Dominion Energy (D) 10-Q 2021 Q1 Quarterly report

0000715957 d:ProvisionForFutureCostOfRemovalMember d:VirginiaElectricAndPowerCompanyMember 2021-03-31

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, 2021

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
001-08489	DOMINION ENERGY, INC.	54-1229715
000-55337	VIRGINIA ELECTRIC AND POWER COMPANY	54-0418825
	120 Tredegar Street Richmond, Virginia 23219 (804) 819-2000

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
	DRUA	2016 Series A 5.25% Enhanced Junior Subordinated Notes	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	☐

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	☐

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 April 23, 2021, the latest practicable date for determination, Dominion Energy, Inc. had 806,524,337 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.

1

COMBINED INDEX

		Page Number
	Glossary of Terms	3
	PART I. Financial Information
Item 1.	Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	69
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	82
Item 4.	Controls and Procedures	83
	PART II. Other Information
Item 1.	Legal Proceedings	84
Item 1A.	Risk Factors	84
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	84
Item 6.	Exhibits	85

2

GLOSSARY OF TERMS

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

Abbreviation or Acronym	Definition
2019 Equity Units	Dominion Energy’s 2019 Series A Equity Units issued in June 2019, initially in the form of 2019 Series A Corporate Units, consisting of a stock purchase contract and a 1/10 interest in a share of the Series A Preferred Stock
2017 Tax Reform Act	An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (previously known as The Tax Cuts and Jobs Act) enacted on December 22, 2017
2021 Triennial Review	Virginia Commission review of Virginia Power’s earned return on base rate generation and distribution services for the four successive 12-month test periods beginning January 1, 2017 and ending December 31, 2020
ACE Rule	Affordable Clean Energy Rule
AFUDC	Allowance for funds used during construction
Align RNG	Align RNG, LLC, a joint venture between Dominion Energy and Smithfield Foods, Inc.
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 590 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
Brookfield	Brookfield Super-Core Infrastructure Partners, an infrastructure fund managed by Brookfield Asset Management Inc.
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
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
Cove Point	Cove Point LNG, LP (formerly known as Dominion Energy Cove Point LNG, LP)

3

CPCN	Certificate of Public Convenience and Necessity
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	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, 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
DSM	Demand-side management
Dth	Dekatherm
Duke Energy	The legal entity, Duke Energy Corporation, one or more of its consolidated subsidiaries, or the entirety of Duke Energy Corporation and its consolidated subsidiaries
East Ohio	The East Ohio Gas Company, doing business as Dominion Energy Ohio
EPA	U.S. Environmental Protection Agency
EPS	Earnings per common share
FERC	Federal Energy Regulatory Commission
FILOT	Fee in lieu of taxes

4

Four Brothers	Four Brothers Solar, LLC, a limited liability company owned by Dominion Energy and Four Brothers Holdings, LLC, a subsidiary of GIP
Fowler Ridge	Fowler I Holdings LLC, a wind-turbine facility in Benton County, Indiana
FTRs	Financial transmission rights
GAAP	U.S. generally accepted accounting principles
Gas Distribution	Gas Distribution operating segment
GENCO	South Carolina Generating Company, Inc.
GHG	Greenhouse gas
GIP	The legal entity, Global Infrastructure Partners, one or more of its consolidated subsidiaries, or the entirety of Global Infrastructure Partners and its consolidated subsidiaries
Granite Mountain	Granite Mountain Holdings, LLC, a limited liability company owned by Dominion Energy and Granite Mountain Renewables, LLC, a subsidiary of GIP
Grassfield Solar	A proposed 20 MW utility-scale solar power station located in Chesapeake, Virginia
Greensville County	A 1,588 MW combined-cycle, natural gas-fired power station in Greensville County, Virginia
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
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
Iron Springs	Iron Springs Holdings, LLC, a limited liability company owned by Dominion Energy and Iron Springs Renewables, LLC, a subsidiary of GIP
Iroquois	Iroquois Gas Transmission System, L.P.
ISO	Independent system operator
JAX LNG	JAX LNG, LLC, an LNG supplier in Florida serving the marine and LNG markets
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 a day
Millstone	Millstone nuclear power station
Millstone 2019 power purchase agreements	Power purchase agreements with Eversource Energy and The United Illuminating Company for Millstone to provide nine million MWh per year of electricity for ten years
MW	Megawatt
MWh	Megawatt hour
NAV	Net asset value
NND Project	V.C. Summer Units 2 and 3 nuclear development project under which DESC and Santee Cooper undertook to construct two Westinghouse AP1000 Advanced Passive Safety nuclear units in Jenkinsville, South Carolina
Norge Solar	A proposed 20 MW utility-scale solar power station located in James City County, Virginia

5

North Carolina    Commission	North Carolina Utilities Commission
NOX	Nitrogen oxide
NRC	U.S. Nuclear Regulatory Commission
Order 1000	Order issued by FERC adopting requirements for electric transmission planning, cost allocation and development
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 Transaction	The proposed sale by Dominion Energy to BHE of Dominion Energy Questar Pipeline, DEQPS and QPC Holding Company, LLC (including its subsidiary Questar Southern Trails Pipeline Company), pursuant to a purchase and sale agreement entered into on October 5, 2020
Questar Gas	Questar Gas Company, doing business as Dominion Energy Utah, Dominion Energy Wyoming and Dominion Energy Idaho
Regulation Act	Legislation effective July 1, 2007, that amended the Virginia Electric Utility Restructuring Act and fuel factor statute, which legislation is also known as the Virginia Electric Utility Regulation Act, as amended in 2015 and 2018
RICO	Racketeer Influenced and Corrupt Organizations Act
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 CCR	A rate adjustment clause associated with the recovery of costs related to the removal of CCR at certain power stations
Rider CE	A rate adjustment clause associated with the recovery of costs related to certain renewable generation facilities in Virginia
Rider GV	A rate adjustment clause associated with the recovery of costs related to Greensville County
Rider R	A rate adjustment clause associated with the recovery of costs related to Bear Garden
Rider S	A rate adjustment clause associated with the recovery of costs related to the Virginia City Hybrid Energy Center
Rider U	A rate adjustment clause associated with the recovery of costs of new underground distribution facilities
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	An approximately 100 MW proposed utility-scale solar power station located in Greensville County, Virginia
Santee Cooper	South Carolina Public Service Authority
SBL Holdco	SBL Holdco, LLC, a wholly-owned subsidiary of DGI
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

6

SCANA Merger Approval Order	Final order issued by the South Carolina Commission on December 21, 2018 setting forth its approval of the SCANA Combination
SCDHEC	South Carolina Department of Health and Environmental Control
SCDOR	South Carolina Department of Revenue
SEC	U.S. Securities and Exchange Commission
Series A Preferred Stock	Dominion Energy’s 1.75% Series A Cumulative Perpetual Convertible Preferred Stock, without par value, with a liquidation preference of $1,000 per share
Series B Preferred Stock	Dominion Energy’s 4.65% Series B Fixed-Rate Cumulative Redeemable Perpetual Preferred Stock, without par value, with a liquidation preference of $1,000 per share
South Carolina    Commission	Public Service Commission of South Carolina
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
Sycamore Solar	A proposed 42 MW utility-scale solar power station located in Pittsylvania County, Virginia
Terra Nova Renewable Partners	A partnership comprised primarily of institutional investors advised by J.P. Morgan Asset Management-Global Real Assets
Three Cedars	Granite Mountain and Iron Springs, collectively
Utah Commission	Utah Public Service Commission
VCEA	Virginia Clean Economy Act of March 2020
VEBA	Voluntary Employees’ Beneficiary Association
VIE	Variable interest entity
Virginia City Hybrid Energy Center	A 610 MW baseload carbon-capture compatible, clean coal powered electric generation facility in Wise County, Virginia
Virginia Commission	Virginia State Corporation Commission
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 1,350 MW combined-cycle, natural gas-fired power station in Warren County, Virginia
WECTEC	WECTEC Global Project Services, Inc., a wholly-owned subsidiary of Westinghouse
Westinghouse	Westinghouse Electric Company LLC
Wexpro	The legal entity, Wexpro Company, one or more of its consolidated subsidiaries, or the entirety of Wexpro Company and its consolidated subsidiaries
White River Hub	White River Hub, LLC
Wrangler	Wrangler Retail Gas Holdings, LLC, a partnership between Dominion Energy and Interstate Gas Supply, Inc.

