Dominion Energy is embarking on a “top-to-bottom” review of its investments and operations to address underperforming share values, the company announced during its third-quarter earnings call Friday.

“Fundamentally we took a look at how we’re doing — how our share price is doing — and the market is telling us that we’re not performing the way investors expect, so we think it merits a complete review from top to bottom,” Dominion CEO Robert Blue said during the call. The company started the year with a share price of $80.21 and has seen that fall over the past three months to $67.13.

The review will include looking at investments in businesses that may be considered “non-strategic” and exploring unregulated investment activities and initiatives. Blue said that the possible changes, however, are not likely to impact the “core earnings growth driver of this company: the continued execution of what we view as an industry leading, highly visible regulated decarbonization growth capital investment opportunity.”

Despite the decline in share value, Blue noted that operating earnings per share are above the midpoint of the company’s quarterly guidance range and said the company is well positioned to meet its annual expectations. It is setting expectations for 98 cents to $1.13 in earnings per share and has narrowed annual 2022 operating earnings to be between $4.03 and $4.18, with the midpoint remaining the same as its original guidance, according to the company’s announcement of the earnings report.

Blue also said the company has “been steadily executing on our investment programs focused on decarbonization. This successful execution is already benefiting our customers, communities, the environment and our investors.”

The company reported $778 million in net income ($0.91/share), compared to $654 million ($0.79/share) for the third quarter of 2021.

Steve Fleishman of Wolfe Research questioned what reasons Dominion believes could be behind its stock performance.

Responding to an analyst’s question about what has driven the company’s stock price, Blue said, “Investors are telling us … what they’re looking for is predictability. What they’re looking for is earnings quality.”

Coastal Virginia Offshore Wind Project Remains on Track

Work on Dominion’s $9.8 billion Coastal Virginia Offshore Wind (CVOW) project is continuing according to schedule, with onshore construction projected to begin in the third quarter of 2023 and offshore work starting in second quarter 2024. Completion of the 2.6-GW project is expected in late 2026, according to Blue’s presentation.

“Development of the project has continued uninterrupted to maintain the project’s schedule, and we expect over 90% of the project costs, excluding contingency, to be fixed by the end of the first quarter 2023 at the latest, as compared to about 75% today,” Blue said.

The company’s turbine installation vessel is more than 60% complete, and it expects it to be in service ahead of the 2024 turbine installation season, Blue said. There are currently no changes to the estimated installation cost, lifetime capacity factor or levelized cost of electricity.

A draft environmental impact statement is anticipated from the U.S. Bureau of Ocean Energy Management, which is also expected to release a record of decision in mid-2023.

The company recently signed a settlement agreement with several parties, filed with the Virginia State Corporation Commission (SCC), that proposes an alternative to the performance requirement ordered by the commission in August. The proposed agreement would supplement the requirement — which Blue had called “untenable” — with a review process in which the company explains any capacity shortfalls and the commission can determine remedies. (See Dominion, Va. Stakeholders File Settlement over Performance Req for OSW Project.)

The agreement also contains consumer protections for possible construction cost overruns. The other parties to the proposal are Virginia Attorney General Jason Miyares, the Sierra Club, Walmart and environmental advocacy organization Appalachian Voices.

“The agreement provides a balanced and reasonable approach that allows the project to continue moving forward to meet the commonwealth’s public policy and economic development priorities and the needs of our customers,” Blue said during the earnings call. “If approved, significant customer benefits include protection from unforeseen increases in construction costs above the project’s budget and enhanced SCC review of performance in lieu of a performance guarantee. We look forward to a decision from the SCC later this year.”

Blue said the completion of the project will be a boon to the local economy and jumpstart the development of further offshore wind projects drawing off upgrades at the Port of Virginia’s Portsmouth Marine Terminal to support OSW installations. (See Dominion Secures 10-Year Va. Port Lease for OSW Staging.)

Steven Ridge Promoted to CFO

Blue also announced the promotion of Steven Ridge, who currently manages Dominion’s Western natural gas distribution operations, to take the place of James Chapman as chief financial officer. Chapman is leaving the company to become treasurer at ExxonMobil.

Ridge “has a wealth of experience in finance, is well known to many of our investors and is a strong, capable leader. We are very fortunate to have him in this new role,” Blue said.