Dominion Energy SC's Q3 Net Income Jumps 72% on Rate Hikes

TL;DR

**Dominion Energy SC is a solid buy, leveraging regulatory approvals to boost profits despite rising costs.**

AI Summary

Dominion Energy South Carolina, Inc. (DESC) reported a significant increase in net income and operating revenue for the nine months ended September 30, 2025. Net income rose to $428 million, a substantial increase from $248 million in the same period of 2024, while operating revenue climbed to $2,741 million from $2,357 million. This growth was driven by approved rate adjustments, including a $154 million annual increase in the electric fuel cost component effective May 2025, and a $15 million base rate increase for natural gas effective November 2025. The company also saw an increase in property additions and construction expenditures, reaching $832 million compared to $767 million in 2024, reflecting investments like the approved $55 million Ritter-Yemassee Transmission Line #2 project. Despite increased operating expenses, including fuel used in electric generation rising to $531 million from $450 million, DESC's strategic rate adjustments and capital investments contributed to improved financial performance. The company also received a $250 million capital contribution from its parent, Dominion Energy, Inc., bolstering its equity.

Why It Matters

This filing reveals a strong financial performance for Dominion Energy South Carolina, driven largely by regulatory approvals for rate increases. For investors, this signals a stable and predictable revenue stream, crucial for a regulated utility, and demonstrates the company's ability to pass on costs and invest in infrastructure. Employees benefit from continued investment in projects like the Ritter-Yemassee Transmission Line #2, indicating job stability and growth opportunities. Customers, however, will face higher utility bills due to the approved $154 million annual electric fuel cost increase and the $15 million natural gas base rate increase. In the competitive utility landscape, DESC's ability to secure these rate adjustments underscores its market position and regulatory influence, potentially setting a precedent for other utilities seeking similar cost recoveries.

Risk Assessment

Risk Level: low — The risk level is low due to the regulated nature of DESC's business, which allows for predictable revenue recovery through approved rate adjustments. The South Carolina Commission approved a $154 million annual increase in the electric fuel cost component and a $15 million base rate increase for natural gas, providing clear mechanisms for cost recovery and revenue growth.

Analyst Insight

Investors should consider this a positive signal for Dominion Energy, Inc. (parent company) and its regulated utility operations. The consistent ability to secure rate increases and manage capital expenditures suggests a stable, income-generating asset. Monitor future regulatory filings for continued rate adjustment approvals and capital project investments.

Financial Highlights

debt To Equity

N/A

revenue

$2,741M

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

$428M

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

+16.3%

Revenue Breakdown

Key Numbers

• $2,741M — Operating Revenue (Increased from $2,357 million in 2024 for the nine months ended September 30, 2025)
• $428M — Net Income (Increased from $248 million in 2024 for the nine months ended September 30, 2025)
• $154M — Annual Electric Fuel Cost Increase (Approved by South Carolina Commission, effective May 2025)
• $15M — Natural Gas Base Rate Increase (Approved by South Carolina Commission, effective November 2025)
• $832M — Property Additions and Construction Expenditures (Increased from $767 million in 2024 for the nine months ended September 30, 2025)
• $55M — Ritter-Yemassee Transmission Line #2 Project Cost (Approved project cost for new transmission line)
• $250M — Capital Contribution from Parent (Received from Dominion Energy, Inc. during the nine months ended September 30, 2025)
• $531M — Fuel Used in Electric Generation (Increased from $450 million in 2024 for the nine months ended September 30, 2025)
• 40,296,147 — Shares of Common Stock Outstanding (As of October 24, 2025, all held by SCANA Corporation)

Key Players & Entities

• DOMINION ENERGY SOUTH CAROLINA, INC. (company) — registrant
• SCANA Corporation (company) — wholly-owned subsidiary of Dominion Energy, Inc. and parent of DESC
• Dominion Energy, Inc. (company) — ultimate parent company
• South Carolina Commission (regulator) — approved rate adjustments and project applications
• Ritter-Yemassee Transmission Line #2 (project) — new 17-mile 230 kV transmission line
• Dominion Energy Services, Inc. (company) — affiliated VIE providing shared services
• GENCO (company) — variable interest entity consolidated by DESC
• Fuel Company (company) — variable interest entity consolidated by DESC
• South Carolina Office of Regulatory Staff (regulator) — filed settlement agreement with DESC

FAQ

Risk Factors

• Rate Case Outcomes [high — regulatory]: Changes in approved rates for electric and natural gas services can significantly impact revenue and profitability. The company relies on regulatory approvals for rate adjustments, such as the $154 million electric fuel cost increase and $15 million natural gas base rate increase, to recover costs and achieve its financial targets.
• Capital Expenditure Execution [medium — operational]: The company is undertaking significant capital investments, with property additions and construction expenditures reaching $832 million for the nine months ended September 30, 2025. Projects like the $55 million Ritter-Yemassee Transmission Line #2 require successful execution to stay on budget and schedule.
• Fuel Cost Volatility [medium — market]: Fluctuations in fuel costs, such as the increase in fuel used for electric generation to $531 million from $450 million, can impact operating expenses. While rate adjustments help recover these costs, significant volatility can create short-term margin pressures.
• Parent Company Support [low — financial]: The company received a $250 million capital contribution from its parent, Dominion Energy, Inc. While this bolsters equity, it highlights a reliance on parent support for financial stability and investment.

