The ability to understand and manage an array of evolving technical, financial, regulatory, geopolitical and environmental risks is critical to sustainable performance.
Dominion’s enterprise risk assessment process provides a business planning framework to help define the company’s optimal risk and reward balance and align with our strategic priorities and the way capital is deployed to support those priorities. Dominion employs an integrated risk assessment framework to provide counsel to and prompt increased dialogue among business unit leadership teams, corporate senior management and the board of directors.
Some examples of enterprise risks that could have a material impact on our financial or operating performance include:
- Regulatory risks. Dominion is subject to extensive regulation at the federal, state and local levels. Compliance with regulations could result in increased costs. In addition, the rates of Dominion Virginia Power and the company’s natural gas transmission and distribution businesses are subject to regulatory review.
- Operating risks. Weather-related incidents, such as hurricanes and winter snow storms, can damage our utility infrastructure and cause power outages, which can result in a drop in energy use and significant repair costs.
- Commodity price risks. Dominion’s merchant power fleet is exposed to potentially volatile fuel costs and electricity prices in competitive wholesale markets. Changes in market prices for electricity and natural gas and other fuels could have an adverse affect on our financial results.
A more complete discussion of the above risks and other key risks affecting Dominion can be found in the company’s Form 10-K filing.