Commission File Number
|
Exact name of Registrant as Specified in its Charter
|
IRS Employer Identification No.
|
||
001-08489
|
DOMINION ENERGY, INC.
|
54-1229715
|
||
000-55337
|
VIRGINIA ELECTRIC AND POWER COMPANY
|
54-0418825
|
||
001-37591
|
DOMINION ENERGY GAS HOLDINGS, LLC
|
46-3639580
|
||
Virginia
|
120 Tredegar Street
|
23219
|
||
(State or other jurisdiction
of incorporation)
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Registrant
|
Title of Each Class
|
Trading
Symbol(s) |
Name of Each Exchange
on which Registered
|
|||
DOMINION ENERGY, INC.
|
Common Stock, no par value
|
D
|
New York Stock Exchange
|
|||
|
2016 Series A 5.25% Enhanced Junior Subordinated Notes
|
DRUA
|
New York Stock Exchange
|
|||
|
2019 Series A Corporate Units
|
DCUE
|
New York Stock Exchange
|
|||
DOMINION ENERGY GAS HOLDINGS, LLC
|
2014 Series C 4.6% Senior Notes
|
|
New York Stock Exchange
|
Item 8.01
|
Other Events.
|
Item 9.01
|
Financial Statements and Exhibits.
|
Exhibit
No.
|
|
|
Description
|
|
|
|
|
|
|
|
99.1
|
|
|
|
|
|
|
|
|
|
99.2
|
|
|
|
|
|
|
|
|
|
101
|
|
|
The following financial statements for the quarter ended June 30, 2019 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 quarter ended June 30, 2019 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 quarter ended June 30, 2019 from Dominion Energy Gas Holdings, LLC’s Current Report on Form
8-K,
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.
|
|
|
|
|
|
|
104
|
|
|
Cover Page Interactive Data File (embedded within the Inline XBRL document).
|
DOMINION ENERGY, INC.
|
||
Registrat
|
||
|
|
|
|
|
/s/ Michele L. Cardiff
|
Name:
|
|
Michele L. Cardiff
|
Title:
|
|
Vice President, Controller and Chief Accounting Officer
|
VIRGINIA ELECTRIC AND POWER COMPANY
|
||
Registrant
|
||
|
|
|
|
|
/s/ Michele L. Cardiff
|
Name:
|
|
Michele L. Cardiff
|
Title:
|
|
Vice President, Controller and Chief Accounting Officer
|
DOMINION ENERGY GAS HOLDINGS, LLC
|
||
Registrant
|
||
|
|
|
|
|
/s/ Michele L. Cardiff
|
Name:
|
|
Michele L. Cardiff
|
Title:
|
|
Vice President, Controller and Chief Accounting Officer
|
Abbreviation or Acronym
|
Definition
|
|
2016 Equity Units
|
Dominion Energy’s 2016 Series A Equity Units issued in August 2016, initially in the form of 2016 Series A Corporate Units, consisting of a stock purchase contract and a 1/40 interest in RSNs issued by Dominion Energy
|
|
2019 Equity Units
|
Dominion Energy’s 2019 Series A Equity Units issued in June 2019, initially in the form of 2019 Series A Corporate Units, consisting of a stock purchase contract and a 1/10 interest in a share of the Series A Preferred Stock
|
|
2017 Tax Reform Act
|
An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (previously known as The Tax Cuts and Jobs Act) enacted on December 22, 2017
|
|
ACE Rule
|
Affordable Clean Energy Rule
|
|
AFUDC
|
Allowance for funds used during construction
|
|
AMI
|
Advanced Metering Infrastructure
|
|
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 Energy II, LLC and FR BR Holdings, LLC effective December 2018
|
|
Brunswick County
|
A 1,376 MW combined-cycle, natural
gas-fired
power station in Brunswick County, Virginia
|
|
CAA
|
Clean Air Act
|
|
CAISO
|
California Independent System Operator
|
|
CCR
|
Coal combustion residual
|
|
CEP
|
Capital Expenditure Program, as established by House Bill 95, Ohio legislation enacted in 2011, deployed by East Ohio to recover certain costs associated with capital investment
|
|
CERCLA
|
Comprehensive Environmental Response, Compensation and Liability Act of 1980, also known as Superfund
|
|
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
|
|
Cove Point
|
Dominion Energy Cove Point LNG, LP
|
|
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.
|
Abbreviation or Acronym
|
Definition
|
|
DEQPS
|
Dominion Energy Questar Pipeline Services, Inc.
|
|
DES
|
Dominion Energy Services, Inc.
|
|
DESC
|
The legal entity, Dominion Energy South Carolina, Inc. (formerly known as South Carolina Electric & Gas Company), one or more of its consolidated subsidiaries or operating segments, or the entirety of Dominion Energy South Carolina, Inc. and its consolidated subsidiaries
|
|
DETI
|
Dominion Energy Transmission, Inc.
|
|
DGI
|
Dominion Generation, Inc.
|
|
DGP
|
Dominion Gathering and Processing, Inc.
|
|
DMLPHCII
|
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 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 Gas Restructuring
|
The acquisition of DCPI and DMLPHCII from, the disposition of East Ohio and DGP to, Dominion Energy by Dominion Energy Gas on November 6, 2019
|
|
Dominion Energy Midstream
|
The legal entity, Dominion Energy Midstream Partners, LP, one or more of its consolidated subsidiaries, Cove Point GP Holding Company, LLC, Iroquois GP Holding Company, LLC, DECG and Dominion Energy Questar Pipeline, or the entirety of Dominion Energy Midstream Partners, LP and its consolidated subsidiaries
|
|
Dominion Energy Questar Pipeline
|
The legal entity, Dominion Energy Questar Pipeline, LLC, one or more of its consolidated subsidiaries, 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
|
|
East Ohio
|
The East Ohio Gas Company, doing business as Dominion Energy Ohio
|
|
Eastern Market Access Project
|
Project to provide 150,000 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
|
|
EPA
|
U.S. Environmental Protection Agency
|
|
EPS
|
Earnings per share
|
|
Export Customers
|
ST Cove Point, LLC, a joint venture of Sumitomo Corporation and Tokyo Gas Co., Ltd., and GAIL Global (USA) LNG, LLC
|
|
FASB
|
Financial Accounting Standards Board
|
|
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
|
|
FTRs
|
Financial transmission rights
|
|
GAAP
|
U.S. generally accepted accounting principles
|
Abbreviation or Acronym
|
Definition
|
|
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
|
|
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
|
|
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.
|
|
ISO-NE
|
ISO New England, Inc.
