Fitch Ratings has affirmed Dominion Energy, Inc.'s (DEI) Long-Term (LT) Issuer Default Rating (IDR) at 'BBB+'.
Fitch has also affirmed the IDRs for DEI's subsidiaries as follows: Virginia Electric and Power Co. (VEPCo) at 'A-', Dominion Energy South Carolina, Inc. (DESC) at 'A-', Questar Gas Company (QGC) at 'A-', and Public Service Company of North Carolina, Inc. (PSNC) at 'A-'. The Rating Outlook for DEI, VEPCo, DESC, QGC and PSNC is Stable. Additionally, Fitch has affirmed the Short-Term (ST) IDRs of DEI, VEPCo and DESC at 'F2' and the ST IDR of QGC at 'F1'.
DEI has concluded a comprehensive business review, which was initiated in November 2022, and announced a new five-year financial plan. A soon-to-be completed asset sale program will produce a meaningful reduction in parent level debt to low-30% of total debt from approximately 40% at year-end 2023, which Fitch views as favorable.
Ultimately, DEI's business portfolio will consist of two state-regulated utilities (VEPCo and DESC), nuclear power generation, contracted renewables, and renewable natural gas facilities. Approximately 90% of DEI's average annual earnings will be derived from the two utility subsidiaries, with VEPCo being the largest contributor. Fitch expects that the simplification of DEI's corporate structure will lead to greater predictability in its financial performance. Nonetheless, the announced financial plan provides limited headroom to the post Coastal Virginia Offshore Wind (CVOW) in-service downgrade threshold of FFO leverage at 5.0x. Any significant variation from Fitch's current expectations may result in negative rating actions.
Additionally, the affirmations of DEI and VEPCo reflect Fitch's expectation for CVOW to be constructed on time and on budget, continuation of existing regulatory constructs for the project, and the completion of a minority partnership stake of 50% of the project. Any deviation from Fitch's current expectation regardings CVOW could have negative rating consequences.
The affirmations of QGC and PSNC are based upon current regulatory constructs and include the expectation that regulators will not impose any onerous financial commitments as part of the sale approval process. DEI's sale of The East Ohio Gas Company (A-/Negative) was completed on March 7, 2024 and is not included in this review.
Key Rating Drivers
Dominion Energy, Inc.
Comprehensive Business Review Completed: The last step in DEI's comprehensive 'top-to-bottom' business review occurred with the announcement on Feb. 22, 2024 of an agreement to sell a 50% noncontrolling interest in the CVOW to private equity firm Stonepeak Partners, LLC. Stonepeak will fund 50% of the CVOW expected $9.8 billion construction costs, with $2.9 billion being contributed upon closing, which is expected to occur in 4Q24.
In August 2023, DEI closed on the sale of the remaining 50% noncontrolling partnership interest in Cove Point LNG for $3.3 billion. The $1 billion net proceeds from the sale were used for parent level debt repayment. In September 2023, DEI announced that it had reached an agreement to sell The East Ohio Gas Company (A-/Negative), QGC and PSNC to Enbridge, Inc. (ENB; BBB+/Stable). The aggregate transaction is valued at $14.0 billion and includes the assumption of approximately $4.6 billion of subsidiary debt. The company closed on the sale of The East Ohio Gas Company. QGC is expected to close in 2Q24 and PSNC in 3Q24.
Fitch estimates that the asset sale program will provide almost $10 billion for parent level debt reduction allowing for a meaningful reduction in parent level debt to low-30% of total debt from approximately 40% prior to the review. Regulated operations will continue to account for approximately 90% of DEI's EBITDA; however, the company will have less geographic and regulatory diversity with VEPCo accounting for over 70% of DEI's consolidated EBITDA versus approximately 65% in prior years.
Limited Headroom in Credit Metrics: Upon consummation of its business review, DEI announced its new five-year financial plan. In Fitch's view, the announced plan provides no headroom to the post Coastal Virginia Offshore Wind (CVOW) in-service downgrade threshold of FFO leverage at 5.0x. The company will retain limited cash due to a high dividend pay-out and will be more reliant on non-utility cash flows, especially in the early years of the new plan.
While some non-utility cash flows have a high degree of certainty due to their contractual nature, there could be more variability than expected in some of the sources. Additionally, the company remains very exposed to the construction risk of the large scale CVOW project, even after considering the benefits of the Stonepeak partnership. Any significant variation from expectations for either financial metrics or the CVOW project may result in negative rating actions.
