Dominion Energy, Inc. Price & Performance (D)

I encourage you to visit our Investor Relations website to review webcast slides as well as the earnings release kit. Joining today's call are Bob Blue, Chair, President and Chief Executive Officer Steven Ridge, Executive Vice President and Chief Financial Officer and Diane Leopold, Executive Vice President and Chief Operating Officer. I will now turn the call over to Bob.

Thanks, David. Good morning.

Almost a year ago, we concluded the comprehensive business review and described five key tenets upon which the reposition Dominion Energy would be premised.

Strategic simplicity, consistent long term financial execution, [indiscernible] dividend security, and the delivery of an exceptional customer experience that would enable us to advocate for and achieve balanced policy constructs and reasonable regulatory outcomes. You heard from me directly from members of the Board that we would collectively be accountable for the company's future performance.

Finally, we committed to being 100% focused on successfully executing against our updated plan. Now year on, none of that has changed.

Those commitments are as equally fundamental to our company today as they were twelve months ago. We know that to rebuild your trust, we must deliver consistently over the long run.

While we're still relatively early in this new chapter of our company, we're off to a positive Looking back at 2024, we accomplished operating earnings per share in the top half of our guidance range despite weather headwinds.

A remarkable storm restoration effort in South Carolina in the aftermath of Hurricane one of the region's most destructive storms ever. Regulatory outcomes in South Carolina and North Carolina base rate cases as well as a number of Virginia rider cases that demonstrate our ability to work cooperatively with regulators and stakeholders to deliver results that benefit both customers and shareholders.

And significant de risking of the Coastal Virginia offshore wind project through both the continued on time achievement of major milestones as well as the closing of a 50% non controlling equity financing through which we've materially reduced project risk for our shareholders. I'll share more perspectives on CVAO a little later in our prepared remarks. We did all of this while achieving a near record setting employee safety performance. And advancing our all of the above strategy to reliably and affordably meet our customers rapidly which includes the largest data center cluster in the world.

Let me now turn it over to Steven to provide a financial update before I walk through additional updates on the execution of our plan.

Thank you, Bob, and thanks to everyone for joining today's call. As shown on Slide five, full year 2024 operating earnings were $2.77 per share, in the top half of our guidance range despite $0.03 of worse than normal weather.

Full year 2024 GAAP earnings were $2.44 per share.

Our fourth quarter operating earnings were $0.58 per share, which for this quarter represented normal weather in our utility service areas. Fourth quarter GAAP earnings were $0.15 per share.

As always, a summary of all drivers for earnings relative to the prior period is included in Schedule four of the earnings release kit. A summary of all adjustments between operating and GAAP results, included in Schedule two. Next on earnings guidance, we've narrowed twenty twenty five operating earnings per share guidance to $3.28 to $3.52 per share inclusive of RNG45Z credit income, while preserving the original midpoint of $3.4 We provide a range to primarily account for variation from normal weather. We're reaffirming annual operating earnings growth guidance of 5% to 7% through 2029 off the 2025 midpoint of $3.3 which excludes the impact of RNG45Z income due to the legislative sunset of that credit at the end of twenty twenty seven. As a reminder, we continue to expect to see variation within that range as a result of the millstone refueling cadence which requires a second planned outage once every third year.

We're also reaffirming our previous guidance related to the dividend, expect to maintain the current dividend level of $2.67 per share annually until such time as we achieve a utility industry aligned payout ratio. Turning now to capital investment.

