UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2021March 31, 2022
or
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number |
| Exact name of registrants as specified in their charters, address of principal executive offices and registrants’ telephone number |
| I.R.S. Employer Identification Number |
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001-08489 |
| DOMINION ENERGY, INC. |
| 54-1229715 |
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000-55337 |
| VIRGINIA ELECTRIC AND POWER COMPANY |
| 54-0418825 |
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| 120 Tredegar Street Richmond, Virginia 23219 (804) 819-2000 |
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State or other jurisdiction of incorporation or organization of the registrants: Virginia
Securities registered pursuant to Section 12(b) of the Act:
Registrant | Trading Symbol | Title of Each Class | Name of Each Exchange on Which Registered |
DOMINION ENERGY, INC. | D | Common Stock, no par value | New York Stock Exchange |
| DCUE | 2019 Series A Corporate Units | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Dominion Energy, Inc. Yes ☒ No ☐ Virginia Electric and Power Company Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Dominion Energy, Inc. Yes ☒ No ☐ Virginia Electric and Power Company Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Dominion Energy, Inc.
Large accelerated filer | ☒ |
| Accelerated filer | ☐ | Emerging growth company | ☐ |
Non-accelerated filer | ☐ |
| Smaller reporting company | ☐ |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Virginia Electric and Power Company
Large accelerated filer | ☐ |
| Accelerated filer | ☐ | Emerging growth company | ☐ |
Non-accelerated filer | ☒ |
| Smaller reporting company | ☐ |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Dominion Energy, Inc. Yes ☐ No ☒ Virginia Electric and Power Company Yes ☐ No ☒
At October 29, 2021,April 28, 2022, the latest practicable date for determination, Dominion Energy, Inc. had 809,908,408811,270,354 shares of common stock outstanding and Virginia Electric and Power Company had 274,723 shares of common stock outstanding. Dominion Energy, Inc. is the sole holder of Virginia Electric and Power Company’s common stock.
This combined Form 10-Q represents separate filings by Dominion Energy, Inc. and Virginia Electric and Power Company. Information contained herein relating to an individual registrant is filed by that registrant on its own behalf. Virginia Electric and Power Company makes no representation as to the information relating to Dominion Energy, Inc.’s other operations.
VIRGINIA ELECTRIC AND POWER COMPANY MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q AND IS FILING THIS FORM 10-Q UNDER THE REDUCED DISCLOSURE FORMAT.
COMBINED INDEX
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Item 1. |
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Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 5. |
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Item 6. |
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GLOSSARY OF TERMS
The following abbreviations or acronyms used in this Form 10-Q are defined below:
Abbreviation or Acronym |
| Definition |
2019 Equity Units |
| Dominion Energy’s 2019 Series A Equity Units issued in June 2019, initially in the form of 2019 Series A Corporate Units, consisting of a stock purchase contract and a 1/10 interest in a share of the Series A Preferred Stock |
2017 Tax Reform Act |
| An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (previously known as The Tax Cuts and Jobs Act) enacted on December 22, 2017 |
2021 Triennial Review |
| Virginia Commission review of Virginia Power’s earned return on base rate generation and distribution services for the four successive 12-month test periods beginning January 1, 2017 and ending December 31, 2020 |
ACE Rule |
| Affordable Clean Energy Rule |
AFUDC |
| Allowance for funds used during construction |
Align RNG |
| Align RNG, LLC, a joint venture between Dominion Energy and Smithfield Foods, Inc. |
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AOCI |
| Accumulated other comprehensive income (loss) |
ARO |
| Asset retirement obligation |
Atlantic Coast Pipeline |
| Atlantic Coast Pipeline, LLC, a limited liability company owned by Dominion Energy and Duke Energy |
Atlantic Coast Pipeline Project |
| A previously proposed approximately 600-mile natural gas pipeline running from West Virginia through Virginia to North Carolina which would have been owned by Dominion Energy and Duke Energy |
bcf |
| Billion cubic feet |
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Bear Garden |
| A |
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CAA |
| Clean Air Act |
CCR |
| Coal combustion residual |
CCRO |
| Customer credit reinvestment offset |
CEO |
| Chief Executive Officer |
CEP |
| Capital Expenditure Program, as established by House Bill 95, Ohio legislation enacted in 2011, deployed by East Ohio to recover certain costs associated with capital investment |
CERCLA |
| Comprehensive Environmental Response, Compensation and Liability Act of 1980, also known as Superfund |
CFO |
| Chief Financial Officer |
Clearway |
| The legal entity, Clearway Energy, Inc. (a subsidiary of Global Infrastructure Partners), one or more of its consolidated subsidiaries, or the entirety of Clearway Energy, Inc. and its consolidated subsidiaries |
CO2 |
| Carbon dioxide |
Colonial Trail West |
| A 142 MW utility-scale solar power station located in Surry County, Virginia |
3
Companies |
| Dominion Energy and Virginia Power, collectively |
Contracted Assets |
| Contracted Assets operating segment |
Cooling degree days |
| Units measuring the extent to which the average daily temperature is greater than 65 degrees Fahrenheit, or 75 degrees Fahrenheit in DESC’s service territory, calculated as the difference between 65 or 75 degrees, as applicable, and the average temperature for that day |
Cove Point |
| Cove Point LNG, LP (formerly known as Dominion Energy Cove Point LNG, LP) |
CPCN |
| Certificate of Public Convenience and Necessity |
3
CVOW Commercial Project |
| A proposed 2.6 GW wind generation facility 27 miles off the coast of Virginia Beach, Virginia in federal waters adjacent to the CVOW Pilot Project and associated interconnection facilities in and around Virginia Beach, Virginia |
CVOW Pilot Project |
| A 12 MW wind generation facility 27 miles off the coast of Virginia Beach, Virginia in federal waters |
CWA |
| Clean Water Act |
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DES |
| Dominion Energy Services, Inc. |
DESC |
| The legal entity, Dominion Energy South Carolina, Inc., one or more of its consolidated entities or operating segment, or the entirety of Dominion Energy South Carolina, Inc. and its consolidated entities |
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DGI |
| Dominion Generation, Inc. |
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DOE |
| U.S. Department of Energy |
Dominion Energy |
| The legal entity, Dominion Energy, Inc., one or more of its consolidated subsidiaries (other than Virginia Power) or operating segments, or the entirety of Dominion Energy, Inc. and its consolidated subsidiaries |
Dominion Energy |
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| The legal entity, MountainWest Pipeline, LLC (formerly known as Dominion Energy Questar Pipeline, |
Dominion Energy South Carolina |
| Dominion Energy South Carolina operating segment |
Dominion Energy Virginia |
| Dominion Energy Virginia operating segment |
4
Dominion |
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DSM |
| Demand-side management |
Dth |
| Dekatherm |
Duke Energy |
| The legal entity, Duke Energy Corporation, one or more of its consolidated subsidiaries, or the entirety of Duke Energy Corporation and its consolidated subsidiaries |
East Ohio |
| The East Ohio Gas Company, doing business as Dominion Energy Ohio |
EnergySolutions |
| EnergySolutions, LLC |
EPA |
| U.S. Environmental Protection Agency |
EPS |
| Earnings per common share |
FERC |
| Federal Energy Regulatory Commission |
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Four Brothers |
| Four Brothers Solar, LLC, a limited liability company owned by Dominion Energy (through December 2021) and Four Brothers Holdings, LLC, a subsidiary of Clearway |
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FTRs |
| Financial transmission rights |
GAAP |
| U.S. generally accepted accounting principles |
Gas Distribution |
| Gas Distribution operating segment |
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GHG |
| Greenhouse gas |
Granite Mountain |
| Granite Mountain Holdings, LLC, a limited liability company owned by Dominion Energy (through December 2021) and Granite Mountain Renewables, LLC, a subsidiary of Clearway |
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GW |
| Gigawatt |
Heating degree days |
| Units measuring the extent to which the average daily temperature is less than 65 degrees Fahrenheit, or 60 degrees Fahrenheit in DESC’s service territory, calculated as the difference between 65 or 60 degrees, as applicable, and the average temperature for that day |
4
Hope |
| Hope Gas, Inc., doing business as Dominion Energy West Virginia |
Iron Springs |
| Iron Springs Holdings, LLC, a limited liability company owned by Dominion Energy (through December 2021) and Iron Springs Renewables, LLC, a subsidiary of Clearway |
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ISO |
| Independent system operator |
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Kewaunee |
| Kewaunee nuclear power station |
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kV |
| Kilovolt |
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LNG |
| Liquefied natural gas |
MD&A |
| Management’s Discussion and Analysis of Financial Condition and Results of Operations |
MGD |
| Million gallons per day |
Millstone |
| Millstone nuclear power station |
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MW |
| Megawatt |
MWh |
| Megawatt hour |
NAV |
| Net asset value |
NND Project |
| V.C. Summer Units 2 and 3 nuclear development project under which DESC and Santee Cooper undertook to construct two Westinghouse AP1000 Advanced Passive Safety nuclear units in Jenkinsville, South Carolina |
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North Anna |
| North Anna nuclear power station |
North Carolina Commission |
| North Carolina Utilities Commission |
NRC |
| U.S. Nuclear Regulatory Commission |
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Ohio Commission |
| Public Utilities Commission of Ohio |
Order 1000 |
| Order issued by FERC adopting requirements for electric transmission planning, cost allocation and development |
Patriot | Patriot Utility Privatizations, LLC, a partnership between Foundation Infrastructure Partners, LLC and John Hancock Life Insurance Company (U.S.A.) and affiliates | |
PIR |
| Pipeline Infrastructure Replacement program deployed by East Ohio |
PJM |
| PJM Interconnection, LLC |
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PSD |
| Prevention of significant deterioration |
PSNC |
| Public Service Company of North Carolina, Incorporated, doing business as Dominion Energy North Carolina |
Q-Pipe Group |
| Collectively, Dominion Energy Questar Pipeline, DEQPS and MountainWest Energy Holding Company, LLC (formerly known as QPC Holding Company, LLC |
Q-Pipe Transaction |
| A previously proposed sale by Dominion Energy to |
Questar Gas |
| Questar Gas Company, doing business as Dominion Energy Utah, Dominion Energy Wyoming and Dominion Energy Idaho |
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RGGI |
| Regional Greenhouse Gas Initiative |
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6
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Rider CCR |
| A rate adjustment clause associated with the recovery of costs related to the removal of CCR at certain power stations |
Rider CE |
| A rate adjustment clause associated with the recovery of costs related to certain renewable generation facilities in Virginia |
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Rider R |
| A rate adjustment clause associated with the recovery of costs related to Bear Garden |
Rider RGGI |
| A rate adjustment clause associated with the recovery of costs related to the purchase of allowances through the RGGI market-based trading program for CO2 |
Rider |
| A rate adjustment clause associated with |
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Rider U |
| A rate adjustment clause associated with the recovery of costs of new underground distribution facilities |
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Rider US-3 |
| A rate adjustment clause associated with the recovery of costs related to Colonial Trail West and Spring Grove 1 |
Rider US-4 |
| A rate adjustment clause associated with the recovery of costs related to Sadler Solar |
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ROE |
| Return on equity |
RTO |
| Regional transmission organization |
Sadler Solar |
| A 100 MW utility-scale solar power station located in Greensville County, Virginia, also referred to as Dry Bread |
Santee Cooper |
| South Carolina Public Service Authority |
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SCANA |
| The legal entity, SCANA Corporation, one or more of its consolidated subsidiaries, or the entirety of SCANA Corporation and its consolidated subsidiaries |
SCANA Combination |
| Dominion Energy’s acquisition of SCANA completed on January 1, 2019 pursuant to the terms of the agreement and plan of merger entered on January 2, 2018 between Dominion Energy and SCANA |
SCANA Merger Approval Order |
| Final order issued by the South Carolina Commission on December 21, 2018 setting forth its approval of the SCANA Combination |
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SCDOR |
| South Carolina Department of Revenue |
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SEC |
| U.S. Securities and Exchange Commission |
7
Series A Preferred Stock |
| Dominion Energy’s 1.75% Series A Cumulative Perpetual Convertible Preferred Stock, without par value, with a liquidation preference of $1,000 per share |
Series B Preferred Stock |
| Dominion Energy’s 4.65% Series B Fixed-Rate Cumulative Redeemable Perpetual Preferred Stock, without par value, with a liquidation preference of $1,000 per share |
Series C Preferred Stock | Dominion Energy’s 4.35% Series C Fixed-Rate Cumulative Redeemable Perpetual Preferred Stock, without par value, with a liquidation preference of $1,000 per share | |
South Carolina Commission |
| Public Service Commission of South Carolina |
Southwest Gas |
| The legal entity, Southwest Gas Holdings, Inc., one or more of its consolidated subsidiaries, or the entirety of Southwest Gas Holdings, Inc. and its consolidated subsidiaries |
Spring Grove 1 |
| A 98 MW utility-scale solar power station located in Surry County, Virginia |
Standard & Poor’s |
| Standard & Poor’s Ratings Services, a division of S&P Global Inc. |
Summer |
| V.C. Summer nuclear power station |
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Surry |
| Surry nuclear power station |
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Terra Nova Renewable Partners |
| The legal entity, Terra Nova Renewable Partners, LLC, a partnership comprised primarily of institutional investors advised by J.P. Morgan Asset Management-Global Real Assets, or one or more of its consolidated subsidiaries |
Three Cedars |
| Granite Mountain and Iron Springs, collectively |
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Utah Commission |
| Utah Public Service Commission |
VCEA |
| Virginia Clean Economy Act of March 2020 |
VEBA |
| Voluntary Employees’ Beneficiary Association |
6
VIE |
| Variable interest entity |
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Virginia Commission |
| Virginia State Corporation Commission |
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Virginia Power |
| The legal entity, Virginia Electric and Power Company, one or more of its consolidated subsidiaries or operating segment, or the entirety of Virginia Electric and Power Company and its consolidated subsidiaries |
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West Virginia Commission |
| Public Service Commission of West Virginia |
Westinghouse |
| Westinghouse Electric Company LLC |
Wexpro |
| The legal entity, Wexpro Company, one or more of its consolidated subsidiaries, or the entirety of Wexpro Company and its consolidated subsidiaries |
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White River Hub |
| MountainWest White River Hub, LLC (formerly known as White River Hub, LLC) |
8
Wisconsin Commission |
| Public |
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WP&L |
| Wisconsin Power and Light Company, a subsidiary of Alliant Energy Corporation |
WPSC |
| Wisconsin Public Service Corporation, a subsidiary of WEC Energy Group |
Wrangler |
| Wrangler Retail Gas Holdings, LLC, a partnership between Dominion Energy (through March 2022) and Interstate Gas Supply, Inc. |
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DOMINION ENERGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
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| Three Months Ended September 30, |
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| Nine Months Ended September 30, |
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| Three Months Ended March 31, |
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| 2021 |
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| 2020 |
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| 2021 |
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| 2020 |
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| 2022 |
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| 2021 |
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(millions, except per share amounts) |
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Operating Revenue |
| $ | 3,176 |
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| $ | 3,607 |
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| $ | 10,084 |
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| $ | 10,651 |
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| $ | 4,279 |
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| $ | 3,870 |
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Operating Expenses |
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Electric fuel and other energy-related purchases |
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| 703 |
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| 594 |
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| 1,740 |
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| 1,758 |
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| 678 |
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| 550 |
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Purchased electric capacity |
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| 26 |
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| 23 |
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| 62 |
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| 36 |
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| 13 |
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| 11 |
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Purchased gas |
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| 60 |
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| 37 |
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| 665 |
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| 561 |
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| 645 |
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| 484 |
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Other operations and maintenance |
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| 924 |
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| 977 |
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| 2,806 |
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| 2,720 |
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| 1,026 |
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| 987 |
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Depreciation, depletion and amortization |
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| 621 |
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| 595 |
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| 1,833 |
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| 1,751 |
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| 698 |
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| 608 |
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Other taxes |
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| 223 |
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| 203 |
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| 702 |
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| 663 |
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| 253 |
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| 257 |
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Impairment of assets and other charges (benefits) |
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| (222 | ) |
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| 1,151 |
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| 194 |
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| 1,963 |
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| (10 | ) |
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| 95 |
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Total operating expenses |
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| 2,335 |
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| 3,580 |
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| 8,002 |
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| 9,452 |
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| 3,303 |
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| 2,992 |
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Income from operations |
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| 841 |
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| 27 |
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| 2,082 |
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| 1,199 |
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| 976 |
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| 878 |
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Earnings (loss) from equity method investees |
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| 69 |
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| (5 | ) |
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| 214 |
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| 0 |
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Earnings from equity method investees |
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| 80 |
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| 80 |
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Other income |
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| 133 |
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| 286 |
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| 732 |
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| 327 |
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| 46 |
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| 287 |
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Interest and related charges |
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| 407 |
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| 306 |
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| 978 |
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| 1,136 |
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| 174 |
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| 53 |
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Income from continuing operations including noncontrolling interests before income tax expense (benefit) |
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| 636 |
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| 2 |
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| 2,050 |
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| 390 |
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Income tax expense (benefit) |
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| 35 |
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| (110 | ) |
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| 200 |
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| (123 | ) | ||||||||
Net Income From Continuing Operations Including Noncontrolling Interests |
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| 601 |
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| 112 |
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| 1,850 |
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| 513 |
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Net Income (Loss) From Discontinued Operations Including Noncontrolling Interests(1)(2) |
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| 65 |
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| 19 |
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| 119 |
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| (1,753 | ) | ||||||||
Net Income (Loss) Including Noncontrolling Interests |
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| 666 |
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| 131 |
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| 1,969 |
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| (1,240 | ) | ||||||||
Income from continuing operations including noncontrolling interests before income tax expense |
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| 928 |
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| 1,192 |
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Income tax expense |
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| 236 |
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| 212 |
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Net Income From Continuing Operations |
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| 692 |
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| 980 |
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Net Income From Discontinued Operations(1) |
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| 19 |
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| 28 |
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Net Income Including Noncontrolling Interests |
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| 711 |
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| 1,008 |
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Noncontrolling Interests |
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| 12 |
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| (225 | ) |
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| 22 |
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| (157 | ) |
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| — |
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| — |
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Net Income (Loss) Attributable to Dominion Energy |
| $ | 654 |
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| $ | 356 |
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| $ | 1,947 |
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| $ | (1,083 | ) | ||||||||
Net Income Attributable to Dominion Energy |
| $ | 711 |
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| $ | 1,008 |
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Amounts attributable to Dominion Energy |
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Net income from continuing operations |
| $ | 589 |
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| $ | 369 |
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| $ | 1,828 |
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| $ | 767 |
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| $ | 692 |
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| $ | 980 |
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Net income (loss) from discontinued operations |
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| 65 |
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| (13 | ) |
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| 119 |
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| (1,850 | ) | ||||||||
Net income (loss) attributable to Dominion Energy |
| $ | 654 |
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| $ | 356 |
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| $ | 1,947 |
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| $ | (1,083 | ) | ||||||||
Net income from discontinued operations |
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| 19 |
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| 28 |
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Net income attributable to Dominion Energy |
| $ | 711 |
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| $ | 1,008 |
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EPS - Basic |
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Net income from continuing operations |
| $ | 0.71 |
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| $ | 0.42 |
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| $ | 2.20 |
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| $ | 0.86 |
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| $ | 0.82 |
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| $ | 1.19 |
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Net income (loss) from discontinued operations |
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| 0.08 |
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| (0.01 | ) |
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| 0.15 |
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| (2.21 | ) | ||||||||
Net income (loss) attributable to Dominion Energy |
| $ | 0.79 |
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| $ | 0.41 |
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| $ | 2.35 |
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| $ | (1.35 | ) | ||||||||
Net income from discontinued operations |
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| 0.02 |
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| 0.04 |
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Net income attributable to Dominion Energy |
| $ | 0.84 |
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| $ | 1.23 |
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EPS - Diluted |
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Net income from continuing operations |
| $ | 0.71 |
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| $ | 0.42 |
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| $ | 2.20 |
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| $ | 0.83 |
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| $ | 0.81 |
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| $ | 1.19 |
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Net income (loss) from discontinued operations |
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| 0.08 |
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|
| (0.01 | ) |
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| 0.15 |
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| (2.21 | ) | ||||||||
Net income (loss) attributable to Dominion Energy |
| $ | 0.79 |
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| $ | 0.41 |
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| $ | 2.35 |
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| $ | (1.38 | ) | ||||||||
Net income from discontinued operations |
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| 0.02 |
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|
| 0.04 |
| ||||||||||||||||
Net income attributable to Dominion Energy |
| $ | 0.83 |
|
| $ | 1.23 |
| ||||||||||||||||
(1) |
|
| Includes income tax expense |
The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.
108
DOMINION ENERGY, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) including noncontrolling interests |
| $ | 666 |
|
| $ | 131 |
|
| $ | 1,969 |
|
| $ | (1,240 | ) | ||||||||
Net income including noncontrolling interests |
| $ | 711 |
|
| $ | 1,008 |
| ||||||||||||||||
Other comprehensive income (loss), net of taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net deferred gains (losses) on derivatives-hedging activities(1) |
|
| (2 | ) |
|
| 10 |
|
|
| 21 |
|
|
| (254 | ) |
|
| 25 |
|
|
| 39 |
|
Changes in unrealized net gains (losses) on investment securities(2) |
|
| 4 |
|
|
| 4 |
|
|
| (15 | ) |
|
| 32 |
|
|
| (62 | ) |
|
| (31 | ) |
Changes in net unrecognized pension and other postretirement benefit costs(3) |
|
| (1 | ) |
|
| (261 | ) |
|
| 5 |
|
|
| (262 | ) |
|
| 28 |
|
|
| 6 |
|
Amounts reclassified to net income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net derivative (gains) losses-hedging activities(4) |
|
| 10 |
|
|
| 188 |
|
|
| 35 |
|
|
| 215 |
|
|
| 10 |
|
|
| 13 |
|
Net realized (gains) losses on investment securities(5) |
|
| (3 | ) |
|
| (1 | ) |
|
| (5 | ) |
|
| (15 | ) |
|
| 3 |
|
|
| 1 |
|
Net pension and other postretirement benefit costs(6) |
|
| 19 |
|
|
| 23 |
|
|
| 63 |
|
|
| 60 |
|
|
| 17 |
|
|
| 18 |
|
Changes in other comprehensive income from equity method investees(7) |
|
| (3 | ) |
|
| 1 |
|
|
| (3 | ) |
|
| 1 |
|
|
| 1 |
|
|
| 0 |
|
Total other comprehensive income (loss) |
|
| 24 |
|
|
| (36 | ) |
|
| 101 |
|
|
| (223 | ) | ||||||||
Comprehensive income (loss) including noncontrolling interests |
|
| 690 |
|
|
| 95 |
|
|
| 2,070 |
|
|
| (1,463 | ) | ||||||||
Comprehensive income (loss) attributable to noncontrolling interests |
|
| 12 |
|
|
| (225 | ) |
|
| 22 |
|
|
| (157 | ) | ||||||||
Comprehensive income (loss) attributable to Dominion Energy |
| $ | 678 |
|
| $ | 320 |
|
| $ | 2,048 |
|
| $ | (1,306 | ) | ||||||||
Total other comprehensive income |
|
| 22 |
|
|
| 46 |
| ||||||||||||||||
Comprehensive income including noncontrolling interests |
|
| 733 |
|
|
| 1,054 |
| ||||||||||||||||
Comprehensive income attributable to noncontrolling interests |
|
| — |
|
|
| — |
| ||||||||||||||||
Comprehensive income attributable to Dominion Energy |
| $ | 733 |
|
| $ | 1,054 |
| ||||||||||||||||
(1) | Net of |
(2) | Net of |
(3) | Net of |
(4) | Net of $(4) million and |
(5) | Net of |
(6) | Net of $(6) |
(7) | Net of |
The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.
11
DOMINION ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
| September 30, 2021 |
|
| December 31, 2020(1) |
|
| March 31, 2022 |
|
| December 31, 2021(1) |
| ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 180 |
|
| $ | 172 |
|
| $ | 444 |
|
| $ | 283 |
|
Customer receivables (less allowance for doubtful accounts of $47 and $42) |
|
| 1,853 |
|
|
| 2,295 |
| ||||||||
Other receivables (less allowance for doubtful accounts of $4 and $3) |
|
| 206 |
|
|
| 212 |
| ||||||||
Customer receivables (less allowance for doubtful accounts of $39 and $40) |
|
| 2,164 |
|
|
| 2,219 |
| ||||||||
Other receivables (less allowance for doubtful accounts of $4 at both dates) |
|
| 341 |
|
|
| 349 |
| ||||||||
Inventories |
|
| 1,593 |
|
|
| 1,550 |
|
|
| 1,512 |
|
|
| 1,631 |
|
Margin deposit assets |
|
| 553 |
|
|
| 19 |
| ||||||||
Prepayments |
|
| 426 |
|
|
| 309 |
| ||||||||
Regulatory assets |
|
| 1,193 |
|
|
| 699 |
|
|
| 1,477 |
|
|
| 1,492 |
|
Other |
|
| 255 |
|
|
| 148 |
|
|
| 1,476 |
|
|
| 1,270 |
|
Current assets held for sale |
|
| 3,039 |
|
|
| 1,482 |
|
|
| 969 |
|
|
| 25 |
|
Total current assets |
|
| 9,298 |
|
|
| 6,886 |
|
|
| 8,383 |
|
|
| 7,269 |
|
Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nuclear decommissioning trust funds |
|
| 7,506 |
|
|
| 6,900 |
|
|
| 7,614 |
|
|
| 7,950 |
|
Investment in equity method affiliates |
|
| 2,920 |
|
|
| 2,934 |
|
|
| 2,937 |
|
|
| 2,932 |
|
Other |
|
| 391 |
|
|
| 404 |
|
|
| 393 |
|
|
| 394 |
|
Total investments |
|
| 10,817 |
|
|
| 10,238 |
|
|
| 10,944 |
|
|
| 11,276 |
|
Property, Plant and Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
| 84,738 |
|
|
| 82,959 |
|
|
| 87,107 |
|
|
| 86,503 |
|
Accumulated depreciation, depletion and amortization |
|
| (26,352 | ) |
|
| (25,111 | ) |
|
| (26,986 | ) |
|
| (26,729 | ) |
Total property, plant and equipment, net |
|
| 58,386 |
|
|
| 57,848 |
|
|
| 60,121 |
|
|
| 59,774 |
|
Deferred Charges and Other Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
| 7,405 |
|
|
| 7,381 |
|
|
| 7,297 |
|
|
| 7,405 |
|
Regulatory assets |
|
| 9,213 |
|
|
| 9,133 |
|
|
| 8,658 |
|
|
| 8,643 |
|
Other |
|
| 4,685 |
|
|
| 4,419 |
|
|
| 5,449 |
|
|
| 5,223 |
|
Total deferred charges and other assets |
|
| 21,303 |
|
|
| 20,933 |
|
|
| 21,404 |
|
|
| 21,271 |
|
Total assets |
| $ | 99,804 |
|
| $ | 95,905 |
|
| $ | 100,852 |
|
| $ | 99,590 |
|
(1) | Dominion Energy’s Consolidated Balance Sheet at December 31, |
The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.
1210
DOMINION ENERGY, INC.
CONSOLIDATED BALANCE SHEETS—(Continued)
(Unaudited)
|
| September 30, 2021 |
|
| December 31, 2020(1) |
|
| March 31, 2022 |
|
| December 31, 2021(1) |
| ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
| ||||||||
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
| ||||||||
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities due within one year |
| $ | 2,845 |
|
| $ | 1,937 |
|
| $ | 2,550 |
|
| $ | 841 |
|
Supplemental 364-Day credit facility borrowings |
|
| — |
|
|
| 225 |
| ||||||||
Short-term debt |
|
| 3,885 |
|
|
| 895 |
|
|
| 2,548 |
|
|
| 2,314 |
|
Accounts payable |
|
| 851 |
|
|
| 944 |
|
|
| 1,090 |
|
|
| 1,197 |
|
Accrued interest, payroll and taxes |
|
| 1,185 |
|
|
| 1,133 |
|
|
| 968 |
|
|
| 1,169 |
|
Derivative liabilities |
|
| 729 |
|
|
| 412 |
|
|
| 727 |
|
|
| 359 |
|
Regulatory liabilities |
|
| 1,059 |
|
|
| 809 |
|
|
| 830 |
|
|
| 986 |
|
Liability to Atlantic Coast Pipeline |
|
| 112 |
|
|
| 1,052 |
| ||||||||
Q-Pipe Transaction deposit |
|
| — |
|
|
| 1,290 |
| ||||||||
Other(2) |
|
| 1,507 |
|
|
| 1,521 |
|
|
| 1,651 |
|
|
| 1,807 |
|
Current liabilities held for sale |
|
| 1,050 |
|
|
| 625 |
|
|
| 217 |
|
|
| — |
|
Total current liabilities |
|
| 13,223 |
|
|
| 10,843 |
|
|
| 10,581 |
|
|
| 8,673 |
|
Long-Term Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
| 31,641 |
|
|
| 30,915 |
|
|
| 34,428 |
|
|
| 35,190 |
|
Junior subordinated notes |
|
| 1,385 |
|
|
| 2,161 |
|
|
| 1,386 |
|
|
| 1,386 |
|
Supplemental credit facility borrowings |
|
| 900 |
|
|
| — |
| ||||||||
Other |
|
| 849 |
|
|
| 881 |
|
|
| 845 |
|
|
| 850 |
|
Total long-term debt |
|
| 34,775 |
|
|
| 33,957 |
|
|
| 36,659 |
|
|
| 37,426 |
|
Deferred Credits and Other Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income taxes and investment tax credits |
|
| 6,313 |
|
|
| 5,953 |
|
|
| 6,885 |
|
|
| 6,658 |
|
Regulatory liabilities |
|
| 10,346 |
|
|
| 10,187 |
|
|
| 10,436 |
|
|
| 10,713 |
|
Other |
|
| 7,915 |
|
|
| 8,504 |
|
|
| 7,161 |
|
|
| 7,202 |
|
Total deferred credits and other liabilities |
|
| 24,574 |
|
|
| 24,644 |
|
|
| 24,482 |
|
|
| 24,573 |
|
Total liabilities |
|
| 72,572 |
|
|
| 69,444 |
|
|
| 71,722 |
|
|
| 70,672 |
|
Commitments and Contingencies (see Note 17) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
| ||||||||
Mezzanine Equity |
|
|
|
|
|
|
|
| ||||||||
Preferred stock (see Note 16) |
|
| 1,610 |
|
|
| 1,610 |
| ||||||||
Shareholders' Equity |
|
|
|
|
|
|
|
| ||||||||
Preferred stock (see Note 16) |
|
| 2,387 |
|
|
| 2,387 |
|
|
| 1,783 |
|
|
| 1,783 |
|
Common stock – no par(3) |
|
| 21,573 |
|
|
| 21,258 |
|
|
| 21,657 |
|
|
| 21,610 |
|
Retained earnings |
|
| 4,562 |
|
|
| 4,189 |
|
|
| 5,516 |
|
|
| 5,373 |
|
Accumulated other comprehensive loss |
|
| (1,616 | ) |
|
| (1,717 | ) |
|
| (1,436 | ) |
|
| (1,458 | ) |
Total shareholders' equity |
|
| 26,906 |
|
|
| 26,117 |
| ||||||||
Noncontrolling interests |
|
| 326 |
|
|
| 344 |
| ||||||||
Total equity |
|
| 27,232 |
|
|
| 26,461 |
| ||||||||
Total liabilities and equity |
| $ | 99,804 |
|
| $ | 95,905 |
| ||||||||
Shareholders' equity |
|
| 27,520 |
|
|
| 27,308 |
| ||||||||
Total liabilities, mezzanine equity and shareholders' equity |
| $ | 100,852 |
|
| $ | 99,590 |
| ||||||||
(1) | Dominion Energy’s Consolidated Balance Sheet at December 31, |
(2) | See Note 10 for amounts attributable to related parties. |
(3) | 1.8 billion shares authorized; |
The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.
13
DOMINION ENERGY, INC.
CONSOLIDATED STATEMENTS OF EQUITY - QUARTER-TO-DATE
(Unaudited)
|
| Preferred Stock |
|
| Common Stock |
|
| Dominion Energy Shareholders |
|
| Total |
|
|
|
|
|
|
|
|
| ||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Retained Earnings |
|
| AOCI |
|
| Shareholders' Equity |
|
| Noncontrolling Interests |
|
| Total Equity |
| |||||||||
(millions, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2020 |
|
| 2 |
|
| $ | 2,387 |
|
|
| 840 |
|
| $ | 23,984 |
|
| $ | 4,480 |
|
| $ | (1,980 | ) |
| $ | 28,871 |
|
| $ | 2,013 |
|
| $ | 30,884 |
|
Net income (loss) including noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 356 |
|
|
|
|
|
|
| 356 |
|
|
| (225 | ) |
|
| 131 |
|
Issuance of stock |
|
|
|
|
|
|
|
|
|
| 4 |
|
|
| 333 |
|
|
|
|
|
|
|
|
|
|
| 333 |
|
|
|
|
|
|
| 333 |
|
Stock repurchases |
|
|
|
|
|
|
|
|
|
| (28 | ) |
|
| (2,385 | ) |
|
|
|
|
|
|
|
|
|
| (2,385 | ) |
|
|
|
|
|
| (2,385 | ) |
Stock awards (net of change in unearned compensation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9 |
|
|
|
|
|
|
|
|
|
|
| 9 |
|
|
|
|
|
|
| 9 |
|
Preferred stock dividends (see Note 16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (16 | ) |
|
|
|
|
|
| (16 | ) |
|
|
|
|
|
| (16 | ) |
Common stock dividends ($0.940 per share) and distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (785 | ) |
|
|
|
|
|
| (785 | ) |
|
| (59 | ) |
|
| (844 | ) |
Other comprehensive loss, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (36 | ) |
|
| (36 | ) |
|
|
|
|
|
| (36 | ) |
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (11 | ) |
|
|
|
|
|
|
|
|
|
| (11 | ) |
| $ | 1 |
|
|
| (10 | ) |
September 30, 2020 |
|
| 2 |
|
| $ | 2,387 |
|
|
| 816 |
|
| $ | 21,930 |
|
| $ | 4,035 |
|
| $ | (2,016 | ) |
| $ | 26,336 |
|
| $ | 1,730 |
|
| $ | 28,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2021 |
|
| 2 |
|
| $ | 2,387 |
|
|
| 807 |
|
| $ | 21,369 |
|
| $ | 4,434 |
|
| $ | (1,640 | ) |
| $ | 26,550 |
|
| $ | 334 |
|
| $ | 26,884 |
|
Net income including noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 654 |
|
|
|
|
|
|
| 654 |
|
|
| 12 |
|
|
| 666 |
|
Issuance of stock |
|
|
|
|
|
|
|
|
|
| 3 |
|
|
| 195 |
|
|
|
|
|
|
|
|
|
|
| 195 |
|
|
|
|
|
|
| 195 |
|
Stock awards (net of change in unearned compensation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9 |
|
|
|
|
|
|
|
|
|
|
| 9 |
|
|
|
|
|
|
| 9 |
|
Preferred stock dividends (see Note 16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (16 | ) |
|
|
|
|
|
| (16 | ) |
|
|
|
|
|
| (16 | ) |
Common stock dividends ($0.630 per share) and distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (510 | ) |
|
|
|
|
|
| (510 | ) |
|
| (19 | ) |
|
| (529 | ) |
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 24 |
|
|
| 24 |
|
|
|
|
|
|
| 24 |
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
|
| (1 | ) |
|
| (1 | ) |
September 30, 2021 |
|
| 2 |
|
| $ | 2,387 |
|
|
| 810 |
|
| $ | 21,573 |
|
| $ | 4,562 |
|
| $ | (1,616 | ) |
| $ | 26,906 |
|
| $ | 326 |
|
| $ | 27,232 |
|
The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.
DOMINION ENERGY, INC.
CONSOLIDATED STATEMENTS OF EQUITY - YEAR-TO-DATE
(Unaudited)
|
| Preferred Stock |
|
| Common Stock |
|
| Dominion Energy Shareholders |
|
| Total |
|
|
|
|
|
|
|
|
|
| Preferred Stock |
|
| Common Stock |
|
| Dominion Energy Shareholders |
|
| Total |
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Retained Earnings |
|
| AOCI |
|
| Shareholders' Equity |
|
| Noncontrolling Interests |
|
| Total Equity |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Retained Earnings |
|
| AOCI |
|
| Shareholders' Equity |
|
| Noncontrolling Interests |
|
| Total Equity |
| ||||||||||||||||||
(millions, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019 |
|
| 2 |
|
| $ | 2,387 |
|
|
| 838 |
|
| $ | 23,824 |
|
| $ | 7,576 |
|
| $ | (1,793 | ) |
| $ | 31,994 |
|
| $ | 2,039 |
|
| $ | 34,033 |
| ||||||||||||||||||||||||||||||||||||
Cumulative-effect of changes in accounting principles |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (48 | ) |
|
|
|
|
|
| (48 | ) |
|
|
|
|
|
| (48 | ) | ||||||||||||||||||||||||||||||||||||
Net loss including noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1,083 | ) |
|
|
|
|
|
| (1,083 | ) |
|
| (157 | ) |
|
| (1,240 | ) | ||||||||||||||||||||||||||||||||||||
Issuance of stock |
|
|
|
|
|
|
|
|
|
| 6 |
|
|
| 481 |
|
|
|
|
|
|
|
|
|
|
| 481 |
|
|
|
|
|
|
| 481 |
| ||||||||||||||||||||||||||||||||||||
Stock repurchases |
|
|
|
|
|
|
|
|
|
| (28 | ) |
|
| (2,385 | ) |
|
|
|
|
|
|
|
|
|
| (2,385 | ) |
|
|
|
|
|
| (2,385 | ) | ||||||||||||||||||||||||||||||||||||
Stock awards (net of change in unearned compensation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 22 |
|
|
|
|
|
|
|
|
|
|
| 22 |
|
|
|
|
|
|
| 22 |
| ||||||||||||||||||||||||||||||||||||
Preferred stock dividends (see Note 16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (48 | ) |
|
|
|
|
|
| (48 | ) |
|
|
|
|
|
| (48 | ) | ||||||||||||||||||||||||||||||||||||
Common stock dividends ($2.820 per common share) and distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (2,362 | ) |
|
|
|
|
|
| (2,362 | ) |
|
| (153 | ) |
|
| (2,515 | ) | ||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (223 | ) |
|
| (223 | ) |
|
|
|
|
|
| (223 | ) | ||||||||||||||||||||||||||||||||||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (12 | ) |
|
|
|
|
|
|
|
|
|
| (12 | ) |
|
| 1 |
|
|
| (11 | ) | ||||||||||||||||||||||||||||||||||||
September 30, 2020 |
|
| 2 |
|
| $ | 2,387 |
|
|
| 816 |
|
| $ | 21,930 |
|
| $ | 4,035 |
|
| $ | (2,016 | ) |
| $ | 26,336 |
|
| $ | 1,730 |
|
| $ | 28,066 |
| ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
December 31, 2020 |
|
| 2 |
|
| $ | 2,387 |
|
|
| 806 |
|
| $ | 21,258 |
|
| $ | 4,189 |
|
| $ | (1,717 | ) |
| $ | 26,117 |
|
| $ | 344 |
|
| $ | 26,461 |
|
|
| 2 |
|
| $ | 2,387 |
|
|
| 806 |
|
| $ | 21,258 |
|
| $ | 4,189 |
|
| $ | (1,717 | ) |
| $ | 26,117 |
|
| $ | 344 |
|
| $ | 26,461 |
|
Net income including noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,947 |
|
|
|
|
|
|
| 1,947 |
|
|
| 22 |
|
|
| 1,969 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,008 |
|
|
|
|
|
|
| 1,008 |
|
|
| — |
|
|
| 1,008 |
|
Issuance of stock |
|
|
|
|
|
|
|
|
|
| 4 |
|
|
| 292 |
|
|
|
|
|
|
|
|
|
|
| 292 |
|
|
|
|
|
|
| 292 |
|
|
|
|
|
|
|
|
|
|
| — |
|
|
| 48 |
|
|
|
|
|
|
|
|
|
|
| 48 |
|
|
|
|
|
|
| 48 |
|
Stock awards (net of change in unearned compensation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 24 |
|
|
|
|
|
|
|
|
|
|
| 24 |
|
|
|
|
|
|
| 24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 4 |
|
|
|
|
|
|
|
|
|
|
| 4 |
|
|
|
|
|
|
| 4 |
|
Preferred stock dividends (see Note 16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (48 | ) |
|
|
|
|
|
| (48 | ) |
|
|
|
|
|
| (48 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (16 | ) |
|
|
|
|
|
| (16 | ) |
|
|
|
|
|
| (16 | ) |
Common stock dividends ($1.890 per share) and distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1,526 | ) |
|
|
|
|
|
| (1,526 | ) |
|
| (40 | ) |
|
| (1,566 | ) | ||||||||||||||||||||||||||||||||||||
Common stock dividends ($0.630 per common share) and distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (508 | ) |
|
|
|
|
|
| (508 | ) |
|
| (6 | ) |
|
| (514 | ) | ||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 101 |
|
|
| 101 |
|
|
|
|
|
|
| 101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 46 |
|
|
| 46 |
|
|
|
|
|
|
| 46 |
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1 | ) |
|
|
|
|
|
|
|
|
|
| (1 | ) |
|
|
|
|
|
| (1 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
|
| 1 |
|
|
| 1 |
|
September 30, 2021 |
|
| 2 |
|
| $ | 2,387 |
|
|
| 810 |
|
| $ | 21,573 |
|
| $ | 4,562 |
|
| $ | (1,616 | ) |
| $ | 26,906 |
|
| $ | 326 |
|
| $ | 27,232 |
| ||||||||||||||||||||||||||||||||||||
March 31, 2021 |
|
| 2 |
|
| $ | 2,387 |
|
|
| 806 |
|
| $ | 21,310 |
|
| $ | 4,673 |
|
| $ | (1,671 | ) |
| $ | 26,699 |
|
| $ | 339 |
|
| $ | 27,038 |
| ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
December 31, 2021 |
|
| 2 |
|
| $ | 1,783 |
|
|
| 810 |
|
| $ | 21,610 |
|
| $ | 5,373 |
|
| $ | (1,458 | ) |
| $ | 27,308 |
|
| $ | — |
|
| $ | 27,308 |
| ||||||||||||||||||||||||||||||||||||
Net income including noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 711 |
|
|
|
|
|
|
| 711 |
|
|
|
|
|
|
| 711 |
| ||||||||||||||||||||||||||||||||||||
Issuance of stock |
|
|
|
|
|
|
|
|
|
| 1 |
|
|
| 45 |
|
|
|
|
|
|
|
|
|
|
| 45 |
|
|
|
|
|
|
| 45 |
| ||||||||||||||||||||||||||||||||||||
Stock awards (net of change in unearned compensation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2 |
|
|
|
|
|
|
|
|
|
|
| 2 |
|
|
|
|
|
|
| 2 |
| ||||||||||||||||||||||||||||||||||||
Preferred stock dividends (see Note 16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (27 | ) |
|
|
|
|
|
| (27 | ) |
|
|
|
|
|
| (27 | ) | ||||||||||||||||||||||||||||||||||||
Common stock dividends ($0.6675 per share) and distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (541 | ) |
|
|
|
|
|
| (541 | ) |
|
|
|
|
|
| (541 | ) | ||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 22 |
|
|
| 22 |
|
|
|
|
|
|
| 22 |
| ||||||||||||||||||||||||||||||||||||
March 31, 2022 |
|
| 2 |
|
| $ | 1,783 |
|
|
| 811 |
|
| $ | 21,657 |
|
| $ | 5,516 |
|
| $ | (1,436 | ) |
| $ | 27,520 |
|
| $ | — |
|
| $ | 27,520 |
| ||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.
1512
DOMINION ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30, |
| 2021 |
|
| 2020 |
| ||||||||||
Three Months Ended March 31, |
| 2022 |
|
| 2021 |
| ||||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) including noncontrolling interests |
| $ | 1,969 |
|
| $ | (1,240 | ) | ||||||||
Adjustments to reconcile net income (loss) including noncontrolling interests to net cash provided by operating activities: |
|
|
|
|
|
|
|
| ||||||||
Net income including noncontrolling interests |
| $ | 711 |
|
| $ | 1,008 |
| ||||||||
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities: |
|
|
|
|
|
|
|
| ||||||||
Depreciation, depletion and amortization (including nuclear fuel) |
|
| 2,058 |
|
|
| 2,178 |
|
|
| 773 |
|
|
| 685 |
|
Deferred income taxes and investment tax credits |
|
| 199 |
|
|
| (380 | ) |
|
| 246 |
|
|
| 216 |
|
Provision for refunds to electric utility customers |
|
| 350 |
|
|
| — |
| ||||||||
Impairment of assets and other charges (benefits) |
|
| 194 |
|
|
| 2,207 |
|
|
| (13 | ) |
|
| 95 |
|
Loss from investment in Atlantic Coast Pipeline |
|
| 19 |
|
|
| 2,376 |
| ||||||||
Net gains on nuclear decommissioning trust funds and other investments |
|
| (370 | ) |
|
| (101 | ) | ||||||||
Gains on sales of assets and equity method investments |
|
| (34 | ) |
|
| — |
| ||||||||
Net (gains) losses on nuclear decommissioning trust funds and other investments |
|
| 113 |
|
|
| (152 | ) | ||||||||
Other adjustments |
|
| 254 |
|
|
| 138 |
|
|
| (72 | ) |
|
| 153 |
|
Changes in: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
| 207 |
|
|
| 237 |
|
|
| 28 |
|
|
| 185 |
|
Inventories |
|
| (45 | ) |
|
| 29 |
|
|
| 80 |
|
|
| 73 |
|
Deferred fuel and purchased gas costs, net |
|
| (531 | ) |
|
| 206 |
|
|
| (256 | ) |
|
| (149 | ) |
Prepayments |
|
| (121 | ) |
|
| (292 | ) |
|
| 21 |
|
|
| 24 |
|
Accounts payable |
|
| (29 | ) |
|
| (186 | ) |
|
| 52 |
|
|
| 21 |
|
Accrued interest, payroll and taxes |
|
| 51 |
|
|
| (113 | ) |
|
| (192 | ) |
|
| (177 | ) |
Customer deposits |
|
| (19 | ) |
|
| (9 | ) |
|
| (1 | ) |
|
| (9 | ) |
Margin deposit assets and liabilities |
|
| (539 | ) |
|
| 3 |
|
|
| (52 | ) |
|
| (60 | ) |
Net realized and unrealized changes related to derivative activities |
|
| 432 |
|
|
| 285 |
|
|
| 29 |
|
|
| (218 | ) |
Pension and other postretirement benefits |
|
| (103 | ) |
|
| (170 | ) |
|
| (117 | ) |
|
| (44 | ) |
Other operating assets and liabilities |
|
| (441 | ) |
|
| (358 | ) |
|
| (191 | ) |
|
| (199 | ) |
Net cash provided by operating activities |
|
| 3,535 |
|
|
| 4,810 |
|
|
| 1,125 |
|
|
| 1,452 |
|
Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant construction and other property additions (including nuclear fuel) |
|
| (4,142 | ) |
|
| (4,409 | ) |
|
| (1,622 | ) |
|
| (1,328 | ) |
Acquisition of solar development projects |
|
| (87 | ) |
|
| (245 | ) |
|
| (37 | ) |
|
| (23 | ) |
Proceeds from sales of securities |
|
| 3,324 |
|
|
| 2,868 |
|
|
| 814 |
|
|
| 1,765 |
|
Purchases of securities |
|
| (3,288 | ) |
|
| (2,948 | ) |
|
| (824 | ) |
|
| (1,765 | ) |
Repayment of Q-Pipe Transaction deposit |
|
| (1,265 | ) |
|
| — |
| ||||||||
Proceeds from sale of assets and equity method investments |
|
| 146 |
|
|
| — |
| ||||||||
Contributions to equity method affiliates |
|
| (1,006 | ) |
|
| (92 | ) |
|
| (15 | ) |
|
| (977 | ) |
Acquisition of equity method investments |
|
| — |
|
|
| (178 | ) | ||||||||
Other |
|
| (143 | ) |
|
| 144 |
|
|
| (36 | ) |
|
| 20 |
|
Net cash used in investing activities |
|
| (6,607 | ) |
|
| (4,860 | ) |
|
| (1,574 | ) |
|
| (2,308 | ) |
Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of short-term debt, net |
|
| 2,990 |
|
|
| 1,417 |
|
|
| 234 |
|
|
| 1,921 |
|
Issuance of short-term notes |
|
| 1,265 |
|
|
| 1,125 |
| ||||||||
Repayment of short-term notes |
|
| — |
|
|
| (625 | ) | ||||||||
Supplemental 364-Day credit facility borrowings |
|
| — |
|
|
| 225 |
| ||||||||
Repayment of supplemental 364-day credit facility borrowings |
|
| (225 | ) |
|
| — |
|
|
| — |
|
|
| (225 | ) |
Issuance of long-term debt |
|
| 2,500 |
|
|
| 5,677 |
|
|
| 1,000 |
|
|
| 150 |
|
Repayment of long-term debt, including redemption premiums |
|
| (2,708 | ) |
|
| (2,546 | ) | ||||||||
Supplemental credit facility borrowings |
|
| 900 |
|
|
| — |
| ||||||||
Repayment of long-term debt |
|
| (39 | ) |
|
| (161 | ) | ||||||||
Issuance of common stock |
|
| 144 |
|
|
| 159 |
|
|
| 45 |
|
|
| 48 |
|
Repurchase of common stock |
|
| — |
|
|
| (2,385 | ) | ||||||||
Common dividend payments |
|
| (1,526 | ) |
|
| (2,362 | ) |
|
| (541 | ) |
|
| (508 | ) |
Other |
|
| (248 | ) |
|
| (346 | ) |
|
| (64 | ) |
|
| (54 | ) |
Net cash provided by financing activities |
|
| 3,092 |
|
|
| 339 |
|
|
| 635 |
|
|
| 1,171 |
|
Increase in cash, restricted cash and equivalents |
|
| 20 |
|
|
| 289 |
|
|
| 186 |
|
|
| 315 |
|
Cash, restricted cash and equivalents at beginning of period |
|
| 247 |
|
|
| 269 |
|
|
| 408 |
|
|
| 247 |
|
Cash, restricted cash and equivalents at end of period |
| $ | 267 |
|
| $ | 558 |
|
| $ | 594 |
|
| $ | 562 |
|
See Note 2 for disclosure of supplemental cash flow information.
The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.
1613
VIRGINIA ELECTRIC AND POWER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenue(1) |
| $ | 1,976 |
|
| $ | 2,248 |
|
| $ | 5,547 |
|
| $ | 5,983 |
|
| $ | 2,167 |
|
| $ | 1,830 |
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric fuel and other energy-related purchases(1) |
|
| 515 |
|
|
| 424 |
|
|
| 1,270 |
|
|
| 1,282 |
|
|
| 516 |
|
|
| 406 |
|
Purchased (excess) electric capacity |
|
| 15 |
|
|
| 3 |
|
|
| 16 |
|
|
| (14 | ) |
|
| 11 |
|
|
| (3 | ) |
Other operations and maintenance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliated suppliers |
|
| 77 |
|
|
| 69 |
|
|
| 242 |
|
|
| 236 |
|
|
| 91 |
|
|
| 87 |
|
Other |
|
| 393 |
|
|
| 456 |
|
|
| 1,140 |
|
|
| 1,083 |
|
|
| 479 |
|
|
| 426 |
|
Depreciation and amortization |
|
| 343 |
|
|
| 324 |
|
|
| 990 |
|
|
| 942 |
|
|
| 429 |
|
|
| 324 |
|
Other taxes |
|
| 86 |
|
|
| 85 |
|
|
| 262 |
|
|
| 257 |
|
|
| 75 |
|
|
| 93 |
|
Impairment of assets and other charges (benefits) |
|
| (230 | ) |
|
| 200 |
|
|
| (269 | ) |
|
| 1,008 |
| ||||||||
Impairment of assets and other charges (benefit) |
|
| 4 |
|
|
| (51 | ) | ||||||||||||||||
Total operating expenses |
|
| 1,199 |
|
|
| 1,561 |
|
|
| 3,651 |
|
|
| 4,794 |
|
|
| 1,605 |
|
|
| 1,282 |
|
Income from operations |
|
| 777 |
|
|
| 687 |
|
|
| 1,896 |
|
|
| 1,189 |
|
|
| 562 |
|
|
| 548 |
|
Other income |
|
| 21 |
|
|
| 34 |
|
|
| 93 |
|
|
| 34 |
|
|
| 4 |
|
|
| 32 |
|
Interest and related charges(1) |
|
| 136 |
|
|
| 135 |
|
|
| 400 |
|
|
| 398 |
|
|
| 148 |
|
|
| 136 |
|
Income before income tax expense |
|
| 662 |
|
|
| 586 |
|
|
| 1,589 |
|
|
| 825 |
|
|
| 418 |
|
|
| 444 |
|
Income tax expense |
|
| 106 |
|
|
| 111 |
|
|
| 245 |
|
|
| 140 |
|
|
| 61 |
|
|
| 70 |
|
Net Income |
| $ | 556 |
|
| $ | 475 |
|
| $ | 1,344 |
|
| $ | 685 |
|
| $ | 357 |
|
| $ | 374 |
|
(1) | See Note 19 for amounts attributable to affiliates. |
The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.
VIRGINIA ELECTRIC AND POWER COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| $ | 556 |
|
| $ | 475 |
|
| $ | 1,344 |
|
| $ | 685 |
|
| $ | 357 |
|
| $ | 374 |
|
Other comprehensive income (loss), net of taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net deferred gains (losses) on derivatives-hedging activities(1) |
|
| (2 | ) |
|
| 5 |
|
|
| 18 |
|
|
| (39 | ) |
|
| 19 |
|
|
| 32 |
|
Changes in unrealized net gains (losses) on nuclear decommissioning trust funds(2) |
|
| — |
|
|
| — |
|
|
| (2 | ) |
|
| 4 |
|
|
| (7 | ) |
|
| (5 | ) |
Amounts reclassified to net income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net derivative (gains) losses-hedging activities(3) |
|
| — |
|
|
| 1 |
|
|
| 1 |
|
|
| 1 |
|
|
| 1 |
|
|
| 1 |
|
Net realized (gains) losses on nuclear decommissioning trust funds(4) |
|
| (1 | ) |
|
| (1 | ) |
|
| (1 | ) |
|
| (2 | ) |
|
| (1 | ) |
|
| 1 |
|
Total other comprehensive income (loss) |
|
| (3 | ) |
|
| 5 |
|
|
| 16 |
|
|
| (36 | ) | ||||||||
Total other comprehensive income |
|
| 12 |
|
|
| 29 |
| ||||||||||||||||
Comprehensive income |
| $ | 553 |
|
| $ | 480 |
|
| $ | 1,360 |
|
| $ | 649 |
|
| $ | 369 |
|
| $ | 403 |
|
(1) | Net of |
(2) | Net of |
(3) | Net of |
(4) | Net of $— |
The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.