7

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DOMINION ENERGY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended March 31,
	2021		2020
(millions, except per share amounts)
Operating Revenue	$	3,870	$	3,938
Operating Expenses
Electric fuel and other energy-related purchases		550		657
Purchased electric capacity		11		2
Purchased gas		484		434
Other operations and maintenance		987		891
Depreciation, depletion and amortization		608		578
Other taxes		257		240
Impairment of assets and other charges		95		768
Total operating expenses		2,992		3,570
Income from operations		878		368
Other income (expense)		367		(454	)
Interest and related charges		53		432
Income (loss) from continuing operations including noncontrolling interests       before income tax expense (benefit)		1,192		(518	)
Income tax expense (benefit)		212		(50	)
Net Income (Loss) From Continuing Operations Including       Noncontrolling Interests		980		(468	)
Net Income From Discontinued Operations Including      Noncontrolling Interests(1)(2)		28		229
Net Income (Loss) Including Noncontrolling Interests		1,008		(239	)
Noncontrolling Interests		—		31
Net Income (Loss) Attributable to Dominion Energy	$	1,008	$	(270	)
Amounts attributable to Dominion Energy
Net Income (Loss) from continuing operations	$	980	$	(466	)
Net Income from discontinued operations		28		196
Net Income (Loss) attributable to Dominion Energy	$	1,008	$	(270	)
EPS - Basic
Net income (loss) from continuing operations	$	1.19	$	(0.57	)
Net income from discontinued operations		0.04		0.23
Net income (loss) attributable to Dominion Energy	$	1.23	$	(0.34	)
EPS - Diluted
Net income (loss) from continuing operations	$	1.19	$	(0.57	)
Net income from discontinued operations		0.04		0.23
Net income (loss) attributable to Dominion Energy	$	1.23	$	(0.34	)

(1) See Note 10 for amounts attributable to related parties.

(2) Includes income tax expense of $7 million and $31 million for the three months ended March 31, 2021 and 2020, respectively.

The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.

8

DOMINION ENERGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended March 31,
	2021			2020
(millions)
Net income (loss) including noncontrolling interests	$	1,008		$	(239	)
Other comprehensive income (loss), net of taxes:
Net deferred gains (losses) on derivatives-hedging activities(1)		39			(266	)
Changes in unrealized net gains (losses) on investment securities(2)		(31	)		9
Changes in net unrecognized pension and other postretirement benefit costs(3)		6			—
Amounts reclassified to net income (loss):
Net derivative losses-hedging activities(4)		13			22
Net realized (gains) losses on investment securities(5)		1			(9	)
Net pension and other postretirement benefit costs(6)		18			19
Total other comprehensive income (loss)		46			(225	)
Comprehensive income (loss) including noncontrolling interests		1,054			(464	)
Comprehensive income attributable to noncontrolling interests		—			31
Comprehensive income (loss) attributable to Dominion Energy	$	1,054		$	(495	)

(1) Net of $(13) million and $93 million tax for the three months ended March 31, 2021 and 2020, respectively.

(2) Net of $10 million and $(4) million tax for the three months ended March 31, 2021 and 2020, respectively.

(3) Net of $(4) million and $0 million tax for the three months ended March 31, 2021 and 2020, respectively.

(4) Net of $(4) million and $(7) million tax for the three months ended March 31, 2021 and 2020, respectively.

(5) Net of $0 million and $4 million tax for the three months ended March 31, 2021 and 2020, respectively.

(6) Net of $(7) million and $(5) million tax for the three months ended March 31, 2021 and 2020, respectively.

The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.

9

DOMINION ENERGY, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2021			December 31, 2020(1)
(millions)
ASSETS
Current Assets
Cash and cash equivalents	$	477		$	172
Customer receivables (less allowance for doubtful accounts of $39 and $42)		1,841			2,295
Other receivables (less allowance for doubtful accounts of $3 at both dates)		239			212
Inventories		1,476			1,550
Regulatory assets		650			699
Other		479			476
Current assets held for sale		1,500			1,482
Total current assets		6,662			6,886
Investments
Nuclear decommissioning trust funds		7,139			6,900
Investment in equity method affiliates		2,949			2,934
Other		405			404
Total investments		10,493			10,238
Property, Plant and Equipment
Property, plant and equipment		84,035			82,959
Accumulated depreciation, depletion and amortization		(25,614	)		(25,111	)
Total property, plant and equipment, net		58,421			57,848
Deferred Charges and Other Assets
Goodwill		7,381			7,381
Regulatory assets		8,793			9,133
Other		4,953			4,419
Total deferred charges and other assets		21,127			20,933
Total assets	$	96,703		$	95,905

(1) Dominion Energy’s Consolidated Balance Sheet at December 31, 2020 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.

10

DOMINION ENERGY, INC.

CONSOLIDATED BALANCE SHEETS—(Continued)

(Unaudited)

	March 31, 2021			December 31, 2020(1)
(millions)
LIABILITIES AND EQUITY
Current Liabilities
Securities due within one year	$	2,639		$	1,937
Supplemental 364-Day credit facility borrowings		—			225
Short-term debt		2,815			895
Accounts payable		848			944
Accrued interest, payroll and taxes		957			1,133
Regulatory liabilities		641			809
Liability to Atlantic Coast Pipeline		97			1,052
Q-Pipe Transaction deposit		1,290			1,290
Other(2)		1,924			1,933
Current liabilities held for sale		625			625
Total current liabilities		11,836			10,843
Long-Term Debt
Long-term debt		30,209			30,915
Junior subordinated notes		2,162			2,161
Other		877			881
Total long-term debt		33,248			33,957
Deferred Credits and Other Liabilities
Deferred income taxes and investment tax credits		6,202			5,953
Regulatory liabilities		10,202			10,187
Other		8,177			8,504
Total deferred credits and other liabilities		24,581			24,644
Total liabilities		69,665			69,444
Commitments and Contingencies (see Note 17)
Equity
Preferred stock (See Note 16)		2,387			2,387
Common stock – no par(3)		21,310			21,258
Retained earnings		4,673			4,189
Accumulated other comprehensive loss		(1,671	)		(1,717	)
Total shareholders' equity		26,699			26,117
Noncontrolling interests		339			344
Total equity		27,038			26,461
Total liabilities and equity	$	96,703		$	95,905

(1) Dominion Energy’s Consolidated Balance Sheet at December 31, 2020 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; 806 million shares outstanding at both March 31, 2021 and December 31, 2020.

The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.

11

DOMINION ENERGY, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

	Preferred Stock				Common Stock				Dominion Energy Shareholders						Total
	Shares		Amount		Shares		Amount		Retained Earnings			AOCI			Shareholders' Equity			Noncontrolling Interests			Total Equity
(millions, except per share amounts)
December 31, 2019		2	$	2,387		838	$	23,824	$	7,576		$	(1,793	)	$	31,994		$	2,039		$	34,033
Cumulative-effect of changes in      accounting principles										(48	)					(48	)					(48	)
Net income (loss) including noncontrolling      interests										(270	)					(270	)		31			(239	)
Issuance of stock						1		78								78						78
Preferred stock dividends (See Note 16)										(16	)					(16	)					(16	)
Common stock dividends ($0.940 per      share) and distributions										(788	)					(788	)		(44	)		(832	)
Other comprehensive loss, net of tax													(225	)		(225	)					(225	)
Other										1						1						1
March 31, 2020		2	$	2,387		839	$	23,902	$	6,455		$	(2,018	)	$	30,726		$	2,026		$	32,752
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      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

The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements

12

DOMINION ENERGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Three Months Ended March 31,	2021			2020
(millions)
Operating Activities
Net income (loss) including noncontrolling interests	$	1,008		$	(239	)
Adjustments to reconcile net income (loss) including noncontrolling interests to net cash    provided by operating activities:
Depreciation, depletion and amortization (including nuclear fuel)		685			759
Deferred income taxes and investment tax credits		216			(65	)
Impairment of assets and other charges		95			768
Net losses (gains) on nuclear decommissioning trust funds and other investments		(152	)		526
Other adjustments		4			4
Changes in:
Accounts receivable		334			245
Inventories		73			71
Deferred fuel and purchased gas costs, net		(149	)		162
Prepayments		24			38
Accounts payable		21			(164	)
Accrued interest, payroll and taxes		(177	)		(234	)
Customer deposits		(9	)		(13	)
Margin deposit assets and liabilities		(60	)		46
Net realized and unrealized changes related to derivative activities		(218	)		36
Other operating assets and liabilities		(243	)		(307	)
Net cash provided by operating activities		1,452			1,633
Investing Activities
Plant construction and other property additions (including nuclear fuel)		(1,328	)		(1,462	)
Acquisition of solar development projects		(23	)		(8	)
Proceeds from sales of securities		1,765			602
Purchases of securities		(1,765	)		(631	)
Contributions to equity method affiliates		(977	)		(11	)
Acquisition of equity method investments		0			(178	)
Other		20			47
Net cash used in investing activities		(2,308	)		(1,641	)
Financing Activities
Issuance of short-term debt, net		1,921			1,279
Issuance of short-term notes		0			500
Repayment of supplemental 364-day credit facility borrowings		(225	)		0
Issuance of long-term debt		150			950
Repayment of long-term debt, including redemption premiums		(161	)		(932	)
Issuance of common stock		48			78
Common dividend payments		(508	)		(788	)
Other		(54	)		(81	)
Net cash provided by financing activities		1,171			1,006
Increase in cash, restricted cash and equivalents		315			998
Cash, restricted cash and equivalents at beginning of period		247			269
Cash, restricted cash and equivalents at end of period	$	562		$	1,267

See Note 2 for disclosure of supplemental cash flow information.

