Q2 2020 Dominion Energy Inc Earnings Call
Good morning, and welcome to the Dominion Energy second quarter earnings Conference call. At this time each of your line is in a listen only mode.
Conclusion of today's presentation, we will open the floor for question.
Actions will be given for the prestigious although if you might you asked a question I would now like to turn Nicole Richie Stephen range, Vice President Investor Relations.
Good morning, Thank you for joining our call.
Earnings materials, including todays prepared remarks may contain forward looking statements and estimates that are subject to various risks and uncertainties. Please refer to our FCC filings, including our most recent annual reports on form 10-K, and our quarterly reports on form 10-Q, four in discussion of factors that may cause results to differ from.
Management estimates and expectations.
This morning, we will discuss some measures of our company's performance that's different from those recognized by GAAP reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measures, which we are which we can calculate are contained in the earnings release kit.
I heard you to visit our Investor Relations website to review webcast slides as well as the earnings release kit.
During today's call or Tom Farrell, Chairman, President and Chief Executive Officer, Jim Chapman Executive Vice President Chief Financial Officer, and Treasurer, There's one other members of the executive management team.
I'll now turn the call from Jim.
Thank you Stephen and good morning.
Our second quarter 2020 operating earnings were 82 cents per share, which included a three sent hurt from worse than normal weather in our utility service territories.
[noise] weather normalize result of 85 cents per share, we're just talk or guidance range.
18th consecutive quarter.
The quarterly guidance midpoint.
We expect to full year financial went back to weather to be balanced during the first two quarters a year.
Timoner data indicate that July was around four cents better than normal and only predictions for August suggests potential additional whether helps [noise].
Note that our second quarter GAAP and operating earnings are not adjusted to account for discontinued operations given the timing of our recent announcement.
It will be reflected beginning with our third quarter disclosures.
GAAP earnings earnings for the quarter negative $1.41 cents per share.
This result was driven primarily by impairment related charges associated with the Atlantic Coast pipeline and supply header project.
We also had a positive impact attributable to net gains on our nuclear decommissioning trust on.
Just a reminder, we report such gains and losses on these bonds as nonoperating.
In summary of adjustments between operating and reported results is included in scheduled to.
The earnings release kit.
On slide four we're initiating third quarter 2020 operating earnings guidance with a range of 85 cents to one dollar on five cents per share.
As mentioned this range reflects the impact of recasting operating earnings to exclude discontinued operations.
We're also farming the 2020 annual guidance range provided on our July six investor call.
As usual.
Ranges assumes normal weather.
Are you should see which could cause results to be towards the top or the bottom up these ranges.
Typically we provide a year ago actual results alongside her guy [noise].
Given the need to adjust historic results for discontinued operations to provide a useful point of comparison.
We plan to provide these figures when we report third quarter and full year results respectively.
I would also note that our 2020 10-K will include three full years of historical results that have been adjusted to reflect the impact of discontinued operations.
Finally, we're we're also affirming the long term annual growth guidance. We gave earlier this month for earnings and dividends per share [noise].
I'll now turn to discuss our observation on the financial impact cobot 19th.
The graph on slide five.
Is it daily and seven day average weather normalized load in the PGM Dom zone.
Compared to the two year historic weather normal average.
Strong residential and data center demand continues to support overall load levels that modestly exceed their historic average.
This is a continuation of the team we've seen since the pandemic began looking forward. We expect this trend to continue.
We provide corresponding data for Dominion energy South Carolina on the next slide.
The call the story here diverge from D.V. and that we did experience whether on the low degradation earlier this year.
On the first quarter call. We suggested the April could represent a bottoming out.
With gradual improvements due to summer.
Fortunately are they at least so far that has been the case with July demand only one person all weather normal historic averages.
I'd also point out that the higher volume sold in the summer months like July.
Tend to have a larger impact when our annual sales revenues in the lower volume shoulder month.
We currently expect this general recovery trend to continue in South Carolina do the remainder of the year.
We estimate that to the end of June.
Lower than budgeted sales associated with the impacts of cooking 19 across our electric utility operations.
Has impacted operating income by approximately four cents per share.
