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Commission File Number
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Exact name of Registrant as Specified in its Charter
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IRS Employer Identification No.
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001-08489
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DOMINION ENERGY, INC.
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54-1229715
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000-55337
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VIRGINIA ELECTRIC AND POWER COMPANY
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54-0418825
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001-37591
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DOMINION ENERGY GAS HOLDINGS, LLC
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46-3639580
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Virginia
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120 Tredegar Street
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23219
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(State or other jurisdiction
of incorporation)
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(Address of Principal Executive Offices)
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(Zip Code)
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Registrant
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Title of Each Class
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Trading
Symbol(s) |
Name of Each Exchange
on which Registered
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DOMINION ENERGY, INC.
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Common Stock, no par value
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D
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New York Stock Exchange
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2016 Series A 5.25% Enhanced Junior Subordinated Notes
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DRUA
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New York Stock Exchange
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2019 Series A Corporate Units
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DCUE
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New York Stock Exchange
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DOMINION ENERGY GAS HOLDINGS, LLC
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2014 Series C 4.6% Senior Notes
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New York Stock Exchange
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Item 8.01
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Other Events.
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Item 9.01
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Financial Statements and Exhibits.
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Exhibit
No. |
Description
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23
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99.1
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99.2
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101
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The following financial statements for the fiscal year ended December 31, 2018 from Dominion Energy, Inc.’s Current Report on Form
8-K,
filed on November 18, 2019, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Equity, (v) Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements. The following financial statements for the fiscal year ended December 31, 2018 from Virginia Electric and Power Company’s Current Report on Form
8-K,
filed on November 18, 2019, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Common Shareholder’s Equity (v) Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements. The following financial statements for the fiscal year ended December 31, 2018 from Dominion Energy Gas Holdings, LLC’s Current Report on Form
8-K,
filed on November 18, 2019, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Equity, (v) Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements.
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document).
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DOMINION ENERGY, INC.
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Registrant
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/s/ Michele L. Cardiff
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Name:
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Michele L. Cardiff
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Title:
|
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Vice President, Controller and Chief
Accounting Officer
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Date: November 18, 2019
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VIRGINIA ELECTRIC AND POWER COMPANY
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Registrant
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/s/ Michele L. Cardiff
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Name:
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Michele L. Cardiff
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Title:
|
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Vice President, Controller and Chief
Accounting Officer
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Date: November 18, 2019
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DOMINION ENERGY GAS HOLDINGS, LLC
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Registrant
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||
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/s/ Michele L. Cardiff
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Name:
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Michele L. Cardiff
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Title:
|
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Vice President, Controller and Chief
Accounting Officer
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Date: November 18, 2019
|
Exhibit 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement Nos. 333-216476, 333-219088 and 333-221291 on Form S-3, and Registration Statement Nos. 033-62705, 333-02733, 333-09167, 333-18391, 333-25587, 333-49725, 333-78173, 333-85094, 333-87529, 333-95795, 333-110332, 333-124257, 333-130566, 333-130570, 333-143916, 333-149989, 333-149993, 333-156027, 333-163805, 333-189578, 333-189579, 333-189580, 333-189581, 333-195768, 333-202364, 333-202366, 333-203952, 333-226041, 333-226039, 333-223265 and 333-223264 on Form S-8 of our report dated February 28, 2019, relating to the consolidated financial statements of Dominion Energy, Inc. and subsidiaries appearing in this Current Report on Form 8-K.
We consent to the incorporation by reference in Registration Statement No. 333-219085 on Form S-3 of our report dated February 28, 2019, relating to the consolidated financial statements of Virginia Electric and Power Company (a wholly-owned subsidiary of Dominion Energy, Inc.) and subsidiaries, appearing in this Current Report on Form 8-K.
/s/ Deloitte & Touche LLP
Richmond, Virginia
November 18, 2019
Abbreviation or Acronym
|
Definition
|
|
2013 Equity Units
|
Dominion Energy’s 2013 Series A Equity Units and 2013 Series B Equity Units issued in June 2013
|
|
2014 Equity Units
|
Dominion Energy’s 2014 Series A Equity Units issued in July 2014
|
|
2016 Equity Units
|
Dominion Energy’s 2016 Series A Equity Units issued in August 2016
|
|
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
|
|
ABO
|
Accumulated benefit obligation
|
|
AFUDC
|
Allowance for funds used during construction
|
|
AMI
|
Advanced Metering Infrastructure
|
|
AMR
|
Automated meter reading program deployed by East Ohio
|
|
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, Duke and Southern Company Gas
|
|
BACT
|
Best available control technology
|
|
Bankruptcy Court
|
U.S. Bankruptcy Court for the Southern District of New York
|
|
bcf
|
Billion cubic feet
|
|
Bear Garden
|
A 590 MW combined—cycle, natural
gas-fired
power station in Buckingham County, Virginia
|
|
Blue Racer
|
Blue Racer Midstream, LLC, a joint venture between Caiman and FR BR Holdings, LLC effective December 2018
|
|
BP
|
BP Wind Energy North America Inc.
|
|
Brunswick County
|
A 1,376 MW combined—cycle, natural
gas-fired
power station in Brunswick County, Virginia
|
|
CAA
|
Clean Air Act
|
|
Caiman
|
Caiman Energy II, LLC
|
|
CAISO
|
California ISO
|
|
CCR
|
Coal combustion residual
|
|
CERCLA
|
Comprehensive Environmental Response, Compensation and Liability Act of 1980, also known as Superfund
|
|
CGN Committee
|
Compensation, Governance and Nominating Committee of Dominion Energy’s Board of Directors
|
|
CNG
|
Consolidated Natural Gas Company
|
|
CO
2
|
Carbon dioxide
|
|
Colonial Trail West
|
An approximately 142 MW proposed utility-scale solar power station located in Surry County, Virginia
|
|
Companies
|
Dominion Energy, Virginia Power and Dominion Energy Gas, collectively
|
|
Corporate Unit
|
A stock purchase contract and 1/20 or 1/40 interest in a RSN issued by Dominion Energy
|
|
Cove Point
|
Dominion Energy Cove Point LNG, LP
|
|
Cove Point Holdings
|
Cove Point GP Holding Company, LLC
|
|
Cove Point LNG Facility
|
An LNG terminalling and storage facility located on the Chesapeake Bay in Lusby, Maryland owned by Cove Point
|
Abbreviation or Acronym
|
Definition
|
|
Cove Point Pipeline
|
A
136-mile
natural gas pipeline owned by Cove Point that connects the Cove Point LNG Facility to interstate natural gas pipelines
|
|
CPCN
|
Certificate of Public Convenience and Necessity
|
|
CWA
DCPI
|
Clean Water Act
The legal entity Dominion Cove Point, LLC (formerly known as Dominion Cove Point, Inc.), one or more of its consolidated subsidiaries, or the entirety of Dominion Cove Point, LLC and its consolidated subsidiaries
|
|
DECG
|
Dominion Energy Carolina Gas Transmission, LLC
|
|
DECGS
|
Dominion Energy Carolina Gas Services, Inc.
|
|
DEQPS
|
Dominion Energy Questar Pipeline Services, Inc.
|
|
Dominion Energy Questar Pipeline Acquisition
|
The acquisition of Dominion Energy Questar Pipeline by Dominion Energy Midstream from Dominion Energy on December 1, 2016
|
|
DES
|
Dominion Energy Services, Inc.
|
|
DETI
|
Dominion Energy Transmission, Inc.
|
|
DGI
|
Dominion Generation, Inc.
|
|
DGP
DMLPHCII
|
Dominion Gathering and Processing, Inc.
Dominion MLP Holding Company II, LLC (formerly known as Dominion MLP Holding Company II, Inc.)
|
|
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 and Dominion Energy Gas) or operating segments, or the entirety of Dominion Energy, Inc. and its consolidated subsidiaries
|
|
Dominion Energy Direct
®
|
A dividend reinvestment and open enrollment direct stock purchase plan
|
|
Dominion Energy Gas
Dominion Energy Gas Restructuring
|
The legal entity, Dominion Energy Gas Holdings, LLC, one or more of its consolidated subsidiaries or operating segment, or the entirety of Dominion Energy Gas Holdings, LLC and its consolidated subsidiaries
The acquisition of DCPI and DMLPHCII from and the disposition of East Ohio and DGP to Dominion Energy on November 6, 2019
|
|
Dominion Energy Midstream
|
The legal entity, Dominion Energy Midstream Partners, LP, one or more of its consolidated subsidiaries, Cove Point Holdings, Iroquois GP Holding Company, LLC, DECG and Dominion Energy Questar Pipeline (beginning December 1, 2016), or the entirety of Dominion Energy Midstream Partners, LP and its consolidated subsidiaries
|
|
Dominion Energy Questar
|
The legal entity, Dominion Energy Questar Corporation, one or more of its consolidated subsidiaries, or the entirety of Dominion Energy Questar Corporation and its consolidated subsidiaries
|
|
Dominion Energy Questar Combination
|
Dominion Energy’s acquisition of Dominion Energy Questar completed on September 16, 2016 pursuant to the terms of the agreement and plan of merger entered on January 31, 2016
|
|
Dominion Energy Questar Pipeline
|
Dominion Energy Questar Pipeline, LLC, one or more of its consolidated subsidiaries, or the entirety of Dominion Energy Questar Pipeline, LLC and its consolidated subsidiaries
|
|
DSM
|
Demand-side management
|
|
Dth
|
Dekatherm
|
|
Duke
|
The legal entity, Duke Energy Corporation, one or more of its consolidated subsidiaries or operating segments, or the entirety of Duke Energy Corporation and its consolidated subsidiaries
|
|
Eagle Solar
|
Eagle Solar, LLC, a wholly-owned subsidiary of DGI
|
|
East Ohio
|
The East Ohio Gas Company, doing business as Dominion Energy Ohio
|
|
Eastern Market Access Project
|
Project to provide 294,000 Dths/day of transportation service to help meet demand for natural gas for Washington Gas Light Company, a local gas utility serving customers in D.C., Virginia and Maryland, and Mattawoman Energy, LLC for its new electric power generation facility to be built in Maryland
|
|
EPA
|
U.S. Environmental Protection Agency
|
|
EPS
|
Earnings per share
|
|
ERISA
|
Employee Retirement Income Security Act of 1974
|
|
Excess Tax Benefits
|
Benefits of tax deductions in excess of the compensation cost recognized for stock-based compensation
|
|
Export Customers
|
ST Cove Point LLC, a joint venture of Sumitomo Corporation and Tokyo Gas Co., Ltd., and GAIL Global (USA) LNG, LLC
|
|
Fairless
|
Fairless power station
|
|
FASB
|
Financial Accounting Standards Board
|
Abbreviation or Acronym
|
Definition
|
|
FERC
|
Federal Energy Regulatory Commission
|
|
FILOT
|
Fee in lieu of taxes
|
|
Four Brothers
|
Four Brothers Solar, LLC, a limited liability company owned by Dominion Energy and Four Brothers Holdings, LLC, a subsidiary of GIP effective August 2018
|
|
Fowler Ridge
|
Fowler I Holdings LLC, a wind-turbine facility joint venture with BP in Benton County, Indiana
|
|
FTRs
|
Financial transmission rights
|
|
GAAP
|
U.S. generally accepted accounting principles
|
|
Gal
|
Gallon
|
|
Gas Infrastructure
|
Gas Infrastructure Group 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 (including, effective August 2018, Four Brothers Holdings, LLC, Granite Mountain Renewables, LLC, and Iron Springs Renewables, LLC) or operating segments, 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 effective August 2018
|
|
Green Mountain
|
Green Mountain Power Corporation
|
|
GreenHat
|
GreenHat Energy, LLC
|
|
Greensville County
|
A 1,588 MW combined-cycle, natural
gas-fired
power station in Greensville County, Virginia
|
|
GTSA
|
Virginia Grid Transformation and Security Act of 2018
|
|
Hope
|
Hope Gas, Inc., doing business as Dominion Energy West Virginia
|
|
Idaho Commission
|
Idaho Public Utilities Commission
|
|
IRCA
|
Intercompany revolving credit agreement
|
|
Iron Springs
|
Iron Springs Holdings, LLC, a limited liability company owned by Dominion Energy and Iron Springs Renewables, LLC, a subsidiary of GIP effective August 2018
|
|
Iroquois
|
Iroquois Gas Transmission System, L.P.
|
|
IRS
|
Internal Revenue Service
|
|
ISO
|
Independent system operator
|
|
ISO-NE
|
ISO New England
|
|
July 2016 hybrids
|
Dominion Energy’s 2016 Series A Enhanced Junior Subordinated Notes due 2076
|
|
June 2006 hybrids
|
Dominion Energy’s 2006 Series A Enhanced Junior Subordinated Notes due 2066
|
|
Kewaunee
|
Kewaunee nuclear power station
|
|
kV
|
Kilovolt
|
|
LIBOR
|
London Interbank Offered Rate
|
|
LIFO
|
Last-in-first-out
inventory method
|
|
Liquefaction Project
|
A natural gas export/liquefaction facility at Cove Point
|
|
LNG
|
Liquefied natural gas
|
|
Local 50
|
International Brotherhood of Electrical Workers Local 50
|
|
Local 69
|
Local 69, Utility Workers Union of America, United Gas Workers
|
|
LTIP
|
Long-term incentive program
|
|
Manchester
|
Manchester power station
|
|
Massachusetts Municipal
|
Massachusetts Municipal Wholesale Electric Company
|
|
MATS
|
Utility Mercury and Air Toxics Standard Rule
|
|
mcfe
|
Thousand cubic feet equivalent
|
|
MGD
|
Million gallons a day
|
|
Millstone
|
Millstone nuclear power station
|
|
MW
|
Megawatt
|
Abbreviation or Acronym
|
Definition
|
|
MWh
|
Megawatt hour
|
|
Natural Gas Rate Stabilization Act
|
Legislation effective February 16, 2005 designed to improve and maintain natural gas service infrastructure to meet the needs of customers in South Carolina
|
|
NAV
|
Net asset value
|
|
NedPower
|
NedPower Mount Storm LLC, a wind-turbine facility joint venture between Dominion Energy and Shell in Grant County, West Virginia
|
|
NEIL
|
Nuclear Electric Insurance Limited
|
|
NGA
|
Natural Gas Act of 1938, as amended
|
|
NGL
|
Natural gas liquid
|
|
NND Project
|
V.C. Summer units 2 and 3 new nuclear development project under which SCANA and Santee Cooper undertook to construct two Westinghouse AP1000 Advanced Passive Safety nuclear units in Jenkinsville, South Carolina
|
|
North Anna
|
North Anna nuclear power station
|
|
North Carolina Commission
|
North Carolina Utilities Commission
|
|
NO
X
|
Nitrogen oxide
|
|
NRC
|
U.S. Nuclear Regulatory Commission
|
|
NRG
|
The legal entity, NRG Energy, Inc., one or more of its consolidated subsidiaries (including, effective November 2016 through August 2018, Four Brothers Holdings, LLC, Granite Mountain Renewables, LLC and Iron Springs Renewables, LLC) or operating segments, or the entirety of NRG Energy, Inc. and its consolidated subsidiaries
|
|
NSPS
|
New Source Performance Standards
|
|
NYSE
|
New York Stock Exchange
|
|
October 2014 hybrids
|
Dominion Energy’s 2014 Series A Enhanced Junior Subordinated Notes due 2054
|
|
ODEC
|
Old Dominion Electric Cooperative
|
|
Ohio Commission
|
Public Utilities Commission of Ohio
|
|
Overthrust
|
Dominion Energy Overthrust Pipeline, LLC, a wholly-owned subsidiary of Dominion Energy Questar Pipeline
|
|
Philadelphia Utility Index
|
Philadelphia Stock Exchange Utility Index
|
|
PIPP
|
Percentage of Income Payment Plan deployed by East Ohio
|
|
PIR
|
Pipeline Infrastructure Replacement program deployed by East Ohio
|
|
PJM
|
PJM Interconnection, L.L.C.
|
|
Power Delivery
|
Power Delivery Group operating segment
|
|
Power Generation
|
Power Generation Group operating segment
|
|
ppb
|
Parts-per-billion
|
|
Predecessor
|
Dominion Energy as the predecessor for accounting purposes for the period of Dominion Energy’s ownership of DCPI and DMLPHCII until the completion of the Dominion Energy Gas Restructuring
|
|
PREP
|
Pipeline Replacement and Expansion Program, a program of replacing, upgrading and expanding natural gas utility infrastructure deployed by Hope
|
|
PSD
|
Prevention of significant deterioration
|
|
PSNC
|
Public Service Company of North Carolina, Incorporated
|
|
Questar Gas
|
Questar Gas Company, doing business as Dominion Energy Utah, Dominion Energy Wyoming and Dominion Energy Idaho
|
|
RCC
|
Replacement Capital Covenant
|
|
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 BW
|
A rate adjustment clause associated with the recovery of costs related to Brunswick County
|
|
Rider E
|
A rate adjustment clause associated with the recovery of costs related to certain capital projects at Virginia Power’s electric generating stations to comply with federal and state environmental laws and regulations
|
|
Rider 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
|
Abbreviation or Acronym
|
Definition
|
|
Rider S
|
A rate adjustment clause associated with the recovery of costs related to the Virginia City Hybrid Energy Center
|
|
Rider T1
|
A rate adjustment clause to recover the difference between revenues produced from transmission rates included in base rates, and the new total revenue requirement developed annually for the rate years effective September 1
|
|
Rider U
|
A rate adjustment clause associated with the recovery of costs of new underground distribution facilities
|
|
Rider
US-2
|
A rate adjustment clause associated with the recovery of costs related to Woodland, Scott Solar and Whitehouse
|
|
Rider
US-3
|
A rate adjustment clause associated with the recovery of costs related to Colonial Trail West and Spring Grove 1
|
|
Rider W
|
A rate adjustment clause associated with the recovery of costs related to Warren County
|
|
Riders C1A and C2A
|
Rate adjustment clauses associated with the recovery of costs related to certain DSM programs approved in DSM cases
|
|
ROE
|
Return on equity
|
|
ROIC
|
Return on invested capital
|
|
RSN
|
Remarketable subordinated note
|
|
RTO
|
Regional transmission organization
|
|
SBL Holdco
|
SBL Holdco, LLC, a wholly-owned subsidiary of DGI
|
|
Santee Cooper
|
South Carolina Public Service Authority
|
|
SCANA
|
The legal entity, SCANA Corporation, one or more of its consolidated subsidiaries or operating segments, or the entirety of SCANA Corporation and its consolidated subsidiaries
|
|
SCANA Combination
|
Dominion Energy’s acquisition of SCANA completed on January 1, 2019 pursuant to the terms of the SCANA Merger Agreement
|
|
SCANA Merger Agreement
|
Agreement and plan of merger entered on January 2, 2018 between Dominion Energy and SCANA
|
|
SCANA Merger Approval Order
|
Final order issued by the South Carolina Commission on December 21, 2018 setting forth its approval of the SCANA Combination
|
|
SCDHEC
|
South Carolina Department of Health and Environmental Control
|
|
SCDOR
|
South Carolina Department of Revenue
|
|
SCE&G
|
The legal entity, South Carolina Electric & Gas Company, its consolidated subsidiaries or operating segments, or the entirety of South Carolina Electric & Gas Company and its consolidated subsidiaries
|
|
Scott Solar
|
A 17 MW utility-scale solar power station in Powhatan County, VA
|
|
SEC
|
U.S. Securities and Exchange Commission
|
|
SEMI
|
SCANA Energy Marketing, Inc.
|
|
September 2006 hybrids
|
Dominion Energy’s 2006 Series B Enhanced Junior Subordinated Notes due 2066
|
|
Shell
|
Shell WindEnergy, Inc.
|
|
Southeast Energy
|
Southeast Energy Group operating segment
|
|
South Carolina Commission
|
South Carolina Public Service Commission
|
|
Spring Grove 1
|
An approximately 98 MW proposed utility-scale solar power station located in Surry County, Virginia
|
|
Summer
|
V.C. Summer nuclear power station
|
|
SunEdison
|
The legal entity, SunEdison, Inc., one or more of its consolidated subsidiaries (including, through November 2016, Four Brothers Holdings, LLC, Granite Mountain Renewables, LLC and Iron Springs Renewables, LLC) or operating segments, or the entirety of SunEdison, Inc. and its consolidated subsidiaries
|
|
Surry
|
Surry nuclear power station
|
|
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
|
Abbreviation or Acronym
|
Definition
|
|
TransCanada
|
The legal entity, TransCanada Corporation, one or more of its consolidated subsidiaries or operating segments, or the entirety of TransCanada Corporation and its consolidated subsidiaries
|
|
TSR
|
Total shareholder return
|
|
UEX Rider
|
Uncollectible Expense Rider deployed by East Ohio
|
|
Utah Commission
|
Public Service Commission of Utah
|
|
VDEQ
|
Virginia Department of Environmental Quality
|
|
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 segments, or the entirety of Virginia Electric and Power Company and its consolidated subsidiaries
|
|
VOC
|
Volatile organic compounds
|
|
Warren County
|
A 1,350 MW combined-cycle, natural
gas-fired
power station in Warren County, Virginia
|
|
WECTEC
|
WECTEC Global Project Services, Inc. (formerly known as Stone & Webster, Inc.), a wholly-owned subsidiary of Westinghouse
|
|
West Virginia Commission
|
Public Service Commission of West Virginia
|
|
Western System
|
Collection of 212 miles of various diameter natural gas pipelines and three compressor stations in Ohio
|
|
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
|
|
Whitehouse
|
A 20 MW utility-scale solar power station in Louisa County, VA
|
|
White River Hub
|
White River Hub, LLC
|
|
Woodland
|
A 19 MW utility-scale solar power station in Isle of Wight County, VA
|
|
Wyoming Commission
|
Wyoming Public Service Commission
|
|
Page
Number
|
|
||
Dominion Energy, Inc.
|
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
8
|
|||
Consolidated Statements of Income for the years ended December 31, 2018, 2017 and 2016
|
9
|
|||
Consolidated Statements of Comprehensive Income for the years ended December 31, 2018, 2017 and 2016
|
10
|
|||
Consolidated Balance Sheets at December 31, 2018 and 2017
|
11
|
|||
Consolidated Statements of Equity at December 31, 2018, 2017 and 2016 and for the years then ended
|
13
|
|||
Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016
|
14
|
|||
Virginia Electric and Power Company
|
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
16
|
|||
Consolidated Statements of Income for the years ended December 31, 2018, 2017 and 2016
|
17
|
|||
Consolidated Statements of Comprehensive Income for the years ended December 31, 2018, 2017 and 2016
|
18
|
|||
Consolidated Balance Sheets at December 31, 2018 and 2017
|
19
|
|||
Consolidated Statements of Common Shareholder’s Equity at December 31, 2018, 2017 and 2016 and for the years then ended
|
21
|
|||
Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016
|
22
|
|||
Dominion Energy Gas Holdings, LLC
|
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
23
|
|||
Consolidated Statements of Income for the years ended December 31, 2018, 2017 and 2016
|
24
|
|||
Consolidated Statements of Comprehensive Income for the years ended December 31, 2018, 2017 and 2016
|
25
|
|||
Consolidated Balance Sheets at December 31, 2018 and 2017
|
26
|
|||
Consolidated Statements of Equity at December 31, 2018, 2017 and 2016 and for the years then ended
|
28
|
|||
Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016
|
29
|
|||
Combined Notes to Consolidated Financial Statements
|
30
|
Year Ended December 31,
|
2018
|
|
2017
|
2016
|
||||||||
(millions, except per share amounts)
|
|
|
|
|||||||||
Operating Revenue
(1)
|
$
|
13,366
|
|
$ |
12,586
|
$ |
11,737
|
|||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|||
Electric fuel and other energy-related purchases
|
|
2,814
|
|
2,301
|
2,333
|
|||||||
Purchased electric capacity
|
|
122
|
|
6
|
99
|
|||||||
Purchased gas
|
|
645
|
|
701
|
459
|
|||||||
Other operations and maintenance
|
|
3,458
|
|
3,200
|
3,279
|
|||||||
Depreciation, depletion and amortization
|
|
2,000
|
|
1,905
|
1,559
|
|||||||
Other taxes
|
|
703
|
|
668
|
596
|
|||||||
Impairment of assets and related charges
|
|
403
|
|
15
|
4
|
|||||||
Gains on sales of assets
|
|
(380
|
)
|
(147
|
) |
(40
|
) | |||||
Total operating expenses
|
|
9,765
|
|
8,649
|
8,289
|
|||||||
Income from operations
|
|
3,601
|
|
3,937
|
3,448
|
|||||||
Other income
(1)
|
|
1,021
|
|
358
|
429
|
|||||||
Interest and related charges
|
|
1,493
|
|
1,205
|
1,010
|
|||||||
Income from operations including noncontrolling interests before income tax expense (benefit)
|
|
3,129
|
|
3,090
|
2,867
|
|||||||
Income tax expense (benefit)
|
|
580
|
|
(30
|
) |
655
|
||||||
Net Income Including Noncontrolling Interests
|
|
2,549
|
|
3,120
|
2,212
|
|||||||
Noncontrolling Interests
|
|
102
|
|
121
|
89
|
|||||||
Net Income Attributable to Dominion Energy
|
$
|
2,447
|
|
$ |
2,999
|
$ |
2,123
|
|||||
Earnings Per Common Share
|
|
|
|
|
|
|
|
|
|
|||
Net income attributable to Dominion Energy — Basic
|
$
|
3.74
|
|
$ |
4.72
|
$ |
3.44
|
|||||
Net income attributable to Dominion Energy — Diluted
|
$
|
3.74
|
|
$ |
4.72
|
$ |
3.44
|
(1)
|
See Note 9 for amounts attributable to related parties.
|
Year Ended December 31,
|
2018
|
2017
|
2016
|
|||||||||
(millions)
|
|
|
|
|||||||||
Net Income Including Noncontrolling Interests
|
$
|
2,549
|
|
$ |
|
$ |
2,212
|
|||||
Other comprehensive income (loss), net of taxes:
|
|
|
|
|||||||||
Net deferred gains (losses) on derivatives-hedging activities, net of $(10), $(3) and $(37) tax
|
|
30
|
|
8
|
55
|
|||||||
Changes in unrealized net gains (losses) on investment securities, net of $5, $(121) and $(53) tax
|
|
(18
|
)
|
215
|
93
|
|||||||
Changes in net unrecognized pension and other postretirement benefit costs, net of $75, $32 and $189 tax
|
|
(215
|
)
|
(69
|
) |
(319
|
) | |||||
Amounts reclassified to net income:
|
|
|
|
|||||||||
Net derivative (gains) losses-hedging activities, net of $(35), $18 and $100 tax
|
|
102
|
|
(29
|
) |
(159
|
) | |||||
Net realized (gains) losses on investment securities, net of $(2), $21 and $15 tax
|
|
5
|
|
(37
|
) |
(28
|
) | |||||
Net pension and other postretirement benefit costs, net of $(21), $(32) and $(22) tax
|
|
78
|
|
50
|
34
|
|||||||
Changes in other comprehensive gains (losses) from equity method investees, net of $(1), $(2) and $— tax
|
|
1
|
|
3
|
(1
|
) | ||||||
Total other comprehensive income (loss)
|
|
(17
|
)
|
141
|
(325
|
) | ||||||
Comprehensive income including noncontrolling interests
|
|
2,532
|
|
3,261
|
1,887
|
|||||||
Comprehensive income attributable to noncontrolling interests
|
|
103
|
|
122
|
89
|
|||||||
Comprehensive income attributable to Dominion Energy
|
$
|
2,429
|
|
$ |
3,139
|
$ |
1,798
|
|||||
At December 31,
|
2018
|
|
2017
|
|||||
(millions)
|
|
|
||||||
ASSETS
|
|
|
|
|
|
|
||
Current Assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
268
|
|
$ |
120
|
|||
Customer receivables (less allowance for doubtful accounts of $14 and $17)
|
|
1,749
|
|
1,660
|
||||
Other receivables (less allowance for doubtful accounts of $4 and $2)
(1)
|
|
331
|
|
126
|
||||
Inventories:
|
|
|
||||||
Materials and supplies
|
|
1,039
|
|
1,049
|
||||
Fossil fuel
|
|
287
|
|
328
|
||||
Gas stored
|
|
92
|
|
100
|
||||
Prepayments
|
|
265
|
|
260
|
||||
Regulatory assets
|
|
496
|
|
294
|
||||
Other
|
|
634
|
|
397
|
||||
Total current assets
|
|
5,161
|
|
4,334
|
||||
Investments
|
|
|
|
|
|
|
||
Nuclear decommissioning trust funds
|
|
4,938
|
|
5,093
|
||||
Investment in equity method affiliates
|
|
1,278
|
|
1,544
|
||||
Other
|
|
344
|
|
327
|
||||
Total investments
|
|
6,560
|
|
6,964
|
||||
Property, Plant and Equipment
|
|
|
|
|
|
|
||
Property, plant and equipment
|
|
76,578
|
|
74,823
|
||||
Accumulated depreciation, depletion and amortization
|
|
(22,018
|
)
|
(21,065
|
) | |||
Total property, plant and equipment, net
|
|
54,560
|
|
53,758
|
||||
Deferred Charges and Other Assets
|
|
|
|
|
|
|
||
Goodwill
|
|
6,410
|
|
6,405
|
||||
Pension and other postretirement benefit assets
|
|
1,279
|
|
1,378
|
||||
Intangible assets, net
|
|
670
|
|
685
|
||||
Regulatory assets
|
|
2,676
|
|
2,480
|
||||
Other
|
|
598
|
|
581
|
||||
Total deferred charges and other assets
|
|
11,633
|
|
11,529
|
||||
|
||||||||
Total assets
|
$
|
77,914
|
|
$ |
76,585
|
|||
(1)
|
See Note 9 for amounts attributable to related parties.
|
At December 31,
|
2018
|
|
2017
|
|||||
(millions)
|
|
|
||||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
||
Current Liabilities
|
|
|
|
|
|
|
||
Securities due within one year
|
$
|
3,624
|
|
$ |
3,078
|
|||
Credit facility borrowings
|
|
73
|
|
—
|
||||
Short-term debt
|
|
334
|
|
3,298
|
||||
Accounts payable
|
|
914
|
|
875
|
||||
Accrued interest, payroll and taxes
|
|
836
|
|
848
|
||||
Other
|
|
1,866
|
|
1,537
|
||||
|
||||||||
Total current liabilities
|
|
7,647
|
|
9,636
|
||||
Long-Term Debt
|
|
|
|
|
|
|
||
Long-term debt
|
|
26,328
|
|
25,588
|
||||
Junior subordinated notes
|
|
3,430
|
|
3,981
|
||||
Remarketable subordinated notes
|
|
1,386
|
|
1,379
|
||||
Total long-term debt
|
|
31,144
|
|
30,948
|
||||
Deferred Credits and Other Liabilities
|
|
|
|
|
|
|
||
Deferred income taxes and investment tax credits
|
|
5,116
|
|
4,523
|
||||
Regulatory liabilities
|
|
6,840
|
|
6,916
|
||||
Asset retirement obligations
|
|
2,250
|
|
2,169
|
||||
Pension and other postretirement benefit liability
|
|
2,328
|
|
2,160
|
||||
Other
(1)
|
|
541
|
|
863
|
||||
Total deferred credits and other liabilities
|
|
17,075
|
|
16,631
|
||||
|
||||||||
Total liabilities
|
|
55,866
|
|
57,215
|
||||
Commitments and Contingencies (see Note 22)
|
|
|
|
|
|
|
||
Equity
|
|
|
|
|
|
|
||
Common stock – no par
(2)
|
|
12,588
|
|
9,865
|
||||
Retained earnings
|
|
9,219
|
|
7,936
|
||||
Accumulated other comprehensive loss
|
|
(1,700
|
)
|
(659
|
) | |||
Total common shareholders’ equity
|
|
20,107
|
|
17,142
|
||||
Noncontrolling interests
|
|
1,941
|
|
2,228
|
||||
Total equity
|
|
22,048
|
|
19,370
|
||||
|
||||||||
Total liabilities and equity
|
$
|
77,914
|
|
$ |
76,585
|
|||
(1)
|
See Note 9 for amounts attributable to related parties.
|
(2)
|
1 billion shares authorized; 681 million shares and 645 million shares outstanding at December 31, 2018 and 2017, respectively.
|
|
Common Stock
|
Dominion Energy
Shareholders |
|
|
|
|
|
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Common
Shareholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
|
||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
December 31, 2015
|
596
|
$ |
6,680
|
$ |
6,458
|
$ |
(474
|
) | $ |
12,664
|
$ |
938
|
$ |
13,602
|
||||||||||||||
Net income including noncontrolling interests
|
|
|
2,123
|
|
2,123
|
89
|
2,212
|
|||||||||||||||||||||
Contributions from SunEdison to Four Brothers and Three Cedars
|
|
|
|
|
—
|
189
|
189
|
|||||||||||||||||||||
Sale of interest in merchant solar projects
|
|
22
|
|
|
22
|
117
|
139
|
|||||||||||||||||||||
Sale of Dominion Energy Midstream common units—net of
costs |
|
|
|
|
—
|
482
|
482
|
|||||||||||||||||||||
Sale of Dominion Energy Midstream convertible preferred units—net of
offering costs |
|
|
|
|
—
|
490
|
490
|
|||||||||||||||||||||
Purchase of Dominion Energy Midstream common units
|
|
(3
|
) |
|
|
(3
|
) |
(14
|
) |
(17
|
) | |||||||||||||||||
Issuance of common stock
|
32
|
2,152
|
|
|
2,152
|
|
2,152
|
|||||||||||||||||||||
Stock awards (net of change in unearned compensation)
|
|
14
|
|
|
14
|
|
14
|
|||||||||||||||||||||
Present value of stock purchase contract payments related to RSNs
(1)
|
|
(191
|
) |
|
|
(191
|
) |
|
(191
|
) | ||||||||||||||||||
Tax effect of Dominion Energy Questar Pipeline contribution to Dominion Energy Midstream
|
|
(116
|
) |
|
|
(116
|
) |
|
(116
|
) | ||||||||||||||||||
Dividends ($2.80 per common share) and distributions
|
|
|
(1,727
|
) |
|
(1,727
|
) |
(62
|
) |
(1,789
|
) | |||||||||||||||||
Other comprehensive loss, net of tax
|
|
|
|
(325
|
) |
(325
|
) |
|
(325
|
) | ||||||||||||||||||
Other
|
|
(8
|
) |
|
|
(8
|
) |
6
|
(2
|
) | ||||||||||||||||||
December 31, 2016
|
628
|
$ |
8,550
|
$ |
6,854
|
$ |
(799
|
) | $ |
14,605
|
$ |
2,235
|
$ |
16,840
|
||||||||||||||
Net income including noncontrolling interests
|
|
|
2,999
|
|
2,999
|
121
|
3,120
|
|||||||||||||||||||||
Contributions from NRG to Four Brothers and Three Cedars
|
|
|
|
|
—
|
9
|
9
|
|||||||||||||||||||||
Issuance of common stock
|
17
|
1,302
|
|
|
1,302
|
|
1,302
|
|||||||||||||||||||||
Sale of Dominion Energy Midstream common units—net of offering costs
|
|
|
|
|
—
|
18
|
18
|
|||||||||||||||||||||
Stock awards (net of change in unearned compensation)
|
|
22
|
|
|
22
|
|
22
|
|||||||||||||||||||||
Dividends ($3.035 per common share) and distributions
|
|
|
(1,931
|
) |
|
(1,931
|
) |
(156
|
) |
(2,087
|
) | |||||||||||||||||
Other comprehensive income, net of tax
|
|
|
|
140
|
140
|
1
|
141
|
|||||||||||||||||||||
Other
|
|
(9
|
) |
14
|
|
5
|
|
5
|
||||||||||||||||||||
December 31, 2017
|
645
|
$ |
9,865
|
$ |
7,936
|
$ |
(659
|
) | $ |
17,142
|
$ |
2,228
|
$ |
19,370
|
||||||||||||||
Cumulative-effect of changes in accounting principles
|
|
|
(127
|
)
|
|
1,029
|
|
|
(1,023
|
)
|
|
(121
|
)
|
|
127
|
|
|
6
|
|
|||||||||
Net income including noncontrolling interests
|
|
|
|
|
|
2,447
|
|
|
|
|
|
2,447
|
|
|
102
|
|
|
2,549
|
|
|||||||||
Issuance of common stock
|
|
36
|
|
|
2,461
|
|
|
|
|
|
|
|
|
2,461
|
|
|
|
|
|
2,461
|
|
|||||||
Sale of Dominion Energy Midstream common units—net of offering costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|||||||
Remeasurement of noncontrolling interest in Dominion Energy Midstream
|
|
|
|
|
375
|
|
|
|
|
|
|
|
|
375
|
|
|
(375
|
)
|
|
—
|
|
|||||||
Stock awards (net of change in unearned compensation)
|
|
|
|
|
22
|
|
|
|
|
|
|
|
|
22
|
|
|
|
|
|
22
|
|
|||||||
Dividends ($3.34 per common share) and distributions
|
|
|
|
|
|
|
|
(2,185
|
)
|
|
|
|
|
(2,185
|
)
|
|
(146
|
)
|
|
(2,331
|
)
|
|||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
(18
|
)
|
|
(18
|
)
|
|
1
|
|
|
(17
|
)
|
|||||||
Other
|
|
|
|
|
(8
|
)
|
|
(8
|
)
|
|
|
|
|
(16
|
)
|
|
|
|
|
(16
|
)
|
|||||||
December 31, 2018
|
|
681
|
|
$
|
12,588
|
|
$
|
9,219
|
|
$
|
(1,700
|
)
|
$
|
20,107
|
|
$
|
1,941
|
|
$
|
22,048
|
|
|||||||
(1)
|
See Note 17 for further information.
|
Year Ended December 31,
|
2018
|
|
|
2017
|
|
|
2016
|
|
||||
(millions)
|
|
|
|
|
|
|
|
|
|
|||
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income including noncontrolling interests
|
$
|
2,549
|
|
|
$
|
3,120
|
|
|
$
|
2,212
|
|
|
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization (including nuclear fuel)
|
|
|
2,280
|
|
|
|
2,202
|
|
|
|
1,849
|
|
Deferred income taxes and investment tax credits
|
|
|
517
|
|
|
|
(3
|
)
|
|
|
725
|
|
Current income tax for Dominion Energy Questar Pipeline contribution to Dominion Energy Midstream
|
|
|
—
|
|
|
|
—
|
|
|
|
(212
|
)
|
Proceeds from assignment of tower rental portfolio
|
|
|
—
|
|
|
|
91
|
|
|
|
—
|
|
Contribution to pension plan
|
|
|
—
|
|
|
|
(75
|
)
|
|
|
—
|
|
Gains on sales of assets and equity method investments
|
|
|
(1,006
|
)
|
|
|
(148
|
)
|
|
|
(50
|
)
|
Provision for rate credits to electric utility customers
|
|
|
77
|
|
|
|
—
|
|
|
|
—
|
|
Charges associated with equity method investments
|
|
|
—
|
|
|
|
158
|
|
|
|
—
|
|
Charges associated with future ash pond and landfill closure costs
|
|
|
81
|
|
|
|
—
|
|
|
|
197
|
|
Impairment of assets and related charges
|
|
|
395
|
|
|
|
15
|
|
|
|
4
|
|
Net (gains) losses on nuclear decommissioning trusts funds and other investments
|
|
|
102
|
|
|
|
(117
|
)
|
|
|
(96
|
)
|
Other adjustments
|
|
|
19
|
|
|
|
33
|
|
|
|
8
|
|
Changes in:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(110
|
)
|
|
|
(103
|
)
|
|
|
(286
|
)
|
Inventories
|
|
|
(29
|
)
|
|
|
15
|
|
|
|
1
|
|
Deferred fuel and purchased gas costs, net
|
|
|
(247
|
)
|
|
|
(71
|
)
|
|
|
54
|
|
Prepayments
|
|
|
(51
|
)
|
|
|
(62
|
)
|
|
|
21
|
|
Accounts payable
|
|
|
67
|
|
|
|
(89
|
)
|
|
|
97
|
|
Accrued interest, payroll and taxes
|
|
|
(12
|
)
|
|
|
64
|
|
|
|
203
|
|
Margin deposit assets and liabilities
|
|
|
—
|
|
|
|
(10
|
)
|
|
|
(66
|
)
|
Net realized and unrealized changes related to derivative activities
|
|
|
181
|
|
|
|
44
|
|
|
|
(335
|
)
|
Asset retirement obligations
|
|
|
(35
|
)
|
|
|
(94
|
)
|
|
|
(61
|
)
|
Pension and other postretirement benefits
|
|
|
(114
|
)
|
|
|
(177
|
)
|
|
|
(152
|
)
|
Other operating assets and liabilities
|
|
|
109
|
|
|
|
(291
|
)
|
|
|
38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
4,773
|
|
|
|
4,502
|
|
|
|
4,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant construction and other property additions (including nuclear fuel)
|
|
|
(4,254
|
)
|
|
|
(5,504
|
)
|
|
|
(6,085
|
)
|
Acquisition of Dominion Energy Questar, net of cash acquired
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,381
|
)
|
Acquisition of solar development projects
|
|
|
(151
|
)
|
|
|
(405
|
)
|
|
|
(40
|
)
|
Proceeds from sales of securities
|
|
|
1,804
|
|
|
|
1,831
|
|
|
|
1,422
|
|
Purchases of securities
|
|
|
(1,894
|
)
|
|
|
(1,940
|
)
|
|
|
(1,504
|
)
|
Proceeds from the sale of certain retail energy marketing assets
|
|
|
54
|
|
|
|
68
|
|
|
|
—
|
|
Proceeds from sales of assets and equity method investments
|
|
|
2,379
|
|
|
|
—
|
|
|
|
—
|
|
Proceeds from assignment of shale development rights
|
|
|
109
|
|
|
|
70
|
|
|
|
10
|
|
Contributions to equity method affiliates
|
|
|
(428
|
)
|
|
|
(370
|
)
|
|
|
(198
|
)
|
Distributions from equity method affiliates
|
|
|
36
|
|
|
|
275
|
|
|
|
2
|
|
Other
|
|
|
(13
|
)
|
|
|
33
|
|
|
|
83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(2,358
|
)
|
|
|
(5,942
|
)
|
|
|
(10,691
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance (repayment) of short-term debt, net
|
|
|
(2,964
|
)
|
|
|
143
|
|
|
|
(654
|
)
|
Issuance of short-term notes
|
|
|
1,450
|
|
|
|
—
|
|
|
|
1,200
|
|
Repayment and repurchase of short-term notes
|
|
|
(1,450
|
)
|
|
|
(250
|
)
|
|
|
(1,800
|
)
|
Issuance and remarketing of long-term debt
|
|
|
6,362
|
|
|
|
3,880
|
|
|
|
7,722
|
|
Repayment and repurchase of long-term debt (including redemption premiums)
|
|
|
(5,682
|
)
|
|
|
(1,572
|
)
|
|
|
(1,610
|
)
|
Credit facility borrowings
|
|
|
73
|
|
|
|
—
|
|
|
|
—
|
|
Net proceeds from issuance of Dominion Energy Midstream common units
|
|
|
4
|
|
|
|
18
|
|
|
|
482
|
|
Net proceeds from issuance of Dominion Energy Midstream preferred units
|
|
|
—
|
|
|
|
—
|
|
|
|
490
|
|
Proceeds from sale of interest in merchant solar projects
|
|
|
—
|
|
|
|
—
|
|
|
|
117
|
|
Contributions from NRG and SunEdison to Four Brothers and Three Cedars
|
|
|
—
|
|
|
|
9
|
|
|
|
189
|
|
Year Ended December 31,
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
(millions)
|
|
|
|
|
|
|
|
|
|
|||
Issuance of common stock
|
|
|
2,461
|
|
|
|
1,302
|
|
|
|
2,152
|
|
Common dividend payments
|
|
|
(2,185
|
)
|
|
|
(1,931
|
)
|
|
|
(1,727
|
)
|
Other
|
|
|
(278
|
)
|
|
|
(296
|
)
|
|
|
(331
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(2,209
|
)
|
|
|
1,303
|
|
|
|
6,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash, restricted cash and equivalents
|
|
|
206
|
|
|
|
(137
|
)
|
|
|
(310
|
)
|
Cash, restricted cash and equivalents at beginning of year
|
|
|
185
|
|
|
|
322
|
|
|
|
632
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, restricted cash and equivalents at end of year
|
|
$
|
391
|
|
|
$
|
185
|
|
|
$
|
322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow Information
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during the year for:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and related charges, excluding capitalized amounts
|
|
$
|
1,362
|
|
|
$
|
1,083
|
|
|
$
|
905
|
|
Income taxes
|
|
|
89
|
|
|
|
9
|
|
|
|
145
|
|
Significant noncash investing and financing activities:
(1)(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued capital expenditures
|
|
|
307
|
|
|
|
343
|
|
|
|
427
|
|
Receivables from sales of assets and equity method investments
|
|
|
159
|
|
|
|
—
|
|
|
|
—
|
|
Guarantee provided by equity method affiliate
|
|
|
—
|
|
|
|
30
|
|
|
|
—
|
|
(1)
|
See Note 9 for noncash activities related to equity method investments.
|
(2)
|
See Note 19 for noncash activities related to the remeasurement of Dominion Energy’s noncontrolling interest in Dominion Energy Midstream.
|
Year Ended December 31,
|
2018
|
|
2017
|
2016
|
||||||||
(millions)
|
|
|
|
|||||||||
Operating Revenue
(1)
|
$
|
7,619
|
|
$ |
7,556
|
$ |
7,588
|
|||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|||
Electric fuel and other energy-related purchases
(1)
|
|
2,318
|
|
1,909
|
1,973
|
|||||||
Purchased electric capacity
|
|
122
|
|
6
|
99
|
|||||||
Other operations and maintenance:
|
|
|
|
|
|
|||||||
Affiliated suppliers
|
|
305
|
|
309
|
310
|
|||||||
Other
|
|
1,371
|
|
1,169
|
1,547
|
|||||||
Depreciation and amortization
|
|
1,132
|
|
1,141
|
1,025
|
|||||||
Other taxes
|
|
300
|
|
290
|
284
|
|||||||
Total operating expenses
|
|
5,548
|
|
4,824
|
5,238
|
|||||||
Income from operations
|
|
2,071
|
|
2,732
|
2,350
|
|||||||
Other income
|
|
22
|
|
76
|
56
|
|||||||
Interest and related charges
(1)
|
|
511
|
|
494
|
461
|
|||||||
Income from operations before income tax expense
|
|
1,582
|
|
2,314
|
1,945
|
|||||||
Income tax expense
|
|
300
|
|
774
|
727
|
|||||||
Net Income
|
$
|
1,282
|
|
$ |
1,540
|
$ |
1,218
|
|||||
(1)
|
See Note 24 for amounts attributable to affiliates.
|
Year Ended December 31,
|
2018
|
|
2017
|
2016
|
||||||||
(millions)
|
|
|
|
|||||||||
Net Income
|
$
|
1,282
|
|
$ |
1,540
|
$ |
1,218
|
|||||
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|||||||
Net deferred gains (losses) on derivatives-hedging activities, net of $(1), $3 and $1 tax
|
|
1
|
|
(5
|
) |
(2
|
) | |||||
Changes in unrealized net gains (losses) on nuclear decommissioning trust funds, net of $—, $(16) and $(7) tax
|
|
—
|
|
24
|
11
|
|||||||
Amounts reclassified to net income:
|
|
|
|
|
|
|||||||
Net derivative (gains) losses-hedging activities, net of $—, $— and $— tax
|
|
1
|
|
1
|
1
|
|||||||
Net realized (gains) losses on nuclear decommissioning trust funds, net of $—, $3 and $2 tax
|
|
—
|
|
(4
|
) |
(4
|
) | |||||
Other comprehensive income
|
|
2
|
|
16
|
6
|
|||||||
Comprehensive income
|
$
|
1,284
|
|
$ |
1,556
|
$ |
1,224
|
|||||
At December 31,
|
2018
|
|
2017
|
|||||
(millions)
|
|
|
||||||
ASSETS
|
|
|
|
|
|
|
||
Current Assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
29
|
|
$ |
14
|
|||
Customer receivables (less allowance for doubtful accounts of $9 and $10)
|
|
999
|
|
951
|
||||
Other receivables (less allowance for doubtful accounts of $3 and $1)
|
|
76
|
|
64
|
||||
Affiliated receivables
|
|
101
|
|
3
|
||||
Inventories (average cost method):
|
|
|
|
|
||||
Materials and supplies
|
|
550
|
|
531
|
||||
Fossil fuel
|
|
287
|
|
319
|
||||
Prepayments
|
|
28
|
|
27
|
||||
Regulatory assets
|
|
424
|
|
205
|
||||
Other
(1)
|
|
77
|
|
110
|
||||
Total current assets
|
|
2,571
|
|
2,224
|
||||
Investments
|
|
|
|
|
|
|
||
Nuclear decommissioning trust funds
|
|
2,369
|
|
2,399
|
||||
Other
|
|
3
|
|
3
|
||||
Total investments
|
|
2,372
|
|
2,402
|
||||
Property, Plant and Equipment
|
|
|
|
|
|
|
||
Property, plant and equipment
|
|
44,524
|
|
42,329
|
||||
Accumulated depreciation and amortization
|
|
(14,003
|
)
|
(13,277
|
) | |||
|
|
30,521
|
|
29,052
|
||||
Deferred Charges and Other Assets
|
|
|
|
|
|
|
||
Pension and other postretirement benefit assets
(1)
|
|
254
|
|
199
|
||||
Intangible assets
|
|
250
|
|
233
|
||||
Regulatory assets
|
|
737
|
|
810
|
||||
Other
(1)
|
|
175
|
|
219
|
||||
Total deferred charges and other assets
|
|
1,416
|
|
1,461
|
||||
Total assets
|
$
|
36,880
|
|
$
|
35,139
|
|||
(1)
|
See Note 24 for amounts attributable to affiliates.
|
At December 31,
|
2018
|
|
2017
|
|||||
(millions)
|
|
|
||||||
LIABILITIES AND COMMON SHAREHOLDER’S EQUITY
|
|
|
|
|
|
|
||
Current Liabilities
|
|
|
|
|
|
|
||
Securities due within one year
|
$
|
350
|
|
$ |
850
|
|||
Short-term debt
|
|
314
|
|
542
|
||||
Accounts payable
|
|
339
|
|
361
|
||||
Payables to affiliates
|
|
209
|
|
125
|
||||
Affiliated current borrowings
|
|
224
|
|
33
|
||||
Accrued interest, payroll and taxes
|
|
248
|
|
256
|
||||
Asset retirement obligations
|
|
245
|
|
216
|
||||
Regulatory liabilities
|
|
299
|
|
127
|
||||
Other
(1)
|
|
587
|
|
410
|
||||
Total current liabilities
|
|
2,815
|
|
2,920
|
||||
Long-Term Debt
|
|
11,321
|
|
10,496
|
||||
Deferred Credits and Other Liabilities
|
|
|
|
|
|
|
||
Deferred income taxes and investment tax credits
|
|
3,017
|
|
2,728
|
||||
Asset retirement obligations
|
|
1,200
|
|
1,149
|
||||
Regulatory liabilities
|
|
4,647
|
|
4,760
|
||||
Pension and other postretirement benefit liability
(1)
|
|
632
|
|
505
|
||||
Other
|
|
201
|
|
357
|
||||
Total deferred credits and other liabilities
|
|
9,697
|
|
9,499
|
||||
Total liabilities
|
|
23,833
|
|
22,915
|
||||
Commitments and Contingencies (see Note 22)
|
|
|
|
|
|
|
||
Common Shareholder’s Equity
|
|
|
|
|
|
|
||
Common stock – no par
(2)
|
|
5,738
|
|
5,738
|
||||
Other
paid-in
capital
|
|
1,113
|
|
1,113
|
||||
Retained earnings
|
|
6,208
|
|
5,311
|
||||
Accumulated other comprehensive income (loss)
|
|
(12
|
)
|
62
|
||||
Total common shareholder’s equity
|
|
13,047
|
|
12,224
|
||||
Total liabilities and shareholder’s equity
|
$
|
36,880
|
|
$
|
35,139
|
|||
(1)
|
See Note 24 for amounts attributable to affiliates.
|
(2)
|
500,000 shares authorized; 274,723 shares outstanding at December 31, 2018 and 2017.