VIRGINIA ELECTRIC AND POWER COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
| September 30, 2021 |
|
| December 31, 2020(1) |
|
| March 31, 2022 |
|
| December 31, 2021(1) |
| ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 38 |
|
| $ | 35 |
|
| $ | 36 |
|
| $ | 26 |
|
Customer receivables (less allowance for doubtful accounts of $32 and $23) |
|
| 1,207 |
|
|
| 1,315 |
| ||||||||
Customer receivables (less allowance for doubtful accounts of $28 at both dates) |
|
| 1,120 |
|
|
| 1,172 |
| ||||||||
Other receivables (less allowance for doubtful accounts of $2 at both dates) |
|
| 58 |
|
|
| 91 |
|
|
| 83 |
|
|
| 112 |
|
Affiliated receivables |
|
| 2 |
|
|
| 5 |
|
|
| 98 |
|
|
| 37 |
|
Inventories (average cost method) |
|
| 826 |
|
|
| 862 |
|
|
| 837 |
|
|
| 871 |
|
Margin deposit assets |
|
| 292 |
|
|
| 167 |
| ||||||||
Regulatory assets |
|
| 690 |
|
|
| 295 |
|
|
| 952 |
|
|
| 850 |
|
Other(2) |
|
| 280 |
|
|
| 59 |
|
|
| 238 |
|
|
| 115 |
|
Total current assets |
|
| 3,101 |
|
|
| 2,662 |
|
|
| 3,656 |
|
|
| 3,350 |
|
Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nuclear decommissioning trust funds |
|
| 3,507 |
|
|
| 3,197 |
|
|
| 3,577 |
|
|
| 3,734 |
|
Other |
|
| 4 |
|
|
| 3 |
|
|
| 3 |
|
|
| 3 |
|
Total investments |
|
| 3,511 |
|
|
| 3,200 |
|
|
| 3,580 |
|
|
| 3,737 |
|
Property, Plant and Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
| 48,795 |
|
|
| 46,736 |
|
|
| 50,725 |
|
|
| 49,890 |
|
Accumulated depreciation and amortization |
|
| (14,919 | ) |
|
| (14,167 | ) |
|
| (15,472 | ) |
|
| (15,234 | ) |
Total property, plant and equipment, net |
|
| 33,876 |
|
|
| 32,569 |
|
|
| 35,253 |
|
|
| 34,656 |
|
Deferred Charges and Other Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory assets |
|
| 3,941 |
|
|
| 3,509 |
|
|
| 4,141 |
|
|
| 4,130 |
|
Other(2) |
|
| 1,974 |
|
|
| 1,714 |
|
|
| 2,160 |
|
|
| 2,059 |
|
Total deferred charges and other assets |
|
| 5,915 |
|
|
| 5,223 |
|
|
| 6,301 | �� |
|
| 6,189 |
|
Total assets |
| $ | 46,403 |
|
| $ | 43,654 |
|
| $ | 48,790 |
|
| $ | 47,932 |
|
(1) | Virginia Power’s Consolidated Balance Sheet at December 31, |
(2) | See Note 19 for amounts attributable to affiliates. |
The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.
1916
VIRGINIA ELECTRIC AND POWER COMPANY
CONSOLIDATED BALANCE SHEETS—(Continued)
(Unaudited)
|
| September 30, 2021 |
|
| December 31, 2020(1) |
|
| March 31, 2022 |
|
| December 31, 2021(1) |
| ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDER’S EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities due within one year |
| $ | 761 |
|
| $ | 8 |
|
| $ | 1,013 |
|
| $ | 313 |
|
Short-term debt |
|
| 896 |
|
|
| 45 |
|
|
| 686 |
|
|
| 745 |
|
Accounts payable |
|
| 393 |
|
|
| 332 |
|
|
| 423 |
|
|
| 402 |
|
Payables to affiliates |
|
| 139 |
|
|
| 266 |
|
|
| 190 |
|
|
| 121 |
|
Affiliated current borrowings |
|
| 310 |
|
|
| 380 |
|
|
| 235 |
|
|
| 699 |
|
Accrued interest, payroll and taxes |
|
| 374 |
|
|
| 253 |
|
|
| 331 |
|
|
| 274 |
|
Regulatory liabilities |
|
| 685 |
|
|
| 425 |
|
|
| 460 |
|
|
| 647 |
|
Derivative liabilities(2) |
|
| 389 |
|
|
| 390 |
|
|
| 241 |
|
|
| 134 |
|
Other |
|
| 703 |
|
|
| 728 |
|
|
| 770 |
|
|
| 758 |
|
Total current liabilities |
|
| 4,650 |
|
|
| 2,827 |
|
|
| 4,349 |
|
|
| 4,093 |
|
Long-Term Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
| 12,462 |
|
|
| 13,207 |
|
|
| 13,733 |
|
|
| 13,453 |
|
Other |
|
| 495 |
|
|
| 480 |
|
|
| 504 |
|
|
| 503 |
|
Total long-term debt |
|
| 12,957 |
|
|
| 13,687 |
|
|
| 14,237 |
|
|
| 13,956 |
|
Deferred Credits and Other Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income taxes and investment tax credits |
|
| 3,028 |
|
|
| 2,779 |
|
|
| 3,323 |
|
|
| 3,183 |
|
Asset retirement obligations |
|
| 3,699 |
|
|
| 3,654 |
|
|
| 3,728 |
|
|
| 3,732 |
|
Regulatory liabilities |
|
| 5,560 |
|
|
| 5,338 |
|
|
| 5,603 |
|
|
| 5,740 |
|
Other(2) |
|
| 892 |
|
|
| 812 |
|
|
| 1,202 |
|
|
| 1,248 |
|
Total deferred credits and other liabilities |
|
| 13,179 |
|
|
| 12,583 |
|
|
| 13,856 |
|
|
| 13,903 |
|
Total liabilities |
|
| 30,786 |
|
|
| 29,097 |
|
|
| 32,442 |
|
|
| 31,952 |
|
Commitments and Contingencies (see Note 17) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shareholder’s Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock – no par(3) |
|
| 5,738 |
|
|
| 5,738 |
|
|
| 5,738 |
|
|
| 5,738 |
|
Other paid-in capital |
|
| 1,113 |
|
|
| 1,113 |
|
|
| 1,113 |
|
|
| 1,113 |
|
Retained earnings |
|
| 8,802 |
|
|
| 7,758 |
|
|
| 9,526 |
|
|
| 9,170 |
|
Accumulated other comprehensive loss |
|
| (36 | ) |
|
| (52 | ) |
|
| (29 | ) |
|
| (41 | ) |
Total common shareholder’s equity |
|
| 15,617 |
|
|
| 14,557 |
|
|
| 16,348 |
|
|
| 15,980 |
|
Total liabilities and shareholder’s equity |
| $ | 46,403 |
|
| $ | 43,654 |
|
| $ | 48,790 |
|
| $ | 47,932 |
|
(1) | Virginia Power’s Consolidated Balance Sheet at December 31, |
(2) | See Note 19 for amounts attributable to affiliates. |
(3) | 500,000 shares authorized; 274,723 shares outstanding at |
The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.
2017
VIRGINIA ELECTRIC AND POWER COMPANY
CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDER’S EQUITY
(Unaudited)
QUARTER-TO-DATE
|
| Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
| Shares |
|
| Amount |
|
| Other Paid-In Capital |
|
| Retained Earnings |
|
| AOCI |
|
| Total |
| ||||||
(millions, except for shares) |
| (thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
June 30, 2020 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 7,163 |
|
| $ | (70 | ) |
| $ | 13,944 |
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 475 |
|
|
|
|
|
|
| 475 |
|
Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (108 | ) |
|
|
|
|
|
| (108 | ) |
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 5 |
|
|
| 5 |
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1 | ) |
|
|
|
|
|
| (1 | ) |
September 30, 2020 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 7,529 |
|
| $ | (65 | ) |
| $ | 14,315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2021 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 8,246 |
|
| $ | (33 | ) |
| $ | 15,064 |
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 556 |
|
|
|
|
|
|
| 556 |
|
Other comprehensive loss, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (3 | ) |
| $ | (3 | ) |
September 30, 2021 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 8,802 |
|
| $ | (36 | ) |
| $ | 15,617 |
|
YEAR-TO-DATE
|
| Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
| Shares |
|
| Amount |
|
| Other Paid-In Capital |
|
| Retained Earnings |
|
| AOCI |
|
| Total |
|
| Shares |
|
| Amount |
|
| Other Paid-In Capital |
|
| Retained Earnings |
|
| AOCI |
|
| Total |
| ||||||||||||
(millions, except for shares) |
| (thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
December 31, 2019 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 7,167 |
|
| $ | (29 | ) |
| $ | 13,989 |
| ||||||||||||||||||||||||
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 685 |
|
|
|
|
|
|
| 685 |
| ||||||||||||||||||||||||
Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (323 | ) |
|
|
|
|
|
| (323 | ) | ||||||||||||||||||||||||
Other comprehensive loss, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (36 | ) |
|
| (36 | ) | ||||||||||||||||||||||||
September 30, 2020 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 7,529 |
|
| $ | (65 | ) |
| $ | 14,315 |
| ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
December 31, 2020 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 7,758 |
|
| $ | (52 | ) |
| $ | 14,557 |
|
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 7,758 |
|
| $ | (52 | ) |
| $ | 14,557 |
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,344 |
|
|
|
|
|
|
| 1,344 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 374 |
|
|
|
|
|
|
| 374 |
|
Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (300 | ) |
|
|
|
|
|
| (300 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (150 | ) |
|
|
|
|
|
| (150 | ) |
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 16 |
|
|
| 16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 29 |
|
|
| 29 |
|
September 30, 2021 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 8,802 |
|
| $ | (36 | ) |
| $ | 15,617 |
| ||||||||||||||||||||||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1 |
|
|
|
|
|
|
| 1 |
| ||||||||||||||||||||||||
March 31, 2021 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 7,983 |
|
| $ | (23 | ) |
| $ | 14,811 |
| ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
December 31, 2021 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 9,170 |
|
| $ | (41 | ) |
| $ | 15,980 |
| ||||||||||||||||||||||||
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 357 |
|
|
|
|
|
|
| 357 |
| ||||||||||||||||||||||||
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 12 |
|
|
| 12 |
| ||||||||||||||||||||||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1 | ) |
|
|
|
|
|
| (1 | ) | ||||||||||||||||||||||||
March 31, 2022 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 9,526 |
|
| $ | (29 | ) |
| $ | 16,348 |
| ||||||||||||||||||||||||
The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.
2118
VIRGINIA ELECTRIC AND POWER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30, |
| 2021 |
|
| 2020 |
| ||||||||||
Three Months Ended March 31, |
| 2022 |
|
| 2021 |
| ||||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| $ | 1,344 |
|
| $ | 685 |
|
| $ | 357 |
|
| $ | 374 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization (including nuclear fuel) |
|
| 1,109 |
|
|
| 1,068 |
|
|
| 425 |
|
|
| 365 |
|
Deferred income taxes and investment tax credits |
|
| 198 |
|
|
| (259 | ) |
|
| 105 |
|
|
| 87 |
|
Impairment of assets and other charges (benefits) |
|
| (269 | ) |
|
| 1,004 |
| ||||||||
Provision for refunds to customers |
|
| 350 |
|
|
| — |
| ||||||||
Impairment of assets and other charges (benefit) |
|
| — |
|
|
| (51 | ) | ||||||||
Other adjustments |
|
| 81 |
|
|
| 11 |
|
|
| 3 |
|
|
| 115 |
|
Changes in: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
| (98 | ) |
|
| (186 | ) |
|
| 76 |
|
|
| 173 |
|
Affiliated receivables and payables |
|
| (123 | ) |
|
| 144 |
|
|
| 9 |
|
|
| (144 | ) |
Inventories |
|
| 36 |
|
|
| 46 |
|
|
| 34 |
|
|
| 21 |
|
Prepayments |
|
| (5 | ) |
|
| 1 |
|
|
| 3 |
|
|
| (4 | ) |
Deferred fuel expenses, net |
|
| (396 | ) |
|
| 144 |
|
|
| (297 | ) |
|
| (159 | ) |
Accounts payable |
|
| 66 |
|
|
| (1 | ) |
|
| 90 |
|
|
| — |
|
Accrued interest, payroll and taxes |
|
| 121 |
|
|
| 81 |
|
|
| 57 |
|
|
| 54 |
|
Margin deposit assets and liabilities |
|
| (121 | ) |
|
| — |
|
|
| (125 | ) |
|
| 2 |
|
Net realized and unrealized changes related to derivative activities |
|
| 8 |
|
|
| (18 | ) | ||||||||
Asset retirement obligations |
|
| 16 |
|
|
| 51 |
| ||||||||
Pension and other postretirement benefits |
|
| 6 |
|
|
| (273 | ) | ||||||||
Other operating assets and liabilities |
|
| (83 | ) |
|
| 67 |
|
|
| (52 | ) |
|
| (49 | ) |
Net cash provided by operating activities |
|
| 2,240 |
|
|
| 2,565 |
|
|
| 685 |
|
|
| 784 |
|
Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant construction and other property additions |
|
| (2,525 | ) |
|
| (2,301 | ) |
|
| (1,037 | ) |
|
| (766 | ) |
Purchases of nuclear fuel |
|
| (73 | ) |
|
| (170 | ) |
|
| (27 | ) |
|
| (46 | ) |
Acquisition of solar development projects |
|
| (61 | ) |
|
| (26 | ) |
|
| (37 | ) |
|
| (10 | ) |
Proceeds from sales of securities |
|
| 1,465 |
|
|
| 694 |
|
|
| 392 |
|
|
| 789 |
|
Purchases of securities |
|
| (1,470 | ) |
|
| (729 | ) |
|
| (415 | ) |
|
| (791 | ) |
Other |
|
| (45 | ) |
|
| 33 |
|
|
| (5 | ) |
|
| 41 |
|
Net cash used in investing activities |
|
| (2,709 | ) |
|
| (2,499 | ) |
|
| (1,129 | ) |
|
| (783 | ) |
Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of short-term debt, net |
|
| 851 |
|
|
| 179 |
| ||||||||
Issuance (repayment) of affiliated current borrowings, net |
|
| (70 | ) |
|
| 123 |
| ||||||||
Issuance (repayment) of short-term debt, net |
|
| (59 | ) |
|
| 375 |
| ||||||||
Repayment of affiliated current borrowings, net |
|
| (464 | ) |
|
| (203 | ) | ||||||||
Issuance of long-term debt, net |
|
| — |
|
|
| 427 |
|
|
| 1,000 |
|
|
| — |
|
Repayment of long-term debt, net |
|
| — |
|
|
| (427 | ) | ||||||||
Common dividend payments to parent |
|
| (300 | ) |
|
| (323 | ) |
|
| — |
|
|
| (150 | ) |
Other |
|
| (8 | ) |
|
| (6 | ) |
|
| (23 | ) |
|
| (2 | ) |
Net cash provided by (used in) financing activities |
|
| 473 |
|
|
| (27 | ) | ||||||||
Net cash provided by financing activities |
|
| 454 |
|
|
| 20 |
| ||||||||
Increase in cash, restricted cash and equivalents |
|
| 4 |
|
|
| 39 |
|
|
| 10 |
|
|
| 21 |
|
Cash, restricted cash and equivalents at beginning of period |
|
| 35 |
|
|
| 24 |
|
|
| 26 |
|
|
| 35 |
|
Cash, restricted cash and equivalents at end of period |
| $ | 39 |
|
| $ | 63 |
|
| $ | 36 |
|
| $ | 56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Note 2 for disclosure of supplemental cash flow information.
The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Nature of Operations
Dominion Energy, headquartered in Richmond, Virginia, is one of the nation’s largest producers and distributors of energy. Dominion Energy’s operations are conducted through various subsidiaries, including Virginia Power. Dominion Energy’s operations also include DESC, regulated gas distribution operations primarily in the eastern and Rocky Mountain regions of the U.S., nonregulated electric generation and following completion of the GT&S Transaction in November 2020, a noncontrolling interest in Cove Point. See Note 3 for a description of the sale of substantially all of Dominion Energy’s gas transmission and storage operations to BHE through the GT&S Transaction completed in November 2020 and the expected sale of Dominion Energy’s remaining regulated gas transmission and storage services in the Rocky Mountain region of the U.S. to Southwest Gas.
Note 2. Significant Accounting Policies
As permitted by the rules and regulations of the SEC, the Companies’ accompanying unaudited Consolidated Financial Statements contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with GAAP. These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020.2021.
In the Companies’ opinion, the accompanying unaudited Consolidated Financial Statements contain all adjustments necessary to present fairly their financial position at September 30, 2021,March 31, 2022 and their results of operations, and changes in equity for the three and nine months ended September 30, 2021 and 2020 and their cash flows for the ninethree months ended September 30, 2021March 31, 2022 and 2020.2021. Such adjustments are normal and recurring in nature unless otherwise noted.
The Companies make certain estimates and assumptions in preparing their Consolidated Financial Statements in accordance with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods presented. Actual results may differ from those estimates.
The Companies’ accompanying unaudited Consolidated Financial Statements include, after eliminating intercompany transactions and balances, their accounts, those of their respective majority-owned subsidiaries and non-wholly-owned entities in which they have a controlling financial interest. For certain partnership structures, income is allocated based on the liquidation value of the underlying contractual arrangements. At September 30, 2021, Dominion Energy owns 50% of the voting interests in Four Brothers and Three Cedars and has a controlling financial interest over the entities through its right to control operations. Clearway’s ownership interest in Four Brothers and Three Cedars (through December 2021) and Terra Nova Renewable Partners’ 33% interest in certain Dominion Energy nonregulated solar projects and Brookfield’s 25% interest in Cove Point (effective(through December 2019 until November 2020)2021) are reflected as noncontrolling interest in Dominion Energy’s Consolidated Financial Statements. In August 2021, Dominion Energy entered into an agreement with Terra Nova Renewable Partners to sell its remaining controlling financial interest in certain nonregulated solar projects. Also in August 2021, Dominion Energy entered into an agreement with Clearway to sell its 50% voting interest in Four Brothers and Three Cedars. See Note 1110 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for morethe year ended December 31, 2021 for additional information.
The results of operations for interim periods are not necessarily indicative of the results expected for the full year. Information for quarterly periods is affected by seasonal variations in sales, rate changes, electric fuel and other energy-related purchases, purchased gas expenses and other factors.
Certain amounts in the Companies’ 20202021 Consolidated Financial Statements and Notes have been reclassified to conform to the 20212022 presentation for comparative purposes; however, such reclassifications did not affect the Companies’ net income, total assets, liabilities, equity or cash flows. Effective in the second quarter of 2021, the Companies updated their Statements of Cash Flows to present net charges for allowance for credit risk and write-offs of accounts receivables within other adjustments to reconcile net income to net cash provided by operating activities from the previous presentation within changes in accounts receivable. All prior period information has been conformed to this presentation, which does not result in a change to net cash provided by operating activities.
Amounts disclosed for Dominion Energy are inclusive of Virginia Power, where applicable. There have been no significant changes from Note 2 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020,2021, with the exception of the items described below.
2320
Cash, Restricted Cash and Equivalents
Restricted Cash and Equivalents
The following table provides a reconciliation of the total cash, restricted cash and equivalents reported within the Companies’ Consolidated Balance Sheets to the corresponding amounts reported within the Companies’ Consolidated Statements of Cash Flows for the ninethree months ended September 30, 2021March 31, 2022 and 2020:2021:
|
| Cash, Restricted Cash and Equivalents at End of Period |
|
| Cash, Restricted Cash and Equivalents at Beginning of Period |
|
| Cash, Restricted Cash and Equivalents at End of Period |
|
| Cash, Restricted Cash and Equivalents at Beginning of Period |
| ||||||||||||||||||||
|
| September 30, 2021 |
|
| September 30, 2020 |
|
| December 31, 2020 |
|
| December 31, 2019 |
|
| March 31, 2022 |
|
| March 31, 2021 |
|
| December 31, 2021 |
|
| December 31, 2020 |
| ||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominion Energy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents(1) |
| $ | 195 |
|
| $ | 462 |
|
| $ | 179 |
|
| $ | 166 |
|
| $ | 446 |
|
| $ | 491 |
|
| $ | 283 |
|
| $ | 179 |
|
Restricted cash and equivalents(2)(3) |
|
| 72 |
|
|
| 96 |
|
|
| 68 |
|
|
| 103 |
|
|
| 148 |
|
|
| 71 |
|
|
| 125 |
|
|
| 68 |
|
Cash, restricted cash and equivalents shown in the Consolidated Statements of Cash Flows |
| $ | 267 |
|
| $ | 558 |
|
| $ | 247 |
|
| $ | 269 |
|
| $ | 594 |
|
| $ | 562 |
|
| $ | 408 |
|
| $ | 247 |
|
Virginia Power |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 38 |
|
| $ | 62 |
|
| $ | 35 |
|
| $ | 17 |
|
| $ | 36 |
|
| $ | 56 |
|
| $ | 26 |
|
| $ | 35 |
|
Restricted cash and equivalents(3) |
|
| 1 |
|
|
| 1 |
|
|
| 0 |
|
|
| 7 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
Cash, restricted cash and equivalents shown in the Consolidated Statements of Cash Flows |
| $ | 39 |
|
| $ | 63 |
|
| $ | 35 |
|
| $ | 24 |
|
| $ | 36 |
|
| $ | 56 |
|
| $ | 26 |
|
| $ | 35 |
|
(1) | At |
(2) | At |
(3) | Restricted cash and equivalent balances are presented within other current assets in the Companies’ Consolidated Balance Sheets. |
Supplemental Cash Flow Information
The following table provides supplemental disclosure of cash flow information related to Dominion Energy:
|
| Nine Months Ended September 30, |
|
| Three Months Ended March 31, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant noncash investing and financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued capital expenditures |
| $ | 374 |
|
| $ | 461 |
|
| $ | 425 |
|
| $ | 341 |
|
Accrued contributions to equity method affiliates |
|
| 0 |
|
|
| 15 |
| ||||||||
Leases(2) |
|
| 75 |
|
|
| 45 |
| ||||||||
Leases(1) |
|
| 24 |
|
|
| 9 |
| ||||||||
(1) |
|
| Includes |
The following table provides supplemental disclosure of cash flow information related to Virginia Power:
|
| Nine Months Ended September 30, |
|
| Three Months Ended March 31, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant noncash investing and financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued capital expenditures |
| $ | 238 |
|
| $ | 234 |
|
| $ | 252 |
|
| $ | 262 |
|
Leases(2) |
|
| 59 |
|
|
| 26 |
| ||||||||
Leases(1) |
|
| 21 |
|
|
| 1 |
| ||||||||
(1) |
|
| Includes |
Property, Plant and Equipment
In March 2020, Virginia Power committed to retire certain coal- and oil-fired generating units before the end of their useful lives based on economic and other factors, including but not limited to market power prices and the VCEA. These units will be retired after they meet their capacity obligations to PJM in 2023.As a result, Virginia Power recorded a charge of $754 million ($561 million after-tax) in the first quarter of 2020, primarily included2022, Virginia Power revised the depreciation rates for its assets to reflect the results of a new depreciation study. The change resulted in impairment of assets and other chargesa decrease in itsdepreciation expense in Virginia Power’s Consolidated Statements of Income. This chargeIncome of $15 million ($11 million after-tax) and an increase in Dominion Energy’s EPS of $0.01 for the three months ended March 31, 2022. The
21
revision is considered a component ofexpected to decrease Virginia Power’s base rates deemed recovered under the GTSA, subject to review as discussed in Note 13 to the Consolidated Financial Statements in Virginia Power’s Annual Report on Form 10-K for the year ended December 31, 2020. In addition, see Note 13 for information on the proposed settlement of the 2021 Triennial Review.
In the second quarter of 2020, Virginia Power recorded charges of $30annual depreciation expense by approximately $60 million ($2245 million after-tax) associated with dismantling certain of these electric generation facilities, recorded in impairment of assets and other charges in its Consolidated Statements of Income.
Asset Retirement Obligations
In the second quarter of 2021,increase Dominion Energy revised its estimated cash flow projections associated with the recovery of spent nuclear fuel costs for its AROs associated with the decommissioning of Kewaunee. As a result, Dominion Energy recorded a charge of $44 million ($35 million after-tax) within other operations and maintenance expense in its Consolidated Statements of Income.Energy’s EPS by approximately $0.05.
In the third quarter of 2021, Dominion Energy revised its estimated cash flow projections associated with certain gas distribution pipeline AROs. As a result, Dominion Energy recorded a $252 million decrease to AROs with a corresponding $173 million decrease to property, plant and equipment, net and the remainder primarily recorded as an increase to regulatory liabilities.
Note 3. Acquisitions and Dispositions
Disposition of Gas Transmission & Storage Operations
In July 2020, Dominion Energy entered into an agreement with BHE with a total value of approximately $10 billion, comprised of approximately $4.0 billion of cash consideration (subject to customary closing adjustments) plus the assumption of long-term debt, to sell substantially all of its gas transmission and storage operations, including processing assets, as well as noncontrolling partnership interests in Iroquois, JAX LNG and White River Hub and a controlling interest in Cove Point (consisting of 100% of the general partner interest and 25% of the total limited partner interests). The agreement provides that Dominion Energy retains the assets and obligations of the pension and other postretirement employee benefit plans associated with the operations included in the transaction and relating to services provided through closing. In October 2020, pursuant to a provision in the agreement with BHE, Dominion Energy elected to exclude the Q-Pipe Group from the transaction as approval under the Hart-Scott-Rodino Act had not been obtained by mid-September 2020. Concurrently in October 2020, Dominion Energy and BHE entered into a separate agreement under which Dominion Energy would sell the Q-Pipe Group for cash consideration of $1.3 billion and the assumption of related long-term debt. In November 2020,December 2021, Dominion Energy completed the GT&S Transactionsale of the Q-Pipe Group to Southwest Gas, as discussed in Note 3 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.2021. In the first quarter of 2022, Dominion Energy recognized a gain of $27 million ($20 million after-tax) in discontinued operations in its Consolidated Statements of Income associated with finalization of working capital adjustments.
In connection with the closing of the GT&S Transaction,sale of the Q-Pipe Group, Dominion Energy and BHESouthwest Gas entered into a transition services agreement under which Dominion Energy will continue to provide specified administrative services to support the operations of the disposed businessbusinesses for up to 2412 months after closing, subsequently extended through June 2023 for certain services. In addition, BHE will provide certain administrative servicessubject to Dominion Energy.extension. Dominion Energy recorded revenue of $5 million and $16$1 million associated with the transition serviceservices agreement in operating revenue in itsthe Consolidated Statements of Income for the three and nine months ended September 30, 2021, respectively.March 31, 2022.
25
AlsoThe following table represents selected information regarding the results of operations, which were reported within discontinued operations in November 2020, BHE provided a $1.3 billion depositDominion Energy’s Consolidated Statements of Income:
|
| Three Months Ended March 31, 2021 |
| |
|
| Q-Pipe Group |
| |
(millions) |
|
|
|
|
Operating revenue |
| $ | 67 |
|
Operating expense |
|
| 19 |
|
Interest and related charges |
|
| 5 |
|
Income before income taxes |
|
| 43 |
|
Income tax expense |
|
| 8 |
|
Net income attributable to Dominion Energy |
| $ | 35 |
|
Capital expenditures and significant noncash items relating to Dominion Energy on the Q-Pipe Transaction. In July 2021, Dominion Energy and BHE mutually agreed to terminate the Q-Pipe Transaction as a result of ongoing uncertainty associated with receiving approval under the Hart-Scott-Rodino Act. Dominion Energy simultaneously announced its intention to pursue the divestiture of the Q-Pipe Group to an alternative buyer via competitive sales process with targeted closing, subject to applicable regulatory approval, byincluded the endfollowing:
|
| Three Months Ended March 31, 2021 |
| |
(millions) |
|
|
|
|
Capital expenditures |
| $ | 3 |
|
Significant noncash items: |
|
|
|
|
Accrued capital expenditures |
|
| 2 |
|
Sale of 2021. Also in July 2021, Dominion Energy entered into an approximately $1.3 billion term loan credit agreement and borrowed the full amount available thereunder. The agreement matures in December 2021, which can be extended at Dominion Energy’s option to June 2022, and bears interest at a variable rate. The proceeds were utilized to repay the deposit received from BHE on the Q-Pipe Transaction. Upon completion of a sale of the Q-Pipe Group, Dominion Energy is required to utilize the net proceeds to repay any outstanding balances under the term loan agreement.Hope
In October 2021,February 2022, Dominion Energy entered into an agreement with Southwest Gas to sell 100% of the Q-Pipe Group. The total value of this transaction is approximately $2 billion, comprised of approximately $1.5 billionequity interests in Hope to Ullico for $690 million of cash consideration, (subjectsubject to customary closing adjustments) plus the assumption of long-term debt. The agreement provides that Dominion Energy retains the assets and obligations of the pension and other postretirement employee benefit plans associated with the operations included in the transaction and relating to services provided through closing.adjustments. The sale will be treated as an asseta stock sale for tax purposes and is expected to close by the end of 2021,2022, contingent on clearance or approval under the Hart-Scott-Rodino Act and from the West Virginia Commission, and other customary closing and regulatory conditions. BasedIn March 2022, the waiting period under the Hart-Scott-Rodino Act expired. Also in March 2022, Dominion Energy filed for review and approval with the West Virginia Commission.
In the first quarter of 2022, Dominion Energy recorded a charge of $87 million in income tax expense in its Consolidated Statements of Income to reflect the recognition of deferred taxes on the recorded balances at September 30, 2021,outside basis of Hope’s stock upon meeting the classification as held for sale. These deferred taxes will reverse upon closing of the sale. See Note 5 for additional information. Following closing of the sale, Dominion Energy expects to recognize a pre-tax gain of approximately $685$60 million, ($500subject to customary closing adjustments, (net of $108 million after-tax) upon closing, including the write-off of $191 milliongoodwill which is not deductible for tax purposes) and an after-tax loss of goodwill, but excludingapproximately $40 million.
22
At March 31, 2022, the effectsassets and liabilities of any closing adjustments.
The operationsHope, included in both the GT&S Transaction and the Q-Pipe GroupGas Distribution, are presented inclassified as held for sale and discontinued operations effective July 2020, at which time depreciationreflected in current assets held for sale and amortization ceased on the applicable assets. As Cove Point had previously been consolidated within Dominion Energy’s financial statements, balances associated with Cove Point prior to the closing of the GT&S Transaction are presented within held-for-sale and discontinued operations. See Note 10current liabilities held for further information regarding Dominion Energy’s equity method investment in Cove Point.
The following table represents selected information regarding the results of operations, which are reported within discontinued operationssale, respectively, in Dominion Energy’s Consolidated Statements of Income:
|
| Three Months Ended September 30, 2021 |
|
| Three Months Ended September 30, 2020 |
|
| Nine Months Ended September 30, 2021 |
|
| Nine Months Ended September 30, 2020 |
| ||||||||||||
|
| Q-Pipe Group |
|
| GT&S Transaction |
|
| Q-Pipe Group |
|
| Q-Pipe Group |
|
| GT&S Transaction |
|
| Q-Pipe Group |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue |
| $ | 62 |
|
| $ | 511 |
|
| $ | 59 |
|
| $ | 188 |
|
| $ | 1,554 |
|
| $ | 182 |
|
Operating expense(1) |
|
| 24 |
|
|
| 208 |
|
|
| 16 |
|
|
| 52 |
|
|
| 1,311 |
|
|
| 78 |
|
Other income(2) |
|
| 26 |
|
|
| (5 | ) |
|
| 1 |
|
|
| 27 |
|
|
| 27 |
|
|
| 3 |
|
Interest and related charges(3) |
|
| 7 |
|
|
| 267 |
|
|
| 5 |
|
|
| 17 |
|
|
| 366 |
|
|
| 15 |
|
Income (loss) before income taxes |
|
| 57 |
|
|
| 31 |
|
|
| 39 |
|
|
| 146 |
|
|
| (96 | ) |
|
| 92 |
|
Income tax expense (benefit)(4) |
|
| 12 |
|
|
| (14 | ) |
|
| 5 |
|
|
| 29 |
|
|
| (65 | ) |
|
| 19 |
|
Net income (loss) including noncontrolling interests |
|
| 45 |
|
|
| 45 |
|
|
| 34 |
|
|
| 117 |
|
|
| (31 | ) |
|
| 73 |
|
Noncontrolling interests |
|
| — |
|
|
| 32 |
|
|
| — |
|
|
| — |
|
|
| 97 |
|
|
| — |
|
Net income (loss) attributable to Dominion Energy |
| $ | 45 |
|
| $ | 13 |
|
| $ | 34 |
|
| $ | 117 |
|
| $ | (128 | ) |
| $ | 73 |
|
|
|
|
|
|
|
|
|
Balance Sheets. The carrying amounts of major classes of assets and liabilities relating to the disposal groups, which are reportedclassified as held for sale in Dominion Energy’s Consolidated Balance Sheets wereare as follows:
|
| At September 30, 2021 |
|
| At December 31, 2020 |
| |||||
|
| Q-Pipe Group |
|
| Q-Pipe Group |
| March 31, 2022 |
| |||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
Current assets(1) |
| $ | 47 |
|
| $ | 47 |
| |||
Equity method investments(2) |
|
| 35 |
|
|
| 35 |
| |||
Current assets | $ | 58 |
| ||||||||
Property, plant and equipment, net |
|
| 1,142 |
|
|
| 1,113 |
|
| 481 |
|
Other deferred charges and other assets, including goodwill and intangible assets(3) |
|
| 223 |
|
|
| 224 |
| |||
Other deferred charges and other assets, including goodwill(1) and intangible assets |
| 305 |
| ||||||||
Current liabilities |
|
| 35 |
|
|
| 30 |
|
| 39 |
|
Long-term debt |
|
| 426 |
|
|
| 426 |
|
| 2 |
|
Other deferred credits and liabilities |
|
| 154 |
|
|
| 154 |
| |||
Deferred credits and other liabilities |
| 174 |
| ||||||||
(1) | Includes |
|
|
|
|
Capital expenditures and significant noncash items relating to the disposal groups included the following:
|
| Nine Months Ended September 30, 2021 |
|
| Nine Months Ended September 30, 2020 |
| ||||||
|
| Q-Pipe Group |
|
| GT&S Transaction |
|
| Q-Pipe Group |
| |||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
| $ | 26 |
|
| $ | 240 |
|
| $ | 27 |
|
Significant noncash items: |
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of assets and other charges |
|
| 0 |
|
|
| 463 |
|
|
| 0 |
|
Depreciation, depletion and amortization |
|
| 0 |
|
|
| 173 |
|
|
| 25 |
|
Accrued capital expenditures |
|
| 2 |
|
|
| 43 |
|
|
| 2 |
|
Sale of Kewaunee
In May 2021, Dominion Energy entered into an agreement to sell 100% of the equity interests in Dominion Energy Kewaunee, Inc. to EnergySolutions, including the transfer of all decommissioning obligations associated with Kewaunee, which ceased operations in 2013. The agreement provides that Dominion Energy retains the assets and obligations of the pension and other postretirement employee benefit plans. In addition, Dominion Energy may continue to withdraw funds prior to closing from the nuclear decommissioning trust to recover certain spent nuclear fuel and other permitted costs, subject to certain conditions. The sale will be treated as an asset sale for tax purposes and is subject to termination by either party if not completed by December 2022. Closing is contingent on approval from the Wisconsin Commission as well as the NRC for the transfer of control of applicable licenses. The purchase agreement requires that EnergySolutions be subject to the Wisconsin regulatory conditions agreed to by Dominion Energy upon its acquisition of Kewaunee, including the return of any excess decommissioning funds to WPSC and WP&L customers following completion of all decommissioning activities.
In May 2021, Dominion Energy and EnergySolutions submitted a license transfer application to the NRC. Also in May 2021, Dominion Energy submitted an application to the Wisconsin Commission for approval. In July 2021, WPSC and WP&L submitted a joint request to the Wisconsin Commission for the waiver of both of their rights of first refusal to purchase Kewaunee, such rights having been granted as the former owners of Kewaunee. In March 2022, the NRC approved the requested license transfer. At September 30, 2021,March 31, 2022, Dominion Energy determined that the assets and liabilities associated with the Kewaunee sale, included in Contracted Assets, did not meet the criteria to be classified as held for sale due to the significant uncertainty surrounding the timing of or ability to obtain necessary regulatory approvals.approval by the Wisconsin Commission.
Dominion Energy expects to record a loss if and when it determines that criteria for the classification as held for sale have been met. If such classification had been made at September 30, 2021,March 31, 2022, Dominion Energy would have recognized a loss of approximately $710$660 million ($565520 million after-tax). If the sale is ultimately completed, the final net loss will primarily depend on the value of the nuclear decommissioning trust and AROs at closing.
Acquisition of Birdseye
In May 2021, Dominion Energy acquired 100% of the ownership interest in Birdseye from BRE Holdings, LLC for total consideration of $46 million, consisting of $28 million in cash and $18 million, measured at fair value at closing, of consideration contingent on the achievement of certain revenue targets and future development project sales. Birdseye is primarily engaged in the development of solar energy projects in southeastern states in the U.S. with 2.5 GW of solar generation projects under development. The allocation of the purchase price resulted in $25 million of development project assets, primarily reflected in other deferred charges and other assets in Dominion Energy’s Consolidated Balance Sheets, and $24 million of goodwill, which is not deductible for tax purposes. The goodwill reflects the value associated with enhancing Dominion Energy's development of regulated and long-term contracted solar generating and electric storage projects. The fair value measurements, including of the assets acquired, were determined using the income approach and are considered Level 3 fair value measurements due to the use of significant judgmental and unobservable inputs, including projected timing and amount of future cash flows. Birdseye is included in Contracted Assets.
Note 4. Operating Revenue
The Companies’ operating revenue consists of the following:
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominion Energy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated electric sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
| $ | 1,281 |
|
| $ | 1,497 |
|
| $ | 3,453 |
|
| $ | 3,746 |
|
| $ | 1,287 |
|
| $ | 1,155 |
|
Commercial |
|
| 831 |
|
|
| 865 |
|
|
| 2,311 |
|
|
| 2,391 |
|
|
| 898 |
|
|
| 719 |
|
Industrial |
|
| 194 |
|
|
| 190 |
|
|
| 547 |
|
|
| 548 |
|
|
| 197 |
|
|
| 178 |
|
Government and other retail |
|
| 258 |
|
|
| 239 |
|
|
| 670 |
|
|
| 651 |
|
|
| 272 |
|
|
| 189 |
|
Wholesale |
|
| 52 |
|
|
| 37 |
|
|
| 131 |
|
|
| 99 |
|
|
| 47 |
|
|
| 43 |
|
Nonregulated electric sales |
|
| 253 |
|
|
| 218 |
|
|
| 719 |
|
|
| 627 |
|
|
| 367 |
|
|
| 254 |
|
Regulated gas sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
|
| 132 |
|
|
| 123 |
|
|
| 950 |
|
|
| 853 |
|
|
| 769 |
|
|
| 630 |
|
Commercial |
|
| 61 |
|
|
| 50 |
|
|
| 346 |
|
|
| 304 |
|
|
| 273 |
|
|
| 206 |
|
Other |
|
| 31 |
|
|
| 18 |
|
|
| 88 |
|
|
| 61 |
|
|
| 45 |
|
|
| 34 |
|
Nonregulated gas sales |
|
| 7 |
|
|
| 12 |
|
|
| 74 |
|
|
| 124 |
|
|
| 1 |
|
|
| 52 |
|
Regulated gas transportation and storage |
|
| 208 |
|
|
| 165 |
|
|
| 698 |
|
|
| 578 |
|
|
| 297 |
|
|
| 271 |
|
Other regulated revenues |
|
| 47 |
|
|
| 61 |
|
|
| 187 |
|
|
| 236 |
|
|
| 46 |
|
|
| 66 |
|
Other nonregulated revenues(1) |
|
| 79 |
|
|
| 61 |
|
|
| 184 |
|
|
| 132 |
|
|
| 48 |
|
|
| 43 |
|
Total operating revenue from contracts with customers |
|
| 3,434 |
|
|
| 3,536 |
|
|
| 10,358 |
|
|
| 10,350 |
|
|
| 4,547 |
|
|
| 3,840 |
|
Other revenues(2)(3) |
|
| (258 | ) |
|
| 71 |
|
|
| (274 | ) |
|
| 301 |
|
|
| (268 | ) |
|
| 30 |
|
Total operating revenue |
| $ | 3,176 |
|
| $ | 3,607 |
|
| $ | 10,084 |
|
| $ | 10,651 |
|
| $ | 4,279 |
|
| $ | 3,870 |
|
Virginia Power |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated electric sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
| $ | 935 |
|
| $ | 1,146 |
|
| $ | 2,572 |
|
| $ | 2,860 |
|
| $ | 1,015 |
|
| $ | 889 |
|
Commercial |
|
| 604 |
|
|
| 645 |
|
|
| 1,715 |
|
|
| 1,805 |
|
|
| 717 |
|
|
| 547 |
|
Industrial |
|
| 94 |
|
|
| 98 |
|
|
| 268 |
|
|
| 284 |
|
|
| 103 |
|
|
| 91 |
|
Government and other retail |
|
| 241 |
|
|
| 223 |
|
|
| 625 |
|
|
| 603 |
|
|
| 258 |
|
|
| 176 |
|
Wholesale |
|
| 31 |
|
|
| 25 |
|
|
| 79 |
|
|
| 70 |
|
|
| 32 |
|
|
| 26 |
|
Nonregulated electric sales |
|
| 14 |
|
|
| 5 |
| ||||||||||||||||
Other regulated revenues |
|
| 37 |
|
|
| 61 |
|
|
| 165 |
|
|
| 217 |
|
|
| 51 |
|
|
| 57 |
|
Other nonregulated revenues(1)(4) |
|
| 45 |
|
|
| 33 |
|
|
| 93 |
|
|
| 66 |
|
|
| 6 |
|
|
| 16 |
|
Total operating revenue from contracts with customers |
|
| 1,987 |
|
|
| 2,231 |
|
|
| 5,517 |
|
|
| 5,905 |
|
|
| 2,196 |
|
|
| 1,807 |
|
Other revenues(2)(4) |
|
| (11 | ) |
|
| 17 |
|
|
| 30 |
|
|
| 78 |
|
|
| (29 | ) |
|
| 23 |
|
Total operating revenue |
| $ | 1,976 |
|
| $ | 2,248 |
|
| $ | 5,547 |
|
| $ | 5,983 |
|
| $ | 2,167 |
|
| $ | 1,830 |
|
(1) | Includes sales which are considered to be goods transferred at a point in time of |
(2) |
|
(3) | Includes revenue associated with services provided to discontinued operations of $1 million |
(4) See Note 19 for amounts attributable to affiliates.
(4) | See Note 19 for amounts attributable to affiliates. |
The table below discloses the aggregate amount of the transaction price allocated to fixed-price performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period and when Dominion Energy expects to recognize this revenue. These revenues relate to contracts containing fixed prices where Dominion Energy will earn the associated revenue over time as it stands ready to perform services provided. This disclosure does not include revenue related to performance obligations that are part of a contract with original durations of one year or less. In addition, this disclosure does not include expected consideration related to performance obligations for which Dominion Energy elects to recognize revenue in the amount it has a right to invoice.
Revenue expected to be recognized on multi-year contracts in place at March 31, 2022 |
| 2022 |
|
| 2023 |
|
| 2024 |
|
| 2025 |
|
| 2026 |
|
| Thereafter |
|
| Total |
| |||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominion Energy |
| $ | 51 |
|
| $ | 66 |
|
| $ | 59 |
|
| $ | 52 |
|
| $ | 45 |
|
| $ | 448 |
|
| $ | 721 |
|
Revenue expected to be recognized on multi-year contracts in place at September 30, 2021 |
| 2021 |
|
| 2022 |
|
| 2023 |
|
| 2024 |
|
| 2025 |
|
| Thereafter |
|
| Total |
| |||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominion Energy(1) |
| $ | 17 |
|
| $ | 68 |
|
| $ | 66 |
|
| $ | 59 |
|
| $ | 51 |
|
| $ | 493 |
|
| $ | 754 |
|
|
|
At September 30, 2021March 31, 2022 and December 31, 2020,2021, Dominion Energy’s contract liability balances were $124$89 million and $130$124 million, respectively, and are recorded primarily in other current liabilities and other deferred credits and other liabilities in the Consolidated Balance Sheets. At September 30, 2021March 31, 2022 and December 31, 2020,2021, Virginia Power’s contract liability balances were $29$42 million and $36$33 million, respectively, and are recorded in other current liabilities and other deferred credits and other liabilities in its Consolidated Balance Sheets.
The Companies recognize revenue as they fulfill their obligations to provide service to their customers. During the ninethree months ended September 30,March 31, 2022 and 2021, and 2020, Dominion Energy recognized revenue of $124$119 million and $95$122 million, respectively, from the beginning contract liability balances. During the ninethree months ended September 30,March 31, 2022 and 2021, and 2020, Virginia Power recognized $36$33 million and $24$36 million, respectively, from the beginning contract liability balance.
Note 5. Income Taxes
For continuing operations, including noncontrolling interests, the statutory U.S. federal income tax rate reconciles to the Companies’ effective income tax rate as follows:
|
| Dominion Energy |
|
| Virginia Power |
|
| Dominion Energy |
|
| Virginia Power |
| ||||||||||||||||||||
Nine Months Ended September 30, |
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||||||||||||||||||
Three Months Ended March 31, |
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||||||||||||||||
U.S. statutory rate |
|
| 21.0 | % |
|
| 21.0 | % |
|
| 21.0 | % |
|
| 21.0 | % |
|
| 21.0 | % |
|
| 21.0 | % |
|
| 21.0 | % |
|
| 21.0 | % |
Increases (reductions) resulting from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recognition of deferred taxes - stock of subsidiary held for sale |
| 9.4 |
|
|
| — |
|
|
| — |
|
|
| — |
| |||||||||||||||||
State taxes, net of federal benefit |
|
| 2.0 |
|
|
| 1.5 |
|
|
| 4.5 |
|
|
| 4.7 |
|
|
| 3.3 |
|
|
| 3.5 |
|
|
| 4.4 |
|
|
| 4.5 |
|
Investment tax credits |
|
| (5.6 | ) |
|
| (30.5 | ) |
|
| (5.8 | ) |
|
| (5.6 | ) |
|
| (3.9 | ) |
|
| (3.8 | ) |
|
| (6.7 | ) |
|
| (6.6 | ) |
Production tax credits |
|
| (0.5 | ) |
|
| (2.4 | ) |
|
| (0.6 | ) |
|
| (0.9 | ) |
|
| (0.4 | ) |
|
| (0.3 | ) |
|
| (0.8 | ) |
|
| (0.6 | ) |
Reversal of excess deferred income taxes |
|
| (3.8 | ) |
|
| (14.5 | ) |
|
| (2.2 | ) |
|
| (1.9 | ) |
|
| (4.1 | ) |
|
| (2.2 | ) |
|
| (3.0 | ) |
|
| (2.2 | ) |
State legislative change |
|
| (1.0 | ) |
|
| — |
|
|
| (1.0 | ) |
|
| — |
| ||||||||||||||||
Change in tax status |
|
| — |
|
|
| (6.1 | ) |
|
| — |
|
|
| — |
| ||||||||||||||||
Changes in state deferred taxes associated with assets held for sale |
|
| 0.5 |
|
|
| — |
|
|
| — |
|
|
| — |
| ||||||||||||||||
AFUDC - equity |
|
| (0.5 | ) |
|
| (1.1 | ) |
|
| (0.5 | ) |
|
| (0.3 | ) |
|
| (0.6 | ) |
|
| (0.4 | ) |
|
| (0.9 | ) |
|
| (0.7 | ) |
Changes in state deferred taxes associated with assets held for sale |
|
| (0.5 | ) |
|
| (11.6 | ) |
|
| — |
|
|
| — |
| ||||||||||||||||
Absence of tax on noncontrolling interest |
|
| (0.2 | ) |
|
| 14.1 |
|
|
| — |
|
|
| — |
| ||||||||||||||||
Other, net |
|
| (1.1 | ) |
|
| (1.8 | ) |
|
| — |
|
|
| — |
|
|
| 0.2 |
|
|
| — |
|
|
| 0.6 |
|
|
| 0.3 |
|
Effective tax rate |
|
| 9.8 | % |
|
| (31.4 | )% |
|
| 15.4 | % |
|
| 17.0 | % |
|
| 25.4 | % |
|
| 17.8 | % |
|
| 14.6 | % |
|
| 15.7 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ForAs described in Note 3, Dominion Energy entered into an agreement to sell 100% of the Companies’ rate-regulated entities,equity interests in Hope that will be treated as a stock sale for income tax purposes. In connection with the pending sale, Dominion Energy established $87 million of deferred tax liabilities reflecting the excess of the financial reporting basis over the tax basis in Hope’s stock. These deferred taxes will reverse atupon closing of the weighted average rate usedsale, which is expected to originateoccur by the deferred tax liability, which in some cases will be 35%. The Companies have recorded an estimateend of excess deferred income tax amortization in 2021. The reversal of these excess deferred income taxes will impact the effective tax rate and rates charged to customers. See Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020 for more information.2022.
For the nine months ended September 30, 2021, the Companies’ effective tax rates reflect the benefit of a state legislative change enacted in April 2021 for tax years beginning January 1, 2022. Dominion Energy’s effective tax rate reflects a $21 million deferred tax benefit, inclusive of a $16 million deferred tax benefit at Virginia Power.
For the nine months ended September 30, 2020, Dominion Energy’s effective tax rate reflects an income tax benefit of $45 million associated with the remeasurement of consolidated state deferred taxes with the classification of gas transmission and storage operations as held for sale. In addition, Dominion Energy’s effective tax rate reflects an income tax expense of $55 million attributable to the noncontrolling interest primarily associated with the impairment of solar assets held in partnership form discussed in Note 11.
As of September 30, 2021,March 31, 2022, there have been no material changes in the Companies’ unrecognized tax benefits or possible changes that could reasonably be expected to occur during the next twelve months. See Note 5 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020,2021, for a discussion of these unrecognized tax benefits.
Discontinued operations
Income tax expense (benefit) includedreflected in discontinued operations is $5$6 million and $(572)$7 million for the ninethree months ended September 30,March 31, 2022 and 2021, and 2020, respectively. 2021 income taxes include a $15 million benefit related to finalizing income tax returns on the GT&S Transaction. 2020 income taxes reflect a charge of $81 million for the write-off of tax-related regulatory assets associated with the Atlantic Coast Pipeline Project.
The following table presents the calculation of Dominion Energy’s basic and diluted EPS:
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions, except EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Dominion Energy from continuing operations |
| $ | 589 |
|
| $ | 369 |
|
| $ | 1,828 |
|
| $ | 767 |
|
| $ | 692 |
|
| $ | 980 |
|
Preferred stock dividends (see Note 16) |
|
| (16 | ) |
|
| (16 | ) |
|
| (48 | ) |
|
| (48 | ) |
|
| (27 | ) |
|
| (16 | ) |
Net income attributable to Dominion Energy from continuing operations – Basic |
|
| 573 |
|
|
| 353 |
|
|
| 1,780 |
|
|
| 719 |
|
|
| 665 |
|
|
| 964 |
|
Dilutive effect of Series A Preferred Stock |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (28 | ) | ||||||||
Dilutive effect of 2019 Equity Units (1) |
|
| 7 |
|
|
| — |
| ||||||||||||||||
Net income attributable to Dominion Energy from continuing operations - Diluted |
| $ | 573 |
|
| $ | 353 |
|
| $ | 1,780 |
|
| $ | 691 |
|
| $ | 672 |
|
| $ | 964 |
|
Net income (loss) attributable to Dominion Energy from discontinued operations - Basic & Diluted |
| $ | 65 |
|
| $ | (13 | ) |
| $ | 119 |
|
| $ | (1,850 | ) | ||||||||
Net income attributable to Dominion Energy from discontinued operations - Basic & Diluted |
| $ | 19 |
|
| $ | 28 |
| ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares of common stock outstanding – Basic |
|
| 808.7 |
|
|
| 833.8 |
|
|
| 807.1 |
|
|
| 837.1 |
|
|
| 810.6 |
|
|
| 805.9 |
|
Net effect of dilutive securities |
|
| 1.3 |
|
|
| — |
|
|
| 0.5 |
|
|
| — |
|
|
| 21.4 |
|
|
| — |
|
Average shares of common stock outstanding – Diluted |
|
| 810.0 |
|
|
| 833.8 |
|
|
| 807.6 |
|
|
| 837.1 |
|
|
| 832.0 |
|
|
| 805.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS from continuing operations – Basic |
| $ | 0.71 |
|
| $ | 0.42 |
|
| $ | 2.20 |
|
| $ | 0.86 |
|
| $ | 0.82 |
|
| $ | 1.19 |
|
EPS from discontinued operations – Basic |
|
| 0.08 |
|
|
| (0.01 | ) |
|
| 0.15 |
|
|
| (2.21 | ) |
|
| 0.02 |
|
|
| 0.04 |
|
EPS attributable to Dominion Energy – Basic |
| $ | 0.79 |
|
| $ | 0.41 |
|
| $ | 2.35 |
|
| $ | (1.35 | ) |
| $ | 0.84 |
|
| $ | 1.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS from continuing operations – Diluted |
| $ | 0.71 |
|
| $ | 0.42 |
|
| $ | 2.20 |
|
| $ | 0.83 |
|
| $ | 0.81 |
|
| $ | 1.19 |
|
EPS from discontinued operations – Diluted |
|
| 0.08 |
|
|
| (0.01 | ) |
|
| 0.15 |
|
|
| (2.21 | ) |
|
| 0.02 |
|
|
| 0.04 |
|
EPS attributable to Dominion Energy – Diluted |
| $ | 0.79 |
|
| $ | 0.41 |
|
| $ | 2.35 |
|
| $ | (1.38 | ) |
| $ | 0.83 |
|
| $ | 1.23 |
|
(1) |
|
(2) | Dilutive securities for 2022 consist primarily of the 2019 Equity Units (applying the if converted method as updated effective January 2022), stock expected to be issued to |
The 2019 Equity Units and the Q-Pipe Transaction deposit, prior to being settled in cash in July 2021, are potentially dilutive securities.instruments. See Note 3 and Note 19 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020 and Note 3, respectively, for additional information. Additionally, the two September 2020 accelerated share purchase agreements were potentially dilutive for the three and nine months ended September 30, 2020. See Note 162021 for additional information.