|
|
June 2006 hybrids
|
Dominion Energy’s 2006 Series A Enhanced Junior Subordinated Notes due 2066
|
|
Kewaunee
|
Kewaunee nuclear power station
|
|
kV
|
Kilovolt
|
|
LNG
|
Liquefied natural gas
|
|
MATS
|
Utility Mercury and Air Toxics Standard Rule
|
|
MGD
|
Million gallons a day
|
|
MW
|
Megawatt
|
|
MWh
|
Megawatt hour
|
|
NAV
|
Net asset value
|
|
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 Carolina Commission
|
North Carolina Utilities Commission
|
|
NRC
|
U.S. Nuclear Regulatory Commission
|
|
NSPS
|
New Source Performance Standards
|
|
NYSE
|
New York Stock Exchange
|
|
ODEC
|
Old Dominion Electric Cooperative
|
|
Ohio Commission
|
Public Utilities Commission of Ohio
|
|
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
|
Abbreviation or Acronym
|
Definition
|
|
Power Generation
|
Power Generation Group operating segment
|
|
|
|
|
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, doing business as Dominion Energy North Carolina
|
|
Questar Gas
|
Questar Gas Company, doing business as Dominion Energy Utah, Dominion Energy Wyoming and Dominion Energy Idaho
|
|
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 GV
|
A rate adjustment clause associated with the recovery of costs related to Greensville County
|
|
Rider R
|
A rate adjustment clause associated with the recovery of costs related to Bear Garden
|
|
Rider S
|
A rate adjustment clause associated with the recovery of costs related to the Virginia City Hybrid Energy Center
|
|
Rider 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
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
US-4
|
A rate adjustment clause associated with the recovery of costs related to Sadler
|
|
Rider W
|
A rate adjustment clause associated with the recovery of costs related to Warren County
|
|
ROE
|
Return on equity
|
|
RSN
|
Remarketable subordinated note
|
|
Sadler
|
An approximately 100 MW proposed utility-scale solar power station located in Greensville County, Virginia
|
|
Santee Cooper
|
South Carolina Public Service Authority
|
|
SBL Holdco
|
SBL Holdco, LLC, a wholly-owned subsidiary of DGI
|
|
SCANA
|
The legal entity, SCANA Corporation, one or more of its consolidated subsidiaries or the entirety of SCANA Corporation and its consolidated subsidiaries
|
|
SCANA Combination
|
Dominion Energy’s acquisition of SCANA completed on January 1, 2019 pursuant to the terms of the agreement and plan of merger entered on January 2, 2018 between Dominion Energy and SCANA
|
|
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
|
|
Scott Solar
|
A 17 MW utility-scale solar power station in Powhatan County, Virginia
|
|
SEC
|
U.S. Securities and Exchange Commission
|
|
September 2006 hybrids
|
Dominion Energy’s 2006 Series B Enhanced Junior Subordinated Notes due 2066
|
|
Series A Preferred Stock
|
Dominion Energy’s 1.75% Series A Cumulative Perpetual Convertible Preferred Stock, without
|
Abbreviation or Acronym
|
Definition
|
|
|
par value, with a liquidation preference of $1,000 per share
|
|
South Carolina Commission
|
Public Service Commission of South Carolina
|
|
Southeast Energy
|
Southeast Energy Group operating segment
|
|
Spring Grove 1
|
An approximately 98 MW proposed utility-scale solar power station located in Surry County, Virginia
|
|
Terra Nova Renewable Partners
|
A partnership comprised primarily of institutional investors advised by J.P. Morgan Asset Management-Global Real Assets
|
|
Three Cedars
|
Granite Mountain and Iron Springs, collectively
|
|
UEX
|
Uncollectible Expense Rider deployed by East Ohio
|
|
|
|
|
Utah Commission
|
|
Utah Public Service Commission
|
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
|
|
Westinghouse
|
Westinghouse Electric Company LLC
|
|
Whitehouse
|
A 20 MW utility-scale solar power station in Louisa County, Virginia
|
|
White River Hub
|
White River Hub, LLC
|
|
Woodland
|
A 19 MW utility-scale solar power station in Isle of Wight County, Virginia
|
|
Wyoming Commission
|
Wyoming Public Service Commission
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions, except per share amounts)
|
|
|
|
|
||||||||||||
Operating Revenue
(1)
|
$
|
3,970
|
|
$ |
3,088
|
$
|
7,828
|
|
$ |
6,554
|
||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
||||||||
Electric fuel and other energy-related purchases
|
|
718
|
|
623
|
|
1,509
|
|
1,367
|
||||||||
Purchased electric capacity
|
|
24
|
|
23
|
|
63
|
|
37
|
||||||||
Purchased gas
|
|
227
|
|
64
|
|
957
|
|
404
|
||||||||
Other operations and maintenance
|
|
1,283
|
|
873
|
|
2,285
|
|
1,668
|
||||||||
Depreciation, depletion and amortization
|
|
661
|
|
463
|
|
1,312
|
|
961
|
||||||||
Other taxes
|
|
284
|
|
166
|
|
576
|
|
365
|
||||||||
Impairment of assets and other charges
|
|
312
|
|
134
|
|
1,147
|
|
135
|
||||||||
Total operating expenses
|
|
3,509
|
|
2,346
|
|
7,849
|
|
4,937
|
||||||||
Income (loss) from operations
|
|
461
|
|
742
|
|
(21
|
)
|
1,617
|
||||||||
Other income
|
|
92
|
|
185
|
|
480
|
|
285
|
||||||||
Interest and related charges
|
|
452
|
|
361
|
|
921
|
|
675
|
||||||||
Income (loss) from operations including noncontrolling interests before income tax expense
|
|
101
|
|
566
|
|
(462
|
)
|
1,227
|
||||||||
Income tax expense
|
|
43
|
|
88
|
|
157
|
|
223
|
||||||||
Net Income (Loss) Including Noncontrolling Interests
|
|
58
|
|
478
|
|
(619
|
)
|
1,004
|
||||||||
Noncontrolling Interests
|
|
4
|
|
29
|
|
7
|
|
52
|
||||||||
Net Income (Loss) Attributable to Dominion Energy
|
$
|
54
|
|
$ |
449
|
$
|
(626
|
)
|
$ |
952
|
||||||
Earnings Per Common Share
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to Dominion Energy - Basic
|
$
|
0.07
|
|
$ |
0.69
|
$
|
(0.78
|
)
|
$ |
1.46
|
||||||
Net income (loss) attributable to Dominion Energy - Diluted
|
|
0.05
|
|
0.69
|
|
(0.78
|
)
|
1.46
|
(1)
|
See Note 10 for amounts attributable to related parties.
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
||||||||||||
Net income (loss) including noncontrolling interests
|
$
|
58
|
|
$ |
478
|
$
|
(619
|
)
|
$ |
1,004
|
||||||
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
||||||||
Net deferred gains (losses) on derivatives-hedging activities
(1)
|
|
(78
|
)
|
(33
|
) |
|
(102
|
)
|
78
|
|||||||
Changes in unrealized net gains (losses) on investment securities
(2)
|
|
13
|
|
(5
|
) |
|
29
|
|
(18
|
) | ||||||
Changes in net unrecognized pension and other postretirement benefit costs
(3)
|
|
113
|
|
—
|
|
113
|
|
—
|
||||||||
Amounts reclassified to net income:
|
|
|
|
|
|
|
|
|
||||||||
Net derivative (gains) losses-hedging activities
(4)
|
|
(21
|
)
|
33
|
|
(52
|
)
|
41
|
||||||||
Net realized (gains) losses on investment securities
(5)
|
|
(1
|
)
|
—
|
|
(1
|
)
|
1
|
||||||||
Net pension and other postretirement benefit costs
(6)
|
|
22
|
|
17
|
|
30
|
|
42
|
||||||||
Changes in other comprehensive income from equity method investees
(7)
|
|
—
|
|
1
|
|
—
|
|
1
|
||||||||
Total other comprehensive income
|
|
48
|
|
13
|
|
17
|
|
145
|
||||||||
Comprehensive income (loss) including noncontrolling interests
|
|
106
|
|
491
|
|
(602
|
)
|
1,149
|
||||||||
Comprehensive income attributable to noncontrolling interests
|
|
4
|
|
29
|
|
7
|
|
53
|
||||||||
Comprehensive income (loss) attributable to Dominion Energy
|
$
|
102
|
|
$ |
462
|
$
|
(609
|
)
|
$ |
1,096
|
||||||
(1)
|
Net of $27 million and $11 million tax for the three months ended June 30, 2019 and 2018, respectively, and net of $32 million and $(26) million tax for the six months ended June 30, 2019 and 2018, respectively.
|
(2)
|
Net of $(5) million and $2 million tax for the three months ended June 30, 2019 and 2018, respectively, and net of $(11) million and $6 million tax for the six months ended June 30, 2019 and 2018, respectively.
|
(3)
|
Net of $(49) million and $— million tax for the three months ended June 30, 2019 and 2018, respectively, and net of $(49) million and $— million tax for the six months ended June 30, 2019 and 2018, respectively.
|
(4)
|
Net of $8 million and $(11) million tax for the three months ended June 30, 2019 and 2018, respectively, and net of $18 million and $(14) million tax for the six months ended June 30, 2019 and 2018, respectively.
|
(5)
|
Net of $— million and $(1)
million
tax for the three months ended June 30, 2019 and 2018, respectively, and net of $— million and $(1) million tax for the six months ended June 30, 2019 and 2018, respectively.
