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Dominion Energy (D) Risk Analysis
Risk Overview Q2, 2026
Risk Change Over Time
Risk Highlights Q2, 2026
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 29
- Regulation - Risk 1The rates of the Companies' principal electric transmission, distribution and generation operations and gas distribution operations are subject to regulatory review.
Revenue provided by the Companies' electric transmission, distribution and generation operations and by gas distribution operations is based primarily on rates approved by state and federal regulatory agencies. The profitability of the Companies' businesses is dependent on their ability, through the rates that they are permitted to charge, to recover costs and earn a reasonable rate of return on their capital investment. At the federal level, the Companies' wholesale rates for electric transmission service are regulated by FERC. Rates for electric transmission services are updated annually according to a FERC-approved formula rate mechanism, and may be subject to additional prospective adjustments and retroactive corrections. A failure by the Companies to justify the appropriateness of these rates or a change in FERC policy or the application of FERC policy could result in rate decreases from current rate levels, which could adversely affect the Companies' results of operations, cash flows and financial condition. At the state level, Virginia Power's retail base rates, terms and conditions for generation and distribution services to customers in Virginia are reviewed by the Virginia Commission in a biennial proceeding that involves the determination of Virginia Power's actual earned ROE during a historic test period, and the determination of Virginia Power's authorized ROE prospectively. Under certain circumstances described in the Regulation Act, Virginia Power may be required to refund a portion of its earnings to customers through a refund process and to reduce its rates. Virginia Power makes assessments throughout the review period and will record a regulatory liability for refunds to customers in any period such refunds are determined probable, which could negatively impact the Companies' results of operations in the period recognized and to cash flows on completion of any biennial review. In states other than Virginia, the Companies' retail electric base rates for generation and distribution services to customers are regulated on a cost-of-service/rate-of-return basis subject to the statutes, rules and procedures of such states. Dominion Energy's rates for gas distribution to retail customers are similarly regulated at the state level. If retail electric or gas earnings exceed the returns established by state utility commissions, retail electric rates or gas rates may be subject to review and possible reduction, which may decrease the Companies' future earnings. Additionally, if any state utility commission does not allow recovery through base rates, on a timely basis, of costs incurred in providing service, the Companies' financial condition, results of operations and/or cash flows could be negatively impacted. Under certain circumstances, state utility regulators may impose a moratorium on increases to retail base rates for a specified period of time, which could delay recovery of costs incurred in providing service. Additionally, governmental officials, stakeholders and advocacy groups may challenge any of the regulatory reviews or proceedings referred to above. Such challenges may result in changes to the regulatory framework under which the Companies' currently operate and/or lengthen the time, complexity and costs associated with such regulatory reviews or proceedings.
- Regulation - Risk 2The Companies' generation business may be negatively affected by possible FERC actions that could change market design in the wholesale markets or affect pricing rules or revenue calculations in the RTO markets.
The Companies' generation stations operating in RTO markets sell capacity, energy and ancillary services into wholesale electricity markets regulated by FERC. The wholesale markets allow these generation stations to take advantage of market price opportunities, but also expose them to market risk. Properly functioning competitive wholesale markets depend upon FERC, PJM and/or ISO-NE's continuation of clearly identified market rules. From time to time, FERC may investigate and/or receive requests from PJM or ISO-NE to authorize changes in market design. FERC also periodically reviews the Companies' authority to sell at market-based rates. Changes by FERC, PJM or ISO-NE to the design of the wholesale markets or its interpretation of market rules, the Companies' authority to sell power at market-based rates, or changes to pricing rules or rules involving revenue calculations, could adversely impact the future results of the Companies' generation business. For example, in April 2024, FERC issued an order that accepted proposed changes to the PJM wholesale capacity market that significantly changed how a generation resource's capacity value is calculated and decreased the total amount of capacity recognized in the PJM region as eligible to meet reserve requirements. In addition, changes to the interpretation and application of FERC's market manipulation rules may occur from time to time. A failure to comply with these market manipulation rules could lead to civil and criminal penalties.
- Regulation - Risk 3The Companies are subject to complex governmental regulation, including tax regulation, that could adversely affect their results of operations and subject the Companies to monetary penalties.
The Companies' operations are subject to extensive federal, state and local laws and regulations and require numerous permits, approvals and certificates from various governmental agencies. Such laws and regulations govern the terms and conditions of the services the Companies offer, relationships with affiliates, protection of critical electric infrastructure assets and mandatory reliability standards and interaction in the wholesale markets, among other matters. The Companies are also subject to legislation and associated regulation governing taxation at the federal, state and local level. They must also comply with environmental legislation and associated regulations. Some such legislation and regulation have not yet been finalized and changes in either interpretation or final laws or regulations could have a negative impact on the Companies. For example, the OBBBA and IRA include various provisions, such as investment and production tax credits and corporate alternative minimum tax, that the Companies have considered in recording their provisions for income taxes. The ultimate impact of these tax laws is subject to pending guidance and interpretations that could adversely impact the Companies' ability to qualify for and maintain tax credits, which could affect the Companies' results of operations, financial condition and/or cash flows. Management believes that the necessary approvals have been obtained for existing operations and that the Companies' businesses are conducted in accordance with applicable laws. The Companies' businesses are subject to regulatory regimes which could result in substantial monetary penalties if either of the Companies is found not to be in compliance. New laws or regulations, the revision or reinterpretation of existing laws or regulations, the imposition of new tariffs or changes to existing tariffs, changes in enforcement practices of regulators or penalties imposed for non-compliance with existing laws or regulations may result in substantial additional expense. Adverse developments in tax laws, credits or other incentives including changes in legislation, administrative interpretations or judicial determinations could result in modifications to business models or otherwise negatively affect the Companies' financial condition, results of operations and/or cash flows. Recent legislative and regulatory changes that are impacting or could impact the Companies include legislation enacted in Virginia in April 2023, the IRA, the VCEA, the 2017 Tax Reform Act, the OBBBA and tariffs imposed on various components required for construction of the CVOW Commercial Project or imported solar panels by the U.S. government in 2025 and 2018, respectively.
- Regulation - Risk 4Changing rating agency requirements could negatively affect the Companies' growth and business strategy.
In order to maintain appropriate credit ratings to obtain needed credit at a reasonable cost in light of existing or future rating agency requirements, the Companies may find it necessary to take steps or change their business plans in ways that may adversely affect their growth and earnings. A reduction in the Companies' credit ratings, including due to a change in rating methodologies, could result in an increase in borrowing costs, loss of access to certain markets, or both, thus adversely affecting operating results and could require the Companies to post additional collateral in connection with some of its price risk management activities.
See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.