Which thus far has been largely offset with corporate initiatives.
[noise] future remains difficult to predict so we are reiterating the demands related earnings sensitivity that we provided on the first quarter call, which could be in which can be found in the appendix of todays presentation.
Consistent with our expectations customer careers.
Increased modestly to date.
We continue to work carefully with their customers to provide options and tools to assist them and we're turning their accounts to current.
Our GAAP results for the quarter reflects the recognition of coated related reserve around $20 million, representing our current expectation for incremental expense associated with future uncollectable accounts.
Turning into a financing update as shown on slide seven.
We provide detailed guidance on our equity capital raising plan.
[noise] persevere ceasing the issuance of new shares under the drip program with immediate effect.
Resulting in a total of about $160 million of new share issuance under the program in 2020.
Roughly half of our fire estimate.
In 2021, and beyond will return to our historic norms around 300 million of new share issuance for you.
[noise] second.
Starting at 21 22.
We expect to see our aftermarket program begin to ramp up.
That by 2024, our first big year of offshore wind investment.
We're back to the 300 million to $500 million per year range that we previously articulated.
Investor Day.
And third we continue to target you're in completion of the share repurchase.
Earlier this month.
Recall that the board authorization for the announced 3 billion dollar buyback was with immediate effect.
We currently expect that there maybe some modest upward bias to this figure based on additional refinement of our overall <unk> analysis.
Well provide additional details around share repurchases next quarter.
I would note do we have not yet repurchased any shares.
We have an exciting opportunities due to deploy significant amounts of capital directed at sustainable energy and related projects.
We projected modest equity financing activities will support the EPS accretive capital investment.
[noise] turning to fixed income.
We didn't get a slide in the appendix detailing our very modest remaining issuance for the year.
Overall, we view the debt capital markets is healthy and liquid across the spectrum of term and we currently have nearly $7 billion in available liquidity.
[noise], our credit rating agencies responded positively to the announcements we made earlier this month.
That's the people revised your outlook to positive all Moody's and Fitch affirmed [laughter] [noise].
In all cases, the agencies remark on the credit positive aspects of our strategic repositioning.
We expect that successful execution of our financial plan will further demonstrate the clear positive production, our overall business risk profile.
Finally, before I summarize my remark.
To give some insight into our investor relation strategy over the next several months as shown on slide eight.
We are increasing our proactive outreach using virtual tools to interact with both existing and prospective shareholders throughout the world, including geographies, where yes G related factors are playing an increasingly prominent role in investment decisions.
We're ramping up our investor targeting efforts to identify prospective shareholders, which are compelling clean energy operating and financial [noise].
Well resonate.
[laughter] tend to use our fourth quarter earnings call to provide something it Oh in Investor day style refresh with supplementary appendix disclosures aimed at providing projected capex rate base and other inputs, which we hope will assist investors and their financial evaluation of our company.
Responsibility to get our reposition story into the market. We therefore look forward to connecting with many of you for discussions on these topics during the next several months.
So to summarize my remarks, we remain focused on extending our track record of delivering financial result that meet or exceed our public commitments.
We feel that aren't businesses are well positioned with regard to cobot related demand in past, but we're monitoring that situation that situation carefully.
We are affirming our updated 2020 operating earnings guidance as well as a long term operating earnings and dividend growth outlooks provided earlier this month.
And finally, we look forward to increasing engagement with existing and prospective investors [noise].
In the month.
I'll now turn the call first off [noise].
Thank you Jim and good morning, everyone.
I would like to start by again expressing our gratitude.
Medical and other frontline health care professionals core engaged in a crisis effort to assist those would be impacted by the Coke 19 pandemic.
We slowed their efforts justice, we salute the efforts of our employees, who continue to perform vital public service by literally keeping the lights on and critical energy flowing.
We continue to evolve Ur Cobot response to incorporate the most up to date guidance from the medical and public health community.
Social discussing proper PPD, and where practical remote work have become the expectation for all employees.
We're also mindful of our customers and the difficult time this has been for them.
We have worked closely with regulators to take steps, including the voluntary suspension non payment service those connections and the offering a flexible payment plans to assist our customers in addressing the financial challenges they may be spacing.