|
(6)
|
Net of $3 million and $(7) million tax for the three months ended June 30, 2019 and 2018, respectively, and net of $(11) million and $(8) million tax for the six months ended June 30, 2019 and 2018, respectively.
|
(7)
|
Net of $— million and $(1) million tax for the three months ended June 30, 2019 and 2018, respectively, and net of $— million and $(1) million tax for the six months ended June 30, 2019 and 2018, respectively.
|
(1)
|
Dominion Energy’s Consolidated Balance Sheet at December 31, 2018 has been derived from the audited Consolidated Balance Sheet at that date.
|
(2)
|
See Note 10 for amounts attributable to related parties.
|
(1)
|
Dominion Energy’s Consolidated Balance Sheet at December 31, 2018 has been derived from the audited Consolidated Balance Sheet at that date.
|
(2)
|
See Note 10 for amounts attributable to related parties.
|
(3)
|
20 million shares authorized; 2 million shares outstanding at June 30, 2019.
|
(4)
|
1.8 billion shares authorized and 803 million shares outstanding at June 30, 2019 and 1 billion shares authorized and 681 million shares outstanding at December 31, 2018.
|
|
Preferred Stock
|
Common Stock
|
Dominion Energy
Shareholders |
Total
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Retained
Earnings |
|
AOCI
|
|
Shareholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
|
||||||||||||||||||
(millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
March 31, 2018
|
—
|
$ |
—
|
653
|
$ |
10,316
|
$ |
8,924
|
$ |
(1,551
|
) | $ |
17,689
|
$ |
2,353
|
$ |
20,042
|
|||||||||||||||||||
Net income including noncontrolling interests
|
|
|
|
|
449
|
|
449
|
29
|
478
|
|||||||||||||||||||||||||||
Issuance of stock
|
|
|
1
|
82
|
|
|
82
|
|
82
|
|||||||||||||||||||||||||||
Remeasurement of noncontrolling interest in Dominion Energy Midstream
|
|
|
|
375
|
|
|
375
|
(375
|
) |
—
|
||||||||||||||||||||||||||
Stock awards (net of change in unearned compensation)
|
|
|
|
9
|
|
|
9
|
|
9
|
|||||||||||||||||||||||||||
Dividends ($0.8350 per common share) and distributions
|
|
|
|
|
(545
|
) |
|
(545
|
) |
(34
|
) |
(579
|
) | |||||||||||||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
13
|
13
|
|
13
|
|||||||||||||||||||||||||||
Other
|
|
|
|
|
(8
|
) |
|
(8
|
) |
(1
|
) |
(9
|
) | |||||||||||||||||||||||
June 30, 2018
|
—
|
$ |
—
|
654
|
$ |
10,782
|
$ |
8,820
|
$ |
(1,538
|
) | $ |
18,064
|
$ |
1,972
|
$ |
20,036
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
March 31, 2019
|
—
|
$ |
—
|
802
|
$ |
20,834
|
$ |
7,806
|
$ |
(1,731
|
) | $ |
26,909
|
$ |
690
|
$ |
27,599
|
|||||||||||||||||||
Net income including noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54
|
|
|
|
|
|
54
|
|
|
4
|
|
|
58
|
|
|||||||||
Issuance of stock
|
|
2
|
|
|
1,596
|
|
|
1
|
|
|
78
|
|
|
|
|
|
|
|
|
1,674
|
|
|
|
|
|
1,674
|
|
|||||||||
Stock purchase contract component of 2019 Equity Units
(1)
|
|
|
|
|
|
|
|
|
|
|
(264
|
)
|
|
|
|
|
|
|
|
(264
|
)
|
|
|
|
|
(264
|
)
|
|||||||||
Stock awards (net of change in unearned compensation)
|
|
|
|
|
|
|
|
|
|
|
12
|
|
|
|
|
|
|
|
|
12
|
|
|
|
|
|
12
|
|
|||||||||
Dividends ($0.9175 per common share) and distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(736
|
)
|
|
|
|
|
(736
|
)
|
|
(10
|
)
|
|
(746
|
)
|
|||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48
|
|
|
48
|
|
|
|
|
|
48
|
|
|||||||||
June 30, 2019
|
|
2
|
|
$
|
1,596
|
|
|
803
|
|
$
|
20,660
|
|
$
|
7,124
|
|
$
|
(1,683
|
)
|
$
|
27,697
|
|
$
|
684
|
|
$
|
28,381
|
|
|||||||||
(1)
|
See Note 17 for further information.
|
|
Preferred Stock
|
Common Stock
|
Dominion Energy
Shareholders |
Total
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Retained
Earnings
|
|
AOCI
|
|
Shareholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
|
||||||||||||||||||
(millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
December 31, 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
|
|
|
|
|
952
|
|
952
|
52
|
1,004
|
|||||||||||||||||||||||||||
Issuance of stock
|
|
|
9
|
662
|
|
|
662
|
|
662
|
|||||||||||||||||||||||||||
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)
|
|
|
|
12
|
|
|
12
|
|
12
|
|||||||||||||||||||||||||||
Dividends ($1.670 per common share) and distributions
|
|
|
|
|
(1,089
|
) |
|
(1,089
|
) |
(65
|
) |
(1,154
|
) | |||||||||||||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
144
|
144
|
1
|
145
|
|||||||||||||||||||||||||||
Other
|
|
|
|
(5
|
) |
(8
|
) |
|
(13
|
) |
|
(13
|
) | |||||||||||||||||||||||
June 30, 2018
|
—
|
$ |
—
|
654
|
$ |
10,782
|
$ |
8,820
|
$ |
(1,538
|
) | $ |
18,064
|
$ |
1,972
|
$ |
20,036
|
|||||||||||||||||||
December 31, 2018
|
—
|
$ |
—
|
681
|
$ |
12,588
|
$ |
9,219
|
$ |
(1,700
|
) | $ |
20,107
|
$ |
1,941
|
$ |
22,048
|
|||||||||||||||||||
Net income (loss) including noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(626
|
)
|
|
|
|
|
(626
|
)
|
|
7
|
|
|
(619
|
)
|
|||||||||
Issuance of stock
|
|
2
|
|
|
1,596
|
|
|
4
|
|
|
325
|
|
|
|
|
|
|
|
|
1,921
|
|
|
|
|
|
1,921
|
|
|||||||||
Stock purchase contract component of 2019 Equity Units
(1)
|
|
|
|
|
|
|
|
|
|
|
(264
|
)
|
|
|
|
|
|
|
|
(264
|
)
|
|
|
|
|
(264
|
)
|
|||||||||
Acquisition of SCANA
|
|
|
|
|
|
|
|
96
|
|
|
6,818
|
|
|
|
|
|
|
|
|
6,818
|
|
|
|
|
|
6,818
|
|
|||||||||
Acquisition of public interest in Dominion Energy Midstream
|
|
|
|
|
|
|
|
22
|
|
|
1,181
|
|
|
|
|
|
|
|
|
1,181
|
|
|
(1,221
|
)
|
|
(40
|
)
|
|||||||||
Stock awards (net of change in unearned compensation)
|
|
|
|
|
|
|
|
|
|
|
12
|
|
|
|
|
|
|
|
|
12
|
|
|
|
|
|
12
|
|
|||||||||
Dividends ($1.835 per common share) and distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,469
|
)
|
|
|
|
|
(1,469
|
)
|
|
(43
|
)
|
|
(1,512
|
)
|
|||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17
|
|
|
17
|
|
|
|
|
|
17
|
|
|||||||||
June 30, 2019
|
|
2
|
|
$
|
1,596
|
|
|
803
|
|
$
|
20,660
|
|
$
|
7,124
|
|
$
|
(1,683
|
)
|
$
|
27,697
|
|
$
|
684
|
|
$
|
28,381
|
|
|||||||||
(1)
|
See Note 17 for further information.