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
Other
Paid-In
Capital |
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Total
|
|
||||||||||||
(millions, except for shares)
|
(thousands)
|
|
|
|
|
|
||||||||||||||||||
December 31, 2015
|
275
|
$ |
5,738
|
$ |
1,113
|
$ |
3,750
|
$ |
40
|
$ |
10,641
|
|||||||||||||
Net income
|
|
|
|
1,218
|
|
1,218
|
||||||||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
6
|
6
|
||||||||||||||||||
December 31, 2016
|
275
|
5,738
|
1,113
|
4,968
|
46
|
11,865
|
||||||||||||||||||
Net income
|
|
|
|
1,540
|
|
1,540
|
||||||||||||||||||
Dividends
|
|
|
|
(1,199
|
) |
|
(1,199
|
) | ||||||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
16
|
16
|
||||||||||||||||||
Other
|
|
|
|
2
|
|
2
|
||||||||||||||||||
December 31, 2017
|
275
|
5,738
|
1,113
|
5,311
|
62
|
12,224
|
||||||||||||||||||
Cumulative-effect of changes in accounting principles
|
|
|
|
|
79
|
|
|
(76
|
)
|
|
3
|
|
||||||||||||
Net income
|
|
|
|
|
1,282
|
|
|
|
1,282
|
|
||||||||||||||
Dividends
|
|
|
|
|
(464
|
)
|
|
|
(464
|
)
|
||||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
2
|
|
|
2
|
|
||||||||||||||
December 31, 2018
|
|
275
|
|
$
|
5,738
|
|
$
|
1,113
|
|
$
|
6,208
|
|
$
|
(12
|
)
|
$
|
13,047
|
|
||||||
Year Ended December 31,
|
2018
|
|
2017
|
2016
|
||||||||
(millions)
|
|
|
|
|||||||||
Operating Activities
|
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
1,282
|
|
$ |
1,540
|
$ |
1,218
|
|||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|||||||
Depreciation and amortization (including nuclear fuel)
|
|
1,309
|
|
1,333
|
1,210
|
|||||||
Deferred income taxes and investment tax credits
|
|
224
|
|
269
|
469
|
|||||||
Proceeds from assignment of rental portfolio
|
|
—
|
|
91
|
—
|
|||||||
Charges associated with future ash pond and landfill closure costs
|
|
81
|
|
—
|
197
|
|||||||
Provision for rate credits to customers
|
|
77
|
|
—
|
—
|
|||||||
Other adjustments
|
|
(21
|
)
|
(36
|
) |
(16
|
) | |||||
Changes in:
|
|
|
|
|
|
|||||||
Accounts receivable
|
|
(60
|
)
|
(27
|
) |
(65
|
) | |||||
Affiliated receivables and payables
|
|
(14
|
)
|
125
|
220
|
|||||||
Inventories
|
|
13
|
|
3
|
20
|
|||||||
Prepayments
|
|
(1
|
)
|
3
|
8
|
|||||||
Deferred fuel expenses, net
|
|
(269
|
)
|
(59
|
) |
69
|
||||||
Accounts payable
|
|
(26
|
)
|
(42
|
) |
25
|
||||||
Accrued interest, payroll and taxes
|
|
(8
|
)
|
17
|
49
|
|||||||
Net realized and unrealized changes related to derivative activities
|
|
119
|
|
13
|
(153
|
) | ||||||
Asset retirement obligations
|
|
(54
|
)
|
(88
|
) |
(59
|
) | |||||
Other operating assets and liabilities
|
|
188
|
|
(181
|
) |
77
|
||||||
Net cash provided by operating activities
|
|
2,840
|
|
2,961
|
3,269
|
|||||||
Investing Activities
|
|
|
|
|
|
|
|
|
|
|||
Plant construction and other property additions
|
|
(2,228
|
)
|
(2,496
|
) |
(2,489
|
) | |||||
Purchases of nuclear fuel
|
|
(173
|
)
|
(192
|
) |
(153
|
) | |||||
Acquisition of solar development projects
|
|
(141
|
)
|
(41
|
) |
(7
|
) | |||||
Purchases of securities
|
|
(925
|
)
|
(884
|
) |
(775
|
) | |||||
Proceeds from sales of securities
|
|
887
|
|
849
|
733
|
|||||||
Other
|
|
(63
|
)
|
(41
|
) |
(33
|
) | |||||
Net cash used in investing activities
|
|
(2,643
|
)
|
(2,805
|
) |
(2,724
|
) | |||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
|||
Issuance (repayment) of short-term debt, net
|
|
(228
|
)
|
477
|
(1,591
|
) | ||||||
Issuance (repayment) of affiliated current borrowings, net
|
|
191
|
|
(229
|
) |
(114
|
) | |||||
Issuance and remarketing of long-term debt
|
|
1,300
|
|
1,500
|
1,688
|
|||||||
Repayment and repurchase of long-term debt
|
|
(964
|
)
|
(681
|
) |
(517
|
) | |||||
Common dividend payments to parent
|
|
(464
|
)
|
(1,199
|
) |
—
|
||||||
Other
|
|
(18
|
)
|
(11
|
) |
(18
|
) | |||||
Net cash used in financing activities
|
|
(183
|
)
|
(143
|
) |
(552
|
) | |||||
Increase (decrease) in cash, restricted cash and equivalents
|
|
14
|
|
13
|
(7
|
) | ||||||
Cash, restricted cash and equivalents at beginning of year
|
|
24
|
|
11
|
18
|
|||||||
Cash, restricted cash and equivalents at end of year
|
$
|
38
|
|
$ |
24
|
$ |
11
|
|||||
Supplemental Cash Flow Information
|
|
|
|
|
|
|
|
|
|
|||
Cash paid during the year for:
|
|
|
|
|
|
|||||||
Interest and related charges, excluding capitalized amounts
|
$
|
498
|
|
$ |
458
|
$ |
435
|
|||||
Income taxes
|
|
128
|
|
362
|
79
|
|||||||
Significant noncash investing activities:
|
|
|
|
|
|
|||||||
Accrued capital expenditures
|
|
204
|
|
169
|
256
|
Year Ended December 31,
|
2018
|
|
2017
|
2016
|
||||||||
(millions)
|
|
|
|
|||||||||
Operating Revenue
(1)
|
$
|
1,996
|
|
$ |
1,523
|
$
|
1,374
|
|||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|||
Purchased
(
gas
e
)
xcess
(1)
|
|
(10
|
)
|
109
|
92
|
|||||||
Other energy-related purchases
|
|
4
|
|
4
|
5
|
|||||||
Other operations and maintenance:
|
|
|
|
|
|
|||||||
Affiliated suppliers
|
|
132
|
|
123
|
82
|
|||||||
Other
(1)
|
|
584
|
|
449
|
365
|
|||||||
Depreciation and amortization
|
|
333
|
|
242
|
191
|
|||||||
Other taxes
|
|
120
|
|
99
|
82
|
|||||||
Impairment of assets and related charges
|
|
163
|
|
15
|
—
|
|||||||
Gains on sales of assets
|
|
(117
|
)
|
(70
|
) |
(44
|
) | |||||
Total operating expenses
|
|
1,209
|
|
971
|
773
|
|||||||
Income from continuing operations
|
|
787
|
|
552
|
601
|
|||||||
Earnings from equity method investee
s
|
|
54
|
|
47
|
44
|
|||||||
Other income
|
|
89
|
|
62
|
43
|
|||||||
Interest and related charges
(1)
|
|
174
|
|
60
|
65
|
|||||||
Income from continuing operations before income tax expense
(
benefit
)
|
|
756
|
|
601
|
623
|
|||||||
Income tax expense (benefit)
|
|
124
|
|
(65
|
) |
197
|
||||||
Net
i
ncome from continuing operations
|
|
632
|
|
666
|
426
|
|||||||
Net
i
ncome from discontinued operations
(2)
|
|
24
|
|
163
|
152
|
|||||||
Net
i
ncome including noncontrolling interest
|
|
656
|
|
829
|
578
|
|||||||
Noncontrolling interest
|
|
175
|
|
126
|
101
|
|||||||
Net
i
ncome attributable to Dominion Energy Gas
|
$
|
481
|
|
$ |
703
|
$ |
477
|
|||||
(1)
|
See Note 24 for amounts attributable to related parties.
|
(2)
|
Includes income tax expense of less than
$1
million, $91 million and $80 million in 2018, 2017 and 2016, respectively.
|
Year Ended December 31,
|
2018
|
|
2017
|
2016
|
||||||||
(millions)
|
|
|
|
|||||||||
Net income including noncontrolling interest
|
$
|
656
|
|
$ |
829
|
$ |
578
|
|||||
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|||||||
Net deferred gains (losses) on derivatives-hedging activities, net of $5, $(3) and $10 tax
|
|
(16
|
)
|
6
|
(16
|
) | ||||||
Changes in net unrecognized pension benefit (costs), net of $20, $(8) and $14 tax
|
|
(52
|
)
|
20
|
(20
|
) | ||||||
Amounts reclassified to net income:
|
|
|
|
|
|
|||||||
Net derivative (gains) losses-hedging activities, net of $(7), $2 and $(6) tax
|
|
19
|
|
(4
|
) |
9
|
||||||
Net pension and other postretirement benefit costs, net of $(2), $(2) and $(2) tax
|
|
4
|
|
4
|
3
|
|||||||
Total other comprehensive income (loss)
|
|
(45
|
)
|
26
|
(24
|
) | ||||||
Comprehensive income including noncontrolling interests
|
|
611
|
|
855
|
554
|
|||||||
Comprehensive income attributable to noncontrolling interests
|
|
175
|
|
127
|
101
|
|||||||
Comprehensive income attributable to Dominion Energy Gas
|
$
|
436
|
|
$ |
728
|
$ |
453
|
|||||
At December 31,
|
2018
|
|
2017
|
|||||
(millions)
|
|
|
|
|||||
ASSETS
|
|
|
|
|
|
|
||
Current Assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
99
|
|
$ |
15
|
|||
Customer receivables (less allowance for doubtful accounts of less than $1 and $1)
(1)
|
|
187
|
|
96
|
||||
Other receivables
(1)
|
|
18
|
|
15
|
||||
Affiliated receivables
|
|
319
|
|
65
|
||||
Affiliated notes receivable
|
|
819
|
|
519
|
||||
Inventories:
|
|
|
|
|
||||
Materials and supplies
|
|
95
|
|
71
|
||||
Gas stored
|
|
2
|
|
1
|
||||
Prepayments
|
|
77
|
|
59
|
||||
Gas imbalances
(1)
|
|
187
|
|
64
|
||||
Current assets of discontinued operations
|
|
444
|
|
358
|
||||
Other
(1)
|
|
|
101
|
|
|
|
59
|
|
Total current assets
|
|
2,348
|
|
1,322
|
||||
Investments
|
|
|
|
|
|
|
||
Affiliated notes receivables
|
|
4,317
|
|
1,450
|
||||
Investment in equity method investments
|
|
339
|
|
349
|
||||
Total investments
|
|
4,656
|
|
1,799
|
||||
Property, Plant and Equipment
|
|
|
|
|
|
|
||
Property, plant and equipment
|
|
14,700
|
|
14,252
|
||||
Accumulated depreciation and amortization
|
|
(3,219
|
)
|
(2,930
|
) | |||
Total property, plant and equipment, net
|
|
11,481
|
|
11,322
|
||||
Deferred Charges and Other Assets
|
|
|
|
|
|
|
||
Goodwill
|
|
1,471
|
|
1,466
|
||||
Intangible assets, net
|
|
115
|
|
91
|
||||
Pension and other postretirement benefit assets
(1)
|
|
705
|
|
716
|
||||
Regulatory assets
|
|
52
|
|
41
|
||||
Other
|
|
74
|
|
81
|
||||
Total deferred charges and other assets
|
|
2,417
|
|
2,395
|
||||
Noncurrent assets of discontinued operations
|
|
5,849
|
|
5,653
|
||||
Total assets
|
$
|
26,751
|
|
$ |
22,491
|
|||
(1)
|
See Note 24 for amounts attributable to related parties.
|
At December 31,
|
2018
|
|
2017
|
|||||
(millions)
|
|
|
|
|||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
||
Current Liabilities
|
|
|
|
|
|
|
||
Securities due within one year
|
$
|
748
|
|
$ |
5
|
|||
Credit facility borrowings
|
|
73
|
|
—
|
||||
Short-term debt
|
|
10
|
|
629
|
||||
Accounts payable
|
|
76
|
|
87
|
||||
Payables to affiliates
|
|
124
|
|
138
|
||||
Affiliated current borrowings
|
|
3,097
|
|
2,806
|
||||
Accrued interest, payroll and taxes
|
|
116
|
|
107
|
||||
Current liabilities of discontinued operations
|
|
|
1,273
|
|
|
|
969
|
|
Other
(1)
|
|
238
|
|
142
|
||||
Total current liabilities
|
|
5,755
|
|
4,883
|
||||
Long-Term Debt
|
|
7,022
|
|
4,295
|
||||
Deferred Credits and Other Liabilities
|
|
|
|
|
|
|
||
Deferred income taxes and investment tax credits
|
|
1,330
|
|
1,006
|
||||
Regulatory liabilities
|
|
765
|
|
769
|
||||
Other
(1)
|
|
118
|
|
126
|
||||
Total deferred credits and other liabilities
|
|
2,213
|
|
1,901
|
||||
Noncurrent liabilities of discontinued operations
|
|
2,896
|
|
2,917
|
||||
Total liabilities
|
|
17,886
|
|
13,996
|
||||
Commitments and Contingencies (see Note 22)
|
|
|
|
|
|
|
||
Equity
|
|
|
|
|
|
|
||
Predecessor equity
|
|
|
1,804
|
|
|
|
1,361
|
|
Membership interests
|
|
4,566
|
|
4,261
|
||||
Accumulated other comprehensive loss
|
|
(169
|
)
|
(98
|
) | |||
Total members’ equity
|
|
6,201
|
|
5,524
|
||||
Noncontrolling interests
|
|
2,664
|
|
2,971
|
||||
Total equity
|
|
8,865
|
|
8,495
|
||||
Total liabilities and equity
|
$
|
26,751
|
|
$ |
22,491
|
|||
(1)
|
See Note 24 for amounts attributable to related parties.
|
Year Ended December 31,
|
2018
|
|
2017
|
2016
|
||||||||
(millions)
|
|
|
|
|
||||||||
Operating Activities
|
|
|
|
|
|
|
|
|
|
|||
Net Income including noncontrolling interest
|
$
|
656
|
|
$ |
829
|
$ |
578
|
|||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|||||||
Depreciation and amortization
|
|
424
|
|
328
|
260
|
|||||||
Deferred income taxes and investment tax credits
|
|
380
|
|
(19
|
) |
267
|
||||||
Gains on sales of assets
|
|
(109
|
)
|
(70
|
) |
(50
|
) | |||||
Impairment of assets and related charges
|
|
385
|
|
15
|
—
|
|||||||
Other adjustments
|
|
21
|
14
|
4
|
||||||||
Changes in:
|
|
|
|
|
|
|||||||
Accounts receivable
|
|
(101
|
)
|
(4
|
) |
(67
|
) | |||||
Affiliated receivables and payables
|
|
(310
|
)
|
26
|
78
|
|||||||
Inventories
|
|
(28
|
)
|
(5
|
) |
9
|
||||||
Prepayments
|
|
(23
|
)
|
(20
|
) |
(1
|
) | |||||
Accounts payable
|
|
1
|
(7
|
) |
11
|
|||||||
Accrued interest, payroll and taxes
|
|
22
|
|
26
|
37
|
|||||||
Pension and other postretirement benefits
|
|
(153
|
)
|
(143
|
) |
(141
|
) | |||||
Other operating assets and liabilities
|
|
30
|
|
(13
|
) |
(9
|
) | |||||
Net cash provided by operating activities
|
|
1,195
|
|
957
|
976
|
|||||||
Investing Activities
|
|
|
|
|
|
|
|
|
|
|||
Plant construction and other property additions
|
|
(1,109
|
)
|
(1,815
|
) |
(2,188
|
) | |||||
Dominion Energy Questar Pipeline
A
cquisition
|
|
—
|
|
—
|
(819
|
) | ||||||
Loan to Dominion Energy from Cove Point
|
|
(2,986
|
)
|
—
|
—
|
|||||||
Advances to Dominion Energy, net of repayment
|
|
—
|
|
32
|
(21
|
) | ||||||
Proceeds from assignments of shale development rights
|
|
109
|
|
70
|
10
|
|||||||
Other
|
|
(20
|
)
|
(27
|
) |
(21
|
) | |||||
Net cash used in investing activities
|
|
(4,006
|
)
|
(1,740
|
) |
(3,039
|
) | |||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
|||
Issuance (repayment) of short-term debt, net
|
|
(619
|
)
|
169
|
69
|
|||||||
Issuance of affiliated current borrowings, net
|
|
291
|
|
628
|
1,136
|
|||||||
Issuance of long-term debt
|
|
3,750
|
|
—
|
980
|
|||||||
Repayment of long-term debt
|
|
(255
|
)
|
—
|
(400
|
) | ||||||
Credit facility borrowings
|
|
73
|
|
—
|
—
|
|||||||
Net proceeds from sale of Dominion Energy Midstream Common Units
|
|
4
|
|
18
|
482
|
|||||||
Net proceeds from sale of Dominion Energy Midstream Series A Preferred Units
|
|
—
|
|
—
|
490
|
|||||||
Contributions from
Dominion Energy
|
|
25
|
|
25
|
25
|
|||||||
Dividends and distribution
s
|
|
(296
|
)
|
(121
|
) |
(633
|
) | |||||
Other
|
|
(21
|
)
|
—
|
(36
|
) | ||||||
Net cash provided by financing activities
|
|
2,952
|
|
719
|
2,113
|
|||||||
Increase (decrease) in cash, restricted cash and equivalents
|
|
141
|
|
(64
|
) |
50
|
||||||
Cash, restricted cash and equivalents at beginning of year
|
|
57
|
|
121
|
71
|
|||||||
Cash, restricted cash and equivalents at end of year
|
$
|
198
|
|
$ |
57
|
$ |
121
|
|||||
Supplemental Cash Flow Information
|
|
|
|
|
|
|
|
|
|
|||
Cash paid (received) during the year for:
|
|
|
|
|
|
|||||||
Interest and related charges, excluding capitalized amounts
|
$
|
162
|
|
$ |
55
|
$ |
62
|
|||||
Income taxes
|
|
79
|
|
11
|
(87
|
) | ||||||
Significant noncash investing
and financi
activities:
ng
|
|
|
|
|
|
|||||||
Accrued capital expenditures
|
|
59
|
|
69
|
87
|
|||||||
Equity
Dominion Energy
contributions from
|
|
23
|
|
26
|
183
|
|||||||
Equity contribution to DEQPS for employee related assets and liabilities
|
|
—
|
|
—
|
37
|
|
●
|
Regulated electric sales
|
|
●
|
Nonregulated electric sales
|
|
●
|
Regulated gas sales
|
|
●
|
Nonregulated gas sales
|
|
●
|
Regulated gas transportation and storage sales
|
|
●
|
Nonregulated gas transportation and storage sales
|
|
●
|
Other regulated revenue
|
|
●
|
Other nonregulated revenue
|
|
●
|
Other revenue
|
|
●
|
Regulated electric sales
|
|
●
|
Nonregulated electric sales
|
|
●
|
Regulated gas sales
|
|
●
|
Nonregulated gas sales
|
|
●
|
Gas transportation and storage sales
|
|
●
|
Other revenue
|
|
●
|
Regulated electric sales
|
|
●
|
Other regulated revenue
|
|
●
|
Other nonregulated revenue
non-jurisdictional
customers from certain solar facilities, revenue from renting space on certain electric transmission poles and distribution towers and service concession arrangements.
|
|
●
|
Other revenue
|
|
●
|
Regulated electric sales
|
|
●
|
Other revenue
|
|
●
|
Regulated gas sales - wholesale
|
|
●
|
Nonregulated gas sales
|
|
●
|
Regulated gas transportation and storage sales
|
|
●
|
Nonregulated gas transportation and storage sales
|
|
●
|
Management service revenue
|
|
●
|
Other regulated revenue
|
|
●
|
Other nonregulated revenue
|
|
●
|
Other revenue
|
|
●
|
Regulated gas sales
|
|
●
|
Nonregulated gas sales
|
|
●
|
Gas transportation and storage sales
|
|
●
|
Other revenue
|
At December 31,
|
2018
|
|
2017
|
|||||
(millions)
|
|
|
||||||
Dominion Energy
|
$
|
35
|
|
$ |
30
|
|||
Virginia Power
|
|
16
|
|
17
|
||||
Dominion Energy Gas
|
|
7
|
|
6
|
|
Cash, Restricted Cash and Equivalents at End/Beginning of Year
|
|||||||||||||||
|
December 31,
2018 |
|
December 31,
2017 |
December 31,
2016 |
December 31,
2015 |
|||||||||||
(millions)
|
|
|
|
|
||||||||||||
Dominion Energy
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
268
|
|
$ |
120
|
$ |
261
|
$ |
607
|
|||||||
Restricted cash and equivalents
(1)
|
|
123
|
|
65
|
61
|
25
|
||||||||||
Cash, restricted cash and equivalents shown in the
Consolidated Statements of Cash Flows |
$
|
391
|
|
$ |
185
|
$ |
322
|
$ |
632
|
|||||||
Virginia Power
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
29
|
|
$ |
14
|
$ |
11
|
$ |
18
|
|||||||
Restricted cash and equivalents
(1)
|
|
9
|
|
10
|
—
|
—
|
||||||||||
Cash, restricted cash and equivalents shown in the
Consolidated Statements of Cash Flows |
$
|
38
|
|
$ |
24
|
$ |
11
|
$ |
18
|
|||||||
Dominion Energy Gas
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
(
2
)
|
$
|
108
|
|
$ |
18
|
$ |
76
|
$ |
57
|
|||||||
Restricted cash and equivalents
(1)
|
|
90
|
|
39
|
45
|
14
|
||||||||||
Cash, restricted cash and equivalents shown in the
Consolidated Statements of Cash Flows |
$
|
198
|
|
$ |
57
|
$ |
121
|
$ |
71
|
|||||||
(1)
|
Restricted cash and equivalent balances are presented within other current assets in the Companies’ Consolidated Balance Sheets.
|
(2)
|
At December 31, 2015, 2016, 2017 and 2018, Dominion Energy Gas had $5 million, $14 million, $3 million and $9 million of cash and cash equivalents included in current assets of discontinued operations, respectively.
|
Year Ended December 31,
|
2018
|
|
2017
|
2016
|
||||||||
(percent)
|
|
|
|
|||||||||
Dominion Energy
|
|
|
|
|
|
|
|
|
|
|||
Generation
|
|
2.71
|
|
2.94
|
2.83
|
|||||||
Transmission
|
|
2.54
|
|
2.55
|
2.47
|
|||||||
Distribution
|
|
2.97
|
|
3.00
|
3.02
|
|||||||
Storage
|
|
2.40
|
|
2.48
|
2.29
|
|||||||
Gas gathering and processing
|
|
2.62
|
|
2.21
|
2.66
|
|||||||
General and other
|
|
4.56
|
|
4.89
|
4.12
|
|||||||
Virginia Power
|
|
|
|
|
|
|
|
|
|
|||
Generation
|
|
2.71
|
|
2.94
|
2.83
|
|||||||
Transmission
|
|
2.52
|
|
2.54
|
2.36
|
|||||||
Distribution
|
|
3.31
|
|
3.32
|
3.32
|
|||||||
General and other
|
|
4.52
|
|
4.68
|
3.49
|
|||||||
Dominion Energy Gas
|
|
|
|
|
|
|
|
|
|
|||
Transmission
|
|
2.66
|
|
2.67
|
2.68
|
|||||||
Distribution
|
|
2.41
|
|
2.56
|
2.42
|
|||||||
Storage
|
|
2.42
|
|
2.51
|
2.26
|
|||||||
Gas gathering and processing
|
|
3.19
|
|
2.00
|
2.56
|
|||||||
General and other
|
|
3.90
|
|
5.00
|
6.37
|
Asset
|
Estimated Useful Lives
|
|||
Merchant generation-nuclear
|
|
44 years
|
|
|
Merchant generation-other
|
|
15-30
years
|
|
|
Nonutility gas gathering and processing
|
|
3-50
years
|
|
|
LNG facility
|
|
40 years
|
|
|
General and other
|
|
5-59
years
|
|
|
●
|
Debt securities classified as trading securities
|
●
|
Debt securities classified as available-for-sale securities
available-for-sale
debt securities, including those held in Dominion Energy’s merchant generation nuclear decommissioning trusts, net realized gains and losses (including any other-than-temporary impairments) are included in other income and unrealized gains and losses are reported as a component of AOCI,
after-tax.
|
●
|
Equity method investments
|
●
|
Cost method investments
|
●
|
The recognition provisions of other-than-temporary impairment guidance apply only to debt securities classified as
available-for-sale
or
held-to-maturity.
|
●
|
Using information obtained from their nuclear decommissioning trust fixed-income investment managers, Dominion Energy and Virginia Power record in earnings any unrealized loss for a debt security when the manager intends to sell the debt security or it is
more-likely-than-not
that the manager will have to sell the debt security before recovery of its fair value up to its cost basis. If that is not the case, but the debt security is deemed to have experienced a credit loss, Dominion Energy and Virginia Power record the credit loss in earnings and any remaining portion of the unrealized loss in AOCI. Credit losses are evaluated primarily by considering the credit ratings of the issuer, prior instances of
non-performance
by the issuer and other factors.
|
●
|
SCE&G will not file an application for a general rate case with the South Carolina Commission with a requested effective date earlier than January 2021; |
●
|
PSNC will not file an application for a general rate case with the North Carolina Commission with a requested effective date earlier than April 2021; |
●
|
Dominion Energy has committed to increasing SCANA’s historical level of corporate contributions to charities by $1 million per year over the next
five years
|
●
|
Dominion Energy will maintain SCE&G and PSNC’s headquarters in Cayce, South Carolina and Gastonia, North Carolina, respectively; and |
●
|
Dominion Energy will seek to minimize reductions in local employment by allowing some DES employees supporting shared and common services functions and activities to be located in Cayce, South Carolina where it makes economic and practical sense to do so. |
|
Amount
|
|
||
(millions)
|
|
|
|
|
Total current assets
|
$ |
1,756
|
||
Investments
|
213
|
|||
Property, plant and equipment
|
10,982
|
|||
Goodwill
|
2,438
|
|||
Regulatory assets
|
4,219
|
|||
Other deferred charges and other assets, including intangible assets
|
314
|
|||
Total Assets
|
19,922
|
|||
Total current liabilities
|
1,506
|
|||
Long-term debt
|
6,707
|
|||
Deferred income taxes
|
1,097
|
|||
Regulatory liabilities
|
2,664
|
|||
Other deferred credits and other liabilities
|
1,109
|
|||
Total Liabilities
|
13,083
|
|||
Total purchase price
|
$ |
6,839
|
||
|
2018
|
|
|||
(millions)
|
|
||||
Utility:
|
|
||||
Generation
|
$ |
5,720
|
|||
Transmission
|
2,416
|
||||
Distribution
|
6,044
|
||||
Storage
|
99
|
||||
Nuclear fuel
|
611
|
||||
General and other
|
631
|
||||
Plant under construction
|
527
|
||||
Total utility
|
16,048
|
||||
Nonutility, including plant under construction
|
283
|
||||
Total property, plant and equipment
|
$ |
16,331
|
|||
|
2018
|
|
|||
(millions)
|
|
||||
Generation
|
2.61
|
% | |||
Transmission
|
2.47
|
||||
Distribution
|
2.48
|
||||
Storage
|
2.48
|
||||
General and other
|
5.64
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
|
|
|
|
2020
|
|
|
2021
|
|
|
2022
|
|
|
2023
|
|
||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCANA
|
|
$
|
95
|
|
|
|
|
|
|
$
|
90
|
|
|
$
|
80
|
|
|
$
|
74
|
|
|
$
|
71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCANA
Corporation
|
SCE&G
|
PSNC
|
Total
|
|||||||||||||
(millions, except percentages)
|
|
|
|
|
||||||||||||
Total facility limit
|
|
400
|
|
1,200
|
(1)
$
200
|
|
1,800
|
|||||||||
Letters of credit advances
|
40
(2)
|
—
|
—
|
40
|
||||||||||||
Weighted-average interest rate
|
3.87
|
% |
n/a
|
n/a
|
3.87
|
% | ||||||||||
Outstanding commercial paper
|
2
|
73
|
98
|
173
|
||||||||||||
Weighted-average interest rate
|
3.65
|
% |
3.82
|
% |
3.49
|
% |
3.63
|
% | ||||||||
Outstanding letters of credit
|
37
|
—
|
—
|
37
|
||||||||||||
Facility capacity available
|
|
321
|
|
1,127
|
$
102
|
|
1,550
|
(1)
|
Includes South Carolina Fuel Company, Inc.’s $
500
million credit facility.
|
(2)
|
In January 2019, SCANA repaid $
40
million in letter of credit advances.
|
Weighted-
average
Coupon
(1)
|
Amount
|
|||||||
(millions, except percentages)
|
|
|
|
|
|
|
||
Unsecured medium term notes, due 2020 to 2022
|
5.42
|
% | $ |
800
|
||||
Unsecured senior notes, due 2019 to 2034
|
3.44
|
70
|
||||||
First mortgage bonds, due 2021 to 2065
|
5.52
|
4,990
|
||||||
GENCO notes, due 2019 to 2024
|
5.49
|
40
|
||||||
Industrial and pollution control bonds, due 2028 to 2038
(2)
|
3.52
|
122
|
||||||
PSNC senior debentures and notes, due 2020 to 2047
|
5.07
|
700
|
||||||
Other, due 2019 to 2027
|
3.46
|
73
|
||||||
Total principal
|
|
$ |
6,795
|
|||||
Current maturities of long-term debt
|
|
(59
|
) | |||||
Unamortized discount, premium and debt issuance costs, net
|
|
(29
|
) | |||||
|
|
|
|
|
|
|
|
|
SCANA total long-term debt
|
|
$ |
6,707
|
|||||
(1)
|
Represents weighted-average coupon rates for debt outstanding at closing of the SCANA Combination.
|
(2)
|
Includes variable rate debt of $
68
million, with a weighted-average interest rate of
1.72
%, which is hedged by fixed swaps.
|
|
|
2019
|
|
|
2020
|
|
|
2021
|
|
|
2022
|
|
|
2023
|
|
|
Thereafter
|
|
|
Total
|
|
|||||||
(millions, except percentages)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Unsecured senior notes
|
$ |
4
|
$ |
4
|
$ |
4
|
$ |
4
|
$ |
4
|
$ |
50
|
$ |
70
|
||||||||||||||
Unsecured medium term notes
|
—
|
250
|
300
|
250
|
—
|
—
|
800
|
|||||||||||||||||||||
First mortgage bonds
|
—
|
—
|
330
|
—
|
—
|
4,660
|
4,990
|
|||||||||||||||||||||
PSNC senior debentures and notes
|
—
|
100
|
150
|
—
|
—
|
450
|
700
|
|||||||||||||||||||||
GENCO notes
|
7
|
7
|
7
|
7
|
7
|
5
|
40
|
|||||||||||||||||||||
Industrial and pollution control bonds
|
—
|
—
|
—
|
—
|
—
|
122
|
122
|
|||||||||||||||||||||
Other
|
48
|
7
|
6
|
5
|
3
|
4
|
73
|
|||||||||||||||||||||
Total
|
$ |
59
|
$ |
368
|
$ |
797
|
$ |
266
|
$ |
14
|
$ |
5,291
|
$ |
6,795
|
||||||||||||||
Weighted-average coupon
|
3.91
|
% |
6.26
|
% |
4.20
|
% |
5.22
|
% |
3.29
|
% |
5.51
|
% |
5.36
|
% |
2019
|
2020
|
2021
|
2022
|
2023
|
Thereafter
|
Total
|
||||||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Purchased electric capacity
(1)
|
$
|
31
|
$
|
30
|
$
|
30
|
$
|
30
|
$
|
30
|
$
|
310
|
$
|
461
|
(1)
|
Commitments represent estimated amounts payable for capacity under power purchase contracts with qualifying facilities which expire at various dates through 2046. Capacity payments under the contracts are generally based on fixed dollar amounts per month.
|
|
2019
|
2020
|
2021
|
2022
|
2023
|
Thereafter
|
Total
|
|||||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Operating leases
|
$
10
|
$
8
|
$
7
|
$
6
|
$
4
|
$
30
|
65
|
(1)
|
Amounts include adjustments for
non-recurring
costs directly related to the SCANA Combination.
|
|
Amount
|
|
||
(millions)
|
|
|||
Total current assets
|
|
$
|
224
|
|
Investments
(1)
|
58
|
|||
Property, plant and equipment, net
(2)
|
4,131
|
|||
Goodwill
|
3,111
|
|||
Total deferred charges and other assets, excluding goodwill
|
75
|
|||
Total Assets
|
7,599
|
|||
Total current liabilities
(3)
|
793
|
|||
Long-term debt
(4)
|
963
|
|||
Deferred income taxes
|
807
|
|||
Regulatory liabilities
|
259
|
|||
Asset retirement obligations
|
160
|
|||
Other deferred credits and other liabilities
|
220
|
|||
Total Liabilities
|
3,202
|
|||
Total purchase price
|
4,397
|
|||
(1)
|
Includes $40 million for an equity method investment in White River Hub. The fair value adjustment on the equity method investment in White River Hub is considered to be equity method goodwill and is not amortized.
|
(2)
|
Nonregulated property, plant and equipment, excluding land, will be depreciated over remaining useful lives primarily ranging from 9 to 18 years.
|
(3)
|
Includes $301 million of short-term debt, of which no amounts remain outstanding at December 31, 2018, as well as a $250 million variable interest rate term loan due in August 2017 that was paid in July 2017.
|
(4)
|
Unsecured senior and medium-term notes with maturities which range from 2017 to 2048 and bear interest at rates from 2.98% to 7.20%.
|
●
|
Contribution of $
75
non-qualified
defined-benefit pension plans and its other post-employment benefit plans within six months of the closing date. This contribution was made in January 2017.
|
●
|
Increasing Dominion Energy Questar’s historical level of corporate contributions to charities by $
1
million per year for at least
five years
.
|
●
|
Withdrawal of Questar Gas’ general rate case filed in July 2016 with the Utah Commission and agreement to not file a general rate case with the Utah Commission to adjust its base distribution
non-gas
rates prior to July 2019, unless otherwise ordered by the Utah Commission. In addition, Questar Gas agreed not to file a general rate case with the Wyoming Commission with a requested rate effective date earlier than January 2020. Questar Gas’ ability to adjust rates through various riders is not affected.
|
|
Twelve Months Ended
December 31,
|
|||
|
2016
(1)
|
|||
(millions, except EPS)
|
|
|||
Operating Revenue
|
$ |
12,497
|
||
Net income attributable to Dominion Energy
|
2,300
|
|||
Earnings Per Common Share – Basic
|
$ |
3.73
|
||
Earnings Per Common Share – Diluted
|
$ |
3.73
|
(1)
|
Amounts include adjustments for
non-recurring
costs directly related to the Dominion Energy Questar Combination.
|
Completed
Acquisition
Date
|
Seller
|
Number
of Projects |
Project
Location |
Project Name(s)
|
Initial
Acquisition (millions)
(1)
|
Project
Cost (millions)
(2)
|
Date of
Commercial Operations |
MW
Capacity |
||||||||||||||||||||
February
2017
|
Community Energy Solar,
LLC |
1
|
Virginia
|
Amazon Solar Farm
Virginia—Southhampton |
$ |
29
|
$ |
205
|
December 2017
|
100
|
||||||||||||||||||
March 2017
|
Solar Frontier Americas Holding LLC
|
1
(3)
|
California
|
Midway II
|
77
|
78
|
June 2017
|
30
|
||||||||||||||||||||
May 2017
|
Cypress Creek Renewables, LLC
|
1
|
North Carolina
|
IS37
|
154
|
160
|
June 2017
|
79
|
||||||||||||||||||||
June 2017
|
Hecate Energy Virginia C&C LLC
|
1
|
Virginia
|
Clarke County
|
16
|
16
|
August 2017
|
10
|
||||||||||||||||||||
June 2017
|
Strata Solar Development, LLC/Moorings Farm 2
Holdco, LLC |
2
|
North Carolina
|
Fremont, Moorings 2
|
20
|
20
|
November 2017
|
10
|
||||||||||||||||||||
September
2017 |
Hecate Energy Virginia C&C LLC
|
1
|
Virginia
|
Cherrydale
|
40
|
41
|
November 2017
|
20
|
||||||||||||||||||||
October
2017
|
Strata Solar Development,
LLC |
2
|
North Carolina
|
Clipperton, Pikeville
|
20
|
21
|
November 2017
|
10
|
||||||||||||||||||||
(1)
|
The purchase price was primarily allocated to Property, Plant and Equipment.
|
(2)
|
Includes acquisition cost.
|
(3)
|
In April 2017, Dominion Energy discontinued efforts on the acquisition of the additional 20 MW solar project from Solar Frontier Americas Holding LLC.
|
|
Year Ended
December
31, 2018
|
|
Year Ended
December 31, 2017 |
Year Ended
December 31, 2016 |
||||||||
(millions)
|
|
|
|
|||||||||
Operating revenue
|
$
|
729
|
|
$ |
728
|
$ |
677
|
|||||
Depreciation and amortization
|
|
76
|
|
71
|
55
|
|||||||
Other operating expenses
|
|
444
|
|
428
|
397
|
|||||||
Other income
|
|
72
|
|
50
|
49
|
|||||||
Interest and related charges
|
|
37
|
|
33
|
25
|
|||||||
Income tax expense
|
|
53
|
|
86
|
87
|
|||||||
Net income from discontinued operations
|
|
191
|
|
160
|
162
|
|
At December
31, 2018
|
|
|
At December
31, 2017
|
||||
(millions)
|
|
|
||||||
Current assets of discontinued operations
(1)
|
$
|
423
|
|
$ |
341
|
|||
Investments
|
|
2
|
|
2
|
||||
Property, plant and equipment, net
|
|
3,669
|
|
3,402
|
||||
Regulatory assets
|
|
711
|
|
511
|
||||
Other deferred charges and other assets, including goodwill and intangible assets
|
|
1,275
|
|
1,319
|
||||
Noncurrent assets of discontinued operations
|
|
5,657
|
|
5,234
|
||||
Current liabilities of discontinued operations
|
|
1,262
|
|
951
|
||||
Long-term debt
|
|
1,300
|
|
1,415
|
||||
Deferred income taxes and investment tax credits
|
|
716
|
|
645
|
||||
Regulatory liabilities
|
|
747
|
|
689
|
||||
Other deferred credits and liabilities
|
|
108
|
|
110
|
||||
Noncurrent liabilities of discontinued operations
|
|
2,871
|
|
2,859
|
|
Year Ended
December
31, 2018
|
|
Year Ended
December 31, 2017 |
Year Ended
December 31, 2016 |
||||||||
(millions)
|
|
|
|
|||||||||
Capital expenditures
|
$
|
352
|
|
$ |
348
|
$ |
352
|
|||||
Significant noncash items
|
|
|
|
|||||||||
Accrued capital expenditures
|
|
5
|
|
8
|
17
|
|
Year Ended
December
31, 2018
|
|
Year Ended
December 31, 2017 |
Year Ended
December 31, 2016 |
||||||||
(millions)
|
|
|
|
|||||||||
Operating revenue
|
$
|
220
|
|
$ |
114
|
$ |
69
|
|||||
Depreciation and amortization
|
|
15
|
|
15
|
14
|
|||||||
Impairment of assets and related charges
|
|
219
|
|
-
|
-
|
|||||||
Other operating expenses
|
|
206
|
|
91
|
72
|
|||||||
Income tax expense (benefit)
|
|
(53
|
)
|
5
|
(7
|
) | ||||||
Net income (loss) from discontinued operations
|
$
|
(167
|
)
|
$ |
3
|
$ |
(10
|
) | ||||
|
At December 31,
2018 |
|
At December 31,
2017 |
|||||
(millions)
|
|
|
|
|
|
|
||
Current assets of discontinued operations
(1)
|
|
$
|
21
|
|
|
$
|
17
|
|
Noncurrent assets of discontinued operations
(2)
|
|
|
192
|
|
|
|
419
|
|
Current liabilities of discontinued operations
|
|
|
11
|
|
|
|
18
|
|
Deferred income taxes and investment tax credits
|
|
|
-
|
|
|
34
|
|
|
Other deferred credits and liabilities
|
|
|
25
|
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
Noncurrent liabilities of discontinued operations
|
|
|
25
|
|
|
|
58
|
|
|
Year Ended
December 31, 2018 |
|
Year Ended
December 31, 2017 |
Year Ended
December 31, 2016 |
||||||||
(millions)
|
|
|
|
|||||||||
Capital expenditures
|
$
|
6
|
|
$ |
8
|
$ |
6
|
|||||
Significant noncash items
|
|
|
|
|||||||||
Impairment of assets and related charges
|
|
(219
|
)
|
-
|
-
|
Year Ended December 31,
|
2018
|
|
||
(millions)
|
|
|||
Dominion Energy
|
|
|
|
|
Regulated electric sales:
|
|
|||
Residential
|
$
|
3,413
|
|
|
Commercial
|
|
2,503
|
|
|
Industrial
|
|
490
|
|
|
Government and other retail
|
|
854
|
|
|
Wholesale
|
|
137
|
|
|
Nonregulated electric sales
|
|
1,294
|
|
|
Regulated gas sales:
|
|
|||
Residential
|
|
818
|
|
|
Commercial
|
|
221
|
|
|
Other
|
|
36
|
|
|
Nonregulated gas sales
|
|
214
|
|
|
Regulated gas transportation and storage:
|
|
|||
FERC-regulated
|
|
1,091
|
|
|
State-regulated
|
|
640
|
|
|
Nonregulated gas transportation and storage
|
|
442
|
|
|
Other regulated revenues
|
|
179
|
|
|
Other nonregulated revenues
(1)(2)
|
|
563
|
|
|
Total operating revenue from contracts with customers
|
|
12,895
|
|
|
Other revenues
(2)(3)
|
|
471
|
|
|
Total operating revenue
|
$
|
13,366
|
|
|
Virginia Power
|
|
|
|
|
Regulated electric sales:
|
|
|||
Residential
|
$
|
3,413
|
|
|
Commercial
|
|
2,503
|
|
|
Industrial
|
|
490
|
|
|
Government and other retail
|
|
854
|
|
|
Wholesale
|
|
137
|
|
|
Other regulated revenues
|
|
132
|
|
|
Other nonregulated revenues
(1)(2)
|
|
55
|
|
|
Total operating revenue from contracts with customers
|
|
7,584
|
|
|
Other revenues
(1)(3)
|
|
35
|
|
|
Total operating revenue
|
$
|
7,619
|
|
|
Dominion Energy Gas
|
|
|
|
|
Regulated gas sales - wholesale
|
$
|
25
|
|
|
Nonregulated gas sales
(1)
|
|
7
|
|
|
Regulated gas transportation and storage
|
|
1,249
|
|
|
Nonregulated gas transportation and storage
|
|
442
|
|
|
Management service revenue
(1)
|
|
257
|
|
|
Other regulated revenues
(
2
)
|
|
19
|
|
|
Other nonregulated revenues
(1
)(2
)
|
|
3
|
|
|
Total operating revenue from contracts with customers
|
|
|
2,002
|
|
|
|
|
|
|
Other revenues
|
|
|
(6
|
)
|
|
|
|
|
|
Total operating revenu
e
|
|
$
|
1,996
|
|
|
|
|
|
|
(1)
|
See Notes 9 and 24 for amounts attributable to related parties and affiliates.
|
(2)
|
Amounts above include $241 million
and $10 million
for the year ended December 31, 2018 primarily consisting of NGL sales at Dominion Energy and Dominion Energy Gas, respectively, which are considered to be goods transferred at a point in time. In addition, the amounts include $17 million and $11 million of sales of renewable energy credits at both Dominion Energy and Virginia Power for the year ended December 31, 2018, respectively, which are considered to be goods transferred at a point in time.
|
(3)
|
Amounts above include $15 million of alternative revenue at Dominion Energy and Virginia Power for the year ended December 31, 2018.
