Farming the Wind Annual Meeting of Shareholders. Thomas F. Farrell, II Chairman, President & CEO Dominion Energy, Inc.

Transcription

1 Farming the Wind 2018 Annual Meeting of Shareholders Thomas F. Farrell, II Chairman, President & CEO Dominion Energy, Inc. 1 May 9, 2018 Greater Richmond Convention Center Richmond, Virginia May 9, 2018

2 Important Note to Investors This presentation contains certain forward-looking statements, including forecasted operating earnings for full-year 2018, which are subject to various risks and uncertainties. Factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations may include factors that are beyond the company's ability to control or estimate precisely, including fluctuations in energy-related commodity prices, estimates of future market conditions, additional competition in our industries, changes in the demand for Dominion Energy s services, access to and costs of capital, fluctuations in the value of our pension assets and assets held in our decommissioning trusts, impacts of acquisitions, divestitures, transfers of assets to joint ventures or Dominion Energy Midstream and retirements of assets based on asset portfolio reviews, the expected timing and likelihood of completion of the proposed acquisition of SCANA Corporation, including the ability to obtain the requisite approvals of SCANA s shareholders and timing, receipt and terms and conditions of required regulatory approvals, the receipt of regulatory approvals for, and timing of other planned projects, acquisitions and divestitures, the timing and execution of Dominion Energy Midstream s growth strategy, and the ability to complete planned construction or expansion projects at all or within the terms and timeframes initially anticipated. Other factors include, but are not limited to, weather conditions and other events, including the effects of hurricanes, high winds, severe storms, earthquakes, flooding and changes in water temperatures on operations, the risk associated with the operation of nuclear facilities, unplanned outages at facilities in which Dominion Energy has an ownership interest, the impact of operational hazards and catastrophic events, state and federal legislative and regulatory developments, including changes in federal and state tax laws and changes to environmental and other laws and regulations, including those related to climate change, greenhouse gases and other emissions to which we are subject, changes in enforcement practices of regulators relating environmental standards and litigation exposure for remedial activities, political and economic conditions, industrial, commercial and residential growth or decline in Dominion Energy s service area, risks of operating businesses in regulated industries that are subject to changing regulatory structures, changes to regulated gas and electric rates collected by Dominion Energy, changes to rating agency requirements and ratings, changing financial accounting standards, fluctuations in interest rates, employee workforce factors, including collective bargaining, counter-party credit and performance risks, adverse outcomes in litigation matters or regulatory proceedings, the risk of hostile cyber intrusions and other uncertainties. Other risk factors are detailed from time to time in Dominion Energy s most recent quarterly report on Form 10-Q or annual report on Form 10-K filed with the Securities and Exchange Commission. Projections or forecasts shown in this presentation are based on the assumptions listed in this presentation and are subject to change at any time. Dominion Energy undertakes no obligation to update any forward-looking information statement to reflect developments after the statement is made. In addition, certain information presented in this document incorporates planned capital expenditures reviewed and endorsed by Dominion Energy s Board of Directors in late Dominion Energy undertakes no obligation to update such planned expenditures to reflect plan or project-specific developments, including regulatory developments, or other updates until the following annual update for the plans. Actual capital expenditures may be subject to regulatory and/or Board of Directors approval and may vary from these estimates. 2

3 Farming the Wind Dominion Energy At a Glance Four Core Values Growth Projects Growth Programs Today s Topics Commitment to Our Communities Summary 3 May 9, 2018

4 Farming the Wind 8:05 a.m. Dominion Energy At a Glance 4 May 9, 2018

5 Dominion Energy Profile 2017 Operating Revenue: $12.6 billion 2017 Operating Earnings: $2.3 billion * Total Assets (year-end 2017): $76.6 billion 2017 Total Return: 9.9 percent Employees (year-end 2017): 16,200 Market Capitalization (year-end 2017): $52.2 billion 5 * Based on non-gaap Financial Measures. Corresponding full-year 2017 reported (GAAP) earnings were $3.0 billion. See GAAP Reconciliation on Dominion Energy s website at dominionenergy.com/investors.

