Robert M. Blue
President, Chief Executive Officer & Chairman of the Board at Dominion Energy
Thank you, Jim. I'll begin with safety. As shown on slide nine, through April of 2022, our OSHA recordable rate was 0.52. While overall results are tracking slightly higher than a year ago, they remain low relative to historical levels and substantially below industry averages. Our safety performance matters immensely to our more than 17,000 employees to their families and to the communities we serve, which is why it matters so much to me and why it is our first core value. Now I'll turn to updates around the execution of our growth plan. Our regulated offshore wind project continues to be on schedule and on budget. Major project milestones are listed on slide 10. As we reported earlier and as Jim mentioned, contracts for major offshore equipment suppliers were completed and signed in late 2021. These include contracts for foundations, transition pieces, substations, transportation, installation and subsea cabling and turbine supply and long-term service agreements. We've been pleased with the progress of the state rider approval review with intervener and staff testimony received, rebuttal testimony filed and a hearing scheduled to commence later this month. The final order is expected from the SEC in early August. The federal permitting process also continues and the next major milestone is receipt of the draft environmental impact statement expected in the second half of this year.
A few items to reiterate here. First, offshore wind, zero fuel cost and transformational economic development and jobs benefits are needed now more than ever. The project will also propel Virginia closer to achieving its goal to become a major hub for the burgeoning offshore wind value chain up and down the country's East Coast. Second, unlike any other such project in North America, this proposed investment is 100% regulated and eligible for rider recovery in Virginia. Finally, the VCEA provides very specific requirements on the presumption of prudency for investment in the project, which we are confident that we have already met. Turning to our Jones-Act vessel. The SEC in March approved our affiliates act application for DEV's contract. The vessel remains on track for delivery in late 2023, and we expected to be entering service with plenty of time to support the 2024 turbine installation season. Turning to other notable clean energy investment updates. On April 23, we filed with the support of the SEC staff and consumer council, a settlement in the pending nuclear subsequent license renewal rider filing. Nuclear life extension represents nearly $4 billion in capital investment through 2035. And this settlement agreement includes the first phase, which represents about $1 billion of that total. This agreement is very good news, and if approved by the SEC, resolves all issues in that case. In our estimation, the success of greenhouse gas emissions reduction targets requires the ongoing viability of existing nuclear facilities. These Virginia units have performed exceptionally well for years, providing over 30% of our customers' energy needs and providing that energy at low cost and carbon free. Based on PJM's carbon intensity rate, just in the last year, Surry and North Anna avoided approximately 14 million tons of regional CO2 emissions.
To provide some context, this is equivalent to a reduction of more than three million nonelectric cars for the entire year. Successful nuclear life extension is a win for customers and the environment, and we want to thank the parties to this proposed settlement for their efforts. On solar, I'm very pleased that the SEC in March approved our most recent clean energy filing, which included nearly 1,000 megawatts of solar and energy storage capacity, our fifth consecutive such approval. We also recently issued an RFP for an additional 1,200 megawatts of solar capacity and 125 megawatts of energy storage. Our next clean energy filing will take place later this year. Our current portfolio of utility-scale projects, which are under various stages of development, represent over seven gigawatts of capacity. This pipeline goes a long way towards fulfilling our plan to meet the approximately 10 gigawatts of utility-owned solar by 2035 as called for by the VCEA. Turning to the solar supply chain. As we discussed on prior calls, there continue to be challenges, supply is still tight and prices for certain components are still up. Recently, there's been a lot of focus on the potential impacts from the Department of Commerce's anti-circumvention review. Let me share a few thoughts on: one, our expectations for that review; two, the degree to which we have already substantially derisked our development activities; and three, our view of what the impacts could be if there are delays and what we might do to mitigate them. First, what do we expect in relation to the review? We expect that preliminary findings will be known by as early as late August.