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
2017
|
|
|
2016
|
|
|||
(millions)
|
|
|
|
|
|||||
Dominion Energy
|
|
|
|
|
|
|
|
|
|
Electric sales:
|
|
|
|
|
|||||
Regulated
|
$ |
7,383
|
|
|
$ |
7,348
|
|||
Nonregulated
|
1,429
|
|
|
1,519
|
|||||
Gas sales:
|
|
|
|
|
|||||
Regulated
|
1,067
|
|
|
500
|
|||||
Nonregulated
|
457
|
|
|
354
|
|||||
Gas transportation and storage
|
1,786
|
|
|
1,636
|
|||||
Other
|
464
|
|
|
380
|
|||||
|
|
||||||||
Total operating revenue
|
$ |
12,586
|
|
|
$ |
11,737
|
|||
|
|
||||||||
Virginia Power
|
|
|
|
|
|
|
|
|
|
Regulated electric sales
|
$ |
7,383
|
|
|
$ |
7,348
|
|||
Other
|
173
|
|
|
240
|
|||||
|
|
||||||||
Total operating revenue
|
$ |
7,556
|
|
|
$ |
7,588
|
|||
|
|
||||||||
Dominion Energy Gas
|
|
|
|
|
|
|
|
|
|
Gas sales:
|
|
|
|
|
|||||
Regulated
|
$ |
6
|
|
|
$ |
44
|
|||
Nonregulated
|
6
|
|
|
4
|
|||||
Gas transportation and storage
|
1,291
|
|
|
1,153
|
|||||
Other
|
220
|
|
|
173
|
|||||
|
|
||||||||
Total operating revenue
|
$ |
1,523
|
|
|
$ |
1,374
|
|||
|
|
|
Dominion Energy
|
Virginia Power
|
Dominion Energy Gas
|
|||||||||||||||||||||||||||||||||
Year Ended December 31,
|
2018
|
|
2017
|
2016
|
2018
|
|
2017
|
2016
|
2018
|
|
2017
|
2016
|
||||||||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Current:
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Federal
|
$
|
(45
|
)
|
$ |
(1
|
) | $ |
(155
|
) |
$
|
36
|
|
$ |
432
|
$ |
168
|
$
|
(227
|
)
|
$ |
75
|
$ |
176
|
|||||||||||||
State
|
|
108
|
|
(26
|
) |
85
|
|
40
|
|
73
|
90
|
|
31
|
|
13
|
32
|
||||||||||||||||||||
Total current expense (benefit)
|
|
63
|
|
(27
|
) |
(70
|
) |
|
76
|
|
505
|
258
|
|
(196
|
)
|
88
|
208
|
|||||||||||||||||||
Deferred:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Federal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
2017 Tax Reform Act impact
(1)
|
|
46
|
|
(851
|
) |
—
|
|
21
|
|
(93
|
) |
—
|
|
(6
|
)
|
(246
|
) |
—
|
||||||||||||||||||
Taxes before operating loss carryforwards
and
investment tax credits
|
|
436
|
|
739
|
1,050
|
|
199
|
|
319
|
435
|
|
343
|
|
88
|
7
|
|||||||||||||||||||||
Tax utilization expense (benefit) of operating
loss carryforwards
|
|
92
|
|
174
|
(161
|
) |
|
—
|
|
4
|
(2
|
) |
|
—
|
|
—
|
—
|
|||||||||||||||||||
Investment tax credits
|
|
(56
|
)
|
(200
|
) |
(248
|
) |
|
(51
|
)
|
(23
|
) |
(25
|
) |
|
—
|
|
—
|
—
|
|||||||||||||||||
State
|
|
(1
|
)
|
132
|
50
|
|
55
|
|
59
|
27
|
|
(17
|
)
|
5
|
(18
|
) | ||||||||||||||||||||
Total deferred expense (benefit)
|
|
517
|
|
(6
|
) |
691
|
|
224
|
|
266
|
435
|
|
320
|
|
(153
|
) |
(11
|
) | ||||||||||||||||||
Investment tax credit-gross deferral
|
|
2
|
|
5
|
35
|
|
2
|
|
5
|
35
|
|
—
|
|
—
|
—
|
|||||||||||||||||||||
Investment tax credit-amortization
|
|
(2
|
)
|
(2
|
) |
(1
|
) |
|
(2
|
)
|
(2
|
) |
(1
|
) |
|
—
|
|
—
|
—
|
|||||||||||||||||
Total income tax expense (benefit)
|
$
|
580
|
|
$ |
(30
|
) | $ |
655
|
$
|
300
|
|
$ |
774
|
$ |
727
|
$
|
124
|
|
$ |
(65
|
) | $ |
197
|
|||||||||||||
(1)
|
The 2017 Tax Reform Act impact includes an expense of $8 million for the year ended December 31, 2018 and a benefit of $93 million for the year ended December 31, 2017 arising from discontinued operations.
|
(1)
|
Includes (4.6)%, (6.7)% and (6.0)%
relating to the absence of tax on noncontrolling interest in 2018, 2017 and 2016, respectively.
|
|
Dominion Energy
|
Virginia Power
|
Dominion Energy Gas
|
|||||||||||||||||||||
At December 31,
|
2018
|
|
2017
|
2018
|
|
2017
|
2018
|
|
2017
|
|||||||||||||||
(millions)
|
|
|
|
|
|
|
||||||||||||||||||
Deferred income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total deferred income tax assets
|
$
|
2,748
|
|
$ |
2,686
|
$
|
1,054
|
|
$ |
923
|
$
|
296
|
|
$ |
293
|
|||||||||
Total deferred income tax liabilities
|
|
7,813
|
|
7,158
|
|
4,020
|
|
3,600
|
|
1,626
|
|
1,299
|
||||||||||||
Total net deferred income tax liabilities
|
$
|
5,065
|
|
$ |
4,472
|
$
|
2,966
|
|
$ |
2,677
|
$
|
1,330
|
|
$ |
1,006
|
|||||||||
Total deferred income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Plant and equipment, primarily depreciation method and basis differences
|
$
|
4,933
|
|
$ |
5,056
|
$
|
3,367
|
|
$ |
2,969
|
$
|
671
|
|
$ |
645
|
|||||||||
Excess deferred income taxes
|
|
(993
|
)
|
(1,050
|
) |
|
(678
|
)
|
(687
|
) |
|
(156
|
)
|
(155
|
) | |||||||||
Nuclear decommissioning
|
|
815
|
|
829
|
|
273
|
|
260
|
|
—
|
|
—
|
||||||||||||
Deferred state income taxes
|
|
626
|
|
834
|
|
284
|
|
378
|
|
203
|
|
258
|
||||||||||||
Federal benefit of deferred state income taxes
|
|
(132
|
)
|
(175
|
) |
|
(60
|
)
|
(79
|
) |
|
(43
|
)
|
(51
|
) | |||||||||
Deferred fuel, purchased energy and gas costs
|
|
60
|
|
1
|
|
59
|
|
(3
|
) |
|
(1
|
)
|
-
|
|||||||||||
Pension benefits
|
|
81
|
|
141
|
|
(132
|
)
|
(104
|
) |
|
134
|
|
139
|
|||||||||||
Other postretirement benefits
|
|
(5
|
)
|
(51
|
) |
|
55
|
|
44
|
|
(3
|
)
|
(3
|
) | ||||||||||
Loss and credit carryforwards
|
|
(1,546
|
)
|
(1,536
|
) |
|
(183
|
)
|
(111
|
) |
|
(5
|
)
|
(5
|
) | |||||||||
Valuation allowances
|
|
158
|
|
146
|
|
5
|
|
5
|
|
6
|
|
4
|
||||||||||||
Partnership basis differences
|
|
1,135
|
|
473
|
|
—
|
|
—
|
|
570
|
|
220
|
||||||||||||
Other
|
|
(67
|
)
|
(196
|
) |
|
(24
|
)
|
5
|
|
(46
|
)
|
(46
|
) | ||||||||||
Total net deferred income tax liabilities
|
$
|
5,065
|
|
$ |
4,472
|
$
|
2,966
|
|
$ |
2,677
|
$
|
1,330
|
|
$ |
1,006
|
|||||||||
Deferred Investment Tax Credits – Regulated Operations
|
|
51
|
|
51
|
|
51
|
|
51
|
|
—
|
|
—
|
||||||||||||
Total Deferred Taxes and Deferred Investment Tax Credits
|
$
|
5,116
|
|
$ |
4,523
|
$
|
3,017
|
|
$ |
2,728
|
$
|
1,330
|
|
$ |
1,006
|
|||||||||
|
Deductible
|
Deferred
|
Valuation
|
Expiration
|
||||||||||||
|
Amount
|
Tax Asset
|
Allowance
|
Period
|
||||||||||||
(millions)
|
|
|
|
|
||||||||||||
Federal losses
|
$
|
120
|
|
$
|
25
|
|
$
|
—
|
|
|
2034
|
|
||||
Federal investment credits
|
|
—
|
|
|
1,007
|
|
|
—
|
|
|
2033-2038
|
|
||||
Federal production credits
|
|
—
|
|
|
150
|
|
|
—
|
|
|
2031-2038
|
|
||||
Other federal credits
|
|
—
|
|
|
62
|
|
|
—
|
|
|
2031-2038
|
|
||||
State losses
|
|
1,126
|
|
|
73
|
|
|
(61
|
)
|
|
2019-2038
|
|
||||
State minimum tax credits
|
|
—
|
|
|
122
|
|
|
—
|
|
|
No expiration
|
|
||||
State investment and other credits
|
|
—
|
|
|
107
|
|
|
(90
|
)
|
|
2019-2025
|
|
||||
Total
|
$
|
1,246
|
|
$
|
1,546
|
|
$
|
(151
|
)
|
|
||||||
|
Deductible
|
Deferred
|
Valuation
|
Expiration
|
||||||||||||
|
Amount
|
Tax Asset
|
Allowance
|
Period
|
||||||||||||
(millions)
|
|
|
|
|
||||||||||||
Federal losses
|
$
|
1
|
|
$
|
—
|
|
$
|
—
|
|
|
2034
|
|
||||
Federal investment credits
|
|
—
|
|
|
113
|
|
|
—
|
|
|
2034-2038
|
|
||||
Federal production and other credits
|
|
—
|
|
|
61
|
|
|
—
|
|
|
2031-2038
|
|
||||
State investment credits
|
|
—
|
|
|
9
|
|
|
(5
|
)
|
|
2024
|
|
||||
Total
|
$
|
1
|
|
$
|
183
|
|
$
|
(5
|
)
|
|
||||||
|
Deductible
|
Deferred
|
Valuation
|
Expiration
|
||||||||||||
|
Amount
|
Tax Asset
|
Allowance
|
Period
|
||||||||||||
(millions)
|
|
|
|
|
||||||||||||
Federal losses
|
$
|
1
|
|
$
|
—
|
|
$
|
—
|
|
|
2034
|
|
||||
State losses
(1)
|
|
62
|
|
|
3
|
|
|
(3
|
)
|
|
2021
|
|
||||
Total
|
$
|
63
|
|
$
|
3
|
|
$
|
(3
|
)
|
|
||||||
(1)
|
Discontinued operations includes $53 million of deductible loss carryforwards which expire between 2036 and 2038, and are reflected as a deferred tax asset with an offsetting valuation allowance of $5 million.
|
|
Dominion Energy
|
Virginia Power
|
Dominion Energy Gas
|
|||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
2016
|
2018
|
|
2017
|
2016
|
2018
|
|
2017
|
2016
|
||||||||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Balance at January 1
|
$
|
38
|
|
$ |
64
|
$ |
103
|
$
|
4
|
|
$ |
13
|
$ |
12
|
$
|
2
|
|
$ |
9
|
$ |
31
|
|||||||||||||||
Increases-prior period positions
|
|
10
|
|
1
|
9
|
|
—
|
|
—
|
4
|
|
—
|
|
—
|
1
|
|||||||||||||||||||||
Decreases-prior period positions
|
|
—
|
|
(9
|
) |
(44
|
) |
|
—
|
|
(1
|
) |
(3
|
) |
|
—
|
|
—
|
(19
|
) | ||||||||||||||||
Increases-current period positions
|
|
10
|
|
5
|
6
|
|
—
|
|
—
|
—
|
|
—
|
|
—
|
—
|
|||||||||||||||||||||
Settlements with tax authorities
|
|
(6
|
)
|
(23
|
) |
(8
|
) |
|
(1
|
)
|
(8
|
) |
—
|
|
—
|
|
(7
|
) |
(4
|
) | ||||||||||||||||
Expiration of statutes of limitations
|
|
(8
|
)
|
—
|
(2
|
) |
|
(1
|
)
|
—
|
—
|
|
—
|
|
—
|
—
|
||||||||||||||||||||
Balance at December 31
|
$
|
44
|
|
$ |
38
|
$ |
64
|
$
|
2
|
|
$ |
4
|
$ |
13
|
$
|
2
|
|
$ |
2
|
$ |
9
|
|||||||||||||||
State
|
Earliest
Open Tax
Year
|
|
||
Pennsylvania
(1)
|
|
2012
|
|
|
Connecticut
|
|
2015
|
|
|
Virginia
(2)
|
|
2015
|
|
|
West Virginia
(1)
|
|
2015
|
|
|
New York
(1)
|
|
2011
|
|
|
Utah
(1)
|
|
2015
|
|
(1)
|
Considered a major state for Dominion Energy Gas’ operations.
|
(2)
|
Considered a major state for Virginia Power’s operations.
|
●
|
Forward commodity prices |
●
|
Transaction prices |
●
|
Price volatility |
●
|
Price correlation |
●
|
Volumes |
●
|
Commodity location |
●
|
Interest rates |
●
|
Credit quality of counterparties and the Companies |
●
|
Credit enhancements |
●
|
Time value |
●
|
Interest rate curves |
●
|
Credit quality of counterparties and the Companies |
●
|
Notional value |
●
|
Credit enhancements |
●
|
Time value |
●
|
Foreign currency forward exchange rates |
●
|
Interest rates
|
|
●
|
Credit quality of counterparties and the Companies
|
|
●
|
Notional value
|
|
●
|
Credit enhancements
|
|
●
|
Time value
|
●
|
Quoted securities prices and indices |
●
|
Securities trading information including volume and restrictions |
●
|
Maturity |
●
|
Interest rates |
●
|
Credit quality |
●
|
Level 1—Quoted prices (unadjusted) in active markets for identical assets and liabilities that they have the ability to access at the measurement date. Instruments categorized in Level 1 primarily consist of financial instruments such as certain exchange-traded derivatives, and exchange-listed equities, U.S. and international equity securities, mutual funds and certain Treasury securities held in nuclear decommissioning trust funds for Dominion Energy and Virginia Power, benefit plan trust funds for Dominion Energy and Dominion Energy Gas, and rabbi trust funds for Dominion Energy. |
●
|
Level 2—Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived from observable market data by correlation or other means. Instruments categorized in Level 2 primarily include commodity forwards and swaps, interest rate swaps, foreign currency swaps and cash and cash equivalents, corporate debt instruments, government securities and other fixed income investments held in nuclear decommissioning trust funds for Dominion Energy and Virginia Power, benefit plan trust funds for Dominion Energy and Dominion Energy Gas and rabbi trust funds for Dominion Energy. |
●
|
Level 3—Unobservable inputs for the asset or liability, including situations where there is little, if any, market activity for the asset or liability. Instruments categorized in Level 3 for the Companies consist of long-dated commodity derivatives, FTRs, certain natural gas and power options and other modeled commodity derivatives. |
|
|
Fair Value
(millions) |
|
|
Valuation Techniques
|
|
Unobservable Input
|
|
Range
|
|
|
Weighted
Average
(1)
|
|
|||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Physical and financial forwards and futures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
(2)
|
|
$
|
42
|
|
|
Discounted cash flow
|
|
Market price (per Dth)
(3)
|
|
|
(2) - 8
|
|
|
|
(1)
|
|
FTRs
|
|
|
15
|
|
|
Discounted cash flow
|
|
Market price (per MWh)
(3)
|
|
|
(2) - 7
|
|
|
|
1
|
|
Physical options:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
|
|
|
2
|
|
|
Option model
|
|
Market price (per Dth)
(3)
|
|
|
1 - 8
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
Price volatility
(4)
|
|
|
18%
-
73%
|
|
|
|
30
|
%
|
Electricity
|
|
|
11
|
|
|
Option model
|
|
Market price (per MWh)
(3)
|
|
|
34 - 50
|
|
|
|
42
|
|
|
|
|
|
|
|
|
|
Price volatility
(4)
|
|
|
39% - 60%
|
|
|
|
49
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial forwards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FTRs
|
|
$
|
6
|
|
|
Discounted cash flow
|
|
Market price (per MWh)
(3)
|
|
|
(2) - 6
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
$
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Averages weighted by volume.
|
(2)
|
Includes basis.
|
(3)
|
Represents market prices beyond defined terms for Levels 1 and 2.
|
(4)
|
Represents volatilities unrepresented in published markets.
|
Significant Unobservable Inputs
|
Position
|
Change to Input
|
Impact on Fair
Value Measurement |
|||
Market price
|
Buy
|
Increase (decrease)
|
Gain (loss)
|
|||
Market price
|
Sell
|
Increase (decrease)
|
Loss (gain)
|
|||
Price volatility
|
Buy
|
Increase (decrease)
|
Gain (loss)
|
|||
Price volatility
|
Sell
|
Increase (decrease)
|
Loss (gain)
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
(millions)
|
|
|
|
|
||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives:
|
|
|
|
|
||||||||||||
Commodity
|
$
|
—
|
|
$
|
180
|
|
$
|
70
|
|
$
|
250
|
|
||||
Interest rate
|
|
—
|
|
|
18
|
|
|
—
|
|
|
18
|
|
||||
Foreign currency
|
|
—
|
|
|
26
|
|
|
—
|
|
|
26
|
|
||||
Investments
(1)
:
|
|
|
|
|
||||||||||||
Equity securities:
|
|
|
|
|
||||||||||||
U.S.
|
|
3,277
|
|
|
—
|
|
|
—
|
|
|
3,277
|
|
||||
Fixed income:
|
|
|
|
|
||||||||||||
Corporate debt instruments
|
|
—
|
|
|
431
|
|
|
—
|
|
|
431
|
|
||||
Government securities
|
|
455
|
|
|
688
|
|
|
—
|
|
|
1,143
|
|
||||
Cash equivalents and other
|
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||
|
||||||||||||||||
Total assets
|
$
|
3,743
|
|
$
|
1,343
|
|
$
|
70
|
|
$
|
5,156
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives:
|
|
|
|
|
||||||||||||
Commodity
|
$
|
—
|
|
$
|
129
|
|
$
|
6
|
|
$
|
135
|
|
||||
Interest rate
|
|
—
|
|
|
142
|
|
|
—
|
|
|
142
|
|
||||
Foreign currency
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
|
||||||||||||||||
Total liabilities
|
$
|
—
|
|
$
|
273
|
|
$
|
6
|
|
$
|
279
|
|
||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives:
|
|
|
|
|
||||||||||||
Commodity
|
$ |
—
|
$ |
101
|
$ |
157
|
$ |
258
|
||||||||
Interest rate
|
—
|
17
|
—
|
17
|
||||||||||||
Foreign currency
|
—
|
32
|
—
|
32
|
||||||||||||
Investments
(1)
:
|
|
|
|
|
||||||||||||
Equity securities:
|
|
|
|
|
||||||||||||
U.S.
|
3,493
|
—
|
—
|
3,493
|
||||||||||||
Fixed income:
|
|
|
|
|
||||||||||||
Corporate debt instruments
|
—
|
444
|
—
|
444
|
||||||||||||
Government securities
|
307
|
794
|
—
|
1,101
|
||||||||||||
Cash equivalents and other
|
34
|
—
|
—
|
34
|
||||||||||||
|
||||||||||||||||
Total assets
|
$ |
3,834
|
$ |
1,388
|
$ |
157
|
$ |
5,379
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives:
|
|
|
|
|
||||||||||||
Commodity
|
$ |
—
|
$ |
190
|
$ |
7
|
$ |
197
|
||||||||
Interest rate
|
—
|
85
|
—
|
85
|
||||||||||||
Foreign currency
|
—
|
2
|
—
|
2
|
||||||||||||
|
||||||||||||||||
Total liabilities
|
$ |
—
|
$ |
277
|
$ |
7
|
$ |
284
|
||||||||
(1)
|
Includes investments held in the nuclear decommissioning and rabbi trusts. Excludes $
220
million and $
88
million of assets at December 31, 2018 and 2017, 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.
|
|
2018
|
|
2017
|
2016
|
||||||||
(millions)
|
|
|
|
|||||||||
Balance at January 1,
|
$
|
150
|
|
$ |
139
|
$ |
95
|
|||||
Total realized and unrealized gains (losses):
|
|
|
|
|
|
|||||||
Included in earnings:
|
|
|
|
|
|
|||||||
Operating Revenue
|
|
(2
|
)
|
3
|
—
|
|||||||
Electric fuel and other energy-related purchases
|
|
(15
|
)
|
(42
|
) |
(35
|
) | |||||
Purchased gas
|
|
—
|
|
1
|
—
|
|||||||
Included in other comprehensive income (loss)
|
|
1
|
|
(2
|
) |
—
|
||||||
Included in regulatory assets/liabilities
|
|
(44
|
)
|
42
|
(39
|
) | ||||||
Settlements
|
|
(27
|
)
|
6
|
38
|
|||||||
Purchases
|
|
—
|
|
—
|
87
|
|||||||
Transfers out of Level 3
|
|
1
|
|
3
|
(7
|
) | ||||||
Balance at December 31,
|
$
|
64
|
|
$ |
150
|
$ |
139
|
|||||
The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still held at the reporting date:
|
|
|
|
|
|
|||||||
Operating Revenue
|
$
|
—
|
|
$ |
2
|
$ |
—
|
|||||
Electric fuel and other energy-related purchases
|
|
—
|
|
—
|
(1
|
) | ||||||
|
Fair Value
(millions) |
Valuation Techniques
|
Unobservable Input
|
Range
|
Weighted
Average
(1)
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Physical and financial forwards and futures:
|
|
|
|
|
|
|||||||||||
Natural gas
(2)
|
$ |
38
|
Discounted cash flow
|
Market price (per Dth)
(3)
|
(2)
-
8
|
(1
|
) | |||||||||
FTRs
|
15
|
Discounted cash flow
|
Market price (per MWh)
(3)
|
(2)
-
7
|
1
|
|||||||||||
Physical options:
|
|
|
|
|
|
|||||||||||
Natural gas
|
2
|
Option model
|
Market price (per Dth)
(3)
|
1
-
8
|
3
|
|||||||||||
|
|
|
|
|
Price volatility
(4)
|
18%
-
73%
|
30
|
% | ||||||||
Electricity
|
11
|
Option model
|
Market price (per MWh)
(3)
|
34
-
50
|
42
|
|||||||||||
|
|
|
|
|
Price volatility
(4)
|
39%
-
60%
|
49
|
% | ||||||||
|
||||||||||||||||
Total assets
|
$ |
66
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|||||||||
Financial forwards:
|
|
|
|
|
|
|||||||||||
FTRs
|
$ |
6
|
Discounted cash flow
|
Market price (per MWh)
(3)
|
(2) - 6
|
—
|
||||||||||
|
||||||||||||||||
Total liabilities
|
$ |
6
|
|
|
|
|
||||||||||
(1)
|
Averages weighted by volume.
|
(2)
|
Includes basis.
|
(3)
|
Represents market prices beyond defined terms for Levels 1 and 2.
|
(4)
|
Represents volatilities unrepresented in published markets.
|
Significant Unobservable Inputs
|
|
Position
|
|
Change to Input
|
|
Impact on Fair
Value Measurement |
Market price
|
|
Buy
|
|
Increase (decrease)
|
|
Gain (loss)
|
Market price
|
|
Sell
|
|
Increase (decrease)
|
|
Loss (gain)
|
Price volatility
|
|
Buy
|
|
Increase (decrease)
|
|
Gain (loss)
|
Price volatility
|
|
Sell
|
|
Increase (decrease)
|
|
Loss (gain)
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives:
|
|
|
|
|
||||||||||||
Commodity
|
$
|
—
|
|
$
|
24
|
|
$
|
66
|
|
$
|
90
|
|
||||
Interest rate
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Investments
(1)
:
|
|
|
|
|
||||||||||||
Equity securities:
|
|
|
|
|
||||||||||||
U.S.
|
|
1,476
|
|
|
—
|
|
|
—
|
|
|
1,476
|
|
||||
Fixed income:
|
|
|
|
|
||||||||||||
Corporate debt instruments
|
|
—
|
|
|
221
|
|
|
—
|
|
|
221
|
|
||||
Government securities
|
|
164
|
|
|
343
|
|
|
—
|
|
|
507
|
|
||||
|
||||||||||||||||
Total assets
|
$
|
1,640
|
|
$
|
591
|
|
$
|
66
|
|
$
|
2,297
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives:
|
|
|
|
|
||||||||||||
Commodity
|
$
|
—
|
|
$
|
9
|
|
$
|
6
|
|
$
|
15
|
|
||||
Interest rate
|
|
—
|
|
|
88
|
|
|
—
|
|
|
88
|
|
||||
|
||||||||||||||||
Total liabilities
|
$
|
—
|
|
$
|
97
|
|
$
|
6
|
|
$
|
103
|
|
||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives:
|
|
|
|
|
||||||||||||
Commodity
|
$ |
—
|
$ |
14
|
$ |
152
|
$ |
166
|
||||||||
Investments
(1)
:
|
|
|
|
|
||||||||||||
Equity securities:
|
|
|
|
|
||||||||||||
U.S.
|
1,566
|
—
|
—
|
1,566
|
||||||||||||
Fixed income:
|
|
|
|
|
||||||||||||
Corporate debt instruments
|
—
|
224
|
—
|
224
|
||||||||||||
Government securities
|
168
|
326
|
—
|
494
|
||||||||||||
Cash equivalents and other
|
16
|
—
|
—
|
16
|
||||||||||||
|
||||||||||||||||
Total assets
|
$ |
1,750
|
$ |
564
|
$ |
152
|
$ |
2,466
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives:
|
|
|
|
|
||||||||||||
Commodity
|
$ |
—
|
$ |
4
|
$ |
5
|
$ |
9
|
||||||||
Interest rate
|
—
|
57
|
—
|
57
|
||||||||||||
|
||||||||||||||||
Total liabilities
|
$ |
—
|
$ |
61
|
$ |
5
|
$ |
66
|
||||||||
(1)
|
Includes investments held in the nuclear decommissioning trusts. Excludes $
160
million and $
27
million of assets at December 31, 2018 and 2017, 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.
|
|
2018
|
|
2017
|
2016
|
||||||||
(millions)
|
|
|
|
|
|
|
||||||
Balance at January 1,
|
$
|
147
|
|
$ |
143
|
$ |
93
|
|||||
Total realized and unrealized gains (losses):
|
|
|
|
|
|
|||||||
Included in earnings:
|
|
|
|
|
|
|||||||
Electric fuel and other energy-related purchases
|
|
(17
|
)
|
(43
|
) |
(35
|
) | |||||
Included in regulatory assets/liabilities
|
|
(45
|
)
|
40
|
(37
|
) | ||||||
Settlements
|
|
(25
|
)
|
7
|
35
|
|||||||
Purchases
|
|
—
|
|
—
|
87
|
|||||||
Balance at December 31,
|
$
|
60
|
|
$ |
147
|
$ |
143
|
|||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commodity
|
$
|
—
|
|
$
|
3
|
|
$
|
—
|
|
$
|
3
|
|
||||
Interest rate
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Foreign currency
|
|
—
|
|
|
26
|
|
|
—
|
|
|
26
|
|
||||
|
||||||||||||||||
Total assets
|
$
|
—
|
|
$
|
31
|
|
$
|
—
|
|
$
|
31
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate
|
$
|
—
|
|
$
|
17
|
|
$
|
—
|
|
$
|
17
|
|
||||
Foreign currency
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
|
||||||||||||||||
Total liabilities
|
$
|
—
|
|
$
|
19
|
|
$
|
—
|
|
$
|
19
|
|
||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate
|
$ |
—
|
$ |
1
|
$ |
—
|
$ |
1
|
||||||||
Foreign currency
|
—
|
32
|
—
|
32
|
||||||||||||
|
||||||||||||||||
Total assets
|
$ |
—
|
$ |
33
|
$ |
—
|
$ |
33
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commodity
|
$ |
—
|
$ |
4
|
$ |
2
|
$ |
6
|
||||||||
Foreign currency
|
—
|
2
|
—
|
2
|
||||||||||||
|
||||||||||||||||
Total liabilities
|
$ |
—
|
$ |
6
|
$ |
2
|
$ |
8
|
||||||||
|
2018
|
|
2017
|
2016
|
||||||||
(millions)
|
|
|
|
|
|
|
||||||
Balance at January 1,
|
$
|
(2
|
)
|
$ |
(2
|
) | $ |
6
|
||||
Total realized and unrealized gains (losses):
|
|
|
|
|
|
|||||||
Included in other comprehensive income (loss)
|
|
1
|
|
(3
|
) |
—
|
||||||
Transfers out of Level 3
|
|
1
|
|
3
|
(8
|
) | ||||||
Balance at December 31,
|
$
|
—
|
|
$ |
(2
|
) | $ |
(2)
|
||||
December 31,
|
2018
|
2017
|
||||||||||||||
|
Carrying
Amount
|
|
Estimated
Fair Value
(1)
|
|
Carrying Amount
|
Estimated Fair
Value
(1)
|
||||||||||
(millions)
|
|
|
|
|
|
|
|
|
||||||||
Dominion Energy
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long-term debt, including securities due within one year
(2)
|
$
|
29,952
|
|
$
|
31,045
|
|
$ |
28,666
|
$ |
31,233
|
||||||
Credit facility borrowings
|
|
73
|
|
|
73
|
|
—
|
—
|
||||||||
Junior subordinated notes
(3)
|
|
3,430
|
|
|
3,358
|
|
3,981
|
4,102
|
||||||||
Remarketable subordinated notes
(3)
|
|
1,386
|
|
|
1,340
|
|
1,379
|
1,446
|
||||||||
Virginia Power
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long-term debt, including securities due within one year
(3)
|
$
|
11,671
|
|
$
|
12,400
|
|
$ |
11,346
|
$ |
12,842
|
||||||
Dominion Energy Gas
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long-term debt, including securities due within one year
(4)
|
$
|
7,770
|
|
$
|
7,803
|
|
$ |
4,300
|
$ |
4,480
|
||||||
Credit facility borrowings
|
|
73
|
|
|
73
|
|
—
|
—
|
||||||||
(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 amounts which represent, the unamortized debt issuance costs, discount or premium, and foreign currency remeasurement adjustments. At December 31, 2018, and 2017, includes the valuation of certain fair value hedges associated with Dominion Energy’s fixed rate debt of $(
20
$(
22
) million, respectively.
|
(3)
|
Carrying amount includes amounts which represent the unamortized debt issuance costs, discount or premium.
|
(4)
|
Carrying amount includes amounts which represent the unamortized debt issuance costs, discount or premium, and foreign currency remeasurement adjustments.
|
|
December 31, 2018
|
December 31, 2017
|
||||||||||||||||||||||||||||||
|
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
|
$
|
175
|
|
$
|
12
|
|
$
|
—
|
|
$
|
163
|
|
$ |
174
|
$ |
9
|
$ |
—
|
$ |
165
|
||||||||||||
Exchange
|
|
68
|
|
|
68
|
|
|
—
|
|
|
—
|
|
80
|
80
|
—
|
—
|
||||||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Over-the-counter
|
|
18
|
|
|
1
|
|
|
—
|
|
|
17
|
|
17
|
8
|
—
|
9
|
||||||||||||||||
Foreign currency contracts:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Over-the-counter
|
|
26
|
|
|
2
|
|
|
—
|
|
|
24
|
|
32
|
2
|
—
|
30
|
||||||||||||||||
Total derivatives, subject to a
similar arrangement
|
$
|
287
|
|
$
|
83
|
|
$
|
—
|
|
$
|
204
|
|
$ |
303
|
$ |
99
|
$ |
—
|
$ |
204
|
||||||||||||
(1)
|
Excludes $7 million and $4 million of derivative assets at December 31, 2018 and 2017, respectively, which are not subject to master netting or similar arrangements.
|
|
December 31, 2018
|
December 31, 2017
|
||||||||||||||||||||||||||||||
|
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
|
|
$
|
12
|
|
$
|
—
|
|
$
|
7
|
|
$ |
76
|
$ |
9
|
$ |
6
|
$ |
61
|
||||||||||||
Exchange
|
|
115
|
|
|
68
|
|
|
47
|
|
|
—
|
|
120
|
80
|
40
|
—
|
||||||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Over-the-counter
|
|
142
|
|
|
1
|
|
|
—
|
|
|
141
|
|
85
|
8
|
—
|
77
|
||||||||||||||||
Foreign currency contracts:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Over-the-counter
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
2
|
2
|
—
|
—
|
||||||||||||||||
|
||||||||||||||||||||||||||||||||
Total derivatives, subject to a master netting or similar arrangement
|
$
|
278
|
|
$
|
83
|
|
$
|
47
|
|
$
|
148
|
|
$ |
283
|
$ |
99
|
$ |
46
|
$ |
138
|
||||||||||||
(1)
|
Excludes $1 million of derivative liabilities at December 31, 2018 and 2017, which are not subject to master netting or similar arrangements.
|
|
Current
|
Noncurrent
|
||||||
Natural Gas (bcf):
|
|
|
||||||
Fixed price
(1)
|
|
56
|
|
|
27
|
|
||
Basis
|
|
214
|
|
|
557
|
|
||
Electricity (MWh):
|
|
|
||||||
Fixed price
(1)
|
|
11,101,869
|
|
|
1,537,200
|
|
||
FTRs
|
|
45,351,415
|
|
|
—
|
|
||
Liquids (Gal)
(2)
|
|
14,413,200
|
|
|
—
|
|
||
Interest rate
(3)
|
$
|
2,700,000,000
|
|
$
|
3,915,839,913
|
|
||
Foreign currency
(3)(4)
|
$
|
—
|
|
$
|
280,000,000
|
|
(1)
|
Includes options.
|
(2)
|
Includes NGLs and oil.
|
(3)
|
Maturity is determined based on final settlement period.
|
(4)
|
Euro equivalent volumes are
€
250,000,000.
|
|
T
ax
|
Amounts Expected to be
Reclassified to Earnings During the Next 12 Months After-Tax |
Maximum Term
|
|||||||||
(millions)
|
|
|
|
|
|
|
||||||
Commodities:
|
|
|
|
|||||||||
|
$
|
—
|
|
$
|
1
|
|
|
36 months
|
|
|||
|
|
27
|
|
|
26
|
|
|
24 months
|
|
|||
|
|
2
|
|
|
2
|
|
|
3 months
|
|
|||
Interest rate
|
|
(276
|
)
|
|
(29
|
)
|
|
396 months
|
|
|||
Foreign currency
|
|
12
|
|
|
(2
|
)
|
|
90 months
|
|
|||
|
$
|
(235
|
)
|
$
|
(2
|
)
|
|
|||||
|
Fair Value –
Derivatives under Hedge Accounting |
|
Fair Value –
Derivatives not under Hedge Accounting |
|
Total Fair Value
|
|
||||||
(millions)
|
|
|
|
|
|
|
||||||
At December 31, 2018
|
|
|
|
|
|
|
|
|
|
|||
ASSETS
|
|
|
|
|
|
|
|
|
|
|||
Current Assets
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
$
|
55
|
|
$
|
154
|
|
$
|
209
|
|
|||
Interest rate
|
|
14
|
|
|
—
|
|
|
14
|
|
|||
Total current derivative assets
(1)
|
|
69
|
|
|
154
|
|
|
223
|
|
|||
Noncurrent Assets
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
|
6
|
|
|
35
|
|
|
41
|
|
|||
Interest rate
|
|
4
|
|
|
—
|
|
|
4
|
|
|||
Foreign currency
|
|
26
|
|
|
—
|
|
|
26
|
|
|||
Total noncurrent derivative assets
(2)
|
|
36
|
|
|
35
|
|
|
71
|
|
|||
|
||||||||||||
Total derivative assets
|
$
|
105
|
|
$
|
189
|
|
$
|
294
|
|
|||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
$
|
17
|
|
$
|
112
|
|
$
|
129
|
|
|||
Interest rate
|
|
26
|
|
|
—
|
|
|
26
|
|
|||
Foreign currency
|
|
2
|
|
|
—
|
|
|
2
|
|
|||
Total current derivative liabilities
(3)
|
|
45
|
|
|
112
|
|
|
157
|
|
|||
Noncurrent Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
|
5
|
|
|
1
|
|
|
6
|
|
|||
Interest rate
|
|
116
|
|
|
—
|
|
|
116
|
|
|||
Total noncurrent derivative liabilities
(4)
|
|
121
|
|
|
1
|
|
|
122
|
|
|||
Total derivative liabilities
|
$
|
166
|
|
$
|
113
|
|
$
|
279
|
|
|||
At December 31, 2017
|
|
|
|
|
|
|
|
|
|
|||
ASSETS
|
|
|
|
|
|
|
|
|
|
|||
Current Assets
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
$ |
5
|
$ |
158
|
$ |
163
|
||||||
Interest rate
|
6
|
—
|
6
|
|||||||||
Total current derivative assets
(1)
|
11
|
158
|
169
|
|||||||||
Noncurrent Assets
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
—
|
95
|
95
|
|||||||||
Interest rate
|
11
|
—
|
11
|
|||||||||
Foreign currency
|
32
|
—
|
32
|
|||||||||
Total noncurrent derivative assets
(2)
|
43
|
95
|
138
|
|||||||||
Total derivative assets
|
$ |
54
|
$ |
253
|
$ |
307
|
||||||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
$ |
103
|
$ |
92
|
$ |
195
|
||||||
Interest rate
|
53
|
—
|
53
|
|||||||||
Foreign currency
|
2
|
—
|
2
|
|||||||||
Total current derivative liabilities
(3)
|
158
|
92
|
250
|
|||||||||
Noncurrent Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
1
|
1
|
2
|
|||||||||
Interest rate
|
32
|
—
|
32
|
|||||||||
Total noncurrent derivative liabilities
(4)
|
33
|
1
|
34
|
|||||||||
Total derivative liabilities
|
$ |
191
|
$ |
93
|
$ |
284
|
||||||
(1)
|
Current derivative assets are presented in other current assets 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.
|
(3)
|
Current derivative liabilities are presented in other current liabilities 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.
|
Derivatives in cash flow hedging relationships
|
Amount of Gain
(Loss) Recognized in AOCI on Derivatives (Effective Portion)
(1)
|
|
Amount of Gain
(Loss) Reclassified From AOCI to Income |
|
Increase
(Decrease) in Derivatives Subject to Regulatory Treatment
(2)
|
|
||||||
(millions)
|
|
|
|
|||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|||
Derivative type and location of gains (losses):
|
|
|
|
|||||||||
Commodity:
|
|
|
|
|||||||||
Operating revenue
|
|
$
|
(90
|
)
|
|
|||||||
Electric fuel and other energy-related purchases
|
|
|
14
|
|
|
|||||||
Total commodity
|
$
|
64
|
|
$
|
(76
|
)
|
$
|
—
|
|
|||
|
||||||||||||
Interest rate
(3)
|
|
(18
|
)
|
|
(48
|
)
|
|
39
|
|
|||
Foreign currency
(4)
|
|
(6
|
)
|
|
(13
|
)
|
|
—
|
|
|||
|
||||||||||||
Total
|
$
|
40
|
|
$
|
(137
|
)
|
$
|
39
|
|
|||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|||
Derivative type and location of gains (losses):
|
|
|
|
|||||||||
Commodity:
|
|
|
|
|||||||||
Operating revenue
|
|
$ |
81
|
|
||||||||
Purchased gas
|
|
(2
|
) |
|
||||||||
Total commodity
|
$ |
1
|
$ |
79
|
$ |
—
|
||||||
|
||||||||||||
Interest rate
(3)
|
(8
|
) |
(52
|
) |
(58
|
) | ||||||
Foreign currency
(4)
|
18
|
20
|
—
|
|||||||||
|
||||||||||||
Total
|
$ |
11
|
$ |
47
|
$ |
(58
|
) | |||||
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|||
Derivative type and location of gains (losses):
|
|
|
|
|||||||||
Commodity:
|
|
|
|
|||||||||
Operating revenue
|
|
$ |
330
|
|
||||||||
Purchased gas
|
|
(13
|
) |
|
||||||||
Electric fuel and other energy-related purchases
|
|
(10
|
) |
|
||||||||
Total commodity
|
$ |
164
|
$ |
307
|
$ |
—
|
||||||
|
||||||||||||
Interest rate
(3)
|
(66
|
) |
(31
|
) |
(26
|
) | ||||||
Foreign currency
(4)
|
(6
|
) |
(17
|
) |
—
|
|||||||
|
||||||||||||
Total
|
$ |
92
|
$ |
259
|
$ |
(26
|
) | |||||
(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 Statements of Income are classified in interest and related charges.