TheFor the three months ended March 31, 2021, the forward stock purchase contracts included within the 2019 Equity Units arewere excluded from the calculation of diluted EPS from continuing operations for the three and nine months ended September 30, 2021 and 2020, as the dilutive stock price threshold was not met. Themet, the Series A Preferred Stock included within the 2019 Equity Units iswas excluded from the calculation of diluted EPS from continuing operations based upon the expectation that the conversion will be settled in cash rather than through the issuance of Dominion Energy common stock. As described in Note 16, effective November 2021 any settlement of the conversion up to $1,000 per share is payable in cash,stock and any amount in excess of $1,000 per share may be settled in cash, common stock or a combination thereof. For the three and nine months ended September 30, 2021 and the three months ended September 30, 2020, a fair value adjustment related to the Series A Preferred Stock included within the 2019 Equity Units is excluded from the calculation of diluted EPS from continuing operations, as such fair value adjustment was not dilutive during the periods.period.
The impact of settling the deposit associated with the Q-Pipe Transaction in shares is excluded from the calculation of diluted EPS from continuing operations for the three and nine months ended September 30,March 31, 2021 based upon the expectation Dominion Energy would settle in cash, which occurred in July 2021, rather than through the issuance of Dominion Energy common stock.
The forward stock purchase contracts included within the September 2020 accelerated share repurchase agreements are excluded from the calculation of diluted EPS for the three and nine months ended September 30, 2020 as the dilutive stock price threshold was not met.
Note 7. Accumulated Other Comprehensive Income (Loss)
Dominion Energy
The following table presents Dominion Energy’s changes in AOCI by component, net(net of tax:
|
| Deferred gains and losses on derivatives- hedging activities |
|
| Unrealized gains and losses on investment securities |
|
| Unrecognized pension and other postretirement benefit costs |
|
| Other comprehensive loss from equity method investees |
|
| Total |
| |||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | (371 | ) |
| $ | 41 |
|
| $ | (1,309 | ) |
| $ | (1 | ) |
| $ | (1,640 | ) |
Other comprehensive income before reclassifications: gains (losses) |
|
| (2 | ) |
|
| 4 |
|
|
| (1 | ) |
|
| (3 | ) |
|
| (2 | ) |
Amounts reclassified from AOCI: (gains) losses(1) |
|
| 10 |
|
|
| (3 | ) |
|
| 19 |
|
|
| 0 |
|
|
| 26 |
|
Net current period other comprehensive income (loss) |
|
| 8 |
|
|
| 1 |
|
|
| 18 |
|
|
| (3 | ) |
|
| 24 |
|
Ending balance |
| $ | (363 | ) |
| $ | 42 |
|
| $ | (1,291 | ) |
| $ | (4 | ) |
| $ | (1,616 | ) |
Three Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | (644 | ) |
| $ | 51 |
|
| $ | (1,385 | ) |
| $ | (2 | ) |
| $ | (1,980 | ) |
Other comprehensive income before reclassifications: gains (losses) |
|
| 10 |
|
|
| 4 |
|
|
| (261 | ) |
|
| 1 |
|
|
| (246 | ) |
Amounts reclassified from AOCI: (gains) losses(1) |
|
| 188 |
|
|
| (1 | ) |
|
| 23 |
|
|
| 0 |
|
|
| 210 |
|
Net current period other comprehensive income (loss) |
|
| 198 |
|
|
| 3 |
|
|
| (238 | ) |
|
| 1 |
|
|
| (36 | ) |
Ending balance |
| $ | (446 | ) |
| $ | 54 |
|
| $ | (1,623 | ) |
| $ | (1 | ) |
| $ | (2,016 | ) |
Nine Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | (419 | ) |
| $ | 62 |
|
| $ | (1,359 | ) |
| $ | (1 | ) |
| $ | (1,717 | ) |
Other comprehensive income before reclassifications: gains (losses) |
|
| 21 |
|
|
| (15 | ) |
|
| 5 |
|
|
| (3 | ) |
|
| 8 |
|
Amounts reclassified from AOCI: (gains) losses(1) |
|
| 35 |
|
|
| (5 | ) |
|
| 63 |
|
|
| 0 |
|
|
| 93 |
|
Net current period other comprehensive income (loss) |
|
| 56 |
|
|
| (20 | ) |
|
| 68 |
|
|
| (3 | ) |
|
| 101 |
|
Ending balance |
| $ | (363 | ) |
| $ | 42 |
|
| $ | (1,291 | ) |
| $ | (4 | ) |
| $ | (1,616 | ) |
Nine Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | (407 | ) |
| $ | 37 |
|
| $ | (1,421 | ) |
| $ | (2 | ) |
| $ | (1,793 | ) |
Other comprehensive income before reclassifications: gains (losses) |
|
| (254 | ) |
|
| 32 |
|
|
| (262 | ) |
|
| 1 |
|
|
| (483 | ) |
Amounts reclassified from AOCI: (gains) losses(1) |
|
| 215 |
|
|
| (15 | ) |
|
| 60 |
|
|
| 0 |
|
|
| 260 |
|
Net current period other comprehensive income (loss) |
|
| (39 | ) |
|
| 17 |
|
|
| (202 | ) |
|
| 1 |
|
|
| (223 | ) |
Ending balance |
| $ | (446 | ) |
| $ | 54 |
|
| $ | (1,623 | ) |
| $ | (1 | ) |
| $ | (2,016 | ) |
|
|
The following table presents Dominion Energy’stax) and reclassifications out of AOCI by component:
Details about AOCI components |
| Amounts reclassified from AOCI |
|
| Affected line item in the Consolidated Statements of Income | |
(millions) |
|
|
|
|
|
|
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
Deferred (gains) and losses on derivatives-hedging activities: |
|
|
|
|
|
|
Interest rate contracts |
| $ | 14 |
|
| Interest and related charges |
Total |
|
| 14 |
|
|
|
Tax |
|
| (4 | ) |
| Income tax expense (benefit) |
Total, net of tax |
| $ | 10 |
|
|
|
Unrealized (gains) and losses on investment securities: |
|
|
|
|
|
|
Realized (gains) losses on sale of securities |
| $ | (4 | ) |
| Other income |
Total |
|
| (4 | ) |
|
|
Tax |
|
| 1 |
|
| Income tax expense (benefit) |
Total, net of tax |
| $ | (3 | ) |
|
|
Unrecognized pension and other postretirement benefit costs: |
|
|
|
|
|
|
Amortization of prior-service costs (credits) |
| $ | (5 | ) |
| Other income |
Amortization of actuarial losses |
|
| 30 |
|
| Other income |
Total |
|
| 25 |
|
|
|
Tax |
|
| (6 | ) |
| Income tax expense (benefit) |
Total, net of tax |
| $ | 19 |
|
|
|
Three Months Ended September 30, 2020 |
|
|
|
|
|
|
Deferred (gains) and losses on derivatives-hedging activities: |
|
|
|
|
|
|
Commodity contracts |
| $ | (8 | ) |
| Operating revenue |
Interest rate contracts |
|
| 23 |
|
| Interest and related charges |
|
|
| 230 |
|
| Discontinued operations |
Foreign currency contracts |
|
| 6 |
|
| Discontinued operations |
Total |
|
| 251 |
|
|
|
Tax |
|
| (63 | ) |
| Income tax expense (benefit) |
Total, net of tax |
| $ | 188 |
|
|
|
Unrealized (gains) and losses on investment securities: |
|
|
|
|
|
|
Realized (gains) losses on sale of securities |
| $ | (3 | ) |
| Other income |
Total |
|
| (3 | ) |
|
|
Tax |
|
| 2 |
|
| Income tax expense (benefit) |
Total, net of tax |
| $ | (1 | ) |
|
|
Unrecognized pension and other postretirement benefit costs: |
|
|
|
|
|
|
Amortization of prior-service costs (credits) |
| $ | (5 | ) |
| Other income |
Amortization of actuarial losses |
|
| 36 |
|
| Other income |
Total |
|
| 31 |
|
|
|
Tax |
|
| (8 | ) |
| Income tax expense (benefit) |
Total, net of tax |
| $ | 23 |
|
|
|
|
|
|
|
|
|
|
Details about AOCI components |
| Amounts reclassified from AOCI |
|
| Affected line item in the Consolidated Statements of Income | |
(millions) |
|
|
|
|
|
|
Nine Months Ended September 30, 2021 |
|
|
|
|
|
|
Deferred (gains) and losses on derivatives-hedging activities: |
|
|
|
|
|
|
Commodity contracts |
| $ | 1 |
|
| Purchased gas |
Interest rate contracts |
|
| 46 |
|
| Interest and related charges |
Total |
|
| 47 |
|
|
|
Tax |
|
| (12 | ) |
| Income tax expense (benefit) |
Total, net of tax |
| $ | 35 |
|
|
|
Unrealized (gains) and losses on investment securities: |
|
|
|
|
|
|
Realized (gains) losses on sale of securities |
| $ | (7 | ) |
| Other income |
Total |
|
| (7 | ) |
|
|
|
| Commodity |
|
|
|
| Interest Rate |
|
|
|
| Total Derivative-Hedging Activities(1) |
|
|
|
| Investment Securities(2) |
|
|
|
| Pension and other postretirement benefit costs(3) |
|
|
|
| Equity Method Investees(4) |
|
|
|
| Total |
| |||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | — |
|
|
|
| $ | (358 | ) |
|
|
| $ | (358 | ) |
|
|
| $ | 37 |
|
|
|
| $ | (1,133 | ) |
|
|
| $ | (4 | ) |
|
|
| $ | (1,458 | ) |
Other comprehensive income before reclassifications: gains (losses) |
|
| — |
|
|
|
|
| 25 |
|
|
|
|
| 25 |
|
|
|
|
| (62 | ) |
|
|
|
| 28 |
|
|
|
|
| 1 |
|
|
|
|
| (8 | ) |
Amounts reclassified from AOCI: (gains) losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and related charges |
|
| — |
|
|
|
|
| 14 |
|
|
|
|
| 14 |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| 14 |
|
Other income |
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| 4 |
|
|
|
|
| 23 |
|
|
|
|
| — |
|
|
|
|
| 27 |
|
Total |
|
| — |
|
|
|
|
| 14 |
|
|
|
|
| 14 |
|
|
|
|
| 4 |
|
|
|
|
| 23 |
|
|
|
|
| — |
|
|
|
|
| 41 |
|
Income tax expense |
|
| — |
|
|
|
|
| (4 | ) |
|
|
|
| (4 | ) |
|
|
|
| (1 | ) |
|
|
|
| (6 | ) |
|
|
|
| — |
|
|
|
|
| (11 | ) |
Total, net of tax |
|
| — |
|
|
|
|
| 10 |
|
|
|
|
| 10 |
|
|
|
|
| 3 |
|
|
|
|
| 17 |
|
|
|
|
| — |
|
|
|
|
| 30 |
|
Net current period other comprehensive income (loss) |
|
| — |
|
|
|
|
| 35 |
|
|
|
|
| 35 |
|
|
|
|
| (59 | ) |
|
|
|
| 45 |
|
|
|
|
| 1 |
|
|
|
|
| 22 |
|
Ending balance |
| $ | — |
|
|
|
| $ | (323 | ) |
|
|
| $ | (323 | ) |
|
|
| $ | (22 | ) |
|
|
| $ | (1,088 | ) |
|
|
| $ | (3 | ) |
|
|
| $ | (1,436 | ) |
Three Months Ended March 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | (1 | ) |
|
|
| $ | (418 | ) |
|
|
| $ | (419 | ) |
|
|
| $ | 62 |
|
|
|
| $ | (1,359 | ) |
|
|
| $ | (1 | ) |
|
|
| $ | (1,717 | ) |
Other comprehensive income before reclassifications: gains (losses) |
|
| — |
|
|
|
|
| 39 |
|
|
|
|
| 39 |
|
|
|
|
| (31 | ) |
|
|
|
| 6 |
|
|
|
|
| — |
|
|
|
|
| 14 |
|
Amounts reclassified from AOCI: (gains) losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased gas |
|
| 1 |
|
|
|
|
| — |
|
|
|
|
| 1 |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| 1 |
|
Interest and related charges |
|
| — |
|
|
|
|
| 16 |
|
|
|
|
| 16 |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| 16 |
|
Other income |
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| 1 |
|
|
|
|
| 25 |
|
|
|
|
| — |
|
|
|
|
| 26 |
|
Total |
|
| 1 |
|
|
|
|
| 16 |
|
|
|
|
| 17 |
|
|
|
|
| 1 |
|
|
|
|
| 25 |
|
|
|
|
| — |
|
|
|
|
| 43 |
|
Income tax expense |
|
| — |
|
|
|
|
| (4 | ) |
|
|
|
| (4 | ) |
|
|
|
| — |
|
|
|
|
| (7 | ) |
|
|
|
| — |
|
|
|
|
| (11 | ) |
Total, net of tax |
|
| 1 |
|
|
|
|
| 12 |
|
|
|
|
| 13 |
|
|
|
|
| 1 |
|
|
|
|
| 18 |
|
|
|
|
| — |
|
|
|
|
| 32 |
|
Net current period other comprehensive income (loss) |
|
| 1 |
|
|
|
|
| 51 |
|
|
|
|
| 52 |
|
|
|
|
| (30 | ) |
|
|
|
| 24 |
|
|
|
|
| — |
|
|
|
|
| 46 |
|
Ending balance |
| $ | — |
|
|
|
| $ | (367 | ) |
|
|
| $ | (367 | ) |
|
|
| $ | 32 |
|
|
|
| $ | (1,335 | ) |
|
|
| $ | (1 | ) |
|
|
| $ | (1,671 | ) |
(1) | Net of $107 million, $119 million, $123 million and $141 million tax at March 31, 2022, December 31, 2021, March 31, 2021 and December 31, 2020, respectively. |
(2) | Net of $8 million, $(10) million, $(11) million and $(21) million tax at March 31, 2022, December 31, 2021, March 31, 2021 and December 31, 2020, respectively. |
(3) | Net of $380 million, $396 million, $468 million and $478 million tax at March 31, 2022, December 31, 2021, March 31, 2021 and December 31, 2020, respectively. |
(4) | Net of $1 million, $1 million, $— and $— tax at March 31, 2022, December 31, 2021, March 31, 2021 and December 31, 2020, respectively. |
33
Tax |
|
| 2 |
|
| Income tax expense (benefit) |
Total, net of tax |
| $ | (5 | ) |
|
|
Unrecognized pension and other postretirement benefit costs: |
|
|
|
|
|
|
Amortization of prior-service costs (credits) |
| $ | (15 | ) |
| Other income |
Amortization of actuarial losses |
|
| 100 |
|
| Other income |
Total |
|
| 85 |
|
|
|
Tax |
|
| (22 | ) |
| Income tax expense (benefit) |
Total, net of tax |
| $ | 63 |
|
|
|
Nine Months Ended September 30, 2020 |
|
|
|
|
|
|
Deferred (gains) and losses on derivatives-hedging activities: |
|
|
|
|
|
|
Commodity contracts |
| $ | (22 | ) |
| Operating revenue |
|
|
| 3 |
|
| Purchased gas |
|
|
| (2 | ) |
| Discontinued operations |
Interest rate contracts |
|
| 66 |
|
| Interest and related charges |
|
|
| 236 |
|
| Discontinued operations |
Foreign currency contracts |
|
| 6 |
|
| Discontinued operations |
Total |
|
| 287 |
|
|
|
Tax |
|
| (72 | ) |
| Income tax expense (benefit) |
Total, net of tax |
| $ | 215 |
|
|
|
Unrealized (gains) and losses on investment securities: |
|
|
|
|
|
|
Realized (gains) losses on sale of securities |
| $ | (21 | ) |
| Other income |
Total |
|
| (21 | ) |
|
|
Tax |
|
| 6 |
|
| Income tax expense (benefit) |
Total, net of tax |
| $ | (15 | ) |
|
|
Unrecognized pension and other postretirement benefit costs: |
|
|
|
|
|
|
Amortization of prior-service costs (credits) |
| $ | (16 | ) |
| Other income |
Amortization of actuarial losses |
|
| 97 |
|
| Other income |
Total |
|
| 81 |
|
|
|
Tax |
|
| (21 | ) |
| Income tax expense (benefit) |
Total, net of tax |
| $ | 60 |
|
|
|
Virginia Power
The following table presents Virginia Power’s changes in AOCI (net of tax) and reclassifications out of AOCI by component, net of tax:component:
|
| Deferred gains and losses on derivatives- hedging activities |
|
| Unrealized gains and losses on investment securities |
|
| Total |
|
| Interest Rate |
|
|
|
| Total Derivative-Hedging Activities(1) |
|
|
|
| Investment Securities(2) |
|
|
|
| Total |
| |||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Three Months Ended March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Beginning balance |
| $ | (39 | ) |
| $ | 6 |
|
| $ | (33 | ) |
| $ | (45 | ) |
|
|
| $ | (45 | ) |
|
|
| $ | 4 |
|
|
| $ | (41 | ) | |
Other comprehensive income before reclassifications: gains (losses) |
|
| (2 | ) |
|
| 0 |
|
|
| (2 | ) |
|
| 19 |
|
|
| 19 |
|
|
| (7 | ) |
|
|
| 12 |
| |||||
Amounts reclassified from AOCI: (gains) losses(1) |
|
| 0 |
|
|
| (1 | ) |
|
| (1 | ) | ||||||||||||||||||||||
Amounts reclassified from AOCI: (gains) losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Interest and related charges |
|
| 1 |
|
|
| 1 |
|
|
| — |
|
|
| 1 |
| ||||||||||||||||||
Other income |
|
| — |
|
|
|
| — |
|
|
|
| (1 | ) |
|
|
|
| (1 | ) | ||||||||||||||
Total |
|
| 1 |
|
|
|
| 1 |
|
|
|
| (1 | ) |
|
|
|
| — |
| ||||||||||||||
Income tax expense |
|
| — |
|
|
|
| — |
|
|
|
| — |
|
|
|
| — |
| |||||||||||||||
Total, net of tax |
|
| 1 |
|
|
|
| 1 |
|
|
|
| (1 | ) |
|
|
|
| — |
| ||||||||||||||
Net current period other comprehensive income (loss) |
|
| (2 | ) |
|
| (1 | ) |
|
| (3 | ) |
|
| 20 |
|
|
|
| 20 |
|
|
|
| (8 | ) |
|
|
|
| 12 |
| ||
Ending balance |
| $ | (41 | ) |
| $ | 5 |
|
| $ | (36 | ) |
| $ | (25 | ) |
|
|
| $ | (25 | ) |
|
|
| $ | (4 | ) |
|
|
| $ | (29 | ) |
Three Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Three Months Ended March 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Beginning balance |
| $ | (78 | ) |
| $ | 8 |
|
| $ | (70 | ) |
| $ | (60 | ) |
|
|
| $ | (60 | ) |
|
|
| $ | 8 |
|
|
| $ | (52 | ) | |
Other comprehensive income before reclassifications: gains (losses) |
|
| 5 |
|
|
| 0 |
|
|
| 5 |
|
|
| 32 |
|
|
| 32 |
|
|
| (5 | ) |
|
|
| 27 |
| |||||
Amounts reclassified from AOCI: (gains) losses(1) |
|
| 1 |
|
|
| (1 | ) |
|
| 0 |
| ||||||||||||||||||||||
Amounts reclassified from AOCI: (gains) losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Interest and related charges |
|
| 1 |
|
|
| 1 |
|
|
| — |
|
|
| 1 |
| ||||||||||||||||||
Other income |
|
| — |
|
|
|
| — |
|
|
|
| 1 |
|
|
|
| 1 |
| |||||||||||||||
Total |
|
| 1 |
|
|
|
| 1 |
|
|
|
| 1 |
|
|
|
| 2 |
| |||||||||||||||
Income tax expense |
|
| — |
|
|
|
| — |
|
|
|
| — |
|
|
|
| — |
| |||||||||||||||
Total, net of tax |
|
| 1 |
|
|
|
| 1 |
|
|
|
| 1 |
|
|
|
| 2 |
| |||||||||||||||
Net current period other comprehensive income (loss) |
|
| 6 |
|
|
| (1 | ) |
|
| 5 |
|
|
| 33 |
|
|
|
| 33 |
|
|
|
| (4 | ) |
|
|
|
| 29 |
| ||
Ending balance |
| $ | (72 | ) |
| $ | 7 |
|
| $ | (65 | ) |
| $ | (27 | ) |
|
|
| $ | (27 | ) |
|
|
| $ | 4 |
|
|
| $ | (23 | ) | |
Nine Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Beginning balance |
| $ | (60 | ) |
| $ | 8 |
|
| $ | (52 | ) | ||||||||||||||||||||||
Other comprehensive income before reclassifications: gains (losses) |
|
| 18 |
|
|
| (2 | ) |
|
| 16 |
| ||||||||||||||||||||||
Amounts reclassified from AOCI: (gains) losses(1) |
|
| 1 |
|
|
| (1 | ) |
|
| 0 |
| ||||||||||||||||||||||
Net current period other comprehensive income (loss) |
|
| 19 |
|
|
| (3 | ) |
|
| 16 |
| ||||||||||||||||||||||
Ending balance |
| $ | (41 | ) |
| $ | 5 |
|
| $ | (36 | ) | ||||||||||||||||||||||
Nine Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Beginning balance |
| $ | (34 | ) |
| $ | 5 |
|
| $ | (29 | ) | ||||||||||||||||||||||
Other comprehensive income before reclassifications: gains (losses) |
|
| (39 | ) |
|
| 4 |
|
|
| (35 | ) | ||||||||||||||||||||||
Amounts reclassified from AOCI: (gains) losses(1) |
|
| 1 |
|
|
| (2 | ) |
|
| (1 | ) | ||||||||||||||||||||||
Net current period other comprehensive income (loss) |
|
| (38 | ) |
|
| 2 |
|
|
| (36 | ) | ||||||||||||||||||||||
Ending balance |
| $ | (72 | ) |
| $ | 7 |
|
| $ | (65 | ) | ||||||||||||||||||||||
(1) |
|
(2) | Net of $1 million, $(2) million, $(2) million and $(3) million tax at March 31, 2022, December 31, 2021, March 31, 2021 and December 31, 2020, respectively. |
Note 8. Fair Value Measurements
The Companies’ fair value measurements are made in accordance with the policies discussed in Note 6 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020.2021. See Note 9 in this report for furtheradditional information about the Companies’ derivatives and hedge accounting activities.
The Companies enter into certain physical and financial forwards, futures, options and swaps, which are considered Level 3 as they have one or more inputs that are not observable and are significant to the valuation. The discounted cash flow method is used to value Level 3 physical and financial forwards futures and swapsfutures contracts. An option model is used to value Level 3 physical options. The discounted cash flow model for forwards futures and swapsfutures calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return and credit spreads. The option model calculates mark-to-market valuations using variations of the Black-Scholes option model. The inputs into the models are the forward market prices, implied price volatilities, risk-free rate of return, the option expiration dates, the option strike prices, the original sales prices and volumes. For Level 3 fair value measurements, certain forward market prices and implied price volatilities are considered unobservable.
3528
The following table presents Dominion Energy’s quantitative information about Level 3 fair value measurements at September 30, 2021.March 31, 2022. The range and weighted average are presented in dollars for market price inputs and percentages for price volatility.inputs.
|
| Fair Value (millions) |
|
| Valuation Techniques |
| Unobservable Input |
|
| Range |
| Weighted Average(1) |
|
| Fair Value (millions) |
|
| Valuation Techniques |
| Unobservable Input |
|
| Range |
| Weighted Average(1) |
| ||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Physical and financial forwards: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas(2) |
| $ | 52 |
|
| Discounted cash flow |
| Market price (per Dth) | (3) |
| (2) - 6 |
|
| (1 | ) |
| $ | 12 |
|
| Discounted cash flow |
| Market price (per Dth) | (3) |
| (2) - 6 |
|
| (1 | ) |
FTRs |
|
| 64 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| (1) - 6 |
|
| 2 |
|
|
| 17 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| (1) - 7 |
|
| 2 |
|
Electricity |
|
| 38 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| 24 - 97 |
|
| 37 |
|
|
| 180 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| 30 - 85 |
|
| 47 |
|
Physical options: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Natural gas |
|
| 6 |
|
| Option model |
| Market price (per Dth) | (3) |
| 4 - 10 |
|
| 7 |
| |||||||||||||||
|
|
|
|
|
|
|
| Price volatility | (4) |
| 19% - 32% |
|
| 24 | % | |||||||||||||||
Total assets |
| $ | 160 |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 209 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Physical and financial forwards: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas(2) |
| $ | 1 |
|
| Discounted cash flow |
| Market price (per Dth) | (3) |
| (2) - 5 |
|
| 0 |
|
| $ | 5 |
|
| Discounted cash flow |
| Market price (per Dth) | (3) |
| (2) - 5 |
|
| (1 | ) |
FTRs |
|
| 6 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| (3) - 6 |
|
| 1 |
|
|
| 2 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| (3) - 3 |
|
| 1 |
|
Electricity |
|
| 9 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| 24 - 111 |
|
| 39 |
| |||||||||||||||
Total liabilities |
| $ | 16 |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 7 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Averages weighted by volume. |
(2) | Includes basis. |
(3) | Represents market prices beyond defined terms for Levels 1 and 2. |
(4) Represents volatilities unrepresented in published markets.
Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:
Significant Unobservable Inputs |
| Position |
| Change to Input |
| Impact on Fair Value Measurement |
Market price |
| Buy |
| Increase (decrease) |
| Gain (loss) |
Market price |
| Sell |
| Increase (decrease) |
| Loss (gain) |
|
|
|
| |||
|
|
|
|
Nonrecurring Fair Value Measurements
In the second quarter of 2021, Dominion Energy recorded a charge of $20 million ($15 million after-tax) in impairment of assets and other charges in its Consolidated Statements of Income to write off substantially all of the long-lived assets of its nonregulated retail software development operations to their estimated fair value, using a market approach, of less than $1 million. The valuation is considered a Level 2 fair value measurement given that it is based on bids received.
In the third quarter of 2021, Dominion Energy recorded a charge of $16 million ($12 million after-tax) in impairment of assets and other charges in its Consolidated Statements of Income to adjust a corporate office building down to its estimated fair value, using both an income and market approach, of $26 million. The valuation is considered a Level 3 measurement due to the use of significant judgmental and unobservable inputs, including projected timing and amount of future cash flows and discount rates inherent in the future cash flows and market prices. The corporate office building is reflected in the Corporate and Other segment and presented as held for sale in Dominion Energy’s Consolidated Balance Sheets at September 30, 2021.
36
See Note 310 for information on the nonrecurring fair value measurement associated with the acquisition of Birdseye.
See Notes 10 and 11 for information onregarding nonrecurring fair value measurements associated with charges recorded related to Fowler Ridge and non-wholly-owned nonregulated solar facilities, respectively.Dominion Energy’s noncontrolling ownership interest in Dominion Privatization.
29
Recurring Fair Value Measurements
Dominion Energy
The following table presents Dominion Energy’s assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
At March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 125 |
|
| $ | 160 |
|
| $ | 285 |
|
| $ | — |
|
| $ | 232 |
|
| $ | 209 |
|
| $ | 441 |
|
Interest rate |
|
| 0 |
|
|
| 371 |
|
|
| 0 |
|
|
| 371 |
|
|
| — |
|
|
| 768 |
|
|
| — |
|
|
| 768 |
|
Investments(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
| 4,738 |
|
|
| 0 |
|
|
| 0 |
|
|
| 4,738 |
|
|
| 5,013 |
|
|
| — |
|
|
| — |
|
|
| 5,013 |
|
Fixed income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt instruments |
|
| 0 |
|
|
| 879 |
|
|
| 0 |
|
|
| 879 |
|
|
| — |
|
|
| 839 |
|
|
| — |
|
|
| 839 |
|
Government securities |
|
| 774 |
|
|
| 715 |
|
|
| 0 |
|
|
| 1,489 |
|
|
| 198 |
|
|
| 1,162 |
|
|
| — |
|
|
| 1,360 |
|
Cash equivalents and other |
|
| 3 |
|
|
| 0 |
|
|
| 0 |
|
|
| 3 |
|
|
| (15 | ) |
|
| — |
|
|
| — |
|
|
| (15 | ) |
Total assets |
| $ | 5,515 |
|
| $ | 2,090 |
|
| $ | 160 |
|
| $ | 7,765 |
|
| $ | 5,196 |
|
| $ | 3,001 |
|
| $ | 209 |
|
| $ | 8,406 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 607 |
|
| $ | 16 |
|
| $ | 623 |
|
| $ | — |
|
| $ | 941 |
|
| $ | 7 |
|
| $ | 948 |
|
Interest rate |
|
| 0 |
|
|
| 327 |
|
|
| 0 |
|
|
| 327 |
|
|
| — |
|
|
| 362 |
|
|
| — |
|
|
| 362 |
|
Foreign currency exchange rate |
|
| — |
|
|
| 4 |
|
|
| — |
|
|
| 4 |
| ||||||||||||||||
Total liabilities |
| $ | 0 |
|
| $ | 934 |
|
| $ | 16 |
|
| $ | 950 |
|
| $ | — |
|
| $ | 1,307 |
|
| $ | 7 |
|
| $ | 1,314 |
|
At December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
At December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 57 |
|
| $ | 110 |
|
| $ | 167 |
|
| $ | — |
|
| $ | 52 |
|
| $ | 230 |
|
| $ | 282 |
|
Interest rate |
|
| 0 |
|
|
| 230 |
|
|
| 0 |
|
|
| 230 |
|
|
| — |
|
|
| 323 |
|
|
| — |
|
|
| 323 |
|
Foreign currency exchange rate |
|
| — |
|
|
| 8 |
|
|
| — |
|
|
| 8 |
| ||||||||||||||||
Investments(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
| 4,648 |
|
|
| 0 |
|
|
| 0 |
|
|
| 4,648 |
|
|
| 5,241 |
|
|
| — |
|
|
| — |
|
|
| 5,241 |
|
Fixed income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt instruments |
|
| 0 |
|
|
| 629 |
|
|
| 0 |
|
|
| 629 |
|
|
| — |
|
|
| 881 |
|
|
| — |
|
|
| 881 |
|
Government securities |
|
| 508 |
|
|
| 730 |
|
|
| 0 |
|
|
| 1,238 |
|
|
| 199 |
|
|
| 1,256 |
|
|
| — |
|
|
| 1,455 |
|
Cash equivalents and other |
|
| 32 |
|
|
| 15 |
|
|
| 0 |
|
|
| 47 |
|
|
| (29 | ) |
|
| — |
|
|
| — |
|
|
| (29 | ) |
Total assets |
| $ | 5,188 |
|
| $ | 1,661 |
|
| $ | 110 |
|
| $ | 6,959 |
|
| $ | 5,411 |
|
| $ | 2,520 |
|
| $ | 230 |
|
| $ | 8,161 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 48 |
|
| $ | 7 |
|
| $ | 55 |
|
| $ | — |
|
| $ | 461 |
|
| $ | 8 |
|
| $ | 469 |
|
Interest rate |
|
| 0 |
|
|
| 431 |
|
|
| 0 |
|
|
| 431 |
|
|
| — |
|
|
| 399 |
|
|
| — |
|
|
| 399 |
|
Total liabilities |
| $ | 0 |
|
| $ | 479 |
|
| $ | 7 |
|
| $ | 486 |
|
| $ | — |
|
| $ | 860 |
|
| $ | 8 |
|
| $ | 868 |
|
(1) | Includes investments held in the nuclear decommissioning and rabbi trusts. Excludes |
3730
The following table presents the net change in Dominion Energy's assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category:
|
| Three Months Ended |
|
| Nine Months Ended |
|
| Three Months Ended |
| |||||||||||||||
|
| September 30, |
|
| September 30, |
|
| March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | 62 |
|
| $ | 123 |
|
| $ | 103 |
|
| $ | (37 | ) |
| $ | 222 |
|
| $ | 103 |
|
Total realized and unrealized gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue |
|
| (6 | ) |
|
| 0 |
|
|
| (8 | ) |
|
| 0 |
| ||||||||
Electric fuel and other energy-related purchases |
|
| 29 |
|
|
| 0 |
|
|
| 12 |
|
|
| (26 | ) |
|
| 48 |
|
|
| (21 | ) |
Included in regulatory assets/liabilities |
|
| 88 |
|
|
| 4 |
|
|
| 49 |
|
|
| 164 |
|
|
| (20 | ) |
|
| (47 | ) |
Settlements |
|
| (29 | ) |
|
| 0 |
|
|
| (12 | ) |
|
| 26 |
|
|
| (48 | ) |
|
| 21 |
|
Ending balance |
| $ | 144 |
|
| $ | 127 |
|
| $ | 144 |
|
| $ | 127 |
|
| $ | 202 |
|
| $ | 56 |
|
There are $(6)were less than $1 million and $(8) million of unrealized gains and losses included in operating revenue in the Level 3 fair value category related to assets/liabilities still held at the reporting date for the three and nine months ended September 30, 2021, respectively. There were 0 unrealized gains and losses included in earnings in the Level 3 fair value category related to assets/liabilities still held at the reporting date for the three and nine months ended September 30, 2020.March 31, 2021 and 0 such amounts for the three months ended March 31, 2022.
Virginia Power
The following table presents Virginia Power’s quantitative information about Level 3 fair value measurements at September 30, 2021.March 31, 2022. The range and weighted average are presented in dollars for market price inputs.
|
| Fair Value (millions) |
|
| Valuation Techniques |
| Unobservable Input |
|
| Range |
| Weighted Average(1) |
|
| Fair Value (millions) |
|
| Valuation Techniques |
| Unobservable Input |
|
| Range |
| Weighted Average(1) |
| ||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Physical and financial forwards: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas(2) |
| $ | 52 |
|
| Discounted cash flow |
| Market price (per Dth) | (3) |
| (2) - 6 |
|
| (1 | ) |
| $ | 12 |
|
| Discounted cash flow |
| Market price (per Dth) | (3) |
| (2) - 6 |
|
| (1 | ) |
FTRs |
|
| 64 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| (1) - 6 |
|
| 2 |
|
|
| 17 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| (1) - 7 |
|
| 2 |
|
Physical options: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Natural gas |
|
| 6 |
|
| Option model |
| Market price (per Dth) | (3) |
| 4 - 10 |
|
| 7 |
| |||||||||||||||
|
|
|
|
|
|
|
| Price volatility | (4) |
| 19% - 32% |
|
| 24 | % | |||||||||||||||
Total assets |
| $ | 122 |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 29 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Physical and financial forwards: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas(2) |
| $ | 1 |
|
| Discounted cash flow |
| Market price (per Dth) | (3) |
| (2) - 5 |
|
| 0 |
|
| $ | 5 |
|
| Discounted cash flow |
| Market price (per Dth) | (3) |
| (2) - 5 |
|
| (1 | ) |
FTRs |
|
| 6 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| (3) - 6 |
|
| 1 |
|
|
| 2 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| (3) - 3 |
|
| 1 |
|
Total liabilities |
| $ | 7 |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 7 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Averages weighted by volume. |
(2) | Includes basis. |
(3) | Represents market prices beyond defined terms for Levels 1 and 2. |
(4) Represents volatilities unrepresented in published markets.
Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:
Significant Unobservable Inputs |
| Position |
| Change to Input |
| Impact on Fair Value Measurement |
Market price |
| Buy |
| Increase (decrease) |
| Gain (loss) |
Market price |
| Sell |
| Increase (decrease) |
| Loss (gain) |
|
|
|
| |||
|
|
|
|
The following table presents Virginia Power’s assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
At March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 67 |
|
| $ | 122 |
|
| $ | 189 |
|
| $ | — |
|
| $ | 75 |
|
| $ | 29 |
|
| $ | 104 |
|
Interest rate |
|
| 0 |
|
|
| 170 |
|
|
| 0 |
|
|
| 170 |
|
|
| — |
|
|
| 300 |
|
|
| — |
|
|
| 300 |
|
Investments(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
| 2,188 |
|
|
| 0 |
|
|
| 0 |
|
|
| 2,188 |
|
|
| 2,325 |
|
|
| — |
|
|
| — |
|
|
| 2,325 |
|
Fixed income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt instruments |
|
| 0 |
|
|
| 516 |
|
|
| 0 |
|
|
| 516 |
|
|
| — |
|
|
| 509 |
|
|
| — |
|
|
| 509 |
|
Government securities |
|
| 349 |
|
|
| 274 |
|
|
| 0 |
|
|
| 623 |
|
|
| 93 |
|
|
| 461 |
|
|
| — |
|
|
| 554 |
|
Total assets |
| $ | 2,537 |
|
| $ | 1,027 |
|
| $ | 122 |
|
| $ | 3,686 |
|
| $ | 2,418 |
|
| $ | 1,345 |
|
| $ | 29 |
|
| $ | 3,792 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 164 |
|
| $ | 7 |
|
| $ | 171 |
|
| $ | — |
|
| $ | 297 |
|
| $ | 7 |
|
| $ | 304 |
|
Interest rate |
|
| 0 |
|
|
| 282 |
|
|
| 0 |
|
|
| 282 |
|
|
| — |
|
|
| 200 |
|
|
| — |
|
|
| 200 |
|
Foreign currency exchange rate |
|
| — |
|
|
| 4 |
|
|
| — |
|
|
| 4 |
| ||||||||||||||||
Total liabilities |
| $ | 0 |
|
| $ | 446 |
|
| $ | 7 |
|
| $ | 453 |
|
| $ | — |
|
| $ | 501 |
|
| $ | 7 |
|
| $ | 508 |
|
At December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
At December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 5 |
|
| $ | 110 |
|
| $ | 115 |
|
| $ | — |
|
| $ | 36 |
|
| $ | 110 |
|
| $ | 146 |
|
Interest rate |
|
| 0 |
|
|
| 66 |
|
|
| 0 |
|
|
| 66 |
|
|
| — |
|
|
| 146 |
|
|
| — |
|
|
| 146 |
|
Foreign currency exchange rate |
|
| — |
|
|
| 8 |
|
|
| — |
|
|
| 8 |
| ||||||||||||||||
Investments(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
| 2,171 |
|
|
| 0 |
|
|
| 0 |
|
|
| 2,171 |
|
|
| 2,420 |
|
|
| — |
|
|
| — |
|
|
| 2,420 |
|
Fixed income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt instruments |
|
| 0 |
|
|
| 348 |
|
|
| 0 |
|
|
| 348 |
|
|
| — |
|
|
| 531 |
|
|
| — |
|
|
| 531 |
|
Government securities |
|
| 201 |
|
|
| 309 |
|
|
| 0 |
|
|
| 510 |
|
|
| 93 |
|
|
| 506 |
|
|
| — |
|
|
| 599 |
|
Cash equivalents and other |
|
| 13 |
|
|
| 0 |
|
|
| 0 |
|
|
| 13 |
|
|
| (3 | ) |
|
| — |
|
|
| — |
|
|
| (3 | ) |
Total assets |
| $ | 2,385 |
|
| $ | 728 |
|
| $ | 110 |
|
| $ | 3,223 |
|
| $ | 2,510 |
|
| $ | 1,227 |
|
| $ | 110 |
|
| $ | 3,847 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 22 |
|
| $ | 7 |
|
| $ | 29 |
|
| $ | — |
|
| $ | 125 |
|
| $ | 8 |
|
| $ | 133 |
|
Interest rate |
|
| 0 |
|
|
| 376 |
|
|
| 0 |
|
|
| 376 |
|
|
| — |
|
|
| 337 |
|
|
| — |
|
|
| 337 |
|
Total liabilities |
| $ | 0 |
|
| $ | 398 |
|
| $ | 7 |
|
| $ | 405 |
|
| $ | — |
|
| $ | 462 |
|
| $ | 8 |
|
| $ | 470 |
|
(1) | Includes investments held in the nuclear decommissioning trusts. Excludes |
32
The following table presents the net change in Virginia Power’s assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category:
|
| Three Months Ended |
|
| Nine Months Ended |
|
| Three Months Ended |
| |||||||||||||||
|
| September 30, |
|
| September 30, |
|
| March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | 74 |
|
| $ | 123 |
|
| $ | 103 |
|
| $ | (37 | ) |
| $ | 102 |
|
| $ | 103 |
|
Total realized and unrealized gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric fuel and other energy-related purchases |
|
| 27 |
|
|
| 0 |
|
|
| 10 |
|
|
| (26 | ) |
|
| 45 |
|
|
| (21 | ) |
Included in regulatory assets/liabilities |
|
| 41 |
|
|
| 4 |
|
|
| 12 |
|
|
| 164 |
|
|
| (80 | ) |
|
| (47 | ) |
Settlements |
|
| (27 | ) |
|
| 0 |
|
|
| (10 | ) |
|
| 26 |
|
|
| (45 | ) |
|
| 21 |
|
Ending balance |
| $ | 115 |
|
| $ | 127 |
|
| $ | 115 |
|
| $ | 127 |
|
| $ | 22 |
|
| $ | 56 |
|
There were 0 unrealized gains or losses included in earnings in the Level 3 fair value category relating to assets/liabilities still held at the reporting date for the three and nine months ended September 30, 2021March 31, 2022 and 2020.2021.
Fair Value of Financial Instruments
Substantially all of the Companies’ financial instruments are recorded at fair value, with the exception of the instruments described below, which are reported at historical cost. Estimated fair values have been determined using available market information and valuation methodologies considered appropriate by management. The carrying amount of cash, restricted cash and equivalents, customer and other receivables, affiliated receivables, short-term debt, affiliated current borrowings, payables to affiliates and accounts payable are representative of fair value because of the short-term nature of these instruments. For the Companies' financial instruments that are not recorded at fair value, the carrying amounts and estimated fair values are as follows:
|
| September 30, 2021 |
|
| December 31, 2020 |
|
| March 31, 2022 |
|
| December 31, 2021 |
| ||||||||||||||||||||
|
| Carrying Amount |
|
| Estimated Fair Value(1) |
|
| Carrying Amount |
|
| Estimated Fair Value(1) |
|
| Carrying Amount |
|
| Estimated Fair Value(1) |
|
| Carrying Amount |
|
| Estimated Fair Value(1) |
| ||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominion Energy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
| $ | 35,140 |
|
| $ | 40,471 |
|
| $ | 31,996 |
|
| $ | 38,773 |
|
| $ | 36,945 |
|
| $ | 38,421 |
|
| $ | 35,996 |
|
| $ | 40,947 |
|
Supplemental credit facility borrowings(4) |
|
| 900 |
|
|
| 900 |
|
|
| 225 |
|
|
| 225 |
| ||||||||||||||||
Junior subordinated notes(5) |
|
| 1,386 |
|
|
| 1,503 |
|
|
| 3,411 |
|
|
| 3,633 |
| ||||||||||||||||
Junior subordinated notes(3) |
|
| 1,386 |
|
|
| 1,407 |
|
|
| 1,386 |
|
|
| 1,470 |
| ||||||||||||||||
Virginia Power |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt(5) |
| $ | 13,212 |
|
| $ | 15,570 |
|
| $ | 13,207 |
|
| $ | 16,455 |
| ||||||||||||||||
Long-term debt(3) |
| $ | 14,736 |
|
| $ | 15,478 |
|
| $ | 13,753 |
|
| $ | 16,021 |
| ||||||||||||||||
(1) | Fair value is estimated using market prices, where available, and interest rates currently available for issuance of debt with similar terms and remaining maturities. All fair value measurements are classified as Level 2. The carrying amount of debt issuances with short-term maturities and variable rates refinanced at current market rates is a reasonable estimate of their fair value. |
(2) | Carrying amount includes current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs and discount or premium. At |
(3) |
|
|
|
| Carrying amount includes current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs, discount or premium. |
Note 9. Derivatives and Hedge Accounting Activities
The Companies’ accounting policies, objectives and strategies for using derivative instruments are discussed in Note 2 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020.2021. See Note 8 in this report for furtheradditional information about fair value measurements and associated valuation methods for derivatives.
Derivative assets and liabilities are presented gross on the Companies’ Consolidated Balance Sheets. The Companies’ derivative contracts include both over-the-counter transactions and those that are executed on an exchange or other trading platform (exchange contracts) and centrally cleared. Over-the-counter contracts are bilateral contracts that are transacted directly with a third party. Exchange contracts utilize a financial intermediary, exchange, or clearinghouse to enter, execute or clear the transactions. Certain over-the-counter and exchange contracts contain contractual rights of setoff through master netting arrangements, derivative clearing agreements and contract default provisions. In addition, the contracts are subject to conditional rights of setoff through counterparty nonperformance, insolvency or other conditions.
In general, most over-the-counter transactions and all exchange contracts are subject to collateral requirements. Types of collateral for over-the-counter and exchange contracts include cash, letters of credit, and in some cases other forms of securities,security, none of which are subject to restrictions. Cash collateral as presentedis used in the table below is used to offset derivative assets and liabilities. In February 2022, Dominion Energy entered into contracts representing offsetting positions to certain existing exchange contracts with collateral requirements as well as new over-the-counter transactions that are not subject to collateral requirements. These contracts resulted in positions which limit the risk of increased cash collateral requirements. Certain accounts receivable and accounts payable recognized on the Companies’ Consolidated Balance Sheets, letters of credit and other forms of securities, as well as certain other long-term debt, all of which are not included in the tables below, are subject to offset under master netting or similar arrangements and would reduce the net exposure. See Note 18 for furtheradditional information regarding credit-related contingent features for the Companies’ derivative instruments.
Dominion Energy
Balance Sheet Presentation
The tables below present Dominion Energy’s derivative asset and liability balances by type of financial instrument, if the gross amounts recognized in its Consolidated Balance Sheets were netted with derivative instruments and cash collateral received or paid:
|
| September 30, 2021 |
|
| December 31, 2020 |
|
| March 31, 2022 |
|
| December 31, 2021 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Gross Amounts Not Offset in the Consolidated Balance Sheet |
|
| Gross Amounts Not Offset in the Consolidated Balance Sheet |
|
| Gross Amounts Not Offset in the Consolidated Balance Sheet |
|
| Gross Amounts Not Offset in the Consolidated Balance Sheet |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Gross Assets Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Received |
|
| Net Amounts |
|
| Gross Assets Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Received |
|
| Net Amounts |
|
| Gross Assets Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Received |
|
| Net Amounts |
|
| Gross Assets Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Received |
|
| Net Amounts |
| ||||||||||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
| $ | 202 |
|
| $ | 10 |
|
| $ | 0 |
|
| $ | 192 |
|
| $ | 117 |
|
| $ | 9 |
|
| $ | 0 |
|
| $ | 108 |
|
| $ | 125 |
|
| $ | 37 |
|
| $ | 0 |
|
| $ | 88 |
|
| $ | 153 |
|
| $ | 13 |
|
| $ | 0 |
|
| $ | 140 |
|
Exchange |
|
| 45 |
|
|
| 32 |
|
|
| 0 |
|
|
| 13 |
|
|
| 49 |
|
|
| 24 |
|
|
| 0 |
|
|
| 25 |
|
|
| 136 |
|
|
| 130 |
|
|
| 0 |
|
|
| 6 |
|
|
| 9 |
|
|
| 7 |
|
|
| 0 |
|
|
| 2 |
|
Interest rate contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
|
| 371 |
|
|
| 27 |
|
|
| 0 |
|
|
| 344 |
|
|
| 230 |
|
|
| 13 |
|
|
| 0 |
|
|
| 217 |
|
|
| 768 |
|
|
| 158 |
|
|
| 0 |
|
|
| 610 |
|
|
| 323 |
|
|
| 49 |
|
|
| 0 |
|
|
| 274 |
|
Foreign currency exchange rate contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||
Over-the-counter |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 8 |
|
|
| 0 |
|
|
| 0 |
|
|
| 8 |
| ||||||||||||||||||||||||||||||||
Total derivatives, subject to a master netting or similar arrangement |
| $ | 618 |
|
| $ | 69 |
|
| $ | 0 |
|
| $ | 549 |
|
| $ | 396 |
|
| $ | 46 |
|
| $ | 0 |
|
| $ | 350 |
|
| $ | 1,029 |
|
| $ | 325 |
|
| $ | 0 |
|
| $ | 704 |
|
| $ | 493 |
|
| $ | 69 |
|
| $ | 0 |
|
| $ | 424 |
|
(1) | Excludes |
|
| September 30, 2021 |
|
| December 31, 2020 |
|
| March 31, 2022 |
|
| December 31, 2021 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Gross Amounts Not Offset in the Consolidated Balance Sheet |
|
| Gross Amounts Not Offset in the Consolidated Balance Sheet |
|
| Gross Amounts Not Offset in the Consolidated Balance Sheet |
|
| Gross Amounts Not Offset in the Consolidated Balance Sheet |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Gross Liabilities Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Paid |
|
| Net Amounts |
|
| Gross Liabilities Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Paid |
|
| Net Amounts |
|
| Gross Liabilities Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Paid |
|
| Net Amounts |
|
| Gross Liabilities Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Paid |
|
| Net Amounts |
| ||||||||||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
| $ | 148 |
|
| $ | 10 |
|
| $ | 79 |
|
| $ | 59 |
|
| $ | 30 |
|
| $ | 9 |
|
| $ | 0 |
|
| $ | 21 |
|
| $ | 326 |
|
| $ | 37 |
|
| $ | 124 |
|
| $ | 165 |
|
| $ | 95 |
|
| $ | 13 |
|
| $ | 54 |
|
| $ | 28 |
|
Exchange |
|
| 473 |
|
|
| 32 |
|
|
| 441 |
|
|
| 0 |
|
|
| 24 |
|
|
| 24 |
|
|
| 0 |
|
|
| 0 |
|
|
| 622 |
|
|
| 130 |
|
|
| 492 |
|
|
| 0 |
|
|
| 374 |
|
|
| 7 |
|
|
| 367 |
|
|
| 0 |
|
Interest rate contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
|
| 327 |
|
|
| 27 |
|
|
| 11 |
|
|
| 289 |
|
|
| 431 |
|
|
| 13 |
|
|
| 17 |
|
|
| 401 |
|
|
| 362 |
|
|
| 158 |
|
|
| 6 |
|
|
| 198 |
|
|
| 399 |
|
|
| 49 |
|
|
| 11 |
|
|
| 339 |
|
Foreign currency exchange rate contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||
Over-the-counter |
|
| 4 |
|
|
| 0 |
|
|
| 0 |
|
|
| 4 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
| ||||||||||||||||||||||||||||||||
Total derivatives, subject to a master netting or similar arrangement |
| $ | 948 |
|
| $ | 69 |
|
| $ | 531 |
|
| $ | 348 |
|
| $ | 485 |
|
| $ | 46 |
|
| $ | 17 |
|
| $ | 422 |
|
| $ | 1,314 |
|
| $ | 325 |
|
| $ | 622 |
|
| $ | 367 |
|
| $ | 868 |
|
| $ | 69 |
|
| $ | 432 |
|
| $ | 367 |
|
(1) |
|
41
Volumes
The following table presents the volume of Dominion Energy’s derivative activity at September 30, 2021.March 31, 2022. These volumes are based on open derivative positions and represent the combined absolute value of their long and short positions, except in the case of offsetting transactions, for which they represent the absolute value of the net volume of its long and short positions.
|
| Current |
|
| Noncurrent |
|
| Current |
|
| Noncurrent |
| ||||
Natural Gas (bcf): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price(1) |
|
| 59 |
|
|
| 9 |
|
|
| 29 |
|
|
| 0 |
|
Basis |
|
| 202 |
|
|
| 472 |
|
|
| 155 |
|
|
| 465 |
|
Electricity (MWh): |
|
|
|
|
|
|
|
| ||||||||
Electricity (MWh in millions): |
|
|
|
|
|
|
|
| ||||||||
Fixed price |
|
| 14,286,444 |
|
|
| 32,508,487 |
|
|
| 15 |
|
|
| 35 |
|
FTRs |
|
| 71,265,005 |
|
|
| 0 |
|
|
| 18 |
|
|
| 0 |
|
Interest rate(2) (millions) |
| $ | 1,600 |
|
| $ | 6,715 |
| ||||||||
Interest rate(2) (in millions) |
| $ | 1,637 |
|
| $ | 12,809 |
| ||||||||
Foreign currency exchange rate(2)(in millions) |
| 520 kr. |
|
| 4,530 kr. |
| ||||||||||
(1) | Includes options. |
(2) | Maturity is determined based on final settlement period. |
AOCI
The following table presents selected information related to losses on cash flow hedges included in AOCI in Dominion Energy’s Consolidated Balance Sheet at September 30, 2021:March 31, 2022:
|
| AOCI After-Tax |
|
| Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax |
|
| Maximum Term |
| AOCI After-Tax |
|
| Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax |
|
| Maximum Term | ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate |
| $ | (363 | ) |
| $ | (43 | ) |
| 387 months |
| $ | (323 | ) |
| $ | (38 | ) |
| 393 months |
Total |
| $ | (363 | ) |
| $ | (43 | ) |
|
|
| $ | (323 | ) |
| $ | (38 | ) |
|
|
The amounts that will be reclassified from AOCI to earnings will generally be offset by the recognition of the hedged transactions (e.g., interest rate payments) in earnings, thereby achieving the realization of prices contemplated by the underlying risk management strategies and will vary from the expected amounts presented above as a result of changes in interest rates.
35
Fair Value Hedges
For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings and presented in the same line item. There were 0 derivative instruments designated as fair value hedges during the three and nine months ended September 30, 2021March 31, 2022 and 2020.2021.