|
Six Months Ended June 30,
|
2019
|
|
2018
|
|||||
(millions)
|
|
|
||||||
Operating Activities
|
|
|
|
|
||||
Net income (loss) including noncontrolling interests
|
$
|
(619
|
)
|
$ |
1,004
|
|||
Adjustments to reconcile net income (loss) including noncontrolling interests to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation, depletion and amortization (including nuclear fuel)
|
|
1,472
|
|
1,106
|
||||
Deferred income taxes and investment tax credits
|
|
107
|
|
229
|
||||
Provision for refunds and rate credits to electric utility customers
|
|
953
|
|
215
|
||||
Impairment of assets and other charges
|
|
1,012
|
|
129
|
||||
Charge related to a voluntary retirement program
|
|
409
|
|
—
|
||||
Net gains on nuclear decommissioning trust funds and other investments
|
|
(371
|
)
|
(40
|
) | |||
Charge associated with future ash pond and landfill closure costs
|
|
—
|
|
81
|
||||
Revision to future ash pond and landfill closure costs
|
|
(113
|
)
|
—
|
||||
Other adjustments
|
|
4
|
|
(46
|
) | |||
Changes in:
|
|
|
|
|
||||
Accounts receivable
|
|
492
|
|
158
|
||||
Inventories
|
|
(14
|
)
|
31
|
||||
Deferred fuel and purchased gas costs, net
|
|
120
|
|
(295
|
) | |||
Prepayments
|
|
22
|
|
(15
|
) | |||
Accounts payable
|
|
(446
|
)
|
(151
|
) | |||
Accrued interest, payroll and taxes
|
|
(264
|
)
|
(90
|
) | |||
Customer deposits
|
|
(85
|
)
|
108
|
||||
Margin deposit assets and liabilities
|
|
113
|
|
(34
|
) | |||
Net realized and unrealized changes related to derivative activities
|
|
(11
|
)
|
82
|
||||
Other operating assets and liabilities
|
|
(468
|
)
|
(47
|
) | |||
Net cash provided by operating activities
|
|
2,313
|
|
2,425
|
||||
Investing Activities
|
|
|
|
|
||||
Plant construction and other property additions (including nuclear fuel)
|
|
(2,112
|
)
|
(2,046
|
) | |||
Cash and restricted cash acquired in the SCANA Combination
|
|
389
|
|
—
|
||||
Acquisition of solar development projects
|
|
(152
|
)
|
(51
|
) | |||
Proceeds from sales of securities
|
|
882
|
|
844
|
||||
Purchases of securities
|
|
(888
|
)
|
(890
|
) | |||
Proceeds from sales of assets and equity method investments
|
|
196
|
|
44
|
||||
Contributions to equity method affiliates
|
|
(132
|
)
|
(134
|
) | |||
Other
|
|
(16
|
)
|
(3
|
) | |||
Net cash used in investing activities
|
|
(1,833
|
)
|
(2,236
|
) | |||
Financing Activities
|
|
|
|
|
||||
Issuance (repayment) of short-term debt, net
|
|
2,040
|
|
(553
|
) | |||
Issuance of short-term notes
|
|
—
|
|
1,450
|
||||
Credit facility borrowings
|
|
—
|
|
73
|
||||
Repayment of credit facility borrowings
|
|
(113
|
)
|
|
—
|
|
||
Issuance of long-term debt
|
|
798
|
|
2,400
|
||||
Repayment of long-term debt, including redemption premiums
|
|
(3,378
|
)
|
(2,840
|
) | |||
Issuance of 2019 Equity Units
|
|
1,582
|
|
|
—
|
|
||
Issuance of common stock
|
|
325
|
|
662
|
||||
Common dividend payments
|
|
(1,469
|
)
|
(1,089
|
) | |||
Other
|
|
(96
|
)
|
(123
|
) | |||
Net cash used in financing activities
|
|
(311
|
)
|
(20
|
) | |||
Increase in cash, restricted cash and equivalents
|
|
169
|
|
169
|
||||
Cash, restricted cash and equivalents at beginning of period
|
|
391
|
|
185
|
||||
Cash, restricted cash and equivalents at end of period
|
$
|
560
|
|
$ |
354
|
|||
Supplemental Cash Flow Information
|
|
|
|
|
||||
Significant noncash investing and financing activities:
(1)(2)(3)
|
|
|
|
|
||||
Accrued capital expenditures
|
$
|
311
|
|
$ |
253
|
|||
Leases
(4)
|
|
24
|
|
—
|
||||
(1)
|
See Note 2 for noncash investing and financing activities related to the adoption of a new accounting standard for leasing arrangements.
|
(2)
|
See Note 3 for noncash investing and financing activities related to the SCANA Combination.
|
(3)
|
See Note 17 for noncash financing activities related to the acquisition of the public interest in Dominion Energy Midstream, the remarketing of RSNs and the issuance of stock purchase contracts associated with the 2019 Equity Units.
|
(4)
|
Includes $22 million of financing leases and $2 million of operating leases.
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
||||||||||||
Operating Revenue
(1)
|
$
|
1,938
|
|
$ |
1,829
|
$
|
3,903
|
|
$ |
3,577
|
||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
||||||||
Electric fuel and other energy-related purchases
(1)
|
|
536
|
|
508
|
|
1,132
|
|
1,099
|
||||||||
Purchased electric capacity
|
|
13
|
|
23
|
|
46
|
|
37
|
||||||||
Other operations and maintenance:
|
|
|
|
|
|
|
|
|
||||||||
Affiliated suppliers
|
|
127
|
|
74
|
|
213
|
|
157
|
||||||||
Other
|
|
438
|
|
365
|
|
631
|
|
681
|
||||||||
Depreciation and amortization
|
|
299
|
|
247
|
|
603
|
|
544
|
||||||||
Other taxes
|
|
90
|
|
79
|
|
175
|
|
162
|
||||||||
Impairment of assets and other charges
|
|
197
|
|
—
|
|
743
|
|
—
|
||||||||
Total operating expenses
|
|
1,700
|
|
1,296
|
|
3,543
|
|
2,680
|
||||||||
Income from operations
|
|
238
|
|
533
|
|
360
|
|
897
|
||||||||
Other income
|
|
16
|
|
21
|
|
53
|
|
24
|
||||||||
Interest and related charges
(1)
|
|
135
|
|
126
|
|
270
|
|
258
|
||||||||
Income before income tax expense
|
|
119
|
|
428
|
|
143
|
|
663
|
||||||||
Income tax expense
|
|
19
|
|
89
|
|
23
|
|
140
|
||||||||
Net Income
|
$
|
100
|
|
$ |
339
|
$
|
120
|
|
$ |
523
|
||||||
(1)
|
See Note
20
for amounts attributable to affiliates.
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
|
|
|
|||||||||
Net income
|
$
|
100
|
|
$ |
339
|
$
|
120
|
|
$ |
523
|
||||||
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
||||||||
Net deferred gains (losses) on derivatives-hedging activities
(1)
|
|
(11
|
)
|
2
|
|
(18
|
)
|
7
|
||||||||
Changes in unrealized net gains (losses) on nuclear decommissioning trust funds
(2)
|
|
2
|
|
(2
|
) |
|
4
|
|
(2
|
) | ||||||
Amounts reclassified to net income:
|
|
|
|
|
|
|
|
|
||||||||
Net derivative (gains) losses on derivative-hedging activities
(3)
|
|
1
|
|
—
|
|
1
|
|
—
|
||||||||
Net realized (gains) losses on nuclear decommissioning trust funds
(3)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
—
|
||||||
Total other comprehensive income (loss)
|
|
(9
|
)
|
—
|
|
(14
|
)
|
5
|
||||||||
Comprehensive income
|
$
|
91
|
|
$ |
339
|
$
|
106
|
|
$ |
528
|
||||||
(1)
|
Net of $4 million and $— million tax for the three months ended June 30, 2019 and 2018, respectively, and net of $6 million and $(2) million tax for the six months ended June 30, 2019 and 2018, respectively.
|
(2)
|
Net of $— million tax for both the three months ended June 30, 2019 and 2018 and net of $(1) million and $1 million tax for the six months ended June 30, 2019 and 2018, respectively.
|
(3)
|
Net of $— million tax for both the three and
six months ended June 30
, 2019
and 2018
.