6 Dominion Energy Footprint 6 Please refer to the Important Note to Investors on slide 2 of this presentation.

7 Proposed SCANA Merger 7 Strategic combination Expands presence in growing Southeast Comprehensive regulatory, legislative solution to V.C. Summer abandonment Details shares of Dominion Energy stock per share of SCANA stock More than $12 billion in customer benefits Increases community spending in SCANA footprint Retains jobs through end of 2019 Approvals State commissions (N.C., S.C.); Ga. already approved Federal (FERC, NRC) Please refer to the Important Note to Investors on slide 2 of this presentation.

8 Dominion Energy Footprint With SCANA 8 Please refer to the Important Note to Investors on slide 2 of this presentation.

9 Farming the Wind Dominion Energy At a Glance Four Core Values Growth Projects Growth Programs Today s Topics Commitment to Our Communities Summary 9 May 9, 2018

10 7:50 p.m. Farming the Wind Four Core Values 10 May 9, 2018

11 Four Core Values 11

12 Number of Recordables per 100 Employees Each Work Year OSHA Recordable Incidence Rates YTD 12 Recast to include certain incidents of hearing loss. Injuries at Dominion Energy West are included in figures.

13 New Sustainability Report Four topic areas Serving customers, communities Environmental stewardship Our culture Our business for the future 13

14 Electric Capacity, by Fuel (2006, 2017) 1.5% 6.3% Coal 7.9% 3.3% 7.8% 29.8% Nuclear 7.0% 17.0% 11.8% Natural Gas Oil 8.4% 20.7% NUGs 21.0% 21.7% Renewable Bath County 36.9%

15 Electric Production, by Fuel (2006, 2017) 0.4% 2.1% 4.0% 2.0% 0.7% 17.1% Coal Nuclear 0.4% 10.4% 13.2% 5.7% 38.7% Natural Gas Oil NUGs/Purchased Power Renewable 32.2% 37.8% 35.5% Bath County

16 Percent Reduction (lbs/mwh) NOx, SO2 & Mercury Reductions 0% -20% -40% -60% -99% -80% -92% -98% SO₂ NOx Hg -100%

17 lbs. per MWh CO2 Intensity Reductions ( ) 1,400 1,300 1,200 1,100 1, ,294 43%

18 lbs. per MWh CO2 Intensity Reductions ( ) 1,400 1,300 1,200 1,100 1, ,294 12% reduction from 2016 to %

19 lbs. per MWh CO2 Intensity (Top 100 Power Producers) 2,500 U.S. Power Sector Average Dominion Energy 2, Data 1,500 1, Source: Benchmarking Air Emissions, NRDC, PSEG & CERES, March 2002.

20 lbs. per MWh CO2 Intensity (Top 100 Power Producers) 2,500 2,000 1,500 U.S. Power Sector Average Dominion Energy 2015 Data 1, Source: Benchmarking Air Emissions, M.J. Bradley & Associates, June 2017.

21 lbs. per MWh CO2 Intensity (Top 100 Power Producers) 2, ,000 1,500 1,000 U.S. Power Sector Average -23% Dominion Energy -43% Source: Benchmarking Air Emissions, NRDC, PSEG & CERES; and M.J. Bradley & Associates, March 2002 and June 2017.

22 Methane Reductions More transparency companywide methane reports Voluntary programs LAUFG EPA Natural Gas Star EPA Methane Challenge Further reductions; established Methane Million Replace pneumatic pumps with electric pumps Reduce releases during blowdowns Install instrument air systems Reduce releases during compressor station maintenance 22

23 Billion Cubic Feet Methane Reductions "Lost" Gas Program EPA Star EPA Challenge Methane Million - (2) (4) (6) (8) (10) (12) ~19 billion cubic feet of cumulative savings in 2022 = (14) (16) (18) 370,000 CARS (20) (22) Projected Estimate 23 Please refer to the Important Note to Investors on slide 2 of this presentation.

24 Mutual Aid More than 800 Dominion Energy employees, contractors volunteered for duty in Florida, Puerto Rico Two of largest power restoration efforts in U.S. history after Hurricanes Irma, Maria Demonstrates company ethos for public service, lending helping hand to those in need 24

25 Excellence Dominion Energy Virginia s best year in customer-commitment metrics Average speed of answer: 42 seconds to 27 seconds Dominion Energy Virginia average minutes out (117 minutes) improved 15 percent over 2016 Dominion Energy Transmission s largest storage turn ever in 2017 Nuclear fleet had record low unplanned outage days 5.4 in

26 Nuclear Fleet Capacity Factor 100.0% 98.0% 96.0% 94.0% 92.0% 90.0% 88.0% 86.0% 84.0% 82.0% 80.0% Industry Dominion Energy 95.1% 92.2% 88.9% 85.2% Sources for Industry figures: Nuclear Energy Institute for , and the Energy Information Administration for 2017.