The following table presents the amounts recorded on the balance sheetConsolidated Balance Sheet related to cumulative basis adjustments for fair value hedges, all of which related to discontinued hedging relationships at both September 30, 2021March 31, 2022 and December 31, 2020:2021:
|
| Carrying Amount of the Hedged Asset (Liability) |
|
| Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Assets (Liabilities) |
|
| Carrying Amount of the Hedged Asset (Liability) |
|
| Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Assets (Liabilities) |
| ||||||||||||||||||||
|
| September 30, 2021 |
|
| December 31, 2020 |
|
| September 30, 2021 |
|
| December 31, 2020 |
|
| March 31, 2022 |
|
| December 31, 2021 |
|
| March 31, 2022 |
|
| December 31, 2021 |
| ||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
| $ | (752 | ) |
| $ | (1,153 | ) |
| $ | (2 | ) |
| $ | (3 | ) |
| $ | (351 | ) |
| $ | (352 | ) |
| $ | (1 | ) |
| $ | (2 | ) |
Fair Value and Gains and Losses on Derivative Instruments
The following table presents the fair values of Dominion Energy’s derivatives and where they are presented in its Consolidated Balance Sheets:
|
| Fair Value – Derivatives under Hedge Accounting |
|
| Fair Value – Derivatives not under Hedge Accounting |
|
| Total Fair Value |
|
| Fair Value – Derivatives under Hedge Accounting |
|
| Fair Value – Derivatives not under Hedge Accounting |
|
| Total Fair Value |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 190 |
|
| $ | 190 |
|
| $ | 0 |
|
| $ | 227 |
|
| $ | 227 |
|
Interest rate |
|
| 0 |
|
|
| 19 |
|
|
| 19 |
|
|
| 40 |
|
|
| 13 |
|
|
| 53 |
|
Total current derivative assets(1) |
|
| 0 |
|
|
| 209 |
|
|
| 209 |
|
|
| 40 |
|
|
| 240 |
|
|
| 280 |
|
Noncurrent Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
|
| 0 |
|
|
| 95 |
|
|
| 95 |
|
|
| 0 |
|
|
| 214 |
|
|
| 214 |
|
Interest rate |
|
| 170 |
|
|
| 182 |
|
|
| 352 |
|
|
| 266 |
|
|
| 449 |
|
|
| 715 |
|
Total noncurrent derivative assets(2) |
|
| 170 |
|
|
| 277 |
|
|
| 447 |
|
|
| 266 |
|
|
| 663 |
|
|
| 929 |
|
Total derivative assets |
| $ | 170 |
|
| $ | 486 |
|
| $ | 656 |
|
| $ | 306 |
|
| $ | 903 |
|
| $ | 1,209 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 484 |
|
| $ | 484 |
|
| $ | 0 |
|
| $ | 725 |
|
| $ | 725 |
|
Interest rate |
|
| 253 |
|
|
| 17 |
|
|
| 270 |
|
|
| 0 |
|
|
| 1 |
|
|
| 1 |
|
Total current derivative liabilities(3) |
|
| 253 |
|
|
| 501 |
|
|
| 754 |
| ||||||||||||
Foreign currency exchange rate |
|
| 0 |
|
|
| 1 |
|
|
| 1 |
| ||||||||||||
Total current derivative liabilities |
|
| 0 |
|
|
| 727 |
|
|
| 727 |
| ||||||||||||
Noncurrent Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
|
| 0 |
|
|
| 139 |
|
|
| 139 |
|
|
| 0 |
|
|
| 223 |
|
|
| 223 |
|
Interest rate |
|
| 29 |
|
|
| 28 |
|
|
| 57 |
|
|
| 200 |
|
|
| 161 |
|
|
| 361 |
|
Total noncurrent derivative liabilities(4) |
|
| 29 |
|
|
| 167 |
|
|
| 196 |
| ||||||||||||
Foreign currency exchange rate |
|
| 0 |
|
|
| 3 |
|
|
| 3 |
| ||||||||||||
Total noncurrent derivative liabilities(3) |
|
| 200 |
|
|
| 387 |
|
|
| 587 |
| ||||||||||||
Total derivative liabilities |
| $ | 282 |
|
| $ | 668 |
|
| $ | 950 |
|
| $ | 200 |
|
| $ | 1,114 |
|
| $ | 1,314 |
|
December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 58 |
|
| $ | 58 |
|
| $ | 0 |
|
| $ | 103 |
|
| $ | 103 |
|
Interest rate |
|
| 0 |
|
|
| 9 |
|
|
| 9 |
|
|
| 1 |
|
|
| 17 |
|
|
| 18 |
|
Foreign currency exchange rate |
|
| 0 |
|
|
| 1 |
|
|
| 1 |
| ||||||||||||
Total current derivative assets(1) |
|
| 0 |
|
|
| 67 |
|
|
| 67 |
|
|
| 1 |
|
|
| 121 |
|
|
| 122 |
|
Noncurrent Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
|
| 0 |
|
|
| 109 |
|
|
| 109 |
|
|
| 0 |
|
|
| 179 |
|
|
| 179 |
|
Interest rate |
|
| 66 |
|
|
| 155 |
|
|
| 221 |
|
|
| 145 |
|
|
| 160 |
|
|
| 305 |
|
Foreign currency exchange rate |
|
| 0 |
|
|
| 7 |
|
|
| 7 |
| ||||||||||||
Total noncurrent derivative assets(2) |
|
| 66 |
|
|
| 264 |
|
|
| 330 |
|
|
| 145 |
|
|
| 346 |
|
|
| 491 |
|
Total derivative assets |
| $ | 66 |
|
| $ | 331 |
|
| $ | 397 |
|
| $ | 146 |
|
| $ | 467 |
|
| $ | 613 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 42 |
|
| $ | 42 |
|
| $ | 0 |
|
| $ | 304 |
|
| $ | 304 |
|
Interest rate |
|
| 363 |
|
|
| 10 |
|
|
| 373 |
|
|
| 42 |
|
|
| 13 |
|
|
| 55 |
|
Total current derivative liabilities(3) |
|
| 363 |
|
|
| 52 |
|
|
| 415 |
| ||||||||||||
Total current derivative liabilities |
|
| 42 |
|
|
| 317 |
|
|
| 359 |
| ||||||||||||
Noncurrent Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
|
| 0 |
|
|
| 13 |
|
|
| 13 |
|
|
| 0 |
|
|
| 165 |
|
|
| 165 |
|
Interest rate |
|
| 19 |
|
|
| 39 |
|
|
| 58 |
|
|
| 295 |
|
|
| 49 |
|
|
| 344 |
|
Total noncurrent derivative liabilities(4) |
|
| 19 |
|
|
| 52 |
|
|
| 71 |
| ||||||||||||
Total noncurrent derivative liabilities(3) |
|
| 295 |
|
|
| 214 |
|
|
| 509 |
| ||||||||||||
Total derivative liabilities |
| $ | 382 |
|
| $ | 104 |
|
| $ | 486 |
|
| $ | 337 |
|
| $ | 531 |
|
| $ | 868 |
|
(1) | Current derivative assets |
(2) | Noncurrent derivative assets are presented in other deferred charges and other assets in Dominion Energy’s Consolidated Balance Sheets. |
(3) |
|
| Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in Dominion Energy’s Consolidated Balance Sheets. |
The following tables present the gains and losses on Dominion Energy’s derivatives, as well as where the associated activity is presented in its Consolidated Balance Sheets and Statements of Income.
Derivatives in cash flow hedging relationships |
| Amount of Gain (Loss) Recognized in AOCI on Derivatives(1) |
|
| Amount of Gain (Loss) Reclassified From AOCI to Income |
|
| Increase (Decrease) in Derivatives Subject to Regulatory Treatment(2) |
| |||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate(3) |
| $ | (2 | ) |
| $ | (14 | ) |
| $ | 9 |
|
Total |
| $ | (2 | ) |
| $ | (14 | ) |
| $ | 9 |
|
Three Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity: |
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue |
|
|
|
|
| $ | 8 |
|
|
|
|
|
Total commodity |
| $ | — |
|
| $ | 8 |
|
| $ | — |
|
Interest rate: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and related charges |
|
|
|
|
| $ | (23 | ) |
|
|
|
|
Discontinued operations |
|
|
|
|
|
| (230 | ) |
|
|
|
|
Total interest rate |
| $ | 8 |
|
| $ | (253 | ) |
| $ | 62 |
|
Foreign currency(4) |
|
| 6 |
|
|
| (6 | ) |
|
| — |
|
Total |
| $ | 14 |
|
| $ | (251 | ) |
| $ | 62 |
|
Nine Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity: |
|
|
|
|
|
|
|
|
|
|
|
|
Purchased gas |
|
|
|
|
| $ | (1 | ) |
|
|
|
|
Total commodity |
| $ | — |
|
| $ | (1 | ) |
| $ | — |
|
Interest rate (3) |
|
| 29 |
|
|
| (46 | ) |
|
| 198 |
|
Total |
| $ | 29 |
|
| $ | (47 | ) |
| $ | 198 |
|
Nine Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity: |
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue |
|
|
|
|
| $ | 22 |
|
|
|
|
|
Purchased gas |
|
|
|
|
|
| (3 | ) |
|
|
|
|
Discontinued operations |
|
|
|
|
|
| 2 |
|
|
|
|
|
Total commodity |
| $ | — |
|
| $ | 21 |
|
| $ | — |
|
Interest rate: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and related charges |
|
|
|
|
| $ | (66 | ) |
|
|
|
|
Discontinued operations |
|
|
|
|
|
| (236 | ) |
|
|
|
|
Total interest rate |
| $ | (328 | ) |
| $ | (302 | ) |
| $ | (488 | ) |
Foreign currency (4) |
|
| (11 | ) |
|
| (6 | ) |
|
| — |
|
Total |
| $ | (339 | ) |
| $ | (287 | ) |
| $ | (488 | ) |
Derivatives in cash flow hedging relationships |
| Amount of Gain (Loss) Recognized in AOCI on Derivatives(1) |
|
| Amount of Gain (Loss) Reclassified From AOCI to Income |
|
| Increase (Decrease) in Derivatives Subject to Regulatory Treatment(2) |
| |||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate(3) |
| $ | 33 |
|
| $ | (14 | ) |
| $ | 279 |
|
Total |
| $ | 33 |
|
| $ | (14 | ) |
| $ | 279 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity(4) |
| $ | — |
|
| $ | (1 | ) |
| $ | — |
|
Interest rate(3) |
|
| 52 |
|
|
| (16 | ) |
|
| 408 |
|
Total |
| $ | 52 |
|
| $ | (17 | ) |
| $ | 408 |
|
(1) | Amounts deferred into AOCI have no associated effect in Dominion Energy’s Consolidated Statements of Income. |
(2) | Represents net derivative activity deferred into and amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Dominion Energy’s Consolidated Statements of Income. |
(3) Amounts recorded in Dominion Energy’s Consolidated Statement of Income are classified in interest and related charges.
(4) Amounts recorded in Dominion Energy’s Consolidated Statement of Income are classified in discontinued operations.
(3) | Amounts recorded in Dominion Energy’s Consolidated Statement of Income are classified in interest and related charges. |
Derivatives not designated as hedging instruments |
| Amount of Gain (Loss) Recognized in Income on Derivatives(1) |
|
| |||||||||||||
|
| Three Months Ended |
|
| Nine Months Ended |
|
| ||||||||||
|
| September 30, |
|
| September 30, |
|
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue |
| $ | (334 | ) |
| $ | (15 | ) |
| $ | (521 | ) |
| $ | 31 |
|
|
Purchased gas |
|
| 25 |
|
|
| 4 |
|
|
| 32 |
|
|
| (6 | ) |
|
Electric fuel and other energy-related purchases |
|
| 44 |
|
|
| (6 | ) |
|
| 7 |
|
|
| (79 | ) |
|
Discontinued operations |
|
| 0 |
|
|
| (1 | ) |
|
| 0 |
|
|
| 4 |
|
|
Interest rate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and related charges |
|
| (20 | ) |
|
| 57 |
|
|
| 142 |
|
|
| (21 | ) |
|
Discontinued operations |
|
| 0 |
|
|
| 5 |
|
|
| 0 |
|
|
| (3 | ) |
|
Foreign Currency: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations |
|
| 0 |
|
|
| 8 |
|
|
| 0 |
|
|
| 8 |
|
|
Total |
| $ | (285 | ) |
| $ | 52 |
|
| $ | (340 | ) |
| $ | (66 | ) |
|
(4) | Amounts recorded in Dominion Energy’s Consolidated Statement of Income are classified in purchased gas. |
Derivatives not designated as hedging instruments |
| Amount of Gain (Loss) Recognized in Income on Derivatives(1)(2) |
|
| |||||
|
| Three Months Ended |
|
| |||||
|
| March 31, |
|
| |||||
|
| 2022 |
|
| 2021 |
|
| ||
(millions) |
|
|
|
|
|
|
|
|
|
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
Commodity: |
|
|
|
|
|
|
|
|
|
Operating revenue |
| $ | (330 | ) |
| $ | (41 | ) |
|
Purchased gas |
|
| 2 |
|
|
| 0 |
|
|
Electric fuel and other energy-related purchases |
|
| 59 |
|
|
| (44 | ) |
|
Interest rate: |
|
|
|
|
|
|
|
|
|
Interest and related charges |
|
| 196 |
|
|
| 319 |
|
|
Total |
| $ | (73 | ) |
| $ | 234 |
|
|
(1) | Includes derivative activity amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Dominion Energy’s Consolidated Statements of |
(2) | Excludes amounts related to foreign currency exchange rate derivatives that are deferred to plant under construction within property, plant and equipment that will begin to amortize once the CVOW Commercial Project is placed in service. |
38
Virginia Power
Balance Sheet Presentation
The tables below present Virginia Power’s derivative asset and liability balances by type of financial instrument, if the gross amounts recognized in its Consolidated Balance Sheets were netted with derivative instruments and cash collateral received or paid:
|
| September 30, 2021 |
|
| December 31, 2020 |
|
| March 31, 2022 |
|
| December 31, 2021 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Gross Amounts Not Offset in the Consolidated Balance Sheet |
|
| Gross Amounts Not Offset in the Consolidated Balance Sheet |
|
| Gross Amounts Not Offset in the Consolidated Balance Sheet |
|
| Gross Amounts Not Offset in the Consolidated Balance Sheet |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Gross Assets Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Received |
|
| Net Amounts |
|
| Gross Assets Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Received |
|
| Net Amounts |
|
| Gross Assets Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Received |
|
| Net Amounts |
|
| Gross Assets Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Received |
|
| Net Amounts |
| ||||||||||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
| $ | 122 |
|
| $ | 7 |
|
| $ | 0 |
|
| $ | 115 |
|
| $ | 111 |
|
| $ | 6 |
|
| $ | 0 |
|
| $ | 105 |
|
| $ | 32 |
|
| $ | 10 |
|
| $ | 0 |
|
| $ | 22 |
|
| $ | 110 |
|
| $ | 8 |
|
| $ | 0 |
|
| $ | 102 |
|
Exchange |
|
| 4 |
|
|
| 4 |
|
|
| 0 |
|
|
| 0 |
|
| 1 |
|
| 1 |
|
|
| 0 |
|
|
| 0 |
|
|
| 9 |
|
|
| 9 |
|
|
| 0 |
|
|
| 0 |
|
|
| 7 |
|
|
| 7 |
|
|
| 0 |
|
|
| 0 |
| ||
Interest rate contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
|
| 170 |
|
|
| 19 |
|
|
| 0 |
|
|
| 151 |
|
| 66 |
|
| 7 |
|
|
| 0 |
|
|
| 59 |
|
|
| 300 |
|
|
| 36 |
|
|
| 0 |
|
|
| 264 |
|
|
| 146 |
|
|
| 20 |
|
|
| 0 |
|
|
| 126 |
| ||
Foreign currency exchange rate contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||
Over-the-counter |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 8 |
|
|
| 0 |
|
|
| 0 |
|
|
| 8 |
| ||||||||||||||||||||||||||||||||
Total derivatives, subject to a master netting or similar arrangement |
| $ | 296 |
|
| $ | 30 |
|
| $ | 0 |
|
| $ | 266 |
|
| $ | 178 |
|
| $ | 14 |
|
| $ | 0 |
|
| $ | 164 |
|
| $ | 341 |
|
| $ | 55 |
|
| $ | 0 |
|
| $ | 286 |
|
| $ | 271 |
|
| $ | 35 |
|
| $ | 0 |
|
| $ | 236 |
|
(1) | Excludes $63 million and |
|
| September 30, 2021 |
|
| December 31, 2020 |
|
| March 31, 2022 |
|
| December 31, 2021 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Gross Amounts Not Offset in the Consolidated Balance Sheet |
|
| Gross Amounts Not Offset in the Consolidated Balance Sheet |
|
| Gross Amounts Not Offset in the Consolidated Balance Sheet |
|
| Gross Amounts Not Offset in the Consolidated Balance Sheet |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Gross Liabilities Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Paid |
|
| Net Amounts |
|
| Gross Liabilities Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Paid |
|
| Net Amounts |
|
| Gross Liabilities Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Paid |
|
| Net Amounts |
|
| Gross Liabilities Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Paid |
|
| Net Amounts |
| ||||||||||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
| $ | 123 |
|
| $ | 7 |
|
| $ | 79 |
|
| $ | 37 |
|
| $ | 6 |
|
| $ | 6 |
|
| $ | 0 |
|
| $ | 0 |
|
| $ | 167 |
|
| $ | 10 |
|
| $ | 124 |
|
| $ | 33 |
|
| $ | 84 |
|
| $ | 8 |
|
| $ | 54 |
|
| $ | 22 |
|
Exchange |
|
| 46 |
|
|
| 4 |
|
|
| 42 |
|
|
| 0 |
|
| 1 |
|
| 1 |
|
|
| 0 |
|
|
| 0 |
|
|
| 136 |
|
|
| 9 |
|
|
| 127 |
|
|
| 0 |
|
|
| 43 |
|
|
| 7 |
|
|
| 36 |
|
|
| 0 |
| ||
Interest rate contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
|
| 282 |
|
|
| 19 |
|
|
| 0 |
|
|
| 263 |
|
| 376 |
|
| 7 |
|
|
| 0 |
|
|
| 369 |
|
|
| 200 |
|
|
| 36 |
|
|
| 0 |
|
|
| 164 |
|
|
| 337 |
|
|
| 20 |
|
|
| 0 |
|
|
| 317 |
| ||
Foreign currency exchange rate contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||
Over-the-counter |
|
| 4 |
|
|
| 0 |
|
|
| 0 |
|
|
| 4 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
| ||||||||||||||||||||||||||||||||
Total derivatives, subject to a master netting or similar arrangement |
| $ | 451 |
|
| $ | 30 |
|
| $ | 121 |
|
| $ | 300 |
|
| $ | 383 |
|
| $ | 14 |
|
| $ | 0 |
|
| $ | 369 |
|
| $ | 507 |
|
| $ | 55 |
|
| $ | 251 |
|
| $ | 201 |
|
| $ | 464 |
|
| $ | 35 |
|
| $ | 90 |
|
| $ | 339 |
|
(1) | Excludes |
39
Volumes
The following table presents the volume of Virginia Power’s derivative activity at September 30, 2021.March 31, 2022. These volumes are based on open derivative positions and represent the combined absolute value of their long and short positions, except in the case of offsetting transactions, for which they represent the absolute value of the net volume of its long and short positions.
|
| Current |
|
| Noncurrent |
|
| Current |
|
| Noncurrent |
| ||||
Natural Gas (bcf): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price(1) |
|
| 23 |
|
|
| 9 |
|
|
| 21 |
|
|
| 0 |
|
Basis |
|
| 143 |
|
|
| 465 |
|
|
| 146 |
|
|
| 463 |
|
Electricity (MWh): |
|
|
|
|
|
|
|
| ||||||||
Electricity (MWh in millions): |
|
|
|
|
|
|
|
| ||||||||
Fixed price |
|
| 5,953,983 |
|
|
| 6,092,512 |
|
|
| 7 |
|
|
| 9 |
|
FTRs |
|
| 71,265,005 |
|
|
| 0 |
|
|
| 18 |
|
|
| 0 |
|
Interest rate(2) (millions) |
| $ | 850 |
|
| $ | 1,900 |
| ||||||||
Interest rate(2) (in millions) |
| $ | 1,100 |
|
| $ | 2,800 |
| ||||||||
Foreign currency exchange rate(2)(in millions) |
| 520 kr. |
|
| 4,530 kr. |
| ||||||||||
(1) | Includes options. |
(2) | Maturity is determined based on final settlement period. |
AOCI
The following table presents selected information related to losses on cash flow hedges included in AOCI in Virginia Power’s Consolidated Balance Sheet at September 30, 2021:March 31, 2022:
|
| AOCI After-Tax |
|
| Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax |
|
| Maximum Term |
| AOCI After-Tax |
|
| Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax |
|
| Maximum Term | ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate |
| $ | (41 | ) |
| $ | (2 | ) |
| 387 months |
| $ | (25 | ) |
| $ | (2 | ) |
| 393 months |
Total |
| $ | (41 | ) |
| $ | (2 | ) |
|
|
| $ | (25 | ) |
| $ | (2 | ) |
|
|
The amounts that will be reclassified from AOCI to earnings will generally be offset by the recognition of the hedged transactions (e.g., interest payments) in earnings, thereby achieving the realization of interest rates contemplated by the underlying risk management strategies and will vary from the expected amounts presented above as a result of changes in interest rates.
4640
Fair Value and Gains and Losses on Derivative Instruments
The following table presents the fair values of Virginia Power’s derivatives and where they are presented in its Consolidated Balance Sheets:
|
| Fair Value – Derivatives under Hedge Accounting |
|
| Fair Value – Derivatives not under Hedge Accounting |
|
| Total Fair Value |
|
| Fair Value – Derivatives under Hedge Accounting |
|
| Fair Value – Derivatives not under Hedge Accounting |
|
| Total Fair Value |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 117 |
|
| $ | 117 |
|
| $ | 0 |
|
| $ | 80 |
|
| $ | 80 |
|
Interest rate |
|
| 34 |
|
|
| 0 |
|
|
| 34 |
| ||||||||||||
Total current derivative assets(1) |
|
| 0 |
|
|
| 117 |
|
|
| 117 |
|
|
| 34 |
|
|
| 80 |
|
|
| 114 |
|
Noncurrent Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
|
| 0 |
|
|
| 72 |
|
|
| 72 |
|
|
| 0 |
|
|
| 24 |
|
|
| 24 |
|
Interest rate |
|
| 170 |
|
|
| 0 |
|
|
| 170 |
|
|
| 266 |
|
|
| 0 |
|
|
| 266 |
|
Total noncurrent derivative assets(2) |
|
| 266 |
|
|
| 24 |
|
|
| 290 |
| ||||||||||||
Total derivative assets |
| $ | 300 |
|
| $ | 104 |
|
| $ | 404 |
| ||||||||||||
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Commodity |
| $ | 0 |
|
| $ | 240 |
|
| $ | 240 |
| ||||||||||||
Foreign currency exchange rate |
|
| 0 |
|
|
| 1 |
|
|
| 1 |
| ||||||||||||
Total current derivative liabilities |
|
| 0 |
|
|
| 241 |
|
|
| 241 |
| ||||||||||||
Noncurrent Liabilities |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Commodity |
|
| 0 |
|
|
| 64 |
|
|
| 64 |
| ||||||||||||
Interest rate |
|
| 200 |
|
|
| 0 |
|
|
| 200 |
| ||||||||||||
Foreign currency exchange rate |
|
| 0 |
|
|
| 3 |
|
|
| 3 |
| ||||||||||||
Total noncurrent derivative liabilities(3) |
|
| 200 |
|
|
| 67 |
|
|
| 267 |
| ||||||||||||
Total derivative liabilities |
| $ | 200 |
|
| $ | 308 |
|
| $ | 508 |
| ||||||||||||
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Commodity |
| $ | 0 |
|
| $ | 74 |
|
| $ | 74 |
| ||||||||||||
Interest rate |
|
| 1 |
|
|
| 0 |
|
|
| 1 |
| ||||||||||||
Foreign currency exchange rate |
|
| 0 |
|
|
| 1 |
|
|
| 1 |
| ||||||||||||
Total current derivative assets(1) |
|
| 1 |
|
|
| 75 |
|
|
| 76 |
| ||||||||||||
Noncurrent Assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Commodity |
|
| 0 |
|
|
| 72 |
|
|
| 72 |
| ||||||||||||
Interest rate |
|
| 145 |
|
|
| 0 |
|
|
| 145 |
| ||||||||||||
Foreign currency exchange rate |
|
| 0 |
|
|
| 7 |
|
|
| 7 |
| ||||||||||||
Total noncurrent derivative assets(2) |
|
| 170 |
|
|
| 72 |
|
|
| 242 |
|
|
| 145 |
|
|
| 79 |
|
|
| 224 |
|
Total derivative assets |
| $ | 170 |
|
| $ | 189 |
|
| $ | 359 |
|
| $ | 146 |
|
| $ | 154 |
|
| $ | 300 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 136 |
|
| $ | 136 |
|
| $ | 0 |
|
| $ | 92 |
|
| $ | 92 |
|
Interest rate |
|
| 253 |
|
|
| 0 |
|
|
| 253 |
|
|
| 42 |
|
|
| 0 |
|
|
| 42 |
|
Total current derivative liabilities |
|
| 253 |
|
|
| 136 |
|
|
| 389 |
|
|
| 42 |
|
|
| 92 |
|
|
| 134 |
|
Noncurrent Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
|
| 0 |
|
|
| 35 |
|
|
| 35 |
|
|
| 0 |
|
|
| 41 |
|
|
| 41 |
|
Interest rate |
|
| 29 |
|
|
| 0 |
|
|
| 29 |
|
|
| 295 |
|
|
| 0 |
|
|
| 295 |
|
Total noncurrent derivative liabilities(3) |
|
| 29 |
|
|
| 35 |
|
|
| 64 |
|
|
| 295 |
|
|
| 41 |
|
|
| 336 |
|
Total derivative liabilities |
| $ | 282 |
|
| $ | 171 |
|
| $ | 453 |
|
| $ | 337 |
|
| $ | 133 |
|
| $ | 470 |
|
December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Commodity |
| $ | 0 |
|
| $ | 22 |
|
| $ | 22 |
| ||||||||||||
Total current derivative assets(1) |
|
| 0 |
|
|
| 22 |
|
|
| 22 |
| ||||||||||||
Noncurrent Assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Commodity |
|
| 0 | �� |
|
| 93 |
|
|
| 93 |
| ||||||||||||
Interest rate |
|
| 66 |
|
|
| 0 |
|
|
| 66 |
| ||||||||||||
Total noncurrent derivative assets(2) |
|
| 66 |
|
|
| 93 |
|
|
| 159 |
| ||||||||||||
Total derivative assets |
| $ | 66 |
|
| $ | 115 |
|
| $ | 181 |
| ||||||||||||
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Commodity |
| $ | 0 |
|
| $ | 28 |
|
| $ | 28 |
| ||||||||||||
Interest rate |
|
| 362 |
|
|
| 0 |
|
|
| 362 |
| ||||||||||||
Total current derivative liabilities |
|
| 362 |
|
|
| 28 |
|
|
| 390 |
| ||||||||||||
Noncurrent Liabilities |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Commodity |
|
| 0 |
|
|
| 1 |
|
|
| 1 |
| ||||||||||||
Interest rate |
|
| 14 |
|
|
| 0 |
|
|
| 14 |
| ||||||||||||
Total noncurrent derivative liabilities(3) |
|
| 14 |
|
|
| 1 |
|
|
| 15 |
| ||||||||||||
Total derivative liabilities |
| $ | 376 |
|
| $ | 29 |
|
| $ | 405 |
| ||||||||||||
(1) | Current derivative assets are presented in other current assets in Virginia Power’s Consolidated Balance Sheets. |
(2) | Noncurrent derivative assets are presented in other deferred charges and other assets in Virginia Power’s Consolidated Balance Sheets. |
(3) | Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in Virginia Power’s Consolidated Balance Sheets. |
The following tables present the gains and losses on Virginia Power’s derivatives, as well as where the associated activity is presented in its Consolidated Balance Sheets and Statements of Income:
Derivatives in cash flow hedging relationships |
| Amount of Gain (Loss) Recognized in AOCI on Derivatives(1) |
|
| Amount of Gain (Loss) Reclassified From AOCI to Income |
|
| Increase (Decrease) in Derivatives Subject to Regulatory Treatment(2) |
|
| Amount of Gain (Loss) Recognized in AOCI on Derivatives(1) |
|
| Amount of Gain (Loss) Reclassified From AOCI to Income |
|
| Increase (Decrease) in Derivatives Subject to Regulatory Treatment(2) |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Three Months Ended March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate(3) |
| $ | (2 | ) |
| $ | (1 | ) |
| $ | 8 |
|
| $ | 26 |
|
| $ | (1 | ) |
| $ | 279 |
|
Total |
| $ | (2 | ) |
| $ | (1 | ) |
| $ | 8 |
|
| $ | 26 |
|
| $ | (1 | ) |
| $ | 279 |
|
Three Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Three Months Ended March 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate(3) |
| $ | 6 |
|
| $ | (1 | ) |
| $ | 60 |
|
| $ | 43 |
|
| $ | (1 | ) |
| $ | 407 |
|
Total |
| $ | 6 |
|
| $ | (1 | ) |
| $ | 60 |
|
| $ | 43 |
|
| $ | (1 | ) |
| $ | 407 |
|
Nine Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Interest rate(3) |
| $ | 24 |
|
| $ | (2 | ) |
| $ | 194 |
| ||||||||||||
Total |
| $ | 24 |
|
| $ | (2 | ) |
| $ | 194 |
| ||||||||||||
Nine Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Interest rate(3) |
| $ | (53 | ) |
| $ | (2 | ) |
| $ | (492 | ) | ||||||||||||
Total |
| $ | (53 | ) |
| $ | (2 | ) |
| $ | (492 | ) | ||||||||||||
(1) | Amounts deferred into AOCI have no associated effect in Virginia Power’s Consolidated Statements of Income. |
(2) | Represents net derivative activity deferred into and amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Virginia Power’s Consolidated Statements of Income. |
(3)Amounts recorded in Virginia Power’s Consolidated Statements of Income are classified in interest and related charges. |
|
Derivatives not designated as hedging instruments |
| Amount of Gain (Loss) Recognized in Income on Derivatives(1) |
|
|
| Amount of Gain (Loss) Recognized in Income on Derivatives(1)(2) |
|
| ||||||||||||||||||
|
| Three Months Ended |
|
| Nine Months Ended |
|
|
| Three Months Ended |
|
| |||||||||||||||
|
| September 30, |
|
| September 30, |
|
|
| March 31, |
|
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
|
| 2022 |
|
| 2021 |
|
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenue |
| $ | (19 | ) |
| $ | — |
|
|
| (25 | ) |
| $ | 0 |
|
|
| $ | (41 | ) |
| $ | (2 | ) |
|
Electric fuel and other energy-related purchases |
|
| 42 |
|
|
| (6 | ) |
|
| 5 |
|
|
| (79 | ) |
|
|
| 57 |
|
|
| (44 | ) |
|
Total |
| $ | 23 |
|
| $ | (6 | ) |
| $ | (20 | ) |
| $ | (79 | ) |
|
| $ | 16 |
|
| $ | (46 | ) |
|
(1) | Includes derivative activity amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Virginia Power’s Consolidated Statements of Income. |
(2)Excludes amounts related to foreign currency exchange rate derivatives that are deferred to plant under construction within property, plant and equipment that will begin to amortize once the CVOW Commercial Project is placed in service.
Note 10. Investments
Dominion Energy
Equity and Debt Securities
Rabbi Trust Securities
Equity and fixed income securities and cash equivalents in Dominion Energy’s rabbi trusts and classified as trading totaled $116 million and $122 million and $134 million at September 30, 2021March 31, 2022 and December 31, 2020,2021, respectively.
4842
Decommissioning Trust Securities
Dominion Energy holds equity and fixed income securities, insurance contracts and cash equivalents in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Dominion Energy’s decommissioning trust funds are summarized below:
|
| Amortized Cost |
|
| Total Unrealized Gains |
|
| Total Unrealized Losses |
|
| Allowance for Credit Losses |
|
| Fair Value |
|
| Amortized Cost |
|
| Total Unrealized Gains |
|
| Total Unrealized Losses |
|
| Allowance for Credit Losses |
|
| Fair Value |
| ||||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Equity securities:(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
| $ | 1,546 |
|
| $ | 3,247 |
|
| $ | (11 | ) |
|
|
|
|
| $ | 4,782 |
|
| $ | 1,586 |
|
| $ | 3,498 |
|
| $ | (13 | ) |
|
|
|
|
| $ | 5,071 |
|
Fixed income securities:(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt instruments |
|
| 842 |
|
|
| 40 |
|
|
| (3 | ) |
| $ | 0 |
|
|
| 879 |
|
|
| 876 |
|
|
| 9 |
|
|
| (45 | ) |
| $ | 0 |
|
|
| 840 |
|
Government securities |
|
| 1,414 |
|
|
| 44 |
|
|
| (6 | ) |
|
| 0 |
|
|
| 1,452 |
|
|
| 1,358 |
|
|
| 14 |
|
|
| (48 | ) |
|
| 0 |
|
|
| 1,324 |
|
Common/collective trust funds |
|
| 187 |
|
|
| 5 |
|
|
| 0 |
|
|
| 0 |
|
|
| 192 |
|
|
| 150 |
|
|
| 3 |
|
|
| 0 |
|
|
| 0 |
|
|
| 153 |
|
Insurance contracts |
|
| 246 |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
| 246 |
|
|
| 242 |
|
|
| 0 |
|
|
| 0 |
|
|
|
|
|
|
| 242 |
|
Cash equivalents and other(3) |
|
| (28 | ) |
|
| 3 |
|
|
| (20 | ) |
|
| 0 |
|
|
| (45 | ) |
|
| 26 |
|
|
| 5 |
|
|
| (47 | ) |
|
| 0 |
|
|
| (16 | ) |
Total |
| $ | 4,207 |
|
| $ | 3,339 |
|
| $ | (40 | ) | (4) | $ | 0 |
|
| $ | 7,506 |
|
| $ | 4,238 |
|
| $ | 3,529 |
|
| $ | (153 | ) | (4) | $ | 0 |
|
| $ | 7,614 |
|
December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Equity securities:(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
| $ | 1,756 |
|
| $ | 2,948 |
|
| $ | (24 | ) |
|
|
|
|
| $ | 4,680 |
|
| $ | 1,567 |
|
| $ | 3,734 |
|
| $ | (13 | ) |
|
|
|
|
| $ | 5,288 |
|
Fixed income securities:(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt instruments |
|
| 572 |
|
|
| 58 |
|
|
| (1 | ) |
| $ | 0 |
|
|
| 629 |
|
|
| 854 |
|
|
| 32 |
|
|
| (5 | ) |
| $ | 0 |
|
|
| 881 |
|
Government securities |
|
| 1,119 |
|
|
| 66 |
|
|
| (1 | ) |
|
| 0 |
|
|
| 1,184 |
|
|
| 1,382 |
|
|
| 43 |
|
|
| (7 | ) |
|
| 0 |
|
|
| 1,418 |
|
Common/collective trust funds |
|
| 170 |
|
|
| 5 |
|
|
| 0 |
|
|
| 0 |
|
|
| 175 |
|
|
| 168 |
|
|
| 4 |
|
|
| 0 |
|
|
| 0 |
|
|
| 172 |
|
Insurance contracts |
|
| 237 |
|
|
| 0 |
|
|
| 0 |
|
|
|
|
|
|
| 237 |
|
|
| 255 |
|
|
| 0 |
|
|
| 0 |
|
|
|
|
|
|
| 255 |
|
Cash equivalents and other(3) |
|
| (8 | ) |
|
| 4 |
|
|
| (1 | ) |
|
| 0 |
|
|
| (5 | ) |
|
| 9 |
|
|
| 2 |
|
|
| (75 | ) |
|
| 0 |
|
|
| (64 | ) |
Total |
| $ | 3,846 |
|
| $ | 3,081 |
|
| $ | (27 | ) | (4) | $ | 0 |
|
| $ | 6,900 |
|
| $ | 4,235 |
|
| $ | 3,815 |
|
| $ | (100 | ) | (4) | $ | 0 |
|
| $ | 7,950 |
|
(1) | Unrealized gains and losses on equity securities are included in other income and the nuclear decommissioning trust regulatory liability. |
(2) | Unrealized gains and losses on fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability. Changes in allowance for credit losses are included in other income. |
(3) | Includes pending purchases of securities of |
(4) | The fair value of securities in an unrealized loss position was |
The portion of unrealized gains and losses that relates to equity securities held within Dominion Energy’s nuclear decommissioning trusts is summarized below:
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gains (losses) recognized during the period |
| $ | (15 | ) |
| $ | 308 |
|
| $ | 616 |
|
| $ | 20 |
|
| $ | (206 | ) |
| $ | 279 |
|
Less: Net (gains) losses recognized during the period on securities sold during the period |
|
| (11 | ) |
|
| (15 | ) |
|
| (323 | ) |
|
| (6 | ) |
|
| (1 | ) |
|
| (178 | ) |
Unrealized gains (losses) recognized during the period on securities still held at period end(1) |
| $ | (26 | ) |
| $ | 293 |
|
| $ | 293 |
|
| $ | 14 |
|
| $ | (207 | ) |
| $ | 101 |
|
(1) | Included in other income and the nuclear decommissioning trust regulatory liability. |
The fair value of Dominion Energy’s fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds at September 30, 2021March 31, 2022 by contractual maturity is as follows:
|
| Amount |
|
| Amount |
| ||
(millions) |
|
|
|
|
|
|
|
|
Due in one year or less |
| $ | 351 |
|
| $ | 274 |
|
Due after one year through five years |
|
| 667 |
|
|
| 610 |
|
Due after five years through ten years |
|
| 654 |
|
|
| 596 |
|
Due after ten years |
|
| 851 |
|
|
| 837 |
|
Total |
| $ | 2,523 |
|
| $ | 2,317 |
|
Presented below is selected information regarding Dominion Energy’s equity and fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds.
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sales |
| $ | 614 |
|
| $ | 1,208 |
|
| $ | 3,324 |
|
| $ | 2,868 |
|
| $ | 814 |
|
| $ | 1,765 |
|
Realized gains(1) |
|
| 25 |
|
|
| 48 |
|
|
| 405 |
|
|
| 188 |
|
|
| 40 |
|
|
| 232 |
|
Realized losses(1) |
|
| 7 |
|
|
| 29 |
|
|
| 81 |
|
|
| 159 |
|
|
| 54 |
|
|
| 59 |
|
(1) | Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability. |
Virginia Power
Virginia Power holds equity and fixed income securities and cash equivalents in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Virginia Power’s decommissioning trust funds are summarized below:
|
| Amortized Cost |
|
| Total Unrealized Gains |
|
| Total Unrealized Losses |
|
| Allowance for Credit Losses |
|
| Fair Value |
|
| Amortized Cost |
|
| Total Unrealized Gains |
|
| Total Unrealized Losses |
|
| Allowance for Credit Losses |
|
| Fair Value |
| ||||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Equity securities:(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
| $ | 829 |
|
| $ | 1,497 |
|
| $ | (10 | ) |
|
|
|
|
| $ | 2,316 |
|
| $ | 857 |
|
| $ | 1,619 |
|
| $ | (12 | ) |
|
|
|
|
| $ | 2,464 |
|
Fixed income securities:(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt instruments |
|
| 497 |
|
|
| 21 |
|
|
| (1 | ) |
| $ | 0 |
|
|
| 517 |
|
|
| 535 |
|
|
| 4 |
|
|
| (30 | ) |
| $ | 0 |
|
|
| 509 |
|
Government securities |
|
| 608 |
|
|
| 16 |
|
|
| (2 | ) |
|
| 0 |
|
|
| 622 |
|
|
| 568 |
|
|
| 4 |
|
|
| (19 | ) |
|
| 0 |
|
|
| 553 |
|
Common/collective trust funds |
|
| 54 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 54 |
|
|
| 55 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 55 |
|
Cash equivalents and other(3) |
|
| (2 | ) |
|
| — |
|
|
| — |
|
|
| 0 |
|
|
| (2 | ) |
|
| (4 | ) |
|
| — |
|
|
| — |
|
|
| 0 |
|
|
| (4 | ) |
Total |
| $ | 1,986 |
|
| $ | 1,534 |
|
| $ | (13 | ) | (4) | $ | 0 |
|
| $ | 3,507 |
|
| $ | 2,011 |
|
| $ | 1,627 |
|
| $ | (61 | ) | (4) | $ | 0 |
|
| $ | 3,577 |
|
December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Equity securities:(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
| $ | 929 |
|
| $ | 1,371 |
|
| $ | (21 | ) |
|
|
|
|
| $ | 2,279 |
|
| $ | 841 |
|
| $ | 1,720 |
|
| $ | (11 | ) |
|
|
|
|
| $ | 2,550 |
|
Fixed income securities:(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt instruments |
|
| 315 |
|
|
| 33 |
|
|
| 0 |
|
| $ | 0 |
|
|
| 348 |
|
|
| 517 |
|
|
| 17 |
|
|
| (3 | ) |
| $ | 0 |
|
|
| 531 |
|
Government securities |
|
| 484 |
|
|
| 25 |
|
|
| — |
|
|
| 0 |
|
|
| 509 |
|
|
| 584 |
|
|
| 16 |
|
|
| (2 | ) |
|
| 0 |
|
|
| 598 |
|
Common/collective trust funds |
|
| 58 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 58 |
|
|
| 53 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 53 |
|
Cash equivalents and other(3) |
|
| 3 |
|
|
| — |
|
|
| — |
|
|
| 0 |
|
|
| 3 |
|
|
| 2 |
|
|
| — |
|
|
| — |
|
|
| 0 |
|
|
| 2 |
|
Total |
| $ | 1,789 |
|
| $ | 1,429 |
|
| $ | (21 | ) | (4) | $ | 0 |
|
| $ | 3,197 |
|
| $ | 1,997 |
|
| $ | 1,753 |
|
| $ | (16 | ) | (4) | $ | 0 |
|
| $ | 3,734 |
|
(1) | Unrealized gains and losses on equity securities are included in other income and the nuclear decommissioning trust regulatory liability. |
(2) | Unrealized gains and losses on fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability. Changes in allowance for credit losses are included in other income. |
50
(3) | Includes pending purchases of securities of $2 million at March 31, 2022, and |
(4) | The fair value of securities in an unrealized loss position was |
The portion of unrealized gains and losses that relates to equity securities held within Virginia Power’s nuclear decommissioning trusts is summarized below:
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gains (losses) recognized during the period |
| $ | 6 |
|
| $ | 138 |
|
| $ | 319 |
|
| $ | (16 | ) |
| $ | (102 | ) |
| $ | 143 |
|
Less: Net (gains) losses recognized during the period on securities sold during the period |
|
| (9 | ) |
|
| (6 | ) |
|
| (182 | ) |
|
| (3 | ) |
|
| (4 | ) |
|
| (88 | ) |
Unrealized gains (losses) recognized during the period on securities still held at period end(1) |
| $ | (3 | ) |
| $ | 132 |
|
| $ | 137 |
|
| $ | (19 | ) |
| $ | (106 | ) |
| $ | 55 |
|
(1) | Included in other income and the nuclear decommissioning trust regulatory liability. |
The fair value of Virginia Power’s fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds at September 30, 2021March 31, 2022 by contractual maturity is as follows:
|
| Amount |
|
| Amount |
| ||
(millions) |
|
|
|
|
|
|
|
|
Due in one year or less |
| $ | 83 |
|
| $ | 83 |
|
Due after one year through five years |
|
| 354 |
|
|
| 302 |
|
Due after five years through ten years |
|
| 372 |
|
|
| 358 |
|
Due after ten years |
|
| 384 |
|
|
| 374 |
|
Total |
| $ | 1,193 |
|
| $ | 1,117 |
|
Presented below is selected information regarding Virginia Power’s equity and fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds.
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sales |
| $ | 216 |
|
| $ | 164 |
|
| $ | 1,465 |
|
| $ | 694 |
|
| $ | 392 |
|
| $ | 789 |
|
Realized gains(1) |
|
| 17 |
|
|
| 18 |
|
|
| 213 |
|
|
| 73 |
|
|
| 16 |
|
|
| 106 |
|
Realized losses(1) |
|
| 2 |
|
|
| 10 |
|
|
| 28 |
|
|
| 58 |
|
|
| 19 |
|
|
| 23 |
|
(1) | Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability. |
Equity Method Investments
Dominion Energy recorded equity earnings on its investments of $214 million and less than $1$80 million for both the ninethree months ended September 30,March 31, 2022 and 2021, and 2020, respectively, in earnings from equity method investees in its Consolidated Statements of Income. In addition, Dominion Energy recorded equity losses of $19$2 million and $2.3 billion$8 million for the ninethree months ended September 30,March 31, 2022 and 2021, and 2020, respectively, in discontinued operations related to its investment in Atlantic Coast Pipeline. Dominion Energy received distributions of $263$76 million and $25$73 million for the ninethree months ended September 30,March 31, 2022 and 2021, and 2020, respectively. Dominion Energy made contributions of $74 million and $1.0 billion and $93 million for the ninethree months ended September 30,March 31, 2022 and 2021, and 2020 respectively. At September 30, 2021March 31, 2022 and December 31, 2020,2021, the net difference between the carrying amount of Dominion Energy’s investments and its share of underlying equity in net assets was $231 million and $213$244 million, respectively. At September 30, 2021,March 31, 2022, these differences are primarily comprised of $2711 million of equity method goodwill that is not being amortized and a $222219 million basis difference from Dominion Energy’s investment in Cove Point, which is being amortized over the useful lives of the underlying assets. At December 31, 2021, these differences are comprised of $27 million of equity method goodwill that is not being amortized, a $221 million basis difference from Dominion Energy’s investment in Cove Point, which is being amortized over the useful lives of the underlying assets, and a net $(18) million basis difference primarily attributable to an unfunded commitment made to Align RNG. At December 31, 2020, these differences are comprised of $27 million of equity method goodwill that is
51
not being amortized, a $227 million basis difference from Dominion Energy’s investment in Cove Point, which is being amortized over the useful lives of the underlying assets, and a net $(41)$(4) million basis difference primarily attributable to an unfunded commitment made to Align RNG.
Cove Point
In November 2020, in conjunction with the GT&S Transaction, Dominion Energy sold 100% of its general partner interest and 25% of the total limited partner interest in Cove Point. Dominion Energy retainedholds a 50% noncontrolling limited partnership interest in Cove Point which is accounted for as an equity method investment, as discussed in Note 9 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020.2021.
45
Income before income taxes recorded by Cove Point was $136$151 million and $132$138 million for the three months ended September 30,March 31, 2022 and 2021, and 2020, respectively, and $410 million and $396 million for the nine months ended September 30, 2021 and 2020, respectively. For the periods prior to closing of the GT&S Transaction, earnings attributable to Dominion Energy are presented in discontinued operations and subsequent to the closing, earningsEarnings attributable to Dominion Energy are presented within earnings from equity method investees in its Consolidated Statements of Income.
Dominion Energy recorded distributions from Cove Point of $85$76 million and $235$73 million for the three and nine months ended September 30,March 31, 2022 and 2021, respectively. NaN contributions were made to Cove Point for the three and nine months ended September 30, 2021.
Atlantic Coast Pipeline
A description of Dominion Energy’s investment in Atlantic Coast Pipeline, including events that led to the cancellation of the Atlantic Coast Pipeline Project in July 2020, is included in Note 9 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.2021.
At September 30, 2021March 31, 2022 and December 31, 2020,2021, Dominion Energy has recorded a liability of $112$115 million and $1.1 billion,$113 million, respectively, in other current liabilities in its Consolidated Balance Sheets as a result of its share of equity losses exceeding its investment which reflects Dominion Energy’s obligations on behalf of Atlantic Coast Pipeline related to its credit facility, through February 2021, and AROs.
In February 2021, Atlantic Coast Pipeline repaid the outstanding borrowed amounts and terminated its revolving credit facility. As of December 31, 2020, Atlantic Coast Pipeline had borrowed $1.8 billion against the revolving credit facility. Concurrently, Dominion Energy’s related guarantee agreement to support its portion of Atlantic Coast Pipeline’s borrowings was also terminated. Dominion Energy’s Consolidated Balance Sheets included a liability of $6 million associated with this guarantee agreement at December 31, 2020.
Dominion Energy recorded contributions of $45$965 million during the three months ended September 30, 2020, and $965 million and $74 million during the nine months ended September 30,March 31, 2021 and 2020, respectively, to Atlantic Coast Pipeline. Dominion Energy recorded 0 contributions during the three months ended September 30, 2021March 31, 2022 to Atlantic Coast Pipeline.
Dominion Energy expects to incur additional losses from Atlantic Coast Pipeline as it completes wind-down activities. While Dominion Energy is unable to precisely estimate the amounts to be incurred by Atlantic Coast Pipeline, the portion of such amounts attributable to Dominion Energy is not expected to be material to Dominion Energy’s results of operations, financial position or statement of cash flows.
DETI provided servicesWrangler
In March 2022, Dominion Energy sold its remaining 15% noncontrolling partnership interest in Wrangler to Atlantic Coast Pipeline which totaled $7Interstate Gas Supply, Inc. for cash consideration of $85 million. Dominion Energy recognized a gain of $11 million and $44($8 million after-tax), included in other income, in its Consolidated Statements of Income for the three and nine months ended September 30, 2020, respectively, included in discontinuedMarch 31, 2022.
All activity relating to Wrangler is recorded within the Corporate and Other segment.
Dominion Privatization
In February 2022, Dominion Energy entered into an agreement to form Dominion Privatization, a partnership with Patriot. Dominion Privatization, through its wholly-owned subsidiaries, will maintain and operate electric and gas distribution infrastructure under service concession arrangements with certain U.S. military installations. Under the agreement, Dominion Energy will contribute its existing privatization operations, excluding contracts held by DESC, and Patriot will contribute cash.
The initial contribution, consisting of privatization operations in South Carolina, Texas and Pennsylvania, closed in March 2022 for which Dominion Energy’sEnergy received total consideration of $120 million, subject to customary closing adjustments, comprised of $60 million in cash proceeds and a 50% noncontrolling ownership interest in Dominion Privatization with an initial fair value of $60 million, estimated using the market approach. This is considered a Level 2 fair value measurement given that it is based on the agreed-upon sales price. In connection with the transaction, Dominion Energy recorded a gain of $23 million ($16 million after-tax), presented in other operations and maintenance expense in its Consolidated Statements of Income.
52
Wrangler
A description of Dominion Energy’s 50% noncontrolling ownership interest in Dominion Privatization is accounted for as an equity method investment as Dominion Energy has the ability to exercise significant influence, but not control, over the investee.
Dominion Energy expects to contribute its existing privatization operations in Wrangler is includedVirginia to Dominion Privatization by the end of 2022, contingent on clearance or approval under the Hart-Scott-Rodino Act and other customary closing and regulatory conditions. In April 2022, Dominion Energy filed with the Federal Trade Commission for approval under the Hart-Scott-Rodino Act. The contribution of the service concession arrangements currently held by Virginia Power also requires approval from the Virginia and North Carolina Commissions. Upon closing of the second contribution, Dominion Energy expects to receive cash proceeds totaling $108 million, subject to customary closing adjustments, and to recognize a gain of approximately $130 million ($100 million after-tax). When this future contribution occurs, Dominion Energy expects to maintain a 50% noncontrolling ownership interest in Note 9 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended DecemberDominion Privatization.
At March 31, 2020. At September 30, 2021 and December 31, 2020, $81 million and $632022, $85 million of contracts and related assets and $21 million and $15$4 million of liabilities respectively, associated with the remaining nonregulated retail energy marketingexisting privatization operations expected to be contributed to Wrangler by December 2021 werein Virginia are classified as held for sale and were includedreflected in current assets held for sale and current liabilities held for sale, onrespectively, in Dominion Energy’s Consolidated Balance Sheets. The related disposal group is primarily comprised of customer receivables, goodwill, inventories, derivativeSheets and in other current assets and other current liabilities, and accounts payable. respectively, in Virginia Power’s Consolidated Balance Sheets.
All activity relatedrelating to WranglerDominion Privatization is recorded inreflected within the Corporate and Other segment.
Fowler Ridge
In September 2020, Dominion Energy sold its 50% noncontrolling partnership interest in Fowler Ridge to BP and terminated an affiliate’s long-term power, capacity and renewable energy credit contract with Fowler Ridge for a net payment by Dominion Energy of $150 million. Dominion Energy recognized a loss of $221 million ($165 million after-tax) on the contract termination, included in impairment of assets and other charges in its Consolidated Statements of Income for the three and nine months ended September 30, 2020.
The $150 million payment was allocated between the contract termination and sale based on the relative fair value of each using an income approach. The fair value determinations for the payment allocations are considered Level 3 fair value measurements due to the use of significant judgmental and unobservable inputs, including the amount of future cash flows and discount rate reflecting risks inherent in the future cash flows and market prices.
Note 11. Property, Plant and Equipment
Acquisitions of Nonregulated Solar Projects
Other than the items discussed below, there have been no significant updates to acquisitions of solar projects by the Companies from those discussed in Note 10 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020.2021.
The following table presents acquisitions by Virginia Power of non-jurisdictional solar projects. Virginia Power has claimed or expects to claim federal investment tax credits on the projects.
Project Name |
| Date Agreement Entered |
| Date Agreement Closed |
| Project Location |
| Project Cost (millions)(1) |
|
| Date of Commercial Operations |
| MW Capacity |
| ||
Bookers Mill |
| February 2021 |
| June 2021 |
| Virginia |
| $ | 200 |
|
| Expected 2023 |
|
| 127 |
|
Belcher |
| June 2019 |
| August 2019 |
| Virginia |
|
| 164 |
|
| June 2021 |
|
| 88 |
|
|
|
The following table presents acquisitions by Dominion Energy of solar projects. Dominion Energy has claimed or expects to claim federal investment tax credits on the projects.
Project Name |
| Date Agreement Entered |
| Date Agreement Closed |
| Project Location |
| Project Cost (millions)(1) |
|
| Date of Commercial Operations |
| MW Capacity |
| ||
Trask |
| May 2020 |
| October 2020 |
| South Carolina |
| $ | 22 |
|
| March 2021 |
|
| 12 |
|
Hardin II |
| August 2020 |
| Expected 2021 |
| Ohio |
|
| 295 |
|
| Expected 2022 |
|
| 150 |
|
Project Name |
| Date Agreement Entered |
| Date Agreement Closed |
| Project Location |
| Project Cost (millions)(1) |
|
| Date of Commercial Operations |
| MW Capacity |
| ||
Pumpkinseed |
| May 2020 |
| May 2020 |
| Virginia |
| $ | 140 |
|
| Expected 2022 |
|
| 60 |
|
Bookers Mill |
| February 2021 |
| June 2021 |
| Virginia |
|
| 230 |
|
| Expected 2023 |
|
| 127 |
|
(1) | Includes acquisition cost. |
InThe following table presents acquisitions by Dominion Energy of solar projects in addition to the facilities discussed above,Virginia Power projects presented above. Dominion Energy has also entered into various agreements to install solar facilities, primarily at schools in Virginia, with in-service dates through 2022. As of September 30, 2021, Dominion Energy anticipates a total projected cost of approximately $65 million under these agreements with an associated aggregate generation capacity of 32 MW. Dominion Energy has claimed or expects to claim federal investment tax credits on the projects.