And at that time, we should have a better informed view of whether tariffs apply to panels being imported from the four Southeast Asian countries included in the review. To clarify, our view is that panels are currently physically available as this review is not about prohibiting imports. What is not clear is whether or not tariffs will apply to panels from the countries included in this review. I'd also note that we're encouraged by the Department of Commerce announcement earlier this week, which further narrowed the focus of this proceeding. Second, how have we derisked our development program? For 2022, our projects are not impacted by the review as the panels needed for those projects are already in the country. These projects remain very much on track. This holds true for our regulated solar project in Virginia and the more modest amount of unregulated solar we're developing on behalf of key customers. For 2023, our portfolio of projects is also largely derisked and on track. All projects in this portfolio, which totaled some 1,100 megawatts across 16 regulated and unregulated projects are fully contracted with 60% of the panels being installed within this portfolio not expected to be impacted by the review, including panels that have been domestically sourced. For the remaining 40%, we expect the timing to be such that there is adequate time to resolve all potential tariff cost issues, if any, following the resolution of at least the first stages of the review.
Now what would be the impact if tariffs are applicable at the end of the day? Given our competitive advantages, including the strength of our supplier relations and contracts, we work to minimize the cost impact. Keep in mind that while a tariff could be a material percentage of an individual panels cost, it may not be as major a cost driver of an overall utility scale solar installation. To provide some context, panels typically account for 30% of a project's total cost. So a 50% tariff on panels would increase the total cost of the project by 15%. So what does that mean for our 2023 portfolio? For the up to 40% potentially subject to review, which represents $800 million in planned capital investment, a hypothetical 50% tariff, if applied to every module, represents only about $120 million of incremental capital or less than one percent of our total capital budget for that year. For our regulated solar projects, these additional costs will become part of our rider approved solar project in Virginia and be subject to approval during the normal annual true-up for approved projects. For our nonregulated solar projects, which are being done on behalf of our key customers, typically very large C&I and data center customers, we expect to work with these customers to minimize the impacts of the tariffs.
And given the time line for development as well as the relative importance of these projects to those customers who have their own clean energy goals, we remain comfortable with our current development expectations. For 2024 and beyond, our view is that there's more than adequate time for us to see where all this goes. If tariffs apply, costs become part of our rider process for our regulated projects and PPA pricing would adjust for our unregulated projects. In the meantime, we're not standing idly by. We're actively engaged with the Biden administration, both through trade groups and directly through our federal delegation. This outreach is intended to remind the administration that in order to meet its longer-term climate goals, there has to be stability. We remain focused on the customer impact and advocate for energy policy that provides for an affordable clean energy transition. Finally, purely hypothetically, if there are delays related to this tariff review, what would the financial impacts be and what might we do to mitigate them? First, we look to accelerate other capital to maintain the same financial profile while maintaining affordable customer rates. We've already noted the very substantial programs we're working on. These customer beneficial programs are focused on resiliency and decarbonization.
On the other hand, if there are delays and were unable to accelerate capital, there'd be a slight help as lower capital needs would reduce financing needs. Lastly, we also would look to additional O&M control initiatives as we have successfully demonstrated our ability to manage controllable costs, as Jim mentioned earlier. In summary, it's still early and we'll have to work through these issues. We're working closely with policymakers and other industry participants, and we'll continue to provide updates as things develop, but we simply do not see any material financial impacts at this time. Shifting gears, let me now address RGGI. In anticipation of the withdrawal of Virginia from RGGI, we filed this morning with the SEC to suspend our rider RGGI that was approved to recover the pass-through costs related to required purchases of allowances through the RGGI market-based trading program for carbon dioxide emissions. We also requested that RGGI compliance costs incurred through July 31 and not yet recovered totaling approximately $178 million be alternatively recovered through DEV's base rates currently in effect. If approved, this proposal will provide a meaningful reduction to customer bills in a way that allows us to continue the rapid decarbonization of our system in Virginia. Our view on RGGI is unchanged from the comments we made to the Virginia DEQ in 2018. While we are committed to the ongoing transition to cleaner and lower carbon emitting resources, we're concerned that Virginia's linkage to the RGGI program through the Virginia carbon proposal would result in a financial burden on customers with no real mitigation of greenhouse gas emissions regionally. Next is our gas distribution business.
