Moody's Ratings on Monday confirmed Dominion Energy Inc.'s Baa2 senior unsecured rating and P-2 commercial paper rating, while revising the issuer outlook to positive from negative. The ratings firm also affirmed the ratings of Dominion's key regulated subsidiaries - Virginia Electric and Power Company and Dominion Energy South Carolina Inc. - and left their outlooks at stable.
The change in outlook followed the announcement of a proposed, all-stock merger between Dominion and NextEra Energy Inc. Moody's said the transaction will leave NextEra guaranteeing Dominion's debt after the deal closes, a commitment the agency expects to result in a one-notch uplift relative to Dominion's current ratings.
Moody's noted the merger is expected to close in the second half of 2027, subject to required state and federal regulatory approvals. The agency reaffirmed Dominion's Baa2 rating on the basis of the company's regulated, vertically integrated utility operations and the strong regulatory support it receives in Virginia and South Carolina.
In justifying the affirmed rating, Moody's cited a string of strategic financial moves Dominion undertook in 2024 that reduced parent-level leverage and curtailed the company's exposure to the Coastal Virginia Offshore Wind, or CVOW, project. The ratings agency also pointed to common equity issuances in 2025 totaling roughly $1.5 billion as having strengthened Dominion's financial policies.
Moody's expects Dominion's 2025 cash flow from operations before working capital to debt ratio to remain in the 14-15% range, a metric it used in assessing the firm's credit profile.
The affirmation of Virginia Electric and Power Company's rating reflects its profile as a vertically integrated utility and a substantial rate base, which Moody's placed at about $48 billion. Moody's highlighted the CVOW project's cost pressures, which increased the budget from $9.8 billion to $11.4 billion, and noted the project is approximately 75% complete.
Company management anticipates finishing the CVOW project before the end of June 2027, a projected completion that Moody's observed would be ahead of the expected timing for the merger to close.
Dominion is a multi-state utility holding company based in Richmond, Virginia. Its two principal subsidiaries serving Virginia and South Carolina together provide electricity to about 4.1 million customers and gas to roughly 500,000 customers. Moody's reported the combined rate base for those operations was about $59.6 billion as of December 31, 2025.
Bottom line: Moody's affirmed Dominion's long- and short-term ratings but upgraded the issuer outlook to positive based on the anticipated NextEra guarantee and Dominion's recent financial actions; the merger remains subject to regulatory approval and timing constraints tied to the CVOW project's completion and the planned second-half-2027 close.