We've updated our five year capital forecast from 2025 through 2029 to $50,000,000,000 an increase of 16% from our prior guidance. We're seeing the need for incremental investment across distribution, transmission and generation to ensure reliable reliability amid continuing growing demand in our service areas. Consistent with our increased focus on transparency, we provided comprehensive and detailed disclosure in the appendix of today's materials So I'll just hit two takeaways here. First, approximately 80% of the capital increase is at Dominion Energy Virginia, driven by higher transmission, distribution and nuclear and second, 60% of the updated capital spend will be eligible for recovery subject to regulatory approval under rider mechanisms. This is an exciting update we're confident in our ability to execute for the benefit of our customers. Outside of today's forecast, we continue to see opportunities for additional investment across the value chain biased towards the end of the decade and beyond, include those opportunities in future updates as warranted by their development status. Before I discuss our financing plan update, I'll affirm our commitment to balance sheet conservatism as demonstrated on Slide seven. The five year plan, we expect our parent leverage to be consistently below 30% and our FFO to debt to be approximately 15%.

Finally, we target mid BBB range credit ratings for our parent company and single A range ratings for our regulated operating companies. No change there. Our long standing focus on achieving and maintaining these ratings is important for our ability to continue to secure a low cost of capital for our customers. Now turning to the financing plan on Slide eight. We're providing a five year look at sources and uses. Meaningful operating cash flows, combined with a balanced mix of external financings satisfy our capital investment and dividend forecasts. Since the last update, we are modestly increasing external financing across debt, hybrid and equity issuance. Specifically on equity, you'll note on Slide nine an increase in 2025. As of today, we've already sold $600,000,000 through forward settled sales under our existing ATM program expect to issue $200,000,000 throughout the year through DRIP programs and expect to satisfy the balance of the approximately $300,000,000 need Beyond 2025, there have been no changes to our common equity issuance guidance. We view this level of steady equity issuance under existing programs in the the context of our sizable growth capital spending program as appropriate keep our consolidated credit metrics within the guidelines for our strong credit ratings category.

Before I hand it back to Bob, note that we're pleased with our 2024 financial performance but it's really all about how we execute going forward. Since the March 1 meeting, we've seen tailwinds like increased regulated capital investment opportunities and we've seen headwinds like higher interest what hasn't changed is our confidence in the plan, which has been built to be appropriately but also not unreasonably conservative.

And with that, I'll turn it back to Bob. Turning to safety performance and affordability on Slide 10. We achieved near record setting safety performance in 2024, as measured by our employee OSHA injury recordable rig. On affordability, our rates continue to be lower than national and regional averages. We're intently focused on ensuring our service isn't just reliable, but that it remains appropriately affordable as well. Next on our Coastal Virginia offshore wind project, we provided several updates last [indiscernible] But I'd like to start with a few project highlights on Slide 11.

First, the project is 50% complete. And on schedule for completion in 2026. Second, CVOW is supported by Virginia law. Approved by the State Corporation Commission and federal agencies. Third, CVOW will provide much needed new generation to support America's AI and cyber preeminence in the largest data center market in the world.

Additionally, the project represents the fastest and most economical way to deliver 2.6 gigawatts of supply to Virginia's grid. And finally, Seaview has created approximately 2,000 direct and indirect American jobs. And generated $2,000,000,000 in American economic activity in addition to having the robust bipartisan support of Virginia's state and federal elective leaders. In summary, this project is consistent with the goal of securing American energy dominance and is part of a comprehensive all of the above energy strategy to affordably meet growing energy needs.

Next on recent construction progress and milestones.

In 2024, we completed a very successful first monopile installation season And work has continued this winter on export cableway.

As well as transition pieces and in the coming days offshore substation installation. As shown on Slide 12, we began some transition pieces on December 31, and have since completed installation of 20 in total. The first offshore substation jacket and topside were delivered to port Smith at the January and will begin installation later this month. The remaining two offshore substations are on track to be delivered this summer and installed in the fall after completion of monopile season in October. On materials and equipment, thus far 130 monopiles have been loaded out, with 116 successfully delivered and 14 more in transit to Virginia presently.

Approximately 75% of the project's monopiles are either in Our partner EEW continues to make strong progress and we expect deliveries continue steadily in the coming weeks.

