We are
2019 Annual Meeting
- f Shareholders
May 7, 2019 Columbia, S.C.
Thomas F . Farrell, II Chairman, President & CEO Dominion Energy, Inc.
We are 2019 Annual Meeting of Shareholders May 7, 2019 Columbia, - - PowerPoint PPT Presentation
We are 2019 Annual Meeting of Shareholders May 7, 2019 Columbia, S.C. Thomas F . Farrell, II Chairman, President & CEO Dominion Energy, Inc. Important Note to Investors This presentation contains certain forward-looking statements,
We are
2019 Annual Meeting
May 7, 2019 Columbia, S.C.
Thomas F . Farrell, II Chairman, President & CEO Dominion Energy, Inc.
Important Note to Investors
2 This presentation contains certain forward-looking statements, including forecasted operating earnings for full-year 2019, which are subject to various risks and
factors that are beyond the company's ability to control or estimate precisely, including fluctuations in energy-related commodity prices, estimates of future market conditions, additional competition in our industries, changes in the demand for Dominion Energy’s services, access to and costs of capital, fluctuations in the value of our pension assets and assets held in our decommissioning trusts, retirements of assets based on asset portfolio reviews, and the ability to complete planned construction or expansion projects at all or within the terms and timeframes initially anticipated. Other factors include, but are not limited to, weather conditions and other events, including the effects of hurricanes, high winds, severe storms, earthquakes, floodin g and changes in water temperatures on operations, the risk associated with the operation of nuclear facilities, unplanned outages at facilities in which Dominion Energy has an
federal and state tax laws and changes to environmental and other laws and regulations, including those related to climate ch ange, greenhouse gases and other emissions to which we are subject, changes in enforcement practices of regulators relating environmental standards and litigation exposure for remedial activities, political and economic conditions, industrial, commercial and residential growth or decline in Dominion Energy’s service area, risks of operating businesses in regulated industries that are subject to changing regulatory structures, changes to regulated gas and electric rates collected by Dominion Energy, changes to rating agency requirements and ratings, changing financial accounting standards, fluctuations in interest rates, employee workforce factors, including collective bargaining, counter-party credit and performance risks, adverse outcomes in litigation matters or regulatory proceedings, the risk of hostile cyber intrusions and other uncertainties. Other risk factors are detailed from time to time in Dominion Energy’s most recent quarterly report on Form 10-Q or annual report on Form 10-K filed with the Securities and Exchange Commission. Projections or forecasts shown in this presentation are based on the assumptions listed in this presentation and are subject to change at any time. Dominion Energy undertakes no obligation to update any forward-looking information statement to reflect developments after the statement is made. In addition, certain information presented in this document incorporates planned capital expenditures reviewed and endorsed by Dominion Energy’s Board of Directors in late 2018.. Dominion Energy undertakes no obligation to update such planned expenditures to reflect plan or project-specific developments, including regulatory developments, or other updates until the following annual update for the plans. Actual capital expenditures may be subject to regulatory and/or Board of Directors’ approval and may vary from these estimates.
Today’s Topics
Welcome to South Carolina
4
➢ Expected to more than double in 2019
➢ 5,730 megawatts electric generation ➢ 22,000 miles electric distribution, transmission lines ➢ 11,700 miles gas distribution, transmission pipeline
Please refer to the “Important Note to Investors” on slide 2 of this presentation.
Our Footprint in South Carolina
Electric service ar area
Columbia Charleston Charleston Columbia
Gas service ar area
Myrtle Beach Myrtle Beach
Electric generat ating stations Domi minion Energy Carolina Gas Transmission
5
Residential Customer Bills
6
$147.70 $121.53 $151.47 $139.76
$50 $70 $90 $110 $130 $150 South Carolina Electric & Gas South Atlantic Average East Coast Average National Average
Summer 2018
Source: EEI Typical Bills and Annual Rates Report, Summer 2018.
Residential Customer Bills
7
Source: EEI Typical Bills and Annual Rates Report, Winter 2019.
$124.35 $120.18 $155.70 $140.63
$50 $70 $90 $110 $130 $150 Dominion Energy South Carolina South Atlantic Average East Coast Average National Average
May 2019
Industrial Rates
7.19 6.58 8.87 7.04
2 4 6 8 10 South Carolina Electric & Gas South Atlantic Average East Coast Average National Average
Summer 2018
Source: EEI Typical Bills and Annual Rates Report, Summer 2018.
