Welcome to the Dominion Energy First Quarter Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to David McFarland, Vice President, Investor Relations.

Good morning and thank you for joining today's call. Earnings materials, including today's prepared remarks contain forward-looking statements and estimates that are subject to various risks and uncertainties. Please refer to our SEC filings, including our most recent annual reports on Form 10-K and our quarterly reports on Form 10-Q for a discussion of factors that may cause results to differ from management's estimates and expectations. This morning, we will discuss some measures of our company's performance that differ from those recognized by GAAP. Reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measures which we can calculate are contained in the earnings release kit. 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, Senior Vice President, Chief Financial Officer; and Diane Leopold, Executive Vice President and Chief Operating Officer. I will now turn the call over to Bob.

Thank you, David. Good morning, everyone. During the first quarter, we delivered financial results consistent with our guidance range and made meaningful progress on regulated investment programs that decarbonize and add resiliency to our systems. We'll cover those topics in more detail but let me begin with safety performance and then address the status of the business review. Our employee OSHA injury recordable rate for the first quarter was 0.21, a significant improvement relative to historical performance, including record-setting results in 2020 and 2021. We have several months left in 2023 to demonstrate our ability to drive injuries toward the only acceptable outcome which is 0. I thank my colleagues for this remarkably strong start to the year. Now, I'd like to address the business review. Our guiding commitments and priorities are unchanged and replicated identically on Slide 3. We continue to receive valuable feedback from investors which has affirmed our focus on these principles. We'll continue to be deliberate and making ourselves available for input from the company's current and prospective capital providers. The review timeline shown on Slide 4 is also unchanged. We plan to host an Investor Day in the third quarter during which we'll provide an updated strategic and financial outlook based on the results of the business review which is still underway. We're working expeditiously but conscientiously in recognition of the vital importance of achieving an optimal result. I'm pleased with the progress we're making towards delivering a compelling repositioning of our company to create maximum long-term value for shareholders, employees, customers and other stakeholders. We have great people and great assets and I'm as excited as ever for the future of our company. Turning now to several noteworthy developments in Virginia, our largest service area. In November, I discussed the need to ensure that…

Thank you, Bob and good morning. Our first quarter 2023 operating earnings, as shown on Slide 8 were $0.99 per share which included $0.10 of hurt from worse than normal weather in our utility service areas. I'll note that this was one of the warmest first quarters on record for our electric utility service areas. Positive factors as compared to last year were normal course regulated growth, higher sales and higher Millstone margins. Other factors in addition to weather include higher interest expense, lower DEV margins for certain utility customer contracts with market-based rates, the absence of solar investment tax credits and O&M timing. Normalized for the negative impact of weather, our results would have been $1.09 per share, above the midpoint of our weather normal guidance range by $0.04 as a result of a combination of several small drivers including Millstone margins, depreciation and taxes. First quarter GAAP results reflect a net income of $1.17 per share which includes the positive noncash mark-to-market impact of economic hedging activities and unrealized gains in the value of our nuclear decommissioning trust funds. A summary of all adjustments between operating and reported results is included in Schedule 2 of the earnings release kit. Moving now to guidance on Slide 9. Given the pending business review, we are not providing full year 2023 earnings guidance. For the second quarter of 2023, we expect operating earnings to be between $0.58 and $0.68 per share. Last year's second quarter operating earnings were $0.77 and included $0.01 hurt from worse than normal weather. The second quarter 2023 guidance midpoint of $0.63 per share represents a decline of $0.14 as compared to last year but is in line with our expectations since the beginning of the year. Let me spend a minute on the key drivers for…

Thanks, Steven. I'll now turn to other business updates on the execution of our growth program. Turning to offshore wind on Slide 11. The project remains on track and on budget. We continue to work closely with the Bureau of Ocean Energy Management and other stakeholders to support the project's time line. The draft EIS received late last year was thorough and contained no surprises. Public hearings have already taken place and we continue to work collaboratively with BOEM and all of the cooperating agencies. We expect the EIS record of decision later this year. We've advanced engineering and design work which has allowed us to release major equipment for fabrication and we made progress on procurement and other preconstruction activities for the onshore scope of work. Consistent with prior guidance, project costs, excluding contingency, are about 90% fixed, further derisking the project in its budget. Project to date, we've invested approximately $1.5 billion which we expect to grow to $3.3 billion by year-end. In our most recent regulatory filing, we updated our expected LCOE to the low end of the $80 to $90 per megawatt range to account for PTC value based on the Inflation Reduction Act. In March, legislation was enacted that authorizes DEV to establish an offshore wind affiliate subject to commission approval. And for the purpose of securing a non-controlling equity financing partner in our offshore wind project. We intend to evaluate this option as part of the business review. Our Jones Act-compliant turbine installation vessel is currently 70% complete. No change to our expectation of the completion well in advance of the need to support the current Coastal Virginia offshore wind construction schedule and timely completion by the end of 2026. On data centers, we're advancing a series of infrastructure upgrade projects that will enable…

[Operator Instructions] We'll take our first question from Shar Pourreza with Guggenheim Partners.

Maybe just, Bob, if we could start with a kind of a sequencing question regarding the Investor Day as it kind of draws closer. Should we be expecting kind of a turnkey Investor Day reset? Or could it still be contingent on potential ongoing sale processes? And the origin of the question is that the wind stake sales seems to be taking a while right now. You have that option now. So just trying to get a feel for what level of closure you're targeting for the rollout.

Yes, Shar, we're targeting, as we have said from the beginning being able to give a very good sense of the long term for our company. So no change from what we expected when we started or when we most recently updated.

Got it. Perfect. And then Steven, you mentioned in the prepared that you continue to look at cost efficiencies, albeit within the context of all the work you've done to date. I guess how should we think about the opportunities here? Any color on scale or timing as we look ahead to the review and beyond?