The accompanying notes are an integral part of Dominion Energy’s Consolidated Financial Statements.

13

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended March 31,
	2021			2020
(millions)
Operating Revenue(1)	$	1,830		$	1,930
Operating Expenses
Electric fuel and other energy-related purchases(1)		406			492
Excess electric capacity		(3	)		(9	)
Other operations and maintenance:
Affiliated suppliers		87			87
Other		426			331
Depreciation and amortization		324			311
Other taxes		93			87
Impairment of assets and other charges (benefit)		(51	)		764
Total operating expenses		1,282			2,063
Income (loss) from operations		548			(133	)
Other income (expense)		32			(52	)
Interest and related charges(1)		136			126
Income (loss) before income tax expense		444			(311	)
Income tax expense (benefit)		70			(31	)
Net Income (Loss)	$	374		$	(280	)

(1) See Note 19 for amounts attributable to affiliates.

The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.

14

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended March 31,
	2021			2020
(millions)
Net income (loss)	$	374		$	(280	)
Other comprehensive income (loss), net of taxes:
Net deferred gains (losses) on derivatives-hedging activities(1)		32			(45	)
Changes in unrealized net losses on nuclear decommissioning trust funds(2)		(5	)		(2	)
Amounts reclassified to net income (loss):
Net derivative losses-hedging activities(3)		1			0
Net realized losses on nuclear decommissioning  trust funds(4)		1			1
Total other comprehensive income (loss)		29			(46	)
Comprehensive income (loss)	$	403		$	(326	)

(1) Net of $(11) million and $16 million tax for the three months ended March 31, 2021 and 2020, respectively.   

(2) Net of $0 million and $0 million tax for the three months ended March 31, 2021 and 2020, respectively.   

(3) Net of $0 million and $0 million tax for the three months ended March 31, 2021 and 2020, respectively.

(4) Net of $0 million and $(1) million tax for the three months ended March 31, 2021 and 2020, respectively. 

The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.

15

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2021			December 31, 2020(1)
(millions)
ASSETS
Current Assets
Cash and cash equivalents	$	56		$	35
Customer receivables (less allowance for doubtful accounts of $18 and $23)		926			1,315
Other receivables (less allowance for doubtful accounts of $2 at both dates)		86			91
Affiliated receivables		10			5
Inventories (average cost method)		840			862
Regulatory assets		292			295
Other(2)		52			59
Total current assets		2,262			2,662
Investments
Nuclear decommissioning trust funds		3,322			3,197
Other		3			3
Total investments		3,325			3,200
Property, Plant and Equipment
Property, plant and equipment		47,431			46,736
Accumulated depreciation and amortization		(14,446	)		(14,167	)
Total property, plant and equipment, net		32,985			32,569
Deferred Charges and Other Assets
Regulatory assets		3,235			3,509
Other(2)		1,977			1,714
Total deferred charges and other assets		5,212			5,223
Total assets	$	43,784		$	43,654

(1) Virginia Power’s Consolidated Balance Sheet at December 31, 2020 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.

16

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED BALANCE SHEETS—(Continued)

(Unaudited)

	March 31, 2021			December 31, 2020(1)
(millions)
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Securities due within one year	$	458		$	8
Short-term debt		420			45
Accounts payable		311			332
Payables to affiliates		125			266
Affiliated current borrowings		177			380
Accrued interest, payroll and taxes		307			253
Asset retirement obligations		159			166
Regulatory liabilities		272			425
Derivative liabilities(2)		171			390
Other		591			562
Total current liabilities		2,991			2,827
Long-Term Debt
Long-term debt		12,759			13,207
Other		481			480
Total long-term debt		13,240			13,687
Deferred Credits and Other Liabilities
Deferred income taxes and investment tax credits		2,873			2,779
Asset retirement obligations		3,681			3,654
Regulatory liabilities		5,402			5,338
Other(2)		786			812
Total deferred credits and other liabilities		12,742			12,583
Total liabilities		28,973			29,097
Commitments and Contingencies (see Note 17)
Common Shareholder’s Equity
Common stock – no par(3)		5,738			5,738
Other paid-in capital		1,113			1,113
Retained earnings		7,983			7,758
Accumulated other comprehensive loss		(23	)		(52	)
Total common shareholder’s equity		14,811			14,557
Total liabilities and shareholder’s equity	$	43,784		$	43,654

(1) Virginia Power’s Consolidated Balance Sheet at December 31, 2020 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 March 31, 2021 and December 31, 2020.

The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.

17

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDER’S EQUITY

(Unaudited)

	Common Stock
	Shares		Amount		Other Paid-In Capital		Retained Earnings			AOCI			Total
(millions, except for shares)	(thousands)
December 31, 2019		275	$	5,738	$	1,113	$	7,167		$	(29	)	$	13,989
Net loss								(280	)					(280	)
Dividends								(108	)					(108	)
Other comprehensive loss, net of tax											(46	)		(46	)
Other								1						1
March 31, 2020		275		5,738		1,113		6,780			(75	)		13,556
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

The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.

18

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Three Months Ended March 31,	2021			2020
(millions)
Operating Activities
Net income (loss)	$	374		$	(280	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization (including nuclear fuel)		365			357
Deferred income taxes and investment tax credits		87			(135	)
Impairment of assets and other charges (benefit)		(51	)		764
Other adjustments		(29	)		53
Changes in:
Accounts receivable		317			123
Affiliated receivables and payables		(144	)		24
Inventories		21			5
Prepayments		(4	)		(5	)
Deferred fuel expenses, net		(159	)		70
Accounts payable		0			99
Accrued interest, payroll and taxes		54			13
Net realized and unrealized changes related to derivative activities		18			(12	)
Other operating assets and liabilities		(65	)		73
Net cash provided by operating activities		784			1,149
Investing Activities
Plant construction and other property additions		(766	)		(764	)
Purchases of nuclear fuel		(46	)		(25	)
Acquisition of solar development projects		(10	)		(6	)
Proceeds from sales of securities		789			294
Purchases of securities		(791	)		(310	)
Other		41			37
Net cash used in investing activities		(783	)		(774	)
Financing Activities
Issuance (repayment) of short-term debt, net		375			(108	)
Repayment of affiliated current borrowings, net		(203	)		(106	)
Common dividend payments to parent		(150	)		(108	)
Other		(2	)		(1	)
Net cash provided by (used in) financing activities		20			(323	)
Increase in cash, restricted cash and equivalents		21			52
Cash, restricted cash and equivalents at beginning of period		35			24
Cash, restricted cash and equivalents at end of period	$	56		$	76

See Note 2 for disclosure of supplemental cash flow information. 

The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.

19

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Nature of Operations

Dominion Energy, headquartered in Richmond, Virginia, is one of the nation’s largest producers and distributors of energy. Dominion Energy’s operations are conducted through various subsidiaries, including Virginia Power. Dominion Energy’s operations also include DESC, regulated gas distribution operations primarily in the eastern and Rocky Mountain regions of the U.S., nonregulated electric generation and, following completion of the GT&S Transaction in November 2020, a noncontrolling interest in Cove Point. See Note 3 for a description of the sale of substantially all of Dominion Energy’s gas transmission and storage operations to BHE through the GT&S Transaction completed in November 2020 and the proposed Q-Pipe Transaction of Dominion Energy’s remaining regulated gas transmission and storage services in the Rocky Mountain region of the U.S.

Note 2. Significant Accounting Policies

As permitted by the rules and regulations of the SEC, the Companies’ accompanying unaudited Consolidated Financial Statements contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with GAAP. These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020.

In the Companies’ opinion, the accompanying unaudited Consolidated Financial Statements contain all adjustments necessary to present fairly their financial position at March 31, 2021 and their results of operations, changes in equity and cash flows for the three months ended March 31, 2021 and 2020. Such adjustments are normal and recurring in nature unless otherwise noted.

The Companies make certain estimates and assumptions in preparing their Consolidated Financial Statements in accordance with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods presented. Actual results may differ from those estimates.

