Dominion Energy, Inc.
Analysis
Dominion's story flipped from finishing one big project to keeping up with demand. Data centres pulled the five-year build up to $65 billion, but the earnings it produces grow far more slowly, so the company spends years ahead of what it earns.How much of Dominion's $65 billion build earns a return before 2030?
- Data centres, not offshore wind, now drive the whole plan.
The data centre pipeline grew by roughly a quarter in a year, to over 50 gigawatts. Management says its long-range demand forecast is already covered by signed contracts, so the growth is booked, not hoped for.How much of Dominion's 50-gigawatt pipeline has signed up to buy power?
- The five-year build grew far faster than the earnings target.
The capital plan rose about 30% in February, but the long-term earnings growth target stayed put. Management's own explanation is that it sells new shares every year and the gas plants it is building do not pay off until the 2030s.How many new shares is Dominion's plan assuming it sells each year?
- The build runs on borrowing and new shares, not on its own cash.
Over the last four quarters Dominion spent about $12 billion on construction and brought in roughly $5 billion of cash. The gap was covered by borrowing and selling new shares, so the build costs money long before it earns any.
- Data centre demand keeps arriving faster than Dominion can connect it. Each new campus signs a long contract before it draws power, so the sales are locked in years ahead of the spending.
- Regulators let Dominion collect on the build while it is still being built. Money comes in from customers as the work happens, instead of waiting years for a finished plant to start paying.
- CVOW's turbine installation keeps speeding up. Each turbine starts earning as it is switched on, so finishing sooner turns construction spending into income sooner.
- The extra spending does not lift the earnings target. The bigger results only show up from 2028, so the next few years look busier without earning much more.
- New shares sold each year shrink the slice each share earns. Even as the business grows, the amount earned per share grows more slowly because there are more shares sharing it.
- CVOW installation slips past July 2027. A quarter of extra installation adds around $150 million, and Dominion pays part of that itself rather than customers.
| Politician | Transaction | Amount | Traded | Filed |
|---|---|---|---|---|
Donald Trump Republican · Executive | Purchase | ≥$1K | May 15 | Jul 1 |
Donald Trump Republican · Executive | Purchase | ≥$1K | Mar 23 | May 13 |
Donald Trump Republican · Executive | Purchase | ≥$15K | Jan 23 | May 13 |
Donald Trump Republican · Executive | Sale | ≥$1K | Jan 12 | May 13 |
Ro Khanna Democratic · House · CA-17 | Sale | ≥$1K | Jan 29 | Feb 6 |
Congressional trading data provided by QuiverQuant
How Dominion Energy turned $16.5B of revenue into $4.4B of operating income.
| Revenue | ||
|---|---|---|
| Dominion Energy Virginia | $11.8B | ▲ 15.71% YoY |
| Dominion Energy South Carolina | $3.6B | ▲ 8.29% YoY |
| Contracted Energy | $1.2B | ▲ 6.31% YoY |
| Total revenue | $16.5B | |
| Gross profit | $8.1B | 49.0% |
| Operating income | $4.4B | 26.7% |