Yes. Thanks, Shar. I think on the third quarter call of 2022, when we announced the business review, we did make some commentary on our focus on continuing our track record of being a very efficient operator. And I think what we said at that time which I think was well put by Jim Chapman was that while we believe there's opportunity and we're constantly focused on looking at that. We don't view it in the -- through a lens of a game changer amount of incremental savings to what we've consistently accomplished. So as we're working through the business review, we continue to expect to find incremental efficiencies but we've been driving a lot of those efficiencies -- inefficiencies out of the business for a number of years as reflected in our O&M efficiency metrics and our rates. .

Perfect. I think just one last one, I guess, just on the SEC. I guess what are your kind of expectations for lawmakers, I guess, to fill the 2 vacant seats at this point? It sounds like there's been little progress in Richmond. I guess what are the pathways forward here?

Yes, Shar. I think it's important to start off by noting that the commission is functioning effectively as evidenced by orders just within the last few weeks that I mentioned in our opening remarks on our Clean Energy III filing, 800 megawatts of solar and storage. And on the transmission line, that's important for us to be able to serve data center customers in Northern Virginia. So the commission is functioning well in its current configuration. I can tell you that the process and the constitution of Virginia is that when there are vacancies, the general assembly can elect judges to fill commissioners to fill those vacancies. If they're not in session, the governor could make an appointment for a term that would last until 30 days after the start of the next regular session. So that's the process. But I think it's important if you sort of step back and think about the regulatory construct in Virginia. If you look just at where we sit in Virginia, we've got low rates. We've got strong reliability. We've got a clear mandate from policymakers for energy security within an energy transition and as our IRP indicates, we've got very strong load growth. So we're sitting in a very good spot moving forward in the Virginia regulatory process. So the commission is functioning now. There is a process for adding 2 new commissioners. But sort of in the big picture, we're very well positioned in Virginia for strong regulatory outcomes in the future.

And we'll take our next question from Steve Fleishman with Wolfe Research.

So just on the framing of the Investor Day, the -- a lot of the balance sheet fix at least seems like it could come from asset sales and the like and markets kind of keep moving around and the like. So just as we go to the Investor Day, should we assume that asset sales, if you're going to do any are actually kind of announced by then or that this process would kind of kick off by then.

Steve, this is Steve. I'll take a shot at that as well. I think as we think about the Investor Day, the goal is to have isolated as many variables of the review as possible at the time that we address the market with the repositioning of the company for the long term. And obviously, given the business review is underway, it's a little bit difficult to provide sort of more specific guidance than that. But we are well down the path on the review. As Bob mentioned, we're pleased with the progress that we're making and we look to use the Investor Day to provide a refreshed strategic and financial outlook that will cover earnings and credit and financing and capital investment. And I think based on the progress we've seen to date, we will be well positioned to do that.

Okay, makes sense. And just on the performance provision and the ROE in Virginia, can you just talk to kind of is there any clear barometer for how they're supposed to judge performance upside or downside?

I think there'll need to be some work done within the commission on how that will work. It's -- there was a similar provision in the law really starting back in 2007. And -- so we see it as an opportunity to demonstrate our excellent performance when we're in front of the commission. But I think it's a little early to establish exactly how that will play out.

Okay. And then lastly, just on the data centers. The -- is there any better clarity on who's really supposed to be servicing this data center load and planning for it? Like is that your obligation as part of PJM and the commission or because they have choice, is it not? Could you just give us some sense on how to think about that aspect of the low growth?

We have an obligation to serve customers in Virginia. It's our obligation and we build generation, transmission and distribution as necessary to serve that load. So that's the way that it has worked. That's the way it's going to keep working in the future. So we've got investments to make as you see from the IRP.

Yes. I mean even the ones that maybe if they do have on-site generation, they're typically connecting to you as well and using Dominion at least for wires and backdrop and the like. Is that correct?

Absolutely. Yes, these are large loads, 24/7, they need the grid.

And we'll take our next question from Jeremy Tonet with JPMorgan.

Just wanted to touch on the IRP scenarios a bit and just see what factors are, I guess, in play between the different scenarios. Just wondering if you would note any notable highlights on resource mix considerations across these scenarios and how that would impact be?

Sure. Jeremy, as you know, we laid out in the plan 5 different scenarios. Some of them required by the commission from decisions in earlier proceedings. We have plans that as they should comply with the Virginia Clean Economy Act. Others, as I noted, required by the commission that don't necessarily comply with the Clean Economy Act but the commission asked for those scenarios as well. Across all of them, what we look for is the appropriate balance between investing to serve our customers reliably and the cost of that service. And compliance with all the rules and regulations that govern us, including the Clean Economy Act. This is -- the IRP is a snapshot in time. It's what -- when we look out 15 and with certain parameters, 25 years, what we think our demand will be as projected by PJM and then the investments that we need to make in order to serve that load. This changes, as you know, over time, when we have further proceedings, it will be adjusted, I'm sure. But we, as of the time of this filing, thinks that -- believe that this document lays out a pretty clear road map for different ways that we'd be able to serve what is very robust demand growth coming over the course of the next 1.5 decade or more.

Got it. That's very helpful. And small point I just wanted to pivot for Millstone. Just wondering if there's any updated thoughts that you could provide there given, I guess, changes in the market?

Yes. As we've said in prior calls, Jeremy, we think Millstone is an incredibly valuable asset to New England, both for reliability and decarbonization purposes. Our team operates that plant extraordinarily well. And as we think about the future of Millstone, we just see that it's very well positioned.

Thank you. This does conclude this morning's conference call. You may disconnect your lines and enjoy your day.