Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2026, for Dominion Energy, Inc. and its subsidiary, Virginia Electric and Power Company (Virginia Power). Dominion Energy operates as a large accelerated filer, providing regulated electricity and natural gas services primarily in Virginia, North Carolina, and South Carolina, alongside nonregulated generation operations. A significant development during the period was the execution of the NextEra Energy Merger Agreement in May 2026, under which Dominion Energy is expected to become a wholly-owned subsidiary of NextEra Energy, subject to regulatory approvals and shareholder votes.
Key Financial Metrics (Six Months Ended June 30, 2026)
| Metric | 2026 (YTD) | 2025 (YTD) | Change |
|---|---|---|---|
| Operating Revenue | $9,499 million | $7,886 million | +20.5% |
| Net Income Attributable to Dominion Energy | $961 million | $1,425 million | -32.6% |
| Diluted EPS | $1.07 | $1.65 | -35.2% |
| Operating Cash Flow | $2,457 million | $2,429 million | +1.2% |
| Capital Expenditures | $5,807 million | $6,226 million | -6.7% |
| Total Debt (Long-term + Current) | $58,725 million | $56,484 million | +4.0% |
| Cash and Cash Equivalents | $296 million | $250 million | +18.4% |
Note: Debt figures include short-term debt, securities due within one year, and long-term debt. Virginia Power reported Net Income of $1,220 million for the six months ended June 30, 2026, compared to $1,020 million in 2025.
Material Changes vs. Prior Period
- Revenue Growth: Operating revenue increased by $1,613 million year-over-year, driven primarily by a $870 million net increase in fuel-related revenue due to higher commodity costs passed through to customers, a $474 million increase in non-fuel rider recoveries, and a $282 million increase from the 2025 Biennial Review rate adjustments in Virginia.
- Profit Decline: Net income decreased significantly due to substantial impairment charges. The primary driver was an $820 million charge for the impairment of nonregulated renewable natural gas facilities. Additional charges included $78 million for nonregulated solar generation facilities and $129 million for costs not expected to be recovered on the CVOW Commercial Project.
- Offsetting Benefits: The decline in net income was partially offset by a $195 million benefit from the revision of Asset Retirement Obligations (AROs) for Millstone Unit 1 and increased net investment gains on nuclear decommissioning trust funds ($205 million increase in the quarter).
- Interest Expense: Interest and related charges increased by $130 million year-over-year, attributed to net issuances of long-term debt and higher balances on variable rate debt.
Guidance, Outlook, and Risks
- Merger Status: The NextEra Energy Merger is expected to close in the second half of 2027. The agreement includes a termination fee of $2.24 billion payable by Dominion Energy if the merger fails under certain circumstances. The merger imposes restrictions on dividends (capped at $0.6675 per share per quarter without NextEra consent) and capital expenditures.
- CVOW Commercial Project: The estimated total project cost for the 2.6 GW offshore wind project is approximately $11.7 billion. Recent updates reflect a net increase in costs due to tariffs and installation conditions, partially offset by reduced interconnection costs. The project is expected to be completed by the end of 2027.
- Regulatory Environment: Virginia Power received approval for a base rate increase effective January 2026 and an incremental increase in January 2027. In South Carolina, a stipulation agreement was approved for a base rate increase effective July 2026.
- Risks: Key risks include the uncertainty of regulatory approvals for the NextEra merger, potential cost overruns on the CVOW project, exposure to commodity price volatility, and environmental compliance costs related to coal combustion residuals (CCR) and wastewater regulations.
Investor Verification Checklist
- Impairment Details: Verify the specific valuation methodologies and future cash flow assumptions used for the $820 million renewable natural gas impairment and the $78 million solar impairment.
- Merger Conditions: Monitor the status of regulatory approvals from FERC, NRC, and state commissions (VA, NC, SC) required to close the NextEra Energy Merger.
- CVOW Cost Recovery: Review the cost-sharing mechanism with Stonepeak and the regulatory approval status for recovering the $11.7 billion project cost from customers.
- Debt Issuance: Confirm the terms and utilization of proceeds for the $4.475 billion in long-term debt issued during the first half of 2026, including the new junior subordinated notes.
- Dividend Policy: Assess the impact of the merger agreement's dividend restrictions on future shareholder returns.