Turning to safety, which is our first core value on slide nine.
Our year to date results put us on track to make 2020, the safest year of operation in the company's more than 100 your history.
As an organization with nearly 20000 employees and 7 million customers.
Our safety performance matters to thousands of families and communities, which is why it matters so much to us.
Do you believe impact lives on a broader scale is also <unk>, what we see an issue, but deeply impacts our employees customers and communities.
We get involved.
Recent social unrest.
Partly caused by the murder in Minneapolis.
Let us to question, but more we can do to assist the cause of social justice.
And racial quality.
Early last month, we publicly committed $5 million to social justice and community rebuilding efforts.
The funds will support nonprofit organizations advocating for social justice and a quality.
Grants will also be designated helped minority owned and small businesses recover from recent disruptions to their businesses.
Words can about sympathy empathy compassion.
I understand it.
But at Dominion energy, we believe that actions speak louder.
So we're investing in recovery reconciliation.
And then the vital work over coming years debilitating actions attitudes and abuses of authority that have traumatized our country.
This month, we followed up on Act amendment with additional pledge of $35 million that will support 11, historically black colleges and universities.
Representing 35000 students across Virginia, Ohio, North and South Carolina.
As well scholarship fund focused on African American underrepresented Montessori minority students across all of our service territory.
These institutions have been foundational into struggled through improved a lot of African Americans and in a fight for social Justice.
We're pleased and humbled to build on our company's nearly 40 year history of supporting historically black colleges and universities.
These initiatives are a recognition of the importance of education.
As an equalizer in society.
Across our company, we are engaging these issues like never before listening and being hurt.
We're committed and taking major steps to increase the diversity of our workforce and in recent years, we have meaningfully improved our supplier diversity.
Embracing diversity inclusion is not only the right thing to do it is imperative to our long term success as a company.
And we're changing the way that long term success will walk operationally and financially.
Slide 11 summarizes the highlights of our strategic repositioning.
Which include a narrower focus to our premier state regulated utility operations, which will account for approximately 85% to 90% of our operating earnings.
And industry, leading clean energy profile.
Best in class long term earnings and dividend per share growth.
And the low risk business profile and healthy balance sheet.
We have a vision for the future and we're preparing our company to be it the vanguard the energy transition that is accelerating across our country.
We are investing billions of dollars in a transition there what makes zero and low emitting resources accountable for around 95% of our company wide electric generation by the end up 2035.
As shown on slide 12.
We have a plan described in our integrated resource plan filings to.
To grow our renewable energy capacity.
On average over 15%.
Per year.
For the next 15 years.
We have successfully achieved our 3000 megawatt target [noise].
Notable generation service or under development in the state of Virginia a.
A year and a half ahead of schedule.
And we're now the third largest owner of solar capacity among utility companies in the country.
Our pilot offshore wind project depicted on the cover of these materials is the only project to have successfully completed the bomb permitting process.
And we'll begin to generate electricity this quarter.
Our 8 billion 2.6 gigawatt full scale offshore wind deployment continues on schedule.
Recent permitting recommendations for northeast when projects are not expected to alter materially our project plans and well be accounted for when we submit our construction and operation plan later this year.
Finally earlier this month, Virginia State Corporation Commission approved our renewable energy tariff.
Which enables us to offer an exciting 100% renewable energy products to our customers.
We're equally focused on emission reductions our gas distribution utilities.
Pipeline and other aging infrastructure replacement extensive leak detection and repair efforts and modified operational procedures decided to capture gas it used to be ventilated vented journey maintenance.
Well reduce the methane emissions, our natural gas utility operations, 65% body into this decade, and 80% by the end up in that.
We're also finding innovative ways to help our customers improve their sustainability.
That's one of the country's largest investors and renewable natural gas we are at the forefront of the intersection agricultural emission reductions in offering natural gas customers are green option that is actually carbon negative meaning that it takes more greenhouse gases out of the atmosphere that it creates when it is used by the customer.
[laughter] coming months, we will share additional insights into our expanding vision.
A sustainable energy future [noise] for our company.
