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Dominion Energy (D) Sells 50% Stake in Cove Point LNG for $3.5B
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Dominion Energy (D - Free Report) recently announced the completion of a definitive agreement to sell its 50% noncontrolling limited partner interest in Cove Point LNG, LP to Berkshire Hathaway Energy. The total transaction value is estimated to be $3.5 billion, inclusive of transaction proceeds and expected proceeds from the termination of related interest rate derivatives.
Proceeds from the sale, are expected to be utilized for debt repayment, including an existing $2.3 billion term loan secured by Dominion Energy's noncontrolling interest in Cove Point.
Dominion Energy's decision to divest its interest in Cove Point LNG underscores its commitment to its core regulated utility operations and further strengthens its financial position. The sale to Berkshire Hathaway Energy marks a significant milestone in Dominion Energy's ongoing strategic realignment.
Dominion’s Long-Term Plans
Dominion Energy’s portfolio realignment strategy focusing on regulated assets is evident from its investments in regulated infrastructure and other fields whose outputs are sold under long-term purchase agreements (PPAs). Dominion divested some of its merchant generation facilities and electric retail energy marketing business to focus on core operations.
Dominion Energy has plans to invest $42 billion in offshore wind and solar projects during 2022-2035 to further expand renewable operations. Organic projects and acquired assets would further expand Dominion’s clean energy portfolio. Dominion Energy aims to attain net-zero carbon and methane emissions from its electric generation and natural gas infrastructure by 2050. The company aims to cut emissions by 70-80% by 2035 from the 2005 level.
Transition in Energy Space
The operators in the U.S. electric power sector are gradually moving toward cleaner sources of energy to produce electricity. Per EIA, the annual share of U.S. electricity generation from renewable energy sources will rise from 2% in 2022 to 23% in 2023 and 25% in 2024 as a result of the continuing addition of solar and wind-generating capacity.
Companies from the Zacks Utilities sector are setting targets to reduce their emissions. Among them are Alliant Energy (LNT - Free Report) , Xcel Energy (XEL - Free Report) and Duke Energy (DUK - Free Report) . All these companies will make substantial investments and have decided to add more renewable energy sources in their generation portfolio and exit from polluting sources to achieve zero-emission targets.
Price Performance
Over the past month, shares of Dominion Energy have lost 0.7%, narrower compared to the industry’s 1.2% decline.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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Dominion Energy (D) Sells 50% Stake in Cove Point LNG for $3.5B
Dominion Energy (D - Free Report) recently announced the completion of a definitive agreement to sell its 50% noncontrolling limited partner interest in Cove Point LNG, LP to Berkshire Hathaway Energy. The total transaction value is estimated to be $3.5 billion, inclusive of transaction proceeds and expected proceeds from the termination of related interest rate derivatives.
Proceeds from the sale, are expected to be utilized for debt repayment, including an existing $2.3 billion term loan secured by Dominion Energy's noncontrolling interest in Cove Point.
Dominion Energy's decision to divest its interest in Cove Point LNG underscores its commitment to its core regulated utility operations and further strengthens its financial position. The sale to Berkshire Hathaway Energy marks a significant milestone in Dominion Energy's ongoing strategic realignment.
Dominion’s Long-Term Plans
Dominion Energy’s portfolio realignment strategy focusing on regulated assets is evident from its investments in regulated infrastructure and other fields whose outputs are sold under long-term purchase agreements (PPAs). Dominion divested some of its merchant generation facilities and electric retail energy marketing business to focus on core operations.
Dominion Energy has plans to invest $42 billion in offshore wind and solar projects during 2022-2035 to further expand renewable operations. Organic projects and acquired assets would further expand Dominion’s clean energy portfolio. Dominion Energy aims to attain net-zero carbon and methane emissions from its electric generation and natural gas infrastructure by 2050. The company aims to cut emissions by 70-80% by 2035 from the 2005 level.
Transition in Energy Space
The operators in the U.S. electric power sector are gradually moving toward cleaner sources of energy to produce electricity. Per EIA, the annual share of U.S. electricity generation from renewable energy sources will rise from 2% in 2022 to 23% in 2023 and 25% in 2024 as a result of the continuing addition of solar and wind-generating capacity.
Companies from the Zacks Utilities sector are setting targets to reduce their emissions. Among them are Alliant Energy (LNT - Free Report) , Xcel Energy (XEL - Free Report) and Duke Energy (DUK - Free Report) . All these companies will make substantial investments and have decided to add more renewable energy sources in their generation portfolio and exit from polluting sources to achieve zero-emission targets.
Price Performance
Over the past month, shares of Dominion Energy have lost 0.7%, narrower compared to the industry’s 1.2% decline.
Image Source: Zacks Investment Research
Zacks Rank
Dominion Energy currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.