Energy utilities play a critical role in achieving the Paris Agreement’s goal of limiting global warming to 1.5 degrees Celsius, requiring net zero greenhouse gas (GHG) emissions by 2050. Utilities provide energy to some of the most GHG-intensive economic sectors. By reducing their own GHG emissions utilities can enable decarbonization across industries.

Natural gas, a fossil fuel, produces 40 percent of the nation’s power.1 Burning natural gas for heat in buildings accounts for approximately 11 percent of national GHG emissions.2

Currently, many utilities’ climate strategies rely on natural gas instead of coal due to lower combustion emissions. Such strategies, however, often ignore Scope 3 emissions from upstream leakage, venting, and flaring in the production and transport of natural gas and the downstream emissions from customers’ combustion of natural gas.

Dominion Energy’s net zero target addresses Scope 1 operational emissions. It does not include its most significant Scope 3 emissions, including upstream production emissions and downstream customer use emissions. In 2019, such emissions accounted for approximately 9 percent and 21 percent respectively of Dominion’s total emissions. When Dominion’s purchased electricity, another Scope 3 category, is included, the amount of emissions not covered in Dominion’s current target increase to approximately 45 percent.3 Further, research has found that the Environmental Protection Agency’s inventory for natural gas, on which many utilities rely for calculating their methane emissions, is potentially underestimating supply chain methane emissions by 60 percent.4

By failing to acknowledge nearly half of the GHG emissions associated with its business, Dominion cannot be considered to be on a path to achieving net zero emissions. Its failure to account for substantial Scope 3 emissions creates the potential for reputational risk associated with greenwashing. This flawed methodology also prevents investors from accurately comparing Dominion’s company risk and climate contributions against other utilities’.

The CA100+ Benchmark, which is supported by $60 trillion in assets, is clear that companies’ net zero targets should “cover[] the most relevant scope 3 GHG emissions.”5 The Science-Based Targets initiative (SBTi) similarly states that if a company’s relevant Scope 3 emissions are over 40 percent of total emissions, or if companies sell natural gas, those emissions must be included in its targets.6

Peer utilities are starting to appropriately account for their Scope 3 emissions. PSEG has committed to set a net zero target through the SBTi.7 Sempra has set net zero targets that cover full Scope 3 value

1 https://www.eia.gov/energyexplained/electricity/electricity-in-the-us.php

2 https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions

3 https://www.dominionenergy.com/-/media/pdfs/global/company/esg/2021-climate-report.pdf, p.11 4 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6223263/

5 https://www.climateaction100.org/wp-content/uploads/2021/03/Climate-Action-100-Benchmark-Indicators-FINAL-3.12.pdf 6 https://sciencebasedtargets.org/resources/legacy/2020/06/SBTi-Power-Sector-15C-guide-FINAL.pdf, p.10 7 https://nj.pseg.com/NewsRoom/NewsRelease254

chain emissions.8 Xcel’s net zero target covers customer emissions.9