Dominion Energy Boosts Capital Expenditure Plan Amidst Projected Surge in Data Center Power Demand
Dominion Energy has increased its five-year capital expenditure plan by $6.9 billion, projecting a total outlay of $50.1 billion from 2025 to 2029. This adjustment aligns with the company's strategy to capitalize on the anticipated growth in power consumption driven by data centers.
Data centers, particularly those supporting artificial intelligence and cryptocurrency, are expected to contribute significantly to the projected surge in power demand in the U.S. in the coming years. Dominion Energy reports an 88% surge in power capacity contracted by data centers in December compared to July.
Despite its optimistic outlook, Dominion Energy has slightly narrowed its forecast for 2025 operating earnings per share to $3.28-$3.52, from the previous range of $3.25-$3.54. The company's shares experienced a decline of 2% in early trading.
For the fourth quarter, Dominion Energy reported operating earnings of 58 cents per share, exceeding analysts' estimates by 2 cents. This was partially attributed to a $119 million tax benefit that offset lower revenues and increased operational expenditure.
During the quarter, Dominion Energy's electric and gas service areas experienced an 8.6% decrease in heating degree days, indicating reduced energy demand for space heating.
"Despite unfavorable weather in our regulated service areas, we achieved 2024 operating earnings per share within the top half of our guidance range," stated Dominion Energy CEO Bob Blue.
Additionally, Dominion Energy incurred a charge of $276 million for anticipated unrecoverable costs from its wind energy project off the coast of Virginia.