Richmond, Va.-based Dominion Energy Inc. announced it has entered into a Memorandum of Understanding (MOU) with Amazon to explore development structures that would advance potential Small Modular Reactor (SMR) nuclear development in Virginia. We generally view the building of SMRs as negative for credit quality since it entails potential construction risk due to its first-of-its kind technology. Developing new nuclear power plants is a highly complex project characterized by extensive timelines, significant capital investments, and inherent execution risks that can lead to significant cost overruns and delays. That said, Dominion?s MOU announcement indicates its intention to explore ways to advance SMR development and financing while also mitigating potential cost and development risks for customers and capital providers. We believe this
