Dominion Energy, Inc. (NYSE:D) Q4 2022 Earnings Call Transcript

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Ross Fowler: Okay. And then, sort of a bigger picture question following on to Jeremy’s question, and I appreciate the fact that you’re in a strategic review at the moment. But just maybe even anecdotally, Bob, as you look at this, you — I think Steve made some comments around the need for significant balance sheet repair, if we’re going to get above that 14% — meaningfully above that 14% FFO to debt ratio. I think dividend cut is clearly off the table, given your comments, but could you maybe prioritize other options, even just anecdotally in your mind at this point as to how you sort of get back to that level?

Bob Blue: Yes. The best priority I could give you is that our objective, as we have already described is to strengthen the balance sheet, with the goal of using the most efficient sources of capital without — with the ability to minimize external equity needs. Beyond that, Ross, we’re doing a review of every line of business. And once we’re finished with that, we’ll be able to outline the ways that we will go about addressing the balance sheet.

Ross Fowler: Okay. I appreciate that, Bob. And then 2023 guidance, I think your comments were that you’re just — you’re not going to provide it sort of for the full year given the strategic review. So, is that just should we expect sort of quarterly guidance going forward as we walk through the year? And can we kind of use Q1 guidance where we’re at as sort of a starting point status quo guidepost, and then make our own assumptions around where the strategic review lands to sort of get ourselves to a 2023 or 2024 number, or how should we think about that going forward?

Bob Blue: Ross, I anticipate we’ll be providing quarterly guidance as we go through the year. With regard to using our first quarter guidance as a guide, I would just say there’s a couple of things. On our third quarter call, we provided a pathway to our 6.5% growth in 2023, much of that’s not changed. There’s a couple of changes that you’ll — that have impacted the first quarter. One is we walk through as much as $0.30 of solar ITCs. We’ve obviously made a comment about that. And it’s the lack of — the run rate as well as the lack of the incremental is reflected in the first quarter. The other major change — really the only other big change besides a little bit of tax timing in the first quarter that we wouldn’t — we’d expect to balance out through the remainder of the year is interest rates, which effectively in the guide we gave on the third quarter call, suggested that interest rates up 2% to 3%.

That was a $0.13 to $0.19 hurt or about $0.15 at the midpoint. Those rates have now gone about 4%, which takes that sort of 15-ish midpoint to more like $0.30. So the combination of the lack of solar plus the incremental headwind with interest rate is what informs the first quarter. I would note that over time, we expect that interest rate headwind to ameliorate as I think most people do, unsure exactly what the timing of that will be. But that should be somewhat temporary.

Operator: Thank you. That will conclude our question-and-answer session. I’ll turn the call back over to management for any additional or closing remarks.

Bob Blue: Thanks very much. We appreciate it, and we’ll talk to you at our next call.

Operator: Thank you. This does conclude this morning’s conference call. You may disconnect your lines, and have a great day.

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