27 March 2018 Wind Storm Fifth-worst storm in company history 690,000 customers lost service 3,900 personnel involved in restoration effort No safety incidents No environmental incidents 27

28 Total Shareholder Return 200% 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% 9.9% Dominion Energy UTY S&P 500 S&P Utility Dow Jones Industrials 87.9% 155.1% 1-Year 5-Year 10-Year 28 Source: Bloomberg. All figures are as of Dec. 31, 2017.

29 Operating Earnings Per Share $5.00 $4.50 $4.00 $3.50 $3.00 $3.03 $3.09 $3.25 $3.43 $3.44 $3.80 $3.60 $3.80-$4.25 $2.50 $ * Based on non-gaap Financial Measures. See GAAP Reconciliation on Dominion Energy s website at dominionenergy.com/investors. Corresponding full-year earnings under GAAP are $2.45 for 2011, $0.53 for 2012, $2.93 for 2013, $2.24 for 2014, $3.20 for 2015, $3.44 per share in 2016, and $4.73 in Please refer to the Important Note to Investors on slide 2 of this presentation.

30 Dividends Per Share $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $3.34* $3.035 $2.80 $2.59 $2.40 $2.25 $2.11 $ *Subject to quarterly determination and declaration by the Board of Directors. Please refer to the Important Note to Investors on slide 2 of this presentation.

31 Innovation Infusing innovation into culture Inspiration Ideation Insights Interconnections Intention Allows company to transform ideas into value Serves as sustaining force against rapid, external change 31

32 Teamwork Builds Stronger Company Fortune s Most Admired companies (No. 2 in sector) Forbes America s Best Employers (No. 79) Women s Choice Award Winner Recognized by The Women s Forum of New York for increasing numbers of women at company at all levels Military Times Best for Vets (No. 33) GI Jobs Military-Friendly Employers (No. 6 overall; No. 1 utility) GI Jobs Military Spouse-Friendly (No. 7 overall; No. 1 utility) 32

33 Farming the Wind Dominion Energy At a Glance Four Core Values Growth Projects Growth Programs Today s Topics Commitment to Our Communities Summary 33 May 9, 2018

34 Farming the Wind Growth Projects 34 May 9, :05 p.m.

35 Cove Point Liquefaction $4.1 billion project entered service earlier this year Improves America s balance of trade Supports cleaner air in Japan, India State-of-art environmental controls on site 100 percent air cooling; zero liquid discharge $40 million in additional revenue to Calvert County, Md. $50 million donation to Md. energy assistance programs 35

36 Cove Point First Customer Shipment 36

37 Greensville Power Station $1.3 billion project 84 percent complete Expected online by year-end Third large gas plant since 2014 Highly efficient Low carbon intensity Va. s most stringent air permit Fuel savings of $2 billion during life of power station 37 Please refer to the Important Note to Investors on slide 2 of this presentation.

38 Atlantic Coast Pipeline Combined with Supply Header, more than $6.5 billion investment Supply Header receipt points 38 Significant progress made Design, engineering essentially complete Executed construction contracts Tree-felling in first-quarter 2018 Commenced full construction on compressor stations (Pa., W.Va., N.C.) Most key permits received Expected in-service: second half of 2019 Please refer to the Important Note to Investors on slide 2 of this presentation.

39 Farming the Wind Dominion Energy At a Glance Four Core Values Growth Projects Growth Programs Today s Topics Commitment to Our Communities Summary 39 May 9, 2018

40 Farming the Wind 12:50 p.m. Growth Programs 40 May 9, 2018

41 Programmatic Growth Power Delivery Grid modernization Strategic undergrounding High-voltage line replacements Power Generation Nuclear relicensing Solar & backup gas-fired capacity Offshore wind Pumped storage 41 Please refer to the Important Note to Investors on slide 2 of this presentation.