Non-Wholly-Owned Nonregulated Solar Facilities
Sale to Terra Nova Renewable Partners
Project Name Date Agreement Entered Date Agreement Closed Project Location Project Cost (millions)(1) Date of Commercial Operations MW Capacity Madison July 2020 July 2020 Virginia $ 130 Expected 2023 62 Atlanta Farms March 2022 Expected 2022 Ohio 390 Expected 2023 200 Hardin II August 2020 Expected 2022 Ohio 295 Expected split(2) 150 (1) Includes acquisition cost. (2) Expected to be split between 2022 and 2023. Note 12. Regulatory Assets and Liabilities Regulatory assets and liabilities include the following: September 30, 2021 December 31, 2020 March 31, 2022 December 31, 2021 (millions) Dominion Energy Regulatory assets: Deferred cost of fuel used in electric generation(1) $ 147 $ — $ 240 $ 251 Deferred project costs and DSM programs for gas utilities(2) 37 35 45 53 Unrecovered gas costs(3) 161 78 82 191 Deferred rider costs for Virginia electric utility(4) 49 98 83 72 Deferred nuclear refueling outage costs(5) 70 53 NND Project costs(6) 138 138 PJM transmission rates(7) 9 71 Ash pond and landfill closure costs(5) 150 193 Deferred nuclear refueling outage costs(6) 76 79 NND Project costs(7) 138 138 Deferred early plant retirement charges(8) 226 — 226 226 Derivatives(9) 161 33 264 112 Other 195 193 173 177 Regulatory assets-current 1,193 699 1,477 1,492 Pension and other postretirement benefit costs(10) 1,274 1,363 Unrecognized pension and other postretirement benefit costs(10) 577 548 Deferred rider costs for Virginia electric utility(4) 442 311 498 489 Deferred project costs for gas utilities(2) 668 632 696 675 Interest rate hedges(11) 838 1,042 612 899 AROs and related funding(12) 332 331 359 329 Cost of reacquired debt(13) 11 245 NND Project costs(6) 2,261 2,364 Ash pond and landfill closure costs(14) 2,361 2,301 NND Project costs(7) 2,191 2,226 Ash pond and landfill closure costs(5) 2,226 2,223 Deferred cost of fuel used in electric generation(1) 139 — 717 409 Deferred early plant retirement charges(8) 282 — 169 226 Other 605 544 613 619 Regulatory assets-noncurrent 9,213 9,133 8,658 8,643 Total regulatory assets $ 10,406 $ 9,832 $ 10,135 $ 10,135 Regulatory liabilities: Deferred cost of fuel used in electric generation(1) $ 1 $ 58 Provision for future cost of removal and AROs(15) 183 183 Reserve for refunds to electric utility customers(16) 422 128 Reserve for future credits to Virginia electric customers(17) — 120 Cost-of-service impact of 2017 Tax Reform Act(18) — 12 Income taxes refundable through future rates(19) 140 124 Monetization of guarantee settlement(20) 67 67 Commodity derivatives(21) 106 9 Provision for future cost of removal and AROs(13) 181 181 Reserve for refunds and rate credits to electric utility customers(14) 243 420 Income taxes refundable through future rates(15) 150 153 Monetization of guarantee settlement(16) 67 67 Derivatives(9) 103 69 Other 140 108 86 96 Regulatory liabilities-current 1,059 809 830 986 Income taxes refundable through future rates(19) 4,274 4,376 Provision for future cost of removal and AROs(15) 2,321 2,150 Nuclear decommissioning trust(22) 1,958 1,719 Monetization of guarantee settlement(20) 848 903 Reserve for refunds to electric utility customers(16) 480 540 Overrecovered other postretirement benefit costs(23) 97 111 Income taxes refundable through future rates(15) 4,164 4,260 Provision for future cost of removal and AROs(13) 2,346 2,331 Nuclear decommissioning trust(17) 2,016 2,158 Monetization of guarantee settlement(16) 753 831 Reserve for refunds and rate credits to electric utility customers(14) 413 448 Unrecognized pension and other postretirement benefit costs(10) 188 200 Overrecovered other postretirement benefit costs(18) 114 105 Other 368 388 442 380 Regulatory liabilities-noncurrent 10,346 10,187 10,436 10,713 Total regulatory liabilities $ 11,405 $ 10,996 $ 11,266 $ 11,699 (1) Reflects deferred fuel expenses for the Virginia, North Carolina and South Carolina jurisdictions of Dominion Energy’s electric generation operations. Reflects a $66 million reduction recorded in the first quarter of 2022 from the application of a portion of the monetization of guarantee settlement previously reflected as regulatory liabilities associated with the approval of DESC’s cost of fuel proceedings. See Note 13 for additional information. (2) Primarily reflects amounts expected to be collected from or owed to gas customers in Dominion Energy’s service territories associated with current and prospective rider projects, including CEP, PIR and pipeline integrity management. See Note 13 for (3) Reflects unrecovered gas costs at regulated gas operations, which are recovered through filings with the applicable regulatory authority. (4) 48 Reflects deferrals under Virginia Power’s electric transmission FERC formula rate and the deferral of costs associated with certain current and prospective rider projects. See Note 13 for (5) Primarily reflects legislation enacted in Virginia in 2019, which requires any CCR asset located at certain Virginia Power stations to be closed by removing the CCR to an approved landfill or through beneficial reuse. These deferred costs are expected to be collected over a period between 15 and 18 years commencing December 2021 through Rider CCR. Virginia Power is entitled to collect carrying costs on uncollected expenditures once expenditures have been made. See Note 13 for additional information. (6) Legislation enacted in Virginia in April 2014 requires Virginia Power to defer operation and maintenance costs incurred in connection with the refueling of any nuclear-powered generating plant. These deferred costs will be amortized over the refueling cycle, not to exceed 18 months. Reflects expenditures by DESC associated with the NND Project, which pursuant to the SCANA Merger Approval Order, will be recovered from DESC electric service customers over a 20-year period ending in 2039. See Note 3 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, (8) Reflects amounts from the early retirements of certain coal- and oil-fired generating units to be amortized through 2023 in accordance with the (9) For jurisdictions subject to cost-based rate regulation, changes in the fair value of derivative instruments result in the recognition of regulatory assets or regulatory liabilities as they are expected to be recovered from or refunded to customers. (10) Represents unrecognized pension and other postretirement employee benefit costs expected to be recovered or refunded through future rates generally over the expected remaining service period of plan participants by certain of Dominion Energy's rate-regulated subsidiaries. (11) Reflects interest rate hedges recoverable from or refundable to customers. Certain of these instruments are settled and any related payments are being amortized into interest expense over the life of the related debt, which has a weighted-average useful life of approximately 27 years as of (12) Represents deferred depreciation and accretion expense related to legal obligations associated with the future retirement of generation, transmission and distribution properties. The AROs primarily relate to DESC’s electric generating facilities, including Summer, and are expected to be recovered over the related property lives and periods of decommissioning which may range up to approximately 105 years. (13) Rates charged to customers by Dominion Energy’s regulated businesses include a provision for the cost of future activities to remove assets that are expected to be incurred at the time of retirement. Reflects amounts previously collected from retail electric customers of DESC for the NND Project to be credited over an estimated 11-year period effective February 2019, in connection with the SCANA Merger Approval Order. See Notes 3 and 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, Amounts recorded to pass the effect of reduced income taxes from the 2017 Tax Reform Act to customers in future periods, which will primarily reverse at the weighted average tax rate that was used to build the reserves over the remaining book life of the property, net of amounts to be recovered through future rates to pay income taxes that become payable when rate revenue is provided to recover AFUDC equity. Reflects amounts to be refunded to DESC electric service customers over a 20-year period ending in 2039 associated with the monetization of a bankruptcy settlement agreement. See Note 3 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, Primarily reflects a regulatory liability representing amounts collected from Virginia jurisdictional customers and placed in external trusts (including income, losses and changes in fair value thereon, as applicable) for the future decommissioning of Dominion Energy’s utility nuclear generation stations, in excess of the related AROs. Reflects a regulatory liability for the collection of postretirement benefit costs allowed in rates in excess of expense incurred. September 30, 2021 December 31, 2020 March 31, 2022 December 31, 2021 (millions) Virginia Power Regulatory assets: Deferred cost of fuel used in electric generation(1) $ 147 $ — $ 119 $ 131 Deferred rider costs(2) 49 98 83 72 Deferred nuclear refueling outage costs(3) 70 53 PJM transmission rates(4) 9 71 Ash pond and landfill closure costs(3) 150 193 Deferred nuclear refueling outage costs(4) 76 79 Deferred early plant retirement charges(5) 226 — 226 226 Derivatives(6) 153 40 257 105 Other 36 33 41 44 Regulatory assets-current 690 295 952 850 Deferred rider costs(2) 442 311 498 489 Interest rate hedges(7) 540 733 326 604 Ash pond and landfill closure costs(8) 2,361 2,301 Ash pond and landfill closure costs(3) 2,226 2,223 Deferred cost of fuel used in electric generation(1) 139 — 717 409 Deferred early plant retirement charges(5) 282 — 169 226 Other 177 164 205 179 Regulatory assets-noncurrent 3,941 3,509 4,141 4,130 Total regulatory assets $ 4,631 $ 3,804 $ 5,093 $ 4,980 Regulatory liabilities: Deferred cost of fuel used in electric generation(1) $ 1 $ 58 Provision for future cost of removal(9) 152 152 Reserve for refunds to Virginia electric customers(10) 299 — Reserve for future credits to Virginia electric customers(11) — 120 Income taxes refundable through future rates(12) 54 54 Provision for future cost of removal(8) 154 154 Reserve for refunds to Virginia electric customers(9) 132 306 Income taxes refundable through future rates(10) 63 63 Derivatives(6) 92 8 61 51 Other 87 33 50 73 Regulatory liabilities-current 685 425 460 647 Income taxes refundable through future rates(12) 2,356 2,404 Nuclear decommissioning trust(13) 1,958 1,719 Provision for future cost of removal(9) 1,042 980 Deferred cost of fuel used in electric generation(1) — 54 Reserve for refunds to Virginia electric customers(10) 31 — Income taxes refundable through future rates(10) 2,305 2,335 Nuclear decommissioning trust(11) 2,016 2,158 Provision for future cost of removal(8) 1,055 1,043 Reserve for refunds to Virginia electric customers(9) 19 25 Other 173 181 208 179 Regulatory liabilities-noncurrent 5,560 5,338 5,603 5,740 Total regulatory liabilities $ 6,245 $ 5,763 $ 6,063 $ 6,387 (1) Reflects deferred fuel expenses for the Virginia and North Carolina jurisdictions of Virginia Power’s generation operations. (2) Reflects deferrals under Virginia Power’s electric transmission FERC formula rate and the deferral of costs associated with certain current and prospective rider projects. See Note 13 for (3) Primarily reflects legislation enacted in Virginia in 2019, which requires any CCR asset located at certain Virginia Power stations to be closed by removing the CCR to an approved landfill or through beneficial reuse. These deferred costs are expected to be collected over a period between 15 and 18 years commencing December 2021 through Rider CCR. Virginia Power is entitled to collect carrying costs on uncollected expenditures once expenditures have been made. See Note 13 for additional information. (4) Legislation enacted in Virginia in April 2014 requires Virginia Power to defer operation and maintenance costs incurred in connection with the refueling of any nuclear-powered generating plant. These deferred costs will be amortized over the refueling cycle, not to exceed 18 months. (5) Reflects amounts from the early retirements of certain coal- and oil-fired generating units to be amortized through 2023 in accordance with the (6) For jurisdictions subject to cost-based rate regulation, changes in the fair value of derivative instruments result in the recognition of regulatory assets or regulatory liabilities as they are expected to be recovered from or refunded to customers. (7) Reflects interest rate hedges recoverable from or refundable to customers. Certain of these instruments are settled and any related payments are being amortized into interest expense over the life of the related debt, which has a weighted-average useful life of approximately 25 years as of (8) Rates charged to customers by Virginia Power's regulated businesses include a provision for the cost of future activities to remove assets that are expected to be incurred at the time of retirement. Reflects amounts to be refunded to jurisdictional retail electric customers in Virginia associated with the Amounts recorded to pass the effect of reduced income taxes from the 2017 Tax Reform Act to customers in future periods, which will reverse at the weighted average tax rate that was used to build the reserves over the remaining book life of the property, net of amounts to be recovered through future rates to pay income taxes that become payable when rate revenue is provided to recover AFUDC equity. Primarily reflects a regulatory liability representing amounts collected from Virginia jurisdictional customers and placed in external trusts (including income, losses and changes in fair value thereon) for the future decommissioning of Virginia Power’s utility nuclear generation stations, in excess of the related AROs. At Note 13. Regulatory Matters Regulatory Matters Involving Potential Loss Contingencies As a result of issues generated in the ordinary course of business, the Companies are involved in various regulatory matters. Certain regulatory matters may ultimately result in a loss; however, as such matters are in an initial procedural phase, involve uncertainty as to the outcome of pending reviews or orders, and/or involve significant factual issues that need to be resolved, it is not possible for the Companies to estimate a range of possible loss. For regulatory matters that the Companies cannot estimate, a statement to this effect is made in the description of the matter. Other matters may have progressed sufficiently through the regulatory process such that the Companies are able to estimate a range of possible loss. For regulatory matters that the Companies are able to reasonably estimate a range of possible losses, an estimated range of possible loss is provided, in excess of the accrued liability (if any) for such matters. Any estimated range is based on currently available information, involves elements of judgment and significant uncertainties and may not represent the Companies’ maximum possible loss exposure. The circumstances of such regulatory matters will change from time to time and actual results may vary significantly from the current estimate. For current matters not specifically reported below, management does not anticipate that the outcome from such matters would have a material effect on the Companies’ financial position, liquidity or results of operations. Other Regulatory Matters Other than the following matters, there have been no significant developments regarding the pending regulatory matters disclosed in Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021. Virginia Regulation Virginia Fuel Expenses In May Renewable Generation Projects In September 2021, Virginia Power filed a petition with the Virginia Commission for CPCNs to construct and operate 13 utility-scale projects totaling approximately 661 MW of solar generation and 70 MW of energy storage as part of its efforts to meet the renewable generation development requirements under the VCEA. The projects are expected to cost approximately $1.4 billion in the aggregate, excluding financing costs, and be placed into service between 2022 and 2023. In Riders Rider Name Application Date Approval Date Rate Year Beginning Total Revenue Requirement (millions) Increase (Decrease) Over Previous Year (millions) Rider CCR February 2022 Pending December 2022 $ 231 $ 15 Rider CE(1) September 2021 March 2022 May 2022 71 61 Rider R June 2021 March 2022 April 2022 59 1 Rider R June 2021 March 2022 April 2023 55 (4 ) Rider RGGI(2) December 2021 Withdrawn Rider SNA(3) October 2021 Pending September 2022 107 N/A Rider T1(4) May 2022 Pending September 2022 706 (161 ) Rider U(5) June 2021 March 2022 April 2022 95 15 Rider US-3 August 2021 March 2022 June 2022 50 12 Rider US-4 August 2021 March 2022 June 2022 15 5 In January 2022, Virginia Power filed a motion to withdraw its application as a result of the announcement by the Governor of Virginia that he intends to withdraw Virginia from RGGI. The Virginia Commission (5) Consists of $60 million for previously approved phases and $35 million for phase six costs for Rider U. Rider Name Application Date Approval Date Rate Year Beginning Total Revenue Requirement (millions) Increase (Decrease) Over Previous Year (millions) Rider B June 2020 February 2021 April 2021 $ 24 $ (8 ) Rider GV June 2020 February 2021 April 2021 153 21 Rider R June 2020 February 2021 April 2021 58 14 Rider S June 2020 February 2021 April 2021 194 (1 ) Rider W June 2020 February 2021 April 2021 120 14 Rider US-3 July 2020 March 2021 June 2021 38 10 Rider US-4 July 2020 March 2021 June 2021 10 3 Rider BW October 2020 July 2021 September 2021 113 14 Rider US-2 October 2020 July 2021 September 2021 9 — Rider E January 2021 September 2021 November 2021 67 (18 ) Rider B June 2021 Pending April 2022 16 (8 ) Rider W June 2021 Pending April 2022 121 1 Rider US-3 August 2021 Pending June 2022 50 12 Rider US-4 August 2021 Pending June 2022 15 5 Rider US-2 October 2021 Pending September 2022 11 2 Description and Location of Project Application Date Approval Date Type of Line Miles of Lines Cost Estimate (millions) Rebuild Clubhouse-Dry Bread Line and Dry Bread-Lakeview Line in Greensville County, Virginia November 2020 July 2021 230 kV 13 $ 25 Elmont-Ladysmith rebuild and related projects in the Counties of Hanover and Caroline, Virginia April 2021 Pending 500 kV 26 95 Beaumeade-Belmont reconductor and rebuild projects in the County of Loudoun, Virginia May 2021 Pending 230 kV 7 15 Extension to Cloud Switching Station and Easters Switching Station in the County of Mecklenburg, Virginia June 2021 Pending 230 kV 15 105 filed a petition with the Virginia Commission requesting a suspension of Rider RGGI approved in August 2021. Virginia Power Description and Location of Project Application Date Approval Date Type of Line Miles of Lines Cost Estimate (millions) Elmont-Ladysmith rebuild and related projects in the Counties of Hanover and Caroline, Virginia April 2021 April 2022 500 kV 26 $ 95 Nimbus line loop and substation and new 230 kV line in the County of Loudon, Virginia February 2022 Pending 230 kV 1 40 South Carolina Regulation DSM Programs DESC has approval for a DSM rider through which it recovers expenditures related to its DSM programs. In January Cost of Fuel DESC’s retail electric rates include a cost of fuel component approved by the South Carolina Commission which may be adjusted periodically to reflect changes in the price of fuel purchased by DESC. In 52 Ohio Regulation PIR Program In 2008, East Ohio began PIR, aimed at replacing approximately 25% of its pipeline system. In April In February 2022, East Ohio filed an application with the Ohio Commission requesting approval to adjust the PIR cost recovery rates for CEP Program In 2011, East Ohio began CEP which enables East Ohio to defer depreciation expense, property tax expense and carrying costs associated with CEP investments. In April In February 2022, the Ohio Commission approved adjustments to In April 2022, East Ohio filed an application with the Ohio Commission requesting approval to adjust CEP cost recovery rates for 2021 costs. The filing reflects gross plant investment for In Note 14. Leases Other than the items discussed below, there have been no significant changes regarding the Companies’ leases as described in Note 15 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, Dominion Energy’s Consolidated Statements of Income include Corporate Office Leasing Arrangement In December 2019, Dominion Energy signed an agreement with a lessor, as amended in May 2020, to construct and lease a new corporate office property in Richmond, Virginia. The lessor provided equity and had obtained financing commitments from debt investors, totaling $465 million, to fund the estimated project costs. In March 2021, Dominion Energy notified the lessor of its intention to terminate the leasing arrangement effective April 2021. As a result, Dominion Energy recorded a charge of $71 million ($53 million after-tax) in the first quarter of 2021, included in impairments of assets and other charges in its Consolidated Statements of Income, primarily for amounts required to be repaid to the lessor. Note 15. Variable Interest Entities There have been no significant changes regarding the entities the Companies consider VIEs as described in Note 16 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, Virginia Power Virginia Power purchased shared services from DES, an affiliated VIE, of Note 16. Significant Financing Transactions Credit Facilities and Short-term Debt The Companies use short-term debt to fund working capital requirements and as a bridge to long-term debt financings. The levels of borrowing may vary significantly during the course of the year, depending upon the timing and amount of cash requirements not satisfied by cash from operations. In addition, Dominion Energy utilizes cash and letters of credit to fund collateral requirements. Collateral requirements are impacted by commodity prices, hedging levels, Dominion Energy’s credit ratings and the credit quality of its counterparties.Other than the items discussed below, there have been no significant changes regarding the Companies’ credit facilities and short-term debt as described in Note 17 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021. Dominion Energy At Facility Limit Outstanding Commercial Paper Outstanding Letters of Credit Facility Capacity Available Facility Limit Outstanding Commercial Paper Outstanding Letters of Credit Facility Capacity Available (millions) Joint revolving credit facility(1) $ 6,000 $ 3,494 $ 99 $ 2,407 $ 6,000 $ 2,075 $ 112 $ 3,813 (1) This credit facility matures in June 2026, with the potential to be extended by the borrowers to June 2028, and can be used by the borrowers under the credit facility to support bank borrowings and the issuance of commercial paper, as well as to support up to a combined $2.0 billion of letters of credit. DESC and Questar Gas’ short-term financings are supported through access as co-borrowers to the joint revolving credit facility discussed above with the Companies. At In addition to the credit Dominion Energy has an effective shelf registration statement with the SEC for the sale of up to $3.0 billion of variable denomination floating rate demand notes, called Dominion Energy Reliability InvestmentSM as disclosed in Note 17 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, Virginia Power Virginia Power’s short-term financing is supported through its access as co-borrower to Dominion Energy’s $6.0 billion joint revolving credit At Facility Limit(1) Outstanding Commercial Paper Outstanding Letters of Credit Facility Limit(1) Outstanding Commercial Paper Outstanding Letters of Credit (millions) Joint revolving credit facility(1) $ 6,000 $ 896 $ 12 $ 6,000 $ 686 $ 38 (1) The full amount of the facility is available to Virginia Power, less any amounts outstanding to co-borrowers Dominion Energy, Questar Gas and DESC. The sub-limit for Virginia Power is set pursuant to the terms of the facility but can be changed at the option of the borrowers multiple times per year. At Long-term Debt Unless otherwise noted, the proceeds of long-term debt issuances were used for general corporate purposes and/or to repay short-term debt. In In April In May 2022, Dominion Energy Preferred Stock Dominion Energy is authorized to issue up to 20 million shares of preferred stock, which may be designated into separate classes. At both Dominion Energy recorded dividends of $7 million ($4.375 per share) for both the three months ended 2019 Corporate Units The 2019 Equity Units, initially issued in the form of 2019 Series A Corporate Units, are described in Note 19 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021. Pursuant to the terms of the 2019 Equity Units, Dominion Energy will conduct a final remarketing for shares of Series A Preferred Stock in May 2022. In The stock purchase contract liability associated with Dominion Energy’s 2019 Equity Units was $22 million and $44 million at March 31, 2022 and December 31, 2021, respectively. Stock purchase contract payments of $22 million and $21 million were made during the three months ended March 31, 2022 and 2021, respectively. Issuance of Common Stock Dominion Energy recorded, net of fees and commissions, In At-the-Market Program In August 2020, Dominion Energy entered into sales agency agreements to effect sales under an at-the-market program as discussed in Note 20 to the Consolidated Financial Statements in the Companies’ Annual Report Form 10-K for the year ended December 31, Repurchase of Common Stock In November 2020, the Board of Directors authorized the repurchase of up to $1.0 billion of Dominion Energy’s common stock in addition to the $3.0 billion repurchase program authorized in July 2020 and completed in December 2020 as discussed in Note 20 to the Consolidated Financial Statements in the Companies’ Annual Report Form 10-K for the year ended December 31, 2020. Dominion Energy did 0t repurchase any shares of common stock during the Note 17. Commitments and Contingencies As a result of issues generated in the ordinary course of business, the Companies are involved in legal proceedings before various courts and are periodically subject to governmental examinations (including by regulatory authorities), inquiries and investigations. Certain legal proceedings and governmental examinations involve demands for unspecified amounts of damages, are in an initial procedural phase, involve uncertainty as to the outcome of pending appeals or motions, or involve significant factual issues that need to be resolved, such that it is not possible for the Companies to estimate a range of possible loss. For such matters that the Companies 56 cannot estimate, a statement to this effect is made in the description of the matter. Other matters may have progressed sufficiently through the litigation or investigative processes such that the Companies are able to estimate a range of possible loss. For legal proceedings and governmental examinations that the Companies are able to reasonably estimate a range of possible losses, an estimated range of possible loss is provided, in excess of the accrued liability (if any) for such matters. The Companies maintain various insurance programs, including general liability insurance coverage which provides coverage for personal injury or wrongful death cases. Any accrued liability is recorded on a gross basis with a receivable also recorded for any probable insurance recoveries. Estimated ranges of loss are inclusive of legal fees and net of any anticipated insurance recoveries. Any estimated range is based on currently available information and involves elements of judgment and significant uncertainties. Any estimated range of possible loss may not represent the Companies’ maximum possible loss exposure. The circumstances of such legal proceedings and governmental examinations will change from time to time and actual results may vary significantly from the current estimate. For current proceedings not specifically reported below, management does not anticipate that the liabilities, if any, arising from such proceedings would have a material effect on the Companies’ financial position, liquidity or results of operations. Environmental Matters The Companies are subject to costs resulting from a number of federal, state and local laws and regulations designed to protect human health and the environment. These laws and regulations affect future planning and existing operations. They can result in increased capital, operating and other costs as a result of compliance, remediation, containment and monitoring obligations. Air The CAA, as amended, is a comprehensive program utilizing a broad range of regulatory tools to protect and preserve the Ozone Standards The EPA published final non-attainment designations for the October 2015 ozone standard in June 2018 with states required to develop plans to address the new standard. ACE Rule In July 2019, the EPA published the final rule informally referred to as the ACE Rule, as a replacement for the Clean Power Plan. The ACE Rule regulated GHG emissions from existing coal-fired power plants pursuant to Section 111(d) of the CAA and required states to develop plans by July 2022 establishing unit-specific performance standards for existing coal-fired power plants. In January 2021, the U.S. Court of Appeals for the D.C. Circuit vacated the ACE Rule and remanded it to the EPA. This decision would take effect upon issuance of the court’s mandate. In March 2021, the court issued a partial mandate vacating and remanding all parts of the ACE Rule except for the portion of the ACE Rule that repealed the Clean Power Plan. In October 2021, the U.S. Supreme Court agreed to hear a challenge of the U.S. Court of Appeals for the D.C. Circuit’s decision on the ACE Rule. While the EPA has stated its intention to replace the ACE Rule, it is unknown at this time if or how the EPA will issue a replacement for the ACE Rule and how that replacement will affect the Companies’ operations, financial condition and/or cash flows. Carbon Regulations In August 2016, the EPA issued a draft rule proposing to reaffirm that a source’s obligation to obtain a PSD or Title V permit for GHGs is triggered only if such permitting requirements are first triggered by non-GHG, or conventional, pollutants that are regulated by the New Source Review program, and exceed a significant emissions rate of 75,000 tons per year of CO2 equivalent emissions. Until the EPA ultimately takes final action on this rulemaking, the Companies cannot predict the impact to their results of operations, financial condition and/or cash flows. In December 2018, the EPA proposed revised Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources. The proposed rule would amend the previous determination that the best system of emission reduction for newly constructed coal-fired steam generating units is no longer partial carbon capture and storage. Instead, the proposed revised best system of emission reduction for this source category is the most efficient demonstrated steam cycle (e.g., supercritical 57 steam conditions for large units and subcritical steam conditions for small units) in combination with best operating practices. In January 2021, the EPA published a final rule affirming that fossil fuel-fired electric generating units meet the requirement that a source category “significantly contribute” to endangering air pollution for the purposes of regulating GHG emissions from new, modified and reconstructed stationary sources. The January 2021 rule also established a threshold for the “significant contribution” threshold that would have meant that no other source category, such as oil and gas facilities, petroleum refineries, and boilers, would meet that requirement at this time. In April 2021, the U.S. Court of Appeals for the D.C. Circuit granted an unopposed motion by the EPA to vacate and remand the January 2021 rule. The proposed revision to the performance standards for coal-fired steam generating units remains pending. Until the EPA ultimately takes final action on this rulemaking, the Companies cannot predict the impact to their results of operations, financial condition and/or cash flows. Water The CWA, as amended, is a comprehensive program requiring a broad range of regulatory tools including a permit program to authorize and regulate discharges to surface waters with strong enforcement mechanisms. The Companies must comply with applicable aspects of the CWA programs at their operating facilities. Regulation 316(b) In October 2014, the final regulations under Section 316(b) of the CWA that govern existing facilities and new units at existing facilities that employ a cooling water intake structure and that have flow levels exceeding a minimum threshold became effective. The rule establishes a national standard for impingement based on seven compliance options, but forgoes the creation of a single technology standard for entrainment. Instead, the EPA has delegated entrainment technology decisions to state regulators. State regulators are to make case-by-case entrainment technology determinations after an examination of 5 mandatory facility-specific factors, including a social cost-benefit test, and 6 optional facility-specific factors. The rule governs all electric generating stations with water withdrawals above two MGD, with a heightened entrainment analysis for those facilities over 125 MGD. Dominion Energy and Virginia Power currently have 15 and 9 facilities, respectively, that are subject to the final regulations. Dominion Energy is also working with the EPA and state regulatory agencies to assess the applicability of Section 316(b) to 8 hydroelectric facilities, including 3 Virginia Power facilities. The Companies anticipate that they may have to install impingement control technologies at certain of these stations that have once-through cooling systems. The Companies are currently evaluating the need or potential for entrainment controls under the final rule as these decisions will be made on a case-by-case basis after a thorough review of detailed biological, Effluent Limitations Guidelines In September 2015, the EPA released a final rule to revise the Effluent Limitations Guidelines for the Steam Electric Power Generating Category. The final rule established updated standards for wastewater discharges that apply primarily at coal and oil steam generating stations. Affected facilities are required to convert from wet to dry or closed cycle coal ash management, improve existing wastewater treatment systems and/or install new wastewater treatment technologies in order to meet the new discharge limits. In April 2017, the EPA granted 2 separate petitions for reconsideration of the Effluent Limitations Guidelines final rule and stayed future compliance dates in the rule. Also in April 2017, the U.S. Court of Appeals for the Fifth Circuit granted the EPA’s request for a stay of the pending consolidated litigation challenging the rule while the EPA addresses the petitions for reconsideration. In September 2017, the EPA signed a rule to postpone the earliest compliance dates for certain waste streams regulations in the Effluent Limitations Guidelines final rule from November 2018 to November 2020; however, the latest date for compliance for these regulations was December 2023. In October 2020, the EPA released the final rule that extends the latest dates for compliance. Individual facilities’ compliance dates will vary based on circumstances and the determination by state regulators and may range from 2021 to 2028. While the impacts of this rule could be material to the Companies’ results of operations, financial condition and/or cash flows, the existing regulatory frameworks in South Carolina and Virginia provide rate recovery mechanisms that could substantially mitigate any such impacts for the regulated electric utilities. Waste Management and Remediation The operations of the Companies are subject to a variety of state and federal laws and regulations governing the management and disposal of solid and hazardous waste, and release of hazardous substances associated with current and/or historical operations. The CERCLA, as amended, and similar state laws, may impose joint, several and strict liability for cleanup on potentially responsible parties who owned, operated or arranged for disposal at facilities affected by a release of hazardous substances. In addition, many 58 states have created programs to incentivize voluntary remediation of sites where historical releases of hazardous substances are identified and property owners or responsible parties decide to initiate cleanups. From time to time, the Companies may be identified as a potentially responsible party in connection with the alleged release of hazardous substances or wastes at a site. Under applicable federal and state laws, the Companies could be responsible for costs associated with the investigation or remediation of impacted sites, or subject to contribution claims by other responsible parties for their costs incurred at such sites. The Companies also may identify, evaluate and remediate other potentially impacted sites under voluntary state programs. Remediation costs may be subject to reimbursement under the Companies’ insurance policies, rate recovery mechanisms, or both. Except as described below, the Companies do not believe these matters will have a material effect on results of operations, financial condition and/or cash flows. Dominion Energy has determined that it is associated with former manufactured gas plant sites, including certain sites associated with Virginia Power. At state or federal environmental agency nor the subject of any current or proposed plans to perform remediation activities. Due to the uncertainty surrounding such sites, the Companies are unable to make an estimate of the potential financial statement impacts. Other Legal Matters The Companies are defendants in a number of lawsuits and claims involving unrelated incidents of property damage and personal injury. Due to the uncertainty surrounding these matters, the Companies are unable to make an estimate of the potential financial statement impacts; however, they could have a material impact on results of operations, financial condition and/or cash flows. SCANA Legal Proceedings The following describes certain legal proceedings involving Dominion Energy, SCANA or DESC relating primarily to events occurring before closing of the SCANA Combination. In addition, certain legal matters which have been resolved are discussed in Note 23 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021. No reference to, or disclosure of, any proceeding, item or matter described below shall be construed as an admission or indication that such proceeding, item or matter is material. For certain of these matters, and unless otherwise noted therein, Dominion Energy is unable to estimate a reasonable range of possible loss and the related financial statement impacts, but for any such matter there could be a material impact to its results of operations, financial condition and/or cash flows. For the matters for which Dominion Energy is able to reasonably estimate a probable loss, Dominion Energy’s Consolidated Balance Sheets at SCANA Shareholder Litigation In September 2017, a shareholder derivative action was filed against certain former executive officers and directors of SCANA in the State Court of Common Pleas in Richland County, South Carolina (the State Court Derivative Case). In September 2018, this action was consolidated with another action in the Business Court Pilot Program in Richland County. The plaintiffs allege, among other things, that the defendants breached their fiduciary duties to shareholders by their gross mismanagement of the NND Project, and that the defendants were unjustly enriched by bonuses they were paid in connection with the project. In January 2019, the defendants filed a motion to dismiss the consolidated action. In February 2019, one action was voluntarily dismissed. In March 2020, the court denied the defendants’ motion to dismiss. In April 2020, the defendants filed a notice of appeal with the South Carolina Court of Appeals and a petition with the Supreme Court of South Carolina seeking appellate review of the denial of the motion to dismiss. In June 2020, the plaintiffs filed a motion to dismiss the appeal with the South Carolina Court of Appeals, which was granted in July 2020. In August 2020, the Supreme Court of South Carolina denied the defendants’ petition seeking appellate review. Also in August 2020, the defendants filed a petition for rehearing with the South Carolina Court of Appeals relating to the July 2020 ruling by the court, which was denied in October 2020. In November 2020, SCANA filed a petition of certiorari with the Supreme Court of South Carolina 59 seeking appellate review of the denial of SCANA’s motion to dismiss. This petition was denied in June 2021. Also in June 2021, the parties reached an agreement in principle in the amount of $33 million to resolve this matter, subject to court approval. This settlement was reached in contemplation of and will be utilized to satisfy a portion of the Federal Court Merger Case and the State Court Merger Case discussed below. In November 2021, the parties executed a settlement agreement and filed with the State Court of Common Pleas in Richland County, South Carolina for approval. In January 2018, a purported class action was filed against SCANA, Dominion Energy and certain former executive officers and directors of SCANA in the State Court of Common Pleas in Lexington County, South Carolina (the City of Warren Lawsuit). The plaintiff alleges, among other things, that defendants violated their fiduciary duties to shareholders by executing a merger agreement that would unfairly deprive plaintiffs of the true value of their SCANA stock, and that Dominion Energy aided and abetted these actions. Among other remedies, the plaintiff seeks to enjoin and/or rescind the merger. In February 2018, a purported class action was filed against Dominion Energy and certain former directors of SCANA and DESC in the State Court of Common Pleas in Richland County, South Carolina (the Metzler Lawsuit). The allegations made and the relief sought by the plaintiffs are substantially similar to that described for the City of Warren Lawsuit. In September 2019, the U.S. District Court for the District of South Carolina granted the plaintiffs’ motion to consolidate the City of Warren Lawsuit and the Metzler Lawsuit (the Federal Court Merger Case). In October 2019, the plaintiffs filed an amended complaint against certain former directors and executive officers of SCANA and DESC, which stated substantially similar allegations to those in the City of Warren Lawsuit and the Metzler Lawsuit as well as an inseparable fraud claim. In November 2019, the defendants filed a motion to dismiss. In April 2020, the U.S. District Court for the District of South Carolina denied the motion to dismiss. In May 2020, SCANA filed a motion to intervene, which was denied in August 2020. In September 2020, SCANA filed a notice of appeal with the U.S. Court of Appeals for the Fourth Circuit. In June 2021, the parties reached an agreement in principle in the amount of $63 million to resolve this matter as well as the State Court Merger Case described below, subject to court approval. This settlement was reached in contemplation of and will be partially satisfied by the State Court Derivative Case settlement described above. In November 2021, the parties executed a settlement agreement, as described above relating to this matter as well as the State Court Derivative Case and the State Court Merger Case, and filed with the State Court of Common Pleas in Richland County, South Carolina for approval. In May 2019, a case was filed against certain former executive officers and directors of SCANA in the State Court of Common Pleas in Richland County, South Carolina (the State Court Merger Case). The plaintiff alleges, among other things, that the defendants breached their fiduciary duties to shareholders by their gross mismanagement of the NND Project, were unjustly enriched by the bonuses they were paid in connection with the project and breached their fiduciary duties to secure and obtain the best price for the sale of SCANA. Also in May 2019, the case was removed to the U.S. District Court of South Carolina by the non-South Carolina defendants. In June 2019, the plaintiffs filed a motion to remand the case to state court. In January 2020, the case was remanded to state court. In February 2020, the defendants filed a motion to dismiss. In June 2021, the parties reached an agreement in principle as described above relating to this matter as well as the Federal Court Merger Case and the State Court Derivative Case. In November 2021, the parties executed a settlement agreement, as described above relating to this matter as well as the State Court Derivative Case and the Federal Court Merger Case, and filed with the State Court of Common Pleas in Richland County, South Carolina for approval. Employment Class Actions and Indemnification In August 2017, a case was filed in the U.S. District Court for the District of South Carolina on behalf of persons who were formerly employed at the NND Project. In July 2018, the court certified this case as a class action. In February 2019, certain of these plaintiffs filed an additional case, which case has been dismissed and the plaintiffs have joined the case filed August 2017. The plaintiffs allege, among other things, that SCANA, DESC, Fluor Corporation and Fluor Enterprises, Inc. violated the Worker Adjustment and Retraining Notification Act in connection with the decision to stop construction at the NND Project. The plaintiffs allege that the defendants failed to provide adequate advance written notice of their terminations of employment and are seeking damages, which could be as much as $100 million for 100% of the NND Project. In January 2021, the U.S. District Court for the District of South Carolina granted summary judgment in favor of SCANA, DESC, Fluor Corporation and Fluor Enterprises, Inc. In February 2021, the plaintiffs filed a notice of appeal with the U.S. Court of Appeals for the Fourth Circuit. In September 2018, a case was filed in the State Court of Common Pleas in Fairfield County, South Carolina by Fluor Enterprises, Inc. and Fluor Daniel Maintenance Services, Inc. against DESC and Santee Cooper. The plaintiffs make claims for indemnification, breach of contract and promissory estoppel arising from, among other things, the defendants' alleged failure and refusal to defend and indemnify the Fluor defendants in the aforementioned case. 60 Governmental Proceedings and Investigations In June 2018, DESC received a notice of proposed assessment of approximately $410 million, excluding interest, from the SCDOR following its audit of DESC’s sales and use tax returns for the periods September 1, 2008 through December 31, 2017. The proposed assessment, which includes 100% of the NND Project, is based on the SCDOR’s position that DESC’s sales and use tax exemption for the NND Project does not apply because the facility will not become operational. In December 2020, the parties reached an agreement in principle in the amount of $165 million to resolve this matter. In June 2021, the parties executed a settlement agreement which allows DESC to fund the settlement amount through a combination of cash, shares of Dominion Energy common stock or real estate with an initial payment of at least $43 million in shares of Dominion Energy common stock. In August 2021, Dominion Energy issued 0.6 million shares of its common stock to satisfy DESC’s obligation for the initial payment under the settlement agreement. In Nuclear Operations Nuclear Insurance Spent Nuclear Fuel As discussed in Note 23 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, Guarantees, Surety Bonds and Letters of Credit In addition, at Dominion Energy also enters into guarantee arrangements on behalf of its consolidated subsidiaries, primarily to facilitate their commercial transactions with third parties. If any of these subsidiaries fail to perform or pay under the contracts and the counterparties seek performance or payment, Dominion Energy would be obligated to satisfy such obligation. To the extent that a liability subject to a guarantee has been incurred by one of Dominion Energy’s consolidated subsidiaries, that liability is included in the Consolidated Financial Statements. Dominion Energy is not required to recognize liabilities for guarantees issued on behalf of its subsidiaries unless it becomes probable that it will have to perform under the guarantees. Terms of the guarantees typically end once obligations have been paid. Dominion Energy currently believes it is unlikely that it would be required to perform or otherwise incur any losses associated with guarantees of its subsidiaries’ obligations. At Maximum Exposure Maximum Exposure (millions) Commodity transactions(1) $ 1,892 $ 2,186 Nuclear obligations(2) 242 243 Solar(3) 463 311 Other(4) 1,254 1,265 Total(5) $ 3,851 Total(5)(6) $ 4,005 (1) Guarantees related to commodity commitments of certain subsidiaries. These guarantees were provided to counterparties in order to facilitate physical and financial transaction related commodities and services. (2) Guarantees primarily related to certain DGI subsidiaries regarding all aspects of running a nuclear facility. (3) 61 Includes guarantees to facilitate the development of solar projects. Also includes guarantees entered into by DGI on behalf of certain subsidiaries to facilitate the acquisition and development of solar projects. (4) Guarantees related to other miscellaneous contractual obligations such as leases, environmental obligations, construction projects and insurance programs. Also includes guarantees entered into by Dominion Energy RNG Holdings II, Inc. on behalf of a subsidiary to facilitate construction of renewable natural gas facilities. Due to the uncertainty of workers’ compensation claims, the parental guarantee has no stated limit. (5) Excludes Dominion (6) In July 2016, Dominion Energy signed an agreement with a lessor to construct and lease a new corporate office property in Richmond, Virginia. The lessor provided equity and obtained financing commitments from debt investors, totaling $365 million, which funded total project costs. The project became substantially complete in August 2019 at which point the facility was available for Dominion Energy’s use and the five-year lease term commenced. At the end of the initial lease term, Dominion Energy can (i) extend the term of the lease for an additional five years, subject to the approval of the participants, at current market terms, (ii) purchase the property for an amount equal to the project costs or, (iii) subject to certain terms and conditions, sell the property on behalf of the lessor to a third party using commercially reasonable efforts to obtain the highest cash purchase price for the property. If the project is sold and the proceeds from the sale are insufficient to repay the investors for the project costs, Dominion Energy may be required to make a payment to the lessor, up to 87% of project costs, for the difference between the project costs and sale proceeds. At March 31, 2022, 0 amounts have been recorded related to this guarantee. Additionally, at Note 18. Credit Risk The Companies’ accounting policies for credit risk are discussed in Note 24 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, At Credit-Related Contingent Provisions Certain of Dominion Energy’s derivative instruments contain credit-related contingent provisions. These provisions require Dominion Energy to provide collateral upon the occurrence of specific events, primarily a credit rating downgrade. If the credit-related contingent features underlying these instruments that are in a liability position and not fully collateralized with cash were fully triggered as of Certain of Virginia Power’s derivative instruments contain credit-related contingent provisions. These provisions require Virginia Power to provide collateral upon the occurrence of specific events, primarily a credit rate downgrade. If the credit-related contingent features underlying these instruments that are in a liability position and not fully collateralized with cash were fully triggered as of See Note 9 for 62 Note 19. Related-Party Transactions Virginia Power engages in related-party transactions primarily with other Dominion Energy subsidiaries (affiliates). Virginia Power’s receivable and payable balances with affiliates are settled based on contractual terms or on a monthly basis, depending on the nature of the underlying transactions. Virginia Power is included in Dominion Energy's consolidated federal income tax return and, where applicable, combined income tax returns for Dominion Energy are filed in various states. Dominion Energy’s transactions with equity method investments are described in Note 10. A discussion of significant related-party transactions follows. Virginia Power Transactions with Affiliates Virginia Power transacts with affiliates for certain quantities of natural gas and other commodities in the ordinary course of business. Virginia Power also enters into certain commodity derivative contracts with affiliates. Virginia Power uses these contracts, which are principally comprised of forward commodity purchases, to manage commodity price risks associated with purchases of natural gas. At Virginia Power participates in certain Dominion Energy benefit plans described in Note 22 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, DES and other affiliates provide accounting, legal, finance and certain administrative and technical services to Virginia Power. In addition, Virginia Power provides certain services to affiliates, including charges for facilities and equipment usage. The financial statements for all years presented include costs for certain general, administrative and corporate expenses assigned by DES to Virginia Power on the basis of direct and allocated methods in accordance with Virginia Power’s services agreements with DES. Where costs incurred cannot be determined by specific identification, the costs are allocated based on the proportional level of effort devoted by DES resources that is attributable to the entity, determined by reference to number of employees, salaries and wages and other similar measures for the relevant DES service. Management believes the assumptions and methodologies underlying the allocation of general corporate overhead expenses are reasonable. Presented below are Virginia Power’s significant transactions with DES and other affiliates: Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended March 31, 2021 2020 2021 2020 2022 2021 (millions) Commodity purchases from affiliates $ 219 $ 135 $ 526 $ 450 $ 293 $ 181 Services provided by affiliates(1) 116 108 363 343 130 125 Services provided to affiliates 6 5 15 14 4 5 (1) Includes capitalized expenditures of $39 million and $38 million for Virginia Power has borrowed funds from Dominion Energy under short-term borrowing arrangements. There were There were 0 issuances of Virginia Power’s common stock to Dominion Energy for the three Note 20. Employee Benefit Plans Net Periodic Benefit (Credit) Cost The service cost component of net periodic benefit (credit) cost is reflected in other operations and maintenance expense in Dominion Energy’s Consolidated Statements of Pension Benefits Other Postretirement Benefits Pension Benefits Other Postretirement Benefits 2021 2020 2021 2020 2022 2021 2022 2021 (millions) Three Months Ended September 30, Three Months Ended March 31, Service cost $ 43 $ 45 $ 6 $ 8 $ 36 $ 42 $ 6 $ 6 Interest cost 80 82 11 15 83 79 11 12 Expected return on plan assets (209 ) (197 ) (43 ) (39 ) (223 ) (208 ) (48 ) (44 ) Amortization of prior service cost (credit) — (1 ) (11 ) (12 ) Amortization of prior service (credit) cost — — (10 ) (10 ) Amortization of net actuarial loss 48 58 1 1 40 48 — 1 Settlements (1) — 3 — — Net periodic benefit credit $ (38 ) $ (10 ) $ (36 ) $ (27 ) Nine Months Ended September 30, Service cost $ 127 $ 131 $ 18 $ 22 Interest cost 238 263 35 45 Expected return on plan assets (625 ) (582 ) (130 ) (117 ) Amortization of prior service cost (credit) — — (32 ) (37 ) Amortization of net actuarial loss 145 155 3 4 Settlements (1) 5 5 — — Net periodic benefit credit $ (110 ) $ (28 ) $ (106 ) $ (83 ) Settlements — (2 ) — — Net periodic benefit (credit) cost $ (64 ) $ (41 ) $ (41 ) $ (35 ) Employer Contributions During the three Note 21. Operating Segments The Companies are organized primarily on the basis of products and services sold in the U.S. A description of the operations included in the Companies’ primary operating segments is as follows: Primary Operating Segment Description of Operations Dominion Energy Virginia Power Dominion Energy Virginia Regulated electric distribution X X Regulated electric transmission X X Regulated electric generation fleet(1) X X Gas Distribution Regulated gas distribution and storage(2) X Dominion Energy South Carolina Regulated electric distribution X Regulated electric transmission X Regulated electric generation fleet X Regulated gas distribution and storage X Contracted Assets Nonregulated electric generation fleet(3) X Noncontrolling interest in Cove Point X (1) Includes Virginia Power’s (2) Includes renewable natural gas operations as well as Wexpro’s gas development and production operations. (3) Includes solar generation facility development operations. In addition to the operating segments above, the Companies also report a Corporate and Other segment. Dominion Energy The Corporate and Other Segment of Dominion Energy includes its corporate, service company and other functions (including unallocated debt) as well as nonregulated retail energy marketing operations (prior to December 2021), including Dominion Energy’s noncontrolling In the 64 attributable to its operating segments. In the three months ended March 31, 2021, Dominion Energy reported after-tax net income of $71 million in the Corporate and Other segment, including $115 million of after-tax net income for specific items with $87 million of after-tax net expenses attributable to its operating segments. The net expenses for specific items • A $125 million ($102 million after-tax) loss related to investments in nuclear decommissioning trust funds, attributable to: • Contracted Assets ($90 million after-tax); and • Dominion Energy Virginia ($12 million after-tax); • A $94 million ($70 million after-tax) charge associated with storm damage and service restoration in Virginia Power’s service territory, attributable to Dominion Energy Virginia; • A $66 million ($47 million after-tax) loss related to economic hedging activities, attributable to Contracted Assets; and • A $61 million ($45 million after-tax) charge for amortization of a regulatory asset established in connection with the settlement of the 2021 Triennial Review, attributable to Dominion Energy Virginia. The net expenses for specific items attributable to Dominion Energy’s operating segments in 2021 primarily related to the impact of the following items: • A $151 million ($112 million after-tax) loss from an unbilled revenue reduction at Virginia Power, attributable to Dominion Energy Virginia; • A • A • A • A • Contracted Assets ($ • Dominion Energy Virginia ($ • A $130 million ($97 million after-tax) benefit for a change in the The following table presents segment information pertaining to Dominion Energy’s operations: Dominion Energy Virginia Gas Distribution Dominion Energy South Carolina Contracted Assets Corporate and Other Adjustments & Eliminations Consolidated Total Dominion Energy Virginia Gas Distribution Dominion Energy South Carolina Contracted Assets Corporate and Other Adjustments & Eliminations Consolidated Total (millions) Three Months Ended September 30, 2021 Three Months Ended March 31, 2022 Total revenue from external customers $ 2,333 $ 372 $ 799 $ 265 $ (612 ) $ 18 $ 3,175 $ 2,172 $ 1,229 $ 798 $ 245 $ (165 ) $ 0 $ 4,279 Intersegment revenue (3 ) 1 1 17 221 (236 ) 1 (3 ) 1 1 4 237 (240 ) 0 Total operating revenue 2,330 373 800 282 (391 ) (218 ) 3,176 2,169 1,230 799 249 72 (240 ) 4,279 Net income from discontinued operations 0 0 0 0 65 0 65 0 0 0 0 19 0 19 Net income (loss) attributable to Dominion Energy 599 69 151 119 (284 ) 0 654 518 294 109 101 (311 ) 0 711 Three Months Ended September 30, 2020 Total revenue from external customers $ 2,257 $ 311 $ 758 $ 288 $ (11 ) $ 9 $ 3,612 Intersegment revenue (3 ) 3 1 13 233 (252 ) (5 ) Total operating revenue 2,254 314 759 301 222 (243 ) 3,607 Net income (loss) from discontinued operations 0 0 0 51 (32 ) 0 19 Net income (loss) attributable to Dominion Energy 613 64 157 112 (590 ) 0 356 Nine Months Ended September 30, 2021 Three Months Ended March 31, 2021 Total revenue from external customers $ 6,072 $ 1,800 $ 2,230 $ 790 $ (857 ) $ 46 $ 10,081 $ 1,987 $ 975 $ 752 $ 268 $ (130 ) $ 17 $ 3,869 Intersegment revenue (10 ) 4 5 55 686 (737 ) 3 (2 ) 1 2 21 230 (251 ) 1 Total operating revenue 6,062 1,804 2,235 845 (171 ) (691 ) 10,084 1,985 976 754 289 100 (234 ) 3,870 Net income from discontinued operations 0 0 0 0 119 0 119 0 0 0 0 28 0 28 Net income (loss) attributable to Dominion Energy 1,464 415 337 373 (642 ) 0 1,947 Nine Months Ended September 30, 2020 Total revenue from external customers $ 6,013 $ 1,597 $ 2,105 $ 810 $ 112 $ 36 $ 10,673 Intersegment revenue (10 ) 9 3 36 703 (763 ) (22 ) Total operating revenue 6,003 1,606 2,108 846 815 (727 ) 10,651 Net income (loss) from discontinued operations 0 0 0 153 (1,906 ) 0 (1,753 ) Net income (loss) attributable to Dominion Energy 1,479 375 326 295 (3,558 ) 0 (1,083 ) Net income attributable to Dominion Energy 434 251 102 150 71 0 1,008 Intersegment sales and transfers for Dominion Energy are based on contractual arrangements and may result in intersegment profit or loss that is eliminated in consolidation, including amounts related to entities presented within discontinued operations. Virginia Power The Corporate and Other Segment of Virginia Power primarily includes specific items attributable to its operating segment that are not included in profit measures evaluated by executive management in assessing the segment’s performance or in allocating resources. In the The net expenses for specific items attributable to Virginia Power’s operating segment in 2022 primarily related to the impact of the following items: • A $94 million ($70 million after-tax) charge associated with storm damage and service restoration in Virginia Power’s service territory, attributable to Dominion Energy Virginia; and • A $61 million ($45 million after-tax) charge for amortization of a regulatory asset established in connection with the settlement of the 2021 Triennial Review, attributable to Dominion Energy Virginia. The net expenses for specific items attributable to Virginia Power’s operating segment in 2021 primarily related to the impact of the following items: • A $151 million ($112 million after-tax) loss from an unbilled revenue reduction; • A • A • A $130 million ($97 million after-tax) benefit for a change in the The following table presents segment information pertaining to Virginia Power’s operations: Dominion Energy Virginia Corporate and Other Consolidated Total Dominion Energy Virginia Corporate and Other Consolidated Total (millions) Three Months Ended September 30, 2021 Three Months Ended March 31, 2022 Operating revenue $ 2,326 $ (350 ) $ 1,976 $ 2,165 $ 2 $ 2,167 Net income (loss) 601 (45 ) 556 516 (159 ) 357 Three Months Ended September 30, 2020 Three Months Ended March 31, 2021 Operating revenue $ 2,248 $ 0 $ 2,248 $ 1,981 $ (151 ) $ 1,830 Net income (loss) 615 (140 ) 475 432 (58 ) 374 Nine Months Ended September 30, 2021 Operating revenue $ 6,048 $ (501 ) $ 5,547 Net income (loss) 1,462 (118 ) 1,344 Nine Months Ended September 30, 2020 Operating revenue $ 5,983 $ 0 $ 5,983 Net income (loss) 1,477 (792 ) 685 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS MD&A discusses Dominion Energy’s results of operations and general financial condition and Virginia Power’s results of operations. MD&A should be read in conjunction with the Companies’ Consolidated Financial Statements. Virginia Power meets the conditions to file under the reduced disclosure format, and therefore has omitted certain sections of MD&A. Contents of MD&A MD&A consists of the following information: • Forward-Looking Statements • Accounting Matters – Dominion Energy • Dominion Energy • Results of Operations • Outlook • Segment Results of Operations • Virginia Power • Results of Operations • Liquidity and Capital Resources – Dominion Energy • Future Issues and Other Matters – Dominion Energy Forward-Looking Statements This report contains statements concerning the Companies’ expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In most cases, the reader can identify these forward-looking statements by such words as “anticipate,” “estimate,” “forecast,” “expect,” “believe,” “should,” “could,” “plan,” “may,” “continue,” “target” or other similar words. The Companies make forward-looking statements with full knowledge that risks and uncertainties exist that may cause actual results to differ materially from predicted results. