UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31,September 30, 2022
or
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number |
| Exact name of registrants as specified in their charters, address of principal executive offices and registrants’ telephone number |
| I.R.S. Employer Identification Number |
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001-08489 |
| DOMINION ENERGY, INC. |
| 54-1229715 |
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000-55337 |
| VIRGINIA ELECTRIC AND POWER COMPANY |
| 54-0418825 |
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| 120 Tredegar Street Richmond, Virginia 23219 (804) 819-2000 |
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State or other jurisdiction of incorporation or organization of the registrants: Virginia
Securities registered pursuant to Section 12(b) of the Act:
Registrant | Trading Symbol | Title of Each Class | Name of Each Exchange on Which Registered |
DOMINION ENERGY, INC. | D | Common Stock, no par value | New York Stock Exchange |
DCUE
2019 Series A Corporate Units
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Dominion Energy, Inc. Yes ☒ No ☐ Virginia Electric and Power Company Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Dominion Energy, Inc. Yes ☒ No ☐ Virginia Electric and Power Company Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Dominion Energy, Inc.
Large accelerated filer | ☒ |
| Accelerated filer | ☐ | Emerging growth company | ☐ |
Non-accelerated filer | ☐ |
| Smaller reporting company | ☐ |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Virginia Electric and Power Company
Large accelerated filer | ☐ |
| Accelerated filer | ☐ | Emerging growth company | ☐ |
Non-accelerated filer | ☒ |
| Smaller reporting company | ☐ |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Dominion Energy, Inc. Yes ☐ No ☒ Virginia Electric and Power Company Yes ☐ No ☒
At AprilOctober 28, 2022, the latest practicable date for determination, Dominion Energy, Inc. had 811,270,354833,275,205 shares of common stock outstanding and Virginia Electric and Power Company had 274,723 shares of common stock outstanding. Dominion Energy, Inc. is the sole holder of Virginia Electric and Power Company’s common stock.
This combined Form 10-Q represents separate filings by Dominion Energy, Inc. and Virginia Electric and Power Company. Information contained herein relating to an individual registrant is filed by that registrant on its own behalf. Virginia Electric and Power Company makes no representation as to the information relating to Dominion Energy, Inc.’s other operations.
VIRGINIA ELECTRIC AND POWER COMPANY MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q AND IS FILING THIS FORM 10-Q UNDER THE REDUCED DISCLOSURE FORMAT.
COMBINED INDEX
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| 3 | |
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Item 1. |
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Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 6. |
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GLOSSARY OF TERMS
The following abbreviations or acronyms used in this Form 10-Q are defined below:
Abbreviation or Acronym |
| Definition |
2019 Equity Units |
| Dominion Energy’s 2019 Series A Equity Units issued in June 2019, initially in the form of 2019 Series A Corporate Units, |
2017 Tax Reform Act |
| An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (previously known as The Tax Cuts and Jobs Act) enacted on December 22, 2017 |
2021 Triennial Review |
| Virginia Commission review of Virginia Power’s earned return on base rate generation and distribution services for the four successive 12-month test periods beginning January 1, 2017 and ending December 31, 2020 |
ACE Rule |
| Affordable Clean Energy Rule |
AFUDC |
| Allowance for funds used during construction |
Align RNG |
| Align RNG, LLC, a joint venture between Dominion Energy and Smithfield Foods, Inc. |
AOCI |
| Accumulated other comprehensive income (loss) |
ARO |
| Asset retirement obligation |
Atlantic Coast Pipeline |
| Atlantic Coast Pipeline, LLC, a limited liability company owned by Dominion Energy and Duke Energy |
Atlantic Coast Pipeline Project |
| A previously proposed approximately 600-mile natural gas pipeline running from West Virginia through Virginia to North Carolina which would have been owned by Dominion Energy and Duke Energy |
bcf |
| Billion cubic feet |
Bear Garden |
| A 622 MW combined-cycle, natural gas-fired power station in Buckingham County, Virginia |
BHE | The legal entity, Berkshire Hathaway Energy Company, one or more of its consolidated subsidiaries (including Dominion Energy Gas, Dominion Energy Midstream and Cove Point effective November 1, 2020), or the entirety of Berkshire Hathaway Energy Company and its consolidated subsidiaries | |
Brunswick County | A 1,376 MW combined-cycle, natural gas-fired power station in Brunswick County, Virginia | |
CAA |
| Clean Air Act |
CCR |
| Coal combustion residual |
CCRO |
| Customer credit reinvestment offset |
CEO |
| Chief Executive Officer |
CEP |
| Capital Expenditure Program, as established by House Bill 95, Ohio legislation enacted in 2011, deployed by East Ohio to recover certain costs associated with capital investment |
CERCLA |
| Comprehensive Environmental Response, Compensation and Liability Act of 1980, also known as Superfund |
CFO |
| Chief Financial Officer |
Clearway |
| The legal entity, Clearway Energy, Inc. (a subsidiary of Global Infrastructure Partners), one or more of its consolidated subsidiaries, or the entirety of Clearway Energy, Inc. and its consolidated subsidiaries |
CO2 |
| Carbon dioxide |
Colonial Trail West |
| A 142 MW utility-scale solar power station located in Surry County, Virginia |
Companies |
| Dominion Energy and Virginia Power, collectively |
Contracted Assets |
| Contracted Assets operating segment |
Cooling degree days |
| Units measuring the extent to which the average daily temperature is greater than 65 degrees Fahrenheit, or 75 degrees Fahrenheit in DESC’s service territory, calculated as the difference between 65 or 75 degrees, as applicable, and the average temperature for that day |
3
Cove Point |
| Cove Point LNG, LP (formerly known as Dominion Energy Cove Point LNG, LP) |
CPCN |
| Certificate of Public Convenience and Necessity |
3
CVOW Commercial Project |
| A proposed 2.6 GW wind generation facility 27 miles off the coast of Virginia Beach, Virginia in federal waters adjacent to the CVOW Pilot Project and associated interconnection facilities in and around Virginia Beach, Virginia |
CVOW Pilot Project |
| A 12 MW wind generation facility 27 miles off the coast of Virginia Beach, Virginia in federal waters |
CWA |
| Clean Water Act |
DCP | The legal entity, CPMLP Holding Company, LLC (formerly known as Dominion Cove Point, LLC), one or more of its consolidated subsidiaries (including Dominion Energy Midstream), or the entirety of CPMLP Holding Company, LLC and its consolidated subsidiaries | |
DECGS | Carolina Gas Services, Inc. (formerly known as Dominion Energy Carolina Gas Services, Inc.) | |
DEQPS |
| MountainWest Pipeline Services, Inc. (formerly known as Dominion Energy Questar Pipeline Services, Inc.) |
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 |
DETI | Eastern Gas Transmission and Storage, Inc. (formerly known as Dominion Energy Transmission, Inc.) | |
DGI |
| Dominion Generation, Inc. |
DGP | Eastern Gathering and Processing, Inc. (formerly known as Dominion Gathering and Processing, Inc.) | |
DMLPHCII | Eastern MLP Holding Company II, LLC (formerly known as Dominion MLP Holding Company II, LLC) | |
DOE |
| U.S. Department of Energy |
Dominion Energy |
| The legal entity, Dominion Energy, Inc., one or more of its consolidated subsidiaries (other than Virginia Power) or operating segments, or the entirety of Dominion Energy, Inc. and its consolidated subsidiaries |
Dominion Energy Gas | The legal entity, Eastern Energy Gas Holdings, LLC (formerly known as Dominion Energy Gas Holdings, LLC), one or more of its consolidated subsidiaries (consisting of DETI, DCP, DMLPHCII and Dominion Iroquois), or the entirety of Eastern Energy Gas Holdings, LLC and its consolidated subsidiaries | |
Dominion Energy Midstream | The legal entity, Northeast Midstream Partners, LP (formerly known as Dominion Energy Midstream Partners, LP), one or more of its consolidated subsidiaries, or the entirety of Northeast Midstream Partners, LP and its consolidated subsidiaries | |
Dominion Energy Questar Pipeline |
| The legal entity, MountainWest Pipeline, LLC (formerly known as Dominion Energy Questar Pipeline, LLC), one or more of its consolidated subsidiaries (including its 50% noncontrolling interest in White River Hub), or the entirety of Dominion Energy Questar Pipeline, LLC and its consolidated subsidiaries |
Dominion Energy South Carolina |
| Dominion Energy South Carolina operating segment |
Dominion Energy Virginia |
| Dominion Energy Virginia operating segment |
Dominion Iroquois | The legal entity Iroquois Inc. (formerly known as Dominion Iroquois Inc.), one or more of its consolidated subsidiaries, or the entirety of Iroquois, Inc. and its consolidated subsidiaries, which held a 50% noncontrolling interest in Iroquois | |
Dominion Privatization |
| Dominion Utility Privatization, LLC, a partnership between Dominion Energy and Patriot |
DSM |
| Demand-side management |
DSM Riders | Rate adjustment clauses, designated Riders C1A, C2A, C3A and C4A, associated with the recovery of costs related to certain Virginia DSM programs in approved DSM cases |
4
Dth |
| Dekatherm |
Duke Energy |
| The legal entity, Duke Energy Corporation, one or more of its consolidated subsidiaries, or the entirety of Duke Energy Corporation and its consolidated subsidiaries |
East Ohio |
| The East Ohio Gas Company, doing business as Dominion Energy Ohio |
EnergySolutions |
| EnergySolutions, LLC |
EPA |
| U.S. Environmental Protection Agency |
EPS |
| Earnings per common share |
FERC |
| Federal Energy Regulatory Commission |
Four Brothers |
| Four Brothers Solar, LLC, a limited liability company owned by Dominion Energy (through December 2021) and Four Brothers Holdings, LLC, a subsidiary of Clearway |
FTRs |
| Financial transmission rights |
GAAP |
| U.S. generally accepted accounting principles |
Gas Distribution |
| Gas Distribution operating segment |
GHG |
| Greenhouse gas |
Granite Mountain |
| Granite Mountain Holdings, LLC, a limited liability company owned by Dominion Energy (through December 2021) and Granite Mountain Renewables, LLC, a subsidiary of Clearway |
GT&S Transaction | The sale by Dominion Energy to BHE of Dominion Energy Gas, DGP, DECGS, Eastern Energy Field Services, Inc. (formerly known as Dominion Energy Field Services, Inc.) and Modular LNG Holdings, Inc. (formerly known as Dominion Modular LNG Holdings, Inc.) (which holds a 50% noncontrolling interest in JAX LNG) pursuant to a purchase and sale agreement entered into on July 3, 2020, which was completed on November 1, 2020 | |
GTSA | Virginia Grid Transformation and Security Act of 2018 | |
GW |
| Gigawatt |
Heating degree days |
| Units measuring the extent to which the average daily temperature is less than 65 degrees Fahrenheit, or 60 degrees Fahrenheit in DESC’s service territory, calculated as the difference between 65 or 60 degrees, as applicable, and the average temperature for that day |
4
Hope |
| Hope Gas, Inc., doing business as Dominion Energy West Virginia through August 2022 |
IRA | An Act to Provide for Reconciliation Pursuant to Title II of Senate Concurrent Resolution 14 of the 117th Congress (also known as the Inflation Reduction Act of 2022) enacted on August 16, 2022 | |
Iron Springs |
| Iron Springs Holdings, LLC, a limited liability company owned by Dominion Energy (through December 2021) and Iron Springs Renewables, LLC, a subsidiary of Clearway |
ISO |
| Independent system operator |
JAX LNG | JAX LNG, LLC, an LNG supplier in Florida serving the marine and LNG markets | |
Jones Act |
| The Coastwise Merchandise Statute (commonly known as the Jones Act) 46 U.S.C. §55102 regulating U.S. maritime commerce |
Kewaunee |
| Kewaunee nuclear power station |
kV |
| Kilovolt |
LNG |
| Liquefied natural gas |
MD&A |
| Management’s Discussion and Analysis of Financial Condition and Results of Operations |
MGD |
| Million gallons per day |
Millstone |
| Millstone nuclear power station |
MW |
| Megawatt |
MWh |
| Megawatt hour |
5
NAV |
| Net asset value |
NND Project |
| V.C. Summer Units 2 and 3 nuclear development project under which DESC and Santee Cooper undertook to construct two Westinghouse AP1000 Advanced Passive Safety nuclear units in Jenkinsville, South Carolina |
North Anna |
| North Anna nuclear power station |
North Carolina Commission |
| North Carolina Utilities Commission |
NRC |
| U.S. Nuclear Regulatory Commission |
Ohio Commission |
| Public Utilities Commission of Ohio |
Order 1000 |
| Order issued by FERC adopting requirements for electric transmission planning, cost allocation and development |
Patriot |
| Patriot Utility Privatizations, LLC, a partnership between Foundation Infrastructure Partners, LLC and John Hancock Life Insurance Company (U.S.A.) and affiliates |
PIPP | Percentage of Income Payment Plan deployed by East Ohio | |
PIR |
| Pipeline Infrastructure Replacement program deployed by East Ohio |
PJM |
| PJM Interconnection, LLC |
PSD |
| Prevention of significant deterioration |
PSNC |
| Public Service Company of North Carolina, Incorporated, doing business as Dominion Energy North Carolina |
Q-Pipe Group |
| Collectively, Dominion Energy Questar Pipeline, DEQPS and MountainWest Energy Holding Company, LLC (formerly known as QPC Holding Company, LLC and its subsidiary MountainWest Southern Trails Pipeline Company (formerly known as Questar Southern Trails Pipeline Company)) |
Q-Pipe Transaction |
| A previously proposed sale by Dominion Energy to Berkshire Hathaway Energy Company of the Q-Pipe Group pursuant to a purchase and sale agreement entered into on October 5, 2020 and terminated on July 9, 2021 |
Questar Gas |
| Questar Gas Company, doing business as Dominion Energy Utah, Dominion Energy Wyoming and Dominion Energy Idaho |
RGGI |
| Regional Greenhouse Gas Initiative |
Rider B | A rate adjustment clause associated with the recovery of costs related to the conversion of three of Virginia Power’s coal-fired power stations to biomass | |
Rider BW | A rate adjustment clause associated with the recovery of costs related to Brunswick County | |
Rider CCR |
| A rate adjustment clause associated with the recovery of costs related to the removal of CCR at certain power stations |
Rider CE |
| A rate adjustment clause associated with the recovery of costs related to certain renewable generation, energy storage and related transmission facilities in Virginia as well as certain small-scale distributed generation projects and related transmission facilities |
5
Rider D | A rate mechanism which allows PSNC to recover from customers all prudently incurred gas costs and certain uncollectible expenses as well as losses on negotiated gas and transportation sales | |
Rider E | A rate adjustment clause associated with the recovery of costs related to certain capital projects at Virginia Power’s electric generating stations to comply with federal and state environmental laws and regulations | |
Rider GT | A rate adjustment clause associated with the recovery of costs associated with electric distribution grid transformation projects that the Virginia Commission has approved as authorized by the GTSA | |
Rider OSW | A rate adjustment clause associated with costs incurred to construct, own and operate the CVOW Commercial Project | |
Rider R |
| A rate adjustment clause associated with the recovery of costs related to Bear Garden |
6
Rider RGGI |
| A rate adjustment clause associated with the recovery of costs related to the purchase of allowances through the RGGI market-based trading program for CO2 |
Rider RPS | A rate adjustment clause associated with the recovery of costs related to the mandatory renewable portfolio standard program established by the VCEA | |
Rider SNA |
| A rate adjustment clause associated with costs relating to the preparation of the applications for subsequent license renewal to the NRC to extend the operating licenses of Surry and North Anna and related projects |
Rider T1 | A rate adjustment clause to recover the difference between revenues produced from transmission rates included in base rates, and the new total revenue requirement developed annually for the rate years effective September 1 | |
Rider U |
| A rate adjustment clause associated with the recovery of costs of new underground distribution facilities |
Rider US-2 | A rate adjustment clause associated with the recovery of costs related to Woodland Solar, Scott Solar and Whitehouse Solar | |
Rider US-3 |
| A rate adjustment clause associated with the recovery of costs related to Colonial Trail West and Spring Grove 1 |
Rider US-4 |
| A rate adjustment clause associated with the recovery of costs related to Sadler Solar |
Rider W | A rate adjustment clause associated with the recovery of costs related to Warren County | |
ROE |
| Return on equity |
RTO |
| Regional transmission organization |
Sadler Solar |
| A 100 MW utility-scale solar power station located in Greensville County, Virginia, also referred to as Dry Bread |
Santee Cooper |
| South Carolina Public Service Authority |
SCANA |
| The legal entity, SCANA Corporation, one or more of its consolidated subsidiaries, or the entirety of SCANA Corporation and its consolidated subsidiaries |
SCANA Combination |
| Dominion Energy’s acquisition of SCANA completed on January 1, 2019 pursuant to the terms of the agreement and plan of merger entered on January 2, 2018 between Dominion Energy and SCANA |
SCANA Merger Approval Order |
| Final order issued by the South Carolina Commission on December 21, 2018 setting forth its approval of the SCANA Combination |
SCDOR |
| South Carolina Department of Revenue |
Scott Solar | A 17 MW utility-scale solar power station in Powhatan County, Virginia | |
SEC |
| U.S. Securities and Exchange Commission |
Series A Preferred Stock |
| Dominion Energy’s |
Series B Preferred Stock |
| Dominion Energy’s 4.65% Series B Fixed-Rate Cumulative Redeemable Perpetual Preferred Stock, without par value, with a liquidation preference of $1,000 per share |
Series C Preferred Stock |
| Dominion Energy’s 4.35% Series C Fixed-Rate Cumulative Redeemable Perpetual Preferred Stock, without par value, with a liquidation preference of $1,000 per share |
South Carolina Commission |
| Public Service Commission of South Carolina |
Southwest Gas |
| The legal entity, Southwest Gas Holdings, Inc., one or more of its consolidated subsidiaries, or the entirety of Southwest Gas Holdings, Inc. and its consolidated subsidiaries |
Spring Grove 1 |
| A 98 MW utility-scale solar power station located in Surry County, Virginia |
Standard & Poor’s |
| Standard & Poor’s Ratings Services, a division of S&P Global Inc. |
Summer |
| V.C. Summer nuclear power station |
Surry |
| Surry nuclear power station |
7
Terra Nova Renewable Partners |
| The legal entity, Terra Nova Renewable Partners, LLC, a partnership comprised primarily of institutional investors advised by J.P. Morgan Asset Management-Global Real Assets, or one or more of its consolidated subsidiaries |
Three Cedars |
| Granite Mountain and Iron Springs, collectively |
UEX | Uncollectible Expense Rider deployed by East Ohio | |
Ullico |
| The legal entity, Ullico Inc., one or more of its consolidated subsidiaries, or the entirety of Ullico Inc. and its consolidated subsidiaries |
Utah Commission |
| Utah Public Service Commission |
VCEA |
| Virginia Clean Economy Act of March 2020 |
VEBA |
| Voluntary Employees’ Beneficiary Association |
6
VIE |
| Variable interest entity |
Virginia Commission |
| Virginia State Corporation Commission |
Virginia Facilities | Proposed electric interconnection and transmission facilities in and around Virginia Beach, Virginia, comprising transmission facilities required to interconnect the CVOW Commercial Project reliably with the existing transmission system; including 3 miles of 230 kV offshore export circuits, 4 miles of underground 230 kV onshore export circuits, a new Harpers switching station, 14 miles of three new overhead 230 kV transmission circuits between a new Harpers switching station and the Fentress substation, rebuild eight miles of two existing 230 kV overhead lines and an expansion of the Fentress substation | |
Virginia Power |
| The legal entity, Virginia Electric and Power Company, one or more of its consolidated subsidiaries or operating segment, or the entirety of Virginia Electric and Power Company and its consolidated subsidiaries |
Warren County | A 1,349 MW combined-cycle, natural gas-fired power station in Warren County, Virginia | |
West Virginia Commission |
| Public Service Commission of West Virginia |
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Wexpro |
| The legal entity, Wexpro Company, one or more of its consolidated subsidiaries, or the entirety of Wexpro Company and its consolidated subsidiaries |
Whitehouse Solar | A 20 MW utility-scale solar power station in Louisa County, Virginia | |
White River Hub |
| MountainWest White River Hub, LLC (formerly known as White River Hub, LLC) |
Wisconsin Commission |
| Public Service Commission of Wisconsin |
Woodland Solar | A 19 MW utility-scale solar power station in Isle of Wight County, Virginia | |
WP&L |
| Wisconsin Power and Light Company, a subsidiary of Alliant Energy Corporation |
WPSC |
| Wisconsin Public Service Corporation, a subsidiary of WEC Energy Group |
Wrangler |
| Wrangler Retail Gas Holdings, LLC, a partnership between Dominion Energy (through March 2022) and Interstate Gas Supply, Inc. |
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DOMINION ENERGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
| Three Months Ended March 31, |
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
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| 2022 |
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| 2021 |
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| 2022 |
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| 2021 |
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| 2022 |
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| 2021 |
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(millions, except per share amounts) |
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Operating Revenue |
| $ | 4,279 |
|
| $ | 3,870 |
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| $ | 4,386 |
|
| $ | 3,176 |
|
| $ | 12,261 |
|
| $ | 10,084 |
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Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Electric fuel and other energy-related purchases |
|
| 678 |
|
|
| 550 |
|
|
| 1,217 |
|
|
| 703 |
|
|
| 2,625 |
|
|
| 1,740 |
|
Purchased electric capacity |
|
| 13 |
|
|
| 11 |
|
|
| 16 |
|
|
| 26 |
|
|
| 45 |
|
|
| 62 |
|
Purchased gas |
|
| 645 |
|
|
| 484 |
|
|
| 138 |
|
|
| 60 |
|
|
| 985 |
|
|
| 665 |
|
Other operations and maintenance |
|
| 1,026 |
|
|
| 987 |
|
|
| 991 |
|
|
| 927 |
|
|
| 3,030 |
|
|
| 2,808 |
|
Depreciation, depletion and amortization |
|
| 698 |
|
|
| 608 |
|
|
| 727 |
|
|
| 621 |
|
|
| 2,120 |
|
|
| 1,833 |
|
Other taxes |
|
| 253 |
|
|
| 257 |
|
|
| 231 |
|
|
| 223 |
|
|
| 719 |
|
|
| 702 |
|
Impairment of assets and other charges (benefits) |
|
| (10 | ) |
|
| 95 |
|
|
| 21 |
|
|
| (222 | ) |
|
| 426 |
|
|
| 194 |
|
Losses (gains) on sales of assets |
|
| (27 | ) |
|
| (3 | ) |
|
| 581 |
|
|
| (2 | ) | ||||||||
Total operating expenses |
|
| 3,303 |
|
|
| 2,992 |
|
|
| 3,314 |
|
|
| 2,335 |
|
|
| 10,531 |
|
|
| 8,002 |
|
Income from operations |
|
| 976 |
|
|
| 878 |
|
|
| 1,072 |
|
|
| 841 |
|
|
| 1,730 |
|
|
| 2,082 |
|
Earnings from equity method investees |
|
| 80 |
|
|
| 80 |
|
|
| 92 |
|
|
| 69 |
|
|
| 255 |
|
|
| 214 |
|
Other income |
|
| 46 |
|
|
| 287 |
| ||||||||||||||||
Other income (expense) |
|
| 70 |
|
|
| 133 |
|
|
| (171 | ) |
|
| 732 |
| ||||||||
Interest and related charges |
|
| 174 |
|
|
| 53 |
|
|
| 329 |
|
|
| 407 |
|
|
| 550 |
|
|
| 978 |
|
Income from continuing operations including noncontrolling interests before income tax expense |
|
| 928 |
|
|
| 1,192 |
|
|
| 905 |
|
|
| 636 |
|
|
| 1,264 |
|
|
| 2,050 |
|
Income tax expense |
|
| 236 |
|
|
| 212 |
|
|
| 124 |
|
|
| 35 |
|
|
| 243 |
|
|
| 200 |
|
Net Income From Continuing Operations |
|
| 692 |
|
|
| 980 |
|
|
| 781 |
|
|
| 601 |
|
|
| 1,021 |
|
|
| 1,850 |
|
Net Income From Discontinued Operations(1) |
|
| 19 |
|
|
| 28 |
| ||||||||||||||||
Net Income (Loss) From Discontinued Operations(1) |
|
| (3 | ) |
|
| 65 |
|
|
| 15 |
|
|
| 119 |
| ||||||||
Net Income Including Noncontrolling Interests |
|
| 711 |
|
|
| 1,008 |
|
|
| 778 |
|
|
| 666 |
|
|
| 1,036 |
|
|
| 1,969 |
|
Noncontrolling Interests |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 12 |
|
|
| — |
|
|
| 22 |
|
Net Income Attributable to Dominion Energy |
| $ | 711 |
|
| $ | 1,008 |
|
| $ | 778 |
|
| $ | 654 |
|
| $ | 1,036 |
|
| $ | 1,947 |
|
Amounts attributable to Dominion Energy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing operations |
| $ | 692 |
|
| $ | 980 |
|
| $ | 781 |
|
| $ | 589 |
|
| $ | 1,021 |
|
| $ | 1,828 |
|
Net income from discontinued operations |
|
| 19 |
|
|
| 28 |
| ||||||||||||||||
Net income (loss) from discontinued operations |
|
| (3 | ) |
|
| 65 |
|
|
| 15 |
|
|
| 119 |
| ||||||||
Net income attributable to Dominion Energy |
| $ | 711 |
|
| $ | 1,008 |
|
| $ | 778 |
|
| $ | 654 |
|
| $ | 1,036 |
|
| $ | 1,947 |
|
EPS - Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing operations |
| $ | 0.82 |
|
| $ | 1.19 |
|
| $ | 0.91 |
|
| $ | 0.71 |
|
| $ | 1.16 |
|
| $ | 2.20 |
|
Net income from discontinued operations |
|
| 0.02 |
|
|
| 0.04 |
| ||||||||||||||||
Net income (loss) from discontinued operations |
|
| — |
|
|
| 0.08 |
|
|
| 0.02 |
|
|
| 0.15 |
| ||||||||
Net income attributable to Dominion Energy |
| $ | 0.84 |
|
| $ | 1.23 |
|
| $ | 0.91 |
|
| $ | 0.79 |
|
| $ | 1.18 |
|
| $ | 2.35 |
|
EPS - Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing operations |
| $ | 0.81 |
|
| $ | 1.19 |
|
| $ | 0.91 |
|
| $ | 0.71 |
|
| $ | 1.15 |
|
| $ | 2.20 |
|
Net income from discontinued operations |
|
| 0.02 |
|
|
| 0.04 |
| ||||||||||||||||
Net income (loss) from discontinued operations |
|
| — |
|
|
| 0.08 |
|
|
| 0.02 |
|
|
| 0.15 |
| ||||||||
Net income attributable to Dominion Energy |
| $ | 0.83 |
|
| $ | 1.23 |
|
| $ | 0.91 |
|
| $ | 0.79 |
|
| $ | 1.17 |
|
| $ | 2.35 |
|
(1) | Includes income tax expense (benefit) of |
The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.
89
DOMINION ENERGY, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
|
| Three Months Ended March 31, |
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| |||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income including noncontrolling interests |
| $ | 711 |
|
| $ | 1,008 |
|
| $ | 778 |
|
| $ | 666 |
|
| $ | 1,036 |
|
| $ | 1,969 |
|
Other comprehensive income (loss), net of taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net deferred gains (losses) on derivatives-hedging activities(1) |
|
| 25 |
|
|
| 39 |
| ||||||||||||||||
Changes in unrealized net gains (losses) on investment securities(2) |
|
| (62 | ) |
|
| (31 | ) | ||||||||||||||||
Changes in net unrecognized pension and other postretirement benefit costs(3) |
|
| 28 |
|
|
| 6 |
| ||||||||||||||||
Amounts reclassified to net income (loss): |
|
|
|
|
|
|
|
| ||||||||||||||||
Net derivative (gains) losses-hedging activities(4) |
|
| 10 |
|
|
| 13 |
| ||||||||||||||||
Net realized (gains) losses on investment securities(5) |
|
| 3 |
|
|
| 1 |
| ||||||||||||||||
Net pension and other postretirement benefit costs(6) |
|
| 17 |
|
|
| 18 |
| ||||||||||||||||
Changes in other comprehensive income from equity method investees(7) |
|
| 1 |
|
|
| 0 |
| ||||||||||||||||
Net deferred gains (losses) on derivatives-hedging activities(1) |
|
| 10 |
|
|
| (2 | ) |
|
| 64 |
|
|
| 21 |
| ||||||||
Changes in unrealized net gains (losses) on investment securities(2) |
|
| (27 | ) |
|
| 4 |
|
|
| (116 | ) |
|
| (15 | ) | ||||||||
Changes in net unrecognized pension and other postretirement benefit costs(3) |
|
| — |
|
|
| (1 | ) |
|
| 30 |
|
|
| 5 |
| ||||||||
Amounts reclassified to net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net derivative (gains) losses-hedging activities(4) |
|
| 12 |
|
|
| 10 |
|
|
| 33 |
|
|
| 35 |
| ||||||||
Net realized (gains) losses on investment securities(5) |
|
| 1 |
|
|
| (3 | ) |
|
| 13 |
|
|
| (5 | ) | ||||||||
Net pension and other postretirement benefit costs(6) |
|
| 26 |
|
|
| 19 |
|
|
| 59 |
|
|
| 63 |
| ||||||||
Changes in other comprehensive income from equity method investees(7) |
|
| — |
|
|
| (3 | ) |
|
| 1 |
|
|
| (3 | ) | ||||||||
Total other comprehensive income |
|
| 22 |
|
|
| 46 |
|
|
| 22 |
|
|
| 24 |
|
|
| 84 |
|
|
| 101 |
|
Comprehensive income including noncontrolling interests |
|
| 733 |
|
|
| 1,054 |
|
|
| 800 |
|
|
| 690 |
|
|
| 1,120 |
|
|
| 2,070 |
|
Comprehensive income attributable to noncontrolling interests |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 12 |
|
|
| — |
|
|
| 22 |
|
Comprehensive income attributable to Dominion Energy |
| $ | 733 |
|
| $ | 1,054 |
|
| $ | 800 |
|
| $ | 678 |
|
| $ | 1,120 |
|
| $ | 2,048 |
|
(1) | Net of $ |
(2) | Net of |
(3) | Net of |
(4) | Net of $(4) million and $(4) million tax for the three months ended |
(5) | Net of $(1) million and |
(6) | Net of $(9) million and $(6) |
(7) | Net of $— million and |
The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.
DOMINION ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
| March 31, 2022 |
|
| December 31, 2021(1) |
|
| September 30, 2022 |
|
| December 31, 2021(1) |
| ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 444 |
|
| $ | 283 |
|
| $ | 163 |
|
| $ | 283 |
|
Customer receivables (less allowance for doubtful accounts of $39 and $40) |
|
| 2,164 |
|
|
| 2,219 |
| ||||||||
Customer receivables (less allowance for doubtful accounts of $38 and $40) |
|
| 2,170 |
|
|
| 2,219 |
| ||||||||
Other receivables (less allowance for doubtful accounts of $4 at both dates) |
|
| 341 |
|
|
| 349 |
|
|
| 275 |
|
|
| 349 |
|
Inventories |
|
| 1,512 |
|
|
| 1,631 |
|
|
| 1,766 |
|
|
| 1,631 |
|
Derivative assets |
|
| 670 |
|
|
| 122 |
| ||||||||
Margin deposit assets |
|
| 829 |
|
|
| 678 |
| ||||||||
Regulatory assets |
|
| 1,477 |
|
|
| 1,492 |
|
|
| 2,064 |
|
|
| 1,492 |
|
Other |
|
| 1,476 |
|
|
| 1,270 |
|
|
| 640 |
|
|
| 470 |
|
Current assets held for sale |
|
| 969 |
|
|
| 25 |
|
|
| 122 |
|
|
| 25 |
|
Total current assets |
|
| 8,383 |
|
|
| 7,269 |
|
|
| 8,699 |
|
|
| 7,269 |
|
Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nuclear decommissioning trust funds |
|
| 7,614 |
|
|
| 7,950 |
|
|
| 5,590 |
|
|
| 7,950 |
|
Investment in equity method affiliates |
|
| 2,937 |
|
|
| 2,932 |
|
|
| 2,940 |
|
|
| 2,932 |
|
Other |
|
| 393 |
|
|
| 394 |
|
|
| 384 |
|
|
| 394 |
|
Total investments |
|
| 10,944 |
|
|
| 11,276 |
|
|
| 8,914 |
|
|
| 11,276 |
|
Property, Plant and Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
| 87,107 |
|
|
| 86,503 |
|
|
| 90,785 |
|
|
| 86,503 |
|
Accumulated depreciation, depletion and amortization |
|
| (26,986 | ) |
|
| (26,729 | ) |
|
| (27,891 | ) |
|
| (26,729 | ) |
Total property, plant and equipment, net |
|
| 60,121 |
|
|
| 59,774 |
|
|
| 62,894 |
|
|
| 59,774 |
|
Deferred Charges and Other Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
| 7,297 |
|
|
| 7,405 |
|
|
| 7,295 |
|
|
| 7,405 |
|
Derivative assets |
|
| 1,799 |
|
|
| 491 |
| ||||||||
Regulatory assets |
|
| 8,658 |
|
|
| 8,643 |
|
|
| 8,961 |
|
|
| 8,643 |
|
Other |
|
| 5,449 |
|
|
| 5,223 |
|
|
| 4,973 |
|
|
| 4,732 |
|
Total deferred charges and other assets |
|
| 21,404 |
|
|
| 21,271 |
|
|
| 23,028 |
|
|
| 21,271 |
|
Total assets |
| $ | 100,852 |
|
| $ | 99,590 |
|
| $ | 103,535 |
|
| $ | 99,590 |
|
(1) | Dominion Energy’s Consolidated Balance Sheet at December 31, 2021 has been derived from the audited Consolidated Balance Sheet at that date. |
The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.
1011
DOMINION ENERGY, INC.
CONSOLIDATED BALANCE SHEETS—(Continued)
(Unaudited)
|
| March 31, 2022 |
|
| December 31, 2021(1) |
|
| September 30, 2022 |
|
| December 31, 2021(1) |
| ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities due within one year |
| $ | 2,550 |
|
| $ | 841 |
|
| $ | 2,889 |
|
| $ | 841 |
|
Short-term debt |
|
| 2,548 |
|
|
| 2,314 |
|
|
| 2,943 |
|
|
| 2,314 |
|
Accounts payable |
|
| 1,090 |
|
|
| 1,197 |
|
|
| 1,105 |
|
|
| 1,197 |
|
Accrued interest, payroll and taxes |
|
| 968 |
|
|
| 1,169 |
|
|
| 1,186 |
|
|
| 1,169 |
|
Derivative liabilities |
|
| 727 |
|
|
| 359 |
|
|
| 1,179 |
|
|
| 359 |
|
Regulatory liabilities |
|
| 830 |
|
|
| 986 |
|
|
| 1,019 |
|
|
| 986 |
|
Other(2) |
|
| 1,651 |
|
|
| 1,807 |
| ||||||||
Current liabilities held for sale |
|
| 217 |
|
|
| — |
| ||||||||
Other(2) |
|
| 1,851 |
|
|
| 1,807 |
| ||||||||
Total current liabilities |
|
| 10,581 |
|
|
| 8,673 |
|
|
| 12,172 |
|
|
| 8,673 |
|
Long-Term Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
| 34,428 |
|
|
| 35,190 |
|
|
| 35,634 |
|
|
| 35,190 |
|
Junior subordinated notes |
|
| 1,386 |
|
|
| 1,386 |
|
|
| 1,387 |
|
|
| 1,386 |
|
Supplemental credit facility borrowings |
|
| 450 |
|
|
| — |
| ||||||||
Other |
|
| 845 |
|
|
| 850 |
|
|
| 691 |
|
|
| 850 |
|
Total long-term debt |
|
| 36,659 |
|
|
| 37,426 |
|
|
| 38,162 |
|
|
| 37,426 |
|
Deferred Credits and Other Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income taxes and investment tax credits |
|
| 6,885 |
|
|
| 6,658 |
|
|
| 7,003 |
|
|
| 6,658 |
|
Derivative liabilities |
|
| 1,192 |
|
|
| 509 |
| ||||||||
Regulatory liabilities |
|
| 10,436 |
|
|
| 10,713 |
|
|
| 10,042 |
|
|
| 10,713 |
|
Other |
|
| 7,161 |
|
|
| 7,202 |
|
|
| 6,391 |
|
|
| 6,693 |
|
Total deferred credits and other liabilities |
|
| 24,482 |
|
|
| 24,573 |
|
|
| 24,628 |
|
|
| 24,573 |
|
Total liabilities |
|
| 71,722 |
|
|
| 70,672 |
|
|
| 74,962 |
|
|
| 70,672 |
|
Commitments and Contingencies (see Note 17) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mezzanine Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock (see Note 16) |
|
| 1,610 |
|
|
| 1,610 |
|
|
| — |
|
|
| 1,610 |
|
Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock (see Note 16) |
|
| 1,783 |
|
|
| 1,783 |
|
|
| 1,783 |
|
|
| 1,783 |
|
Common stock – no par(3) |
|
| 21,657 |
|
|
| 21,610 |
| ||||||||
Common stock – no par(3) |
|
| 23,480 |
|
|
| 21,610 |
| ||||||||
Retained earnings |
|
| 5,516 |
|
|
| 5,373 |
|
|
| 4,684 |
|
|
| 5,373 |
|
Accumulated other comprehensive loss |
|
| (1,436 | ) |
|
| (1,458 | ) |
|
| (1,374 | ) |
|
| (1,458 | ) |
Shareholders' equity |
|
| 27,520 |
|
|
| 27,308 |
|
|
| 28,573 |
|
|
| 27,308 |
|
Total liabilities, mezzanine equity and shareholders' equity |
| $ | 100,852 |
|
| $ | 99,590 |
|
| $ | 103,535 |
|
| $ | 99,590 |
|
(1) | Dominion Energy’s Consolidated Balance Sheet at December 31, 2021 has been derived from the audited Consolidated Balance Sheet at that date. |
(2) | See Note 10 for amounts attributable to related parties. |
(3) | 1.8 billion shares authorized; |
The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.
DOMINION ENERGY, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
QUARTER-TO-DATE
|
| Preferred Stock |
|
| Common Stock |
|
| Dominion Energy Shareholders |
|
| Total |
|
|
|
|
|
|
|
|
| ||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Retained Earnings |
|
| AOCI |
|
| Shareholders' Equity |
|
| Noncontrolling Interests |
|
| Total Equity |
| |||||||||
(millions, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020 |
|
| 2 |
|
| $ | 2,387 |
|
|
| 806 |
|
| $ | 21,258 |
|
| $ | 4,189 |
|
| $ | (1,717 | ) |
| $ | 26,117 |
|
| $ | 344 |
|
| $ | 26,461 |
|
Net income including noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,008 |
|
|
|
|
|
|
| 1,008 |
|
|
| — |
|
|
| 1,008 |
|
Issuance of stock |
|
|
|
|
|
|
|
|
|
| — |
|
|
| 48 |
|
|
|
|
|
|
|
|
|
|
| 48 |
|
|
|
|
|
|
| 48 |
|
Stock awards (net of change in unearned compensation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 4 |
|
|
|
|
|
|
|
|
|
|
| 4 |
|
|
|
|
|
|
| 4 |
|
Preferred stock dividends (see Note 16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (16 | ) |
|
|
|
|
|
| (16 | ) |
|
|
|
|
|
| (16 | ) |
Common stock dividends ($0.630 per common share) and distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (508 | ) |
|
|
|
|
|
| (508 | ) |
|
| (6 | ) |
|
| (514 | ) |
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 46 |
|
|
| 46 |
|
|
|
|
|
|
| 46 |
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
|
| 1 |
|
|
| 1 |
|
March 31, 2021 |
|
| 2 |
|
| $ | 2,387 |
|
|
| 806 |
|
| $ | 21,310 |
|
| $ | 4,673 |
|
| $ | (1,671 | ) |
| $ | 26,699 |
|
| $ | 339 |
|
| $ | 27,038 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021 |
|
| 2 |
|
| $ | 1,783 |
|
|
| 810 |
|
| $ | 21,610 |
|
| $ | 5,373 |
|
| $ | (1,458 | ) |
| $ | 27,308 |
|
| $ | — |
|
| $ | 27,308 |
|
Net income including noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 711 |
|
|
|
|
|
|
| 711 |
|
|
|
|
|
|
| 711 |
|
Issuance of stock |
|
|
|
|
|
|
|
|
|
| 1 |
|
|
| 45 |
|
|
|
|
|
|
|
|
|
|
| 45 |
|
|
|
|
|
|
| 45 |
|
Stock awards (net of change in unearned compensation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2 |
|
|
|
|
|
|
|
|
|
|
| 2 |
|
|
|
|
|
|
| 2 |
|
Preferred stock dividends (see Note 16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (27 | ) |
|
|
|
|
|
| (27 | ) |
|
|
|
|
|
| (27 | ) |
Common stock dividends ($0.6675 per share) and distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (541 | ) |
|
|
|
|
|
| (541 | ) |
|
|
|
|
|
| (541 | ) |
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 22 |
|
|
| 22 |
|
|
|
|
|
|
| 22 |
|
March 31, 2022 |
|
| 2 |
|
| $ | 1,783 |
|
|
| 811 |
|
| $ | 21,657 |
|
| $ | 5,516 |
|
| $ | (1,436 | ) |
| $ | 27,520 |
|
| $ | — |
|
| $ | 27,520 |
|
|
| Preferred Stock |
|
| Common Stock |
|
| Dominion Energy Shareholders |
|
| Total |
|
|
|
|
|
|
|
|
| ||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Retained Earnings |
|
| AOCI |
|
| Shareholders' Equity |
|
| Noncontrolling Interests |
|
| Total Equity |
| |||||||||
(millions, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2021 |
|
| 2 |
|
| $ | 2,387 |
|
|
| 807 |
|
| $ | 21,369 |
|
| $ | 4,434 |
|
| $ | (1,640 | ) |
| $ | 26,550 |
|
| $ | 334 |
|
| $ | 26,884 |
|
Net income including noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 654 |
|
|
|
|
|
|
| 654 |
|
|
| 12 |
|
|
| 666 |
|
Issuance of stock |
|
|
|
|
|
|
|
|
|
| 3 |
|
|
| 195 |
|
|
|
|
|
|
|
|
|
|
| 195 |
|
|
|
|
|
|
| 195 |
|
Stock awards (net of change in unearned compensation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9 |
|
|
|
|
|
|
|
|
|
|
| 9 |
|
|
|
|
|
|
| 9 |
|
Preferred stock dividends (see Note 16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (16 | ) |
|
|
|
|
|
| (16 | ) |
|
|
|
|
|
| (16 | ) |
Common stock dividends ($0.630 per share) and distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (510 | ) |
|
|
|
|
|
| (510 | ) |
|
| (19 | ) |
|
| (529 | ) |
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 24 |
|
|
| 24 |
|
|
|
|
|
|
| 24 |
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
| $ | (1 | ) |
|
| (1 | ) |
September 30, 2021 |
|
| 2 |
|
| $ | 2,387 |
|
|
| 810 |
|
| $ | 21,573 |
|
| $ | 4,562 |
|
| $ | (1,616 | ) |
| $ | 26,906 |
|
| $ | 326 |
|
| $ | 27,232 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2022 |
|
| 2 |
|
| $ | 1,783 |
|
|
| 832 |
|
| $ | 23,427 |
|
| $ | 4,483 |
|
| $ | (1,396 | ) |
| $ | 28,297 |
|
| $ | — |
|
| $ | 28,297 |
|
Net income including noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 778 |
|
|
|
|
|
|
| 778 |
|
|
|
|
|
|
| 778 |
|
Issuance of stock |
|
|
|
|
|
|
|
|
|
| 1 |
|
|
| 44 |
|
|
|
|
|
|
|
|
|
|
| 44 |
|
|
|
|
|
|
| 44 |
|
Stock awards (net of change in unearned compensation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9 |
|
|
|
|
|
|
|
|
|
|
| 9 |
|
|
|
|
|
|
| 9 |
|
Preferred stock dividends (see Note 16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (20 | ) |
|
|
|
|
|
| (20 | ) |
|
|
|
|
|
| (20 | ) |
Common stock dividends ($0.6675 per share) and distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (557 | ) |
|
|
|
|
|
| (557 | ) |
|
|
|
|
|
| (557 | ) |
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 22 |
|
|
| 22 |
|
|
|
|
|
|
| 22 |
|
September 30, 2022 |
|
| 2 |
|
| $ | 1,783 |
|
|
| 833 |
|
| $ | 23,480 |
|
| $ | 4,684 |
|
| $ | (1,374 | ) |
| $ | 28,573 |
|
| $ | — |
|
| $ | 28,573 |
|
The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.
12
DOMINION ENERGY, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
YEAR-TO-DATE
|
| Preferred Stock |
|
| Common Stock |
|
| Dominion Energy Shareholders |
|
| Total |
|
|
|
|
|
|
|
|
| ||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Retained Earnings |
|
| AOCI |
|
| Shareholders' Equity |
|
| Noncontrolling Interests |
|
| Total Equity |
| |||||||||
(millions, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020 |
|
| 2 |
|
| $ | 2,387 |
|
|
| 806 |
|
| $ | 21,258 |
|
| $ | 4,189 |
|
| $ | (1,717 | ) |
| $ | 26,117 |
|
| $ | 344 |
|
| $ | 26,461 |
|
Net income including noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,947 |
|
|
|
|
|
|
| 1,947 |
|
|
| 22 |
|
|
| 1,969 |
|
Issuance of stock |
|
|
|
|
|
|
|
|
|
| 4 |
|
|
| 292 |
|
|
|
|
|
|
|
|
|
|
| 292 |
|
|
|
|
|
|
| 292 |
|
Stock awards (net of change in unearned compensation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 24 |
|
|
|
|
|
|
|
|
|
|
| 24 |
|
|
|
|
|
|
| 24 |
|
Preferred stock dividends (see Note 16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (48 | ) |
|
|
|
|
|
| (48 | ) |
|
|
|
|
|
| (48 | ) |
Common stock dividends ($1.890 per common share) and distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1,526 | ) |
|
|
|
|
|
| (1,526 | ) |
|
| (40 | ) |
|
| (1,566 | ) |
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 101 |
|
|
| 101 |
|
|
|
|
|
|
| 101 |
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1 | ) |
|
|
|
|
|
|
|
|
|
| (1 | ) |
|
|
|
|
|
| (1 | ) |
September 30, 2021 |
|
| 2 |
|
| $ | 2,387 |
|
|
| 810 |
|
| $ | 21,573 |
|
| $ | 4,562 |
|
| $ | (1,616 | ) |
| $ | 26,906 |
|
| $ | 326 |
|
| $ | 27,232 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021 |
|
| 2 |
|
| $ | 1,783 |
|
|
| 810 |
|
| $ | 21,610 |
|
| $ | 5,373 |
|
| $ | (1,458 | ) |
| $ | 27,308 |
|
| $ | — |
|
| $ | 27,308 |
|
Net income including noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,036 |
|
|
|
|
|
|
| 1,036 |
|
|
|
|
|
|
| 1,036 |
|
Issuance of stock |
|
|
|
|
|
|
|
|
|
| 23 |
|
|
| 1,847 |
|
|
|
|
|
|
|
|
|
|
| 1,847 |
|
|
|
|
|
|
| 1,847 |
|
Stock awards (net of change in unearned compensation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 23 |
|
|
|
|
|
|
|
|
|
|
| 23 |
|
|
|
|
|
|
| 23 |
|
Preferred stock dividends (see Note 16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (72 | ) |
|
|
|
|
|
| (72 | ) |
|
|
|
|
|
| (72 | ) |
Common stock dividends ($2.025 per share) and distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1,653 | ) |
|
|
|
|
|
| (1,653 | ) |
|
|
|
|
|
| (1,653 | ) |
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 84 |
|
|
| 84 |
|
|
|
|
|
|
| 84 |
|
September 30, 2022 |
|
| 2 |
|
| $ | 1,783 |
|
|
| 833 |
|
| $ | 23,480 |
|
| $ | 4,684 |
|
| $ | (1,374 | ) |
| $ | 28,573 |
|
| $ | — |
|
| $ | 28,573 |
|
The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.
14
DOMINION ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31, |
| 2022 |
|
| 2021 |
| ||||||||||
Nine Months Ended September 30, |
| 2022 |
|
| 2021 |
| ||||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income including noncontrolling interests |
| $ | 711 |
|
| $ | 1,008 |
|
| $ | 1,036 |
|
| $ | 1,969 |
|
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization (including nuclear fuel) |
|
| 773 |
|
|
| 685 |
|
|
| 2,334 |
|
|
| 2,058 |
|
Deferred income taxes and investment tax credits |
|
| 246 |
|
|
| 216 |
|
|
| 269 |
|
|
| 199 |
|
Impairment of assets and other charges (benefits) |
|
| (13 | ) |
|
| 95 |
| ||||||||
Gains on sales of assets and equity method investments |
|
| (34 | ) |
|
| — |
| ||||||||
Provision for refunds to electric utility customers |
|
| — |
|
|
| 350 |
| ||||||||
Impairment of assets and other charges |
|
| 394 |
|
|
| 194 |
| ||||||||
Losses (gains) on sales of assets and equity method investments |
|
| 601 |
|
|
| — |
| ||||||||
Net (gains) losses on nuclear decommissioning trust funds and other investments |
|
| 113 |
|
|
| (152 | ) |
|
| 658 |
|
|
| (370 | ) |
Other adjustments |
|
| (72 | ) |
|
| 153 |
|
|
| (85 | ) |
|
| 273 |
|
Changes in: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
| 28 |
|
|
| 185 |
|
|
| (56 | ) |
|
| 207 |
|
Inventories |
|
| 80 |
|
|
| 73 |
|
|
| (206 | ) |
|
| (45 | ) |
Deferred fuel and purchased gas costs, net |
|
| (256 | ) |
|
| (149 | ) |
|
| (1,525 | ) |
|
| (531 | ) |
Prepayments |
|
| 21 |
|
|
| 24 |
|
|
| (103 | ) |
|
| (121 | ) |
Accounts payable |
|
| 52 |
|
|
| 21 |
|
|
| (54 | ) |
|
| (29 | ) |
Accrued interest, payroll and taxes |
|
| (192 | ) |
|
| (177 | ) |
|
| 28 |
|
|
| 51 |
|
Customer deposits |
|
| (1 | ) |
|
| (9 | ) | ||||||||
Margin deposit assets and liabilities |
|
| (52 | ) |
|
| (60 | ) |
|
| (152 | ) |
|
| (539 | ) |
Net realized and unrealized changes related to derivative activities |
|
| 29 |
|
|
| (218 | ) |
|
| 114 |
|
|
| 432 |
|
Pension and other postretirement benefits |
|
| (117 | ) |
|
| (44 | ) |
|
| (344 | ) |
|
| (103 | ) |
Other operating assets and liabilities |
|
| (191 | ) |
|
| (199 | ) |
|
| (238 | ) |
|
| (460 | ) |
Net cash provided by operating activities |
|
| 1,125 |
|
|
| 1,452 |
|
|
| 2,671 |
|
|
| 3,535 |
|
Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant construction and other property additions (including nuclear fuel) |
|
| (1,622 | ) |
|
| (1,328 | ) |
|
| (5,251 | ) |
|
| (4,142 | ) |
Acquisition of solar development projects |
|
| (37 | ) |
|
| (23 | ) |
|
| (139 | ) |
|
| (87 | ) |
Proceeds from sale of Hope |
|
| 722 |
|
|
| — |
| ||||||||
Proceeds from sales of securities |
|
| 814 |
|
|
| 1,765 |
|
|
| 2,686 |
|
|
| 3,324 |
|
Purchases of securities |
|
| (824 | ) |
|
| (1,765 | ) |
|
| (2,479 | ) |
|
| (3,288 | ) |
Repayment of Q-Pipe Transaction deposit |
|
| — |
|
|
| (1,265 | ) | ||||||||
Proceeds from sale of assets and equity method investments |
|
| 146 |
|
|
| — |
|
|
| 146 |
|
|
| — |
|
Contributions to equity method affiliates |
|
| (15 | ) |
|
| (977 | ) |
|
| (34 | ) |
|
| (1,006 | ) |
Short-term deposit |
|
| (2,000 | ) |
|
| — |
| ||||||||
Return of short-term deposit |
|
| 2,000 |
|
|
| — |
| ||||||||
Other |
|
| (36 | ) |
|
| 20 |
|
|
| (170 | ) |
|
| (143 | ) |
Net cash used in investing activities |
|
| (1,574 | ) |
|
| (2,308 | ) |
|
| (4,519 | ) |
|
| (6,607 | ) |
Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of short-term debt, net |
|
| 234 |
|
|
| 1,921 |
|
|
| 629 |
|
|
| 2,990 |
|
Issuance of short-term notes |
|
| — |
|
|
| 1,265 |
| ||||||||
Repayment of supplemental 364-day credit facility borrowings |
|
| — |
|
|
| (225 | ) |
|
| — |
|
|
| (225 | ) |
Issuance of long-term debt |
|
| 1,000 |
|
|
| 150 |
| ||||||||
Repayment of long-term debt |
|
| (39 | ) |
|
| (161 | ) | ||||||||
Issuance and remarketing of long-term debt |
|
| 3,588 |
|
|
| 2,500 |
| ||||||||
Repayment and repurchase of long-term debt |
|
| (1,213 | ) |
|
| (2,708 | ) | ||||||||
Supplemental credit facility borrowings |
|
| 900 |
|
|
| 900 |
| ||||||||
Repayment of supplemental credit facility borrowings |
|
| (450 | ) |
|
| — |
| ||||||||
Series A Preferred Stock redemption |
|
| (1,610 | ) |
|
| — |
| ||||||||
Issuance of common stock |
|
| 45 |
|
|
| 48 |
|
|
| 1,744 |
|
|
| 144 |
|
Common dividend payments |
|
| (541 | ) |
|
| (508 | ) |
|
| (1,653 | ) |
|
| (1,526 | ) |
Other |
|
| (64 | ) |
|
| (54 | ) |
|
| (155 | ) |
|
| (248 | ) |
Net cash provided by financing activities |
|
| 635 |
|
|
| 1,171 |
|
|
| 1,780 |
|
|
| 3,092 |
|
Increase in cash, restricted cash and equivalents |
|
| 186 |
|
|
| 315 |
| ||||||||
Increase (decrease) in cash, restricted cash and equivalents |
|
| (68 | ) |
|
| 20 |
| ||||||||
Cash, restricted cash and equivalents at beginning of period |
|
| 408 |
|
|
| 247 |
|
|
| 408 |
|
|
| 247 |
|
Cash, restricted cash and equivalents at end of period |
| $ | 594 |
|
| $ | 562 |
|
| $ | 340 |
|
| $ | 267 |
|
See Note 2 for disclosure of supplemental cash flow information.