Out of the project's 176 transition pieces, all have been rolled. Of these, 152 have been successfully steel welded. And of these 91 have been completed. Representing over 50% of the total. We expect the final transition piece to be completed in October. Additionally, the schedule for the manufacturing of our turbines remains on track. As a reminder, Siemens Gamesa, the project's wind turbine supplier, is manufacturing the same turbine model for CEVAO has been successfully fabricated, installed and is now operating at the Morey West Offshore Wind Project.

Eight towers have been completed with an additional 31 in progress.

Blade fabrication is now underway.

And we expect Nacelle production to begin next month. Turning to regulatory, we made our quarterly offshore wind accompanied by a detailed explanation of the change in project costs from 9,800,000,000.0 to $10,700,000,000 Let me share a few thoughts here. First, as you would expect, the cost increase is disappointing.

We take great pride as an organization in delivering on time and on budget. Since the original cost submission forty months ago, we've spared no effort Ultimately, despite having about $300,000,000 budgeted for network upgrades, which was more than sufficient based on PJM's initial estimates. That estimate has proved too low. New electric generation resources constructed within PJM regardless of their generation type are signed costs by PJM that are deemed and ensure the reliability and stability of the electric grid. Higher network upgrade cost estimates by PJM reflect the significant increase in demand growth that requires incremental generation transmission resources across the system. I think it warrants noting that the aggregate cost for other project inputs including offshore scope, have remained in line with the original budget. Second, network upgrades do not impact project construction or timeline. And represented the largest unfixed project cost by far. We now have a much clearer, though not final view of those costs.

Further, we've refreshed contingency to represent 5% of remaining project costs. Third, cost sharing and risk sharing is working as intended to protect customers and shareholders. As a result of the cost sharing settlement approved by Virginia regulators, the project cost update is expected to increase residential customer builds by an average of $0.43 per month over the life of the project. And the updated LCOE continues to benchmark very favorably with new generation alternatives including solar, battery and gas fired generation. CEVAO remains one of the most affordable sources of energy for our customers. Of the $900,000,000 cost increase, 80% or $700,000,000 is expected to be recovered via rider, and added to rate base subject to regulatory approval. 50% of the non recoverable portion of the increase will be borne by Stonepeak rather than Dominion Energy shareholders.

Finally, I know investors are very focused on the probability of future cost [indiscernible] I recognize the critical importance of executing against any guidance offered. The project is on time, and we're committed to delivering it in line with the now updated cost estimate.

We don't have perfect insight into the information that PJM will use to finalize costs by mid year.

But we've done a significant amount of analysis around the most recent estimate, which informs our updated cost estimate.

I am confident in our updated estimate and believe that if there is a revision up or down, with respect to PJM network upgrades come July, it would not be of a similar magnitude. Finally, a few updates on Charybdis, as shown on Slide 16. The vessel is 96% complete up from 93% as of our last earnings call. And C trials are underway. What we're showing there is a picture of the 30,000 ton vessel fully jacked to its full height of almost 400 feet. We continue to expect Caribas to complete sea trials in early twenty twenty five consistent with our previous schedule. And be delivered to CVOW in the third quarter. There's also no change to the vessel's cost of $715,000,000 Turning now to data centers. We continue to see exciting developments here, so let me share a few updates. First, where things stand today. Virginia hosts the largest data center concentration in the world by far. Since we started tracking, we've connected approximately four fifty data centers representing nearly nine gigawatts of capacity. Data center sales today represent about 26% of total sales for DEV. Data centers are attracted to Virginia by connections to world class fiber networks, Virginia's attractive business climate, availability of a trained workforce, and access to our affordable, reliable and increasingly clean energy.