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Additionally, other factors may cause actual results to differ materially from those indicated in any forward-looking statement. These factors include but are not limited to: • Unusual weather conditions and their effect on energy sales to customers and energy commodity prices; • Extreme weather events and other natural disasters, including, but not limited to, hurricanes, high winds, severe storms, earthquakes, flooding, climate changes and changes in water temperatures and availability that can cause outages and property damage to facilities; • The impact of extraordinary external events, such as the current pandemic health event resulting from COVID-19, and their collateral consequences, including extended disruption of economic activity in our markets and global supply chains; • Federal, state and local legislative and regulatory developments, including changes in or interpretations of federal and state tax laws and regulations; • Risks of operating businesses in regulated industries that are subject to changing regulatory structures; • Changes to regulated electric rates collected by the Companies and regulated gas distribution, transportation and storage rates collected by Dominion Energy; • Changes in rules for RTOs and ISOs in which the Companies join and/or participate, including changes in rate designs, changes in FERC’s interpretation of market rules and new and evolving capacity models; • Risks associated with Virginia Power’s membership and participation in PJM, including risks related to obligations created by the default of other participants; 68 • Risks associated with entities in which Dominion Energy shares ownership with third parties, including risks that result from lack of sole decision making authority, disputes that may arise between Dominion Energy and third party participants and difficulties in exiting these arrangements; • Changes in future levels of domestic and international natural gas production, supply or consumption; • Impacts to Dominion Energy’s noncontrolling interest in Cove Point from fluctuations in future volumes of LNG imports or exports from the U.S. and other countries worldwide or demand for, purchases of and prices related to natural gas or LNG; • Timing and receipt of regulatory approvals necessary for planned construction or growth projects and compliance with conditions associated with such regulatory approvals; • The inability to complete planned construction, conversion or growth projects at all, or with the outcomes or within the terms and time frames initially anticipated, including as a result of increased public involvement, intervention or litigation in such projects; • Risks and uncertainties that may impact the Companies’ ability to develop and construct the CVOW Commercial Project within the currently proposed timeline, or at all, and consistent with current cost estimates along with the ability to recover such costs from customers; • Changes to federal, state and local environmental laws and regulations, including those related to climate change, the tightening of emission or discharge limits for GHGs and other substances, more extensive permitting requirements and the regulation of additional substances; • Cost of environmental strategy and compliance, including those costs related to climate change; • Changes in implementation and enforcement practices of regulators relating to environmental standards and litigation exposure for remedial activities; • Difficulty in anticipating mitigation requirements associated with environmental and other regulatory approvals or related appeals; • Unplanned outages at facilities in which the Companies have an ownership interest; • The impact of operational hazards, including adverse developments with respect to pipeline and plant safety or integrity, equipment loss, malfunction or failure, operator error and other catastrophic events; • Risks associated with the operation of nuclear facilities, including costs associated with the disposal of spent nuclear fuel, decommissioning, plant maintenance and changes in existing regulations governing such facilities; • Changes in operating, maintenance and construction costs; • Domestic terrorism and other threats to the Companies’ physical and intangible assets, as well as threats to cybersecurity; • Additional competition in industries in which the Companies operate, including in electric markets in which Dominion Energy’s nonregulated generation facilities operate and potential competition from the development and deployment of alternative energy sources, such as self-generation and distributed generation technologies, and availability of market alternatives to large commercial and industrial customers; • Competition in the development, construction and ownership of certain electric transmission facilities in the Companies’ service territory in connection with Order 1000; • Changes in technology, particularly with respect to new, developing or alternative sources of generation and smart grid technologies; • Changes in demand for the Companies’ services, including industrial, commercial and residential growth or decline in the Companies’ service areas, changes in supplies of natural gas delivered to Dominion Energy’s pipeline system, failure to maintain or replace customer contracts on favorable terms, changes in customer growth or usage patterns, including as a result of energy conservation programs, the availability of energy efficient devices and the use of distributed generation methods; • Receipt of approvals for, and timing of, closing dates for acquisitions and divestitures; • Impacts of acquisitions, divestitures, transfers of assets to joint ventures and retirements of assets based on asset portfolio reviews; • The expected timing and likelihood of • Adverse outcomes in litigation matters or regulatory proceedings, including matters acquired in the SCANA Combination; • Counterparty credit and performance risk; • Fluctuations in the value of investments held in nuclear decommissioning trusts by the Companies and in benefit plan trusts by Dominion Energy; • Fluctuations in energy-related commodity prices and the effect these could have on Dominion Energy’s earnings and the Companies’ liquidity position and the underlying value of their assets; • Fluctuations in interest rates; • Fluctuations in currency exchange rates of the Euro or Danish Krone associated with the CVOW Commercial Project; • Changes in rating agency requirements or credit ratings and their effect on availability and cost of capital; • Global capital market conditions, including the availability of credit and the ability to obtain financing on reasonable terms; • Political and economic conditions, including inflation and deflation; • Employee workforce factors including collective bargaining agreements and labor negotiations with union employees; and • Changes in financial or regulatory accounting principles or policies imposed by governing bodies. Additionally, other risks that could cause actual results to differ from predicted results are set forth in Part I. Item 1A. Risk Factors in the Companies’ Annual Report on Form 10-K for the year ended December 31, The Companies’ forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. The Companies caution the reader not to place undue reliance on their forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, differ materially from actual results. The Companies undertake no obligation to update any forward-looking statement to reflect developments occurring after the statement is made. Accounting Matters Critical Accounting Policies and Estimates As of Dominion Energy Results of Operations Presented below is a summary of Dominion Energy’s consolidated results: 2021 2020 $ Change 2022 2021 $ Change (millions, except EPS) Third Quarter First Quarter Net income attributable to Dominion Energy $ 654 $ 356 $ 298 $ 711 $ 1,008 $ (297 ) Diluted EPS 0.79 0.41 0.38 0.83 1.23 (0.40 ) Year-To-Date Net income (loss) attributable to Dominion Energy $ 1,947 $ (1,083 ) $ 3,030 Diluted EPS 2.35 (1.38 ) 3.73 Overview Net income attributable to Dominion Energy Analysis of Consolidated OperationsIn August 2021, Dominion Energy entered into an agreement with Terra Nova Renewable Partnersto sell SBL Holdco, which holds Dominion Energy’s remaining 67% controlling interest in certain nonregulated solar projects for consideration of $456 million,53subject to customary closing adjustments, with the amount of cash reduced by the amount of SBL Holdco’s debt outstanding at closing. The transaction is expected to close in the fourth quarter of 2021, contingent on clearance or approval under the Hart-Scott-Rodino Act and by FERC as well as other customary closing and regulatory conditions. In September 2021, the waiting period under the Hart-Scott-Rodino Act expired. In October 2021, FERC approved the proposed sale.At September 30, 2021, $743 million of assets, primarily consisting of property, plant and equipment, and $339 million of liabilities, primarily consisting of long-term debt, were classified as held for sale in Dominion Energy’s Consolidated Balance Sheets. Dominion Energy expects to record a gain of approximately $30 million ($31 million after-tax) upon closing.All activity related to SBL Holdco is recorded within Contracted Assets.Sale to ClearwayIn August 2021, Dominion Energy entered an agreement with Clearway to sell its 50% controlling interest in Four Brothers and Three Cedars for $335 million in cash, subject to customary closing adjustments. The transaction is expected to close in the fourth quarter of 2021, contingent on clearance or approval under the Hart-Scott-Rodino Act and by FERC as well as other customary closing and regulatory conditions. In October 2021, the waiting period under the Hart-Scott-Rodino Act expired.At September 30, 2021, $744 million of related assets, primarily consisting of property, plant and equipment, and $75 million of liabilities, primarily consisting of operating leases, were classified as held for sale in Dominion Energy’s Consolidated Balance Sheets. Dominion Energy expects to record a loss of approximately $225 million ($170 million after-tax) upon closing, primarily associated with the derecognition of noncontrolling interest. All activity related to Four Brothers and Three Cedars is recorded within Contracted Assets.ImpairmentIn the third quarter of 2020, Dominion Energy performed a strategic review of its long-term intentions for its contracted nonregulated solar generation assets in partnerships outside of its core electric service territories in consideration of the impact of the VCEA and Dominion Energy’s decision to sell substantially all of its gas transmission and storage operations. Based on an evaluation of Dominion Energy’s interests in these long-lived assets for recoverability under a probability weighted approach, Dominion Energy determined the assets were impaired. As a result of this evaluation, Dominion Energy recorded a charge of $665 million ($293 million after-tax attributable to Dominion Energy and $267 million attributable to noncontrolling interest) in impairment of assets and other charges in its Consolidated Statements of Income for both the three and nine months ended September 30, 2020 to adjust the property, plant and equipment down to its estimated fair value of $1.4 billion. The fair value was estimated using an income approach. The valuation is considered a Level 3 fair value measurement due to the use of significant judgmental and unobservable inputs, including projected timing and amount of future cash flows and discount rates reflecting risks inherent in the future cash flows and market prices.Virginia Power CCRO UtilizationIn the third quarter of 2021, Virginia Power wrote off $318 million, primarily consisting of property, plant and equipment, net representing the utilization of a CCRO in accordance with the GTSA in connection with the proposed settlement of the 2021 Triennial Review. See Note 13 for additional information.Acquisition of Gathering and Processing AssetsIn November 2021, Wexpro closed on an agreement with a natural gas gathering systems operator to purchase an existing natural gas gathering system in Wyoming including pipelines, compressors and dehydration equipment for total consideration of $41 million.moreadditional information.moreadditional information.(6)(7)20202021 for moreadditional information.(7)Reflects current portion of amounts to be recovered through retail rates in Virginia for payments Virginia Power expects to make to PJM through 2026 under the terms of a FERC settlement agreement in May 2018 resolving a PJM cost allocation matter.proposed settlement of the 2021 Triennial Review. See Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 for additional information.September 30, 2021.March 31, 2022. During the second quarter of 2021, DESC recorded a charge of $237 million ($178 million after-tax) in impairment of assets and other charges to write-off the balance of a regulatory asset that is no longer probable of recovery under the settlement agreement approved in DESC’s retail electric base rate case. See Note 13 for more information.(14)Primarily reflects legislation enacted in Virginia in 2019, which requires any CCR asset located at certain Virginia Power stations to be closed by removing the CCR to an approved landfill or through beneficial reuse. These deferred costs are expected to be collected over a period between 15 and 18 years commencing December 2021 through Rider CCR. Virginia Power is entitled to collect carrying costs once expenditures have been made. See Note 13 for additional information.(15) Reflects an increase of $66 million associated with the revision of certain gas distribution pipeline AROs in the third quarter of 2021. See Note 2 for more information.(16)(14)20202021 for moreadditional information. Also reflects amounts to be refunded to jurisdictional retail electric customers in Virginia associated with the proposed settlement of the 2021 Triennial Review. See Note 13 for additional information.(17)Represents a reserve related to the expected use of a CCRO in accordance with the GTSA associated with the 2021 Triennial Review. See Note 13 for additional information.(18)Balance refundable to customers related to the decrease in revenue requirements for recovery of income taxes at the Companies’ regulated electric generation and electric and natural gas distribution operations. See Notes 3 and 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 20202021 for moreadditional information.(19)(15)(20)(16)20202021 for moreadditional information.(21)For jurisdictions subject to cost-based rate regulation, changes in the fair value of derivative instruments result in the recognition of regulatory assets or regulatory liabilities as they are expected to be recovered from or refunded to customers.(22)(17)(23)(18)moreadditional information.(4)Reflects current portion of amounts to be recovered through retail rates in Virginia for payments Virginia Power expects to make to PJM through 2026 under the terms of a FERC settlement agreement in May 2018 resolving a PJM cost allocation matter.proposed settlement of the 2021 Triennial Review. See Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 for additional information.September 30, 2021.March 31, 2022.Primarily reflects legislation enacted in Virginia in 2019, which requires any CCR asset located at certain Virginia Power stations to be closed by removing the CCR to an approved landfill or through beneficial reuse. These deferred costs are expected to be collected over a period between 15 and 18 years commencing December 2021 through Rider CCR. Virginia Power is entitled to collect carrying costs once expenditures have been made. See Note 13 for additional information. (9)(10)(9)proposed settlement of the 2021 Triennial Review. See Note 13 for additional information. 57(11)Represents a reserve related to the expected use of a CCROConsolidated Financial Statements in accordance with the GTSA associated withCompanies’ Annual Report on Form 10-K for the year ended December 31, 2021 Triennial Review. See Note 13 for additional information. (12)(10)(13)(11)September 30, 2021,March 31, 2022, Dominion Energy and Virginia Power regulatory assets include $4.5$4.1 billion and $3.3$3.0 billion, respectively, on which they do not expect to earn a return during the applicable recovery period. With the exception of certain items discussed above, the majority of these expenditures are expected to be recovered within the next two years.2020.2021 Triennial ReviewIn March 2021, Virginia Power filed its base rate case and accompanying schedules in support of the 2021 Triennial Review. In its filing, Virginia Power did not request an increase in base rates for generation and distribution services and proposed that base rates remain at their existing level. Virginia Power’s earnings test analysis, as filed, demonstrates it earned a combined ROE of 10.85% on its generation and distribution services for the test period, before accounting for forgiven customer balances. Pursuant to Virginia legislation, forgiven customer balances are excluded from the cost of service in determining test period revenues as part of the 2021 Triennial Review. To the extent that the Virginia Commission determines total earnings for the test period to be above Virginia Power’s authorized earnings band, the forgiven balance amounts are offset against the available revenues in the determination of any customer bill credits, or utilization of a CCRO. Test period earnings may be further reduced by Virginia Commission approved investment amounts in qualifying solar or wind generation facilities or electric distribution grid transformation projects that Virginia Power elects to include as a CCRO under the GTSA. In its filing, Virginia Power elected to utilize $26 million of the Coastal Virginia Offshore Wind Pilot project investment as a CCRO to offset available revenues. The Virginia Commission will determine whether Virginia Power’s earnings for the test period, considered as a whole, were within 70 basis points above or below the authorized ROE of 9.2%. Should the Virginia Commission determine that there are additional available revenues for earnings sharing, then Virginia Power has contingently elected to offset those revenues with additional Virginia Commission approved qualifying CCRO investments. The Virginia Commission will also authorize an ROE for Virginia Power that will be applied to Virginia Power’s riders prospectively and that will also be utilized to measure base rate earnings as of January 1, 2021. Virginia Power has requested authorization of an ROE of 10.8% based on Virginia Power’s current cost of equity. Pursuant to the Regulation Act, Virginia Power’s authorized ROE shall not be set lower than the average of either (i) the returns reported for the three previous years by not less than a majority of comparable utilities in the Southeastern U.S., with certain limitations as described in the Regulation Act, or (ii) the authorized returns that are set by the applicable regulatory commissions for the same select peer group. In May 2021, Virginia Power filed supplemental58testimony to reflect updated test period earnings, including an earned ROE of 10.42%, before accounting for forgiven customer balances, and that no amount of eligible CCRO is necessary to be elected to be utilized.In the third and fourth quarters of 2020, Virginia Power recorded a net charge of $130 million related to the use of a CCRO in accordance with the GTSA, including a charge of $200 million ($149 million after-tax) in the third quarter of 2020, included in impairment of assets and other charges (benefits) in its Consolidated Statements of Income. In the first quarter of 2021, Virginia Power recorded a benefit of $130 million ($97 million after-tax) in impairment of assets and other charges (benefits) in its Consolidated Statements of Income to adjust its reserve related to the use of a CCRO in accordance with the GTSA.In October 2021, Virginia Power, the Virginia Commission staff and other parties filed a comprehensive settlement agreement with the Virginia Commission for approval. The comprehensive settlement agreement provides for $330 million in one-time refunds to customers made up of $255 million over a 6-month period and $75 million over three years, a $50 million going-forward base rate reduction and an authorized ROE of 9.35%. Additionally, Virginia Power has agreed to utilize $309 million of qualifying CCRO investments in the CVOW Pilot Project, deployment of AMI and a Customer Information Platform to offset available earnings and to amortize through 2023 the early retirement charges for coal- and oil-fired generation units recorded in 2019 and 2020. This matter is pending.In connection with the proposed settlement agreement, Virginia Power recorded in the third quarter of 2021 a $350 million ($261 million after-tax) charge for refunds to be provided to customers in operating revenues in its Consolidated Statements of Income as well as a $549 million ($409 million after-tax) benefit primarily from the establishment of a regulatory asset associated with the early retirements of certain coal- and oil-fired generating units and a $318 million ($237 million after-tax) charge for CCRO benefits provided to customers in impairment of assets and other charges (benefits) in its Consolidated Statements of Income. The amounts recorded reflect the impact related to jurisdictional customers as a result of the 2021 Triennial Review as well as the impact on certain non-jurisdictional customers which follow Virginia Power’s jurisdictional customer rate methodology.Utility Disconnection Moratorium LegislationIn November 2020, legislation was enacted in Virginia relating to the moratorium on utility disconnections during the COVID-19 pandemic and resulted in Virginia Power forgiving Virginia jurisdictional retail electric customer balances that were more than 30 days past due as of September 30, 2020. As a result, Virginia Power recorded a charge of $127 million in the fourth quarter of 2020. In connection with the Virginia 2021 budget process, in the first quarter of 2021 Virginia Power recorded a charge of $76 million ($56 million after-tax) in impairment of assets and other charges (benefits) in its Consolidated Statements of Income for Virginia jurisdictional retail electric customer balances that were more than 30 days past due as of December 31, 2020 that Virginia Power is required to forgive. These forgiven customer balances are factored into Virginia Power’s 2021 Triennial Review as discussed above.Grid Transformation and Security Act of 2018In June 2021, Virginia Power filed a petition with the Virginia Commission for approval of a plan for electric distribution grid transformation projects as authorized by the GTSA. The plan includes 14 projects covering 6 components: (i) smart meters; (ii) customer information platform; (iii) grid improvement projects; (iv) physical and cyber security; (v) telecommunications infrastructure and (vi) customer education (Phase II). For Phase II, the total proposed capital investment during 2022 – 2023 is $669 million and the proposed operations and maintenance investment is $110 million. This matter is pending.2021,2022, Virginia Power filed its annual fuel factor filing with the Virginia Commission to recover an estimated $1.4$2.3 billion in Virginia jurisdictional projected fuel expensesexpense for the rate year beginning July 1, 20212022 and $72 milliona projected $1.0 billion under-recovered balance as of estimated net under-recovered balances through June 30, 2021.2022. Virginia Power’s proposed fuel rate represents a fuel revenue increase of $1.8 billion when applied to projected kilowatt-hour sales for that period. Virginia Power also proposed alternatives to recover this under-collected balance over a two- or three-year period. Under these alternatives, Virginia Power’s fuel revenues for the rate year would increase by $1.3 billion or $1.2 billion, respectively. In addition, Virginia Power proposed a change in the timing of fuel cost recovery for certain customers that would consider those customers’ portion of the projected under-recovered balance to have been recovered as of June 2021, the30, 2022. If approved, Virginia Commission approved the annual fuel factor.Power expects to recognize a charge of approximately $155 million to its Consolidated Statement of Income associated with these certain customers. This matter is pending.In May 2020 and July 2020, Virginia Power entered into and closed on separate agreements to acquire Grassfield Solar, Norge Solar and Sycamore Solar. The projects are expected to cost approximately $170 million in aggregate once constructed, including the initial acquisition cost. The facilities are expected to generate 82 MW combined and be placed into service in 2022. In October 2020, Virginia Power filed an application with the Virginia Commission for CPCNs to construct and operate these projects as part of its efforts to meet the renewable generation development requirements under the VCEA. In April 2021, the Virginia Commission approved the application.This matter is pending.November 2021, Virginia Power filed an application withMarch 2022, the Virginia Commission requesting approval and certification ofapproved the Virginia Facilities component of the CVOW Commercial Project. The onshore Virginia Facilities have an estimated cost of approximately $1.1 billion, excluding financing costs, which is included within the overall cost of the CVOW Commercial Project. In addition, Virginia Power requested approval from the Virginia Commission to enter into financial hedges with U.S. financial institutions to mitigate the foreign currency exchange risk associated with certain supplier contracts associated with the CVOW Commercial Project. This matter is pending.petition.Nuclear Life Extension Program51In October 2021, Virginia Power filed a petition with the Virginia Commission requesting a determination that it is reasonable and prudent for Virginia Power to pursue a nuclear life extension program to extend the operating licenses of Surry and North Anna and to carry out projects to upgrade or replace systems and equipment necessary to continue to safely and reliably operate these nuclear power stations. The nuclear life extension program is expected to cost approximately $3.9 billion, excluding financing costs. This matter is pending.Below is a discussion ofDevelopments for significant riders associated with various Virginia Power projects:projects are as follows:•The Virginia Commission previously approved Rider U in conjunction with cost recovery to move certain electric distribution facilities underground as authorized by Virginia legislation. In June 2020, Virginia Power proposed an $80 million total revenue requirement consisting of $44 million for previously approved phases and $36 million for phase five costs for Rider U for the rate year beginning April 1, 2021. This total revenue requirement represents a $28 million increase over the previous year. In February 2021, the Virginia Commission approved the filing.In June 2021, Virginia Power proposed a $96 million total revenue requirement consisting of $61 million for previously approved phases and $35 million for phase six costs for Rider U for the rate year beginning April 1, 2022. This total revenue requirement represents a $16 million increase over the previous year. This matter is pending.•(1)Pursuant to Virginia legislation, Virginia Power can recover the costs related to the closure of CCR units. In February 2021, Virginia Power filed for approval of Rider CCR with a proposed $216 million revenue requirement for the rate year beginning December 1, 2021. In October 2021, the Virginia Commission approved the filing.•In October 2020, Virginia Power applied for approval of Rider CE associated with Grassfield Solar, Norge Solar and Sycamore Solar described above. In April 2021, the Virginia Commission approved a $10 million revenue requirement for the rate year beginning June 1, 2021.•The Virginia Commission previously approved Rider T1 concerning transmission rates. In May 2021, Virginia Power proposed a $874 million total revenue requirement consisting of $493 million for the transmission component of Virginia Power’s base rates and $381 million for Rider T1 for the rate year beginning September 1, 2021. This total revenue requirement represents a $190 million decrease versus the revenues to be produced during the rate year under current rates. In August 2021, the Virginia Commission approved the filing.•Pursuant to the VCEA, Virginia Power can recover costs of compliance with the mandatory renewable portfolio standard program. In December 2020, Virginia Power filed for approval of Rider RPS with a proposed $13 million revenue requirement for the rate year beginning August 1, 2021. In July 2021, the Virginia Commission approved the filing.•The Virginia Commission previously approved Rider GV relating to Greensville County. In June 2021, Virginia Power proposed a biennial update procedure for Rider GV with two consecutive rate years. The filing proposed a revenue requirement of $142 million for the rate year beginning April 1, 2022 and a revenue requirement of $127 million for the rate year beginning April 2023. This matter is pending.•The Virginia Commission previously approved Rider R relating to Bear Garden. In June 2021, Virginia Power proposed a biennial update procedure for Rider R with two consecutive rate years. The filing proposed a revenue requirement of $59 million for the rate year beginning April 1, 2022 and a revenue requirement of $55 million for the rate year beginning April 1, 2023. This matter is pending.•The Virginia Commission previously approved Rider S relating to Virginia City Hybrid Energy Center. In June 2021, Virginia Power proposed a biennial update procedure for Rider S with two consecutive rate years. The filing proposed a revenue requirement of $192 million for the rate year beginning April 1, 2022 and a revenue requirement of $191 million for the rate year beginning April 1, 2023. This matter is pending.•Pursuant to Virginia legislation, Virginia Power can recover costs associated with participating in a market-based carbon trading program consistent with RGGI. In August 2021, the Virginia Commission approved Rider RGGI with a $168 million revenue requirement for the rate year beginning September 1, 2021, however, subsequently in August 2021, the Virginia60Commission issued an order granting reconsideration and suspended its order approving the revenue requirement. This matter is pending.•Pursuant to Virginia legislation, Virginia Power can recover costs associated with electric distribution grid transformation projects that the Virginia Commission has approved as authorized by the GTSA. In August 2021, Virginia Power filed for approval of Rider GT with a proposed $56 million revenue requirement for the rate year beginning June 1, 2022. This matter is pending.•The Virginia Commission previously approved Riders C1A, C2A and C3A in connection with cost recovery for DSM programs. In December 2020, Virginia Power filed a petition to approve an additional 10 new energy efficiency programs and 1 new demand response DSM program for five years, subject to future extension, with a $162 million cost cap, and proposed a total $78 million revenue requirement for the rate year beginning September 1, 2021. Virginia Power also requested approval to establish a new Rider C4A in connection with cost recovery for DSM programs. In September 2021, the Virginia Commission approved a total revenue requirement of $74 million, which represents a $14 million increase over the previous year. The Virginia Commission also established Rider C4A. •In September 2021, Virginia Power applied for approval of Rider CE associatedAssociated with solar generation and energy storage projects requested for approval in September 2021, solar generation projects approved in April 2021 and certain small-scale solar projects with a proposed $71 million total revenue requirement for the rate year beginning May 1, 2022. This total revenue requirement represents a $61 million increase over the previous year. This matter is pending.projects.•(2)previously approved Rider BW relating to Brunswick County power station. In October 2021,granted Virginia Power proposed a biennial update procedure for Rider BW with two consecutive rate years. The filing proposed a revenue requirement of $145 million for the rate year beginning September 1, 2022 and a revenue requirement of $120 million for the rate year beginning September 1, 2023. This matter is pending.Power’s motion in April 2022. See additional discussion below.•(3)In October 2021, Virginia Power filed a petition with the Virginia Commission for Rider SNA associated with costs relating to the preparation of the applications for subsequent license renewal to the NRC to extend the operating licenses of Surry and North Anna and related projects. Virginia Poweralso requested approval of a cost recovery of approximately $1.2 billion through Rider SNA for the first phase of nuclear life extension program which includes investments through 20242024.In April 2022, Virginia Power, the Virginia Commission staff and certain interested parties filed a proposed stipulation recommending that costs incurred after February 2022 associated with the first phase of the nuclear life extension program for North Anna be deferred and requested for recovery in a $109 million revenue requirement for the rate year beginning September 1, 2022. This matter is pending.subsequent Rider SNA filing.•(4)In November 2021, Virginia Power filed an application with the Virginia Commission requesting approvalConsists of Rider OSW associated with costs incurred to construct, own and operate the CVOW Commercial Project. The filing proposed a revenue requirement of $79$482 million for the rate year beginning September 1, 2022. This matter is pending.transmission component of Virginia Power’s base rates and $224 million for Rider T1.Additional significant riders associated with variousIn May 2022, Virginia Power projects are as follows:Electric Transmission ProjectsNorth Carolina RegulationNorth Carolina Fuel FilingIn August 2021,also requested that RGGI compliance costs incurred and unrecovered through July 2022 be recovered through existing base rates in effect during the period incurred. If approved by the Virginia Commission, Virginia Power submittedexpects to record charges to its annual filing to the North Carolina Commission to adjust the fuel componentConsolidated Statement of its electric rates. Virginia Power updated its filing in October 2021 to reflect the increased commodity cost of fuel and proposed a total $26 million increase to the fuel component of its electric ratesIncome for the amount of any unrecovered costs, which are estimated to be approximately $215 million, including the impact of certain non-jurisdictional customers which follow Virginia Power’s jurisdictional customer rate year beginning February 1, 2022.methodology. This matter is pending.PSNC Base Rate CaseElectric Transmission ProjectIn April 2021, PSNC filed its general rate case application, direct testimony, exhibits, and schedules with the North Carolina Commission. PSNC proposed a non-fuel, base rate increase of $53 million to be effective November 1, 2021. After considering the benefits of the 2017 Tax Reform Act, the net revenue increase to customers would be approximately $42 million. The base rate increase was proposed to recover the significant investment in infrastructure to serve a growing customer base, improve safety and reliability of the transmission and distribution system and enhance energy efficiency and sustainability. The proposed rates would provide for an ROE of 10.25% compared to the currently authorized ROE of 9.7%.In October 2021, PSNC, the North Carolina Commission public staff and certain other parties of record filed a stipulation of settlement with the North Carolina Commission for approval. The stipulation of settlement provides for a non-fuel, base rate increase of $29 million effective November 1, 2021, based on an ROE of 9.60%. The net revenue increase to customers, after considering the amortization of the previously deferred benefits of the 2017 Tax Reform Act, would be $4 million in the initial rate year, $23 million for the following rate year and then $25 million beginning for the third through fifth rate years. In addition, the stipulation of settlement provides for the recovery, over four years, of $106 million of operation and maintenance costs which PSNC has incurred and deferred through June 2021 to comply with federal standards for pipeline integrity and safety. In November 2021, PSNC implemented temporary rates consistent with the stipulation of settlement. If the North Carolina Commission deems the temporary rates excessive in the final order, the excess amount along with interest will be refunded to customers. This matter is pending.Pipeline Integrity and Safety ProgramThe North Carolina Commission has authorized PSNC to use a tracker mechanism to recover the incurred capital investment and associated costs of complying with federal standards for pipeline integrity and safety requirements that are not in current base rates. In September 2021, the North Carolina Commission approved PSNC’s request to increase the integrity management annual revenue requirement to $34 million, an increase of $1 million over its previous filing, effective October 2021.Rider DRider D allows PSNC to recover from customers all prudently incurred gas costs and certain related uncollectible expenses as well as losses on negotiated gas and transportation sales. In September 2021, PSNC submitted a filing with the North Carolina Commission for a $61 million gas cost increase. The North Carolina Commission approved the filing in September 2021 with rates effective October 2021.South Carolina Electric Base Rate CaseIn August 2020, DESC filed its retail electric base rate case and schedules with the South Carolina Commission. DESC proposed a non-fuel, base rate increase of $178 million, or 7.75%, based on an adjusted test year data, effective on or after the first billing cycle of March 2021. The base rate increase was proposed to recover the significant investment in assets and operating resources required to serve an expanding customer base, maintain the safety, reliability and efficiency of DESC’s system and meet increasingly stringent reliability, security and environmental requirements for the benefit of South Carolina customers. DESC presented an earned ROE of 5.90% based upon a fully-adjusted test period. The proposed rates would provide for an earned ROE equal to the current authorized earned ROE of 10.25% established in the previous rate case in 2012. In January 2021, the South Carolina Commission approved a62proposal made by the South Carolina Office of Regulatory Staff, and agreed to by DESC and other intervenors, to stay the base rate case due to the current economic conditions and to allow the parties more time to negotiate a settlement with a final order to be issued no later than August 2021. In July 2021, DESC, the South Carolina Office of Regulatory Staff and other parties of record filed a comprehensive settlement agreement with the South Carolina Commission for approval. The comprehensive settlement agreement provides for a non-fuel, base rate increase of $62 million (resulting in a net increase of $36 million after considering an accelerated amortization of certain excess deferred income taxes) commencing with bills issued on September 1, 2021 and an authorized earned ROE of 9.50%. Additionally, DESC has agreed to commit up to $15 million to forgive retail electric customer balances that were more than 60 days past due as of May 31, 2021, and provide $15 million for energy efficiency upgrades and critical health and safety repairs to customer homes. Pursuant to the comprehensive settlement agreement, DESC would not filea retail electric base rate case prior to July 1, 2023, such that new rates would not be effective prior to January 1, 2024, absent unforeseen extraordinary economic or financial conditions that may include changes in corporate tax rates. In July 2021, the South Carolina Commission approved the comprehensive settlement agreement and issued its final order in August 2021.In connection with this matter, in the second quarter of 2021, Dominion Energy recorded charges of $249 million ($187 million after-tax) reflected within impairment of assets and other charges (benefits), including $237 million of regulatory assets associated with DESC’s purchases of its first mortgage bonds during 2019 that are no longer probable of recovery under the settlement agreement, and $18 million ($14 million after-tax) reflected within other income in its Consolidated Statements of Income.2021,2022, DESC filed an application with the South Carolina Commission seeking approval to recover $48$60 million of costs and net lost revenues associated with these programs, along with an incentive to invest in such programs. In April 2021,2022, the South Carolina Commission approved the filing. In connectionrequest, effective with the approvalfirst billing cycle of the comprehensive settlement agreement in the South Carolina base rate case discussed above, the net lost revenue component of the DSM rider was adjusted resulting in a recovery of $43 million commencing with bills issued on September 1, 2021.May 2022.February 2021, DESC filed a proposal withApril 2022, the South Carolina Commission approved DESC’s request to increase the total fuel cost component of retail electric rates. DESC’s proposed adjustment would increase annual base fuel component recoveries by $36 million and is designed to recover DESC’s current base fuel costs, net of the existing over-collected balance, over the 12-month period beginningrates, effective with the first billing cycle of May 2021. In addition, DESC proposed a decrease to its variable environmental component and an increase to its distributed energy resource component. In April 2021, the2022. The South Carolina Commission also approved DESC’s request to apply approximately $66 million representing the filing.Natural Gas RatesIn June 2021, DESC filednet balance of funds associated with the South Carolina Commissionmonetization of the bankruptcy settlement with Toshiba Corporation following the satisfaction of liens against NND Project property previously recorded in regulatory liabilities, as a reduction to its monitoring report for the 12-month period ended March 31, 2021under-collected base fuel cost balance, along with a total revenue requirement of $426 million. This represents a $9 million overall annual increase to its natural gas rates under the terms of the Natural Gas Rate Stabilization Act effective with the first billing cycle of November 2021. In October 2021, the South Carolina Commission issued an order approving a total revenue requirement of $424 million effective with the first billing cycle of November 2021. This represents a $7 million overall annualrequested increase to DESC’s natural gas rates.variable environmental and avoided capacity cost component. The net effect is an annual increase of $143 million.2021,2022, the Ohio Commission approved an extension of East Ohio’s PIR program for capital investments through 2026 with continuation of 3% increases of annual capital expenditures per year.20202021 costs. The filing reflects gross plant investment for 20202021 of $178$225 million, cumulative gross plant investment of $2.0$2.2 billion and an annuala revenue requirement of $243$273 million. This matter is pending.2021, East Ohio2022, certain parties filed an application requesting approvalappeal with the Supreme Court of Ohio appealing the Ohio Commission’s December 2020 order establishing the CEP rider, including the rate of return utilized in determining the revenue requirement. This matter is pending. adjust the CEP cost recovery rates for 2019 and 2020 costs. The approved rates reflect gross plant investment for 2019 and 2020 of $231 million, cumulative gross plant investment of $952 million and a revenue requirement of $118 million. The Ohio Commission also ordered that East Ohio should file its next base rate case by October 2023.20192021 of $137 million, gross plant investment for 2020 of $99$140 million, cumulative gross plant investment of $957 million$1.1 billion and a revenue requirement of $119$137 million. This matter is pending.UEX RiderEast Ohio has approval for a UEX Rider through which it recovers the bad debt expense of most customers not participating in the PIPP Plus Program. The UEX Rider is adjusted annually to achieve dollar for dollar recovery of East Ohio’s actual write-offs of uncollectible amounts. In July 2021, the Ohio Commission approved East Ohio’s application to adjust its UEX Rider to reflect an63increased annual revenue requirement of $20 million to provide for an under-recovered accumulated bad debt expense of $7 million as of March 31, 2021, and recovery of net bad debt expense projected to total $13 million for the twelve-month period ending March 2022.West VirginiaUtah RegulationWest VirginiaUtah Base Rate CaseSeptember 2020, HopeMay 2022, Questar Gas filed its base rate case and schedules with the West VirginiaUtah Commission. HopeQuestar Gas proposed a non-fuel, base rate increase of $28 million.$71 million effective January 2023. The base rate increase was proposed to recover the significant investment in distribution infrastructure and costs associated with the acquisition of over 2,000 miles of gathering assets, both for the benefit of West VirginiaUtah customers. The proposed rates would provide for an ROE of 10.25%10.3% compared to the currently authorized ROE of 9.45%9.5%. In July 2021, the West Virginia Commission approved a non-fuel, base rate increase of $13 million for rates effective July 2021 with an ROE of 9.54%. In August 2021, Hope filed a petition for reconsideration with the West Virginia Commission regarding certain return calculations included in the July 2021 approval order.PREPIn May 2021, Hope filed a PREP application with the West Virginia Commission requesting approval to recover PREP costs related to $54 million and $56 million of projected capital investment for 2021 and 2022, respectively. The application also includes a true-up of PREP costs related to the 2020 actual capital investment of $34 million and sets forth $9 million of annual PREP costs to be recovered in proposed rates effective November 1, 2021. In October 2021, the West Virginia Commission approved the request.Utah RegulationPurchased GasIn May 2021, the Utah Commission approved Questar Gas’ request for a $43 million gas cost increase with rates effective June 2021.In October 2021, the Utah Commission approved Questar Gas’ request for an $83 million gas cost increase with rates effective November 2021.This matter is pending.2020.2021.$58$4 million and $147$34 million for the three and nine months ended September 30,March 31, 2022 and 2021, respectively, and $61 million and $146 million for the three and nine months ended September 30, 2020, respectively, of rental revenue included in operating revenue. Dominion Energy’s Consolidated Statements of Income include $29$9 million and $87$27 million for the three and nine months ended September 30,March 31, 2022 and 2021, respectively, and $26 million and $76 million for the three and nine months ended September 30, 2020, respectively, of depreciation expense included in depreciation, depletion and amortization, related to facilities subject to power purchase agreements under which Dominion Energy is the lessor.2020.Dominion EnergyDominion Energy’s Consolidated Balance Sheets include $264 million presented in current liabilities held for sale at September 30, 2021 as well as $32 million presented in securities due within one year and $239 million presented in long-term debt at December 31, 2020, for debt issued by SBL Holdco, a VIE, net of issuance costs, that is nonrecourse to Dominion Energy and is secured by SBL Holdco’s interest in certain nonregulated solar facilities.2021. $89$98 million and $81$96 million for the three months ended September 30,March 31, 2022 and 2021, and 2020, respectively, and $278 million and $260 million for the nine months ended September 30, 2021 and 2020, respectively. Virginia Power’s Consolidated Balance Sheets include amounts due to DES of $24$111 million and $175$20 million at September 30, 2021March 31, 2022 and December 31, 2020,2021, respectively, recorded in payables to affiliates.In June 2021, Dominion Energy amendedEnergy’s short-term financing is supported by its $6.0 billion joint revolving credit facility to providethat provides for a discount in the pricing of certain annual fees and amounts borrowed by Dominion Energy under the facility if Dominion Energy achieves certain annual renewable electric generation and diversity and inclusion objectives. In addition, the amended facility incorporates certain administrative changes with respect to the anticipated transition from LIBOR to an alternative benchmark rate. The key financial covenants are unchanged from the previous facility.September 30, 2021,March 31, 2022, Dominion Energy’s commercial paper and letters of credit outstanding, as well as its capacity available under the credit facility, were as follows:September 30, 2021,March 31, 2022, the sub-limits for DESC and Questar Gas were $500 million and $250 million, respectively.In January 2021, DESC and GENCO applied to FERC for a two-year short-term borrowing authorization. In March 2021, FERC granted DESC authority through March 2023 to issue short-term indebtedness (pursuant to Section 204 of the Federal Power Act) in amounts not to exceed $2.2 billion outstanding with maturity dates of one year or less. In addition, in March 2021, FERC granted GENCO authority through March 2023 to issue short-term indebtedness not to exceed $200 million outstanding with maturity dates of one year or less.facilitiesfacility mentioned above, Dominion Energy also has a credit facility which allows Dominion Energy to issue up to approximately $30 million in letters of credit and matures in June 2022. In April 2022, Dominion Energy entered into an agreement to amend and restate this facility to extend the maturity date to June 2025. At September 30, 2021March 31, 2022 and December 31, 2020,2021, Dominion Energy had $29$20 million and $30$29 million in letters of credit outstanding under this agreement,facility, respectively.In addition to the credit facilities mentioned above, SBL Holdco has $30 million of credit facilities which had an original stated maturity date of December 2017 with automatic one-year renewals through the maturity of the SBL Holdco term loan agreement in 2023. Dominion Solar Projects III, Inc. has $25 million of credit facilities which had an original stated maturity date of May 2018 with automatic one-year renewals through the maturity of the Dominion Solar Projects III, Inc. term loan agreement in 2024. At both September 30, 2021 and December 31, 2020, 0 amounts were outstanding under either of these facilities.In March 2020, Dominion Energy entered into a $900 million 364-Day Revolving Credit Agreement that bore interest at a variable rate. At December 31, 2020, $225 million was outstanding under the agreement. In March 2021, the agreement reached maturity and Dominion Energy repaid the outstanding borrowed amount in full.In July 2021, Dominion Energy entered into an approximately $1.3 billion term loan credit agreement following the termination of the Q-Pipe Transaction as discussed in Note 3.2020.2021. At September 30, 2021March 31, 2022 and December 31, 2020,2021, Dominion Energy’s Consolidated Balance Sheets include $391$473 million and $268$431 million, respectively, with respect to such notes presented within short-term debt. The proceeds are used for general corporate purposes and to repay debt.facility, as amended in June 2021.facility. The credit facility can be used for working capital, as support for the combined commercial paper programs of Virginia Power, Dominion Energy, Questar Gas and DESCthe borrowers under the credit facility and for other general corporate purposes.September 30, 2021,March 31, 2022, Virginia Power’s share of commercial paper and letters of credit outstanding under the joint revolving credit facility with Dominion Energy, Questar Gas and DESC was as follows: September 30, 2021,March 31, 2022, the sub-limit for Virginia Power was $1.75 billion. If Virginia Power has liquidity needs in excess of its sub-limit, the sub-limit may be changed or such needs may be satisfied through short-term intercompany borrowings from Dominion Energy. This credit facility matures in June 2026, with the potential to be extended by the borrowers to June 2028. The credit facility can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $2.0 billion (or the sub-limit, whichever is less) of letters of credit.March 2021, PSNCJanuary 2022, Virginia Power issued through private placement, $150$600 million of 3.10%2.40% senior notes and $400 million of 2.95% senior notes that mature in 2051.2032 and 2051, respectively.2021,2022, Virginia Power remarketed two series of tax-exempt bonds, with an aggregate outstanding principal of approximately $138 million to new investors. Both bonds will bear interest at a coupon of 1.65% until May 2024, after which they will bear interest at a market rate to be determined at that time.issued $600provided notice of its intention to borrow $900 million of 1.45% senior notes and $500 million of 3.30% senior notes that mature in 2026 and 2041, respectively. In June 2021, Dominion Energy entered into a $900 millionunder its Sustainability Revolving Credit Agreement. This supplemental credit facility,Facility which matures in June 2024 and bears interest at a variable rate, offers a reduced interest rate margin with respect to borrowed amounts allocated to certain environmental sustainability or social investment initiatives. Proceeds of the supplemental credit facility also may be used for general corporate purposes, but such proceeds are not eligible for a reduced interest rate margin. At September 30, 2021, $900 million was outstanding under the supplemental credit facility. The proceeds from these borrowings were used to support environmental sustainability and social investment initiatives ($250 million) and for general corporate purposes ($650 million). The maximum allowed total debt to total capital ratio under this supplemental credit facility is consistent with such allowed ratio under Dominion Energy’s joint revolving credit facility.In July 2021, DESC redeemed the remaining principal outstanding of $30 million of its 3.22% first mortgage bonds, plus accrued interest. The bonds would have otherwise matured in October 2021.In July 2021, Dominion Energy redeemed the remaining principal outstanding of $400 million of its 2.0% senior notes, plus accrued interest. The notes would have otherwise matured in August 2021.In August 2021, Dominion Energy issued $1.0 billion of 2.25% senior notes that mature in 2031. The proceeds from this offering will be used to finance and/or refinance, in whole or in part, existing and future expenditures associated with the development, construction, acquisition and operation of certain solar projects.In August 2021, Dominion Energy redeemed the remaining principal outstanding of $800 million of its July 2016 hybrids, which matured in 2076 and were listed on the NYSE under the symbol DRUA. Expenses related to the early redemption of the hybrids were $23 million reflected within interest and related charges in the Consolidated Statements of Income for the three and nine months ended September 30, 2021.In August 2021, Questar Gas issued through private placements $125 million of 2.21% senior notesand $125 million of 3.15% senior notes that mature in 2031 and 2051, respectively.In November 2021, Virginia Power provided notice to redeem its 2.95% senior notes, which would have otherwise matured in January 2022, at the remaining principal outstanding of $450 million plus accrued interest. Derivative RestructuringIn June 2020, Dominion Energy amended a portfolio of interest rate swaps with a notional value of $2.0 billion, extending the mandatory termination dates from 2020 and 2021 to December 2024. As a result of this noncash financing activity with an embedded interest rate swap, Dominion Energy recorded $326 million in other long-term debt representing the net present value of the initial fair value measurement of the new contract as discussed in Note 18 to the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020. In August 2021, Dominion Energy settled certain of the outstanding interest rate swaps which would have otherwise matured in December 2024, resulting in a $39 million reduction in other long-term debt.In August 2020, Virginia Power amended a portfolio of interest rate swaps with a notional value of $900 million, extending the mandatory termination dates from 2020 to December 2023. As a result of this noncash financing activity with an embedded interest rate swap, Virginia Power recorded $443 million in other long-term debt representing the net present value of the initial fair value measurement of the new contract as discussed in Note 18 to the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020.rate.September 30, 2021March 31, 2022 and December 31, 2020,2021, Dominion Energy had issued and outstanding 2.43.4 million shares of preferred stock, 1.6 million, 0.8 million and 0.81.0 million of which were designated as the Series A Preferred Stock, the Series B Preferred Stock and the Series BC Preferred Stock, respectively. September 30,March 31, 2022 and 2021 and 2020, and $21 million ($13.125 per share) for both the nine months ended September 30, 2021 and 2020, on the Series A Preferred Stock. Dominion Energy also recorded dividends of $9 million ($11.625 per share) for both the three months ended September 30,March 31, 2022 and 2021 and 2020, and $27 million ($34.875 per share) for bothon the nine months ended September 30, 2021 and 2020, on Series B Preferred Stock. The stock purchase contract liability associated with Dominion Energy’s 2019 Equity Units was $65Energy recorded dividends of $11 million and $129 million at September 30, 2021 and December 31, 2020, respectively. Stock purchase contract payments of $64 million and $62 million were made during($10.875 per share) for the ninethree months ended September 30, 2021 and 2020, respectively. In calculating diluted EPS, Dominion Energy applies the treasury stock method to the stock purchase contracts and the if-converted method toMarch 31, 2022 on the Series AC Preferred Stock. ThereOther than as discussed below, there have been no significant changes to Dominion Energy’s Series A Preferred Stock, Series B Preferred Stock and Series BC Preferred Stock as described in Note 19 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020, other than the item described below.2021.– Conversion Settlement ModificationNovember 2021,the event of a successful remarketing, the dividend rate on the preferred stock may be reset and the conversion rate on the preferred stock may increase depending on the closing price of Dominion Energy’s Articlescommon stock on the date of Incorporation were amendedthe remarketing. In May 2022, Dominion Energy received a commitment from a financial institution to require that any conversionpurchase up to 1.6 million shares of its Series A Preferred Stock be settled,in the final remarketing if any such shares included in the final remarketing are not sold to other purchasers through a marketed process at Dominion Energy’s election, either entirely in cash or in cash upa dividend rate of not more than 1.75% for the June 2022 through August 2022 dividend period, which dividend rate will increase to the first $1,000 per share and in shares of Dominion Energy common stock, cash or any combination thereof for any amounts in excess of $1,000 per share.6.75% effective September 2022. As a result, Dominion Energy, subject to approval by its Board of establishingDirectors and the settlement of a minimum amount to be settled in cash if the holders elect to convertsuccessful remarketing, will redeem all outstanding shares of the Series A Preferred Stock in September 2022. In addition, Dominion Energy committed to make a short-term deposit of at least $1.6 billion but not more than $2.0 billion at the financial institution in May 2022. Dominion Energy will not directly receive proceeds from a successful remarketing as the remarketing will be reclassified from equityconducted on behalf of investors that, as of the remarketing, continue to mezzanine equityhold corporate units or otherwise elect to participate in the fourth quarterremarketing. Proceeds from a successful remarketing attributable to investors that continue to hold corporate units would be used to pay the purchase price to Dominion Energy for issuance of 2021.its common stock under the stock purchase contracts that are a component of such corporate units. In accordance with the terms of the 2019 Equity Units, if the final remarketing is unsuccessful, shares of the Series A Preferred Stock that remain a component of such corporate units as of the remarketing will be tendered to Dominion Energy to satisfy the investors’ obligation under the stock purchase contract, unless an investor elects to settle its stock purchase obligation in cash. Under the terms of the stock purchase contracts included in the 2019 Equity Units, assuming no anti-dilution or other adjustments, the maximum number of shares of common stock Dominion Energy will issue in June 2022 is 21.8 million for consideration of $1.6 billion.$292$45 million from the issuance of 41 million shares of common stock for the ninethree months ended September 30, 2021March 31, 2022 and $481$48 million from the issuance of 6.2less than 1 million shares of common stock for the ninethree months ended September 30, 2020,March 31, 2021, through various programs including Dominion Energy Direct® and employee savings plans as well as settlements of litigation as described in Note 20 to the Consolidated Financial Statements to the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020.2021.67July 2021,May 2022, Dominion Energy issued 1.40.9 million shares of its common stock, valued at $104$72 million, to partially satisfy DESC’s remaining obligation under a settlement agreement for the FILOT litigation discussed in Note 17.In August 2021, Dominion Energy issued 0.6 million shares of its common stock, valued at $45 million, to satisfy DESC’s obligation for the initial payment under a settlement agreement with the SCDOR discussed in Note 17.In September 2020, Dominion Energy issued 4.1 million shares of its common stock to satisfy its obligation under a settlement agreement for the Santee Cooper Ratepayer Case discussed in Note 17. These shares were immediately repurchased as discussed below.2020. As of September 30, 2021,2021. Dominion Energy hasdid not issuedissue any shares or enteredenter into any forward sale agreements under this program.program during the three months ended March 31, 2022.
In August 2020, Dominion Energy began repurchasing shares under an open market agreement with a financial institution. During the third quarter of 2020, Dominion Energy repurchased 7.2 million shares of Dominion Energy common stock for $562 million.
In September 2020, Dominion Energy entered into2 prepaid accelerated share repurchase agreements with separate financial institutions as counterparties, which was ultimately completed in November 2020. Dominion Energy made payments totaling $1.5 billion to the counterparties in exchange for an aggregate of approximately 17.2 million shares of Dominion Energy common stock, which represented approximately 90% of $1.5 billion worth of Dominion Energy shares based on the closing price of such shares on the date the agreements were executed. As a result, Dominion Energy recorded a reduction to common stock of $1.5 billion during the third quarter of 2020.