As we've discussed in the past, our gas utility operations are enhancing sustainability and working to reduce Scope one and three emissions with focused efforts around energy efficiency, renewable natural gas and hydrogen blending, operational modifications, potential changes around procurement practices and unique customer product offerings. For example, in March, we launched the CarbonRight program in Utah, which allows customers to offset 100% of their carbon emissions from natural gas usage for $5 a month. On the regulatory front, we continue to see strong support for timely recovery on prudently incurred investment to provide safe, reliable, affordable and increasingly sustainable service, including pipeline replacement efforts and expansion of service to rural communities. Earlier this week, we filed a general rate case in Utah, which is required every three years. We asked in the case for an ROE of 10.3% and a revenue requirement increase of $70 million, which represents around a 6% increase to a typical customer bill. We expect new rates based on a typical procedural schedule to be effective in January of next year. On RNG, we remain the largest agriculture-based RNG developer in the country. We've recently commenced operations at our second RNG project and expect five additional projects to come online this year for a total of seven projects producing RNG-based natural gas. In addition to these seven projects, we have a portfolio of projects in various stages of development.
At Dominion Energy South Carolina, I'd first like to highlight that business's excellent operating performance. Our employees completed the quarter with zero injuries, a goal that remains the top priority for our entire company. In addition, our commitment to the customer is unwavering. During the quarter, the average annual customer outage minutes, or SAIDI, was reduced by 20% relative to the same period last year, placing us again in the top quartile among all utilities in the Southeast. This commitment to our customers was recently validated when Dominion Energy South Carolina was recognized as the easiest utility to do business with by Escalent, a top human behavior and analytics advisory firm. As it relates to our generation modernization program in South Carolina, we're on track. As a reminder, we're placing several of our older generation peaking turbines with modern, more efficient units. Modernizing this equipment will lower fuel cost to customers, improve environmental performance and provide reliability and efficiency benefits to accommodate the large and growing intermittent solar generation in South Carolina. We're moving forward with two of the proposed sites, and we'll hold an RFP for a third later this year. Turning to slide 13. Let me recap where we are on customer rates in Virginia, our largest service territory. Again, we are dedicated to the delivery of safe and reliable energy to our customers, which is also affordable.
Over the past 10 years, our rates, including fuel recovery, have increased on average by less than 1% per year, which is much lower than the average annual inflation rate over that period. Meanwhile, the share of our customers' wallet attributable to DEV's customer bill has declined over that time period, a testament to the fact that DEV's rates have remained relatively stable despite an overall increase in household income during that time. We also have rates that remain below the national and various regional averages. Based on EIA data, our typical customer rate is 13% lower than the national average. Looking ahead, we expect to continue to offer a compelling value proposition to our customers with the addition of zero fuel resources to support sales growth driven by very robust data center demand, the ramp-up in electric vehicle adoption in our service territory and continued customer growth. In summary, we continue to be on an unwavering path to meet Virginia's clean energy goals by 2045. And it's incumbent upon us to deliver energy that is safe, reliable, affordable and increasingly sustainable. Finally, let me highlight noteworthy developments in the legislative landscape for our company in Virginia. The General Assembly passed and the Governor signed House Bill 894, which tasks the SCC with setting up a site readiness program to encourage utility infrastructure investment in industrial sites designated as high demand. It also directs the Virginia Department of Energy to convene a work group to identify strategies for promotion of advanced small modular nuclear reactors.
This bill exemplifies Virginia's pro-business, common sense approach to energy policy and regulation that puts a priority on reliability, affordability and sustainability. While still early, we applaud efforts to support research and development of technologies that will allow the utility industry to drive further carbon emissions reductions. I see all this is consistent with the common sense approach to energy policy regulation that we typically see across our premier state jurisdictions. With that, let me summarize our remarks on slide 14. Safety remains our top priority for the entire company. We extended our track record of reporting results in line with our financial guidance. We affirmed our existing annual and long-term earnings guidance and our dividend growth guidance. We're focused on executing across project construction and achieving regulatory outcomes that serve our customers well, and we're aggressively pursuing our vision to be the most sustainable regulated energy company in America. We're now ready to take your questions.