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. 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). 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.

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). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. At ~~October 29, 2021,~~August 1, 2022, Dominion Energy South Carolina, Inc. had outstanding 40,296,147 shares of common stock, all of which were held by SCANA Corporation, a wholly-owned subsidiary of Dominion Energy, Inc.

Dominion Energy South Carolina, Inc. 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.

The following abbreviations or acronyms used in this Form 10-Q are defined below:

Abbreviation or Acronym		Definition
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
ACE Rule		Affordable Clean Energy Rule
AOCI		Accumulated other comprehensive income (loss)
ARO		Asset retirement obligation
BACT		Best available control technology
CAA		Clean Air Act
CCR		Coal combustion residual
CEO		Chief Executive Officer
CERCLA		Comprehensive Environmental Response, Compensation and Liability Act of 1980, also known as Superfund
CFO		Chief Financial Officer
CO₂		Carbon dioxide
~~Consortium~~		~~A consortium consisting of Westinghouse and WECTEC~~
CUA		Capacity Use Area
CWA		Clean Water Act
~~DECG~~		Carolina Gas Transmission, LLC, (formerly known as Dominion Energy Carolina Gas Transmission, LLC), a subsidiary of Berkshire Hathaway Energy Company effective November 2020 (previously a subsidiary of Dominion Energy)
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
~~DESS~~		~~Dominion Energy Southeast Services, Inc.~~
Dominion Energy		The legal entity, Dominion Energy, Inc., one or more of its consolidated subsidiaries (other than DESC) or operating segments, or the entirety of Dominion Energy, Inc. and its consolidated subsidiaries
Dominion Energy South Carolina		Dominion Energy South Carolina operating segment
DSM		Demand-side management
ELG Rule		Effluent limitations guidelines for the steam electric power generating category
EPA		U.S. Environmental Protection Agency
FERC		Federal Energy Regulatory Commission
~~FILOT~~		~~Fee in lieu of taxes~~
Fuel Company		South Carolina Fuel Company, Inc.
GAAP		U.S. generally accepted accounting principles
GENCO		South Carolina Generating Company, Inc.
GHG		Greenhouse gas
~~IAA~~		~~Interim Assessment Agreement dated March 28, 2017, as amended, among DESC, Santee Cooper, Westinghouse and WECTEC~~
MD&A		Management's Discussion and Analysis of Financial Condition and Results of Operations
MGD		Million gallons per day
~~MGP~~MWh		~~Manufactured gas plant~~Megawatt hour
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
NO_x		Nitrogen oxide
NRC		U.S. Nuclear Regulatory Commission
Order 1000		Order issued by FERC adopting requirements for electric transmission planning, cost allocation and development
~~PGA~~		~~Purchased gas adjustment~~
PSD		Prevention of significant deterioration

(millions)	September 30, 2021			December 31, 2020			June 30, 2022			December 31, 2021
ASSETS
Utility plant in service	$	14,000		$	13,680		$	14,423		$	14,200
Accumulated depreciation and amortization		(5,162	)		(5,027	)		(5,261	)		(5,192	)
Construction work in progress		524			460			517			481
Nuclear fuel, net of accumulated amortization		210			221			197			216
Utility plant, net ($723 and $730 related to VIEs)		9,572			9,334
Utility plant, net ($708 and $729 related to VIEs)								9,876			9,705
Nonutility Property and Investments:
Nonutility property, net of accumulated depreciation		37			39			42			42
Assets held in trust, nuclear decommissioning		248			238			225			256
Nonutility property and investments, net		285			277			267			298
Current Assets:
Cash and cash equivalents		22			5			46			30
Receivables:
Customer, net of allowance for uncollectible accounts of $5 and $10		337			365
Customer, net of allowance for uncollectible accounts of $5 in both periods								399			358
Affiliated and related party		32			16			3			16
Other		54			64			126			152
Inventories (at average cost):
Fuel		64			68			64			60
Gas stored		21			14			27			25
Materials and supplies		183			176			210			186
Prepayments		100			75			103			70
Regulatory assets		252			229			449			361
Other current assets		44			27
Total current assets ($73 and $103 related to VIEs)		1,109			1,039
Other current assets⁽¹⁾								87			57
Total current assets ($63 and $77 related to VIEs)								1,514			1,315
Deferred Debits and Other Assets:
Regulatory assets		3,412			3,726			3,305			3,323
Other		147			103
Total deferred debits and other assets ($36 and $35 related to VIEs)		3,559			3,829
Affiliated receivables								76			66
Other⁽¹⁾								309			220
Total deferred debits and other assets ($25 and $31 related to VIEs)								3,690			3,609
Total assets	$	14,525		$	14,479		$	15,347		$	14,927

(millions)	September 30, 2021			December 31, 2020			June 30, 2022			December 31, 2021
CAPITALIZATION AND LIABILITIES
Common Stock - no par value, 40.3 million shares outstanding	$	4,166		$	4,017		$	4,088		$	4,016
Retained earnings		191			277			357			335
Accumulated other comprehensive loss		(2	)		(2	)		(1	)		(1	)
Total common equity		4,355			4,292			4,444			4,350
Noncontrolling interest		175			192			168			175
Total equity		4,530			4,484			4,612			4,525
Long-term debt, net		3,327			3,327			3,725			3,724
Affiliated long-term debt		230			230			230			230
Finance leases		11			15			8			10
Total long-term debt		3,568			3,572			3,963			3,964
Total capitalization		8,098			8,056			8,575			8,489
Current Liabilities:
Short-term borrowings								190			0
Securities due within one year		5			39			4			5
Accounts payable		161			178			288			232
Affiliated and related party payables		660			457			667			458
Customer deposits and customer prepayments		71			70			75			73
Taxes accrued		173			215			123			222
Interest accrued		91			95			72			73
Regulatory liabilities		270			283			301			245
Reserves for litigation and regulatory proceedings		133			208			124			211
Other		116			40			135			144
Total current liabilities		1,680			1,585			1,979			1,663
Deferred Credits and Other Liabilities:
Deferred income taxes and investment tax credits		900			858			1,077			975
Asset retirement obligations		593			597			613			599
Pension and other postretirement benefits		177			172			158			164
Regulatory liabilities		2,892			3,005			2,859			2,936
Affiliated liabilities		0			13
Other		185			193			86			101
Total deferred credits and other liabilities		4,747			4,838			4,793			4,775
Commitments and Contingencies (see Note 10)
Total capitalization and liabilities	$	14,525		$	14,479		$	15,347		$	14,927

	Three Months Ended September 30,					Nine Months Ended September 30,				Three Months Ended June 30,					Six Months Ended June 30,
(millions)	2021		2020			2021		2020		2022		2021			2022		2021
Operating Revenue⁽¹⁾	$	863	$	755		$	2,299	$	2,051
Operating Revenue⁽¹⁾										$	909	$	692		$	1,758	$	1,436
Operating Expenses:
Fuel used in electric generation⁽¹⁾		200		135			452		334
Purchased power⁽¹⁾		24		25			67		63
Fuel used in electric generation⁽¹⁾											254		120			428		252
Purchased power⁽¹⁾											27		27			58		43
Gas purchased for resale⁽¹⁾		57		33			188		124		89		50			194		131
Other operations and maintenance		116		93			332		276		109		117			226		216
Other operations and maintenance - affiliated suppliers		45		49			145		154		39		47			82		100
Impairment of assets and other charges		1		63			320		65		4		259			4		319
Depreciation and amortization		122		118			362		354		126		119			251		240
Other taxes⁽¹⁾		64		59			191		186
Other taxes⁽¹⁾											71		62			144		127
Total operating expenses		629		575			2,057		1,556		719		801			1,387		1,428
Operating income		234		180			242		495
Operating income (loss)											190		(109	)		371		8
Other income (expense), net		6		(2	)		0		3		20		(12	)		24		(6	)
Interest charges, net of allowance for borrowed funds used during construction of $1, $2, $3 and $5⁽²⁾		50		57			159		173
Income before income tax expense		190		121			83		325
Income tax expense		42		15			6		59
Net Income and Other Comprehensive Income		148		106			77		266
Interest charges, net of allowance for borrowed funds used during construction of $1, $1, $2 and $2⁽¹⁾											53		54			105		109
Income (loss) before income tax expense											157		(175	)		290		(107	)
Income tax expense (benefit)											31		(49	)		57		(36	)
Net Income (Loss) and Other Comprehensive Income (Loss)											126		(126	)		233		(71	)
Comprehensive Income Attributable to Noncontrolling Interest		4		5			13		8		7		5			11		9
Comprehensive Income Available to Common Shareholder	$	144	$	101		$	64	$	258
Comprehensive Income (Loss) Available to Common Shareholder										$	119	$	(131	)	$	222	$	(80	)