In September 2020, Dominion Energy repurchased 4.1 million shares of Dominion Energy common stock in a private transaction for $323 million. ninethree months ended September 30, 2021March 31, 2022.nation'snation’s air quality. At a minimum, states are required to establish regulatory programs to meet applicable requirements of the CAA. However, states may choose to develop regulatory programs that are more restrictive. Many of the Companies’ facilities are subject to the CAA’s permitting and other requirements.UntilCertain states in which the statesCompanies operate have developed plans, and had such plans approved or partially approved by the EPA, which are not expected to have a material impact on the Companies’ results of operations or cash flows. However, until implementation plans for the standard are developed and approved for all states in which the Companies operate, the Companies are unable to predict whether or to what extent the new rules will ultimately require additional controls. The expenditures required to implement additional controls could have a material impact on the Companies’ results of operations and cash flows.69technology,technological, and cost and benefit studies. DESC is conducting studies and implementing plans as required by the rule to determine appropriate intake structure modifications at certain facilities to ensure compliance with this rule. While the impacts of this rule could be material to the Companies’ results of operations, financial condition and/or cash flows, the existing regulatory frameworks in South Carolina and Virginia provide rate recovery mechanisms that could substantially mitigate any such impacts for the regulated electric utilities.1213 sites associated with Dominion Energy including certain sites acquired in the SCANA Combination, remediation work has been substantially completed under federal or state oversight. Where required, the sites are following state-approved groundwater monitoring programs. Dominion Energy has proposed remediation plans associated with 32 sites, including 1 at Virginia Power, and expects to commence remediation activities in 2021 or 2022 depending on receipt of final permits and approvals. At September 30, 2021March 31, 2022 and December 31, 2020,2021, Dominion Energy had $40$52 million and $42$45 million, respectively, and Virginia Power had $25 million and $26 million, respectively,at both periods, of reserves recorded. In addition, for 1 site associated with Dominion Energy, an updated work plan submitted to SCDHEC in September 2018, would increase costs by approximately $11 million if approved by federal and state agencies. In September 2020, this plan was submitted to the Army Corps of Engineers. Dominion Energy is associated with 12 additional sites, including 2 associated with Virginia Power, which are not under investigation by any70September 30, 2021March 31, 2022 and December 31, 20202021 include reserves of $196$257 million and $208$274 million, respectively, included withinin other current liabilities, and insurance receivables of $41$118 million and $8 million, respectively,at both dates, included within other receivables. These balances at March 31, 2022 and December 31, 2021 include $70 million and $85 million, respectively, of offsetting reserves and insurance receivables related to personal injury or wrongful death cases which are currently pending. During the ninethree months ended September 30,March 31, 2022, 0 charges were included in Dominion Energy’s Consolidated Statements of Income. During the three months ended March 31, 2021, Dominion Energy’s Consolidated Statements of Income include charges of $100$60 million ($75 million after-tax), included within impairment of assets and other charges. During both the three and nine months ended September 30, 2020, Dominion Energy’s Consolidated Statements of Income include charges of $44 million ($3345 million after-tax) included within impairment of assets and other charges. In addition, Dominion Energy’s Consolidated Statements of Income for the nine months ended September 30, 2020 include charges of $25 million ($25 million after-tax) included within other income.Ratepayer Class ActionsIn May 2018, a consolidated complaint against DESC, SCANA and the State of South Carolina was filed in the State Court of Common Pleas in Hampton County, South Carolina (the DESC Ratepayer Case). The plaintiffs alleged, among other things, that DESC was negligent and unjustly enriched, breached alleged fiduciary and contractual duties and committed fraud and misrepresentation in failing to properly manage the NND Project, and that DESC committed unfair trade practices and violated state anti-trust laws. In December 2018, the State Court of Common Pleas in Hampton County entered an order granting preliminary approval of a class action settlement. The court entered an order granting final approval of the settlement in June 2019, which became effective in July 2019. The settlement agreement, contingent upon the closing of the SCANA Combination, provided that SCANA and DESC establish an escrow account and proceeds from the escrow account would be distributed to the plaintiffs, after payment of certain taxes, attorneys' fees and other expenses and administrative costs. The escrow account would include (1) up to $2.0 billion, net of a credit of up to $2.0 billion in future electric bill relief, which would inure to the benefit of the escrow account in favor of class members over a period of time established by the South Carolina Commission in its order related to matters before the South Carolina Commission related to the NND Project, (2) a cash payment of $115 million and (3) the transfer of certain DESC-owned real estate or sales proceeds from the sale of such properties, which counsel for the plaintiffs estimated to have an aggregate value between $60 million and $85 million. At the closing of the SCANA Combination, SCANA and DESC funded the cash payment portion of the escrow account. In July 2019, DESC transferred $117 million representing the cash payment, plus accrued interest, to the plaintiffs. Through August 2020, property, plant and equipment with a net recorded value of $27 million had been transferred to the plaintiffs in coordination with the court-appointed real estate trustee to satisfy the settlement agreement. In September 2020, the court entered an order approving a final resolution of the transfer of real estate or sales proceeds with a cash contribution of $38.5 million by DESC and the conveyance of property, plant and equipment with a net recorded value of $3 million, which was completed by DESC in October 2020.In September 2017, a purported class action was filed by Santee Cooper ratepayers against Santee Cooper, DESC, Palmetto Electric Cooperative, Inc. and Central Electric Power Cooperative, Inc. in the State Court of Common Pleas in Hampton County, South Carolina (the Santee Cooper Ratepayer Case). The allegations were substantially similar to those in the DESC Ratepayer Case. In March 2020, the parties executed a settlement agreement relating to this matter as well as the Luquire Case and the Glibowski Case described below. The settlement agreement provided that Dominion Energy and Santee Cooper establish a fund for the benefit of class members in the amount of $520 million, of which Dominion Energy’s portion was $320 million of shares of Dominion Energy common stock. In July 2020, the court issued a final approval of the settlement agreement. In September 2020, Dominion Energy issued $322 million of shares of Dominion Energy common stock to satisfy its obligation under the settlement agreement, including interest charges.71In July 2019, a similar purported class action was filed by certain Santee Cooper ratepayers against DESC, SCANA, Dominion Energy and former directors and officers of SCANA in the State Court of Common Pleas in Orangeburg, South Carolina (the Luquire Case). In August 2019, DESC, SCANA and Dominion Energy were voluntarily dismissed from the case. The claims were similar to the Santee Cooper Ratepayer Case. In March 2020, the parties executed a settlement agreement as described above relating to this matter as well as the Santee Cooper Ratepayer Case and the Glibowski Case. This case was dismissed as part of the Santee Cooper Ratepayer Case settlement described above.RICO Class ActionIn January 2018, a purported class action was filed, and subsequently amended, against SCANA, DESC and certain former executive officers in the U.S. District Court for the District of South Carolina (the Glibowski Case). The plaintiff alleged, among other things, that SCANA, DESC and the individual defendants participated in an unlawful racketeering enterprise in violation of RICO and conspired to violate RICO by fraudulently inflating utility bills to generate unlawful proceeds. In March 2020, the parties executed a settlement agreement as described above relating to this matter as well as the Santee Cooper Ratepayer Case and the Luquire Case. This case was dismissed as part of the Santee Cooper Ratepayer Case settlement described above.In September 2017, a purported class action was filed against SCANA and certain former executive officers and directors in the U.S. District Court for the District of South Carolina. Subsequent additional purported class actions were separately filed against all or nearly all of these defendants (collectively the SCANA Securities Class Action). In January 2018, the U.S. District Court for the District of South Carolina consolidated these suits, and the plaintiffs filed a consolidated amended complaint in March 2018. The plaintiffs alleged, among other things, that the defendants violated §10(b) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, and that the individually named defendants are liable under §20(a) of the same act. In December 2019, the parties executed a settlement agreement pursuant to which SCANA would pay $192.5 million, up to $32.5 million of which could be satisfied through the issuance of shares of Dominion Energy common stock, subject to court approval. In February 2020, the U.S. District Court for the District of South Carolina granted preliminary approval of the settlement agreement, pending a fairness hearing, and granted final approval in July 2020. In March 2020, SCANA funded an escrow account with $160 million in cash and paid the balance of $32.5 million in cash in August 2020 to satisfy the settlement.72This case is pending.In November 2021, the U.S Court of Appeals for the Fourth Circuit affirmed the lower court ruling. In March 2022, the deadline to file an appeal to the Supreme Court of the United States expired.This case is pending.FILOT Litigation and Related MattersIn November 2017, Fairfield County filedAs a complaint and a motion for temporary injunction against DESCresult of the ruling in favor of the defendants in the State Court of Common Pleas in Fairfield County, South Carolina, making allegations of breach of contract, fraud, negligent misrepresentation, breach of fiduciary duty, breach of implied duty of good faith and fair dealing and unfair trade practices relatedaforementioned case, any potential loss by DESC would be limited to DESC’s termination of the FILOT agreement between DESC and Fairfield County related to the NND Project. The plaintiff sought a temporary and permanent injunction to prevent DESC from terminating the FILOT agreement. The plaintiff withdrew the motion for temporary injunction in December 2017. In July 2021, the parties executed a settlement agreement requiring DESC to pay $99 million, which could be satisfied in either cash or shares of Dominion Energy common stock. Also in July 2021, the State Court of Common Pleas in Fairfield County, South Carolina approved the settlement. In July 2021, Dominion Energy issued 1.4 million shares of Dominion Energy common stock to satisfy DESC’s obligation under the settlement agreement.an inconsequential amount.September and October 2017, SCANA was served with subpoenasMay 2022, Dominion Energy issued by the U.S. Attorney’s Office for the District of South Carolina and the Staff of the SEC’s Division of Enforcement seeking documents related to the NND Project. In February 2020, the SEC filed a complaint against SCANA, twoan additional 0.9 million shares of its former executive officers and DESC in the U.S. District Court for the District of South Carolina alleging that the defendants violated federal securities laws by making false and misleading statements about the NND Project. In April 2020, SCANA and DESC reached an agreement in principle with the Staff of the SEC’s Division of Enforcementcommon stock to settle, without admitting or denying the allegations in the complaint. In December 2020, the U.S. District Court for the District of73South Carolina issued an order approvingpartially satisfy DESC’s remaining obligation under the settlement which required SCANA to pay a civil monetary penalty totaling $25 million, and SCANA and DESC to pay disgorgement and prejudgment interest totaling $112.5 million, which disgorgement and prejudgment interest amount were deemed satisfied by the settlements in the SCANA Securities Class Action and the DESC Ratepayer Case. SCANA paid the civil penalty in December 2020. The SEC civil action against two former executive officers of SCANA remains pending and is currently subject to a stay granted by the court in June 2020 at the request of the U.S. Attorney’s Office for the District of South Carolina.In addition, the South Carolina Law Enforcement Division is conducting a criminal investigation into the handling of the NND Project by SCANA and DESC. Dominion Energy is cooperating fully with the investigations by the U.S. Attorney’s Office and the South Carolina Law Enforcement Division, including responding to additional subpoenas and document requests. Dominion Energy has also entered into a cooperation agreement with the U.S. Attorney’s Office and the South Carolina Attorney General’s Office. The cooperation agreement provides that in consideration of its full cooperation with these investigations to the satisfaction of both agencies, neither such agency will criminally prosecute or bring any civil action against Dominion Energy or any of its current, previous, or future direct or indirect subsidiaries related to the NND Project. A former executive officer of SCANA entered a plea agreement with the U.S. Attorney’s Office and the South Carolina Attorney General’s Office in June 2020 and entered a guilty plea with the U.S. District Court for the District of South Carolina in July 2020. Another former executive officer of SCANA entered a plea agreement with the U.S. Attorney's Office and the South Carolina Attorney General's Office in November 2020 and entered guilty pleas in the U.S. District Court for the District of South Carolina and in South Carolina state court in February 2021. As a result of the pleas, Dominion Energy has terminated indemnity for these former executive officers related to these two cases.Abandoned NND ProjectDESC, for itself and as agent for Santee Cooper, entered into an engineering, construction and procurement contract with Westinghouse and WECTEC in 2008 for the design and construction of the NND Project, of which DESC’s ownership share is 55%. Various difficulties were encountered in connection with the project. The ability of Westinghouse and WECTEC to adhere to established budgets and construction schedules was affected by many variables, including unanticipated difficulties encountered in connection with project engineering and the construction of project components, constrained financial resources of the contractors, regulatory, legal, training and construction processes associated with securing approvals, permits and licenses and necessary amendments to them within projected time frames, the availability of labor and materials at estimated costs and the efficiency of project labor. There were also contractor and supplier performance issues, difficulties in timely meeting critical regulatory requirements, contract disputes, and changes in key contractors or subcontractors. These matters preceded the filing for bankruptcy protection by Westinghouse and WECTEC in March 2017, and were the subject of comprehensive analyses performed by SCANA and Santee Cooper.Based on the results of SCANA’s analysis, and in light of Santee Cooper's decision to suspend construction on the NND Project, in July 2017, SCANA determined to stop the construction of the units and to pursue recovery of costs incurred in connection with the construction under the abandonment provisions of the Base Load Review Act or through other means. This decision by SCANA became the focus of numerous legislative, regulatory and legal proceedings. Some of these proceedings remain unresolved and are described above.In September 2017, DESC, for itself and as agent for Santee Cooper, filed with the U.S. Bankruptcy Court for the Southern District of New York Proofs of Claim for unliquidated damages against each of Westinghouse and WECTEC. These Proofs of Claim were based upon the anticipatory repudiation and material breach by Westinghouse and WECTEC of the contract, and assert against Westinghouse and WECTEC any and all claims that are based thereon or that may be related thereto.Westinghouse’s reorganization plan was confirmed by the U.S. Bankruptcy Court for the Southern District of New York and became effective in August 2018. In connection with the effectiveness of the reorganization plan, the contract associated with the NND Project was deemed rejected. DESC is contesting approximately $285 million of filed liens in Fairfield County, South Carolina. Most of these asserted liens are claims that relate to work performed by Westinghouse subcontractors before the Westinghouse bankruptcy, although some of them are claims arising from work performed after the Westinghouse bankruptcy.Westinghouse has indicated that some unsecured creditors have sought or may seek amounts beyond what Westinghouse allocated when it submitted its reorganization plan to the U.S. Bankruptcy Court for the Southern District of New York. If any unsecured creditor is successful in its attempt to include its claim as part of the class of general unsecured creditors beyond the amounts in the bankruptcy reorganization plan allocated by Westinghouse, it is possible that the reorganization plan will not provide for payment in full or nearly in full to its pre-petition trade creditors. The shortfall could be significant.DESC and Santee Cooper were responsible for amounts owed to Westinghouse for valid work performed by Westinghouse subcontractors on the NND Project after the Westinghouse bankruptcy filing until termination of the interim assessment agreement. In74December 2019, DESC and Santee Cooper entered into a confidential settlement agreement with W Wind Down Co LLC resolving claims relating to the interim assessment agreement.Further, some Westinghouse subcontractors who have made claims against Westinghouse in the bankruptcy proceeding also filed against DESC and Santee Cooper in South Carolina state court for damages. Many of these claimants have also asserted construction liens against the NND Project site. DESC also intends to oppose these claims and liens. With respect to claims of Westinghouse subcontractors, DESC believes there were sufficient amounts previously funded during the interim assessment agreement period to pay such validly asserted claims. With respect to the Westinghouse subcontractor claims which relate to other periods, DESC understands that such claims will be paid pursuant to Westinghouse’s confirmed bankruptcy reorganization plan. DESC further understands that the amounts paid under the plan may satisfy such claims in full. Therefore, DESC believes that the Westinghouse subcontractors may be paid substantially (and potentially in full) by Westinghouse. While Dominion Energy cannot be assured that it will not have any exposure on account of unpaid Westinghouse subcontractor claims, which DESC is presently disputing, Dominion Energy believes it is unlikely that it will be required to make payments on account of such claims that would exceed the portion of the Toshiba Settlement allocated for such balances within the SCANA Merger Approval Order recorded in regulatory liabilities on Dominion Energy’s Consolidated Balance Sheets.Other than the items discussed below, thereThere have been no significant changes regarding the Companies’ nuclear insurance as described in Note 23 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020.In March 2021, the total liability protection per nuclear incident available to all participants in the Secondary Financial Protection Program decreased from $13.8 billion to $13.7 billion. In June 2021, the total liability protection per nuclear incident available to all participants in the Secondary Financial Protection Program decreased from $13.7 billion to $13.5 billion. These decreases do not impact Dominion Energy’s responsibility per active unit under the Price-Anderson Amendments Act of 1988.Effective June 2021, Dominion Energy reduced the levels of nuclear property insurance coverage for each of the reactor sites at Millstone, North Anna and Surry from $1.70 billion to the NRC minimum requirement of $1.06 billion. As a result of this reduction in nuclear property insurance coverage, Dominion Energy and Virginia Power’s maximum retrospective premium assessment for the current annual policy period was reduced to $76 million and $35 million, respectively.2021.2020,2021, the Companies entered into contracts with the DOE for the disposal of spent nuclear fuel under provisions of the Nuclear Waste Policy Act of 1982.In June 2018, a lawsuit for Kewaunee was filed in the U.S. Court of Federal Claims for recovery of spent nuclear fuel storage costs incurred after 2013. In March 2019, Dominion Energy amended its filing for recovery of spent nuclear fuel storage to include costs incurred for the year ended December 31, 2018. This matter is pending.Upon the closing of the GT&S Transaction,At March 31, 2022, Dominion Energy retained itshad issued 4 guarantees related to Cove Point, an equity method investment, in support of terminal services, transportation and construction. NaN of the Cove Point guarantees have a cumulative maximum exposure of $1.9 billion while the other 2 guarantees have 0 maximum limit. No amounts related to these guarantees have been recorded.September 30, 2021,March 31, 2022, Dominion Energy had issued an additional $25$20 million of guarantees, primarily to support third parties. No amounts related to these guarantees have been recorded.September 30, 2021,March 31, 2022, Dominion Energy had issued the following subsidiary guarantees:Energy's guarantees for the new corporate office property andEnergy’s guarantee of an offshore wind installation vessel discussed in Note 15 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020.2021.September 30, 2021,March 31, 2022, Dominion Energy had purchased $169$227 million of surety bonds, including $95$156 million at Virginia Power, and authorized the issuance of letters of credit by financial institutions of $99$112 million to facilitate commercial transactions by its subsidiaries with third parties. Under the terms of surety bonds, the Companies are obligated to indemnify the respective surety bond company for any amounts paid.20202021.September 30, 2021,March 31, 2022, Dominion Energy’s credit exposure totaled $177$96 million, primarily related to price risk management activities. Of this amount, investment grade counterparties, including those internally rated, represented 91%85%. NaN single counterparty, whether investment grade or non-investment grade, exceeded $51$27 million of exposure. At September 30, 2021,March 31, 2022, Virginia Power’s exposure related to wholesale customers totaled $10$14 million. Of this amount, investment grade counterparties, including those internally rated, represented 80%57%. NaN single counterparty, whether investment grade or non-investment grade, exceeded $4$3 million of exposure.76September 30, 2021March 31, 2022 and December 31, 2020,2021, Dominion Energy would have been required to post $102$128 million and $14$31 million, respectively, of additional collateral to its counterparties. The collateral that would be required to be posted includes the impacts of any offsetting asset positions and any amounts already posted for derivatives, non-derivative contracts and derivatives elected under the normal purchases and normal sales exception, per contractual terms. Dominion Energy had posted $90$125 million and $1$66 million of collateral at September 30, 2021March 31, 2022 and December 31, 2020,2021, respectively, related to derivatives with credit-related contingent provisions that are in a liability position and not fully collateralized with cash. The aggregate fair value of all derivative instruments with credit-related contingent provisions that are in a liability position and not fully collateralized with cash was $192$253 million and $15$97 million at September 30, 2021March 31, 2022 and December 31, 2020,2021, respectively, which does not include the impact of any offsetting asset positions.September 30, 2021March 31, 2022 and December 31, 2020,2021, Virginia Power would have been required to post an additional $40$39 million and $2$22 million, respectively, of additional collateral to its counterparties. The collateral that would be required to be posted includes the impacts of any offsetting asset position and any amounts already posted for derivatives and non-derivative contracts, per contractual terms. Virginia Power had posted $79$118 million and $54 million of collateral at September 30,March 31, 2022 and December 31, 2021, respectively, related to derivatives with credit-related contingent provisions that are in a liability position and not fully collateralized with cash. NaN such amounts were posted at December 31, 2020. The aggregate fair value of all derivative instruments with credit-related contingent provisions that are in a liability position and not fully collateralized with cash was $119$157 million and $2$76 million at September 30, 2021March 31, 2022 and December 31, 2020,2021, respectively, which does not include the impact of any offsetting asset positions.furtheradditional information about derivative instruments.September 30,March 31, 2022, Virginia Power’s derivative assets and liabilities with affiliates were $64 million and $1 million, respectively. At December 31, 2021, Virginia Power’s derivative assets and liabilities with affiliates were $63$29 million and $2 million, respectively. At December 31, 2020, Virginia Power’s derivative assets and liabilities with affiliates were $3 million and $22$6 million, respectively. See Note 9 for moreadditional information.2020.2021. At September 30, 2021March 31, 2022 and December 31, 2020,2021, amounts due to Dominion Energy associated with the Dominion Energy Pension Plan and included in other deferred credits and other liabilities in the Consolidated Balance Sheets were $500$540 million and $436$522 million, respectively. At September 30, 2021March 31, 2022 and December 31, 2020,2021, Virginia Power's amounts due from Dominion Energy associated with the Dominion Energy Retiree Health and Welfare Plan and included in other deferred charges and other assets in the Consolidated Balance Sheets were $412$453 million and $354$431 million, respectively. While Virginia Power has not been notified by Dominion Energy of any required contributions to be made in 2022, it anticipates that it may have to contribute approximately $175 million as a result of Dominion Energy’s contribution made to its qualified defined benefit pension plans in December 2021.77 both the three months ended September 30,March 31, 2022 and 2021, and 2020, and $121 million and $107 million for the nine months ended September 30, 2021 and 2020, respectively.$310$235 million and $380$699 million in short-term demand note borrowings from Dominion Energy as of September 30, 2021March 31, 2022 and December 31, 2020,2021, respectively. Virginia Power had 0 outstanding borrowings, net of repayments, under the Dominion Energy money pool for its nonregulated subsidiaries as of September 30, 2021March 31, 2022 and December 31, 2020.2021. Interest charges related to Virginia Power’s borrowings from Dominion Energy were immaterial for the three and nine months ended September 30, 2021March 31, 2022 and 2020.2021.and nine months ended September 30, 2021March 31, 2022 and 2020.2021.Income, except for $3 million and $12 million for the three and nine months ended September 30, 2020, respectively, presented in discontinued operations.Income. The non-service cost components of net periodic benefit (credit) cost are reflected in other income in Dominion Energy’s Consolidated Statements of Income. The components of Dominion Energy’s provision for net periodic benefit cost (credit) are as follows:(1)2021 amounts relate primarily to the Dominion Energy executive nonqualified pension plan. 2020 amounts related primarily to Dominion Energy’s sale of substantially all of its gas transmission and storage operations to BHE.78and nine months ended September 30, 2021,March 31, 2022, Dominion Energy made 0 contributions to its qualified defined benefit pension plans or other postretirement benefit plans. Dominion Energy is 0t required to make any contributions to its qualified defined benefit pension plans or to VEBAs associated with its other postretirement plans in 2021.2022. Dominion Energy considers voluntary contributions from time to time, either in the form of cash or equity securities.nonjurisdictionalnon-jurisdictional generation operations.interestinterests in Wrangler.Wrangler (through March 2022) and Dominion Privatization. In addition, Corporate and Other includes specific items attributable to Dominion Energy’s operating segments that are not included in profit measures evaluated by executive management in assessing the segments’ performance or in allocating resources as well as the net impact of the gas transmission and storage operations presented in discontinued operations, which are discussed in Note 3.ninethree months ended September 30, 2021,March 31, 2022, Dominion Energy reported after-tax net expenses of $642$311 million in the Corporate and Other segment, including $492$289 million of after-tax net expenses for specific items with $617$269 million of after-tax net expenses In the nine months ended September 30, 2020, Dominion Energy reported after-tax net expenses of $3.6 billion in the Corporate and Other segment, including $3.4 billion of after-taxwith $1.3 billion of after-tax net expenses attributable to itsDominion Energy’s operating segments.segments in 2022 primarily related to the impact of the following items:79•A $447 million ($336 million after-tax) loss related to economic hedging activities, attributable to Contracted Assets;•$266 million ($199 million after-tax) of charges associated with the settlement of the South Carolina electric base rate case, attributable to Dominion Energy South Carolina;$119$76 million ($89 million after-tax) net charge associated with the proposed settlement of the 2021 Triennial Review, attributable to Dominion Energy Virginia;•A $77 million ($5756 million after-tax) charge for the forgiveness of Virginia retail electric customer accounts in arrears pursuant to Virginia’s 2021 budget process, attributable to Dominion Energy Virginia;$70$60 million ($5345 million after-tax) charge associated with litigation acquired in the SCANA Combination, attributable to Dominion Energy South Carolina; and$68$51 million ($5038 million after-tax) charge associated with storm damage and service restoration in Virginia Power’s service territory, attributable to Dominion Energy Virginia; and•A $44 million ($35 million after-tax) charge related to a revision in estimated recovery of spent nuclear fuel costs associated with the decommissioning of Kewaunee, attributable to Contracted Assets; partially offset by$309$134 million ($248100 million after-tax) gain related to investments in nuclear decommissioning trust funds, attributable to:21888 million after-tax) and;; and3012 million after-tax); andexpected CCRO to be provided to Virginia retail electric customers under the GTSA, attributable to Dominion Energy Virginia.The net expense for specific items attributable to Dominion Energy’s operating segments in 2020 primarily related to the impact of the following items:•A $751 million ($564 million after-tax) charge primarily related to the planned early retirement of certain Virginia Power electric generation facilities, attributable to Dominion Energy Virginia;•A $405 million ($298 million after-tax) charge associated with certain nonregulated solar generation facilities, attributable to Contracted Assets;•A $221 million ($171 million after-tax) chargereserve associated with the sale of Fowler Ridge, attributable to Contracted Assets; and•A $200 million ($149 million after-tax) charge for the expected CCRO to be provided to Virginia retail electric utility customers under the GTSA,2021 Triennial Review, attributable to Dominion Energy Virginia.81ninethree months ended September 30, 2021,March 31, 2022, Virginia Power reported after-tax net expenses of $118$159 million in the Corporate and Other segment, including $186$130 million of after-tax net expenses for specific items all of which was attributable to its operating segment. In the ninethree months ended September 30, 2020,March 31, 2021, Virginia Power reported after-tax net expenses of $792$58 million in the Corporate and Other segment, including $815$117 million of after-tax net expenses for specific items all of which was attributable to its operating segment.$119$76 million ($89 million after-tax) net charge associated with the proposed settlement of the 2021 Triennial Review;•A $77 million ($5756 million after-tax) charge for the forgiveness of Virginia retail electric customer accounts in arrears pursuant to Virginia’s 2021 budget process; and$68$51 million ($5038 million after-tax) charge associated with storm damage and service restoration in its service territory; partially offset byexpected CCRO to be provided to Virginia retail electric customers underreserve associated with the GTSA.2021 Triennial Review.The net expense for specific items attributable to Virginia Power’s operating segment in 2020 primarily related to a $751 million ($559 million after-tax) charge related to the planned early retirement of certain Virginia Power electric generation facilities and a $200 million ($149 million after-tax) charge for the expected CCRO to be provided to Virginia retail electric utility customers under the GTSA.83completing the completion of the proposed sales of the Q-Pipe GroupKewaunee and Kewaunee,Hope, including the ability to obtain the requisite regulatory approvals and the terms and conditions of such regulatory approvals;842020 and in Part II. Item 1A. Risk Factors in this report.2021.September 30, 2021,March 31, 2022, there have been no significant changes with regard to the critical accounting policies and estimates disclosed in MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020 and in the Companies’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2021. The policies disclosed included the accounting for regulated operations, AROs, income taxes, accounting for derivative contracts and financial instruments at fair value, use of estimates in goodwill impairment testing, use of estimates in long-lived asset and equity method investment impairment testing, employee benefit plans and held for sale classification.ThirdFirst Quarter 20212022 vs. 20202021increased 84%decreased 29%, primarily due to the absence of charges associated with an impairment of interests in certain nonregulated solar generation facilities and the termination of a contract in connection with the sale of Fowler Ridge. In addition, there was a decrease in charges associated with Virginia Power’s 2021 Triennial Review. These increases were partially offset by a decrease in net investment earnings on nuclear decommissioning trust funds and increased unrealized lossesa charge to reflect the recognition of deferred taxes on economic hedging activities.the outside basis of Hope’s stock upon meeting the classification as held for sale.Year-To-Date 2021 vs. 2020Net income attributable to Dominion Energy increased $3.0 billion, primarily due to the absence of charges associated with the cancellation of the Atlantic Coast Pipeline Project and related portions of the Supply Header Project which are presented in discontinued operations, the planned early retirements of certain electric generation facilities in Virginia, an impairment of interests in certain nonregulated solar generation facilities and the termination of a contract in connection with the sale of Fowler Ridge. In addition, there was an increase in net investment earnings on nuclear decommissioning trust funds and a decrease in charges8570associated with Virginia Power’s 2021 Triennial Review. These increases were partially offset by charges associated with the settlement of the South Carolina electric base rate case and increased unrealized losses on economic hedging activities.
Presented below are selected amounts related to Dominion Energy’s results of operations:
|
| Third Quarter |
|
| Year-To-Date |
|
| First Quarter |
| |||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| $ Change |
|
| 2021 |
|
| 2020 |
|
| $ Change |
|
| 2022 |
|
| 2021 |
|
| $ Change |
| |||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue |
| $ | 3,176 |
|
| $ | 3,607 |
|
| $ | (431 | ) |
| $ | 10,084 |
|
| $ | 10,651 |
|
| $ | (567 | ) |
| $ | 4,279 |
|
| $ | 3,870 |
|
| $ | 409 |
|
Electric fuel and other energy-related purchases |
|
| 703 |
|
|
| 594 |
|
|
| 109 |
|
|
| 1,740 |
|
|
| 1,758 |
|
|
| (18 | ) |
|
| 678 |
|
|
| 550 |
|
|
| 128 |
|
Purchased electric capacity |
|
| 26 |
|
|
| 23 |
|
|
| 3 |
|
|
| 62 |
|
|
| 36 |
|
|
| 26 |
|
|
| 13 |
|
|
| 11 |
|
|
| 2 |
|
Purchased gas |
|
| 60 |
|
|
| 37 |
|
|
| 23 |
|
|
| 665 |
|
|
| 561 |
|
|
| 104 |
|
|
| 645 |
|
|
| 484 |
|
|
| 161 |
|
Other operations and maintenance |
|
| 924 |
|
|
| 977 |
|
|
| (53 | ) |
|
| 2,806 |
|
|
| 2,720 |
|
|
| 86 |
|
|
| 1,026 |
|
|
| 987 |
|
|
| 39 |
|
Depreciation, depletion and amortization |
|
| 621 |
|
|
| 595 |
|
|
| 26 |
|
|
| 1,833 |
|
|
| 1,751 |
|
|
| 82 |
|
|
| 698 |
|
|
| 608 |
|
|
| 90 |
|
Other taxes |
|
| 223 |
|
|
| 203 |
|
|
| 20 |
|
|
| 702 |
|
|
| 663 |
|
|
| 39 |
|
|
| 253 |
|
|
| 257 |
|
|
| (4 | ) |
Impairment of assets and other charges (benefits) |
|
| (222 | ) |
|
| 1,151 |
|
|
| (1,373 | ) |
|
| 194 |
|
|
| 1,963 |
|
|
| (1,769 | ) |
|
| (10 | ) |
|
| 95 |
|
|
| (105 | ) |
Earnings (loss) from equity method investees |
|
| 69 |
|
|
| (5 | ) |
|
| 74 |
|
|
| 214 |
|
|
| — |
|
|
| 214 |
| ||||||||||||
Earnings from equity method investees |
|
| 80 |
|
|
| 80 |
|
|
| — |
| ||||||||||||||||||||||||
Other income |
|
| 133 |
|
|
| 286 |
|
|
| (153 | ) |
|
| 732 |
|
|
| 327 |
|
|
| 405 |
|
|
| 46 |
|
|
| 287 |
|
|
| (241 | ) |
Interest and related charges |
|
| 407 |
|
|
| 306 |
|
|
| 101 |
|
|
| 978 |
|
|
| 1,136 |
|
|
| (158 | ) |
|
| 174 |
|
|
| 53 |
|
|
| 121 |
|
Income tax expense (benefit) |
|
| 35 |
|
|
| (110 | ) |
|
| 145 |
|
|
| 200 |
|
|
| (123 | ) |
|
| 323 |
| ||||||||||||
Net income (loss) from discontinued operations including noncontrolling interests |
|
| 65 |
|
|
| 19 |
|
|
| 46 |
|
|
| 119 |
|
|
| (1,753 | ) |
|
| 1,872 |
| ||||||||||||
Noncontrolling interests |
|
| 12 |
|
|
| (225 | ) |
|
| 237 |
|
|
| 22 |
|
|
| (157 | ) |
|
| 179 |
| ||||||||||||
Income tax expense |
|
| 236 |
|
|
| 212 |
|
|
| 24 |
| ||||||||||||||||||||||||
Net income from discontinued operations including noncontrolling interests |
|
| 19 |
|
|
| 28 |
|
|
| (9 | ) | ||||||||||||||||||||||||
An analysis of Dominion Energy’s results of operations follows:
ThirdFirst Quarter 20212022 vs. 20202021
Operating revenue decreased 12%increased 11%, primarily reflecting:
• | A |
|
|
|
|
|
|
|
|
These decreases were partially offset by:
|
|
|
|
|
|
|
|
Electric fuel and other energy-related purchases increased 18%, primarily due to higher commodity costs for electric utilities, which are offset in operating revenue and do not impact net income.
Purchased gas increased 62%, primarily due to an increase in commodity costs for gas utilities, which are offset in operating revenue and do not impact net income.
Other operations and maintenance decreased 5%, primarily due to a decrease in certain Virginia Power expenditures which are primarily recovered through state- and FERC-regulated rates and do not impact net income ($35 million), a decrease in storm damage
86
and restoration costs in Virginia Power’s service territory ($22 million) and a decrease in merger and integration-related costs associated with the SCANA Combination ($16 million).
Other taxes increased 10%, primarily due to increased property taxes related to growth projects placed into service.
Impairment of assets and other charges (benefits) decreased $1.4 billion, primarily due to the absence of charges associated with certain nonregulated solar generation facilities ($665 million), the termination of a contract in connection with the sale of Fowler Ridge ($221 million) and litigation acquired in the SCANA Combination ($44 million). In addition, there was a decrease for a benefit from the establishment of a regulatory asset associated with the early retirements of certain coal- and oil-fired generating units associated with the proposed settlement of the 2021 Triennial Review ($549 million). These decreases were partially offset by increased charges for CCRO benefits provided to retail electric customers in Virginia associated with Virginia Power’s 2021 Triennial Review ($118 million).
Earnings from equity method investees increased $74 million, primarily due to an increase in equity method earnings from Cove Point following closing of the GT&S Transaction.
Other income decreased 53%, primarily due to a decrease in net investment gains on nuclear decommissioning trust funds ($204 million) partially offset by the absence of a charge for social justice commitments ($35 million) and an increase in non-service components of pension and other postretirement employee benefit plan credits ($33 million).
Interest and related charges increased 33%, primarily due to unrealized losses in 2021 as compared to unrealized gains in 2020 associated with freestanding derivatives ($83 million) and charges associated with the early redemption of certain securities in the third quarter of 2021 ($23 million), partially offset by the absence of borrowings in response to COVID-19 in 2020 ($18 million).
Income tax expense increased $145 million, primarily due to higher pre-tax income ($147 million) and the absence of prior year benefits including reductions in consolidated state deferred income taxes associated with gas transmission and storage operations ($45 million) and adjustments finalizing the effects of changes in tax status of certain subsidiaries in connection with the Dominion Energy Gas Restructuring ($24 million). These increases are partially offset by the absence of prior year income tax expense primarily associated with the impairment of nonregulated solar generating assets held in partnerships attributable to the noncontrolling interest ($55 million).
Net income from discontinued operations including noncontrolling interests increased $46 million, primarily due to the absence of charges associated with the Atlantic Coast Pipeline Project.
Noncontrolling interests increased $237 million, primarily due to the absence of impairments associated with certain nonregulated solar generation facilities ($267 million) partially offset by the closing of the GT&S Transaction in November 2020 ($32 million).
Year-To-Date 2021 vs. 2020
Operating revenue decreased 5%, primarily reflecting:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
These decreases were partially offset by:
|
|
|
|
|
|
|
|
|
|
|
|
Electric fuel and other energy-related purchases decreased 1%, primarily due to a decrease in PJM off-system sales ($47 million), partially offset by higher commodity costs for electric utilities ($34 million), which are offset in operating revenue and do not impact net income.
Purchased electric capacity increased 72%, primarily due to an increase in expense related to the annual PJM capacity performance market effective June 2020 ($17 million) and an increase in expense related to the annual PJM capacity performance market effective June 2021 ($13 million).
Purchased gas increased 19%, primarily due to an increase in commodity costs for gas utilities, which are offset in operating revenue and do not impact net income.
Other operations and maintenance increased 3%, primarily reflecting:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of assets and other charges (benefits) decreased 90%, primarily reflecting:
|
|
• | The absence of a |
• | A $69 million increase from Virginia Power riders; |
• | A $37 million increase following the approved base rate case for PSNC; |
• | A $21 million increase in sales to electric utility retail customers associated with |
• | A $20 million increase in sales to electric utility retail customers, primarily due to an increase in heating degree days. |
These increases were partially offset by:
• | A $112 million decrease associated with market prices affecting Millstone, including economic hedging impacts of net realized and unrealized losses on freestanding derivatives ($ |
• | A |
• |
|
• |
|
• | A $29 million decrease from the sale of non-wholly-owned nonregulated solar facilities. |
Electric fuel and other energy-related purchases increased 23%, primarily due to higher commodity costs for electric utilities, which are offset in operating revenue and do not impact net income.
Purchased gas increased 33%, primarily due to an increase in commodity costs for gas utilities ($193 million), which are offset in operating revenue and do not impact net income, partially offset by a decrease as a result of the contribution of certain nonregulated natural gas retail energy contracts to Wrangler ($40 million).
Other operations and maintenance increased 4%, primarily reflecting:
• | A $41 million increase in |
• | A $32 million increase in outside services; and |
• | A $15 million increase in outage costs at Virginia |
• |
|
|
|
|
|
|
|
|
|
Earnings from equity method investeesDepreciation, depletion and amortization increased $214 million,15%, primarily due to an increase for amortization of a regulatory asset established in equity method earnings from Cove Point following closingthe settlement of the GT&S Transaction.
Other income increased $405 million, primarily due to an increase in net investment gains on nuclear decommissioning trust funds2021 Triennial Review ($26761 million), an increase in non-service componentsRGGI related amortization ($45 million), which are offset in operating revenue and do not impact net income, and an increase due to various projects being placed into service ($32 million), partially offset by depreciation rates revised in the first quarter of pension2022 at Virginia Power ($21 million) and a decrease from the sale of non-wholly-owned nonregulated solar facilities ($14 million).
Impairment of assets and other postretirement employee benefit plan creditscharges decreased $105 million, primarily due to the absence of a charge for the forgiveness of Virginia retail electric customer accounts in arrears pursuant to Virginia’s 2021 budget process ($9776 million), the absence of a charge for social justice commitmentscorporate office lease termination ($4071 million), and the absence of charges associated with litigation acquired in the SCANA Combination ($25 million) and an increase in AFUDC associated with rate-regulated projects ($2260 million), partially offset by chargesthe absence of a benefit for a change in the CCRO reserve associated with the settlement of the South Carolina electric base rate case2021 Triennial Review ($18130 million).
Other income decreased 84%, primarily due to net investment losses in 2022 compared to net investment gains in 2021 on nuclear decommissioning trust funds.
Interest and related charges decreased 14%,increased $121 million, primarily due to lower unrealized gains in 2021 compared to unrealized losses in 2020 associated with freestanding derivatives ($150 million), the absence of borrowings in response to COVID-19 in 2020 ($42138 million) and the absence of charges associated with the early redemption of certain securities in the first quarter of 2020higher long-term debt interest expense resulting from net debt issuances ($3132 million), partially offset by charges associated with the early redemption of certain securitieslower interest expense on junior subordinated notes due to repayments in the third quarter of 2021 ($2325 million) and higher premiums received on interest rate derivatives ($14 million).
Income tax expense increased $323 million11%, primarily due to highera charge to reflect the recognition of deferred taxes on the outside basis of Hope’s stock upon meeting the classification as held for sale that will reverse when the sale is completed ($87 million), partially offset by lower pre-tax income ($34564 million) and the absence of prior year benefits including reductions in consolidated state deferred income taxes associated with gas transmission and storage operations ($45 million) and adjustments finalizing the effects of changes in tax status of certain subsidiaries in connection with the Dominion Energy Gas Restructuring ($24 million). These increases are partially offset by the benefit of a state legislative change ($21 million) and
the absenceOutlook
As of prior year expense primarily associated with the impairment of nonregulated solar generating assets heldMarch 31, 2022, there have been no material changes to Dominion Energy’s 2022 outlook as described in partnerships attributable to the noncontrolling interest ($55 million).
Net income from discontinued operations including noncontrolling interests increased $1.9 billion, primarily due to a decrease in charges associated with the Atlantic Coast Pipeline Project and related portions of the Supply Header Project ($2.1 billion) partially offset by the absence of operations soldItem 7. MD&A in the GT&S Transaction ($231 million).
Noncontrolling interests increased $179 million, primarily due toCompanies’ Annual Report on Form 10-K for the absence of impairments associated with certain nonregulated solar generation facilities ($267 million) partially offset by the closing of the GT&S Transaction in November 2020 ($97 million).year ended December 31, 2021.
Segment Results of Operations
Segment results include the impact of intersegment revenues and expenses, which may result in intersegment profit and loss. Presented below is a summary of contributions by Dominion Energy’s operating segments to net income (loss) attributable to Dominion Energy:
|
| Net Income (Loss) Attributable to Dominion Energy |
|
| Diluted EPS |
|
| Net Income (Loss) Attributable to Dominion Energy |
|
| EPS(1) |
| ||||||||||||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| $ Change |
|
| 2021 |
|
| 2020 |
|
| $ Change |
|
| 2022 |
|
| 2021 |
|
| $ Change |
|
| 2022 |
|
| 2021 |
|
| $ Change |
| ||||||||||||
(millions, except EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
First Quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Dominion Energy Virginia |
| $ | 599 |
|
| $ | 613 |
|
| $ | (14 | ) |
| $ | 0.74 |
|
| $ | 0.74 |
|
| $ | — |
|
| $ | 518 |
|
| $ | 434 |
|
| $ | 84 |
|
| $ | 0.64 |
|
| $ | 0.54 |
|
| $ | 0.10 |
|
Gas Distribution |
|
| 69 |
|
|
| 64 |
|
|
| 5 |
|
|
| 0.08 |
|
|
| 0.08 |
|
|
| — |
|
|
| 294 |
|
|
| 251 |
|
|
| 43 |
|
|
| 0.36 |
|
|
| 0.31 |
|
|
| 0.05 |
|
Dominion Energy South Carolina |
|
| 151 |
|
|
| 157 |
|
|
| (6 | ) |
|
| 0.19 |
|
|
| 0.19 |
|
|
| — |
|
|
| 109 |
|
|
| 102 |
|
|
| 7 |
|
|
| 0.13 |
|
|
| 0.13 |
|
|
| — |
|
Contracted Assets |
|
| 119 |
|
|
| 112 |
|
|
| 7 |
|
|
| 0.15 |
|
|
| 0.13 |
|
|
| 0.02 |
|
|
| 101 |
|
|
| 150 |
|
|
| (49 | ) |
|
| 0.13 |
|
|
| 0.18 |
|
|
| (0.05 | ) |
Corporate and Other |
|
| (284 | ) |
|
| (590 | ) |
|
| 306 |
|
|
| (0.37 | ) |
|
| (0.73 | ) |
|
| 0.36 |
|
|
| (311 | ) |
|
| 71 |
|
|
| (382 | ) |
|
| (0.43 | ) |
|
| 0.07 |
|
|
| (0.50 | ) |
Consolidated |
| $ | 654 |
|
| $ | 356 |
|
| $ | 298 |
|
| $ | 0.79 |
|
| $ | 0.41 |
|
| $ | 0.38 |
|
| $ | 711 |
|
| $ | 1,008 |
|
| $ | (297 | ) |
| $ | 0.83 |
|
| $ | 1.23 |
|
| $ | (0.40 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Year-To-Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Dominion Energy Virginia |
| $ | 1,464 |
|
| $ | 1,479 |
|
| $ | (15 | ) |
| $ | 1.81 |
|
| $ | 1.77 |
|
| $ | 0.04 |
| ||||||||||||||||||||||||
Gas Distribution |
|
| 415 |
|
|
| 375 |
|
|
| 40 |
|
|
| 0.52 |
|
|
| 0.45 |
|
|
| 0.07 |
| ||||||||||||||||||||||||
Dominion Energy South Carolina |
|
| 337 |
|
|
| 326 |
|
|
| 11 |
|
|
| 0.42 |
|
|
| 0.39 |
|
|
| 0.03 |
| ||||||||||||||||||||||||
Contracted Assets |
|
| 373 |
|
|
| 295 |
|
|
| 78 |
|
|
| 0.46 |
|
|
| 0.35 |
|
|
| 0.11 |
| ||||||||||||||||||||||||
Corporate and Other |
|
| (642 | ) |
|
| (3,558 | ) |
|
| 2,916 |
|
|
| (0.86 | ) |
|
| (4.34 | ) |
|
| 3.48 |
| ||||||||||||||||||||||||
Consolidated |
| $ | 1,947 |
|
| $ | (1,083 | ) |
| $ | 3,030 |
|
| $ | 2.35 |
|
| $ | (1.38 | ) |
| $ | 3.73 |
| ||||||||||||||||||||||||
(1) | Consolidated results are presented on a diluted EPS basis. The dilutive impacts, primarily consisting of potential shares which had not yet been issued, are included within the results of the Corporate and Other segment. EPS contributions for Dominion Energy’s operating segments are presented utilizing basic average shares outstanding for the period. |
72
Dominion Energy Virginia
Presented below are selected operating statistics related to Dominion Energy Virginia’s operations:
|
| Third Quarter |
|
| Year-To-Date |
|
| First Quarter |
| |||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| % Change |
|
| 2021 |
|
| 2020 |
|
| % Change |
|
| 2022 |
|
| 2021 |
|
| % Change |
| |||||||||
Electricity delivered (million MWh) |
|
| 24.0 |
|
|
| 23.8 |
|
|
| 1 | % |
|
| 65.0 |
|
|
| 63.3 |
|
|
| 3 | % |
|
| 22.3 |
|
|
| 21.7 |
|
|
| 3 | % |
Electricity supplied (million MWh): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility |
|
| 24.1 |
|
|
| 24.2 |
|
|
| — |
|
|
| 65.5 |
|
|
| 66.4 |
|
|
| (1 | ) |
|
| 22.3 |
|
|
| 21.9 |
|
|
| 2 |
|
Non-Jurisdictional |
|
| 0.3 |
|
|
| 0.2 |
|
|
| 50 |
|
|
| 0.8 |
|
|
| 0.5 |
|
|
| 60 |
|
|
| 0.3 |
|
|
| 0.2 |
|
|
| 50 |
|
Degree days (electric distribution and utility service area): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cooling |
|
| 1,176 |
|
|
| 1,256 |
|
|
| (6 | ) |
|
| 1,696 |
|
|
| 1,708 |
|
|
| (1 | ) |
|
| 11 |
|
|
| 11 |
|
|
| — |
|
Heating |
|
| — |
|
|
| 19 |
|
|
| (100 | ) |
|
| 2,174 |
|
|
| 1,908 |
|
|
| 14 |
|
|
| 1,895 |
|
|
| 1,889 |
|
|
| — |
|
Average electric distribution customer accounts (thousands) |
|
| 2,702 |
|
|
| 2,667 |
|
|
| 1 |
|
|
| 2,693 |
|
|
| 2,657 |
|
|
| 1 |
|
|
| 2,716 |
|
|
| 2,684 |
|
|
| 1 |
|
Presented below, on an after-tax basis, are the key factors impacting Dominion Energy Virginia’s net income contribution:
|
| Third Quarter 2021 vs. 2020 Increase (Decrease) |
|
| Year-To-Date 2021 vs. 2020 Increase (Decrease) |
|
| First Quarter 2022 vs. 2021 Increase (Decrease) |
| |||||||||||||||
|
| Amount |
|
| EPS |
|
| Amount |
|
| EPS |
|
| Amount |
|
| EPS |
| ||||||
(millions, except EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated electric sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weather |
| $ | (19 | ) |
| $ | (0.02 | ) |
| $ | 46 |
|
| $ | 0.05 |
|
| $ | 14 |
|
| $ | 0.02 |
|
Other |
|
| 22 |
|
|
| 0.03 |
|
|
| (18 | ) |
|
| (0.02 | ) |
|
| (9 | ) |
|
| (0.01 | ) |
Rider equity return |
|
| 16 |
|
|
| 0.02 |
|
|
| 26 |
|
|
| 0.03 |
|
|
| 16 |
|
|
| 0.02 |
|
Electric capacity |
|
| (8 | ) |
|
| (0.01 | ) |
|
| (21 | ) |
|
| (0.03 | ) |
|
| (8 | ) |
|
| (0.01 | ) |
Planned outage costs |
|
| 1 |
|
|
| — |
|
|
| (13 | ) |
|
| (0.02 | ) |
|
| (7 | ) |
|
| (0.01 | ) |
Depreciation and amortization |
|
| (12 | ) |
|
| (0.01 | ) |
|
| (23 | ) |
|
| (0.03 | ) |
|
| 7 |
|
|
| 0.01 |
|
Renewable energy investment tax credits |
|
| (5 | ) |
|
| (0.01 | ) |
|
| (1 | ) |
|
| — |
|
|
| 61 |
|
|
| 0.08 |
|
Other |
|
| (9 | ) |
|
| (0.02 | ) |
|
| (11 | ) |
|
| (0.01 | ) |
|
| 10 |
|
|
| 0.01 |
|
Share accretion |
|
| — |
|
|
| 0.02 |
|
|
| — |
|
|
| 0.07 |
| ||||||||
Share dilution |
|
| — |
|
|
| (0.01 | ) | ||||||||||||||||
Change in net income contribution |
| $ | (14 | ) |
| $ | — |
|
| $ | (15 | ) |
| $ | 0.04 |
|
| $ | 84 |
|
| $ | 0.10 |
|
Gas Distribution
Presented below are selected operating statistics related to Gas Distribution’s operations:
|
| Third Quarter |
|
| Year-To-Date |
|
| First Quarter |
| |||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| % Change |
|
| 2021 |
|
| 2020 |
|
| % Change |
|
| 2022 |
|
| 2021 |
|
| % Change |
| |||||||||
Gas distribution throughput (bcf): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
| 14 |
|
|
| 14 |
|
|
| — | % |
|
| 124 |
|
|
| 118 |
|
|
| 5 | % |
|
| 89 |
|
|
| 86 |
|
|
| 3 | % |
Transportation |
|
| 216 |
|
|
| 188 |
|
|
| 15 |
|
|
| 705 |
|
|
| 628 |
|
|
| 12 |
|
|
| 301 |
|
|
| 273 |
|
|
| 10 |
|
Heating degree days (gas distribution service area): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North Carolina |
|
| 6 |
|
|
| 31 |
|
|
| (81 | ) |
|
| 1,979 |
|
|
| 1,679 |
|
|
| 18 |
|
|
| 1,583 |
|
|
| 1,692 |
|
|
| (6 | ) |
Ohio and West Virginia |
|
| 40 |
|
|
| 90 |
|
|
| (56 | ) |
|
| 3,489 |
|
|
| 3,336 |
|
|
| 5 |
|
|
| 2,912 |
|
|
| 2,758 |
|
|
| 6 |
|
Utah, Wyoming and Idaho |
|
| 49 |
|
|
| 54 |
|
|
| (9 | ) |
|
| 2,982 |
|
|
| 2,933 |
|
|
| 2 |
|
|
| 2,478 |
|
|
| 2,398 |
|
|
| 3 |
|
Average gas distribution customer accounts (thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
| 1,936 |
|
|
| 1,896 |
|
|
| 2 |
|
|
| 1,929 |
|
|
| 1,887 |
|
|
| 2 |
|
|
| 1,965 |
|
|
| 1,922 |
|
|
| 2 |
|
Transportation |
|
| 1,126 |
|
|
| 1,125 |
|
|
| — |
|
|
| 1,133 |
|
|
| 1,123 |
|
|
| 1 |
|
|
| 1,140 |
|
|
| 1,137 |
|
|
| — |
|
Presented below, on an after-tax basis, are the key factors impacting Gas Distribution’s net income contribution:
|
| Third Quarter 2021 vs. 2020 Increase (Decrease) |
|
| Year-To-Date 2021 vs. 2020 Increase (Decrease) |
|
| First Quarter 2022 vs. 2021 Increase (Decrease) |
| |||||||||||||||
|
| Amount |
|
| EPS |
|
| Amount |
|
| EPS |
|
| Amount |
|
| EPS |
| ||||||
(millions, except EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated gas sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weather |
| $ | (1 | ) |
| $ | — |
|
| $ | 2 |
|
| $ | — |
|
| $ | 2 |
|
| $ | — |
|
Other |
|
| 8 |
|
|
| 0.01 |
|
|
| 15 |
|
|
| 0.02 |
|
|
| 34 |
|
|
| 0.04 |
|
Rider equity return |
|
| 8 |
|
|
| 0.01 |
|
|
| 29 |
|
|
| 0.03 |
|
|
| 8 |
|
|
| 0.01 |
|
Interest expense, net |
|
| (2 | ) |
|
| — |
|
|
| 14 |
|
|
| 0.02 |
|
|
| 1 |
|
|
| — |
|
Other |
|
| (8 | ) |
|
| (0.02 | ) |
|
| (20 | ) |
|
| (0.02 | ) |
|
| (2 | ) |
|
| — |
|
Share accretion |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0.02 |
| ||||||||
Share dilution |
|
| — |
|
|
| — |
| ||||||||||||||||
Change in net income contribution |
| $ | 5 |
|
| $ | — |
|
| $ | 40 |
|
| $ | 0.07 |
|
| $ | 43 |
|
| $ | 0.05 |
|
Dominion Energy South Carolina
Presented below are selected operating statistics related to Dominion Energy South Carolina’s operations:
|
| Third Quarter |
|
| Year-To-Date |
|
| First Quarter |
| |||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| % Change |
|
| 2021 |
|
| 2020 |
|
| % Change |
|
| 2022 |
|
| 2021 |
|
| % Change |
| |||||||||
Electricity delivered (million MWh) |
|
| 6.6 |
|
|
| 6.6 |
|
|
| — | % |
|
| 17.3 |
|
|
| 16.9 |
|
|
| 2 | % |
|
| 5.2 |
|
|
| 5.3 |
|
|
| (2 | %) |
Electricity supplied (million MWh) |
|
| 6.8 |
|
|
| 6.9 |
|
|
| (1 | ) |
|
| 18.1 |
|
|
| 17.6 |
|
|
| 3 |
|
|
| 5.5 |
|
|
| 5.6 |
|
|
| (2 | ) |
Degree days (electric distribution service areas): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cooling |
|
| 448 |
|
|
| 597 |
|
|
| (25 | ) |
|
| 620 |
|
|
| 773 |
|
|
| (20 | ) |
|
| — |
|
|
| 1 |
|
|
| (100 | ) |
Heating |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 839 |
|
|
| 610 |
|
|
| 38 |
|
|
| 750 |
|
|
| 786 |
|
|
| (5 | ) |
Average electric distribution customer accounts (thousands) |
|
| 769 |
|
|
| 756 |
|
|
| 2 |
|
|
| 765 |
|
|
| 748 |
|
|
| 2 |
|
|
| 772 |
|
|
| 761 |
|
|
| 1 |
|
Gas distribution throughput (bcf): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
| 16 |
|
|
| 14 |
|
|
| 14 |
|
|
| 51 |
|
|
| 47 |
|
|
| 9 |
|
|
| 20 |
|
|
| 20 |
|
|
| — |
|
Average gas distribution customer accounts (thousands) |
|
| 414 |
|
|
| 401 |
|
|
| 3 |
|
|
| 411 |
|
|
| 397 |
|
|
| 4 |
|
|
| 422 |
|
|
| 408 |
|
|
| 3 |
|
Presented below, on an after-tax basis, are the key factors impacting Dominion Energy South Carolina’s net income contribution:
|
| Third Quarter 2021 vs. 2020 Increase (Decrease) |
|
| Year-To-Date 2021 vs. 2020 Increase (Decrease) |
|
| First Quarter 2022 vs. 2021 Increase (Decrease) |
| |||||||||||||||
|
| Amount |
|
| EPS |
|
| Amount |
|
| EPS |
|
| Amount |
|
| EPS |
| ||||||
(millions, except EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated electric sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weather |
| $ | (13 | ) |
| $ | (0.02 | ) |
| $ | 2 |
|
| $ | — |
|
| $ | 1 |
|
| $ | — |
|
Other |
|
| 19 |
|
|
| 0.02 |
|
|
| 31 |
|
|
| 0.04 |
|
|
| 15 |
|
|
| 0.02 |
|
Capital cost rider |
|
| (2 | ) |
|
| — |
|
|
| (5 | ) |
|
| (0.01 | ) |
|
| (2 | ) |
|
| — |
|
Regulated gas sales |
|
| 1 |
|
|
| — |
|
|
| 6 |
|
|
| 0.01 |
|
|
| 3 |
|
|
| — |
|
Interest expense, net |
|
| 1 |
|
|
| — |
|
|
| 7 |
|
|
| 0.01 |
| ||||||||
Other |
|
| (12 | ) |
|
| (0.01 | ) |
|
| (30 | ) |
|
| (0.03 | ) |
|
| (10 | ) |
|
| (0.02 | ) |
Share accretion |
|
| — |
|
|
| 0.01 |
|
|
| — |
|
|
| 0.01 |
| ||||||||
Share dilution |
|
| — |
|
|
| — |
| ||||||||||||||||
Change in net income contribution |
| $ | (6 | ) |
| $ | — |
|
| $ | 11 |
|
| $ | 0.03 |
|
| $ | 7 |
|
| $ | — |
|
Contracted Assets
Presented below are selected operating statistics related to Contracted Asset’s operations:
|
| Third Quarter |
|
| Year-To-Date |
| ||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| % Change |
|
| 2021 |
|
| 2020 |
|
| % Change |
| ||||||
Electricity supplied (million MWh) |
|
| 5.7 |
|
|
| 5.7 |
|
|
| — | % |
|
| 16.4 |
|
|
| 15.5 |
|
|
| 6 | % |
|
| First Quarter |
| |||||||||
|
| 2022 |
|
| 2021 |
|
| % Change |
| |||
Electricity supplied (million MWh) |
|
| 4.6 |
|
|
| 5.1 |
|
|
| (10 | %) |
Presented below, on an after-tax basis, are the key factors impacting Contracted Asset’s net income contribution:
|
| Third Quarter 2021 vs. 2020 Increase (Decrease) |
|
| Year-To-Date 2021 vs. 2020 Increase (Decrease) |
|
| First Quarter 2022 vs. 2021 Increase (Decrease) |
| |||||||||||||||
|
| Amount |
|
| EPS |
|
| Amount |
|
| EPS |
|
| Amount |
|
| EPS |
| ||||||
(millions, except EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margin(1) |
| $ | (2 | ) |
| $ | — |
|
| $ | 19 |
|
| $ | 0.02 |
|
| $ | (24 | ) |
| $ | (0.03 | ) |
Planned outage costs |
|
| 3 |
|
|
| — |
|
|
| 28 |
|
|
| 0.03 |
|
|
| (4 | ) |
|
| — |
|
Renewable energy investment tax credits |
|
| — |
|
|
| — |
|
|
| 23 |
|
|
| 0.03 |
|
|
| (29 | ) |
|
| (0.04 | ) |
Absence of contract associated with Fowler Ridge |
|
| 3 |
|
|
| — |
|
|
| 14 |
|
|
| 0.02 |
| ||||||||
Depreciation and amortization |
|
| 12 |
|
|
| 0.02 |
| ||||||||||||||||
Other |
|
| 3 |
|
|
| 0.02 |
|
|
| (6 | ) |
|
| (0.01 | ) |
|
| (4 | ) |
|
| — |
|
Share accretion |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0.02 |
| ||||||||
Share dilution |
|
| — |
|
|
| — |
| ||||||||||||||||
Change in net income contribution |
| $ | 7 |
|
| $ | 0.02 |
|
| $ | 78 |
|
| $ | 0.11 |
|
| $ | (49 | ) |
| $ | (0.05 | ) |
(1) | Includes earnings associated with a 50% noncontrolling interest in Cove Point. |
Corporate and Other
Presented below are the Corporate and Other segment’s after-tax results:
|
| Third Quarter |
|
| Year-To-Date |
|
| First Quarter |
| |||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| $ Change |
|
| 2021 |
|
| 2020 |
|
| $ Change |
|
| 2022 |
|
| 2021 |
|
| $ Change |
| |||||||||
(millions, except EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specific items attributable to operating segments |
| $ | (303 | ) |
| $ | (556 | ) |
| $ | 253 |
|
| $ | (617 | ) |
| $ | (1,334 | ) |
| $ | 717 |
|
| $ | (269 | ) |
| $ | (87 | ) |
| $ | (182 | ) |
Specific items attributable to Corporate and Other segment |
|
| 39 |
|
|
| (4 | ) |
|
| 43 |
|
|
| 125 |
|
|
| (2,083 | ) |
|
| 2,208 |
|
|
| (20 | ) |
|
| 202 |
|
|
| (222 | ) |
Total specific items |
|
| (264 | ) |
|
| (560 | ) |
|
| 296 |
|
|
| (492 | ) |
|
| (3,417 | ) |
|
| 2,925 |
|
|
| (289 | ) |
|
| 115 |
|
|
| (404 | ) |
Other corporate operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
| (100 | ) |
|
| (95 | ) |
|
| (5 | ) |
|
| (317 | ) |
|
| (272 | ) |
|
| (45 | ) |
|
| (79 | ) |
|
| (111 | ) |
|
| 32 |
|
Other |
|
| 80 |
|
|
| 65 |
|
|
| 15 |
|
|
| 167 |
|
|
| 131 |
|
|
| 36 |
|
|
| 57 |
|
|
| 67 |
|
|
| (10 | ) |
Total other corporate operations |
|
| (20 | ) |
|
| (30 | ) |
|
| 10 |
|
|
| (150 | ) |
|
| (141 | ) |
|
| (9 | ) |
|
| (22 | ) |
|
| (44 | ) |
|
| 22 |
|
Total net expense |
| $ | (284 | ) |
| $ | (590 | ) |
| $ | 306 |
|
| $ | (642 | ) |
| $ | (3,558 | ) |
| $ | 2,916 |
| ||||||||||||
Total net income (expense) |
| $ | (311 | ) |
| $ | 71 |
|
| $ | (382 | ) | ||||||||||||||||||||||||
EPS impact |
| $ | (0.37 | ) |
| $ | (0.73 | ) |
| $ | 0.36 |
|
| $ | (0.86 | ) |
| $ | (4.34 | ) |
| $ | 3.48 |
|
| $ | (0.43 | ) |
| $ | 0.07 |
|
| $ | (0.50 | ) |
Total Specific Items
Corporate and Other includes specific items attributable to Dominion Energy’s primary operating segments that are not included in profit measures evaluated by executive management in assessing the segments' performance or in allocating resources. See Note 21 to the Consolidated Financial Statements in this report for discussion of these items in more detail. Corporate and Other also includes items attributable to the Corporate and Other segment. For the three months ended September 30, 2021,In 2022, this primarily included $65a $87 million charge to reflect the recognition of deferred taxes on the outside basis of Hope’s stock upon meeting the classification as held for sale that will reverse when the sale is completed, a $52 million after-tax benefit for derivative mark-to-market changes and $19 million net income offrom discontinued operations, primarily associated with the Q-Pipe Group, $17 million of after-tax charges associated with the early redemption of certain debt securities and an $11 million after-tax loss for derivative mark-to-market changes. For the nine months ended September 30,Group. In 2021, this primarily included $119a $234 million after-tax benefit for derivative mark-to-market changes, a $53 million after-tax charge for corporate office lease termination associated with workplace realignment and $28 million net income offrom discontinued operations, primarily associated with the Q-Pipe Group, a $105 million after-tax benefit for derivative mark-to-market changes, $61 million of after-tax charges for workplace realignment, primarily related to a corporate office lease termination, $31 million of after-tax charges for merger and integration-related costs associated with the SCANA Combination and $17 million of after-tax charges associated with the early redemption of certain debt securities.Group.