The Companies’ accompanying unaudited Consolidated Financial Statements include, after eliminating intercompany transactions and balances, their accounts, those of their respective majority-owned subsidiaries and non-wholly-owned entities in which they have a controlling financial interest. For certain partnership structures, income is allocated based on the liquidation value of the underlying contractual arrangements. At March 31, 2021, Dominion Energy owns 50% of the voting interests in Four Brothers and Three Cedars and has a controlling financial interest over the entities through its right to control operations. GIP’s ownership interest in Four Brothers and Three Cedars, Terra Nova Renewable Partners’ 33% interest in certain Dominion Energy nonregulated solar projects and Brookfield’s 25% interest in Cove Point (effective December 2019 until November 2020) are reflected as noncontrolling interest in Dominion Energy’s Consolidated Financial Statements. Terra Nova Renewable Partners has a future option to buy all or a portion of Dominion Energy’s remaining 67% ownership in certain nonregulated solar projects upon the occurrence of certain events, including any proposed sale by Dominion Energy of its interest.

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’ 2020 Consolidated Financial Statements and Notes have been reclassified to conform to the 2021 presentation for comparative purposes; however, such reclassifications did not affect the Companies’ net income, total assets, liabilities, equity or cash flows.

Amounts disclosed for Dominion Energy are inclusive of Virginia Power, where applicable. There have been no significant changes from Note 2 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020, with the exception of the items described below.

20

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 three months ended March 31, 2021 and 2020:

	Cash, Restricted Cash and Equivalents at End of Period				Cash, Restricted Cash and Equivalents at Beginning of Period
	March 31, 2021		March 31, 2020		December 31, 2020		December 31, 2019
(millions)
Dominion Energy
Cash and cash equivalents(1)	$	491	$	1,192	$	179	$	166
Restricted cash and equivalents(2)(3)		71		75		68		103
Cash, restricted cash and equivalents shown in the    Consolidated Statements of Cash Flows	$	562	$	1,267	$	247	$	269
Virginia Power
Cash and cash equivalents	$	56	$	71	$	35	$	17
Restricted cash and equivalents(3)		0		5		0		7
Cash, restricted cash and equivalents shown in the    Consolidated Statements of Cash Flows	$	56	$	76	$	35	$	24

(1) At March 31, 2021, March 31, 2020, December 31, 2020 and December 31, 2019, Dominion Energy had $14 million, $59 million, $7 million and $31 million of cash and cash equivalents included in current assets held for sale, respectively.

(2) At March 31, 2021, March 31, 2020, December 31, 2020 and December 31, 2019, Dominion Energy had $3 million, $12 million, $3 million and $12 million of restricted cash and equivalents included in current assets held for sale, respectively.

(3) Restricted cash and equivalent balances are presented within other current assets in the Companies’ Consolidated Balance Sheets.

Supplemental Cash Flow Information

The following table provides supplemental disclosure of cash flow information related to Dominion Energy:

	Three Months Ended March 31,
	2021		2020
(millions)
Significant noncash investing and financing activities:
Accrued capital expenditures	$	341	$	343
Leases(1)		9		17

(1) Includes $2 million and $17 million of financing leases at March 31, 2021 and 2020, respectively, and $7 million of operating leases at March 31, 2021.

The following table provides supplemental disclosure of cash flow information related to Virginia Power:

	Three Months Ended March 31,
	2021		2020
(millions)
Significant noncash investing and financing activities:
Accrued capital expenditures	$	262	$	210
Financing leases		1		10

Property, Plant and Equipment

In March 2020, Virginia Power committed to retire certain coal- and oil-fired generating units before the end of their useful lives based on economic and other factors, including but not limited to market power prices and the VCEA. These units will be retired after they meet their capacity obligations to PJM in 2023. As a result, Virginia Power recorded a charge of $754 million ($561 million after-tax) in the first quarter of 2020, primarily included in impairment of assets and other charges in its Consolidated Statements of Income. This charge is considered a component of Virginia Power’s base rates deemed recovered under the GTSA, subject to review as discussed in Note 13 to the Consolidated Financial Statements in Virginia Power’s Annual Report on Form 10-K for the year ended December 31, 2020.

21

Note 3. Acquisitions and Dispositions

Disposition of Gas Transmission & Storage Operations to BHE

In July 2020, Dominion Energy entered into an agreement with BHE with a total value of approximately $10 billion, comprised of approximately $4.0 billion of cash consideration (subject to customary closing adjustments) plus the assumption of long-term debt, to sell substantially all of its gas transmission and storage operations, including processing assets, as well as noncontrolling partnership interests in Iroquois, JAX LNG and White River Hub and a controlling interest in Cove Point (consisting of 100% of the general partner interest and 25% of the total limited partner interests). The agreement provides that Dominion Energy retains the assets and obligations of the pension and other postretirement employee benefit plans associated with the operations included in the transaction and relating to services provided through closing. In October 2020, pursuant to a provision in the agreement with BHE, Dominion Energy elected to exclude Dominion Energy Questar Pipeline and certain other affiliated entities from the transaction as approval under the Hart-Scott-Rodino Act had not been obtained by mid-September 2020. Concurrently in October 2020, Dominion Energy and BHE entered into a separate agreement under which Dominion Energy will sell Dominion Energy Questar Pipeline and certain other affiliated entities for cash consideration of $1.3 billion and the assumption of related long-term debt.  In November 2020, Dominion Energy completed the GT&S Transaction as discussed in Note 3 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

In connection with closing of the GT&S Transaction, Dominion Energy and BHE entered into a transition services agreement under which Dominion Energy will continue to provide specified administrative services to support the operations of the disposed business for up to 24 months after closing. In addition, BHE will provide certain administrative services to Dominion Energy. Dominion Energy recorded revenue of $5 million associated with the transition service agreement in operating revenue in its Consolidated Statements of Income for the three months ended March 31, 2021.

Also in November 2020, BHE provided a $1.3 billion deposit to Dominion Energy on the Q-Pipe Transaction. Dominion Energy will be required to repay all or substantially all of this deposit, or issue to BHE an equivalent value in shares of Dominion Energy common stock at Dominion Energy’s option, if the Q-Pipe Transaction does not close by December 30, 2021. Dominion Energy may, effective April 1, 2021, solicit or accept offers from alternative buyers for all or a material portion of the Q-Pipe Transaction and either party may terminate the Q-Pipe Transaction if closing has not occurred on or before June 30, 2021.  If the Hart-Scott-Rodino Act approval has not been obtained by June 30, 2021, upon BHE’s request, Dominion Energy will seek an alternative buyer for all or a material portion of the Q-Pipe Transaction. The Q-Pipe Transaction is structured as an asset sale for tax purposes and is expected to close in 2021, contingent on clearance or approval under the Hart-Scott-Rodino Act, and other customary closing and regulatory conditions. Based on the recorded balances at March 31, 2021, Dominion Energy expects to recognize a pre-tax gain of approximately $450 million ($320 million after-tax) upon closing, including the write-off of $191 million of goodwill, but excluding the effects of any closing adjustments.

The operations included in both the GT&S Transaction and the Q-Pipe Transaction are presented in held-for-sale and discontinued operations effective July 2020. As a result, the previously reported amounts have been recast to reflect this presentation and depreciation and amortization ceased on the applicable assets. As Cove Point had previously been consolidated within Dominion Energy’s financial statements, balances associated with Cove Point prior to the closing of the GT&S Transaction are presented within held-for-sale and discontinued operations. See Note 10 for further information regarding Dominion Energy’s equity method investment in Cove Point.

The following table represents selected information regarding the results of operations, which are reported within discontinued operations in Dominion Energy’s Consolidated Statements of Income:

	Three Months Ended March 31, 2021		Three Months Ended March 31, 2020
	Q-Pipe Transaction		GT&S Transaction		Q-Pipe Transaction
(millions)
Operating revenue	$	67	$	563	$	65
Operating expense		19		333		33
Other income		0		20		1
Interest and related charges		5		53		4
Income before income taxes		43		197		29
Income tax expense		8		27		4
Net income including noncontrolling interests		35		170		25
Noncontrolling interests		—		33		—
Net income attributable to Dominion Energy	$	35	$	137	$	25

22

The carrying amounts of major classes of assets and liabilities relating to the disposal groups, which are reported as held for sale in Dominion Energy’s Consolidated Balance Sheets were as follows:

	At March 31, 2021		At December 31, 2020
	Q-Pipe Transaction		Q-Pipe Transaction
(millions)
Current assets(1)	$	49	$	47
Equity method investments(2)		35		35
Property, plant and equipment, net		1,120		1,113
Other deferred charges and other assets, including goodwill and intangible assets(3)		224		224
Current liabilities		30		30
Long-term debt		426		426
Other deferred credits and liabilities		154		154

(1) Includes cash and cash equivalents of $13 million and $7 million as of March 31, 2021 and December 31, 2020.