Large Subsidiary Capital Project: DEI subsidiary, VEPCo, is constructing CVOW, a 176-turbine offshore wind installation 27 miles off of the coast of Virginia. The first phase will provide VEPCo with 2.6GW of rate-based wind generation at an estimated cost of $9.8 billion, excluding financing costs. The Bureau of Ocean Energy Management (BOEM) issued a favorable decision in October 2023 and onshore construction has commenced. The project's expected in-service date is late 2026. The company currently projects that the levelized cost of energy (LCOE) will be $77/MWh. The legislatively mandated LCOE prudency cap is $125/MWh.
As per the company's disclosures, greater than 90% of the project's costs have been fixed. VEPCo will recover CVOW costs via an annually revised rate rider. On July 7, 2023, the Virginia State Corporation Commission (VSCC) approved VEPCo's $271 million Rider Offshore Wind (Rider OSW) request for the current rate year beginning September 2023. The company has made its rider filing for the next rate year, representing $486 million of annual revenue. The sale of 50% of CVOW to Stonepeak will provide VEPCo funding for the large project there by reducing the support from DEI and provide for cost sharing of project costs up to $11.3 billion.
Fitch expects that DEI will maintain VEPCo's regulatory capital structure of at least 52.1% during the CVOW construction period. While DEI and VEPCo have taken significant steps to de-risk CVOW project, there can be no assurances of unexpected costs or delays. If such were to occur, it would pose a risk to the ratings of DEI and VEPCo.
Predominately Regulated Asset Base: Upon completion of the LDC divestures, DEI's business portfolio will consist of two state-regulated utilities, nuclear power generation, contracted renewables, and renewable natural gas facilities. VEPCo will continue to be the largest contributor comprising about 75% of DEI's average annual earnings over the 2025-2029 five-year plan, followed by DESC at approximately 15%. Fitch views the regulatory environment in both Virginia and South Carolina to be supportive of credit quality.
The Virginia State Corporation Commisison (VSCC) recently approved VEPCo's comprehensive settlement in its biennial review, which results in no change to the company's 2024-2025 base rates. The settlement incorporates the legislatively mandated 9.70% ROE, but is silent on capital structure. As per legislation, VEPCo is required to take reasonable efforts to maintain a common equity ratio of 52.10% through December 2024. DESC's last rate case was resolved via settlement in 2021 resulting in a net revenue increase of $35.6 million ($61.6 million before accelerated return of deferred income taxes) based upon a 9.5% ROE and equity capitalization of 51.62%.
Deferred Fuel Balances: Over the recent years, DEI's utility subsidiaries experienced significant increases in deferred fuel and purchased power. While costs, especially natural gas, have declined significantly during 2023, significant balances remain to be collected at VEPCo and DESC. DEI's deferred balance is $1,466 as of Dec. 31, 2023 million. VEPCo issued $1,281 million of securitization debt to recover the subsidiary's deferred fuel costs. A substantial portion of the proceeds are expected to be upstreamed to DEI and will be used for parent level debt reduction. DESC has filed and received approval to recover its net under-recovered amounts over a 12-month period effective May 2023.
Parent-Subsidiary Rating Linkage: There is parent subsidiary linkage between DEI and all of its rated subsidiaries. Fitch determines DEI's standalone credit profile (SCP) based on consolidated metrics. Fitch believes DEI's regulated utility subsidiaries have stronger SCPs than DEI. As such, Fitch has followed the stronger subsidiary path. Emphasis is placed on the subsidiaries' status as regulated entities. Legal ring fencing is considered porous given the general protections afforded by economic regulation. Access and control are evaluated as porous.
DEI centrally manages the treasury function for all of its entities and is the sole source of equity; however, each subsidiary issues its own long-term debt. Due to the aforementioned linkage considerations, Fitch will limit the difference between DEI and its higher rated regulated subsidiaries to two notches.
Virginia Electric and Power Company
Offshore Wind Project: The Virginia Clean Economy Act (VCEA), which was passed in 2020, mandates fossil plant retirements and deems renewable investments to be in the public interest and eligible for rider recovery, among other aspects. As envisioned, VCEA is resulting in significant investment by VEPCo in offshore wind, solar, onshore wind and energy storage. VEPCo is pursing the 2.6 GW Coastal Virginia Offshore Wind (CVOW) project as a way to meet the state's renewable energy targets and demand growth.
