The continued wave of data center construction in Northern Virginia will keep Dominion Energy Inc.’s 2023 sales above the utility’s long-term projections.
Dominion’s commercial customers in Virginia and South Carolina posted 2022 normalized sales growth of 10.2%, which more than compensated for decreases among residential and industrial clients to give the Richmond-based company total sales growth of 3.4%. That was more than double the rate from 2021 and well above the 1-1.5% long-term range CEO Bob Blue and his team have forecast.
Speaking to analysts after Dominion reported its fourth-quarter results, Blue pointed to a recent PJM forecast of demand growth that projects Dominion’s Virginia service area will grow its summer peak load 5% annually through early next decade. He also singled out news last month from Amazon, which plans to invest billions more in the region.
“Data centers currently represent about 20% of our total sales in Virginia and have provided strong sales growth to date, a trend supported by these two announcements we certainly expect to continue,” Blue said. “Our work continues to advance projects to bring both new and upgraded infrastructure.”
Dominion produced a net loss of $42 million in the three months ended Dec. 31 versus a profit of more than $1.3 billion in late 2021. Excluding a $1.5 billion impairment charge related to contracted solar generation facilities (which the Dominion executives have decided to no longer invest in to generate tax credits) and other special items, operating earnings rose to $903 million from $752 million. The contributions to that number by Dominion Energy Virginia and Dominion Energy South Carolina were a combined $530 million, down from $555 million in the prior-year period.
On their conference call, Blue and CFO Steve Ridge also discussed the following items, among other things:
• The company’s work on the massive, roughly $10 billion Coastal Virginia Offshore Wind farm is, Blue said, “very much on track and on budget.” About 90% of the project’s costs, excluding contingencies, are expected to be fixed by the end of March and Dominion’s turbine installation ship is about two-thirds finished. Construction remains on track to be completed by the end of 2026.
• The broad review of Dominion’s businesses that Blue launched late last year is making progress. Blue said its focus areas include limiting equity issuance to fund future investments and eyeing further improvements to operational costs. A wider-ranging update is scheduled for this spring.
Shares of Dominion (Ticker: D) fell about 3% Feb. 8 to $59.63. Over the past six months, they have given up more than a quarter of their value, trimming the company’s market capitalization to about $50 billion.