(2) Comprised of an equity method investment in White River Hub.

(3) Includes goodwill of $191 million at both March 31, 2021 and December 31, 2020.

Capital expenditures and significant noncash items relating to the disposal groups included the following:

	Three Months Ended March 31, 2021		Three Months Ended March 31, 2020
	Q-Pipe Transaction		GT&S Transaction		Q-Pipe Transaction
(millions)
Capital expenditures	$	3	$	73	$	6
Significant noncash items
Depreciation, depletion and amortization		0		82		13
Accrued capital expenditures		2		16		0

23

Note 4. Operating Revenue

The Companies’ operating revenue consists of the following:

	Three Months Ended March 31,
	2021		2020
(millions)
Dominion Energy
Regulated electric sales:
Residential	$	1,155	$	1,158
Commercial		719		798
Industrial		178		182
Government and other retail		189		219
Wholesale		43		33
Nonregulated electric sales		249		232
Regulated gas sales:
Residential		630		548
Commercial		206		191
Other		34		28
Nonregulated gas sales		52		83
Regulated gas transportation and storage		271		232
Other regulated revenues		66		92
Other nonregulated revenues(1)(2)		48		31
Total operating revenue from contracts    with customers		3,840		3,827
Other revenues(3)(4)		30		111
Total operating revenue	$	3,870	$	3,938
Virginia Power
Regulated electric sales:
Residential	$	889	$	896
Commercial		547		614
Industrial		91		97
Government and other retail		176		203
Wholesale		26		24
Other regulated revenues		57		62
Other nonregulated revenues(1)(2)		21		13
Total operating revenue from contracts    with customers		1,807		1,909
Other revenues(2)(3)		23		21
Total operating revenue	$	1,830	$	1,930

(1) Amounts above include sales which are considered to be goods transferred at a point in time. Such amounts include $7 million for both the three months ended March 31, 2021 and 2020, primarily consisting of sales of commodities related to nonregulated extraction activities and other miscellaneous products. Additionally, amounts above include sales of renewable energy credits. Such amounts included $6 million and $4 million for the three months ended March 31, 2021 and $4 million and $3 million for the three months ended March 31, 2020, at Dominion Energy and Virginia Power, respectively.

(2) See Notes 10 and 19 for amounts attributable to related parties and affiliates.

(3) Amounts above include alternative revenue of $22 million and $36 million at Dominion Energy and $20 million and $17 million at Virginia Power for the three months ended March 31, 2021 and 2020, respectively.

(4) Amounts above include revenue associated with services provided to discontinued operations of $1 million and $2 million for the three months ended March 31, 2021 and 2020, respectively.

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 the Companies expect to recognize this revenue. These revenues relate to contracts containing fixed prices where the Companies will earn the associated revenue over time as they stand 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 the Companies elect to recognize revenue in the amount they have a right to invoice.

Revenue expected to be recognized on multi-year    contracts in place at March 31, 2021	2021		2022		2023		2024		2025		Thereafter		Total
(millions)
Dominion Energy	$	51	$	68	$	66	$	59	$	51	$	493	$	788

24

At March 31, 2021 and December 31, 2020, Dominion Energy’s contract liability balances were $74 million and $130 million, respectively, and are recorded in other current liabilities and other deferred credits and other liabilities in the Consolidated Balance Sheets.  At March 31, 2021 and December 31, 2020, Virginia Power’s contract liability balances were $32 million and $36 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 three months ended March 31, 2021 and 2020, Dominion Energy recognized revenue of $122 million and $93 million, respectively, from the beginning contract liability balances. During the three months ended March 31, 2021 and 2020, Virginia Power recognized $36 million and $24 million, respectively, from the beginning contract liability balance.  

Note 5. Income Taxes

For continuing operations, including noncontrolling interests, the statutory U.S. federal income tax rate reconciles to the Companies’ effective income tax rate as follows:

	Dominion Energy						Virginia Power
Three Months Ended March 31,	2021			2020			2021			2020
U.S. statutory rate		21.0	%		21.0	%		21.0	%		21.0	%
Increases (reductions) resulting from:
State taxes, net of federal benefit		3.5			3.3			4.5			4.8
Investment tax credits		(3.8	)		(7.0	)		(6.6	)		(6.4	)
Production tax credits		(0.3	)		(0.8	)		(0.6	)		(0.8	)
Reversal of excess deferred income    taxes		(2.2	)		(7.8	)		(2.2	)		(8.1	)
AFUDC - equity		(0.4	)		(0.7	)		(0.7	)		(0.7	)
Other, net		—			1.7			0.3			0.3
Effective tax rate		17.8	%		9.7	%		15.7	%		10.1	%

For the Companies’ rate-regulated entities, deferred taxes will reverse at the weighted average rate used to originate the deferred tax liability, which in some cases will be 35%. The Companies have recorded an estimate of excess deferred income tax amortization in 2021. The reversal of these excess deferred income taxes will impact the effective tax rate and rates charged to customers. See Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020 for more information.

As of March 31, 2021, there have been no material changes in the Companies’ unrecognized tax benefits or possible changes that could reasonably be expected to occur during the next twelve months. See Note 5 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020, for a discussion of these unrecognized tax benefits.

In April 2021, a state legislative change was enacted for tax years beginning January 1, 2022. Dominion Energy expects to record an approximate $20 million deferred tax benefit, inclusive of an approximate $15 million benefit at Virginia Power, in the second quarter of 2021.

Discontinued operations

Income tax expense reflected in discontinued operations is $7 million and $31 million for the three months ended March 31, 2021 and 2020, respectively.

25

Note 6. Earnings Per Share

The following table presents the calculation of Dominion Energy’s basic and diluted EPS:

	Three Months Ended March 31,
	2021			2020
(millions, except EPS)
Net income (loss) attributable to Dominion Energy from     continuing operations	$	980		$	(466	)
Preferred stock dividends (see Note 16)		(16	)		(16	)
Net income (loss) attributable to Dominion Energy from     continuing operations – Basic		964			(482	)
Dilutive effect of Series A Preferred Stock		—			—
Net income (loss) attributable to Dominion Energy from     continuing operations - Diluted	$	964		$	(482	)
Net income attributable to Dominion Energy from     discontinued operations - Basic & Diluted	$	28		$	196
Average shares of common stock outstanding – Basic &     Diluted		805.9			838.2
Net effect of dilutive securities		—			—
Average shares of common stock outstanding – Diluted		805.9			838.2
EPS from continuing operations – Basic	$	1.19		$	(0.57	)
EPS from discontinued operations – Basic		0.04			0.23
EPS attributable to Dominion Energy – Basic	$	1.23		$	(0.34	)
EPS from continuing operations – Diluted		1.19		$	(0.57	)
EPS from discontinued operations – Diluted		0.04			0.23
EPS attributable to Dominion Energy – Diluted	$	1.23		$	(0.34	)

The 2019 Equity Units and the Q-Pipe Transaction deposit are potentially dilutive securities. See Note 3 in this report and Note 19 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020 for more information. The forward stock purchase contracts included within the 2019 Equity Units were excluded from the calculation of diluted EPS from continuing operations for the three months ended March 31, 2021, as the dilutive stock price threshold was not met. The Series A Preferred Stock included within the 2019 Equity Units is excluded from the calculation of diluted EPS from continuing operations based upon the expectation that the conversion will be settled in cash rather than through the issuance of Dominion Energy common stock. For the three months ended March 31, 2021, 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. As a result of a net loss attributable to Dominion Energy from continuing operations for the three months ended March 31, 2020, any adjustments to earnings or shares would be considered antidilutive and are therefore excluded from the calculation of diluted EPS from continuing operations. 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 months ended March 31, 2021 based upon the expectation Dominion Energy would settle in cash rather than through the issuance of Dominion Energy common stock.

26

Note 7. Accumulated Other Comprehensive Income

Dominion Energy

The following table presents Dominion Energy’s changes in AOCI by component, net of tax:

	Deferred gains and losses on derivatives- hedging activities			Unrealized gains and losses on investment securities			Unrecognized pension and other postretirement benefit costs			Other comprehensive loss from equity method investees			Total
(millions)
Three Months Ended March 31, 2021
Beginning balance	$	(419	)	$	62		$	(1,359	)	$	(1	)	$	(1,717	)
Other comprehensive income before reclassifications:    gains (losses)		39			(31	)		6			0			14
Amounts reclassified from AOCI: (gains) losses(1)		13			1			18			0			32
Net current period other comprehensive income (loss)		52			(30	)		24			0			46
Ending balance	$	(367	)	$	32		$	(1,335	)	$	(1	)	$	(1,671	)
Three Months Ended March 31, 2020
Beginning balance	$	(407	)	$	37		$	(1,421	)	$	(2	)	$	(1,793	)
Other comprehensive income before reclassifications:    gains (losses)		(266	)		9			—			0			(257	)
Amounts reclassified from AOCI: (gains) losses(1)		22			(9	)		19			0			32
Net current period other comprehensive income (loss)		(244	)		—			19			0			(225	)
Ending balance	$	(651	)	$	37		$	(1,402	)	$	(2	)	$	(2,018	)

(1) See table below for details about these reclassifications.