The $9.8 billion project (inclusive of $1.4 billion in transmission costs) is in the final permitting process. The Bureau of Ocean Energy Management (BOEM) issued a favorable decision in October 2023. Onshore construction has commenced and VEPCo expects to commence monopile installation in late 2Q24. The project's expected in-service date is late 2026. The company currently projects that the levelized cost of energy (LCOE) will be $77/MWh. The legislatively mandated LCOE prudency cap is $125/MWh.
CVOW Cost Recovery: VEPCo is recovering its revenue requirements for CVOW through a rate adjustment clause (Rider OSW). VEPCo, the Virginia attorney general, and other parties reached an agreement in October 2022, subsequently approved by the commission, that removes a performance guarantee originally ordered by the Virginia State Corporation Commission (VSCC) and replaced it with protections for customers if there were to be increased construction cost.
The settlement agreement allows VEPCo to recover the first $500 million of incremental costs and provides for a cost sharing mechanism of costs between $10.3 billion and $13.7 billion. Once operational, VEPCo will report average net capacity factors on an annual basis. A net capacity factor (on a three-year basis) of less than 42% may result in a review from the commission.
VEPCo has also committed to take reasonable steps to ensure any and all benefits of the Inflation Reduction Act are pursued by the company and are passed along to ratepayers. On July 7, 2023, VSCC approved VEPCo's $271 million Rider OSW request for the current rate year beginning September 2023. The company has made its rider filing for the next rate year, representing $486 million of annual revenue. A final order in that proceeding is expected by August 2024.
Fitch considers the rider recovery mechanism for CVOW to be favorable. However, Fitch remains concerned about the impact if significant delays or cost escalation were incurred. Fitch is aware of other off-shore wind projects in the U.S. and globally that have been cancelled or renegotiated due to cost escalation.
CVOW Partnership Benefits: Fitch views recently announced partnership between VEPCo and Stonepeak to be beneficial in reducing CVOW risk and provides an additional source of funding. As per the partnership agreement, Stonepeak must make capital contribution up to $11.3 billion project costs based upon their 50% share. For project costs between $11.3 billion and $13.7 billion Stonepeak will have the option to share in the projects costs. Once consummated, as per the terms of the agreement, Stonepeak will receive 50% of the project's revenue, which is the Rider OSW as approved by the VSCC. Fitch will reduce VEPCo's and DEI's FFO by the amount of cash paid to Stonepeak in calculating the entities FFO leverage.
2023 Virginia Legislation: The Virginia legislature passed utility-related legislation in February 2023 that results in significant changes to the state's regulations. The new legislation includes the authority to seek securitization of deferred fuel balances, a shift to biennial rate reviews and ability for VEPCo to seek a passive partner in the CVOW project.
As per legislation, the company made its first biennial review filing with the VSCC in July 2023 covering the years 2021-2022. The company reached a comprehensive settlement with the VSCC staff, the attorney general, and other parties in the case on Nov. 14, 2023. The settling parties agreed that VEPCo's 2021-2022 base rates were within the authorized earnings band, and as a result no change to the company's 2024-2025 base rates are required. The settlement incorporates the legislatively mandated 9.70% ROE, but is silent on capital structure. The VSCC recently approved VEPCo's comprehensive settlement.
As per legislation, VEPCo is required to take reasonable efforts to maintain a common equity ratio of 52.10% through December 2024. Consistent with the legislation, certain riders amounting to approximately $350 million annually were rolled into base rates effective July 1, 2023. Fitch views the current expected outcome as constructive. However, Fitch believes that the commission will have more flexibility to adjust rates beginning with the 2025 biennial review.
Deferred Fuel Cost Recovery: Over the last two years, VEPCo has experienced significant increases in deferred fuel costs as the result of high natural gas prices and the inability to pass along the costs on a timely basis. Fitch considers the deferrals to be timing differences and excludes the cash flow impact from FFO but includes the debt impact in FFO. In January 2024, VEPCo issued $1,281 million of securitization debt to recover the subsidiary's deferred fuel costs. Fitch will remove the effects of the securitization from calculating VEPCo's credit metrics.
Increased Capex: As a result of the CVOW project, VEPCo's capex forecast for 2024-2027 is expected to be approximately $33 billion, inclusive of amounts attributable to Stonepeak. The timely cost-recovery mechanisms available to VEPCo will help soften the financial strain of funding the capex plan. Favorably, the Stonepeak partnership will provide funding totaling $4.9 billion (which includes amount spent previous to 2024). In addition to Vepco's 2024 non-CVOW capex increased approximately 33% owing to significant grid reliability and resiliency projects, including federally regulated transmission.