The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.
1315
VIRGINIA ELECTRIC AND POWER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
| Three Months Ended March 31, |
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| |||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenue(1) |
| $ | 2,167 |
|
| $ | 1,830 |
| ||||||||||||||||
Operating Revenue(1) |
| $ | 2,875 |
|
| $ | 1,976 |
|
| $ | 7,217 |
|
| $ | 5,547 |
| ||||||||
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric fuel and other energy-related purchases(1) |
|
| 516 |
|
|
| 406 |
| ||||||||||||||||
Purchased (excess) electric capacity |
|
| 11 |
|
|
| (3 | ) | ||||||||||||||||
Electric fuel and other energy-related purchases(1) |
|
| 981 |
|
|
| 515 |
|
|
| 2,030 |
|
|
| 1,270 |
| ||||||||
Purchased electric capacity |
|
| 11 |
|
|
| 15 |
|
|
| 33 |
|
|
| 16 |
| ||||||||
Other operations and maintenance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliated suppliers |
|
| 91 |
|
|
| 87 |
|
|
| 81 |
|
|
| 77 |
|
|
| 256 |
|
|
| 242 |
|
Other |
|
| 479 |
|
|
| 426 |
|
|
| 450 |
|
|
| 393 |
|
|
| 1,323 |
|
|
| 1,140 |
|
Depreciation and amortization |
|
| 429 |
|
|
| 324 |
|
|
| 451 |
|
|
| 343 |
|
|
| 1,305 |
|
|
| 990 |
|
Other taxes |
|
| 75 |
|
|
| 93 |
|
|
| 80 |
|
|
| 86 |
|
|
| 238 |
|
|
| 262 |
|
Impairment of assets and other charges (benefit) |
|
| 4 |
|
|
| (51 | ) |
|
| 19 |
|
|
| (230 | ) |
|
| 432 |
|
|
| (269 | ) |
Total operating expenses |
|
| 1,605 |
|
|
| 1,282 |
|
|
| 2,073 |
|
|
| 1,199 |
|
|
| 5,617 |
|
|
| 3,651 |
|
Income from operations |
|
| 562 |
|
|
| 548 |
|
|
| 802 |
|
|
| 777 |
|
|
| 1,600 |
|
|
| 1,896 |
|
Other income |
|
| 4 |
|
|
| 32 |
| ||||||||||||||||
Interest and related charges(1) |
|
| 148 |
|
|
| 136 |
| ||||||||||||||||
Other income (expense) |
|
| 3 |
|
|
| 21 |
|
|
| (37 | ) |
|
| 93 |
| ||||||||
Interest and related charges(1) |
|
| 168 |
|
|
| 136 |
|
|
| 461 |
|
|
| 400 |
| ||||||||
Income before income tax expense |
|
| 418 |
|
|
| 444 |
|
|
| 637 |
|
|
| 662 |
|
|
| 1,102 |
|
|
| 1,589 |
|
Income tax expense |
|
| 61 |
|
|
| 70 |
|
|
| 66 |
|
|
| 106 |
|
|
| 127 |
|
|
| 245 |
|
Net Income |
| $ | 357 |
|
| $ | 374 |
|
| $ | 571 |
|
| $ | 556 |
|
| $ | 975 |
|
| $ | 1,344 |
|
(1) | See Note 19 for amounts attributable to affiliates. |
The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.
VIRGINIA ELECTRIC AND POWER COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
|
| Three Months Ended March 31, |
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| |||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| $ | 357 |
|
| $ | 374 |
|
| $ | 571 |
|
| $ | 556 |
|
| $ | 975 |
|
| $ | 1,344 |
|
Other comprehensive income (loss), net of taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net deferred gains (losses) on derivatives-hedging activities(1) |
|
| 19 |
|
|
| 32 |
| ||||||||||||||||
Changes in unrealized net gains (losses) on nuclear decommissioning trust funds(2) |
|
| (7 | ) |
|
| (5 | ) | ||||||||||||||||
Amounts reclassified to net income (loss): |
|
|
|
|
|
|
|
| ||||||||||||||||
Net derivative (gains) losses-hedging activities(3) |
|
| 1 |
|
|
| 1 |
| ||||||||||||||||
Net realized (gains) losses on nuclear decommissioning trust funds(4) |
|
| (1 | ) |
|
| 1 |
| ||||||||||||||||
Total other comprehensive income |
|
| 12 |
|
|
| 29 |
| ||||||||||||||||
Net deferred gains (losses) on derivatives-hedging activities(1) |
|
| 13 |
|
|
| (2 | ) |
|
| 57 |
|
|
| 18 |
| ||||||||
Changes in unrealized net gains (losses) on nuclear decommissioning trust funds(2) |
|
| (4 | ) |
|
| — |
|
|
| (14 | ) |
|
| (2 | ) | ||||||||
Amounts reclassified to net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net derivative (gains) losses-hedging activities(3) |
|
| — |
|
|
| — |
|
|
| 1 |
|
|
| 1 |
| ||||||||
Net realized (gains) losses on nuclear decommissioning trust funds(4) |
|
| — |
|
|
| (1 | ) |
|
| (1 | ) |
|
| (1 | ) | ||||||||
Total other comprehensive income (loss) |
|
| 9 |
|
|
| (3 | ) |
|
| 43 |
|
|
| 16 |
| ||||||||
Comprehensive income |
| $ | 369 |
|
| $ | 403 |
|
| $ | 580 |
|
| $ | 553 |
|
| $ | 1,018 |
|
| $ | 1,360 |
|
(1) | Net of |
(2) | Net of |
(3) | Net of |
(4) | Net of $— million and $— million tax for the three months ended |
The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.
VIRGINIA ELECTRIC AND POWER COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
| March 31, 2022 |
|
| December 31, 2021(1) |
|
| September 30, 2022 |
|
| December 31, 2021(1) |
| ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 36 |
|
| $ | 26 |
|
| $ | 18 |
|
| $ | 26 |
|
Customer receivables (less allowance for doubtful accounts of $28 at both dates) |
|
| 1,120 |
|
|
| 1,172 |
|
|
| 1,443 |
|
|
| 1,172 |
|
Other receivables (less allowance for doubtful accounts of $2 at both dates) |
|
| 83 |
|
|
| 112 |
|
|
| 73 |
|
|
| 112 |
|
Affiliated receivables |
|
| 98 |
|
|
| 37 |
|
|
| 84 |
|
|
| 37 |
|
Inventories (average cost method) |
|
| 837 |
|
|
| 871 |
|
|
| 905 |
|
|
| 871 |
|
Margin deposit assets |
|
| 292 |
|
|
| 167 |
|
|
| 498 |
|
|
| 167 |
|
Derivative assets(2) |
|
| 363 |
|
|
| 76 |
| ||||||||
Regulatory assets |
|
| 952 |
|
|
| 850 |
|
|
| 1,136 |
|
|
| 850 |
|
Other(2) |
|
| 238 |
|
|
| 115 |
| ||||||||
Other |
|
| 139 |
|
|
| 39 |
| ||||||||
Total current assets |
|
| 3,656 |
|
|
| 3,350 |
|
|
| 4,659 |
|
|
| 3,350 |
|
Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nuclear decommissioning trust funds |
|
| 3,577 |
|
|
| 3,734 |
|
|
| 3,004 |
|
|
| 3,734 |
|
Other |
|
| 3 |
|
|
| 3 |
|
|
| 3 |
|
|
| 3 |
|
Total investments |
|
| 3,580 |
|
|
| 3,737 |
|
|
| 3,007 |
|
|
| 3,737 |
|
Property, Plant and Equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
| 50,725 |
|
|
| 49,890 |
|
|
| 53,149 |
|
|
| 49,890 |
|
Accumulated depreciation and amortization |
|
| (15,472 | ) |
|
| (15,234 | ) |
|
| (16,028 | ) |
|
| (15,234 | ) |
Total property, plant and equipment, net |
|
| 35,253 |
|
|
| 34,656 |
|
|
| 37,121 |
|
|
| 34,656 |
|
Deferred Charges and Other Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory assets |
|
| 4,141 |
|
|
| 4,130 |
|
|
| 4,518 |
|
|
| 4,130 |
|
Other(2) |
|
| 2,160 |
|
|
| 2,059 |
| ||||||||
Other(2) |
|
| 2,683 |
|
|
| 2,059 |
| ||||||||
Total deferred charges and other assets |
|
| 6,301 | �� |
|
| 6,189 |
|
|
| 7,201 |
|
|
| 6,189 |
|
Total assets |
| $ | 48,790 |
|
| $ | 47,932 |
|
| $ | 51,988 |
|
| $ | 47,932 |
|
(1) | Virginia Power’s Consolidated Balance Sheet at December 31, 2021 has been derived from the audited Consolidated Balance Sheet at that date. |
(2) | See Note 19 for amounts attributable to affiliates. |
The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.
1618
VIRGINIA ELECTRIC AND POWER COMPANY
CONSOLIDATED BALANCE SHEETS—(Continued)
(Unaudited)
|
| March 31, 2022 |
|
| December 31, 2021(1) |
|
| September 30, 2022 |
|
| December 31, 2021(1) |
| ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDER’S EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities due within one year |
| $ | 1,013 |
|
| $ | 313 |
|
| $ | 715 |
|
| $ | 313 |
|
Short-term debt |
|
| 686 |
|
|
| 745 |
|
|
| 1,009 |
|
|
| 745 |
|
Accounts payable |
|
| 423 |
|
|
| 402 |
|
|
| 478 |
|
|
| 402 |
|
Payables to affiliates |
|
| 190 |
|
|
| 121 |
|
|
| 168 |
|
|
| 121 |
|
Affiliated current borrowings |
|
| 235 |
|
|
| 699 |
|
|
| 784 |
|
|
| 699 |
|
Accrued interest, payroll and taxes |
|
| 331 |
|
|
| 274 |
|
|
| 408 |
|
|
| 274 |
|
Asset retirement obligations |
|
| 303 |
|
|
| 191 |
| ||||||||
Regulatory liabilities |
|
| 460 |
|
|
| 647 |
|
|
| 648 |
|
|
| 647 |
|
Derivative liabilities(2) |
|
| 241 |
|
|
| 134 |
| ||||||||
Derivative liabilities(2) |
|
| 442 |
|
|
| 134 |
| ||||||||
Other |
|
| 770 |
|
|
| 758 |
|
|
| 744 |
|
|
| 567 |
|
Total current liabilities |
|
| 4,349 |
|
|
| 4,093 |
|
|
| 5,699 |
|
|
| 4,093 |
|
Long-Term Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
| 13,733 |
|
|
| 13,453 |
|
|
| 14,914 |
|
|
| 13,453 |
|
Other |
|
| 504 |
|
|
| 503 |
|
|
| 509 |
|
|
| 503 |
|
Total long-term debt |
|
| 14,237 |
|
|
| 13,956 |
|
|
| 15,423 |
|
|
| 13,956 |
|
Deferred Credits and Other Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income taxes and investment tax credits |
|
| 3,323 |
|
|
| 3,183 |
|
|
| 3,435 |
|
|
| 3,183 |
|
Asset retirement obligations |
|
| 3,728 |
|
|
| 3,732 |
|
|
| 3,687 |
|
|
| 3,732 |
|
Regulatory liabilities |
|
| 5,603 |
|
|
| 5,740 |
|
|
| 5,269 |
|
|
| 5,740 |
|
Other(2) |
|
| 1,202 |
|
|
| 1,248 |
| ||||||||
Other(2) |
|
| 1,477 |
|
|
| 1,248 |
| ||||||||
Total deferred credits and other liabilities |
|
| 13,856 |
|
|
| 13,903 |
|
|
| 13,868 |
|
|
| 13,903 |
|
Total liabilities |
|
| 32,442 |
|
|
| 31,952 |
|
|
| 34,990 |
|
|
| 31,952 |
|
Commitments and Contingencies (see Note 17) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shareholder’s Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock – no par(3) |
|
| 5,738 |
|
|
| 5,738 |
| ||||||||
Common stock – no par(3) |
|
| 5,738 |
|
|
| 5,738 |
| ||||||||
Other paid-in capital |
|
| 1,113 |
|
|
| 1,113 |
|
|
| 1,113 |
|
|
| 1,113 |
|
Retained earnings |
|
| 9,526 |
|
|
| 9,170 |
|
|
| 10,145 |
|
|
| 9,170 |
|
Accumulated other comprehensive loss |
|
| (29 | ) |
|
| (41 | ) | ||||||||
Accumulated other comprehensive income (loss) |
|
| 2 |
|
|
| (41 | ) | ||||||||
Total common shareholder’s equity |
|
| 16,348 |
|
|
| 15,980 |
|
|
| 16,998 |
|
|
| 15,980 |
|
Total liabilities and shareholder’s equity |
| $ | 48,790 |
|
| $ | 47,932 |
|
| $ | 51,988 |
|
| $ | 47,932 |
|
(1) | Virginia Power’s Consolidated Balance Sheet at December 31, 2021 has been derived from the audited Consolidated Balance Sheet at that date. |
(2) | See Note 19 for amounts attributable to affiliates. |
(3) | 500,000 shares authorized; 274,723 shares outstanding at |
The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.
1719
VIRGINIA ELECTRIC AND POWER COMPANY
CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDER’S EQUITY
(Unaudited)
QUARTER-TO-DATE
|
| Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
| Shares |
|
| Amount |
|
| Other Paid-In Capital |
|
| Retained Earnings |
|
| AOCI |
|
| Total |
| ||||||
(millions, except for shares) |
| (thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
December 31, 2020 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 7,758 |
|
| $ | (52 | ) |
| $ | 14,557 |
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 374 |
|
|
|
|
|
|
| 374 |
|
Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (150 | ) |
|
|
|
|
|
| (150 | ) |
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 29 |
|
|
| 29 |
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1 |
|
|
|
|
|
|
| 1 |
|
March 31, 2021 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 7,983 |
|
| $ | (23 | ) |
| $ | 14,811 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 9,170 |
|
| $ | (41 | ) |
| $ | 15,980 |
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 357 |
|
|
|
|
|
|
| 357 |
|
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 12 |
|
|
| 12 |
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1 | ) |
|
|
|
|
|
| (1 | ) |
March 31, 2022 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 9,526 |
|
| $ | (29 | ) |
| $ | 16,348 |
|
|
| Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
| Shares |
|
| Amount |
|
| Other Paid-In Capital |
|
| Retained Earnings |
|
| AOCI |
|
| Total |
| ||||||
(millions, except for shares) |
| (thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
June 30, 2021 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 8,246 |
|
| $ | (33 | ) |
| $ | 15,064 |
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 556 |
|
|
|
|
|
|
| 556 |
|
Other comprehensive loss, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (3 | ) |
|
| (3 | ) |
September 30, 2021 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 8,802 |
|
| $ | (36 | ) |
| $ | 15,617 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2022 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 9,574 |
|
| $ | (7 | ) |
| $ | 16,418 |
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 571 |
|
|
|
|
|
|
| 571 |
|
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9 |
|
|
| 9 |
|
September 30, 2022 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 10,145 |
|
| $ | 2 |
|
| $ | 16,998 |
|
YEAR-TO-DATE
|
| Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
| Shares |
|
| Amount |
|
| Other Paid-In Capital |
|
| Retained Earnings |
|
| AOCI |
|
| Total |
| ||||||
(millions, except for shares) |
| (thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
December 31, 2020 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 7,758 |
|
| $ | (52 | ) |
| $ | 14,557 |
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,344 |
|
|
|
|
|
|
| 1,344 |
|
Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (300 | ) |
|
|
|
|
|
| (300 | ) |
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 16 |
|
|
| 16 |
|
September 30, 2021 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 8,802 |
|
| $ | (36 | ) |
| $ | 15,617 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 9,170 |
|
| $ | (41 | ) |
| $ | 15,980 |
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 975 |
|
|
|
|
|
|
| 975 |
|
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 43 |
|
|
| 43 |
|
September 30, 2022 |
|
| 275 |
|
| $ | 5,738 |
|
| $ | 1,113 |
|
| $ | 10,145 |
|
| $ | 2 |
|
| $ | 16,998 |
|
The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.
1820
VIRGINIA ELECTRIC AND POWER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31, |
| 2022 |
|
| 2021 |
| ||||||||||
Nine Months Ended September 30, |
| 2022 |
|
| 2021 |
| ||||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| $ | 357 |
|
| $ | 374 |
|
| $ | 975 |
|
| $ | 1,344 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization (including nuclear fuel) |
|
| 425 |
|
|
| 365 |
|
|
| 1,428 |
|
|
| 1,109 |
|
Deferred income taxes and investment tax credits |
|
| 105 |
|
|
| 87 |
|
|
| 183 |
|
|
| 198 |
|
Impairment of assets and other charges (benefit) |
|
| — |
|
|
| (51 | ) |
|
| 403 |
|
|
| (269 | ) |
Provision for refunds to customers |
|
| — |
|
|
| 350 |
| ||||||||
Net (gains) losses on nuclear decommissioning trust funds and other investments |
|
| 89 |
|
|
| (46 | ) | ||||||||
Other adjustments |
|
| 3 |
|
|
| 115 |
|
|
| (46 | ) |
|
| 127 |
|
Changes in: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
| 76 |
|
|
| 173 |
|
|
| (351 | ) |
|
| (98 | ) |
Affiliated receivables and payables |
|
| 9 |
|
|
| (144 | ) |
|
| 1 |
|
|
| (123 | ) |
Inventories |
|
| 34 |
|
|
| 21 |
|
|
| (34 | ) |
|
| 36 |
|
Prepayments |
|
| 3 |
|
|
| (4 | ) |
|
| (4 | ) |
|
| (5 | ) |
Deferred fuel expenses, net |
|
| (297 | ) |
|
| (159 | ) |
|
| (1,207 | ) |
|
| (396 | ) |
Accounts payable |
|
| 90 |
|
|
| — |
|
|
| 90 |
|
|
| 66 |
|
Accrued interest, payroll and taxes |
|
| 57 |
|
|
| 54 |
|
|
| 134 |
|
|
| 121 |
|
Margin deposit assets and liabilities |
|
| (125 | ) |
|
| 2 |
|
|
| (331 | ) |
|
| (121 | ) |
Net realized and unrealized changes related to derivative activities |
|
| 88 |
|
|
| 8 |
| ||||||||
Other operating assets and liabilities |
|
| (52 | ) |
|
| (49 | ) |
|
| (24 | ) |
|
| (61 | ) |
Net cash provided by operating activities |
|
| 685 |
|
|
| 784 |
|
|
| 1,394 |
|
|
| 2,240 |
|
Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant construction and other property additions |
|
| (1,037 | ) |
|
| (766 | ) |
|
| (3,322 | ) |
|
| (2,525 | ) |
Purchases of nuclear fuel |
|
| (27 | ) |
|
| (46 | ) |
|
| (169 | ) |
|
| (73 | ) |
Acquisition of solar development projects |
|
| (37 | ) |
|
| (10 | ) |
|
| (51 | ) |
|
| (61 | ) |
Proceeds from sales of securities |
|
| 392 |
|
|
| 789 |
|
|
| 1,289 |
|
|
| 1,465 |
|
Purchases of securities |
|
| (415 | ) |
|
| (791 | ) |
|
| (1,334 | ) |
|
| (1,470 | ) |
Other |
|
| (5 | ) |
|
| 41 |
|
|
| (10 | ) |
|
| (45 | ) |
Net cash used in investing activities |
|
| (1,129 | ) |
|
| (783 | ) |
|
| (3,597 | ) |
|
| (2,709 | ) |
Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance (repayment) of short-term debt, net |
|
| (59 | ) |
|
| 375 |
| ||||||||
Repayment of affiliated current borrowings, net |
|
| (464 | ) |
|
| (203 | ) | ||||||||
Issuance of long-term debt, net |
|
| 1,000 |
|
|
| — |
| ||||||||
Issuance of short-term debt, net |
|
| 264 |
|
|
| 851 |
| ||||||||
Issuance (repayment) of affiliated current borrowings, net |
|
| 85 |
|
|
| (70 | ) | ||||||||
Issuance and remarketing of long-term debt |
|
| 2,338 |
|
|
| — |
| ||||||||
Repayment and repurchase of long-term debt |
|
| (438 | ) |
|
| — |
| ||||||||
Common dividend payments to parent |
|
| — |
|
|
| (150 | ) |
|
| — |
|
|
| (300 | ) |
Other |
|
| (23 | ) |
|
| (2 | ) |
|
| (52 | ) |
|
| (8 | ) |
Net cash provided by financing activities |
|
| 454 |
|
|
| 20 |
|
|
| 2,197 |
|
|
| 473 |
|
Increase in cash, restricted cash and equivalents |
|
| 10 |
|
|
| 21 |
| ||||||||
Increase (decrease) in cash, restricted cash and equivalents |
|
| (6 | ) |
|
| 4 |
| ||||||||
Cash, restricted cash and equivalents at beginning of period |
|
| 26 |
|
|
| 35 |
|
|
| 26 |
|
|
| 35 |
|
Cash, restricted cash and equivalents at end of period |
| $ | 36 |
|
| $ | 56 |
|
| $ | 20 |
|
| $ | 39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Note 2 for disclosure of supplemental cash flow information.
The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Nature of Operations
Dominion Energy, headquartered in Richmond, Virginia, is one of the nation’s largest producers and distributors of energy. Dominion Energy’s operations are conducted through various subsidiaries, including Virginia Power. Dominion Energy’s operations also include DESC, regulated gas distribution operations primarily in the eastern and Rocky Mountain regions of the U.S., nonregulated electric generation and a noncontrolling interest in Cove Point.
Note 2. Significant Accounting Policies
As permitted by the rules and regulations of the SEC, the Companies’ accompanying unaudited Consolidated Financial Statements contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with GAAP. These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.
In the Companies’ opinion, the accompanying unaudited Consolidated Financial Statements contain all adjustments necessary to present fairly their financial position at March 31,September 30, 2022, and their results of operations and changes in equity for the three and nine months ended September 30, 2022 and 2021 and their cash flows for the threenine months ended March 31,September 30, 2022 and 2021. Such adjustments are normal and recurring in nature unless otherwise noted.
The Companies make certain estimates and assumptions in preparing their Consolidated Financial Statements in accordance with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods presented. Actual results may differ from those estimates.
The Companies’ accompanying unaudited Consolidated Financial Statements include, after eliminating intercompany transactions and balances, their accounts, those of their respective majority-owned subsidiaries and non-wholly-owned entities in which they have a controlling financial interest. For certain partnership structures, income is allocated based on the liquidation value of the underlying contractual arrangements. Clearway’s ownership interest in Four Brothers and Three Cedars (through December 2021) and Terra Nova Renewable Partners’ 33% interest in certain Dominion Energy nonregulated solar projects (through December 2021) are reflected as noncontrolling interest in Dominion Energy’s Consolidated Financial Statements. See Note 10 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 for additional information.
The results of operations for interim periods are not necessarily indicative of the results expected for the full year. Information for quarterly periods is affected by seasonal variations in sales, rate changes, electric fuel and other energy-related purchases, purchased gas expenses and other factors.
Certain amounts in the Companies’ 2021 Consolidated Financial Statements and Notes have been reclassified to conform to the 2022 presentation for comparative purposes; however, such reclassifications did not affect the Companies’ net income, total assets, liabilities, equity or cash flows. Effective in the second quarter of 2021, the Companies updated their Statements of Cash Flows to present net charges for allowance for credit risk and write-offs of accounts receivables within other adjustments to reconcile net income to net cash provided by operating activities from the previous presentation within changes in accounts receivable. All prior period information has been conformed to this presentation, which does not result in a change to net cash provided by operating activities.
Amounts disclosed for Dominion Energy are inclusive of Virginia Power, where applicable. There have been no significant changes from Note 2 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021, with the exception of the items described below.
2022
Cash, Restricted Cash and Equivalents
Restricted Cash and Equivalents
The following table provides a reconciliation of the total cash, restricted cash and equivalents reported within the Companies’ Consolidated Balance Sheets to the corresponding amounts reported within the Companies’ Consolidated Statements of Cash Flows for the threenine months ended March 31,September 30, 2022 and 2021:
|
| Cash, Restricted Cash and Equivalents at End of Period |
|
| Cash, Restricted Cash and Equivalents at Beginning of Period |
|
| Cash, Restricted Cash and Equivalents at End of Period |
|
| Cash, Restricted Cash and Equivalents at Beginning of Period |
| ||||||||||||||||||||
|
| March 31, 2022 |
|
| March 31, 2021 |
|
| December 31, 2021 |
|
| December 31, 2020 |
|
| September 30, 2022 |
|
| September 30, 2021 |
|
| December 31, 2021 |
|
| December 31, 2020 |
| ||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominion Energy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents(1) |
| $ | 446 |
|
| $ | 491 |
|
| $ | 283 |
|
| $ | 179 |
|
| $ | 163 |
|
| $ | 195 |
|
| $ | 283 |
|
| $ | 179 |
|
Restricted cash and equivalents(2)(3) |
|
| 148 |
|
|
| 71 |
|
|
| 125 |
|
|
| 68 |
|
|
| 177 |
|
|
| 72 |
|
|
| 125 |
|
|
| 68 |
|
Cash, restricted cash and equivalents shown in the Consolidated Statements of Cash Flows |
| $ | 594 |
|
| $ | 562 |
|
| $ | 408 |
|
| $ | 247 |
|
| $ | 340 |
|
| $ | 267 |
|
| $ | 408 |
|
| $ | 247 |
|
Virginia Power |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 36 |
|
| $ | 56 |
|
| $ | 26 |
|
| $ | 35 |
|
| $ | 18 |
|
| $ | 38 |
|
| $ | 26 |
|
| $ | 35 |
|
Restricted cash and equivalents(3) |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 2 |
|
|
| 1 |
|
|
| — |
|
|
| — |
|
Cash, restricted cash and equivalents shown in the Consolidated Statements of Cash Flows |
| $ | 36 |
|
| $ | 56 |
|
| $ | 26 |
|
| $ | 35 |
|
| $ | 20 |
|
| $ | 39 |
|
| $ | 26 |
|
| $ | 35 |
|
(1) | At |
(2) | At |
(3) | Restricted cash and |
Supplemental Cash Flow Information
The following table provides supplemental disclosure of cash flow information related to Dominion Energy:
|
| Three Months Ended March 31, |
|
| Nine Months Ended September 30, |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant noncash investing and financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued capital expenditures |
| $ | 425 |
|
| $ | 341 |
|
| $ | 745 |
|
| $ | 374 |
|
Leases |
|
| 24 |
|
|
| 9 |
|
|
| 129 |
|
|
| 75 |
|
(1) | See Note 10 for noncash investing activities related to the acquisition of a noncontrolling interest in Dominion Privatization and Notes 16 and 17 for noncash financing activities related to the remarketing of Series A Preferred Stock and the issuance of common stock and transfer of property associated with the settlement of litigation. |
(2) | Includes |
The following table provides supplemental disclosure of cash flow information related to Virginia Power:
|
| Three Months Ended March 31, |
|
| Nine Months Ended September 30, |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant noncash investing and financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued capital expenditures |
| $ | 252 |
|
| $ | 262 |
|
| $ | 454 |
|
| $ | 238 |
|
Leases(1) |
|
| 21 |
|
|
| 1 |
|
|
| 113 |
|
|
| 59 |
|
(1) | Includes |
23
Property, Plant and Equipment
In the first quarter of 2022, Virginia Power revised the depreciation rates for its assets to reflect the results of a new depreciation study. The change resulted in a decrease in depreciation expense in Virginia Power’s Consolidated Statements of Income of $15 million ($11 million after-tax) and $45 million ($33 million after-tax) for the three and nine months ended September 30, 2022, respectively, and an increase in Dominion Energy’s EPS of $0.01 and $0.04 for the three and nine months ended March 31, 2022.September 30, 2022, respectively. The
21
revision is expected to decrease Virginia Power’s annual depreciation expense by approximately $60 million ($45 million after-tax) and increase Dominion Energy’s EPS by approximately $0.05.
For the three and nine months ended September 30, 2022, Virginia Power recorded charges of $18 million ($14 million after-tax) and $60 million ($45 million after-tax), respectively, associated with dismantling certain coal- and oil-fired generating units retired before the end of their useful lives, recorded in impairment of assets and other charges (benefits) in its Consolidated Statements of Income.
Asset Retirement Obligations
In the second quarter of 2021, Dominion Energy revised its estimated cash flow projections associated with the recovery of spent nuclear fuel costs for its AROs associated with the decommissioning of Kewaunee. As a result, Dominion Energy recorded a charge of $44 million ($35 million after-tax) within other operations and maintenance expense in its Consolidated Statements of Income.
Note 3. Acquisitions and Dispositions
Disposition of Gas Transmission & Storage Operations
In December 2021, Dominion Energy completed the sale of the Q-Pipe Group to Southwest Gas, as discussed in Note 3 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In the first quarter of 2022, Dominion Energy recognized a gain of $27 million ($20 million after-tax) in discontinued operations in its Consolidated Statements of Income associated with finalization of working capital adjustments.
In connection with the closing of the sale of the Q-Pipe Group, Dominion Energy and Southwest Gas entered into a transition services agreement under which Dominion Energy will continue to provide specified administrative services to support the operations of the disposed businesses for up to 12 months after closing, subject to extension. Dominion Energy recorded $1$2 million and $5 million associated with the transition services agreement in operating revenue in the Consolidated Statements of Income for the three and nine months ended March 31, 2022.September 30, 2022, respectively.
The following table represents selected information regarding the results of operations, which were reported within discontinued operations in Dominion Energy’s Consolidated Statements of Income:
|
| Three Months Ended March 31, 2021 |
|
| Three Months Ended September 30, 2021 |
|
| Nine Months Ended September 30, 2021 |
| |||
|
| Q-Pipe Group |
|
| Q-Pipe Group |
|
| Q-Pipe Group |
| |||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue |
| $ | 67 |
|
| $ | 62 |
|
| $ | 188 |
|
Operating expense |
|
| 19 |
|
|
| 24 |
|
|
| 52 |
|
Other income(1) |
|
| 26 |
|
|
| 27 |
| ||||
Interest and related charges |
|
| 5 |
|
|
| 7 |
|
|
| 17 |
|
Income before income taxes |
|
| 43 |
| ||||||||
Income before income taxes(2) |
|
| 57 |
|
|
| 146 |
| ||||
Income tax expense |
|
| 8 |
|
|
| 12 |
|
|
| 29 |
|
Net income attributable to Dominion Energy |
| $ | 35 |
|
| $ | 45 |
|
| $ | 117 |
|
(1) | Includes a $25 million benefit associated with the termination of the Q-Pipe Transaction in the third quarter of 2021. |
(2) | Excludes $18 million income tax benefit recorded in the third quarter of 2021 associated with the GT&S Transaction. |
Capital expenditures and significant noncash items relating to the Q-Pipe Group included the following:
|
| Three Months Ended March 31, 2021 |
|
| Nine Months Ended September 30, 2021 |
| ||
(millions) |
|
|
|
|
|
|
|
|
Capital expenditures |
| $ | 3 |
|
| $ | 26 |
|
Significant noncash items: |
|
|
|
|
|
|
|
|
Accrued capital expenditures |
|
| 2 |
|
|
| 2 |
|
Sale of Hope
In February 2022, Dominion Energy entered into an agreement to sell 100% of the equity interests in Hope to Ullico for $690 million of cash consideration, subject to customary closing adjustments.adjustments, which closed in August 2022 after all customary closing and regulatory conditions were satisfied, including clearance under the Hart-Scott-Rodino Act and approval from the West Virginia Commission. The sale will beis treated as a stock sale for tax purposes and is expectedpurposes.
Upon closing, Dominion Energy recognized a pre-tax gain of $8 million, subject to close by the end of 2022, contingent on clearance or approval under the Hart-Scott-Rodino Act and from the West Virginia Commission, and other customary closing and regulatory conditions. In March 2022,adjustments, (net of $110 million write-off of goodwill which was not deductible for tax purposes) in losses (gains) on sales of assets in its Consolidated Statements of Income. The transaction resulted in an after-tax loss of $89 million. Upon meeting the waiting period under the Hart-Scott-Rodino Act expired. Alsoclassification as held for sale in March 2022, Dominion Energy filed for review and approval with the West Virginia Commission.
In the first quarter of 2022 and through the second quarter of 2022, Dominion Energy had recorded a chargecharges of $87$90 million in deferred income tax expense in its Consolidated Statements of Income to reflect the recognition of deferred taxes on the outside basis of Hope’s stock upon meeting the classification as held for sale. Thesestock. This deferred taxes will reverseincome tax expense reversed upon closing of the sale.sale and became a component of current income tax expense on the sale disclosed above. See Note 5 for additional information. FollowingIn addition, a curtailment was recorded related to other postretirement benefit plans as discussed in Note 20.
All activity related to Hope prior, or not related, to closing, of the sale, Dominion Energy expects to recognize a pre-tax gain of approximately $60 million, subject to customary closing adjustments, (net of $108 million write-off of goodwill which is not deductible for tax purposes) and an after-tax loss of approximately $40 million.
22
At March 31, 2022, the assets and liabilities of Hope, included in Gas Distribution, are classified as held for sale and reflected in current assets held for sale and current liabilities held for sale, respectively, in Dominion Energy’s Consolidated Balance Sheets. The carrying amounts of major classes of assets and liabilities classified as held for sale in Dominion Energy’s Consolidated Balance Sheets are as follows:Distribution.
| March 31, 2022 |
| |
(millions) |
|
|
|
Current assets | $ | 58 |
|
Property, plant and equipment, net |
| 481 |
|
Other deferred charges and other assets, including goodwill(1) and intangible assets |
| 305 |
|
Current liabilities |
| 39 |
|
Long-term debt |
| 2 |
|
Deferred credits and other liabilities |
| 174 |
|
|
|
Sale of Kewaunee
In May 2021, Dominion Energy entered into an agreement to sell 100% of the equity interests in Dominion Energy Kewaunee, Inc. to EnergySolutions, including the transfer of all decommissioning obligations associated with Kewaunee, which ceased operations in 2013. The agreement provides thatsale closed in June 2022 following approval from the Wisconsin Commission in May 2022 and NRC approval of a requested license transfer in March 2022. The sale is treated as an asset sale for tax purposes and Dominion Energy retainsretained the assets and obligations of the pension and other postretirement employee benefit plans. In addition, Dominion Energy may continue to withdraw funds prior to closing from the nuclear decommissioning trust to recover certain spent nuclear fuel and other permitted costs, subject to certain conditions. The sale will be treated as an asset sale for tax purposes andEnergySolutions is subject to termination by either party if not completed by December 2022. Closing is contingent on approval from the Wisconsin Commission as well as the NRC for the transfer of control of applicable licenses. The purchase agreement requires that EnergySolutions be subject to the Wisconsin regulatory conditions agreed to by Dominion Energy upon its acquisition of Kewaunee, including the return of any excess decommissioning funds to WPSC and WP&L customers following completion of all decommissioning activities.
In May 2021, Dominion Energy and EnergySolutions submitted a license transfer application to the NRC. Also in May 2021, Dominion Energy submitted an application to the Wisconsin Commission for approval. In July 2021, WPSC and WP&L submitted a joint request to the Wisconsin Commission for the waiversecond quarter of both of their rights of first refusal to purchase Kewaunee, such rights having been granted as the former owners of Kewaunee. In March 2022, the NRC approved the requested license transfer. At March 31, 2022, Dominion Energy determined that therecorded a loss of $649 million ($513 million after-tax), recorded in losses (gains) on sales of assets and liabilities associated with the Kewaunee sale, included in Contracted Assets, did not meet the criteria to be classified as held for sale dueits Consolidated Statements of Income, primarily related to the significantdifference between the nuclear decommissioning trust and AROs. Prior to its receipt, there had been uncertainty surroundingas to the timing of or ability to obtain approval byfrom the Wisconsin Commission.
Prior to closing, Dominion Energy expects to record a loss if and when it determines that criteria for the classification as held for sale have been met. If such classification had been made at March 31, 2022, Dominion Energy would have recognized a loss of approximately $660withdrew $80 million ($520 million after-tax). If the sale is ultimately completed, the final net loss will primarily depend on the value offrom the nuclear decommissioning trust to recover certain spent nuclear fuel and AROs at closing.other permitted costs.
All activity related to Kewaunee prior to closing is included in Contracted Assets.
Note 4. Operating Revenue
The Companies’ operating revenue consists of the following:
|
| Three Months Ended March 31, |
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| |||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominion Energy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated electric sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
| $ | 1,287 |
|
| $ | 1,155 |
|
| $ | 1,609 |
|
| $ | 1,281 |
|
| $ | 4,013 |
|
| $ | 3,453 |
|
Commercial |
|
| 898 |
|
|
| 719 |
|
|
| 1,349 |
|
|
| 831 |
|
|
| 3,336 |
|
|
| 2,311 |
|
Industrial |
|
| 197 |
|
|
| 178 |
|
|
| 253 |
|
|
| 194 |
|
|
| 670 |
|
|
| 547 |
|
Government and other retail |
|
| 272 |
|
|
| 189 |
|
|
| 353 |
|
|
| 258 |
|
|
| 922 |
|
|
| 670 |
|
Wholesale |
|
| 47 |
|
|
| 43 |
|
|
| 66 |
|
|
| 52 |
|
|
| 181 |
|
|
| 131 |
|
Nonregulated electric sales |
|
| 367 |
|
|
| 254 |
|
|
| 345 |
|
|
| 271 |
|
|
| 948 |
|
|
| 754 |
|
Regulated gas sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
|
| 769 |
|
|
| 630 |
|
|
| 154 |
|
|
| 132 |
|
|
| 1,154 |
|
|
| 950 |
|
Commercial |
|
| 273 |
|
|
| 206 |
|
|
| 83 |
|
|
| 61 |
|
|
| 462 |
|
|
| 346 |
|
Other |
|
| 45 |
|
|
| 34 |
|
|
| 62 |
|
|
| 31 |
|
|
| 158 |
|
|
| 88 |
|
Nonregulated gas sales |
|
| 1 |
|
|
| 52 |
|
|
| 2 |
|
|
| 7 |
|
|
| 7 |
|
|
| 74 |
|
Regulated gas transportation and storage |
|
| 297 |
|
|
| 271 |
|
|
| 229 |
|
|
| 208 |
|
|
| 767 |
|
|
| 698 |
|
Other regulated revenues |
|
| 46 |
|
|
| 66 |
|
|
| 76 |
|
|
| 47 |
|
|
| 195 |
|
|
| 187 |
|
Other nonregulated revenues(1) |
|
| 48 |
|
|
| 43 |
|
|
| 74 |
|
|
| 61 |
|
|
| 183 |
|
|
| 149 |
|
Total operating revenue from contracts with customers |
|
| 4,547 |
|
|
| 3,840 |
|
|
| 4,655 |
|
|
| 3,434 |
|
|
| 12,996 |
|
|
| 10,358 |
|
Other revenues(2)(3) |
|
| (268 | ) |
|
| 30 |
|
|
| (269 | ) |
|
| (258 | ) |
|
| (735 | ) |
|
| (274 | ) |
Total operating revenue |
| $ | 4,279 |
|
| $ | 3,870 |
|
| $ | 4,386 |
|
| $ | 3,176 |
|
| $ | 12,261 |
|
| $ | 10,084 |
|
Virginia Power |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated electric sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
| $ | 1,015 |
|
| $ | 889 |
|
| $ | 1,238 |
|
| $ | 935 |
|
| $ | 3,069 |
|
| $ | 2,572 |
|
Commercial |
|
| 717 |
|
|
| 547 |
|
|
| 1,105 |
|
|
| 604 |
|
|
| 2,696 |
|
|
| 1,715 |
|
Industrial |
|
| 103 |
|
|
| 91 |
|
|
| 134 |
|
|
| 94 |
|
|
| 347 |
|
|
| 268 |
|
Government and other retail |
|
| 258 |
|
|
| 176 |
|
|
| 335 |
|
|
| 241 |
|
|
| 874 |
|
|
| 625 |
|
Wholesale |
|
| 32 |
|
|
| 26 |
|
|
| 38 |
|
|
| 31 |
|
|
| 101 |
|
|
| 79 |
|
Nonregulated electric sales |
|
| 14 |
|
|
| 5 |
|
|
| 17 |
|
|
| 18 |
|
|
| 62 |
|
|
| 32 |
|
Other regulated revenues |
|
| 51 |
|
|
| 57 |
|
|
| 64 |
|
|
| 37 |
|
|
| 195 |
|
|
| 165 |
|
Other nonregulated revenues(1)(4) |
|
| 6 |
|
|
| 16 |
|
|
| 28 |
|
|
| 27 |
|
|
| 50 |
|
|
| 61 |
|
Total operating revenue from contracts with customers |
|
| 2,196 |
|
|
| 1,807 |
|
|
| 2,959 |
|
|
| 1,987 |
|
|
| 7,394 |
|
|
| 5,517 |
|
Other revenues(2)(4) |
|
| (29 | ) |
|
| 23 |
|
|
| (84 | ) |
|
| (11 | ) |
|
| (177 | ) |
|
| 30 |
|
Total operating revenue |
| $ | 2,167 |
|
| $ | 1,830 |
|
| $ | 2,875 |
|
| $ | 1,976 |
|
| $ | 7,217 |
|
| $ | 5,547 |
|
(1) | Includes sales which are considered to be goods transferred at a point in time of |
(2) | Includes alternative revenue of |
(3) | Includes revenue associated with services provided to discontinued operations of $1 million and $3 million for the three and nine months ended |
(4) | See Note 19 for amounts attributable to affiliates. |
The table below discloses the aggregate amount of the transaction price allocated to fixed-price performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period and when Dominion Energy expects to recognize this revenue. These revenues relate to contracts containing fixed prices where Dominion Energy will earn the associated revenue over time as it stands ready to perform services provided. This disclosure does not include revenue related to performance obligations that are part of a contract with original durations of one year or less. In addition, this disclosure does not include expected consideration related to performance obligations for which Dominion Energy elects to recognize revenue in the amount it has a right to invoice.
Revenue expected to be recognized on multi-year contracts in place at March 31, 2022 |
| 2022 |
|
| 2023 |
|
| 2024 |
|
| 2025 |
|
| 2026 |
|
| Thereafter |
|
| Total |
| |||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominion Energy |
| $ | 51 |
|
| $ | 66 |
|
| $ | 59 |
|
| $ | 52 |
|
| $ | 45 |
|
| $ | 448 |
|
| $ | 721 |
|
Revenue expected to be recognized on multi-year contracts in place at September 30, 2022 |
| 2022 |
|
| 2023 |
|
| 2024 |
|
| 2025 |
|
| 2026 |
|
| Thereafter |
|
| Total |
| |||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominion Energy |
| $ | 18 |
|
| $ | 68 |
|
| $ | 61 |
|
| $ | 54 |
|
| $ | 48 |
|
| $ | 449 |
|
| $ | 698 |
|
At March 31,September 30, 2022 and December 31, 2021, Dominion Energy’s contract liability balances were $89$159 million and $124 million, respectively, and are recorded primarily in other current liabilities and other deferred credits and other liabilities in the Consolidated Balance Sheets. At March 31,September 30, 2022 and December 31, 2021, Virginia Power’s contract liability balances were $42$43 million and $33 million, respectively, and are recorded in other current liabilities and other deferred credits and other liabilities in its Consolidated Balance Sheets.
The Companies recognize revenue as they fulfill their obligations to provide service to their customers. During the threenine months ended March 31,September 30, 2022 and 2021, Dominion Energy recognized revenue of $119$120 million and $122$124 million, respectively, from the beginning contract liability balances. During the threenine months ended March 31,September 30, 2022 and 2021, Virginia Power recognized $33 million and $36 million, respectively, from the beginning contract liability balance.balances.
Note 5. Income Taxes
For continuing operations, including noncontrolling interests, the statutory U.S. federal income tax rate reconciles to the Companies’ effective income tax rate as follows:
|
| Dominion Energy |
|
| Virginia Power |
|
| Dominion Energy |
|
| Virginia Power |
| ||||||||||||||||||||
Three Months Ended March 31, |
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||||||||||||||||
Nine Months Ended September 30, |
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||||||||||||||||
U.S. statutory rate |
|
| 21.0 | % |
|
| 21.0 | % |
|
| 21.0 | % |
|
| 21.0 | % |
|
| 21.0 | % |
|
| 21.0 | % |
|
| 21.0 | % |
|
| 21.0 | % |
Increases (reductions) resulting from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recognition of deferred taxes - stock of subsidiary held for sale |
| 9.4 |
|
|
| — |
|
|
| — |
|
|
| — |
| |||||||||||||||||
Recognition of taxes - sale of subsidiary stock |
|
| 7.3 |
|
|
| — |
|
|
| — |
|
|
| — |
| ||||||||||||||||
State taxes, net of federal benefit |
|
| 3.3 |
|
|
| 3.5 |
|
|
| 4.4 |
|
|
| 4.5 |
|
|
| 4.7 |
|
|
| 2.0 |
|
|
| 4.4 |
|
|
| 4.5 |
|
Investment tax credits |
|
| (3.9 | ) |
|
| (3.8 | ) |
|
| (6.7 | ) |
|
| (6.6 | ) |
|
| (6.4 | ) |
|
| (5.6 | ) |
|
| (8.9 | ) |
|
| (5.8 | ) |
Production tax credits |
|
| (0.4 | ) |
|
| (0.3 | ) |
|
| (0.8 | ) |
|
| (0.6 | ) |
|
| (0.7 | ) |
|
| (0.5 | ) |
|
| (1.0 | ) |
|
| (0.6 | ) |
Reversal of excess deferred income taxes |
|
| (4.1 | ) |
|
| (2.2 | ) |
|
| (3.0 | ) |
|
| (2.2 | ) |
|
| (6.1 | ) |
|
| (3.8 | ) |
|
| (3.7 | ) |
|
| (2.2 | ) |
State legislative change |
|
| — |
|
|
| (1.0 | ) |
|
| — |
|
|
| (1.0 | ) | ||||||||||||||||
Changes in state deferred taxes associated with assets held for sale |
|
| 0.5 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0.4 |
|
|
| (0.5 | ) |
|
| — |
|
|
| — |
|
AFUDC - equity |
|
| (0.6 | ) |
|
| (0.4 | ) |
|
| (0.9 | ) |
|
| (0.7 | ) |
|
| (0.6 | ) |
|
| (0.5 | ) |
|
| (0.8 | ) |
|
| (0.5 | ) |
Absence of tax on noncontrolling interest |
|
| — |
|
|
| (0.2 | ) |
|
| — |
|
|
| — |
| ||||||||||||||||
Other, net |
|
| 0.2 |
|
|
| — |
|
|
| 0.6 |
|
|
| 0.3 |
|
|
| (0.4 | ) |
|
| (1.1 | ) |
|
| 0.5 |
|
|
| — |
|
Effective tax rate |
|
| 25.4 | % |
|
| 17.8 | % |
|
| 14.6 | % |
|
| 15.7 | % |
|
| 19.2 | % |
|
| 9.8 | % |
|
| 11.5 | % |
|
| 15.4 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As described in Note 3, Dominion Energy entered into an agreement to sellsold 100% of the equity interests in Hope that will be treated asin a stock sale for income tax purposes. In connection withDominion Energy’s 2022 effective tax rate reflects the pending sale, Dominion Energy established $87 million of deferredcurrent income tax liabilities reflecting the excess of the financial reporting basis over the tax basis in Hope’s stock. These deferred taxes will reverse upon closing ofexpense on the sale which is expected to occur by the end of 2022.Hope’s stock.
As of March 31,September 30, 2022, there have been no material changes in the Companies’ unrecognized tax benefits. It is reasonably possible that recent case law and interactions with the taxing authority could result in a decrease in unrecognized tax benefits or possible changes that could reasonably be expectedby up to occur$26 million during the next twelve months. If such changes were to occur, other than revisions of the accrual for interest on tax underpayments and overpayments, earnings could increase by up to $26 million for Dominion Energy. See Note 5 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021, for a discussion of these unrecognized tax benefits.
The Companies’ 2021 effective tax rates reflect the benefit of a state legislative change enacted in April 2021 for tax years beginning January 1, 2022. Dominion Energy’s effective tax rate reflects a $21 million deferred tax benefit, inclusive of a $16 million deferred tax benefit at Virginia Power.
Discontinued operations
Income tax expense reflected in discontinued operations is $6$4 million and $7$5 million for the threenine months ended March 31,September 30, 2022 and 2021, respectively. 2021 income taxes include a $15 million benefit related to finalizing income tax returns on the GT&S Transaction.