42 Programmatic Growth Gas Infrastructure Pipeline replacements Pipeline expansion projects DETI modernization 42 Please refer to the Important Note to Investors on slide 2 of this presentation.

43 Power Delivery Grid modernization $300-$350 million per year in investment Increase renewable integration Enhance reliability, customer experience Focus on preventing outages, restores power more quickly when outages occur Smart meters Intelligent grid devices Grid resiliency Customer information platform $870 million for energy efficiency programs over 10 years $6 million annual contribution for weatherization programs 43 Please refer to the Important Note to Investors on slide 2 of this presentation.

44 Power Delivery Strategic undergrounding ~$150 million per year through 2020 $175 million per year Decade-long program Bury 4,000 miles most vulnerable lines Transmission upgrades $800 million annually Replace 2,000 miles of high-voltage transmission lines Physical security Undergrounding pilots 44 Please refer to the Important Note to Investors on slide 2 of this presentation.

45 Power Generation Nuclear relicensing Seeking additional 20 years of operation for Surry, North Anna Helps keep carbon emissions low in Virginia Identifying equipment, hardware needs Safety of employees, public paramount concern Up to $4 billion in investment over coming decade Pumped storage Potential sites in Southwest Virginia Works like battery, used when needed after storage Maintains grid reliability Up to $2 billion in investment 45 Please refer to the Important Note to Investors on slide 2 of this presentation.

46 Power Generation Solar Brought online 1,230 megawatts of company-owned solar since megawatts brought online in Virginia in 2017 ranks Dominion Energy Virginia among top 10 utilities in nation Could build as many as 5,000 additional megawatts over next decade Complementary gas generation for reliability Offshore wind 12-megawatt demonstration project with Ørsted $300 million More than 20 miles off coast of Virginia Beach As many as 2,000 megawatts available for development 46 Please refer to the Important Note to Investors on slide 2 of this presentation.

47 Gas Infrastructure Pipeline replacement programs Ohio, West Virginia, Utah $325-$350 million annually to replace ~7,000 miles Increases safety, reduces methane emissions Pipeline expansions Identified nearly 1 billion cubic feet per day of new capacity needs $775 million in investment Additional projects to come from increasing commodity costs, shutdowns of costlier, less-efficient, higher-emitting power stations 47 Please refer to the Important Note to Investors on slide 2 of this presentation.

48 Gas Infrastructure Dominion Energy Transmission modernization $250 million per year Investments in pipeline, storage, system infrastructure Provides: Reliability Safety Regulatory compliance Service enhancements 48 Please refer to the Important Note to Investors on slide 2 of this presentation.

49 Growth Plan in Summary Shift from big projects to big programs $3.5 billion per year in growth capital through 2020 Expands to $3.7-$4.2 billion per year beginning in 2021 Focused on clean energy, dependability of delivery systems Supports 6-8 percent CAGR ; 5+ percent 2021 & beyond Goal: Sustainable growth over long-term 49 Please refer to the Important Note to Investors on slide 2 of this presentation.

50 Farming the Wind Dominion Energy At a Glance Four Core Values Growth Projects Growth Programs Today s Topics Commitment to Our Communities Summary 50 May 9, 2018

51 Farming the Wind Commitment To Our Communities 11:30 a.m.

52 Aiding Our Communities Nearly $30 million in giving in 2017 $17 million from Dominion Energy Charitable Foundation Includes $2.4 million in employee matching gifts $3 million in direct giving About $9 million to energy assistance programs Volunteer program almost 125,000 hours in 2017 Project Plant It! Community Impact Awards Watershed Mini Grants program 52

53 Giving Back in Virginia 53 $14.9 million contributed to Virginia organizations in 2017 $1 million in environmental/ conservation contributions $4.7 million in EnergyShare funding by company Strong Men & Women in Virginia History Dominion Energy Charity Classic Dominion Energy ArtStars

54 Farming the Wind Dominion Energy At a Glance Four Core Values Growth Projects Growth Programs Today s Topics Commitment to Our Communities Summary 54 May 9, 2018

55 Farming the Wind Safe 6:28 a.m. Reliable Efficient Summary Responsible Community-, customer-focused 55 May 9, 2018

56 Farming the Wind 56 May 9, 2018