And the country.
Next let me address the upcoming Dominion Energy South Carolina rate case.
Earlier. This month, we made a preliminary filing that formally signaled aren't tend to file a general rate case for sitting next month.
The first for the base electric business in South Carolina since 2012.
We expect new rates based on typical procedural schedule to be affected in March 2021.
Since the last rate case, eight years ago Dominion Energy South Carolina has conducted over 80000, new electric customers, representing a 12% increase and invested over $2 billion net of retirements and electric generation transmission and distribution systems that serve customers every day.
Despite prudent cost management.
Resulting earned return does not measure up to the cost of capital, we must employ to maintain excellent reliability and service that our customers while.
We estimate that our filing will imply a single digit percentage rate increase which will be significantly lower.
Then a compounded rate of inflation of nearly 14% since the end of the last test here.
Well 2011.
Customers costs keep the lights on and to deliver a portable and increasingly sustainable electricity.
We are committed to that ideal in South Carolina today, as we work when we close the merger.
Well that I'll summarize today's call is false.
Our safety performance is on track to set a new company record.
We're making important financial commitments to address social Justice and support African American and other represent a minority students we achieved weather normalized operating earnings exceeded the midpoint of our guidance range for the 18.
Consecutive quarter.
We affirmed our enhanced long term earnings and dividends per share growth guidance.
Our transaction with Berkshire Hathaway's on schedule for a fourth quarter closing.
And we are aggressively pursuing our vision to be the most sustainable energy company in the country.
Before we turn your questions I want to discuss our announcement. This morning about my changed for all from President and CEO to executive Chairman at Dominion effective at the end of this quarter I'm in my 25th year that the company 15th year as CEO.
And turning 65.
Its December.
Three years ago, the board began to consider various alternatives might tomorrow eventual retirement.
We have undertaken a series of steps over these years last September we took an important step in that process by creating the co chief operating officer role.
Today's announcement, there's another step in a long design succession process.
I'm pleased to say that Bob Lou will become president and CEO on October one reporting to me as executive chair.
Dialing Diane Leopold is being promoted to chief operating officer reporting to book and we were sabal for all of the company's operations across our multi state footprint.
Tim Chapman, our CFO will report the Blue ESMO Carter rate President of our services company Carlos Brown, Our General Counsel Bill Murray, our head of corporate affairs in public policy count, our net or ahead of regulation and customer experience.
And tenure Ross or Chief Auditor Carter Reid will also report to me in her role as chief of staff demand.
I provide you with this detail to underscore that the team we have assembled at dominion over the past 15 years.
Well be the same team the carries us into the future.
It is this group that has taken dominion to the top ranks among American utilities in safety.
Operational excellence and compliance.
It is also this team that has supported and expanded our steadfast commitment to sustainability.
Diversity and community engagement.
These individuals of course did not achieve these results on their up.
They were supported by thousands of others at our company.
Who share in live our company's values.
As you know over the years, we've made significant and in some cases transformative changes to dominion.
Our succession process, we have taken a deliberate strategic approach <unk> <unk> two repositioning dominion for the future.
We're now largely state regulated multi utility company with a growth profile for both earnings per share and dividends among the highest in our industry.
We also have one of the strongest yes see stories in the sector.
From exiting oil and gas production and merchant fossil generation.
To emerging with quest star in Scana.
Two embracing solar power advanced storage and grid modernization.
We licensing our nuclear fleet.
As well as the development of the largest offshore wind farm in the Americas.
It has it been this team of individuals leading the way.
With our most recent strategic alignment in selling our gas storage and pipeline segment.
Embracing a clear path and that's your by 2050 important I thought it would be an appropriate time take the next step in our management transition at the end of this quarter.
There's no established timeframe for my role as executive Chair and I look forward to continue to serve the company on behalf of our shareholders.
Immersed in communities.
The primary goal of our succession planning process, it's been to ensure continuity of our strategy.
Public policy corporate values and operational excellence.
This change is a step in carrying out that call.
Well also continue to service chairman of the board of directors with the company.
As executive Chair I will continue to represent the company engaging with key stakeholders industry groups and others I would be particularly focused on continuing to develop our strategic plan and dominion's leadership in the new clean energy economy.