The following table presents the calculation of Dominion Energy’s basic and diluted EPS:
|
| Three Months Ended March 31, |
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| |||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions, except EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Dominion Energy from continuing operations |
| $ | 692 |
|
| $ | 980 |
|
| $ | 781 |
|
| $ | 589 |
|
| $ | 1,021 |
|
| $ | 1,828 |
|
Preferred stock dividends (see Note 16) |
|
| (27 | ) |
|
| (16 | ) |
|
| (20 | ) |
|
| (16 | ) |
|
| (72 | ) |
|
| (48 | ) |
Net income attributable to Dominion Energy from continuing operations – Basic |
|
| 665 |
|
|
| 964 |
|
|
| 761 |
|
|
| 573 |
|
|
| 949 |
|
|
| 1,780 |
|
Dilutive effect of 2019 Equity Units (1) |
|
| 7 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 12 |
|
|
| — |
|
Net income attributable to Dominion Energy from continuing operations - Diluted |
| $ | 672 |
|
| $ | 964 |
|
| $ | 761 |
|
| $ | 573 |
|
| $ | 961 |
|
| $ | 1,780 |
|
Net income attributable to Dominion Energy from discontinued operations - Basic & Diluted |
| $ | 19 |
|
| $ | 28 |
| ||||||||||||||||
Net income (loss) attributable to Dominion Energy from discontinued operations - Basic & Diluted |
| $ | (3 | ) |
| $ | 65 |
|
| $ | 15 |
|
| $ | 119 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares of common stock outstanding – Basic |
|
| 810.6 |
|
|
| 805.9 |
|
|
| 832.6 |
|
|
| 808.7 |
|
|
| 820.6 |
|
|
| 807.1 |
|
Net effect of dilutive securities (2) |
|
| 21.4 |
|
|
| — |
|
|
| 0.6 |
|
|
| 1.3 |
|
|
| 12.1 |
|
|
| 0.5 |
|
Average shares of common stock outstanding – Diluted |
|
| 832.0 |
|
|
| 805.9 |
|
|
| 833.2 |
|
|
| 810.0 |
|
|
| 832.7 |
|
|
| 807.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS from continuing operations – Basic |
| $ | 0.82 |
|
| $ | 1.19 |
|
| $ | 0.91 |
|
| $ | 0.71 |
|
| $ | 1.16 |
|
| $ | 2.20 |
|
EPS from discontinued operations – Basic |
|
| 0.02 |
|
|
| 0.04 |
|
|
| — |
|
|
| 0.08 |
|
|
| 0.02 |
|
|
| 0.15 |
|
EPS attributable to Dominion Energy – Basic |
| $ | 0.84 |
|
| $ | 1.23 |
|
| $ | 0.91 |
|
| $ | 0.79 |
|
| $ | 1.18 |
|
| $ | 2.35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS from continuing operations – Diluted |
| $ | 0.81 |
|
| $ | 1.19 |
|
| $ | 0.91 |
|
| $ | 0.71 |
|
| $ | 1.15 |
|
| $ | 2.20 |
|
EPS from discontinued operations – Diluted |
|
| 0.02 |
|
|
| 0.04 |
|
|
| — |
|
|
| 0.08 |
|
|
| 0.02 |
|
|
| 0.15 |
|
EPS attributable to Dominion Energy – Diluted |
| $ | 0.83 |
|
| $ | 1.23 |
|
| $ | 0.91 |
|
| $ | 0.79 |
|
| $ | 1.17 |
|
| $ | 2.35 |
|
(1) | As discussed in Note 16, effective in June 2022 through its settlement in September 2022, the Series A Preferred Stock was considered to be mandatorily redeemable and was classified in current liabilities. In accordance with revised accounting standards effective January 2022, a fair value adjustment, if dilutive, of the Series A Preferred Stock |
(2) | Dilutive securities for the three and nine months ended September 30, 2022 consist primarily of the 2019 Equity Units through their settlement in June 2022 (applying the if converted method as updated effective January 2022), stock |
The 2019 Equity Units, prior to settlement in June 2022, and the Q-Pipe Transaction deposit, prior to being settled in cash in July 2021, arewere potentially dilutive instruments. See Note 16 to the Consolidated Financial Statements in this report and Note 3 and Note 19 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 for additional information.
For the three and nine months ended March 31,September 30, 2021, the forward stock purchase contracts included within the 2019 Equity Units wereare excluded from the calculation of diluted EPS from continuing operations as the dilutive stock price threshold was not met, the Series A Preferred Stock included within the 2019 Equity Units wasis excluded from the calculation of diluted EPS from continuing operations based upon the expectation that the conversion will be settledwould settle in cash rather than through the issuance of Dominion Energy common stock and a fair value adjustment related to the Series A Preferred Stock included within the 2019 Equity Units is excluded from the calculation of diluted EPS from continuing operations, as such fair value adjustment was not dilutive during the period.
The impact of settling the deposit associated with the Q-Pipe Transaction in shares is excluded from the calculation of diluted EPS from continuing operations for the three and nine months ended March 31,September 30, 2021 based upon the expectation Dominion Energy would settle in cash, which occurred in July 2021, rather than through the issuance of Dominion Energy common stock.
Note 7. Accumulated Other Comprehensive Income (Loss)
Dominion Energy
The following table presents Dominion Energy’s changes in AOCI (net of tax) and reclassifications out of AOCI by component:
|
| Commodity |
|
| Interest Rate |
|
| Total Derivative-Hedging Activities(1) |
|
|
| Investment Securities(2) |
|
|
| Pension and other postretirement benefit costs(3) |
|
|
| Equity Method Investees(4) |
|
| Total |
|
| Commodity |
|
| Interest Rate |
|
| Total Derivative-Hedging Activities(1) |
|
|
| Investment Securities(2) |
|
|
| Pension and other postretirement benefit costs(3) |
|
|
| Equity Method Investees(4) |
|
| Total |
| ||||||||||||||||||||||||||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance |
| $ | — |
|
|
| $ | (358 | ) |
| $ | (358 | ) |
| $ | 37 |
| $ | (1,133 | ) |
| $ | (4 | ) |
| $ | (1,458 | ) |
| $ | — |
|
|
| $ | (283 | ) |
|
|
| $ | (283 | ) |
|
|
| $ | (40 | ) |
|
|
| $ | (1,070 | ) |
|
|
| $ | (3 | ) |
|
|
| $ | (1,396 | ) | |||||||||||||
Other comprehensive income before reclassifications: gains (losses) |
|
| — |
|
|
| 25 |
|
|
| 25 |
|
|
| (62 | ) |
|
|
| 28 |
|
|
| 1 |
|
|
| (8 | ) |
|
| — |
|
|
| 10 |
|
|
| 10 |
|
|
| (27 | ) |
|
|
| — |
|
|
| — |
|
|
| (17 | ) | ||||||||||||||||||||||
Amounts reclassified from AOCI: (gains) losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Interest and related charges |
|
| — |
|
|
| 14 |
|
|
| 14 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 14 |
|
|
| — |
|
|
| 16 |
|
|
| 16 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 16 |
| ||||||||||||||||||||||||
Other income |
|
| — |
|
|
|
| — |
|
|
|
| — |
|
|
|
| 4 |
|
|
|
| 23 |
|
|
|
| — |
|
|
|
| 27 |
| ||||||||||||||||||||||||||||||||||||||||||||||
Other income (expense) |
|
| — |
|
|
|
| — |
|
|
|
| — |
|
|
|
| 2 |
|
|
|
| 35 |
|
|
|
| — |
|
|
|
| 37 |
| ||||||||||||||||||||||||||||||||||||||||||||||
Total |
|
| — |
|
|
|
| 14 |
|
|
|
| 14 |
|
|
|
| 4 |
|
|
|
| 23 |
|
|
|
| — |
|
|
|
| 41 |
|
|
| — |
|
|
|
| 16 |
|
|
|
| 16 |
|
|
|
| 2 |
|
|
|
| 35 |
|
|
|
| — |
|
|
|
| 53 |
| ||||||||||||
Income tax expense |
|
| — |
|
|
|
| (4 | ) |
|
|
|
| (4 | ) |
|
|
|
| (1 | ) |
|
|
|
| (6 | ) |
|
|
|
| — |
|
|
|
| (11 | ) | ||||||||||||||||||||||||||||||||||||||||||
Income tax expense (benefit) |
|
| — |
|
|
|
| (4 | ) |
|
|
|
| (4 | ) |
|
|
|
| (1 | ) |
|
|
|
| (9 | ) |
|
|
|
| — |
|
|
|
| (14 | ) | ||||||||||||||||||||||||||||||||||||||||||
Total, net of tax |
|
| — |
|
|
|
| 10 |
|
|
|
| 10 |
|
|
|
| 3 |
|
|
|
| 17 |
|
|
|
| — |
|
|
|
| 30 |
|
|
| — |
|
|
|
| 12 |
|
|
|
| 12 |
|
|
|
| 1 |
|
|
|
| 26 |
|
|
|
| — |
|
|
|
| 39 |
| ||||||||||||
Net current period other comprehensive income (loss) |
|
| — |
|
|
|
| 35 |
|
|
|
| 35 |
|
|
|
| (59 | ) |
|
|
|
| 45 |
|
|
|
| 1 |
|
|
|
| 22 |
|
|
| — |
|
|
|
| 22 |
|
|
|
| 22 |
|
|
|
| (26 | ) |
|
|
|
| 26 |
|
|
|
| — |
|
|
|
| 22 |
| ||||||||||
Ending balance |
| $ | — |
|
|
| $ | (323 | ) |
|
|
| $ | (323 | ) |
|
|
| $ | (22 | ) |
|
|
| $ | (1,088 | ) |
|
|
| $ | (3 | ) |
|
|
| $ | (1,436 | ) |
| $ | — |
|
|
| $ | (261 | ) |
|
|
| $ | (261 | ) |
|
|
| $ | (66 | ) |
|
|
| $ | (1,044 | ) |
|
|
| $ | (3 | ) |
|
|
| $ | (1,374 | ) | ||
Three Months Ended March 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance |
| $ | (1 | ) |
|
|
| $ | (418 | ) |
|
|
| $ | (419 | ) |
|
|
| $ | 62 |
|
|
| $ | (1,359 | ) |
|
|
| $ | (1 | ) |
|
|
| $ | (1,717 | ) |
| $ | — |
|
|
| $ | (371 | ) |
|
|
| $ | (371 | ) |
|
|
| $ | 41 |
|
|
| $ | (1,309 | ) |
|
|
| $ | (1 | ) |
|
|
| $ | (1,640 | ) | |||
Other comprehensive income before reclassifications: gains (losses) |
|
| — |
|
|
| 39 |
|
|
| 39 |
|
|
| (31 | ) |
|
|
| 6 |
|
|
| — |
|
|
| 14 |
|
|
| — |
|
|
| (2 | ) |
|
|
| (2 | ) |
|
|
| 4 |
|
|
| (1 | ) |
|
|
| (3 | ) |
|
|
| (2 | ) | |||||||||||||||||||
Amounts reclassified from AOCI: (gains) losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Purchased gas |
|
| 1 |
|
|
| — |
|
|
| 1 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest and related charges |
|
| — |
|
|
| 16 |
|
|
| 16 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 16 |
|
|
| — |
|
|
| 14 |
|
|
| 14 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 14 |
| ||||||||||||||||||||||||
Other income |
|
| — |
|
|
|
| — |
|
|
|
| — |
|
|
|
| 1 |
|
|
|
| 25 |
|
|
|
| — |
|
|
|
| 26 |
| ||||||||||||||||||||||||||||||||||||||||||||||
Other income (expense) |
|
| — |
|
|
|
| — |
|
|
|
| — |
|
|
|
| (4 | ) |
|
|
|
| 25 |
|
|
|
| — |
|
|
|
| 21 |
| |||||||||||||||||||||||||||||||||||||||||||||
Total |
|
| 1 |
|
|
|
| 16 |
|
|
|
| 17 |
|
|
|
| 1 |
|
|
|
| 25 |
|
|
|
| — |
|
|
|
| 43 |
|
|
| — |
|
|
|
| 14 |
|
|
|
| 14 |
|
|
|
| (4 | ) |
|
|
|
| 25 |
|
|
|
| — |
|
|
|
| 35 |
| |||||||||||
Income tax expense |
|
| — |
|
|
|
| (4 | ) |
|
|
|
| (4 | ) |
|
|
|
| — |
|
|
|
| (7 | ) |
|
|
|
| — |
|
|
|
| (11 | ) | |||||||||||||||||||||||||||||||||||||||||||
Income tax expense (benefit) |
|
| — |
|
|
|
| (4 | ) |
|
|
|
| (4 | ) |
|
|
|
| 1 |
|
|
|
| (6 | ) |
|
|
|
| — |
|
|
|
| (9 | ) | |||||||||||||||||||||||||||||||||||||||||||
Total, net of tax |
|
| 1 |
|
|
|
| 12 |
|
|
|
| 13 |
|
|
|
| 1 |
|
|
|
| 18 |
|
|
|
| — |
|
|
|
| 32 |
|
|
| — |
|
|
|
| 10 |
|
|
|
| 10 |
|
|
|
| (3 | ) |
|
|
|
| 19 |
|
|
|
| — |
|
|
|
| 26 |
| |||||||||||
Net current period other comprehensive income (loss) |
|
| 1 |
|
|
|
| 51 |
|
|
|
| 52 |
|
|
|
| (30 | ) |
|
|
|
| 24 |
|
|
|
| — |
|
|
|
| 46 |
|
|
| — |
|
|
|
| 8 |
|
|
|
| 8 |
|
|
|
| 1 |
|
|
|
| 18 |
|
|
|
| (3 | ) |
|
|
|
| 24 |
| ||||||||||
Ending balance |
| $ | — |
|
|
| $ | (367 | ) |
|
|
| $ | (367 | ) |
|
|
| $ | 32 |
|
|
| $ | (1,335 | ) |
|
|
| $ | (1 | ) |
|
|
| $ | (1,671 | ) |
| $ | — |
|
|
| $ | (363 | ) |
|
|
| $ | (363 | ) |
|
|
| $ | 42 |
|
|
| $ | (1,291 | ) |
|
|
| $ | (4 | ) |
|
|
| $ | (1,616 | ) |
(1) | Net of $87 million, $94 million, $121 million and $125 million tax at September 30, 2022, June 30, 2022, September 30, 2021 and June 30, 2021, respectively. |
(2) | Net of $23 million, $14 million, $(11) million and $(12) million tax at September 30, 2022, June 30, 2022, September 30, 2021 and June 30, 2021, respectively. |
(3) | Net of $367 million, $376 million, $448 million and $455 million tax at September 30, 2022, June 30, 2022, September 30, 2021 and June 30, 2021, respectively. |
(4) | Net of $1 million, $1 million, $1 million and $— million tax at September 30, 2022, June 30, 2022, September 30, 2021 and June 30, 2021, respectively. |
|
| Commodity |
|
|
|
| Interest Rate |
|
|
|
| Total Derivative-Hedging Activities(1) |
|
|
|
| Investment Securities(2) |
|
|
|
| Pension and other postretirement benefit costs(3) |
|
|
|
| Equity Method Investees(4) |
|
|
|
| Total |
| |||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | — |
|
|
|
| $ | (358 | ) |
|
|
| $ | (358 | ) |
|
|
| $ | 37 |
|
|
|
| $ | (1,133 | ) |
|
|
| $ | (4 | ) |
|
|
| $ | (1,458 | ) |
Other comprehensive income before reclassifications: gains (losses) |
|
| — |
|
|
|
|
| 64 |
|
|
|
|
| 64 |
|
|
|
|
| (116 | ) |
|
|
|
| 30 |
|
|
|
|
| 1 |
|
|
|
|
| (21 | ) |
Amounts reclassified from AOCI: (gains) losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and related charges |
|
| — |
|
|
|
|
| 44 |
|
|
|
|
| 44 |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| 44 |
|
Other income (expense) |
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| 18 |
|
|
|
|
| 80 |
|
|
|
|
| — |
|
|
|
|
| 98 |
|
Total |
|
| — |
|
|
|
|
| 44 |
|
|
|
|
| 44 |
|
|
|
|
| 18 |
|
|
|
|
| 80 |
|
|
|
|
| — |
|
|
|
|
| 142 |
|
Income tax expense (benefit) |
|
| — |
|
|
|
|
| (11 | ) |
|
|
|
| (11 | ) |
|
|
|
| (5 | ) |
|
|
|
| (21 | ) |
|
|
|
| — |
|
|
|
|
| (37 | ) |
Total, net of tax |
|
| — |
|
|
|
|
| 33 |
|
|
|
|
| 33 |
|
|
|
|
| 13 |
|
|
|
|
| 59 |
|
|
|
|
| — |
|
|
|
|
| 105 |
|
Net current period other comprehensive income (loss) |
|
| — |
|
|
|
|
| 97 |
|
|
|
|
| 97 |
|
|
|
|
| (103 | ) |
|
|
|
| 89 |
|
|
|
|
| 1 |
|
|
|
|
| 84 |
|
Ending balance |
| $ | — |
|
|
|
| $ | (261 | ) |
|
|
| $ | (261 | ) |
|
|
| $ | (66 | ) |
|
|
| $ | (1,044 | ) |
|
|
| $ | (3 | ) |
|
|
| $ | (1,374 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | (1 | ) |
|
|
| $ | (418 | ) |
|
|
| $ | (419 | ) |
|
|
| $ | 62 |
|
|
|
| $ | (1,359 | ) |
|
|
| $ | (1 | ) |
|
|
| $ | (1,717 | ) |
Other comprehensive income before reclassifications: gains (losses) |
|
| — |
|
|
|
|
| 21 |
|
|
|
|
| 21 |
|
|
|
|
| (15 | ) |
|
|
|
| 5 |
|
|
|
|
| (3 | ) |
|
|
|
| 8 |
|
Amounts reclassified from AOCI: (gains) losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased gas |
|
| 1 |
|
|
|
|
| — |
|
|
|
|
| 1 |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| 1 |
|
Interest and related charges |
|
| — |
|
|
|
|
| 46 |
|
|
|
|
| 46 |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| 46 |
|
Other income (expense) |
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| (7 | ) |
|
|
|
| 85 |
|
|
|
|
| — |
|
|
|
|
| 78 |
|
Total |
|
| 1 |
|
|
|
|
| 46 |
|
|
|
|
| 47 |
|
|
|
|
| (7 | ) |
|
|
|
| 85 |
|
|
|
|
| — |
|
|
|
|
| 125 |
|
Income tax expense (benefit) |
|
| — |
|
|
|
|
| (12 | ) |
|
|
|
| (12 | ) |
|
|
|
| 2 |
|
|
|
|
| (22 | ) |
|
|
|
| — |
|
|
|
|
| (32 | ) |
Total, net of tax |
|
| 1 |
|
|
|
|
| 34 |
|
|
|
|
| 35 |
|
|
|
|
| (5 | ) |
|
|
|
| 63 |
|
|
|
|
| — |
|
|
|
|
| 93 |
|
Net current period other comprehensive income (loss) |
|
| 1 |
|
|
|
|
| 55 |
|
|
|
|
| 56 |
|
|
|
|
| (20 | ) |
|
|
|
| 68 |
|
|
|
|
| (3 | ) |
|
|
|
| 101 |
|
Ending balance |
| $ | — |
|
|
|
| $ | (363 | ) |
|
|
| $ | (363 | ) |
|
|
| $ | 42 |
|
|
|
| $ | (1,291 | ) |
|
|
| $ | (4 | ) |
|
|
| $ | (1,616 | ) |
(1) | Net of |
(2) | Net of |
(3) | Net of |
(4) | Net of $1 million, $1 million, |
Virginia Power
The following table presents Virginia Power’s changes in AOCI (net of tax) and reclassifications out of AOCI by component:
|
| Interest Rate |
|
|
|
| Total Derivative-Hedging Activities(1) |
|
|
|
| Investment Securities(2) |
|
|
|
| Total |
|
| Interest Rate |
|
|
|
| Total Derivative-Hedging Activities(1) |
|
|
|
| Investment Securities(2) |
|
|
|
| Total |
| ||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Three Months Ended March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
Three Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
Beginning balance |
| $ | (45 | ) |
|
|
| $ | (45 | ) |
|
|
| $ | 4 |
|
|
| $ | (41 | ) |
| $ | — |
|
|
| $ | — |
|
|
| $ | (7 | ) |
|
|
| $ | (7 | ) | |||
Other comprehensive income before reclassifications: gains (losses) |
|
| 19 |
|
|
| 19 |
|
|
| (7 | ) |
|
|
| 12 |
|
|
| 13 |
|
|
| 13 |
|
|
| (4 | ) |
|
|
| 9 |
| ||||||||||
Amounts reclassified from AOCI: (gains) losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Interest and related charges |
|
| 1 |
|
|
| 1 |
|
|
| — |
|
|
| 1 |
|
|
| 1 |
|
|
| 1 |
|
|
| — |
|
|
| 1 |
| ||||||||||||
Other income |
|
| — |
|
|
|
| — |
|
|
|
| (1 | ) |
|
|
|
| (1 | ) | ||||||||||||||||||||||||
Other income (expense) |
|
| — |
|
|
|
| — |
|
|
|
| — |
|
|
|
| — |
| |||||||||||||||||||||||||
Total |
|
| 1 |
|
|
|
| 1 |
|
|
|
| (1 | ) |
|
|
|
| — |
|
|
| 1 |
|
|
|
| 1 |
|
|
|
| — |
|
|
|
| 1 |
| |||||
Income tax expense |
|
| — |
|
|
|
| — |
|
|
|
| — |
|
|
|
| — |
| |||||||||||||||||||||||||
Income tax expense (benefit) |
|
| (1 | ) |
|
|
|
| (1 | ) |
|
|
|
| — |
|
|
|
| (1 | ) | |||||||||||||||||||||||
Total, net of tax |
|
| 1 |
|
|
|
| 1 |
|
|
|
| (1 | ) |
|
|
|
| — |
|
|
| — |
|
|
|
| — |
|
|
|
| — |
|
|
|
| — |
| |||||
Net current period other comprehensive income (loss) |
|
| 20 |
|
|
|
| 20 |
|
|
|
| (8 | ) |
|
|
|
| 12 |
|
|
| 13 |
|
|
|
| 13 |
|
|
|
| (4 | ) |
|
|
|
| 9 |
| ||||
Ending balance |
| $ | (25 | ) |
|
|
| $ | (25 | ) |
|
|
| $ | (4 | ) |
|
|
| $ | (29 | ) |
| $ | 13 |
|
|
| $ | 13 |
|
|
| $ | (11 | ) |
|
|
| $ | 2 |
| ||
Three Months Ended March 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Beginning balance |
| $ | (60 | ) |
|
|
| $ | (60 | ) |
|
|
| $ | 8 |
|
|
| $ | (52 | ) |
| $ | (39 | ) |
|
|
| $ | (39 | ) |
|
|
| $ | 6 |
|
|
| $ | (33 | ) | ||
Other comprehensive income before reclassifications: gains (losses) |
|
| 32 |
|
|
| 32 |
|
|
| (5 | ) |
|
|
| 27 |
|
|
| (2 | ) |
|
|
| (2 | ) |
|
|
| — |
|
|
| (2 | ) | |||||||||
Amounts reclassified from AOCI: (gains) losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Interest and related charges |
|
| 1 |
|
|
| 1 |
|
|
| — |
|
|
| 1 |
|
|
| 1 |
|
|
| 1 |
|
|
| — |
|
|
| 1 |
| ||||||||||||
Other income |
|
| — |
|
|
|
| — |
|
|
|
| 1 |
|
|
|
| 1 |
| |||||||||||||||||||||||||
Other income (expense) |
|
| — |
|
|
|
| — |
|
|
|
| (1 | ) |
|
|
|
| (1 | ) | ||||||||||||||||||||||||
Total |
|
| 1 |
|
|
|
| 1 |
|
|
|
| 1 |
|
|
|
| 2 |
|
|
| 1 |
|
|
|
| 1 |
|
|
|
| (1 | ) |
|
|
|
| — |
| |||||
Income tax expense |
|
| — |
|
|
|
| — |
|
|
|
| — |
|
|
|
| — |
| |||||||||||||||||||||||||
Income tax expense (benefit) |
|
| (1 | ) |
|
|
|
| (1 | ) |
|
|
|
| — |
|
|
|
| (1 | ) | |||||||||||||||||||||||
Total, net of tax |
|
| 1 |
|
|
|
| 1 |
|
|
|
| 1 |
|
|
|
| 2 |
|
|
| — |
|
|
|
| — |
|
|
|
| (1 | ) |
|
|
|
| (1 | ) | |||||
Net current period other comprehensive income (loss) |
|
| 33 |
|
|
|
| 33 |
|
|
|
| (4 | ) |
|
|
|
| 29 |
|
|
| (2 | ) |
|
|
|
| (2 | ) |
|
|
|
| (1 | ) |
|
|
|
| (3 | ) | ||
Ending balance |
| $ | (27 | ) |
|
|
| $ | (27 | ) |
|
|
| $ | 4 |
|
|
| $ | (23 | ) |
| $ | (41 | ) |
|
|
| $ | (41 | ) |
|
|
| $ | 5 |
|
|
| $ | (36 | ) | ||
(1) Net of $(4) million, $— million, $14 million and $14 million tax at September 30, 2022, June 30, 2022, September 30, 2021 and June 30, 2021, respectively | (1) Net of $(4) million, $— million, $14 million and $14 million tax at September 30, 2022, June 30, 2022, September 30, 2021 and June 30, 2021, respectively |
| ||||||||||||||||||||||||||||||||||||||||||
(2) Net of $4 million, $3 million, $(2) million and $(2) million tax at September 30, 2022, June 30, 2022, September 30, 2021 and June 30, 2021, respectively. | (2) Net of $4 million, $3 million, $(2) million and $(2) million tax at September 30, 2022, June 30, 2022, September 30, 2021 and June 30, 2021, respectively. |
|
|
| Interest Rate |
|
|
|
| Total Derivative-Hedging Activities(1) |
|
|
|
| Investment Securities(2) |
|
|
|
| Total |
| ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | (45 | ) |
|
|
| $ | (45 | ) |
|
|
| $ | 4 |
|
|
|
| $ | (41 | ) |
Other comprehensive income before reclassifications: gains (losses) |
|
| 57 |
|
|
|
|
| 57 |
|
|
|
|
| (14 | ) |
|
|
|
| 43 |
|
Amounts reclassified from AOCI: (gains) losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and related charges |
|
| 2 |
|
|
|
|
| 2 |
|
|
|
|
| — |
|
|
|
|
| 2 |
|
Other income (expense) |
|
| — |
|
|
|
|
| — |
|
|
|
|
| (1 | ) |
|
|
|
| (1 | ) |
Total |
|
| 2 |
|
|
|
|
| 2 |
|
|
|
|
| (1 | ) |
|
|
|
| 1 |
|
Income tax expense (benefit) |
|
| (1 | ) |
|
|
|
| (1 | ) |
|
|
|
| — |
|
|
|
|
| (1 | ) |
Total, net of tax |
|
| 1 |
|
|
|
|
| 1 |
|
|
|
|
| (1 | ) |
|
|
|
| — |
|
Net current period other comprehensive income (loss) |
|
| 58 |
|
|
|
|
| 58 |
|
|
|
|
| (15 | ) |
|
|
|
| 43 |
|
Ending balance |
| $ | 13 |
|
|
|
| $ | 13 |
|
|
|
| $ | (11 | ) |
|
|
| $ | 2 |
|
Nine Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | (60 | ) |
|
|
| $ | (60 | ) |
|
|
| $ | 8 |
|
|
|
| $ | (52 | ) |
Other comprehensive income before reclassifications: gains (losses) |
|
| 18 |
|
|
|
|
| 18 |
|
|
|
|
| (2 | ) |
|
|
|
| 16 |
|
Amounts reclassified from AOCI: (gains) losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and related charges |
|
| 2 |
|
|
|
|
| 2 |
|
|
|
|
| — |
|
|
|
|
| 2 |
|
Other income (expense) |
|
| — |
|
|
|
|
| — |
|
|
|
|
| (1 | ) |
|
|
|
| (1 | ) |
Total |
|
| 2 |
|
|
|
|
| 2 |
|
|
|
|
| (1 | ) |
|
|
|
| 1 |
|
Income tax expense (benefit) |
|
| (1 | ) |
|
|
|
| (1 | ) |
|
|
|
| — |
|
|
|
|
| (1 | ) |
Total, net of tax |
|
| 1 |
|
|
|
|
| 1 |
|
|
|
|
| (1 | ) |
|
|
|
| — |
|
Net current period other comprehensive income (loss) |
|
| 19 |
|
|
|
|
| 19 |
|
|
|
|
| (3 | ) |
|
|
|
| 16 |
|
Ending balance |
| $ | (41 | ) |
|
|
| $ | (41 | ) |
|
|
| $ | 5 |
|
|
|
| $ | (36 | ) |
(1) | Net of |
(2) | Net of |
Note 8. Fair Value Measurements
The Companies’ fair value measurements are made in accordance with the policies discussed in Note 6 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021. See Note 9 in this report for additional information about the Companies’ derivatives and hedge accounting activities.
The Companies enter into certain physical and financial forwards, futures options and swaps,options, which are considered Level 3 as they have one or more inputs that are not observable and are significant to the valuation. The discounted cash flow method is used to value Level 3 physical and financial forwards and futures contracts. An option model is used to value Level 3 physical options. The discounted cash flow model for forwards and futures calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return and credit spreads. The option model calculates mark-to-market valuations using variations of the Black-Scholes option model. The inputs into the models are the forward market prices, implied price volatilities, risk-free rate of return, the option expiration dates, the option strike prices, the original sales prices and volumes. For Level 3 fair value measurements, certain forward market prices and implied price volatilities are considered unobservable.
2832
The following table presents Dominion Energy’s quantitative information about Level 3 fair value measurements at March 31,September 30, 2022. The range and weighted average are presented in dollars for market price inputs.inputs and percentages for price volatility.
|
| Fair Value (millions) |
|
| Valuation Techniques |
| Unobservable Input |
|
| Range |
| Weighted Average(1) |
|
| Fair Value (millions) |
|
| Valuation Techniques |
| Unobservable Input |
|
| Range |
| Weighted Average(1) | |||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Physical and financial forwards: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas(2) |
| $ | 12 |
|
| Discounted cash flow |
| Market price (per Dth) | (3) |
| (2) - 6 |
|
| (1 | ) |
| $ | 1 |
|
| Discounted cash flow |
| Market price (per Dth) | (3) |
| (2) - 6 |
| (1) |
FTRs |
|
| 17 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| (1) - 7 |
|
| 2 |
|
|
| 263 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| 1-19 |
| 5 |
Electricity |
|
| 180 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| 30 - 85 |
|
| 47 |
|
|
| 211 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| 28-199 |
| 51 |
Physical options: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Natural gas(2) |
|
| 24 |
|
| Option model |
| Market price (per Dth) | (3) |
| 4-17 |
| 10 | |||||||||||||||
|
|
|
|
|
|
|
| Price volatility | (4) |
| 13%-70% |
| 51% | |||||||||||||||
Total assets |
| $ | 209 |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 499 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Physical and financial forwards: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas(2) |
| $ | 5 |
|
| Discounted cash flow |
| Market price (per Dth) | (3) |
| (2) - 5 |
|
| (1 | ) |
| $ | 12 |
|
| Discounted cash flow |
| Market price (per Dth) | (3) |
| (2)-8 |
| 1 |
FTRs |
|
| 2 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| (3) - 3 |
|
| 1 |
|
|
| 5 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| 1-10 |
| 4 |
Total liabilities |
| $ | 7 |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 17 |
|
|
|
|
|
|
|
|
|
|
(1) | Averages weighted by volume. |
(2) | Includes basis. |
(3) | Represents market prices beyond defined terms for Levels 1 and 2. |
(4) | Represents volatilities unrepresented in published markets. |
Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:
Significant Unobservable Inputs |
| Position |
| Change to Input |
| Impact on Fair Value Measurement |
Market price |
| Buy |
| Increase (decrease) |
| Gain (loss) |
Market price |
| Sell |
| Increase (decrease) |
| Loss (gain) |
Price volatility | Buy | Increase (decrease) | Gain (loss) | |||
Price volatility | Sell | Increase (decrease) | Loss (gain) |
Nonrecurring Fair Value Measurements
In the second quarter of 2021, Dominion Energy recorded a charge of $20 million ($15 million after-tax) in impairment of assets and other charges in its Consolidated Statements of Income to write off substantially all of the long-lived assets of its nonregulated retail software development operations to their estimated fair value, using a market approach, of less than $1 million. The valuation is considered a Level 2 fair value measurement given that it is based on bids received.
See Note 10 for information regarding nonrecurring fair value measurements associated with Dominion Energy’s noncontrolling ownership interest in Dominion Privatization.
2933
Recurring Fair Value Measurements
Dominion Energy
The following table presents Dominion Energy’s assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
At September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | — |
|
| $ | 232 |
|
| $ | 209 |
|
| $ | 441 |
|
| $ | — |
|
| $ | 371 |
|
| $ | 499 |
|
| $ | 870 |
|
Interest rate |
|
| — |
|
|
| 768 |
|
|
| — |
|
|
| 768 |
|
|
| — |
|
|
| 1,593 |
|
|
| — |
|
|
| 1,593 |
|
Foreign currency exchange rate |
|
| — |
|
|
| 6 |
|
|
| — |
|
|
| 6 |
| ||||||||||||||||
Investments(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
| 5,013 |
|
|
| — |
|
|
| — |
|
|
| 5,013 |
|
|
| 3,514 |
|
|
| — |
|
|
| — |
|
|
| 3,514 |
|
Fixed income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt instruments |
|
| — |
|
|
| 839 |
|
|
| — |
|
|
| 839 |
|
|
| — |
|
|
| 563 |
|
|
| — |
|
|
| 563 |
|
Government securities |
|
| 198 |
|
|
| 1,162 |
|
|
| — |
|
|
| 1,360 |
|
|
| 159 |
|
|
| 1,067 |
|
|
| — |
|
|
| 1,226 |
|
Cash equivalents and other |
|
| (15 | ) |
|
| — |
|
|
| — |
|
|
| (15 | ) | ||||||||||||||||
Total assets |
| $ | 5,196 |
|
| $ | 3,001 |
|
| $ | 209 |
|
| $ | 8,406 |
|
| $ | 3,673 |
|
| $ | 3,600 |
|
| $ | 499 |
|
| $ | 7,772 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | — |
|
| $ | 941 |
|
| $ | 7 |
|
| $ | 948 |
|
| $ | — |
|
| $ | 1,492 |
|
| $ | 17 |
|
| $ | 1,509 |
|
Interest rate |
|
| — |
|
|
| 362 |
|
|
| — |
|
|
| 362 |
|
|
| — |
|
|
| 475 |
|
|
| — |
|
|
| 475 |
|
Foreign currency exchange rate |
|
| — |
|
|
| 4 |
|
|
| — |
|
|
| 4 |
|
|
| — |
|
|
| 387 |
|
|
| — |
|
|
| 387 |
|
Total liabilities |
| $ | — |
|
| $ | 1,307 |
|
| $ | 7 |
|
| $ | 1,314 |
|
| $ | — |
|
| $ | 2,354 |
|
| $ | 17 |
|
| $ | 2,371 |
|
At December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | — |
|
| $ | 52 |
|
| $ | 230 |
|
| $ | 282 |
|
| $ | — |
|
| $ | 52 |
|
| $ | 230 |
|
| $ | 282 |
|
Interest rate |
|
| — |
|
|
| 323 |
|
|
| — |
|
|
| 323 |
|
|
| — |
|
|
| 323 |
|
|
| — |
|
|
| 323 |
|
Foreign currency exchange rate |
|
| — |
|
|
| 8 |
|
|
| — |
|
|
| 8 |
|
|
| — |
|
|
| 8 |
|
|
| — |
|
|
| 8 |
|
Investments(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
| 5,241 |
|
|
| — |
|
|
| — |
|
|
| 5,241 |
|
|
| 5,241 |
|
|
| — |
|
|
| — |
|
|
| 5,241 |
|
Fixed income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt instruments |
|
| — |
|
|
| 881 |
|
|
| — |
|
|
| 881 |
|
|
| — |
|
|
| 881 |
|
|
| — |
|
|
| 881 |
|
Government securities |
|
| 199 |
|
|
| 1,256 |
|
|
| — |
|
|
| 1,455 |
|
|
| 199 |
|
|
| 1,256 |
|
|
| — |
|
|
| 1,455 |
|
Cash equivalents and other |
|
| (29 | ) |
|
| — |
|
|
| — |
|
|
| (29 | ) |
|
| (29 | ) |
|
| — |
|
|
| — |
|
|
| (29 | ) |
Total assets |
| $ | 5,411 |
|
| $ | 2,520 |
|
| $ | 230 |
|
| $ | 8,161 |
|
| $ | 5,411 |
|
| $ | 2,520 |
|
| $ | 230 |
|
| $ | 8,161 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | — |
|
| $ | 461 |
|
| $ | 8 |
|
| $ | 469 |
|
| $ | — |
|
| $ | 461 |
|
| $ | 8 |
|
| $ | 469 |
|
Interest rate |
|
| — |
|
|
| 399 |
|
|
| — |
|
|
| 399 |
|
|
| — |
|
|
| 399 |
|
|
| — |
|
|
| 399 |
|
Total liabilities |
| $ | — |
|
| $ | 860 |
|
| $ | 8 |
|
| $ | 868 |
|
| $ | — |
|
| $ | 860 |
|
| $ | 8 |
|
| $ | 868 |
|
(1) | Includes investments held in the nuclear decommissioning and rabbi trusts. Excludes |
3034
The following table presents the net change in Dominion Energy's assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category:
|
| Three Months Ended |
|
| Three Months Ended |
|
| Nine Months Ended |
| |||||||||||||||
|
| March 31, |
|
| September 30, |
|
| September 30, |
| |||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | 222 |
|
| $ | 103 |
|
| $ | 480 |
|
| $ | 62 |
|
| $ | 222 |
|
| $ | 103 |
|
Total realized and unrealized gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue |
|
| — |
|
|
| (6 | ) |
|
| — |
|
|
| (8 | ) | ||||||||
Electric fuel and other energy-related purchases |
|
| 48 |
|
|
| (21 | ) |
|
| 181 |
|
|
| 29 |
|
|
| 346 |
|
|
| 12 |
|
Included in regulatory assets/liabilities |
|
| (20 | ) |
|
| (47 | ) |
|
| 2 |
|
|
| 88 |
|
|
| 243 |
|
|
| 49 |
|
Settlements |
|
| (48 | ) |
|
| 21 |
|
|
| (181 | ) |
|
| (29 | ) |
|
| (346 | ) |
|
| (12 | ) |
Purchases |
|
| — |
|
|
| — |
|
|
| 17 |
|
|
| — |
| ||||||||
Ending balance |
| $ | 202 |
|
| $ | 56 |
|
| $ | 482 |
|
| $ | 144 |
|
| $ | 482 |
|
| $ | 144 |
|
There were less than $1$(6) million and $(8) million of unrealized gains and losses included in earningsoperating revenue in the Level 3 fair value category related to assets/liabilities still held at the reporting date for the three and nine months ended March 31,September 30, 2021, respectively, and 0no such amounts for the three and nine months ended March 31,September 30, 2022.
Virginia Power
The following table presents Virginia Power’s quantitative information about Level 3 fair value measurements at March 31,September 30, 2022. The range and weighted average are presented in dollars for market price inputs.inputs and percentages for price volatility.
|
| Fair Value (millions) |
|
| Valuation Techniques |
| Unobservable Input |
|
| Range |
| Weighted Average(1) |
|
| Fair Value (millions) |
|
| Valuation Techniques |
| Unobservable Input |
|
| Range |
| Weighted Average(1) |
| ||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Physical and financial forwards: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas(2) |
| $ | 12 |
|
| Discounted cash flow |
| Market price (per Dth) | (3) |
| (2) - 6 |
|
| (1 | ) |
| $ | 1 |
|
| Discounted cash flow |
| Market price (per Dth) | (3) |
| (2) - 6 |
| (1) |
| |
FTRs |
|
| 17 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| (1) - 7 |
|
| 2 |
|
|
| 263 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| 1 - 19 |
| 5 |
| |
Physical options: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Natural gas(2) |
|
| 24 |
|
| Option model |
| Market price (per Dth) | (3) |
| 4-17 |
| 10 |
| ||||||||||||||||
|
|
|
|
|
|
|
| Price volatility | (4) |
| 13%-70% |
|
| 51 | % | |||||||||||||||
Total assets |
| $ | 29 |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 288 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Physical and financial forwards: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas(2) |
| $ | 5 |
|
| Discounted cash flow |
| Market price (per Dth) | (3) |
| (2) - 5 |
|
| (1 | ) |
| $ | 12 |
|
| Discounted cash flow |
| Market price (per Dth) | (3) |
| (2) - 5 |
| 1 |
| |
FTRs |
|
| 2 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| (3) - 3 |
|
| 1 |
|
|
| 5 |
|
| Discounted cash flow |
| Market price (per MWh) | (3) |
| 1-10 |
| 4 |
| |
Total liabilities |
| $ | 7 |
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 17 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Averages weighted by volume. |
(2) | Includes basis. |
(3) | Represents market prices beyond defined terms for Levels 1 and 2. |
(4) | Represents volatilities unrepresented in published markets. |
Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:
Significant Unobservable Inputs |
| Position |
| Change to Input |
| Impact on Fair Value Measurement |
Market price |
| Buy |
| Increase (decrease) |
| Gain (loss) |
Market price |
| Sell |
| Increase (decrease) |
| Loss (gain) |
Price volatility | Buy | Increase (decrease) | Gain (loss) | |||
Price volatility | Sell | Increase (decrease) | Loss (gain) |
The following table presents Virginia Power’s assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
At September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | — |
|
| $ | 75 |
|
| $ | 29 |
|
| $ | 104 |
|
| $ | — |
|
| $ | 71 |
|
| $ | 288 |
|
| $ | 359 |
|
Interest rate |
|
| — |
|
|
| 300 |
|
|
| — |
|
|
| 300 |
|
|
| — |
|
|
| 596 |
|
|
| — |
|
|
| 596 |
|
Foreign currency exchange rate |
|
| — |
|
|
| 6 |
|
|
| — |
|
|
| 6 |
| ||||||||||||||||
Investments(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
| 2,325 |
|
|
| — |
|
|
| — |
|
|
| 2,325 |
|
|
| 1,870 |
|
|
| — |
|
|
| — |
|
|
| 1,870 |
|
Fixed income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt instruments |
|
| — |
|
|
| 509 |
|
|
| — |
|
|
| 509 |
|
|
| — |
|
|
| 372 |
|
|
| — |
|
|
| 372 |
|
Government securities |
|
| 93 |
|
|
| 461 |
|
|
| — |
|
|
| 554 |
|
|
| 88 |
|
|
| 518 |
|
|
| — |
|
|
| 606 |
|
Total assets |
| $ | 2,418 |
|
| $ | 1,345 |
|
| $ | 29 |
|
| $ | 3,792 |
|
| $ | 1,958 |
|
| $ | 1,563 |
|
| $ | 288 |
|
| $ | 3,809 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | — |
|
| $ | 297 |
|
| $ | 7 |
|
| $ | 304 |
|
| $ | — |
|
| $ | 486 |
|
| $ | 17 |
|
| $ | 503 |
|
Interest rate |
|
| — |
|
|
| 200 |
|
|
| — |
|
|
| 200 |
|
|
| — |
|
|
| 27 |
|
|
| — |
|
|
| 27 |
|
Foreign currency exchange rate |
|
| — |
|
|
| 4 |
|
|
| — |
|
|
| 4 |
|
|
| — |
|
|
| 387 |
|
|
| — |
|
|
| 387 |
|
Total liabilities |
| $ | — |
|
| $ | 501 |
|
| $ | 7 |
|
| $ | 508 |
|
| $ | — |
|
| $ | 900 |
|
| $ | 17 |
|
| $ | 917 |
|
At December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | — |
|
| $ | 36 |
|
| $ | 110 |
|
| $ | 146 |
|
| $ | — |
|
| $ | 36 |
|
| $ | 110 |
|
| $ | 146 |
|
Interest rate |
|
| — |
|
|
| 146 |
|
|
| — |
|
|
| 146 |
|
|
| — |
|
|
| 146 |
|
|
| — |
|
|
| 146 |
|
Foreign currency exchange rate |
|
| — |
|
|
| 8 |
|
|
| — |
|
|
| 8 |
|
|
| — |
|
|
| 8 |
|
|
| — |
|
|
| 8 |
|
Investments(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
| 2,420 |
|
|
| — |
|
|
| — |
|
|
| 2,420 |
|
|
| 2,420 |
|
|
| — |
|
|
| — |
|
|
| 2,420 |
|
Fixed income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt instruments |
|
| — |
|
|
| 531 |
|
|
| — |
|
|
| 531 |
|
|
| — |
|
|
| 531 |
|
|
| — |
|
|
| 531 |
|
Government securities |
|
| 93 |
|
|
| 506 |
|
|
| — |
|
|
| 599 |
|
|
| 93 |
|
|
| 506 |
|
|
| — |
|
|
| 599 |
|
Cash equivalents and other |
|
| (3 | ) |
|
| — |
|
|
| — |
|
|
| (3 | ) |
|
| (3 | ) |
|
| — |
|
|
| — |
|
|
| (3 | ) |
Total assets |
| $ | 2,510 |
|
| $ | 1,227 |
|
| $ | 110 |
|
| $ | 3,847 |
|
| $ | 2,510 |
|
| $ | 1,227 |
|
| $ | 110 |
|
| $ | 3,847 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | — |
|
| $ | 125 |
|
| $ | 8 |
|
| $ | 133 |
|
| $ | — |
|
| $ | 125 |
|
| $ | 8 |
|
| $ | 133 |
|
Interest rate |
|
| — |
|
|
| 337 |
|
|
| — |
|
|
| 337 |
|
|
| — |
|
|
| 337 |
|
|
| — |
|
|
| 337 |
|
Total liabilities |
| $ | — |
|
| $ | 462 |
|
| $ | 8 |
|
| $ | 470 |
|
| $ | — |
|
| $ | 462 |
|
| $ | 8 |
|
| $ | 470 |
|
(1) | Includes investments held in the nuclear decommissioning trusts. Excludes |
3236
The following table presents the net change in Virginia Power’s assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category:
|
| Three Months Ended |
|
| Three Months Ended |
|
| Nine Months Ended |
| |||||||||||||||
|
| March 31, |
|
| September 30, |
|
| September 30, |
| |||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
| $ | 102 |
|
| $ | 103 |
|
| $ | 245 |
|
| $ | 74 |
|
| $ | 102 |
|
| $ | 103 |
|
Total realized and unrealized gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric fuel and other energy-related purchases |
|
| 45 |
|
|
| (21 | ) |
|
| 142 |
|
|
| 27 |
|
|
| 293 |
|
|
| 10 |
|
Included in regulatory assets/liabilities |
|
| (80 | ) |
|
| (47 | ) |
|
| 26 |
|
|
| 41 |
|
|
| 152 |
|
|
| 12 |
|
Settlements |
|
| (45 | ) |
|
| 21 |
|
|
| (142 | ) |
|
| (27 | ) |
|
| (293 | ) |
|
| (10 | ) |
Purchases |
|
| — |
|
|
| — |
|
|
| 17 |
|
|
| — |
| ||||||||
Ending balance |
| $ | 22 |
|
| $ | 56 |
|
| $ | 271 |
|
| $ | 115 |
|
| $ | 271 |
|
| $ | 115 |
|
There were 0no unrealized gains or losses included in earnings in the Level 3 fair value category relating to assets/liabilities still held at the reporting date for the three and nine months ended March 31,September 30, 2022 and 2021.
Fair Value of Financial Instruments
Substantially all of the Companies’ financial instruments are recorded at fair value, with the exception of the instruments described below, which are reported at historical cost. Estimated fair values have been determined using available market information and valuation methodologies considered appropriate by management. The carrying amount of cash, restricted cash and equivalents, customer and other receivables, affiliated receivables, short-term debt, mandatorily redeemable preferred stock, affiliated current borrowings, payables to affiliates and accounts payable are representative of fair value because of the short-term nature of these instruments. For the Companies' financial instruments that are not recorded at fair value, the carrying amounts and estimated fair values are as follows:
|
| March 31, 2022 |
|
| December 31, 2021 |
|
| September 30, 2022 |
|
| December 31, 2021 |
| ||||||||||||||||||||
|
| Carrying Amount |
|
| Estimated Fair Value(1) |
|
| Carrying Amount |
|
| Estimated Fair Value(1) |
|
| Carrying Amount |
|
| Estimated Fair Value(1) |
|
| Carrying Amount |
|
| Estimated Fair Value(1) |
| ||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominion Energy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt(2) |
| $ | 36,945 |
|
| $ | 38,421 |
|
| $ | 35,996 |
|
| $ | 40,947 |
|
| $ | 38,487 |
|
| $ | 34,700 |
|
| $ | 35,996 |
|
| $ | 40,947 |
|
Supplemental credit facility borrowings |
|
| 450 |
|
|
| 450 |
|
|
| — |
|
|
| — |
| ||||||||||||||||
Junior subordinated notes(3) |
|
| 1,386 |
|
|
| 1,407 |
|
|
| 1,386 |
|
|
| 1,470 |
|
|
| 1,387 |
|
|
| 1,338 |
|
|
| 1,386 |
|
|
| 1,470 |
|
Virginia Power |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt(3) |
| $ | 14,736 |
|
| $ | 15,478 |
|
| $ | 13,753 |
|
| $ | 16,021 |
|
| $ | 15,618 |
|
| $ | 13,840 |
|
| $ | 13,753 |
|
| $ | 16,021 |
|
(1) | Fair value is estimated using market prices, where available, and interest rates currently available for issuance of debt with similar terms and remaining maturities. All fair value measurements are classified as Level 2. The carrying amount of debt issuances with short-term maturities and variable rates refinanced at current market rates is a reasonable estimate of their fair value. |
(2) | Carrying amount includes current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs and discount or premium. At |
(3) | Carrying amount includes current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs, discount or premium. |
Note 9. Derivatives and Hedge Accounting Activities
The Companies’ accounting policies, objectives and strategies for using derivative instruments are discussed in Note 2 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021. See Note 8 in this report for additional information about fair value measurements and associated valuation methods for derivatives.
Derivative assets and liabilities are presented gross on the Companies’ Consolidated Balance Sheets. The Companies’ derivative contracts include both over-the-counter transactions and those that are executed on an exchange or other trading platform (exchange contracts) and centrally cleared. Over-the-counter contracts are bilateral contracts that are transacted directly with a third party. Exchange contracts utilize a financial intermediary, exchange, or clearinghouse to enter, execute or clear the transactions. Certain over-the-counter and exchange contracts contain contractual rights of setoff through master netting arrangements, derivative clearing
37
agreements and contract default provisions. In addition, the contracts are subject to conditional rights of setoff through counterparty nonperformance, insolvency or other conditions.
In general, most over-the-counter transactions and all exchange contracts are subject to collateral requirements. Types of collateral for over-the-counter and exchange contracts include cash, letters of credit, and in some cases other forms of security, none of which are subject to restrictions. Cash collateral is used in the table below to offset derivative assets and liabilities. In February 2022, Dominion Energy entered into contracts representing offsetting positions to certain existing exchange contracts with collateral requirements as well as new over-the-counter transactions that are not subject to collateral requirements. These contracts resulted in positions which limit the risk of increased cash collateral requirements. Certain accounts receivable and accounts payable recognized on the Companies’ Consolidated Balance Sheets, letters of credit and other forms of securities, as well as certain other long-term debt, all of which are not included in the tables below, are subject to offset under master netting or similar arrangements and would reduce the net exposure. See Note 18 for additional information regarding credit-related contingent features for the Companies’ derivative instruments.