|
(1)
|
Virginia Power’s Consolidated Balance Sheet at December 31, 2018 has been derived from the audited Consolidated Balance Sheet at that date.
|
(2)
|
See Note
20
for amounts attributable to affiliates.
|
|
|
|
December 31, 2018
(1)
|
|||||
(millions)
|
|
|
||||||
LIABILITIES AND SHAREHOLDER’S EQUITY
|
|
|
||||||
Current Liabilities
|
|
|
|
|
||||
Securities due within one year
|
$
|
2
|
|
$ |
350
|
|||
Short-term debt
|
|
1,300
|
|
314
|
||||
Accounts payable
|
|
253
|
|
339
|
||||
Payables to affiliates
|
|
182
|
|
209
|
||||
Affiliated current borrowings
|
|
71
|
|
224
|
||||
Regulatory liabilities
|
|
188
|
|
299
|
||||
Other
(2)
|
|
1,262
|
|
1,080
|
||||
Total current liabilities
|
|
3,258
|
|
2,815
|
||||
Long-Term Debt
|
|
11,291
|
|
11,321
|
||||
Deferred Credits and Other Liabilities
|
|
|
|
|
||||
Deferred income taxes and investment tax credits
|
|
3,006
|
|
3,017
|
||||
Asset retirement obligations
|
|
3,389
|
|
1,200
|
||||
Regulatory liabilities
|
|
4,812
|
|
4,647
|
||||
Operating lease liabilities
|
|
158
|
|
—
|
||||
Other
(2)
|
|
1,120
|
|
833
|
||||
Total deferred credits and other liabilities
|
|
12,485
|
|
9,697
|
||||
Total liabilities
|
|
27,034
|
|
23,833
|
||||
Commitments and Contingencies (see Note 18)
|
|
|
|
|
||||
Common Shareholder’s Equity
|
|
|
|
|
||||
Common stock – no par
(3)
|
|
5,738
|
|
5,738
|
||||
Other
paid-in
capital
|
|
1,113
|
|
1,113
|
||||
Retained earnings
|
|
6,139
|
|
6,208
|
||||
Accumulated other comprehensive loss
|
|
(26
|
)
|
(12
|
) | |||
Total common shareholder’s equity
|
|
12,964
|
|
13,047
|
||||
Total liabilities and shareholder’s equity
|
$
|
39,998
|
|
$ |
36,880
|
|||
(1)
|
Virginia Power’s Consolidated Balance Sheet at December 31, 2018 has been derived from the audited Consolidated Balance Sheet at that date.
|
(2)
|
See Note
20
for amounts attributable to affiliates.
|
(3)
|
500,000 shares authorized; 274,723 shares outstanding at June 30, 2019 and December 31, 2018.
|
Six Months Ended June 30,
|
2019
|
|
2018
|
|||||||||
(millions)
|
|
|
|
|||||||||
Operating Activities
|
|
|
|
|||||||||
Net income
|
$
|
120
|
|
|
|
|
$ |
523
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization (including nuclear fuel)
|
|
690
|
|
|
|
|
632
|
|||||
Deferred income taxes and investment tax credits
|
|
(43
|
)
|
|
|
|
137
|
|||||
Charge associated with future ash pond and landfill closure costs
|
|
—
|
|
|
|
|
81
|
|||||
Revision to future ash pond and landfill closure costs
|
|
(113
|
)
|
|
|
—
|
||||||
Impairment of assets and other charges
|
|
608
|
|
|
|
—
|
||||||
Provision for rate credits to customers
|
|
—
|
|
|
215
|
|||||||
Charge related to a voluntary retirement program
|
|
190
|
|
|
|
|
—
|
|||||
Other adjustments
|
|
(51
|
)
|
|
|
|
(19
|
) | ||||
Changes in:
|
|
|
|
|
|
|
|
|||||
Accounts receivable
|
|
68
|
|
|
|
|
(26
|
) | ||||
Affiliated receivables and payables
|
|
(179
|
)
|
|
|
|
(86
|
) | ||||
Inventories
|
|
(30
|
)
|
|
|
|
36
|
|||||
Prepayments
|
|
(4
|
)
|
|
|
|
(6
|
) | ||||
Deferred fuel expenses, net
|
|
153
|
|
|
|
|
(357
|
) | ||||
Accounts payable
|
|
(35
|
)
|
|
|
|
(45
|
) | ||||
Accrued interest, payroll and taxes
|
|
14
|
|
|
|
|
13
|
|||||
Net realized and unrealized changes related to derivative activities
|
|
17
|
|
|
|
|
54
|
|||||
Asset retirement obligations
|
|
14
|
|
|
|
|
(18
|
) | ||||
Other operating assets and liabilities
|
|
(345
|
)
|
|
|
|
64
|
|||||
Net cash provided by operating activities
|
|
1,074
|
|
|
|
|
1,198
|
|||||
Investing Activities
|
|
|
|
|
|
|
|
|||||
Plant construction and other property additions
|
|
(1,079
|
)
|
|
|
|
(1,170
|
) | ||||
Purchases of nuclear fuel
|
|
(67
|
)
|
|
|
|
(55
|
) | ||||
Acquisition of solar development projects
|
|
(150
|
)
|
|
|
|
(43
|
) | ||||
Proceeds from sales of securities
|
|
447
|
|
|
|
|
414
|
|||||
Purchases of securities
|
|
(478
|
)
|
|
|
|
(436
|
) | ||||
Other
|
|
(11
|
)
|
|
|
|
4
|
|||||
Net cash used in investing activities
|
|
(1,338
|
)
|
|
|
|
(1,286
|
) | ||||
Financing Activities
|
|
|
|
|
|
|
|
|||||
Issuance of short-term debt, net
|
|
986
|
|
|
|
|
616
|
|||||
Repayment of affiliated current borrowings, net
|
|
(153
|
)
|
|
|
|
(8
|
) | ||||
Issuance of long-term debt
|
|
198
|
|
|
|
|
700
|
|||||
Repayment of long-term debt
|
|
(589
|
)
|
|
|
|
(951
|
) | ||||
Common dividend payments to parent
|
|
(189
|
)
|
|
|
|
(257
|
) | ||||
Other
|
|
(2
|
)
|
|
|
|
(6
|
) | ||||
Net cash provided by financing activities
|
|
251
|
|
|
|
|
94
|
|||||
Increase (decrease) in cash, restricted cash and equivalents
|
|
(13
|
)
|
|
|
|
6
|
|||||
Cash, restricted cash and equivalents at beginning of period
|
|
38
|
|
|
|
|
24
|
|||||
Cash, restricted cash and equivalents at end of period
|
$
|
25
|
|
|
|
|
$ |
30
|
||||
Supplemental Cash Flow Information
|
|
|
|
|
|
|
|
|||||
Significant noncash investing activities:
(1)
|
|
|
|
|
|
|
|
|||||
Accrued capital expenditures
|
$
|
193
|
|
|
|
|
$ |
159
|
||||
Financing leases
|
|
9
|
|
|
|
|
—
|
|||||
(1)
|
See Note 2 for noncash investing and financing activities related to the adoption of a new accounting standard for leasing arrangements.