Cents per Kilowatt-Hour
8
Industrial Rates
6.28 6.45 9.59 7.01
2 4 6 8 10 Dominion Energy South Carolina South Atlantic Average East Coast Average National Average
May 2019
Cents per Kilowatt-Hour
9
Source: EEI Typical Bills and Annual Rates Report, Winter 2019.
Today’s Topics
Our Core Values
11
Safety Our highest priority — in the workplace & in the community. Ethics Integrity, individual responsibility & accountability go hand-in-hand with bottom-line results. We cannot and will not take shortcuts. Excellence The odds of long-term success improve when we go beyond “good” and strive for “great.” Embrace Change Transformation and growth are the keys to long-term prosperity. A culture of receptivity to change and ardor for innovation propels
One Dominion Energy Our term for teamwork – a unifying outlook transcending
focusing on our shared mission and purpose.
Safety
Safety
13
1.87 1.40 1.24 1.25 1.08 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
Number of Recordables per 100 Employees Each Work Year
Safety
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1.87 1.40 1.24 1.25 1.08 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
Number of Recordables per 100 Employees Each Work Year
Peer Average: 1.06 in 2018
Safety
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0.65 0.65 0.46*
2017 2018 2019
OSHA recordable incident rate, With SCANA
Number of Recordables per 100 Employees Each Work Year
YTD
* Through April 30, 2019.
Ethics
17
0% 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Percent Reduction
SO₂ NOx Hg
Ethics
Generation Emissions Reductions
18
0% 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Percent Reduction
SO₂ NOx Hg
Ethics
Generation Emissions Reductions
Net Generation
57.3 51.3 55.5 57.6 57.2 50.8 41.8 36.1 33.2 33.1 33.8 36.7 30.1 27.7
10 20 30 40 50 60
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Ethics
19
CO2 Emissions (Millions of Metric Tons)
Carbon Emissions Reductions From Generating Fleet
57.3 51.3 55.5 57.6 57.2 50.8 41.8 36.1 33.2 33.1 33.8 36.7 30.1 27.7
10 20 30 40 50 60
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Ethics
20
CO2 Emissions (Millions of Metric Tons)
Carbon Emissions Reductions From Generating Fleet
About twice the reduction from U.S. power sector
Ethics
21
57.3 51.3 55.5 57.6 57.2 50.8 41.8 36.1 33.2 33.1 33.8 36.7 30.1 27.7
10 20 30 40 50 60
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
CO2 Emissions (Millions of Metric Tons)
Carbon Emissions Reductions From Generating Fleet
About twice the reduction from U.S. power sector
Net Generation
Ethics
22
➢ Intensity: 60 percent – from 2000 to 2030 ➢ Total emissions: 55 percent – from 2005 to 2030 80 percent – from 2005 to 2050
* Does not include the Southeast Energy Group. Targets will be updated to include those businesses later this year. Please refer to the “Important Note to Investors” on slide 2 of this presentation.
Ethics
23
(35) (30) (25) (20) (15) (10) (5)
New and Expanded Voluntary Programs
Voluntary efforts through variety of programs have yielded substantial methane reductions
Cumulative Methane Saved Natural Gas Businesses
Methane, Billion Cubic Feet
Projected 20222010 2012 2014 2016 2015 2011 2013
Projected 20302017
50%
2010-30
* Does not include the Southeast Energy Group. Targets will be updated to include those businesses later this year. Please refer to the “Important Note to Investors” on slide 2 of this presentation. Sources: EPA filings & internal reporting.
3.3 Million CARS
Ethics
24
Transparency
➢ How company identifies, manages climate change risks ➢ Top 20 percent among U.S. utility peers
➢ Current, future water-related risks, opportunities ➢ Top 15 percent among U.S. utility peers
➢ “Two degree” scenarios ➢ Governance framework around climate matters
Ethics
25
Diversity & Inclusion
➢ Focus on recruitment of diverse interns, veterans, disabled ➢ Award $5,000 scholarships to up to 50 diverse students each year ➢ Unconscious bias training prerequisite for staffing, hiring managers ➢ More focused recruiting this year
➢ Sponsor, promote employee resource groups (ERGs) ➢ Survey employees to measure engagement in ERG
Excellence
Excellence
27
➢ Cove Point liquefaction facility ➢ Greensville County Power Station ➢ 1,350 megawatts of solar brought online since 2016 ➢ $900 million in electric transmission assets ➢ Dominion Energy Carolina Gas Charleston project
➢ Nuclear Energy Institute
➢ Utah Board of Oil, Gas & Mining
Embrace Change
Embrace Change
Innovation, Technology , and Sustainability Council (Chaired by CEO) Innovation team (SVP + team) 3rd party technical advisers Senior management Board of Directors Behind the meter Solar Offshore wind Electric vehicles RNG Marine LNG
TEAMS
29
Please refer to the “Important Note to Investors” on slide 2 of this presentation.