Dominion Energy
Balance Sheet Presentation
The tables below present Dominion Energy’s derivative asset and liability balances by type of financial instrument, if the gross amounts recognized in its Consolidated Balance Sheets were netted with derivative instruments and cash collateral received or paid:
|
| March 31, 2022 |
|
| December 31, 2021 |
|
| September 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 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Gross Assets Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Received |
|
| Net Amounts |
|
| Gross Assets Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Received |
|
| Net Amounts |
|
| Gross Assets Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Received |
|
| Net Amounts |
|
| Gross Assets Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Received |
|
| Net Amounts |
| ||||||||||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
| $ | 125 |
|
| $ | 37 |
|
| $ | 0 |
|
| $ | 88 |
|
| $ | 153 |
|
| $ | 13 |
|
| $ | 0 |
|
| $ | 140 |
|
| $ | 367 |
|
| $ | 11 |
|
| $ | — |
|
| $ | 356 |
|
| $ | 153 |
|
| $ | 13 |
|
| $ | — |
|
| $ | 140 |
|
Exchange |
|
| 136 |
|
|
| 130 |
|
|
| 0 |
|
|
| 6 |
|
|
| 9 |
|
|
| 7 |
|
|
| 0 |
|
|
| 2 |
|
|
| 292 |
|
|
| 287 |
|
|
| — |
|
|
| 5 |
|
|
| 9 |
|
|
| 7 |
|
|
| — |
|
|
| 2 |
|
Interest rate contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
|
| 768 |
|
|
| 158 |
|
|
| 0 |
|
|
| 610 |
|
|
| 323 |
|
|
| 49 |
|
|
| 0 |
|
|
| 274 |
|
|
| 1,593 |
|
|
| 410 |
|
|
| — |
|
|
| 1,183 |
|
|
| 323 |
|
|
| 49 |
|
|
| — |
|
|
| 274 |
|
Foreign currency exchange rate contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 8 |
|
|
| 0 |
|
|
| 0 |
|
|
| 8 |
|
|
| 6 |
|
|
| 6 |
|
|
| — |
|
|
| — |
|
|
| 8 |
|
|
| — |
|
|
| — |
|
|
| 8 |
|
Total derivatives, subject to a master netting or similar arrangement |
| $ | 1,029 |
|
| $ | 325 |
|
| $ | 0 |
|
| $ | 704 |
|
| $ | 493 |
|
| $ | 69 |
|
| $ | 0 |
|
| $ | 424 |
|
| $ | 2,258 |
|
| $ | 714 |
|
| $ | — |
|
| $ | 1,544 |
|
| $ | 493 |
|
| $ | 69 |
|
| $ | — |
|
| $ | 424 |
|
(1) | Excludes |
|
| March 31, 2022 |
|
| December 31, 2021 |
|
| September 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 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Gross Liabilities Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Paid |
|
| Net Amounts |
|
| Gross Liabilities Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Paid |
|
| Net Amounts |
|
| Gross Liabilities Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Paid |
|
| Net Amounts |
|
| Gross Liabilities Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Paid |
|
| Net Amounts |
| ||||||||||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
| $ | 326 |
|
| $ | 37 |
|
| $ | 124 |
|
| $ | 165 |
|
| $ | 95 |
|
| $ | 13 |
|
| $ | 54 |
|
| $ | 28 |
|
| $ | 660 |
|
| $ | 17 |
|
| $ | 121 |
|
| $ | 522 |
|
| $ | 95 |
|
| $ | 13 |
|
| $ | 54 |
|
| $ | 28 |
|
Exchange |
|
| 622 |
|
|
| 130 |
|
|
| 492 |
|
|
| 0 |
|
|
| 374 |
|
|
| 7 |
|
|
| 367 |
|
|
| 0 |
|
|
| 849 |
|
|
| 287 |
|
|
| 562 |
|
|
| — |
|
|
| 374 |
|
|
| 7 |
|
|
| 367 |
|
|
| — |
|
Interest rate contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
|
| 362 |
|
|
| 158 |
|
|
| 6 |
|
|
| 198 |
|
|
| 399 |
|
|
| 49 |
|
|
| 11 |
|
|
| 339 |
|
|
| 475 |
|
|
| 257 |
|
|
| 3 |
|
|
| 215 |
|
|
| 399 |
|
|
| 49 |
|
|
| 11 |
|
|
| 339 |
|
Foreign currency exchange rate contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
|
| 4 |
|
|
| 0 |
|
|
| 0 |
|
|
| 4 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 387 |
|
|
| 153 |
|
|
| — |
|
|
| 234 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total derivatives, subject to a master netting or similar arrangement |
| $ | 1,314 |
|
| $ | 325 |
|
| $ | 622 |
|
| $ | 367 |
|
| $ | 868 |
|
| $ | 69 |
|
| $ | 432 |
|
| $ | 367 |
|
| $ | 2,371 |
|
| $ | 714 |
|
| $ | 686 |
|
| $ | 971 |
|
| $ | 868 |
|
| $ | 69 |
|
| $ | 432 |
|
| $ | 367 |
|
(1) | There were |
Volumes
The following table presents the volume of Dominion Energy’s derivative activity at March 31,September 30, 2022. These volumes are based on open derivative positions and represent the combined absolute value of their long and short positions, except in the case of offsetting transactions, for which they represent the absolute value of the net volume of its long and short positions.
|
| Current |
|
| Noncurrent |
|
| Current |
|
| Noncurrent |
| ||||
Natural Gas (bcf): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price |
|
| 29 |
|
|
| 0 |
|
|
| 47 |
|
|
| 7 |
|
Basis(1) |
|
| 155 |
|
|
| 465 |
|
|
| 159 |
|
|
| 439 |
|
Electricity (MWh in millions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price |
|
| 15 |
|
|
| 35 |
|
|
| 16 |
|
|
| 31 |
|
FTRs |
|
| 18 |
|
|
| 0 |
|
|
| 72 |
|
|
| — |
|
Oil (Gal in millions) |
|
| 6 |
|
|
| — |
| ||||||||
Interest rate(2) (in millions) |
| $ | 1,637 |
|
| $ | 12,809 |
|
| $ | 358 |
|
| $ | 12,581 |
|
Foreign currency exchange rate(2)(in millions) |
| 520 kr. |
|
| 4,530 kr. |
| ||||||||||
Foreign currency exchange rate(2)(in millions): |
|
|
|
|
|
|
|
| ||||||||
Danish Krone |
| 468 kr. |
|
| 4,167 kr. |
| ||||||||||
Euro |
| €351 |
|
| €2,651 |
|
(1) | Includes options. |
(2) | Maturity is determined based on final settlement period. |
AOCI
The following table presents selected information related to losses on cash flow hedges included in AOCI in Dominion Energy’s Consolidated Balance Sheet at March 31,September 30, 2022:
|
| AOCI After-Tax |
|
| Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax |
|
| Maximum Term |
| AOCI After-Tax |
|
| Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax |
|
| Maximum Term | ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate |
| $ | (323 | ) |
| $ | (38 | ) |
| 393 months |
| $ | (261 | ) |
| $ | (33 | ) |
| 387 months |
Total |
| $ | (323 | ) |
| $ | (38 | ) |
|
|
| $ | (261 | ) |
| $ | (33 | ) |
|
|
The amounts that will be reclassified from AOCI to earnings will generally be offset by the recognition of the hedged transactions (e.g., interest rate payments) in earnings, thereby achieving the realization of prices contemplated by the underlying risk management strategies and will vary from the expected amounts presented above as a result of changes in interest rates.
35
Fair Value Hedges
For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings and presented in the same line item. There were 0no derivative instruments designated as fair value hedges during the three and nine months ended March 31,September 30, 2022 and 2021.
The following table presents the amounts recorded on the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges, all of which related to discontinued hedging relationships at both March 31,September 30, 2022 and December 31, 2021:
|
| Carrying Amount of the Hedged Asset (Liability) |
|
| Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Assets (Liabilities) |
|
| Carrying Amount of the Hedged Asset (Liability) |
|
| Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Assets (Liabilities) |
| ||||||||||||||||||||
|
| March 31, 2022 |
|
| December 31, 2021 |
|
| March 31, 2022 |
|
| December 31, 2021 |
|
| September 30, 2022 |
|
| December 31, 2021 |
|
| September 30, 2022 |
|
| December 31, 2021 |
| ||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
| $ | (351 | ) |
| $ | (352 | ) |
| $ | (1 | ) |
| $ | (2 | ) |
| $ | — |
|
| $ | (352 | ) |
| $ | — |
|
| $ | (2 | ) |
Fair Value and Gains and Losses on Derivative Instruments
The following table presents the fair values of Dominion Energy’s derivatives and where they are presented in its Consolidated Balance Sheets:
|
| Fair Value – Derivatives under Hedge Accounting |
|
| Fair Value – Derivatives not under Hedge Accounting |
|
| Total Fair Value |
| |||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 227 |
|
| $ | 227 |
|
Interest rate |
|
| 40 |
|
|
| 13 |
|
|
| 53 |
|
Total current derivative assets(1) |
|
| 40 |
|
|
| 240 |
|
|
| 280 |
|
Noncurrent Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
|
| 0 |
|
|
| 214 |
|
|
| 214 |
|
Interest rate |
|
| 266 |
|
|
| 449 |
|
|
| 715 |
|
Total noncurrent derivative assets(2) |
|
| 266 |
|
|
| 663 |
|
|
| 929 |
|
Total derivative assets |
| $ | 306 |
|
| $ | 903 |
|
| $ | 1,209 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 725 |
|
| $ | 725 |
|
Interest rate |
|
| 0 |
|
|
| 1 |
|
|
| 1 |
|
Foreign currency exchange rate |
|
| 0 |
|
|
| 1 |
|
|
| 1 |
|
Total current derivative liabilities |
|
| 0 |
|
|
| 727 |
|
|
| 727 |
|
Noncurrent Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
|
| 0 |
|
|
| 223 |
|
|
| 223 |
|
Interest rate |
|
| 200 |
|
|
| 161 |
|
|
| 361 |
|
Foreign currency exchange rate |
|
| 0 |
|
|
| 3 |
|
|
| 3 |
|
Total noncurrent derivative liabilities(3) |
|
| 200 |
|
|
| 387 |
|
|
| 587 |
|
Total derivative liabilities |
| $ | 200 |
|
| $ | 1,114 |
|
| $ | 1,314 |
|
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 103 |
|
| $ | 103 |
|
Interest rate |
|
| 1 |
|
|
| 17 |
|
|
| 18 |
|
Foreign currency exchange rate |
|
| 0 |
|
|
| 1 |
|
|
| 1 |
|
Total current derivative assets(1) |
|
| 1 |
|
|
| 121 |
|
|
| 122 |
|
Noncurrent Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
|
| 0 |
|
|
| 179 |
|
|
| 179 |
|
Interest rate |
|
| 145 |
|
|
| 160 |
|
|
| 305 |
|
Foreign currency exchange rate |
|
| 0 |
|
|
| 7 |
|
|
| 7 |
|
Total noncurrent derivative assets(2) |
|
| 145 |
|
|
| 346 |
|
|
| 491 |
|
Total derivative assets |
| $ | 146 |
|
| $ | 467 |
|
| $ | 613 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 304 |
|
| $ | 304 |
|
Interest rate |
|
| 42 |
|
|
| 13 |
|
|
| 55 |
|
Total current derivative liabilities |
|
| 42 |
|
|
| 317 |
|
|
| 359 |
|
Noncurrent Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
|
| 0 |
|
|
| 165 |
|
|
| 165 |
|
Interest rate |
|
| 295 |
|
|
| 49 |
|
|
| 344 |
|
Total noncurrent derivative liabilities(3) |
|
| 295 |
|
|
| 214 |
|
|
| 509 |
|
Total derivative liabilities |
| $ | 337 |
|
| $ | 531 |
|
| $ | 868 |
|
|
|
|
| Fair Value – Derivatives under Hedge Accounting |
|
| Fair Value – Derivatives not under Hedge Accounting |
|
| Total Fair Value |
| |||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | — |
|
| $ | 610 |
|
| $ | 610 |
|
Interest rate |
|
| — |
|
|
| 54 |
|
|
| 54 |
|
Foreign currency exchange rate |
|
| — |
|
|
| 6 |
|
|
| 6 |
|
Total current derivative assets |
|
| — |
|
|
| 670 |
|
|
| 670 |
|
Noncurrent Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
|
| — |
|
|
| 260 |
|
|
| 260 |
|
Interest rate |
|
| 596 |
|
|
| 943 |
|
|
| 1,539 |
|
Total noncurrent derivative assets |
|
| 596 |
|
|
| 1,203 |
|
|
| 1,799 |
|
Total derivative assets |
| $ | 596 |
|
| $ | 1,873 |
|
| $ | 2,469 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | — |
|
| $ | 1,083 |
|
| $ | 1,083 |
|
Interest rate |
|
| — |
|
|
| 46 |
|
|
| 46 |
|
Foreign currency exchange rate |
|
| — |
|
|
| 50 |
|
|
| 50 |
|
Total current derivative liabilities |
|
| — |
|
|
| 1,179 |
|
|
| 1,179 |
|
Noncurrent Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
|
| — |
|
|
| 426 |
|
|
| 426 |
|
Interest rate |
|
| 27 |
|
|
| 402 |
|
|
| 429 |
|
Foreign currency exchange rate |
|
| — |
|
|
| 337 |
|
|
| 337 |
|
Total noncurrent derivative liabilities |
|
| 27 |
|
|
| 1,165 |
|
|
| 1,192 |
|
Total derivative liabilities |
| $ | 27 |
|
| $ | 2,344 |
|
| $ | 2,371 |
|
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | — |
|
| $ | 103 |
|
| $ | 103 |
|
Interest rate |
|
| 1 |
|
|
| 17 |
|
|
| 18 |
|
Foreign currency exchange rate |
|
| — |
|
|
| 1 |
|
|
| 1 |
|
Total current derivative assets |
|
| 1 |
|
|
| 121 |
|
|
| 122 |
|
Noncurrent Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
|
| — |
|
|
| 179 |
|
|
| 179 |
|
Interest rate |
|
| 145 |
|
|
| 160 |
|
|
| 305 |
|
Foreign currency exchange rate |
|
| — |
|
|
| 7 |
|
|
| 7 |
|
Total noncurrent derivative assets |
|
| 145 |
|
|
| 346 |
|
|
| 491 |
|
Total derivative assets |
| $ | 146 |
|
| $ | 467 |
|
| $ | 613 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | — |
|
| $ | 304 |
|
| $ | 304 |
|
Interest rate |
|
| 42 |
|
|
| 13 |
|
|
| 55 |
|
Total current derivative liabilities |
|
| 42 |
|
|
| 317 |
|
|
| 359 |
|
Noncurrent Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
|
| — |
|
|
| 165 |
|
|
| 165 |
|
Interest rate |
|
| 295 |
|
|
| 49 |
|
|
| 344 |
|
Total noncurrent derivative liabilities |
|
| 295 |
|
|
| 214 |
|
|
| 509 |
|
Total derivative liabilities |
| $ | 337 |
|
| $ | 531 |
|
| $ | 868 |
|
|
|
|
|
The following tables present the gains and losses on Dominion Energy’s derivatives, as well as where the associated activity is presented in its Consolidated Balance Sheets and Statements of Income.
Derivatives in cash flow hedging relationships |
| Amount of Gain (Loss) Recognized in AOCI on Derivatives(1) |
|
| Amount of Gain (Loss) Reclassified From AOCI to Income |
|
| Increase (Decrease) in Derivatives Subject to Regulatory Treatment(2) |
|
| Amount of Gain (Loss) Recognized in AOCI on Derivatives(1) |
|
| Amount of Gain (Loss) Reclassified From AOCI to Income |
|
| Increase (Decrease) in Derivatives Subject to Regulatory Treatment(2) |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Three Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate(3) |
| $ | 33 |
|
| $ | (14 | ) |
| $ | 279 |
|
| $ | 14 |
|
| $ | (16 | ) |
| $ | 182 |
|
Total |
| $ | 33 |
|
| $ | (14 | ) |
| $ | 279 |
|
| $ | 14 |
|
| $ | (16 | ) |
| $ | 182 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Three Months Ended March 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity(4) |
| $ | — |
|
| $ | (1 | ) |
| $ | — |
| ||||||||||||
Interest rate(3) |
|
| 52 |
|
|
| (16 | ) |
|
| 408 |
|
| $ | (2 | ) |
| $ | (14 | ) |
| $ | 9 |
|
Total |
| $ | 52 |
|
| $ | (17 | ) |
| $ | 408 |
|
| $ | (2 | ) |
| $ | (14 | ) |
| $ | 9 |
|
Nine Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Interest rate (3) |
| $ | 86 |
|
| $ | (44 | ) |
| $ | 815 |
| ||||||||||||
Total |
| $ | 86 |
|
| $ | (44 | ) |
| $ | 815 |
| ||||||||||||
Nine Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Interest rate (3) |
| $ | 29 |
|
| $ | (46 | ) |
| $ | 198 |
| ||||||||||||
Commodity(4) |
|
| — |
|
|
| (1 | ) |
|
| — |
| ||||||||||||
Total |
| $ | 29 |
|
| $ | (47 | ) |
| $ | 198 |
|
(1) | Amounts deferred into AOCI have no associated effect in Dominion Energy’s Consolidated Statements of Income. |
(2) | Represents net derivative activity deferred into and amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Dominion Energy’s Consolidated Statements of Income. |
(3) | Amounts recorded in Dominion Energy’s Consolidated Statement of Income are classified in interest and related charges. |
(4) | Amounts recorded in Dominion Energy’s Consolidated Statement of Income are classified in purchased gas. |
Derivatives not designated as hedging instruments |
| Amount of Gain (Loss) Recognized in Income on Derivatives(1)(2) |
|
|
| Amount of Gain (Loss) Recognized in Income on Derivatives(1)(2) |
| ||||||||||||||||||||
|
| Three Months Ended |
|
|
| Three Months Ended |
|
| Nine Months Ended |
| |||||||||||||||||
|
| March 31, |
|
|
| September 30, |
|
| September 30, |
| |||||||||||||||||
|
| 2022 |
|
| 2021 |
|
|
| 2022 |
|
|
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue |
| $ | (330 | ) |
| $ | (41 | ) |
|
| $ | (306 | ) |
|
|
| $ | (334 | ) |
| $ | (908 | ) |
| $ | (521 | ) |
Purchased gas |
|
| 2 |
|
|
| 0 |
|
|
|
| 1 |
|
|
|
|
| 25 |
|
|
| 6 |
|
|
| 32 |
|
Electric fuel and other energy-related purchases |
|
| 59 |
|
|
| (44 | ) |
|
|
| 205 |
|
|
|
|
| 44 |
|
|
| 401 |
|
|
| 7 |
|
Interest rate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and related charges |
|
| 196 |
|
|
| 319 |
|
|
|
| 92 |
|
|
|
|
| (20 | ) |
|
| 628 |
|
|
| 142 |
|
Total |
| $ | (73 | ) |
| $ | 234 |
|
|
| $ | (8 | ) |
|
|
| $ | (285 | ) |
| $ | 127 |
|
| $ | (340 | ) |
(1) | Includes derivative activity amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Dominion Energy’s Consolidated Statements of Income. |
(2) | Excludes amounts related to foreign currency exchange rate derivatives that are deferred to plant under construction within property, plant and equipment and regulatory assets/liabilities that will begin to amortize once the CVOW Commercial Project is placed in service. |
3842
Virginia Power
Balance Sheet Presentation
The tables below present Virginia Power’s derivative asset and liability balances by type of financial instrument, if the gross amounts recognized in its Consolidated Balance Sheets were netted with derivative instruments and cash collateral received or paid:
|
| March 31, 2022 |
|
| December 31, 2021 |
|
| September 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 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Gross Assets Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Received |
|
| Net Amounts |
|
| Gross Assets Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Received |
|
| Net Amounts |
|
| Gross Assets Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Received |
|
| Net Amounts |
|
| Gross Assets Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Received |
|
| Net Amounts |
| ||||||||||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
| $ | 32 |
|
| $ | 10 |
|
| $ | 0 |
|
| $ | 22 |
|
| $ | 110 |
|
| $ | 8 |
|
| $ | 0 |
|
| $ | 102 |
|
| $ | 297 |
|
| $ | 7 |
|
| $ | — |
|
| $ | 290 |
|
| $ | 110 |
|
| $ | 8 |
|
| $ | — |
|
| $ | 102 |
|
Exchange |
|
| 9 |
|
|
| 9 |
|
|
| 0 |
|
|
| 0 |
|
|
| 7 |
|
|
| 7 |
|
|
| 0 |
|
|
| 0 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 7 |
|
|
| 7 |
|
|
| — |
|
|
| — |
|
Interest rate contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
|
| 300 |
|
|
| 36 |
|
|
| 0 |
|
|
| 264 |
|
|
| 146 |
|
|
| 20 |
|
|
| 0 |
|
|
| 126 |
|
|
| 596 |
|
|
| 163 |
|
|
| — |
|
|
| 433 |
|
|
| 146 |
|
|
| 20 |
|
|
| — |
|
|
| 126 |
|
Foreign currency exchange rate contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 8 |
|
|
| 0 |
|
|
| 0 |
|
|
| 8 |
|
|
| 6 |
|
|
| 6 |
|
|
| — |
|
|
| — |
|
|
| 8 |
|
|
| — |
|
|
| — |
|
|
| 8 |
|
Total derivatives, subject to a master netting or similar arrangement |
| $ | 341 |
|
| $ | 55 |
|
| $ | 0 |
|
| $ | 286 |
|
| $ | 271 |
|
| $ | 35 |
|
| $ | 0 |
|
| $ | 236 |
|
| $ | 899 |
|
| $ | 176 |
|
| $ | — |
|
| $ | 723 |
|
| $ | 271 |
|
| $ | 35 |
|
| $ | — |
|
| $ | 236 |
|
(1) | Excludes |
|
| March 31, 2022 |
|
| December 31, 2021 |
|
| September 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 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Gross Liabilities Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Paid |
|
| Net Amounts |
|
| Gross Liabilities Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Paid |
|
| Net Amounts |
|
| Gross Liabilities Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Paid |
|
| Net Amounts |
|
| Gross Liabilities Presented in the Consolidated Balance Sheet(1) |
|
| Financial Instruments |
|
| Cash Collateral Paid |
|
| Net Amounts |
| ||||||||||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
| $ | 167 |
|
| $ | 10 |
|
| $ | 124 |
|
| $ | 33 |
|
| $ | 84 |
|
| $ | 8 |
|
| $ | 54 |
|
| $ | 22 |
|
| $ | 233 |
|
| $ | 13 |
|
| $ | 121 |
|
| $ | 99 |
|
| $ | 84 |
|
| $ | 8 |
|
| $ | 54 |
|
| $ | 22 |
|
Exchange |
|
| 136 |
|
|
| 9 |
|
|
| 127 |
|
|
| 0 |
|
|
| 43 |
|
|
| 7 |
|
|
| 36 |
|
|
| 0 |
|
|
| 268 |
|
|
| — |
|
|
| 268 |
|
|
| — |
|
|
| 43 |
|
|
| 7 |
|
|
| 36 |
|
|
| — |
|
Interest rate contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
|
| 200 |
|
|
| 36 |
|
|
| 0 |
|
|
| 164 |
|
|
| 337 |
|
|
| 20 |
|
|
| 0 |
|
|
| 317 |
|
|
| 27 |
|
|
| 10 |
|
|
| — |
|
|
| 17 |
|
|
| 337 |
|
|
| 20 |
|
|
| — |
|
|
| 317 |
|
Foreign currency exchange rate contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter |
|
| 4 |
|
|
| 0 |
|
|
| 0 |
|
|
| 4 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 387 |
|
|
| 153 |
|
|
| — |
|
|
| 234 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total derivatives, subject to a master netting or similar arrangement |
| $ | 507 |
|
| $ | 55 |
|
| $ | 251 |
|
| $ | 201 |
|
| $ | 464 |
|
| $ | 35 |
|
| $ | 90 |
|
| $ | 339 |
|
| $ | 915 |
|
| $ | 176 |
|
| $ | 389 |
|
| $ | 350 |
|
| $ | 464 |
|
| $ | 35 |
|
| $ | 90 |
|
| $ | 339 |
|
(1) | Excludes |
3943
Volumes
The following table presents the volume of Virginia Power’s derivative activity at March 31,September 30, 2022. These volumes are based on open derivative positions and represent the combined absolute value of their long and short positions, except in the case of offsetting transactions, for which they represent the absolute value of the net volume of its long and short positions.
|
| Current |
|
| Noncurrent |
|
| Current |
|
| Noncurrent |
| ||||
Natural Gas (bcf): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price |
|
| 21 |
|
|
| 0 |
|
|
| 34 |
|
|
| 7 |
|
Basis(1) |
|
| 146 |
|
|
| 463 |
|
|
| 145 |
|
|
| 428 |
|
Electricity (MWh in millions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed price |
|
| 7 |
|
|
| 9 |
|
|
| 8 |
|
|
| 5 |
|
FTRs |
|
| 18 |
|
|
| 0 |
|
|
| 72 |
|
|
| — |
|
Oil (Gal in millions) |
|
| 6 |
|
|
| — |
| ||||||||
Interest rate(2) (in millions) |
| $ | 1,100 |
|
| $ | 2,800 |
|
| $ | 250 |
|
| $ | 3,050 |
|
Foreign currency exchange rate(2)(in millions) |
| 520 kr. |
|
| 4,530 kr. |
| ||||||||||
Foreign currency exchange rate(2)(in millions): |
|
|
|
|
|
|
|
| ||||||||
Danish Krone |
| 468 kr. |
|
| 4,167 kr. |
| ||||||||||
Euro |
| €351 |
|
| €2,651 |
|
(1) | Includes options. |
(2) | Maturity is determined based on final settlement period. |
AOCI
The following table presents selected information related to losses on cash flow hedges included in AOCI in Virginia Power’s Consolidated Balance Sheet at March 31,September 30, 2022:
|
| AOCI After-Tax |
|
| Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax |
|
| Maximum Term |
| AOCI After-Tax |
|
| Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax |
|
| Maximum Term | ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate |
| $ | (25 | ) |
| $ | (2 | ) |
| 393 months |
| $ | 13 |
|
| $ | (1 | ) |
| 387 months |
Total |
| $ | (25 | ) |
| $ | (2 | ) |
|
|
| $ | 13 |
|
| $ | (1 | ) |
|
|
The amounts that will be reclassified from AOCI to earnings will generally be offset by the recognition of the hedged transactions (e.g., interest payments) in earnings, thereby achieving the realization of interest rates contemplated by the underlying risk management strategies and will vary from the expected amounts presented above as a result of changes in interest rates.
4044
Fair Value and Gains and Losses on Derivative Instruments
The following table presents the fair values of Virginia Power’s derivatives and where they are presented in its Consolidated Balance Sheets:
|
| Fair Value – Derivatives under Hedge Accounting |
|
| Fair Value – Derivatives not under Hedge Accounting |
|
| Total Fair Value |
|
| Fair Value – Derivatives under Hedge Accounting |
|
| Fair Value – Derivatives not under Hedge Accounting |
|
| Total Fair Value |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 80 |
|
| $ | 80 |
|
| $ | — |
|
| $ | 357 |
|
| $ | 357 |
|
Interest rate |
|
| 34 |
|
|
| 0 |
|
|
| 34 |
| ||||||||||||
Foreign currency exchange rate |
|
| — |
|
|
| 6 |
|
|
| 6 |
| ||||||||||||
Total current derivative assets |
|
| 34 |
|
|
| 80 |
|
|
| 114 |
|
|
| — |
|
|
| 363 |
|
|
| 363 |
|
Noncurrent Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
|
| 0 |
|
|
| 24 |
|
|
| 24 |
|
|
| — |
|
|
| 2 |
|
|
| 2 |
|
Interest rate |
|
| 266 |
|
|
| 0 |
|
|
| 266 |
|
|
| 596 |
|
|
| — |
|
|
| 596 |
|
Total noncurrent derivative assets(2) |
|
| 266 |
|
|
| 24 |
|
|
| 290 |
| ||||||||||||
Total noncurrent derivative assets(1) |
|
| 596 |
|
|
| 2 |
|
|
| 598 |
| ||||||||||||
Total derivative assets |
| $ | 300 |
|
| $ | 104 |
|
| $ | 404 |
|
| $ | 596 |
|
| $ | 365 |
|
| $ | 961 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 240 |
|
| $ | 240 |
|
| $ | — |
|
| $ | 392 |
|
| $ | 392 |
|
Foreign currency exchange rate |
|
| 0 |
|
|
| 1 |
|
|
| 1 |
|
|
| — |
|
|
| 50 |
|
|
| 50 |
|
Total current derivative liabilities |
|
| 0 |
|
|
| 241 |
|
|
| 241 |
|
|
| — |
|
|
| 442 |
|
|
| 442 |
|
Noncurrent Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
|
| 0 |
|
|
| 64 |
|
|
| 64 |
|
|
| — |
|
|
| 111 |
|
|
| 111 |
|
Interest rate |
|
| 200 |
|
|
| 0 |
|
|
| 200 |
|
|
| 27 |
|
|
| — |
|
|
| 27 |
|
Foreign currency exchange rate |
|
| 0 |
|
|
| 3 |
|
|
| 3 |
|
|
| — |
|
|
| 337 |
|
|
| 337 |
|
Total noncurrent derivative liabilities |
|
| 200 |
|
|
| 67 |
|
|
| 267 |
|
|
| 27 |
|
|
| 448 |
|
|
| 475 |
|
Total derivative liabilities |
| $ | 200 |
|
| $ | 308 |
|
| $ | 508 |
|
| $ | 27 |
|
| $ | 890 |
|
| $ | 917 |
|
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 74 |
|
| $ | 74 |
|
| $ | — |
|
| $ | 74 |
|
| $ | 74 |
|
Interest rate |
|
| 1 |
|
|
| 0 |
|
|
| 1 |
|
|
| 1 |
|
|
| — |
|
|
| 1 |
|
Foreign currency exchange rate |
|
| 0 |
|
|
| 1 |
|
|
| 1 |
|
|
| — |
|
|
| 1 |
|
|
| 1 |
|
Total current derivative assets |
|
| 1 |
|
|
| 75 |
|
|
| 76 |
|
|
| 1 |
|
|
| 75 |
|
|
| 76 |
|
Noncurrent Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
|
| 0 |
|
|
| 72 |
|
|
| 72 |
|
|
| — |
|
|
| 72 |
|
|
| 72 |
|
Interest rate |
|
| 145 |
|
|
| 0 |
|
|
| 145 |
|
|
| 145 |
|
|
| — |
|
|
| 145 |
|
Foreign currency exchange rate |
|
| 0 |
|
|
| 7 |
|
|
| 7 |
|
|
| — |
|
|
| 7 |
|
|
| 7 |
|
Total noncurrent derivative assets(2) |
|
| 145 |
|
|
| 79 |
|
|
| 224 |
| ||||||||||||
Total noncurrent derivative assets(1) |
|
| 145 |
|
|
| 79 |
|
|
| 224 |
| ||||||||||||
Total derivative assets |
| $ | 146 |
|
| $ | 154 |
|
| $ | 300 |
|
| $ | 146 |
|
| $ | 154 |
|
| $ | 300 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
| $ | 0 |
|
| $ | 92 |
|
| $ | 92 |
|
| $ | — |
|
| $ | 92 |
|
| $ | 92 |
|
Interest rate |
|
| 42 |
|
|
| 0 |
|
|
| 42 |
|
|
| 42 |
|
|
| — |
|
|
| 42 |
|
Total current derivative liabilities |
|
| 42 |
|
|
| 92 |
|
|
| 134 |
|
|
| 42 |
|
|
| 92 |
|
|
| 134 |
|
Noncurrent Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity |
|
| 0 |
|
|
| 41 |
|
|
| 41 |
|
|
| — |
|
|
| 41 |
|
|
| 41 |
|
Interest rate |
|
| 295 |
|
|
| 0 |
|
|
| 295 |
|
|
| 295 |
|
|
| — |
|
|
| 295 |
|
Total noncurrent derivative liabilities |
|
| 295 |
|
|
| 41 |
|
|
| 336 |
|
|
| 295 |
|
|
| 41 |
|
|
| 336 |
|
Total derivative liabilities |
| $ | 337 |
|
| $ | 133 |
|
| $ | 470 |
|
| $ | 337 |
|
| $ | 133 |
|
| $ | 470 |
|
|
|
| Noncurrent derivative assets are presented in other deferred charges and other assets in Virginia Power’s Consolidated Balance Sheets. |
| Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in Virginia Power’s Consolidated Balance Sheets. |
The following tables present the gains and losses on Virginia Power’s derivatives, as well as where the associated activity is presented in its Consolidated Balance Sheets and Statements of Income:
Derivatives in cash flow hedging relationships |
| Amount of Gain (Loss) Recognized in AOCI on Derivatives(1) |
|
| Amount of Gain (Loss) Reclassified From AOCI to Income |
|
| Increase (Decrease) in Derivatives Subject to Regulatory Treatment(2) |
|
| Amount of Gain (Loss) Recognized in AOCI on Derivatives(1) |
|
| Amount of Gain (Loss) Reclassified From AOCI to Income |
|
| Increase (Decrease) in Derivatives Subject to Regulatory Treatment(2) |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Three Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate(3) |
| $ | 26 |
|
| $ | (1 | ) |
| $ | 279 |
|
| $ | 18 |
|
| $ | (1 | ) |
| $ | 182 |
|
Total |
| $ | 26 |
|
| $ | (1 | ) |
| $ | 279 |
|
| $ | 18 |
|
| $ | (1 | ) |
| $ | 182 |
|
Three Months Ended March 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate(3) |
| $ | 43 |
|
| $ | (1 | ) |
| $ | 407 |
|
| $ | (2 | ) |
| $ | (1 | ) |
| $ | 8 |
|
Total |
| $ | 43 |
|
| $ | (1 | ) |
| $ | 407 |
|
| $ | (2 | ) |
| $ | (1 | ) |
| $ | 8 |
|
Nine Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Interest rate(3) |
| $ | 77 |
|
| $ | (2 | ) |
| $ | 814 |
| ||||||||||||
Total |
| $ | 77 |
|
| $ | (2 | ) |
| $ | 814 |
| ||||||||||||
Nine Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Interest rate(3) |
| $ | 24 |
|
| $ | (2 | ) |
| $ | 194 |
| ||||||||||||
Total |
| $ | 24 |
|
| $ | (2 | ) |
| $ | 194 |
|
(1) | Amounts deferred into AOCI have no associated effect in Virginia Power’s Consolidated Statements of Income. |
(2) | Represents net derivative activity deferred into and amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Virginia Power’s Consolidated Statements of Income. |
(3) Amounts recorded in Virginia Power’s Consolidated Statements of Income are classified in interest and related charges.
Derivatives not designated as hedging instruments |
| Amount of Gain (Loss) Recognized in Income on Derivatives(1)(2) |
|
|
| Amount of Gain (Loss) Recognized in Income on Derivatives(1)(2) |
| ||||||||||||||||||||
|
| Three Months Ended |
|
|
| Three Months Ended |
|
| Nine Months Ended |
| |||||||||||||||||
|
| March 31, |
|
|
| September 30, |
|
| September 30, |
| |||||||||||||||||
|
| 2022 |
|
| 2021 |
|
|
| 2022 |
|
|
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative type and location of gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenue |
| $ | (41 | ) |
| $ | (2 | ) |
|
| $ | (108 | ) |
|
|
| $ | (19 | ) |
| $ | (237 | ) |
| $ | (25 | ) |
Electric fuel and other energy-related purchases |
|
| 57 |
|
|
| (44 | ) |
|
|
| 166 |
|
|
|
|
| 42 |
|
|
| 348 |
|
|
| 5 |
|
Total |
| $ | 16 |
|
| $ | (46 | ) |
|
| $ | 58 |
|
|
|
| $ | 23 |
|
| $ | 111 |
|
| $ | (20 | ) |
(1) | Includes derivative activity amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Virginia Power’s Consolidated Statements of Income. |
(2) Excludes amounts related to foreign currency exchange rate derivatives that are deferred to plant under construction within property, plant and equipment and regulatory assets/liabilities that will begin to amortize once the CVOW Commercial Project is placed in service.
Note 10. Investments
Dominion Energy
Equity and Debt Securities
Short-Term Deposit
In May 2022, Dominion Energy entered into an agreement with a financial institution and committed to make a short-term deposit of at least $1.6 billion but not more than $2.0 billion to be posted as collateral to secure its $1.6 billion redemption obligation of the Series A Preferred Stock as described in Note 16. In May 2022, Dominion Energy funded the short-term deposit in the amount of $2.0 billion, which earned interest income at an annual rate of 1.75% through its maturity in September 2022.
46
Rabbi Trust Securities
Equity and fixed income securities and cash equivalents in Dominion Energy’s rabbi trusts and classified as trading totaled $116$109 million and $122 million at March 31,September 30, 2022 and December 31, 2021, respectively.
42
Decommissioning Trust Securities
Dominion Energy holds equity and fixed income securities, insurance contracts and cash equivalents in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Dominion Energy’s decommissioning trust funds are summarized below:
|
| Amortized Cost |
|
| Total Unrealized Gains |
|
| Total Unrealized Losses |
|
| Allowance for Credit Losses |
|
| Fair Value |
|
| Amortized Cost |
|
| Total Unrealized Gains |
|
| Total Unrealized Losses |
|
| Allowance for Credit Losses |
|
| Fair Value |
| ||||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Equity securities:(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
| $ | 1,586 |
|
| $ | 3,498 |
|
| $ | (13 | ) |
|
|
|
|
| $ | 5,071 |
|
| $ | 1,375 |
|
| $ | 2,209 |
|
| $ | (37 | ) |
|
|
|
|
| $ | 3,547 |
|
Fixed income securities:(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt instruments |
|
| 876 |
|
|
| 9 |
|
|
| (45 | ) |
| $ | 0 |
|
|
| 840 |
|
|
| 649 |
|
|
| — |
|
|
| (86 | ) |
| $ | — |
|
|
| 563 |
|
Government securities |
|
| 1,358 |
|
|
| 14 |
|
|
| (48 | ) |
|
| 0 |
|
|
| 1,324 |
|
|
| 1,291 |
|
|
| 1 |
|
|
| (101 | ) |
|
| — |
|
|
| 1,191 |
|
Common/collective trust funds |
|
| 150 |
|
|
| 3 |
|
|
| 0 |
|
|
| 0 |
|
|
| 153 |
|
|
| 62 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 62 |
|
Insurance contracts |
|
| 242 |
|
|
| 0 |
|
|
| 0 |
|
|
|
|
|
|
| 242 |
|
|
| 214 |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
| 214 |
|
Cash equivalents and other(3) |
|
| 26 |
|
|
| 5 |
|
|
| (47 | ) |
|
| 0 |
|
|
| (16 | ) |
|
| 13 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 13 |
|
Total |
| $ | 4,238 |
|
| $ | 3,529 |
|
| $ | (153 | ) | (4) | $ | 0 |
|
| $ | 7,614 |
|
| $ | 3,604 |
|
| $ | 2,210 |
|
| $ | (224 | ) | (4) | $ | — |
|
| $ | 5,590 |
|
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities:(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
| $ | 1,567 |
|
| $ | 3,734 |
|
| $ | (13 | ) |
|
|
|
|
| $ | 5,288 |
|
| $ | 1,567 |
|
| $ | 3,734 |
|
| $ | (13 | ) |
|
|
|
|
| $ | 5,288 |
|
Fixed income securities:(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt instruments |
|
| 854 |
|
|
| 32 |
|
|
| (5 | ) |
| $ | 0 |
|
|
| 881 |
|
|
| 854 |
|
|
| 32 |
|
|
| (5 | ) |
| $ | — |
|
|
| 881 |
|
Government securities |
|
| 1,382 |
|
|
| 43 |
|
|
| (7 | ) |
|
| 0 |
|
|
| 1,418 |
|
|
| 1,382 |
|
|
| 43 |
|
|
| (7 | ) |
|
| — |
|
|
| 1,418 |
|
Common/collective trust funds |
|
| 168 |
|
|
| 4 |
|
|
| 0 |
|
|
| 0 |
|
|
| 172 |
|
|
| 168 |
|
|
| 4 |
|
|
| — |
|
|
| — |
|
|
| 172 |
|
Insurance contracts |
|
| 255 |
|
|
| 0 |
|
|
| 0 |
|
|
|
|
|
|
| 255 |
|
|
| 255 |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
| 255 |
|
Cash equivalents and other(3) |
|
| 9 |
|
|
| 2 |
|
|
| (75 | ) |
|
| 0 |
|
|
| (64 | ) |
|
| 9 |
|
|
| 2 |
|
|
| (75 | ) |
|
| — |
|
|
| (64 | ) |
Total |
| $ | 4,235 |
|
| $ | 3,815 |
|
| $ | (100 | ) | (4) | $ | 0 |
|
| $ | 7,950 |
|
| $ | 4,235 |
|
| $ | 3,815 |
|
| $ | (100 | ) | (4) | $ | — |
|
| $ | 7,950 |
|
(1) | Unrealized gains and losses on equity securities are included in other income and the nuclear decommissioning trust regulatory liability. |
(2) | Unrealized gains and losses on fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability. Changes in allowance for credit losses are included in other income. |
(3) | Includes pending sales of securities of $13 million at September 30, 2022, and pending purchases of securities of |
(4) | The fair value of securities in an unrealized loss position was |
The portion of unrealized gains and losses that relates to equity securities held within Dominion Energy’s nuclear decommissioning trusts is summarized below:
|
| Three Months Ended March 31, |
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| |||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gains (losses) recognized during the period |
| $ | (206 | ) |
| $ | 279 |
|
| $ | (205 | ) |
| $ | (15 | ) |
| $ | (1,123 | ) |
| $ | 616 |
|
Less: Net (gains) losses recognized during the period on securities sold during the period |
|
| (1 | ) |
|
| (178 | ) |
|
| (2 | ) |
|
| (11 | ) |
|
| 3 |
|
|
| (323 | ) |
Unrealized gains (losses) recognized during the period on securities still held at period end(1) |
| $ | (207 | ) |
| $ | 101 |
|
| $ | (207 | ) |
| $ | (26 | ) |
| $ | (1,120 | ) |
| $ | 293 |
|
(1) | Included in other income and the nuclear decommissioning trust regulatory liability. |
The fair value of Dominion Energy’s fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds at March 31,September 30, 2022 by contractual maturity is as follows:
|
| Amount |
|
| Amount |
| ||
(millions) |
|
|
|
|
|
|
|
|
Due in one year or less |
| $ | 274 |
|
| $ | 122 |
|
Due after one year through five years |
|
| 610 |
|
|
| 512 |
|
Due after five years through ten years |
|
| 596 |
|
|
| 453 |
|
Due after ten years |
|
| 837 |
|
|
| 729 |
|
Total |
| $ | 2,317 |
|
| $ | 1,816 |
|
Presented below is selected information regarding Dominion Energy’s equity and fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds.
|
| Three Months Ended March 31, |
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| |||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sales |
| $ | 814 |
|
| $ | 1,765 |
|
| $ | 605 |
|
| $ | 614 |
|
| $ | 2,686 |
|
| $ | 3,324 |
|
Realized gains(1) |
|
| 40 |
|
|
| 232 |
|
|
| 17 |
|
|
| 25 |
|
|
| 132 |
|
|
| 405 |
|
Realized losses(1) |
|
| 54 |
|
|
| 59 |
|
|
| 50 |
|
|
| 7 |
|
|
| 247 |
|
|
| 81 |
|
(1) | Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability. |
Virginia Power
Virginia Power holds equity and fixed income securities and cash equivalents in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Virginia Power’s decommissioning trust funds are summarized below:
|
| Amortized Cost |
|
| Total Unrealized Gains |
|
| Total Unrealized Losses |
|
| Allowance for Credit Losses |
|
| Fair Value |
|
| Amortized Cost |
|
| Total Unrealized Gains |
|
| Total Unrealized Losses |
|
| Allowance for Credit Losses |
|
| Fair Value |
| ||||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Equity securities:(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
| $ | 857 |
|
| $ | 1,619 |
|
| $ | (12 | ) |
|
|
|
|
| $ | 2,464 |
|
| $ | 856 |
|
| $ | 1,151 |
|
| $ | (32 | ) |
|
|
|
|
| $ | 1,975 |
|
Fixed income securities:(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt instruments |
|
| 535 |
|
|
| 4 |
|
|
| (30 | ) |
| $ | 0 |
|
|
| 509 |
|
|
| 434 |
|
|
| — |
|
|
| (62 | ) |
| $ | — |
|
|
| 372 |
|
Government securities |
|
| 568 |
|
|
| 4 |
|
|
| (19 | ) |
|
| 0 |
|
|
| 553 |
|
|
| 654 |
|
|
| — |
|
|
| (48 | ) |
|
| — |
|
|
| 606 |
|
Common/collective trust funds |
|
| 55 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 55 |
|
|
| 45 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 45 |
|
Cash equivalents and other(3) |
|
| (4 | ) |
|
| — |
|
|
| — |
|
|
| 0 |
|
|
| (4 | ) |
|
| 6 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 6 |
|
Total |
| $ | 2,011 |
|
| $ | 1,627 |
|
| $ | (61 | ) | (4) | $ | 0 |
|
| $ | 3,577 |
|
| $ | 1,995 |
|
| $ | 1,151 |
|
| $ | (142 | ) | (4) | $ | — |
|
| $ | 3,004 |
|
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities:(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
| $ | 841 |
|
| $ | 1,720 |
|
| $ | (11 | ) |
|
|
|
|
| $ | 2,550 |
|
| $ | 841 |
|
| $ | 1,720 |
|
| $ | (11 | ) |
|
|
|
|
| $ | 2,550 |
|
Fixed income securities:(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt instruments |
|
| 517 |
|
|
| 17 |
|
|
| (3 | ) |
| $ | 0 |
|
|
| 531 |
|
|
| 517 |
|
|
| 17 |
|
|
| (3 | ) |
| $ | — |
|
|
| 531 |
|
Government securities |
|
| 584 |
|
|
| 16 |
|
|
| (2 | ) |
|
| 0 |
|
|
| 598 |
|
|
| 584 |
|
|
| 16 |
|
|
| (2 | ) |
|
| — |
|
|
| 598 |
|
Common/collective trust funds |
|
| 53 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 53 |
|
|
| 53 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 53 |
|
Cash equivalents and other(3) |
|
| 2 |
|
|
| — |
|
|
| — |
|
|
| 0 |
|
|
| 2 |
|
|
| 2 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2 |
|
Total |
| $ | 1,997 |
|
| $ | 1,753 |
|
| $ | (16 | ) | (4) | $ | 0 |
|
| $ | 3,734 |
|
| $ | 1,997 |
|
| $ | 1,753 |
|
| $ | (16 | ) | (4) | $ | — |
|
| $ | 3,734 |
|
(1) | Unrealized gains and losses on equity securities are included in other income and the nuclear decommissioning trust regulatory liability. |
(2) | Unrealized gains and losses on fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability. Changes in allowance for credit losses are included in other income. |
(3) | Includes pending |
(4) | The fair value of securities in an unrealized loss position was |
The portion of unrealized gains and losses that relates to equity securities held within Virginia Power’s nuclear decommissioning trusts is summarized below:
|
| Three Months Ended March 31, |
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| |||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gains (losses) recognized during the period |
| $ | (102 | ) |
| $ | 143 |
|
| $ | (118 | ) |
| $ | 6 |
|
| $ | (581 | ) |
| $ | 319 |
|
Less: Net (gains) losses recognized during the period on securities sold during the period |
|
| (4 | ) |
|
| (88 | ) |
|
| (4 | ) |
|
| (9 | ) |
|
| (8 | ) |
|
| (182 | ) |
Unrealized gains (losses) recognized during the period on securities still held at period end(1) |
| $ | (106 | ) |
| $ | 55 |
|
| $ | (122 | ) |
| $ | (3 | ) |
| $ | (589 | ) |
| $ | 137 |
|
(1) | Included in other income and the nuclear decommissioning trust regulatory liability. |
The fair value of Virginia Power’s fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds at March 31,September 30, 2022 by contractual maturity is as follows:
|
| Amount |
|
| Amount |
| ||
(millions) |
|
|
|
|
|
|
|
|
Due in one year or less |
| $ | 83 |
|
| $ | 64 |
|
Due after one year through five years |
|
| 302 |
|
|
| 277 |
|
Due after five years through ten years |
|
| 358 |
|
|
| 301 |
|
Due after ten years |
|
| 374 |
|
|
| 381 |
|
Total |
| $ | 1,117 |
|
| $ | 1,023 |
|
Presented below is selected information regarding Virginia Power’s equity and fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds.
|
| Three Months Ended March 31, |
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| |||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sales |
| $ | 392 |
|
| $ | 789 |
|
| $ | 425 |
|
| $ | 216 |
|
| $ | 1,289 |
|
| $ | 1,465 |
|
Realized gains(1) |
|
| 16 |
|
|
| 106 |
|
|
| 14 |
|
|
| 17 |
|
|
| 40 |
|
|
| 213 |
|
Realized losses(1) |
|
| 19 |
|
|
| 23 |
|
|
| 33 |
|
|
| 2 |
|
|
| 85 |
|
|
| 28 |
|
(1) | Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability. |
Equity Method Investments
Dominion Energy recorded equity earnings on its investments of $80255 million and $214 million for both the threenine months ended March 31,September 30, 2022 and 2021, respectively, in earnings from equity method investees in its Consolidated Statements of Income. In addition, Dominion Energy recorded equity losses of $2$6 million and $8$19 million for the threenine months ended March 31,September 30, 2022 and 2021, respectively, in discontinued operations related to its investment in Atlantic Coast Pipeline. Dominion Energy received distributions of $76$268 million and $73$263 million for the threenine months ended March 31,September 30, 2022 and 2021, respectively. Dominion Energy made contributions of $74$93 million and $1.0 billion for the threenine months ended March 31,September 30, 2022 and 2021, respectively. At March 31,September 30, 2022 and December 31, 2021, the net difference between the carrying amount of Dominion Energy’s investments and its share of underlying equity in net assets was $231$227 million and $244 million, respectively. At March 31,September 30, 2022, these differences are primarily comprised of $11 million of equity method goodwill that is not being amortized and a $219216 million basis difference from Dominion Energy’s investment in Cove Point, which is being amortized over the useful lives of the underlying assets. At December 31, 2021, these differences are comprised of $27 million of equity method goodwill that is not being amortized, a $221 million basis difference from Dominion Energy’s investment in Cove Point, which is being amortized over the useful lives of the underlying assets, and a net $(4) million basis difference primarily attributable to an unfunded commitment made to Align RNG.
Cove Point
Dominion Energy holds a 50% noncontrolling limited partnership interest in Cove Point which is accounted for as an equity method investment, as discussed in Note 9 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.
4549
Income before income taxes recorded byfor 100% of Cove Point was $151$197 million and $138$136 million for the three months ended March 31,September 30, 2022 and 2021, respectively, and $506 million and $410 million for the nine months ended September 30, 2022 and 2021, respectively. Earnings attributable to Dominion Energy are presented within earnings from equity method investees in its Consolidated Statements of Income.
Dominion Energy recorded distributions from Cove Point of $76$98 million and $73$85 million for the three months ended March 31,September 30, 2022 and 2021, respectively, and $259 million and $235 million for the nine months ended September 30, 2022 and 2021, respectively.
Atlantic Coast Pipeline
A description of Dominion Energy’s investment in Atlantic Coast Pipeline, including events that led to the cancellation of the Atlantic Coast Pipeline Project in July 2020, is included in Note 9 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
At March 31,September 30, 2022 and December 31, 2021, Dominion Energy has recorded a liability of $115$119 million and $113 million, respectively, in other current liabilities in its Consolidated Balance Sheets as a result of its share of equity losses exceeding its investment which reflects Dominion Energy’s obligations on behalf of Atlantic Coast Pipeline related to its AROs.
Dominion Energy recorded contributions of $965 million during the threenine months ended March 31,September 30, 2021 to Atlantic Coast Pipeline. Dominion Energy recorded 0no contributions during the threenine months ended March 31,September 30, 2022 to Atlantic Coast Pipeline.
Dominion Energy expects to incur additional losses from Atlantic Coast Pipeline as it completes wind-down activities. While Dominion Energy is unable to precisely estimate the amounts to be incurred by Atlantic Coast Pipeline, the portion of such amounts attributable to Dominion Energy is not expected to be material to Dominion Energy’s results of operations, financial position or statement of cash flows.
Wrangler
In March 2022, Dominion Energy sold its remaining 15% noncontrolling partnership interest in Wrangler to Interstate Gas Supply, Inc. for cash consideration of $85 million. Dominion Energy recognized a gain of $11 million ($8 million after-tax), included in other income (expense), in its Consolidated Statements of Income for the threenine months ended March 31,September 30, 2022.
All activity relatingrelated to Wrangler is recorded within the Corporate and Other segment.
