The priorities of the Company have not changed—to provide reliable, affordable, and increasingly clean power to its customers. However, this year the long-term projected amount of power needed in the DOM Zone materially increased. The 2023 PJM Load Forecast included a significant increase in the expected peak and energy demand in the DOM Zone over the Planning Period, with annual peak and energy load growth of nearly 5% and 7% respectively, over the next decade. This increase is driven primarily by data centers and, to a lesser extent, electrification in both the Company’s service territory and in other service areas within DOM Zone. Winter Storm Elliott on December 23 and 24, 2022, also magnified the need for dispatchable generation, backup fuel sources, and resources that are available to generate during winter peaks. Through the development of this 2023 Plan, the Company addresses these needs with a diverse portfolio of resources.

The Company is transforming its distribution grid to provide an enhanced platform for distributed energy resources (“DERs") and targeted DSM programs; more secure and reliable service, leading to the increased availability of DERs; and more ways for customers to save energy and money through DSM programs and other rate offerings. The Company has also received approval of new customer offerings in Virginia to support and incentivize the installation of charging infrastructure for electric vehicles (“EVs"), including an offering to support fleet electrification.

Over the long term, achieving the clean energy goals of Virginia, North Carolina, and the Company will require supportive legislative and regulatory policies, technological advancements, grid modernization, and broader investments across the economy. This includes support for the testing and deployment of technologies, such as long duration energy storage; renewable natural gas; vehicle-to-grid; hydrogen; advanced nuclear; and carbon capture and sequestration, all of which have the potential to significantly reduce greenhouse gas emissions.

In this 2023 Plan, the Company presents five alternative plans (the “Alternative Plans") to meet customers’ needs in the future under different scenarios, which are designed using constraint-based least-cost planning techniques and proven technologies:

• Plan A: This Alternative Plan presents a least-cost plan that meets only applicable carbon regulations and the mandatory renewable energy portfolio standard program (“RPS Program") requirements of the Virginia Clean Economy Act (“VCEA"). The Company presents this Alternative Plan in compliance with prior SCC and NCUC orders and for cost comparison purposes only. It is important to emphasize that Alternative Plan A does not meet the development targets for solar, wind, and energy storage resources in Virginia established through the VCEA.

• Plan B: This Alternative Plan includes the significant development of solar, wind, and energy storage envisioned by the VCEA, petitioned by 2035 and built by 2038. Plan B includes the development of six new small modular reactors (“SMRs") starting in 2034 and a second offshore wind project, providing carbon free power. This plan does require an increase in the Company’s ability to import capacity and energy by 2040. Plan B also preserves existing generation and includes several new gas combustion turbines to address future energy and system reliability needs.

• Plan C: This Alternative Plan is like Plan B in preserving existing generation to address future system reliability, stability, and energy independence issues, with identical assumptions regarding the retirement of existing Company-owned carbon-emitting generation. Plan C differs from Plan B in that all new generation resources were selected on a least-cost optimization basis without regard for the development targets for solar, wind, and energy storage resources in Virginia established through the VCEA.

• Plan D: This Alternative Plan uses similar assumptions as Plan B but retires all Company-owned carbon-emitting generation by the end of 2045, resulting in zero carbon dioxide (“CO2") emissions from the Company’s fleet in 2046. In order to retire all carbon-emitting units by the end of 2045, the Company will need to build and buy significant incremental capacity to reliably meet customer load. Plan D shows the Company building over 4,500 MW of incremental energy storage and more than 3,000 MW of incremental SMRs to meet this need when compared to Plan B. Even with these additional resources, Plan D results in the Company purchasing 10,800 MW of capacity in 2045 and beyond, raising significant concerns about system reliability and energy independence, including over-reliance on out-of-state capacity to meet customer needs. This Plan will also require a substantial increase in energy purchase limits. Over time as more renewable energy and energy storage resources are added to the system and as other technology advances, the Company will continue gaining knowledge about the impact of such system changes to assess the ability of a Plan D approach to maintain system reliability.

• Plan E: This Alternative Plan is like Plan D in retiring all Company-owned carbon-emitting generation by the end of 2045. Plan E differs from Plan D in that all new generation resources were selected on a least-cost optimization basis without regard for the development targets for solar, wind, and energy storage resources in Virginia established through the VCEA. Like Plan D, Plan E would require the Company to build and buy significant incremental capacity and energy to reliably meet customer load. Over time as more renewable energy and energy storage resources are added to the system, the Company will continue gaining knowledge about the impact of such system changes to assess the ability of a Plan E approach to maintain system reliability.

All Alternative Plans utilize the load forecast prepared by PJM; assume a capacity factor for solar resources based on the lower of the design capacity factor or the three-year average of the Company’s existing solar facilities in Virginia; and assume that Virginia exits the Regional Greenhouse Gas Initiative (“RGGI") before January 1, 2024. All plans assume the retirement of Yorktown 3, Chesterfield 5, and Chesterfield 6 in May 2023. The 2023 Plan also presents multiple sensitivities on various assumptions. Notably, the Company presents a high load sensitivity that would require increased capacity and energy purchases even earlier in the Plan. Increased market reliance shown in sensitivities with higher load or less energy efficiency is a reliability concern. The Company also presents sensitivities on all Alternative Plans that show the higher cost to customers if Virginia remains in RGGI.

The table on numbered page 4 of the report presents a high-level summary of the Alternative Plans. The resource additions shown here are incremental to existing generation and approved generation under construction, including nearly 2,600 MW of offshore wind.

As can be seen in the Summary Table, all Alternative Plans show significant solar, wind and energy storage development over the 25-year Study Period. Additionally, Plans B through E include development of SMRs. Due to an increasing load forecast, and the need for dispatchable generation, the Alternative Plans show additional natural gas-fired resources and preserve existing carbon-emitting units beyond statutory retirement deadlines established in the VCEA. The law explicitly authorizes the Company to petition the SCC for relief from these requirements on the basis that the unit retirements would threaten the reliability or security of electric service to customers. If the Company ultimately retires all carbon-emitting generation by the end of 2045, as shown in Plans D and E, significant incremental wind, solar, nuclear, and energy storage resources are needed. While all Alternative Plans incorporate only known technologies, the Company fully expects that new technologies could take the place of today’s technologies over the 15-year Planning Period and the 25-year Study Period.

Going forward, long-term integrated resource plans will evolve and will continue to support the cleaner future envisioned by public policy, by lawmakers, and by the Company. As noted, this future, while achievable, will require supportive legislative and regulatory policies, technological advancements, grid modernization, and broader investments across the economy. It will also require further study and analyses of necessary investments in the transmission and distribution systems to ensure the reliable electric service that customers expect and deserve. For example, the Company knows that greater investments in some plans are required to support greater capacity and energy imports. Overall, the Company’s deliberate transitional approach to a cleaner future has, and will continue, to provide customers a path to clean energy that meets public policy objectives while maintaining the standard of reliability necessary to power Virginia’s and North Carolina’s modern economies.