Embrace Change
30
Please refer to the “Important Note to Investors” on slide 2 of this presentation.
Behind the meter Solar Offshore wind Electric vehicles RNG Marine LNG Project G Project M Project H Project N Project I Project O Project J Project P Project K Project Q Project L Project R
TEAMS & PROJECTS
Embrace Change
31
Please refer to the “Important Note to Investors” on slide 2 of this presentation.
➢ Renewable natural gas – waste methane from hog & dairy farms, food waste, landfills, wastewater treatment ➢ Smithfield Foods partnership – Align RNG ➢ Lowers GHG footprint
➢ Broadband for underserved rural Virginia ➢ Middle-mile pilot project
➢ Solar site pollinators ➢ Environmental sustainability, reduction in lawn/weed maintenance DEV Substation DEV fiber optic network 3rd Party ISP
Embrace Change – Transportation
32
Please refer to the “Important Note to Investors” on slide 2 of this presentation.
at home, work & on road
➢ Clean EV web application
➢ Long-term plan for all fleet vehicles to be EVs or NGVs ➢ Charging & CNG stations
➢ Ships burn high-emitting bunker oil ➢ Liquefied natural gas would be more environmentally friendly
Actions
33
Environmental, Social & Governance Issues
Board of Directors Senior Leadership Employees
▪ Sustainability and Corporate Responsibility Committee – five independent directors – oversees company’s approach to ESG matters ▪ Diverse board ▪ ESG matters addressed at every regularly scheduled meeting ▪ Innovation, Technology and Sustainability Councilchaired by CEO ▪ ESG Working Group ▪ Chief Innovation Officer role ▪ Officer-level employee engagement and development position ▪ Leader-led diversity and inclusion training for all employees ▪ Annual Incentive Plan includes safety, environmental, diversity goals ▪ Employee resource groups, diversity councils ▪ Volunteerism program includes volunteer time off for employees ▪ LEED-certified construction for all new workplace projects
Only company to host ESG Investor Session
One Dominion Energy
One Dominion Energy
35
Major Projects Regulated Mergers Community , customer, employee achievements Environmental, social & governance Cove Point Liquefaction SCANA Grid Transformation & Security Act Carbon & methane reductions Power generation (Greensville, Brunswick, Warren, VCHEC, Bear Garden) Questar SCE&G bill relief Board refreshment Atlantic Coast Pipeline CarolinaGas Transmission Millstone zero- carbon contract Disclosure enhancement
One Dominion Energy
36
➢ Most Admired Gas & Electric Utilities (Fortune) ➢ America’s Best Employers (Forbes) ➢ Best Employers for Diversity (Forbes) ➢ Best Employers for Women (Forbes) ➢ Best Companies for Women (Women’s Choice Award) ➢ Management 250 (The Wall Street Journal) ➢ Top 10 Military-Friendly Company (G.I. Jobs) ➢ Best for Vets (Military Times) ➢ HIRE Vets Medallion, Program Demonstration Award (Platinum)
✓ U.S. Department of Labor
Today’s Topics
Unregulated Power Electric Service Territory Oil & Gas Production Gas Pipelines Storage Field Gas Service Territory LNG Import Terminal Regulated Power
38
Our Footprint – 2007
More Than Decade of Repositioning
39
$40B Regulated capex
Regulated generation Electric transmission Customer growth Resiliency enhancements Cove Point liquefaction
$20B Regulated M&A
SCANA Questar Carolina Gas Transmission Iroquois Pipeline
(+)
$25B
Unregulated asset sales
E&P Merchant generation Blue Racer Midstream
(-)
Where We Are Today
40
12.5%
EPS growth
10.0%
DPS growth
~$8B
parent-level debt reduction
+1.7M
utility customers (SCANA)
GTSA
Grid Transformation & Security Act
~$2.5B
nonregulated asset sales
Ratings affirmed
S&P / Moody’s / Fitch
Our Footprint Today
41
Legend Electric utility service territory Gas utility service territory Utility electric generation Contracted generation Natural gas pipeline Atlantic Coast Pipeline Cove Point Storage
Our Footprint Today
Please refer to the “Important Note to Investors” on slide 2 of this presentation.
42
Legend Electric utility service territory Gas utility service territory Utility electric generation Contracted generation Natural gas pipeline Atlantic Coast Pipeline Cove Point Storage
Our Footprint Today
Please refer to the “Important Note to Investors” on slide 2 of this presentation.