Dominion Privatization
In February 2022, Dominion Energy entered into an agreement to form Dominion Privatization, a partnership with Patriot. Dominion Privatization, through its wholly-owned subsidiaries, will maintain and operate electric and gas distribution infrastructure under service concession arrangements with certain U.S. military installations. Under the agreement, Dominion Energy will contribute its existing privatization operations, excluding contracts held by DESC, and Patriot will contribute cash.
The initial contribution, consisting of privatization operations in South Carolina, Texas and Pennsylvania, closed in March 2022 for which Dominion Energy received total consideration of $120 million, subject to customary closing adjustments, comprised of $60 million in cash proceeds and a 50% noncontrolling ownership interest in Dominion Privatization with an initial fair value of $60 million, estimated using the market approach. This is considered a Level 2 fair value measurement given that it is based on the agreed-upon sales price. In connection with the transaction,first quarter of 2022, Dominion Energy recorded a gain of $23 million ($16 million after-tax), presented in other operations and maintenance expenselosses (gains) on sales of assets in its Consolidated Statements of Income. Dominion Energy’s 50% noncontrolling ownership interest in Dominion Privatization is accounted for as an equity method investment as Dominion Energy has the ability to exercise significant influence, but not control, over the investee.
Dominion Energy expects to contribute its existing privatization operations in Virginia to Dominion Privatization by the end of 2022, contingent on clearance or approval under the Hart-Scott-Rodino Act and other customary closing and regulatory conditions. In April 2022, Dominion Energy filed with the Federal Trade Commission for approval under the Hart-Scott-Rodino Act. In May 2022, the waiting period under the Hart-Scott-Rodino Act expired. The contribution of the service concession arrangements currently held by Virginia Power also requires approval from the Virginia and North Carolina Commissions. In May 2022, Virginia Power filed for such approval with the Virginia and North Carolina Commissions. In July and September 2022, the Virginia Commission and North Carolina Commission, respectively, approved the request to transfer at net book value. Upon closing of the second contribution, Dominion Energy expects to receive cash proceeds totaling $108 million, subject to customary closing adjustments, and to recognize a gain of approximately $130 million ($100 million after-tax). When this future contribution occurs, Dominion Energy expects to maintain a 50% noncontrolling ownership interest in Dominion Privatization.
At March 31,September 30, 2022, $85$83 million of contracts and related assets and $4 million of liabilities associated with existing privatization operations in Virginia are classified as held for sale and reflected in current assets held for sale and other current liabilities, held for sale,
50
respectively, in Dominion Energy’s Consolidated Balance Sheets and in other current assets and other current liabilities, respectively, in Virginia Power’s Consolidated Balance Sheets.
All activity relatingrelated to Dominion Privatization is reflected within the Corporate and Other segment.
Note 11. Property, Plant and Equipment
Acquisitions of Nonregulated Solar Projects
Other than the items discussed below, there have been no significant updates to acquisitions of solar projects by the Companies from those discussed in Note 10 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.
The following table presents acquisitions by Virginia Power of non-jurisdictional solar projects. Virginia Power has claimed or expects to claim federal investment tax credits on the projects.
Project Name |
| Date Agreement Entered |
| Date Agreement Closed |
| Project Location |
| Project Cost (millions)(1) |
|
| Date of Commercial Operations |
| MW Capacity |
|
| Date Agreement Entered |
| Date Agreement Closed |
| Project Location |
| Project Cost (millions)(1) |
|
| Date of Commercial Operations |
| MW Capacity |
| ||||
Pumpkinseed |
| May 2020 |
| May 2020 |
| Virginia |
| $ | 140 |
|
| Expected 2022 |
|
| 60 |
|
| May 2020 |
| May 2020 |
| Virginia |
| $ | 138 |
|
| September 2022 |
|
| 60 |
|
Bookers Mill |
| February 2021 |
| June 2021 |
| Virginia |
|
| 230 |
|
| Expected 2023 |
|
| 127 |
|
| February 2021 |
| June 2021 |
| Virginia |
|
| 225 |
|
| Expected 2023 |
|
| 127 |
|
(1) | Includes acquisition cost. |
The following table presents acquisitions by Dominion Energy of solar projects in addition to the Virginia Power projects presented above. Dominion Energy expects to claim federal investment tax credits on the projects.
Project Name |
| Date Agreement Entered |
| Date Agreement Closed |
| Project Location |
| Project Cost (millions)(1) |
|
| Date of Commercial Operations |
| MW Capacity |
|
| Date Agreement Entered |
| Date Agreement Closed |
| Project Location |
| Project Cost (millions)(1) |
|
| Date of Commercial Operations |
| MW Capacity |
| ||||
Madison |
| July 2020 |
| July 2020 |
| Virginia |
| $ | 130 |
|
| Expected 2023 |
|
| 62 |
|
| July 2020 |
| July 2020 |
| Virginia |
| $ | 130 |
|
| Expected 2023 |
|
| 62 |
|
Atlanta Farms |
| March 2022 |
| Expected 2022 |
| Ohio |
|
| 390 |
|
| Expected 2023 |
|
| 200 |
|
| March 2022 |
| May 2022 |
| Ohio |
|
| 390 |
|
| Expected split(2) |
|
| 200 |
|
Hardin II |
| August 2020 |
| Expected 2022 |
| Ohio |
|
| 295 |
|
| Expected split(2) |
|
| 150 |
|
| August 2020 |
| Expected 2022 |
| Ohio |
|
| 290 |
|
| Expected 2023 |
|
| 150 |
|
(1) | Includes acquisition |
(2) | Expected to be split between |
Sale of Utility Property
In June 2022, Dominion Energy 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, Dominion Energy recognized a gain of $16 million ($12 million after-tax), recorded in losses (gains) on sales of assets, in its Consolidated Statements of Income for the nine months ended September 30, 2022.
Note 12. Regulatory Assets and Liabilities
Regulatory assets and liabilities include the following:
|
| March 31, 2022 |
|
| December 31, 2021 |
|
| September 30, 2022 |
|
| December 31, 2021 |
| ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominion Energy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred cost of fuel used in electric generation(1) |
| $ | 240 |
|
| $ | 251 |
|
| $ | 571 |
|
| $ | 251 |
|
Deferred project costs and DSM programs for gas utilities(2) |
|
| 45 |
|
|
| 53 |
|
|
| 68 |
|
|
| 53 |
|
Unrecovered gas costs(3) |
|
| 82 |
|
|
| 191 |
|
|
| 184 |
|
|
| 191 |
|
Deferred rider costs for Virginia electric utility(4) |
|
| 83 |
|
|
| 72 |
|
|
| 149 |
|
|
| 72 |
|
Ash pond and landfill closure costs(5) |
|
| 150 |
|
|
| 193 |
|
|
| 62 |
|
|
| 193 |
|
Deferred nuclear refueling outage costs(6) |
|
| 76 |
|
|
| 79 |
|
|
| 55 |
|
|
| 79 |
|
NND Project costs(7) |
|
| 138 |
|
|
| 138 |
|
|
| 138 |
|
|
| 138 |
|
Deferred early plant retirement charges(8) |
|
| 226 |
|
|
| 226 |
|
|
| 226 |
|
|
| 226 |
|
Derivatives(9) |
|
| 264 |
|
|
| 112 |
|
|
| 375 |
|
|
| 112 |
|
Other |
|
| 173 |
|
|
| 177 |
|
|
| 236 |
|
|
| 177 |
|
Regulatory assets-current |
|
| 1,477 |
|
|
| 1,492 |
|
|
| 2,064 |
|
|
| 1,492 |
|
Unrecognized pension and other postretirement benefit costs(10) |
|
| 577 |
|
|
| 548 |
|
|
| 549 |
|
|
| 548 |
|
Deferred rider costs for Virginia electric utility(4) |
|
| 498 |
|
|
| 489 |
|
|
| 312 |
|
|
| 489 |
|
Deferred project costs for gas utilities(2) |
|
| 696 |
|
|
| 675 |
|
|
| 693 |
|
|
| 675 |
|
Interest rate hedges(11) |
|
| 612 |
|
|
| 899 |
|
|
| 170 |
|
|
| 899 |
|
AROs and related funding(12) |
|
| 359 |
|
|
| 329 |
|
|
| 409 |
|
|
| 329 |
|
NND Project costs(7) |
|
| 2,191 |
|
|
| 2,226 |
|
|
| 2,122 |
|
|
| 2,226 |
|
Ash pond and landfill closure costs(5) |
|
| 2,226 |
|
|
| 2,223 |
|
|
| 2,245 |
|
|
| 2,223 |
|
Deferred cost of fuel used in electric generation(1) |
|
| 717 |
|
|
| 409 |
|
|
| 1,318 |
|
|
| 409 |
|
Deferred early plant retirement charges(8) |
|
| 169 |
|
|
| 226 |
|
|
| 56 |
|
|
| 226 |
|
Derivatives(9) |
|
| 562 |
|
|
| 35 |
| ||||||||
Other |
|
| 613 |
|
|
| 619 |
|
|
| 525 |
|
|
| 584 |
|
Regulatory assets-noncurrent |
|
| 8,658 |
|
|
| 8,643 |
|
|
| 8,961 |
|
|
| 8,643 |
|
Total regulatory assets |
| $ | 10,135 |
|
| $ | 10,135 |
|
| $ | 11,025 |
|
| $ | 10,135 |
|
Regulatory liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for future cost of removal and AROs(13) |
|
| 181 |
|
|
| 181 |
|
|
| 181 |
|
|
| 181 |
|
Reserve for refunds and rate credits to electric utility customers(14) |
|
| 243 |
|
|
| 420 |
|
|
| 129 |
|
|
| 420 |
|
Income taxes refundable through future rates(15) |
|
| 150 |
|
|
| 153 |
|
|
| 147 |
|
|
| 153 |
|
Monetization of guarantee settlement(16) |
|
| 67 |
|
|
| 67 |
|
|
| 67 |
|
|
| 67 |
|
Derivatives(9) |
|
| 103 |
|
|
| 69 |
|
|
| 325 |
|
|
| 69 |
|
Other |
|
| 86 |
|
|
| 96 |
|
|
| 170 |
|
|
| 96 |
|
Regulatory liabilities-current |
|
| 830 |
|
|
| 986 |
|
|
| 1,019 |
|
|
| 986 |
|
Income taxes refundable through future rates(15) |
|
| 4,164 |
|
|
| 4,260 |
|
|
| 4,096 |
|
|
| 4,260 |
|
Provision for future cost of removal and AROs(13) |
|
| 2,346 |
|
|
| 2,331 |
|
|
| 2,409 |
|
|
| 2,331 |
|
Nuclear decommissioning trust(17) |
|
| 2,016 |
|
|
| 2,158 |
|
|
| 1,532 |
|
|
| 2,158 |
|
Monetization of guarantee settlement(16) |
|
| 753 |
|
|
| 831 |
|
|
| 719 |
|
|
| 831 |
|
Interest rate hedges(11) |
|
| 202 |
|
|
| 67 |
| ||||||||
Reserve for refunds and rate credits to electric utility customers(14) |
|
| 413 |
|
|
| 448 |
|
|
| 358 |
|
|
| 448 |
|
Unrecognized pension and other postretirement benefit costs(10) |
|
| 188 |
|
|
| 200 |
|
|
| 177 |
|
|
| 200 |
|
Overrecovered other postretirement benefit costs(18) |
|
| 114 |
|
|
| 105 |
|
|
| 131 |
|
|
| 105 |
|
Derivatives(9) |
|
| 227 |
|
|
| 169 |
| ||||||||
Other |
|
| 442 |
|
|
| 380 |
|
|
| 191 |
|
|
| 144 |
|
Regulatory liabilities-noncurrent |
|
| 10,436 |
|
|
| 10,713 |
|
|
| 10,042 |
|
|
| 10,713 |
|
Total regulatory liabilities |
| $ | 11,266 |
|
| $ | 11,699 |
|
| $ | 11,061 |
|
| $ | 11,699 |
|
(1) | Reflects deferred fuel expenses for the Virginia, North Carolina and South Carolina jurisdictions of Dominion Energy’s electric generation operations. Reflects a $66 million reduction recorded in the first quarter of 2022 from the application of a portion of the monetization of guarantee settlement previously reflected as regulatory liabilities associated with the approval of DESC’s cost of fuel proceedings. See Note 13 for additional information. |
(2) | Primarily reflects amounts expected to be collected from or owed to gas customers in Dominion Energy’s service territories associated with current and prospective rider projects, including CEP, PIR and pipeline integrity management. See Note 13 for additional information. |
52
(3) | Reflects unrecovered gas costs at regulated gas operations, which are recovered through filings with the applicable regulatory authority. |
(4) |
48
Reflects deferrals under Virginia Power’s electric transmission FERC formula rate and the deferral of costs associated with certain current and prospective rider projects. See Note 13 for additional information. |
(5) | Primarily reflects legislation enacted in Virginia in 2019, which requires any CCR asset located at certain Virginia Power stations to be closed by removing the CCR to an approved landfill or through beneficial reuse. These deferred costs are expected to be collected over a period between 15 and 18 years commencing December 2021 through Rider CCR. Virginia Power is entitled to collect carrying costs on uncollected expenditures once expenditures have been made. See Note 13 for additional information. |
(6) | Legislation enacted in Virginia in April 2014 requires Virginia Power to defer operation and maintenance costs incurred in connection with the refueling of any nuclear-powered generating plant. These deferred costs will be amortized over the refueling cycle, not to exceed 18 months. |
(7) | Reflects expenditures by DESC associated with the NND Project, which pursuant to the SCANA Merger Approval Order, will be recovered from DESC electric service customers over a 20-year period ending in 2039. See Note 3 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 for additional information. |
(8) | Reflects amounts from the early retirements of certain coal- and oil-fired generating units to be amortized through 2023 in accordance with the settlement of the 2021 Triennial Review. See Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 for additional information. |
(9) |
|
(10) | Represents unrecognized pension and other postretirement employee benefit costs expected to be recovered or refunded through future rates generally over the expected remaining service period of plan participants by certain of Dominion Energy's rate-regulated subsidiaries. |
(11) | Reflects interest rate hedges recoverable from or refundable to customers. Certain of these instruments are settled and any related payments are being amortized into interest expense over the life of the related debt, which has a weighted-average useful life of approximately |
(12) | Represents deferred depreciation and accretion expense related to legal obligations associated with the future retirement of generation, transmission and distribution properties. The AROs primarily relate to DESC’s electric generating facilities, including Summer, and are expected to be recovered over the related property lives and periods of decommissioning which may range up to approximately 105 years. |
(13) | Rates charged to customers by Dominion Energy’s regulated businesses include a provision for the cost of future activities to remove assets that are expected to be incurred at the time of retirement. |
(14) | Reflects amounts previously collected from retail electric customers of DESC for the NND Project to be credited over an estimated 11-year period effective February 2019, in connection with the SCANA Merger Approval Order. See Notes 3 and 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 for additional information. Also reflects amounts to be refunded to jurisdictional retail electric customers in Virginia associated with the settlement of the 2021 Triennial Review. See Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 for additional information. |
(15) | Amounts recorded to pass the effect of reduced income taxes from the 2017 Tax Reform Act to customers in future periods, which will primarily reverse at the weighted average tax rate that was used to build the reserves over the remaining book life of the property, net of amounts to be recovered through future rates to pay income taxes that become payable when rate revenue is provided to recover AFUDC equity. |
(16) | Reflects amounts to be refunded to DESC electric service customers over a 20-year period ending in 2039 associated with the monetization of a bankruptcy settlement agreement. See Note 3 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 for additional information. |
(17) | Primarily reflects a regulatory liability representing amounts collected from Virginia jurisdictional customers and placed in external trusts (including income, losses and changes in fair value thereon, as applicable) for the future decommissioning of Dominion Energy’s utility nuclear generation stations, in excess of the related AROs. |
(18) | Reflects a regulatory liability for the collection of postretirement benefit costs allowed in rates in excess of expense incurred. |
|
| March 31, 2022 |
|
| December 31, 2021 |
|
| September 30, 2022 |
|
| December 31, 2021 |
| ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Virginia Power |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred cost of fuel used in electric generation(1) |
| $ | 119 |
|
| $ | 131 |
|
| $ | 205 |
|
| $ | 131 |
|
Deferred rider costs(2) |
|
| 83 |
|
|
| 72 |
|
|
| 149 |
|
|
| 72 |
|
Ash pond and landfill closure costs(3) |
|
| 150 |
|
|
| 193 |
|
|
| 62 |
|
|
| 193 |
|
Deferred nuclear refueling outage costs(4) |
|
| 76 |
|
|
| 79 |
|
|
| 55 |
|
|
| 79 |
|
Deferred early plant retirement charges(5) |
|
| 226 |
|
|
| 226 |
|
|
| 226 |
|
|
| 226 |
|
Derivatives(6) |
|
| 257 |
|
|
| 105 |
|
|
| 369 |
|
|
| 105 |
|
Other |
|
| 41 |
|
|
| 44 |
|
|
| 70 |
|
|
| 44 |
|
Regulatory assets-current |
|
| 952 |
|
|
| 850 |
|
|
| 1,136 |
|
|
| 850 |
|
Deferred rider costs(2) |
|
| 498 |
|
|
| 489 |
|
|
| 312 |
|
|
| 489 |
|
Interest rate hedges(7) |
|
| 326 |
|
|
| 604 |
|
|
| — |
|
|
| 604 |
|
Ash pond and landfill closure costs(3) |
|
| 2,226 |
|
|
| 2,223 |
|
|
| 2,242 |
|
|
| 2,223 |
|
Deferred cost of fuel used in electric generation(1) |
|
| 717 |
|
|
| 409 |
|
|
| 1,318 |
|
|
| 409 |
|
Deferred early plant retirement charges(5) |
|
| 169 |
|
|
| 226 |
|
|
| 56 |
|
|
| 226 |
|
Derivatives(6) |
|
| 453 |
|
|
| 34 |
| ||||||||
Other |
|
| 205 |
|
|
| 179 |
|
|
| 137 |
|
|
| 145 |
|
Regulatory assets-noncurrent |
|
| 4,141 |
|
|
| 4,130 |
|
|
| 4,518 |
|
|
| 4,130 |
|
Total regulatory assets |
| $ | 5,093 |
|
| $ | 4,980 |
|
| $ | 5,654 |
|
| $ | 4,980 |
|
Regulatory liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for future cost of removal(8) |
|
| 154 |
|
|
| 154 |
|
|
| 154 |
|
|
| 154 |
|
Reserve for refunds to Virginia electric customers(9) |
|
| 132 |
|
|
| 306 |
|
|
| 27 |
|
|
| 306 |
|
Income taxes refundable through future rates(10) |
|
| 63 |
|
|
| 63 |
|
|
| 63 |
|
|
| 63 |
|
Derivatives(6) |
|
| 61 |
|
|
| 51 |
|
|
| 265 |
|
|
| 51 |
|
Other |
|
| 50 |
|
|
| 73 |
|
|
| 139 |
|
|
| 73 |
|
Regulatory liabilities-current |
|
| 460 |
|
|
| 647 |
|
|
| 648 |
|
|
| 647 |
|
Income taxes refundable through future rates(10) |
|
| 2,305 |
|
|
| 2,335 |
|
|
| 2,280 |
|
|
| 2,335 |
|
Nuclear decommissioning trust(11) |
|
| 2,016 |
|
|
| 2,158 |
|
|
| 1,532 |
|
|
| 2,158 |
|
Provision for future cost of removal(8) |
|
| 1,055 |
|
|
| 1,043 |
|
|
| 1,082 |
|
|
| 1,043 |
|
Reserve for refunds to Virginia electric customers(9) |
|
| 19 |
|
|
| 25 |
| ||||||||
Interest rate hedges(7) |
|
| 202 |
|
|
| — |
| ||||||||
Reserve for refunds to Virginia electric customers(9) |
|
| 6 |
|
|
| 25 |
| ||||||||
Other |
|
| 208 |
|
|
| 179 |
|
|
| 167 |
|
|
| 179 |
|
Regulatory liabilities-noncurrent |
|
| 5,603 |
|
|
| 5,740 |
|
|
| 5,269 |
|
|
| 5,740 |
|
Total regulatory liabilities |
| $ | 6,063 |
|
| $ | 6,387 |
|
| $ | 5,917 |
|
| $ | 6,387 |
|
(1) | Reflects deferred fuel expenses for the Virginia and North Carolina jurisdictions of Virginia Power’s generation operations. See Note 13 for additional information. |
(2) | Reflects deferrals under Virginia Power’s electric transmission FERC formula rate and the deferral of costs associated with certain current and prospective rider projects. See Note 13 for additional information. |
(3) | Primarily reflects legislation enacted in Virginia in 2019, which requires any CCR asset located at certain Virginia Power stations to be closed by removing the CCR to an approved landfill or through beneficial reuse. These deferred costs are expected to be collected over a period between 15 and 18 years commencing December 2021 through Rider CCR. Virginia Power is entitled to collect carrying costs on uncollected expenditures once expenditures have been made. See Note 13 for additional information. |
(4) | Legislation enacted in Virginia in April 2014 requires Virginia Power to defer operation and maintenance costs incurred in connection with the refueling of any nuclear-powered generating plant. These deferred costs will be amortized over the refueling cycle, not to exceed 18 months. |
(5) | Reflects amounts from the early retirements of certain coal- and oil-fired generating units to be amortized through 2023 in accordance with the settlement of the 2021 Triennial Review. See Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 for additional information. |
(6) |
|
(7) | Reflects interest rate hedges recoverable from or refundable to customers. Certain of these instruments are settled and any related payments are being amortized into interest expense over the life of the related debt, which has a weighted-average useful life of approximately |
(8) | Rates charged to customers by Virginia Power's regulated businesses include a provision for the cost of future activities to remove assets that are expected to be incurred at the time of retirement. |
(9) | Reflects amounts to be refunded to jurisdictional retail electric customers in Virginia associated with the settlement of the 2021 Triennial Review. See Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 for additional information. |
54
(10) | Amounts recorded to pass the effect of reduced income taxes from the 2017 Tax Reform Act to customers in future periods, which will reverse at the weighted average tax rate that was used to build the reserves over the remaining book life of the property, net of amounts to be recovered through future rates to pay income taxes that become payable when rate revenue is provided to recover AFUDC equity. |
(11) | Primarily reflects a regulatory liability representing amounts collected from Virginia jurisdictional customers and placed in external trusts (including income, losses and changes in fair value thereon) for the future decommissioning of Virginia Power’s utility nuclear generation stations, in excess of the related AROs. |
At March 31,September 30, 2022, Dominion Energy and Virginia Power regulatory assets include $4.1$4.8 billion and $3.0$3.3 billion, respectively, on which they do not expect to earn a return during the applicable recovery period. With the exception of certain items discussed above, the majority of these expenditures are expected to be recovered within the next two years.
Note 13. Regulatory Matters
Regulatory Matters Involving Potential Loss Contingencies
As a result of issues generated in the ordinary course of business, the Companies are involved in various regulatory matters. Certain regulatory matters may ultimately result in a loss; however, as such matters are in an initial procedural phase, involve uncertainty as to the outcome of pending reviews or orders, and/or involve significant factual issues that need to be resolved, it is not possible for the Companies to estimate a range of possible loss. For regulatory matters that the Companies cannot estimate, a statement to this effect is made in the description of the matter. Other matters may have progressed sufficiently through the regulatory process such that the Companies are able to estimate a range of possible loss. For regulatory matters that the Companies are able to reasonably estimate a range of possible losses, an estimated range of possible loss is provided, in excess of the accrued liability (if any) for such matters. Any estimated range is based on currently available information, involves elements of judgment and significant uncertainties and may not represent the Companies’ maximum possible loss exposure. The circumstances of such regulatory matters will change from time to time and actual results may vary significantly from the current estimate. For current matters not specifically reported below, management does not anticipate that the outcome from such matters would have a material effect on the Companies’ financial position, liquidity or results of operations.
Other Regulatory Matters
Other than the following matters, there have been no significant developments regarding the pending regulatory matters disclosed in Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.
Virginia Regulation
Virginia Fuel Expenses
In May 2022, Virginia Power filed its annual fuel factor filing with the Virginia Commission to recover an estimated $2.3 billion in Virginia jurisdictional projected fuel expense for the rate year beginning July 1, 2022 and a projected $1.0 billion under-recovered balance as of June 30, 2022. Virginia Power’s proposed fuel rate represents a fuel revenue increase of $1.8 billion when applied to projected kilowatt-hour sales for that period. Virginia Power also proposed alternatives to recover this under-collected balance over a two- or three-year period. Under these alternatives, Virginia Power’s fuel revenues for the rate year would increase by $1.3 billion or $1.2 billion, respectively. In addition, Virginia Power proposed a change in the timing of fuel cost recovery for certain customers who elect market-based rates that would consider those customers’ portion of the projected under-recovered balance to have been recovered as of June 30, 2022. If approved,In July 2022, Virginia Power, expects to recognizethe Virginia Commission staff and another party filed a comprehensive settlement agreement with the Virginia Commission for approval. The comprehensive settlement agreement provides for the collection of the requested under-recovered projected fuel expense over a three-year period beginning July 1, 2022 and that Virginia Power will exclude from recovery through base rates one half of the related financing costs over the three-year period. In addition, the proposed settlement agreement affirmed Virginia Power’s proposal regarding fuel cost recovery for market-based rate customers. As a result, Virginia Power recorded a $191 million ($142 million after-tax) charge in the second quarter of approximately $155 million to2022 within impairment of assets and other charges in its Consolidated Statement of Income associated with these certain customers. This matter is pending.Income. In September 2022, the Virginia Commission approved the comprehensive settlement agreement.
Renewable Generation Projects
In September 2021, Virginia Power filed a petition with the Virginia Commission for CPCNs to construct and operate 13 utility-scale projects totaling approximately 661 MW of solar generation and 70 MW of energy storage as part of its efforts to meet the renewable generation development requirements under the VCEA. The projects, as of September 2021, are expected to cost approximately $1.4 billion in the aggregate, excluding financing costs, and be placed into service between 2022 and 2023. In March 2022, the Virginia Commission approved the petition.
51In October 2022, Virginia Power filed a petition with the Virginia Commission for CPCNs to construct and operate eight utility-scale projects totaling approximately 474 MW of solar generation and 16 MW of energy storage as part of its efforts to meet the renewable
55
generation development requirements under the VCEA. The projects, as of October 2022, are expected to cost approximately $1.2 billion in the aggregate, excluding financing costs, and be placed into service between 2024 through 2025. This matter is pending.
In November 2021, Virginia Power filed an application with the Virginia Commission requesting approval and certification of the Virginia Facilities component of the CVOW Commercial Project. The onshore Virginia Facilities have an estimated cost of approximately $1.1 billion, excluding financing costs, which is included within the overall cost of the CVOW Commercial Project. In addition, Virginia Power requested approval from the Virginia Commission to enter into financial hedges with U.S. financial institutions to mitigate the foreign currency exchange risk associated with certain supplier contracts associated with the CVOW Commercial Project. In August 2022, the Virginia Commission approved the application for certification of the Virginia Facilities component of the CVOW Commercial Project and noted that no further action was required with respect to Virginia Power’s foreign currency risk mitigation plan. Also in August 2022, Virginia Power filed a petition for limited reconsideration relating to the performance standard for operation of the CVOW Commercial Project included in the Virginia Commission’s August order. The Virginia Commission granted reconsideration and suspended in part the August order pending its reconsideration. In October 2022, Virginia Power, Office of the Attorney General of Virginia and other parties filed a settlement agreement with the Virginia Commission for approval. The settlement agreement provides for certain cost sharing mechanisms of total construction costs between $10.3 billion and $13.7 billion, as subject to potential adjustment to the extent construction costs are decreased by the IRA, and includes enhanced performance reporting provisions associated with operation of the CVOW Commercial Project in lieu of a performance guarantee. This matter is pending.
Nuclear Life Extension
In October 2021, Virginia Power filed a petition with the Virginia Commission requesting a determination that it is reasonable and prudent for Virginia Power to pursue a nuclear life extension program to extend the operating licenses of Surry and North Anna and to carry out projects to upgrade or replace systems and equipment necessary to continue to safely and reliably operate these nuclear power stations. The nuclear life extension program is expected to cost approximately $3.9 billion, excluding financing costs. In July 2022, the Virginia Commission approved the petition.
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Riders
Developments for significant riders associated with various Virginia Power projects are as follows:
Rider Name |
| Application Date |
| Approval Date |
| Rate Year Beginning |
| Total Revenue Requirement (millions) |
|
| Increase (Decrease) Over Previous Year (millions) |
|
| Application Date |
| Approval Date |
| Rate Year Beginning |
| Total Revenue Requirement (millions) |
|
| Increase (Decrease) Over Previous Year (millions) |
| ||||
Rider B |
| June 2022 |
| Pending |
| April 2023 |
| $ | 34 |
|
| $ | 18 |
| ||||||||||||||
Rider B |
| June 2022 |
| Pending |
| April 2024 |
|
| 34 |
|
|
| — |
| ||||||||||||||
Rider BW |
| October 2021 |
| May 2022 |
| September 2022 |
|
| 145 |
|
|
| 32 |
| ||||||||||||||
Rider BW |
| October 2021 |
| May 2022 |
| September 2023 |
|
| 120 |
|
|
| (25 | ) | ||||||||||||||
Rider CCR |
| February 2022 |
| Pending |
| December 2022 |
| $ | 231 |
|
| $ | 15 |
|
| February 2022 |
| October 2022 |
| December 2022 |
|
| 231 |
|
|
| 15 |
|
Rider CE(1) |
| September 2021 |
| March 2022 |
| May 2022 |
|
| 71 |
|
|
| 61 |
| ||||||||||||||
Rider CE(1) |
| September 2021 |
| March 2022 |
| May 2022 |
|
| 71 |
|
|
| 61 |
| ||||||||||||||
Rider CE(2) |
| October 2022 |
| Pending |
| May 2023 |
|
| 89 |
|
|
| 18 |
| ||||||||||||||
Rider E |
| January 2022 |
| September 2022 |
| November 2022 |
|
| 101 |
|
|
| 34 |
| ||||||||||||||
Rider GT |
| August 2021 |
| May 2022 |
| June 2022 |
|
| 56 |
|
| N/A |
| |||||||||||||||
Rider GT |
| August 2022 |
| Pending |
| June 2023 |
|
| 16 |
|
|
| (40 | ) | ||||||||||||||
Rider OSW |
| November 2021 |
| August 2022(3) |
| September 2022 |
|
| 79 |
|
| N/A |
| |||||||||||||||
Rider OSW |
| November 2022 |
| Pending |
| September 2023 |
|
| 271 |
|
|
| 192 |
| ||||||||||||||
Rider R |
| June 2021 |
| March 2022 |
| April 2022 |
|
| 59 |
|
|
| 1 |
|
| June 2021 |
| March 2022 |
| April 2022 |
|
| 59 |
|
|
| 1 |
|
Rider R |
| June 2021 |
| March 2022 |
| April 2023 |
|
| 55 |
|
|
| (4 | ) |
| June 2021 |
| March 2022 |
| April 2023 |
|
| 55 |
|
|
| (4 | ) |
Rider RGGI(2) |
| December 2021 |
| Withdrawn |
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Rider SNA(3) |
| October 2021 |
| Pending |
| September 2022 |
|
| 107 |
|
| N/A |
| |||||||||||||||
Rider T1(4) |
| May 2022 |
| Pending |
| September 2022 |
|
| 706 |
|
|
| (161 | ) | ||||||||||||||
Rider U(5) |
| June 2021 |
| March 2022 |
| April 2022 |
|
| 95 |
|
|
| 15 |
| ||||||||||||||
Rider RGGI(4) |
| December 2021 |
| Withdrawn |
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Rider RPS |
| December 2021 |
| June 2022 |
| September 2022 |
|
| 140 |
|
|
| 127 |
| ||||||||||||||
Rider SNA(5) |
| October 2021 |
| July 2022 |
| September 2022 |
|
| 107 |
|
| N/A |
| |||||||||||||||
Rider SNA(5) |
| October 2022 |
| Pending |
| September 2023 |
|
| 50 |
|
|
| (57 | ) | ||||||||||||||
Rider T1(6) |
| May 2022 |
| July 2022 |
| September 2022 |
|
| 706 |
|
|
| (168 | ) | ||||||||||||||
Rider U(7) |
| June 2021 |
| March 2022 |
| April 2022 |
|
| 95 |
|
|
| 15 |
| ||||||||||||||
Rider U(8) |
| June 2022 |
| Pending |
| April 2023 |
|
| 74 |
|
|
| (21 | ) | ||||||||||||||
Rider US-2 |
| October 2021 |
| June 2022 |
| September 2022 |
|
| 11 |
|
|
| 2 |
| ||||||||||||||
Rider US-3 |
| August 2021 |
| March 2022 |
| June 2022 |
|
| 50 |
|
|
| 12 |
| ||||||||||||||
Rider US-3 |
| August 2021 |
| March 2022 |
| June 2022 |
|
| 50 |
|
|
| 12 |
|
| August 2022 |
| Pending |
| June 2023 |
|
| 40 |
|
|
| (10 | ) |
Rider US-4 |
| August 2021 |
| March 2022 |
| June 2022 |
|
| 15 |
|
|
| 5 |
|
| August 2021 |
| March 2022 |
| June 2022 |
|
| 15 |
|
|
| 5 |
|
Rider US-4 |
| August 2022 |
| Pending |
| June 2023 |
|
| 17 |
|
|
| 2 |
| ||||||||||||||
Rider W |
| June 2022 |
| Pending |
| April 2023 |
|
| 106 |
|
|
| (15 | ) | ||||||||||||||
Rider W |
| June 2022 |
| Pending |
| April 2024 |
|
| 109 |
|
|
| 3 |
| ||||||||||||||
DSM Riders(9) |
| December 2021 |
| August 2022 |
| September 2022 |
|
| 91 |
|
|
| 17 |
|
(1) | Associated with solar generation and energy storage projects |
(2) | Associated with solar generation and energy storage projects requested for approval in October 2022 and certain small-scale solar projects in addition to previously approved Rider CE projects. |
(3) | In August 2022, Virginia Power filed a petition for limited reconsideration relating to a performance standard for operation of the CVOW Commercial Project included in the Virginia Commission’s August order. The Virginia Commission granted reconsideration and suspended in part the August order pending its reconsideration with Rider OSW approved on an interim basis. |
(4) | In January 2022, Virginia Power filed a motion to withdraw its application as a result of the announcement by the Governor of Virginia that he intends to withdraw Virginia from RGGI. The Virginia Commission granted Virginia Power’s motion in April 2022. See additional discussion below. |
| Virginia Power also requested approval of cost recovery of approximately $1.2 billion through Rider SNA for the first phase of nuclear life extension program which includes investments through 2024.In April 2022, Virginia Power, the Virginia Commission staff and certain interested parties filed a proposed stipulation recommending that costs incurred after February 2022 associated with the first phase of the nuclear life extension program for North Anna be deferred and requested for recovery in a subsequent Rider SNA filing. |
| Consists of $482 million for the transmission component of Virginia Power’s base rates and $224 million for Rider T1. |
| Consists of $60 million for previously approved phases and $35 million for phase six costs for Rider U. |
(8) | As amended in June 2022, application consists of $74 million for previously approved phases of Rider U. |
(9) | Associated with an additional nine new energy efficiency programs with a $140 million cost cap, with the ability to exceed the cost cap by no more than 15%. |
In May 2022, Virginia Power filed a petition with the Virginia Commission requesting a suspension of Rider RGGI approved in August 2021. Virginia Power also requested that RGGI compliance costs incurred and unrecovered through July 2022 be recovered through existing base rates in effect during the period incurred. If approved by theThe Virginia Commission approved the request in June 2022. In the second quarter of 2022, Virginia Power expects to recordrecorded a charge of $180 million ($134 million after-tax) in impairment of assets and other charges to its Consolidated Statement of Income for the amount of any unrecovered costs, which are estimated to be approximately $215 million,deemed recovered through base rates through June 30, 2022, including the impact of certain non-jurisdictional customers which follow Virginia Power’s jurisdictional customer rate methodology. Virginia Power recorded $33 million ($25 million after-tax) in depreciation and amortization in the third quarter of 2022.
57
Electric Transmission Projects
Description and Location of Project |
| Application Date |
| Approval Date |
| Type of Line |
| Miles of Lines |
| Cost Estimate (millions) |
| |
Elmont-Ladysmith rebuild and related projects in the Counties of Hanover and Caroline, Virginia |
| April 2021 |
| April 2022 |
| 500 kV |
| 26 |
| $ | 95 |
|
Rebuild transmission lines and related projects in the City of Staunton and County of Augusta, Virginia |
| November 2021 |
| August 2022 |
| 230 kV |
| 21 |
|
| 45 |
|
Build new Dulles Towne Center substation and line loop in the County of Loudoun, Virginia |
| December 2021 |
| July 2022 |
| 230 kV |
| 1 |
|
| 105 |
|
Nimbus line loop and substation and new 230 kV line in the County of Loudon, Virginia |
| February 2022 |
| October 2022 |
| 230 kV |
| 1 |
|
| 40 |
|
Partial rebuild of Bristers-Ox 115 kV line in Fauquier and Prince William Counties, Virginia |
| August 2022 |
| Pending |
| 115 kV |
| 15 |
|
| 40 |
|
Construct new switching station, substations, transmission lines and related projects in Lunenberg and Mecklenburg Counties, Virginia |
| October 2022 |
| Pending |
| 230 kV |
| 18 |
|
| 230 |
|
Construct new switching station, substation, transmission lines and related projects in Charlotte, Halifax and Mecklenburg Counties, Virginia |
| October 2022 |
| Pending |
| 230 kV |
| 26 |
|
| 215 |
|
Construct new switching stations, substation, transmission lines and related projects in Loudoun County, Virginia |
| October 2022 |
| Pending |
| 500/230 kV |
| 4 |
|
| 720 |
|
North Carolina Regulation
Virginia Power North Carolina Base Rate Case
In March 2019, Virginia Power filed its base rate case and schedules with the North Carolina Commission. In February 2020, the North Carolina Commission issued its final order relating to base rates. In July 2020, Virginia Power filed a notice of appeal and exceptions to the Supreme Court of North Carolina, arguing that the North Carolina Commission committed reversible error on certain issues relating to the ratemaking treatment of certain coal ash remediation costs. In June 2022, the Supreme Court of North Carolina affirmed the North Carolina Commission’s order.
Virginia Power North Carolina Fuel Filing
In August 2022, Virginia Power submitted its annual filing to the North Carolina Commission to adjust the fuel component of its electric rates. Virginia Power updated its filing in October 2022 to reflect the increased commodity cost of fuel and proposed a total $107 million increase to the fuel component of its electric rates for the rate year beginning February 1, 2023. Virginia Power also submitted an alternative to recover the increase over a two-year period. Under this approach, Virginia Power proposed a total $80 million increase to the fuel component of its electric rates implemented on a staggered timeline for the rate year beginning February 1, 2023 with remaining unrecovered balances to be recovered in the rate year beginning February 1, 2024. This matter is pending.
Electric Transmission ProjectPSNC Rider D
Description and Location of Project |
| Application Date |
| Approval Date |
| Type of Line |
| Miles of Lines |
| Cost Estimate (millions) |
| |
Elmont-Ladysmith rebuild and related projects in the Counties of Hanover and Caroline, Virginia |
| April 2021 |
| April 2022 |
| 500 kV |
| 26 |
| $ | 95 |
|
Nimbus line loop and substation and new 230 kV line in the County of Loudon, Virginia |
| February 2022 |
| Pending |
| 230 kV |
| 1 |
|
| 40 |
|
Rider D allows PSNC to recover from customers all prudently incurred gas costs and the related portion of uncollectible expenses as well as losses on negotiated gas and transportation sales. In May 2022, PSNC submitted a filing with the North Carolina Commission for a $56 million gas cost increase. The North Carolina Commission approved the filing in May 2022 with rates effective June 2022. In September 2022, PSNC submitted a filing with the North Carolina Commission for a $126 million gas cost increase. The North Carolina Commission approved the filing in September 2022 with rates effective October 2022.
PSNC Customer Usage Tracker
PSNC utilizes a customer usage tracker, a decoupling mechanism, which allows it to adjust its base rates semi-annually for residential and commercial customers based on average per customer consumption. In September 2022, PSNC submitted a filing with the North Carolina Commission for a $46 million increase relating to the customer usage tracker. The North Carolina Commission approved the filing in September 2022 with rates effective October 2022.
South Carolina Regulation
DSM Programs
DESC has approval for a DSM rider through which it recovers expenditures related to its DSM programs. In January 2022, DESC filed an application with the South Carolina Commission seeking approval to recover $60 million of costs and net lost revenues
58
associated with these programs, along with an incentive to invest in such programs. In April 2022, the South Carolina Commission approved the request, effective with the first billing cycle of May 2022.
Cost of Fuel
DESC’s retail electric rates include a cost of fuel component approved by the South Carolina Commission which may be adjusted periodically to reflect changes in the price of fuel purchased by DESC. In April 2022, the South Carolina Commission approved DESC’s request to increase the total fuel cost component of retail electric rates, effective with the first billing cycle of May 2022. The South Carolina Commission also approved DESC’s request to apply approximately $66 million representing the net balance of funds associated with the monetization of the bankruptcy settlement with Toshiba Corporation following the satisfaction of liens against NND Project property previously recorded in regulatory liabilities, as a reduction to its 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.
52In August 2022, DESC filed an application with the South Carolina Commission seeking a mid-period adjustment to increase the base fuel component of retail electric rates for the recovery of electric fuel costs. If approved, the increase of the base fuel cost component is expected to be effective with the first billing cycle of January 2023. The estimated annual increase is $399 million. This matter is pending.
Natural Gas Rates
In June 2022, DESC filed with the South Carolina Commission its monitoring report for the 12-month period ended March 31, 2022 with a total revenue requirement of $553 million. This represents a $129 million overall annual increase to its natural gas rates including a $16 million base rate increase under the terms of the Natural Gas Rate Stabilization Act effective with the first billing cycle of November 2022. In October 2022, the South Carolina Commission issued an order approving a total revenue requirement of $549 million effective with the first billing cycle of November 2022. This represents a $125 million overall annual increase to DESC’s natural gas rates including a $12 million base rate increase under the terms of the Natural Gas Rate Stabilization Act.
Ohio Regulation
PIR Program
In 2008, East Ohio began PIR, aimed at replacing approximately 25% of its pipeline system. In April 2022, the Ohio Commission approved an extension of East Ohio’s PIR program for capital investments through 2026 with continuation of 3% increases of annual capital expenditures per year.
In FebruaryJune 2022, East Ohio filed an application with the Ohio Commission requesting approvalapproved East Ohio’s application to adjust the PIR cost recovery rates for 2021 costs. The filing reflects gross plant investment for 2021 of $225 million, cumulative gross plant investment of $2.2 billion and a revenue requirement of $273 million. This matter is pending.
CEP Program
In 2011, East Ohio began CEP which enables East Ohio to defer depreciation expense, property tax expense and carrying costs associated with CEP investments. In April 2022, certain parties filed an appeal with the Supreme Court of Ohio appealing the Ohio Commission’s December 2020 order establishing the CEP rider, including the rate of return utilized in determining the revenue requirement. This matter is pending.
In February 2022, the Ohio Commission approved adjustments to CEP cost recovery rates for 2019 and 2020 costs. The approved rates reflect gross plant investment for 2019 and 2020 of $231 million, cumulative gross plant investment of $952 million and a revenue requirement of $118 million. The Ohio Commission also ordered that East Ohio should file its next base rate case by October 2023.
In AprilNovember 2022, East Ohio filed an application with the Ohio Commission requesting approvalapproved adjustments to adjust CEP cost recovery rates for 2021 costs. The filing reflectsapproved rates reflect gross plant investment for 2021 of $140$146 million, cumulative gross plant investment of $1.1 billion and a revenue requirement of $137$131 million. This matter
PIPP Plus Program
Under the Ohio PIPP Plus Program, eligible customers can make reduced payments based on their ability to pay their bill. The difference between the customer’s total bill and the PIPP amount is pending.deferred and collected under the PIPP rider in accordance with the rules of the Ohio Commission. In July 2022, East Ohio’s annual update of the PIPP rider filed in May 2022 with the Ohio Commission was approved. The revised rider rate reflects recovery over the twelve-month period from July 2022 through June 2023 of projected deferred program costs of approximately $22 million from April 2022 through June 2023, net of over-recovery of accumulated arrearages of approximately $4 million as of March 31, 2022.
59
UEX Rider
East Ohio has approval for a UEX rider through which it recovers the bad debt expense of most customers not participating in the PIPP Plus Program. The UEX rider is adjusted annually to achieve dollar for dollar recovery of East Ohio’s actual writeoffs of uncollectible amounts. In July 2022, the Ohio Commission approved East Ohio’s application to adjust its UEX rider to reflect an annual revenue requirement of $20 million to provide for recovery of an under-recovered accumulated bad debt expense of $7 million as of March 31, 2022, and recovery of net bad debt expense projected to total $13 million for the twelve-month period ending March 2023.
West Virginia Regulation
West Virginia Base Rate Case
In September 2020, Hope filed its base rate case and schedules with the West Virginia Commission. Hope proposed a non-fuel, base rate increase of $28 million. The base rate increase was proposed to recover the significant investment in distribution infrastructure and costs associated with the acquisition of over 2,000 miles of gathering assets, both for the benefit of West Virginia customers. The proposed rates would provide for an ROE of 10.25% compared to the authorized ROE of 9.45%. In July 2021, the West Virginia Commission approved a non-fuel, base rate increase of $13 million for rates effective July 2021 with an ROE of 9.54%. In August 2021, Hope filed a petition for reconsideration with the West Virginia Commission regarding certain return calculations included in the July 2021 approval order. In June 2022, the West Virginia Commission issued an order resolving this petition without material modification to Hope’s base rates.
Utah Regulation
Utah Base Rate Case
In May 2022, Questar Gas filed its base rate case and schedules with the Utah Commission. Questar Gas proposed a non-fuel, base rate increase of $71 million effective January 2023. The base rate increase was proposed to recover the significant investment in distribution infrastructure for the benefit of Utah customers. The proposed rates would provide for an ROE of 10.3% compared to the currently authorized ROE of 9.5%. This matter is pending.
Purchased Gas
In July 2022, the Utah Commission approved Questar Gas’ request for a $94 million gas cost increase with rates effective August 2022.
In October 2022, the Utah Commission approved Questar Gas’ request for a $128 million gas cost increase with rates effective November 2022.
Note 14. Leases
Other than the items discussed below, there have been no significant changes regarding the Companies’ leases as described in Note 15 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.
Dominion Energy’s Consolidated Statements of Income include $4 $6million and $34$17 million for the three and nine months ended March 31,September 30, 2022, respectively, and $58 million and $147 million for the three and nine months ended September 30, 2021, respectively, of rental revenue included in operating revenue. Dominion Energy’s Consolidated Statements of Income include $9 million and $27$26 million for the three and nine months ended March 31,September 30, 2022, respectively, and $29 million and $87 million for the three and nine months ended September 30, 2021, respectively, of depreciation expense included in depreciation, depletion and amortization, related to facilities subject to power purchase agreements under which Dominion Energy is the lessor.
Corporate Office Leasing Arrangement
In December 2019, Dominion Energy signed an agreement with a lessor, as amended in May 2020, to construct and lease a new corporate office property in Richmond, Virginia. The lessor provided equity and had obtained financing commitments from debt investors, totaling $465 million, to fund the estimated project costs. In March 2021, Dominion Energy notified the lessor of its intention to terminate the leasing arrangement effective April 2021. As a result, Dominion Energy recorded a charge of $71 million ($53 million after-tax) in the first quarter of 2021, included in impairments of assets and other charges in its Consolidated Statements of Income, primarily for amounts required to be repaid to the lessor.
Note 15. Variable Interest Entities
There have been no significant changes regarding the entities the Companies consider VIEs as described in Note 16 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.
Virginia Power
Virginia Power purchased shared services from DES, an affiliated VIE, of $98$96 million and $96$89 million for the three months ended March 31,September 30, 2022 and 2021, respectively, and $290 million and $278 million for the nine months ended September 30, 2022 and 2021, respectively. Virginia Power’s Consolidated Balance Sheets include amounts due to DES of $111$27 million and $20 million at March 31,September 30, 2022 and December 31, 2021, respectively, recorded in payables to affiliates.
Note 16. Significant Financing Transactions
Credit Facilities and Short-term Debt
The Companies use short-term debt to fund working capital requirements and as a bridge to long-term debt financings. The levels of borrowing may vary significantly during the course of the year, depending upon the timing and amount of cash requirements not satisfied by cash from operations. In addition, Dominion Energy utilizes cash and letters of credit to fund collateral requirements. Collateral requirements are impacted by commodity prices, hedging levels, Dominion Energy’s credit ratings and the credit quality of its counterparties. Other than the items discussed below, there have been no significant changes regarding the Companies’ credit facilities and short-term debt as described in Note 17 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.
Dominion Energy
Dominion Energy’s short-term financing is supported by its $6.0 billion joint revolving credit facility that provides for a discount in the pricing of certain annual fees and amounts borrowed by Dominion Energy under the facility if Dominion Energy achieves certain annual renewable electric generation and diversity and inclusion objectives.
At March 31,September 30, 2022, Dominion Energy’s commercial paper and letters of credit outstanding, as well as its capacity available under the credit facility, were as follows:
|
| Facility Limit |
|
| Outstanding Commercial Paper |
|
| Outstanding Letters of Credit |
|
| Facility Capacity Available |
|
| Facility Limit |
|
| Outstanding Commercial Paper |
|
| Outstanding Letters of Credit |
|
| Facility Capacity Available |
| ||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joint revolving credit facility(1) |
| $ | 6,000 |
|
| $ | 2,075 |
|
| $ | 112 |
|
| $ | 3,813 |
| ||||||||||||||||
Joint revolving credit facility(1) |
| $ | 6,000 |
|
| $ | 2,600 |
|
| $ | 251 |
|
| $ | 3,149 |
|
(1) | This credit facility matures in June 2026, with the potential to be extended by the borrowers to June 2028, and can be used by the borrowers under the credit facility to support bank borrowings and the issuance of commercial paper, as well as to support up to a combined $2.0 billion of letters of credit. |
DESC and Questar Gas’ short-term financings are supported through access as co-borrowers to the joint revolving credit facility discussed above with the Companies. At March 31,September 30, 2022, the sub-limits for DESC and Questar Gas were $500 million and $250 million, respectively.
In addition to the credit facility mentioned above, Dominion Energy also has a credit facility which allows Dominion Energy to issue up to approximately $30 million in letters of credit and matureswas scheduled to mature in June 2022. In April 2022, Dominion Energy entered into an agreement to amend and restate this facility to extend the maturity date to June 2025. In May 2022, Dominion Energy further amended and restated this facility to have a maturity date of June 2024. At March 31,September 30, 2022 and December 31, 2021, Dominion Energy had $20 million and $29 million in letters of credit outstanding under this facility, respectively.
Dominion Energy has an effective shelf registration statement with the SEC for the sale of up to $3.0 billion of variable denomination floating rate demand notes, called Dominion Energy Reliability InvestmentSM as disclosed in Note 17 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021. At March 31,September 30, 2022 and December 31, 2021, Dominion Energy’s Consolidated Balance Sheets include $473$343 million and $431 million, respectively, with respect to such notes presented within short-term debt. The proceeds are used for general corporate purposes and to repay debt.
Virginia Power
Virginia Power’s short-term financing is supported through its access as co-borrower to Dominion Energy’s $6.0 billion joint revolving credit facility. The credit facility can be used for working capital, as support for the combined commercial paper programs of the borrowers under the credit facility and for other general corporate purposes.
At March 31,September 30, 2022, Virginia Power’s share of commercial paper and letters of credit outstanding under the joint revolving credit facility with Dominion Energy, Questar Gas and DESC was as follows:
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Joint revolving credit facility(1) |
| $ | 6,000 |
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| $ | 1,009 |
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| $ | 180 |
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| (1) | The full amount of the facility is available to Virginia Power, less any amounts outstanding to co-borrowers Dominion Energy, Questar Gas and DESC. The sub-limit for Virginia Power is set pursuant to the terms of the facility but can be changed at the option of the borrowers multiple times per year. At |
Long-term Debt
Unless otherwise noted, the proceeds of long-term debt issuances were used for general corporate purposes and/or to repay short-term debt.