	Nine Months Ended September 30,						Six Months Ended June 30,
(millions)	2021			2020			2022			2021
Operating Activities
Net income	$	77		$	266
Adjustments to reconcile net income to net cash provided by operating activities:
Net income (loss)							$	233		$	(71	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Impairment of assets and other charges		320			12			4			319
Deferred income taxes, net		42			255			102			(52	)
Depreciation and amortization		362			354			251			240
Amortization of nuclear fuel		30			31			19			20
Other adjustments		8			24			4			6
Changes in certain assets and liabilities:
Receivables		35			(64	)		(29	)		21
Receivables - affiliated and related party		(31	)		5			13			(2	)
Inventories		(10	)		10			(30	)		(4	)
Prepayments		(33	)		(43	)		(23	)		(38	)
Regulatory assets		(86	)		(8	)		(178	)		(51	)
Regulatory liabilities		(133	)		(168	)		36			(108	)
Accounts payable		34			(33	)		66			81
Accounts payable - affiliated and related party		(65	)		(24	)		63			(66	)
Taxes accrued		(42	)		(52	)		(99	)		(99	)
Interest accrued								(1	)		2
Pension and other postretirement benefits		5			0			(6	)		3
Other assets and liabilities		24			41			(212	)		78
Net cash provided by operating activities		537			606			213			279
Investing Activities
Property additions and construction expenditures		(584	)		(472	)		(346	)		(415	)
Proceeds from investments and sales of assets		7			12			9			6
Purchase of investments		(7	)		(11	)		(1	)		(7	)
Purchase of investments - affiliated		(2	)		(1	)		0			(1	)
Short-term investments - affiliated		15			0			0			15
Other		1			0			1			0
Net cash used in investing activities		(570	)		(472	)		(337	)		(402	)
Financing Activities
Repayment of long-term debt		(34	)		0
Dividend to parent		(180	)		0			(218	)		(105	)
Short-term borrowings, net								190			60
Short-term borrowings - affiliated, net		268			(130	)		146			187
Other		(4	)		(5	)		(2	)		(2	)
Net cash provided by (used in) financing activities		50			(135	)
Net cash provided by financing activities								116			140
Net increase (decrease) in cash, restricted cash and equivalents		17			(1	)		(8	)		17
Cash, restricted cash and equivalents at beginning of period⁽¹⁾		5			4
Cash, restricted cash and equivalents at end of period⁽¹⁾	$	22		$	3
Cash, restricted cash and equivalents at beginning of period⁽¹⁾								54			5
Cash, restricted cash and equivalents at end of period⁽¹⁾							$	46		$	22
Supplemental Cash Flow Information
Significant noncash investing and financing activities⁽²⁾:
Significant noncash investing and financing activities:⁽²⁾
Accrued construction expenditures	$	38		$	42		$	98		$	27
Leases⁽³⁾		0			2
Operating leases								3			0

	Common Stock															Common Stock
(millions)	Shares		Amount		Retained Earnings			AOCI			Noncontrolling Interest		Total Equity			Shares		Amount		Retained Earnings			AOCI			Noncontrolling Interest			Total Equity
June 30, 2020		40	$	3,695	$	177		$	(3	)	$	183	$	4,052
Total comprehensive income available to common shareholder						101						5		106
Capital contribution from parent			322											322
September 30, 2020		40	$	4,017	$	278		$	(3	)	$	188	$	4,480
March 31, 2021																	40	$	4,017	$	253		$	(2	)	$	196		$	4,464
Total comprehensive income (loss) available (attributable) to common shareholder																					(131	)					5			(126	)
Dividend to parent																											(30	)		(30	)
June 30, 2021																	40	$	4,017	$	122		$	(2	)	$	171		$	4,308

June 30, 2021		40	$	4,017	$	122		$	(2	)	$	171	$	4,308
March 31, 2022																	40	$	4,016	$	338		$	(1	)	$	169		$	4,522
Total comprehensive income available to common shareholder						144						4		148							119						7			126
Capital contribution from parent				149										149					72											72
Dividend to parent						(75	)							(75	)						(100	)					(8	)		(108	)
September 30, 2021		40	$	4,166	$	191		$	(2	)	$	175	$	4,530
June 30, 2022																	40	$	4,088	$	357		$	(1	)	$	168		$	4,612

	Common Stock																Common Stock
(millions)	Shares		Amount		Retained Earnings			AOCI			Noncontrolling Interest			Total Equity			Shares		Amount		Retained Earnings			AOCI			Noncontrolling Interest			Total Equity
December 31, 2019		40	$	3,695	$	20		$	(3	)	$	180		$	3,892
Total comprehensive income available to common shareholder						258						8			266
Capital contribution from parent			322												322
September 30, 2020		40	$	4,017	$	278		$	(3	)	$	188		$	4,480
December 31, 2020																		40	$	4,017	$	277		$	(2	)	$	192		$	4,484
Total comprehensive income (loss) available (attributable) to common shareholder																						(80	)					9			(71	)
Dividend to parent																						(75	)					(30	)		(105	)
June 30, 2021																		40	$	4,017	$	122		$	(2	)	$	171		$	4,308

December 31, 2020		40	$	4,017	$	277		$	(2	)	$	192		$	4,484
December 31, 2021																		40	$	4,016	$	335		$	(1	)	$	175		$	4,525
Total comprehensive income available to common shareholder						64						13			77							222						11			233
Capital contribution from parent				149											149				72												72
Dividend to parent						(150	)					(30	)		(180	)						(200	)					(18	)		(218	)
September 30, 2021		40	$	4,166	$	191		$	(2	)	$	175		$	4,530
June 30, 2022																		40	$	4,088	$	357		$	(1	)	$	168		$	4,612

The following notes should be read in conjunction with the Notes to Consolidated Financial Statements appearing in DESC's Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

These are interim financial statements and, due to the seasonality of DESC's business and matters that may occur during the rest of the year, the amounts reported in the Consolidated Statements of Comprehensive Income are not necessarily indicative of amounts expected for the full year. In the opinion of management, the information furnished herein reflects all adjustments which are necessary for a fair statement of the results for the interim periods reported, and such adjustments are of a normal recurring nature. In addition, the preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Certain amounts in DESC's ~~2020~~2021 Consolidated Financial Statements and Notes have been reclassified to conform to the ~~2021~~2022 presentation for comparative purposes; however, such reclassifications did not affect DESC's net income and other comprehensive income, total assets, liabilities, equity or cash flows. Effective in the second quarter of 2021, DESC updated its 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.

DESC is a wholly-owned subsidiary of SCANA, which is a wholly-owned subsidiary of Dominion Energy.

DESC has determined that it has a controlling financial interest in each of GENCO and Fuel Company (which are considered to be VIEs) and, accordingly, DESC's Consolidated Financial Statements include, after eliminating intercompany balances and transactions, the accounts of DESC, GENCO and Fuel Company. See Note 2 to the Consolidated Financial Statements included in DESC’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 for a description of GENCO and Fuel Company.

~~Effective January 2021,~~ DESC purchases shared services from DES, an affiliated VIE that provides accounting, legal, finance and certain administrative and technical services to all Dominion Energy subsidiaries, including DESC. ~~DESC had previously purchased such services from DESS, an affiliated VIE, that had provided such services to all SCANA subsidiaries.~~ DESC has determined that it is not the primary beneficiary of DES as it does not have either the power to direct the activities that most significantly impact its economic performance or an obligation to absorb losses and benefits which could be significant to it. See Note 12 for amounts attributable to affiliates.

There have been no significant changes from Note 2 to the Consolidated Financial Statements in DESC's Annual Report on Form 10-K for the year ended December 31, ~~2020, with the exception of the item described below.~~

In the third quarter of 2021, DESC revised its estimated cash flow projections associated with certain gas distribution pipeline AROs. As a result, DESC recorded a $23 million decrease to AROs with a corresponding $20 million decrease to utility plant, net and the remainder recorded as a decrease to regulatory assets.2021.

As a result of issues generated in the ordinary course of business, DESC is 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 DESC to estimate a range of possible loss. For regulatory matters that DESC 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 DESC is able to estimate a range of possible loss. For regulatory matters that DESC is 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 DESC’s

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 DESC’s financial position, liquidity or results of operations.

Other than the following matters, there have been no significant developments regarding the pending regulatory matters disclosed in Note 3 to the Consolidated Financial Statements in DESC's Annual Report on Form 10-K for the year ended December 31, ~~2020.~~

In 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 a proposal 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 then 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 voted to approve the comprehensive settlement agreement and issued its final order in August 2021.~~

In connection with this matter, in the second quarter of 2021 DESC recorded charges of $249 million ($187 million after-tax) reflected within impairment of assets and other charges, 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.

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 ~~February 2021, DESC filed a proposal with~~April 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 components. In April 2021, the~~2022. The South Carolina Commission also approved DESC’s request to apply approximately $66 million representing the ~~filing.~~net balance of funds associated with the monetization of the bankruptcy settlement with Toshiba following the satisfaction of liens against NND Project property previously recorded in regulatory liabilities, as a reduction to its under-collected base fuel cost balance, along with a requested increase to DESC’s variable environmental and avoided capacity cost component. The net effect is an annual increase of $143 million.

DESC has approval for a DSM rider through which it recovers expenditures related to its DSM programs. In January ~~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 connection~~request, effective with the ~~approval~~first 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.

DESC utilizes a pension costs rider approved by the South Carolina Commission which is designed to allow recovery of projected pension costs, including under-collected balances or net of over-collected balances, as applicable. The rider is typically reviewed for adjustment every 12 months with any resulting increase or decrease going into effect beginning with the first billing cycle in May. In ~~February 2021, DESC requested that~~April 2022, the South Carolina Commission ~~approve an~~approved DESC’s requested adjustment to this rider to decrease annual revenue by ~~less than $1~~$12 million.~~In April 2021, the South Carolina Commission approved the filing.~~

In June ~~2021,~~2022, DESC filed with the South Carolina Commission its monitoring report for the 12-month period ended March 31, ~~2021~~2022 with a total revenue requirement of ~~$426~~$553 million. This represents a $9$129 million overall annual increase to its natural gas rates including a $16 million increase under the terms of the ~~RSA~~Natural Gas Rate Stabilization Act effective with the first billing cycle of November ~~2021.~~ 2022. This matter is pending.

In ~~October~~November 2021, DESC filed an application with 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 annual increase~~seeking approval to ~~DESC’s~~create DSM programs for DESC's residential and commercial natural gas ~~rates.~~

~~DESC's natural~~customers and a new rider to retail gas ~~tariffs include a PGA that provides~~rates for the recovery of ~~actual gas~~the associated program costs ~~incurred, including transportation costs. DESC’s gas rates are calculated using~~and a ~~methodology which may adjust~~shared savings incentive of 9.9%. The application also includes a notice of intent that DESC would seek to recover the ~~cost of gas monthly based on a 12-month rolling average, and its gas purchasing policies and practices are reviewed annually by~~net lost revenues resulting from the proposed DSM programs through the annual Natural Gas Rate Stabilization Act proceeding. In June 2022, the South Carolina ~~Commission.~~Commission voted to approve the proposed DSM programs with a shared savings incentive of 8.14%. A final order is pending.