$96B
assets
21,300
employees
3.3M
customers
(gas utility)
7.5M
customers
(total)
3.4M
customers
(elec. utility)
$61B
market cap
18
states of
31GW
generation
(total capacity)
15,900
gas trans. miles
10,200
electric
84,800
electric
92,900
gas dist. miles
1.1 Tcf gas storage 11GW
generation
(zero-carbon)
43
Premium Locations
44
Top states for business (2018) Best states for business (2018) Unemployment rate (Jan. 2019) Population growth (2013-18)
#4 #4 #6 #22 #3 #2 #12 #1 #15 #14 #10 #9 #1 #12 #15 #20
Virginia Utah North Carolina South Carolina Ohio
CNBC Forbes U.S. BLS U.S. Census
Total Return
45
Source: Bloomberg.
201.3% 153.6% 243.0%
0% 50% 100% 150% 200% 250% 300%
2008 YE 2009 YE 2010 YE 2011 YE 2012 YE 2013 YE 2014 YE 2015 YE 2016 YE 2017 YE 2018
Dominion Energy Philadelphia Utility Sector Index S&P 500 Index
Operating Earnings
$3.03 $3.09 $3.25 $3.43 $3.44 $3.80 $3.60 $4.05 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 $4.05-$4.40
* Based on non-GAAP Financial Measures. See GAAP Reconciliation on Dominion Energy’s website at dominionenergy.com/investors. Corresponding full-year earnings under GAAP are $2.45 for 2011, $0.53 for 2012, $2.93 for 2013, $2.24 for 2014, $3.20 for 2015, $3.44 per share in 2016, $4.72 in 2017 and $3.74 per share in 2018. Please refer to the “Important Note to Investors” on slide 2 of this presentation.
46
Dollars Per Share
Earnings Growth (2017-2023)
47
$3.65*
$2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0 $5.5 $6.0 2017 midpoint 2018A 2019E 2020E 2021E 2022E 2023E
* Based on non-GAAP Financial Measures. See GAAP Reconciliation on Dominion Energy’s website at dominionenergy.com/investors. Corresponding full-year earnings under GAAP are $4.72 in 2017 and $3.74 per share in 2018. Please refer to the “Important Note to Investors” on slide 2 of this presentation.
6%—8% CAGR
Original Guidance
Dollars Per Share
Earnings Growth (2017-2023)
48
$3.65* $4.05*
$2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0 $5.5 $6.0 2017 midpoint 2018A 2019E 2020E 2021E 2022E 2023E
* Based on non-GAAP Financial Measures. See GAAP Reconciliation on Dominion Energy’s website at dominionenergy.com/investors. Corresponding full-year earnings under GAAP are $4.72 in 2017 and $3.74 per share in 2018. Please refer to the “Important Note to Investors” on slide 2 of this presentation.
6%—8% CAGR
Strong 2018 Results
Dollars Per Share
Earnings Growth (2017-2023)
49
$3.65* $4.05*
$2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0 $5.5 $6.0 2017 midpoint 2018A 2019E 2020E 2021E 2022E 2023E $4.05-4.40
* Based on non-GAAP Financial Measures. See GAAP Reconciliation on Dominion Energy’s website at dominionenergy.com/investors. Corresponding full-year earnings under GAAP are $4.72 in 2017 and $3.74 per share in 2018. Please refer to the “Important Note to Investors” on slide 2 of this presentation.
6%—8% CAGR
2019 & 2020 Guidance Issued
6.7% CAGR
(within original 6%—8% range) Dollars Per Share
Earnings Growth (2017-2023)
50
$3.65* $4.05*
$2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0 $5.5 $6.0 2017 midpoint 2018A 2019E 2020E 2021E 2022E 2023E $4.05-4.40
* Based on non-GAAP Financial Measures. See GAAP Reconciliation on Dominion Energy’s website at dominionenergy.com/investors. Corresponding full-year earnings under GAAP are $4.72 in 2017 and $3.74 per share in 2018. Please refer to the “Important Note to Investors” on slide 2 of this presentation.
6%—8% CAGR
2019 & 2020 Guidance Issued
6.7% CAGR
(within original 6%—8% range) Dollars Per Share
~5% per year
Earnings Growth (2017-2023)
51
$3.65* $4.05*
$2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0 $5.5 $6.0 2017 midpoint 2018A 2019E 2020E 2021E 2022E 2023E $4.05-4.40
* Based on non-GAAP Financial Measures. See GAAP Reconciliation on Dominion Energy’s website at dominionenergy.com/investors. Corresponding full-year earnings under GAAP are $4.72 in 2017 and $3.74 per share in 2018. Please refer to the “Important Note to Investors” on slide 2 of this presentation.