In recent years to address this demand, we've advanced electric transmission projects to bring both new and upgraded infrastructure to enable continued connection and expansion of data center customers in Eastern Loudoun County, Virginia. This work has included reconduring lines, expanding substation infrastructure, as well as building a 500 kV transmission line that we expect to complete on schedule the end of twenty twenty five. Further, just last week, the SEC approved another 500 kV line into Eastern Loudoun County. That we expect to be in service by year end twenty twenty seven. And that will allow us to stay ahead of the region's rapidly growing electricity needs. Second, where do we go from here? The PJM Dom Zone is experiencing unprecedented load growth This growth is accelerating in orders of magnitude driven by one, the number of data centers requesting to be connected onto our system two, the size of each facility and three, the acceleration of each facility's ramp schedule to reach full capacity. For some context, as shown on Slide 17, PJM recently updated its DomZone forecast that now projects peak summer load growth of approximately 6.3% per year To put that into perspective, the resulting peak load projected for 02/1934 has increased from 26.1 gigawatts as of the 2022 PJM estimate to 41.5 gigawatts as of this year's estimate.

An increase of nearly 60%. Last year, we implemented changes to our process on how we handle new delivery point requests our system This change will allow us to organize load requests into batches. And serve them in the order they are received. Since we began communicating these changes, we've seen an increase in demand from customers. As shown on Slide 18, we've updated our data center contracted capacity.

We now have approximately 40 gigawatts various stages of contracting as of December 2024, which compares to around 21 gigawatts as of July 2024, an increase of 19 gigawatts or 88% As a reminder, these contracts are broken into one substation engineering letters of authorization. Two, construction letters of authorization and three, electrical service agreements. As customers move from one to three, the cost commitment and obligation by the customer increase. We're currently studying over 26 gigawatts of data center demand within the Substation Engineering Letters of Authorization stage, which means a customer has requested the company to begin the necessary engineering for new infrastructure required to serve the customer. This compares to approximately eight gigawatts as of July 2024. And represents a remarkable 245% increase. We've analyzed the data several ways. And certainly we believe some of this growth is attributable to the new batch system which naturally incents customers to get into the process early. But what's undeniable is that data center growth in Virginia is not slowing down. In fact, it's accelerating. And we're taking every step to meet this opportunity.

There are also about five gigawatts of data center demand that have executed construction letters of authorization.

Which are contracts that enable construction of the required distribution and substation electric infrastructure to begin. Should a customer in this stage elect to discontinue a project, they're obligated to reimburse the company for its investment to date. Finally, the nearly nine gigawatts included in represent contracts for electric service between Dominion Energy and a customer This has increased by nearly a gigawatt since July 2024. Each contract is structured for an individual account. By signing an ESA, the customer is committing to consume a certain level of electricity annually. Often with ramp schedules where the contracted usage grows over time. As Stephen mentioned, this is all evidence of opportunities for additional investment across the value chain for many years to come.

Turning to Slide 19, let me highlight a couple of additional business updates. First, an update on our transmission business and the joint planning agreement with AEP and FirstEnergy. A package of our own and jointly proposed projects has been shortlisted by PJM in their window process, which is ongoing with final approvals expected this month. Dominion share of the joint planning agreement will lead to approximately $1,000,000,000 of incremental capital spend in the five year plan.

When combined with our other DEV transmission projects, this will result in annual transmission capital spend of greater than $2,800,000,000 beginning in 2027. Above the $2,500,000,000 we are we'd previously forecasted. Next in South Carolina, policymakers are in session and continue to evaluate potential energy legislation We're appreciative of the significant time spent to date by the legislature on this important As we've indicated in the past, we're committed to supporting South Carolina's growing economy. However, as we've testified, the regulatory framework for DESC creates regulatory lag that makes it practically possible [indiscernible] especially as compared to neighboring Southeastern regulated jurisdictions including Virginia. Finally on Millstone, the facility provides over 90% of Connecticut's carbon free electricity, and 55% of its output is under a fixed price contract through late twenty twenty nine. The remaining output continues to be significantly de risked by our hedging program which we've updated in the appendix of today's materials. During 2024, Millstone performed well. And achieved a capacity factor of 92% aligning with our expectations of exemplary performance, and reflecting our unwavering commitment to safety and best in class operations. As many of you are aware, there's been recent legislative activity in New England and in Massachusetts aimed at authorizing future additional procurements of nuclear power.

