Richmond-based Dominion Energy has announced a $64.7 billion capital investment plan for 2026–2030, marking a sharp increase from its previous $50.1 billion five-year budget. The expanded strategy is designed to support accelerating electric demand, largely driven by data center growth in Virginia, while maintaining affordability and a strong credit profile.
$64.7 Billion Capex Focused on Grid Reliability and Clean Energy
Dominion’s five-year capital plan prioritizes rider-eligible investments aimed at reliability, resiliency and decarbonization.
Key allocations include:
Electric Transmission: $16 billion or 25 percent of total capex to strengthen grid stability
Electric Distribution: $13 billion or 20 percent to support economic growth and system resiliency
New Gas Generation: $12 billion or 18 percent to ensure energy supply security
Solar: 13 percent of total spending
Battery Storage: 3 percent allocation
Dominion Energy Virginia accounts for the majority of planned spending at $54.8 billion, while Dominion Energy South Carolina represents $7.6 billion.
Data Center Growth Driving Demand Surge
Dominion’s Virginia service territory hosts the world’s largest data center market, exceeding the combined capacity of the next five largest U.S. markets. As of December, the utility had contracted nearly 48.5 gigawatts of data center capacity, up 1.4 GW from September.
Customers include major technology firms such as Alphabet, Amazon, Microsoft, Meta and Equinix, alongside private operators including CoreWeave and CyrusOne.
In the Virginia “DOM Zone,” weather-normal retail sales increased 5.4 percent in 2025, underscoring what Dominion describes as a “step change” in electric demand.
Earnings Outlook and Financial Strategy
Dominion has transitioned to a pure-play regulated utility model, with 95 percent of earnings derived from state-regulated operations.
2026 Operating EPS Guidance: $3.45 to $3.69 per share
Midpoint: $3.57 per share, including RNG 45Z tax credits
Long-term EPS Growth Target: 5 percent to 7 percent annually through 2030
However, the earnings midpoint fell slightly below the analyst consensus estimate of $3.60, contributing to a 1.4 percent decline in premarket trading.
Fourth-quarter operating expenses rose nearly 11 percent year over year to $3.33 billion, partially offsetting improved revenue performance. Adjusted earnings for the quarter were 68 cents per share, narrowly above estimates of 67 cents.
Funding the $65 Billion Expansion
To finance the capital plan, Dominion expects to rely on a mix of:
Operating Cash Flow: $46.4 billion
Common Equity Issuances: Approximately $7.1 billion via DRIP and ATM programs
Debt Issuances: $20.4 billion in fixed-income funding
The company is targeting a parent debt ratio below 30 percent and an FFO-to-debt ratio of approximately 15 percent to preserve credit strength.
Strategic Projects and Offshore Wind
A key component of Dominion’s growth strategy is the $11.5 billion Coastal Virginia Offshore Wind project, which remains on schedule. First electricity is expected in the first quarter of 2026, with full completion anticipated in early 2027.
Operational Efficiency Focus
Dominion emphasized disciplined cost control, ranking in the top quartile for low electric non-fuel operations and maintenance costs per MWh in 2024, with the second-best peer ranking. The utility continues to pursue process optimization and technology investments to mitigate inflationary pressures.
Outlook
Dominion Energy’s $65 billion capital strategy reflects the growing infrastructure demands of hyperscale data centers and electrification trends. While near-term expense pressures and earnings guidance tempered investor reaction, the company maintains that its regulated model, robust demand pipeline and disciplined financing approach position it for sustained 5 percent to 7 percent annual earnings growth through 2030.
BABURAJAN KIZHAKEDATH