27

The following table presents Dominion Energy’s reclassifications out of AOCI by component:

Details about AOCI components	Amounts reclassified from AOCI			Affected line item in the Consolidated Statements of Income
(millions)
Three Months Ended March 31, 2021
Deferred (gains) and losses on derivatives-hedging activities:
Commodity contracts	$	1		Purchased gas
Interest rate contracts		16		Interest and related charges
Total		17
Tax		(4	)	Income tax expense (benefit)
Total, net of tax	$	13
Unrealized (gains) and losses on investment securities:
Realized (gains) losses on sale of securities	$	1		Other income (expense)
Total		1
Tax		—		Income tax expense (benefit)
Total, net of tax	$	1
Unrecognized pension and other postretirement benefit costs:
Amortization of prior-service costs (credits)	$	(5	)	Other income (expense)
Amortization of actuarial losses		30		Other income (expense)
Total		25
Tax		(7	)	Income tax expense (benefit)
Total, net of tax	$	18
Three Months Ended March 31, 2020
Deferred (gains) and losses on derivatives-hedging activities:
Commodity contracts	$	(6	)	Operating revenue
		3		Purchased gas
		(1	)	Discontinued operations
Interest rate contracts		25		Interest and related charges
		2		Discontinued operations
Foreign currency contracts		6		Discontinued operations
Total		29
Tax		(7	)	Income tax expense (benefit)
Total, net of tax	$	22
Unrealized (gains) and losses on investment securities:
Realized (gains) losses on sale of securities	$	(13	)	Other income (expense)
Total		(13	)
Tax		4		Income tax expense (benefit)
Total, net of tax	$	(9	)
Unrecognized pension and other postretirement benefit costs:
Amortization of prior-service costs (credits)	$	(6	)	Other income (expense)
Amortization of actuarial losses		30		Other income (expense)
Total		24
Tax		(5	)	Income tax expense (benefit)
Total, net of tax	$	19

28

Virginia Power

The following table presents Virginia Power’s changes in AOCI by component, net of tax:

	Deferred gains and losses on derivatives- hedging activities			Unrealized gains and losses on investment securities			Total
(millions)
Three Months Ended March 31, 2021
Beginning balance	$	(60	)	$	8		$	(52	)
Other comprehensive income before reclassifications:    gains (losses)		32			(5	)		27
Amounts reclassified from AOCI: losses(1)		1			1			2
Net current period other comprehensive income (loss)		33			(4	)		29
Ending balance	$	(27	)	$	4		$	(23	)
Three Months Ended March 31, 2020
Beginning balance	$	(34	)	$	5		$	(29	)
Other comprehensive income before reclassifications:    losses		(45	)		(2	)		(47	)
Amounts reclassified from AOCI: losses(1)		—			1			1
Net current period other comprehensive income (loss)		(45	)		(1	)		(46	)
Ending balance	$	(79	)	$	4		$	(75	)

(1) See table below for details about these reclassifications.

The following table presents Virginia Power’s reclassifications out of AOCI by component:

Details about AOCI components	Amounts reclassified from AOCI			Affected line item in the Consolidated Statements  of Income
(millions)
Three Months Ended March 31, 2021
(Gains) losses on cash flow hedges:
Interest rate contracts	$	1		Interest and related charges
Total		1
Tax		—		Income tax expense (benefit)
Total, net of tax	$	1
Unrealized (gains) and losses on investment securities:
Realized (gains) losses on sale of securities	$	1		Other income (expense)
Total		1
Tax		—		Income tax expense (benefit)
Total, net of tax	$	1
Three Months Ended March 31, 2020
Unrealized (gains) and losses on investment securities:
Realized (gains) losses on sale of securities	$	2		Other income (expense)
Total		2
Tax		(1	)	Income tax expense (benefit)
Total, net of tax	$	1

Note 8. Fair Value Measurements

The Companies’ fair value measurements are made in accordance with the policies discussed in Note 6 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020. See Note 9 in this report for further information about the Companies’ derivatives and hedge accounting activities.

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The Companies enter into certain physical and financial forwards, futures, options and swaps, which are considered Level 3 as they have one or more inputs that are not observable and are significant to the valuation. The discounted cash flow method is used to value Level 3 physical and financial forwards, futures and swaps contracts. The discounted cash flow model for forwards, futures and swaps calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return and credit spreads. For Level 3 fair value measurements, certain forward market prices are considered unobservable.

The following table presents Dominion Energy’s quantitative information about Level 3 fair value measurements at March 31, 2021.  The range and weighted average are presented in dollars for market price inputs.

	Fair Value (millions)		Valuation Techniques	Unobservable Input		Range	Weighted Average(1)
Assets
Physical and financial forwards:
Natural gas(2)	$	56	Discounted cash flow	Market price (per Dth)	(3)	(2) - 3		(1	)
FTRs		2	Discounted cash flow	Market price (per MWh)	(3)	(2) - 3		0
Total assets	$	58
Liabilities
Financial forwards:
FTRs	$	2	Discounted cash flow	Market price (per MWh)	(3)	(2) - 2		0
Total liabilities	$	2

(1) Averages weighted by volume.

(2) Includes basis.

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

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

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)

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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
(millions)
At March 31, 2021
Assets
Derivatives:
Commodity	$	0	$	51	$	58	$	109
Interest rate		0		740		0		740
Investments(1):
Equity securities:
U.S.		4,569		0		0		4,569
Fixed income:
Corporate debt instruments		0		722		0		722
Government securities		728		727		0		1,455
Cash equivalents and other		18		0		0		18
Total assets	$	5,315	$	2,240	$	58	$	7,613
Liabilities
Derivatives:
Commodity	$	0	$	76	$	2	$	78
Interest rate		0		186		0		186
Total liabilities	$	0	$	262	$	2	$	264
At December 31, 2020
Assets
Derivatives:
Commodity	$	0	$	57	$	110	$	167
Interest rate		0		230		0		230
Investments(1):
Equity securities:
U.S.		4,648		0		0		4,648
Fixed income:
Corporate debt instruments		0		629		0		629
Government securities		508		730		0		1,238
Cash equivalents and other		32		15		0		47
Total assets	$	5,188	$	1,661	$	110	$	6,959
Liabilities
Derivatives:
Commodity	$	0	$	48	$	7	$	55
Interest rate		0		431		0		431
Total liabilities	$	0	$	479	$	7	$	486

(1)

31

Includes investments held in the nuclear decommissioning and rabbi trusts. Excludes $399 million and $340 million of assets at March 31, 2021 and December 31, 2020, respectively, measured at fair value using NAV (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.

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
	March 31,
	2021			2020
(millions)
Beginning balance	$	103		$	(37	)
Total realized and unrealized gains (losses):
Included in earnings:
Electric fuel and other energy-related purchases		(21	)		(22	)
Included in regulatory assets/liabilities		(47	)		80
Settlements		21			22
Ending balance	$	56		$	43

There are less than $1 million of unrealized gains and losses included in earnings in the Level 3 fair value category related to assets/liabilities still held at the reporting date for the three months ended March 31, 2021. There were 0 unrealized gains and losses included in earnings in the Level 3 fair value category related to assets/liabilities still held at the reporting date for the three months ended March 31, 2020.

Virginia Power

The following table presents Virginia Power’s quantitative information about Level 3 fair value measurements at March 31, 2021.  The range and weighted average are presented in dollars for market price inputs.

	Fair Value (millions)		Valuation Techniques	Unobservable Input		Range	Weighted Average(1)
Assets
Physical and financial forwards:
Natural gas(2)	$	56	Discounted cash flow	Market price (per Dth)	(3)	(2) - 3		(1	)
FTRs		2	Discounted cash flow	Market price (per MWh)	(3)	(2) - 3		0
Total assets	$	58
Liabilities
Financial forwards:
FTRs	$	2	Discounted cash flow	Market price (per MWh)	(3)	(2) - 2		0
Total liabilities	$	2

(1) Averages weighted by volume.

(2) Includes basis.