In January 2022, Virginia Power issued $600 million of 2.40% senior notes and $400 million of 2.95% senior notes that mature in 2032 and 2051, respectively.
In April 2022, Virginia Power remarketed two series of tax-exempt bonds, with an aggregate outstanding principal of approximately $138 million to new investors. Both bonds will bear interest at a coupon of 1.65% until May 2024, after which they will bear interest at a market rate to be determined at that time.
In May 2022, Dominion Energy provided notice of its intention to borrowborrowed $900 million under its Sustainability Revolving Credit Facility which matures in 2024 and bears interest at a variable rate. The proceeds from these borrowings were used to support environmental sustainability and social investment initiatives ($450 million) and for general corporate purposes ($450 million). In June 2022, Dominion Energy repaid $450 million borrowed for general corporate purposes.
In May 2022, Virginia Power issued $600 million of 3.75% senior notes and $600 million of 4.625% senior notes that mature in 2027 and 2052, respectively.
In August 2022, Dominion Energy issued $400 million of 4.35% senior notes and $600 million of 4.85% senior notes that mature in 2032 and 2052, respectively.
In August 2022, Questar Gas issued through private placement $125 million of 4.39% senior notes and $125 million of 4.70% senior notes that will mature in 2032 and 2052, respectively.
In the third quarter of 2022, Dominion Energy repurchased $149 million of senior notes with various interest rates and maturity dates. Gains related to the early redemption of the senior notes were $17 million ($13 million after-tax) reflected within interest and related charges in Dominion Energy’s Consolidated Statements of Income for the three and nine months ended September 30, 2022. In October 2022, Dominion Energy repurchased $61 million of senior notes with various interest rates and maturity dates.
In October 2022, Dominion Energy remarketed its $27 million Peninsula Ports Authority of Virginia Coal Terminal Revenue Refunding Bonds, Series 2003 due in 2033 to new investors. The bonds will bear interest at a coupon rate of 3.80% until October 2024, after which they will bear interest at a market rate to be determined at that time.
In October 2022, East Ohio completed pricing and expects to issue through private placement by December 2022 $250 million of 6.19% and $250 million of 6.38% senior notes that will mature in 2032 and 2052, respectively.
Derivative Restructuring
In June 2020, Dominion Energy amended a portfolio of interest rate swaps with a notional value of $2.0 billion, extending the mandatory termination dates, as discussed in Note 18 to the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021. In August 2022, Dominion Energy settled certain of the outstanding interest rate swaps which would have otherwise matured in December 2024, resulting in a $154 million reduction in other long-term debt.
Preferred Stock
Dominion Energy is authorized to issue up to 20 million shares of preferred stock, which may be designated into separate classes. At both March 31,September 30, 2022, Dominion Energy had issued and outstanding 1.8 million shares of preferred stock, 0.8 million and 1.0 million of which were designated as the Series B Preferred Stock and the Series C Preferred Stock, respectively. At December 31, 2021, Dominion Energy had issued and outstanding 3.4 million shares of preferred stock, 1.6 million, 0.8 million and 1.0 million of which were designated as the Series A Preferred Stock, the Series B Preferred Stock and the Series C Preferred Stock, respectively.
Dominion Energy recorded dividends of $7 million ($4.375 per share) for both the three months ended March 31,September 30, 2021, and $12 million ($7.292 per share) and $21 million ($13.125 per share) for the nine months ended September 30, 2022 and 2021, respectively, on the Series A Preferred Stock. In addition, Dominion Energy recorded interest expense of $5 million and $7 million on the Series A Preferred Stock for the three and nine months ended September 30, 2022, respectively, following the reclassification of these shares to a mandatorily redeemable liability effective June 2022 as discussed below. Dominion Energy recorded dividends of $9 million ($11.625 per share) for both the three months ended March 31,September 30, 2022 and 2021, and $27 million ($34.875 per share) for both the nine months ended September 30, 2022 and 2021, on the Series B Preferred Stock. Dominion Energy recorded dividends of $11 million ($10.875 per share) for the three months ended March 31,September 30, 2022, and $33 million ($32.625 per share) for the nine months ended September 30, 2022, on the Series C Preferred Stock.
Other than as discussed below, there have been no significant changes to Dominion Energy’s Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock as described in Note 19 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.
2019 Corporate Units
The 2019 Equity Units, initially issued in the form of 2019 Series A Corporate Units, are described in Note 19 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.
Pursuant to the terms of the 2019 Equity Units, Dominion Energy will conductconducted a final remarketing forof substantially all shares of Series A Preferred Stock in May 2022. In the event of a successful remarketing,2022 which resulted in the dividend rate onfor all shares of Series A Preferred Stock being reset to 1.75% for the preferred stock may be resetJune 2022 through August 2022 dividend period and the6.75% effective September 2022. The conversion rate on the preferred stock maySeries A Preferred Stock did not increase depending on the closing price of Dominion Energy’s common stock on the dateas a result of the remarketing. In May 2022, Dominion Energy received a commitment from a financial institution to purchase up to 1.6 million shares of the Series A Preferred Stock in the final remarketing. Accordingly, following the settlement of the successful remarketing if any such shares included in the final remarketing are not sold to other purchasers through a marketed process at a dividend rate of not more than 1.75% for the June 2022 through August 2022 dividend period, which dividend rate will increase to 6.75% effective September 2022. As a result, Dominion Energy, subject toand approval byfrom its Board of Directors and the settlement of a successful remarketing, willin June 2022, Dominion Energy became obligated to redeem all outstanding shares of the Series A Preferred Stock in September 2022. As such, effective June 2022, the Series A Preferred Stock was considered to be mandatorily redeemable and was classified as a current liability. In addition, Dominion Energy committed to makemade a short-term deposit of at least $1.6 billion but not more than $2.0 billion at the financial institution as described further in May 2022. Dominion Energy will not directly receive proceedsNote 10. Proceeds from a successfulthe final remarketing as the remarketing will be conductedwere used on behalf of investors that, asholders of 2019 Series A Corporate Units at the time of the remarketing continue to hold corporate units or otherwise elect to participate in the remarketing. Proceeds from a successful remarketing attributable to investors that continue to hold corporate units would be used to pay the purchase price to Dominion Energy for the issuance of its common stock under the stock purchase contracts that are a component ofincluded in such corporate units.units in June 2022. In accordance with the terms of the 2019 Equity Units, if the final remarketing is unsuccessful,September 2022, Dominion Energy redeemed all outstanding shares of the Series A Preferred Stock that remain a component of such corporate units as of the remarketing will be tendered to Dominion Energy to satisfy the investors’ obligation under the stock purchase contract, unless an investor elects to settle its stock purchase obligation in cash. Under the terms of the stock purchase contracts included in the 2019 Equity Units, assuming no anti-dilution or other adjustments, the maximum number of shares of common stock Dominion Energy will issue in June 2022 is 21.8 million for consideration of $1.6 billion.
The stock purchase contract liability associated with Dominion Energy’s 2019 Equity Units was $22 million and $44 million at March 31, 2022 and December 31, 2021, respectively.2021. Stock purchase contract payments of $22$44 million and $21$64 million were made during the threenine months ended March 31,September 30, 2022 and 2021, respectively.
Issuance of Common Stock
Dominion Energy recorded, net of fees and commissions, $45$134 million from the issuance of 12 million shares of common stock for the threenine months ended March 31,September 30, 2022 and $48$292 million from the issuance of less than 14 million shares of common stock for the threenine months ended March 31,September 30, 2021, through various programs including Dominion Energy Direct® and employee savings plans as described in Note 20 to the Consolidated Financial Statements to the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.
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In May 2022,August 2021, Dominion Energy issued 0.90.6 million shares of its common stock, valued at $72$45 million, to satisfy DESC’s obligation for the initial payment under a settlement agreement with the SCDOR discussed in Note 17. In May 2022, Dominion Energy issued 0.9 million shares of its common stock, valued at $72 million, to partially satisfy DESC’s remaining obligation under the settlement agreement.
In June 2022, Dominion Energy issued 0.4 million shares of its common stock, valued at $30 million, to partially satisfy its obligation under a settlement agreement withfor the SCDORState Court Merger Case discussed in Note 17.
In June 2022, Dominion Energy issued 19.4 million shares to settle the stock purchase contract component of the 2019 Equity Units and received proceeds of $1.6 billion.
In July 2021, Dominion Energy issued 1.4 million shares of its common stock, valued at $104 million, to satisfy DESC’s obligation under a settlement agreement for the FILOT litigation discussed in Note 17.
At-the-Market Program
In August 2020, Dominion Energy entered into sales agency agreements to effect sales under an at-the-market program as discussed in Note 20 to the Consolidated Financial Statements in the Companies’ Annual Report Form 10-K for the year ended December 31, 2021. Dominion Energy did not issue any shares or enter into any forward sale agreements under this program during the threenine months ended March 31,September 30, 2022.
Repurchase of Common Stock
In November 2020, the Board of Directors authorized the repurchase of up to $1.0 billion of Dominion Energy’s common stock in addition to the $3.0 billion repurchase program authorized in July 2020 and completed in December 2020 as discussed in Note 20 to the Consolidated Financial Statements in the Companies’ Annual Report Form 10-K for the year ended December 31, 20202021.
Dominion Energy did 0tnot repurchase any shares of common stock during the threenine months ended March 31,September 30, 2022.
Note 17. Commitments and Contingencies
As a result of issues generated in the ordinary course of business, the Companies are involved in legal proceedings before various courts and are periodically subject to governmental examinations (including by regulatory authorities), inquiries and investigations. Certain legal proceedings and governmental examinations involve demands for unspecified amounts of damages, are in an initial procedural phase, involve uncertainty as to the outcome of pending appeals or motions, or involve significant factual issues that need to be resolved, such that it is not possible for the Companies to estimate a range of possible loss. For such matters that the Companies
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cannot estimate, a statement to this effect is made in the description of the matter. Other matters may have progressed sufficiently through the litigation or investigative processes such that the Companies are able to estimate a range of possible loss. For legal proceedings and governmental examinations that the Companies are able to reasonably estimate a range of possible losses, an estimated range of possible loss is provided, in excess of the accrued liability (if any) for such matters. The Companies maintain various insurance programs, including general liability insurance coverage which provides coverage for personal injury or wrongful death cases. Any accrued liability is recorded on a gross basis with a receivable also recorded for any probable insurance recoveries. Estimated ranges of loss are inclusive of legal fees and net of any anticipated insurance recoveries. Any estimated range is based on currently available information and involves elements of judgment and significant uncertainties. Any estimated range of possible loss may not represent the Companies’ maximum possible loss exposure. The circumstances of such legal proceedings and governmental examinations will change from time to time and actual results may vary significantly from the current estimate. For current proceedings not specifically reported below, management does not anticipate that the liabilities, if any, arising from such proceedings would have a material effect on the Companies’ financial position, liquidity or results of operations.
Environmental Matters
The Companies are subject to costs resulting from a number of federal, state and local laws and regulations designed to protect human health and the environment. These laws and regulations affect future planning and existing operations. They can result in increased capital, operating and other costs as a result of compliance, remediation, containment and monitoring obligations.
Air
The CAA, as amended, is a comprehensive program utilizing a broad range of regulatory tools to protect and preserve the 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 the Companies’ facilities are subject to the CAA’s permitting and other requirements.
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Ozone Standards
The EPA published final non-attainment designations for the October 2015 ozone standard in June 2018 with states required to develop plans to address the new standard. Certain states in which the Companies operate have developed plans, and had such plans approved or partially approved by the EPA, which are not expected to have a material impact on the Companies’ results of operations or cash flows. However, until implementation plans for the standard are developed and approved for all states in which the Companies operate, the Companies are unable to predict whether or to what extent the new rules will ultimately require additional controls. The expenditures required to implement additional controls could have a material impact on the Companies’ results of operations and cash flows.
ACE Rule
In July 2019, the EPA published the final rule informally referred to as the ACE Rule, as a replacement for the Clean Power Plan. The ACE Rule regulated GHG emissions from existing coal-fired power plants pursuant to Section 111(d) of the CAA and required states to develop plans by July 2022 establishing unit-specific performance standards for existing coal-fired power plants. In January 2021, the U.S. Court of Appeals for the D.C. Circuit vacated the ACE Rule and remanded it to the EPA. This decision would take effect upon issuance of the court’s mandate. In March 2021, the court issued a partial mandate vacating and remanding all parts of the ACE Rule except for the portion of the ACE Rule that repealed the Clean Power Plan. In October 2021, the U.S. Supreme Court agreed to hear a challenge of the U.S. Court of Appeals for the D.C. Circuit’s decision on the ACE Rule. WhileIn June 2022, the EPA has stated its intention to replaceU.S. Supreme Court reversed the ACE Rule, it is unknown at this time if or how the EPA will issue a replacement forD.C. Circuit’s decision on the ACE Rule and how that replacement will affectremanded the Companies’case back to the D.C. Circuit. Until the case is resolved by the D.C. Circuit and/or the EPA issues new rulemaking, the Companies cannot predict an impact to its operations, financial condition and/or cash flows.
Carbon Regulations
In August 2016, the EPA issued a draft rule proposing to reaffirm that a source’s obligation to obtain a PSD or Title V permit for GHGs is triggered only if such permitting requirements are first triggered by non-GHG, or conventional, pollutants that are regulated by the New Source Review program, and exceed a significant emissions rate of 75,000 tons per year of CO2 equivalent emissions. Until the EPA ultimately takes final action on this rulemaking, the Companies cannot predict the impact to their results of operations, financial condition and/or cash flows.
In December 2018, the EPA proposed revised Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources. The proposed rule would amend the previous determination that the best system of emission reduction for newly constructed coal-fired steam generating units is no longer partial carbon capture and storage. Instead, the proposed revised best system of emission reduction for this source category is the most efficient demonstrated steam cycle (e.g., supercritical
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steam conditions for large units and subcritical steam conditions for small units) in combination with best operating practices. In January 2021, the EPA published a final rule affirming that fossil fuel-fired electric generating units meet the requirement that a source category “significantly contribute” to endangering air pollution for the purposes of regulating GHG emissions from new, modified and reconstructed stationary sources. The January 2021 rule also established a threshold for the “significant contribution” threshold that would have meant that no other source category, such as oil and gas facilities, petroleum refineries, and boilers, would meet that requirement at this time. In April 2021, the U.S. Court of Appeals for the D.C. Circuit granted an unopposed motion by the EPA to vacate and remand the January 2021 rule. The proposed revision to the performance standards for coal-fired steam generating units remains pending. Until the EPA ultimately takes final action on this rulemaking, the Companies cannot predict the impact to their results of operations, financial condition and/or cash flows.
Water
The CWA, as amended, is a comprehensive program requiring a broad range of regulatory tools including a permit program to authorize and regulate discharges to surface waters with strong enforcement mechanisms. The Companies must comply with applicable aspects of the CWA programs at their operating facilities.
Regulation 316(b)
In October 2014, the final regulations under Section 316(b) of the CWA that govern existing facilities and new units at existing facilities that employ a cooling water intake structure and that have flow levels exceeding a minimum threshold became effective. The rule establishes a national standard for impingement based on seven compliance options, but forgoes the creation of a single technology standard for entrainment. Instead, the EPA has delegated entrainment technology decisions to state regulators. State regulators are to make case-by-case entrainment technology determinations after an examination of 5five mandatory facility-specific factors, including a social cost-benefit test, and 6six optional facility-specific factors. The rule governs all electric generating stations with water withdrawals above two MGD, with a heightened entrainment analysis for those facilities over 125 MGD. Dominion Energy and Virginia Power currently have 15 and 9nine facilities, respectively, that are subject to the final regulations. Dominion Energy is also working with the EPA and state regulatory agencies to assess the applicability of Section 316(b) to 8eight hydroelectric facilities, including 3three Virginia Power facilities. The Companies anticipate that they may have to install impingement control technologies at certain of these stations that have once-through cooling systems. The Companies are currently evaluating the need or potential for entrainment controls under the final rule as these decisions will be made on a case-by-case basis after a thorough review of detailed biological, technological, and cost benefit studies. DESC is conducting studies and implementing plans as required by the rule to
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determine appropriate intake structure modifications at certain facilities to ensure compliance with this rule. While the impacts of this rule could be material to the Companies’ results of operations, financial condition and/or cash flows, the existing regulatory frameworks in South Carolina and Virginia provide rate recovery mechanisms that could substantially mitigate any such impacts for the regulated electric utilities.
Effluent Limitations Guidelines
In September 2015, the EPA released a final rule to revise the Effluent Limitations Guidelines for the Steam Electric Power Generating Category. The final rule established updated standards for wastewater discharges that apply primarily at coal and oil steam generating stations. Affected facilities are required to convert from wet to dry or closed cycle coal ash management, improve existing wastewater treatment systems and/or install new wastewater treatment technologies in order to meet the new discharge limits. In April 2017, the EPA granted 2two separate petitions for reconsideration of the Effluent Limitations Guidelines final rule and stayed future compliance dates in the rule. Also in April 2017, the U.S. Court of Appeals for the Fifth Circuit granted the EPA’s request for a stay of the pending consolidated litigation challenging the rule while the EPA addresses the petitions for reconsideration. In September 2017, the EPA signed a rule to postpone the earliest compliance dates for certain waste streams regulations in the Effluent Limitations Guidelines final rule from November 2018 to November 2020; however, the latest date for compliance for these regulations was December 2023. In October 2020, the EPA released the final rule that extends the latest dates for compliance. Individual facilities’ compliance dates will vary based on circumstances and the determination by state regulators and may range from 2021 to 2028. While the impacts of this rule could be material to the Companies’ results of operations, financial condition and/or cash flows, the existing regulatory frameworks in South Carolina and Virginia provide rate recovery mechanisms that could substantially mitigate any such impacts for the regulated electric utilities.
Waste Management and Remediation
The operations of the Companies are subject to a variety of state and federal laws and regulations governing the management and disposal of solid and hazardous waste, and release of hazardous substances associated with current and/or historical operations. The CERCLA, as amended, and similar state laws, may impose joint, several and strict liability for cleanup on potentially responsible parties who owned, operated or arranged for disposal at facilities affected by a release of hazardous substances. In addition, many
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states have created programs to incentivize voluntary remediation of sites where historical releases of hazardous substances are identified and property owners or responsible parties decide to initiate cleanups.
From time to time, the Companies may be identified as a potentially responsible party in connection with the alleged release of hazardous substances or wastes at a site. Under applicable federal and state laws, the Companies could be responsible for costs associated with the investigation or remediation of impacted sites, or subject to contribution claims by other responsible parties for their costs incurred at such sites. The Companies also may identify, evaluate and remediate other potentially impacted sites under voluntary state programs. Remediation costs may be subject to reimbursement under the Companies’ insurance policies, rate recovery mechanisms, or both. Except as described below, the Companies do not believe these matters will have a material effect on results of operations, financial condition and/or cash flows.
Dominion Energy has determined that it is associated with former manufactured gas plant sites, including certain sites associated with Virginia Power. At 13 sites associated with Dominion Energy remediation work has been substantially completed under federal or state oversight. Where required, the sites are following state-approved groundwater monitoring programs. Dominion Energy commenced remediation activities at one site in the second quarter of 2022. In addition, Dominion Energy has proposed remediation plans associated with 2 sites, including 1one site at Virginia Power and expects to commence remediation activities in 20222023 depending on receipt of final permits and approvals. At March 31,September 30, 2022 and December 31, 2021, Dominion Energy had $52$47 million and $45 million, respectively, and Virginia Power had $25 million at both periods, of reserves recorded. Dominion Energy is associated with 12 additional sites, including 2two associated with Virginia Power, which are not under investigation by any state or federal environmental agency nor the subject of any current or proposed plans to perform remediation activities. Due to the uncertainty surrounding such sites, the Companies are unable to make an estimate of the potential financial statement impacts.
Other Legal Matters
The Companies are defendants in a number of lawsuits and claims involving unrelated incidents of property damage and personal injury. Due to the uncertainty surrounding these matters, the Companies are unable to make an estimate of the potential financial statement impacts; however, they could have a material impact on results of operations, financial condition and/or cash flows.
SCANA Legal Proceedings
The following describes certain legal proceedings involving Dominion Energy, SCANA or DESC relating primarily to events occurring before closing of the SCANA Combination. In addition, certain legal matters which have been resolved are discussed in
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Note 23 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021. No reference to, or disclosure of, any proceeding, item or matter described below shall be construed as an admission or indication that such proceeding, item or matter is material. For certain of these matters, and unless otherwise noted therein, Dominion Energy is unable to estimate a reasonable range of possible loss and the related financial statement impacts, but for any such matter there could be a material impact to its results of operations, financial condition and/or cash flows. For the matters for which Dominion Energy is able to reasonably estimate a probable loss, Dominion Energy’s Consolidated Balance Sheets at March 31,September 30, 2022 and December 31, 2021 include reserves of $257$96 million and $274$274 million, respectively, included in other current liabilities, and insurance receivables of $118$68 million at both dates,and $118 million, respectively, included within other receivables. These balances at March 31,September 30, 2022 and December 31, 2021 include $70$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 three and nine months ended March 31,September 30, 2022, 0 charges were included in Dominion Energy’s Consolidated Statements of Income.Income were inconsequential. During the threenine months ended March 31,September 30, 2021, Dominion Energy’s Consolidated Statements of Income include charges of $60$100 million ($4575 million after-tax), included within impairment of assets and other charges.
SCANA Shareholder Litigation
In September 2017, a shareholder derivative action was filed against certain former executive officers and directors of SCANA in the State Court of Common Pleas in Richland County, South Carolina (the State Court Derivative Case). In September 2018, this action was consolidated with another action in the Business Court Pilot Program in Richland County. The plaintiffs allege, among other things, that the defendants breached their fiduciary duties to shareholders by their gross mismanagement of the NND Project, and that the defendants were unjustly enriched by bonuses they were paid in connection with the project. In January 2019, the defendants filed a motion to dismiss the consolidated action. In February 2019, one action was voluntarily dismissed. In March 2020, the court denied the defendants’ motion to dismiss. In April 2020, the defendants filed a notice of appeal with the South Carolina Court of Appeals and a petition with the Supreme Court of South Carolina seeking appellate review of the denial of the motion to dismiss. In June 2020, the plaintiffs filed a motion to dismiss the appeal with the South Carolina Court of Appeals, which was granted in July 2020. In August 2020, the Supreme Court of South Carolina denied the defendants’ petition seeking appellate review. Also in August 2020, the defendants filed a petition for rehearing with the South Carolina Court of Appeals relating to the July 2020 ruling by the court, which was denied in October 2020. In November 2020, SCANA filed a petition of certiorari with the Supreme Court of South Carolina
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seeking appellate review of the denial of SCANA’s motion to dismiss. This petition was denied in June 2021. Also in June 2021, the parties reached an agreement in principle in the amount of $33 million to resolve this matter, subject to court approval. This settlement was reached in contemplation of and willto be utilized to satisfy a portion of the Federal Court Merger Case and the State Court Merger Case discussed below. In November 2021, the parties executed a settlement agreement and filed with the State Court of Common Pleas in Richland County, South Carolina for approval. In June 2022, the State Court of Common Pleas in Richland County, South Carolina issued final approval of the settlement agreement with the funds utilized to satisfy a portion of the State Court Merger Case as discussed below.
In January 2018, a purported class action was filed against SCANA, Dominion Energy and certain former executive officers and directors of SCANA in the State Court of Common Pleas in Lexington County, South Carolina (the City of Warren Lawsuit). The plaintiff alleges, among other things, that defendants violated their fiduciary duties to shareholders by executing a merger agreement that would unfairly deprive plaintiffs of the true value of their SCANA stock, and that Dominion Energy aided and abetted these actions. Among other remedies, the plaintiff seeks to enjoin and/or rescind the merger.
In February 2018, a purported class action was filed against Dominion Energy and certain former directors of SCANA and DESC in the State Court of Common Pleas in Richland County, South Carolina (the Metzler Lawsuit). The allegations made and the relief sought by the plaintiffs are substantially similar to that described for the City of Warren Lawsuit.
In September 2019, the U.S. District Court for the District of South Carolina granted the plaintiffs’ motion to consolidate the City of Warren Lawsuit and the Metzler Lawsuit (the Federal Court Merger Case). In October 2019, the plaintiffs filed an amended complaint against certain former directors and executive officers of SCANA and DESC, which stated substantially similar allegations to those in the City of Warren Lawsuit and the Metzler Lawsuit as well as an inseparable fraud claim. In November 2019, the defendants filed a motion to dismiss. In April 2020, the U.S. District Court for the District of South Carolina denied the motion to dismiss. In May 2020, SCANA filed a motion to intervene, which was denied in August 2020. In September 2020, SCANA filed a notice of appeal with the U.S. Court of Appeals for the Fourth Circuit. In June 2021, the parties reached an agreement in principle in the amount of $63 million to resolve this matter as well as the State Court Merger Case described below, subject to court approval. This settlement was reached in contemplation of and willto be partially satisfied by the State Court Derivative Case settlement described above. In November 2021, the parties executed a settlement agreement, as described above relating to this matter as well as the State Court Derivative Case and the State Court Merger Case, and filed with the State Court of Common Pleas in Richland County, South Carolina for approval. In June 2022, this case was dismissed in connection with the final approval by the State Court of Common Pleas in Richland County, South Carolina of the settlement agreement.
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In May 2019, a case was filed against certain former executive officers and directors of SCANA in the State Court of Common Pleas in Richland County, South Carolina (the State Court Merger Case). The plaintiff alleges, among other things, that the defendants breached their fiduciary duties to shareholders by their gross mismanagement of the NND Project, were unjustly enriched by the bonuses they were paid in connection with the project and breached their fiduciary duties to secure and obtain the best price for the sale of SCANA. Also in May 2019, the case was removed to the U.S. District Court of South Carolina by the non-South Carolina defendants. In June 2019, the plaintiffs filed a motion to remand the case to state court. In January 2020, the case was remanded to state court. In February 2020, the defendants filed a motion to dismiss. In June 2021, the parties reached an agreement in principle as described above relating to this matter as well as the Federal Court Merger Case and the State Court Derivative Case. In November 2021, the parties executed a settlement agreement, as described above relating to this matter as well as the State Court Derivative Case and the Federal Court Merger Case, and filed with the State Court of Common Pleas in Richland County, South Carolina for approval. In June 2022, the State Court of Common Pleas in Richland County, South Carolina issued final approval of the settlement agreement. Also in June 2022, Dominion Energy utilized the $33 million of insurance proceeds from the State Court Derivative Case settlement, the issuance of 0.4 million shares of its common stock and paid $2 million in cash to satisfy its obligations under the settlement agreement.
Employment Class Actions and Indemnification
In August 2017, a case was filed in the U.S. District Court for the District of South Carolina on behalf of persons who were formerly employed at the NND Project. In July 2018, the court certified this case as a class action. In February 2019, certain of these plaintiffs filed an additional case, which case has been dismissed and the plaintiffs have joined the case filed August 2017. The plaintiffs allege, among other things, that SCANA, DESC, Fluor Corporation and Fluor Enterprises, Inc. violated the Worker Adjustment and Retraining Notification Act in connection with the decision to stop construction at the NND Project. The plaintiffs allege that the defendants failed to provide adequate advance written notice of their terminations of employment and are seeking damages, which could be as much as $100 million for 100% of the NND Project. In January 2021, the U.S. District Court for the District of South Carolina granted summary judgment in favor of SCANA, DESC, Fluor Corporation and Fluor Enterprises, Inc. In February 2021, the plaintiffs filed a notice of appeal with the U.S. Court of Appeals for the Fourth Circuit. In 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. As a result of the ruling in favor of the defendants in the aforementioned case, any potential loss by DESC would be limitedwas able to resolve Fluor’s claims for an inconsequential amount.
60
Governmental Proceedings and Investigations
In June 2018, DESC received a notice of proposed assessment of approximately $410 million, excluding interest, from the SCDOR following its audit of DESC’s sales and use tax returns for the periods September 1, 2008 through December 31, 2017. The proposed assessment, which includes 100% of the NND Project, is based on the SCDOR’s position that DESC’s sales and use tax exemption for the NND Project does not apply because the facility will not become operational. In December 2020, the parties reached an agreement in principle in the amount of $165 million to resolve this matter. In June 2021, the parties executed a settlement agreement which allows DESC to fund the settlement amount through a combination of cash, shares of Dominion Energy common stock or real estate with an initial payment of at least $43 million in shares of Dominion Energy common stock. In August 2021, Dominion Energy issued 0.6 million shares of its common stock to satisfy DESC’s obligation for the initial payment under the settlement agreement. In May 2022, Dominion Energy issued an additional 0.9 million shares of its common stock to partially satisfy DESC’s remaining obligation under the settlement agreement.In June 2022, DESC requested approval from the South Carolina Commission to transfer certain real estate with a total settlement value of $51 million to satisfy its remaining obligation under the settlement agreement. In July 2022, the South Carolina Commission voted to approve the request and issued its final order in August 2022. In September 2022, DESC transferred certain non-utility property with a fair value of $28 million to the SCDOR under the settlement agreement, resulting in a gain of $18 million ($14 million after-tax) recorded in losses (gains) on sales of assets in Dominion Energy’s Consolidated Statements of Income for the three and nine months ended September 30, 2022. Certain additional utility property representing $3 million of the value to be conveyed is expected to transfer by the end of 2022. The transfer of the remaining real estate remains subject to the approval of FERC. In October 2022, DESC filed for such approval with FERC. If such approval is received, the transfer of such utility and non-utility properties is expected to result in a gain of approximately $20 million upon completion.
Nuclear Operations
Nuclear Insurance
ThereOther than the items discussed below, there have been no significant changes regarding the Companies’ nuclear insurance as described in Note 23 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.
During the second quarter of 2022, Dominion Energy reduced the levels of nuclear property insurance coverage for the reactor site at Summer from $2.75 billion to the NRC minimum requirement of $1.06 billion. As a result of this reduction in nuclear property insurance coverage, Dominion Energy’s maximum retrospective premium assessment for the current annual policy period was reduced to $65 million. Additionally, DESC maintains an excess property insurance policy with the European Mutual Association for Nuclear Insurance which provides coverage to Summer for property damage and outage costs resulting from an event of a non-nuclear origin. Dominion Energy reduced the levels of coverage from $415 million to $1 million.
During the third quarter of 2022, the total liability protection per nuclear incident available to all participants in the Secondary Financial Protection Program increased from $13.5 billion to $13.7 billion. This increase does not impact Dominion Energy’s responsibility per active unit under the Price-Anderson Amendments Act of 1988.
Spent Nuclear Fuel
As discussed in Note 23 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021, the Companies entered into contracts with the DOE for the disposal of spent nuclear fuel under provisions of the Nuclear Waste Policy Act of 1982.
Guarantees, Surety Bonds and Letters of Credit
At March 31,September 30, 2022, Dominion Energy had issued 4four guarantees related to Cove Point, an equity method investment, in support of terminal services, transportation and construction. NaNTwo of the Cove Point guarantees have a cumulative maximum exposure of $1.9 billion while the other 2two guarantees have 0no maximum limit. No amounts related to these guarantees have been recorded.
In addition, at March 31,September 30, 2022, Dominion Energy had issued an additional $20 million of guarantees, primarily to support third parties. No amounts related to these guarantees have been recorded.
Dominion Energy also enters into guarantee arrangements on behalf of its consolidated subsidiaries, primarily to facilitate their commercial transactions with third parties. If any of these subsidiaries fail to perform or pay under the contracts and the counterparties seek performance or payment, Dominion Energy would be obligated to satisfy such obligation. To the extent that a liability subject to a guarantee has been incurred by one of Dominion Energy’s consolidated subsidiaries, that liability is included in the Consolidated Financial Statements. Dominion Energy is not required to recognize liabilities for guarantees issued on behalf of its subsidiaries unless it becomes probable that it will have to perform under the guarantees. Terms of the guarantees typically end once obligations have been paid. Dominion Energy currently believes it is unlikely that it would be required to perform or otherwise incur any losses associated with guarantees of its subsidiaries’ obligations.
At March 31,September 30, 2022, Dominion Energy had issued the following subsidiary guarantees:
|
| Maximum Exposure |
|
| Maximum Exposure |
| ||
(millions) |
|
|
|
|
|
|
|
|
Commodity transactions(1) |
| $ | 2,186 |
|
| $ | 2,514 |
|
Nuclear obligations(2) |
|
| 243 |
|
|
| 243 |
|
Solar(3) |
|
| 311 |
|
|
| 303 |
|
Other(4) |
|
| 1,265 |
|
|
| 1,268 |
|
Total(5)(6) |
| $ | 4,005 |
| ||||
Total(5)(6) |
| $ | 4,328 |
|
(1) | Guarantees related to commodity commitments of certain subsidiaries. These guarantees were provided to counterparties in order to facilitate physical and financial transaction related commodities and services. |
(2) | Guarantees primarily related to certain DGI subsidiaries regarding all aspects of running a nuclear facility. |
(3) |
61
Includes guarantees to facilitate the development of solar projects. |
(4) | Guarantees related to other miscellaneous contractual obligations such as leases, environmental obligations, construction projects and insurance programs. Also includes guarantees entered into by Dominion Energy RNG Holdings II, Inc. on behalf of a subsidiary to facilitate construction of renewable natural gas facilities. Due to the uncertainty of workers’ compensation claims, the parental guarantee has no stated limit. |
69
(5) | Excludes Dominion Energy’s guarantee of an offshore wind installation vessel discussed in Note 15 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021. |
(6) In July 2016, Dominion Energy signed an agreement with a lessor to construct and lease a new corporate office property in Richmond, Virginia. The lessor provided equity and obtained financing commitments from debt investors, totaling $365 million, which funded total project costs. The project became substantially complete in August 2019 at which point the facility was available for Dominion Energy’s use and the five-year lease term commenced. At the end of the initial lease term, Dominion Energy can (i) extend the term of the lease for an additional five years, subject to the approval of the participants, at current market terms, (ii) purchase the property for an amount equal to the project costs or, (iii) subject to certain terms and conditions, sell the property on behalf of the lessor to a third party using commercially reasonable efforts to obtain the highest cash purchase price for the property. If the project is sold and the proceeds from the sale are insufficient to repay the investors for the project costs, Dominion Energy may be required to make a payment to the lessor, up to 87% of project costs, for the difference between the project costs and sale proceeds. At March 31, 2022, 0
(6) | In July 2016, Dominion Energy signed an agreement with a lessor to construct and lease a new corporate office property in Richmond, Virginia. The lessor provided equity and obtained financing commitments from debt investors, totaling $365 million, which funded total project costs. The project became substantially complete in August 2019 at which point the facility was available for Dominion Energy’s use and the five-year lease term commenced. At the end of the initial lease term, Dominion Energy can (i) extend the term of the lease for an additional five years, subject to the approval of the participants, at current market terms, (ii) purchase the property for an amount equal to the project costs or, (iii) subject to certain terms and conditions, sell the property on behalf of the lessor to a third party using commercially reasonable efforts to obtain the highest cash purchase price for the property. If the project is sold and the proceeds from the sale are insufficient to repay the investors for the project costs, Dominion Energy may be required to make a payment to the lessor, up to 87% of project costs, for the difference between the project costs and sale proceeds. At September 30, 2022, no amounts have been recorded related to this guarantee. |
Additionally, at March 31,September 30, 2022, Dominion Energy had purchased $227$248 million of surety bonds, including $156$172 million at Virginia Power, and authorized the issuance of letters of credit by financial institutions of $112$251 million to facilitate commercial transactions by its subsidiaries with third parties. Under the terms of surety bonds, the Companies are obligated to indemnify the respective surety bond company for any amounts paid.
Note 18. Credit Risk
The Companies’ accounting policies for credit risk are discussed in Note 24 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.
At March 31,September 30, 2022, Dominion Energy’s credit exposure totaled $96$133 million, primarily related to price risk management activities. Of this amount, investment grade counterparties, including those internally rated, represented 85%88%. NaNNo single counterparty, whether investment grade or non-investment grade, exceeded $27$45 million of exposure. At March 31,September 30, 2022, Virginia Power’s exposure related to wholesale customers totaled $14$17 million. Of this amount, investment grade counterparties, including those internally rated, represented 57%78%. NaNNo single counterparty, whether investment grade or non-investment grade, exceeded $3$4 million of exposure.
Credit-Related Contingent Provisions
Certain of Dominion Energy’s derivative instruments contain credit-related contingent provisions. These provisions require Dominion Energy to provide collateral upon the occurrence of specific events, primarily a credit rating downgrade. If the credit-related contingent features underlying these instruments that are in a liability position and not fully collateralized with cash were fully triggered as of March 31,September 30, 2022 and December 31, 2021, Dominion Energy would have been required to post $128$189 million and $31 million, respectively, of additional collateral to its counterparties. The collateral that would be required to be posted includes the impacts of any offsetting asset positions and any amounts already posted for derivatives, non-derivative contracts and derivatives elected under the normal purchases and normal sales exception, per contractual terms. Dominion Energy had posted $125$124 million and $66 million of collateral at March 31,September 30, 2022 and December 31, 2021, respectively, related to derivativesderivative instruments with credit-related contingent provisions that are in a liability position and not fully collateralized with cash. In addition, Dominion Energy had posted letters of credit as collateral with counterparties covering $53 million of fair value of derivative instruments in a liability position at September 30, 2022. 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 $253$313 million and $97 million at March 31,September 30, 2022 and December 31, 2021, respectively, which does not include the impact of any offsetting asset positions.
Certain of Virginia Power’s derivative instruments contain credit-related contingent provisions. These provisions require Virginia Power to provide collateral upon the occurrence of specific events, primarily a credit rate downgrade. If the credit-related contingent features underlying these instruments that are in a liability position and not fully collateralized with cash were fully triggered as of March 31,September 30, 2022 and December 31, 2021, Virginia Power would have been required to post $39$58 million and $22 million, respectively, of additional collateral to its counterparties. The collateral that would be required to be posted includes the impacts of any offsetting asset position and any amounts already posted for derivatives and non-derivative contracts, per contractual terms. Virginia Power had posted $118$121 million and $54 million of collateral at March 31,September 30, 2022 and December 31, 2021, respectively, related to derivativesderivative instruments with credit-related contingent provisions that are in a liability position and not fully collateralized with cash. In addition, Virginia Power had posted letters of credit as collateral with counterparties covering $53 million of fair value of derivative instruments in a liability position at September 30, 2022. 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 $157$179 million and $76 million at March 31,September 30, 2022 and December 31, 2021, respectively, which does not include the impact of any offsetting asset positions.
See Note 9 for additional information about derivative instruments.
6270
Note 19. Related-Party Transactions
Virginia Power engages in related-party transactions primarily with other Dominion Energy subsidiaries (affiliates). Virginia Power’s receivable and payable balances with affiliates are settled based on contractual terms or on a monthly basis, depending on the nature of the underlying transactions. Virginia Power is included in Dominion Energy's consolidated federal income tax return and, where applicable, combined income tax returns for Dominion Energy are filed in various states. Dominion Energy’s transactions with equity method investments are described in Note 10. A discussion of significant related-party transactions follows.
Virginia Power
Transactions with Affiliates
Virginia Power transacts with affiliates for certain quantities of natural gas and other commodities in the ordinary course of business. Virginia Power also enters into certain commodity derivative contracts with affiliates. Virginia Power uses these contracts, which are principally comprised of forward commodity purchases, to manage commodity price risks associated with purchases of natural gas. At March 31,September 30, 2022, Virginia Power’s derivative assets and liabilities with affiliates were $64 million and $1$3 million, respectively. At December 31, 2021, Virginia Power’s derivative assets and liabilities with affiliates were $29 million and $6 million, respectively. See Note 9 for additional information.
Virginia Power participates in certain Dominion Energy benefit plans described in Note 22 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021. At March 31,September 30, 2022 and December 31, 2021, amounts due to Dominion Energy associated with the Dominion Energy Pension Plan and included in other deferred credits and other liabilities in the Consolidated Balance Sheets were $540$576 million and $522 million, respectively. At March 31,September 30, 2022 and December 31, 2021, Virginia Power's amounts due from Dominion Energy associated with the Dominion Energy Retiree Health and Welfare Plan and included in other deferred charges and other assets in the Consolidated Balance Sheets were $453$493 million and $431 million, respectively. While Virginia Power has not been notified by Dominion Energy of any required contributions to be made in 2022, it anticipates that it may have to contribute approximately $175 million as a result of Dominion Energy’s contribution made to its qualified defined benefit pension plans in December 2021.
DES and other affiliates provide accounting, legal, finance and certain administrative and technical services to Virginia Power. In addition, Virginia Power provides certain services to affiliates, including charges for facilities and equipment usage.
The financial statements for all years presented include costs for certain general, administrative and corporate expenses assigned by DES to Virginia Power on the basis of direct and allocated methods in accordance with Virginia Power’s services agreements with DES. Where costs incurred cannot be determined by specific identification, the costs are allocated based on the proportional level of effort devoted by DES resources that is attributable to the entity, determined by reference to number of employees, salaries and wages and other similar measures for the relevant DES service. Management believes the assumptions and methodologies underlying the allocation of general corporate overhead expenses are reasonable.
Presented below are Virginia Power’s significant transactions with DES and other affiliates:
|
| Three Months Ended March 31, |
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| |||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity purchases from affiliates |
| $ | 293 |
|
| $ | 181 |
|
| $ | 515 |
|
| $ | 219 |
|
| $ | 1,099 |
|
| $ | 526 |
|
Services provided by affiliates(1) |
|
| 130 |
|
|
| 125 |
|
|
| 125 |
|
|
| 116 |
|
|
| 378 |
|
|
| 363 |
|
Services provided to affiliates |
|
| 4 |
|
|
| 5 |
|
|
| 4 |
|
|
| 6 |
|
|
| 13 |
|
|
| 15 |
|
(1) | Includes capitalized expenditures of |
Virginia Power has borrowed funds from Dominion Energy under short-term borrowing arrangements. There were $235$784 million and $699 million in short-term demand note borrowings from Dominion Energy as of March 31,September 30, 2022 and December 31, 2021, respectively. Virginia Power had 0no outstanding borrowings, net of repayments, under the Dominion Energy money pool for its nonregulated subsidiaries as of March 31,September 30, 2022 and December 31, 2021. Interest charges related to Virginia Power’s borrowings from Dominion Energy were immaterialinconsequential for both the three and nine months ended March 31,September 30, 2022 and 2021.
There were 0no issuances of Virginia Power’s common stock to Dominion Energy for the three and nine months ended March 31,September 30, 2022 and 2021.
Note 20. Employee Benefit Plans
Net Periodic Benefit (Credit) Cost
The service cost component of net periodic benefit (credit) cost is reflected in other operations and maintenance expense in Dominion Energy’s Consolidated Statements of Income. The non-service cost components of net periodic benefit (credit) cost are reflected in other income (expense) in Dominion Energy’s Consolidated Statements of Income. The components of Dominion Energy’s provision for net periodic benefit cost (credit) are as follows:
|
| Pension Benefits |
|
| Other Postretirement Benefits |
|
| Pension Benefits |
|
| Other Postretirement Benefits |
| ||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Three Months Ended September 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Service cost |
| $ | 35 |
|
| $ | 43 |
|
| $ | 5 |
|
| $ | 6 |
| ||||||||||||||||
Interest cost |
|
| 83 |
|
|
| 80 |
|
|
| 11 |
|
|
| 11 |
| ||||||||||||||||
Expected return on plan assets |
|
| (221 | ) |
|
| (209 | ) |
|
| (47 | ) |
|
| (43 | ) | ||||||||||||||||
Amortization of prior service cost (credit) |
|
| — |
|
|
| — |
|
|
| (10 | ) |
|
| (11 | ) | ||||||||||||||||
Amortization of net actuarial loss |
|
| 39 |
|
|
| 48 |
|
|
| — |
|
|
| 1 |
| ||||||||||||||||
Curtailment(1) |
|
| — |
|
|
| — |
|
|
| (8 | ) |
|
| — |
| ||||||||||||||||
Net periodic benefit (credit) cost |
| $ | (64 | ) |
| $ | (38 | ) |
| $ | (49 | ) |
| $ | (36 | ) | ||||||||||||||||
Nine Months Ended September 30, |
|
|
|
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|
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|
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|
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|
|
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|
| ||||||||||||||||
Service cost |
| $ | 36 |
|
| $ | 42 |
|
| $ | 6 |
|
| $ | 6 |
|
| $ | 106 |
|
| $ | 127 |
|
| $ | 16 |
|
| $ | 18 |
|
Interest cost |
|
| 83 |
|
|
| 79 |
|
|
| 11 |
|
|
| 12 |
|
|
| 250 |
|
|
| 238 |
|
|
| 34 |
|
|
| 35 |
|
Expected return on plan assets |
|
| (223 | ) |
|
| (208 | ) |
|
| (48 | ) |
|
| (44 | ) |
|
| (667 | ) |
|
| (625 | ) |
|
| (143 | ) |
|
| (130 | ) |
Amortization of prior service (credit) cost |
|
| — |
|
|
| — |
|
|
| (10 | ) |
|
| (10 | ) |
|
| — |
|
|
| — |
|
|
| (29 | ) |
|
| (32 | ) |
Amortization of net actuarial loss |
|
| 40 |
|
|
| 48 |
|
|
| — |
|
|
| 1 |
|
|
| 119 |
|
|
| 145 |
|
|
| (1 | ) |
|
| 3 |
|
Settlements |
|
| — |
|
|
| (2 | ) |
|
| — |
|
|
| — |
| ||||||||||||||||
Settlements and curtailment(1) |
|
| — |
|
|
| 5 |
|
|
| (8 | ) |
|
| — |
| ||||||||||||||||
Net periodic benefit (credit) cost |
| $ | (64 | ) |
| $ | (41 | ) |
| $ | (41 | ) |
| $ | (35 | ) |
| $ | (192 | ) |
| $ | (110 | ) |
| $ | (131 | ) |
| $ | (106 | ) |
(1) 2022 amounts relate primarily to Dominion Energy’s sale of Hope. 2021 amounts relate primarily to the Dominion Energy executive nonqualified pension plan.
Employer Contributions
During the three and nine months ended March 31,September 30, 2022, Dominion Energy made 0no contributions to its qualified defined benefit pension plans or other postretirement benefit plans. Dominion Energy is 0tnot required to make any contributions to its qualified defined benefit pension plans or to VEBAs associated with its other postretirement plans in 2022. Dominion Energy considers voluntary contributions from time to time, either in the form of cash or equity securities.
Note 21. Operating Segments
The Companies are organized primarily on the basis of products and services sold in the U.S. A description of the operations included in the Companies’ primary operating segments is as follows:
Primary Operating Segment |
| Description of Operations |
| Dominion Energy |
| Virginia Power |
Dominion Energy Virginia |
| Regulated electric distribution |
| X |
| X |
|
| Regulated electric transmission |
| X |
| X |
|
| Regulated electric generation fleet(1) |
| X |
| X |
Gas Distribution |
| Regulated gas distribution and storage(2) |
| X |
|
|
Dominion Energy South Carolina |
| Regulated electric distribution |
| X |
|
|
|
| Regulated electric transmission |
| X |
|
|
|
| Regulated electric generation fleet |
| X |
|
|
|
| Regulated gas distribution and storage |
| X |
|
|
Contracted Assets |
| Nonregulated electric generation fleet(3) |
| X |
|
|
|
| Noncontrolling interest in Cove Point |
| X |
|
|
(1) | Includes Virginia Power’s non-jurisdictional generation operations. |
(2) | Includes renewable natural gas operations as well as Wexpro’s gas development and production operations. |
(3) | Includes solar generation facility development operations. |
In addition to the operating segments above, the Companies also report a Corporate and Other segment.
72
Dominion Energy
The Corporate and Other Segment of Dominion Energy includes its corporate, service company and other functions (including unallocated debt) as well as nonregulated retail energy marketing operations (prior to December 2021), including Dominion Energy’s noncontrolling interests in Wrangler (through March 2022) and Dominion Privatization. In addition, Corporate and Other includes specific items attributable to Dominion Energy’s operating segments that are not included in profit measures evaluated by executive management in assessing the segments’ performance or in allocating resources as well as the net impact of the gas transmission and storage operations presented in discontinued operations, which are discussed in Note 3.
In the threenine months ended March 31,September 30, 2022, Dominion Energy reported after-tax net expenses of $311$1.7 billion in the Corporate and Other segment, including $1.6 billion of after-tax net expenses for specific items with $1.8 billion of after-tax net expenses attributable to its operating segments. In the nine months ended September 30, 2021, Dominion Energy reported after-tax net expenses of $642 million in the Corporate and Other segment, including $289$492 million of after-tax net expenses for specific items with $269 million of after-tax net expenses
64
attributable to its operating segments. In the three months ended March 31, 2021, Dominion Energy reported after-tax net income of $71 million in the Corporate and Other segment, including $115 million of after-tax net income for specific items with $87$617 million of after-tax net expenses attributable to its operating segments.
