- Dominion Energy boosted its 20252029 capex plan to about $50.1B to meet surging electricity demand, especially from data centers in Virginia and South Carolina.
- Q1 2025 revenue rose about 12% year over year, with full-year operating EPS guided at $3.283.52 and long-term EPS growth targeted at 57% through 2029.
- The stock screens somewhat expensive versus peers and valuation models, with a forward P/E near 16.8 and fair value implied in the mid-50s versus roughly $59.
- Key risks are regulatory rate-setting and cost recovery, particularly for large projects like the CVOW offshore wind build amid rising interconnection, inflation, and execution costs.
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As of early 2025, Dominion Energy is clearly doubling down on its regulated utility and clean energy portfolio, spurred by surging demand from data centers, rising electrification (heating, transportation), and favorable regulatory environments. The company’s decision to lift its five-year capex plan to $50.1 billion reflects not only ambitions in infrastructure, offshore wind (e.g. Coastal Virginia Offshore Wind, CVOW), and grid modernization, but also confidence in being able to recover those investments through regulatory mechanisms and rate adjustments. This positions Dominion favorably to capture structural demand growth.
Financially, the company has delivered solid near-term performance. In Q1 2025, revenues jumped ~12%, operating earnings beat expectations, and Virginia and South Carolina segments showed strong growth in spatially important demand zones., Dominion has also reaffirmed full-year guidance, and projected EPS growth of 5-7% through 2029. However, this growth is being underpinned by heavy investment, leverage, and exposure to regulatory outcomes.
On valuation, Dominion appears to trade at a premium to its historical relative value and many of its utility peers. Relative valuation models suggest fair value in the low–$50s while the current share price is higher; forward P/E is ~16.8× vs. higher multiples for some peers but still elevated given the business’ capital intensity and rate risk.
Regulatory/regional risks and rate cases are key upside/downside levers. While Virginia’s State Corporation Commission and regulators elsewhere have approved some rate increases, they’re often below what Dominion has sought. Cost overruns (e.g., CVOW’s rising costs), higher interconnection charges, weather variability, and rising inputs (materials, labor) could squeeze margins. Customer sensitivity to rate hikes—especially in residential classes—may bring political risk.,,
Strategic implications: investors already holding the stock might lean towards a total return strategy that emphasizes dividend yield (~4–4.5%) and long-term growth, assuming regulatory outcomes remain favorable. New entrants may look for valuation pullbacks or better entry points. Close monitoring of project execution (especially CVOW), regulatory decisions, and how Dominion handles rising capital and interconnection costs will be crucial.
Open questions include: Can Dominion maintain its earnings growth targets if interest rates or inflation spike further? Will regulators allow full cost recovery for its most ambitious projects and for data center–driven infrastructure demand? And how will competitive pressures, in particular from other utilities offering clean energy and offshore wind, affect Dominion’s market share and return profile?
Supporting Notes
- Dominion raised its 2025–2029 capital expenditure plan to $50.1 billion, up from $43.2 billion, driven by elevated demand from data centers, AI, cryptocurrency, and electrification trends.
- In Q1 2025, revenues increased ~12% year-over-year, operating earnings beat consensus, with strong performance in Virginia (operating earnings up ~32%) and South Carolina (~90% increase); company reiterated full-year EPS guidance of $3.28–$3.52.,
- Long-term operating earnings per share growth guidance is 5-7% through 2029 off the 2025 base; reaffirmed in Q3 results.
- Forward P/E is approximately 16.80×; relative valuation models suggest fair value in the $54.38–$57.12 range, indicating current price (~$59) is above modelled fair value.
- Rate case outcomes show regulators granting less than Dominion sought: Virginia’s State Corporation Commission approved ~$11.24/month base rate increase in 2026 and ~$2.36/month in 2027, both below Dominion’s original requests. (via [0news14] paraphrased)
- Coastal Virginia Offshore Wind (CVOW) project’s costs have increased (from ~$9.8B to ~$10.7B) due to interconnection and onshore network expenses; project ~50% complete and expected to finish in late-2026.,
- Debt metrics underline financial exposure: total debt-to-equity ~1.5–1.6×; operating leverage and regulatory risk tied to recovering massive project costs.,
- Dividend yield (~4.5%) is above industry average. [Primary article] while payout ratio indicates reliance on regulated cash flows and likely regulatory oversight over capital and cost recovery.