As vice president of finance at Dominion Energy, Prabir Purohit has been an ace for the Richmond, Virginia-based company.
Born and raised in India, Purohit studied aerospace engineering at the Indian Institute of Technology and received his master’s in the subject at Iowa State University, and later an MBA from Emory University with a concentration in finance. Early career successes included working as director of investment banking at Bank of America and senior analyst at power company Mirant Corporation.
“As a foreign person trying to find a job, aerospace is not the best option, so the power industry seemed like one of the places I could go,” he explains. “Mirant, a power producer, went under and emerged from bankruptcy, so I thought it was time to look for other opportunities. I went to business school, and I found a job in the financial industry.”
While at Bank of America, Purohit was introduced to his current boss, and his impressive background within the finance and engineering space made him a perfect fit for Dominion Energy. He was immediately placed in the company’s mergers and acquisitions team. “I was happy to join a team at Dominion Energy that was talented, growth oriented while having a strong focus on company values,” he says.
“For a while, I was also responsible for the financial analysis group,” he continues. “M&A is more external focused looking at strategy and growth. The financial analysis group evaluates organic growth projects. These projects need to go through a thorough financial and business risk analysis before they are approved.”
Currently, Purohit manages M&A and the treasury function, which involves all of Dominion Energy’s capital markets activity and all cash management—processing invoices, managing accounts, and moving cash around. One of the company’s most notable M&A deals was the 2019 acquisition of SCANA, which expanded Dominion Energy’s operations in Georgia and the Carolinas.
“We started working on that as part small team within the company as soon as I got here in 2016. SCANA was the only small utility on the entire East Coast,” he explains. “Besides the size, the attractive part was that its operations were in an area of South Carolina that was seeing significant customer and demand growth.”
“Since I’ve been here, we have monetized pretty much all our businesses that are not contracted and exposed to movements in commodity prices, gas prices, and oil prices.”
SCANA was building a new nuclear plant at the time—something no one in the US had done for more than three decades. The amount of capital it was planning to spend on the project was approximately $10 billion—a good proportion of the value of the company itself. Its contractor on the project, Westinghouse, filed for bankruptcy protection and that added significant uncertainty to SCANA’s balance sheet and valuation.
“They ended up abandoning the nuclear plants, and their stock price traded down amidst political and regulatory concerns,” Purohit recounts. “Our approach to that was if we can somehow resolve the political and regulatory concerns about the nuclear plant, we can successfully merge with SCANA—their service territory and customers.”
Dominion Energy was able to resolve the concerns, and Purohit along with the Dominion Energy team negotiated a winning deal, merging with the utility. That was a win for shareholders and customers throughout South Carolina.
What Purohit has learned dealing with M&A for an investor owned public utilities company is that it’s not the same as it would be for any other company. It’s not just the board you’re dealing with, but also the regulators and customers who are important stakeholders of any utility.
“One of the benefits of how we approached it with SCANA is we proposed a customer benefit package for the regulators before we had a deal with the board,” he explains. “That was the difference that helped us get the deal done, because no one else had a plan for the regulators and customers.”
Another big achievement of Purohit was when he first showed up on the job, Dominion Energy’s credit profile was somewhat lagging with agencies because its credit indicators were below the threshold they are expected to be.
“One thing we, in the treasury and M&A team, focused on was to improve credit,” he shares. “Since I’ve been here, we have monetized pretty much all our businesses that are not contracted and exposed to movements in commodity prices, gas prices, and oil prices. Although these businesses are profitable, they are not viewed by agencies as being credit friendly.”
That included the sale of the Fairless Power Station in Pennsylvania and the Manchester Street Power Station in Providence, Rhode Island, as part of a $1.2 billion sale to Starwood Energy Group. That same year, Dominion Energy also sold its share in Blue Racer Midstream, a joint venture formed in 2012 with Caiman Energy to own, operate, develop, and acquire midstream assets in the Utica Shale and certain adjacent areas in the Marcellus Shale. That brought in another $1.5 billion.
“One of the benefits of how we approached it with SCANA is we proposed a customer benefit package for the regulators before we had a deal with the board.”
“This July , we announced a deal with Warren Buffet’s Berkshire Hathaway Energy, that we’re selling our entire gas pipeline business,” Purohit says, adding that the deal, factoring in debt, resulted in about $10 billion.
“Truist Securities is proud to support Dominion Energy and its leadership in providing innovative clean energy solutions, renewable power, and environmental stewardship to customers and stakeholders,” says David Smith, managing director of energy investment banking at Truist Securities. “We congratulate the Dominion Energy team for this recognition.”
But Purohit isn’t only about work. He’s also a huge tennis nut, playing with his local tennis club and rooting for his professional favorites at the US Open for the past twelve years, missing only this year because of the coronavirus pandemic.
Looking ahead, Purohit notes that times are changing as investors are getting more interested in ESG (Environmental, Social, and Governance) initiatives across all sectors and all that will lead to a transformation in the utility industry.
“One of our goals within Dominion Energy is trying to transform the company to adapt more to that type of environment—that could mean technology, more renewables, electric vehicles, etc.—we need to be ready for what’s coming in the future,” he says.