|
(4)
|
Amounts recorded in Dominion Energy’s Consolidated Statements of Income are classified in other income.
|
Derivatives not designated as hedging instruments
|
Amount of Gain (Loss) Recognized in Income on
Derivatives
(1)
|
|||||||||||
Year Ended December 31,
|
2018
|
|
2017
|
2016
|
||||||||
(millions)
|
|
|
|
|
|
|
||||||
Derivative type and location of gains (losses):
|
|
|
|
|||||||||
Commodity:
|
|
|
|
|||||||||
Operating revenue
|
$
|
(28
|
)
|
$ |
18
|
$ |
2
|
|||||
Purchased gas
|
|
11
|
|
(3
|
) |
4
|
||||||
Electric fuel and other energy-related purchases
|
|
(9
|
)
|
(59
|
) |
(70
|
) | |||||
Other operations & maintenance
|
|
—
|
|
(1
|
) |
1
|
||||||
|
||||||||||||
Total
|
$
|
(26
|
)
|
$ |
(45
|
) | $ |
(63
|
) | |||
(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.
|
|
December 31, 2018
|
December 31, 2017
|
||||||||||||||||||||||||||||||
|
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
|
$
|
64
|
|
$
|
6
|
|
$
|
—
|
|
$
|
58
|
|
$ |
155
|
$ |
4
|
$ |
—
|
$ |
151
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Over-the-counter
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
—
|
—
|
—
|
—
|
||||||||||||||||
Total derivatives, subject to a master netting or similar arrangement
|
$
|
67
|
|
$
|
6
|
|
$
|
—
|
|
$
|
61
|
|
$ |
155
|
$ |
4
|
$ |
—
|
$ |
151
|
||||||||||||
(1)
|
Excludes $26 million and $11 million of derivative assets at December 31, 2018 and 2017, respectively, which are not subject to master netting or similar arrangements.
|
|
December 31, 2018
Gross Amounts Not Offset in the Consolidated
Balance Sheet
|
December 31, 2017
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
|
$
|
6
|
|
$
|
6
|
|
$
|
—
|
|
$
|
—
|
|
$ |
4
|
$ |
4
|
$ |
—
|
$ |
—
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Over-the-counter
|
|
88
|
|
|
—
|
|
|
—
|
|
|
88
|
|
57
|
—
|
—
|
57
|
||||||||||||||||
Total derivatives, subject to a master netting or similar arrangement
|
$
|
94
|
|
$
|
6
|
|
$
|
—
|
|
$
|
88
|
|
$ |
61
|
$ |
4
|
$ |
—
|
$ |
57
|
||||||||||||
(1)
|
Excludes $9 million and $5 million of derivative liabilities at December 31, 2018 and 2017, respectively, which are not subject to master netting or similar arrangements.
|
|
Current
|
Noncurrent
|
||||||
Natural Gas (bcf):
|
|
|
||||||
Fixed price
(1)
|
|
29
|
|
|
8
|
|
||
Basis
|
|
136
|
|
|
488
|
|
||
Electricity (MWh):
|
|
|
||||||
Fixed price
(1)
|
|
367,019
|
|
|
—
|
|
||
FTRs
|
|
45,351,415
|
|
|
—
|
|
||
Interest rate
(2)
|
$
|
700,000,000
|
|
$
|
1,200,000,000
|
|
(1)
|
Includes options.
|
(2)
|
Maturity is determined based on final settlement period.
|
|
AOCI After-
T
ax
|
Amounts Expected to be
Reclassified to Earnings During the Next 12 Months After-Tax |
Maximum Term
|
|||||||||
(millions)
|
|
|
|
|
|
|
||||||
Interest rate
|
$
|
(13
|
)
|
$
|
(1
|
)
|
|
396 months
|
|
|||
Total
|
$
|
(13
|
)
|
$
|
(1
|
)
|
|
|||||
|
Fair Value –
Derivatives under Hedge Accounting |
|
Fair Value –
Derivatives not under Hedge Accounting |
|
Total Fair Value
|
|
||||||
(millions)
|
|
|
|
|||||||||
At December 31, 2018
|
|
|
|
|
|
|
|
|
|
|||
ASSETS
|
|
|
|
|
|
|
|
|
|
|||
Current Assets
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
$
|
—
|
|
$
|
60
|
|
$
|
60
|
|
|||
Interest rate
|
|
3
|
|
|
—
|
|
|
3
|
|
|||
Total current derivative assets
(1)
|
|
3
|
|
|
60
|
|
|
63
|
|
|||
Noncurrent Assets
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
|
—
|
|
|
30
|
|
|
30
|
|
|||
Total noncurrent derivative assets
(2)
|
|
—
|
|
|
30
|
|
|
30
|
|
|||
|
||||||||||||
Total derivative assets
|
$
|
3
|
|
$
|
90
|
|
$
|
93
|
|
|||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
$
|
—
|
|
$
|
15
|
|
$
|
15
|
|
|||
Interest rate
|
|
10
|
|
|
—
|
|
|
10
|
|
|||
Total current derivative liabilities
(3)
|
|
10
|
|
|
15
|
|
|
25
|
|
|||
Noncurrent Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Interest rate
|
|
78
|
|
|
—
|
|
|
78
|
|
|||
Total noncurrent derivatives liabilities
(4)
|
|
78
|
|
|
—
|
|
|
78
|
|
|||
|
||||||||||||
Total derivative liabilities
|
$
|
88
|
|
$
|
15
|
|
$
|
103
|
|
|||
At December 31, 2017
|
|
|
|
|
|
|
|
|
|
|||
ASSETS
|
|
|
|
|
|
|
|
|
|
|||
Current Assets
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
$ |
—
|
$ |
75
|
$ |
75
|
||||||
Total current derivative assets
(1)
|
—
|
75
|
75
|
|||||||||
Noncurrent Assets
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
—
|
91
|
91
|
|||||||||
Total noncurrent derivative assets
(2)
|
—
|
91
|
91
|
|||||||||
|
||||||||||||
Total derivative assets
|
$ |
—
|
$ |
166
|
$ |
166
|
||||||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
$ |
—
|
$ |
9
|
$ |
9
|
||||||
Interest rate
|
44
|
—
|
44
|
|||||||||
Total current derivative liabilities
(3)
|
44
|
9
|
53
|
|||||||||
Noncurrent Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Interest rate
|
13
|
—
|
13
|
|||||||||
Total noncurrent derivative liabilities
(4)
|
13
|
—
|
13
|
|||||||||
|
||||||||||||
Total derivative liabilities
|
$ |
57
|
$ |
9
|
$ |
66
|
||||||
(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)
|
Current derivative liabilities are presented in other current liabilities in Virginia Power’s Consolidated Balance Sheets.
|
(4)
|
Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in Virginia Power’s Consolidated Balance Sheets.
|
Derivatives in cash flow hedging relationships
|
Amount of Gain
(Loss) Recognized in AOCI on Derivatives (Effective Portion)
(1)
|
|
Amount of Gain
(Loss) Reclassified From AOCI to Income |
|
Increase
(Decrease) in Derivatives Subject to Regulatory Treatment
(2)
|
|
||||||
(millions)
|
|
|
|
|||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|||
Derivative type and location of gains (losses):
|
|
|
|
|||||||||
Interest rate
(3)
|
$
|
2
|
|
$
|
(1
|
)
|
$
|
39
|
|
|||
|
||||||||||||
Total
|
$
|
2
|
|
$
|
(1
|
)
|
$
|
39
|
|
|||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|||
Derivative type and location of gains (losses):
|
|
|
|
|||||||||
Interest rate
(3)
|
$ |
(8
|
) | $ |
(1
|
) | $ |
(58
|
) | |||
|
||||||||||||
Total
|
$ |
(8
|
) | $ |
(1
|
) | $ |
(58
|
) | |||
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|||
Derivative type and location of gains (losses):
|
|
|
|
|||||||||
Interest rate
(3)
|
$ |
(3
|
) | $ |
(1
|
) | $ |
(26
|
) | |||
|
||||||||||||
Total
|
$ |
(3
|
) | $ |
(1
|
) | $ |
(26
|
) | |||
(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.
|
(1)
|
Includes derivative activity amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Virginia Power’s Consolidated Statements of Income.
|
(2)
|
Amounts recorded in Virginia Power’s Consolidated Statements of Income are classified in electric fuel and other energy-related purchases.
|
|
December 31, 2018
|
December 31, 2017
|
||||||||||||||||||||||||||||||
|
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 |
|
Financial
Instruments |
|
Cash
Collateral Received |
|
Net
Amounts |
|
Gross Assets
Presented in the Consolidated Balance Sheet |
Financial
Instruments |
Cash
Collateral Received |
Net
Amounts |
||||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Commodity contracts:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Over-the-counter
|
$
|
3
|
|
$
|
—
|
|
$
|
—
|
|
$
|
3
|
|
$ |
—
|
$ |
—
|
$ |
—
|
$ |
—
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Over-the-counter
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
1
|
—
|
—
|
1
|
||||||||||||||||
Foreign currency contracts:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Over-the-counter
|
|
26
|
|
|
2
|
|
|
—
|
|
|
24
|
|
32
|
2
|
—
|
30
|
||||||||||||||||
Total derivatives, subject to a master netting or similar arrangement
|
$
|
31
|
|
$
|
2
|
|
$
|
—
|
|
$
|
29
|
|
$ |
33
|
$ |
2
|
$ |
—
|
$ |
31
|
||||||||||||
|
December 31, 2018
|
December 31, 2017
|
||||||||||||||||||||||||||||||
|
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 |
|
Financial
Instruments |
|
Cash
Collateral Paid |
|
Net
Amounts |
|
Gross
Liabilities Presented in the Consolidated Balance Sheet |
Financial
|
Cash
Collateral Paid |
Net
Amounts |
||||||||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Over-the-counter
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$ |
6
|
$ |
—
|
$ |
—
|
$ |
6
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Over-the-counter
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
—
|
—
|
—
|
—
|
||||||||||||||||
Foreign currency contracts:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Over-the-counter
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
2
|
2
|
—
|
—
|
||||||||||||||||
Total
master arrangement |
$
|
19
|
|
$
|
2
|
|
$
|
—
|
|
$
|
17
|
|
$ |
8
|
$ |
2
|
$ |
—
|
$
|
6
|
||||||||||||
|
Current
|
Noncurrent
|
||||||
NGLs (Gal)
|
|
14,413,200
|
|
|
—
|
|
||
Interest rate
(1)
|
$
|
600,000,000
|
|
$
|
750,000,000
|
|
||
Foreign currency
(1)(2)
|
$
|
—
|
|
$
|
280,000,000
|
|
(1)
|
Maturity is determined based on final settlement period.
|
(2)
|
Euro equivalent volumes are
€
250,000,000.
|
|
AOCI After-
T
ax
|
Amounts Expected to be
Reclassified to Earnings During the Next 12 Months After-Tax |
Maximum Term
|
|||||||||
(millions)
|
|
|
|
|||||||||
Commodities:
|
|
|
|
|||||||||
NGLs
|
$
|
2
|
|
$
|
2
|
|
|
3 months
|
|
|||
Interest rate
|
|
(39
|
)
|
|
(3
|
)
|
|
312 months
|
|
|||
Foreign currency
|
|
12
|
|
|
(2
|
)
|
|
90 months
|
|
|||
Total
|
$
|
(25
|
)
|
$
|
(3
|
)
|
|
|||||
|
Fair Value –
Derivatives under Hedge Accounting |
|
Fair Value –
Derivatives not under Hedge Accounting |
|
Total Fair Value
|
|
||||||
(millions)
|
|
|
|
|||||||||
At December 31, 2018
|
|
|
|
|
|
|
|
|
|
|||
ASSETS
|
|
|
|
|
|
|
|
|
|
|||
Current Assets
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
$
|
3
|
|
$
|
—
|
|
$
|
3
|
|
|||
Interest rate
|
|
2
|
|
|
—
|
|
|
2
|
|
|||
Total current derivative assets
(1)
|
|
5
|
|
|
—
|
|
|
5
|
|
|||
Noncurrent Assets
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency
|
|
26
|
|
|
—
|
|
|
26
|
|
|||
Total noncurrent derivative assets
(2)
|
|
26
|
|
|
—
|
|
|
26
|
|
|||
|
||||||||||||
Total derivative assets
|
$
|
31
|
|
$
|
—
|
|
$
|
31
|
|
|||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Interest rate
|
$
|
9
|
|
$
|
—
|
|
$
|
9
|
|
|||
Foreign currency
|
|
2
|
|
|
—
|
|
|
2
|
|
|||
Total current derivative liabilities
(3)
|
|
11
|
|
|
—
|
|
|
11
|
|
|||
Noncurrent Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Interest rate
|
|
8
|
|
|
—
|
|
|
8
|
|
|||
Total noncurrent derivative liabilities
(4)
|
|
8
|
|
|
—
|
|
|
8
|
|
|||
|
||||||||||||
Total derivative liabilities
|
$
|
19
|
|
$
|
—
|
|
$
|
19
|
|
|||
At December 31, 2017
|
|
|
|
|
|
|
|
|
|
|||
ASSETS
|
|
|
|
|
|
|
|
|
|
|||
Noncurrent Assets
|
|
|
|
|
|
|
|
|
|
|||
Interest rate
|
$ |
1
|
$ |
—
|
$ |
1
|
||||||
Foreign currency
|
32
|
—
|
32
|
|||||||||
Total noncurrent derivative assets
(2)
|
33
|
—
|
33
|
|||||||||
|
||||||||||||
Total derivative assets
|
$ |
33
|
$ |
—
|
$ |
33
|
||||||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
$ |
6
|
$ |
—
|
$ |
6
|
||||||
Foreign currency
|
2
|
—
|
2
|
|||||||||
Total current derivative liabilities
(
5
)
|
8
|
—
|
8
|
|||||||||
|
||||||||||||
Total derivative liabilities
|
$ |
8
|
$ |
—
|
$ |
8
|
||||||
(1)
|
Current derivative assets
include $2 million
in other current assets
, with the remainder recorded in
current assets of discontinued operations in Dominion Energy Gas’ Consolidated Balance Sheets.
|
(2)
|
Noncurrent derivative assets are presented in other deferred charges and other assets in Dominion Energy Gas’ Consolidated Balance Sheets.
|
(3)
|
Current derivative liabilities are presented in other current liabilities and current liabilities of discontinued operations in Dominion Energy Gas’ Consolidated Balance Sheets.
|
(4)
|
Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in Dominion Energy Gas’ Consolidated Balance Sheets.
|
(5)
|
Current derivative liabilities include $2 million in other current liabilities, with the remainder recorded in current liabilities of discontinued operations in Dominion Energy Gas’ Consolidated Balance Sheets.
|
Derivatives in cash flow hedging relationships
|
Amount of Gain
(Loss) Recognized in AOCI on Derivatives (Effective Portion)
(1)
|
|
Amount of Gain
(Loss) Reclassified From AOCI to Income |
|
||||
(millions)
|
|
|
||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
||
Derivative type and location of gains (losses):
|
|
|
||||||
Commodity:
|
|
|
||||||
Net
i
|
|
$
|
(8
|
)
|
||||
Total commodity
|
$
|
1
|
|
$
|
(8
|
)
|
||
|
||||||||
Interest rate
(2)
|
|
(16
|
)
|
|
(5
|
)
|
||
Foreign currency
(3)
|
|
(6
|
)
|
|
(13
|
)
|
||
|
||||||||
Total
|
$
|
(21
|
)
|
$
|
(26
|
)
|
||
Year Ended December 31, 2017
|
|
|
|
|
|
|
||
Derivative type and location of gains (losses):
|
|
|
||||||
Commodity:
|
|
|
||||||
Net
i
ncome from discontinued operations
|
|
$ |
(8
|
) | ||||
Total commodity
|
$ |
(10
|
) | $ |
(8
|
) | ||
|
||||||||
Interest rate
(2)
|
1
|
(6
|
) | |||||
Foreign currency
(3)
|
18
|
20
|
||||||
|
||||||||
Total
|
$ |
9
|
$ |
6
|
||||
Year Ended December 31, 2016
|
|
|
|
|
|
|
||
Derivative type and location of gains (losses):
|
|
|
||||||
Commodity:
|
|
|
||||||
Net
i
ncome from discontinued operations
|
|
$ |
4
|
|||||
Total commodity
|
$ |
(12
|
) | $ |
4
|
|||
|
||||||||
Interest rate
(2)
|
(8
|
) |
(2
|
) | ||||
Foreign currency
(3)
|
(6
|
) |
(17
|
) | ||||
|
||||||||
Total
|
$ |
(26
|
) | $ |
(15
|
) | ||
(1)
|
Amounts deferred into AOCI have no associated effect in Dominion Energy Gas’ Consolidated Statements of Income.
|
(2)
|
Amounts recorded in Dominion Energy Gas’ Consolidated Statements of Income are classified in interest and related charges.
|
(3)
|
Amounts recorded in Dominion Energy Gas’ Consolidated Statements of Income are classified in other income.
|
Derivatives not designated as hedging instruments
|
Amount of Gain (Loss) Recognized in Income on
Derivatives |
|||||||||||
Year Ended December 31,
|
2018
|
|
2017
|
2016
|
||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|||
Derivative type and location of gains (losses):
|
|
|
|
|||||||||
Commodity
|
|
|
|
|||||||||
Operating revenue
|
$
|
(11
|
)
|
$ |
—
|
$ |
1
|
|||||
|
||||||||||||
Total
|
$
|
(11
|
)
|
$ |
—
|
$ |
1
|
|||||
|
2018
|
|
2017
|
2016
|
||||||||
(millions, except EPS)
|
|
|
|
|||||||||
Net Income Attributable to Dominion Energy
|
$
|
2,447
|
|
$ |
2,999
|
$ |
2,123
|
|||||
Average shares of common stock outstanding – Basic
|
|
654.2
|
|
636.0
|
616.4
|
|||||||
Net effect of dilutive securities
(1)
|
|
0.7
|
|
—
|
0.7
|
|||||||
Average shares of common stock outstanding – Diluted
|
|
654.9
|
|
636.0
|
617.1
|
|||||||
Earnings Per Common Share – Basic
|
$
|
3.74
|
|
$ |
4.72
|
$ |
3.44
|
|||||
Earnings Per Common Share – Diluted
|
$
|
3.74
|
|
$ |
4.72
|
$ |
3.44
|
(1)
|
Dilutive securities for 2018 consist primarily of forward sale agreements, effective April 2018 to December 2018. Dilutive securities for 2016 consist primarily of the 2013 Equity Units. See Notes 17 and 19 for more information.
|
|
Amortized
Cost
|
|
Total
Unrealized
Gains
|
|
Total
Unrealized
Losses
|
|
Fair Value
|
|
||||||||
(millions)
|
|
|
|
|
||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity securities:
(1)
|
|
|
|
|
||||||||||||
U.S.
|
$
|
1,741
|
|
$
|
1,640
|
|
$
|
(51
|
)
|
$
|
3,330
|
|
||||
Fixed income securities:
(2)
|
|
|
|
|
||||||||||||
Corporate debt instruments
|
|
435
|
|
|
5
|
|
|
(9
|
)
|
|
431
|
|
||||
Government securities
|
|
1,092
|
|
|
17
|
|
|
(12
|
)
|
|
1,097
|
|
||||
Common/collective trust funds
|
|
76
|
|
|
—
|
|
|
—
|
|
|
76
|
|
||||
Cash equivalents and other
(3)
|
|
4
|
|
—
|
—
|
|
4
|
|
||||||||
Total
|
$
|
3,348
|
|
$
|
1,662
|
|
$
|
(72
|
)
(4)
|
$
|
4,938
|
|
||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity securities:
(2)
|
|
|
|
|
||||||||||||
U.S.
|
$ |
1,569
|
$ |
1,857
|
$ |
—
|
$ |
3,426
|
||||||||
Fixed income securities:
(2)
|
|
|
|
|
||||||||||||
Corporate debt instruments
|
430
|
15
|
(1
|
) |
444
|
|||||||||||
Government securities
|
1,039
|
27
|
(5
|
) |
1,061
|
|||||||||||
Common/collective trust funds
|
60
|
—
|
—
|
60
|
||||||||||||
Cost method investments
|
68
|
—
|
—
|
68
|
||||||||||||
Cash equivalents and other
(3)
|
34
|
—
|
—
|
34
|
||||||||||||
Total
|
$ |
3,200
|
$ |
1,899
|
$
|
(6
|
)
(4)
|
$ |
5,093
|
|||||||
(1)
|
Effective January 2018, unrealized gains and losses on equity securities, including those previously classified as cost method investments, are included in other income and the nuclear decommissioning trust regulatory liability as discussed in Note 2.
|
(2)
|
Unrealized gains and losses on equity securities (for 2017) and fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability as discussed in Note 2.
|
(3)
|
Includes pending sales of securities of $5 million at December 31, 2017.
|
(4)
|
The fair value of securities in an unrealized loss position was $833 million and $565 million at December 31, 2018 and 2017, respectively.
|
|
|
|
|
|
|
Twelve Months Ended
December 31, 2018 |
|
||
(millions)
|
|
|||
Net losses recognized during the period
|
$
|
(245
|
)
|
|
Less: Net gains recognized during the period
on securities sold during the period |
|
(58
|
)
|
|
Unrealized losses recognized during the period
on securities still held at December 31, 2018
(1)
|
$
|
(303
|
)
|
|
(1)
|
Included in other income and the nuclear decommissioning trust regulatory liability as discussed in Note 2.
|
|
|
|
||
(millions)
|
|
|||
Due in one year or less
|
$
|
167
|
|
|
Due after one year through five years
|
|
389
|
|
|
Due after five years through ten years
|
|
376
|
|
|
Due after ten years
|
|
672
|
|
|
Total
|
$
|
1,604
|
|
|
Year Ended December 31,
|
2018
|
|
2017
|
2016
|
||||||||
(millions)
|
|
|
|
|
||||||||
Proceeds from sales
|
$
|
1,804
|
|
$ |
1,831
|
$ |
1,422
|
|||||
Realized gains
(1)
|
|
140
|
|
166
|
128
|
|||||||
Realized losses
(1)
|
|
91
|
|
71
|
55
|
(1)
|
Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability as discussed in Note 2.
|
Year Ended December 31,
|
2018
|
|
2017
|
2016
|
||||||||
(millions)
|
|
|
|
|||||||||
Total other-than-temporary impairment losses
(1)
|
$
|
30
|
|
$ |
44
|
$ |
51
|
|||||
Losses recorded to the nuclear decommissioning trust regulatory liability
|
|
—
|
|
(16
|
) |
(16
|
) | |||||
Losses recognized in other comprehensive income (before taxes)
|
|
(30
|
)
|
(5
|
) |
(12
|
) | |||||
Net impairment losses recognized in earnings
|
$
|
—
|
|
$ |
23
|
$ |
23
|
|||||
(1)
|
Amounts include other-than-temporary impairment losses for debt securities of $
5
million and $
13
million at December 31, 2017 and 2016, respectively.
|
|
Amortized
Cost
|
|
Total
Unrealized
Gains
|
|
Total
Unrealized
Losses
|
|
Fair Value
|
|
||||||||
(millions)
|
|
|
|
|
||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity securities:
(1)
|
|
|
|
|
||||||||||||
U.S.
|
$
|
858
|
|
$
|
751
|
|
$
|
(24
|
)
|
$
|
1,585
|
|
||||
Fixed income securities:
(2)
|
|
|
|
|
||||||||||||
Corporate debt instruments
|
|
224
|
|
|
2
|
|
|
(5
|
)
|
|
221
|
|
||||
Government securities
|
|
504
|
|
|
7
|
|
|
(5
|
)
|
|
506
|
|
||||
Common/collective trust funds
|
|
51
|
|
|
—
|
|
|
—
|
|
|
51
|
|
||||
Cash equivalents and other
(3)
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Total
|
$
|
1,643
|
|
$
|
760
|
|
$
|
(34
|
)
(4)
|
$
|
2,369
|
|
||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity securities:
(2)
|
|
|
|
|
||||||||||||
U.S.
|
$ |
734
|
$ |
831
|
$ |
—
|
$ |
1,565
|
||||||||
Fixed income securities:
(2)
|
|
|
|
|
||||||||||||
Corporate debt instruments
|
216
|
8
|
—
|
224
|
||||||||||||
Government securities
|
482
|
13
|
(2
|
) |
493
|
|||||||||||
Common/collective trust funds
|
27
|
—
|
—
|
27
|
||||||||||||
Cost method investments
|
68
|
—
|
—
|
68
|
||||||||||||
Cash equivalents and other
(3)
|
22
|
—
|
—
|
22
|
||||||||||||
Total
|
$ |
1,549
|
$ |
852
|
$ |
(2
|
)
(4)
|
$ |
2,399
|
|||||||
(1)
|
Effective January 2018, unrealized gains and losses on equity securities, including those previously classified as cost method investments, are included in other income and the nuclear decommissioning trust regulatory liability as discussed in Note 2.
|
(2)
|
Unrealized gains and losses on equity securities (for 2017) and fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability as discussed in Note 2.
|
(3)
|
Includes pending sales of securities of $6 million at both December 31, 2018 and 2017.
|
(4)
|
The fair value of securities in an unrealized loss position was $404 million and $234 million at December 31, 2018 and 2017, respectively.
|
|
|
|||
(millions)
|
|
|||
Net losses recognized during the period
|
$
|
(105
|
)
|
|
Less: Net gains recognized during the period
on securities sold during the period |
|
(32
|
)
|
|
Unrealized losses recognized during the period
on securities still held at December 31, 2018
(1)
|
$
|
(137
|
)
|
|
(1)
|
Included in other income and the nuclear decommissioning trust regulatory liability as discussed in Note 2.
|
|
|
|
|
|
|
Amount
|
|
||
(millions)
|
|
|||
Due in one year or less
|
$
|
54
|
|
|
Due after one year through five years
|
|
156
|
|
|
Due after five years through ten years
|
|
210
|
|
|
Due after ten years
|
|
358
|
|
|
Total
|
$
|
778
|
|
|
Year Ended December 31,
|
2018
|
|
2017
|
2016
|
||||||||
(millions)
|
|
|
|
|||||||||
Proceeds from sales
|
$
|
887
|
|
$ |
849
|
$ |
733
|
|||||
Realized gains
(1)
|
|
60
|
|
75
|
63
|
|||||||
Realized losses
(1)
|
|
27
|
|
30
|
27
|
(1)
|
Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability as discussed in Note 2.
|
Year Ended December 31,
|
2018
|
|
2017
|
2016
|
||||||||
(millions)
|
|
|
|
|||||||||
Total other-than-temporary impairment losses
(1)
|
$
|
15
|
|
$ |
20
|
$ |
26
|
|||||
Losses recorded to the nuclear decommissioning trust regulatory liability
|
|
—
|
|
(16
|
) |
(16
|
) | |||||
Losses recognized in other comprehensive income (before taxes)
|
|
(15
|
)
|
(2
|
) |
(7
|
) | |||||
Net impairment losses recognized in earnings
|
$
|
—
|
|
$ |
2
|
$ |
3
|
|||||
(1)
|
Amounts include other-than-temporary impairment losses for debt securities of $
2
million and $
8
million at December 31, 2017 and 2016
|
Company
|
Ownership%
|
Investment Balance
|
Description
|
|||||||||||
As of December 31,
|
|
2018
|
2017
|
|
||||||||||
(millions)
|
|
|
|
|
||||||||||
Dominion Energy
|
|
|
|
|
|
|
|
|
|
|
||||
Atlantic Coast Pipeline
|
48
|
% |
$
|
820
|
|
$ |
382
|
Gas transmission system
|
||||||
Blue Racer
|
50
|
% |
|
—
|
|
691
|
Midstream gas and related services
|
|||||||
Iroquois
|
50
|
% |
|
302
|
|
311
|
Gas transmission system
|
|||||||
Fowler Ridge
|
50
|
% |
|
82
|
|
81
|
Wind-powered merchant generation facility
|
|||||||
Other
(
1
)
|
various
|
|
74
|
|
79
|
|
||||||||
Total
|
|
$
|
1,278
|
|
$ |
1,544
|
|
|||||||
Dominion Energy Gas
|
|
|
|
|
|
|
|
|
|
|
||||
Iroquois
|
50
|
% |
|
302
|
|
311
|
Gas transmission system
|
|||||||
White River Hub
|
50
|
% |
|
37
|
|
38
|
Gas transmission system
|
|||||||
Total
|
|
$
|
339
|
|
$ |
349
|
|
|||||||
(1)
|
Liability of less than $1 million and $17 million associated with NedPower recorded to other deferred credits and other liabilities, on the Consolidated Balance Sheets as of December 31, 2018 and 2017, respectively. See additional discussion of NedPower below.
|
|
At December 31, 2018
|
|
At December 31, 2017
|
|||||
(millions)
|
|
|
||||||
Current assets
|
$
|
112
|
|
$ |
122
|
|||
Noncurrent assets
|
|
588
|
|
599
|
||||
Current liabilities
|
|
165
|
|
21
|
||||
Noncurrent liabilities
|
|
193
|
|
334
|
|
Year Ended
December 31, 2018 |
|
Year Ended
December 31, 2017 |
Year Ended
December 31, 2016 |
||||||||
(millions)
|
|
|
|
|||||||||
Revenues
|
$
|
194
|
|
$ |
194
|
$ |
195
|
|||||
Operating
i
ncome
|
|
108
|
|
110
|
103
|
|||||||
Net
i
ncome
|
|
94
|
|
93
|
86
|
|
At December 31, 2018
|
|
At December 31, 2017
|
|||||
(millions)
|
|
|
||||||
Current assets
|
$
|
3
|
|
$ |
3
|
|||
Noncurrent assets
|
|
41
|
|
42
|
||||
Current liabilities
|
|
2
|
|
1
|
|
Year Ended
December 31, 2018 |
|
Year Ended
December 31, 2017 |
Period Ended
December 31, 2016 |
||||||||
(millions)
|
|
|
|
|||||||||
Revenues
|
$
|
12
|
|
$ |
10
|
$ |
3
|
|||||
Operating
i
ncome
|
|
8
|
|
7
|
2
|
|||||||
Net
i
ncome
|
|
8
|
|
7
|
2
|
|
|
|
|
|||||||||||||
|
|
Bath
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
County
|
|
|
North
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Pumped
|
|
|
Anna
|
|
|
Clover
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Storage
|
|
|
Units 1
|
|
|
Power
|
|
|
Millstone
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Station
(1)
|
|
|
and 2
(1)
|
|
|
Station
(1)
|
|
|
Unit 3
(2)
|
|
||||
(millions, except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Ownership interest
|
|
|
60
|
%
|
|
|
88.4
|
%
|
|
|
50
|
%
|
|
|
93.5
|
%
|
Plant in service
|
|
|
1,058
|
|
|
|
2,560
|
|
|
|
590
|
|
|
|
1,231
|
|
Accumulated depreciation
|
|
|
(639
|
)
|
|
|
(1,305
|
)
|
|
|
(240
|
)
|
|
|
(400
|
)
|
Nuclear fuel
|
|
|
—
|
|
|
|
721
|
|
|
|
—
|
|
|
|
571
|
|
Accumulated amortization of nuclear fuel
|
|
|
—
|
|
|
|
(608
|
)
|
|
|
—
|
|
|
|
(423
|
)
|
Plant under construction
|
|
|
6
|
|
|
|
103
|
|
|
|
9
|
|
|
|
66
|
|
(1)
|
Units jointly owned by Virginia Power.
|
(2)
|
Unit jointly owned by Dominion Energy.
|
(1)
|
Goodwill recorded at the Corporate and Other segment is allocated to the primary operating segments for goodwill impairment testing purposes.
|
(2)
|
Goodwill amounts do not contain any accumulated impairment losses.
|
(3)
|
See Note 3.
|
|
2018
|
2017
|
||||||||||||||
At December 31,
|
Gross Carrying
Amount |
|
Accumulated
Amortization |
|
Gross Carrying
Amount |
Accumulated
Amortization |
||||||||||
(millions)
|
|
|
|
|
||||||||||||
Dominion Energy
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Software, licenses and other
|
$
|
1,033
|
|
$
|
363
|
|
$
|
1,043
|
$
|
358
|
||||||
Virginia Power
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Software, licenses and other
|
$
|
384
|
|
$
|
134
|
|
$
|
347
|
$
|
114
|
||||||
Dominion Energy Gas
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Software, licenses and other
|
$
|
179
|
|
$
|
64
|
|
$
|
151
|
$
|
60
|
||||||
|
2019
|
2020
|
2021
|
2022
|
2023
|
|||||||||||||||
(millions)
|
|
|
|
|
|
|||||||||||||||
Dominion Energy
|
$
|
67
|
|
$
|
56
|
|
$
|
44
|
|
$
|
34
|
|
$
|
23
|
|
|||||
Virginia Power
|
$
|
29
|
|
$
|
23
|
|
$
|
16
|
|
$
|
12
|
|
$
|
6
|
|
|||||
Dominion Energy Gas
|
$
|
10
|
|
$
|
9
|
|
$
|
9
|
|
$
|
7
|
|
$
|
6
|
|
|||||
At December 31,
|
2018
|
|
2017
|
|||||
(millions)
|
|
|
||||||
Dominion Energy
|
|
|
|
|
|
|
||
Regulatory assets:
|
|
|
||||||
Deferred cost of fuel used in electric generation
(1)
|
$
|
174
|
|
$ |
23
|
|||
Deferred rate adjustment clause costs
(2)
|
|
96
|
|
70
|
||||
Deferred nuclear refueling outage costs
(3)
|
|
69
|
|
54
|
||||
Unrecovered gas costs
(4)
|
|
14
|
|
38
|
||||
Other
|
|
143
|
|
109
|
||||
Regulatory assets-current
|
|
496
|
|
294
|
||||
Unrecognized pension and other postretirement benefit costs
(5)
|
|
1,497
|
|
1,336
|
||||
Deferred rate adjustment clause costs
(2)
|
|
329
|
|
401
|
||||
Utility reform legislation
(6)
|
|
204
|
|
147
|
||||
PJM transmission rates
(7)
|
|
192
|
|
222
|
||||
Derivatives
(8)
|
|
184
|
|
223
|
||||
Deferred cost of fuel used in electric generation
(1)
|
|
83
|
|
—
|
||||
Other
|
|
187
|
|
151
|
||||
Regulatory assets-noncurrent
|
|
2,676
|
|
2,480
|
||||
Total regulatory assets
|
$
|
3,172
|
|
$ |
2,774
|
|||
Regulatory liabilities:
|
|
|
||||||
Provision for future cost of removal and AROs
(9)
|
$
|
117
|
|
$ |
101
|
|||
Cost-of-service
impact of 2017 Tax Reform Act
(10)
|
|
104
|
|
—
|
||||
Reserve for rate credits to electric utility customers
(11)
|
|
71
|
|
—
|
||||
Other
|
|
64
|
|
92
|
||||
Regulatory liabilities-current
(12)
|
|
356
|
|
193
|
||||
Income taxes refundable through future rates
(13)
|
|
4,071
|
|
4,058
|
||||
Provision for future cost of removal and AROs
(9)
|
|
1,409
|
|
1,384
|
||||
Nuclear decommissioning trust
(14)
|
|
1,070
|
|
1,121
|
||||
Derivatives
(8)
|
|
25
|
|
69
|
||||
Other
|
|
265
|
|
284
|
||||
Regulatory liabilities-noncurrent
|
|
6,840
|
|
6,916
|
||||
Total regulatory liabilities
|
$
|
7,196
|
|
$ |
7,109
|
|||
Virginia Power
|
|
|
|
|
|
|
||
Regulatory assets:
|
|
|
||||||
Deferred cost of fuel used in electric generation
(1)
|
$
|
174
|
|
$ |
23
|
|||
Deferred rate adjustment clause costs
(2)
|
|
78
|
|
56
|
||||
Deferred nuclear refueling outage costs
(3)
|
|
69
|
|
54
|
||||
Other
|
|
103
|
|
72
|
||||
Regulatory assets-current
|
|
424
|
|
205
|
||||
Deferred rate adjustment clause costs
(2)
|
|
230
|
|
312
|
||||
PJM transmission rates
(7)
|
|
192
|
|
222
|
||||
Derivatives
(8)
|
|
151
|
|
190
|
||||
Deferred cost of fuel used in electric generation
(1)
|
|
83
|
|
—
|
||||
Other
|
|
81
|
|
86
|
||||
Regulatory assets-noncurrent
|
|
737
|
|
810
|
||||
Total regulatory assets
|
$
|
1,161
|
|
$ |
1,015
|
|||
Regulatory liabilities:
|
|
|
||||||
Cost-of-service
impact of 2017 Tax Reform Act
(10)
|
$
|
95
|
|
$ |
—
|
|||
Provision for future cost of removal
(9)
|
|
92
|
|
80
|
||||
Reserve for rate credits to customers
(11)
|
|
71
|
|
—
|
||||
Other
|
|
41
|
|
47
|
||||
Regulatory liabilities-current
|
|
299
|
|
127
|
||||
Income taxes refundable through future rates
(13)
|
|
2,579
|
|
2,581
|
||||
Nuclear decommissioning trust
(14)
|
|
1,070
|
|
1,121
|
||||
Provision for future cost of removal
(9)
|
|
940
|
|
915
|
||||
Derivatives
(8)
|
|
25
|
|
69
|
Other
|
|
33
|
|
74
|
||||
Regulatory liabilities-noncurrent
|
|
4,647
|
|
4,760
|
||||
Total regulatory liabilities
|
$
|
4,946
|
|
$ |
4,887
|
|||
Dominion Energy Gas
|
|
|
|
|
|
|
||
Regulatory assets:
|
|
|
||||||
Unrecovered gas costs
(4)
|
$
|
1
|
|
$ |
11
|
|||
Other
|
|
7
|
|
6
|
||||
Regulatory assets-current
(15)
|
|
8
|
|
17
|
||||
Unrecognized pension and other postretirement benefit costs
(5)
|
|
15
|
|
—
|
||||
Interest rate hedges
(16)
|
|
33
|
|
33
|
||||
Other
|
|
4
|
|
8
|
||||
Regulatory assets-noncurrent
|
|
52
|
|
41
|
||||
Total regulatory assets
|
$
|
60
|
|
$ |
58
|
|||
Regulatory liabilities:
|
|
|
||||||
Provision for future cost of removal and AROs
(9)
|
$
|
9
|
|
$ |
7
|
|||
Overrecovered gas costs
(4)
|
|
7
|
|
5
|
||||
Other
|
|
8
|
|
9
|
||||
Regulatory liabilities-current
(12)
|
|
24
|
|
21
|
||||
Income taxes refundable through future rates
(13)
|
|
530
|
|
551
|
||||
Provision for future cost of removal and AROs
(9)
|
|
113
|
|
124
|
||||
Unrecognized other postretirement benefit costs
(17)
|
|
106
|
|
76
|
||||
Other
|
|
16
|
|
28
|
||||
Regulatory liabilities-noncurrent
|
|
765
|
|
769
|
||||
Total regulatory liabilities
|
$
|
789
|
|
$ |
790
|
(1)
|
Reflects deferred fuel expenses for the Virginia and North Carolina jurisdictions of Dominion Energy and Virginia Power’s generation operations. See Note 13 for more information.
|
(2)
|
Primarily reflects deferrals under the electric transmission FERC formula rate and the deferral of costs associated with certain current and prospective rider projects net of income taxes refundable from the 2017 Tax Reform Act for Virginia Power and deferrals of costs associated with certain current and prospective rider projects for East Ohio. See Note 13 for more information.
|
(3)
|
Legislation enacted in Virginia in April 2014 requires Virginia Power to defer operation and maintenance costs incurred in connection with the refueling of any nuclear-powered generating plant. These deferred costs will be amortized over the refueling cycle, not to exceed 18 months.
|
(4)
|
Reflects unrecovered or overrecovered gas costs at regulated gas operations, which are recovered or refunded through filings with the applicable regulatory authority
.
|
(5)
|
Represents unrecognized pension and other postretirement employee benefit costs expected to be recovered through future rates generally over the expected remaining service period of plan participants by certain of Dominion Energy and Dominion Energy Gas’ rate-regulated subsidiaries.
|
(6)
|
Ohio legislation under House Bill 95, which became effective in September 2011. This law updates natural gas legislation by enabling gas companies to include more
up-to-date
cost levels when filing rate cases. It also allows gas companies to seek approval of capital expenditure plans under which gas companies can recognize carrying costs on associated capital investments placed in service and can defer the carrying costs plus depreciation and property tax expenses for recovery from ratepayers in the future.
|
(7)
|
Reflects amounts related to the PJM transmission cost allocation matter. See Note 13 for more information.
|
(8)
|
As discussed under Derivative Instruments in Note 2, for jurisdictions subject to cost-based rate regulation, changes in the fair value of derivative instruments result in the recognition of regulatory assets or regulatory liabilities as they are expected to be recovered from or refunded to customers.
|
(9)
|
Rates charged to customers by the Companies’ regulated businesses include a provision for the cost of future activities to remove assets that are expected to be incurred at the time of retirement.
|
(10)
|
Balance refundable to customers related to the decrease in revenue requirements for recovery of income taxes at the Companies’ regulated electric generation and electric and natural gas distribution operations. See Note 13 for more information.
|
(11)
|
Charge associated with Virginia legislation enacted in March 2018 that requires
one-time
rate credits of certain amounts to utility customers. See Note 13 for more information.
|
(12)
|
Current regulatory liabilities are presented in other current liabilities in Dominion Energy and Dominion Energy Gas’ Consolidated Balance Sheets.
|
(13)
|
Amounts recorded to pass the effect of reduced income tax rates from the 2017 Tax Reform Act to customers in future periods, which will reverse at the weighted average tax rate that was used to build the reserves over the remaining book life of the property, net of amounts to be recovered through future rates to pay income taxes that become payable when rate revenue is provided to recover AFUDC-equity.
|
(14)
|
Primarily reflects a regulatory liability representing amounts collected from Virginia jurisdictional customers and placed in external trusts (including income, losses and changes in fair value thereon) for the future decommissioning of Virginia Power’s utility nuclear generation stations, in excess of the related AROs.
|
(15)
|
Current regulatory assets are presented in other current assets in Dominion Energy Gas’ Consolidated Balance Sheets.
|
(16)
|
Reflects interest rate hedges recoverable from or refundable to customers. Certain of these instruments are settled and any related payments are being amortized into interest expense over the life of the related debt, which has a weighted average useful life of approximately 30 years.
|
(17)
|
Reflects a regulatory liability for the collection of postretirement benefit costs allowed in rates in excess of expense incurred.
|
●
|
The Virginia Commission previously approved Rider T1 concerning transmission rates. In May 2018, Virginia Power proposed a $755 million total revenue requirement consisting of $468 million for the transmission component of Virginia Power’s base rates and $287 million for Rider T1. This total revenue requirement represents a $146 million increase versus the revenues to be produced during the rate year under current rates. In August 2018, the Virginia Commission approved a total revenue requirement of $630 million, including Rider T1, subject to
true-up,
for the rate year beginning September 1, 2018. The Virginia Commission’s order required an adjustment to Rider T1 to begin providing projected benefits associated with the 2017 Tax Reform Act to customers in rates effective September 1, 2018. Such projected benefits were not included in the underlying transmission formula rates approved by FERC. Also in August 2018, Virginia Power filed a petition with the Virginia Commission seeking limited reconsideration and rehearing of this approval to adjust the total revenue requirement to $636 million. In November 2018, the Virginia Commission denied the petition for limited reconsideration and rehearing and adjusted the total revenue requirement to $628 million.
|
●
|
The Virginia Commission previously approved Rider U in conjunction with cost recovery to move certain electric distribution facilities underground as authorized by Virginia legislation. In March 2018, Virginia Power requested approval of its third phase of conversions totaling $179 million and a balance of $65 million in second phase conversions not previously approved for recovery through Rider U. Virginia Power also proposed a total $73 million revenue requirement for the rate year beginning February 1, 2019 for continuing recovery of the previously approved first and second phase conversions and the proposed second and third phase conversions. In December 2018, the Virginia Commission approved a total $70 million annual revenue requirement effective February 1, 2019, a total capital investment of $179 million for third phase conversions and a balance of $64 million for second phase conversions not previously approved for recovery through Rider U.
|
●
|
The Virginia Commission previously approved Riders C1A and C2A in connection with cost recovery for DSM programs. In October 2018, Virginia Power requested approval to implement ten new energy efficiency programs and one new demand-response DSM program for five years, subject to future extensions, with a $262 million cost cap, and proposed a total $49 million revenue requirement for the rate year beginning July 1, 2019, which represents an $18 million increase over the previous year. This matter is pending.
|
Rider Name
|
Application Date
|
Approval Date
|
Rate Year
Beginning
|
Total Revenue
Requirement (millions) |
|
Increase (Decrease) Over
Previous Year (millions) |
|
|||||||
Rider S
|
|
June 2018
|
|
February 2019
|
|
April 2019
|
|
$
|
215
|
|
|
$
|
(3
|
)
|
Rider GV
|
June 2018
|
February 2019
|
April 2019
|
120
|
38
|
|||||||||
Rider W
|
June 2018
|
February 2019
|
April 2019
|
105
|
(4
|
) | ||||||||
Rider R
|
June 2018
|
February 2019
|
April 2019
|
57
|
(9
|
) | ||||||||
Rider B
|
June 2018
|
February 2019
|
April 2019
|
38
|
(9
|
) | ||||||||
Rider BW
|
October 2018
|
Pending
|
September 2019
|
123
|
7
|
|||||||||
Rider
US-2
|
October 2018
|
Pending
|
September 2019
|
16
|
3
|
|||||||||
Rider E
|
December 2018
|
Pending
|
November 2019
|
114
|
N/A
|
Description and Location
of Project
|
Application
Date
|
|
Approval
Date
|
|
Type of
Line
|
|
Miles of
Lines
|
|
Cost Estimate
(millions)
|
|
||||||||||
Rebuild and operate existing 115 kV transmission lines between the Possum Point Switching Station and Northern Virginia Electric Cooperative’s Smoketown delivery point
|
June 2017
|
|
February 2018
|
|
230 kV
|
9
|
$ |
20
|
||||||||||||
Rebuild and operate between the Dooms substation and the Valley substation, along with associated substation work
|
September 2017
|
September 2018
|
500 kV
|
18
|
65
|
|||||||||||||||
Build and operate between the Idylwood and Tysons substations, along with associated substation work
|
November 2017
|
September 2018
|
230 kV
|
4
|
125
|
|||||||||||||||
Rebuild and operate between the Chesterfield and Hopewell substations, along with associated substation work
|
May 2018
|
November 2018
|
230 kV
|
8
|
30
|
|||||||||||||||
Rebuild and operate between the Chesterfield and Lakeside substations, along with associated substation work
|
May 2018
|
December 2018
|
230 kV
|
21
|
35
|
|||||||||||||||
Rebuild and operate between the Landstown and Thrasher substations, along with associated substation work
|
June 2018
|
December 2018
|
230 kV
|
8.5
|
20
|
|||||||||||||||
Partial rebuild of overhead transmission lines in Alleghany County, Virginia and Covington, Virginia
|
August 2018
|
Pending
|
138 kV
|
5
|
15
|
|||||||||||||||
Build a new substation and connect three existing transmission lines thereto in Fluvanna County, Virginia
|
October 2018
|
Pending
|
230 kV
|
<1
|
30
|
|
Amount
|
|
||
(millions)
|
|
|||
Dominion Energy
|
|
|
|
|
AROs at December 31, 2016
|
$ |
2,485
|
||
Obligations incurred during the period
|
37
|
|||
Obligations settled during the period
|
(214
|
) | ||
Revisions in estimated cash flows
|
7
|
|||
Accretion
|
117
|
|||
AROs at December 31, 2017
(1)
|
$ |
2,432
|
||
Obligations incurred during the period
|
|
20
|
|
|
Obligations settled during the period
|
|
(159
|
)
|
|
Revisions in estimated cash flows
(2)
|
|
120
|
|
|
Accretion
|
|
119
|
|
|
AROs at December 31, 2018
(1)
|
$
|
2,532
|
|
|
Virginia Power
|
|
|
|
|
AROs at December 31, 2016
|
$ |
1,443
|
||
Obligations incurred during the period
|
11
|
|||
Obligations settled during the period
|
(152
|
) | ||
Revisions in estimated cash flows
|
(1
|
) | ||
Accretion
|
64
|
|||
AROs at December 31, 2017
|
$ |
1,365
|
||
Obligations incurred during the period
|
|
14
|
|
|
Obligations settled during the period
|
|
(119
|
)
|
|
Revisions in estimated cash flows
(2)
|
|
120
|
|
|
Accretion
|
|
65
|
|
|
AROs at December 31, 2018
|
$
|
1,445
|
|
|
Dominion Energy Gas
|
|
|
|
|
AROs at December 31, 2016
|
$ |
83
|
||
Obligations incurred during the period
|
1
|
|||
Obligations settled during the period
|
(4
|
) | ||
Accretion
|
5
|
|||
AROs at December 31, 2017
(3)
|
$ |
85
|
||
Obligations incurred during the period
|
|
3
|
|
|
Obligations settled during the period
|
|
(6
|
)
|
|
Accretion
|
|
6
|
|
|
AROs at December 31, 2018
(3)
|
$
|
88
|
|
|
(1)
|
Includes $263 million and $282 million reported in other current liabilities at December 31, 2017, and 2018, respectively.
|
(2)
|
Reflects future ash pond and landfill closure costs at certain utility generation facilities. See Note 22 for further information.
|
(3)
|
Includes $76 million and $74 million reported in other deferred credits and other liabilities, with the remainder recorded in other current liabilities, at December 31, 2017 and 2018, respectively.
|
|
Facility Limit
|
Outstanding
Commercial Paper
(1)
|
Outstanding
Letters of Credit |
Facility Capacity
Available |
||||||||||||
(millions)
|
|
|
|
|
||||||||||||
At December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Joint revolving credit facility
(2)
|
$
|
6,000
|
|
$
|
324
|
|
$
|
88
|
|
$
|
5,588
|
|
||||
At December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Joint revolving credit facility
(3)
|
$ |
5,000
|
$ |
3,298
|
$ |
—
|
$ |
1,702
|
||||||||
Joint revolving credit facility
(3)
|
500
|
—
|
76
|
424
|
||||||||||||
Total
|
$ |
5,500
|
$ |
3,298
|
$ |
76
|
$ |
2,126
|
||||||||
(1)
|
The weighted-average interest rates of the outstanding commercial paper supported by Dominion Energy’s credit facilities were 2.93% and 1.61% at December 31, 2018 and 2017, respectively.
|
(2)
|
This credit facility matures in March 2023 and can be used by the Companies to support bank borrowings and the issuance of commercial paper, as well as to support up to a combined $2.0 billion of letters of credit.
|
(3)
|
These credit facilities were replaced in March 2018 with a $6.0 billion joint revolving credit facility. The facilities were scheduled to mature in April 2020 and were used to support bank borrowings and the issuance of commercial paper, as well as to support up to a combined $2.0 billion of letters of credit.
|
(1)
|
The weighted-average interest rates of the outstanding commercial paper supported by these credit facilities were 2.94% and 1.65% at December 31, 2018 and 2017, respectively.
|
(2)
|
The full amount of the facility is available to Virginia Power, less any amounts outstanding to
co-borrowers
Dominion Energy, Dominion Energy Gas and Questar Gas. The
sub-limit
for Virginia Power is set within the facility limit but can be changed at the option of the Companies multiple times per year. At December 31, 2018, the
sub-limit
for Virginia Power was $1.5 billion. If Virginia Power has liquidity needs in excess of its
sub-limit,
the
sub-limit
may be changed or such needs may be satisfied through short-term intercompany borrowings from Dominion Energy. This credit facility matures in March 2023 and can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $2.0 billion (or the
sub-limit,
whichever is less) of letters of credit.
|
(3)
|
These facilities were replaced in March 2018 with a $6.0 billion joint revolving credit facility. The full amount of the facilities was available to Virginia Power, less any amounts outstanding to
co-borrowers
Dominion Energy, Dominion Energy Gas and Questar Gas.