For the three months ended September 30, 2020, this primarily included $30 million of after-tax charges for social justice commitments, $11 million of after-tax charges for merger and integration-related costs associated with the SCANA Combination and $10 million of after-tax charges related to the effects of COVID-19, partially offset by $47 million after-tax income for derivative mark-to-market changes. For the nine months ended September 30, 2020, this primarily included $1.9 billion net loss of discontinued operations, including the results of operations of the entities included in the GT&S Transaction and Q-Pipe Group as well as charges associated with the cancellation of the Atlantic Coast Pipeline Project, $70 million of after-tax charges for merger and integration-related costs associated with the SCANA Combination, $30 million of after-tax charges for social justice commitments, $23 million of after-tax charges related to the effects of COVID-19 and $23 million of after-tax charges associated with the early redemption of certain debt securities.
92
Virginia Power
Results of Operations
Presented below is a summary of Virginia Power’s consolidated results:
|
| Third Quarter |
|
| Year-To-Date |
|
| First Quarter |
| |||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| $ Change |
|
| 2021 |
|
| 2020 |
|
| $ Change |
|
| 2022 |
|
| 2021 |
|
| $ Change |
| |||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| $ | 556 |
|
| $ | 475 |
|
| $ | 81 |
|
| $ | 1,344 |
|
| $ | 685 |
|
| $ | 659 |
|
| $ | 357 |
|
| $ | 374 |
|
| $ | (17 | ) |
Overview
Third
First Quarter 20212022 vs. 20202021
Net income increased 17%, primarily duedecreased 5% with no transactions or events contributing to a decreasesignificant change in charges associated with the 2021 Triennial Review.
Year-To-Date 2021 vs. 2020
Net income increased 96%, primarily due to the absence of charges related to the planned early retirements of certain electric generation facilities and a decrease in charges associated with the 2021 Triennial Review.net income.
Analysis of Consolidated Operations
Presented below are selected amounts related to Virginia Power’s results of operations:
|
| Third Quarter |
|
| Year-To-Date |
|
| First Quarter |
| |||||||||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| $ Change |
|
| 2021 |
|
| 2020 |
|
| $ Change |
|
| 2022 |
|
| 2021 |
|
| $ Change |
| |||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue |
| $ | 1,976 |
|
| $ | 2,248 |
|
| $ | (272 | ) |
| $ | 5,547 |
|
| $ | 5,983 |
|
| $ | (436 | ) |
| $ | 2,167 |
|
| $ | 1,830 |
|
| $ | 337 |
|
Electric fuel and other energy-related purchases |
|
| 515 |
|
|
| 424 |
|
|
| 91 |
|
|
| 1,270 |
|
|
| 1,282 |
|
|
| (12 | ) |
|
| 516 |
|
|
| 406 |
|
|
| 110 |
|
Purchased (excess) electric capacity |
|
| 15 |
|
|
| 3 |
|
|
| 12 |
|
|
| 16 |
|
|
| (14 | ) |
|
| 30 |
|
|
| 11 |
|
|
| (3 | ) |
|
| 14 |
|
Other operations and maintenance |
|
| 470 |
|
|
| 525 |
|
|
| (55 | ) |
|
| 1,382 |
|
|
| 1,319 |
|
|
| 63 |
|
|
| 570 |
|
|
| 513 |
|
|
| 57 |
|
Depreciation and amortization |
|
| 343 |
|
|
| 324 |
|
|
| 19 |
|
|
| 990 |
|
|
| 942 |
|
|
| 48 |
|
|
| 429 |
|
|
| 324 |
|
|
| 105 |
|
Other taxes |
|
| 86 |
|
|
| 85 |
|
|
| 1 |
|
|
| 262 |
|
|
| 257 |
|
|
| 5 |
|
|
| 75 |
|
|
| 93 |
|
|
| (18 | ) |
Impairment of assets and other charges (benefits) |
|
| (230 | ) |
|
| 200 |
|
|
| (430 | ) |
|
| (269 | ) |
|
| 1,008 |
|
|
| (1,277 | ) | ||||||||||||
Impairment of assets and other charges (benefit) |
|
| 4 |
|
|
| (51 | ) |
|
| 55 |
| ||||||||||||||||||||||||
Other income |
|
| 21 |
|
|
| 34 |
|
|
| (13 | ) |
|
| 93 |
|
|
| 34 |
|
|
| 59 |
|
|
| 4 |
|
|
| 32 |
|
|
| (28 | ) |
Interest and related charges |
|
| 136 |
|
|
| 135 |
|
|
| 1 |
|
|
| 400 |
|
|
| 398 |
|
|
| 2 |
|
|
| 148 |
|
|
| 136 |
|
|
| 12 |
|
Income tax expense |
|
| 106 |
|
|
| 111 |
|
|
| (5 | ) |
|
| 245 |
|
|
| 140 |
|
|
| 105 |
|
|
| 61 |
|
|
| 70 |
|
|
| (9 | ) |
An analysis of Virginia Power’s results of operations follows:
ThirdFirst Quarter 20212022 vs. 20202021
Operating revenue decreased 12%increased 18%, primarily reflecting:
• |
|
• | A |
|
|
|
|
|
|
These decreases were partially offset by:
|
|
• | A |
• | A $35 million increase in sales to electric utility retail customers associated with economic and other usage factors; |
|
|
• |
|
These increases were partially offset by:
• | A $40 million decrease associated with settlements of economic hedges of certain regulated electric sales; and |
• | A $15 million decrease reflecting a reduction in base rates associated with the settlement of the 2021 Triennial Review. |
Electric fuel and other energy-related purchases increased 21%27%, primarily due to higher commodity costs for electric utilities, ($92 million), which are offset in operating revenue and do not impact net income, partially offset by a decrease in PJM off-system sales ($12 million).income.
Purchased electric capacity increased $12$14 million, primarily due to an increase in expense related to the annual PJM capacity performance market effective June 2021.
Other operations and maintenancedecreased 10% increased 11%, primarily reflecting:
• | A |
• | A $17 million increase in outside services; and |
• | The absence of a $10 million reduction in bad debt expense due to the forgiveness of Virginia retail electric customer accounts in arrears pursuant to Virginia’s 2021 budget process; partially offset by |
• | A $14 million decrease in certain expenses which are primarily recovered through state- and FERC-regulated rates and do not impact net income; and |
• | A |
|
|
Impairment of assetsDepreciation and other charges (benefits)amortization decreased $430 million,increased 32%, primarily due to a benefit from the establishmentan increase for amortization of a regulatory asset associated withestablished in the early retirements of certain coal- and oil-fired generating units associated with the proposed settlement of the 2021 Triennial Review ($54961 million), partially offset by increased charges for CCRO benefits provided to retail electric customersan increase in Virginia associated with the 2021 Triennial ReviewRGGI related amortization ($118 million).
Other income decreased 38%, primarily due to a decrease in net investment gains on nuclear decommissioning trust funds.
Income tax expense decreased 5%, primarily due to increased investment tax credits ($20 million) partially offset by higher pre-tax income ($14 million).
Year-To-Date 2021 vs. 2020
Operating revenue decreased 7%, primarily reflecting:
|
|
|
|
|
|
|
|
|
|
These decreases were partially offset by:
|
|
|
|
|
|
|
|
|
|
Electric fuel and other energy-related purchases decreased 1%, primarily due to a decrease in PJM off-system sales ($47 million), partially offset by higher commodity costs for electric utilities ($2345 million), which are offset in operating revenue and do not impact net income.
Purchased electric capacity increased $30 million, primarily due to an increase in expense related to the annual PJM capacity performance market effective June 2020 ($17 million)income, and an increase due to various projects being placed into service ($22 million), partially offset by depreciation rates revised in expense related to the annual PJM capacity performance market effective June 2021first quarter of 2022 ($1321 million).
Other operations and maintenancetaxes increased 5%decreased 19%, primarily reflecting:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of assets and other charges (benefits) decreased $1.3 billion,increased $55 million, primarily reflecting:
|
|
|
|
|
|
|
|
|
|
Other income increased $59 million,decreased 88%, primarily due to an increase net investment losses in 2022 compared to net investment gains in 2021 on nuclear decommissioning trust fundsfunds.
Interest and related charges ($40 million)increased 9%, primarily due to higher long-term debt interest expense resulting from net debt issuances in 2022 and an increase in AFUDC associated with rate-regulated projects ($19 million).2021.
Income tax expense increased 75%decreased 13%, primarily due to higherlower pre-tax income ($171 million) partially offset by increased investment tax credits ($47 million) and the benefit of a state legislative change ($16 million).income.
Liquidity and Capital Resources
Dominion Energy depends on both internalcash generated from operations and external sources of liquidity to provide working capital and as a bridge to long-term debt financings. Short-termDominion Energy’s material cash requirements not met by cash provided by operations are generally satisfiedinclude capital and investment expenditures, repaying short-term and long-term debt obligations and paying dividends on its common and preferred stock. This section should be read in conjunction with proceeds from short-term borrowings. Long-term cash needs are met through issuances of debt and/or equity securities.
At September 30, 2021, Dominion Energy had $2.4 billion of unused capacity under its joint revolving credit facility.
A summary of Dominion Energy’s cash flows is presented below:
|
| 2021 |
|
| 2020 |
| ||
(millions) |
|
|
|
|
|
|
|
|
Cash, restricted cash and equivalents at January 1 |
| $ | 247 |
|
| $ | 269 |
|
Cash flows provided by (used in): |
|
|
|
|
|
|
|
|
Operating activities(1) |
|
| 3,535 |
|
|
| 4,810 |
|
Investing activities(2) |
|
| (6,607 | ) |
|
| (4,860 | ) |
Financing activities(3) |
|
| 3,092 |
|
|
| 339 |
|
Net increase in cash, restricted cash and equivalents |
|
| 20 |
|
|
| 289 |
|
Cash, restricted cash and equivalents at September 30 |
| $ | 267 |
|
| $ | 558 |
|
|
|
|
|
|
|
Operating Cash Flows
Net cash provided by Dominion Energy’s operating activities decreased $1.3 billion, including approximately $1.4 billion from discontinued operations. Net cash provided by continuing operations increased primarily due to distributions from Cove Point, the absence of a contract termination payment in connection with the sale of Fowler Ridge, decreases in severance payments primarily related to a voluntary retirement program and other changes in working capital items, partially offset by lower deferred fuel cost recoveries and increased margin deposits.
Dominion Energy believes that its operations provide a stable source of cash flow to contribute to planned levels of capital expenditures and maintain or grow the dividend on common shares.
Dominion Energy’s operations are subject to risks and uncertainties that may negatively impact the timing or amounts of operating cash flows, which are discussed in Part I. Item 1A. Risk Factors in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020 and in Part II. Item 1A. Risk Factors in this report.
Credit Risk
Dominion Energy’s exposure to potential concentrations of credit risk results primarily from its energy marketing and price risk management activities. Presented below is a summary of Dominion Energy’s credit exposure as of September 30, 2021 for these activities. Gross credit exposure for each counterparty is calculated prior to the application of collateral and represents outstanding receivables plus any unrealized on- or off-balance sheet exposure, taking into account contractual netting rights.
|
| Gross Credit Exposure |
|
| Credit Collateral |
|
| Net Credit Exposure |
| |||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Investment grade(1) |
| $ | 83 |
|
| $ | — |
|
| $ | 83 |
|
Non-investment grade(2) |
|
| 2 |
|
|
| 5 |
|
|
| 1 |
|
No external ratings: |
|
|
|
|
|
|
|
|
|
|
|
|
Internally rated—investment grade(3) |
|
| 80 |
|
|
| 2 |
|
|
| 78 |
|
Internally rated—non-investment grade(4) |
|
| 15 |
|
|
| 26 |
|
|
| 15 |
|
Total(5) |
| $ | 180 |
|
| $ | 33 |
|
| $ | 177 |
|
|
|
|
|
|
|
|
|
(5) Excludes the Millstone 2019 power purchase agreements.
Investing Cash Flows
Net cash used in Dominion Energy’s investing activities increased $1.7 billion, primarily due to the repayment of the Q-Pipe Transaction deposit and an increase in contributions to equity method affiliates including Atlantic Coast Pipeline, partially offset by a decrease in plant construction and other property additions and the absence of the acquisitions of Pivotal LNG, Inc. and an additional interest in Atlantic Coast Pipeline.
Financing Cash Flows and Liquidity
Dominion Energy relies on capital markets as significant sources of funding for capital requirements not satisfied by cash provided by its operations. As discussed further in Credit Ratings and Debt Covenants in7. MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020, the ability2021.
Analysis of Cash Flows
Presented below are selected amounts related to borrow funds or issue securities and the return demandedDominion Energy’s cash flows:
|
| 2022 |
|
| 2021 |
| ||
(millions) |
|
|
|
|
|
|
|
|
Cash, restricted cash and equivalents at January 1 |
| $ | 408 |
|
| $ | 247 |
|
Cash flows provided by (used in): |
|
|
|
|
|
|
|
|
Operating activities |
|
| 1,125 |
|
|
| 1,452 |
|
Investing activities |
|
| (1,574 | ) |
|
| (2,308 | ) |
Financing activities |
|
| 635 |
|
|
| 1,171 |
|
Net increase in cash, restricted cash and equivalents |
|
| 186 |
|
|
| 315 |
|
Cash, restricted cash and equivalents at March 31 |
| $ | 594 |
|
| $ | 562 |
|
Operating Cash Flows
Net cash provided by investors are affected by credit ratings. In addition, the raisingDominion Energy's operating activities decreased $327 million, inclusive of external capital is subjecta $12 million decrease from discontinued operations, primarily due to certain regulatory requirements, including registrationcurrent year refund payments to Virginia electric customers associated with the SEC for certain issuances.settlement of the 2021 Triennial Review ($190 million), lower deferred fuel cost recoveries ($108 million) and changes in working capital ($134 million).
Dominion Energy currently meets the definition of a well-known seasoned issuer under SEC rules governing the registration, communication and offering processes under the Securities Act of 1933, as amended. The rules provide for a streamlined shelf registration process to provide registrants with timely access to capital. This allows Dominion Energy to use automatic shelf registration statements to register any offering of securities, other than those for exchange offers or business combination transactions.
9677
Investing Cash Flows
Net cash used in Dominion Energy’s investing activities decreased $734 million, primarily due to a decrease in contributions to equity method affiliates including Atlantic Coast Pipeline ($962 million) and proceeds from the sale of assets and equity method investments ($146 million), partially offset by an increase in plant construction and other property additions ($294 million).
Financing Cash Flows
Net cash provided by Dominion Energy's financing activities increased $2.8 billiondecreased $536 million primarily due to the absence of common stock repurchases and lower common stock dividend payments, partially offset by lower net issuances of debt.short-term debt ($1.7 billion), partially offset by higher issuances, net of repayments and redemptions, of long-term debt ($1.0 billion) and the absence of repayment of the 364-day revolving supplemental credit facility borrowings ($225 million).
Credit Facilities and Short-Term Debt
As discussed in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021, Dominion Energy generally uses proceeds from short-term borrowings, including commercial paper, to satisfy short-term cash requirements not met through cash from operations. The levels of borrowing may vary significantly during the course of the year, depending on the timing and amount of cash requirements not satisfied by cash from operations. There have been no significant changes to Dominion Energy’s use of credit facilities and/or short-term debt during the three months ended March 31, 2022.
Dominion Energy Reliability InvestmentSM Program
Dominion Energy has an effective shelf registration statement with the SEC for the sale of up to $3.0 billion of variable denomination floating rate demand notes, called Dominion Energy Reliability InvestmentSM. The registration limits the principal amount that may be outstanding at any one time to $1.0 billion. The notes are offered on a continuous basis and bear interest at a floating rate per annum determined by the Dominion Energy Reliability Investment Committee, or its designee, on a weekly basis. The notes have no stated maturity date, are non-transferable and may be redeemed in whole or in part by Dominion Energy or at the investor’s option at any time. At September 30, 2021,March 31, 2022, Dominion Energy’s Consolidated Balance Sheets include $391$473 million with respect to such notes presented within short-term debt. The proceeds are used for general corporate purposes and to repay debt.
Credit Facilities
Dominion Energy maintains a $6.0 billion joint revolving credit facility which provides for a discount in the pricing of certain annual fees and amounts borrowed by Dominion Energy under the facility if Dominion Energy achieves certain annual renewable electric generation and diversity and inclusion objectives. At March 31, 2022, Dominion Energy had $3.8 billion of unused capacity under its joint revolving credit facility. See Note 16 to the Consolidated Financial Statements in this report for further information regardingthe balances of commercial paper and letters of credit outstanding.
In addition to the primary sources of short-term liquidity discussed above, from time to time Dominion Energy’sEnergy enters into separate supplementary credit facilities liquidityor term loans as discussed in Note 16 to the Consolidated Financial Statements in this report.
Long-Term Debt
Issuances and significant financing transactions, includingBorrowings of Long-Term Debt
Through March 31, 2022, Dominion Energy issued or borrowed the following long-term debt. Unless otherwise noted, the proceeds were used for the repayment of existing long-term indebtedness and for general corporate purposes.
Month of Issuance |
| Type |
| Public / Private |
| Issuer / Borrowing Entity |
| Principal |
|
| Rate |
|
| Stated Maturity | ||
|
|
|
|
|
|
|
| (millions) |
|
|
|
|
|
|
| |
January |
| Senior notes |
| Public |
| Virginia Power |
| $ | 600 |
|
|
| 2.400 | % |
| 2032 |
January |
| Senior notes |
| Public |
| Virginia Power |
|
| 400 |
|
|
| 2.950 | % |
| 2051 |
Total issuances and borrowings |
|
|
|
|
| $ | 1,000 |
|
|
|
|
|
|
| ||
Dominion Energy currently meets the definition of a well-known seasoned issuer under SEC rules governing the registration, communication and offering processes under the Securities Act of 1933, as amended. The rules provide for a streamlined shelf registration process to provide registrants with timely access to capital. This allows Dominion Energy to use automatic shelf registration statements to register any offering of securities, other than those for exchange offers or business combination transactions.
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Dominion Energy maintains a $900 million Sustainability Revolving Credit Agreement entered intoFacility which matures in June 2021,2024 and bears interest at a $1.3variable rate for amounts borrowed for general corporate purposes. The facility also offers a reduced interest rate margin with respect to borrowed amounts allocated to certain environmental sustainability or social investment initiatives. At March 31, 2022, Dominion Energy had no amounts outstanding under this supplemental credit facility. In May 2022, Dominion Energy provided notice of its intention to borrow $900 million under the facility.
Dominion Energy anticipates, excluding potential opportunistic financings, issuing between approximately $3.2 billion term loan credit agreement entered into in July 2021, the issuance of $1.0and $4.4 billion of 2.25% senior notes in August 2021long-term debt during 2022, inclusive of amounts issued through March 31, 2022 as shown above. The raising of external capital is subject to certain regulatory requirements, including registration with the SEC for certain issuances.
Repayment, Repurchases and theRedemptions of Long-Term Debt
Dominion Energy may from time to time reduce its outstanding debt and level of interest expense through redemption of debt securities prior to maturity or repurchases of debt securities in the remaining principal outstanding of $800 million of its July 2016 hybridsopen market, in August 2021.privately negotiated transactions, through tender offers or otherwise.
In November 2021, Dominion Energy received commitments from lenders for its subsidiary holding its noncontrolling interest in Cove Point to issue approximately $2.5 billion inThe following long-term debt secured by its noncontrolling interestwas repaid, repurchased or redeemed through March 31, 2022:
Month of Redemption |
| Type |
| Entity |
| Principal | (1) | Rate |
| Stated Maturity | |
|
|
|
|
|
| (millions) |
|
|
|
| |
Debt scheduled to mature in 2022 |
|
|
| $ | 39 |
| various |
|
| ||
Early redemptions |
|
|
|
|
|
|
|
|
| ||
None |
|
|
|
|
|
|
|
|
|
|
|
Total repayments, repurchases and redemptions |
|
| $ | 39 |
|
|
|
| |||
(1) | Total amount redeemed prior to maturity includes remaining principal plus accrued interest. |
See Note 16 to the Consolidated Financial Statements in Cove Point. The proceeds are expectedthis report and Note 18 to be utilized to repay portionsthe Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 for additional information regarding scheduled maturities of Dominion Energy’s long-term debt, including related average interest rates.
Remarketing of Long-Term Debt
Through March 31, 2022, Dominion Energy was not required to and did not complete the remarketing of any of its long-term debt. In 2022, Dominion Energy expects to remarket approximately $165 million of its senior notes and tax-exempt bonds, inclusive of $138 million of Virginia Power’s tax-exempt bonds remarketed in April 2022.
Credit Ratings
CreditAs discussed in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021, Dominion Energy’s credit ratings affect its liquidity, cost of borrowing under credit facilities and collateral posting requirements under commodity contracts, as well as the rates at which it is able to offer debt securities. The credit ratings for Dominion Energy are intended to provide banksaffected by its financial profile, mix of regulated and capital market participants with a framework for comparingnonregulated businesses and respective cash flows, changes in methodologies used by the ratings agencies and event risk, if applicable, such as major acquisitions or dispositions. A credit quality of securities and arerating is not a recommendation to buy, sell or hold securities. securities and should be evaluated independently of any other rating. As of March 31, 2022, there have been no changes in Dominion Energy’s credit ratings.
Financial Covenants
As discussed in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021, Dominion Energy is subject to various covenants present in the enabling agreements underlying Dominion Energy’s debt. As of March 31, 2022, there have been no material changes to covenants, nor any events of default under Dominion Energy’s covenants.
Common Stock, Preferred Stock and Other Equity Securities
In the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021, there is a discussion of Dominion Energy’s existing equity financing programs, including an at-the-market program and Dominion Energy Direct®. Through March 31, 2022, Dominion Energy has issued $45 million of stock through these programs. See Note 16 to the Consolidated Financial Statements in
79
Credit Ratingsthis report for additional information. Dominion Energy anticipates raising between $300 million and $500 million of capital through the issuance of common stock in 2022 and may issue up to $150 million of stock under settlement agreements associated with litigation acquired in the SCANA Combination as discussed in Note 17 to the Consolidated Financial Statements in this report, inclusive of 0.9 million shares of its common stock, valued at $72 million, issued in May 2022 to partially satisfy DESC’s remaining obligation under a settlement agreement with the SCDOR. As discussed in Note 16 to the Consolidated Financial Statements in this report, in June 2022, Dominion Energy will settle the stock purchase contract component of the 2019 Equity Units which is expected to result in proceeds in the event of a successful remarketing of $1.6 billion and the issuance of up to 21.8 million shares, subject to a formula based on the average closing price of Dominion Energy common stock. As discussed in Note 16 to the Consolidated Financial Statements in this report, Dominion Energy, subject to approval by its Board of Directors and the settlement of a successful remarketing, will redeem all outstanding shares of the Series A Preferred Stock in September 2022.
Through March 31, 2022, Dominion Energy has not repurchased and does not plan to repurchase in 2022 any shares of common stock, except for shares tendered by employees to satisfy tax withholding obligations on vested restricted stock.
Capital Expenditures
As of March 31, 2022, there have been no material changes to Dominion Energy’s total planned capital expenditures for each segment through 2026 as disclosed in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.
Dividends
Dominion Energy believes that its operations provide a stable source of cash flow to contribute to planned levels of capital expenditures and maintain or grow the dividend on common shares. See Note 16 to the Consolidated Financial Statements in this report for additional information regarding Dominion Energy’s outstanding preferred stock and associated dividend rates.
Subsidiary Dividend Restrictions
As of March 31, 2022, there have been no material changes to the subsidiary dividend restrictions disclosed in the Dividends section of MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020, there2021
Credit Risk
Dominion Energy’s exposure to potential concentrations of credit risk results primarily from its energy marketing and price risk management activities. Presented below is a discussion on the usesummary of capital markets by Dominion EnergyEnergy’s credit exposure as wellMarch 31, 2022 for these activities. Gross credit exposure for each counterparty is calculated as the impact of credit ratings on the accessibilityoutstanding receivables plus any unrealized on- or off-balance sheet exposure, taking into account contractual netting rights.
|
| Gross Credit Exposure |
|
| Credit Collateral |
|
| Net Credit Exposure |
| |||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Investment grade(1) |
| $ | 54 |
|
| $ | — |
|
| $ | 54 |
|
Non-investment grade(2) |
|
| 15 |
|
|
| 14 |
|
|
| 1 |
|
No external ratings: |
|
|
|
|
|
|
|
|
|
|
|
|
Internally rated—investment grade(3) |
|
| 27 |
|
|
| — |
|
|
| 27 |
|
Internally rated—non-investment grade(4) |
|
| 14 |
|
|
| — |
|
|
| 14 |
|
Total |
| $ | 110 |
|
| $ | 14 |
|
| $ | 96 |
|
(1) | Designations as investment grade are based upon minimum credit ratings assigned by Moody’s Investors Service and Standard & Poor’s. The five largest counterparty exposures, combined, for this category represented approximately 45% of the total net credit exposure. |
(2) | The five largest counterparty exposures, combined, for this category represented less than 1% of the total net credit exposure. |
(3) | The five largest counterparty exposures, combined, for this category represented approximately 28% of the total net credit exposure. |
(4) | The five largest counterparty exposures, combined, for this category represented approximately 7% of the total net credit exposure. |
Fuel and costs of using these markets. As of September 30, 2021, thereOther Purchase Commitments
There have been no material changes inoutside of the ordinary course of business to Dominion Energy’s credit ratings.
Debt Covenants
In the Debt Covenants section of MD&Afuel and other purchase commitments included in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020, there is a discussion on the various covenants present in the enabling agreements underlying Dominion Energy’s debt. 2021.
Other Material Cash Requirements
As of September 30, 2021,March 31, 2022, there have been no material changes to debt covenants, nor any eventsoutside of default underthe ordinary course of business to Dominion Energy’s debt covenants.
Subsidiary Dividend Restrictions
As of September 30, 2021, there have been noother material changes to the subsidiary dividend restrictions disclosed in MD&Acash requirements included in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020.
Future Cash Payments for Contractual Obligations and Planned Capital Expenditures
As of September 30, 2021, there have been no material changes outside the ordinary course of business to Dominion Energy’s contractual2021. Such obligations nor any material changes to planned capital expenditures as disclosed in MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020.include:
Use of Off-Balance Sheet Arrangements
As of September 30, 2021, there have been no material changes to the off-balance sheet arrangements disclosed in MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020, with the exception of the matter disclosed in the Use of Off-Balance Sheet Arrangements section in MD&A in the Companies’ Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.
• | Operating and finance lease obligations – See Note 14 to the Consolidated Financial Statements in this report; |
• | Regulatory liabilities – See Note 12 to the Consolidated Financial Statements in this report; |
• | AROs – See Note 14 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021; |
• | Employee benefit plan obligations – See Note 22 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021; |
• | Charitable commitments – See Note 23 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021; |
• | Off-balance sheet leasing arrangements – See Note 15 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021; and |
• | Guarantees – See Note 17 to the Consolidated Financial Statements in this report. |
Future Issues and Other Matters
The following discussion of future issues and other information includes current developments of previously disclosed matters and new issues arising during the period covered by, and subsequent to, the dates of Dominion Energy’s Consolidated Financial Statements that may impact future results of operations, financial condition and/or cash flows. This section should be read in conjunction withSee Item 1. Business, and Future Issues and Other Matters in MD&A in the Companies’ Annual Report on Form 10-K for the year ended
97
December 31, 2020, Future Issues and Other Matters in MD&A in the Companies’ Quarterly Report on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021 and Note 17 to the Consolidated Financial Statements in this report.
Environmental Matters
Dominion Energy is subject to costs resulting from a number of federal, state and local laws and regulations designed to protect human health and the environment. These laws and regulations affect future planning and existing operations. They can result in increased capital, operating and other costs as a result of compliance, remediation, containment and monitoring obligations. See Note 23 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020 and Note 17 to the Consolidated Financial Statements in this report for additional information on various environmental matters.
Legal Matters
SeeNotes 13 and 23 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 20202021 and Notes 13 and 17 to the Consolidated Financial Statements and Item 1. Legal Proceedings in this report for additional information on various legal matters.
Regulatory Matters
See Notes 3 and 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020 and Note 13 to the Consolidated Financial Statements in this report for additional information on various environmental, regulatory, matters.legal and other matters that may impact future results of operations, financial condition and/or cash flows.
CVOW Commercial Project
In September 2019, Virginia Power filed applications with PJM for the CVOW Commercial Project and for certain approvals and rider recovery fromMarch 2022, the Virginia Commission in November 2021. The total cost of the project is estimated to be approximately $10 billion, excluding financing costs.approved Virginia Power’s estimateapplication filed in December 2021 for the 2.6 GW project’s projected levelized costapproval of energy is approximately $80-90/MWh. Following a competitive procurement process, Virginia Power has entered into or is in the final stages of negotiating fixed price contracts for the major offshore construction and equipment components. The contracts include services denominated in currencies other than the U.S. dollar for approximately €2.9 billion and 3.9 billion kr., which have been included within the cost estimate above based on a spot price from the third quarter of 2021. In addition, certain of the fixed price contracts, approximately €0.7 billion, contain commodity indexing provisions linked to steel. As a result, any changes in applicable exchange rates or commodity indices could result in a change to the ultimate cost of the project. Virginia Power is evaluating hedging strategies, subject to approval by the Virginia Commission, to mitigate such risk. In addition, the offshore construction scope is expected to include an approximately 20-month lease contract with an affiliated entity pending approval by the Virginia Commission, for the use of a Jones Act compliant offshore wind installation vessel currently under development. In April 2022, Virginia Power has completedfiled an application with the conceptual design phaseNorth Carolina Commission for the project’s onshore electric transmission facilities and selected a recommended route with consideration given for resiliency and minimizing environmental impacts. Any changes to the onshore route necessitated during the receipt of various permitting approvals could result in upward pressure on the estimated costapproval of the project. Upon receiving approvals from the Virginia Commission and other permitting entities, Virginia Power anticipates commencing major construction activities in 2023 and the project is expected to be placed in service by the end of 2026. Virginia Power expects to incur approximately 80% of the project costs from 2023 through 2025. Through September 30, 2021, Virginia Power had incurred approximately $170 million of project costs. Virginia Power anticipates funding the project consistent with its approved debt to equity capitalization structure. The project is vital for Virginia Power to meet the renewable energy portfolio standard established in the VCEA and is consistent with the criteria within the VCEA for the construction of an offshore wind facility deemed to be in the public interest as well as the guidelines facilitating cost recovery. See additional discussion of the VCEA provisions concerning renewable generation projects in Note 13 to the Companies’ Annual Report on Form 10-K for year ended December 31, 2020. same lease contract.
Southeast Energy Exchange Market
In February 2021, DESCMay 2022, Virginia Power entered into forward purchase agreements with a notional amount of approximately €3.2 billion to hedge its foreign currency rate risk exposure to certain fixed price contracts for the major offshore construction and the other membersequipment components of the Southeast Energy Exchange Market submitted the Southeast Energy Exchange Market Agreement to FERC for authorization. This agreement sets forth the framework and rules for establishing and maintaining a new electronic trading platform designed to enhance the existing bilateral market in the Southeast utilizing zero-charge transmission service. That transmission service, in turn, will be voluntarily provided by participating transmission service providers, including DESC. In October 2021, the Southeast Energy Exchange Market Agreement became effective by operation of law as a result of a split FERC vote. The members expect the Southeast Energy Exchange Market platform to be operational in 2022.
CVOW Commercial Project.
ITEM 3.
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
The matters discussed in this Item may contain “forward-looking statements” as described in the introductory paragraphs under Part I., Item 2. MD&A in this report. The reader’s attention is directed to those paragraphs for discussion of various risks and uncertainties that may impact the Companies.
Market Risk Sensitive Instruments and Risk Management
The Companies’ financial instruments, commodity contracts and related financial derivative instruments are exposed to potential losses due to adverse changes in commodity prices, interest rates and equity security prices as described below. Commodity price risk is present in the Companies’ electric operations and Dominion Energy’s natural gas procurement and marketing operations due to the exposure to market shifts in prices received and paid for electricity, natural gas and other commodities. The Companies use commodity derivative contracts to manage price risk exposures for these operations. Interest rate risk is generally related to their outstanding debt and future issuances of debt. In addition, the Companies are exposed to investment price risk through various portfolios of equity and debt securities. The Companies’ exposure to foreign currency exchange rate risk is related to certain fixed price contracts entered into in 2021 in connection with the CVOW Commercial Project. The contracts include services denominated in currencies other than the U.S. dollar for approximately €2.6 billion and 5.1 billion kr. In addition, certain of the fixed price contracts, approximately €0.7 billion, contain commodity indexing provisions linked to steel. As a result, any changes in applicable exchange rates or commodity indices could result in a change to the ultimate cost of the project. In May 2022, Virginia Power entered into forward purchase agreements with a notional amount of approximately €3.2 billion to hedge its foreign currency rate risk exposure to certain fixed price contracts for the major offshore construction and equipment components of the CVOW Commercial Project.
The following sensitivity analysis estimates the potential loss of future earnings or fair value from market risk sensitive instruments over a selected time period due to a 10% change in commodity prices or interest rates.
Commodity Price Risk
To manage price risk, the Companies hold commodity-based derivative instruments held for non-trading purposes associated with purchases and sales of electricity, natural gas and other energy-related products.
The derivatives used to manage commodity price risk are executed within established policies and procedures and may include instruments such as futures, forwards, swaps, options and FTRs that are sensitive to changes in the related commodity prices. For sensitivity analysis purposes, the hypothetical change in market prices of commodity-based derivative instruments is determined based on models that consider the market prices of commodities in future periods, the volatility of the market prices in each period, as well as the time value factors of the derivative instruments. Prices and volatility are principally determined based on observable market prices.
A hypothetical 10% increase in commodity prices would have resulted in a decrease of $24$78 million and $16 million in the fair value of Dominion Energy’s commodity-based derivative instruments as of September 30, 2021. March 31, 2022 and December 31, 2021, respectively.
A hypothetical 10% decreaseincrease in commodity prices would have resulted in a decrease of $2$38 million and $6 million in the fair value of Dominion Energy’s commodity-based derivative instruments as of December 31, 2020.
A hypothetical 10% decrease in commodity prices would have resulted in a decrease in fair value of $2 million and $35 million of Virginia Power’s commodity-based derivative instruments as of September 30, 2021March 31, 2022 and December 31, 2020,2021, respectively.
The impact of a change in energy commodity prices on the Companies' commodity-based derivative instruments at a point in time is not necessarily representative of the results that will be realized when the contracts are ultimately settled. Net losses from commodity-based financial derivative instruments used for hedging purposes, to the extent realized, will generally be offset by recognition of the hedged transaction, such as revenue from physical sales of the commodity.
Interest Rate Risk
The Companies manage their interest rate risk exposure predominantly by maintaining a balance of fixed and variable rate debt. They also enter into interest rate sensitive derivatives, including interest rate swaps and interest rate lock agreements. For variable rate debt outstanding for Dominion Energy and Virginia Power, a hypothetical 10% increase in market interest rates would not have resulted in a material change in earnings at September 30, 2021March 31, 2022 or December 31, 2020.2021.
The Companies also use interest rate derivatives, including forward-starting swaps, interest rate swaps and interest rate blocklock agreements to manage interest rate risk. As of September 30, 2021,March 31, 2022, Dominion Energy and Virginia Power had $8.3$14.4 billion and $2.8$3.9 billion, respectively, in aggregate notional amounts of these interest rate derivatives outstanding. A hypothetical 10% decrease in market interest rates would have resulted in a decrease of $143$228 million and $115$141 million, respectively, in the fair value of Dominion Energy and Virginia Power’s interest rate derivatives at September 30, 2021.March 31, 2022. As of December 31, 2020,2021, Dominion Energy and Virginia Power had $6.9$11.4 billion and $2.1$2.8 billion, respectively, in aggregate notional amounts of these interest rate derivatives outstanding. A
82
hypothetical 10% decrease in market interest rates would have resulted in a decrease of $124$191 million and $75$111 million, respectively, in the fair value of Dominion Energy and Virginia Power’s interest rate derivatives at December 31, 2020.2021.
99
The impact of a change in interest rates on the Companies’ interest rate-based financial derivative instruments at a point in time is not necessarily representative of the results that will be realized when the contracts are ultimately settled. Net gains and/or losses from interest rate derivative instruments used for hedging purposes, to the extent realized, will generally be offset by recognition of the hedged transaction.
Investment Price Risk
The Companies are subject to investment price risk due to securities held as investments in nuclear decommissioning and rabbi trust funds that are managed by third-party investment managers. These trust funds primarily hold marketable securities that are reported in the Companies’ Consolidated Balance Sheets at fair value.
Dominion Energy recognized net investment losses (including investment income) on nuclear decommissioning and rabbi trust investments of $197 million for the three months ended March 31, 2022, and net investment gains (including investment income) on nuclear decommissioning and rabbi trust investments of $678 million, $130$304 million and $662 million$1.1 billion for the ninethree months ended September 30,March 31, 2021 and 2020, and the year ended December 31, 2020,2021, respectively. Net realized gains and losses include gains and losses from the sale of investments.investments as well as any other-than-temporary declines in fair value. Dominion Energy recorded in AOCI and regulatory liabilities, a net decrease in unrealized gains on debt investments of $50$134 million, $64 million and $64 million for the ninethree months ended September 30,March 31, 2022 and 2021 and a net increase in unrealized gains on debt investments of $42 million and $57 million for the nine months ended September 30, 2020 and the year ended December 31, 2020,2021, respectively.
Virginia Power recognized net investment losses (including investment income) on nuclear decommissioning trust investments of $89 million for the three months ended March 31, 2022, and net investment gains (including investment income) on nuclear decommissioning trust investments of $335 million, $31$153 million and $287$568 million for the ninethree months ended September 30,March 31, 2021 and 2020, and the year ended December 31, 2020,2021, respectively. Net realized gains and losses include gains and losses from the sale of investments.investments as well as any other-than-temporary declines in fair value. Virginia Power recorded in AOCI and regulatory liabilities, a net decrease in unrealized gains on debt investments of $24$68 million, $28 million and $31 million for the ninethree months ended September 30,March 31, 2022 and 2021 and a net increase in unrealized gains on debt investments of $22 million and $29 million for the nine months ended September 30, 2020 and the year ended December 31, 2020,2021, respectively.
Dominion Energy sponsors pension and other postretirement employee benefit plans that hold investments in trusts to fund employee benefit payments. Virginia Power employees participate in these plans. Differences between actual and expected returns on plan assets are accumulated and amortized during future periods. As such, any investment-related declines in these trusts will result in future increases in the net periodic cost recognized for employee benefit plans and will be included in the determination of the amount of cash to be contributed to the employee benefit plans.
ITEM 4. CONTROLS AND PROCEDURES
Senior management of both Dominion Energy and Virginia Power, including Dominion Energy and Virginia Power’s CEO and CFO, evaluated the effectiveness of each company’s disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation process, each of Dominion Energy and Virginia Power’s CEO and CFO have concluded that each company’s disclosure controls and procedures are effective.
There were no changes that occurred during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, Dominion Energy or Virginia Power’s internal control over financial reporting.
10083
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, the Companies are parties to various legal, environmental or other regulatory proceedings, including in the ordinary course of business. SEC regulations require disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that the Companies reasonably believe will exceed a specified threshold. Pursuant to the SEC regulations, the Companies use a threshold of $1 million for such proceedings.
See the following for discussions on various legal, environmental and other regulatory proceedings to which the Companies are a party, which information is incorporated herein by reference:
• | Notes 13 and 23 to the Consolidated Financial Statements and Future Issues and Other Matters in MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, |
• | Notes 13 and 17 to the Consolidated Financial Statements in this report. |
ITEM 1A. RISK FACTORS
The Companies’ businesses are influenced by many factors that are difficult to predict, involve uncertainties that may materially affect actual results and are often beyond the Companies’ control. A number of these risk factors have been identified in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020,2021, which should be taken into consideration when reviewing the information contained in this report. Other than the risk factor discussed below, thereThere have been no material changes with regard to the risk factors previously disclosed in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020.2021. For other factors that may cause actual results to differ materially from those indicated in any forward-looking statement or projection contained in this report, see Forward-Looking Statements in MD&A in this report.
The development and construction of the CVOW Commercial Project involves significant risks.
The CVOW Commercial Project is a large-scale, complex project that will take several years to complete. Significant delays or cost increases, or an inability to recover certain project costs, could have an adverse effect on the Companies’ financial condition, cash flows and results of operations. If the Companies are unable to complete the development and construction of the CVOW Commercial Project or decide in the future to delay or cancel the project, the Companies may not be able to recover all or a portion of their investment in the project and may incur substantial cancellation payments under existing contracts or other substantial costs associated with any such delay or cancellation. The Companies’ ability to complete the CVOW Commercial Project within the currently proposed timeline, or at all, and consistent with current cost estimates is subject to various risks and uncertainties, certain of which are beyond the Companies’ control.
The development and construction of the CVOW Commercial Project is dependent on the Companies’ ability to obtain and maintain various local, state and federal permits and other regulatory approvals, including Virginia Commission approval for rider recovery of project costs. In addition, the design and route of the project’s onshore electric transmission and other facilities remain subject to regulatory review and approval. Changes in the design and route of these onshore facilities, including an increase in amount of undergrounding, would likely increase project costs. Also, the CVOW Commercial Project may become the subject of litigation or other forms of intervention by third parties, including stakeholders or advocacy groups, that may impact the timing and receipt of permits or other regulatory approvals or otherwise delay or increase the cost of the project.
The Companies’ ability to invest the significant financial resources necessary for the CVOW Commercial Project is dependent on the Companies’ access to the financial markets in a timely and cost-effective manner. A decline in the Companies’ credit worthiness, an unfavorable market reputation of either the Companies or their industry or general market disruptions could adversely impact financing costs and increase the overall cost of the project.
The development and construction of the CVOW Commercial Project is also dependent on the ability of certain key suppliers and contractors to timely satisfy their obligations under contracts entered into or expected to be entered into. Given the unique equipment and expertise required for this project, the Companies may not be able to remedy in a timely and cost-effective manner, if at all, any failure by one or more of these suppliers or contractors to timely satisfy their contractual obligations. Certain of the fixed price contracts for major offshore construction and equipment components are denominated in Euros and Danish kroner, including those which contain commodity indexing provisions linked to steel. Accordingly, to the extent the Companies are unable to, including from the inability to receive approval from the Virginia Commission, or elect not to, hedge their exposure to these currencies, adverse fluctuations in the applicable exchange rates would likely adversely affect the cost of the CVOW Commercial Project. Similarly, adverse fluctuations in the price of certain raw materials, including steel, would likely, to the extent not hedged by the Companies, adversely affect the overall costs incurred to develop and construct the project.
The development and construction of the CVOW Commercial Project involves the use of new turbine technology and will take place in a marine environment, which presents unique challenges and will require the use of a specialized workforce and specialized equipment. In addition, the timely installation of the turbines is dependent on the completion and availability of a Jones Act compliant vessel currently under construction, and regulatory approval for Virginia Power to use an affiliate’s vessel.
The timeline for development and construction of the CVOW Commercial Project may also be negatively impacted by severe weather events or marine wildlife, including migration patterns of endangered and protected species, both of which are outside of the control of the Companies and its contractors. Any significant delays in the project timeline, including from any of the factors discussed above, resulting in both the delay of commencement of construction to 2024 or later combined with a delay to the in-service date to 2028 or later may impact the ability of the Companies to recover the costs of the CVOW Commercial Project.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Dominion Energy
Purchases of Equity Securities
Period |
| Total Number of Shares (or Units) Purchased(1) |
|
| Average Price Paid per Share (or Unit)(2) |
|
| Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs |
|
| Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased under the Plans or Programs(3) | |||
7/1/21 - 7/31/21 |
|
| — |
|
| $ | — |
|
|
| — |
|
| $ 0.92 billion |
8/1/21 - 8/31/21 |
|
| — |
|
|
| — |
|
|
| — |
|
| 0.92 billion |
9/1/21 - 9/30/21 |
|
| 321 |
|
|
| 74.58 |
|
|
| — |
|
| 0.92 billion |
Total |
|
| 321 |
|
|
| 74.58 |
|
|
| — |
|
| $ 0.92 billion |
Period |
| Total Number of Shares (or Units) Purchased(1) |
|
| Average Price Paid per Share (or Unit)(2) |
|
| Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs |
|
| Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased under the Plans or Programs(3) | |||
1/1/22 - 1/31/22 |
|
| 3,942 |
|
| $ | 78.64 |
|
|
| — |
|
| $ 0.92 billion |
2/1/22 - 2/28/22 |
|
| 59,592 |
|
|
| 80.00 |
|
|
| — |
|
| 0.92 billion |
3/1/22 - 3/31/22 |
|
| 6,111 |
|
|
| 79.29 |
|
|
| — |
|
| 0.92 billion |
Total |
|
| 69,645 |
|
|
| 79.86 |
|
|
| — |
|
| $ 0.92 billion |
(1) | Represents shares of common stock that were tendered by employees to satisfy tax withholding obligations on vested restricted stock. |
(2) | Represents the weighted-average price paid per share. |
(3) | In November 2020, the Dominion Energy Board of Directors authorized the repurchase of up to $1.0 billion of shares of common stock. This repurchase program has no expiration date or price or volume targets and may be modified, suspended or terminated at any time. Shares may be purchased through open market or privately negotiated transactions or otherwise at the discretion of management subject to prevailing market conditions, applicable securities laws and other factors. |
ITEM 5. OTHER INFORMATION
Effective November 3, 2021,
On May 5, 2022, Dominion Energy amended Section IIIA(9)(d)(i)filed a prospectus supplement to its effective registration statement on Form S-3 (File No. 333-239467) filed with the SEC on June 26, 2020 for purposes of registering the offer and resale of certain shares of its Articles of Incorporationcommon stock previously issued and delivered to provide that,SCDOR in connectionaccordance with the conversionterms of any sharea settlement agreement as discussed in Note 17 to the Consolidated Financial Statements in this report. The registration rights agreement and opinion of counsel relating to the registration and validity of such shares are filed as Exhibits 4.2 and 5.1, respectively, to this Quarterly Report on Form 10-Q for the purpose of incorporating such exhibits by reference into the registration statement and the related prospectus contained therein, as supplemented by the prospectus supplement.
On May 5, 2022, Dominion Energy notified applicable holders that it will conduct a final remarketing of shares of Series A Preferred Stock during a final remarketing period beginning on May 23, 2022 and ending on May 27, 2022. Dominion Energy will (i) select as the “settlement method” either “cash settlement” or “combination settlement” and (ii)has received a commitment from a financial institution to purchase at a price of $1,000 per share any shares of Series A Preferred Stock included in the event it selects “combinationfinal remarketing that are not sold to other purchasers through a marketed process based on an annual dividend rate of 1.75% for the June 1, 2022 through August 31, 2022 dividend period, which annual dividend rate will increase to 6.75% effective September 1, 2022. In connection with this commitment, Dominion Energy has agreed to redeem all outstanding shares of Series A Preferred Stock on September 1, 2022, assuming settlement” specify of the final remarketing and subject to approval by Dominion Energy’s Board of Directors, a “specified dollar amount” of not less than $1,000. Underdetermination that Dominion Energy has funds legally available for the redemption as required by Virginia law and the terms of the ArticlesSeries A Preferred Stock and the issuance of Incorporation,a redemption notice as required by the amendment did not require shareholder approval. The foregoing description is qualified in its entirety by reference to the full textterms of the Articles of Incorporation, as amended, which are filed as Exhibit 3.1.a hereto and incorporated herein by reference.Series A Preferred Stock.
10285
ITEM 6. EXHIBITS
103
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| ||||
32.b |
|
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|
| X | |||||
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|
| ||||
99 |
| Condensed consolidated earnings statements (filed herewith). |
| X |
| X | ||||
86
Exhibit Number | Description | Dominion Energy | Virginia Power | |||||||
|
|
|
|
|
|
| ||||
101 |
| The following financial statements from Dominion Energy, Inc.’s Quarterly Report on Form 10-Q for the quarter ended |
| X |
| X | ||||
|
|
|
|
|
|
| ||||
104 |
| Cover Page Interactive Data File formatted in iXBRL (Inline eXtensible Business Reporting Language) and contained in Exhibit 101. |
| X |
| X | ||||
|
|
|
|
|
|
| ||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| DOMINION ENERGY, INC. Registrant | |
|
| |
| /s/ Michele L. Cardiff | |
| Michele L. Cardiff Senior Vice President, Controller and Chief Accounting Officer | |
|
| |
| VIRGINIA ELECTRIC AND POWER COMPANY Registrant | |
|
| |
| /s/ Michele L. Cardiff | |
| Michele L. Cardiff Senior Vice President, Controller and Chief Accounting Officer | |
|
|
10588