And we've continued to engage with multiple parties there to find the best value for Millstone. In addition to state sponsored procurement, we continue to evaluate the prospect of We feel strongly that any data center option needs to be pursued in collaborative fashion with stakeholders in Connecticut. At this point, we don't have a timeline for potential announcements. Remain focused and we'll continue to provide updates as things develop. With that, let me summarize our remarks on Slide 20. We achieved near record setting safety performance this year. We reaffirmed our long term operating earnings per share growth rate credit and dividend guidance for March 1, and narrowed our 2025 operating earnings guidance range. CEVA remains on schedule with robust cost sharing that protects customers and shareholders. In collaboration with our policymakers, regulators and stakeholders, we continue to make the necessary investments to provide the reliable, affordable, increasingly clean energy that powers our customers every day.

And we're 100% focused on execution. We know we must continue to deliver and we will. With that, we're ready to take your questions.

We'll take our first question from Shar Pourreza of Guggenheim Partners.

Hey guys, good morning. Good morning, Shar. Good morning, Bob. Bob, just on Coval, just I guess in light of the updates earlier this month, maybe can you just elaborate on the remain variability in the projects, if there were delays in supplier component deliveries, how flexible to schedule, how would the standby cost be recovered, would suppliers pay, And any new color on how you're thinking about incremental wind projects in light of your experience on CEVAAL one to date and the prospects for policy and tariff headwinds from DC? Thanks.

Yes, Shar, you got a lot in there. All in one question. So let me see if I can work my way through the very pieces and I'll ask Diane to talk a little bit about sort of where we are on the project. And derisking.

So we're in a very good position with this project. And we feel very confident about the more data to come from PJM on network upgrades But we've done a lot of work with the best data that we can So far, the data that we've used seems to be consistent with what PJM is looking at. And we think it puts us in a pretty good position. Let me talk a little bit about tariffs because you mentioned overall sort of derisking on the project. It's really too early to say how potential tariffs might affect this project. I can tell you that remaining spend outside of The United States is about $2,500,000,000 majority of that from Europe. Only a portion of that for components that would include steel or aluminum With respect to potential steel and aluminum tariffs in particular, Generally, these types of tariffs are not intended to apply to most finished products. Would consider the CVOW components to be finished products. That said, we don't have the annexes to accompany the executive order. We can't know what if any of our remaining spend would be potentially subject to tariffs.

These are finished products that include some steel, some other materials. So it's not as simple as just taking a contract value and applying a percentage. For example, nacelles have thousands of components in them blades as most people know, don't have steel or aluminum in them. If the steel and aluminum tariffs end up taking effect, it won't be before March 12. So we should get some better insight before then The past may not be a predictor of the future, but if these tariffs follow the form of those imposed in 2018, they largely wouldn't apply to CVAO at all. And then finally, and Diane will talk sort of about how we're doing on [indiscernible] We have $200,000,000 of contingency within the current project budget of $10,700,000 up to $11,300,000 50% of costs are recoverable from customers and costs are shared fifty-fifty with Stonepeak. Dan, you want to talk a little bit about sort of where we are in the development? Sure. Good morning, Shar. So, when I think about the risk First, I kind of look at where we are All of our permits are in hand. All of the materials have been purchased. We have fixed price contracts for all the major equipment.

Fabrication is going very well. All the deliveries of that fabricated equipment is right on time and the installation activities have been moving forward on track. So when I kind of look at the performance of the suppliers, as we're progressing now that we're 50% complete, risks are naturally [indiscernible] So just take as an example, Demet with the vessel and installation logistics, as we saw in the first piling season, we kind of got better and better and got to 25 monopiles a month kind of as as a run rate. And as we've seen this winter, the transition piece in installation and the cable installation is just going right on track. So when I look at what costs are still unfixed, we've talked about the final estimate we're feeling good about on PJM. There's fuel for all the vessels and there's project management So So we need to complete fabrication that's going very well. Need normal weather. And so we're feeling really comfortable about where we are and where the suppliers have been performing.

