S&P revises Dominion Energy view to positive

S&P said it revised the outlook for Dominion Energy Inc. and its subsidiaries to positive from stable on news the company will sell almost all of its gas transmission and storage assets to Berkshire Hathaway Energy Co. for $9.745 billion.

Concurrently, Dominion announced it was canceling the Atlantic Coast Pipeline due to ongoing delays and increasing cost uncertainty.

Also, at the same time, S&P placed its ratings at Dominion Energy Gas Holdings LLC (DEGH) and Dominion Energy Questar Pipeline LLC (DEQP) on CreditWatch with positive implications. “This reflects our expectations for higher ratings because these entities will likely be acquired by a higher-rated entity and will probably benefit from being a part of a higher-rated group,” S&P said in a press release.

“We expect the company to complete the transaction by year-end 2020, and we expect that the company will use the sale proceeds to buy back shares. Furthermore, the company’s announcement to reduce its dividends will help to offset some of the lost cash flows from DEGH and is in-line with our expectations that FFO to debt will consistently reflect 15%-16%,” the agency said.

S&P also changed the outlook to positive on Virginia Electric & Power Co., Questar Gas Co., Dominion Energy Ohio, Dominion Energy South Carolina Inc., Scana Corp. and Public Service Co. of North Carolina Inc.

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