These facilities were scheduled to mature in April 2020 and were used to support bank borrowings and the issuance of commercial paper, as well as to support up to $2.0 billion (or the sub-limit, whichever is less) of letters of credit.
|
|
|
Outstanding
(1)
|
Credit |
|||||||||
(millions)
|
|
|
|
|||||||||
At December 31, 2018
|
|
|
|
|
|
|
|
|
|
|||
Joint revolving credit facility
(2)
|
$
|
1,500
|
|
$
|
10
|
|
$
|
—
|
|
|||
At December 31, 2017
|
|
|
|
|
|
|
|
|
|
|||
Joint revolving credit facility
(3)
|
$ |
1,000
|
$ |
629
|
$ |
—
|
||||||
Joint revolving credit facility
(3)
|
500
|
—
|
—
|
|||||||||
Total
|
$ |
1,500
|
$ |
629
|
$ |
—
|
||||||
(1)
|
The weighted-average interest rates of the outstanding commercial paper supported by these credit facilities were 2.58% and 1.57% at December 31, 2018 and 2017, respectively.
|
(2)
|
A maximum of $1.5 billion of the facility is available to Dominion Energy Gas, assuming adequate capacity is available after giving effect to uses by
co-borrowers
Dominion Energy, Virginia Power and Questar Gas. The
sub-limit
for Dominion Energy Gas is set within the facility limit but can be changed at the option of the Companies multiple times per year. At December 31, 2018, the
sub-limit
for Dominion Energy Gas was $750 million. If Dominion Energy Gas has liquidity needs in excess of its
sub-limit,
the
sub-limit
may be changed or such needs may be satisfied through short-term intercompany borrowings from Dominion Energy. This credit facility matures in March 2023 and can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $1.5 billion (or the
sub-limit,
whichever is less) of letters of credit.
|
(3)
|
These facilities were replaced in March 2018 with a $6.0 billion joint revolving credit facility. A maximum of a combined $1.5 billion of the facilities was available to Dominion Energy Gas, assuming adequate capacity was available after giving effect to uses by
co-borrowers
Dominion Energy, Virginia Power and Questar Gas. These credit facilities were scheduled to mature in April 2020 and were used to support bank borrowings and the issuance of commercial paper, as well as to support up to $1.5 billion (or the
sub-limit,
whichever is less) of letters of credit.
|
|
|
|
|
|
|
|
|
|
|
|||
At December 31,
|
|
2018
Weighted-
average
Coupon
(1)
|
|
|
2018
|
|
|
2017
|
|
|||
(millions, except percentages)
|
|
|
|
|
|
|
|
|
|
|||
Dominion Energy Gas Holdings, LLC:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured Senior Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable rate, due 2021
|
|
|
3.39
|
%
|
|
$
|
500
|
|
|
$
|
—
|
|
2.5% to 3.55%, due 2019 to 2023
|
|
|
2.90
|
%
|
|
|
1,800
|
|
|
|
1,800
|
|
3.317% to 4.8%, due 2024 to 2044
(2)
|
|
|
4.12
|
%
|
|
|
1,787
|
|
|
|
1,800
|
|
Dominion Energy Midstream Partners, LP:
|
|
|
|
|
|
|
|
|
|
|
|
|
Term Loans, variable rates, due 2019 and 2021
(3)(4)
|
|
|
4.13
|
%
|
|
|
3,300
|
|
|
|
300
|
|
Revolving Credit Agreement, variable rates, due 2021
(4)
|
|
|
3.55
|
%
|
|
|
73
|
|
|
|
—
|
|
Unsecured Senior and Medium-Term Notes, 5.83% and 6.48%,
due 2018
(5)
|
|
|
|
|
|
|
—
|
|
|
|
255
|
|
Unsecured Senior Notes, 3.53% to 4.875%, due 2028 to 2041
(5)
|
|
|
4.23
|
%
|
|
|
430
|
|
|
|
180
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominion Energy Gas Holdings, LLC total principal
|
|
|
|
|
|
$
|
7,890
|
|
|
$
|
4,335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities due within one year
(6)
|
|
|
3.16
|
%
|
|
|
(748
|
)
|
|
|
(5
|
)
|
Credit facility borrowings
(4)
|
|
|
3.55
|
%
|
|
|
(73
|
)
|
|
|
—
|
|
Unamortized discount and debt issuance costs
|
|
|
|
|
|
|
(47
|
)
|
|
|
(35
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominion Energy Gas Holdings, LLC total long-term debt
|
|
|
|
|
|
$
|
7,022
|
|
|
$
|
4,295
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Virginia Electric and Power Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured Senior Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
1.2% to 5.4%, due 2018 to 2023
|
|
|
3.35
|
%
|
|
$
|
1,800
|
|
|
$
|
2,650
|
|
2.95% to 8.875%, due 2024 to 2048
|
|
|
4.61
|
%
|
|
|
9,290
|
|
|
|
7,990
|
|
Tax-Exempt
Financings
(7)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable rates, due 2024 to 2027
|
|
|
|
|
|
|
—
|
|
|
|
100
|
|
1.75% to 5.6%, due 2023 to 2041
|
|
|
2.18
|
%
|
|
|
664
|
|
|
|
678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Virginia Electric and Power Company total principal
|
|
|
|
|
|
$
|
11,754
|
|
|
$
|
11,418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities due within one year
|
|
|
5.00
|
%
|
|
|
(350
|
)
|
|
|
(850
|
)
|
Unamortized discount, premium and debt issuances costs, net
|
|
|
|
|
|
|
(83
|
)
|
|
|
(72
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Virginia Electric and Power Company total long-term debt
|
|
|
|
|
|
$
|
11,321
|
|
|
$
|
10,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominion Energy, Inc.:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured Senior Notes
(8)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable rates, due 2019 and 2020
|
|
|
3.23
|
%
|
|
$
|
800
|
|
|
$
|
800
|
|
1.5% to 6.4%, due 2018 to 2022
|
|
|
2.75
|
%
|
|
|
2,550
|
|
|
|
5,800
|
|
2.85% to 7.0%, due 2024 to 2044
|
|
|
4.81
|
%
|
|
|
4,849
|
|
|
|
5,049
|
|
Unsecured Junior Subordinated Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
2.579% to 4.104%, due 2019 to 2021
|
|
|
3.08
|
%
|
|
|
2,100
|
|
|
|
2,100
|
|
Payable to Affiliated Trust, 8.4%, due 2031
|
|
|
8.40
|
%
|
|
|
10
|
|
|
|
10
|
|
Enhanced Junior Subordinated Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
5.25% and 5.75%, due 2054 and 2076
|
|
|
5.48
|
%
|
|
|
1,485
|
|
|
|
1,485
|
|
Variable rates, due 2066
|
|
|
5.26
|
%
|
|
|
422
|
|
|
|
422
|
|
Remarketable Subordinated Notes, 2.0%, due 2021 and 2024
|
|
|
2.00
|
%
|
|
|
1,400
|
|
|
|
1,400
|
|
Unsecured Debentures and Senior Notes
(9)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
6.8% and 6.875%, due 2026 and 2027
|
|
|
6.81
|
%
|
|
|
89
|
|
|
|
89
|
|
Unsecured Senior and Medium-Term Notes
(10)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
5.31% and 6.3%, due 2018
|
|
|
|
|
|
|
—
|
|
|
|
120
|
|
2.98% to 7.20%, due 2024 to 2051
|
|
|
4.25
|
%
|
|
|
750
|
|
|
|
600
|
|
Secured Senior Notes, 4.82%, due 2042
(11)
|
|
|
4.82
|
%
|
|
|
362
|
|
|
|
—
|
|
Term Loans, variable rates, due 2023 and 2024
(12)
|
|
|
4.85
|
%
|
|
|
582
|
|
|
|
638
|
|
Tax-Exempt
Financing, 1.55%, due 2033
(13)
|
|
|
1.55
|
%
|
|
|
27
|
|
|
|
27
|
|
Capital leases, 4.14% to 6.04%, due 2019 to 2029
|
|
|
5.99
|
%
|
|
|
39
|
|
|
|
—
|
|
Dominion Energy Gas Holdings, LLC total principal (from above)
|
|
|
|
|
|
|
7,890
|
|
|
|
4,335
|
|
Virginia Electric and Power Company total principal (from above)
|
|
|
|
|
|
|
11,754
|
|
|
|
11,418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominion Energy, Inc. total principal
|
|
|
|
|
|
$
|
35,109
|
|
|
$
|
34,293
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value hedge valuation
(14)
|
|
|
|
|
|
|
(20
|
)
|
|
|
(22
|
)
|
Securities due within one year
(6)(15)
|
|
|
3.23
|
%
|
|
|
(3,624
|
)
|
|
|
(3,078
|
)
|
Credit facility borrowings
(4)
|
|
|
3.55
|
%
|
|
|
(73
|
)
|
|
|
—
|
|
Unamortized discount, premium and debt issuance costs, net
|
|
|
|
|
|
|
(248
|
)
|
|
|
(245
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominion Energy, Inc. total long-term debt
|
|
|
|
|
|
$
|
31,144
|
|
|
$
|
30,948
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents weighted-average coupon rates for debt outstanding as of December 31, 2018.
|
(2)
|
Amount includes foreign currency remeasurement adjustments.
|
(3)
|
Includes debt obligations of Cove Point that are secured by Dominion Energy’s common equity interest in Cove Point.
|
(4)
|
In February 2019, Dominion Energy Midstream repaid its $
300
million variable rate term loan due in December 2019 and terminated the credit facility due in March 2021 subsequent to repaying the $
73
million outstanding balance. As such, credit facility borrowings are presented within current liabilities in Dominion Energy Gas’ Consolidated Balance Sheets at December 31, 2018.
|
(5)
|
Represents debt obligations of Dominion Energy Questar Pipeline. See Note 3 for more information.
|
(6)
|
2017 excludes $
250
million of Dominion Energy Questar Pipeline’s senior notes that matured in February 2018 using proceeds from the January 2018 issuance, through private placements, of $
100
million and $
150
million of senior notes that mature in 2028 and 2038, respectively.
|
(7)
|
These financings relate to certain pollution control equipment at Virginia Power’s generating facilities. In March 2018, Virginia Power redeemed certain variable rate
tax-exempt
financings supported by its $
100
14
million Economic Development Authority of the County of Chesterfield Solid Waste and Sewage Disposal Revenue Bonds due in 2031.
|
(8)
|
In November and December 2018, Dominion Energy redeemed certain senior notes prior to their stated maturity. See below for a discussion of the senior note redemptions.
|
(9)
|
Represents debt assumed by Dominion Energy from the merger of its former CNG subsidiary.
|
(10)
|
Represents debt obligations of Questar Gas. See Note 3 for more information.
|
(11)
|
Represents debt obligations of Eagle Solar. The debt is nonrecourse to Dominion Energy and is secured by Eagle Solar’s interest in certain merchant solar facilities.
|
(12)
|
Represents debt associated with SBL Holdco and Dominion Solar Projects III, Inc. The debt is nonrecourse to Dominion Energy and is secured by SBL Holdco and Dominion Solar Projects III, Inc.’s interest in certain merchant solar facilities.
|
(13)
|
Represents debt obligations of a DGI subsidiary.
|
(14)
|
Represents the valuation of certain fair value hedges associated with Dominion Energy’s fixed rate debt.
|
(15)
|
Includes $
20
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
|
||||||||||||||
(millions, except percentages)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Dominion Energy Gas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Term Loans
(1)
|
$
|
300
|
|
$
|
—
|
|
$
|
3,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
3,300
|
|
|||||||
Credit Facility Borrowings
(1)
|
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|||||||
Unsecured Senior Notes
|
|
450
|
|
|
700
|
|
|
500
|
|
|
—
|
|
|
650
|
|
|
2,217
|
|
|
4,517
|
|
|||||||
Total
|
$
|
750
|
|
$
|
700
|
|
$
|
3,573
|
|
$
|
—
|
|
$
|
650
|
|
$
|
2,217
|
|
$
|
7,890
|
|
|||||||
Weighted-average Coupon
|
|
2.94
|
%
|
|
2.80
|
%
|
|
4.05
|
%
|
|
|
|
|
3.29
|
%
|
|
4.14
|
%
|
|
|||||||||
Virginia Power
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Unsecured Senior Notes
|
$
|
350
|
|
$
|
—
|
|
$
|
—
|
|
$
|
750
|
|
$
|
700
|
|
$
|
9,290
|
|
$
|
11,090
|
|
|||||||
Tax-Exempt
Financings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
624
|
|
|
664
|
|
|||||||
Total
|
$
|
350
|
|
$
|
—
|
|
$
|
—
|
|
$
|
750
|
|
$
|
740
|
|
$
|
9,914
|
|
$
|
11,754
|
|
|||||||
Weighted-average Coupon
|
|
5.00
|
%
|
|
|
|
3.15
|
%
|
|
2.87
|
%
|
|
4.45
|
%
|
|
|||||||||||||
Dominion Energy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Term Loans
(1)(2)
|
$
|
336
|
|
$
|
35
|
|
$
|
3,035
|
|
$
|
34
|
|
$
|
273
|
|
$
|
169
|
|
$
|
3,882
|
|
|||||||
Credit Facility Borrowings
(1)
|
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|||||||
Unsecured Senior Notes
|
|
2,700
|
|
|
1,000
|
|
|
900
|
|
|
1,500
|
|
|
1,350
|
|
|
17,195
|
|
|
24,645
|
|
|||||||
Secured Senior Notes
|
|
17
|
|
|
15
|
|
|
17
|
|
|
19
|
|
|
16
|
|
|
278
|
|
|
362
|
|
|||||||
Tax-Exempt
Financings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
651
|
|
|
691
|
|
|||||||
Unsecured Junior Subordinated Notes Payable to Affiliated Trusts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
10
|
|
|||||||
Unsecured Junior Subordinated Notes
|
|
550
|
|
|
1,000
|
|
|
550
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,100
|
|
|||||||
Enhanced Junior Subordinated Notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,907
|
|
|
1,907
|
|
|||||||
Remarketable Subordinated Notes
|
|
—
|
|
|
—
|
|
|
700
|
|
|
—
|
|
|
—
|
|
|
700
|
|
|
1,400
|
|
|||||||
Capital leases
|
|
4
|
|
|
4
|
|
|
4
|
|
|
3
|
|
|
3
|
|
|
21
|
|
|
39
|
|
|||||||
Total
|
$
|
3,607
|
|
$
|
2,054
|
|
$
|
5,279
|
|
$
|
1,556
|
|
$
|
1,682
|
|
$
|
20,931
|
|
$
|
35,109
|
|
|||||||
Weighted-average Coupon
|
|
3.23
|
%
|
|
2.80
|
%
|
|
3.64
|
%
|
|
3.02
|
%
|
|
3.41
|
%
|
|
4.51
|
%
|
|
(1)
|
In February 2019, Dominion Energy Midstream repaid its $300 million variable rate term loan due in December 2019 and terminated the credit facility due in March 2021 subsequent to repaying the $73 million outstanding balance. As such, credit facility borrowings are presented within current liabilities in Dominion Energy Gas and Dominion Energy’s Consolidated Balance Sheets at December 31, 2018.
|
(2)
|
Excludes mandatory prepayments associated with SBL Holdco and Dominion Solar Projects III, Inc. based on cash flows in excess of debt service. At December 31, 2018, $20 million of estimated mandatory prepayments due within one year were included in securities due within one year in Dominion Energy’s Consolidated Balance Sheets.
|
Issuance Date
|
Units
Issued
|
|
Total Net
Proceeds
|
|
Total
Long-term
Debt |
|
RSN Annual
Interest Rate
|
|
Stock
Purchase
Contract
Annual
Rate
|
|
Stock
Purchase
Contract
Liability
(1)
|
|
Stock Purchase
Settlement Date
|
|
||||||||||||||
(millions, except
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
8/15/2016
(2)
|
28
|
$ |
1,374.8
|
$ |
1,400.0
|
2.000
|
%
(3)
|
4.750
|
% | $ |
190.6
|
8/15/2019
|
(1)
|
Payments of $
64
million and $
101
million were made in 2018 and 2017, respectively, including payments for the remarketed 2014 Series A notes. The stock purchase contract liability was $
47
million and $
111
million at December 31, 2018 and 2017, respectively.
|
(2)
|
The maturity dates of the $
700
million Series
A-1
RSNs and $
700
million Series
A-2
RSNs are August 15, 2021 and August 15, 2024, respectively.
|
(3)
|
Annual interest rate applies to each of the Series
A-1
RSNs and Series
A-2
RSNs.
|
|
|
|
|
|
|
|
||
At December 31,
|
2018
|
|
2017
|
|||||
(millions)
|
|
|
||||||
Dominion Energy
|
|
|
|
|
|
|
||
Net deferred losses on derivatives-hedging activities, net of $79 and $188 tax
|
$
|
(234
|
)
|
$ |
(301
|
) | ||
Net unrealized gains on nuclear decommissioning trust funds, net of $— and $(419) tax
|
|
2
|
|
747
|
||||
Net unrecognized pension and other postretirement benefit costs, net of $519 and $692 tax
|
|
(1,465
|
)
|
(1,101
|
) | |||
Other comprehensive loss from equity method investees, net of $— and $2 tax
|
|
(2
|
)
|
(3
|
) | |||
Total AOCI, including noncontrolling interest
|
$
|
(1,699
|
)
|
$ |
(658
|
) | ||
Less other comprehensive income attributable to noncontrolling interest
|
|
1
|
|
1
|
||||
Total AOCI, excluding noncontrolling interest
|
$
|
(1,700
|
)
|
$ |
(659
|
) | ||
Virginia Power
|
|
|
|
|
|
|
||
Net deferred losses on derivatives-hedging activities, net of $4 and $8 tax
|
$
|
(13
|
)
|
$ |
(12
|
) | ||
Net unrealized gains on nuclear decommissioning trust funds, net of $— and $(47) tax
|
|
1
|
|
74
|
||||
Total AOCI
|
$
|
(12
|
)
|
$ |
62
|
|||
Dominion Energy Gas
|
|
|
|
|
|
|
||
Net deferred losses on derivatives-hedging activities, net of $8 and $15 tax
|
$
|
(25
|
)
|
$ |
(23
|
) | ||
Net unrecognized pension costs, net of $56 and $59 tax
|
|
(144
|
)
|
(75
|
) | |||
Total AOCI
|
$
|
(169
|
)
|
$ |
(98
|
) | ||
|
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 investees |
Total
|
|||||||||||||
(millions)
|
|
|
|
|
|
|||||||||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Beginning balance
|
$
|
(302
|
)
|
$
|
747
|
|
$
|
(1,101
|
)
|
$
|
(3
|
)
|
$
|
(659
|
)
|
|||||
Other comprehensive income before reclassifications: gains
|
|
30
|
|
|
(18
|
)
|
|
(215
|
)
|
|
1
|
|
|
(202
|
)
|
|||||
Amounts reclassified from AOCI: (gains) losses
(1)
|
|
102
|
|
|
5
|
|
|
78
|
|
|
—
|
|
|
185
|
|
|||||
Net current period other comprehensive income (loss)
|
|
132
|
|
|
(13
|
)
|
|
(137
|
)
|
|
1
|
|
|
(17
|
)
|
|||||
Cumulative-effect of changes in accounting principle
|
|
(64
|
)
|
|
(732
|
)
|
|
(227
|
)
|
|
—
|
|
|
(1,023
|
)
|
|||||
Less other comprehensive income (loss) attributable to
interest
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Ending balance
|
$
|
(235
|
)
|
$
|
2
|
|
$
|
(1,465
|
)
|
$
|
(2
|
)
|
$
|
(1,700
|
)
|
|||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Beginning balance
|
$ |
(280
|
) | $ |
569
|
$ |
(1,082
|
) | $ |
(6
|
) | $ |
(799
|
) | ||||||
Other comprehensive income before reclassifications: gains (losses)
|
8
|
215
|
(69
|
) |
3
|
157
|
||||||||||||||
Amounts reclassified from AOCI: (gains) losses
(1)
|
(29
|
) |
(37
|
) |
50
|
—
|
(16
|
) | ||||||||||||
Net current period other comprehensive income (loss)
|
(21
|
) |
178
|
(19
|
) |
3
|
141
|
|||||||||||||
Less other comprehensive income (loss) attributable to
interest
|
1
|
—
|
—
|
—
|
1
|
|||||||||||||||
Ending balance
|
$ |
(302
|
) | $ |
747
|
$ |
(1,101
|
) | $ |
(3
|
) | $ |
(659
|
) | ||||||
(1)
|
See table below for details about these reclassifications.
|
Details about AOCI components
|
Amounts
AOCI
|
Affected line item in the Consolidated Statements of
Income
|
||||
(millions)
|
|
|
||||
Year Ended December 31, 2018
|
|
|
|
|
||
Deferred (gains) and losses on derivatives-hedging activities:
|
|
|
|
|
||
Commodity contracts
|
$
|
90
|
|
Operating revenue
|
||
|
|
(14
|
)
|
Electric fuel and other energy-related purchases
|
||
Interest rate contracts
|
|
48
|
|
Interest and related charges
|
||
Foreign currency contracts
|
|
13
|
|
Other Income
|
||
Total
|
|
137
|
|
|
||
Tax
|
|
(35
|
)
|
Income tax expense
|
||
Total, net of tax
|
$
|
102
|
|
|
||
Unrealized (gains) and losses on investment securities:
|
|
|
|
|
||
Realized (gain) loss on sale of securities
|
$
|
7
|
|
Other income
|
||
Total
|
|
7
|
|
|
||
Tax
|
|
(2
|
)
|
Income tax expense
|
||
Total, net of tax
|
$
|
5
|
|
|
||
Unrecognized pension and other postretirement benefit costs:
|
|
|
|
|
||
Amortization of prior-service costs (credits)
|
$
|
(21
|
)
|
Other income
|
||
Amortization of actuarial losses
|
|
120
|
|
Other income
|
||
Total
|
|
99
|
|
|
||
Tax
|
|
(21
|
)
|
Income tax expense
|
||
Total, net of tax
|
$
|
78
|
|
|
||
Year Ended December 31, 2017
|
|
|
|
|
||
Deferred (gains) and losses on derivatives-hedging activities:
|
|
|
|
|
||
Commodity contracts
|
$ |
(81
|
) |
Operating revenue
|
||
|
2
|
Purchased gas
|
||||
Interest rate contracts
|
52
|
Interest and related charges
|
||||
Foreign currency contracts
|
(20
|
) |
Other Income
|
|||
Total
|
(47
|
) |
|
|||
Tax
|
18
|
Income tax expense
|
||||
Total, net of tax
|
$ |
(29
|
) |
|
||
Unrealized (gains) and losses on investment securities:
|
|
|
||||
Realized (gain) loss on sale of securities
|
$ |
(81
|
) |
Other income
|
||
Impairment
|
23
|
Other income
|
||||
Total
|
(58
|
) |
|
|||
Tax
|
21
|
Income tax expense
|
||||
Total, net of tax
|
$ |
(37
|
) |
|
||
Unrecognized pension and other postretirement benefit costs:
|
|
|
||||
Prior-service costs (credits)
|
$ |
(21
|
) |
Other income
|
||
Actuarial losses
|
103
|
Other income
|
||||
Total
|
82
|
|
||||
Tax
|
(32
|
) |
Income tax expense
|
|||
Total, net of tax
|
$ |
50
|
|
|||
(1)
|
See table below for details about these reclassifications.
|
|
|
Deferred gains and
losses on
derivatives-hedging
activities |
|
Unrecognized
pension and other postretirement benefit costs |
|
Total
|
||||||
(millions)
|
|
|
|
|||||||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|||
Beginning balance
|
$
|
(23
|
)
|
$
|
(75
|
)
|
$
|
(98
|
)
|
|||
Other comprehensive income before reclassifications: gains (losses)
|
|
(16
|
)
|
|
(52
|
)
|
|
(68
|
)
|
|||
Amounts reclassified from AOCI: (gains) losses
(1)
|
|
19
|
|
|
4
|
|
|
23
|
|
|||
Net current period other comprehensive income (loss)
|
|
3
|
|
|
(48
|
)
|
|
(45
|
)
|
|||
Cumulative-effect of changes in accounting principle
|
|
(5
|
)
|
|
(21
|
)
|
|
(26
|
)
|
|||
Ending balance
|
$
|
(25
|
)
|
$
|
(144
|
)
|
$
|
(169
|
)
|
|||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|||
Beginning balance
|
$ |
(24
|
) | $ |
(99
|
) | $ |
(123
|
) | |||
Other comprehensive income before reclassifications: gains (losses)
|
6
|
20
|
26
|
|||||||||
Amounts reclassified from AOCI: gains (losses)
(1)
|
(4
|
) |
4
|
—
|
||||||||
Net current period other comprehensive income (loss)
|
2
|
24
|
26
|
|||||||||
Less other comprehensive income (loss) attributable to noncontrolling interest
|
|
|
1
|
|
|
|
—
|
|
|
|
1
|
|
Ending balance
|
$ |
(23
|
) | $ |
(75
|
) | $ |
(98
|
) | |||
(1)
|
See table below for details about these reclassifications.
|
|
Shares
|
|
-
average Grant
Date Fair Value
|
|
||||
|
(thousands)
|
|
||||||
Nonvested at December 31, 2015
|
855
|
|
$ |
66.16
|
||||
Granted
|
372
|
71.67
|
||||||
Vested
|
(301
|
) |
56.83
|
|||||
Cancelled and forfeited
|
(40
|
) |
71.75
|
|||||
Nonvested at December 31, 2016
|
886
|
$ |
71.40
|
|||||
Granted
|
454
|
74.24
|
||||||
Vested
|
(287
|
) |
68.90
|
|||||
Cancelled and forfeited
|
(10
|
) |
72.37
|
|||||
Nonvested at December 31, 2017
|
1,043
|
$ |
73.32
|
|||||
Granted
|
|
534
|
|
|
72.92
|
|
||
Vested
|
|
(316
|
)
|
|
73.59
|
|
||
Cancelled and forfeited
|
|
(53
|
)
|
|
74.25
|
|
||
Nonvested at December 31, 2018
|
|
1,208
|
|
$
|
73.03
|
|
||
|
Pension Benefits
|
Other Postretirement Benefits
|
||||||||||||||
Year Ended December 31,
|
2018
|
|
2017
|
2018
|
|
2017
|
||||||||||
(millions, except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dominion Energy
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Changes in benefit obligation:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Benefit obligation at beginning of year
|
$
|
9,052
|
|
$ |
8,132
|
$
|
1,529
|
|
$ |
1,478
|
||||||
Service cost
|
|
157
|
|
138
|
|
27
|
|
26
|
||||||||
Interest cost
|
|
337
|
|
345
|
|
56
|
|
60
|
||||||||
Benefits paid
|
|
(358
|
)
|
(323
|
) |
|
(87
|
)
|
(83
|
) | ||||||
Actuarial (gains) losses during the year
|
|
(688
|
)
|
830
|
|
(158
|
)
|
119
|
||||||||
Plan amendments
(1)
|
|
—
|
|
5
|
|
(4
|
)
|
(73
|
) | |||||||
Settlements and curtailments
(2)
|
|
—
|
|
(75
|
) |
|
—
|
|
2
|
|||||||
Benefit obligation at end of year
|
$
|
8,500
|
|
$ |
9,052
|
$
|
1,363
|
|
$ |
1,529
|
||||||
Changes in fair value of plan assets:
|
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
8,062
|
|
$ |
7,016
|
$
|
1,729
|
|
$ |
1,512
|
||||||
Actual return (loss) on plan assets
|
|
(513
|
)
|
1,327
|
|
(92
|
)
|
236
|
||||||||
Employer contributions
|
|
6
|
|
118
|
|
12
|
|
13
|
||||||||
Benefits paid
|
|
(358
|
)
|
(323
|
) |
|
(68
|
)
|
(32
|
) | ||||||
Settlements
(2)
|
|
—
|
|
(76
|
) |
|
—
|
|
—
|
|||||||
Fair value of plan assets at end of year
|
$
|
7,197
|
|
$ |
8,062
|
$
|
1,581
|
|
$ |
1,729
|
||||||
Funded status at end of year
|
$
|
(1,303
|
)
|
$ |
(990
|
) |
$
|
218
|
|
$ |
200
|
|||||
Amounts recognized in the Consolidated Balance Sheets at December 31:
|
|
|
|
|
||||||||||||
Noncurrent pension and other postretirement benefit assets
|
$
|
1,003
|
|
$ |
1,117
|
$
|
276
|
|
$ |
261
|
||||||
Other current liabilities
|
|
(34
|
)
|
(8
|
) |
|
(2
|
)
|
—
|
|||||||
Noncurrent pension and other postretirement benefit liabilities
|
|
(2,272
|
)
|
(2,099
|
) |
|
(56
|
)
|
(61
|
) | ||||||
Net amount recognized
|
$
|
(1,303
|
)
|
$ |
(990
|
) |
$
|
218
|
|
$ |
200
|
|||||
Significant assumptions used to determine benefit obligations as of December 31:
|
|
|
|
|
||||||||||||
Discount rate
|
|
4.42%–4.43%
|
|
3.80%–3.81%
|
|
4.37%–4.38%
|
|
3.76%
|
||||||||
Weighted average rate of increase for compensation
|
|
4.32
|
%
|
4.09%
|
|
|
4.30%-4.55%
|
|
3.95%-4.11%
|
|||||||
Dominion Energy Gas
|
|
|
|
|
|
|
|
|
||||||||
Changes in benefit obligation:
|
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
773
|
|
$ |
683
|
$
|
290
|
|
$ |
320
|
||||||
Service cost
|
|
18
|
|
15
|
|
4
|
|
4
|
||||||||
Interest cost
|
|
29
|
|
30
|
|
11
|
|
12
|
||||||||
Benefits paid
|
|
(34
|
)
|
(33
|
) |
|
(18
|
)
|
(19
|
) | ||||||
Actuarial (gains) losses during the year
|
|
(56
|
)
|
78
|
|
(27
|
)
|
34
|
||||||||
Plan amendments
(1)
|
|
—
|
|
—
|
|
(4
|
)
|
(61
|
) | |||||||
Benefit obligation at end of year
|
$
|
730
|
|
$ |
773
|
$
|
256
|
|
$ |
290
|
||||||
Changes in fair value of plan assets:
|
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
1,803
|
|
$ |
1,542
|
$
|
333
|
|
$ |
299
|
||||||
Actual return (loss) on plan assets
|
|
(113
|
)
|
294
|
|
(16
|
)
|
41
|
||||||||
Employer contributions
|
|
—
|
|
—
|
|
12
|
|
12
|
||||||||
Benefits paid
|
|
(34
|
)
|
(33
|
) |
|
(18
|
)
|
(19
|
) | ||||||
Fair value of plan assets at end of year
|
$
|
1,656
|
|
$ |
1,803
|
$
|
311
|
|
$ |
333
|
||||||
Funded status at end of year
|
$
|
926
|
|
$ |
1,030
|
$
|
55
|
|
$ |
43
|
||||||
Amounts recognized in the Consolidated Balance Sheets at December 31:
|
|
|
|
|
||||||||||||
Noncurrent pension and other postretirement benefit assets
|
$
|
310
|
|
$ |
347
|
$
|
63
|
|
$ |
57
|
||||||
Noncurrent assets of discontinued operations
|
|
616
|
|
683
|
|
—
|
|
—
|
||||||||
Noncurrent liabilities of discontinued operations
|
|
—
|
|
—
|
|
(8
|
)
|
(14
|
) | |||||||
Net amount recognized
|
$
|
926
|
|
$ |
1,030
|
$
|
55
|
|
$ |
43
|
||||||
Significant assumptions used to determine benefit obligations as of December 31:
|
|
|
|
|
||||||||||||
Discount rate
|
|
4.42
|
%
|
3.81
|
% |
|
4.37
|
%
|
3.76
|
% | ||||||
Weighted average rate of increase for compensation
|
|
4.55
|
%
|
4.11
|
% |
|
n/a
|
|
n/a
|
|||||||
(1)
|
2017 amounts relate primarily to a plan amendment that changed
post-65
retiree medical coverage for certain current and future Local 69 retirees effective July 1,
2017. |
(2)
|
2017 amount relates primarily to settlement and curtailment as a result of the voluntary and involuntary separation programs at Dominion Energy Questar.
|
As of December 31,
|
2018
|
|
2017
|
|||||
(millions)
|
|
|
||||||
Accumulated benefit obligation
|
$
|
7,056
|
|
$ |
7,392
|
|||
Fair value of plan assets
|
|
5,398
|
|
6,103
|
||||
|
Estimated Future Benefit Payments
|
|||||||
|
Pension Benefits
|
|
Other Postretirement
Benefits
|
|
||||
(millions)
|
|
|
||||||
Dominion Energy
|
|
|
||||||
2019
|
$
|
|
|
$
|
98
|
|
||
2020
|
|
405
|
|
|
99
|
|
||
2021
|
|
426
|
|
|
99
|
|
||
2022
|
|
442
|
|
|
99
|
|
||
2023
|
|
465
|
|
|
98
|
|
||
2024-2028
|
|
2,548
|
|
|
461
|
|
||
Dominion Energy Gas
|
|
|
|
|
|
|
||
2019
|
$
|
37
|
|
$
|
19
|
|
||
2020
|
|
39
|
|
|
19
|
|
||
2021
|
|
40
|
|
|
19
|
|
||
2022
|
|
42
|
|
|
19
|
|
||
2023
|
|
43
|
|
|
19
|
|
||
2024-2028
|
|
223
|
|
|
90
|
|
||
(1)
|
These investments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.
|
(2)
|
Excludes net assets related to pending sales of securities of $12 million, net accrued income of $21 million, and includes net assets related to pending purchases of securities of $22 million at December 31, 2018. Excludes net assets related to pending sales of securities of $11 million, net accrued income of $19 million, and includes net assets related to pending purchases of securities of $15 million at December 31, 2017.
|
(3)
|
Excludes net assets related to pending sales of securities of $3 million, net accrued income of $5 million, and includes net assets related to pending purchases of securities of $5 million at December 31, 2018. Excludes net assets related to pending sales of securities of $3 million, net accrued income of $4 million, and includes net assets related to pending purchases of securities of $3 million at December 31, 2017.
|
(1)
|
These investments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.
|
(2)
|
Excludes net assets related to pending sales of securities of $1 million, net accrued income of $2 million, and includes net assets related to pending purchases of securities of $2 million at December 31, 2018. Excludes net assets related to pending sales of securities of $1 million, net accrued income of $2 million, and includes net assets related to pending purchases of securities of $1 million at December 31, 2017.
|
|
●
|
Cash and Cash Equivalents
—Investments are held primarily in short-term notes and treasury bills, which are valued at cost plus accrued interest.
|
|
●
|
Common and Preferred Stocks
—Investments are valued at the closing price reported on the active market on which the individual securities are traded.
|
|
●
|
Insurance Contracts
—Investments in Group Annuity Contracts with John Hancock were entered into after 1992 and are stated at fair value based on the fair value of the underlying securities as provided by the managers and include investments in U.S. government securities, corporate debt instruments, state and municipal debt securities.
|
●
|
Corporate Debt Instruments
|
●
|
Government Securities
|
●
|
Common/Collective Trust Funds
|
●
|
Alternative Investments
|
|
|
Pension Benefits
|
|
|
Other Postretirement Benefits
|
|
||||||||||||||||||
Year Ended December 31,
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
||||||
(millions, except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Dominion Energy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Service cost
|
$
|
157
|
|
$ |
138
|
$ |
118
|
$
|
27
|
|
$ |
26
|
$ |
31
|
||||||||||
Interest cost
|
|
337
|
|
345
|
317
|
|
56
|
|
60
|
65
|
||||||||||||||
Expected return on plan assets
|
|
(663
|
)
|
(639
|
) |
(573
|
) |
|
(143
|
)
|
(128
|
) |
(118
|
) | ||||||||||
Amortization of prior service (credit) cost
|
|
1
|
|
1
|
1
|
|
(52
|
)
|
(51
|
) |
(35
|
) | ||||||||||||
Amortization of net actuarial loss
|
|
193
|
|
162
|
111
|
|
11
|
|
13
|
8
|
||||||||||||||
Settlements and curtailments
|
|
—
|
|
—
|
1
|
|
—
|
|
—
|
—
|
||||||||||||||
Net periodic benefit (credit) cost
|
$
|
25
|
|
$ |
7
|
$ |
(25
|
) |
$
|
(101
|
)
|
$ |
(80
|
) | $ |
(49
|
) | |||||||
Changes in plan assets and benefit obligations recognized in
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current year net actuarial (gain) loss
|
$
|
490
|
|
$ |
142
|
$ |
931
|
$
|
78
|
|
$ |
12
|
$ |
178
|
||||||||||
Prior service (credit) cost
|
|
—
|
|
5
|
—
|
|
(4
|
)
|
(73
|
) |
(216
|
) | ||||||||||||
Settlements and curtailments
|
|
—
|
|
1
|
(1
|
) |
|
—
|
|
2
|
—
|
|||||||||||||
Less amounts included in net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Amortization of net actuarial loss
|
|
(193
|
)
|
(162
|
) |
(111
|
) |
|
(11
|
)
|
(13
|
) |
(8
|
) | ||||||||||
Amortization of prior service credit (cost)
|
|
(1
|
)
|
(1
|
) |
(1
|
) |
|
52
|
|
51
|
35
|
||||||||||||
Total recognized in other comprehensive income and regulatory
|
$
|
296
|
|
$ |
(15
|
) | $ |
818
|
$
|
115
|
|
$ |
(21
|
) | $ |
(11
|
) | |||||||
Significant assumptions used to determine periodic cost:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Discount rate
|
|
3.80%-3.81%
|
|
3.31%-4.50%
|
2.87%-4.99%
|
|
3.76
|
%
|
3.92%-4.47%
|
3.56%-4.94%
|
||||||||||||||
Expected long-term rate of return on plan assets
|
|
8.75
|
%
|
8.75
|
% |
8.75
|
% |
|
8.50
|
%
|
8.50
|
% |
8.50
|
% | ||||||||||
Weighted average rate of increase for compensation
|
|
4.09
|
%
|
4.09
|
% |
4.22
|
% |
|
3.95%-4.11%
|
|
3.29
|
% |
4.22
|
% | ||||||||||
Healthcare cost trend rate
(1)
|
|
|
|
|
|
|
7.00
|
%
|
7.00
|
% |
7.00
|
% | ||||||||||||
Rate to which the cost trend rate is assumed to decline (the
ultimate trend rate)
(1)
|
|
|
|
|
|
|
5.00
|
%
|
5.00
|
% |
5.00
|
% | ||||||||||||
Year that the rate reaches the ultimate trend rate
(1)(2)
|
|
|
|
|
|
|
2022
|
|
2021
|
2020
|
||||||||||||||
Dominion Energy Gas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Service cost
|
$
|
18
|
|
$ |
15
|
$ |
13
|
$
|
4
|
|
$ |
4
|
$ |
5
|
||||||||||
Interest cost
|
|
29
|
|
30
|
30
|
|
11
|
|
12
|
14
|
||||||||||||||
Expected return on plan assets
|
|
(150
|
)
|
(141
|
) |
(134
|
) |
|
(28
|
)
|
(24
|
) |
(23
|
) | ||||||||||
Amortization of prior service (credit) cost
|
|
—
|
|
—
|
—
|
|
(4
|
)
|
(3
|
) |
1
|
|||||||||||||
Amortization of net actuarial loss
|
|
19
|
|
16
|
13
|
|
3
|
|
2
|
1
|
||||||||||||||
Net periodic benefit (credit) cost
|
$
|
(84
|
)
|
$ |
(80
|
) | $ |
(78
|
) |
$
|
(14
|
)
|
$ |
(9
|
) | $ |
(2
|
) | ||||||
Changes in plan assets and benefit obligations recognized in other comprehensive income and regulatory assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current year net actuarial (gain) loss
|
$
|
207
|
|
$ |
(75
|
) | $ |
91
|
$
|
16
|
|
$ |
18
|
$ |
28
|
|||||||||
Prior service cost
|
|
—
|
|
—
|
—
|
|
(4
|
)
|
(61
|
) |
—
|
|||||||||||||
Less amounts included in net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Amortization of net actuarial loss
|
|
(19
|
)
|
(16
|
) |
(13
|
) |
|
(3
|
)
|
(2
|
) |
(1
|
) | ||||||||||
Amortization of prior service credit (cost)
|
|
—
|
|
—
|
—
|
|
4
|
|
3
|
(1
|
) | |||||||||||||
Total recognized in other comprehensive income and regulatory
assets and liabilities |
$
|
188
|
|
$ |
(91
|
) | $ |
78
|
$
|
13
|
|
$ |
(42
|
) | $ |
26
|
||||||||
Significant assumptions used to determine periodic cost:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Discount rate
|
3.81
|
%
|
4.50
|
% |
4.99
|
% |
|
3.81
|
%
|
4.47
|
% |
4.93
|
% | |||||||||||
Expected long-term rate of return on plan assets
|
|
8.75
|
%
|
8.75
|
% |
8.75
|
% |
|
8.50
|
%
|
8.50
|
% |
8.50
|
% | ||||||||||
Weighted average rate of increase for compensation
|
|
4.11
|
%
|
4.11
|
% |
3.93
|
% |
|
4.55
|
%
|
4.11
|
% |
3.93
|
% | ||||||||||
Healthcare cost trend rate
(1)
|
|
|
|
|
|
|
7.00
|
%
|
7.00
|
% |
7.00
|
% | ||||||||||||
Rate to which the cost trend rate is assumed to decline (the
ultimate trend rate)
(1)
|
|
|
|
|
|
|
5.00
|
%
|
5.00
|
% |
5.00
|
% | ||||||||||||
Year that the rate reaches the ultimate trend rate
(1)
|
|
|
|
|
2022
|
|
2021
|
2020
|
||||||||||||||||
(1)
|
Assumptions used to determine net periodic cost for the following year.
|
(2)
|
The Society of Actuaries model used to determine healthcare cost trend rates was updated in 2014. The new model converges to the ultimate trend rate much more quickly than previous models.
|
|
Pension Benefits
|
Other
Postretirement
Benefits
|
||||||||||||||
At December 31,
|
2018
|
|
2017
|
2018
|
|
2017
|
||||||||||
(millions)
|
|
|
|
|
||||||||||||
Dominion Energy
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net actuarial loss
|
$
|
3,477
|
|
$ |
3,181
|
$
|
350
|
|
$ |
283
|
||||||
Prior service (credit) cost
|
|
7
|
|
8
|
|
(393
|
)
|
(440
|
) | |||||||
Total
(1)
|
$
|
3,484
|
|
$ |
3,189
|
$
|
(43
|
)
|
$ |
(157
|
) | |||||
Dominion Energy Gas
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net actuarial loss
|
$
|
555
|
|
$ |
367
|
$
|
89
|
|
$ |
76
|
||||||
Prior service (credit) cost
|
|
—
|
|
—
|
|
(52
|
)
|
(52
|
) | |||||||
Total
(2)
|
$
|
555
|
|
$ |
367
|
$
|
37
|
|
$ |
24
|
||||||
(1)
|
As of December 31, 2018, of the $3.5 billion and $(43) million related to pension benefits and other postretirement benefits, $2.0 billion and $(41) million, respectively, are included in AOCI, with the remainder included in regulatory assets and liabilities. As of December 31, 2017, of the $3.2 billion and $(157) million related to pension benefits and other postretirement benefits, $1.9 billion and $(87) million, respectively, are included in AOCI, with the remainder included in regulatory assets and liabilities.
|
(2)
|
As of December 31, 2018, of the $555 million related to pension benefits, $200 million is included in AOCI, with the remainder included in noncurrent assets of discontinued operations; of the $37 million related to other postretirement benefits, $22 million is included in noncurrent assets of discontinued operations with the remainder included in regulatory assets and liabilities. As of December 31, 2017, of the $367 million related to pension benefits, $134 million is included in AOCI, with the remainder included in noncurrent assets of discontinued operations; of the $24 million related to other postretirement benefits, $25 million is included in noncurrent assets of discontinued operations with the
difference
included in regulatory liabilities.
|
|
|
|
Other Postretirement
Benefits
|
|
||||
(millions)
|
|
|
||||||
Dominion Energy
|
|
|
|
|
|
|
||
Net actuarial loss
|
$
|
155
|
|
$
|
18
|
|
||
Prior service (credit) cost
|
|
1
|
|
|
(52
|
)
|
||
Dominion Energy Gas
|
|
|
|
|
|
|
||
Net actuarial loss
|
$
|
19
|
|
$
|
4
|
|
||
Prior service (credit) cost
|
|
—
|
|
|
(4
|
)
|
||
●
|
Expected inflation and risk-free interest rate assumptions; |
●
|
Historical return analysis to determine long term historic returns as well as historic risk premiums for various asset classes; |
●
|
Expected future risk premiums, asset classes’ volatilities and correlations; |
●
|
Forward-looking return expectations derived from the yield on long-term bonds and the expected long-term returns of major capital market assumptions; and |
●
|
Investment allocation of plan assets. |
|
Other Postretirement Benefits
|
|||||||
|
One percentage
point increase
|
|
One percentage
point decrease
|
|
||||
(millions)
|
|
|
||||||
Dominion Energy
|
|
|
|
|
|
|
||
Effect on net periodic cost for 2019
|
$
|
|
|
$
|
(16
|
)
|
||
Effect on other postretirement benefit obligation at December 31, 2018
|
|
130
|
|
|
(110
|
)
|
||
Dominion Energy Gas
|
|
|
|
|
|
|
||
Effect on net periodic cost for 2019
|
$
|
4
|
|
$
|
(3
|
)
|
||
Effect on other postretirement benefit obligation at December 31, 2018
|
|
25
|
|
|
(22
|
)
|
||
|
Coverage
|
|
||
(billions)
|
|
|||
Dominion Energy
|
|
|
|
|
Millstone
|
$
|
1.70
|
|
|
Kewaunee
|
|
0.05
|
|
|
Virginia Power
(1)
|
|
|
|
|
Surry
|
$
|
1.70
|
|
|
North Anna
|
|
1.70
|
|
(1)
|
Surry and North Anna share a blanket property limit of $200 million.