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
||||||||||||
Operating Revenue
(1)
|
$
|
530
|
|
$ |
508
|
$
|
1,096
|
|
$ |
898
|
||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
||||||||
Purchased
(
gas
excess
)
(1)
|
|
(3
|
)
|
(6
|
) |
|
9
|
|
8
|
|||||||
Other energy-related purchases
|
|
1
|
|
2
|
|
1
|
|
2
|
||||||||
Other operations and maintenance:
|
|
|
|
|
|
|
|
|
||||||||
Affiliated suppliers
|
|
54
|
|
38
|
|
93
|
|
69
|
||||||||
Other
|
|
156
|
|
151
|
|
293
|
|
285
|
||||||||
Depreciation and amortization
|
|
92
|
|
88
|
|
182
|
|
150
|
||||||||
Other taxes
|
|
38
|
|
25
|
|
78
|
|
52
|
||||||||
Impairment of assets and other charges
|
|
13
|
|
126
|
|
13
|
|
126
|
||||||||
Gains on sales of assets
|
|
—
|
|
(6
|
) |
|
—
|
|
(51
|
) | ||||||
Total operating expenses
|
|
351
|
|
418
|
|
669
|
|
641
|
||||||||
Income from continuing operations
|
|
179
|
|
90
|
|
427
|
|
257
|
||||||||
Earnings from equity method investees
|
|
9
|
|
11
|
|
22
|
|
31
|
||||||||
Other income
|
|
44
|
|
16
|
|
85
|
|
33
|
||||||||
Interest and related charges
(1)
|
|
86
|
|
46
|
|
173
|
|
50
|
||||||||
Income from continuing operations before income tax expense
(
benefit
)
|
|
146
|
|
71
|
|
361
|
|
271
|
||||||||
Income tax expense (benefit)
|
|
23
|
|
(13
|
) |
|
66
|
|
31
|
|||||||
Net
i
ncome from continuing operations
|
|
123
|
|
84
|
|
295
|
|
240
|
||||||||
Net income from discontinued operations
|
|
26
|
|
45
|
|
80
|
|
102
|
||||||||
Net income including noncontrolling interest
|
|
149
|
|
129
|
|
375
|
|
342
|
||||||||
Noncontrolling interest
|
|
30
|
|
46
|
|
66
|
|
79
|
||||||||
Net Income attributable to Dominion Energy Gas
|
$
|
119
|
|
$ |
83
|
$
|
309
|
|
$ |
263
|
||||||
(1)
|
See Note 20 for amounts attributable to related parties.
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
|
|
|
|
||||||||
Net income
including noncontrolling interest
|
$
|
149
|
|
$ |
129
|
$
|
375
|
|
$ |
342
|
||||||
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
||||||||
Net deferred gains (losses) on derivatives-hedging activities
(1)
|
|
(24
|
)
|
(20
|
) |
|
(51
|
)
|
(6
|
) | ||||||
Changes in unrecognized pension and other postretirement benefit costs
(2)
|
|
29
|
|
—
|
|
29
|
|
—
|
||||||||
Amounts reclassified to net income:
|
|
|
|
|
|
|
|
|
||||||||
Net derivative (gains) losses-hedging activities
(3)
|
|
(2
|
)
|
13
|
|
1
|
|
11
|
||||||||
Net pension and other postretirement benefit costs
(4)
|
|
2
|
|
1
|
|
3
|
|
2
|
||||||||
Total other comprehensive income (loss)
|
|
5
|
|
(6
|
) |
|
(18
|
)
|
7
|
|||||||
Comprehensive income including noncontrolling interest
|
|
154
|
|
123
|
|
357
|
|
349
|
||||||||
Comprehensive income attributable to noncontrolling interest
|
|
30
|
|
46
|
|
65
|
|
80
|
||||||||
Comprehensive income
attributable to Dominion Energy Gas
|
$
|
124
|
|
$ |
77
|
$
|
292
|
|
$ |
269
|
||||||
(1)
|
Net of $8 million and $7 million tax for the three months ended June 30, 2019 and 2018, respectively, and net of $17 million and $2 million tax for the six months ended June 30, 2019 and 2018, respectively.
|
(2)
|
Net of $(11) million and $— million tax for the three months ended June 30, 2019 and 2018, respectively, and net of $(11) million and $— million tax for the six months ended June 30, 2019 and 2018, respectively.
|
(3)
|
Net of $— million and $(5) million tax for the three months ended June 30, 2019 and 2018, respectively, and net of $— million and $(4) million tax for the six months ended June 30, 2019 and 2018, respectively.
|
(4)
|
Net of $— million tax for both the three months ended June 30, 2019 and 2018 and net of $(1) million tax for both the six months ended June 30, 2019 and 2018.
|
(1)
|
Dominion Energy Gas’ Consolidated Balance Sheet at December 31, 2018 has been derived from the audited Consolidated Balance Sheet at that date.
|
(2)
|
See Note 20 for amounts attributable to related parties.
|
(1)
|
Dominion Energy Gas’ Consolidated Balance Sheet at December 31, 2018 has been derived from the audited Consolidated Balance Sheet at that date.
|
(2)
|
See Note 20 for amounts attributable to related parties.
|
Six Months Ended June 30,
|
2019
|
|
2018
|
|||||
(millions)
|
|
|
|
|
||||
Operating Activities
|
|
|
|
|
||||
Net income including noncontrolling interest
|
$
|
375
|
|
$ |
342
|
|||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
227
|
|
193
|
||||
Deferred income taxes and investment tax credits
|
|
39
|
|
195
|
||||
Charge related to a voluntary retirement program
|
|
73
|
|
—
|
||||
Impairment of assets and other charges
|
|
13
|
|
129
|
||||
Gains on sales of assets
|
|
—
|
|
(44
|
) | |||
Other adjustments
|
|
15
|
|
9
|
||||
Changes in:
|
|
|
|
|
||||
Accounts receivable
|
|
88
|
|
27
|
||||
Affiliated receivables and payables
|
|
(48
|
)
|
(107
|
) | |||
Inventories
|
|
(31
|
)
|
(28
|
) | |||
Prepayments
|
|
59
|
|
(100
|
) | |||
Accounts payable
|
|
(105
|
)
|
(98
|
) | |||
Accrued interest, payroll and taxes
|
|
(55
|
)
|
(49
|
) | |||
Customer deposits
|
|
(81
|
)
|
110
|
||||
Pension and other postretirement benefits
|
|
(64
|
)
|
(71
|
) | |||
Other operating assets and liabilities
|
|
(45
|
) |
17
|
||||
Net cash provided by operating activities
|
|
460
|
|
525
|
||||
Investing Activities
|
|
|
|
|
||||
Plant construction and other property additions
|
|
(341
|
)
|
(541
|
) | |||
Proceeds from assignments of shale development rights
|
|
—
|
|
44
|
||||
Other
|
|
(12
|
)
|
(8
|
) | |||
Net cash used in investing activities
|
|
(353
|
)
|
(505
|
) | |||
Financing Activities
|
|
|
|
|
||||
Issuance (repayment) of short-term debt, net
|
|
240
|
|
(441
|
) | |||
Issuance (repayment) of affiliated current borrowings, net
|
|
(11
|
)
|
107
|
||||
Issuance of long-term debt
|
|
—
|
|
750
|
||||
Repayment of long-term debt
|
|
(300
|
)
|
(250
|
) | |||
Issuance of affiliated long-term debt
|
|
395
|
|
|
—
|
|
||
Credit facility borrowings
|
|
—
|
|
73
|
||||
Repayment of credit facility borrowings
|
|
(73
|
)
|
|
—
|
|
||
Net proceeds from sale of Dominion Energy Midstream Common Units
|
|
—
|
|
4
|
||||
Contributions from Dominion Energy
|
|
—
|
|
25
|
||||
Dividends and distributions
|
|
(348
|
)
|
(124
|
) | |||
Other
|
|
(1
|
)
|
(6
|
) | |||
Net cash provided by (used in) financing activities
|
|
(98
|
)
|
138
|
||||
Increase in cash, restricted cash and equivalents
|
|
9
|
|
158
|
||||
Cash, restricted cash and equivalents at beginning of period
|
|
198
|
|
57
|
||||
Cash, restricted cash and equivalents at end of period
|
$
|
207
|
|
$ |
215
|
|||
Supplemental Cash Flow Information
|
|
|
|
|
||||
Significant noncash investing
and financing
activities:
(1)
|
|
|
|
|
||||
Accrued capital expenditures
|
$
|
43
|
|
$ |
56
|
|||
|
6
|
—
|
(1)
|
See Note 2 for noncash investing and financing activities related to the adoption of a new accounting standard for leasing arrangements.