Rate-regulated utilities recognize in their financial statements certain revenues and expenses in different periods than do other enterprises. As a result, DESC has recorded regulatory assets and regulatory liabilities which are summarized in the following table. Except for NND Project costs and certain other unrecovered costs referenced herein, substantially all regulatory assets are either explicitly excluded from rate base or are effectively excluded from rate base due to their being offset by related liabilities.

September 30,

December 31,

(millions)

2021

2020

Regulatory assets:

NND Project costs⁽¹⁾

$
138

$
138

Deferred employee benefit plan costs⁽²⁾

8

9

Other unrecovered plant⁽³⁾

15

14

DSM programs⁽⁴⁾

22

29

AROs⁽⁵⁾

2

2

Cost of fuel and purchased gas under-collections⁽⁶⁾

26

1

Other

41

36

Regulatory assets - current

252

229

NND Project costs⁽¹⁾

2,261

2,364

AROs⁽⁵⁾

314

309

Cost of reacquired debt⁽⁷⁾

11

243

Deferred employee benefit plan costs⁽²⁾

153

159

Deferred losses on interest rate derivatives⁽⁸⁾

297

308

Other unrecovered plant⁽³⁾

57

61

DSM programs⁽⁴⁾

44

46

Environmental remediation costs⁽⁹⁾

20

20

Deferred storm damage costs⁽¹⁰⁾

39

45

Deferred transmission operating costs⁽¹¹⁾

78

63

Other⁽¹²⁾

138

108

Regulatory assets - noncurrent

3,412

3,726

Total regulatory assets

$
3,664

$
3,955

Regulatory liabilities:

Monetization of guaranty settlement⁽¹³⁾

$
67

$
67

Income taxes refundable through future rates⁽¹⁴⁾

43

21

Reserve for refunds to electric utility customers⁽¹⁵⁾

121

128

Cost of fuel and purchased gas over-collections⁽⁶⁾

0

58

Derivatives⁽¹⁶⁾

22

0

Other

17

9

Regulatory liabilities - current

270

283

Monetization of guaranty settlement⁽¹³⁾

848

903

Income taxes refundable through future rates⁽¹⁴⁾

910

919

Asset removal costs⁽¹⁷⁾

577

564

Deferred gains on interest rate derivatives⁽⁸⁾

67

69

Reserve for refunds to electric utility customers⁽¹⁵⁾

451

540

Derivatives⁽¹⁶⁾

25

0

Other

14

10

Regulatory liabilities - noncurrent

2,892

3,005

Total regulatory liabilities

$
3,162

$
3,288

	June 30,		December 31,
(millions)	2022		2021
Regulatory assets:
NND Project costs⁽¹⁾	$	138	$	138
Deferred employee benefit plan costs⁽²⁾		4		8
Other unrecovered plant⁽³⁾		17		16
DSM programs⁽⁴⁾		22		23
Cost of fuel and purchased gas under-collections⁽⁵⁾		219		126
Other		49		50
Regulatory assets – current		449		361
NND Project costs⁽¹⁾		2,157		2,226
AROs⁽⁶⁾		367		311
Deferred employee benefit plan costs⁽²⁾		109		106
Deferred losses on interest rate derivatives⁽⁷⁾		280		295
Other unrecovered plant⁽³⁾		62		57
DSM programs⁽⁴⁾		43		45
Environmental remediation costs⁽⁸⁾		36		30
Deferred storm damage costs⁽⁹⁾		39		38
Deferred transmission operating costs⁽¹⁰⁾		76		77
Other⁽¹¹⁾		136		138
Regulatory assets - noncurrent		3,305		3,323
Total regulatory assets	$	3,754	$	3,684
Regulatory liabilities:
Monetization of guaranty settlement⁽¹²⁾	$	67	$	67
Income taxes refundable through future rates⁽¹³⁾		38		42
Reserve for refunds to electric utility customers⁽¹⁴⁾		108		113
Derivatives⁽¹⁵⁾		78		18
Other		10		5
Regulatory liabilities - current		301		245
Monetization of guaranty settlement⁽¹²⁾		736		831
Income taxes refundable through future rates⁽¹³⁾		886		903
Asset removal costs⁽¹⁶⁾		579		570
Deferred gains on interest rate derivatives⁽⁷⁾		66		67
Reserve for refunds to electric utility customers⁽¹⁴⁾		369		425
Derivatives⁽¹⁵⁾		216		131
Other		7		9
Regulatory liabilities - noncurrent		2,859		2,936
Total regulatory liabilities	$	3,160	$	3,181

(6) 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.

Regulatory assets have been recorded based on the probability of their recovery. All regulatory assets represent incurred costs that may be deferred under GAAP for regulated operations. The South Carolina Commission or FERC has reviewed and approved through specific orders certain of the items shown as regulatory assets. In addition, regulatory assets include, but are not limited to, certain costs which have not been specifically approved for recovery by one of these regulatory agencies. While such costs are not currently being recovered, management believes they would be allowable under existing rate-making concepts embodied in rate orders or applicable state law and expects to recover these costs through rates in future periods.

	Three Months Ended				Three Months Ended				Nine Months Ended				Nine Months Ended				Three Months Ended				Three Months Ended				Six Months Ended				Six Months Ended
	September 30, 2021				September 30, 2020				September 30, 2021				September 30, 2020				June 30, 2022				June 30, 2021				June 30, 2022				June 30, 2021
(millions)	Electric		Gas		Electric		Gas		Electric		Gas		Electric		Gas		Electric		Gas		Electric		Gas		Electric		Gas		Electric		Gas
Customer class:
Residential	$	366	$	34	$	349	$	27	$	912	$	170	$	862	$	139	$	332	$	45	$	271	$	38	$	632	$	154	$	546	$	136
Commercial		244		26		216		18		618		91		568		71		245		35		199		26		446		83		374		65
Industrial		112		27		90		15		295		67		253		44		135		43		95		18		243		74		183		40
Other		46		4		33		4		117		16		90		12		62		6		38		7		100		12		71		12
Revenues from contracts with customers		768		91		688		64		1,942		344		1,773		266		774		129		603		89		1,421		323		1,174		253
Other revenues		4		0		3		0		12		1		12		0		6		0		0		0		14		0		8		1
Total Operating Revenues	$	772	$	91	$	691	$	64	$	1,954	$	345	$	1,785	$	266	$	780	$	129	$	603	$	89	$	1,435	$	323	$	1,182	$	254

Contract liabilities represent the obligation to transfer goods or services to a customer for which consideration has already been received from the customer. DESC had contract liability balances of $9$11 million and $5$8 million at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. During the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, DESC recognized revenue of $4 million and $6$3 million, respectively, from the beginning contract liability balances as DESC fulfilled its obligations to provide service to its customers. Contract liabilities are recorded in customer deposits and customer prepayments in the Consolidated Balance Sheets.

Balances and activity related to contract costs deferred as regulatory assets were as follows:

For all periods presented, DESC's authorized shares of common stock, no par value, were 50 million, of which 40.3 million were issued and outstanding, and DESC's authorized shares of preferred stock, no par value, were 20 million, of which 1,000 shares were issued and outstanding. All outstanding shares of common and preferred stock are held by SCANA.

In ~~July 2021,~~May 2022, Dominion Energy issued ~~$104~~$72 million of shares of Dominion Energy common stock to partially satisfy DESC’s remaining obligation under a settlement agreement for the FILOT litigation discussed in Note 10. In August 2021, Dominion Energy issued $45 million of shares of Dominion Energy common stock to satisfy DESC’s obligation for the initial payment under a settlement agreement with the SCDOR discussed in Note 10. In connection with ~~these transactions,~~this transaction, DESC recorded an equity ~~contributions~~contribution from Dominion Energy in the ~~third~~second quarter of ~~2021.~~2022.

There have been no material changes to the dividend restrictions affecting DESC described in Note 5 to the Consolidated Financial Statements in DESC’s Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021.

~~DESC's~~DESC’s short-term financing is supported through its access as co-borrower to Dominion Energy’s $6.0 billion joint revolving credit facility, ~~as amended in June 2021. The facility~~which can be used for working capital, as support for the combined commercial paper programs of DESC, Dominion Energy, Virginia Power and Questar Gas, and for other general corporate purposes.Other than the items discussed below, there have been no significant changes from Note 6 to the Consolidated Financial Statements in DESC's Annual Report on Form 10-K for the year ended December 31, 2021.

At ~~September~~June 30, ~~2021,~~2022, DESC's share of commercial paper and letters of credit outstanding under its joint credit facility with Dominion Energy, was as follows:

(millions)

Facility Limit

Outstanding

Commercial Paper

Outstanding

Letters of Credit

Facility Limit

Outstanding

Commercial Paper

Outstanding

Letters of Credit

Joint revolving credit facility⁽¹⁾

1,000

Joint revolving credit facility⁽¹⁾

1,000

190

~~In January 2021, DESC and GENCO each 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.

DESC is obligated with respect to an aggregate of $68 million of industrial revenue bonds which are secured by letters of credit. These letters of credit expire, subject to renewal, in the fourth quarter of 2022.

~~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.~~

DESC has FERC approval to enter into an inter-company credit agreement with Dominion Energy under which DESC may have short-term borrowings outstanding up to $900 million. At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, DESC had borrowings outstanding under this credit agreement totaling ~~$623~~$561 million and ~~$149~~$415 million, respectively, which are recorded in affiliated and related party payables in DESC’s Consolidated Balance Sheets. For the three and ~~nine~~six months ended ~~September~~June 30, 2022, DESC recorded interest charges of $3 million and $5 million, respectively. For the three and six months ended June 30, 2021, DESC recorded interest charges of $2 million and ~~$6 million, respectively. For the three and nine months ended September 30, 2020, DESC recorded interest charges of $2 million and $7~~$4 million, respectively.