The net expenses for specific items attributable to Dominion Energy’s operating segments in 2022 primarily related to the impact of the following items:
• | A |
| • | Contracted Assets ($ |
| • | Dominion Energy Virginia ($ |
• | A $649 million ($513 million after-tax) loss associated with the sale of Kewaunee, attributable to Contracted Assets; |
• | A $213 million ($159 million after-tax) charge for RGGI compliance costs deemed recovered through base rates, attributable to Dominion Energy Virginia; |
• | A $191 million ($142 million after-tax) charge in connection with a comprehensive settlement agreement for Virginia fuel expenses, attributable to Dominion Energy Virginia; |
• | A $183 million ($136 million after-tax) charge for amortization of a regulatory asset established in connection with the settlement of the 2021 Triennial Review, attributable to Dominion Energy Virginia; |
• | A $135 million ($94 million after-tax) loss related to economic hedging activities, attributable to Contracted Assets; |
• | A $94 million ($70 million after-tax) charge associated with storm damage and service restoration in Virginia Power’s service territory, attributable to Dominion Energy Virginia; |
• | A |
• | A |
The net expenses for specific items attributable to Dominion Energy’s operating segments in 2021 primarily related to the impact of the following items:
• | A $447 million ($336 million after-tax) loss related to economic hedging activities, attributable to Contracted Assets; |
• | $266 million ($199 million after-tax) of charges associated with the settlement of the South Carolina electric base rate case, attributable to Dominion Energy South Carolina; |
• | A $151 million ($112 million after-tax) loss from an unbilled revenue reduction at Virginia Power, attributable to Dominion Energy Virginia; |
• | A |
• | A $77 million ($57 million after-tax) charge for the forgiveness of Virginia retail electric customer accounts in arrears pursuant to Virginia’s 2021 budget process, attributable to Dominion Energy Virginia; |
• | A |
• | A |
• | A $44 million ($35 million after-tax) charge related to a revision in estimated recovery of spent nuclear fuel costs associated with the decommissioning of Kewaunee, attributable to Contracted Assets; partially offset by |
• | A |
| • | Contracted Assets ($ |
| • | Dominion Energy Virginia ($ |
• | A $130 million ($97 million after-tax) benefit for a change in the CCRO reserve associated with the 2021 Triennial Review, attributable to Dominion Energy Virginia. |
The following table presents segment information pertaining to Dominion Energy’s operations:
|
| Dominion Energy Virginia |
|
| Gas Distribution |
|
| Dominion Energy South Carolina |
|
| Contracted Assets |
|
| Corporate and Other |
|
| Adjustments & Eliminations |
|
| Consolidated Total |
|
| Dominion Energy Virginia |
|
| Gas Distribution |
|
| Dominion Energy South Carolina |
|
| Contracted Assets |
|
| Corporate and Other |
|
| Adjustments & Eliminations |
|
| Consolidated Total |
| ||||||||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
Three Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
Total revenue from external customers |
| $ | 2,871 |
|
| $ | 436 |
|
| $ | 915 |
|
| $ | 239 |
|
| $ | (75 | ) |
| $ | — |
|
| $ | 4,386 |
| ||||||||||||||||||||||||||||
Intersegment revenue |
|
| (4 | ) |
|
| 1 |
|
|
| 2 |
|
|
| 5 |
|
|
| 224 |
|
|
| (228 | ) |
|
| — |
| ||||||||||||||||||||||||||||
Total operating revenue |
|
| 2,867 |
|
|
| 437 |
|
|
| 917 |
|
|
| 244 |
|
|
| 149 |
|
|
| (228 | ) |
|
| 4,386 |
| ||||||||||||||||||||||||||||
Net loss from discontinued operations |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (3 | ) |
|
| — |
|
|
| (3 | ) | ||||||||||||||||||||||||||||
Net income (loss) attributable to Dominion Energy |
|
| 617 |
|
|
| 67 |
|
|
| 175 |
|
|
| 121 |
|
|
| (202 | ) |
|
| — |
|
|
| 778 |
| ||||||||||||||||||||||||||||
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
Total revenue from external customers |
| $ | 2,172 |
|
| $ | 1,229 |
|
| $ | 798 |
|
| $ | 245 |
|
| $ | (165 | ) |
| $ | 0 |
|
| $ | 4,279 |
|
| $ | 2,333 |
|
| $ | 372 |
|
| $ | 799 |
|
| $ | 265 |
|
| $ | (612 | ) |
| $ | 18 |
|
| $ | 3,175 |
|
Intersegment revenue |
|
| (3 | ) |
|
| 1 |
|
|
| 1 |
|
|
| 4 |
|
|
| 237 |
|
|
| (240 | ) |
|
| 0 |
|
|
| (3 | ) |
|
| 1 |
|
|
| 1 |
|
|
| 17 |
|
|
| 221 |
|
|
| (236 | ) |
|
| 1 |
|
Total operating revenue |
|
| 2,169 |
|
|
| 1,230 |
|
|
| 799 |
|
|
| 249 |
|
|
| 72 |
|
|
| (240 | ) |
|
| 4,279 |
|
|
| 2,330 |
|
|
| 373 |
|
|
| 800 |
|
|
| 282 |
|
|
| (391 | ) |
|
| (218 | ) |
|
| 3,176 |
|
Net income from discontinued operations |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 19 |
|
|
| 0 |
|
|
| 19 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 65 |
|
|
| — |
|
|
| 65 |
|
Net income (loss) attributable to Dominion Energy |
|
| 518 |
|
|
| 294 |
|
|
| 109 |
|
|
| 101 |
|
|
| (311 | ) |
|
| 0 |
|
|
| 711 |
|
|
| 599 |
|
|
| 69 |
|
|
| 151 |
|
|
| 119 |
|
|
| (284 | ) |
|
| — |
|
|
| 654 |
|
Three Months Ended March 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
Nine Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
Total revenue from external customers |
| $ | 1,987 |
|
| $ | 975 |
|
| $ | 752 |
|
| $ | 268 |
|
| $ | (130 | ) |
| $ | 17 |
|
| $ | 3,869 |
|
| $ | 7,218 |
|
| $ | 2,230 |
|
| $ | 2,525 |
|
| $ | 645 |
|
| $ | (357 | ) |
| $ | — |
|
| $ | 12,261 |
|
Intersegment revenue |
|
| (2 | ) |
|
| 1 |
|
|
| 2 |
|
|
| 21 |
|
|
| 230 |
|
|
| (251 | ) |
|
| 1 |
|
|
| (10 | ) |
|
| 2 |
|
|
| 6 |
|
|
| 15 |
|
|
| 686 |
|
|
| (699 | ) |
|
| — |
|
Total operating revenue |
|
| 1,985 |
|
|
| 976 |
|
|
| 754 |
|
|
| 289 |
|
|
| 100 |
|
|
| (234 | ) |
|
| 3,870 |
|
|
| 7,208 |
|
|
| 2,232 |
|
|
| 2,531 |
|
|
| 660 |
|
|
| 329 |
|
|
| (699 | ) |
|
| 12,261 |
|
Net income from discontinued operations |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 28 |
|
|
| 0 |
|
|
| 28 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 15 |
|
|
| — |
|
|
| 15 |
|
Net income attributable to Dominion Energy |
|
| 434 |
|
|
| 251 |
|
|
| 102 |
|
|
| 150 |
|
|
| 71 |
|
|
| 0 |
|
|
| 1,008 |
| ||||||||||||||||||||||||||||
Net income (loss) attributable to Dominion Energy |
|
| 1,575 |
|
|
| 486 |
|
|
| 408 |
|
|
| 242 |
|
|
| (1,675 | ) |
|
| — |
|
|
| 1,036 |
| ||||||||||||||||||||||||||||
Nine Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
Total revenue from external customers |
| $ | 6,072 |
|
| $ | 1,800 |
|
| $ | 2,230 |
|
| $ | 790 |
|
| $ | (857 | ) |
| $ | 46 |
|
| $ | 10,081 |
| ||||||||||||||||||||||||||||
Intersegment revenue |
|
| (10 | ) |
|
| 4 |
|
|
| 5 |
|
|
| 55 |
|
|
| 686 |
|
|
| (737 | ) |
|
| 3 |
| ||||||||||||||||||||||||||||
Total operating revenue |
|
| 6,062 |
|
|
| 1,804 |
|
|
| 2,235 |
|
|
| 845 |
|
|
| (171 | ) |
|
| (691 | ) |
|
| 10,084 |
| ||||||||||||||||||||||||||||
Net income from discontinued operations |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 119 |
|
|
| — |
|
|
| 119 |
| ||||||||||||||||||||||||||||
Net income (loss) attributable to Dominion Energy |
|
| 1,464 |
|
|
| 415 |
|
|
| 337 |
|
|
| 373 |
|
|
| (642 | ) |
|
| — |
|
|
| 1,947 |
|
Intersegment sales and transfers for Dominion Energy are based on contractual arrangements and may result in intersegment profit or loss that is eliminated in consolidation, including amounts related to entities presented within discontinued operations.
Virginia Power
The Corporate and Other Segment of Virginia Power primarily includes specific items attributable to its operating segment that are not included in profit measures evaluated by executive management in assessing the segment’s performance or in allocating resources.
75
In the threenine months ended March 31,September 30, 2022, Virginia Power reported after-tax net expenses of $159$601 million in the Corporate and Other segment, including $130$641 million of after-tax net expenses for specific items allwith $635 million of which wasafter-tax net expenses attributable to its operating segment. In the threenine months ended March 31,September 30, 2021, Virginia Power reported after-tax net expenses of $58$118 million in the Corporate and Other segment, including $117$186 million of after-tax net expenses for specific items all of which was attributable to its operating segment.
The net expenses for specific items attributable to Virginia Power’s operating segment in 2022 primarily related to the impact of the following items:
• | A |
• | A |
• | A $183 million ($136 million after-tax) charge for amortization of a regulatory asset established in connection with the settlement of the 2021 Triennial |
• | A $96 million ($71 million after-tax) loss related to investments in nuclear decommissioning trust funds; |
• | A $94 million ($70 million after-tax) charge associated with storm damage and service restoration in its service territory; and |
• | A $60 million ($45 million after-tax) charge for dismantling costs associated with certain retired electric generation facilities. |
The net expenses for specific items attributable to Virginia Power’s operating segment in 2021 primarily related to the impact of the following items:
• | A $151 million ($112 million after-tax) loss from an unbilled revenue reduction; |
• | A |
• | A $77 million ($57 million after-tax) charge for the forgiveness of Virginia retail electric customer accounts in arrears pursuant to Virginia’s 2021 budget process; and |
• | A |
• | A $130 million ($97 million after-tax) benefit for a change in the CCRO reserve associated with the 2021 Triennial Review. |
The following table presents segment information pertaining to Virginia Power’s operations:
|
| Dominion Energy Virginia |
|
| Corporate and Other |
|
| Consolidated Total |
|
| Dominion Energy Virginia |
|
| Corporate and Other |
|
| Consolidated Total |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Three Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Operating revenue |
| $ | 2,165 |
|
| $ | 2 |
|
| $ | 2,167 |
|
| $ | 2,865 |
|
| $ | 10 |
|
| $ | 2,875 |
|
Net income (loss) |
|
| 516 |
|
|
| (159 | ) |
|
| 357 |
|
|
| 618 |
|
|
| (47 | ) |
|
| 571 |
|
Three Months Ended March 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Operating revenue |
| $ | 1,981 |
|
| $ | (151 | ) |
| $ | 1,830 |
|
| $ | 2,326 |
|
| $ | (350 | ) |
| $ | 1,976 |
|
Net income (loss) |
|
| 432 |
|
|
| (58 | ) |
|
| 374 |
|
|
| 601 |
|
|
| (45 | ) |
|
| 556 |
|
Nine Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Operating revenue |
| $ | 7,200 |
|
| $ | 17 |
|
| $ | 7,217 |
| ||||||||||||
Net income (loss) |
|
| 1,576 |
|
|
| (601 | ) |
|
| 975 |
| ||||||||||||
Nine Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Operating revenue |
| $ | 6,048 |
|
| $ | (501 | ) |
| $ | 5,547 |
| ||||||||||||
Net income (loss) |
|
| 1,462 |
|
|
| (118 | ) |
|
| 1,344 |
|
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MD&A discusses Dominion Energy’s results of operations and general financial condition and Virginia Power’s results of operations. MD&A should be read in conjunction with the Companies’ Consolidated Financial Statements. Virginia Power meets the conditions to file under the reduced disclosure format, and therefore has omitted certain sections of MD&A.
Contents of MD&A
MD&A consists of the following information:
• | Forward-Looking Statements |
• | Accounting Matters – Dominion Energy |
• | Dominion Energy |
| • | Results of Operations |
| • | Outlook |
| • | Segment Results of Operations |
• | Virginia Power |
| • | Results of Operations |
• | Liquidity and Capital Resources – Dominion Energy |
• | Future Issues and Other Matters – Dominion Energy |
Forward-Looking Statements
This report contains statements concerning the Companies’ expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In most cases, the reader can identify these forward-looking statements by such words as “anticipate,” “estimate,” “forecast,” “expect,” “believe,” “should,” “could,” “plan,” “may,” “continue,” “target” or other similar words.
The Companies make forward-looking statements with full knowledge that risks and uncertainties exist that may cause actual results to differ materially from predicted results. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Additionally, other factors may cause actual results to differ materially from those indicated in any forward-looking statement. These factors include but are not limited to:
• | Unusual weather conditions and their effect on energy sales to customers and energy commodity prices; |
• | Extreme weather events and other natural disasters, including, but not limited to, hurricanes, high winds, severe storms, earthquakes, flooding, climate changes and changes in water temperatures and availability that can cause outages and property damage to facilities; |
• | The impact of extraordinary external events, such as the current pandemic health event resulting from COVID-19, and their collateral consequences, including extended disruption of economic activity in our markets and global supply chains; |
• | Federal, state and local legislative and regulatory developments, including changes in or interpretations of federal and state tax laws and regulations; |
• | The direct and indirect impacts of implementing recommendations resulting from the business review announced in November 2022; |
• | Risks of operating businesses in regulated industries that are subject to changing regulatory structures; |
• | Changes to regulated electric rates collected by the Companies and regulated gas distribution, transportation and storage rates collected by Dominion Energy; |
• | Changes in rules for RTOs and ISOs in which the Companies join and/or participate, including changes in rate designs, changes in FERC’s interpretation of market rules and new and evolving capacity models; |
• | Risks associated with Virginia Power’s membership and participation in PJM, including risks related to obligations created by the default of other participants; |
6877
• | Risks associated with entities in which Dominion Energy shares ownership with third parties, including risks that result from lack of sole decision making authority, disputes that may arise between Dominion Energy and third party participants and difficulties in exiting these arrangements; |
• | Changes in future levels of domestic and international natural gas production, supply or consumption; |
• | Impacts to Dominion Energy’s noncontrolling interest in Cove Point from fluctuations in future volumes of LNG imports or exports from the U.S. and other countries worldwide or demand for, purchases of and prices related to natural gas or LNG; |
• | Timing and receipt of regulatory approvals necessary for planned construction or growth projects and compliance with conditions associated with such regulatory approvals; |
• | The inability to complete planned construction, conversion or growth projects at all, or with the outcomes or within the terms and time frames initially anticipated, including as a result of increased public involvement, intervention or litigation in such projects; |
• | Risks and uncertainties that may impact the Companies’ ability to develop and construct the CVOW Commercial Project within the currently proposed timeline, or at all, and consistent with current cost estimates along with the ability to recover such costs from customers; |
• | Changes to federal, state and local environmental laws and regulations, including those related to climate change, the tightening of emission or discharge limits for GHGs and other substances, more extensive permitting requirements and the regulation of additional substances; |
• | Cost of environmental strategy and compliance, including those costs related to climate change; |
• | Changes in implementation and enforcement practices of regulators relating to environmental standards and litigation exposure for remedial activities; |
• | Difficulty in anticipating mitigation requirements associated with environmental and other regulatory approvals or related appeals; |
• | Unplanned outages at facilities in which the Companies have an ownership interest; |
• | The impact of operational hazards, including adverse developments with respect to pipeline and plant safety or integrity, equipment loss, malfunction or failure, operator error and other catastrophic events; |
• | Risks associated with the operation of nuclear facilities, including costs associated with the disposal of spent nuclear fuel, decommissioning, plant maintenance and changes in existing regulations governing such facilities; |
• | Changes in operating, maintenance and construction costs; |
• | Domestic terrorism and other threats to the Companies’ physical and intangible assets, as well as threats to cybersecurity; |
• | Additional competition in industries in which the Companies operate, including in electric markets in which Dominion Energy’s nonregulated generation facilities operate and potential competition from the development and deployment of alternative energy sources, such as self-generation and distributed generation technologies, and availability of market alternatives to large commercial and industrial customers; |
• | Competition in the development, construction and ownership of certain electric transmission facilities in the Companies’ service territory in connection with Order 1000; |
• | Changes in technology, particularly with respect to new, developing or alternative sources of generation and smart grid technologies; |
• | Changes in demand for the Companies’ services, including industrial, commercial and residential growth or decline in the Companies’ service areas, changes in supplies of natural gas delivered to Dominion Energy’s pipeline system, failure to maintain or replace customer contracts on favorable terms, changes in customer growth or usage patterns, including as a result of energy conservation programs, the availability of energy efficient devices and the use of distributed generation methods; |
• | Receipt of approvals for, and timing of, closing dates for acquisitions and divestitures; |
• | Impacts of acquisitions, divestitures, transfers of assets to joint ventures and retirements of assets based on asset portfolio reviews; |
• |
|
| Adverse outcomes in litigation matters or regulatory proceedings, including matters acquired in the SCANA Combination; |
• | Counterparty credit and performance risk; |
• | Fluctuations in the value of investments held in nuclear decommissioning trusts by the Companies and in benefit plan trusts by Dominion Energy; |
78
• | Fluctuations in energy-related commodity prices and the effect these could have on Dominion Energy’s earnings and the Companies’ liquidity position and the underlying value of their assets; |
• | Fluctuations in interest rates; |
• | Fluctuations in currency exchange rates of the Euro or Danish Krone associated with the CVOW Commercial Project; |
• | Changes in rating agency requirements or credit ratings and their effect on availability and cost of capital; |
• | Global capital market conditions, including the availability of credit and the ability to obtain financing on reasonable terms; |
• | Political and economic conditions, including inflation and deflation; |
• | Employee workforce factors including collective bargaining agreements and labor negotiations with union employees; and |
• | Changes in financial or regulatory accounting principles or policies imposed by governing bodies. |
Additionally, other risks that could cause actual results to differ from predicted results are set forth in Part I. Item 1A. Risk Factors in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.
The Companies’ forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. The Companies caution the reader not to place undue reliance on their forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, differ materially from actual results. The Companies undertake no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.
Accounting Matters
Critical Accounting Policies and Estimates
As of March 31,September 30, 2022, there have been no significant changes with regard to the critical accounting policies and estimates disclosed in MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021. The policies disclosed included the accounting for regulated operations, AROs, income taxes, accounting for derivative contracts and financial instruments at fair value, use of estimates in goodwill impairment testing, use of estimates in long-lived asset and equity method investment impairment testing, employee benefit plans and held for sale classification.
Dominion Energy
Results of Operations
Presented below is a summary of Dominion Energy’s consolidated results:
|
| 2022 |
|
| 2021 |
|
| $ Change |
|
| 2022 |
|
| 2021 |
|
| $ Change |
| ||||||
(millions, except EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Third Quarter |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Net income attributable to Dominion Energy |
| $ | 711 |
|
| $ | 1,008 |
|
| $ | (297 | ) |
| $ | 778 |
|
| $ | 654 |
|
| $ | 124 |
|
Diluted EPS |
|
| 0.83 |
|
|
| 1.23 |
|
|
| (0.40 | ) |
|
| 0.91 |
|
|
| 0.79 |
|
|
| 0.12 |
|
Year-To-Date |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Net income attributable to Dominion Energy |
| $ | 1,036 |
|
| $ | 1,947 |
|
| $ | (911 | ) | ||||||||||||
Diluted EPS |
|
| 1.17 |
|
|
| 2.35 |
|
|
| (1.18 | ) |
Overview
FirstThird Quarter 2022 vs. 2021
Net income attributable to Dominion Energy decreased 29%increased 19%, primarily due to increased unrealized gains on economic hedging activities, partially offset by a decrease in net investment earnings on nuclear decommissioning trust funds.
Year-To-Date 2022 vs. 2021
Net income attributable to Dominion Energy decreased 47%, primarily due to a loss associated with the sale of Kewaunee, a decrease in net investment earnings on nuclear decommissioning trust funds, a net decrease associated with the impacts of Virginia Power’s 2021 Triennial Review, a charge for RGGI compliance costs deemed recovered through base rates and a charge to reflectin connection with a comprehensive settlement agreement for Virginia fuel expenses. These decreases were partially offset by the recognitionabsence of deferred taxescharges associated with the settlement of the South Carolina electric base rate case and increased unrealized gains on the outside basis of Hope’s stock upon meeting the classification as held for sale.economic hedging activities.
70
Analysis of Consolidated Operations
Presented below are selected amounts related to Dominion Energy’s results of operations:
|
| First Quarter |
|
| Third Quarter |
|
| Year-To-Date |
| |||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| $ Change |
|
| 2022 |
|
| 2021 |
|
| $ Change |
|
| 2022 |
|
| 2021 |
|
| $ Change |
| |||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue |
| $ | 4,279 |
|
| $ | 3,870 |
|
| $ | 409 |
|
| $ | 4,386 |
|
| $ | 3,176 |
|
| $ | 1,210 |
|
| $ | 12,261 |
|
| $ | 10,084 |
|
| $ | 2,177 |
|
Electric fuel and other energy-related purchases |
|
| 678 |
|
|
| 550 |
|
|
| 128 |
|
|
| 1,217 |
|
|
| 703 |
|
|
| 514 |
|
|
| 2,625 |
|
|
| 1,740 |
|
|
| 885 |
|
Purchased electric capacity |
|
| 13 |
|
|
| 11 |
|
|
| 2 |
|
|
| 16 |
|
|
| 26 |
|
|
| (10 | ) |
|
| 45 |
|
|
| 62 |
|
|
| (17 | ) |
Purchased gas |
|
| 645 |
|
|
| 484 |
|
|
| 161 |
|
|
| 138 |
|
|
| 60 |
|
|
| 78 |
|
|
| 985 |
|
|
| 665 |
|
|
| 320 |
|
Other operations and maintenance |
|
| 1,026 |
|
|
| 987 |
|
|
| 39 |
|
|
| 991 |
|
|
| 927 |
|
|
| 64 |
|
|
| 3,030 |
|
|
| 2,808 |
|
|
| 222 |
|
Depreciation, depletion and amortization |
|
| 698 |
|
|
| 608 |
|
|
| 90 |
|
|
| 727 |
|
|
| 621 |
|
|
| 106 |
|
|
| 2,120 |
|
|
| 1,833 |
|
|
| 287 |
|
Other taxes |
|
| 253 |
|
|
| 257 |
|
|
| (4 | ) |
|
| 231 |
|
|
| 223 |
|
|
| 8 |
|
|
| 719 |
|
|
| 702 |
|
|
| 17 |
|
Impairment of assets and other charges (benefits) |
|
| (10 | ) |
|
| 95 |
|
|
| (105 | ) |
|
| 21 |
|
|
| (222 | ) |
|
| 243 |
|
|
| 426 |
|
|
| 194 |
|
|
| 232 |
|
Losses (gains) on sales of assets |
|
| (27 | ) |
|
| (3 | ) |
|
| (24 | ) |
|
| 581 |
|
|
| (2 | ) |
|
| 583 |
| ||||||||||||
Earnings from equity method investees |
|
| 80 |
|
|
| 80 |
|
|
| — |
|
|
| 92 |
|
|
| 69 |
|
|
| 23 |
|
|
| 255 |
|
|
| 214 |
|
|
| 41 |
|
Other income |
|
| 46 |
|
|
| 287 |
|
|
| (241 | ) | ||||||||||||||||||||||||
Other income (expense) |
|
| 70 |
|
|
| 133 |
|
|
| (63 | ) |
|
| (171 | ) |
|
| 732 |
|
|
| (903 | ) | ||||||||||||
Interest and related charges |
|
| 174 |
|
|
| 53 |
|
|
| 121 |
|
|
| 329 |
|
|
| 407 |
|
|
| (78 | ) |
|
| 550 |
|
|
| 978 |
|
|
| (428 | ) |
Income tax expense |
|
| 236 |
|
|
| 212 |
|
|
| 24 |
|
|
| 124 |
|
|
| 35 |
|
|
| 89 |
|
|
| 243 |
|
|
| 200 |
|
|
| 43 |
|
Net income from discontinued operations including noncontrolling interests |
|
| 19 |
|
|
| 28 |
|
|
| (9 | ) | ||||||||||||||||||||||||
Net income (loss) from discontinued operations including noncontrolling interests |
|
| (3 | ) |
|
| 65 |
|
|
| (68 | ) |
|
| 15 |
|
|
| 119 |
|
|
| (104 | ) | ||||||||||||
Noncontrolling interests |
|
| — |
|
|
| 12 |
|
|
| (12 | ) |
|
| — |
|
|
| 22 |
|
|
| (22 | ) |
An analysis of Dominion Energy’s results of operations follows:
FirstThird Quarter 2022 vs. 2021
Operating revenue increased 11%38%, primarily reflecting:
• | A |
• | The absence of a $350 million decrease for refunds provided to retail electric customers in Virginia associated with the settlement of the 2021 Triennial Review; |
• | A $195 million increase associated with market prices affecting Millstone, including economic hedging impacts of net realized and unrealized gains on freestanding derivatives ($109 million); |
• | A $131 million increase to recover the costs and an authorized return, as applicable, associated with Virginia Power non-fuel riders; and |
• | A $16 million increase from gas utility capital cost riders. |
These increases were partially offset by:
• | A $54 million decrease from the sale of non-wholly-owned nonregulated solar facilities; and |
• | A $20 million decrease reflecting a reduction in base rates associated with the settlement of the 2021 Triennial Review. |
Electric fuel and other energy-related purchases increased 73%, primarily due to higher commodity costs for electric utilities ($495 million) and an increase in the use of purchased renewable energy credits at Virginia Power ($15 million), which are offset in operating revenue and do not impact net income.
Purchased gas increased $78 million, primarily due to an increase in commodity costs for gas utilities, which are offset in operating revenue and do not impact net income.
Other operations and maintenance increased 7%, primarily due to an increase in certain Virginia Power expenditures which are primarily recovered through state- and FERC-regulated rates and do not impact net income ($38 million) and an increase in the materials and supplies expense primarily as a result of higher prices ($26 million), partially offset by a decrease in salaries, wages and benefits ($17 million).
80
Depreciation, depletion and amortization increased 17%, primarily due to an increase for amortization of a regulatory asset established in the settlement of the 2021 Triennial Review ($61 million), an increase due to various projects being placed into service ($52 million) and an increase in RGGI related amortization ($33 million), which except for the suspended period of Rider RGGI is offset in operating revenue and does not impact net income, partially offset by depreciation rates revised in the first quarter of 2022 at Virginia Power ($21 million).
Impairment of assets and other charges (benefits) increased $243 million, primarily due to the absence of a benefit from the establishment of a regulatory asset associated with the early retirements of certain coal- and oil-fired generating units associated with the settlement of the 2021 Triennial Review ($549 million) and dismantling costs associated with certain retired electric generation facilities at Virginia Power ($18 million), partially offset by the absence of charges for CCRO benefits provided to retail electric customers in Virginia associated with Virginia Power’s 2021 Triennial Review ($318 million).
Losses (gains) on sales of assets decreased $24 million, primarily due to a gain on the transfer of certain non-utility property in South Carolina.
Earnings from equity method investees increased 33%, primarily due to an increase in equity method earnings from Cove Point as a result of additional processing services provided to existing customers during 2022.
Other income decreased 47%, primarily due to net investment losses in 2022 compared to net investment gains in 2021 on nuclear decommissioning trust funds ($99 million), partially offset by an increase in non-service components of pension and other postretirement employee benefit plan credits ($30 million).
Interest and related charges decreased 19%, primarily due to unrealized gains in 2022 compared to unrealized losses in 2021 associated with freestanding derivatives ($100 million), the absence of charges associated with the early redemption of certain securities in the third quarter of 2021 ($23 million), benefits associated with the early redemption of certain securities in the third quarter of 2022 ($17 million) and higher premiums received on interest rate derivatives ($17 million), partially offset by an increase from net debt issuances ($52 million) and increased interest on commercial paper borrowings due to higher interest rates ($18 million).
Income tax expense increased $89 million, primarily due to higher pre-tax income including lower state income tax benefits on pre-tax losses from nuclear decommissioning trusts and economic hedges.
Net income from discontinued operations including noncontrolling interests decreased $68 million, primarily due to the absence of operations in connection with the sale of the Q-Pipe Group.
Year-To-Date 2022 vs. 2021
Operating revenue increased 22%, primarily reflecting:
• | A $1.2 billion increase in fuel-related revenue as a result of an increase in commodity costs associated with sales to electric utility retail customers ($827 million) and gas utility customers ($362 million); |
• | The absence of a $350 million decrease for refunds provided to retail electric customers in Virginia associated with the settlement of the 2021 Triennial Review; |
• | A $345 million increase to recover the costs and an authorized return, as applicable, associated with Virginia Power non-fuel riders; |
• | The absence of a $151 million decrease from an unbilled revenue reduction at Virginia Power; |
• | A |
• | A $59 million net increase associated with market prices affecting Millstone, including economic hedging impacts of net realized and unrealized losses on freestanding derivatives ($182 million); |
• | A $50 million increase in sales to electric utility retail customers associated with economic and other usage factors; |
• | A $42 million increase from |
• | A |
• | A |
• | A $32 million increase in sales to customers from non-jurisdictional solar generation facilities at Virginia Power; |
• | A $25 million increase in sales to electric utility retail customers from an increase in heating degree days during the heating season ($20 million) and |
• | A $20 million increase in |
These increases were partially offset by:
• | A |
• | A |
• | A |
|
|
• | A |
Electric fuel and other energy-related purchases increased 23%51%, primarily due to higher commodity costs for electric utilities ($827 million) and an increase in the use of purchased renewable energy credits at Virginia Power ($27 million), which are offset in operating revenue and do not impact net income.
Purchased gas increased 33%48%, primarily due to an increase in commodity costs for gas utilities ($193362 million), which are offset in operating revenue and do not impact net income, partially offset by a decrease as a result of the contribution of certain nonregulated natural gas retail energy contracts to Wrangler ($4051 million).
Other operations and maintenance increased 4%8%, primarily reflecting:
• | A |
• | A $73 million increase in outage costs at Millstone ($61 million) and Virginia Power ($12 million); |
• | A $36 million increase in the materials and supplies expense primarily as a result of higher prices; |
• | A $33 million increase in storm damage and restoration costs in Virginia Power’s service territory; and |
• | A |
|
|
• |
|
• | A $27 million decrease in salaries, wages and benefits; and |
• | A $26 million decrease in merger and integration-related costs associated with the SCANA Combination. |
Depreciation, depletion and amortization increased 15%16%, primarily due to an increase for amortization of a regulatory asset established in the settlement of the 2021 Triennial Review ($61183 million), an increase in RGGI related amortization ($45120 million), which areexcept for the suspended period of Rider RGGI is offset in operating revenue and dodoes not impact net income, and an increase due to various projects being placed into service ($32115 million), partially offset by depreciation rates revised in the first quarter of 2022 at Virginia Power ($2162 million) and a decrease from the sale of non-wholly-owned nonregulated solar facilities ($1440 million).
Impairment of assets and other charges (benefits) decreased $105increased $232 million, primarily reflecting:
• | The absence of a benefit from the establishment of a regulatory asset associated with the early retirement of certain coal- and oil-fired generating units associated with the settlement of the 2021 Triennial Review ($549 million); |
• | A charge in connection with a comprehensive settlement agreement for Virginia fuel expenses ($191 million); |
• | A charge for RGGI compliance costs deemed recovered through base rates ($180 million); and |
• | Dismantling costs associated with certain retired electric generation facilities at Virginia Power ($60 million); partially offset by |
• | The absence of charges associated with the settlement of the South Carolina electric base rate case ($249 million); |
• | The absence of charges for CCRO benefits provided to retail electric customers in Virginia associated with Virginia Power’s 2021 Triennial Review ($188 million); |
• | The absence of charges associated with litigation acquired in the SCANA Combination ($100 million); |
• | The absence of a charge for the forgiveness of Virginia retail electric customer accounts in arrears pursuant to Virginia’s 2021 budget process ($77 million); |
• | The absence of a charge for corporate office lease termination ($62 million); and |
• | The absence of a write-off of nonregulated retail software development assets ($20 million). |
Losses (gains) on sales of assets increased $583 million, primarily due to the absence of a charge for the forgiveness of Virginia retail electric customer accounts in arrears pursuant to Virginia’s 2021 budget process ($76 million), the absence of a charge for corporate office lease termination ($71 million) and the absence of chargesloss associated with litigation acquired in the SCANA Combinationsale of Kewaunee ($60649 million), partially offset by a gain on the absencecontribution of certain privatization operations to Dominion Privatization ($23 million), a benefit forgain on the transfer of certain non-utility property in South Carolina ($18 million) and a changegain on the sale of certain utility property in the CCRO reserve associated with the 2021 Triennial ReviewSouth Carolina ($13016 million).
Earnings from equity method investees increased 19%, primarily due to an increase in equity method earnings from Cove Point as a result of additional processing services provided to existing customers during 2022.
Other income decreased 84%,$903 million, primarily due to net investment losses in 2022 compared to net investment gains in 2021 on nuclear decommissioning trust funds.funds ($999 million), partially offset by an increase in non-service components of pension and other postretirement employee benefit plan credits ($84 million) and the absence of charges associated with the settlement of the South Carolina electric base rate case ($18 million).
Interest and related charges increased $121 million,decreased 44%, primarily due to lowerhigher unrealized gains associated with freestanding derivatives ($138 million) and higher long-term debt interest expense resulting from net debt issuances ($32445 million), partially offset by lower interest expense ona decrease due to junior subordinated notes due tonote repayments in 2021 ($2552 million) and, higher premiums received on interest rate derivatives ($1447 million), the absence of charges associated with the early redemption of certain securities in the third quarter of 2021 ($23 million) and benefits associated with the early redemption of certain securities in the third quarter of 2022 ($17 million), partially offset by an increase from net debt issuances ($119 million) and increased interest on commercial paper borrowings due to higher interest rates ($25 million).
Income tax expense increased 11%22%, primarily due to a charge to reflect the recognition of deferred taxestax expense on the outside basissale of Hope’s stock upon meeting($90 million), lower interim period allocation of investment tax credits ($34 million) and the classification as held for sale that will reverse whenabsence of the sale is completedbenefit from a state legislative change ($8721 million), partially offset by lower pre-tax income including lower state income tax benefits on pre-tax losses from nuclear decommissioning trusts and economic hedges ($64109 million).
Net income from discontinued operations including noncontrolling interests decreased 87%, primarily due to the absence of operations in connection with the sale of the Q-Pipe Group.
Noncontrolling interests decreased $22 million, primarily due to the absence of operations in connection with the sale of certain nonregulated solar generating projects held in partnerships.
Outlook
As of March 31,September 30, 2022, there have been no material changes to Dominion Energy’s 2022 outlook as described in Item 7.2. MD&A in the Companies’ AnnualQuarterly Report on Form 10-K10-Q for the yearquarter ended December 31, 2021.June 30, 2022.
83
Segment Results of Operations
Segment results include the impact of intersegment revenues and expenses, which may result in intersegment profit and loss. Presented below is a summary of contributions by Dominion Energy’s operating segments to net income (loss) attributable to Dominion Energy:
|
| Net Income (Loss) Attributable to Dominion Energy |
|
| EPS(1) |
|
| Net Income (Loss) Attributable to Dominion Energy |
|
| EPS(1) |
| ||||||||||||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| $ Change |
|
| 2022 |
|
| 2021 |
|
| $ Change |
|
| 2022 |
|
| 2021 |
|
| $ Change |
|
| 2022 |
|
| 2021 |
|
| $ Change |
| ||||||||||||
(millions, except EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Third Quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Dominion Energy Virginia |
| $ | 518 |
|
| $ | 434 |
|
| $ | 84 |
|
| $ | 0.64 |
|
| $ | 0.54 |
|
| $ | 0.10 |
|
| $ | 617 |
|
| $ | 599 |
|
| $ | 18 |
|
| $ | 0.74 |
|
| $ | 0.74 |
|
| $ | — |
|
Gas Distribution |
|
| 294 |
|
|
| 251 |
|
|
| 43 |
|
|
| 0.36 |
|
|
| 0.31 |
|
|
| 0.05 |
|
|
| 67 |
|
|
| 69 |
|
|
| (2 | ) |
|
| 0.08 |
|
|
| 0.08 |
|
|
| — |
|
Dominion Energy South Carolina |
|
| 109 |
|
|
| 102 |
|
|
| 7 |
|
|
| 0.13 |
|
|
| 0.13 |
|
|
| — |
|
|
| 175 |
|
|
| 151 |
|
|
| 24 |
|
|
| 0.21 |
|
|
| 0.19 |
|
|
| 0.02 |
|
Contracted Assets |
|
| 101 |
|
|
| 150 |
|
|
| (49 | ) |
|
| 0.13 |
|
|
| 0.18 |
|
|
| (0.05 | ) |
|
| 121 |
|
|
| 119 |
|
|
| 2 |
|
|
| 0.15 |
|
|
| 0.15 |
|
|
| — |
|
Corporate and Other |
|
| (311 | ) |
|
| 71 |
|
|
| (382 | ) |
|
| (0.43 | ) |
|
| 0.07 |
|
|
| (0.50 | ) |
|
| (202 | ) |
|
| (284 | ) |
|
| 82 |
|
|
| (0.27 | ) |
|
| (0.37 | ) |
|
| 0.10 |
|
Consolidated |
| $ | 711 |
|
| $ | 1,008 |
|
| $ | (297 | ) |
| $ | 0.83 |
|
| $ | 1.23 |
|
| $ | (0.40 | ) |
| $ | 778 |
|
| $ | 654 |
|
| $ | 124 |
|
| $ | 0.91 |
|
| $ | 0.79 |
|
| $ | 0.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Year-To-Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Dominion Energy Virginia |
| $ | 1,575 |
|
| $ | 1,464 |
|
| $ | 111 |
|
| $ | 1.92 |
|
| $ | 1.81 |
|
| $ | 0.11 |
| ||||||||||||||||||||||||
Gas Distribution |
|
| 486 |
|
|
| 415 |
|
|
| 71 |
|
|
| 0.59 |
|
|
| 0.52 |
|
|
| 0.07 |
| ||||||||||||||||||||||||
Dominion Energy South Carolina |
|
| 408 |
|
|
| 337 |
|
|
| 71 |
|
|
| 0.50 |
|
|
| 0.42 |
|
|
| 0.08 |
| ||||||||||||||||||||||||
Contracted Assets |
|
| 242 |
|
|
| 373 |
|
|
| (131 | ) |
|
| 0.29 |
|
|
| 0.46 |
|
|
| (0.17 | ) | ||||||||||||||||||||||||
Corporate and Other |
|
| (1,675 | ) |
|
| (642 | ) |
|
| (1,033 | ) |
|
| (2.13 | ) |
|
| (0.86 | ) |
|
| (1.27 | ) | ||||||||||||||||||||||||
Consolidated |
| $ | 1,036 |
|
| $ | 1,947 |
|
| $ | (911 | ) |
| $ | 1.17 |
|
| $ | 2.35 |
|
| $ | (1.18 | ) |
| Consolidated results are presented on a diluted EPS basis. The dilutive impacts, primarily consisting of potential shares which had not yet been issued, are included within the results of the Corporate and Other segment. EPS contributions for Dominion Energy’s operating segments are presented utilizing basic average shares outstanding for the period. |
72
Dominion Energy Virginia
Presented below are selected operating statistics related to Dominion Energy Virginia’s operations:
|
| First Quarter |
|
| Third Quarter |
|
| Year-To-Date |
| |||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| % Change |
|
| 2022 |
|
| 2021 |
|
| % Change |
|
| 2022 |
|
| 2021 |
|
| % Change |
| |||||||||
Electricity delivered (million MWh) |
|
| 22.3 |
|
|
| 21.7 |
|
|
| 3 | % |
|
| 24.9 |
|
|
| 24.0 |
|
|
| 4 | % |
|
| 67.9 |
|
|
| 65.0 |
|
|
| 4 | % |
Electricity supplied (million MWh): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility |
|
| 22.3 |
|
|
| 21.9 |
|
|
| 2 |
|
|
| 25.0 |
|
|
| 24.1 |
|
|
| 4 |
|
|
| 68.1 |
|
|
| 65.5 |
|
|
| 4 |
|
Non-Jurisdictional |
|
| 0.3 |
|
|
| 0.2 |
|
|
| 50 |
|
|
| 0.5 |
|
|
| 0.3 |
|
|
| 67 |
|
|
| 1.3 |
|
|
| 0.8 |
|
|
| 63 |
|
Degree days (electric distribution and utility service area): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cooling |
|
| 11 |
|
|
| 11 |
|
|
| — |
|
|
| 1,222 |
|
|
| 1,176 |
|
|
| 4 |
|
|
| 1,735 |
|
|
| 1,696 |
|
|
| 2 |
|
Heating |
|
| 1,895 |
|
|
| 1,889 |
|
|
| — |
|
|
| 17 |
|
|
| — |
|
|
| N/A |
|
|
| 2,209 |
|
|
| 2,174 |
|
|
| 2 |
|
Average electric distribution customer accounts (thousands) |
|
| 2,716 |
|
|
| 2,684 |
|
|
| 1 |
|
|
| 2,727 |
|
|
| 2,702 |
|
|
| 1 |
|
|
| 2,721 |
|
|
| 2,693 |
|
|
| 1 |
|
Presented below, on an after-tax basis, are the key factors impacting Dominion Energy Virginia’s net income contribution:
|
| First Quarter 2022 vs. 2021 Increase (Decrease) |
|
| Third Quarter 2022 vs. 2021 Increase (Decrease) |
|
| Year-To-Date 2022 vs. 2021 Increase (Decrease) |
| |||||||||||||||
|
| Amount |
|
| EPS |
|
| Amount |
|
| EPS |
|
| Amount |
|
| EPS |
| ||||||
(millions, except EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated electric sales: |
|
|
|
|
|
|
|
| ||||||||||||||||
Weather |
| $ | 14 |
|
| $ | 0.02 |
|
| $ | (6 | ) |
| $ | (0.01 | ) |
| $ | 1 |
|
| $ | — |
|
Other |
|
| (9 | ) |
|
| (0.01 | ) | ||||||||||||||||
Customer usage and other factors |
|
| 11 |
|
|
| 0.01 |
|
|
| 41 |
|
|
| 0.05 |
| ||||||||
Customer-elected rate impacts |
|
| (14 | ) |
|
| (0.02 | ) |
|
| 42 |
|
|
| 0.05 |
| ||||||||
Base rate case impacts |
|
| (15 | ) |
|
| (0.02 | ) |
|
| (33 | ) |
|
| (0.04 | ) | ||||||||
Rider equity return |
|
| 16 |
|
|
| 0.02 |
|
|
| 28 |
|
|
| 0.03 |
|
|
| 56 |
|
|
| 0.07 |
|
Electric capacity |
|
| (8 | ) |
|
| (0.01 | ) |
|
| 6 |
|
|
| 0.01 |
|
|
| (6 | ) |
|
| (0.01 | ) |
Planned outage costs |
|
| (7 | ) |
|
| (0.01 | ) | ||||||||||||||||
Depreciation and amortization |
|
| 7 |
|
|
| 0.01 |
|
|
| 9 |
|
|
| 0.01 |
|
|
| 25 |
|
|
| 0.03 |
|
Renewable energy investment tax credits |
|
| 61 |
|
|
| 0.08 |
|
|
| 28 |
|
|
| 0.03 |
|
|
| 51 |
|
|
| 0.06 |
|
Interest expense, net |
|
| (5 | ) |
|
| (0.01 | ) |
|
| (16 | ) |
|
| (0.02 | ) | ||||||||
Other |
|
| 10 |
|
|
| 0.01 |
|
|
| (24 | ) |
|
| (0.01 | ) |
|
| (50 | ) |
|
| (0.05 | ) |
Share dilution |
|
| — |
|
|
| (0.01 | ) |
|
| — |
|
|
| (0.02 | ) |
|
| — |
|
|
| (0.03 | ) |
Change in net income contribution |
| $ | 84 |
|
| $ | 0.10 |
|
| $ | 18 |
|
| $ | — |
|
| $ | 111 |
|
| $ | 0.11 |
|
Gas Distribution
Presented below are selected operating statistics related to Gas Distribution’s operations:
|
| First Quarter |
|
| Third Quarter |
|
| Year-To-Date |
| |||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| % Change |
|
| 2022(1) |
|
| 2021 |
|
| % Change |
|
| 2022(1) |
|
| 2021 |
|
| % Change |
| |||||||||
Gas distribution throughput (bcf): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
| 89 |
|
|
| 86 |
|
|
| 3 | % |
|
| 13 |
|
|
| 14 |
|
|
| (7 | %) |
|
| 128 |
|
|
| 124 |
|
|
| 3 | % |
Transportation |
|
| 301 |
|
|
| 273 |
|
|
| 10 |
|
|
| 240 |
|
|
| 216 |
|
|
| 11 |
|
|
| 758 |
|
|
| 705 |
|
|
| 8 |
|
Heating degree days (gas distribution service area): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North Carolina |
|
| 1,583 |
|
|
| 1,692 |
|
|
| (6 | ) |
|
| 24 |
|
|
| 6 |
|
|
| 300 |
|
|
| 1,796 |
|
|
| 1,979 |
|
|
| (9 | ) |
Ohio and West Virginia |
|
| 2,912 |
|
|
| 2,758 |
|
|
| 6 |
|
|
| 80 |
|
|
| 40 |
|
|
| 100 |
|
|
| 3,614 |
|
|
| 3,489 |
|
|
| 4 |
|
Utah, Wyoming and Idaho |
|
| 2,478 |
|
|
| 2,398 |
|
|
| 3 |
|
|
| 3 |
|
|
| 49 |
|
|
| (94 | ) |
|
| 3,143 |
|
|
| 2,982 |
|
|
| 5 |
|
Average gas distribution customer accounts (thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
| 1,965 |
|
|
| 1,922 |
|
|
| 2 |
|
|
| 1,948 |
|
|
| 1,936 |
|
|
| 1 |
|
|
| 1,959 |
|
|
| 1,929 |
|
|
| 2 |
|
Transportation |
|
| 1,140 |
|
|
| 1,137 |
|
|
| — |
|
|
| 1,127 |
|
|
| 1,126 |
|
|
| — |
|
|
| 1,134 |
|
|
| 1,133 |
|
|
| — |
|
(1) | Includes Hope through August 2022. |
Presented below, on an after-tax basis, are the key factors impacting Gas Distribution’s net income contribution:
|
| First Quarter 2022 vs. 2021 Increase (Decrease) |
|
| Third Quarter 2022 vs. 2021 Increase (Decrease) |
|
| Year-To-Date 2022 vs. 2021 Increase (Decrease) |
| |||||||||||||||
|
| Amount |
|
| EPS |
|
| Amount |
|
| EPS |
|
| Amount |
|
| EPS |
| ||||||
(millions, except EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated gas sales: |
|
|
|
|
|
|
|
| ||||||||||||||||
Weather |
| $ | 2 |
|
| $ | — |
|
| $ | 1 |
|
| $ | — |
|
| $ | 3 |
|
| $ | — |
|
Other |
|
| 34 |
|
|
| 0.04 |
| ||||||||||||||||
Customer usage and other factors |
|
| 6 |
|
|
| 0.01 |
|
|
| 25 |
|
|
| 0.03 |
| ||||||||
Base rate case impacts |
|
| (2 | ) |
|
| — |
|
|
| 33 |
|
|
| 0.04 |
| ||||||||
Rider equity return |
|
| 8 |
|
|
| 0.01 |
|
|
| 6 |
|
|
| 0.01 |
|
|
| 19 |
|
|
| 0.02 |
|
Interest expense, net |
|
| 1 |
|
|
| — |
|
|
| (5 | ) |
|
| (0.01 | ) |
|
| (7 | ) |
|
| (0.01 | ) |
Other |
|
| (2 | ) |
|
| — |
|
|
| (8 | ) |
|
| (0.01 | ) |
|
| (2 | ) |
|
| — |
|
Share dilution |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (0.01 | ) |
Change in net income contribution |
| $ | 43 |
|
| $ | 0.05 |
|
| $ | (2 | ) |
| $ | — |
|
| $ | 71 |
|
| $ | 0.07 |
|
Dominion Energy South Carolina
Presented below are selected operating statistics related to Dominion Energy South Carolina’s operations:
|
| First Quarter |
|
| Third Quarter |
|
| Year-To-Date |
| |||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| % Change |
|
| 2022 |
|
| 2021 |
|
| % Change |
|
| 2022 |
|
| 2021 |
|
| % Change |
| |||||||||
Electricity delivered (million MWh) |
|
| 5.2 |
|
|
| 5.3 |
|
|
| (2 | %) |
|
| 6.6 |
|
|
| 6.6 |
|
|
| — | % |
|
| 17.7 |
|
|
| 17.3 |
|
|
| 2 | % |
Electricity supplied (million MWh) |
|
| 5.5 |
|
|
| 5.6 |
|
|
| (2 | ) |
|
| 6.9 |
|
|
| 6.8 |
|
|
| 1 |
|
|
| 18.6 |
|
|
| 18.1 |
|
|
| 3 |
|
Degree days (electric distribution service areas): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cooling |
|
| — |
|
|
| 1 |
|
|
| (100 | ) |
|
| 514 |
|
|
| 448 |
|
|
| 15 |
|
|
| 767 |
|
|
| 620 |
|
|
| 24 |
|
Heating |
|
| 750 |
|
|
| 786 |
|
|
| (5 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 783 |
|
|
| 839 |
|
|
| (7 | ) |
Average electric distribution customer accounts (thousands) |
|
| 772 |
|
|
| 761 |
|
|
| 1 |
|
|
| 779 |
|
|
| 769 |
|
|
| 1 |
|
|
| 776 |
|
|
| 765 |
|
|
| 1 |
|
Gas distribution throughput (bcf): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
| 20 |
|
|
| 20 |
|
|
| — |
|
|
| 15 |
|
|
| 16 |
|
|
| (6 | ) |
|
| 50 |
|
|
| 51 |
|
|
| (2 | ) |
Average gas distribution customer accounts (thousands) |
|
| 422 |
|
|
| 408 |
|
|
| 3 |
|
|
| 428 |
|
|
| 414 |
|
|
| 3 |
|
|
| 425 |
|
|
| 411 |
|
|
| 3 |
|
Presented below, on an after-tax basis, are the key factors impacting Dominion Energy South Carolina’s net income contribution:
|
| First Quarter 2022 vs. 2021 Increase (Decrease) |
|
| Third Quarter 2022 vs. 2021 Increase (Decrease) |
|
| Year-To-Date 2022 vs. 2021 Increase (Decrease) |
| |||||||||||||||
|
| Amount |
|
| EPS |
|
| Amount |
|
| EPS |
|
| Amount |
|
| EPS |
| ||||||
(millions, except EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated electric sales: |
|
|
|
|
|
|
|
| ||||||||||||||||
Weather |
| $ | 1 |
|
| $ | — |
|
| $ | 5 |
|
| $ | 0.01 |
|
| $ | 18 |
|
| $ | 0.02 |
|
Other |
|
| 15 |
|
|
| 0.02 |
| ||||||||||||||||
Customer usage and other factors |
|
| 9 |
|
|
| 0.01 |
|
|
| 27 |
|
|
| 0.03 |
| ||||||||
Customer-elected rate impacts |
|
| 5 |
|
|
| 0.01 |
|
|
| 15 |
|
|
| 0.02 |
| ||||||||
Base rate case & Natural Gas Rate Stabilization Act impacts |
|
| 5 |
|
|
| 0.01 |
|
|
| 19 |
|
|
| 0.02 |
| ||||||||
Capital cost rider |
|
| (2 | ) |
|
| — |
|
|
| (2 | ) |
|
| — |
|
|
| (6 | ) |
|
| (0.01 | ) |
Regulated gas sales |
|
| 3 |
|
|
| — |
| ||||||||||||||||
Depreciation and amortization |
|
| (4 | ) |
|
| — |
|
|
| (12 | ) |
|
| (0.01 | ) | ||||||||
Interest expense, net |
|
| (7 | ) |
|
| (0.01 | ) |
|
| (10 | ) |
|
| (0.01 | ) | ||||||||
Other |
|
| (10 | ) |
|
| (0.02 | ) |
|
| 13 |
|
|
| — |
|
|
| 20 |
|
|
| 0.03 |
|
Share dilution |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (0.01 | ) |
|
| — |
|
|
| (0.01 | ) |
Change in net income contribution |
| $ | 7 |
|
| $ | — |
|
| $ | 24 |
|
| $ | 0.02 |
|
| $ | 71 |
|
| $ | 0.08 |
|
Contracted Assets
Presented below are selected operating statistics related to Contracted Asset’s operations:
|
| First Quarter |
| |||||||||
|
| 2022 |
|
| 2021 |
|
| % Change |
| |||
Electricity supplied (million MWh) |
|
| 4.6 |
|
|
| 5.1 |
|
|
| (10 | %) |
|
| Third Quarter |
|
| Year-To-Date |
| ||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| % Change |
|
| 2022 |
|
| 2021 |
|
| % Change |
| ||||||
Electricity supplied (million MWh) |
|
| 5.0 |
|
|
| 5.7 |
|
|
| (12 | %) |
|
| 13.0 |
|
|
| 16.4 |
|
|
| (21 | %) |
Presented below, on an after-tax basis, are the key factors impacting Contracted Asset’s net income contribution:
|
| First Quarter 2022 vs. 2021 Increase (Decrease) |
|
| Third Quarter 2022 vs. 2021 Increase (Decrease) |
|
| Year-To-Date 2022 vs. 2021 Increase (Decrease) |
| |||||||||||||||
|
| Amount |
|
| EPS |
|
| Amount |
|
| EPS |
|
| Amount |
|
| EPS |
| ||||||
(millions, except EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margin(1) |
| $ | (24 | ) |
| $ | (0.03 | ) | ||||||||||||||||
Margin(1) |
| $ | 30 |
|
| $ | 0.04 |
|
| $ | 3 |
|
| $ | — |
| ||||||||
Sale of non-wholly-owned nonregulated solar facilities |
|
| (10 | ) |
|
| (0.01 | ) |
|
| (19 | ) |
|
| (0.02 | ) | ||||||||
Planned outage costs |
|
| (4 | ) |
|
| — |
|
|
| 5 |
|
|
| 0.01 |
|
|
| (44 | ) |
|
| (0.05 | ) |
Renewable energy investment tax credits |
|
| (29 | ) |
|
| (0.04 | ) |
|
| — |
|
|
| — |
|
|
| (29 | ) |
|
| (0.04 | ) |
Depreciation and amortization |
|
| 12 |
|
|
| 0.02 |
| ||||||||||||||||
Interest expense, net |
|
| (14 | ) |
|
| (0.02 | ) |
|
| (39 | ) |
|
| (0.05 | ) | ||||||||
Other |
|
| (4 | ) |
|
| — |
|
|
| (9 | ) |
|
| (0.02 | ) |
|
| (3 | ) |
|
| — |
|
Share dilution |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (0.01 | ) |
Change in net income contribution |
| $ | (49 | ) |
| $ | (0.05 | ) |
| $ | 2 |
|
| $ | — |
|
| $ | (131 | ) |
| $ | (0.17 | ) |
(1) | Includes earnings associated with a 50% noncontrolling interest in Cove Point. |
Corporate and Other
Presented below are the Corporate and Other segment’s after-tax results:
|
| First Quarter |
|
| Third Quarter |
|
| Year-To-Date |
| |||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| $ Change |
|
| 2022 |
|
| 2021 |
|
| $ Change |
|
| 2022 |
|
| 2021 |
|
| $ Change |
| |||||||||
(millions, except EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specific items attributable to operating segments |
| $ | (269 | ) |
| $ | (87 | ) |
| $ | (182 | ) |
| $ | (269 | ) |
| $ | (303 | ) |
| $ | 34 |
|
| $ | (1,792 | ) |
| $ | (617 | ) |
| $ | (1,175 | ) |
Specific items attributable to Corporate and Other segment |
|
| (20 | ) |
|
| 202 |
|
|
| (222 | ) |
|
| 103 |
|
|
| 39 |
|
|
| 64 |
|
|
| 226 |
|
|
| 125 |
|
|
| 101 |
|
Total specific items |
|
| (289 | ) |
|
| 115 |
|
|
| (404 | ) |
|
| (166 | ) |
|
| (264 | ) |
|
| 98 |
|
|
| (1,566 | ) |
|
| (492 | ) |
|
| (1,074 | ) |
Other corporate operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
| (79 | ) |
|
| (111 | ) |
|
| 32 |
|
|
| (77 | ) |
|
| (100 | ) |
|
| 23 |
|
|
| (238 | ) |
|
| (317 | ) |
|
| 79 |
|
Other |
|
| 57 |
|
|
| 67 |
|
|
| (10 | ) |
|
| 41 |
|
|
| 80 |
|
|
| (39 | ) |
|
| 129 |
|
|
| 167 |
|
|
| (38 | ) |
Total other corporate operations |
|
| (22 | ) |
|
| (44 | ) |
|
| 22 |
|
|
| (36 | ) |
|
| (20 | ) |
|
| (16 | ) |
|
| (109 | ) |
|
| (150 | ) |
|
| 41 |
|
Total net income (expense) |
| $ | (311 | ) |
| $ | 71 |
|
| $ | (382 | ) | ||||||||||||||||||||||||
Total net expense |
| $ | (202 | ) |
| $ | (284 | ) |
| $ | 82 |
|
| $ | (1,675 | ) |
| $ | (642 | ) |
| $ | (1,033 | ) | ||||||||||||
EPS impact |
| $ | (0.43 | ) |
| $ | 0.07 |
|
| $ | (0.50 | ) |
| $ | (0.27 | ) |
| $ | (0.37 | ) |
| $ | 0.10 |
|
| $ | (2.13 | ) |
| $ | (0.86 | ) |
| $ | (1.27 | ) |
Total Specific Items
Corporate and Other includes specific items attributable to Dominion Energy’s primary operating segments that are not included in profit measures evaluated by executive management in assessing the segments' performance or in allocating resources. See Note 21 to the Consolidated Financial Statements in this report for discussion of these items in more detail. Corporate and Other also includes items attributable to the Corporate and Other segment. InFor the three months ended September 30, 2022, other than the effects of required interim period provision for income taxes, this primarily included a $87$90 million benefit for the reversal of a deferred tax charge to reflect the recognitionupon closing of deferred taxes on the outside basis of Hope’s stock upon meeting the classification as held for sale that will reverse when the sale is completed,of Hope. For the nine months ended September 30, 2022, other than the effects of required interim period provision for income taxes, this primarily included a $52$231 million after-tax benefit for derivative mark-to-market changes and $19$15 million net income from discontinued operations, primarily associated with the Q-Pipe Group. In
For the three months ended September 30, 2021, this primarily included a $234 million after-tax benefit for derivative mark-to-market changes, a $53 million after-tax charge for corporate office lease termination associated with workplace realignment and $28$65 million net income from discontinued operations, primarily associated with the Q-Pipe Group.Group, $17 million of after-tax charges associated with the early redemption of certain debt securities and an $11 million after-tax loss for derivative mark-to-market changes. For the nine months ended September 30, 2021, this primarily included $119 million net income from discontinued operations, primarily associated with the Q-Pipe Group, a $105 million after-tax benefit for derivative mark-to-market changes, $61 million of after-tax charges for workplace realignment, primarily related to a corporate office lease termination, $31 million of after-tax charges for merger and integration-related costs associated with the SCANA Combination and $17 million of after-tax charges associated with the early redemption of certain debt securities.
