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Dominion Energy's Earnings: A Spark of Optimism or Just Smoke and Mirrors?
Dominion Energy just released its Q3 2025 earnings, and the initial headlines are rosy. Net income is up, guidance is reaffirmed, and the company is patting itself on the back. But before we uncork the champagne, let's dig into the numbers and see if this is a genuine turnaround or just clever accounting.
The headline figure is a GAAP net income of $1.0 billion, or $1.16 per share, compared to $934 million, or $1.09 per share, for the same period last year. Adjusted operating earnings (non-GAAP) also saw a bump, reaching $921 million, or $1.06 per share, compared to $836 million ($0.98 per share) a year earlier. At first glance, a solid performance. But here's where things get interesting.
A significant portion of this growth is attributed to Dominion Energy Virginia, contributing $679 million, a $17 million increase year-on-year. South Carolina added $168 million, up $21 million, and the Contracted Energy segment nearly doubled its earnings to $165 million. The Contracted Energy jump is particularly noteworthy, driven by investment tax credits related to renewable energy. Are these sustainable gains, or are they one-time boosts masking underlying weaknesses? That's the question we need to answer.
The company is also reaffirming its guidance for 5% to 7% annual growth in operating earnings per share through 2029, based on a $3.30 per share baseline for 2025. This is where my eyebrows start to raise. Reaffirming guidance is nice, but it doesn't guarantee anything. It's a target, not a promise. And targets can be missed, especially in the volatile energy market.
The Charybdis Conundrum
Then there's the elephant in the room: the wind turbine installation vessel Charybdis. Dominion admits to commissioning delays, calling it a "challenge" and acknowledging that they "failed to deliver." (That's putting it mildly.) The vessel, intended to be a strategic advantage, has become a major headache. CEO Robert Blue assures investors that first power will be delivered late in Q1 2026, but the delays have "significantly reduced the schedule for weather and vessel maintenance contingency." In plain English, they're cutting it close, and any further setbacks could push the project into 2027. Dominion Energy Confirms Commissioning Delays on WTIV Charybdis
Dominion spent $715 million on this vessel, betting that it would provide enhanced schedule and cost certainty. Now, it's looking more like a costly gamble. Blue highlights the uniqueness of the vessel, being the first Jones Act-compliant WTIV built and regulated in the US, but that uniqueness comes with inherent risks, apparently. Inspections revealed issues with the electrical system and documentation, requiring fixes and surveys. Over 4,000 inspections have been done across 69 electrical systems.
The cost overruns on the Charybdis project are not the only concern. The proposed natural gas plant in Colleton County, South Carolina, has seen its price tag double in the past year, adding $2.5 billion to the price. Santee Cooper and Dominion are splitting the cost, with Dominion's share now at $2.5 billion. Rising costs of materials and labor are to blame, according to Santee Cooper, with demand for gas turbines soaring across the country. Dominion also cites tariffs and construction/engineering contracts as factors. Here’s why price for SC natural gas plant ballooned $2.5 billion in about a year
And this is the part of the report that I find genuinely puzzling... Dominion is also warning customers about "phantom energy," the electricity wasted by devices that are plugged in but not in use. They estimate this costs the average household about $100 per year. While it's good to promote energy efficiency, it feels a bit tone-deaf to be nickel-and-diming consumers while simultaneously overseeing massive cost overruns on major projects. It's like a restaurant complaining about customers taking too many sugar packets while simultaneously throwing away entire trays of uneaten food.
Is Dominion Just Kicking the Can Down the Road?
The numbers paint a picture of short-term gains masking potential long-term problems. The company is hitting its targets right now, but at what cost? The Charybdis debacle and the rising costs of the natural gas plant suggest a lack of foresight and cost control. Are they truly building a sustainable energy future, or are they just kicking the can down the road, hoping someone else will deal with the mess later?
A Glossy Report Hiding Deeper Cracks
Dominion's earnings report looks good on paper, but the devil is in the details—and the cost overruns. I'm not convinced this is a sustainable success story. The market may be fooled, but I'm not buying it.