Fuel Company and GENCO participated in a SCANA utility money pool until January 2021, when that utility money pool was ~~closed, and Fuel Company and GENCO joined the Dominion Energy utility money pool with other regulated subsidiaries of Dominion Energy.~~closed. Money pool borrowings and investments bore interest at short-term market rates. For the ~~nine~~six months ended ~~September~~June 30, 2021, DESC recorded both interest income ~~from money pool transactions of less than $1 million,~~ and ~~for the same period DESC recorded~~ interest expense from money pool transactions of less than $1 million. For the three and nine months ended September 30, 2020, DESC recorded interest income from money pool transactions of less than $1 million and $2 million, respectively, and for the same periods DESC recorded interest expense from money pool transactions of less than $1 million and $2 million, respectively. At December 31, 2020, DESC had outstanding money pool borrowings due to an affiliate of $206 million and investments due from an affiliate of $15 million. On its Consolidated Balance Sheet, DESC includes money pool borrowings within affiliated and related party payables and money pool investments within affiliated and related party receivables.

DESC’s effective tax rate for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 is ~~7.2%~~19.8% compared to ~~18.2%~~33.6% for the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. DESC’s effective tax rate for the ~~nine~~six months ended ~~September~~June 30, 2021 is primarily attributable to ~~the nominal year-to-date pre-tax~~loss before income tax resulting from charges ~~in connection~~associated with the ~~comprehensive~~ settlement ~~agreement discussed in Note 2.~~

~~DESC has recorded an estimate~~ of ~~excess deferred income tax amortization in 2021. The reversal of these excess deferred income taxes will impact~~ the ~~effective tax~~South Carolina electric base rate ~~and rates charged to customers. See Note 3 to the Consolidated Financial Statements in DESC’s Annual Report on Form 10-K for the year ended December 31, 2020 for more information.~~case.

As of ~~September~~June 30, ~~2021,~~2022, there have been no material changes in DESC’s unrecognized tax benefits. See Note 7 to the Consolidated Financial Statements in DESC's Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 for a discussion of these unrecognized tax benefits.

DESC’s accounting policies, objectives, and strategies for using derivative instruments are discussed in Note 2 in the Consolidated Financial Statements in DESC’s Annual Report on Form 10-K for the year ended December 31, ~~2020. DESC uses derivative instruments such as physical forwards to manage its commodity risk of its business operations.~~2021. See Note 8 for further information about fair value measurements and associated valuation methods for derivatives.

Derivative assets and liabilities are presented gross on the Consolidated Balance Sheets. DESC’s derivative contracts include over-the-counter transactions. Over-the-counter contracts are bilateral contracts that are transacted directly with a third party. Certain over-the-counter contracts contain contractual rights of setoff through master netting arrangements 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 are subject to collateral requirements. Types of collateral for over-the-counter contracts include cash, letters of credit and, in some cases, other forms of security, none of which are subject to restrictions. Cash collateral, as presented in the table below, is used to offset derivative assets and liabilities.

Certain of DESC’s derivative instruments contain credit-related contingent provisions. These provisions require DESC to provide collateral upon the occurrence of specific events, primarily a credit rating downgrade. If the credit-related contingent features underlying the instruments that are in a liability position and not fully collateralized with cash were fully triggered as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, DESC would have been required to post ~~$10~~$3 million and ~~$10~~$8 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. DESC had posted ~~$11~~$3 million and $1$11 million, respectively, of collateral at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 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 $21 million and $11 million at September~~as of June 30, ~~2021~~2022 and December 31, ~~2020, respectively.~~2021 was $6 million and $19 million, respectively, which does not include the impact of any offsetting asset positions.

The table below presents derivative balances by type of financial instrument, if the gross amounts recognized in the Consolidated Balance Sheets were netted with derivative instruments and cash collateral received or paid. DESC’s commodity derivative assets are not subject to a master netting agreement or similar arrangement.

	September 30, 2021								December 31, 2020								June 30, 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
(millions)	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
Interest rate contracts:
Over-the-counter	$	21	$	0	$	11	$	10	$	27	$	0	$	17	$	10	$	6	$	0	$	3	$	3	$	19	$	0	$	11	$	8
Total derivatives	$	21	$	0	$	11	$	10	$	27	$	0	$	17	$	10	$	6	$	0	$	3	$	3	$	19	$	0	$	11	$	8

The following table presents the volume of derivative activity at ~~September~~June 30, ~~2021.~~2022. These volumes are based on open derivative positions and represent the combined absolute value of their long and short positions.

The following tables present the fair values of derivatives and where they are presented in the Consolidated Balance Sheets:

(millions)	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
At September 30, 2021
At June 30, 2022
ASSETS
Current Assets
Commodity	$	0	$	22	$	22	$	0	$	79	$	79
Total current derivative assets⁽¹⁾		0		22		22		0		79		79
Noncurrent Assets
Commodity		0		25		25		0		216		216
Total noncurrent derivative assets⁽²⁾		0		25		25		0		216		216
Total derivative assets	$	0	$	47	$	47	$	0	$	295	$	295
LIABILITIES
Current Liabilities
Interest rate	$	1	$	1	$	2	$	1	$	0	$	1
Total current derivative liabilities⁽³⁾		1		1		2		1		0		1
Noncurrent Liabilities
Commodity		0		1		1
Interest rate		12		7		19		4		1		5
Total noncurrent derivative liabilities⁽⁴⁾		12		8		20		4		1		5
Total derivative liabilities	$	13	$	9	$	22	$	5	$	1	$	6
At December 31, 2020
At December 31, 2021
ASSETS
Current Assets
Commodity							$	0	$	18	$	18
Total current derivative assets⁽¹⁾								0		18		18
Noncurrent Assets
Commodity								0		130		130
Total noncurrent derivative assets⁽²⁾								0		130		130
Total derivative assets							$	0	$	148	$	148
LIABILITIES
Current Liabilities
Interest rate	$	1	$	1	$	2	$	1	$	1	$	2
Total current derivative liabilities⁽³⁾		1		1		2		1		1		2
Noncurrent Liabilities
Interest rate		15		10		25		11		6		17
Total noncurrent derivative liabilities⁽⁴⁾		15		10		25		11		6		17
Total derivative liabilities	$	16	$	11	$	27	$	12	$	7	$	19

The following tables present the gains and losses on derivatives, as well as where the associated activity is presented in the Consolidated Balance Sheets and Statements of Comprehensive ~~Income:~~Income (Loss):

(millions)	Increase (Decrease) in Derivatives Subject to Regulatory Treatment⁽¹⁾			Increase (Decrease) in Derivatives Subject to Regulatory Treatment⁽¹⁾
Three Months Ended September 30, 2021
Three Months Ended June 30, 2022
Derivative type and location of gains (losses):
Interest rate	$	1		$	3
Total	$	1		$	3
Three Months Ended September 30, 2020
Three Months Ended June 30, 2021
Derivative type and location of gains (losses):
Interest rate	$	2		$	(1	)
Total	$	2		$	(1	)
Nine Months Ended September 30, 2021
Six Months Ended June 30, 2022
Derivative type and location of gains (losses):
Interest rate	$	7		$	8
Total	$	7		$	8
Nine Months Ended September 30, 2020
Six Months Ended June 30, 2021
Derivative type and location of gains (losses):
Interest rate	$	(2	)	$	6
Total	$	(2	)	$	6

(millions)

Amount of Gain (Loss)
Recognized in Income on
Derivatives⁽¹⁾

Three Months Ended September 30,

Location

2021

2020

Derivative type and location of gains (losses):

Commodity contracts

Purchased power

$
3

$
0

Interest rate contracts

Interest charges

0

0

Total

$
3

$
0

Nine Months Ended September 30,

Derivative type and location of gains (losses):

Commodity contracts

Purchased power

$
3

$
0

Interest rate contracts

Interest charges

(1
)

(1
)
Total

$
2

$
(1
)

(millions)	Amount of Gain (Loss) Recognized in Income on Derivatives⁽¹⁾
Three Months Ended June 30,	2022			2021
Derivative type and location of gains (losses):
Commodity contracts:
Purchased power	$	15		$	0
Total	$	15		$	0
Six Months Ended June 30,
Derivative type and location of gains (losses):
Commodity contracts:
Purchased power	$	18		$	0
Interest rate contracts:
Interest charges		(1	)		(1	)
Total	$	17		$	(1	)

DESC’s fair value measurements are made in accordance with the policies discussed in Note 9 to the Consolidated Financial Statements in DESC’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. See Note 7 in this report for further information about DESC’s derivatives and hedge accounting activities. DESC applies fair value measurements to certain assets and liabilities including commodity and interest rate derivative instruments.

When evaluating pricing information provided by Designated Contract Market settlement pricing, other pricing services, or brokers, DESC considers the ability to transact at the quoted price, i.e. if the quotes are based on an active market or an inactive market and to the extent which pricing models are used, if pricing is not readily available. If pricing information from external sources is not

available, or if DESC believes that observable pricing is not indicative of fair value, judgment is required to develop the estimates of fair value. In those cases the unobservable inputs are developed and substantiated using historical information, available market data, third-party data and statistical analysis. Periodically, inputs to valuation models are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships and changes in third-party sources. The inputs and assumptions used in measuring fair value include the following for commodity derivative contracts:

DESC enters into physical forwards contracts, 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 forwards contracts. The discounted cash flow model for forwards calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return, and credit spreads. For Level 3 fair value measurements, certain forward market prices are considered unobservable.