Stabilizing Credit Metrics: VEPCo's FFO leverage for the LTM ended Dec. 31, 2023 was 3.6x, which was an improvement from the elevated leverage FFO leverage for the LTM ended Dec. 31, 2022 of 4.3x. Ongoing recovery of deferred fuel costs and service territory growth have benefitted VEPCo's cash flow. Fitch expects VEPCo to maintain headroom within its 4.5x downgrade threshold over the forecast period.
Dominion Energy South Carolina, Inc.
2024 Base Rate Filing: DESC filed a request on March 1, 2024 to increase $302.9 million based upon 10.6% ROE and 52.51% equity capitalization. The commission is required to make a decision in the filing by Sept. 1, 2024 with rates effective shortly thereafter. The filing is the first since the 2021 base rate settlement, which included a stay-out provision. In that proceeding, which was approved in July 2021, DESC received a net revenue increase of $35.6 million ($61.6 million before accelerated return of deferred income taxes); a regulatory capital structure of 51.62% equity; authorized ROE of 9.5%; and a rate base amount of $5.8 billion.
Deferred Fuel Cost Recovery: In the last two years, DESC experienced significant increases in fuel costs as the result of high natural gas prices. The company's cumulative under collected base fuel cost was $384 million as of April 2023. DESC received an order to collect the deferred fuel expenses over 12 months starting with the May 2023 billing cycle. Fitch considers the deferrals to be timing differences and excludes the cash flow effects from FFO but includes the debt impact in FFO.
Gas Base Rate Filing: DESC filed its first gas base rate case since 2005 in March 2023. The company requested an increase of $19 million based upon a 10.38% ROE and 54.78% equity capitalization. The company reached a settlement in the case, which the PSCSC approved on Sept. 20, 2023. The settlement will result in a $8.9 million net rate increase and is based upon a below average 9.49% ROE but robust 54.78% equity capitalization. Natural gas utility assets account for approximately 13% of DESC's rate base.
Improved Regulatory Environment: The ratings reflect the resolution of highly contentious legal and regulatory issues resulting from SCANA's 2017 abandonment of the V. C. Summer Nuclear Station expansion project and evidence of an improved regulatory relationship under DEI ownership. A multi-docketed proceeding resulted in a PSCSC final order in January 2019 that addressed the ratemaking treatment for $2.8 billion of the $4.7 billion in abandoned nuclear costs, as well as approving $2.0 billion in rate relief. DESC is allowed to earn a 9.9% ROE on $2.8 billion of a new nuclear development rate base with 52.81% equity capitalization.
Expectation for Improved Credit Metrics: The company's metrics improved under DEI's ownership; however, additional near-term improvement is stalled due to deferred fuel costs, elevated capex and the 2021 agreement to a base rate freeze. As a result, DESC's FFO leverage was 5.2x as of TTM Dec. 31, 2023 and is expected to remain elevated in 2024. Fitch expects DESC's leverage to improve with a constructive outcome in the current rate filing.
Questar Gas Company
Announced Divestiture: DEI announced on Sept. 5, 2023 that it had reached an agreement to sell QGC, PSNC, The East Ohio Gas Company to ENB. The sale of QGC includes cost of service gas supplier Wexpro and related affiliates and is valued at $4.3 billion including the assumption of $1.3 billion in debt. The sale is expected to close in June 2024, if not before. The company has reached a settlement with intervenors in the merger approval case.
Low-Risk Business Profile: QGC is a local gas distribution utility serving customers in Utah, Wyoming and Idaho. The majority of the company's customers are located in the state of Utah, which continues to experience significant growth. QGC's recorded three-year customer growth of 2.5%, and Fitch expects ongoing increases over the forecast period in line with the service territories' economic growth.
2022 Base Rate Case Decision: QGC filed its last rate case in May 2022, requesting a base rate increase of $71 million effective January 2023. The request was based upon a ROE of 10.3% and equity capitalization of 53.21%. In December 2022, the company was authorized a $47.8 million increase based on a 9.6% ROE and 51% equity capitalization. Fitch considers the rate case outcome as constructive. The company's prior rate was decided in February 2020, when the Utah Commission awarded QGC a $2.7 million rate increase premised upon a 9.5% ROE and 55% capitalization.