And with that we will be happy to answer your questions [noise].
[noise]. Thank you and just open the floor for questions.
Yes, good question right.
[noise] followed by the one key on your Touchtone phone now.
[laughter].
And then yourself from the questioning Keith Please press Star Keane against you asked a question at this time. Please press star one now.
Our first question will come from James.
Sackler wouldn't be human capital markets.
Good morning, everybody hear me [noise].
Yes, we can good morning.
Well, thanks for taking my questions and before we start not congratulations to both you Tom Bob and Diane for the announcements today.
Great. Thank you.
Just two real quick question on Slide eight you just got you discussed in Investor Day style financial up eight which will include a rolling forward of the capital plan into rate base estimates.
Well. This included a year by year end or a segment by segment program break down of the capital spend as well as the associated rate base by year end segment.
Hi, James Good morning, it's a it's Jim yes, so we weren't planning stages for that for the fourth quarter roll out of that analyst day, Investor Day style, a refreshed and we hope to do <unk>.
Hi, just things we did last time around last March where we didnt provide a by segment and mostly by year rate base and a other growth data. So we can improve on that little bit we're thinking through how to do that.
Feedback, but we do expect to provide kind of everything everything you just mentioned on the fourth quarter call.
Okay, and I mean in just staying in that vein since you've already given sort of some of the financing through 2024.
Year, well, we I'm probably roll this out it will this like 2021 through 2025 or how are you thinking about that.
Yes, that's a possibility for sure.
So let me add to our our existing disclosure, it's not it's not so.
Last March we set up $26 billion of gross capital spending from 19 to 23, we updated some of that on the first quarter call. This year for three programs under the VCA in Virginia, obviously, a longer term gas transmission storage capital spend which is about 3 billion comes out of that.
Our existing gotten still largely intact and relevant but we will be Brian that wallboard was more granular updates on fourth quarter call.
And then just.
Last question on this part of it is and really just kind of sticking to the 2025 sort of timeframe. He's given a lot of line of sight on the financing through 2024, but your capex really as you start to do the offshore wind starts to really the only got in 23 24. Just wondering if you are looking to sort of move.
Your capex forecast out I'm, a little bit kinda talk about yeah. The financing plan as we move into 24 suit 26 in the offshore wind starts coming online.
Yeah Fair fair enough I mean, those numbers, because big and there's a lot of visibility around that offshore wind Stan.
I would say that on an overall bases the cadence of that $26 billion number in a good number [laughter] pretty it's pretty much a run rate. So yeah. There's a slight increase there. So if we as we provides additional detail or additional year up capital spend will also support that with a information our financing.
Matt, but I wouldn't expect a drastic departure from our kind of run rate numbers that we've talked about today.
[noise] Anda.
[noise], Yeah, James you're you're cutting out there little bit, but you're not kind of run rate again, what will provide an update on the fourth quarter call.
It's not going to be a drastic departure from that if that was your question.
Yeah, No that's perfect and then let the last question I apologize, but clearly it's been a lot of press in the last week's rounding political spending practices in vehicles on slide 20, you briefly address your rankings in the Zepa Zyklon index, which.
I like the use of trends that are under their methodology, but I was wondering if you could speak a little bit more passed in current use the social welfare organizations like the classical ones.
And do you plan to modify your political strategies at all in light of the recent investigation.
Sure. Thanks for asking first we have fully disclosed fiber once before contributions for many years.
Zyklon Center you reference is a independent organization that works with the Wharton School with University, Pennsylvania.
[laughter] to look at a huge very wide variety of factors and they rank all these companies on their disclosure practices.
And our disclosure is ranks among the highest in the country.
Certainly among the highest and utilities for its transparency I like I say, we've disclosed all ER and over the last five years I think our contributions have been under $500000.
70% of which went to a an organization that are associated with American petroleum is to supporting pipeline projects.
So.
We are fully disclosed everything it's not it's a very small part of what we do under $500000 over five years.
And we have no intention of changing our practices because they are perfectly appropriate.
Ah completely compliant with every state federal law.
