- Dominion Energy on Tuesday committed to reaching net-zero emissions in its power generation and natural gas operations by 2050 through a mixture of electrification, energy efficiency, renewable generation and the continued operation of its nuclear fleet.
- At the same time, the company announced it is expanding its ownership position in the controversial Atlantic Coast Pipeline by purchasing Southern Company's 5% stake for $175 million. Dominion will now own 53% of the gas project, with Duke Energy holding 47%.
- Dominion made the announcements during its fourth-quarter and full-year 2019 earnings call. For Q4, the company reported earnings of $1.1 billion, or $1.32/share, compared with net income of $641 million in the same period of 2018.
Dominion says it has already made rapid progress to cut its greenhouse gas emissions, but will now accelerate those efforts through a diverse menu of efforts focused on its own operations as well as other industries.
The company says it is "poised to support a dramatic reduction in the carbon footprint of the transportation sector" by deploying electric vehicle charging infrastructure and developing the United States' largest electric school bus program. The utility will also support the use of liquefied natural gas, compressed natural gas and hydrogen fuels in long-haul trucks and maritime shipping vessels.
Dominion previously committed to cut methane emissions from its natural gas operations 50% between 2010 and 2030 and carbon emissions from its power generating facilities 80% between 2005 and 2050. The company says it has made "significant" progress on those goals, with carbon emissions down 50% and methane emissions cut by nearly 25%.
Company officials say they have also reduced coal-fired generation by 80% — from 52% in 2005 to 12% in 2019.
"We estimate that coal-fired generation today accounts for less than 8% of our total regulated investment base," Dominion CEO Tom Farrell said in a conference call with analysts and reporters.
The company said it will also make investments in renewable natural gas (RNG) projects in the agriculture sector, capturing methane from farms that will be "at least equivalent to any remaining methane and carbon dioxide emissions from the company's natural gas operations."
RNG efforts are expected to make Dominion's gas infrastructure net zero 10 years before the rest of the company, officials said.
Dominion expands ownership of delayed Atlantic Coast Pipeline
Dominion also announced it would be buying Southern's equity stake in the Atlantic Coast Pipeline, though Southern will remain an anchor customer for the project through its Virginia gas distribution company.
Construction on the controversial pipeline project has been halted, pending a decision by the U.S. Supreme Court. Oral arguments are scheduled for Feb. 24, regarding the project's plan to cross the Appalachian Trail.
In December, the Fourth U.S. Circuit Court of Appeals ruled the U.S. Forest Service was not authorized to allow the project to run under the popular hiking route, which is protected National Park Service land. A ruling on that decision is expected by the middle of this year, Dominion officials said.
Opponents of the project say it is environmentally risky and the new natural gas capacity is unnecessary, but Dominion is predicting a favorable ruling that will put the project back on track.
"We remain optimistic that the court will issue an order reversing the 4th Circuit in the May or June timeframe," Farrell said, adding that the company has continued to work with the U.S. Fish and Wildlife Service on a reissued biological opinion.
"Upon receipt of the updated biological opinion, we intend to notify [the Federal Energy Regulatory Commission] and anticipate thereafter, the recommencement of construction across major portions of the pipeline," Farrell said.
Farrell confirmed the project's timeline, saying construction is expected to be complete by the end of next year and the pipeline will be commissioned shortly after.
"Project costs of approximately $8 billion are in line with the high end of the judicial option range we provided about a year ago," Farrell said. "This estimate incorporates the various potential approaches to permitting issues and construction plans and timing."
The pipeline was originally expected to cost between $6 billion and $6.5 billion.
Despite Dominion's optimism, project opponents including the Southern Environmental Law Center (SELC) say the pipeline's future is in doubt.
"Dominion tried to force a pipeline compressor station into a community where it didn’t belong, just like it has tried to force the pipeline through a national park, national forests, and steep mountains," SELC Senior Attorney Greg Buppert said in a statement.
Dominion reported full-year 2019 earnings of $1.4 billion, or $1.73 per share, compared with earnings of $2.4 billion in 2018.
Shares of Dominion climbed $0.63 on Tuesday, to close at $85.22. Six months ago, the stock traded around $74/share.