Sorry, I'll jump back in. You also mentioned future projects. I don't think it'll come as a surprise to you that we are very focused on this project and bringing it in consistent with the schedule and budget that we've been talking about. We've got a couple of other leases. We have no capital in the plan associated with those leases. And we'll just sort of see where things go in the future. But our focus is on this project. Did we get all the pieces and parts you had in there, Shah? Or is there anything we missed?

No, that was fantastic. I'll actually leave it I'll leave it at that with my 20 part question. I appreciate it guys.

Thanks. Question from Nicholas Cappanella of Barclays.

Hey, thanks for taking my questions. Good morning.

Good morning. So I just the updated gigawatts on the data center side is just a really large number. And I'm just kind of curious just want to first confirm, this is incremental to what PJM has kind of put out here in the beginning of the year? And then secondly, just how do you kind of think about the timeline to kind of wrap some of that into the plan in the current decade? And is there like a sensitivity we should be thinking about for every gigawatt of new data center hookup? Is there an amount of CapEx whether transmission or generation that would be required for that? Thanks. [indiscernible] sort of is that in PJM, no, those gigawatts that are in the substation engineering phase. Those are not in the PJM forecast. There is no sort of rule of thumb on any particular amount of gigawatts and sort of the the capital plan and so forth. I think it's just important for everyone to Virginia, in Northern Virginia and in Loudoun County continues to be very significant. You see that in the numbers there. Just to give you a sense, I know there are some folks who may have some misunderstanding about Loudon in particular.

About how much more capacity the transmission projects that were working on, including the two five hundred kV lines that we mentioned in our prepared remarks, that's an additional six gigawatts of capacity in Eastern Loudoun alone.

So there's room in Eastern Loudoun on the system. And the data centers continue to expand as well sort of outward from Loudoun County, particularly into neighboring counties coming down Interstate 95. There's also data center expansion happening in the Richmond Metro Area, pretty substantially. So that demand just keeps coming. We're very focused on making sure we can serve it And we want to do that in a way that's consistent with our mission of reliable, affordable, we clean energy?

Hey, I appreciate that. And then Just kind of expanding on your comments from Millstone and the prospects for any type of incremental large customer for that remaining non fixed portion. Just there seems to be a lot of focus on additionality if it comes with colocation in any form. And just maybe you can kind of comment on that's something that you think you would need to move forward with a contract opportunity there or the next kind of catalyst we should be kind of watching for know that this is potentially going in the right direction. Thanks.

We can't give you a catalyst for what you should be looking for as we we've said, there is not a timeline on this. From the potential large user customers we've talked to, additionality is not [indiscernible] They certainly talk about it, but they don't that's not a gating item. So we're going to keep talking to potential data center co locator customers. To the states of Massachusetts and Connecticut, others in New England. And we're going to continue to stick with what we said pretty clearly is we need to make sure we're taking into account the interests of stakeholders in Connecticut as we think about this very valuable asset.

Great. Thanks a lot.

From Jeremy Tonet of JPMorgan.

Hi, good morning.

Hey, Jeremy. Hey, I just want to dive into the Virginia data center opportunity a little bit more, and quite the step up as you outlined there. Just wondering if you could touch a bit more on reactions from stakeholders and really just thinking about this load driving incremental build pressure and thoughts about I guess bill headroom in general here? Yes. Great question, Jeremy.