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
|
2019
|
|
|
2020
|
|
|
2021
|
|
|
2022
|
|
|
2023
|
|
|
Thereafter
|
|
|
Total
|
|
|||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Purchased electric capacity
(1)
|
|
$
|
60
|
|
|
$
|
52
|
|
|
$
|
46
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
158
|
|
(1)
|
Commitments represent estimated amounts payable for capacity under power purchase contracts with independent power producers, which end in 2021. Capacity payments under the contracts are generally based on fixed dollar amounts per month, subject to escalation using broad based economic indices. At December 31, 2018, the present value of Virginia Power’s total commitment for capacity payments is $142 million. Capacity payments totaled $50 million, $114 million and $248 million, and energy payments totaled $42 million, $72 million and $126 million for the years ended 2018, 2017 and 2016, respectively.
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
|
||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Dominion Energy
|
$
|
64
|
|
$
|
61
|
|
$
|
55
|
|
$
|
47
|
|
$
|
38
|
|
$
|
384
|
|
$
|
649
|
|
|||||||
Virginia Power
|
|
34
|
|
|
32
|
|
|
28
|
|
|
22
|
|
|
16
|
|
|
106
|
|
|
238
|
|
|||||||
Dominion Energy Gas
|
|
12
|
|
|
11
|
|
|
9
|
|
|
7
|
|
|
4
|
|
|
3
|
|
|
46
|
|
|
Maximum
Exposure
|
|
||
(millions)
|
|
|||
Commodity transactions
(1)
|
$
|
2,186
|
|
|
Nuclear obligations
(2)
|
|
179
|
|
|
Cove Point
(3)
|
|
1,900
|
|
|
Solar
(4)
|
|
659
|
|
|
Other
(5)
|
|
420
|
|
|
(6)
|
$
|
5,344
|
|
|
(1)
|
Guarantees related to commodity commitments of certain subsidiaries. These guarantees were provided to counterparties in order to facilitate physical and financial transaction related commodities and services.
|
(2)
|
Guarantees related to certain DGI subsidiaries’ regarding all aspects of running a nuclear facility.
|
(3)
|
Guarantees related to Cove Point, in support of terminal services, transportation and construction. Cove Point has two guarantees that have no maximum limit and, therefore, are not included in this amount.
|
(4)
|
Includes guarantees to facilitate the development of solar projects. Also includes guarantees entered into by DGI on behalf of certain subsidiaries to facilitate the acquisition and development of solar projects.
|
(5)
|
Guarantees related to other miscellaneous contractual obligations such as leases, environmental obligations, construction projects and insurance programs. Due to the uncertainty of worker’s compensation claims, the parental guarantee has no stated limit. Also included are guarantees related to certain DGI subsidiaries’ obligations for equity capital contributions and energy generation associated with Fowler Ridge and NedPower. As of December 31, 2018, Dominion Energy’s maximum remaining cumulative exposure under these equity funding agreements is $
4
million through 2019 and its maximum annual future contribution is approximately $
4
million.
|
(6)
|
Excludes Dominion Energy’s guarantee for the construction of the new corporate office property discussed further within Lease Commitments above.
|
Year Ended December 31,
|
2018
|
|
2017
|
2016
|
||||||||
(millions)
|
|
|
|
|||||||||
Commodity purchases from affiliates
|
$
|
930
|
|
$ |
674
|
$ |
571
|
|||||
Services provided by affiliates
(1)
|
|
450
|
|
453
|
454
|
|||||||
Services provided to affiliates
|
|
24
|
|
25
|
22
|
(1)
|
Includes capitalized expenditures of $145 million, $144 million and $144 million for the year ended December 31, 2018, 2017 and 2016, respectively.
|
Year Ended December 31,
|
2018
|
|
2017
|
2016
|
||||||||
(millions)
|
|
|
|
|||||||||
Sales of natural gas and transportation and storage services to affiliates
|
$
|
168
|
|
$ |
173
|
$ |
114
|
|||||
Purchases of natural gas from affiliates
|
|
—
|
|
10
|
5
|
|||||||
Services provided by related parties
(1)
|
|
169
|
|
193
|
159
|
|||||||
Services provided to related parties
(2)
|
|
260
|
|
190
|
131
|
(1)
|
Includes capitalized expenditures of $37 million, $53 million and $60 million for the year ended December 31, 2018, 2017 and 2016, respectively.
|
(2)
|
Includes amounts
attributable to Atlantic Coast Pipeline, a related party VIE.
|
At December 31,
|
2018
|
|
|
2017
|
|
|||
(millions)
|
|
|
|
|||||
Other receivables
(1)
|
$
|
13
|
|
$
|
12
|
|||
Customer receivables from related parties
|
|
—
|
|
2
|
||||
Imbalances receivable from affiliates
|
|
16
|
|
10
|
||||
Imbalances payable from affiliates
(2)
|
|
4
|
|
|
|
—
|
|
(1)
|
Represents amounts due from Atlantic Coast Pipeline, a related party VIE.
|
(2)
|
Amounts are presented in other current liabilities in Dominion Energy Gas’ Consolidated Balance Sheets.
|
Primary Operating Segment
|
|
Description of Operations
|
|
Dominion
Energy
|
|
|
Virginia Power
|
|
|
Dominion
Energy Gas
|
|
|||
Power Delivery
|
|
Regulated electric distribution
|
|
|
X
|
|
|
|
X
|
|
|
|
|
|
|
|
Regulated electric transmission
|
|
|
X
|
|
|
|
X
|
|
|
|
|
|
Power Generation
|
|
Regulated electric generation fleet
|
|
|
X
|
|
|
|
X
|
|
|
|
|
|
|
|
Merchant electric generation fleet
|
|
|
X
|
|
|
|
|
|
|
|
|
|
Gas Infrastructure
|
|
Gas transmission and storage
|
|
|
X
(1)
|
|
|
|
|
|
|
|
X
|
|
|
|
Gas distribution and storage
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
Gas gathering and processing
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
LNG terminalling and storage
|
|
|
X
|
|
|
|
|
|
|
|
X
|
|
|
|
Nonregulated retail energy marketing
|
|
|
X
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes remaining producer services activities.
|
•
|
A $219 million ($164 million
after-tax)
charge related to the impairment of certain gathering and processing assets attributable to Gas Infrastructure;
|
•
|
A $215 million ($160 million
after-tax)
charge associated with Virginia legislation enacted in March 2018 that requires
one-time
rate credits of certain amounts to utility customers, attributable to:
|
|
•
|
Power Generation ($109 million
after-tax);
and
|
|
•
|
Power Delivery ($51 million
after-tax);
|
•
|
A $170 million ($134 million
after-tax)
net loss related to our investments in nuclear decommissioning trust funds attributable to Power Generation;
|
•
|
A $124 million ($88 million
after-tax)
charge for disallowance of FERC-regulated plant attributable to Gas Infrastructure;
|
• |
An $81 million ($60 million
after-tax)
charge associated primarily with the asset retirement obligations for ash ponds and landfills at certain utility generation facilities in connection with the enactment of Virginia legislation in April 2018 attributable to Power Generation; and
|
• |
A $70 million ($52 million
after-tax)
charge associated with major storm damage and service restoration attributable to Power Delivery; partially offset by
|
• |
An $828 million ($619 million
after-tax)
benefit associated with the sale of certain merchant generation facilities and equity method investments attributable to:
|
• |
Power Generation ($229 million
after-tax);
and
|
• |
Gas Infrastructure ($390 million
after-tax).
|
• | A $979 million tax benefit resulting from the remeasurement of deferred income taxes as a result of the 2017 Tax Reform Act, primarily attributable to: |
• | Gas Infrastructure ($324 million); |
• | Power Generation ($655 million); partially offset by |
• |
$158 million ($96 million
after-tax)
of charges associated with equity method investments in wind-powered generation facilities, attributable to Power Generation.
|
• |
A $197 million ($122 million
after-tax)
charge related to future ash pond and landfill closure costs at certain utility generation facilities, attributable to Power Generation; and
|
• |
A $59 million ($36 million
after-tax)
charge related to an organizational design initiative, attributable to:
|
• |
Power Delivery ($5 million
after-tax);
|
• |
Gas Infrastructure ($12 million
after-tax);
and
|
• |
Power Generation ($19 million
after-tax).
|
Year Ended December 31,
|
Power
Delivery
|
|
Power
Generation
|
|
Gas
Infrastructure
|
|
Corporate
and Other
|
|
Adjustments
&
Eliminations
|
|
Consolidated
Total
|
|
||||||||||||
(millions)
|
|
|
|
|
|
|
||||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total revenue from external customers
|
$
|
2,206
|
|
$
|
7,104
|
|
$
|
4,221
|
|
$
|
(208
|
)
|
$
|
43
|
|
$
|
13,366
|
|
||||||
Intersegment revenue
|
|
23
|
|
|
11
|
|
|
27
|
|
|
674
|
|
|
(735
|
)
|
|
—
|
|
||||||
Total operating revenue
|
|
2,229
|
|
|
7,115
|
|
|
4,248
|
|
|
466
|
|
|
(692
|
)
|
|
13,366
|
|
||||||
Depreciation, depletion and amortization
|
|
625
|
|
|
746
|
|
|
615
|
|
|
14
|
|
|
—
|
|
|
2,000
|
|
||||||
Impairment of assets and related charges
|
|
—
|
|
|
1
|
|
|
8
|
|
|
394
|
|
|
—
|
|
|
403
|
|
||||||
Gains on sales of assets
|
|
—
|
|
|
6
|
|
|
(186
|
)
|
|
(200
|
)
|
|
—
|
|
|
(380
|
)
|
||||||
Equity in earnings of equity method investees
|
|
—
|
|
|
18
|
|
|
178
|
|
|
1
|
|
|
—
|
|
|
197
|
|
||||||
Interest income
|
|
—
|
|
|
90
|
|
|
64
|
|
|
126
|
|
|
(196
|
)
|
|
84
|
|
||||||
Interest and related charges
|
|
265
|
|
|
374
|
|
|
268
|
|
|
782
|
|
|
(196
|
)
|
|
1,493
|
|
||||||
Income tax expense (benefit)
|
|
160
|
|
|
294
|
|
|
330
|
|
|
(204
|
)
|
|
—
|
|
|
580
|
|
||||||
Net income (loss) attributable to Dominion Energy
|
|
587
|
|
|
1,254
|
|
|
1,214
|
|
|
(608
|
)
|
|
—
|
|
|
2,447
|
|
||||||
Investment in equity method investees
|
|
—
|
|
|
82
|
|
|
1,159
|
|
|
37
|
|
|
—
|
|
|
1,278
|
|
||||||
Capital expenditures
|
|
1,564
|
|
|
1,321
|
|
|
1,415
|
|
|
105
|
|
|
—
|
|
|
4,405
|
|
||||||
Total assets (billions)
|
|
17.8
|
|
|
28.2
|
|
|
31.5
|
|
|
11.2
|
|
|
(10.8
|
)
|
|
77.9
|
|
||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total revenue from external customers
|
$ |
2,206
|
$ |
6,676
|
$ |
2,832
|
$ |
16
|
$ |
856
|
$ |
12,586
|
||||||||||||
Intersegment revenue
|
22
|
10
|
834
|
610
|
(1,476
|
) |
—
|
|||||||||||||||||
Total operating revenue
|
2,228
|
6,686
|
3,666
|
626
|
(620
|
) |
12,586
|
|||||||||||||||||
Depreciation, depletion and amortization
|
593
|
747
|
522
|
43
|
—
|
1,905
|
||||||||||||||||||
Impairment of assets and related charges
|
—
|
—
|
—
|
15
|
—
|
15
|
||||||||||||||||||
Gains on sales of assets
|
—
|
—
|
(147
|
) |
—
|
—
|
(147
|
) | ||||||||||||||||
Equity in earnings of equity method investees
|
—
|
(181
|
) |
159
|
4
|
—
|
(18
|
) | ||||||||||||||||
Interest income
|
4
|
92
|
45
|
96
|
(155
|
) |
82
|
|||||||||||||||||
Interest and related charges
|
265
|
342
|
109
|
644
|
(155
|
) |
1,205
|
|||||||||||||||||
Income tax expense (benefit)
|
334
|
373
|
487
|
(1,224
|
) |
—
|
(30
|
) | ||||||||||||||||
Net income (loss) attributable to Dominion Energy
|
531
|
1,181
|
898
|
389
|
—
|
2,999
|
||||||||||||||||||
Investment in equity method investees
|
—
|
81
|
1,422
|
41
|
—
|
1,544
|
||||||||||||||||||
Capital expenditures
|
1,433
|
2,275
|
2,149
|
52
|
—
|
5,909
|
||||||||||||||||||
Total assets (billions)
|
16.7
|
29.0
|
28.0
|
12.0
|
(9.1
|
) |
76.6
|
|||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total revenue from external customers
|
$ |
2,210
|
$ |
6,747
|
$ |
2,069
|
$ |
(7
|
) | $ |
718
|
$ |
11,737
|
|||||||||||
Intersegment revenue
|
23
|
10
|
697
|
609
|
(1,339
|
) |
—
|
|||||||||||||||||
Total operating revenue
|
2,233
|
6,757
|
2,766
|
602
|
(621
|
) |
11,737
|
|||||||||||||||||
Depreciation, depletion and amortization
|
537
|
662
|
330
|
30
|
—
|
1,559
|
||||||||||||||||||
Impairment of assets and related charges
|
—
|
—
|
—
|
4
|
—
|
4
|
||||||||||||||||||
Gains on sales of assets
|
—
|
4
|
(44
|
) |
—
|
—
|
(40
|
) | ||||||||||||||||
Equity in earnings of equity method investees
|
—
|
(16
|
) |
105
|
22
|
—
|
111
|
|||||||||||||||||
Interest income
|
—
|
74
|
34
|
36
|
(78
|
) |
66
|
|||||||||||||||||
Interest and related charges
|
244
|
290
|
38
|
516
|
(78
|
) |
1,010
|
|||||||||||||||||
Income tax expense (benefit)
|
308
|
279
|
431
|
(363
|
) |
—
|
655
|
|||||||||||||||||
Net income (loss) attributable to Dominion Energy
|
484
|
1,397
|
726
|
(484
|
) |
—
|
2,123
|
|||||||||||||||||
Capital expenditures
|
1,320
|
2,440
|
2,322
|
43
|
—
|
6,125
|
• |
A $215 million ($160 million
after-tax)
charge associated with Virginia legislation enacted in March 2018 that requires
one-time
rate credits of certain amounts to utility customers, attributable to:
|
• |
Power Generation ($109 million
after-tax);
and
|
• |
Power Delivery ($51 million
after-tax).
|
• |
An $81 million ($60 million
after-tax)
charge associated primarily with the asset retirement obligations for ash ponds and landfills at certain utility generation facilities in connection with the enactment of Virginia legislation in April 2018 attributable to Power Generation.
|
• |
A $70 million ($52 million
after-tax)
charge associated with major storm damage and service restoration attributable to Power Delivery.
|
• | A $93 million tax benefit resulting from the remeasurement of deferred income taxes as a result of the 2017 Tax Reform Act, attributable to Power Generation. |
• |
A $197 million ($121 million
after-tax)
charge related to future ash pond and landfill closure costs at certain utility generation facilities, attributable to Power Generation.
|
Year Ended December 31,
|
Power
Delivery
|
|
Power
Generation
|
|
Corporate
and Other
|
|
Adjustments
& Eliminations |
|
Consolidated
Total
|
|
||||||||||
(millions)
|
|
|
|
|
|
|||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating revenue
|
$
|
2,204
|
|
$
|
5,630
|
|
$
|
(215
|
)
|
$
|
—
|
|
$
|
7,619
|
|
|||||
Depreciation and amortization
|
|
624
|
|
|
533
|
|
|
(25
|
)
|
|
—
|
|
1,132
|
|
||||||
Interest income
|
|
—
|
|
|
9
|
|
|
5
|
|
|
(4
|
)
|
10
|
|
||||||
Interest and related charges
|
|
265
|
|
|
250
|
|
|
—
|
|
|
(4
|
)
|
511
|
|
||||||
Income tax expense (benefit)
|
|
158
|
|
|
220
|
|
|
(78
|
)
|
|
—
|
|
300
|
|
||||||
Net income (loss)
|
|
586
|
|
|
1,008
|
|
|
(312
|
)
|
|
—
|
|
1,282
|
|
||||||
Capital expenditures
|
|
1,539
|
|
|
1,003
|
|
|
—
|
|
|
—
|
|
2,542
|
|
||||||
Total assets (billions)
|
|
17.6
|
|
|
19.4
|
|
|
—
|
|
|
(0.1
|
)
|
36.9
|
|
||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating revenue
|
$ |
2,212
|
$ |
5,344
|
$ |
—
|
$ |
—
|
$ |
7,556
|
||||||||||
Depreciation and amortization
|
594
|
547
|
—
|
—
|
1,141
|
|||||||||||||||
Interest income
|
4
|
15
|
3
|
(3
|
) |
19
|
||||||||||||||
Interest and related charges
|
265
|
232
|
—
|
(3
|
) |
494
|
||||||||||||||
Income tax expense (benefit)
|
334
|
534
|
(94
|
) |
—
|
774
|
||||||||||||||
Net income
|
527
|
939
|
74
|
—
|
1,540
|
|||||||||||||||
Capital expenditures
|
1,439
|
1,290
|
—
|
—
|
2,729
|
|||||||||||||||
Total assets (billions)
|
16.6
|
18.6
|
—
|
(0.1
|
) |
35.1
|
||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating revenue
|
$ |
2,217
|
$ |
5,390
|
$ |
(19
|
) | $ |
—
|
$ |
7,588
|
|||||||||
Depreciation and amortization
|
537
|
488
|
—
|
—
|
1,025
|
|||||||||||||||
Interest income
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Interest and related charges
|
244
|
219
|
—
|
(2
|
) |
461
|
||||||||||||||
Income tax expense (benefit)
|
307
|
524
|
(104
|
) |
—
|
727
|
||||||||||||||
Net income (loss)
|
482
|
909
|
(173
|
) |
—
|
1,218
|
||||||||||||||
Capital expenditures
|
1,313
|
1,336
|
—
|
—
|
2,649
|
• | A $169 million tax benefit resulting from the remeasurement of deferred income taxes as a result of the 2017 Tax Reform Act. |
•
|
$9 million ($8 million
after-tax)
of transaction and transition costs related to the Dominion Energy Questar Pipeline acquisition, and
|
•
|
A $7 million ($4 million
after-tax)
charge related to an organizational design initiative.
|
|
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
||||||||||||
(millions)
|
|
|
|
|
||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating revenue
|
$
|
|
|
$
|
3,088
|
|
$
|
3,451
|
|
$
|
3,361
|
|
||||
Income from operations
|
|
875
|
|
|
742
|
|
|
1,150
|
|
|
834
|
|
||||
Net income including noncontrolling interests
|
|
526
|
|
|
478
|
|
|
883
|
|
|
662
|
|
||||
Net income attributable to Dominion Energy
|
|
503
|
|
|
449
|
|
|
854
|
|
|
641
|
|
||||
Basic EPS:
|
|
|
|
|
||||||||||||
Net income attributable to Dominion Energy
|
|
0.77
|
|
|
0.69
|
|
|
1.31
|
|
|
0.97
|
|
||||
Diluted EPS:
|
|
|
|
|
||||||||||||
Net income attributable to Dominion Energy
|
|
0.77
|
|
|
0.69
|
|
|
1.30
|
|
|
0.97
|
|
||||
Dividends declared per common share
|
|
0.835
|
|
|
0.835
|
|
|
0.835
|
|
|
0.835
|
|
||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating revenue
|
$ |
3,384
|
$ |
2,813
|
$ |
3,179
|
$ |
3,210
|
||||||||
Income from operations
|
1,079
|
753
|
1,152
|
953
|
||||||||||||
Net income including noncontrolling interests
|
674
|
417
|
696
|
1,333
|
||||||||||||
Net income attributable to Dominion Energy
|
632
|
390
|
665
|
1,312
|
||||||||||||
Basic EPS:
|
|
|
|
|
||||||||||||
Net income attributable to Dominion Energy
|
1.01
|
0.62
|
1.03
|
2.04
|
||||||||||||
Diluted EPS:
|
|
|
|
|
||||||||||||
Net income attributable to Dominion Energy
|
1.01
|
0.62
|
1.03
|
2.04
|
||||||||||||
Dividends declared per common share
|
0.755
|
0.755
|
0.770
|
0.770
|
• |
Fourth quarter results include $536 million of
after-tax
gains from the sale of certain merchant generation facilities and equity method investments partially offset by a $164 million
after-tax
impairment charge for certain gathering and processing assets.
|
• |
Second quarter results include an $89 million
after-tax
charge for disallowance of FERC-regulated plant.
|
• |
First quarter results include a $160 million
after-tax
charge associated with Virginia legislation enacted in March 2018 that required
one-time
rate credits of certain amounts to utility customers.
|
• |
Fourth quarter results include $
851
million tax benefit resulting from the remeasurement of deferred income taxes as a result of the 2017 Tax Reform Act, partially offset by $
96
million of
after-tax
charges associated with our equity method investments in wind-powered generation facilities.
|
|
|
First Quarter
|
|
|
Second Quarter
|
|
|
Third Quarter
|
|
|
Fourth Quarter
|
|
||||
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue
|
|
$
|
1,748
|
|
|
$
|
1,829
|
|
|
$
|
2,232
|
|
|
$
|
1,810
|
|
Income from operations
|
|
|
364
|
|
|
|
533
|
|
|
|
756
|
|
|
|
418
|
|
Net income
|
|
|
184
|
|
|
|
339
|
|
|
|
520
|
|
|
|
239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue
|
|
$
|
1,831
|
|
|
$
|
1,747
|
|
|
$
|
2,154
|
|
|
$
|
1,824
|
|
Income from operations
|
|
|
653
|
|
|
|
613
|
|
|
|
847
|
|
|
|
619
|
|
Net income
|
|
|
356
|
|
|
|
318
|
|
|
|
459
|
|
|
|
407
|
|
• |
First quarter results include a $160 million
after-tax
charge associated with Virginia legislation enacted in March 2018 that required
one-time
rate credits of certain amounts to utility customers.
|
• | Fourth quarter results include a $93 million tax benefit resulting from the remeasurement of deferred income taxes as a result of the 2017 Tax Reform Act. |
|
First Quarter
|
Second
Quarter |
|
|
Third Quarter
|
|
Fourth Quarter
|
|||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue
|
|
$
|
389
|
|
|
$
|
508
|
|
|
$
|
533
|
|
|
$
|
566
|
|
Income from
continuing
operations
|
|
|
167
|
|
|
|
90
|
|
|
|
302
|
|
|
|
228
|
|
Net income including noncontrolling interest
|
|
|
213
|
|
|
|
129
|
|
|
|
242
|
|
|
|
72
|
|
Net income from continuing operations
|
|
|
157
|
|
|
|
84
|
|
|
|
209
|
|
|
|
182
|
|
Net income (loss) from discontinued operations
|
|
|
56
|
|
|
|
45
|
|
|
|
33
|
|
|
|
(110
|
)
|
Net income attributable to Dominion Energy Gas
|
|
|
180
|
|
|
|
83
|
|
|
|
191
|
|
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenue
|
|
$
|
404
|
|
|
$
|
363
|
|
|
$
|
351
|
|
|
$
|
405
|
|
Income from
continuing
operations
|
|
|
147
|
|
|
|
97
|
|
|
|
166
|
|
|
|
142
|
|
Net income including noncontrolling interest
|
|
|
156
|
|
|
|
109
|
|
|
|
151
|
|
|
|
412
|
|
Net income from continuing operations
|
|
|
113
|
|
|
|
73
|
|
|
|
115
|
|
|
|
365
|
|
Net income from discontinued operations
|
|
|
44
|
|
|
|
36
|
|
|
|
36
|
|
|
|
47
|
|
Net income attributable to Dominion Energy Gas
|
119
|
78
|
119
|
387
|
||||||||||||
• |
Fourth quarter results include a $165 million
after-tax
impairment charge for certain gathering and processing assets
, included in discontinued operations
.
|
• |
Second quarter results include an $89 million
after-tax
charge for disallowance of FERC-regulated plant.
|
• | Fourth quarter results include a $246 million tax benefit resulting from the remeasurement of deferred income taxes as a result of the 2017 Tax Reform Act. |
Exhibit 99.2
Glossary of Terms
The following abbreviations or acronyms used in this Form 8-K are defined below:
Abbreviation or Acronym | Definition | |
2017 Tax Reform Act |
An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (previously known as The Tax Cuts and Jobs Act) enacted on December 22, 2017 |
|
AFUDC |
Allowance for funds used during construction |
|
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, Duke and Southern Company Gas |
|
Atlantic Coast Pipeline Project |
The approximately 600-mile natural gas pipeline running from West Virginia through Virginia to North Carolina which will be owned by Dominion Energy, Duke and Southern Company Gas and constructed and operated by DETI |
|
bcf |
Billion cubic feet |
|
Blue Racer |
Blue Racer Midstream, LLC, a joint venture between Caiman and FR BR Holdings, LLC effective December 2018 |
|
Caiman |
Caiman Energy II, LLC |
|
CCR |
Coal combustion residual |
|
CEA |
Commodity Exchange Act |
|
Clean Power Plan |
Regulations issued by the EPA in August 2015 for states to follow in developing plans to reduce CO2 emissions from existing fossil fuel-fired electric generating units, stayed by the U.S. Supreme Court in February 2016 pending resolution of court challenges by certain states |
|
CNG |
Consolidated Natural Gas Company |
|
Companies |
Dominion Energy, Virginia Power and Dominion Energy Gas, collectively |
|
Cooling degree days |
Units measuring the extent to which the average daily temperature is greater than 65 degrees Fahrenheit, calculated as the difference between 65 degrees and the average temperature for that day |
|
Corporate Unit |
A stock purchase contract and 1/20 or 1/40 interest in a RSN issued by Dominion Energy |
|
Cove Point |
Dominion Energy Cove Point LNG, LP |
|
Cove Point Holdings |
Cove Point GP Holding Company, LLC |
|
Cove Point LNG Facility |
An LNG terminalling and storage facility located on the Chesapeake Bay in Lusby, Maryland owned by Cove Point |
1
Abbreviation or Acronym | Definition | |
DECG |
Dominion Energy Carolina Gas Transmission, LLC |
|
DETI |
Dominion Energy Transmission, Inc. |
|
DGI |
Dominion Generation, Inc. |
|
DGP |
Dominion Gathering and Processing, Inc. |
|
Dodd-Frank Act |
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 |
|
Dominion Energy |
The legal entity, Dominion Energy, Inc., one or more of its consolidated subsidiaries (other than Virginia Power and Dominion Energy Gas) or operating segments, or the entirety of Dominion Energy, Inc. and its consolidated subsidiaries |
|
Dominion Energy Direct® |
A dividend reinvestment and open enrollment direct stock purchase plan |
|
Dominion Energy Gas |
The legal entity, Dominion Energy Gas Holdings, LLC, one or more of its consolidated subsidiaries or operating segment, or the entirety of Dominion Energy Gas Holdings, LLC and its consolidated subsidiaries |
|
Dominion Energy Midstream |
The legal entity, Dominion Energy Midstream Partners, LP, one or more of its consolidated subsidiaries, Cove Point Holdings, Iroquois GP Holding Company, LLC, DECG and Dominion Energy Questar Pipeline (beginning December 1, 2016), or the entirety of Dominion Energy Midstream Partners, LP and its consolidated subsidiaries |
|
Dominion Energy Questar |
The legal entity, Dominion Energy Questar Corporation, one or more of its consolidated subsidiaries, or the entirety of Dominion Energy Questar Corporation and its consolidated subsidiaries |
|
Dominion Energy Questar Combination |
Dominion Energys acquisition of Dominion Energy Questar completed on September 16, 2016 pursuant to the terms of the agreement and plan of merger entered on January 31, 2016 |
|
Dominion Energy Questar Pipeline |
Dominion Energy Questar Pipeline, LLC, one or more of its consolidated subsidiaries, or the entirety of Dominion Energy Questar Pipeline, LLC and its consolidated subsidiaries |
|
Dth |
Dekatherm |
|
Duke |
The legal entity, Duke Energy Corporation, one or more of its consolidated subsidiaries or operating segments, or the entirety of Duke Energy Corporation and its consolidated subsidiaries |
|
Eagle Solar |
Eagle Solar, LLC, a wholly-owned subsidiary of DGI |
|
East Ohio |
The East Ohio Gas Company, doing business as Dominion Energy Ohio |
|
Eastern Market Access Project |
Project to provide 294,000 Dths/day of transportation service to help meet demand for natural gas for Washington Gas Light Company, a local gas utility serving customers in D.C., Virginia and Maryland, and Mattawoman Energy, LLC for its new electric power generation facility to be built in Maryland |
|
EPA |
U.S. Environmental Protection Agency |
|
EPS |
Earnings per share |
|
Fairless |
Fairless power station |
|
FASB |
Financial Accounting Standards Board |
2
Abbreviation or Acronym | Definition | |
FERC |
Federal Energy Regulatory Commission |
|
Fitch |
Fitch Ratings Ltd. |
|
FTRs |
Financial transmission rights |
|
Gas Infrastructure |
Gas Infrastructure Group operating segment |
|
GHG |
Greenhouse gas |
|
Greensville County |
A 1,588 MW combined-cycle, natural gas-fired power station in Greensville County, Virginia |
|
Heating degree days |
Units measuring the extent to which the average daily temperature is less than 65 degrees Fahrenheit, calculated as the difference between 65 degrees and the average temperature for that day |
|
Hope |
Hope Gas, Inc., doing business as Dominion Energy West Virginia |
|
Iroquois |
Iroquois Gas Transmission System, L.P. |
|
ISO |
Independent system operator |
|
June 2006 hybrids |
Dominion Energys 2006 Series A Enhanced Junior Subordinated Notes due 2066 |
|
Liquefaction Project |
A natural gas export/liquefaction facility at Cove Point |
|
LNG |
Liquefied natural gas |
|
Manchester |
Manchester power station |
|
MD&A |
Managements Discussion and Analysis of Financial Condition and Results of Operations |
|
Millstone |
Millstone nuclear power station |
|
Moodys |
Moodys Investors Service |
|
MW |
Megawatt |
3
Abbreviation or Acronym | Definition | |
MWh |
Megawatt hour |
|
NERC |
North American Electric Reliability Corporation |
|
North Anna |
North Anna nuclear power station |
|
NOX |
Nitrogen oxide |
|
NRC |
U.S. Nuclear Regulatory Commission |
|
Order 1000 |
Order issued by FERC adopting new requirements for electric transmission planning, cost allocation and development |
|
PHMSA |
Pipeline and Hazardous Materials Safety Administration |
|
PJM |
PJM Interconnection, L.L.C. |
|
Power Delivery |
Power Delivery Group operating segment |
|
Power Generation |
Power Generation Group operating segment |
|
PSNC |
Public Service Company of North Carolina, Incorporated |
|
Questar Gas |
Questar Gas Company, doing business as Dominion Energy Utah, Dominion Energy Wyoming and Dominion Energy Idaho |
|
RCC |
Replacement Capital Covenant |
|
RGGI |
Regional Greenhouse Gas Initiative |
4
Abbreviation or Acronym | Definition | |
RSN |
Remarketable subordinated note |
|
RTO |
Regional transmission organization |
|
SCANA |
The legal entity, SCANA Corporation, one or more of its consolidated subsidiaries or operating segments, or the entirety of SCANA Corporation and its consolidated subsidiaries |
|
SCANA Combination |
Dominion Energys acquisition of SCANA completed on January 1, 2019 pursuant to the terms of the SCANA Merger Agreement |
|
SCE&G |
The legal entity, South Carolina Electric & Gas Company, its consolidated subsidiaries or operating segments, or the entirety of South Carolina Electric & Gas Company and its consolidated subsidiaries |
|
September 2006 hybrids |
Dominion Energys 2006 Series B Enhanced Junior Subordinated Notes due 2066 |
|
Southeast Energy |
Southeast Energy Group operating segment |
|
South Carolina Commission |
South Carolina Public Service Commission |
|
Standard & Poors |
Standard & Poors Ratings Services, a division of the McGraw-Hill Companies, Inc. |
5
Abbreviation or Acronym | Definition | |
VDEQ |
Virginia Department of Environmental Quality |
|
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 segments, or the entirety of Virginia Electric and Power Company and its consolidated subsidiaries |
6
Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
MD&A discusses Dominion Energys results of operations and general financial condition and Virginia Power and Dominion Energy Gas results of operations. MD&A should be read in conjunction with Item 1. Business and the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data. Virginia Power and Dominion Energy Gas meet the conditions to file under the reduced disclosure format, and therefore have omitted certain sections of MD&A.
CONTENTS OF MD&A
MD&A consists of the following information:
|
Forward-Looking Statements |
|
Accounting MattersDominion Energy |
|
Dominion Energy |
|
Results of Operations |
|
Segment Results of Operations |
|
Virginia Power |
|
Results of Operations |
|
Dominion Energy Gas |
|
Results of Operations |
|
Liquidity and Capital ResourcesDominion Energy |
|
Future Issues and Other MattersDominion Energy |
FORWARD-LOOKING STATEMENTS
This report contains statements concerning the Companies expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In most cases, the reader can identify these forward-looking statements by such words as anticipate, estimate, forecast, expect, believe, should, could, plan, may, continue, target or other similar words.
The Companies make forward-looking statements with full knowledge that risks and uncertainties exist that may cause actual results to differ materially from predicted results. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Additionally, other factors may cause actual results to differ materially from those indicated in any forward-looking statement. These factors include but are not limited to:
● |
Unusual weather conditions and their effect on energy sales to customers and energy commodity prices; |
● |
Extreme weather events and other natural disasters, including, but not limited to, hurricanes, high winds, severe storms, earthquakes, flooding and changes in water temperatures and availability that can cause outages and property damage to facilities; |
● |
Federal, state and local legislative and regulatory developments, including changes in federal and state tax laws and regulations; |
● |
Changes to federal, state and local environmental laws and regulations, including those related to climate change, the tightening of emission or discharge limits for GHGs and other substances, more extensive permitting requirements and the regulation of additional substances; |
● |
Cost of environmental compliance, including those costs related to climate change; |
● |
Changes in implementation and enforcement practices of regulators relating to environmental standards and litigation exposure for remedial activities; |
● |
Difficulty in anticipating mitigation requirements associated with environmental and other regulatory approvals or related appeals; |
● |
Risks associated with the operation of nuclear facilities, including costs associated with the disposal of spent nuclear fuel, decommissioning, plant maintenance and changes in existing regulations governing such facilities; |
7
● |
Unplanned outages at facilities in which the Companies have an ownership interest; |
● |
Fluctuations in energy-related commodity prices and the effect these could have on Dominion Energy and Dominion Energy Gas earnings and the Companies liquidity position and the underlying value of their assets; |
● |
Counterparty credit and performance risk; |
● |
Global capital market conditions, including the availability of credit and the ability to obtain financing on reasonable terms; |
● |
Risks associated with Virginia Powers membership and participation in PJM, including risks related to obligations created by the default of other participants; |
● |
Fluctuations in the value of investments held in nuclear decommissioning trusts by Dominion Energy and Virginia Power and in benefit plan trusts by Dominion Energy and Dominion Energy Gas; |
● |
Fluctuations in interest rates or foreign currency exchange rates; |
● |
Changes in rating agency requirements or credit ratings and their effect on availability and cost of capital; |
● |
Changes in financial or regulatory accounting principles or policies imposed by governing bodies; |
● |
Employee workforce factors including collective bargaining agreements and labor negotiations with union employees; |
● |
Risks of operating businesses in regulated industries that are subject to changing regulatory structures; |
● |
Impacts of acquisitions, including the recently completed SCANA Combination, divestitures, transfers of assets to joint ventures and retirements of assets based on asset portfolio reviews; |
● |
Receipt of approvals for, and timing of, closing dates for acquisitions and divestitures; |
● |
Changes in rules for RTOs and ISOs in which Dominion Energy and Virginia Power participate, including changes in rate designs, changes in FERCs interpretation of market rules and new and evolving capacity models; |
● |
Political and economic conditions, including inflation and deflation; |
● |
Domestic terrorism and other threats to the Companies physical and intangible assets, as well as threats to cybersecurity; |
● |
Changes in demand for the Companies services, including industrial, commercial and residential growth or decline in the Companies service areas, changes in supplies of natural gas delivered to Dominion Energy and Dominion Energy Gas pipeline and processing systems, failure to maintain or replace customer contracts on favorable terms, changes in customer growth or usage patterns, including as a result of energy conservation programs, the availability of energy efficient devices and the use of distributed generation methods; |
● |
Additional competition in industries in which the Companies operate, including in electric markets in which Dominion Energys merchant generation facilities operate and potential competition from the development and deployment of alternative energy sources, such as self-generation and distributed generation technologies, and availability of market alternatives to large commercial and industrial customers; |
● |
Competition in the development, construction and ownership of certain electric transmission facilities in Dominion Energy and Virginia Powers service territories in connection with Order 1000; |
● |
Changes in technology, particularly with respect to new, developing or alternative sources of generation and smart grid technologies; |
● |
Changes to regulated electric rates collected by Dominion Energy and Virginia Power and regulated gas distribution, transportation and storage rates, including LNG storage, collected by Dominion Energy and Dominion Energy Gas; |
● |
Changes in operating, maintenance and construction costs; |
● |
Timing and receipt of regulatory approvals necessary for planned construction or growth projects and compliance with conditions associated with such regulatory approvals; |
● |
The inability to complete planned construction, conversion or growth projects at all, or with the outcomes or within the terms and time frames initially anticipated, including as a result of increased public involvement or intervention in such projects; |
● |
Adverse outcomes in litigation matters or regulatory proceedings, including matters acquired in the SCANA Combination; and |
● |
The impact of operational hazards, including adverse developments with respect to pipeline and plant safety or integrity, equipment loss, malfunction or failure, operator error, and other catastrophic events. |
● |
Risks associated with entities in which Dominion Energy Gas shares ownership with third parties, including risks that result from lack of sole decision making authority, disputes that may arise between Dominion Energy Gas and third party participants and difficulties in exiting these arrangements; |
● |
Changes in future levels of domestic and international natural gas production, supply or consumption; |
● |
Fluctuations in future volumes of LNG imports or exports from the U.S. and other countries worldwide or demand for, purchases of, and prices related to natural gas or LNG; |
8
Additionally, other risks that could cause actual results to differ from predicted results are set forth in Item 1A. Risk Factors.
The Companies forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. The Companies caution the reader not to place undue reliance on their forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, differ materially from actual results. The Companies undertake no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.
ACCOUNTING MATTERS
Critical Accounting Policies and Estimates
Dominion Energy has identified the following accounting policies, including certain inherent estimates, that as a result of the judgments, uncertainties, uniqueness and complexities of the underlying accounting standards and operations involved, could result in material changes to its financial condition or results of operations under different conditions or using different assumptions. Dominion Energy has discussed the development, selection and disclosure of each of these policies with the Audit Committee of its Board of Directors.