Why margins, we are we have nothing to be concerned about.
With respect to any of our political giving we're getting to two of these filings so called fiber wants to force.
Great. Thanks for all the time and Oh, sorry, sorry about the phone breaking up there and then that'll have a good weekend. Okay. We heard we heard your thanks James.
[noise]. Our next question will come from short Parisa went to Guggenheim partners.
Hey, good morning, guys.
Morning.
Hi, just done on the equity guide some people may be struggling where that buying back this year and starting to issue next year can you touched on this thought and and why not decide to de lever in further sort of improved the credit metrics versus buying back which could be sort of multiple accretive in of itself. So.
And I just have a quick follow up.
Oh, Yes, let me start let me start there so.
Our balance sheet.
He is already in the right place.
I will take time to go through all the history, but I think as you know we've made just a ton of progress not area.
Over the last several years.
And it's even better.
Pro forma for the sale Oh, the GNS business so.
No that's sale.
Almost $6 billion Oh, the $10 billion transaction value is really from my perspective debt retirement.
So I think agencies that recognize that also in their commentaries I just talked about positive outlook I simply.
So given given that the status of our balance sheet and related improvements from this transaction.
We feel pretty good about our plan to provide the net proceeds.
Back to our shareholders and this and this buyback, which where as I mentioned, we're targeting for completion by the end to end to the here.
But that said, we do have a sizeable.
Clean energy and related capital spend program just talked about that James.
[noise] and it's only increasing as we go through the years slowly.
So so therefore, we do even though we're doing the buyback and given the net proceeds back to our shareholders. We think it's prudent.
With that strong balance sheet position. We're in we do plan. So we can then.
Some equity issuance.
Even if it's just in this form the drip in 2021 and beyond.
But I think I think perspective is important I mean for spending programs of decides what we're doing to be starting out with the trip.
Less than half percentage point of our market cap in here in a pretty efficient program like like drip and later.
With other official programs all our ATM, we think its overall pretty modest.
And we think it's about it's the best way to go.
Got it and then just honing in on the buyback you know what what's specifically again driving upsizing can you kind of sort of quantify and then on the timing seems that poor Q purchases could be a little bit conservative on your viewpoint can you buy back soon or even if you don't have to proceed.
In the door you know in can you potentially close this transaction sooner than Fourq you. So what's driving the upsizing and can you start to buy back sooner than Fourq you, even if the proceeds on that thanks.
Yeah. So we have a couple things there we have a board authority to commence our buybacks with immediate effect.
Oh, we do not need to wait until the transaction closes.
We haven't Bonnie.
And we retain kind of full flexibility, we can do that with the open market purchases, we could do it with accelerated share repurchase a tender Dutch auction.
So more more guidance to calm on that through the through the fall as we go.
We do expect still to complete that by the end of the year, even if we start sooner.
We're not guiding to any different closing time line.
Kind of early fourth quarter, all about all remains on track, but then as it relates to the Vietnam quantum Yeah. We mentioned, there's upward bias where's that coming from it will provide more do you still not too as we go.
But that comes from first of all just a conservative first caught on what tax cash taxes would be on this sale.
We indicated about $700 million [laughter], so there's interplay there between the tax aspect.
Oh and the tax aspect of the then it was pipeline advancement and impairment of slighter.
And interplay of our sizeable.
Tax credit position.
So it continues to do more work on that we see probably if anything a downward bias in the.
Taxes payable from 700, and therefore upper bias in the size of the buyback.
And it's not huge new again, we'll come to that Guy, it's somewhere between zero and 200 million kinda that magnitude.
And we'll provide more more guidance, but again conservative for Scott I, probably improving from their modestly and well we'll provide more detail all that as we as we go to fall.
Got it thanks, Jim and Tom Congrats on stage two of your career.
Thank you sure appreciate it.
Thank you. Our next question will come from Durgesh Chopra with Evercore ISI.
Hey, good morning, Thanks for taking my question and congratulations to you Tom.
Thank you there as well thank you.
So maybe just.
Starting off I actually have one question only just like the other questions have been answered Jim <unk>, so that the credit rating agencies.