Supportive Regulatory Environment: Utah regulation benefits from numerous rider mechanisms, including weather normalization, revenue decoupling, infrastructure replacement and purchased gas adjustment, that serve to reduce regulatory lag and stabilize credit metrics. ROEs granted in Utah are generally in line with the industry averages.
Wexpro Agreements: QGC obtains a significant amount of its natural gas supply from DEI affiliate, Wexpro Company, in accordance with Wyoming and Utah regulatory agreements. Under these arrangements, Wexpro produces and sells gas at a regulated cost of service for the benefit of QGC's customers. The longstanding arrangement results in lower costs and less volatile customer bills.
Public Service Company of North Carolina, Incorporated
Announced Divestiture: DEI announced on Sept. 5, 2023 it had reached an agreement to sell PSNC, QGC and The East Ohio Gas Company to ENB. The sale of PSNC is valued at $3.1 billion including the assumption of $1.0 billion in debt. The PSNC sale is expected to close in 3Q24.
Rate Case Settlement: The North Carolina Utilities Commission (NCUC) approved a settlement in PSNC's rate case on Jan. 21, 2022. The order made permanent temporary rates that were implemented in November 2021. After giving effect for previously deferred tax benefits, the net revenue increase to customers is $6 million in the first rate-year, $25 million in the second rate-year, and $27 million in rate years three to five. Rates are based upon a ROE of 9.60% and equity capitalization of 51.60%. The company's original request was a $53 million increase based on a 10.25% ROE and 55% equity capitalization structure.
Supportive Regulatory Environment: Fitch considers NCUC to be a supportive commission. In addition to rate case outcomes with ROEs that are at, or above the national average, gas utilities in North Carolina benefit from tracking and rider mechanisms. The company is able to use a tracker mechanism to recover the cost of ongoing pipeline integrity management (PIM) programs between base rate cases.
In March 2024, PSNC submitted a filing with the commission to increase the integrity management annual revenue requirement to $19.7 million, effective March 2024, which was approved by the commission. PSNC benefits from rider recovery (Rider D) for prudently incurred gas costs, uncollectible expenses, and losses on negotiated gas and transportation sales. In January 2024, PSNC approved the recovery of $42 million in gas cost decrease under Rider D effective January 2024. PSNC also benefits from revenue decoupling for residential and commercial customers.
Derivation Summary
Despite the positive implications of the company's recently completed strategic review, Fitch continues to consider DEI as weakly positioned in the 'BBB+' rating category, owing to the large CVOW construction project and limited headroom to the post CVOW in-service downgrade threshold of FFO leverage at 5.0x. Fitch currently expects approximately 90% of DEI's EBITDA to come from state-regulated utility businesses over the forecast period. This is in line with The Southern Company's (BBB+/Stable) utility EBITDA of 86% but compares more favorably against Sempra's (BBB+/Stable) 80%.
DEI's expected post CVOW leverage is higher than Sempra's (mid- to high 4.5x) and Southern's expected consolidated FFO leverage of approximately 4.7x. Positively, DEI-level debt will be significantly reduced upon the completion of asset sales bringing it to approximately 30%, which is in the higher part of the 30% range of most of its peers. DEI, Sempra and Southern all have significant construction risk; Dominion is constructing CVOW, Sempra is a part owner in Port Arthur LNG project and Southern is in the final stages of constructing two new nuclear units.
Key Assumptions
Use of asset sale proceeds to reduce parent level debt
Annual equity issuance of $700 million
Current common dividend rate of $2.67 per share
Maintenance of utility subsidiaries capital structures in line with regulatory capital structures;
No adverse regulatory changes;
VEPCo issuance of $1.3 billion fuel securitization with proceeds to reduce parent level debt;
CVOW completion in 2026 at an estimated cost of $9.8 billion and implementation of rider recovery as envisioned in the legislation;
Execution of Stonepeak CVOW partnership agreement by Dec. 31, 2024;
Completion of announced LDC divestitures by Dec. 31, 2024.
RATING SENSITIVITIES
Dominion Energy, Inc.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
Positive rating action is not likely at this time given the large capital investment plan and high consolidated leverage. However, the ratings could be upgraded if FFO leverage drops below 4.3x on a sustainable basis.