The following table presents DESC’s quantitative information about Level 3 fair value measurements at ~~September~~June 30, ~~2021.~~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 forwards:

Electricity

Discounted cash flow

Market price (per MWh)

⁽²⁾

24 - 77

295

Discounted cash flow

Market price (per MWh)

⁽²⁾

30-141

Total assets

295

Liabilities

Physical forwards:

Electricity

Discounted cash flow

Market price (per MWh)

⁽²⁾

24 - 60

Total liabilities

(1) Averages weighted by volume.

(2) Represents market prices beyond defined terms for Levels 1 and 2.

Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:

During the third quarter of 2020, DESC determined that certain of its nonutility property was impaired and recorded a $12 million charge ($9 million after-tax) within impairments and other charges in its Consolidated Statements of Income to adjust the property down to its estimated fair value of $6 million. The fair value determinations are considered Level 2 fair value measurements due to the use of real estate appraised values.

The following table presents DESC’s assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:

(millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
At September 30, 2021
At June 30, 2022
Assets
Commodity	$	0	$	0	$	47	$	47	$	0	$	0	$	295	$	295
Total assets	$	0	$	0	$	47	$	47	$	0	$	0	$	295	$	295
Liabilities
Commodity	$	0	$	0	$	1	$	1
Interest rate		0		21		0		21	$	0	$	6	$	0	$	6
Total liabilities	$	0	$	21	$	1	$	22	$	0	$	6	$	0	$	6
At December 31, 2020
At December 31, 2021
Assets
Commodity									$	0	$	0	$	148	$	148
Total assets									$	0	$	0	$	148	$	148
Liabilities
Interest rate	$	0	$	27	$	0	$	27	$	0	$	19	$	0	$	19
Total liabilities	$	0	$	27	$	0	$	27	$	0	$	19	$	0	$	19

The following table presents the net change in DESC's assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category.



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
(millions)
Beginning balance	$	225		$	0		$	148		$	0
Total realized and unrealized gains (losses):
Included in earnings:
Purchased power		15			0			18			0
Included in regulatory assets/liabilities		70			(13	)		147			(13	)
Settlements		(15	)		0			(18	)		0
Ending balance	$	295		$	(13	)	$	295		$	(13	)

There ~~were no net changes~~are 0 unrealized gains and losses included in ~~assets and liabilities measured at fair value on a recurring basis and included~~earnings in the Level 3 fair value category related to assets/liabilities still held at the reporting date for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2022 and 2021.

Substantially all of DESC’s 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 financial instruments classified within current assets and current liabilities are representative of fair value because of the short-term nature of these instruments. For 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				June 30, 2022				December 31, 2021
(millions)	Carrying Amount		Estimated Fair Value⁽¹⁾		Carrying Amount		Estimated Fair Value⁽¹⁾		Carrying Amount		Estimated Fair Value⁽¹⁾		Carrying Amount		Estimated Fair Value⁽¹⁾
Long-term debt⁽²⁾	$	3,327	$	4,468	$	3,360	$	4,748	$	3,725	$	3,832	$	3,724	$	4,831
Affiliated long-term debt		230		230		230		230		230		230		230		230

~~(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.~~

Components of net periodic benefit cost (credit) recorded by DESC were as follows:

(millions)	Pension Benefits						Other Postretirement Benefits				Pension Benefits						Other Postretirement Benefits
Three Months Ended September 30,	2021			2020			2021		2020
Three Months Ended June 30,											2022			2021			2022		2021
Service cost	$	3		$	3		$	0	$	1	$	2		$	1		$	1	$	0
Interest cost		5			6			1		2		6			5			1		2
Expected return on assets		(12	)		(11	)		0		0		(13	)		(12	)		0		0
Amortization of actuarial losses		1			2			0		0		0			1			0		0
Net periodic benefit cost (credit)	$	(3	)	$	0		$	1	$	3	$	(5	)	$	(5	)	$	2	$	2
Nine Months Ended September 30,
Six Months Ended June 30,
Service cost	$	7		$	10		$	1	$	3	$	4		$	4		$	1	$	1
Interest cost		15			18			4		6		11			10			3		3
Expected return on assets		(36	)		(33	)		0		0		(25	)		(24	)		0		0
Amortization of actuarial losses		4			5			0		0		0			3			0		0
Net periodic benefit cost (credit)	$	(10	)	$	0		$	5	$	9	$	(10	)	$	(7	)	$	4	$	4

During the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, DESC made no contributions to its pension trust and does not expect to make any such contributions in ~~2021.~~2022. DESC recovers current pension costs through either a rate rider that may be adjusted annually for retail electric operations or through cost of service rates for gas operations.

As a result of issues generated in the ordinary course of business, DESC is involved in legal proceedings before various courts and is 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 DESC to estimate a range of possible loss. For such matters that DESC 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 DESC is able to estimate a range of possible loss. For legal proceedings and governmental examinations that DESC is 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. DESC maintains 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 DESC’s 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 DESC’s financial position, liquidity or results of operations.

DESC 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.

From a regulatory perspective, DESC continually monitors and ~~GENCO continually monitor and evaluate their~~evaluates its current and projected emission levels and ~~strive~~strives to comply with all state and federal regulations regarding those emissions. DESC ~~and GENCO participate~~participates in the SO₂and NO_X emission allowance programs with respect to coal plant emissions and also ~~have~~has constructed additional pollution control equipment at ~~their~~its coal-fired electric generating plants. These actions are expected to address many of the rules and regulations discussed herein.

The CAA, as amended, is a comprehensive program utilizing a broad range of regulatory tools to protect and preserve the nation'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 DESC’s facilities are subject to the CAA’s permitting and other requirements.

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. Until the states have developed implementation plans for the standard, DESC is 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 DESC’s results of operations and cash flows.

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~~In June 2022, the ~~EPA has stated its intention to replace~~U.S. Supreme Court reversed the ~~ACE Rule, it is unknown at this time if or how the EPA will issue a replacement for~~D.C. Circuit’s decision on the ACE Rule and ~~how that replacement will affect DESC’s~~remanded the case back to the D.C. Circuit. Until the case is resolved by the D.C. Circuit and/or the EPA issues new rulemaking, DESC cannot predict an impact to its operations, financial condition and/or cash flows.

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, DESC cannot predict the impact to its 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 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, DESC cannot predict the impact to its results of operations, financial condition and/or cash flows.

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. DESC must comply with applicable aspects of the CWA programs at its operating facilities.

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 ~~five~~5 mandatory facility-specific factors, including a social cost-benefit test, and ~~six~~6 optional facility-specific factors. The rule governs all electric generating stations with water withdrawals above 2 MGD, with a heightened entrainment analysis for those facilities over 125 MGD. DESC has 5 facilities that are subject to the final regulations. DESC is also working with the EPA and state regulatory agencies to assess the applicability of Section 316(b) to 5 hydroelectric facilities. DESC anticipates that it may have to install impingement control technologies at certain of these stations that have once-through cooling systems. DESC is 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, ~~technology,~~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 DESC’s results of operations, financial condition and/or cash flows, the existing regulatory framework in South Carolina provides rate recovery mechanisms that could substantially mitigate any such impacts for DESC.

In September 2015, the EPA released a final rule to revise the ELG Rule. 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 ~~two~~2 separate petitions for reconsideration of the final ELG 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 final ELG 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 DESC’s results of operations, financial condition and/or cash flows, as DESC expects that wastewater treatment technology retrofits and modifications ~~to the bottom ash handling systems~~ at the Williams and Wateree generating stations will be required, the existing regulatory framework in South Carolina provides rate recovery mechanisms that could substantially mitigate any such impacts for DESC.

In November 2019, a new CUA was established in the counties surrounding the Cope Generating Station (Western Capacity Use Area) under the South Carolina Groundwater Use and Reporting Regulation. Under the regulation any groundwater well in a CUA that withdraws above three million gallons per month must be permitted. The Cope Generating Station is located within this new Western Capacity Use Area. Cope has been using four deep groundwater wells for cooling water and other house loads since 1996. Prior to designation of the new Western Capacity Use Area, the wells at Cope Station were only required to be registered not permitted. As a result of this designation, Cope will need to restore the surface water equipment to operable status to reduce reliance on groundwater wells. This includes completion of 316(b) requirements, (including SCDHEC BACT determination and modification of the station national pollutant discharge elimination system permit) and extensive inspection, repair and/or replacement of the associated surface water withdrawal equipment which has been idle since 1996. While the impacts of this rule change are material to DESC’s results of operations, financial condition and/or cash flows, the existing regulatory framework in South Carolina provides rate recovery mechanisms that could substantially mitigate any such impacts for DESC.

The operations of DESC 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 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, DESC 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, DESC 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. DESC also may identify, evaluate and remediate other potentially impacted sites under voluntary state programs. Remediation costs may be subject to reimbursement under DESC’s insurance policies, rate recovery mechanisms, or both. Except as described below, DESC does not believe these matters will have a material effect on results of operations, financial condition and/or cash flows.

DESC has 4 decommissioned ~~MGP~~manufactured gas plant sites in South Carolina that are in various states of investigation, remediation and monitoring under work plans approved by, or under review by, the SCDHEC or the EPA. DESC anticipates that activities at these sites will continue through 2025 at an estimated cost of $9$26 million. In addition, for one site, 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. DESC expects to recover costs arising from the remediation work at all four sites through rate recovery mechanisms and as of ~~September~~June 30, ~~2021,~~2022, deferred amounts, net of amounts previously recovered through rates and insurance settlements, totaled ~~$21~~$38 million and are included in regulatory assets.

In April 2015, the EPA enacted a final rule regulating CCR landfills, existing ash ponds that still receive and manage CCRs, and inactive ash ponds that do not receive, but still store, CCRs. DESC currently has inactive and existing CCR ponds and CCR landfills subject to the final rule at 3 different facilities. This rule created a legal obligation for DESC to retrofit or close all of its inactive and existing ash ponds over a certain period of time, as well as perform required monitoring, corrective action, and post-closure care activities as necessary.