It was the transaction obviously it came up with a positive view I didn't see but is there a chance that youre photo debt metrics.
Got it just didn't here going forward now that the business mix is it's very different.
[noise], that's your gosh by that do you mean caused a downgrade or I'm pretty threshold from agencies.
Exactly yes.
I think I think there a I can't speak for the agencies there I'm on the downgrade Oh wait times. There there has actually yeah I would I would think that as we continue to execute on this plan.
And improve on our business risk profile de risk our our profile.
Well the logical thing to discuss but we're not guiding folks to expect that in the in the near term, but I understand the question and we'll see what happens.
Understood, Thanks, guys and a great quarter again, thank you.
Thank you Mr. gosh.
Thank you know I should come from Weinstein with credit Suisse.
[noise] [noise] [noise] my right when it got.
Good morning, Good morning, Hey.
Yeah, Congratulations Oh, Tom Bobbing, Diane both all all three view.
I just thank you I'm asking about the yes, because we get closer to the Tri Annual review I think you're going to you should be filing it pretty soon it's it's not already.
You know, which we'd be looking for there in terms of timeline and dates and hearings and things like that.
[laughter], Michael it's Bob blew up so obviously a lot or we're focused on a that triennial. We will file in March of next year and it will be litigated over the course that you are with the decision by the end of November.
So that's a the cadence for that.
Okay, great and.
In terms of the offshore wind project. It wasn't really much mentioned in the presentation. Oh this time around but im just wondering if you can give us an update on I guess, the filing which I think you're probably still planning towards the end of the year rights with me Liam.
Right, we expect to file that caught with them at the end of this year and its progressing well surveying Geo technical work in the preparation that are going very well so.
We're pleased just as we were pleased with Uh huh.
Construction on a test turbines.
And it is a is that project included on that.
Slide that shows the 15, you know over 15% increase and renewable generation of isn't yes 2035.
Yes.
Yes, it and there's a relatively small part of it it looks like solar stuff vast majority of it.
That's correct, it's a large solar build well I don't really thinking the commercial project a small however is the largest a in the Americas.
It looks like it's going to get dwarfed by I saw it is that all ends in the state of Virginia, and South Carolina I suppose.
It it's oh within the PJM footprint, but we're talking mostly in in Virginia, Yes.
Great all right. Thank you very much guys and congratulations again and Africa, we can.
That's my remarks you.
[laughter] you. Our next question will come from Steve Fleishman with Wolfe Research.
Hi, Good morning warning first Ah Hey, Tom Congrats to you in a long time and also congrats to Bob and two Diane.
Well deserved so.
Thank you.
Good good hands. So I guess just could you just remind us what you need to do to actually get to the transaction closed.
In terms of or perhaps to so we're tracking there.
Just to have HSR really and a that's progressing along just fine.
Okay, Great and then.
I mean, there's not going to be a lot of time to actually execute on the buyback in Q4, it's a decent amount stock. So could you just talk about.
Kind of how you're thinking about doing it.
[laughter] Yeah, let me go there Steve So again, we don't have to the guidance on that yet who will provide more through the fall.
But I just mentioned all those options, we haven't heard school to get that don't but we don't necessarily need to wait until the fourth quarter to start.
Probably won't.
So couldn't compete very well could be a mix of approaches a market purchases and other approaches.
In two or in place of a fourth quarter tender style event. So I know that's pretty broad.
But we don't need to compress that into just a month or two in the fourth quarter. We got its already start to start now.
Okay.
And then maybe just a when you look at.
[noise] I guess I guess that.
I know you said, you're gonna be doing a lot of continued marketing.
On the.
The company and story in the kind of the new clean energy.
Further refocus their just maybe just give a little color what kind of feedback you've gone so far because obviously.
There was no big news with a financial changes and then.
And then this refocus work what kind of investor feedback you've gotten so far.
[noise], Yeah, let me start there and that was a just three weeks ago or so when they move ins as announcement and we didn't get a quite a bit feedback from across the spectrum different types of investors and when you look at all to heart, we sat around and considered a lot of it pretty carefully including notably the feedback from.