Industry Context

Dominion Energy South Carolina operates in the regulated utility sector, characterized by stable demand but significant capital intensity. The industry is increasingly focused on infrastructure modernization, renewable energy integration, and managing the costs associated with environmental regulations. Competitive pressures are generally limited due to the monopolistic nature of regulated utilities, with success largely dependent on regulatory approvals and efficient operations.

Regulatory Implications

The company's financial performance is heavily influenced by decisions from the South Carolina Commission. Approved rate adjustments, such as the recent electric fuel cost and natural gas base rate increases, are critical for revenue recovery and profitability. Future regulatory decisions on capital projects and cost recovery mechanisms will continue to shape DESC's financial outlook.

What Investors Should Do

1. Monitor future rate case filings and outcomes for potential impacts on revenue and profitability.
2. Track the progress and cost management of major capital projects like the Ritter-Yemassee Transmission Line #2.
3. Analyze the impact of fuel cost volatility on operating margins, even with rate recovery mechanisms in place.
4. Assess the ongoing need for and impact of capital contributions from the parent company, Dominion Energy, Inc.

Key Dates

• 2025-05-01: Effective Date of Electric Fuel Cost Increase — A $154 million annual increase in the electric fuel cost component was approved, directly contributing to higher operating revenue and helping to offset rising fuel expenses.
• 2025-11-01: Effective Date of Natural Gas Base Rate Increase — A $15 million increase in natural gas base rates was approved, expected to enhance revenue from natural gas operations.
• 2025-09-30: Nine Months Ended — Period for which the significant increases in net income ($428M vs $248M) and operating revenue ($2,741M vs $2,357M) were reported, driven by rate adjustments and capital investments.
• 2025-10-24: Shares of Common Stock Outstanding Date — As of this date, 40,296,147 shares of common stock were outstanding, all held by SCANA Corporation, indicating full ownership by the parent structure.

Glossary

AFUDC

Allowance for funds used during construction. This is a non-cash item representing the cost of borrowed funds and equity used to finance construction projects during the construction period. (While not explicitly quantified in the summary, AFUDC is a common component in utility accounting and can impact reported earnings and the rate base.)

DESC

Dominion Energy South Carolina, Inc. The legal entity whose financial performance is being analyzed. (This is the primary subject of the 10-Q filing.)

VIE

Variable Interest Entity. An entity that is controlled by another entity through contractual arrangements, even if it does not have a majority of the voting interest. (DESC consolidates GENCO and Fuel Company as VIEs, meaning their financial results are included in DESC's consolidated statements.)

Rate Adjustment

An approved change in the prices charged to customers for utility services, typically to allow the company to recover its costs and earn a fair rate of return. (Key driver of DESC's increased revenue and net income, as evidenced by the electric fuel cost and natural gas base rate increases.)

Capital Contribution

An investment of capital into a company, typically from its owners or parent company. (DESC received a $250 million capital contribution from its parent, Dominion Energy, Inc., strengthening its equity position.)

Year-Over-Year Comparison

For the nine months ended September 30, 2025, Dominion Energy South Carolina, Inc. has demonstrated a strong financial improvement compared to the same period in 2024. Operating revenue increased by approximately 16.3% to $2,741 million, and net income saw a substantial rise of 72.6% to $428 million. This growth is primarily attributed to approved rate adjustments that offset increased operating expenses, particularly in fuel costs, and reflect continued investment in infrastructure.

Filing Documents

• ck0000091882-20250930.htm (10-Q) — 3041KB
• ck0000091882-ex31_a.htm (EX-31.A) — 14KB
• ck0000091882-ex31_b.htm (EX-31.B) — 14KB
• ck0000091882-ex32_a.htm (EX-32.A) — 10KB
• 0001193125-25-260249.txt ( ) — 14532KB
• ck0000091882-20250930.xsd (EX-101.SCH) — 1408KB
• ck0000091882-20250930_htm.xml (XML) — 3853KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements 5 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 28 Item 4.

Controls and Procedures

Controls and Procedures 31

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 32 Item 1A.