In December 2016, legislation was enacted that creates a framework for EPA- approved state CCR permit programs. In August 2017, the EPA issued interim guidance outlining the framework for state CCR program approval. The EPA has enforcement authority until state programs are approved. The EPA and states with approved programs both will have authority to enforce CCR requirements under their respective rules and programs. In September 2017, the EPA agreed to reconsider portions of the CCR rule in response to two petitions for reconsideration. In March 2018, the EPA proposed certain changes to the CCR rule related to issues remanded as part of the pending litigation and other issues the EPA is reconsidering. Several of the proposed changes would allow states with approved CCR permit programs additional flexibility in implementing their programs. In July 2018, the EPA promulgated the first phase of changes to the CCR rule. In August 2018, the U.S. Court of Appeals for the D.C. Circuit issued its decision in the pending challenges of the CCR rule, vacating and remanding to the EPA three provisions of the rule. Until this matter is resolved and all phases of the CCR rule are promulgated, DESC is unable to precisely estimate potential incremental impacts or costs related to existing coal ash sites in connection with future implementation of the final CCR rule. While such amounts may be material to DESC’s results of operations, financial condition and/or cash flows, the existing regulatory framework in South Carolina provides rate recovery mechanisms that could substantially mitigate any such impacts.

A description of events and circumstances leading up to DESC's abandonment of the NND Project and subsequent regulatory, legislative, legal and investigative proceedings, as well as related impairments of NND Project and other costs are described in Note 12 to the Consolidated Financial Statements in DESC's Annual Report on Form 10-K for the year ended December 31, 2020.

The following describes certain legal proceedings involving 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 12 to the Consolidated Financial Statements in DESC’s 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, DESC 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 DESC is able to reasonably estimate a probable loss, the Consolidated Balance Sheets at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 include reserves of ~~$133~~$124 million and ~~$208~~$211 million, respectively, and insurance receivables of $8$68 million and $85 million, respectively, included within other receivables. These balances at June 30, 2022 and December 31, 2021 include $68 million and $85 million, respectively, of offsetting reserves and insurance receivables related to personal injury or wrongful death cases which are currently pending. During both the ~~nine~~three and six months ended ~~September~~June 30, ~~2021,~~2022, charges included in DESC’s Consolidated Statements of Comprehensive Income ~~include charges of $70 million ($53 million after-tax), included within impairment of assets and other charges.~~were inconsequential. During ~~both~~ the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, DESC’s Consolidated Statements of Comprehensive Income includes charges of ~~$51~~$10 million ($388 million after-tax) and $70 million ($53 million after-tax), respectively, included within impairment of assets and other charges.

In 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 $22 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.~~

In 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.

In 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 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 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, Dominion Energy removed the case to the U.S. District Court for the District of South Carolina and filed a Motion to Dismiss in March 2018. In September 2019, the U.S. District Court for the District of South Carolina granted the plaintiffs’ motion to consolidate the Metzler Lawsuit with another lawsuit regarding the SCANA Merger Agreement to which DESC is not a party. 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 initial lawsuits 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 to settle this case, along with a related case to which DESC was not a party, subject to court approval, with no financial impact to DESC. In June 2022, this case was dismissed in connection with court approval of the related case to which DESC was not a party.

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. ~~This 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.

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. ~~This case is pending.~~

~~In November 2017, Fairfield County filed~~As a ~~complaint and a motion for temporary injunction against DESC~~result 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, DESC was able 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 motionresolve Fluor’s claims 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.

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 ~~September and October 2017, SCANA was served with subpoenas~~May 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 of South Carolina issued an order approving~~partially satisfy DESC’s remaining obligation under the settlement ~~which required SCANA to pay a civil monetary penalty totaling $25 million, and SCANA and~~agreement. In June 2022, 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,~~requested approval from the South Carolina ~~Law Enforcement Division is conducting~~Commission to transfer certain real estate with a ~~criminal investigation into~~total settlement value of $51 million to satisfy its remaining obligation under 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~~settlement agreement. In July 2022, the South Carolina ~~Law Enforcement Division, including responding~~Commission voted to ~~additional subpoenas and document requests. Dominion Energy has also entered into a cooperation agreement with~~approve 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.request. 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.final order is pending. As a result, certain of the ~~pleas, Dominion Energy has terminated indemnity for these former executive officers related~~utility and non-utility properties representing $31 million of the value to ~~these two cases.~~

~~In September 2019,~~be conveyed are expected to transfer by the end of 2022 and result in a ~~South Carolina state court jury awarded a judgment~~gain of approximately $20 million. The transfer of the remaining real estate remains subject to the ~~estate~~approval of ~~Jose Larios in a wrongful death suit filed in June 2017 against DESC,~~FERC. If such approval is received, the transfer of ~~which DESC was apportioned $19 million. DESC holds general liability insurance coverage which~~such utility and non-utility properties is expected to ~~provide payment for substantially all DESC’s liability~~result in ~~this matter. In October 2019, DESC filed~~ a ~~motion requesting a reduction in the judgment or, in the alternative, a new trial. In November 2019,DESC’s motion for a new trial was granted, setting aside the entire verdict amount. This matter is pending.~~gain of approximately $20 million upon completion.

Westinghouse’s Reorganization Plan became effective August 1, 2018. Initially, Westinghouse had projected that its Reorganization Plan would pay in full or nearly in full its pre-petition trade creditors, including several of the Westinghouse Subcontractors which have alleged non-payment by the Consortium for amounts owed for work performed on the NND Project and have filed liens on related property in Fairfield County, South Carolina. DESC is contesting approximately $285 million of such filed liens. Most of these asserted liens are “pre-petition” claims that relate to work performed by Westinghouse Subcontractors before the Westinghouse bankruptcy, although some of them are “post-petition” claims arising from work performed after the Westinghouse bankruptcy. 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. In addition, payments under the Toshiba Settlement are subject to reduction if Westinghouse pays Westinghouse Subcontractors holding pre-petition liens directly. Under these circumstances, DESC and Santee Cooper, each in its pro rata share, would be required to make Citibank, N.A., which purchased the scheduled payments under the Toshiba Settlement, whole for reductions related to valid subcontractor and vendor pre-petition liens up to $60 million ($33 million for DESC's 55% share).

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 (i.e., post-petition) until termination of the IAA (the IAA Period). In the Westinghouse bankruptcy proceeding, deadlines were established for creditors of Westinghouse to assert the amounts owed to such creditors prior to the Westinghouse bankruptcy filing and during the IAA Period. Many of the Westinghouse Subcontractors have filed such claims. In December 2019, DESC and Santee Cooper entered into a confidential settlement agreement with W Wind Down Co LLC resolving claims relating to the IAA.

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. The Westinghouse Subcontractor claims in South Carolina state court include common law claims for pre-petition work, IAA Period work, and work after the termination of the IAA. Many of these claimants have also asserted construction liens against the NND Project site. While DESC cannot be assured that it will not have any exposure on account of unpaid Westinghouse Subcontractor claims, which claims DESC is presently disputing, DESC 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 DESC’s Consolidated Balance Sheets.Nuclear Operations

Other than the item discussed below, there have been no significant changes regarding DESC’s nuclear insurance as described in Note 12 to the Consolidated Financial Statements in DESC’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

During the ~~total liability protection per~~second quarter of 2022, Dominion Energy reduced the levels of nuclear ~~incident available to all participants in~~property insurance coverage for the ~~Secondary Financial Protection Program decreased~~reactor site at Summer from ~~$13.8~~$2.75 billion to ~~$13.7~~the NRC minimum requirement of $1.06 billion. ~~In June 2021,~~As a result of this reduction in nuclear property insurance coverage, DESC’s maximum retrospective premium assessment for the ~~total liability protection per nuclear incident available~~current annual policy period was reduced to ~~all participants in~~$11

million. Additionally, DESC maintains an excess property insurance policy with the ~~Secondary Financial Protection Program decreased~~European Mutual Association for Nuclear Insurance which provides coverage to Summer for property damage and outage costs resulting from ~~$13.7 billion~~an event of a non-nuclear origin. Dominion Energy reduced the levels of coverage from $415 million to ~~$13.5 billion. These decreases do not impact DESC’s responsibility per active unit under the Price-Anderson Amendments Act of 1988.~~$1 million.

The Corporate and Other segment includes specific items attributable to ~~its~~DESC’s 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 ~~nine~~six months ended ~~September~~June 30, 2022, DESC reported an immaterial amount of specific items in the Corporate and Other segment. In the six months ended June 30, 2021, DESC reported after-tax net expense of $261 million for specific items in the Corporate and Other segment, all of which was attributable to its operating segment. In the nine months ended September 30, 2020, DESC reported after-tax net expense of $61$256 million for specific items in the Corporate and Other segment, all of which was attributable to its operating segment.

The net expense for specific items attributable to DESC’s operating segment in 2021 primarily related to the impact of the following items:

~~The net expense for specific items attributable to DESC’s operating segment in 2020 primarily related to $53 million ($40 million after-tax) of charges associated with litigation.~~

(millions)	External Revenue		Comprehensive Income (Loss) Available (Attributable) to Common Shareholder
Three Months Ended June 30, 2022
Dominion Energy South Carolina	$	909	$	119
Corporate and Other		0		0
Consolidated Total	$	909	$	119

Three Months Ended June 30, 2021
Dominion Energy South Carolina	$	692	$	79
Corporate and Other		0		(210	)
Consolidated Total	$	692	$	(131	)

Six Months Ended June 30, 2022
Dominion Energy South Carolina	$	1,758	$	223
Corporate and Other		0		(1	)
Consolidated total	$	1,758	$	222

Six Months Ended June 30, 2021
Dominion Energy South Carolina	$	1,436	$	176
Corporate and Other		0		(256	)
Consolidated total	$	1,436	$	(80	)

(millions)

External
Revenue

Comprehensive
Income (Loss)
Available
(Attributable) to
Common
Shareholder

Three Months Ended September 30, 2021

Dominion Energy South Carolina

$
863

$
149

Corporate and Other

0

(5
)
Consolidated Total

$
863

$
144

Three Months Ended September 30, 2020

Dominion Energy South Carolina

$
755

$
153

Corporate and Other

0

(52
)
Consolidated Total

$
755

$
101

Nine Months Ended September 30, 2021

Dominion Energy South Carolina

$
2,299

$
325

Corporate and Other

0

(261
)
Consolidated Total

$
2,299

$
64

Nine Months Ended September 30, 2020

Dominion Energy South Carolina

$
2,051

$
319

Corporate and Other

0

(61
)
Consolidated Total

$
2,051

$
258

DESC owns 40% of Canadys Refined Coal, LLC, which was involved in the manufacturing and sale of refined coal to reduce emissions at one of DESC's generating facilities. DESC accounts for this investment using the equity method.