|
|
Cash, Restricted Cash and Equivalents
at End of Period
|
Cash, Restricted Cash and Equivalents at
Beginning of Period
|
||||||||||||||
|
June 30,
2019
|
|
June 30,
2018
|
December 31,
2018
|
December 31,
2017
|
|||||||||||
(millions)
|
|
|
|
|
|
|||||||||||
Dominion Energy
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
382
|
|
$ |
190
|
$ |
268
|
$ |
120
|
|||||||
Restricted cash and equivalents
(1)
|
|
178
|
|
164
|
123
|
65
|
||||||||||
Cash, restricted cash and equivalents shown in the Consolidated Statements of Cash Flows
|
$
|
560
|
|
$ |
354
|
$ |
391
|
$ |
185
|
|||||||
Virginia Power
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
17
|
|
$ |
20
|
$ |
29
|
$ |
14
|
|||||||
Restricted cash and equivalents
(1)
|
|
8
|
|
10
|
9
|
10
|
||||||||||
Cash, restricted cash and equivalents shown in the Consolidated Statements of Cash Flows
|
$
|
25
|
|
$ |
30
|
$ |
38
|
$ |
24
|
|||||||
Dominion Energy Gas
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
(2)
|
$
|
195
|
|
$ |
70
|
$ |
108
|
$ |
18
|
|||||||
Restricted cash and equivalents
(1)
|
|
12
|
|
145
|
90
|
39
|
||||||||||
Cash, restricted cash and equivalents shown in the Consolidated Statements of Cash Flows
|
$
|
207
|
|
$ |
215
|
$ |
198
|
$ |
57
|
|||||||
(1)
|
Restricted cash and equivalent balances are presented within other current assets in the Companies’ Consolidated Balance Sheets.
|
(2)
|
At June 30, 2019, June 30, 2018, December 31, 2018 and December 31, 2017, Dominion Energy Gas had $
12
million, $
3
million, $
9
million and $
3
million of cash and cash equivalents included in current assets of discontinued operations, respectively.
|
●
|
DESC 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 DESC 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)
|
|
$
1,772
|
|
|
Investments
|
|
224
|
|
|
Property, plant and equipment
(2)
|
|
11,006
|
|
|
Goodwill
|
|
2,574
|
|
|
Regulatory assets
(3)
|
|
3,940
|
|
|
Other deferred charges and other assets, including intangible assets
|
|
430
|
|
|
Total Assets
|
|
19,946
|
|
|
Total current liabilities
|
|
1,515
|
|
|
Long-term debt
|
|
6,707
|
|
|
Deferred income taxes
|
|
1,118
|
|
|
Regulatory liabilities
|
|
2,668
|
|
|
Other deferred credits and other liabilities
(4)
|
|
1,099
|
|
|
Total Liabilities
|
|
13,107
|
|
|
Total purchase price
(5)
|
|
$
6,839
|
|
(1)
|
Includes $389 million of cash, restricted cash and equivalents, of which $115 million is considered restricted.
|
(2)
|
Includes $105 million of certain property, plant and equipment associated with the NND Project for which Dominion Energy committed to forgo recovery in accordance with the SCANA Merger Approval Order. As a result, Dominion Energy’s Consolidated Statement of Income for the six months ended June 30, 2019 includes a charge of $105 million ($79 million
after-tax),
included in impairment of assets and other charges.
|
(3)
|
Includes $264 million of certain income
tax-related
regulatory assets associated with the NND Project for which Dominion Energy committed to forgo recovery in accordance with the SCANA Merger Approval Order. See Note 5 for additional information.
|
(4)
|
Includes a $379 million pension and other postretirement benefit liability.
|
(5)
|
Includes stock-based compensation awards with an estimated fair value of $21 million.
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2019
(1)
|
|
2018
(1)
|
2019
(1)
|
|
2018
(1)
|
||||||||||
(millions, except EPS)
|
|
|
|
|
|
|||||||||||
Operating Revenue
|
$
|
3,970
|
|
$ |
3,910
|
$
|
8,835
|
|
$ |
8,546
|
||||||
Net income attributable to Dominion Energy
|
|
392
|
|
456
|
|
962
|
|
1,131
|
||||||||
Earnings Per Common Share – Basic
|
$
|
0.49
|
|
$ |
0.61
|
$
|
1.21
|
|
$ |
1.51
|
||||||
Earnings Per Common Share – Diluted
|
$
|
0.47
|
|
$ |
0.61
|
$
|
1.19
|
|
$ |
1.51
|
(1)
|
Amounts include adjustments for
non-recurring
costs directly related to the SCANA Combination.
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
|
|||||||||||
Operating revenue
|
$
|
154
|
|
$ |
164
|
$
|
383
|
|
$ |
379
|
||||||
Depreciation and amortization
|
|
22
|
|
19
|
|
43
|
|
36
|
||||||||
Other
operating
expenses
|
|
128
|
|
99
|
|
277
|
|
235
|
||||||||
Other income
|
|
18
|
|
18
|
|
37
|
|
36
|
||||||||
Interest and related charges
|
|
8
|
|
9
|
|
18
|
|
17
|
||||||||
Income tax expense
|
|
3
|
|
11
|
|
17
|
|
26
|
||||||||
Net income from discontinued operations
|
$
|
11
|
|
$ |
44
|
$
|
65
|
|
$ |
101
|
||||||
|
At June 30,
2019 |
|
|
|
At December
31, 2018 |
|||||||
(millions)
|
|
|
|
|
|
|||||||
Current assets of discontinued operations
(1)
|
$
|
303
|
|
|
|
|
$ |
423
|
||||
Investments
|
|
2
|
|
|
|
|
2
|
|||||
Property, plant and equipment, net
|
|
3,790
|
|
|
|
|
3,669
|
|||||
Regulatory assets
|
|
647
|
|
|
|
|
711
|
|||||
Other deferred charges and other assets, including goodwill and intangible assets
|
|
1,418
|
|
|
|
|
1,275
|
|||||
Noncurrent assets of discontinued operations
|
|
5,857
|
|
|
|
|
5,657
|
|||||
Current liabilities of discontinued operations
|
|
1,014
|
|
|
|
|
1,262
|
|||||
Long-term debt
|
|
1,552
|
|
|
|
|
1,300
|
|||||
Deferred income taxes and investment tax credits
|
|
733
|
|
|
|
|
716
|
|||||
Regulatory liabilities
|
|
768
|
|
|
|
|
747
|
|||||
Other deferred credits and liabilities
|
|
112
|
|
|
|
|
108
|
|||||
Noncurrent liabilities of discontinued operations
|
|
3,165
|
|
|
|
|
2,871
|
|
Six Months Ended June 30,
|
|||||||||
|
2019
|
|
|
2018
|
||||||
(millions)
|
|
|
|
|||||||
Capital expenditures
|
$
|
168
|
|
|
$ |
157
|
||||
Significant noncash items
|
|
|
|
|
|
|||||
Charge related to a voluntary retirement program
|
|
|
32
|
|
|
|
|
|
—
|
|
Accrued capital expenditures
|
|
8
|
|
|
10
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
||||||||||||
Operating revenue
|
$
|
34
|
|
$ |
52
|
$
|
79
|
|
$ |
102
|
||||||
Depreciation and amortization
|
|
1
|
|
4
|
|
2
|
|
7
|
||||||||
Other
operating expenses
|
|
12
|
|
47
|
|
56
|
|
94
|
||||||||
Income tax expense
|
|
6
|
|
—
|
|
6
|
|
—
|
||||||||
Net income from discontinued operations
|
$
|
15
|
|
$ |
1
|
$
|
15
|
|
$ |
1
|
||||||
|
At June 30,
2019 |
|
At December
31, 2018 |
|||||
(millions)
|
|
|
|
