DOMINION ENERGY, INC

DOMINION ENERGY, INC. Material Event - Key Takeaways for Investors

Dominion Energy, Inc. recently announced two significant developments that will reshape its financial outlook and strategic direction, directly impacting investors.

1. The Big News Dominion Energy, Inc. will implement major changes:

• Dividend Reduction: The company will cut its quarterly cash dividend to shareholders by approximately 33%, reducing it to $0.66 per share. This strategic move aims to bolster the company's financial health.
• Coastal Virginia Offshore Wind (CVOW) Project Update: The estimated total cost for its flagship CVOW Project has climbed from approximately $11.2 billion to $11.5 billion. Furthermore, the project's completion date has shifted, now anticipated in early 2027 instead of late 2026.

2. When This Happened Dominion Energy reported these significant developments on or around January 30, 2026. The company specifically detailed the CVOW project updates in a presentation posted on its investor relations website that day, typically accompanying an SEC 8-K filing.

3. Why This Is Happening (Strategy & Financials) Dominion Energy's decisions stem from a strategic imperative: to fortify its financial health and finance its transition to a cleaner energy portfolio.

• Dividend Cut Rationale: The company's primary goal is to strengthen its balance sheet, reduce its substantial debt, and boost financial flexibility. By retaining an estimated $2 billion annually, Dominion plans to self-fund a larger share of its significant capital expenditures—projected at $37 billion over the next five years for clean energy initiatives. This strategy aims to improve its credit profile, lessen dependence on outside financing, and achieve a more sustainable debt-to-EBITDA ratio (e.g., targeting below 5.0x), aligning with its focus on regulated utility operations.
• CVOW Project Challenges: Several factors contribute to the increased costs and delays for this critical offshore wind project:
  • Regulatory Work Stoppage: A temporary construction halt in December 2025, mandated by the U.S. Department of Interior’s Bureau of Ocean Energy Management. Although work resumed in January 2026 following a court order, the interruption added costs and extended the schedule.
  • Tariffs: Additional estimated expenses from tariffs on imported materials and equipment needed for construction.

4. Why This Matters for Investors (Impact & Risks) These announcements carry significant implications for both Dominion Energy and its shareholders:

• For the Company:
  • Financial Stability: The dividend cut is a crucial step to improve Dominion's long-term financial resilience, allowing it to fund strategic growth without excessive borrowing.
  • Strategic Execution: It underscores the company's commitment to its regulated utility model and clean energy transition. However, it also highlights the execution risks inherent in large, complex projects like CVOW, which can encounter regulatory hurdles, supply chain issues, and cost overruns.
  • Credit Profile: Successful debt reduction and self-funding could improve credit ratings and lower borrowing costs over time.
• For Shareholders:
  • Income Investors: Investors who bought Dominion stock primarily for its consistent dividend income will experience a substantial reduction in quarterly payouts, potentially requiring them to re-evaluate their investment.
  • Stock Price Volatility: Dividend cuts typically trigger immediate negative stock price reactions. The additional news of project cost increases and delays could further heighten market uncertainty and volatility.
  • Long-Term Outlook: While painful in the short term, the company positions these actions as essential for long-term financial strength and sustainable growth. Investors must closely monitor Dominion's ability to execute its debt reduction plans and effectively manage its capital projects to realize potential future capital appreciation or a return to higher dividends.

5. Who Is Affected?

• Shareholders: Directly affected by reduced dividend income and potential stock price fluctuations.
• The Company: Aims for improved financial health and strategic execution, but faces ongoing challenges managing large-scale capital projects and navigating regulatory environments.
• Customers: No immediate direct impact on utility bills. However, long-term project delays or cost increases could indirectly affect future energy supply or costs.
• Credit Rating Agencies: Will closely monitor Dominion's financial performance and strategic execution, which can impact the company's borrowing costs.

6. What's Next? (Outlook & Key Metrics to Watch)

• Immediate Term: Expect continued stock price volatility as the market fully processes the implications of both the dividend cut and the CVOW project challenges.
• Short Term: Dominion will begin paying the reduced dividend. The company expects to provide more detailed financial guidance on its debt reduction targets and capital expenditure plans in upcoming earnings calls.
• Long Term: Investors should closely monitor:
  • Debt Reduction Progress: Track the company's success in lowering debt levels and achieving its target debt-to-EBITDA ratio.
  • Project Execution: Watch for updates on the CVOW project's revised timeline and budget adherence, alongside progress on other clean energy investments.
  • Regulatory Environment: The outcome of regulatory reviews and approvals for ongoing and future projects will prove critical to the company's strategic success.
  • Future Dividend Policy: Potential for dividend growth will depend on the successful execution of its financial and strategic goals.

7. Investor Action Points:

• Re-evaluate Investment Thesis: Assess how a lower dividend and increased project risk align with your personal financial goals and risk tolerance.
• Monitor Financials Closely: Monitor Dominion's quarterly earnings reports, investor presentations, and SEC filings for updates on debt, cash flow, capital expenditures, and project milestones.
• Assess Execution Risk: Recognize that large capital projects, especially in emerging sectors, inherently carry risks of cost overruns and delays.
• Consider Long-Term Strategy: Evaluate if Dominion's pivot to a more financially disciplined, regulated utility model focused on clean energy aligns with your long-term investment horizon.