~~DESS,~~DES, on behalf of itself and its parent company, ~~provided~~provide the following services to DESC, ~~through December 2020,~~ which ~~were~~are rendered at direct or allocated cost: information systems, telecommunications, customer support, marketing and sales, human resources, corporate compliance, purchasing, financial, risk management, public affairs, legal, investor relations, gas supply and capacity management, strategic planning, general administrative and retirement benefits. In addition, ~~DESS processed~~DES processes and ~~paid~~pays invoices for DESC and ~~was~~is reimbursed. ~~Effective January 2021, DES provides to DESC the services previously provided by DESS.~~ Costs for these services include amounts capitalized. Amounts expensed are primarily recorded in other operations and maintenance - affiliated suppliers and other income, ~~(expense),~~ net in the Consolidated Statements of Comprehensive Income.

DESC transacts with affiliates for certain quantities of electricity in the ordinary course of business. DESC also enters into certain commodity derivative contracts with affiliates. DESC uses these contracts, which are principally comprised of forward commodity purchases, to manage commodity price risks associated with purchases of electricity. See Note 7 for additional information.

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
(millions)	2021		2020		2021		2020		2022		2021		2022		2021
Direct and allocated costs from DES and DESS⁽¹⁾	$	53	$	72	$	168	$	202
Direct and allocated costs from DES⁽¹⁾									$	51	$	57	$	106	$	115
Operating Revenues - Electric from sales to affiliate		0		1		2		3		1		1		2		2
Operating Expenses - Other taxes from affiliate		2		3		6		7		2		2		5		4
Purchases of electricity from solar affiliates		5		4		12		10		5		5		7		7
Demand and transportation charges from DECG - Fuel used in electric generation		0		5		0		14
Demand and transportation charges from DECG - Gas purchased for resale		0		11		0		33

(1) Includes amounts recorded in other current assets of $15 million and $4 million as of June 30, 2022 and December 31, 2021, respectively, and amounts recorded in other deferred debits and other assets of $45 million and $24 million as of June 30, 2022 and December 31, 2021, respectively.

	Three Months Ended September 30,					Nine Months Ended September 30,						Three Months Ended June 30,					Six Months Ended June 30,
(millions)	2021		2020			2021			2020			2022		2021			2022		2021
Revenues from contracts with customers	$	0	$	0		$	0		$	1
Other income		3		3			10			10		$	1	$	4		$	3	$	7
Other expense		1		(6	)		(15	)		(11	)		0		(18	)		1		(16	)
Gains on sales of assets													17		0			17		0
Allowance for equity funds used during construction		2		1			5			3			2		2			3		3
Other income (expense), net	$	6	$	(2	)	$	0		$	3		$	20	$	(12	)	$	24	$	(6	)

Non-service cost components of pension and other postretirement benefits are included in other income (expense).

In June 2022, DESC completed the sale of certain utility property in South Carolina, as approved by the South Carolina Commission in May 2022, for total cash consideration of $16 million. In connection with the sale, DESC recognized a gain of $16 million ($12 million after-tax) for the three and six months ended June 30, 2022.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MD&A provides management’s narrative analysis of its consolidated results of operations. MD&A should be read in conjunction with DESC's Consolidated Financial Statements. DESC meets the conditions to file under the reduced disclosure format, and therefore has omitted certain sections of MD&A.

This report contains statements concerning DESC’s expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements are “forward-looking statements.” 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.

DESC makes 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:

Additionally, other risks that could cause actual results to differ from predicted results are set forth in Part I. Item 1A. Risk Factors in DESC’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

DESC’s forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. DESC cautions the reader not to place undue reliance on its forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, differ materially from actual results. DESC undertakes no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.

	Third Quarter						Year-To-Date							Second Quarter							Year-To-Date
(millions)	2021		2020		$ Change		2021		2020		$ Change			2022		2021			$ Change		2022		2021			$ Change
Net income	$	148	$	106	$	42	$	77	$	266	$	(189	)
Net income (loss)														$	126	$	(126	)	$	252	$	233	$	(71	)	$	304

Net income increased ~~40%,~~$252 million, primarily due to the absence of ~~charges associated with litigation.~~

~~Net income decreased 71%, primarily due to~~ charges associated with the settlement of the South Carolina electric base rate case.

Net income increased $304 million, primarily due to the absence of charges associated with the settlement of the South Carolina electric base rate case and the absence of charges associated with litigation.

	Third Quarter								Year-To-Date							Second Quarter								Year-To-Date
(millions)	2021		2020			$ Change			2021		2020		$ Change			2022		2021			$ Change			2022		2021			$ Change
Operating revenues	$	863	$	755		$	108		$	2,299	$	2,051	$	248		$	909	$	692		$	217		$	1,758	$	1,436		$	322
Fuel used in electric generation		200		135			65			452		334		118			254		120			134			428		252			176
Purchased power		24		25			(1	)		67		63		4			27		27			—			58		43			15
Gas purchased for resale		57		33			24			188		124		64			89		50			39			194		131			63
Other operations and maintenance		161		142			19			477		430		47			148		164			(16	)		308		316			(8	)
Impairment of assets and other charges		1		63			(62	)		320		65		255			4		259			(255	)		4		319			(315	)
Depreciation and amortization		122		118			4			362		354		8			126		119			7			251		240			11
Other taxes		64		59			5			191		186		5			71		62			9			144		127			17
Other income (expense), net		6		(2	)		8			—		3		(3	)		20		(12	)		32			24		(6	)		30
Interest charges		50		57			(7	)		159		173		(14	)		53		54			(1	)		105		109			(4	)
Income tax expense		42		15			27			6		59		(53	)
Income tax expense (benefit)																	31		(49	)		80			57		(36	)		93

Operating ~~revenue~~revenues increased ~~14%~~31%, primarily due to a $95 million increase in the fuel cost component included in utility rates as a result of an increase in commodity costs and purchased power costs associated with sales to electric utility retail customers ($70 million) and gas utility customers ($25 million), an increase in sales to electric utility retail customers associated with economic and other usage factors ($15 million), an increase in sales to electric utility retail customers associated with growth ($7 million) and the absence of changes in excess deferred income tax amortization included within the capital cost rider ($7 million), partially offset by a decrease in sales to electric utility retail customers, primarily due to a decrease in cooling degree days ($17 million).reflecting:

Fuel used in electric generation increased ~~48%,~~$134 million, primarily due to increased fuel costs associated with electric utility retail customers ($120 million) and an increase in fuel costs associated with off-system sales ($12 million), which are offset in operating revenue and do not impact net income.

Gas purchased for resale increased ~~73%~~78%, primarily due to an increase in costs associated with gas utility customers, which are offset in operating revenue and do not impact net income.

Other operations and maintenance ~~increased 13%~~decreased 10%, primarily due to ~~an increase~~a decrease in outside services.

Impairment of assets and other charges decreased 98%, primarily due to the absence of charges ~~associated with~~ ~~litigation ($51 million) and the absence of an impairment charge of certain nonutility property ($12 million).~~

~~Other income (expense), net~~ ~~increased $8 million, primarily due to~~ ~~lower non-service costs related to pension and other postretirement benefits.~~

~~Interest charges~~ ~~decreased 12%, primarily due to lower amortization on losses of reacquired debt~~ associated with the settlement of the South Carolina electric base rate ~~case.~~case ($249 million) and the absence of charges associated with litigation ($10 million).

Other income (expense), net increased $32 million, primarily due to the absence of charges associated with the settlement of the South Carolina electric base rate case ($18 million) and a gain on the sale of certain utility property ($16 million).

Income tax expense increased ~~$27~~$80 million, primarily due to higher pre-tax ~~income ($17 million) and the absence of changes in excess deferred income tax amortization associated with the gain on the sale of SEMI’s assets ($7 million).~~income.

Operating ~~revenue~~revenues increased ~~12%~~22%, primarily due to a $195 million increase in the fuel cost component included in utility rates as a result of an increase in commodity costs and purchased power costs associated with sales to electric utility retail customers ($130 million) and gas utility customers ($65 million), an increase in sales to electric utility retail customers associated with growth ($21 million), an increase in sales to electric utility retail customers associated with economic and other usage factors ($16 million) and an increase in sales to gas utility customers associated with growth ($5 million).reflecting:

Fuel used in electric generation increased ~~35%~~70%, primarily due to increased fuel costs associated with electric utility retail customers ($165 million) and an increase in fuel costs associated with off-system sales ($10 million), which are offset in operating revenue and do not impact net income.

Purchased power increased 35%, primarily due to an increase in costs associated with electric utility customers, which are offset in operating revenue and do not impact net income.

Gas purchased for resale increased ~~52%~~48%, primarily due to an increase in costs associated with gas utility customers, which are offset in operating revenue and do not impact net income.