ACCOUNTING FOR REGULATED OPERATIONS
The accounting for Dominion Energys regulated electric and gas operations differs from the accounting for nonregulated operations in that Dominion Energy is required to reflect the effect of rate regulation in its Consolidated Financial Statements. For regulated businesses subject to federal or state cost-of-service rate regulation, regulatory practices that assign costs to accounting periods may differ from accounting methods generally applied by nonregulated companies. When it is probable that regulators will permit the recovery of current costs through future rates charged to customers, these costs that otherwise would be expensed by nonregulated companies are deferred as regulatory assets. Likewise, regulatory liabilities are recognized when it is probable that regulators will require customer refunds through future rates or when revenue is collected from customers for expenditures that have yet to be incurred. Generally, regulatory assets and liabilities are amortized into income over the period authorized by the regulator.
Dominion Energy evaluates whether or not recovery of its regulatory assets through future rates is probable and makes various assumptions in its analysis. The expectations of future recovery are generally based on orders issued by regulatory commissions, legislation or historical experience, as well as discussions with applicable regulatory authorities and legal counsel. If recovery of a regulatory asset is determined to be less than probable, it will be written off in the period such assessment is made. See Notes 12 and 13 to the Consolidated Financial Statements for additional information.
ASSET RETIREMENT OBLIGATIONS
Dominion Energy recognizes liabilities for the expected cost of retiring tangible long-lived assets for which a legal obligation exists and the ARO can be reasonably estimated. These AROs are recognized at fair value as incurred or when sufficient information becomes available to determine fair value and are generally capitalized as part of the cost of the related long-lived assets. In the absence of quoted market prices, Dominion Energy estimates the fair value of its AROs using present value techniques, in which it makes various assumptions including estimates of the amounts and timing of future cash flows associated with retirement activities, credit-adjusted risk free rates and cost escalation rates. The impact on measurements of new AROs or remeasurements of existing AROs, using different cost escalation or credit-adjusted risk free rates in the future, may be significant. When Dominion Energy revises any assumptions used to calculate the fair value of existing AROs, it adjusts the carrying amount of both the ARO liability and the related long-lived asset for assets that are in service; for assets that have ceased operations, Dominion Energy adjusts the carrying amount of the ARO liability with such changes recognized in income. Dominion Energy accretes the ARO liability to reflect the passage of time. In 2018, Dominion Energy recorded an increase in AROs of $140 million primarily related to future ash pond and landfill closure costs at certain generation facilities. See Note 22 to the Consolidated Financial Statements for additional information.
In 2018, 2017 and 2016, Dominion Energy recognized $119 million, $117 million and $104 million, respectively, of accretion, and expects to recognize approximately $145 million in 2019. Dominion Energy records accretion and depreciation associated with utility nuclear decommissioning AROs and regulated pipeline replacement AROs as an adjustment to the regulatory liabilities related to these items.
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A significant portion of Dominion Energys AROs relates to the future decommissioning of its merchant and utility nuclear facilities. These nuclear decommissioning AROs are reported in the Power Generation segment. Subsequent to the SCANA Combination, SCANAs nuclear decommissioning AROs will be reported in the Southeast Energy segment. At December 31, 2018, Dominion Energys nuclear decommissioning AROs totaled $1.6 billion, representing approximately 62% of its total AROs. Subsequent to the SCANA Combination, Dominion Energys nuclear decommissioning AROs will total approximately $1.8 billion, representing approximately 55% of its total AROs. Based on their significance, the following discussion of critical assumptions inherent in determining the fair value of AROs relates to those associated with Dominion Energys nuclear decommissioning obligations.
Dominion Energy obtains from third-party specialists periodic site-specific base year cost studies in order to estimate the nature, cost and timing of planned decommissioning activities for its nuclear plants. These cost studies are based on relevant information available at the time they are performed; however, estimates of future cash flows for extended periods of time are by nature highly uncertain and may vary significantly from actual results. In addition, Dominion Energys cost estimates include cost escalation rates that are applied to the base year costs. Dominion Energy determines cost escalation rates, which represent projected cost increases over time due to both general inflation and increases in the cost of specific decommissioning activities, for each nuclear facility. The selection of these cost escalation rates is dependent on subjective factors which are considered to be critical assumptions.
INCOME TAXES
Judgment and the use of estimates are required in developing the provision for income taxes and reporting of tax-related assets and liabilities. The interpretation of tax laws, including the provisions of the 2017 Tax Reform Act, involves uncertainty, since tax authorities may interpret the laws differently. In addition, the states in which the Companies operate may or may not conform to some or all the provisions in the 2017 Tax Reform Act. Ultimate resolution or clarification of income tax matters may result in favorable or unfavorable impacts to net income and cash flows, and adjustments to tax-related assets and liabilities could be material.
Given the uncertainty and judgment involved in the determination and filing of income taxes, there are standards for recognition and measurement in financial statements of positions taken or expected to be taken by an entity in its income tax returns. Positions taken by an entity in its income tax returns that are recognized in the financial statements must satisfy a more-likely-than-not recognition threshold, assuming that the position will be examined by tax authorities with full knowledge of all relevant information. At December 31, 2018, Dominion Energy had $44 million of unrecognized tax benefits. Changes in these unrecognized tax benefits may result from remeasurement of amounts expected to be realized, settlements with tax authorities and expiration of statutes of limitations.
Deferred income tax assets and liabilities are recorded representing future effects on income taxes for temporary differences between the bases of assets and liabilities for financial reporting and tax purposes. Dominion Energy evaluates quarterly the probability of realizing deferred tax assets by considering current and historical financial results, expectations for future taxable income and the availability of tax planning strategies that can be implemented, if necessary, to realize deferred tax assets. Failure to achieve forecasted taxable income or successfully implement tax planning strategies may affect the realization of deferred tax assets. Dominion Energy establishes a valuation allowance when it is more-likely-than-not that all or a portion of a deferred tax asset will not be realized. At December 31, 2018, Dominion Energy had established $158 million of valuation allowances.
The 2017 Tax Reform Act included a broad range of tax reform provisions affecting the Companies, including changes in corporate tax rates and business deductions. Many of these provisions differ significantly from prior U.S. tax law, resulting in pervasive financial reporting implications for the Companies. The 2017 Tax Reform Act included significant changes to the Internal Revenue Code of 1986, including amendments which significantly change the taxation of individuals and business entities and included specific provisions related to regulated public utilities including Virginia Power, DETI, Questar Gas, Hope, East Ohio and SCE&G and PSNC, following the SCANA Combination. The more significant changes that impact the Companies included in the 2017 Tax Reform Act are (i) reducing the corporate federal income tax rate from 35% to 21%; (ii) effective in 2018, limiting the deductibility of interest expense to 30% of adjusted taxable income for certain businesses with any disallowed interest allowed to be carried forward indefinitely; (iii) permitting 100% expensing (100% bonus depreciation) for certain qualified property; (iv) eliminating the deduction for qualified domestic production activities; and (v) limiting the utilization of net operating losses arising after December 31, 2017 to 80% of taxable income with an indefinite carryforward. The specific provisions related to regulated public utilities in the 2017 Tax Reform Act generally allow for the continued deductibility of interest expense, the exclusion from full expensing for tax purposes of certain property acquired and placed in service after September 27, 2017 and continued certain rate normalization requirements for accelerated depreciation benefits.
At the date of enactment, the Companies deferred taxes were remeasured based upon the new tax rate expected to apply when temporary differences are realized or settled. For regulated operations, many of the changes in deferred taxes represented amounts probable of collection from or refund to customers, and were recorded as either an increase to a regulatory asset or liability. The 2017 Tax Reform Act included provisions that stipulate how these excess deferred taxes may be passed back to customers for certain accelerated tax depreciation benefits. Potential refunds of other deferred taxes will be determined by the Companies regulators. For nonregulated operations, the changes in deferred taxes were recorded as an adjustment to deferred tax expense.
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ACCOUNTING FOR DERIVATIVE CONTRACTS AND FINANCIAL INSTRUMENTS AT FAIR VALUE
Dominion Energy uses derivative contracts such as physical and financial forwards, futures, swaps, options and FTRs to manage commodity, interest rate and foreign currency exchange rate risks of its business operations. Derivative contracts, with certain exceptions, are reported in the Consolidated Balance Sheets at fair value. The majority of investments held in Dominion Energys nuclear decommissioning and rabbi trusts and pension and other postretirement funds are also subject to fair value accounting. See Notes 6 and 21 to the Consolidated Financial Statements for further information on these fair value measurements.
Fair value is based on actively-quoted market prices, if available. In the absence of actively-quoted market prices, management seeks indicative price information from external sources, including broker quotes and industry publications. When evaluating pricing information provided by brokers and other pricing services, Dominion Energy considers whether the broker is willing and able to trade at the quoted price, if the broker quotes are based on an active market or an inactive market and the extent to which brokers are utilizing a particular model if pricing is not readily available. If pricing information from external sources is not available, or if Dominion Energy believes that observable pricing information is not indicative of fair value, judgment is required to develop the estimates of fair value. In those cases, Dominion Energy must estimate prices based on available historical and near-term future price information and use of statistical methods, including regression analysis, that reflect its market assumptions.
Dominion Energy maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.
USE OF ESTIMATES IN GOODWILL IMPAIRMENT TESTING
As of December 31, 2018, Dominion Energy reported $6.4 billion of goodwill in its Consolidated Balance Sheet. A significant portion resulted from the acquisition of the former CNG in 2000 and the Dominion Energy Questar Combination in 2016. As discussed in Note 3 to the Consolidated Financial Statements, Dominion Energy expects to reflect a significant amount of goodwill in connection with the SCANA Combination in its Consolidated Balance Sheet in the first quarter of 2019.
In April of each year, Dominion Energy tests its goodwill for potential impairment, and performs additional tests more frequently if an event occurs or circumstances change in the interim that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount. The 2018, 2017 and 2016 annual tests and any interim tests did not result in the recognition of any goodwill impairment.
In general, Dominion Energy estimates the fair value of its reporting units by using a combination of discounted cash flows and other valuation techniques that use multiples of earnings for peer group companies and analyses of recent business combinations involving peer group companies. Fair value estimates are dependent on subjective factors such as Dominion Energys estimate of future cash flows, the selection of appropriate discount and growth rates, and the selection of peer group companies and recent transactions. These underlying assumptions and estimates are made as of a point in time; subsequent modifications, particularly changes in discount rates or growth rates inherent in Dominion Energys estimates of future cash flows, could result in a future impairment of goodwill. Although Dominion Energy has consistently applied the same methods in developing the assumptions and estimates that underlie the fair value calculations, such as estimates of future cash flows, and based those estimates on relevant information available at the time, such cash flow estimates are highly uncertain by nature and may vary significantly from actual results. If the estimates of future cash flows used in the most recent tests had been 10% lower, the resulting fair values would have still been greater than the carrying values of each of those reporting units tested, indicating that no impairment was present.
See Note 11 to the Consolidated Financial Statements for additional information.
USE OF ESTIMATES IN LONG-LIVED ASSET AND EQUITY METHOD INVESTMENT IMPAIRMENT TESTING
Impairment testing for an individual or group of long-lived assets, including intangible assets with definite lives, and equity method investments is required when circumstances indicate those assets may be impaired. When a long-lived assets carrying amount exceeds the undiscounted estimated future cash flows associated with the asset, the asset is considered impaired to the extent that the assets fair value is less than its carrying amount. When an equity method investments carrying amount exceeds its fair value, and the decline in value is deemed to be other-than-temporary, an impairment is recognized to the extent that the fair value is less than its carrying amount. Performing an impairment test on long-lived assets and equity method investments involves judgment in areas such as identifying if circumstances indicate an impairment may exist, identifying and grouping affected assets in the case of long-lived assets, and developing the undiscounted and discounted estimated future cash flows (used to estimate fair value in the absence of a market-based value) associated with the asset, including probability weighting such cash flows to reflect expectations about possible variations in their amounts or timing, expectations about the operations of the long-lived assets and equity method investments and the selection of an appropriate discount rate. When determining whether a long-lived asset or asset group has been impaired, management groups assets at the lowest level that has identifiable cash flows. Although cash flow estimates are based on relevant information available at the time the estimates are made, estimates of future cash flows are, by nature, highly uncertain and may vary significantly
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from actual results. For example, estimates of future cash flows would contemplate factors which may change over time, such as the expected use of the asset or underlying assets of equity method investees, including future production and sales levels, expected fluctuations of prices of commodities sold and consumed and expected proceeds from dispositions. See Notes 6 and 9 to the Consolidated Financial Statements for a discussion of impairments related to certain long-lived assets and equity method investments.
As discussed in Future Issues and Other Matters, delays in obtaining permits necessary for construction and construction delays due to judicial actions have impacted the estimated cost and schedule for the Atlantic Coast Pipeline Project. As a result, Dominion Energy evaluated the carrying amount of its equity method investment in Atlantic Coast Pipeline for an other-than-temporary impairment and determined that it was not impaired. Any significant changes affecting the discounted cash flow estimates associated with the Atlantic Coast Pipeline Project, such as future unfavorable judicial actions resulting in further construction and in-service delays along with an increase in construction costs, could result in an impairment charge.
EMPLOYEE BENEFIT PLANS
Dominion Energy sponsors noncontributory defined benefit pension plans and other postretirement benefit plans for eligible active employees, retirees and qualifying dependents. The projected costs of providing benefits under these plans are dependent, in part, on historical information such as employee demographics, the level of contributions made to the plans and earnings on plan assets. Assumptions about the future, including the expected long-term rate of return on plan assets, discount rates applied to benefit obligations, mortality rates and the anticipated rate of increase in healthcare costs and participant compensation, also have a significant impact on employee benefit costs. The impact of changes in these factors, as well as differences between Dominion Energys assumptions and actual experience, is generally recognized in the Consolidated Statements of Income over the remaining average service period of plan participants, rather than immediately.
The expected long-term rates of return on plan assets, discount rates, healthcare cost trend rates and mortality rates are critical assumptions. Dominion Energy determines the expected long-term rates of return on plan assets for pension plans and other postretirement benefit plans by using a combination of:
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Expected inflation and risk-free interest rate assumptions; |
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Historical return analysis to determine long-term historic returns as well as historic risk premiums for various asset classes; |
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Expected future risk premiums, asset classes volatilities and correlations; |
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Forward-looking return expectations derived from the yield on long-term bonds and the expected long-term returns of major capital market assumptions; and |
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Investment allocation of plan assets. The strategic target asset allocation for Dominion Energys pension funds is 28% U.S. equity, 18% non-U.S. equity, 35% fixed income, 3% real estate and 16% other alternative investments, such as private equity investments. |
Strategic investment policies are established for Dominion Energys prefunded benefit plans based upon periodic asset/liability studies. Factors considered in setting the investment policy include those mentioned above such as employee demographics, liability growth rates, future discount rates, the funded status of the plans and the expected long-term rate of return on plan assets. Deviations from the plans strategic allocation are a function of Dominion Energys assessments regarding short-term risk and reward opportunities in the capital markets and/or short-term market movements which result in the plans actual asset allocations varying from the strategic target asset allocations. Through periodic rebalancing, actual allocations are brought back in line with the targets. Future asset/liability studies will focus on strategies to further reduce pension and other postretirement plan risk, while still achieving attractive levels of returns.
Dominion Energy develops non-investment related assumptions, which are then compared to the forecasts of an independent investment advisor to ensure reasonableness. An internal committee selects the final assumptions. Dominion Energy calculated its pension cost using an expected long-term rate of return on plan assets assumption of 8.75% for 2018, 2017 and 2016. For 2019, the expected long-term rate of return for pension cost assumption is 8.65% for Dominion Energys plans held as of December 31, 2018. Dominion Energy calculated its other postretirement benefit cost using an expected long-term rate of return on plan assets assumption of 8.50% for 2018, 2017 and 2016. For 2019, the expected long-term rate of return for other postretirement benefit cost assumption is 8.50%. The rate used in calculating other postretirement benefit cost is lower than the rate used in calculating pension cost because of differences in the relative amounts of various types of investments held as plan assets.
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Dominion Energy determines discount rates from analyses of AA/Aa rated bonds with cash flows matching the expected payments to be made under its plans. The discount rates used to calculate pension cost and other postretirement benefit cost ranged from 3.80% to 3.81% for pension plans and 3.76% for other postretirement benefit plans in 2018, ranged from 3.31% to 4.50% for pension plans and 3.92% to 4.47% for other postretirement benefit plans in 2017 and ranged from 2.87% to 4.99% for pension plans and 3.56% to 4.94% for other postretirement benefit plans in 2016. Dominion Energy selected a discount rate ranging from 4.42% to 4.43% for pension plans and 4.37% to 4.38% for other postretirement benefit plans for determining its December 31, 2018 projected benefit obligations.
Dominion Energy establishes the healthcare cost trend rate assumption based on analyses of various factors including the specific provisions of its medical plans, actual cost trends experienced and projected, and demographics of plan participants. Dominion Energys healthcare cost trend rate assumption as of December 31, 2018 was 6.50% and is expected to gradually decrease to 5.00% by 2025 and continue at that rate for years thereafter.
Mortality rates are developed from actual and projected plan experience for postretirement benefit plans. Dominion Energys actuary conducts an experience study periodically as part of the process to select its best estimate of mortality. Dominion Energy considers both standard mortality tables and improvement factors as well as the plans actual experience when selecting a best estimate. During 2016, Dominion Energy conducted a new experience study as scheduled and, as a result, updated its mortality assumptions.
The following table illustrates the effect on cost of changing the critical actuarial assumptions previously discussed for Dominion Energys plans held as of December 31, 2018, while holding all other assumptions constant:
Increase in Net Periodic Cost | ||||||||||||
Change in
Actuarial Assumption |
Pension
Benefits |
Other
Postretirement Benefits |
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(millions, except percentages) | ||||||||||||
Discount rate |
(0.25 | )% | $ | 20 | $ | 2 | ||||||
Long-term rate of return on plan assets |
(0.25 | )% | 19 | 4 | ||||||||
Healthcare cost trend rate |
1 | % | N/A | 20 |
In addition to the effects on cost, at December 31, 2018, a 0.25% decrease in the discount rate would increase Dominion Energys projected pension benefit obligation by $294 million and its accumulated postretirement benefit obligation by $37 million, while a 1.00% increase in the healthcare cost trend rate would increase its accumulated postretirement benefit obligation by $130 million.
See Note 21 to the Consolidated Financial Statements for additional information on Dominion Energys employee benefit plans.
New Accounting Standards
See Note 2 to the Consolidated Financial Statements for a discussion of new accounting standards.
Dominion Energy
RESULTS OF OPERATIONS
Presented below is a summary of Dominion Energys consolidated results:
Year Ended December 31, |
2018 | $ Change | 2017 | $ Change | 2016 | |||||||||||||||
(millions, except EPS) | ||||||||||||||||||||
Net Income attributable to Dominion Energy |
$ | 2,447 | $ | (552) | $ | 2,999 | $ | 876 | $ | 2,123 | ||||||||||
Diluted EPS |
3.74 | (0.98) | 4.72 | 1.28 | 3.44 |
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Overview
2018 VS. 2017
Net income attributable to Dominion Energy decreased 18%, primarily due to the absence of benefits in 2017 resulting from the remeasurement of deferred income taxes to the new corporate income tax rate, an impairment charge on certain gathering and processing assets, a charge associated with Virginia legislation enacted in March 2018, decreased net investment earnings on nuclear decommissioning trust funds, lower renewable energy investment tax credits and a charge for disallowance of FERC-regulated plant. These decreases were partially offset by gains on the sales of certain merchant generation facilities and equity method investments, the commencement of commercial operations of the Liquefaction Project and the absence of charges associated with equity method investments in wind-powered generation facilities.
2017 VS. 2016
Net income attributable to Dominion Energy increased 41%, primarily due to benefits resulting from the remeasurement of deferred income taxes to the new corporate income tax rate, the Dominion Energy Questar Combination and an absence of charges related to future ash pond and landfill closures. These increases were partially offset by lower renewable energy investment tax credits and charges associated with equity method investments in wind-powered generation facilities.
Analysis of Consolidated Operations
Presented below are selected amounts related to Dominion Energys results of operations:
Year Ended December 31, |
2018 | $ Change | 2017 | $ Change | 2016 | |||||||||||||||
(millions) | ||||||||||||||||||||
Operating revenue |
$ | 13,366 | $ | 780 | $ | 12,586 | $ | 849 | $ | 11,737 | ||||||||||
Electric fuel and other energy-related purchases |
2,814 | 513 | 2,301 | (32 | ) | 2,333 | ||||||||||||||
Purchased electric capacity |
122 | 116 | 6 | (93 | ) | 99 | ||||||||||||||
Purchased gas |
645 | (56 | ) | 701 | 242 | 459 | ||||||||||||||
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Net revenue |
9,785 | 207 | 9,578 | 732 | 8,846 | |||||||||||||||
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Other operations and maintenance |
3,458 | 258 | 3,200 | (79 | ) | 3,279 | ||||||||||||||
Depreciation, depletion and amortization |
2,000 | 95 | 1,905 | 346 | 1,559 | |||||||||||||||
Other taxes |
703 | 35 | 668 | 72 | 596 | |||||||||||||||
Impairment of assets and related charges |
403 | 388 | 15 | 11 | 4 | |||||||||||||||
Gains on sales of assets |
(380 | ) | (233 | ) | (147 | ) | (107 | ) | (40 | ) | ||||||||||
Other income |
1,021 | 663 | 358 | (71 | ) | 429 | ||||||||||||||
Interest and related charges |
1,493 | 288 | 1,205 | 195 | 1,010 | |||||||||||||||
Income tax expense |
580 | 610 | (30 | ) | (685 | ) | 655 | |||||||||||||
Noncontrolling interests |
102 | (19 | ) | 121 | 32 | 89 |
An analysis of Dominion Energys results of operations follows:
2018 VS. 2017
Net revenue increased 2%, primarily reflecting:
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A $500 million increase due to commencement of commercial operations of the Liquefaction Project, including terminalling services provided to the Export Customers ($508 million) and regulated gas transportation contracts to serve the Export Customers ($58 million), partially offset by credits associated with the start-up phase of the Liquefaction Project ($66 million); |
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An increase in sales to electric utility retail customers from an increase in heating degree days during the heating season of 2018 ($71 million) and an increase in cooling degree days during the cooling season of 2018 ($69 million); |
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A $130 million increase due to favorable pricing at merchant generation facilities; |
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A $92 million increase due to growth projects placed in service, other than the Liquefaction Project; |
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A $74 million increase in services performed for Atlantic Coast Pipeline; and |
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A $46 million increase in sales to electric utility retail customers due to customer growth. |
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These increases were partially offset by:
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A $325 million decrease for regulated electric generation and electric and gas distribution operations as a result of the 2017 Tax Reform Act; |
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A $215 million charge associated with Virginia legislation enacted in March 2018 that requires one-time rate credits of certain amounts to utility customers; |
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A $94 million increase in net electric capacity expense related to the annual PJM capacity performance market effective June 2017 ($112 million) and the annual PJM capacity performance market effective June 2018 ($39 million), partially offset by a benefit related to non-utility generators ($57 million); |
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An $89 million decrease in rate adjustment clauses associated with electric utility operations, which includes the impacts of the 2017 Tax Reform Act; and |
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A $38 million decrease from scheduled declines in or expiration of certain DETI and Cove Point contracts. |
Net revenue does not reflect an impact from a reduction in planned outage days at Millstone as there was an offsetting increase in unplanned outage days.
Other operations and maintenance increased 8%, primarily reflecting:
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A $102 million increase in storm damage and service restoration costs in the regulated electric service territory; |
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An $81 million increase due to a charge associated primarily with future ash pond and landfill closure costs in connection with the enactment of Virginia legislation in April 2018; |
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A $73 million increase in services performed for Atlantic Coast Pipeline. These expenses are billed to Atlantic Coast Pipeline and do not significantly impact net income; |
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A $47 million increase in operating expenses from the commercial operations of the Liquefaction Project and costs associated with regulated gas transportation contracts to serve the Export Customers; and |
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A $38 million increase in salaries, wages and benefits, partially offset by |
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A $74 million decrease from a reduction in planned outage days at certain merchant and utility generation facilities. |
Depreciation, depletion and amortization increased 5%, primarily due to an increase from various growth projects being placed into service ($187 million), including the Liquefaction Project ($81 million), partially offset by revised depreciation rates for regulated nuclear plants to comply with the Virginia Commission requirements ($61 million).
Impairment of assets and related charges increased $388 million, primarily due to a $219 million impairment charge on certain gathering and processing assets, a $135 million charge for disallowance of FERC-regulated plant and a $37 million write-off associated with the Eastern Market Access Project.
Gains on sales of assets increased $233 million, primarily due to the sale of Fairless and Manchester ($210 million) and an increase in gains related to agreements to convey shale development rights under natural gas storage fields ($46 million).
Other income increased $663 million, primarily reflecting a gain on the sale of Dominion Energys 50% limited partnership interest in Blue Racer ($546 million), the absence of charges associated with equity method investments in wind-powered generation facilities ($158 million), a gain on the sale of Dominion Energys 25% limited partnership interest in Catalyst Old River Hydroelectric Limited Partnership ($87 million) and a decrease in the non-service components of pension and other postretirement employee benefit credits capitalized to property, plant and equipment in 2018 ($45 million), partially offset by a decrease in net investment earnings on nuclear decommissioning trust funds ($209 million).
Interest and related charges increased 24%, primarily due to the absence of capitalization of interest expense associated with the Liquefaction Project upon completion of construction ($111 million), higher long-term debt interest expense resulting from net debt issuances in 2018 and 2017 ($92 million) and charges associated with the early redemption of certain debt securities ($69 million).
Income tax expense increased $610 million, primarily due to the absence of benefits resulting from the remeasurement of deferred income taxes to the new corporate income tax rate ($851 million) and lower renewable energy investment tax credits ($138 million), partially offset by the reduced corporate income tax rate ($414 million).
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2017 VS. 2016
Net revenue increased 8%, primarily reflecting:
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A $663 million increase from the operations acquired in the Dominion Energy Questar Combination being included for all of 2017; |
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A $97 million electric capacity benefit related to non-utility generators ($133 million) and a benefit due to the annual PJM capacity performance market effective June 2016 ($123 million), partially offset by the annual PJM capacity performance market effective June 2017 ($159 million); |
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An $86 million increase due to additional generation output from merchant solar generating projects; |
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A $71 million increase in sales to electric utility retail customers due to the effect of changes in customer usage and other factors, including $25 million related to customer growth; |
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A $63 million increase from regulated natural gas transmission growth projects placed in service; |
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A $46 million increase from rate adjustment clauses associated with electric utility operations; and |
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A $34 million increase in services performed for Atlantic Coast Pipeline. |
These increases were partially offset by:
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A $144 million decrease from Cove Point import contracts; |
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A $114 million decrease due to unfavorable pricing at merchant generation facilities; and |
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A decrease in sales to electric utility retail customers from a decrease in cooling degree days during the cooling season of 2017 ($53 million) and a reduction in heating degree days during the heating season of 2017 ($28 million). |
Other operations and maintenance decreased 2%, primarily reflecting:
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A $197 million absence of charges related to future ash pond and landfill closure costs at certain utility generation facilities; |
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A $115 million decrease in certain electric transmission-related expenditures. These expenses are primarily recovered through state and FERC rates and do not impact net income; |
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The absence of organizational design initiative costs ($64 million); and |
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A $46 million decrease in storm damage and service restoration costs associated with electric utility operations, partially offset by |
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A $162 million increase from the operations acquired in the Dominion Energy Questar Combination being included for all of 2017; |
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A $92 million increase in salaries, wages and benefits; |
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A $36 million increase in outage costs; and |
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A $33 million increase in services performed for Atlantic Coast Pipeline. These expenses are billed to Atlantic Coast Pipeline and do not significantly impact net income. |
Depreciation, depletion and amortization increased 22%, primarily due to the operations acquired in the Dominion Energy Questar Combination being included for all of 2017 ($162 million) and various growth projects being placed into service ($151 million).
Other taxes increased 12%, primarily due to the operations acquired in the Dominion Energy Questar Combination being included for all of 2017 ($35 million) and increased property taxes related to growth projects placed into service ($27 million).
Gains on sales of assets increased $107 million, primarily due to the sale of certain assets associated with nonregulated retail energy marketing operations.
Other income decreased 17%, primarily due to charges associated with equity method investments in wind-powered generation facilities ($158 million), partially offset by an increase in earnings, excluding charges, from equity method investments ($29 million) an increase in AFUDC associated with rate-regulated projects ($23 million) and an increase in the non-service cost components of pension and other postretirement employee benefit credits ($14 million).
Interest and related charges increased 19%, primarily due to higher long-term debt interest expense resulting from debt issuances in 2016 and 2017 ($171 million) and debt acquired in the Dominion Energy Questar Combination ($37 million).
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Income tax expense decreased $685 million, primarily due to benefits resulting from the remeasurement of deferred income taxes to the new corporate income tax rate ($851 million), partially offset by lower renewable energy investment tax credits ($133 million).
Outlook
Dominion Energys 2019 net income is expected to decrease on a per share basis as compared to 2018 primarily from the following:
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Charges incurred for refunds to SCE&G electric customers and transaction and transition costs related to the SCANA Combination; |
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The absence of earnings from, and gains on, the sales of certain merchant generation facilities and equity method investments; |
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A charge associated with the early retirement of the existing automated meter reading infrastructure; |
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Return to normal weather; |
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An increase in pension-related expenses; and |
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Share dilution. |
These decreases are expected to be partially offset by the following:
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Commercial operation of the Liquefaction Project for the entire year; |
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The inclusion of operations acquired in the SCANA Combination; |
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The absence of charges associated with the impairment of certain gathering and processing assets and disallowance of FERC-regulated plant; |
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The absence of charges associated with Virginia legislation enacted in March 2018; |
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Construction and operation of growth projects in gas transmission and distribution; and |
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Construction and operation of growth projects in electric utility operations. |
SEGMENT RESULTS OF OPERATIONS
Segment results include the impact of intersegment revenues and expenses, which may result in intersegment profit or loss. Presented below is a summary of contributions by Dominion Energys operating segments to net income attributable to Dominion Energy:
Year Ended December 31, |
2018 | 2017 | 2016 | |||||||||||||||||||||
Net income (loss)
attributable to
Energy |
Diluted
EPS |
Net income
attributable to Dominion Energy |
Diluted
EPS |
Net income
(loss) attributable to Dominion Energy |
Diluted
EPS |
|||||||||||||||||||
(millions, except EPS) | ||||||||||||||||||||||||
Power Delivery |
$ | 587 | $ | 0.90 | $ | 531 | $ | 0.83 | $ | 484 | $ | 0.78 | ||||||||||||
Power Generation |
1,254 | 1.92 | 1,181 | 1.86 | 1,397 | 2.26 | ||||||||||||||||||
Gas Infrastructure |
1,214 | 1.85 | 898 | 1.41 | 726 | 1.18 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Primary operating segments |
3,055 | 4.67 | 2,610 | 4.10 | 2,607 | 4.22 | ||||||||||||||||||
Corporate and Other |
(608 | ) | (0.93 | ) | 389 | 0.62 | (484 | ) | (0.78 | ) | ||||||||||||||
|
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|
|
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|
|
|
|
|
|||||||||||||
Consolidated |
$ | 2,447 | $ | 3.74 | $ | 2,999 | $ | 4.72 | $ | 2,123 | $ | 3.44 | ||||||||||||
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|
17
Power Delivery
Presented below are operating statistics related to Power Deliverys operations:
Year Ended December 31, |
2018 | % Change | 2017 | % Change | 2016 | |||||||||||||||
Electricity delivered (million MWh) |
87.8 | 5 | % | 83.4 | | % | 83.7 | |||||||||||||
Degree days (electric distribution service area): |
||||||||||||||||||||
Cooling |
2,019 | 12 | 1,801 | (2 | ) | 1,830 | ||||||||||||||
Heating |
3,608 | 16 | 3,104 | (10 | ) | 3,446 | ||||||||||||||
Average electric distribution customer accounts (thousands)(1) |
2,600 | 1 | 2,574 | 1 | 2,549 |
(1) |
Period average. |
Presented below, on an after-tax basis, are the key factors impacting Power Deliverys net income contribution:
2018 VS. 2017
Increase (Decrease) | ||||||||
Amount | EPS | |||||||
(millions, except EPS) | ||||||||
Regulated electric sales: |
||||||||
Weather |
$ | 29 | $ | 0.05 | ||||
Other |
48 | 0.08 | ||||||
Rate adjustment clause equity return |
26 | 0.04 | ||||||
Depreciation and amortization |
(8 | ) | (0.01 | ) | ||||
Storm damage and service restoration |
(19 | ) | (0.03 | ) | ||||
Other |
(20 | ) | (0.03 | ) | ||||
Share dilution |
| (0.03 | ) | |||||
|
|
|
|
|||||
Change in net income contribution |
$ | 56 | $ | 0.07 | ||||
|
|
|
|
2017 VS. 2016
Increase (Decrease) | ||||||||
Amount | EPS | |||||||
(millions, except EPS) | ||||||||
Regulated electric sales: |
||||||||
Weather |
$ | (14 | ) | $ | (0.02 | ) | ||
Other |
15 | 0.02 | ||||||
FERC transmission equity return |
14 | 0.02 | ||||||
Storm damage and service restoration |
14 | 0.02 | ||||||
Other |
18 | 0.03 | ||||||
Share dilution |
| (0.02 | ) | |||||
|
|
|
|
|||||
Change in net income contribution |
$ | 47 | $ | 0.05 | ||||
|
|
|
|
18
Power Generation
Presented below are operating statistics related to Power Generations operations:
Year Ended December 31, |
2018 | % Change | 2017 | % Change | 2016 | |||||||||||||||
Electricity supplied (million MWh): |
||||||||||||||||||||
Utility |
88.0 | 4 | % | 85.0 | (3 | )% | 87.9 | |||||||||||||
Merchant |
28.8 | | 28.9 | | 28.9 | |||||||||||||||
Degree days (electric utility service area): |
||||||||||||||||||||
Cooling |
2,019 | 12 | 1,801 | (2 | ) | 1,830 | ||||||||||||||
Heating |
3,608 | 16 | 3,104 | (10 | ) | 3,446 |
Presented below, on an after-tax basis, are the key factors impacting Power Generations net income contribution:
2018 VS. 2017
Increase (Decrease) | ||||||||
Amount | EPS | |||||||
(millions, except EPS) | ||||||||
Regulated electric sales: |
||||||||
Weather |
$ | 57 | $ | 0.09 | ||||
Other |
(5 | ) | (0.01 | ) | ||||
Merchant generation margin |
110 | 0.17 | ||||||
Planned outage costs |
46 | 0.07 | ||||||
2017 Tax Reform Act impacts |
45 | 0.07 | ||||||
Depreciation and amortization |
30 | 0.05 | ||||||
Electric capacity |
(66 | ) | (0.10 | ) | ||||
Renewable energy investment tax credit |
(138 | ) | (0.21 | ) | ||||
Other |
(6 | ) | (0.01 | ) | ||||
Share dilution |
| (0.06 | ) | |||||
|
|
|
|
|||||
Change in net income contribution |
$ | 73 | $ | 0.06 | ||||
|
|
|
|
2017 VS. 2016
Increase (Decrease) | ||||||||
Amount | EPS | |||||||
(millions, except EPS) | ||||||||
Regulated electric sales: |
||||||||
Weather |
$ | (36 | ) | $ | (0.06 | ) | ||
Other |
32 | 0.05 | ||||||
Electric capacity |
58 | 0.09 | ||||||
Depreciation and amortization |
(46 | ) | (0.07 | ) | ||||
Renewable energy investment tax credit |
(133 | ) | (0.21 | ) | ||||
Merchant generation margin |
(28 | ) | (0.04 | ) | ||||
Interest expense |
(25 | ) | (0.04 | ) | ||||
Outage costs |
(22 | ) | (0.03 | ) | ||||
Other |
(16 | ) | (0.03 | ) | ||||
Share dilution |
| (0.06 | ) | |||||
|
|
|
|
|||||
Change in net income contribution |
$ | (216 | ) | $ | (0.40 | ) | ||
|
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|
19
Gas Infrastructure
Presented below are selected operating statistics related to Gas Infrastructures operations.
Year Ended December 31, |
2018 | % Change | 2017 | % Change | 2016 | |||||||||||||||
Gas distribution throughput (bcf)(1): |
||||||||||||||||||||
Sales |
131 | 1 | % | 130 | 113 | % | 61 | |||||||||||||
Transportation |
725 | 11 | 654 | 22 | 537 | |||||||||||||||
Heating degree days (gas distribution service area): |
||||||||||||||||||||
Eastern region |
5,693 | 15 | 4,930 | (6 | ) | 5,235 | ||||||||||||||
Western region(1) |
4,672 | (4 | ) | 4,892 | 161 | 1,876 | ||||||||||||||
Average gas distribution customer accounts (thousands)(1)(2): |
||||||||||||||||||||
Sales |
1,258 | 1 | 1,240 | | 1,234 | (3) | ||||||||||||||
Transportation |
1,096 | 1 | 1,086 | 1 | 1,071 | |||||||||||||||
Average retail energy marketing customer accounts (thousands)(2) |
750 | (47 | ) | 1,405 | 2 | 1,376 |
(1) |
Includes Dominion Energy Questar effective September 2016. |
(2) |
Period average. |
(3) |
Includes Dominion Energy Questar customer accounts for the entire year. |
Presented below, on an after-tax basis, are the key factors impacting Gas Infrastructures net income contribution:
2018 VS. 2017
Increase (Decrease) | ||||||||
Amount | EPS | |||||||
(millions, except EPS) | ||||||||
2017 Tax Reform Act impacts |
$ | 141 | $ | 0.22 | ||||
State legislative change |
18 | 0.03 | ||||||
Assignment of shale development rights |
27 | 0.04 | ||||||
Transportation and storage growth projects |
30 | 0.05 | ||||||
Cove Point export contracts |
259 | 0.41 | ||||||
Cove Point import contracts |
(12 | ) | (0.02 | ) | ||||
DETI contract declines |
(20 | ) | (0.03 | ) | ||||
Interest expense, net |
(86 | ) | (0.14 | ) | ||||
Other |
(41 | ) | (0.07 | ) | ||||
Share dilution |
| (0.05 | ) | |||||
|
|
|
|
|||||
Change in net income contribution |
$ | 316 | $ | 0.44 | ||||
|
|
|
|
2017 VS. 2016
Increase (Decrease) | ||||||||
Amount | EPS | |||||||
(millions, except EPS) | ||||||||
Dominion Energy Questar Combination |
$ | 184 | $ | 0.30 | ||||
Sale of certain energy marketing assets |
48 | 0.08 | ||||||
Assignment of shale development rights |
13 | 0.02 | ||||||
Noncontrolling interest(1) |
(30 | ) | (0.05 | ) | ||||
Cove Point import contracts |
(86 | ) | (0.14 | ) | ||||
Transportation and storage growth projects |
29 | 0.04 | ||||||
Other |
14 | 0.02 | ||||||
Share dilution |
| (0.04 | ) | |||||
|
|
|
|
|||||
Change in net income contribution |
$ | 172 | $ | 0.23 | ||||
|
|
|
|
(1) |
Represents the portion of earnings attributable to Dominion Energy Midstreams public unitholders. |
20
Corporate and Other
Presented below are the Corporate and Other segments after-tax results:
Year Ended December 31, |
2018 | 2017 | 2016 | |||||||||
(millions, except EPS) | ||||||||||||
Specific items attributable to operating segments |
$ | (88 | ) | $ | 861 | $ | (180 | ) | ||||
Specific items attributable to Corporate and Other segment |
(116 | ) | (151 | ) | (44 | ) | ||||||
|
|
|
|
|
|
|||||||
Total specific items |
(204 | ) | 710 | (224 | ) | |||||||
Other corporate operations: |
||||||||||||
2017 Tax Reform Act impacts |
(80 | ) | | | ||||||||
Interest expense, net |
(355 | ) | (330 | ) | (277 | ) | ||||||
Other |
31 | 9 | 17 | |||||||||
|
|
|
|
|
|
|||||||
Total other corporate operations |
(404 | ) | (321 | ) | (260 | ) | ||||||
|
|
|
|
|
|
|||||||
Total net income (expense) |
(608 | ) | 389 | (484 | ) | |||||||
|
|
|
|
|
|
|||||||
EPS impact |
$ | (0.93 | ) | $ | 0.62 | $ | (0.78 | ) | ||||
|
|
|
|
|
|
TOTAL SPECIFIC ITEMS
Corporate and Other includes specific items attributable to Dominion Energys primary operating segments that are not included in profit measures evaluated by executive management in assessing the segments performance or in allocating resources. See Note 25 to the Consolidated Financial Statements for discussion of these items in more detail. Corporate and Other also includes specific items attributable to the Corporate and Other segment. In 2018, this primarily included $51 million of after-tax charges associated with the early redemption of certain debt securities and $31 million of after-tax transaction and transition costs associated with the Dominion Energy Questar Combination and SCANA Combination. In 2017, this primarily included $124 million of tax benefits resulting from the remeasurement of deferred income taxes to the new corporate income tax rate. In 2016, this primarily included $53 million of after-tax transaction and transition costs associated with the Dominion Energy Questar Combination.
VIRGINIA POWER
RESULTS OF OPERATIONS
Presented below is a summary of Virginia Powers consolidated results:
Year Ended December 31, |
2018 | $ Change | 2017 | $ Change | 2016 | |||||||||||||||
(millions) | ||||||||||||||||||||
Net Income |
$ | 1,282 | $ | (258 | ) | $ | 1,540 | $ | 322 | $ | 1,218 |
Overview
2018 VS. 2017
Net income decreased 17%, primarily due to a charge associated with Virginia legislation enacted in March 2018, an increase in storm damage and service restoration costs, a charge associated primarily with future ash pond and landfill closure costs in connection with the enactment of Virginia legislation in April 2018 and an increase in net electric capacity expense, partially offset by an increase in heating and cooling degree days in the service territory.
2017 VS. 2016
Net income increased 26%, primarily due to the absence of charges related to future ash pond and landfill closure costs, a benefit from the remeasurement of deferred income taxes to the new corporate income tax rate and an electric capacity benefit.
21
Analysis of Consolidated Operations
Presented below are selected amounts related to Virginia Powers results of operations:
Year Ended December 31, |
2018 | $ Change | 2017 | $ Change | 2016 | |||||||||||||||
(millions) | ||||||||||||||||||||
Operating revenue |
$ | 7,619 | $ | 63 | $ | 7,556 | $ | (32 | ) | $ | 7,588 | |||||||||
Electric fuel and other energy-related purchases |
2,318 | 409 | 1,909 | (64 | ) | 1,973 | ||||||||||||||
Purchased electric capacity |
122 | 116 | 6 | (93 | ) | 99 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net revenue |
5,179 | (462 | ) | 5,641 | 125 | 5,516 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other operations and maintenance |
1,676 | 198 | 1,478 | (379 | ) | 1,857 | ||||||||||||||
Depreciation and amortization |
1,132 | (9 | ) | 1,141 | 116 | 1,025 | ||||||||||||||
Other taxes |
300 | 10 | 290 | 6 | 284 | |||||||||||||||
Other income |
22 | (54 | ) | 76 | 20 | 56 | ||||||||||||||
Interest and related charges |
511 | 17 | 494 | 33 | 461 | |||||||||||||||
Income tax expense |
300 | (474 | ) | 774 | 47 | 727 |
An analysis of Virginia Powers results of operations follows:
2018 VS. 2017
Net revenue decreased 8%, primarily reflecting:
|
A $238 million decrease for regulated generation and distribution operations as a result of the 2017 Tax Reform Act; |
|
A $215 million charge associated with Virginia legislation enacted in March 2018 that requires one-time rate credits of certain amounts to utility customers; |
|
A $94 million increase in net electric capacity expense related to the annual PJM capacity performance market effective June 2017 ($112 million) and the annual PJM capacity performance market effective June 2018 ($39 million), partially offset by a benefit related to non-utility generators ($57 million); and |
|
An $89 million decrease from rate adjustment clauses, which includes the impacts of the 2017 Tax Reform Act; partially offset by |
|
An increase in sales to retail customers from an increase in heating degree days during the heating season of 2018 ($71 million) and an increase in cooling degree days during the cooling season of 2018 ($69 million); and |
|
A $46 million increase in sales to retail customers due to customer growth. |
Other operations and maintenance increased 13%, primarily reflecting:
|
A $102 million increase due to storm damage and service restoration costs; and |
|
An $81 million increase due to a charge associated primarily with future ash pond and landfill closure costs in connection with the enactment of Virginia legislation in April 2018; partially offset by |
|
A $19 million decrease from a reduction in planned outage days at certain generation facilities. |
Depreciation and amortization was substantially consistent as a decrease due to revised depreciation rates for regulated nuclear plants to comply with the Virginia Commission requirements ($61 million) was substantially offset by various growth projects being placed into service ($56 million).
Other income decreased 71%, primarily related to lower realized gains (including investment income) on nuclear decommissioning trust funds ($23 million), the electric transmission tower rental portfolio, including the absence of the assignment of such amounts to Vertical Bridge Towers II, LLC ($18 million) and the absence of interest income associated with the settlement of state income tax refund claims ($11 million), partially offset by the absence of a charge associated with a customer settlement ($16 million).
Income tax expense decreased 61%, primarily due to lower pre-tax income ($256 million), the reduced corporate income tax rate ($235 million) and higher renewable energy investment tax credits ($35 million), partially offset by the absence of benefits resulting from the remeasurement of deferred income taxes to the new corporate income tax rate ($93 million).
22
2017 VS. 2016
Net revenue increased 2%, primarily reflecting:
|
A $97 million electric capacity benefit related to non-utility generators ($133 million) and a benefit due to the annual PJM capacity performance market effective June 2016 ($123 million), partially offset by the annual PJM capacity performance market effective June 2017 ($159 million); |
|
A $71 million increase in sales to retail customers due to the effect of changes in customer usage and other factors, including $25 million related to customer growth; and |
|
A $46 million increase from rate adjustment clauses; partially offset by |
|
A decrease in sales to retail customers from a decrease in cooling degree days during the cooling season of 2017 ($53 million) and a reduction in heating degree days during the heating season of 2017 ($28 million). |
Other operations and maintenance decreased 20%, primarily reflecting:
|
A $197 million decrease due to the absence of charges related to future ash pond and landfill closure costs at certain utility generation facilities; |
|
A $115 million decrease in certain electric transmission-related expenditures. These expenses are primarily recovered through state and FERC rates and do not impact net income; |
|
A $46 million decrease in storm damage and service restoration costs; and |
|
The absence of organizational design initiative costs ($32 million); partially offset by |
|
A $37 million increase in salaries, wages and benefits and general administrative expenses. |
Depreciation and amortization increased 11%, primarily due to various growth projects being placed into service ($58 million) and revised depreciation rates ($40 million).