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

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

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)

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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
(millions)
At March 31, 2021
Assets
Derivatives:
Commodity	$	0	$	18	$	58	$	76
Interest rate		0		283		0		283
Investments(1):
Equity securities:
U.S.		2,132		0		0		2,132
Fixed income:
Corporate debt instruments		0		400		0		400
Government securities		340		277		0		617
Total assets	$	2,472	$	978	$	58	$	3,508
Liabilities
Derivatives:
Commodity	$	0	$	26	$	2	$	28
Interest rate		0		150		0		150
Total liabilities	$	0	$	176	$	2	$	178
At December 31, 2020
Assets
Derivatives:
Commodity	$	0	$	5	$	110	$	115
Interest rate		0		66		0		66
Investments(1):
Equity securities:
U.S.		2,171		0		0		2,171
Fixed income:
Corporate debt instruments		0		348		0		348
Government securities		201		309		0		510
Cash equivalents and other		13		0		0		13
Total assets	$	2,385	$	728	$	110	$	3,223
Liabilities
Derivatives:
Commodity	$	0	$	22	$	7	$	29
Interest rate		0		376		0		376
Total liabilities	$	0	$	398	$	7	$	405

(1)

33

Includes investments held in the nuclear decommissioning trusts. Excludes $199 million and $167 million of assets at March 31, 2021 and December 31, 2020, respectively, measured at fair value using NAV (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.

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
	March 31,
	2021			2020
(millions)
Beginning balance	$	103		$	(37	)
Total realized and unrealized gains (losses):
Included in earnings:
Electric fuel and other energy-related purchases		(21	)		(22	)
Included in regulatory assets/liabilities		(47	)		80
Settlements		21			22
Ending balance	$	56		$	43

There were 0 unrealized gains or losses included in earnings in the Level 3 fair value category relating to assets/liabilities still held at the reporting date for the three months ended March 31, 2021 and 2020.

Fair Value of Financial Instruments

Substantially all of the Companies’ financial instruments are recorded at fair value, with the exception of the instruments described below, which are reported at historical cost. Estimated fair values have been determined using available market information and valuation methodologies considered appropriate by management. The carrying amount of cash, restricted cash and equivalents, customer and other receivables, affiliated receivables, short-term debt, affiliated current borrowings, payables to affiliates and accounts payable are representative of fair value because of the short-term nature of these instruments. For the Companies' financial instruments that are not recorded at fair value, the carrying amounts and estimated fair values are as follows:

	March 31, 2021				December 31, 2020
	Carrying Amount		Estimated Fair Value(1)		Carrying Amount		Estimated Fair Value(1)
(millions)
Dominion Energy
Long-term debt(2)(3)	$	31,991	$	36,334	$	31,996	$	38,773
Supplemental 364-Day credit facility borrowings		0		0		225		225
Junior subordinated notes(4)		3,412		3,579		3,411		3,633
Virginia Power
Long-term debt(4)	$	13,209	$	15,174	$	13,207	$	16,455

(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 both March 31, 2021 and December 31, 2020, the carrying amount includes the valuation of certain fair value hedges associated with fixed rate debt of $3 million.

(3) Includes amounts classified as held for sale, see Note 3.

(4) Carrying amount includes current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs, discount or premium.

Note 9. Derivatives and Hedge Accounting Activities

The Companies’ accounting policies, objectives and strategies for using derivative instruments are discussed in Note 2 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020. See Note 8 in this report for further 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

34

agreements and contract default provisions. In addition, the contracts are subject to conditional rights of setoff through counterparty nonperformance, insolvency or other conditions.

In general, most over-the-counter transactions and all exchange contracts are subject to collateral requirements. Types of collateral for over-the-counter and exchange contracts include cash, letters of credit, and in some cases other forms of securities, none of which are subject to restrictions. Cash collateral, as presented in the table below, is used to offset derivative assets and liabilities.  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 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 further 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, 2021								December 31, 2020
	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
(millions)
Commodity contracts:
Over-the-counter	$	76	$	18	$	0	$	58	$	117	$	9	$	0	$	108
Exchange		33		33		0		0		49		24		0		25
Interest rate contracts:
Over-the-counter		740		19		0		721		230		13		0		217
Total derivatives, subject to a    master netting or similar    arrangement	$	849	$	70	$	0	$	779	$	396	$	46	$	0	$	350

(1) Excludes less than $1 million and $1 million of derivative assets at March 31, 2021 and December 31, 2020, respectively, which are not subject to master netting or similar arrangements.

	March 31, 2021								December 31, 2020
	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
(millions)
Commodity contracts:
Over-the-counter	$	28	$	18	$	0	$	10	$	30	$	9	$	0	$	21
Exchange		50		33		17		0		24		24		0		0
Interest rate contracts:
Over-the-counter		186		19		11		156		431		13		17		401
Total derivatives, subject to a    master netting or similar    arrangement	$	264	$	70	$	28	$	166	$	485	$	46	$	17	$	422

(1)

35

Excludes less than $1 million and $1 million of derivative liabilities at March 31, 2021 and December 31, 2020, respectively, which are not subject to master netting or similar arrangements.

Volumes

The following table presents the volume of Dominion Energy’s derivative activity at March 31, 2021. 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
Natural Gas (bcf):
Fixed price(1)		60		19
Basis		202		496
Electricity (MWh):
Fixed price		10,745,307		9,789,934
FTRs		18,264,727		0
Interest rate(2) (millions)	$	1,250	$	5,407

(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, 2021:

	AOCI After-Tax			Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax			Maximum Term
(millions)
Interest rate	$	(367	)	$	(40	)	393 months
Total	$	(367	)	$	(40	)

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.

Fair Value Hedges

For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings and presented in the same line item. There were 0 derivative instruments designated as fair value hedges during the three months ended March 31, 2021 and March 31, 2020.

The following table presents the amounts recorded on the balance sheet related to cumulative basis adjustments for fair value hedges:

	Carrying Amount of the Hedged Asset (Liability)(1)						Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Assets (Liabilities)(2)
	March 31, 2021			December 31, 2020			March 31, 2021			December 31, 2020
(millions)
Long-term debt	$	(1,153	)	$	(1,153	)	$	(3	)	$	(3	)

(1) Includes $(1.2) billion related to discontinued hedging relationships at both March 31, 2021 and December 31, 2020.

(2) Includes $(3) million of hedging adjustments on discontinued hedging relationships at both March 31, 2021 and December 31, 2020.

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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, 2021
ASSETS
Current Assets
Commodity	$	0	$	24	$	24
Interest rate		0		12		12
Total current derivative assets(1)		0		36		36
Noncurrent Assets
Commodity		0		85		85
Interest rate		287		441		728
Total noncurrent derivative assets(2)		287		526		813
Total derivative assets	$	287	$	562	$	849
LIABILITIES
Current Liabilities
Commodity	$	0	$	61	$	61
Interest rate		150		10		160
Total current derivative liabilities(3)		150		71		221
Noncurrent Liabilities
Commodity		0		17		17
Interest rate		0		26		26
Total noncurrent derivative liabilities(4)		0		43		43
Total derivative liabilities	$	150	$	114	$	264
December 31, 2020
ASSETS
Current Assets
Commodity	$	0	$	58	$	58
Interest rate		0		9		9
Total current derivative assets(1)		0		67		67
Noncurrent Assets
Commodity		0		109		109
Interest rate		66		155		221
Total noncurrent derivative assets(2)		66		264		330
Total derivative assets	$	66	$	331	$	397
LIABILITIES
Current Liabilities
Commodity	$	0	$	42	$	42
Interest rate		363		10		373
Total current derivative liabilities(3)		363		52		415
Noncurrent Liabilities
Commodity		0		13		13
Interest rate		19		39		58
Total noncurrent derivative liabilities(4)		19		52		71
Total derivative liabilities	$	382	$	104	$	486

(1) Current derivative assets include $31 million and $63 million in other current assets in Dominion Energy’s Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020, respectively.  The remainder is recorded in current assets held for sale in Dominion Energy’s Consolidated Balance Sheets.

(2) Noncurrent derivative assets are presented in other deferred charges and other assets in Dominion Energy’s Consolidated Balance Sheets.   

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(3) Current derivative liabilities include $217 million and $412 million at March 31, 2021 and December 31, 2020, respectively, presented in other current liabilities in Dominion Energy’s Consolidated Balance Sheets. The remainder is in current liabilities held for sale in Dominion Energy’s Consolidated Balance Sheets.

(4) Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in Dominion Energy’s Consolidated Balance Sheets.

The following tables present the gains and losses on Dominion Energy’s derivatives, as well as where the associated activity is presented in its Consolidated Balance Sheets and Statements of Income.