Policymakers in Virginia are very focused on data center build out because they see the economic benefit of it. And you can see it in localities where there already is a substantial amount of data center load, tax bills, property tax bills and say Loudoun County are substantially than they would have to be without the tax revenue that's coming in from data centers. And so part of the economy and making Virginia a tech hub is really important to stakeholders in Virginia particularly to Governor Youngkin, he talks about that quite a bit. So there is an interest in continuing to see data center expansion. As there are more megawatt hours sold to data centers, then that spreads the total costs out over a larger group of customers and can actually help with customer bill headroom. And I know there's often a discussion about sort of our data centers paying their fair share or is other customer classes subsidizing data centers? These kinds of debates about one customer class subsidizing another customer class have been going on since the beginning of utility regulation. There are ways always to address that in Virginia, particularly with biennial reviews. So, I suspect that in the biennial that we'll file in March, that this issue will be considered by the commission.

And I'm confident that they'll make a decision that in data center growth in Virginia. In a way that is that works for all customers of Virginia. This is just good for the economy of Virginia. And it's important to keep it going.

Got it. That's helpful there. And want to continue with the biannual, if we could. Just wondering on overall engagement, with stakeholders there and besides affordability as you outlined there, any key issues hash out here? And just trying to think about how we should be thinking about Virginia regulatory sausage making at this point? Going to focus on just filing a pretty straightforward rate case in Virginia. As I expect many people know, in the last biennial, there was sort of prescribed ROE that is not the case in this one. We've got a couple of new judges on the SEC. Relatively new, they've a little less than a year they've been on the on the bench.

But when we think about our positioning in a rate case, we start with Our reliability and our affordability they're both incredibly strong in Virginia. We are well recognized among stakeholders as being a very reliable provider of electricity. And our rates, as we mentioned in our prepared remarks, continue to be below regional and national averages. So we're in a strong position The sort of general environment going into the case, I think, is very constructive. And we'll have a result by the November. But I would not there's nothing particularly exotic in this upcoming biennial. Got it. Makes sense. Thank you for that.

We'll take our next question from David Arcaro of Morgan Stanley.

Good morning, David.

Let me see. I had a question on the offshore wind side of things. With the earlier this year, the executive order around offshore wind and the Secretary of the Interior reviewing existing projects. I was just wondering your interpretation and viewpoints on what that could mean for existing [indiscernible] Yes, we don't think there's going to be impact to CVAL from these executive order. If you think about it, it's got all the permits it needs, including all of its federal permits. It's consistent with some very important energy objectives that the administration has our articulated. An important part of an all of the above strategy to deliver more power to a growing economy in Virginia. It's certainly the fastest and most economical way to deliver 2.6 gigawatts to the grid stopping it be the most inflationary action that could be taken with respect to energy in Virginia. It's homegrown. It helps promote American energy dominance. It needed to power that growing data center market we've been talking about. Critical to continuing U. S. Superiority in AI and technology. It's creating American Jobs 2,000 at last count. It's specifically authorized by Virginia law.

It has robust bipartisan support of leaders in Virginia sense and are already in law will continue and CVOW definitely fits that bill.

Okay, excellent. I appreciate that commentary. Then I was also curious on the on the data center side of things, just to dig in a little bit bit more. Obviously, your pipeline has grown a huge amount over the last six months. And then when we look at the PJM forecast for the 02/1934 forecast, they've only gone up a little bit. Do those numbers have to rise from here or are there constraints in actually connecting all of these data centers? Or something else that's making you think that not all of these are actually going to crystallize and come to your system?

Well, I think if you look at what we're planning for, what we've got capital for, We're highly confident that the data centers are going to show up in our system.

Mean, if you think about it, we've been serving data center customers longer than anybody else.

We understand better than other companies, I believe, the way they build, the way they ramp up. And we understand extremely well sort of a confidence level in their arrival. So So the new batch system may have had some effect on the number of customers who have sort of jumped into that substation engineering letters of authorization group, but bottom line is there is a lot of growth coming in data centers in Virginia. We're building the infrastructure in order to serve them. David, I'd just add. Okay, great.

Back on Slide 17 where you see that PGM forecast 02/1934, summer peak of 41.5. We would suggest that increase we've seen in our Q is not fully reflected in in that PJM update. It's a little bit backward looking.