Virginia Power
Results of Operations
Presented below is a summary of Virginia Power’s consolidated results:
|
| First Quarter |
|
| Third Quarter |
|
| Year-To-Date |
| |||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| $ Change |
|
| 2022 |
|
| 2021 |
|
| $ Change |
|
| 2022 |
|
| 2021 |
|
| $ Change |
| |||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| $ | 357 |
|
| $ | 374 |
|
| $ | (17 | ) |
| $ | 571 |
|
| $ | 556 |
|
| $ | 15 |
|
| $ | 975 |
|
| $ | 1,344 |
|
| $ | (369 | ) |
Overview
FirstThird Quarter 2022 vs. 2021
Net income decreased 5% with no transactions or events contributingincreased 3%, primarily due to a significant changenet increase associated with the impacts of the 2021 Triennial Review.
Year-To-Date 2022 vs. 2021
Net income decreased 27%, primarily due to a decrease in net income.investment earnings on nuclear decommissioning trust funds, a net decrease associated with the impacts of the 2021 Triennial Review, a charge for RGGI compliance costs deemed recovered through base rates and a charge in connection with a comprehensive settlement agreement for Virginia fuel expenses.
Analysis of Consolidated Operations
Presented below are selected amounts related to Virginia Power’s results of operations:
|
| First Quarter |
|
| Third Quarter |
|
| Year-To-Date |
| |||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| $ Change |
|
| 2022 |
|
| 2021 |
|
| $ Change |
|
| 2022 |
|
| 2021 |
|
| $ Change |
| |||||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue |
| $ | 2,167 |
|
| $ | 1,830 |
|
| $ | 337 |
|
| $ | 2,875 |
|
| $ | 1,976 |
|
| $ | 899 |
|
| $ | 7,217 |
|
| $ | 5,547 |
|
| $ | 1,670 |
|
Electric fuel and other energy-related purchases |
|
| 516 |
|
|
| 406 |
|
|
| 110 |
|
|
| 981 |
|
|
| 515 |
|
|
| 466 |
|
|
| 2,030 |
|
|
| 1,270 |
|
|
| 760 |
|
Purchased (excess) electric capacity |
|
| 11 |
|
|
| (3 | ) |
|
| 14 |
| ||||||||||||||||||||||||
Purchased electric capacity |
|
| 11 |
|
|
| 15 |
|
|
| (4 | ) |
|
| 33 |
|
|
| 16 |
|
|
| 17 |
| ||||||||||||
Other operations and maintenance |
|
| 570 |
|
|
| 513 |
|
|
| 57 |
|
|
| 531 |
|
|
| 470 |
|
|
| 61 |
|
|
| 1,579 |
|
|
| 1,382 |
|
|
| 197 |
|
Depreciation and amortization |
|
| 429 |
|
|
| 324 |
|
|
| 105 |
|
|
| 451 |
|
|
| 343 |
|
|
| 108 |
|
|
| 1,305 |
|
|
| 990 |
|
|
| 315 |
|
Other taxes |
|
| 75 |
|
|
| 93 |
|
|
| (18 | ) |
|
| 80 |
|
|
| 86 |
|
|
| (6 | ) |
|
| 238 |
|
|
| 262 |
|
|
| (24 | ) |
Impairment of assets and other charges (benefit) |
|
| 4 |
|
|
| (51 | ) |
|
| 55 |
|
|
| 19 |
|
|
| (230 | ) |
|
| 249 |
|
|
| 432 |
|
|
| (269 | ) |
|
| 701 |
|
Other income |
|
| 4 |
|
|
| 32 |
|
|
| (28 | ) | ||||||||||||||||||||||||
Other income (expense) |
|
| 3 |
|
|
| 21 |
|
|
| (18 | ) |
|
| (37 | ) |
|
| 93 |
|
|
| (130 | ) | ||||||||||||
Interest and related charges |
|
| 148 |
|
|
| 136 |
|
|
| 12 |
|
|
| 168 |
|
|
| 136 |
|
|
| 32 |
|
|
| 461 |
|
|
| 400 |
|
|
| 61 |
|
Income tax expense |
|
| 61 |
|
|
| 70 |
|
|
| (9 | ) |
|
| 66 |
|
|
| 106 |
|
|
| (40 | ) |
|
| 127 |
|
|
| 245 |
|
|
| (118 | ) |
An analysis of Virginia Power’s results of operations follows:
FirstThird Quarter 2022 vs. 2021
Operating revenue increased 18%45%, primarily reflecting:
• | A $445 million increase in fuel-related revenue as a result of a net increase in commodity costs associated with sales to electric utility retail customers; |
• | The absence of a $350 million decrease for refunds provided to retail electric customers in Virginia associated with the settlement of the 2021 Triennial Review; and |
• | A $131 million increase to recover the costs and an authorized return, as applicable, associated with non-fuel riders; partially offset by |
• | A $20 million decrease reflecting a reduction in base rates associated with the settlement of the 2021 Triennial Review; and |
• | A $18 million net decrease from electric utility customers who elect to pay market based or other negotiated rates, including settlements of economic hedges. |
Electric fuel and other energy-related purchases increased 90%, primarily due to higher commodity costs for electric utilities ($445 million) and an increase in the use of purchased renewable energy credits ($15 million), which are offset in operating revenue and do not impact net income.
Other operations and maintenance increased 13%, primarily due to an increase in certain expenses which are primarily recovered through state- and FERC-regulated rates and do not impact net income.
Depreciation and amortization increased 31%, primarily due to an increase for amortization of a regulatory asset established in the settlement of the 2021 Triennial Review ($61 million), an increase in RGGI related amortization ($33 million), which except for the suspended period of Rider RGGI is offset in operating revenue and does not impact net income, and an increase due to various projects being placed into service ($33 million), partially offset by depreciation rates revised in the first quarter of 2022 ($21 million).
Impairment of assets and other charges increased $249 million, primarily due to the absence of a benefit from the establishment of a regulatory asset associated with the early retirements of certain coal- and oil-fired generating units associated with the settlement of the 2021 Triennial Review ($549 million) and dismantling costs associated with certain retired electric generation facilities ($18 million), partially offset by the absence of charges for CCRO benefits provided to retail electric customers in Virginia associated with Virginia Power’s 2021 Triennial Review ($318 million).
Other income decreased 86%, primarily due to net investment losses in 2022 compared to net investment gains in 2021 on nuclear decommissioning trust funds.
Interest and related charges increased 24%, primarily due to an increase from net debt issuances in 2022 and 2021.
Income tax expense decreased 38%, primarily due to higher interim period tax allocation benefits.
Year-To-Date 2022 vs. 2021
Operating revenue increased 30%, primarily reflecting:
• | A $717 million increase in fuel-related revenue as a result of a net increase in commodity costs associated with sales to electric utility retail customers; |
• | The absence of a $350 million decrease for refunds provided to retail electric customers in Virginia associated with the settlement of the 2021 Triennial Review; |
• | A $345 million increase to recover the costs and an authorized return, as applicable, associated with non-fuel riders; |
• | The absence of a $151 million decrease from an unbilled revenue reduction; |
• | A |
|
|
• | A $35 million increase in sales to electric utility retail customers associated with economic and other usage factors; |
• | A $32 million increase in sales to customers from non-jurisdictional solar generation facilities; |
• | A $20 million increase in sales to electric utility retail customers associated with growth; and |
• | A |
These increases were partially offset by:
• | A |
|
|
Electric fuel and other energy-related purchases increased 27%60%, primarily due to higher commodity costs for electric utilities ($717 million) and an increase in the use of purchased renewable energy credits ($27 million), which are offset in operating revenue and do not impact net income.
Purchased electric capacity increased $14$17 million, primarily due to an increase in expense related to the annual PJM capacity performance market effective June 2021.
Other operations and maintenance increased 11%14%, primarily reflecting:
• | A |
• | A $33 million increase in storm damage and service restoration costs; |
• | A |
|
|
• | A |
• | A |
Depreciation and amortization increased 32%, primarily due to an increase for amortization of a regulatory asset established in the settlement of the 2021 Triennial Review ($61183 million), an increase in RGGI related amortization ($45120 million), which areexcept for the suspended period of Rider RGGI is offset in operating revenue and dodoes not impact net income, and an increase due to various projects being placed into service ($2272 million), partially offset by depreciation rates revised in the first quarter of 2022 ($21 million).
Other taxes decreased 19%, primarily due to lower property taxes recorded in 2022 ($6 million) and lower business and occupational taxes as a result of a West Virginia legislative change ($562 million).
Impairment of assets and other charges increased $55$701 million, primarily due to the absence of a benefit for a change in the CCRO reserve associated with the 2021 Triennial Review ($130 million), partially offset by the absence of a charge for the forgiveness of Virginia retail electric customer accounts in arrears pursuant to Virginia’s 2021 budget process ($76reflecting:
• | The absence of a benefit from the establishment of a regulatory asset associated with the early retirement of certain coal- and oil-fired generating units associated with the settlement of the 2021 Triennial Review ($549 million); |
• | A charge in connection with a comprehensive settlement agreement for Virginia fuel expenses ($191 million); |
• | A charge for RGGI compliance costs deemed recovered through base rates ($180 million); and |
• | Dismantling costs associated with certain retired electric generation facilities ($60 million); partially offset by |
• | The absence of charges for CCRO benefits provided to retail electric customers in Virginia associated with Virginia Power’s 2021 Triennial Review ($188 million); and |
• | The absence of a charge for the forgiveness of Virginia retail electric customer accounts in arrears pursuant to Virginia’s 2021 budget process ($77 million). |
Other income decreased 88%,$130 million, primarily due to net investment losses in 2022 compared to net investment gains in 2021 on nuclear decommissioning trust funds.
Interest and related charges increased 9%15%, primarily due to higher long-term debt interest expense resultingan increase from net debt issuances in 2022 and 2021.
Income tax expense decreased 13%48%, primarily due to lower pre-tax income.income ($141 million), partially offset by the absence of the benefit from a state legislative change ($16 million).
Liquidity and Capital Resources
Dominion Energy depends on both cash generated from operations and external sources of liquidity to provide working capital and as a bridge to long-term financings. Dominion Energy’s material cash requirements include capital and investment expenditures, repaying short-term and long-term debt obligations and paying dividends on its common and preferred stock. This section should be read in conjunction with Item 7. MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.
Analysis of Cash Flows
Presented below are selected amounts related to Dominion Energy’s cash flows:
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, restricted cash and equivalents at January 1 |
| $ | 408 |
|
| $ | 247 |
|
| $ | 408 |
|
| $ | 247 |
|
Cash flows provided by (used in): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities |
|
| 1,125 |
|
|
| 1,452 |
|
|
| 2,671 |
|
|
| 3,535 |
|
Investing activities |
|
| (1,574 | ) |
|
| (2,308 | ) |
|
| (4,519 | ) |
|
| (6,607 | ) |
Financing activities |
|
| 635 |
|
|
| 1,171 |
|
|
| 1,780 |
|
|
| 3,092 |
|
Net increase in cash, restricted cash and equivalents |
|
| 186 |
|
|
| 315 |
| ||||||||
Cash, restricted cash and equivalents at March 31 |
| $ | 594 |
|
| $ | 562 |
| ||||||||
Net increase (decrease) in cash, restricted cash and equivalents |
|
| (68 | ) |
|
| 20 |
| ||||||||
Cash, restricted cash and equivalents at September 30 |
| $ | 340 |
|
| $ | 267 |
|
Operating Cash Flows
Net cash provided by Dominion Energy's operating activities decreased $327$864 million, inclusive of a $12$172 million decrease from discontinued operations. Net cash from continuing operations decreased $692 million, primarily due to lower deferred fuel cost recoveries ($994 million), current year refund payments to Virginia electric customers associated with the settlement of the 2021 Triennial Review ($190 million), lower deferred fuel cost recoveries ($108315 million) and changes in working capital ($134469 million)., partially offset by lower margin deposits ($387 million) and an increase of $699 million primarily as the result of higher operating cash flows from electric utility and gas distribution operations driven by riders, customer usage and other factors.
77
Investing Cash Flows
Net cash used in Dominion Energy’s investing activities decreased $734 million,$2.1 billion, primarily due to the absence of the repayment of the Q-Pipe Transaction deposit ($1.3 billion), a decrease in contributions to equity method affiliates including Atlantic Coast Pipeline ($962972 million) and net proceeds from the sale of assets and equity method investmentsHope ($146722 million), partially offset by an increase in plant construction and other property additions ($294 million)1.1 billion).
Financing Cash Flows
Net cash provided by Dominion Energy's financing activities decreased $536 million$1.3 billion primarily due to lower net issuances of short-term debt ($1.72.4 billion), the redemption of the Series A Preferred Stock ($1.6 billion) and lower issuance of short-term notes ($1.3 billion), partially offset by higher issuances, net of repayments and redemptions,issuances of long-term debt ($1.02.6 billion) and the absence of repaymentsettlement of the 364-day revolving supplemental credit facility borrowingsstock purchase contract component of the 2019 Equity Units ($225 million)1.6 billion).
90
Credit Facilities and Short-Term Debt
As discussed in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021, Dominion Energy generally uses proceeds from short-term borrowings, including commercial paper, to satisfy short-term cash requirements not met through cash from operations. The levels of borrowing may vary significantly during the course of the year, depending on the timing and amount of cash requirements not satisfied by cash from operations. There have been no significant changes to Dominion Energy’s use of credit facilities and/or short-term debt during the threenine months ended March 31,September 30, 2022.
Dominion Energy Reliability InvestmentSM Program
Dominion Energy has an effective shelf registration statement with the SEC for the sale of up to $3.0 billion of variable denomination floating rate demand notes, called Dominion Energy Reliability InvestmentSM. The registration limits the principal amount that may be outstanding at any one time to $1.0 billion. The notes are offered on a continuous basis and bear interest at a floating rate per annum determined by the Dominion Energy Reliability Investment Committee, or its designee, on a weekly basis. The notes have no stated maturity date, are non-transferable and may be redeemed in whole or in part by Dominion Energy or at the investor’s option at any time. At March 31,September 30, 2022, Dominion Energy’s Consolidated Balance Sheets include $473$343 million with respect to such notes presented within short-term debt. The proceeds are used for general corporate purposes and to repay debt.
Credit Facilities
Dominion Energy maintains a $6.0 billion joint revolving credit facility which provides for a discount in the pricing of certain annual fees and amounts borrowed by Dominion Energy under the facility if Dominion Energy achieves certain annual renewable electric generation and diversity and inclusion objectives. At March 31,September 30, 2022, Dominion Energy had $3.8$3.1 billion of unused capacity under its joint revolving credit facility. See Note 16 to the Consolidated Financial Statements in this report for the balances of commercial paper and letters of credit outstanding.
In addition to the primary sources of short-term liquidity discussed above, from time to time Dominion Energy enters into separate supplementary credit facilities or term loans as discussed in Note 16 to the Consolidated Financial Statements in this report.
Long-Term Debt
Sustainability Revolving Credit Facility
Dominion Energy maintains a $900 million Sustainability Revolving Credit Facility which matures in 2024 and bears interest at a variable rate. The facility offers a reduced interest rate margin with respect to borrowed amounts allocated to certain environmental sustainability or social investment initiatives. In May 2022, Dominion Energy borrowed $900 million with the proceeds used to support environmental sustainability and social investment initiatives ($450 million) and for general corporate purposes ($450 million). In June 2022, Dominion Energy repaid $450 million borrowed for general corporate purposes. At September 30, 2022, Dominion Energy had $450 million outstanding under this supplemental credit facility.
Issuances and Borrowings of Long-Term Debt
Through March 31,September 30, 2022, Dominion Energy issued or borrowed the following long-term debt. Unless otherwise noted, the proceeds were used for the repayment of existing long-term indebtedness and for general corporate purposes.purposes and/or to repay short-term debt.
Month of Issuance |
| Type |
| Public / Private |
| Issuer / Borrowing Entity |
| Principal |
|
| Rate |
|
| Stated Maturity | |||||||||||||||||||
Month |
| Type |
| Public / Private |
| Entity |
| Principal |
|
| Rate |
|
|
| Stated Maturity | ||||||||||||||||||
|
|
|
|
|
|
|
| (millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (millions) |
|
|
|
|
|
|
|
| ||
January |
| Senior notes |
| Public |
| Virginia Power |
| $ | 600 |
|
|
| 2.400 | % |
| 2032 |
| Senior notes |
| Public |
| Virginia Power |
| $ | 600 |
|
|
| 2.400 |
| % |
| 2032 |
January |
| Senior notes |
| Public |
| Virginia Power |
|
| 400 |
|
|
| 2.950 | % |
| 2051 |
| Senior notes |
| Public |
| Virginia Power |
|
| 400 |
|
|
| 2.950 |
| % |
| 2051 |
May |
| Senior notes |
| Public |
| Virginia Power |
|
| 600 |
|
|
| 3.750 |
| % |
| 2027 | ||||||||||||||||
May |
| Senior notes |
| Public |
| Virginia Power |
|
| 600 |
|
|
| 4.625 |
| % |
| 2052 | ||||||||||||||||
August |
| Senior notes |
| Public |
| Dominion Energy |
|
| 400 |
|
|
| 4.350 |
| % |
| 2032 | ||||||||||||||||
August |
| Senior notes |
| Public |
| Dominion Energy |
|
| 600 |
|
|
| 4.850 |
| % |
| 2052 | ||||||||||||||||
August |
| Senior notes |
| Private |
| Questar Gas |
|
| 125 |
|
|
| 4.390 |
| % |
| 2032 | ||||||||||||||||
August |
| Senior notes |
| Private |
| Questar Gas |
|
| 125 |
|
|
| 4.700 |
| % |
| 2052 | ||||||||||||||||
Total issuances and borrowings | Total issuances and borrowings |
|
|
|
|
| $ | 1,000 |
|
|
|
|
|
|
| Total issuances and borrowings |
|
|
|
|
| $ | 3,450 |
|
|
|
|
|
|
|
|
Dominion Energy currently meets the definition of a well-known seasoned issuer under SEC rules governing the registration, communication and offering processes under the Securities Act of 1933, as amended. The rules provide for a streamlined shelf
91
registration process to provide registrants with timely access to capital. This allows Dominion Energy to use automatic shelf registration statements to register any offering of securities, other than those for exchange offers or business combination transactions.
78
Dominion Energy maintains a $900 million Sustainability Revolving Credit Facility which matures in 2024 and bears interest at a variable rate for amounts borrowed for general corporate purposes. The facility also offers a reduced interest rate margin with respect to borrowed amounts allocated to certain environmental sustainability or social investment initiatives. At March 31, 2022, Dominion Energy had no amounts outstanding under this supplemental credit facility. In May 2022, Dominion Energy provided notice of its intention to borrow $900 million under the facility.
Dominion Energy anticipates, excluding potential opportunistic financings, issuing between approximately $3.2 billion and $4.4 billion of long-term debt during 2022, inclusive of amounts issued through March 31,September 30, 2022 as shown in the table above. The raising of external capital is subject to certain regulatory requirements, including registration with the SEC for certain issuances.
Repayment, Repurchases and Redemptions of Long-Term Debt
Dominion Energy may from time to time reduce its outstanding debt and level of interest expense through redemption of debt securities prior to maturity or repurchases of debt securities in the open market, in privately negotiated transactions, through tender offers or otherwise.
The following long-term debt was repaid, repurchased or redeemed through March 31,September 30, 2022:
Month of Redemption |
| Type |
| Entity |
| Principal | (1) | Rate |
| Stated Maturity | |
|
|
|
|
|
| (millions) |
|
|
|
| |
Debt scheduled to mature in 2022 |
|
|
| $ | 39 |
| various |
|
| ||
Early redemptions |
|
|
|
|
|
|
|
|
| ||
None |
|
|
|
|
|
|
|
|
|
|
|
Total repayments, repurchases and redemptions |
|
| $ | 39 |
|
|
|
|
Month |
| Type |
| Entity |
| Principal (1) |
|
| Rate |
|
| Stated Maturity | ||
|
|
|
|
|
| (millions) |
|
|
|
|
|
|
| |
Debt scheduled to mature in 2022 |
|
|
| $ | 772 |
|
| various |
|
|
| |||
Early repurchases & redemptions |
|
|
|
|
|
|
|
|
|
|
|
| ||
July |
| Senior Note |
| Dominion Energy |
| 5 |
|
|
| 4.250 | % |
| 2028 | |
Multiple |
| Senior Note |
| Dominion Energy |
| 98 |
|
|
| 2.250 | % |
| 2031 | |
Multiple |
| Senior Note |
| Dominion Energy |
| 14 |
|
|
| 3.300 | % |
| 2041 | |
Multiple |
| Senior Note |
| Dominion Energy |
| 28 |
|
|
| 1.450 | % |
| 2026 | |
September |
| Senior Note |
| Dominion Energy |
| 4 |
|
|
| 4.700 | % |
| 2044 | |
Total repayments, repurchases and redemptions |
|
| $ | 921 |
|
|
|
|
|
|
|
(1) | Total amount redeemed prior to maturity includes remaining principal plus accrued interest. |
In addition, in October 2022, Dominion Energy repurchased $61 million of senior notes with various interest rates and maturity dates.
See Note 16 to the Consolidated Financial Statements in this report and Note 18 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 for additional information regarding scheduled maturities of Dominion Energy’s long-term debt, including related average interest rates.
Remarketing of Long-Term Debt
Through March 31, 2022, Dominion Energy was not required to and did not complete the remarketing of any of its long-term debt. In 2022, Dominion Energy expects to remarket approximatelycompleted the remarketing of $165 million of its senior notes and tax-exempt bonds, inclusivecomposed of $138 million ofthe Virginia Power’s tax-exemptPower bonds remarketed in April 2022. and the Dominion Energy bonds remarketed in October 2022. See Note 16 to the Consolidated Financial Statements in this report for additional information.
Credit Ratings
As discussed in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021, Dominion Energy’s credit ratings affect its liquidity, cost of borrowing under credit facilities and collateral posting requirements under commodity contracts, as well as the rates at which it is able to offer debt securities. The credit ratings for Dominion Energy are affected by its financial profile, mix of regulated and nonregulated businesses and respective cash flows, changes in methodologies used by the ratings agencies and event risk, if applicable, such as major acquisitions or dispositions. A credit rating is not a recommendation to buy, sell or hold securities and should be evaluated independently of any other rating. As of March 31,September 30, 2022, there have been no changes in Dominion Energy’s credit ratings. In August 2022, Standard & Poor’s revised its credit ratings outlook for Dominion Energy from positive to stable and affirmed all other current ratings.
Financial Covenants
As discussed in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021, Dominion Energy is subject to various covenants present in the enabling agreements underlying Dominion Energy’s debt. As of March 31,September 30, 2022, there have been no material changes to covenants, nor any events of default under Dominion Energy’s covenants.
92
Common Stock, Preferred Stock and Other Equity Securities
In the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021, there is a discussion of Dominion Energy’s existing equity financing programs, including an at-the-market program and Dominion Energy Direct®. Through March 31,September 30, 2022, Dominion Energy has issued $45$134 million of stock through these programs. See Note 16 to the Consolidated Financial Statements in
79
this report for additional information. Dominion Energy anticipates raising between $300 million and $500 million of capital through the issuance of common stock in 2022 and may issue up to $150 million of stock under settlement agreements associated with litigation acquired in the SCANA Combination as discussed in Note 17 to the Consolidated Financial Statements in this report, inclusive of 0.91.3 million shares of its common stock, valued at $72$102 million, issued in May 2022 to partially satisfy DESC’s remaining obligation under a settlement agreement with the SCDOR.through September 30, 2022. As discussed in Note 16 to the Consolidated Financial Statements in this report, in June 2022, Dominion Energy willissued 19.4 million shares to settle the stock purchase contract component of the 2019 Equity Units which is expected to result inand received proceeds in the event of a successful remarketing of $1.6 billion and the issuance of up to 21.8 million shares, subject to a formula based on the average closing price ofbillion. Dominion Energy common stock. As discussed in Note 16 to the Consolidated Financial Statements in this report, Dominion Energy, subject to approval by its Board of Directors and the settlement of a successful remarketing, will redeemredeemed all outstanding shares of the Series A Preferred Stock in September 2022.2022 for $1.6 billion.
Through March 31,September 30, 2022, Dominion Energy has not repurchased and does not plan to repurchase in 2022 any shares of common stock, except for shares tendered by employees to satisfy tax withholding obligations on vested restricted stock.
Capital Expenditures
As of March 31,September 30, 2022, there have been no material changes to Dominion Energy’s total planned capital expenditures for each segment through 2026 as disclosed in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.
Dividends
Dominion Energy believes that its operations provide a stable source of cash flow to contribute to planned levels of capital expenditures and maintain or grow the dividend on common shares. See Note 16 to the Consolidated Financial Statements in this report for additional information regarding Dominion Energy’s outstanding preferred stock and associated dividend rates.
Subsidiary Dividend Restrictions
As of March 31,September 30, 2022, there have been no material changes to the subsidiary dividend restrictions disclosed in the Dividends section of MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 20212021.
Credit Risk
Dominion Energy’s exposure to potential concentrations of credit risk results primarily from its energy marketing and price risk management activities. Presented below is a summary of Dominion Energy’s credit exposure as March 31,at September 30, 2022 for these activities. Gross credit exposure for each counterparty is calculated as outstanding receivables plus any unrealized on- or off-balance sheet exposure, taking into account contractual netting rights.
|
| Gross Credit Exposure |
|
| Credit Collateral |
|
| Net Credit Exposure |
|
| Gross Credit Exposure |
|
| Credit Collateral |
|
| Net Credit Exposure |
| ||||||
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment grade(1) |
| $ | 54 |
|
| $ | — |
|
| $ | 54 |
|
| $ | 28 |
|
| $ | — |
|
| $ | 28 |
|
Non-investment grade(2) |
|
| 15 |
|
|
| 14 |
|
|
| 1 |
|
|
| 35 |
|
|
| 34 |
|
|
| 1 |
|
No external ratings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internally rated—investment grade(3) |
|
| 27 |
|
|
| — |
|
|
| 27 |
|
|
| 111 |
|
|
| 21 |
|
|
| 90 |
|
Internally rated—non-investment grade(4) |
|
| 14 |
|
|
| — |
|
|
| 14 |
|
|
| 14 |
|
|
| — |
|
|
| 14 |
|
Total |
| $ | 110 |
|
| $ | 14 |
|
| $ | 96 |
|
| $ | 188 |
|
| $ | 55 |
|
| $ | 133 |
|
(1) | Designations as investment grade are based upon minimum credit ratings assigned by Moody’s Investors Service and Standard & Poor’s. The five largest counterparty exposures, combined, for this category represented approximately |
(2) | The five largest counterparty exposures, combined, for this category represented |
(3) | The five largest counterparty exposures, combined, for this category represented approximately |
(4) | The five largest counterparty exposures, combined, for this category represented approximately |
(5) Excludes long-term purchase power agreements entered to satisfy legislative or state regulatory commission requirements.
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Fuel and Other Purchase Commitments
There have been no material changes outside of the ordinary course of business to Dominion Energy’s fuel and other purchase commitments included in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.
Other Material Cash Requirements
As of March 31,September 30, 2022, there have been no material changes outside of the ordinary course of business to Dominion Energy’s other material cash requirements included in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021. Such obligations include:
| • | Operating and finance lease obligations – See Note 14 to the Consolidated Financial Statements in this report; |
| • | Regulatory liabilities – See Note 12 to the Consolidated Financial Statements in this report; |
| • | AROs – See Note 14 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021; |
| • | Employee benefit plan obligations – See Note 22 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021; |
| • | Charitable commitments – See Note 23 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021; |
| • | Off-balance sheet leasing arrangements – See Note 15 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021; and |
| • | Guarantees – See Note 17 to the Consolidated Financial Statements in this report. |
Future Issues and Other Matters
See Item 1. Business, Future Issues and Other Matters in MD&A and Notes 13 and 23 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 and Notes 13 and 17 to the Consolidated Financial Statements in this report for additional information on various environmental, regulatory, legal and other matters that may impact future results of operations, financial condition and/or cash flows.
Business Review
In November 2022, Dominion Energy announced the commencement of a business review of value-maximizing strategic business actions, alternatives to its current business mix and capital allocation and regulatory options which may assist customers to manage costs and provide greater predictability to its long-term, state-regulated utility value proposition. While the impacts cannot be estimated until the review is completed, which is expected in 2023, implementation of recommendations resulting from the business review could have a material impact on Dominion Energy's future results of operations, financial condition and/or cash flows.
Federal Income Tax Laws
The IRA extends the investment and production tax credits for renewable technologies including wind and solar, and expands the qualifying technologies to include stand-alone storage, hydrogen, renewable natural gas, nuclear and, after 2024, other zero-emissions facilities. The IRA supersedes prior renewable energy legislation discussed in Note 5 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The IRA contains a two-tiered credit system applicable to both the production and investment tax credits with a lower base credit amount that can be increased up to five times if the taxpayer can satisfy certain labor requirements.
The IRA imposes a 15% alternative minimum tax on GAAP net income, as adjusted for certain items, of corporations in excess of $1 billion, for tax years beginning after December 31, 2022. Entities that are subject to the alternative minimum tax may use tax credits to reduce the liability by up to 75% and will receive a tax credit carryforward with an indefinite life that can be claimed against the regular tax in future years. Deferred taxes will continue to be measured at the regular tax rate. Pending additional guidance, the alternative minimum tax is not expected to have an effect on the assessment of the realizability of Dominion Energy’s deferred tax assets or a material impact on Dominion Energy’s future results of operations or cash flows.
Future Environmental Regulations
The IRA includes provisions which impose an annual fee for waste methane emissions from the oil and natural gas industry beginning with emissions reported in calendar year 2024 to the extent that an entity’s emissions exceed a stated threshold, with implementation to be addressed by future rulemaking by the EPA. Pending the completion of such rulemaking, Dominion Energy currently does not expect these provisions to materially affect its future results of operations, financial condition and/or cash flows.
CVOW Commercial Project
In March 2022, the Virginia Commission approved Virginia Power’s application filed in December 2021 for approval of a lease contract with an affiliated entity for the use of a Jones Act compliant offshore wind installation vessel currently under development. In April 2022, Virginia Power filed an application with the North Carolina Commission for approval of the same lease contract.
In May 2022, Virginia Power entered into forward purchase agreements with a notional amount of approximately €3.2 billion to hedge its foreign currency rate risk exposure to certain fixed price contracts for the major offshore construction and equipment components of the CVOW Commercial Project.
In August 2022, the Virginia Commission approved the application for certification of the Virginia Facilities component of the CVOW Commercial Project, the revenue requirement for the initial rate year of Rider OSW and noted that no further action was required with respect to Virginia Power’s foreign currency risk mitigation plan. The Virginia Commission also included a performance standard for operation of the CVOW Commercial Project, which would require that customers be held harmless for any shortfall in energy production below an annual net capacity factor of 42%, as determined on a three-year rolling average, with details on the implementation of such standard to be determined in a future proceeding. Also in August 2022, Virginia Power filed a petition for limited reconsideration relating to the performance standard for operation of the CVOW Commercial Project included in the Virginia Commission’s August order. The Virginia Commission granted reconsideration and suspended in part the August order pending its reconsideration with Rider OSW approved on an interim basis. In October 2022, Virginia Power, Office of the Attorney General of Virginia and other parties filed a settlement agreement with the Virginia Commission for approval. The settlement agreement provides for a voluntary cost sharing mechanism resulting from unforeseen construction cost increases; specifically, that Virginia Power will be eligible to recover 50% of such incremental costs which fall between $10.3 billion and $11.3 billion with no recovery of such incremental costs which fall between $11.3 billion and $13.7 billion. There is no voluntary cost sharing mechanism for any total construction costs in excess of $13.7 billion, the recovery of which would be determined in a future Virginia Commission preceding. The settlement agreement also provides for customers to receive the maximum benefits available under the IRA including that to the extent the IRA reduces the total construction costs, such reductions will also be applied to the cost sharing bands discussed above. In addition, the settlement agreement includes enhanced performance reporting provisions, in lieu of a performance guarantee, for the operation of the CVOW Commercial Project. To the extent the annual net capacity factor is below 42%, as determined on a three-year rolling average, Virginia Power is required to provide detailed explanation of the factors contributing to any shortfall to the Virginia Commission which could determine in a future proceeding a remedy for incremental costs incurred associated with any deemed unreasonable or imprudent actions of Virginia Power. If the performance standard included in the August order is maintained in the Virginia Commission’s final order, it could result in cancellation of the project with Virginia Power eligible to recover costs incurred to date.
ITEM 3.
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
The matters discussed in this Item may contain “forward-looking statements” as described in the introductory paragraphs under Part I., Item 2. MD&A in this report. The reader’s attention is directed to those paragraphs for discussion of various risks and uncertainties that may impact the Companies.
Market Risk Sensitive Instruments and Risk Management
The Companies’ financial instruments, commodity contracts and related financial derivative instruments are exposed to potential losses due to adverse changes in commodity prices, interest rates, foreign currency exchange rates and equity securitysecurities prices as described below. Commodity price risk is present in the Companies’ electric operations and Dominion Energy’s natural gas procurement and marketing operations due to the exposure to market shifts in prices received and paid for electricity, natural gas and other commodities. The Companies use commodity derivative contracts to manage price risk exposures for these operations. Interest rate risk is generally related to their outstanding debt and future issuances of debt. In addition, the Companies are exposed to investment price risk through various portfolios of equity and debt securities. The Companies’ exposure to foreign currency exchange rate risk is related to certain fixed price contracts entered into in 2021 in connection with the CVOW Commercial Project. The contracts include services denominated in currencies other than the U.S. dollar for approximately €2.6 billion and 5.1 billion kr. In addition, certain of the fixed price contracts, approximately €0.7 billion, contain commodity indexing provisions linked to steel. As a result, any changes in applicable exchange rates or commodity indices could result in a change to the ultimate cost of the project. In May 2022, Virginia Power entered into forward purchase agreements with a notional amount of approximately €3.2 billion to economically hedge its foreign currency rate risk exposure to certain fixed price contracts for the major offshore construction and equipment components of the CVOW Commercial Project.
The following sensitivity analysis estimates the potential loss of future earnings or fair value from market risk sensitive instruments over a selected time period due to a 10% change in commodity prices, interest rates or interestforeign currency exchange rates.
Commodity Price Risk
To manage price risk, the Companies hold commodity-based derivative instruments held for non-trading purposes associated with purchases and sales of electricity, natural gas and other energy-related products.
The derivatives used to manage commodity price risk are executed within established policies and procedures and may include instruments such as futures, forwards, swaps, options and FTRs that are sensitive to changes in the related commodity prices. For sensitivity analysis purposes, the hypothetical change in market prices of commodity-based derivative instruments is determined based on models that consider the market prices of commodities in future periods, the volatility of the market prices in each period, as well as the time value factors of the derivative instruments. Prices and volatility are principally determined based on observable market prices.
A hypothetical 10% increase in commodity prices would have resulted in a decrease of $78$76 million and $16 million in the fair value of Dominion Energy’s commodity-based derivative instruments as of March 31,September 30, 2022 and December 31, 2021, respectively.
A hypothetical 10% increase in commodity prices would have resulted in a decrease of $38$8 million and $6 million in the fair value of Virginia Power’s commodity-based derivative instruments as of March 31,September 30, 2022 and December 31, 2021, respectively.
The impact of a change in energy commodity prices on the Companies' commodity-based derivative instruments at a point in time is not necessarily representative of the results that will be realized when the contracts are ultimately settled. Net losses from commodity-based financial derivative instruments used for hedging purposes, to the extent realized, will generally be offset by recognition of the hedged transaction, such as revenue from physical sales of the commodity.
Interest Rate Risk
The Companies manage their interest rate risk exposure predominantly by maintaining a balance of fixed and variable rate debt. They also enter into interest rate sensitive derivatives, including interest rate swaps and interest rate lock agreements. For variable rate debt outstanding for Dominion Energy, a hypothetical 10% increase in market interest rates would result in a $25 million and $6 million decrease in earnings at September 30, 2022 and December 31, 2021, respectively. For variable rate debt outstanding for Virginia Power, a hypothetical 10% increase in market interest rates would not have resulted in a material change in earnings at March 31,September 30, 2022 or December 31, 2021.
The Companies also use interest rate derivatives, including forward-starting swaps, interest rate swaps and interest rate lock agreements to manage interest rate risk. As of March 31,September 30, 2022, Dominion Energy and Virginia Power had $14.4$12.9 billion and $3.9$3.3 billion, respectively, in aggregate notional amounts of these interest rate derivatives outstanding. A hypothetical 10% decrease in market interest rates would have resulted in a decrease of $228$260 million and $141$140 million, respectively, in the fair value of Dominion
96
Energy and Virginia Power’s interest rate derivatives at March 31,September 30, 2022. As of December 31, 2021, Dominion Energy and Virginia Power had $11.4 billion and $2.8 billion, respectively, in aggregate notional amounts of these interest rate derivatives outstanding. A
82
hypothetical 10% decrease in market interest rates would have resulted in a decrease of $191 million and $111 million, respectively, in the fair value of Dominion Energy and Virginia Power’s interest rate derivatives at December 31, 2021.
The impact of a change in interest rates on the Companies’ interest rate-based financial derivative instruments at a point in time is not necessarily representative of the results that will be realized when the contracts are ultimately settled. Net gains and/or losses from interest rate derivative instruments used for hedging purposes, to the extent realized, will generally be offset by recognition of the hedged transaction.
Foreign Currency Exchange Rate Risk
The Companies utilize foreign currency swaps to economically hedge the foreign currency exchange risk associated with fixed price contracts related to the CVOW Commercial Project denominated in foreign currencies. As of September 30, 2022, Dominion Energy had €3.4 billion in aggregate notional amounts of these foreign currency forward purchase agreements outstanding. A hypothetical 10% increase in exchange rates would have resulted in a decrease of $321 million in the fair value of Dominion Energy’s foreign currency swaps at September 30, 2022.
The impact of a change in exchange rates on the Companies’ foreign currency-based financial derivative instruments at a point in time is not necessarily representative of the results that will be realized when the contracts are ultimately settled. Net gains and/or losses from foreign exchange derivative instruments used for hedging purposes, to the extent realized, will generally be offset by recognition of the hedged transaction.
Investment Price Risk
The Companies are subject to investment price risk due to securities held as investments in nuclear decommissioning and rabbi trust funds that are managed by third-party investment managers. These trust funds primarily hold marketable securities that are reported in the Companies’ Consolidated Balance Sheets at fair value.
Dominion Energy recognized net investment losses (including investment income) on nuclear decommissioning and rabbi trust investments of $197 million$1.2 billion for the threenine months ended March 31,September 30, 2022, and net investment gains (including investment income) on nuclear decommissioning and rabbi trust investments of $304$678 million and $1.1 billion for the threenine months ended March 31,September 30, 2021 and the year ended December 31, 2021, respectively. Net realized gains and losses include gains and losses from the sale of investments as well as any other-than-temporary declines in fair value. Dominion Energy recorded in AOCI and regulatory liabilities, a net decrease in unrealized gains on debt investments of $134$253 million, $64$50 million and $64 million for the threenine months ended March 31,September 30, 2022 and 2021 and the year ended December 31, 2021, respectively.
Virginia Power recognized net investment losses (including investment income) on nuclear decommissioning trust investments of $89$593 million for the threenine months ended March 31,September 30, 2022, and net investment gains (including investment income) on nuclear decommissioning trust investments of $153$335 million and $568 million for the threenine months ended March 31,September 30, 2021 and the year ended December 31, 2021, respectively. Net realized gains and losses include gains and losses from the sale of investments as well as any other-than-temporary declines in fair value. Virginia Power recorded in AOCI and regulatory liabilities, a net decrease in unrealized gains on debt investments of $68$137 million, $28$24 million and $31 million for the threenine months ended March 31,September 30, 2022 and 2021 and the year ended December 31, 2021, respectively.
Dominion Energy sponsors pension and other postretirement employee benefit plans that hold investments in trusts to fund employee benefit payments. Virginia Power employees participate in these plans. Differences between actual and expected returns on plan assets are accumulated and amortized during future periods. As such, any investment-related declines in these trusts will result in future increases in the net periodic cost recognized for employee benefit plans and will be included in the determination of the amount of cash to be contributed to the employee benefit plans.
ITEM 4. CONTROLS AND PROCEDURES
Senior management of both Dominion Energy and Virginia Power, including Dominion Energy and Virginia Power’s CEO and CFO, evaluated the effectiveness of each company’s disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation process, each of Dominion Energy and Virginia Power’s CEO and CFO have concluded that each company’s disclosure controls and procedures are effective.
There were no changes that occurred during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, Dominion Energy or Virginia Power’s internal control over financial reporting.
8397
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, the Companies are parties to various legal, environmental or other regulatory proceedings, including in the ordinary course of business. SEC regulations require disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that the Companies reasonably believe will exceed a specified threshold. Pursuant to the SEC regulations, the Companies use a threshold of $1 million for such proceedings.
See the following for discussions on various legal, environmental and other regulatory proceedings to which the Companies are a party, which information is incorporated herein by reference:
• | Notes 13 and 23 to the Consolidated Financial Statements and Future Issues and Other Matters in MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021. |
• | Notes 13 and 17 to the Consolidated Financial Statements in this report. |
ITEM 1A. RISK FACTORS
The Companies’ businesses are influenced by many factors that are difficult to predict, involve uncertainties that may materially affect actual results and are often beyond the Companies’ control. A number of these risk factors have been identified in the Companies’ Annual Report on Form 10-K for the year ended December 31, 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 the Companies’ Annual Report on Form 10-K for the year ended December 31, 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.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Dominion Energy
Purchases of Equity Securities
Period |
| Total Number of Shares (or Units) Purchased(1) |
|
| Average Price Paid per Share (or Unit)(2) |
|
| Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs |
|
| Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased under the Plans or Programs(3) | |||
1/1/22 - 1/31/22 |
|
| 3,942 |
|
| $ | 78.64 |
|
|
| — |
|
| $ 0.92 billion |
2/1/22 - 2/28/22 |
|
| 59,592 |
|
|
| 80.00 |
|
|
| — |
|
| 0.92 billion |
3/1/22 - 3/31/22 |
|
| 6,111 |
|
|
| 79.29 |
|
|
| — |
|
| 0.92 billion |
Total |
|
| 69,645 |
|
|
| 79.86 |
|
|
| — |
|
| $ 0.92 billion |
Period |
| Total Number of Shares (or Units) Purchased(1) |
|
| Average Price Paid per Share (or Unit)(2) |
|
| Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs |
|
| Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased under the Plans or Programs(3) | |||
7/1/22 - 7/31/22 |
|
| 70 |
|
| $ | 81.24 |
|
|
| — |
|
| $ 0.92 billion |
8/1/22 - 8/31/22 |
|
| 1,774 |
|
|
| 82.54 |
|
|
| — |
|
| 0.92 billion |
9/1/22 - 9/30/22 |
|
| 1,310 |
|
|
| 82.36 |
|
|
| — |
|
| 0.92 billion |
Total |
|
| 3,154 |
|
| $ | 82.44 |
|
|
| — |
|
| $ 0.92 billion |
(1) | Represents shares of common stock that were tendered by employees to satisfy tax withholding obligations on vested restricted stock. |
(2) | Represents the weighted-average price paid per share. |
(3) | In November 2020, the Dominion Energy Board of Directors authorized the repurchase of up to $1.0 billion of shares of common stock. This repurchase program has no expiration date or price or volume targets and may be modified, suspended or terminated at any time. Shares may be purchased through open market or privately negotiated transactions or otherwise at the discretion of management subject to prevailing market conditions, applicable securities laws and other factors. |
ITEM 5. OTHER INFORMATION
On May 5, 2022, Dominion Energy filed a prospectus supplement to its effective registration statement on Form S-3 (File No. 333-239467) filed with the SEC on June 26, 2020 for purposes of registering the offer and resale of certain shares of its common stock previously issued and delivered to SCDOR in accordance with the terms of a settlement agreement as discussed in Note 17 to the Consolidated Financial Statements in this report. The registration rights agreement and opinion of counsel relating to the registration and validity of such shares are filed as Exhibits 4.2 and 5.1, respectively, to this Quarterly Report on Form 10-Q for the purpose of incorporating such exhibits by reference into the registration statement and the related prospectus contained therein, as supplemented by the prospectus supplement.
On May 5, 2022, Dominion Energy notified applicable holders that it will conduct a final remarketing of shares of Series A Preferred Stock during a final remarketing period beginning on May 23, 2022 and ending on May 27, 2022. Dominion Energy has received a commitment from a financial institution to purchase at a price of $1,000 per share any shares of Series A Preferred Stock included in the final remarketing that are not sold to other purchasers through a marketed process based on an annual dividend rate of 1.75% for the June 1, 2022 through August 31, 2022 dividend period, which annual dividend rate will increase to 6.75% effective September 1, 2022. In connection with this commitment, Dominion Energy has agreed to redeem all outstanding shares of Series A Preferred Stock on September 1, 2022, assuming settlement of the final remarketing and subject to approval by Dominion Energy’s Board of Directors, a determination that Dominion Energy has funds legally available for the redemption as required by Virginia law and the terms of the Series A Preferred Stock and the issuance of a redemption notice as required by the terms of the Series A Preferred Stock.
8598
ITEM 6. EXHIBITS
99
Exhibit Number |
| Description |
| Dominion Energy |
| |||||
|
| Virginia Power | ||||||||
|
|
|
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|
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| ||||
31.a |
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| X |
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| |||||
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| ||||
31.b |
|
| X |
|
| |||||
|
|
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|
|
| ||||
31.c |
|
|
|
| X | |||||
|
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|
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|
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| ||||
31.d |
|
|
|
| X | |||||
|
|
|
|
|
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| ||||
32.a |
|
| X |
|
| |||||
|
|
|
|
|
|
| ||||
32.b |
|
|
|
| X | |||||
|
|
|
|
|
|
| ||||
99 |
| Condensed consolidated earnings statements (filed herewith). |
| X |
| X |
86
|
|
|
| |||||||
|
|
|
|
|
|
| ||||
101 |
| The following financial statements from Dominion Energy, Inc.’s Quarterly Report on Form 10-Q for the quarter ended |
| X |
| X | ||||
|
|
|
|
|
|
| ||||
104 |
| Cover Page Interactive Data File formatted in iXBRL (Inline eXtensible Business Reporting Language) and contained in Exhibit 101. |
| X |
| X | ||||
|
|
|
|
|
|
|
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| DOMINION ENERGY, INC. Registrant | |
|
| |
| /s/ Michele L. Cardiff | |
| Michele L. Cardiff Senior Vice President, Controller and Chief Accounting Officer | |
|
| |
| VIRGINIA ELECTRIC AND POWER COMPANY Registrant | |
|
| |
| /s/ Michele L. Cardiff | |
| Michele L. Cardiff Senior Vice President, Controller and Chief Accounting Officer | |
|
|
88101