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
FFO leverage expected to exceed 5.4x during the offshore wind project permitting and construction phases, followed by 5.0x after beginning service;
A downgrade of VEPCo's IDR to 'BBB+';
Material escalation of CVOW costs above current estimate of $9.8 billion and/or delays beyond scheduled YE 2026 completion;
Failure to complete the sale of 50% CVOW interest by the end of 2024;
Significant project costs not deemed recoverable by the VSCC and/or denial of rider recovery for CVOW;
Breach of a major CVOW EPC or supplier contract;
Unfavorable regulatory or legislative developments.
Virginia Electric and Power Company
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
Positive rating action is not likely in the near future given the capex plan and CVOW construction.
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
An increase in FFO leverage above 4.5x;
Material escalation of CVOW costs above current estimate of $9.8 billion and/or delays beyond scheduled YE 2026 completion;
Failure to complete the sale of 50% CVOW interest by the end of 2024;
Significant project costs not deemed recoverable by the SCC and/or denial of rider recovery for CVOW;
Breach of a major CVOW EPC or supplier contract;
Unfavorable regulatory or legislative developments;
A downgrade of two notches or more at DEI under Fitch's parent and subsidiary linkage criteria
Dominion Energy South Carolina, Inc.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
Sustained FFO leverage at or below 3.5x.
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
Unfavorable state regulatory or legislative developments.
FFO leverage consistently and materially exceeding 4.5x.
A downgrade of two notches or more at DEI under Fitch's parent and subsidiary linkage criteria.
Public Service Company of North Carolina, Incorporated
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
Sustained FFO leverage at or below 3.5x.
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
FFO leverage consistently and materially exceeding 4.5x;
Unfavorable regulatory developments;
Downgrade of two notches or more at DEI under Fitch's parent and subsidiary linkage criteria.
Questar Gas Company
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
FFO leverage below 3.5x on a sustainable basis.
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
An increase in FFO leverage above 4.5x on a sustainable basis;
Unfavorable regulatory developments;
Downgrade of two notches or more at DEI under Fitch's parent and subsidiary linkage criteria.
Liquidity and Debt Structure
Adequate Liquidity: In June 2021, DEI extended the maturity of its $6.0 billion joint revolving credit agreement to June 2026, with the potential to be extended to June 2028. As of Dec. 31, 2023, the current subsidiary sublimits under this facility are as follows: DEI $3.50 billion, VEPCo $1.75 billion, DESC $500 million and QGC $250 million.
If any of the above DEI subsidiaries have liquidity needs in excess of their respective current sub-limit, it can be changed or such needs could be satisfied through short-term intercompany borrowings from DEI or the intercompany money pool.
DEI also entered into a $900 million supplemental credit facility maturing June 2024. The supplemental credit facility offers a reduced interest rate margin for borrowed amounts allocated to certain environmental sustainability or social justice initiatives. In March 2023, DEI borrowed $450 million with the proceeds used for general corporate purposes. In April 2023, Dominion Energy repaid $450 million borrowed for general corporate purposes. In September 2023, Dominion Energy borrowed $450 million under this facility with the proceeds used for general corporate purposes. In October 2023, Dominion Energy repaid $450 million borrowed for general corporate purposes. At Dec. 31, 2023, Dominion Energy had $450 million outstanding.
DEI does not guarantee the debt obligations of its utility subsidiaries. DEI, VEPCo, DESC and QGC are individually borrowers under DEI's joint revolving credit facility. PSNC is not a borrower under DEI's credit facility and relies solely on DEI for their short-term liquidity needs.
Per the credit agreement, DEI's calculated total debt/total capital ratio is not to exceed 67.5%. As of Dec. 31, 2023, the actual ratio was 61.6%. On a consolidated basis, DEI had total liquidity of $2.62 billion, including $184 million of cash as of Dec. 31, 2023. DEI's consolidated long-term debt maturities are as follows 2024: $6.581 billion, 2025: $1.519 billion, 2026: $2.140 billion, 2027: $1,804 billion, and 2028: $1.309 billion
Issuer Profile
Upon completion of the LDC divestures, DEI's business portfolio will consist of two state-regulated utilities, nuclear power generation, contracted renewables, and renewable natural gas facilities. VEPCo will continue to be the largest contributor comprising about 75% of DEI's average annual earnings over the 2025-2029 five-year plan, followed by DESC at approximately 15%.
Summary of Financial Adjustments
DEI debt is adjusted by assigning 50% equity credit to DEI's enhanced junior subordinated debentures, trust preferred and perpetual preferred stock.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.
DOMINION ENERGY, INC. 