Derivatives in cash flow hedging relationships	Amount of Gain (Loss) Recognized in AOCI on Derivatives(1)			Amount of Gain (Loss) Reclassified From AOCI to Income			Increase (Decrease) in Derivatives Subject to Regulatory Treatment(2)
(millions)
Three Months Ended March 31, 2021
Derivative type and location of gains (losses):
Commodity:
Purchased gas	$	—		$	(1	)	$	—
Interest rate:
Interest and related charges		52			(16	)		408
Total	$	52		$	(17	)	$	408
Three Months Ended March 31, 2020
Derivative type and location of gains (losses):
Commodity:
Operating revenue				$	6
Purchased gas					(3	)
Discontinued operations					1
Total Commodity	$	—		$	4		$	—
Interest rate:
Interest and related charges					(25	)
Discontinued operations					(2	)
Total interest rate		(336	)		(27	)		(563	)
Foreign currency(3)		(23	)		(6	)		—
Total	$	(359	)	$	(29	)	$	(563	)

(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 discontinued operations.

Derivatives not designated as hedging instruments	Amount of Gain (Loss) Recognized in Income on Derivatives(1)
	Three Months Ended
	March 31,
	2021			2020
(millions)
Derivative type and location of gains (losses):
Commodity:
Operating revenue	$	(41	)	$	51
Purchased gas		0			(11	)
Electric fuel and other energy-related purchases		(44	)		(65	)
Discontinued operations		0			11
Interest rate:
Interest and related charges		319			(53	)
Discontinued operations		0			(8	)
Total	$	234		$	(75	)

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(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.

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, 2021								December 31, 2020
	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
(millions)
Commodity contracts:
Over-the-counter	$	71	$	15	$	0	$	56	$	111	$	6	$	0	$	105
Exchange		3		3		0		0	1		1			0		0
Interest rate contracts:
Over-the-counter		283		19		0		264	66		7			0		59
Total derivatives, subject to a    master netting or similar    arrangement	$	357	$	37	$	0	$	320	$	178	$	14	$	0	$	164

(1) Excludes $2 million and $3 million of derivative assets at March 31, 2021 and December 31, 2020, respectively, which are not subject to master netting or similar arrangements.

	March 31, 2021								December 31, 2020
	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
(millions)
Commodity contracts:
Over-the-counter	$	19	$	15	$	0	$	4	$	6	$	6	$	0	$	0
Exchange		4		3		1		0	1		1			0		0
Interest rate contracts:
Over-the-counter		150		19		0		131	376		7			0		369
Total derivatives, subject to a    master netting or similar    arrangement	$	173	$	37	$	1	$	135	$	383	$	14	$	0	$	369

(1)

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Excludes $5 million and $22 million of derivative liabilities at March 31, 2021 and December 31, 2020, respectively, which are not subject to master netting or similar arrangements.

Volumes

The following table presents the volume of Virginia Power’s derivative activity at March 31, 2021. 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
Natural Gas (bcf):
Fixed price(1)		35		18
Basis		151		495
Electricity (MWh):
Fixed price		3,770,002		3,029,859
FTRs		18,264,727		0
Interest rate(2) (millions)	$	850	$	1,200

(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, 2021:

	AOCI After-Tax			Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax			Maximum Term
(millions)
Interest rate	$	(27	)	$	(2	)	393 months
Total	$	(27	)	$	(2	)

The amounts that will be reclassified from AOCI to earnings will generally be offset by the recognition of the hedged transactions (e.g., interest payments) in earnings, thereby achieving the realization of interest rates contemplated by the underlying risk management strategies and will vary from the expected amounts presented above as a result of changes in interest rates.

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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
(millions)
March 31, 2021
ASSETS
Current Assets
Commodity	$	0	$	11	$	11
Total current derivative assets(1)		0		11		11
Noncurrent Assets
Commodity		0		65		65
Interest rate		283		0		283
Total noncurrent derivative assets(2)		283		65		348
Total derivative assets	$	283	$	76	$	359
LIABILITIES
Current Liabilities
Commodity	$	0	$	21	$	21
Interest rate		150		0		150
Total current derivative liabilities		150		21		171
Noncurrent Liabilities
Commodity		0		7		7
Total noncurrent derivative liabilities(3)		0		7		7
Total derivative liabilities	$	150	$	28	$	178
December 31, 2020
ASSETS
Current Assets
Commodity	$	0	$	22	$	22
Total current derivative assets(1)		0		22		22
Noncurrent Assets
Commodity		0		93		93
Interest rate		66		0		66
Total noncurrent derivative assets(2)		66		93		159
Total derivative assets	$	66	$	115	$	181
LIABILITIES
Current Liabilities
Commodity	$	0	$	28	$	28
Interest rate		362		0		362
Total current derivative liabilities		362		28		390
Noncurrent Liabilities
Commodity		0		1		1
Interest rate		14		0		14
Total noncurrent derivative liabilities(3)		14		1		15
Total derivative liabilities	$	376	$	29	$	405

(1) Current derivative assets are presented in other current assets in Virginia Power’s Consolidated Balance Sheets.

(2) Noncurrent derivative assets are presented in other deferred charges and other assets in Virginia Power’s Consolidated Balance Sheets. 

(3) Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in Virginia Power’s Consolidated Balance Sheets.

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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)
(millions)
Three Months Ended March 31, 2021
Derivative type and location of gains (losses):
Interest rate(3)	$	43		$	(1	)	$	407
Total	$	43		$	(1	)	$	407
Three Months Ended March 31, 2020
Derivative type and location of gains (losses):
Interest rate(3)	$	(61	)	$	0		$	(565	)
Total	$	(61	)	$	0		$	(565	)

(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)
	Three Months Ended
	March 31,
	2021			2020
(millions)
Derivative type and location of gains (losses):
Commodity:
Electric fuel and other energy-related purchases	$	(44	)	$	(65	)
Operating revenue		(2	)		0
Total	$	(46	)	$	(65	)

(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.

Note 10. Investments

Dominion Energy

Equity and Debt Securities

Rabbi Trust Securities

Equity and fixed income securities and cash equivalents in Dominion Energy’s rabbi trusts and classified as trading totaled $139 million and $134 million at March 31, 2021 and December 31, 2020, respectively.

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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
(millions)
March 31, 2021
Equity securities:(1)
U.S.	$	1,573		$	3,036	$	(10	)				$	4,599
Fixed income securities:(2)
Corporate debt instruments		698			32		(8	)		$	0		722
Government securities		1,369			47		(14	)			0		1,402
Common/collective trust funds		221			6		0				0		227
Insurance contracts		237			—		—						237
Cash equivalents and other(3)		(51	)		3		—				0		(48	)
Total	$	4,047		$	3,124	$	(32	)	(4)	$	0	$	7,139
December 31, 2020
Equity securities:(1)
U.S.	$	1,756		$	2,948	$	(24	)				$	4,680
Fixed income securities:(2)
Corporate debt instruments		572			58		(1	)		$	0		629
Government securities		1,119			66		(1	)			0		1,184
Common/collective trust funds		170			5		0				0		175
Insurance contracts		237			0		0						237
Cash equivalents and other(3)		(8	)		4		(1	)			0		(5	)
Total	$	3,846		$	3,081	$	(27	)	(4)	$	0	$	6,900

(1) Unrealized gains and losses on equity securities are included in other income and the nuclear decommissioning trust regulatory liability.

(2) Unrealized gains and losses on fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability. Changes in allowance for credit losses are included in other income.

(3) Includes pending purchases of securities of $63 million and $49 million at March 31, 2021 and December 31, 2020, respectively.

(4) The fair value of securities in an unrealized loss position was $937 million and $293 million at March 31, 2021 and December 31, 2020, respectively.

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,
	2021			2020
(millions)
Net gains (losses) recognized during the period	$	279		$	(898	)
Less: Net (gains) losses recognized during the period    on securities sold during the period		(178	)		14
Unrealized gains (losses) recognized during the period    on securities still held at period end(1)	$	101		$	(884	)

(1) Included in other income and the nuclear decommissioning trust regulatory liability.

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The fair value of Dominion Energy’s fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds at March 31, 2021 by contractual maturity is as follows:

	Amount
(millions)
Due in one year or less	$	292
Due after one year through five years		640
Due after five years through ten years		614
Due after ten years		805
Total	$	2,351

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,
	2021		2020
(millions)
Proceeds from sales	$	1,765	$	602
Realized gains(1)		232		66
Realized losses(1)		59		69

(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
(millions)
March 31, 2021
Equity securities:(1)
U.S.	$	839		$	1,414	$	(9	)				$	2,244
Fixed income securities:(2)
Corporate debt instruments		385			18		(3	)		$	0		400
Government securities		601			18		(3	)			0		616
Common/collective trust funds		86			0		0				0		86
Cash equivalents and other(3)		(24	)		—		—				0		(24	)
Total	$	1,887		$	1,450	$	(15	)	(4)	$	0	$	3,322
December 31, 2020
Equity securities:(1)
U.S.	$	929		$	1,371	$	(21	)				$	2,279
Fixed income securities:(2)