6%—8% CAGR 6.7% CAGR
(within original 6%—8% range)
~5% per year
5%+ post-2020
Dollars Per Share
5%+
Dividends
52
$1.97 $2.11 $2.25 $2.40 $2.59 $2.80 $3.035 $3.34 $3.67* $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 Dollars Per Share
*Subject to quarterly determination and declaration by the Board of Directors. Please refer to the “Important Note to Investors” on slide 2 of this presentation.
Dividend Policy
53
$2.80 $3.035 $3.34 $3.67* $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 2016A 2017A 2018A 2019E 2020 + Beyond
*Subject to quarterly determination and declaration by the Board of Directors. Please refer to the “Important Note to Investors” on slide 2 of this presentation.
70% 87%
Payout ratio
Dollars Per Share
Dividend Policy
54
$2.80 $3.035 $3.34 $3.67* $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 2016A 2017A 2018A 2019E 2020 + Beyond
*Subject to quarterly determination and declaration by the Board of Directors. Please refer to the “Important Note to Investors” on slide 2 of this presentation.
70% 87%
Payout ratio Low 70s%
Dollars Per Share
Today’s Topics
Five-Year Growth Plan
56
$4 $5 $5 $5 $6 2019E 2020E 2021E 2022E 2023E Total
~$26B
~$26B
2019-23 growth capital
Gas Transmission & Storage 14% Dominion Energy SC 8%
Please refer to the “Important Note to Investors” on slide 2 of this presentation.
Dominion Energy Virginia
57
2019—2023 growth capital ($B)
Transmission 26% Solar 22% Grid Transformation 10%
Offshore wind 7%
Pumped storage 6% Enviro/CT/other 7% Strategic undergrounding 5% Customer growth10%
~$17B
2019—2023 growth capital Nuclear relicensing 7%
Please refer to the “Important Note to Investors” on slide 2 of this presentation.
Gas Transmission & Storage
58
Please refer to the “Important Note to Investors” on slide 2 of this presentation.
2019—2023 growth capital ($B)
ACP 34%
Resiliency
21% Other end-use 13% Base growth 32%
$3.6B
TOTAL
Gas Distribution
59
Please refer to the “Important Note to Investors” on slide 2 of this presentation.
2019—2023 growth capital ($B)
$3.5B
Ohio 41% Utah/Wyo. 31% N.C. 22% W.Va. 7% Rider investment 58% Customer growth and other 42%
$3.5B
Dominion Energy South Carolina
60
Please refer to the “Important Note to Investors” on slide 2 of this presentation.
2019—2023 growth capital ($B)
$2.1B
Electric 76% Gas 24%
$2.1B
Electric customer growth 32%
Electric environmental 24%
Gas customer growth 24% Grid transformation 9% Electric transmission 5% AMI 6%
Types of Growth Programs
61
Please refer to the “Important Note to Investors” on slide 2 of this presentation.
➢ Nuclear relicensing ➢ Renewables ➢ Renewable-enabling gas combustion turbines ➢ Grid transformation ➢ Transmission ➢ Customer growth ➢ Environmental
Types of Growth Programs
62
Please refer to the “Important Note to Investors” on slide 2 of this presentation.
➢ Pipeline replacement ➢ Customer, rate base growth ➢ Resiliency ➢ Atlantic Coast Pipeline
Today’s Topics
Charitable Giving
64
$18.5 $23.4 $26.6 $28.5 $34.9 $40.0*
$0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50
2014 2015 2016 2017 2018 2019
In Millions of Dollars
About a third of a billion dollars in charitable giving since 2007; more than $130 million since 2014
*Please refer to the “Important Note to Investors” on slide 2 of this presentation.
Community Volunteerism
65
125,000 126,000 1,400,000
200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000
2017 2018 2007-2018
Number of Hours
Invested in Our Communities
66
➢ $17 million in Foundation giving ➢ $6 million in direct giving ➢ $12 million to EnergyShare ➢ $320,000 in South Carolina; SCANA contributed $1.6 million in state
✓ Expect at least $4.4 million* in charitable giving in SCANA states in 2019
➢ Principal sponsor ($100,000 total)
*Please refer to the “Important Note to Investors” on slide 2 of this presentation.
Today’s Topics
Summary
68
We are
2019 Annual Meeting
May 7, 2019 Columbia, S.C.
DominionEnergy.com