Risk Factors

Risk Factors 32 Item 5. Other Information 32 Item 6. Exhibits 33 2 GLOSSARY OF TERMS The following abbreviations or acronyms used in this Form 10-Q are defined below: Abbreviation or Acronym Definition 2017 Tax Reform Act An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (previously known as The Tax Cuts and Jobs Act) enacted on December 22, 2017 AFUDC Allowance for funds used during construction AOCI Accumulated other comprehensive income (loss) ARO Asset retirement obligation bcf Billion cubic feet BTA Best technology available CAA Clean Air Act CCR Coal combustion residual CEO Chief Executive Officer CERCLA Comprehensive Environmental Response, Compensation and Liability Act of 1980, also known as Superfund CFO Chief Financial Officer CO 2 Carbon dioxide Cooling degree days Units measuring the extent to which the average daily temperature is greater than 75 degrees Fahrenheit, calculated as the difference between 75 degrees and the average temperature for that day CODM Chief Operating Decision Maker CPCN Certificate of Public Convenience and Necessity CUA Capacity Use Area CWA Clean Water Act DES Dominion Energy Services, Inc. DESC The legal entity, Dominion Energy South Carolina, Inc., one or more of its consolidated entities or operating segment, or the entirety of Dominion Energy South Carolina, Inc. and its consolidated entities Dominion Energy The legal entity, Dominion Energy, Inc., one or more of its consolidated subsidiaries (other than DESC) or operating segments, or the entirety of Dominion Energy, Inc. and its consolidated subsidiaries Dominion Energy South Carolina Dominion Energy South Carolina operating segment DSM Demand-side management Dth Dekatherm ELG Rule Effluent limitations guidelines for the steam electric power generating category EPA U.S. E

FINANCI AL INFORMATION

PART I. FINANCI AL INFORMATION

FINANC IAL STATEMENTS

ITEM 1. FINANC IAL STATEMENTS Dominion Energy South Carolina, Inc. Consolidated B alance Sheets (Unaudited) (millions) September 30, 2025 December 31, 2024 ASSETS Utility plant in service $ 16,909 $ 16,300 Accumulated depreciation and amortization ( 5,946 ) ( 5,761 ) Construction work in progress 996 899 Nuclear fuel, net of accumulated amortization 203 224 Utility plant, net ($ 819 and $ 824 related to VIEs) 12,162 11,662 Nonutility Property and Investments: Nonutility property, net of accumulated depreciation 16 16 Assets held in trust, nuclear decommissioning 279 268 Nonutility property and investments, net 295 284 Current Assets: Cash and cash equivalents 7 — Receivables: Customer, net of allowance for uncollectible accounts of $ 7 and $ 6 433 423 Affiliated and related party 2 4 Other 85 104 Inventories (at average cost): Fuel 99 83 Gas storage 25 22 Materials and supplies 238 211 Prepayments 116 91 Derivative assets (1) 56 63 Regulatory assets 293 299 Other current assets 16 16 Total current assets ($ 95 and $ 79 related to VIEs) 1,370 1,316 Deferred Debits and Other Assets: Derivative assets (1) 254 309 Regulatory assets 3,307 3,342 Affiliated receivables 29 26 Other 101 102 Total deferred debits and other assets ($ 28 and $ 25 related to VIEs) 3,691 3,779 Total assets $ 17,518 $ 17,041 (1) See Note 12 for amounts attributable to affiliates. See Notes to Consolidated Financial Statements. 5 Dominion Energy South Carolina, Inc. Consolidated Balance Sheets—(Continued) (Unaudited) (millions) September 30, 2025 December 31, 2024 CAPITALIZATION AND LIABILITIES Common Stock - no par value, 40.3 million shares outstanding at both dates $ 4,338 $ 4,088 Retained earnings 1,037 689 Accumulated other comprehensive loss ( 1 ) ( 1 ) To

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) The following notes should be read in conjunction with the Notes to Consolidated Financial Statements appearing in DESC's Annual Report on Form 10-K for the year ended December 31, 2024. These are interim financial statements and, due to the seasonality of DESC's business and matters that may occur during the rest of the year, the amounts reported in the Consolidated Statements of Comprehensive Income are not necessarily indicative of amounts expected for the full year. In the opinion of management, the information furnished herein reflects all adjustments which are necessary for a fair statement of the results for the interim periods reported, and such adjustments are of a normal recurring nature unless otherwise noted. In addition, the preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain amounts in DESC's 2024 Consolidated Financial Statements and Notes have been reclassified to conform to the 2025 presentation for comparative purposes; however, such reclassifications did not affect DESC's net income and other comprehensive income, total assets, liabilities, equity or cash flows. DESC is a wholly-owned subsidiary of SCANA, which is a wholly-owned subsidiary of Dominion Energy. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Consolidation and Variable Interest Entities DESC has determined that it has a controlling financial interest in each of GENCO and Fuel Company (which are considered to be VIEs) and, accordingly, DESC's Consolidated Financial Statements include, after eliminating intercompany balances and transactions, the accounts of DESC, GE

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