~~Other operations and maintenance~~ increased 11%, primarily due to an increase in outside services ($26 million), an increase in salaries, wages and benefits and administrative expenses ($9 million), an increase in materials and supplies ($9 million) and NND Project wind down costs ($5 million), partially offset by lower bad debt expense, primarily due to the effects of COVID-19 in 2020 ($9 million).

Impairment of assets and other charges ~~increased $255 million,~~decreased 99%, primarily due tothe absence of charges associated with the settlement of the South Carolina electric base rate case ($249 million) and ~~an increase in~~ the absence of charges associated with litigation ($1970 million).

Other taxes increased 13%, ~~partially offset by the absence of an impairment charge of certain nonutility~~primarily due to higher property ~~($12 million).~~taxes.

Other income (expense), net ~~decreased $3~~increased $30 million, primarily due to the absence of charges associated with the settlement of the South Carolina electric base rate case ($18 million) ~~partially offset by lower non-service costs related to pension~~ and ~~other postretirement benefits~~a gain on the sale of certain utility property ($916 million).

Income tax expense ~~decreased 90%,~~increased $93 million, primarily due to ~~lower~~higher pre-tax ~~income ($60 million), partially offset by the absence of changes in excess deferred income tax amortization associated with the gain on the sale of SEMI’s assets ($7 million).~~income.

Senior management of DESC, including DESC’s CEO and CFO, evaluated the effectiveness of DESC’s disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation process, DESC’s CEO and CFO have concluded that DESC’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, DESC’s internal control over financial reporting.

From time to time, DESC is party 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 DESC reasonably believes will exceed a specified threshold. Pursuant to the SEC regulations, DESC uses a threshold of $1 million for such proceedings.

See the following for discussions on various legal, environmental and other regulatory proceedings to which DESC is a party, which information is incorporated herein by reference:

DESC’s business is influenced by many factors that are difficult to predict, involve uncertainties that may materially affect actual results and are often beyond its control. A number of these risk factors have been identified in DESC’s 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. There have been no material changes with regard to the risk factors previously disclosed in DESC's 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.

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.

		I.R.S. Employer
Commission File Number	Exact name of registrant as specified in its charter	Identification Number

001-3375	DOMINION ENERGY SOUTH CAROLINA, INC.	57-0248695

	south carolina
	(State or other jurisdiction of incorporation or organization)

	400 OTARRE PARKWAY
	CAYCE, South Carolina	29033
	(Address of principal executive offices)	(Zip Code)

	(803) 217-9000
	(Registrants’ telephone number)

		Page
	Glossary of Terms	3

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	5

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3026

Item 4.	Controls and Procedures	3329

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	3430

Item 1A.	Risk Factors	34
		30
Item 6.	Exhibits	3531

~~Abbreviation or Acronym~~		~~Definition~~
Questar Gas		Questar Gas Company, a wholly-owned subsidiary of Dominion Energy
~~Reorganization Plan~~		~~Modified Second Amended Joint Chapter 11 Plan of Reorganization, filed by Westinghouse~~
~~RICO~~		~~Racketeer Influenced and Corrupt Organizations Act~~
~~ROE~~		~~Return on equity~~
~~RSA~~		~~Natural Gas Rate Stabilization Act~~
Santee Cooper		South Carolina Public Service Authority
SCANA		The legal entity, SCANA Corporation, one or more of its consolidated subsidiaries (other than DESC) 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 SCANA Merger Agreement

Abbreviation or Acronym		Definition
SCANA Merger Agreement		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
SCDHEC		South Carolina Department of Health and Environmental Control
SCDOR		South Carolina Department of Revenue
SEC		U.S. Securities and Exchange Commission
~~SEMI~~		SCANA Energy Marketing, LLC (formerly known as SCANA Energy Marketing, Inc.), a subsidiary of SCANA through December 2019, and effective December 2019, a subsidiary of Wrangler Retail Gas Holdings, LLC, a partnership between Dominion Energy and Interstate Gas Supply Inc.
SO₂		Sulfur dioxide
South Carolina Commission		Public Service Commission of South Carolina
Summer		V. C. Summer nuclear power station
Toshiba		Toshiba Corporation, parent company of Westinghouse
Toshiba Settlement		Settlement Agreement dated as of July 27, 2017, by and among Toshiba, DESC and Santee Cooper
VIE		Variable interest entity
Virginia Power		The legal entity, Virginia Electric and Power Company, a wholly-owned subsidiary of Dominion Energy, one or more of its consolidated subsidiaries or operating segment, or the entirety of Virginia Electric and Power Company and its consolidated subsidiaries
~~WECTEC~~		~~WECTEC Global Project Services, Inc., a wholly-owned subsidiary of Westinghouse~~
Westinghouse		Westinghouse Electric Company LLC
~~Westinghouse Subcontractors~~		~~Subcontractors and suppliers to the Consortium~~

	Current		Noncurrent
Electricity (MWh):
Fixed price		1,756,930		22,928,956
Interest rate⁽¹⁾ (millions)	$	0	$	71


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Large accelerated filer	☐		Accelerated filer	☐	Emerging growth company	☐
Non-accelerated filer	☒		Smaller reporting company	☐

	September 30,		December 31,
(millions)	2021		2020
Regulatory assets:
NND Project costs⁽¹⁾	$	138	$	138
Deferred employee benefit plan costs⁽²⁾		8		9
Other unrecovered plant⁽³⁾		15		14
DSM programs⁽⁴⁾		22		29
AROs⁽⁵⁾		2		2
Cost of fuel and purchased gas under-collections⁽⁶⁾		26		1
Other		41		36
Regulatory assets - current		252		229
NND Project costs⁽¹⁾		2,261		2,364
AROs⁽⁵⁾		314		309
Cost of reacquired debt⁽⁷⁾		11		243
Deferred employee benefit plan costs⁽²⁾		153		159
Deferred losses on interest rate derivatives⁽⁸⁾		297		308
Other unrecovered plant⁽³⁾		57		61
DSM programs⁽⁴⁾		44		46
Environmental remediation costs⁽⁹⁾		20		20
Deferred storm damage costs⁽¹⁰⁾		39		45
Deferred transmission operating costs⁽¹¹⁾		78		63
Other⁽¹²⁾		138		108
Regulatory assets - noncurrent		3,412		3,726
Total regulatory assets	$	3,664	$	3,955
Regulatory liabilities:
Monetization of guaranty settlement⁽¹³⁾	$	67	$	67
Income taxes refundable through future rates⁽¹⁴⁾		43		21
Reserve for refunds to electric utility customers⁽¹⁵⁾		121		128
Cost of fuel and purchased gas over-collections⁽⁶⁾		0		58
Derivatives⁽¹⁶⁾		22		0
Other		17		9
Regulatory liabilities - current		270		283
Monetization of guaranty settlement⁽¹³⁾		848		903
Income taxes refundable through future rates⁽¹⁴⁾		910		919
Asset removal costs⁽¹⁷⁾		577		564
Deferred gains on interest rate derivatives⁽⁸⁾		67		69
Reserve for refunds to electric utility customers⁽¹⁵⁾		451		540
Derivatives⁽¹⁶⁾		25		0
Other		14		10
Regulatory liabilities - noncurrent		2,892		3,005
Total regulatory liabilities	$	3,162	$	3,288

	Current		Noncurrent
Electricity (MWh in millions):
Fixed price		2		25
Interest rate⁽¹⁾(in millions)	$	0	$	71

(millions)		Amount of Gain (Loss) Recognized in Income on Derivatives⁽¹⁾
Three Months Ended September 30,	Location	2021			2020
Derivative type and location of gains (losses):
Commodity contracts	Purchased power	$	3		$	0
Interest rate contracts	Interest charges		0			0
Total		$	3		$	0
Nine Months Ended September 30,
Derivative type and location of gains (losses):
Commodity contracts	Purchased power	$	3		$	0
Interest rate contracts	Interest charges		(1	)		(1	)
Total		$	2		$	(1	)


	•	~~Forward commodity prices~~
	•	~~Transaction prices~~
	•	~~Volumes~~
	•	~~Commodity location~~
	•	~~Interest rates~~
	•	~~Credit quality of counterparties and the Companies~~
	•	~~Credit enhancements~~
	•	~~Time value~~

Exhibit No.		Description
3.1		Amended and Restated Articles of Incorporation, effective April 29, 2019 (Exhibit 3.1, Form 8-K filed April 29, 2019, File No. 1-3375).
3.2		Amended and Restated Bylaws, effective April 29, 2019 (Exhibit 3.2, Form 8-K filed April 29, 2019, File No. 1-3375).
4.1		Dominion Energy South Carolina, Inc. agrees to furnish to the U.S. Securities and Exchange Commission upon request any instrument with respect to long-term debt as to which the total amount of securities authorized does not exceed 10% of its total consolidated assets.
31.a		Certification by Chief Executive Officer of Dominion Energy South Carolina, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.b		Certification by Chief Financial Officer of Dominion Energy South Carolina, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.a		Certification to the Securities and Exchange Commission by Chief Executive Officer and Chief Financial Officer of Dominion Energy South Carolina, Inc. as required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101		The following financial statements from Dominion Energy South Carolina, Inc.’s Quarterly Report on Form 10-Q for the quarter ended ~~September~~June 30, ~~2021,~~2022, filed on ~~November 5, 2021,~~August 8, 2022, formatted in iXBRL (Inline eXtensible Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Comprehensive Income (Loss), (iii) Consolidated Statements of Cash Flows, (iv) Consolidated Statements of Changes in Common Equity, and (v) the Notes to Consolidated Financial Statements.
104		Cover Page Interactive Data File (formatted in iXBRL (Inline eXtensible Reporting Language) and contained in Exhibit 101).

	DOMINION ENERGY SOUTH CAROLINA, INC.
		(Registrant)

	By:	/s/ Michele L. Cardiff
Date: ~~November 5, 2021~~August 8, 2022		Michele L. Cardiff
		Senior Vice President, Controller and Chief Accounting Officer