carolina depreciation expense
Dominion Energy South Carolina Depreciation expense At time of merger close, Dominion Energy measured SCANA assets and liabilities at estimated fair value as per applicable accounting guidelines “Regulated” assets fair value equal to carrying values (ASC 980, Regulated Operations) Other assets
Slide 115: South Carolina asset portfolio
Dominion Energy South Carolina Asset portfolio ¹ Hardeeville natural gas not currently in operations Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 115
Slide 116: South Carolina asset portfolio
Dominion Energy South Carolina Asset portfolio Net Summer Plant Location Fuel Type Capacity (MW) McMeekin Irmo, SC Gas 250 Urquhart Unit 3 Beech Island, SC Gas 95 Jasper (CC) Hardeeville, SC Gas¹ 852 Urquhart (CC) Beech Island, SC Gas¹ 458 Columbia Energy Center (CC) Gaston, SC Gas¹ 504 Hagood Units
Slide 117: Millstone hedging (2020)
Dominion Energy Contracted Generation Millstone hedging (2020) Continued hedging strategy on 10-year uncontracted MWh to reduce contract earnings volatility ~55% Currently hedged ~25% ~7M ~16M MWh MWh per year¹ per year Standard Available hedging to hedge ~45% ~75% ¹ Represents Dominion Energy owned
Slide 118: Contracted Generation asset portfolio
Dominion Energy Contracted Generation Asset portfolio Please refer to page 2 for risks and uncertainties related to projections and forward looking statements. 118
Slide 119: Contracted Generation asset portfolio
Dominion Energy Contracted Generation Asset portfolio Fuel Summer Fuel Summer Plant Location Type Capacity (MW) Plant Location Type Capacity (MW) Millstone Waterford, CT Nuclear 2,001 Imperial Valley Solar Niland, CA Solar 13 Fowler Ridge Benton County, IN Wind 150 Kansas Solar Lenmore, CA Solar 13
Slide 120: Credit: Liquidity
Dominion Energy Credit: Liquidity $6.0 billion credit facility¹ $3B sublimit DEI (CP Issuer) $1.5B Intercompany sublimit note VEPCO (CP Issuer) $0.75B sublimit Intercompany note Dominion Energy Gas (CP Issuer) $0.5B sublimit Intercompany note2 SCE&G $0.25B (CP Issuer) sublimit Intercompany note Ques
Slide 121: Credit: Current ratings
Dominion Energy Credit: Current ratings Dominion Energy, Inc. Moody’s S&P Fitch Corporate/Issuer Baa2 BBB+ BBB+ Senior Unsecured Debt Securities Baa2 BBB BBB+ Junior Subordinated Notes Baa3 BBB BBB Enhanced Junior Subordinated Notes Baa3 BBB- BBB- Short-Term/Commercial Paper P-2 A-2 F2 Outlook Stabl
Slide 122: Credit: Current ratings
Dominion Energy Credit: Current ratings SCANA Corp. Moody’s S&P Fitch Corporate/Issuer Ba1 BBB+ BBB- Senior Unsecured Debt Securities Ba1 BBB BBB- Short-Term/Commercial Paper Not Prime A-2 F3 Outlook Positive Stable Positive SCE&G Moody’s S&P Fitch Corporate/Issuer Baa3 BBB+ BBB Senior Unsecured Deb
Slide 123: Credit: FFO or CFO pre-WC to debt
Dominion Energy Credit: FFO or CFO pre-WC to debt Net cash provided by operating activities (-) Changes in working capital Numerator (-) Capitalized interest (Note 2, Property, Plant and Equipment) Source: 10K (+) Depreciation component of operating leases (Note 22. Lease Commitments) Consolidated S
Slide 124: Credit: Parent-level debt to consolidated debt
Dominion Energy Credit: Parent-level debt to consolidated debt Consolidated debt (-) Solar non-recourse debt (Note 17. Long Term Debt) (-) Cove Point non-recourse debt (Note 17. Long Term Debt) (-) Cash and cash equivalents Parent-level debt (-) Operating company total debt (Operating company balanc
Slide 125: Pension overview
Dominion Energy Pension overview Dominion Energy, Inc. SCANA Corporation Combined¹ Assets ($B) $7.7 $0.7 $8.4 Fixed income 32% Fixed income 32% Fixed income 32% (+) Public equity 46% (+) Public equity 58% (+) Public equity 47% Allocation targets2 (+) Other3 22% (+) Other3 10% (+) Other3 21% Total 10
Slide 126: Investor relations contact information
Dominion Energy Investor relations contact information Website Email investors.dominionenergy.com [email protected] Investor Relations team Steven Ridge (804) 929-6865 [email protected] Paul Adams Sarah Scott (804) 819-2814 (804) 819-2315 paul.t.adams@dominionener