From: DOMINION ENERGY, INC.
Sent: Fri, Jul 10, 2020 3:08 pm
Subject: A Letter to Dominion Energy Shareholders
July 8, 2020
Dear Fellow Shareholders,
In the past few days, you have probably seen two important pieces of news about our company. I am writing to provide more information about these decisions, which I believe position us well for the future.
First, I hope you saw that we agreed to sell most of our natural gas transmission and storage business to Berkshire Hathaway Energy, a division of Berkshire Hathaway Inc. These are world-class assets and supported by some of the best people in the business. They generate substantial income. But they are not growing.
The second action we took, along with our partner, Duke Energy, was the difficult decision to cease development of the Atlantic Coast Pipeline (ACP). We toiled nearly six years to bring that project to life. I am proud of our team and the challenges we overcame. But the hard reality is that new infrastructure projects like ACP – despite the need for them – now face legal and regulatory challenges that create significant and costly delays. Ultimately, we determined it was imprudent to continue investing, amid so much uncertainty. That uncertainty was highlighted after our announcement, when a federal judge ordered the shutdown of a pipeline in operation since 2017, in order to complete yet another exhaustive environmental review.
As we look forward, we will focus on serving our nearly 7 million gas and electric customers and on investing in and developing clean energy.
For our company and our investors, this transition means a stronger balance sheet and higher earnings-per-share growth. We are significantly reducing our outstanding debt and our risk.
However, selling our gas transmission and storage business means we no longer have the cash flows from that business. As a result, we must also reduce our dividend payout, starting in the fourth quarter when the transaction is expected to close. While we anticipate our third-quarter dividend will remain at 94 cents, our fourth-quarter dividend is expected to be around 63 cents, with an expected payment of approximately $2.50 per share in 2021.
Dividend decisions are not taken lightly. We believe these steps will position shareholders well long-term. That is why our plans provide for an increase in our projected dividend growth rate from the current 2.5 percent annually to 6 percent annually, beginning in 2022, combined with higher earnings growth, less risk and significantly less debt.
We understand how important dividends are to our investors. We know this is disappointing. I assure you we made this decision after much deliberation, considering risk, earnings growth and the dividend – in the short- and long-term. We are confident we are setting an even better path forward.
You may find additional information at http://www.dominionenergy.com/investors.
Thank you for your continued confidence and investment in Dominion Energy.
Thomas F. Farrell, II – CEO, DOMINION RESOURCES