Other income increased 36%, primarily reflecting:
|
An $11 million increase in interest income associated with the settlement of state income tax refund claims; |
|
An $11 million increase from the assignment of Virginia Powers electric transmission tower rental portfolio; and |
|
An $8 million increase in AFUDC associated with rate-regulated projects; partially offset by |
|
A $16 million charge associated with a customer settlement. |
Income tax expense increased 6% primarily due to higher pretax income ($139 million), partially offset by benefits resulting from the remeasurement of deferred income taxes to the new corporate income tax rate ($93 million).
DOMINION ENERGY GAS
RESULTS OF OPERATIONS
Presented below is a summary of Dominion Energy Gas consolidated results:
Year Ended December 31, |
2018 | $ Change | 2017 | $ Change | 2016 | |||||||||||||||
(millions) | ||||||||||||||||||||
Net income attributable to Dominion Energy Gas |
$ | 481 | $ | (222 | ) | $ | 703 | $ | 226 | $ | 477 |
Overview
2018 VS. 2017
Net income attributable to Dominion Energy Gas decreased 32%, primarily due to an impairment charge on certain gathering and processing assets included in discontinued operations, a charge for disallowance of FERC-regulated plant and the absence of benefits from the 2017 Tax Reform Act partially offset by the commencement of commercial operations of the Liquefaction Project, regulated natural gas transmission activities from growth projects placed into service and an increase in gains from agreements to convey shale development rights underneath several natural gas storage fields.
23
2017 VS. 2016
Net income attributable to Dominion Energy Gas increased 47%, primarily due to the operations of Dominion Energy Quarter Pipeline being included for all of 2017, a benefit from the remeasurement of deferred income taxes to the new corporate income tax rate and gas transportation and storage activities from growth projects placed into service.
Analysis of Consolidated Operations
Presented below are selected amounts related to Dominion Energy Gas results of operations:
Year Ended December 31, |
2018 | $ Change | 2017 | $ Change | 2016 | |||||||||||||||
(millions) | ||||||||||||||||||||
Operating revenue |
$ | 1,996 | $ | 473 | $ | 1,523 | $ | 149 | $ | 1,374 | ||||||||||
Purchased (excess) gas |
(10 | ) | (119 | ) | 109 | 17 | 92 | |||||||||||||
Other energy-related purchases |
4 | | 4 | (1 | ) | 5 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net revenue |
2,002 | 592 | 1,410 | 133 | 1,277 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other operations and maintenance |
716 | 144 | 572 | 125 | 447 | |||||||||||||||
Depreciation and amortization |
333 | 91 | 242 | 51 | 191 | |||||||||||||||
Other taxes |
120 | 21 | 99 | 17 | 82 | |||||||||||||||
Impairment of assets and related charges |
163 | 148 | 15 | 15 | | |||||||||||||||
Gains on sales of assets |
(117 | ) | (47 | ) | (70 | ) | (26 | ) | (44 | ) | ||||||||||
Earnings from equity method investees |
54 | 7 | 47 | 3 | 44 | |||||||||||||||
Other income |
89 | 27 | 62 | 19 | 43 | |||||||||||||||
Interest and related charges |
174 | 114 | 60 | (5 | ) | 65 | ||||||||||||||
Income tax expense (benefit) |
124 | 189 | (65 | ) | (262 | ) | 197 | |||||||||||||
Net income from discontinued operations |
24 | (139 | ) | 163 | 11 | 152 | ||||||||||||||
Noncontrolling interests |
175 | 49 | 126 | 25 | 101 |
An analysis of Dominion Energy Gas results of operations follows:
2018 VS. 2017
Net revenue increased 42%, primarily reflecting:
|
A $500 million increase due to commencement of commercial operations of the Liquefaction Project, including terminalling services provided to the Export Customers ($508 million) and regulated gas transportation contracts to serve the Export Customers ($58 million), partially offset by credits associated with the start-up phase of the Liquefaction Project ($66 million); |
|
A $74 million increase in services performed for Atlantic Coast Pipeline; and |
|
A $57 million increase due to regulated natural gas transmission growth projects placed in service, other than the Liquefaction Project; partially offset by |
|
A $38 million decrease from scheduled declines in or expiration of certain DETI and Cove Point contracts. |
Other operations and maintenance increased 25%, primarily reflecting:
|
A $73 million increase in services performed for Atlantic Coast Pipeline. These expenses are billed to Atlantic Coast Pipeline and do not significantly impact net income; |
|
A $47 million increase in operating expenses from the commercial operations of the Liquefaction Project and costs associated with regulated gas transportation contracts to serve the Export Customers; and |
|
A $13 million increase in salaries, wages and benefits and general administrative expenses. |
Depreciation and amortization increased 38%, primarily due to an increase from various growth projects being placed into service, including the Liquefaction Project.
24
Other taxes increased 21%, primarily due to property taxes associated with the Liquefaction Project commencing commercial operations.
Impairment of assets and related charges increased $148 million, primarily due to a charge for disallowance of FERC-regulated plant ($127 million) and a write-off associated with the Eastern Market Access Project ($37 million), partially offset by the absence of a charge to write-off the balance of a regulatory asset no longer considered probable of recovery ($15 million).
Gains on sales of assets increased 67%, primarily due to increased gains related to agreements to convey shale development rights under natural gas storage fields.
Earnings from equity method investees increased 15%, primarily due to higher earnings from unsubscribed capacity as a result of an increase in heating degree days at Iroquois.
Other income increased 44%, primarily due to interest income from Cove Points promissory notes receivable from Dominion Energy issued in September 2018 ($20 million) and a decrease in non-service components of pension and other postretirement employee benefit credits capitalized to property, plant and equipment in 2018 ($13 million), partially offset by AFUDC on rate-regulated projects ($7 million).
Interest and related charges increased $114 million, primarily due to the absence of capitalization of interest expense associated with the Liquefaction Project upon completion of construction ($72 million) and Cove Points term loan borrowings ($36 million).
Income tax expense increased $189 million, primarily due to the absence of benefits resulting from the remeasurement of deferred income taxes to the new corporate income tax rate ($246 million), higher pre-tax income ($37 million), the absence of a settlement with state tax authorities ($5 million), partially offset by the reduced corporate income tax rate ($90 million) and a state legislative change ($10 million).
2017 VS. 2016
Net revenue increased 10%, primarily reflecting:
|
A $165 million increase due to Dominion Energy Questar Pipeline operations being included for all of 2017; |
|
A $55 million increase due to regulated natural gas transmission growth projects placed in service; |
|
A $34 million increase in services performed for Atlantic Coast Pipeline; partially offset by
|
|
A $144 million decrease from Cove Point import contracts. |
Other operations and maintenance increased 28%, primarily reflecting:
|
A $33 million increase in services performed for Atlantic Coast Pipeline. These expenses are billed to Atlantic Coast Pipeline and do not significantly impact net income; |
|
A $33 million increase due to Dominion Energy Questar Pipeline operations being included for all of 2017; |
|
A $13 million increase in salaries, wages and benefits and general administrative expenses; and |
|
A $13 million increase in labor and outside service costs associated with Cove Points operations affected by the Liquefaction Project. |
Depreciation and amortization increased 27%, primarily due to Dominion Energy Questar Pipeline operations being included for all of 2017 ($40 million) and various growth projects being placed into service ($9 million).
Other taxes increased 21%, primarily due to Dominion Energy Questar Pipeline operations being included for all of 2017.
Impairment of assets and related charges increased $15 million, primarily due to a charge to write-off the balance of a regulatory asset no longer considered probable of recovery.
Gains on sales of assets increased 59%, primarily due to increased gains from agreements to convey shale development rights underneath several natural gas storage fields.
25
Other income increased 44%, primarily due to an increase in AFUDC associated with rate-regulated projects ($14 million) and an increase in the non-service cost components of pension and other postretirement employee benefit credits ($8 million), partially offset by the absence of the 2016 sale of a portion of Dominion Energy Gas interest in Iroquois ($5 million).
Income tax expense decreased $262 million, primarily due to the benefits resulting from the remeasurement of deferred income taxes to the new corporate income tax rate ($246 million) and lower pre-tax income ($11 million).
LIQUIDITY AND CAPITAL RESOURCES
Dominion Energy depends on both internal and external sources of liquidity to provide working capital and as a bridge to long-term debt financings. Short-term cash requirements not met by cash provided by operations are generally satisfied with proceeds from short-term borrowings. Long-term cash needs are met through issuances of debt and/or equity securities.
At December 31, 2018, Dominion Energy had $5.6 billion of unused capacity under its credit facility. See additional discussion below under Credit Facilities and Short-Term Debt.
A summary of Dominion Energys cash flows is presented below:
Year Ended December 31, |
2018 | 2017 | 2016 | |||||||||
(millions) | ||||||||||||
Cash, restricted cash and equivalents at beginning of year |
$ | 185 | $ | 322 | $ | 632 | ||||||
Cash flows provided by (used in): |
||||||||||||
Operating activities |
4,773 | 4,502 | 4,151 | |||||||||
Investing activities |
(2,358 | ) | (5,942 | ) | (10,691 | ) | ||||||
Financing activities |
(2,209 | ) | 1,303 | 6,230 | ||||||||
|
|
|
|
|
|
|||||||
Net increase (decrease) in cash, restricted cash and equivalents |
206 | (137 | ) | (310 | ) | |||||||
|
|
|
|
|
|
|||||||
Cash, restricted cash and equivalents at end of year |
$ | 391 | $ | 185 | $ | 322 | ||||||
|
|
|
|
|
|
Operating Cash Flows
Net cash provided by Dominion Energys operating activities increased $271 million, primarily due to the commencement of commercial operations of the Liquefaction Project, higher merchant generation margin, derivative activities and the favorable impact of weather, partially offset by lower deferred fuel cost recoveries in the Virginia jurisdiction, increased interest expense and one-time rate credits to electric utility customers.
Dominion Energy believes that its operations provide a stable source of cash flow to contribute to planned levels of capital expenditures and maintain or grow the dividend on common shares. In December 2018, Dominion Energys Board of Directors established an annual dividend rate for 2019 of $3.67 per share of common stock, a 10.0% increase over the 2018 rate. Dividends are subject to declaration by the Board of Directors. In January 2019, Dominion Energys Board of Directors declared dividends payable in March 2019 of 91.75 cents per share of common stock.
Dominion Energys operations are subject to risks and uncertainties that may negatively impact the timing or amounts of operating cash flows, and which are discussed in Item 1A. Risk Factors.
Credit Risk
Dominion Energys exposure to potential concentrations of credit risk results primarily from its energy marketing and price risk management activities. Presented below is a summary of Dominion Energys credit exposure as of December 31, 2018 for these
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activities. Gross credit exposure for each counterparty is calculated as outstanding receivables plus any unrealized on- or off-balance sheet exposure, taking into account contractual netting rights.
Gross Credit
Exposure |
Credit
Collateral |
Net Credit
Exposure |
||||||||||
(millions) | ||||||||||||
Investment grade(1) |
$ | 101 | $ | 4 | $ | 97 | ||||||
Non-investment grade(2) |
1 | | 1 | |||||||||
No external ratings: |
||||||||||||
Internally ratedinvestment grade(3) |
3 | | 3 | |||||||||
Internally ratednon-investment grade(4) |
44 | | 44 | |||||||||
|
|
|
|
|
|
|||||||
Total |
$ | 149 | $ | 4 | $ | 145 | ||||||
|
|
|
|
|
|
(1) |
Designations as investment grade are based upon minimum credit ratings assigned by Moodys and Standard & Poors. The five largest counterparty exposures, combined, for this category represented approximately 60% of the total net credit exposure. |
(2) |
The five largest counterparty exposures, combined, for this category represented less than 1% of the total net credit exposure. |
(3) |
The five largest counterparty exposures, combined, for this category represented approximately 2% of the total net credit exposure. |
(4) |
The five largest counterparty exposures, combined, for this category represented approximately 26% of the total net credit exposure. |
Investing Cash Flows
Net cash used in Dominion Energys investing activities decreased $3.6 billion, primarily due to proceeds from the sale of certain merchant generation facilities and equity method investments and decreases in plant construction due to the commencement of commercial operations of the Liquefaction Project and Greensville County.
Financing Cash Flows and Liquidity
Dominion Energy relies on capital markets as significant sources of funding for capital requirements not satisfied by cash provided by its operations. As discussed in Credit Ratings, Dominion Energys ability to borrow funds or issue securities and the return demanded by investors are affected by credit ratings. In addition, the raising of external capital is subject to certain regulatory requirements, including registration with the SEC for certain issuances.
Dominion Energy currently meets the definition of a well-known seasoned issuer under SEC rules governing the registration, communications and offering processes under the Securities Act of 1933. The rules provide for a streamlined shelf registration process to provide registrants with timely access to capital. This allows Dominion Energy to use automatic shelf registration statements to register any offering of securities, other than those for exchange offers or business combination transactions.
From time to time, Dominion Energy may reduce its outstanding debt and level of interest expense through redemption of debt securities prior to maturity and repurchases in the open market, in privately negotiated transactions, through tender offers or otherwise.
Net cash used by Dominion Energys financing activities in 2018 was $2.2 billion compared to net cash provided by financing activities in 2017 of $1.3 billion, primarily due to net debt repayments in 2018 compared to net debt issuances in 2017, partially offset by the issuance of common stock.
Credit Facilities and Short-Term Debt
Dominion Energy uses short-term debt to fund working capital requirements and as a bridge to long-term debt financings. The levels of borrowing may vary significantly during the course of the year, depending upon the timing and amount of cash requirements not satisfied by cash from operations. In addition, Dominion Energy utilizes cash and letters of credit to fund collateral requirements. Collateral requirements are impacted by commodity prices, hedging levels, Dominion Energys credit ratings and the credit quality of its counterparties.
In connection with commodity hedging activities, Dominion Energy is required to provide collateral to counterparties under some circumstances. Under certain collateral arrangements, Dominion Energy may satisfy these requirements by electing to either deposit cash, post letters of credit or, in some cases, utilize other forms of security. From time to time, Dominion Energy may vary the form of collateral provided to counterparties after weighing the costs and benefits of various factors associated with the different forms of collateral. These factors include short-term borrowing and short-term investment rates, the spread over these short-term rates at which Dominion Energy can issue commercial paper, balance sheet impacts, the costs and fees of alternative collateral postings with these and other counterparties and overall liquidity management objectives.
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Dominion Energys commercial paper and letters of credit outstanding, as well as capacity available under its credit facility, were as follows:
Facility Limit |
Outstanding
Commercial Paper(1) |
Outstanding
Letters of Credit |
Facility Capacity
Available |
|||||||||||||
(millions) | ||||||||||||||||
At December 31, 2018 |
||||||||||||||||
Joint revolving credit facility(2) |
$ | 6,000 | $ | 324 | $ | 88 | $ | 5,588 |
(1) |
The weighted-average interest rate of the outstanding commercial paper supported by Dominion Energys credit facility was 2.93% at December 31, 2018. |
(2) |
This credit facility matures in March 2023 and can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to a combined $2.0 billion of letters of credit. |
In connection with the SCANA Combination, Dominion Energy intends to terminate SCANA, SCE&G and PSNCs existing credit facilities, which have limits of $400 million, $700 million and $200 million, respectively, and add SCE&G as a co-borrower to its $6.0 billion joint revolving credit facility in the first quarter of 2019 once certain regulatory approvals are obtained. In January 2019, Virginia Power and SCE&G, as co-borrowers, filed with the Virginia Commission and the South Carolina Commission, respectively, for approval. In February 2019, the Virginia Commission approved the request. SCE&G is required to obtain FERC approval to issue short-term indebtedness, including commercial paper, and to assume liabilities as a guarantor. In February 2019, Dominion Energy terminated South Carolina Fuel Company, Inc.s existing credit facility of $500 million.
In November 2017, Dominion Energy filed an SEC shelf registration statement for the sale of up to $3.0 billion of variable denomination floating rate demand notes, called Dominion Energy Reliability InvestmentSM. The registration limits the principal amount that may be outstanding at any one time to $1.0 billion. The notes are offered on a continuous basis and bear interest at a floating rate per annum determined by the Dominion Energy Reliability Investment Committee, or its designee, on a weekly basis. The notes have no stated maturity date, are non-transferable and may be redeemed in whole or in part by Dominion Energy or at the investors option at any time. The balance as of December 31, 2018 was $10 million. The notes are short-term debt obligations on Dominion Energys Consolidated Balance Sheets. The proceeds will be used for general corporate purposes and to repay debt.
In March 2018, Dominion Energy Midstream entered into a $500 million revolving credit facility. The credit facility was scheduled to mature in March 2021, bore interest at a variable rate, and was used to support bank borrowings and the issuance of commercial paper, as well as to support up to $250 million of letters of credit. At December 31, 2018, Dominion Energy Midstream had $73 million outstanding under this credit facility. In February 2019, Dominion Energy Midstream terminated the facility subsequent to repaying the outstanding balance, plus accrued interest.
In October 2018, Dominion Energy entered into a credit agreement, which allows Dominion Energy to issue up to approximately $21 million in letters of credit. At December 31, 2018, approximately $21 million in letters of credit were outstanding under this agreement. The facility terminates in June 2020.
In February and June 2018, Dominion Energy borrowed $950 million and $500 million, respectively, under 364-Day Term Loan Agreements that bore interest at a variable rate. In September 2018, the principal outstanding plus accrued interest for both borrowings was repaid.
Long-Term Debt
During 2018, Dominion Energy issued the following long-term public debt:
Type |
Issuer | Principal | Rate | Maturity | ||||||||||
(millions) | ||||||||||||||
Senior notes |
Dominion Energy | $ | 300 | 4.250 | % | 2028 | ||||||||
Senior notes |
Virginia Power | 700 | 3.800 | % | 2028 | |||||||||
Senior notes |
Virginia Power | 600 | 4.600 | % | 2048 | |||||||||
Senior notes |
Dominion Energy Gas | 500 | variable | 2021 | ||||||||||
|
|
|
|
|
|
|||||||||
Total notes issued |
$ | 2,100 | ||||||||||||
|
|
|
|
|
|
During 2018, Dominion Energy also issued the following long-term private debt:
|
In January 2018, Dominion Energy Questar Pipeline issued, through private placement, $100 million of 3.53% senior notes and $150 million of 3.91% senior notes that mature in 2028 and 2038, respectively. The proceeds were used to repay maturing long-term debt. |
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|
In April 2018, Questar Gas issued through private placement $50 million of 3.30% senior notes and $100 million of 3.97% senior notes that mature in 2030 and 2047, respectively. The proceeds were used for general corporate purposes and to repay short-term debt, including commercial paper. |
|
In May 2018, Dominion Energy issued through private placement $500 million of variable rate senior notes that mature in 2020. The proceeds were used for general corporate purposes and to repay short-term debt, including commercial paper. In November 2018, the notes were redeemed at the principal outstanding plus accrued interest. |
|
In November 2018, Eagle Solar issued through private placement $362 million of 4.82% senior secured notes which mature in December 2042. The debt is nonrecourse to Dominion Energy and is secured by Eagle Solars interest in certain merchant solar facilities. The proceeds were used for the reimbursement of equity amounts previously invested by Dominion Energy in the acquisition, development or construction of the projects in Eagle Solar. |
During 2018, Dominion Energy also borrowed the following under a term loan agreement:
|
In September 2018, Cove Point closed on an up to $3.0 billion term loan that is secured by Dominion Energys common equity interest in Cove Point, bears interest at a variable rate and matures in 2021. In accordance with the terms of the term loan, Cove Point borrowed $2.0 billion and $1.0 billion in September 2018 and December 2018, respectively. Under the terms of the term loan, Cove Point faces certain restrictions on issuing additional debt, divesting the Cove Point LNG Facility, paying distributions to Dominion Energy or taking certain other actions without necessary approvals. |
During 2018, in addition to the November 2018 redemption described above, Dominion Energy redeemed the following long-term debt:
|
In March 2018, Virginia Power redeemed $100 million of its variable rate tax-exempt financings which would otherwise have matured in 2024, 2026 and 2027. |
|
In December 2018, Virginia Power redeemed its $14 million 5.60% Economic Development Authority of the County of Chesterfield Solid Waste and Sewage Disposal Revenue Bonds, Series 2007A, due in 2031 at the principal outstanding plus accrued interest. |
|
In December 2018, Dominion Energy redeemed the following outstanding series of senior notes: 2011 Series A 4.45% Senior Notes due 2021, 2014 Series B 2.50% Senior Notes due 2019 and 2014 Series C 3.625% Senior Notes due 2024 with an aggregate outstanding principal of $1.7 billion plus accrued interest and the applicable make-whole premium of $34 million. See Note 17 to the Consolidated Financial Statements for a description of senior note redemptions. |
During 2018, Dominion Energy repaid and repurchased $5.7 billion of long-term debt, including redemption premiums.
In February 2019, Dominion Energy Midstream repaid its $300 million variable rate term loan agreement due in December 2019 at the principal outstanding plus accrued interest.
In February 2019, SCANA launched a tender offer for certain of its medium term notes having an aggregate purchase price of up to $300 million that expires in March 2019. Also in February 2019, SCE&G launched a tender offer for any and all of certain of its first mortgage bonds pursuant to which it purchased first mortgage bonds having an aggregate purchase price of $1.0 billion. SCE&G simultaneously launched a tender offer that expires in March 2019 for certain other of its first mortgage bonds having an aggregate purchase price equal to $1.2 billion less the aggregate purchase price paid in the any and all tender offer.
Noncontrolling Interest in Dominion Energy Midstream
In May 2018, all of the subordinated units of Dominion Energy Midstream held by Dominion Energy were converted into common units on a 1:1 ratio following the payment of Dominion Energy Midstreams distribution for the first quarter of 2018. In June 2018, Dominion Energy, as general partner, exercised an incentive distribution right reset as defined in Dominion Energy Midstreams partnership agreement and received 26.7 million common units representing limited partner interests in Dominion Energy Midstream. As a result of the increase in its ownership interest in Dominion Energy Midstream, Dominion Energy recorded a decrease in noncontrolling interest, and a corresponding increase in shareholders equity, of $375 million reflecting the change in the carrying value of the interest in the net assets of Dominion Energy Midstream held by others.
In January 2019, Dominion Energy and Dominion Energy Midstream closed on an agreement and plan of merger pursuant to which Dominion Energy acquired each outstanding common unit representing limited partner interests in Dominion Energy Midstream not already owned by Dominion Energy through the issuance of 22.5 million shares of common stock valued at $1.6 billion. Under the terms of the agreement and plan of merger, each publicly held outstanding common unit representing limited partner interests in Dominion Energy Midstream was converted into the right to receive 0.2492 shares of Dominion Energy common stock. Immediately
29
prior to the closing, each Series A Preferred Unit representing limited partner interests in Dominion Energy Midstream was converted into common units representing limited partner interests in Dominion Energy Midstream in accordance with the terms of Dominion Energy Midstreams partnership agreement.
Issuance of Common Stock and Other Equity Securities
Dominion Energy maintains Dominion Energy Direct® and a number of employee savings plans through which contributions may be invested in Dominion Energys common stock. These shares may either be newly issued or purchased on the open market with proceeds contributed to these plans. Currently, Dominion Energy is issuing new shares of common stock for these direct stock purchase plans.
During 2018, Dominion Energy received cash proceeds of $2.5 billion, net of fees and commissions from the issuance of approximately 36 million shares of common stock through various programs including the forward sale agreements described in Note 19 resulting in approximately 681 million shares of common stock outstanding at December 31, 2018. These proceeds include cash of $315 million from the issuance of 4.5 million of shares through Dominion Energy Direct® and employee savings plans.
In 2018, Dominion Energy issued 9.3 million shares and received cash proceeds of $692 million, net of fees and commissions paid of $7 million through its at-the-market programs. See Note 19 for a description of the at-the-market programs.
Dominion Energy entered in March 2018, and closed in April 2018, separate forward sale agreements with Goldman Sachs & Co. LLC and Credit Suisse Capital LLC, as forward purchasers, and an underwriting agreement with Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. LLC, as representatives of the several underwriters named therein, relating to an aggregate of 20.0 million shares of Dominion Energy common stock. The underwriting agreement granted the underwriters a 30-day option to purchase up to an additional three million shares of Dominion Energy common stock, which the underwriters exercised with respect to approximately 2.1 million shares in April 2018. Dominion Energy entered into separate forward sale agreements with the forward purchasers with respect to the additional shares. In December 2018, Dominion Energy received proceeds of $1.4 billion upon the physical settlement of 22.1 million shares. See Note 19 to the Consolidated Financial Statements for a description of the forward sale agreements.
In January 2019, in connection with the SCANA Combination, Dominion Energy issued 95.6 million shares of Dominion Energy common stock, valued at $6.8 billion, representing 0.6690 of a share of Dominion Energy common stock for each share of SCANA common stock outstanding at closing. SCANAs outstanding debt totaled $6.9 billion at closing. Also in January 2019, Dominion Energy issued 22.5 million shares of common stock to acquire interests in Dominion Energy Midstream as noted above. In addition, during 2019, Dominion Energy plans to issue shares for employee savings plans and direct stock purchase and dividend reinvestment plans.
Repurchase of Common Stock
Dominion Energy did not repurchase any shares in 2018 and does not plan to repurchase shares during 2019, except for shares tendered by employees to satisfy tax withholding obligations on vested restricted stock, which does not count against its stock repurchase authorization.
Credit Ratings
Credit ratings are intended to provide banks and capital market participants with a framework for comparing the credit quality of securities and are not a recommendation to buy, sell or hold securities. Dominion Energy believes that its current credit ratings provide sufficient access to the capital markets. However, disruptions in the banking and capital markets not specifically related to Dominion Energy may affect its ability to access these funding sources or cause an increase in the return required by investors. Dominion Energys credit ratings affect its liquidity, cost of borrowing under credit facilities and collateral posting requirements under commodity contracts, as well as the rates at which it is able to offer its debt securities.
Both quantitative (financial strength) and qualitative (business or operating characteristics) factors are considered by the credit rating agencies in establishing an individual companys credit rating. Credit ratings should be evaluated independently and are subject to revision or withdrawal at any time by the assigning rating organization. The credit ratings for Dominion Energy are affected by its financial profile, mix of regulated and nonregulated businesses and respective cash flows, changes in methodologies used by the rating agencies and event risk, if applicable, such as major acquisitions or dispositions.
In December 2018, Moodys and Standard & Poors affirmed Dominion Energys ratings and changed Dominion Energys rating outlook to stable from negative.
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Credit ratings and outlooks as of February 25, 2019 follow:
(1) |
Securities do not have an interest deferral feature. |
(2) |
Securities have an interest deferral feature. |
A downgrade in an individual companys credit rating does not necessarily restrict its ability to raise short-term and long-term financing as long as its credit rating remains investment grade, but it could result in an increase in the cost of borrowing. Dominion Energy works closely with Fitch, Moodys and Standard & Poors with the objective of achieving its targeted credit ratings. Dominion Energy may find it necessary to modify its business plan to maintain or achieve appropriate credit ratings and such changes may adversely affect growth and EPS.
Debt Covenants
As part of borrowing funds and issuing debt (both short-term and long-term) or preferred securities, Dominion Energy must enter into enabling agreements. These agreements contain covenants that, in the event of default, could result in the acceleration of principal and interest payments; restrictions on distributions related to capital stock, including dividends, redemptions, repurchases, liquidation payments or guarantee payments; and in some cases, the termination of credit commitments unless a waiver of such requirements is agreed to by the lenders/security holders. These provisions are customary, with each agreement specifying which covenants apply. These provisions are not necessarily unique to Dominion Energy.
Some of the typical covenants include:
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The timely payment of principal and interest; |
|
Information requirements, including submitting financial reports and information about changes in Dominion Energys credit ratings to lenders; |
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Performance obligations, audits/inspections, continuation of the basic nature of business, restrictions on certain matters related to merger or consolidation and restrictions on disposition of all or substantially all assets; |
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Compliance with collateral minimums or requirements related to mortgage bonds; and |
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Limitations on liens. |
Dominion Energy is required to pay annual commitment fees to maintain its credit facility. In addition, Dominion Energys credit agreement contains various terms and conditions that could affect its ability to borrow under the facility. They include a maximum debt to total capital ratio and cross-default provisions.
As of December 31, 2018, the calculated total debt to total capital ratio, pursuant to the terms of the agreement, was as follows:
Company | Maximum Allowed Ratio | Actual Ratio(1)(2) | ||||||
Dominion Energy |
67.5 | % | 53.4 | % | ||||
|
|
|
|
(1) |
Indebtedness as defined by the bank agreements excludes certain junior subordinated and remarketable subordinated notes reflected as long-term debt as well as AOCI reflected as equity in the Consolidated Balance Sheets. |
(2) |
At January 1, 2019, the calculated total debt to total capital ratio, as adjusted for the SCANA Combination was 52.8%. |
If Dominion Energy or any of its material subsidiaries fails to make payment on various debt obligations in excess of $100 million, the lenders could require the defaulting company, if it is a borrower under Dominion Energys credit facility, to accelerate its repayment of any outstanding borrowings and the lenders could terminate their commitments, if any, to lend funds to that company under the credit facility. In addition, if the defaulting company is Virginia Power, Dominion Energys obligations to repay any outstanding borrowing under the credit facility could also be accelerated and the lenders commitments to Dominion Energy could terminate.
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Dominion Energy executed RCCs in connection with its issuance of the June 2006 hybrids and September 2006 hybrids. See Note 17 to the Consolidated Financial Statements for additional information, including terms of the RCCs.
At December 31, 2018, the termination dates and covered debt under the RCCs associated with Dominion Energys hybrids were as follows:
Hybrid | RCC Termination Date |
Designated Covered Debt
Under RCC |
||||
June 2006 hybrids |
6/30/2036 |
September 2006
hybrids |
||||
September 2006 hybrids |
9/30/2036 | June 2006 hybrids |
Dominion Energy monitors these debt covenants on a regular basis in order to ensure that events of default will not occur. As of December 31, 2018, there have been no events of default under Dominion Energys debt covenants.
Dividend Restrictions
Certain agreements associated with Dominion Energys credit facility contain restrictions on the ratio of debt to total capitalization. These limitations did not restrict Dominion Energys ability to pay dividends or receive dividends from its subsidiaries at December 31, 2018.
See Note 17 to the Consolidated Financial Statements for a description of potential restrictions on dividend payments by Dominion Energy, including in connection with the deferral of interest payments and contract adjustment payments on certain junior subordinated notes and equity units, initially in the form of corporate units, which information is incorporated herein by reference.
Future Cash Payments for Contractual Obligations and Planned Capital Expenditures
Contractual Obligations
Dominion Energy is party to numerous contracts and arrangements obligating it to make cash payments in future years. These contracts include financing arrangements such as debt agreements and leases, as well as contracts for the purchase of goods and services and financial derivatives. Presented below is a table summarizing cash payments that may result from contracts to which Dominion Energy is a party as of December 31, 2018. In addition, see Note 3 to the Consolidated Financial Statements for a description of significant contractual obligations acquired in the SCANA Combination. For purchase obligations and other liabilities, amounts are based upon contract terms, including fixed and minimum quantities to be purchased at fixed or market-based prices. Actual cash payments will be based upon actual quantities purchased and prices paid and will likely differ from amounts presented below. The table excludes all amounts classified as current liabilities in the Consolidated Balance Sheets, other than current maturities of long-term debt, interest payable and certain derivative instruments. The majority of Dominion Energys current liabilities will be paid in cash in 2019.
2019 |
2020-
2021 |
2022-
2023 |
2024 and
thereafter |
Total | ||||||||||||||||
(millions) | ||||||||||||||||||||
Long-term debt(1)(2) |
$ | 3,607 | $ | 7,333 | $ | 3,238 | $ | 20,931 | $ | 35,109 | ||||||||||
Interest payments(3) |
1,419 | 2,456 | 2,037 | 15,629 | 21,541 | |||||||||||||||
Operating leases |
64 | 116 | 85 | 384 | 649 | |||||||||||||||
Purchase obligations(4): |
||||||||||||||||||||
Purchased electric capacity for utility operations |
60 | 98 | | | 158 | |||||||||||||||
Fuel commitments for utility operations |
1,060 | 644 | 363 | 1,057 | 3,124 | |||||||||||||||
Fuel commitments for nonregulated operations |
35 | 169 | 84 | 113 | 401 | |||||||||||||||
Pipeline transportation and storage |
329 | 537 | 403 | 1,723 | 2,992 | |||||||||||||||
Other(5) |
206 | 122 | 48 | 13 | 389 | |||||||||||||||
Other long-term liabilities(6): |
||||||||||||||||||||
Other contractual obligations(7) |
88 | 53 | 19 | 42 | 202 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total cash payments |
$ | 6,868 | $ | 11,528 | $ | 6,277 | $ | 39,892 | $ | 64,565 | ||||||||||
|
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|
|
|
|
|
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|
(1) |
Based on stated maturity dates rather than the earlier redemption dates that could be elected by instrument holders. |
(2) |
Includes capital leases. See Note 17 to the Consolidated Financial Statements for more information. |
(3) |
Includes interest payments over the terms of the debt and payments on related stock purchase contracts. Interest is calculated using the applicable interest rate or forward interest rate curve at December 31, 2018 and outstanding principal for each instrument with the terms ending at each instruments stated maturity. See Note 17 to the Consolidated Financial Statements. Does not reflect Dominion Energys |
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ability to defer interest and stock purchase contract payments on certain junior subordinated notes or RSNs and equity units, initially in the form of Corporate Units. |
(4) |
Amounts exclude open purchase orders for services that are provided on demand, the timing of which cannot be determined. |
(5) |
Includes capital, operations, and maintenance commitments. |
(6) |
Excludes regulatory liabilities, AROs and employee benefit plan obligations, which are not contractually fixed as to timing and amount. See Notes 12, 14 and 21 to the Consolidated Financial Statements. Due to uncertainty about the timing and amounts that will ultimately be paid, $29 million of income taxes payable associated with unrecognized tax benefits are excluded. Deferred income taxes are also excluded since cash payments are based primarily on taxable income for each discrete fiscal year. See Note 5 to the Consolidated Financial Statements. |
(7) |
Includes interest rate and foreign currency swap agreements. |
Planned Capital Expenditures
Dominion Energys planned capital expenditures are expected to total approximately $6.3 billion, $7.3 billion and $6.9 billion in 2019, 2020 and 2021, respectively. Dominion Energys planned expenditures are expected to include construction and expansion of electric generation and natural gas transmission and storage facilities, construction improvements and expansion of electric transmission and distribution assets, purchases of nuclear fuel, maintenance and expected contributions to Atlantic Coast Pipeline.
Dominion Energy expects to fund its capital expenditures with cash from operations and a combination of securities issuances and short-term borrowings. Planned capital expenditures include capital projects that are subject to approval by regulators and the Board of Directors.
See Power Delivery, Power Generation, Gas Infrastructure and Southeast Energy-Properties in Item 1. Business for a discussion of Dominion Energys expansion plans.
These estimates are based on a capital expenditures plan reviewed and endorsed by Dominion Energys Board of Directors in late 2018 and are subject to continuing review and adjustment and actual capital expenditures may vary from these estimates. Dominion Energy may also choose to postpone or cancel certain planned capital expenditures in order to mitigate the need for future debt financings and equity issuances.
Use of Off-Balance Sheet Arrangements
Leasing Arrangement
In July 2016, Dominion Energy signed an agreement with a lessor to construct and lease a new corporate office property in Richmond, Virginia. The lessor is providing equity and has obtained financing commitments from debt investors, totaling $365 million, to fund the estimated project costs. The project is expected to be completed by mid-2019. Dominion Energy has been appointed to act as the construction agent for the lessor, during which time Dominion Energy will request cash draws from the lessor and debt investors to fund all project costs, which totaled $281 million as of December 31, 2018. If the project is terminated under certain events of default, Dominion Energy could be required to pay up to 89.9% of the then funded amount. For specific full recourse events, Dominion Energy could be required to pay up to 100% of the then funded amount.
The five-year lease term will commence once construction is substantially complete and the facility is able to be occupied. At the end of the initial lease term, Dominion Energy can (i) extend the term of the lease for an additional five years, subject to the approval of the participants, at current market terms, (ii) purchase the property for an amount equal to the project costs or, (iii) subject to certain terms and conditions, sell the property on behalf of the lessor to a third party using commercially reasonable efforts to obtain the highest cash purchase price for the property. If the project is sold and the proceeds from the sale are insufficient to repay the investors for the project costs, Dominion Energy may be required to make a payment to the lessor, up to 87% of project costs, for the difference between the project costs and sale proceeds.
The respective transactions have been structured so that Dominion Energy is not considered the owner during construction for financial accounting purposes and, therefore, will not reflect the construction activity in its consolidated financial statements. In accordance with revised accounting guidance pertaining to the recognition, measurement, presentation and disclosure of leasing arrangements, which is effective in January 2019, Dominion Energy expects to recognize a right-of-use asset and a corresponding finance lease liability at the commencement of the lease term. Dominion Energy will be considered the owner of the leased property for tax purposes, and as a result, will be entitled to tax deductions for depreciation and interest expense.
Guarantees
Dominion Energy primarily enters into guarantee arrangements on behalf of its consolidated subsidiaries. These arrangements are not subject to the provisions of FASB guidance that dictate a guarantors accounting and disclosure requirements for guarantees, including indirect guarantees of indebtedness of others. In addition, Dominion Energy has provided a guarantee to support a portion of Atlantic
33
Coast Pipelines obligation under a $3.4 billion revolving credit facility. See Note 22 to the Consolidated Financial Statements for additional information, which information is incorporated herein by reference.
FUTURE ISSUES AND OTHER MATTERS
See Item 1. Business and Notes 13 and 22 to the Consolidated Financial Statements for additional information on various environmental, regulatory, legal and other matters that may impact future results of operations, financial condition and/or cash flows.
Environmental Matters
Dominion Energy is subject to costs resulting from a number of federal, state and local laws and regulations designed to protect human health and the environment. These laws and regulations affect future planning and existing operations. They can result in increased capital, operating and other costs as a result of compliance, remediation, containment and monitoring obligations.
Environmental Protection and Monitoring Expenditures
Dominion Energy incurred $198 million, $200 million and $394 million of expenses (including accretion and depreciation) during, 2018, 2017 and 2016 respectively, in connection with environmental protection and monitoring activities. Dominion Energy expects these expenses to be approximately $191 million and $183 million in 2019 and 2020, respectively. In addition, capital expenditures related to environmental controls were $104 million, $201 million, and $191 million for 2018, 2017 and 2016, respectively. Dominion Energy expects these expenditures to be approximately $192 million and $203 million for 2019 and 2020, respectively.
Future Environmental Regulations
Air
In August 2018, the EPA proposed the Affordable Clean Energy rule as a replacement for the Clean Power Plan. The Affordable Clean Energy rule applies to fossil fuel-fired steam electric generating units greater than or equal to 25 MW, however, it does not apply to combustion turbines or units that burn biomass. The proposed rule includes unit-specific performance standards based on the degree of emission reduction levels achievable from unit efficiency improvements to be determined by the permitting agency. The Affordable Clean Energy rule would require states to develop plans within three years of the final rule to implement these performance standards. These state plans must be approved by the EPA. Given these developments and the associated federal and state regulatory and legal uncertainties, Dominion Energy cannot predict the potential financial statement impacts but believes the potential expenditures to comply could be material.
Climate Change
In December 2015, the Paris Agreement was formally adopted under the United Nations Framework Convention on Climate Change. A key element of the initial U.S. commitment to the agreement was the implementation of the Clean Power Plan, which the EPA has proposed to repeal. In June 2017, the Administration announced that the U.S. intends to file to withdraw from the Paris Agreement in 2019. Several states, including Virginia, subsequently announced a commitment to achieving the carbon reduction goals of the Paris Agreement. It is not possible at this time to predict the timing and impact of this withdrawal, or how any legal requirements in the U.S. at the federal, state or local levels pursuant to the Paris Agreement could impact the Companies customers or the business.
State Actions Related to Air and GHG Emissions
In August 2017, the Ozone Transport Commission released a draft model rule for control of NOX emissions from natural gas pipeline compressor fuel-fire prime movers. States within the ozone transport region, including states in which Dominion Energy has natural gas operations, are expected to develop reasonably achievable control technology rules for existing sources based on the Ozone Transport Commission model rule. States outside of the Ozone Transport Commission may also consider the model rules in setting new reasonably achievable control technology standards.
In January 2018, the VDEQ published for comment a proposed state carbon regulation program linked to RGGI. In February 2019, the VDEQ proposed a revised rule with a 28 million ton initial carbon cap, which is 15% lower than the original proposal, based on revised modeling that uses projections of lower natural gas prices and additional solar capacity. A final rule is expected in mid-2019. Several other states in which Dominion Energy operates, including Pennsylvania, New York, Maryland and Ohio are developing or have announced plans to develop state-specific regulations to control GHG emissions, including methane. Dominion Energy cannot currently estimate the potential financial statement impacts related to these matters, but there could be a material impact to its financial condition and/or cash flows.
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PHMSA Regulation
The most recent reauthorization of PHMSA included new provisions on historical records research, maximum-allowed operating pressure validation, use of automated or remote-controlled valves on new or replaced lines, increased civil penalties and evaluation of expanding integrity management beyond high-consequence areas. PHMSA has not yet issued new rulemaking on most of these items.
Dodd-Frank Act
The Dodd-Frank Act was enacted into law in July 2010 in an effort to improve regulation of financial markets. The CEA, as amended by Title VII of the Dodd-Frank Act, requires certain over-the counter derivatives, or swaps, to be cleared through a derivatives clearing organization and, if the swap is subject to a clearing requirement, to be executed on a designated contract market or swap execution facility. Non-financial entities that use swaps to hedge or mitigate commercial risk, often referred to as end users, may elect the end-user exception to the CEAs clearing requirements. Dominion Energy has elected to exempt its swaps from the CEAs clearing requirements. If, as a result of changes to the rulemaking process, Dominion Energys derivative activities are not exempted from clearing, exchange trading or margin requirements, it could be subject to higher costs due to decreased market liquidity or increased margin payments. In addition, Dominion Energys swap dealer counterparties may attempt to pass-through additional trading costs in connection with changes to or the elimination of rulemaking that implements Title VII of the Dodd-Frank Act. Due to the evolving rulemaking process, Dominion Energy is currently unable to assess the potential impact of the Dodd-Frank Acts derivative-related provisions on its financial condition, results of operations or cash flows.
Virginia Legislation
In February 2019, legislation was passed by the Virginia General Assembly, and is awaiting signature by the Governor of Virginia, which would require any CCR unit located at Virginia Powers Bremo, Chesapeake, Chesterfield or Possum Point power stations that stop accepting CCR prior to July 2019 be closed by removing the CCR to an approved landfill or through recycling for beneficial reuse. The legislation further would require that at least 6.8 million cubic yards of CCR be beneficially reused and that costs associated with the closure of these CCR units be recoverable through a rate adjustment clause approved by the Virginia Commission with a revenue requirement that cannot exceed $225 million in any 12-month period. While the impacts of this rule could be material to Dominion Energy and Virginia Powers financial condition and/or cash flows, such rate adjustment clause would substantially mitigate any impact to Dominion Energy and Virginia Powers results of operations.
Atlantic Coast Pipeline
In September 2014, Dominion Energy, along with Duke and Southern Company Gas, announced the formation of Atlantic Coast Pipeline. Atlantic Coast Pipeline is focused on constructing an approximately 600-mile natural gas pipeline running from West Virginia through Virginia to North Carolina. During the third and fourth quarters of 2018, a FERC stop work order together with delays in obtaining permits necessary for construction and delays in construction due to judicial actions impacted the cost and schedule for the project. As a result project cost estimates have increased from between $6.0 billion to $6.5 billion to between $7.0 billion to $7.5 billion, excluding financing costs. Atlantic Coast Pipeline expects to achieve a late 2020 in-service date for at least key segments of the project, while the remainder may extend into early 2021. Alternatively, if it takes longer to resolve the judicial issues, such as through appeal to the Supreme Court of the U.S., full in-service could extend to the end of 2021 with total project cost estimated to increase an additional $250 million, resulting in total project cost estimates of $7.25 billion to $7.75 billion excluding financing costs. Abnormal weather, work delays (including due to judicial or regulatory action) and other conditions may result in further cost or schedule modifications in the future, which could result in a material impact to Dominion Energys cash flows, financial position and/or results of operations.
North Anna
Virginia Power is considering the construction of a third nuclear unit at a site located at North Anna. If Virginia Power decides to build a new unit, it would require a Combined Construction Permit and Operating License from the NRC, approval of the Virginia Commission and certain environmental permits and other approvals. In June 2017, the NRC issued the Combined Construction Permit and Operating License. Virginia Power has not yet committed to building a new nuclear unit at North Anna.
Other Matters
While management currently has no plans which may affect the carrying value of Millstone, based on potential future economic and other factors, including, but not limited to, market power prices, results of capacity auctions, legislative and regulatory solutions to ensure nuclear plants are fairly compensated for their carbon-free generation, and the impact of potential EPA carbon rules; there is risk that Millstone may be evaluated for an early retirement date. Should management make any decision on a potential early retirement date, the precise date and the resulting financial statement impacts, which could be material to Dominion Energy, may be
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affected by a number of factors, including any potential regulatory or legislative solutions, results of any transmission system reliability study assessments and decommissioning requirements, among other factors.
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