And to Bob's point and to your question, will all of the amount that we're seeing in that first phase ultimately convert. We don't know for sure. Many of them do in the past. And as we've moved further from down the column, we've seen increasing conversion rates to 100% from the second to the third bucket. So again, I think it's a sign, a bullish sign. Will all of it ultimately convert? We don't know. We think a lot of it will. And that to us is a bullish sign of the ability to continue to invest across the value chain in support of those customers in a low risk regulated environment.

Got it. Okay, great.

Thanks very much. Thank you. We'll move next to Anthony Crudell of Mizuho.

Hey, good morning. Just super quick one question following David's. When I look at the column on Page 18, is there just a rule of thumb of how long it takes a project to transition from one category to next as it works itself [indiscernible] Well, we gave some updated guidance to our customers. As you recall, we've talked about, which was moving from a serial to more of a a cluster or a batch approach. And when we did that, we gave indications that from the time you sort of started the process to the potential time where you're signing the the ESA and taking delivery of power that that period would be extended by somewhere between twelve and thirty six months, puts us at speed to market of between four to seven years. 26 gigawatts, that's all in very different phases and probably timelines. Don't have specific guidance for you as to how to translate the 26 into the CLOA box or the ESA box but again, from sort of the very beginning of the process typically to the very end of the process, [indiscernible] pressure that? It's all going to sort of depend on where the specific project wants to be cited and where we have existing delivery points.

So not real don't have real specific guidance for anything, I apologize. But it's all pretty bespoke depending on where the need is. No, that's perfect. And thanks so much for the update. I appreciate it. Thank you. You bet. Thanks. Our next question is from David Paz Morning, David. Just Yes, thanks for the time. Just quickly on your assumption for earned returns.

In your outlook, are you projecting any lag over the period? Maybe how much of [indiscernible] if you can break it down by Virginia and Carolina, that'd be great. Yes. David, we haven't given that sort of specific level of guidance. As we go into periodic rate cases and we engage with stakeholders, But I think what we've said in the past has been that at DEV in particular, where we've got a fairly significant amount of the investment in in riders, which generally earn at their allowed. We see pretty good ability to achieve allowed returns in 2023, our annual information filing, if you adjust for a handful of items, whether some amortization of fossil retirements that we needed to take. We were We were hitting on the base side of the business at pretty close to our allowed and expect that sort of continue. And then in South Carolina, I think what we've indicated in testimony is that under the existing rate case process that by the time new rates go into effect, given its backward looking nature, we could be anywhere between eighty, ninety basis basis points is under earning immediately when rates go into into effect.

And we've quantified, I think, 100 basis points to 200 basis points on average of under earning during a rate case cycle. And as Bob mentioned in his prepared remarks, we've made that a point of focus. And in our discussions with stakeholders in South Carolina and our excitement about supporting the needs of the growth needs for growth in the state also a discussion about the ability for us to earn a return that's closer to to our allowed. So obviously, there's work being done on that now. We have tried to be appropriately conservative in our assumptions in the plan as it relates to both where the alloweds are set as well as where the earneds are set. We certainly have assumed that we have the ability to do than what we've done in the past through some mechanism, whether it's legislation or potential for more frequent rate cases in South Carolina. But I'd rather not get into sort of specific assumption we've made. I think we've tried to be reasonable reasonably conservative, but appropriately so.

Okay.

Now that makes sense. And just maybe quickly the four plus billion of new CapEx, does any of that include any incremental spend on your interest in summer 02/2003?

No, no, it doesn't. We've indicated that we're not participating nor interested in that project. And I think you meant I think you're referring to $7,000,000,000 total capital increase, but yes, none of that's related to [indiscernible] Okay.

Thank you. This concludes our question and answer session. So I'll turn it back to Bob Blue for closing remarks.

Thanks everyone for taking the time to join the call today. Enjoy the rest of your day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.