Retail investors to very focused on the dividend and income if that's income fund investors. So we we get bad and took that door.
But the feedback from I guess, maybe longer term investors institutional investors and those investors I mentioned my prepared remarks that are in North America or elsewhere that increasingly or thinking about their investment decisions do the lens of <unk> U.S.G. topic.
That's feedback was pretty positive.
On the long term prospects Oh this transaction repositioning the company in this way I'm, just drinking bouchie, increasing the growth rate.
Highlighting all the already underway as she spending programs, a clean energy and related so that'd be that's been pretty good.
But you Didnt change a material change for Dominion. So we had been already.
And we highlighted here that we're going to spend a lot of time. The next few months just reconnecting with people.
Existing investors prospective investors walking to that story, making sure that gets it not only what we've done but exactly what we're doing under the spending programs and the size and scale and cadence and financing. There's a lot to talk about and one thing has been consistent and and all of our interactions with investors distinguish that.
In the last two weeks is everyone really wants to spend more time to make sure they get it and understanding all those dynamics, but overall, it's been it's been pretty positive.
Okay, great. Thank you.
Thanks, Dave.
[noise] Oh My last question will come from Jeremy Tonet with JP Morgan.
Hi, good morning, Thanks for fitting me in here warning just though.
One just the multi prong question on natural gas I couldn't hear I'm just wondering how you think the needs a in your service Terry territories have changed over time since you first Nancy <unk>.
And with the HCP cancellation, what are your expectations for gas distribution capex a into the fourth quarter refreshed here.
They're an upward by went quiet unless you have 18 competing for capital.
Finally, if I could just how do you think hydrogen could fit into the picture over time here.
Thank you for the quite long just on the let me I'm going to answer the very first part of it and then turn it over to Diane.
The need for the Atlantic Coast pipeline or service territory, [noise] course service territory for us.
[laughter].
Virginia North Carolina.
ER and potentially South Carolina, well the need it's not changed at all.
The the result of it is that need will go on Matt.
As a result of the cancellation of the Atlantic Coast pipeline.
Pipeline was over 90% subscribed for 15 years by utility companies you that we're going to use it to serve gas distribution customers.
And convert coal plants through natural gas facilities over the years to call that need will now go on Matt.
So with respect to that one project no change the best balances the questions I'll turn over to Diane.
Okay and good morning, so with respect to the L.D.C.
Capital spend and certainly we'll give a refresh snuck in the Q4, Oh, well they really don't see any change there. So we really have jurisdictions that are in very supportive states for our programs and there.
Gross area [laughter].
Airline, Utah, Ohio, West, Virginia in the key jurisdiction [laughter], we have pipeline replacement programs in essentially all of those areas that are significant and dark commissions recognized the long term nature of those programs and the need to have that infrastructure replacement.
For safety reliability and sustainability, so I really don't see anything there as well as the continued growth projects to meet the increasing.
And then these high growth areas, so really no change on the LBC side.
With respect to hydrogen.
We do see that there will be an increase in hydrogen utilization in the energy mix over the next several decades and we'd certainly spent a lot of time studying it.
At the moment at least our knowledge no.
Continental U.S. LDC is blending hydrogen into supply mix today.
We committed a couple of years ago to making sure our LDC system is ready to accept.
5% hydrogen by 2030, so just in the next decade and our initial pilot is in advanced planning stages in Utah.
So high level, we think there's going to be a lot of activity in this area, but for the most part it's still in that study preparatory planning stage, but expected to be ramping up and look forward to share an update.
That's very helpful. Thanks, and [laughter] to the gas situation real quick with N. B P. D think that there's any role for that to play I guess in you know.
Meeting some of those that does need that Oh, we're gonna go on Matt without HCP.
Not that we can say.
Got it and just one last one if I could with regard to the upcoming election here. Just wondering if you had any preliminary thoughts on potential impacts at the federal or state level for Dominion overall.
I have no intention whatsoever of commenting on the upcoming elections in any respect.
[laughter] I'll leave it there thank you [laughter] <unk> [laughter].
Thank you and this does.
Good morning. This conference call you may disconnect your lines and enjoy your day.
[noise].