|||||
Current assets of discontinued operations
(1)
|
$
|
23
|
|
$ |
21
|
|||
Noncurrent assets of discontinued operations
(2)
|
|
194
|
|
192
|
||||
Current liabilities of discontinued operations
|
|
16
|
|
11
|
||||
Noncurrent liabilities of discontinued operations
|
|
12
|
|
25
|
|
Six
Months Ended June 30,
|
|||||||
|
2019
|
|
2018
|
|||||
(millions)
|
|
|
||||||
Capital expenditures
|
$
|
8
|
|
$ |
3
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
||||||||||||
Dominion Energy
|
|
|
|
|
|
|
||||||||||
Regulated electric sales:
|
|
|
|
|
|
|
||||||||||
Residential
|
$
|
1,094
|
|
$ |
788
|
$
|
1,740
|
|
$ |
1,605
|
||||||
Commercial
|
|
889
|
|
636
|
|
1,385
|
|
1,160
|
||||||||
Industrial
|
|
217
|
|
121
|
|
247
|
|
228
|
||||||||
Government and other retail
|
|
214
|
|
210
|
|
414
|
|
423
|
||||||||
Wholesale
|
|
41
|
|
23
|
|
89
|
|
65
|
||||||||
Nonregulated electric sales
|
|
175
|
|
282
|
|
491
|
|
700
|
||||||||
Regulated gas sales:
|
|
|
|
|
|
|
|
|
||||||||
Residential
|
|
177
|
|
116
|
|
779
|
|
480
|
||||||||
Commercial
|
|
73
|
|
34
|
|
264
|
|
137
|
||||||||
Other
|
|
25
|
|
1
|
|
63
|
|
11
|
||||||||
Nonregulated gas sales
|
|
71
|
|
9
|
|
318
|
|
97
|
||||||||
Regulated gas transportation and storage:
|
|
|
|
|
|
|
|
|
||||||||
FERC-regulated
|
|
247
|
|
272
|
|
524
|
|
534
|
||||||||
State-regulated
|
|
166
|
|
144
|
|
379
|
|
334
|
||||||||
Nonregulated gas transportation and storage
|
|
174
|
|
124
|
|
348
|
|
124
|
||||||||
Other regulated revenues
(1)
|
|
82
|
|
44
|
|
126
|
|
94
|
||||||||
Other nonregulated revenues
(1)(2)
|
|
101
|
|
141
|
|
209
|
|
277
|
||||||||
Total operating revenue from contracts with customers
|
|
3,746
|
|
2,945
|
|
7,376
|
|
6,269
|
||||||||
Other revenues
(3)
|
|
224
|
|
143
|
|
452
|
|
285
|
||||||||
Total operating revenue
|
$
|
3,970
|
|
$ |
3,088
|
$
|
7,828
|
|
$ |
6,554
|
||||||
Virginia Power
|
|
|
|
|
|
|
|
|
||||||||
Regulated electric sales:
|
|
|
|
|
|
|
|
|
||||||||
Residential
|
$
|
808
|
|
$ |
788
|
$
|
1,731
|
|
$ |
1,605
|
||||||
Commercial
|
|
681
|
|
636
|
|
1,317
|
|
1,160
|
||||||||
Industrial
|
|
118
|
|
121
|
|
230
|
|
228
|
||||||||
Government and other retail
|
|
197
|
|
210
|
|
401
|
|
423
|
||||||||
Wholesale
|
|
29
|
|
23
|
|
66
|
|
65
|
||||||||
Other regulated revenues
|
|
62
|
|
33
|
|
88
|
|
65
|
||||||||
Other nonregulated revenues
(2)
|
|
19
|
|
18
|
|
33
|
|
31
|
||||||||
Total operating revenue from contracts with customers
|
|
1,914
|
|
1,829
|
|
3,866
|
|
3,577
|
||||||||
Other revenues
(2)(3)
|
|
24
|
|
—
|
|
37
|
|
—
|
||||||||
Total operating revenue
|
$
|
1,938
|
|
$ |
1,829
|
$
|
3,903
|
|
$ |
3,577
|
||||||
Dominion Energy Gas
|
|
|
|
|
|
|
|
|
||||||||
Regulated gas sales - wholesale
|
$
|
—
|
|
$ |
—
|
$
|
2
|
|
$ |
6
|
||||||
Nonregulated gas sales
(2)
|
|
1
|
|
1
|
|
3
|
|
3
|
||||||||
Regulated gas transportation and storage
|
|
306
|
|
303
|
|
646
|
|
616
|
||||||||
Nonregulated gas transportation and storage
|
|
173
|
|
124
|
|
348
|
|
124
|
||||||||
Management service revenue
(2)
|
|
45
|
|
73
|
|
88
|
|
132
|
||||||||
Other regulated revenues
(
1
)
|
|
3
|
|
6
|
|
6
|
|
14
|
||||||||
Other nonregulated revenues
(1)(2)
|
|
1
|
|
—
|
|
1
|
|
1
|
||||||||
Total operating revenue from contracts with customers
|
|
529
|
|
507
|
|
1,094
|
|
896
|
||||||||
Other revenues
|
|
1
|
|
1
|
|
2
|
|
2
|
||||||||
Total operating revenue
|
$
|
530
|
|
$ |
508
|
$
|
1,096
|
|
$ |
898
|
||||||
(1)
|
Amounts above include $42 million
and $
for the three months ended June 30, 2019, $33 million
2
and $
for the three months ended June 30, 2018, $93
3
and $
million for the six months ended June 30, 2019 and $63 million
3
and $
for the six months ended June 30, 2018 primarily consisting of NGL sales at Dominion Energy
6
million
and Dominion Energy Gas
, respectively, which are considered to be goods transferred at a point in time.
|
(2)
|
See Notes 10 and 20 for amounts attributable to related parties and affiliates.
|
(3)
|
Amounts above include alternative revenue of $21 million and $35 million at Dominion Energy and $18 million and $26 million at Virginia Power for the three and six months ended June 30, 2019, respectively.
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
|
|||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Dominion Energy
|
$ |
808
|
$ |
1,561
|
$ |
1,461
|
$ |
1,343
|
$ |
1,173
|
$ |
13,570
|
$ |
19,916
|
||||||||||||||
Virginia Power
|
11
|
3
|
1
|
—
|
—
|
—
|
15
|
|||||||||||||||||||||
Dominion Energy Gas
|
854
|
1,666
|
1,566
|
1,427
|
1,234
|
13,879
|
20,626
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions, except EPS)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to Dominion Energy - Basic
|
$
|
54
|
|
$ |
449
|
$
|
(626
|
)
|
$ |
952
|
||||||
Dilutive effect of Series A Preferred Stock
|
|
(13
|
)
|
—
|
|
—
|
|
—
|
||||||||
Net income (loss) attributable to Dominion Energy - Diluted
|
|
41
|
|
449
|
|
(626
|
)
|
952
|
||||||||
Average shares of common stock outstanding – Basic
|
|
802.5
|
|
652.8
|
|
797.8
|
|
651.6
|
||||||||
Net effect of dilutive securities
|
|
0.1
|
|
0.3
|
|
—
|
|
0.2
|
||||||||
Average shares of common stock outstanding – Diluted
|
|
802.6
|
|
653.1
|
|
797.8
|
|
651.8
|
||||||||
Earnings Per Common Share – Basic
|
$
|
0.07
|
|
$ |
0.69
|
$
|
(0.78
|
)
|
$ |
1.46
|
||||||
Earnings Per Common Share – Diluted
|
$
|
0.05
|
|
$ |
0.69
|
$
|
(0.78
|
)
|
$ |
1.46
|
|
Deferred
gains and
losses on
derivatives-
hedging
activities
|
|
Unrealized
gains and
losses on
investment
securities
|
|
Unrecognized
pension and
other
postretirement
benefit costs
|
|
Other
comprehensive
loss from
equity method
investees
|
|
Total
|
|
||||||||||
(millions)
|
|
|
|
|
|
|||||||||||||||
Three Months Ended June 30, 2019
|
|
|
|
|
|
|||||||||||||||
Beginning balance
|
$
|
(290
|
)
|
$
|
18
|
|
$
|
(1,457
|
)
|
$
|
(2
|
)
|
$
|
(1,731
|
)
|
|||||
Other comprehensive income before reclassifications: gains (losses)
|
|
(78
|
)
|
|
13
|
|
|
113
|
|
|
—
|
|
|
48
|
|
|||||
Amounts reclassified from AOCI: (gains) losses
(1)
|
|
(21
|
)
|
|
(1
|
)
|
|
22
|
|
|
—
|
|
|
—
|
|
|||||
Net current period other comprehensive income (loss)
|
|
(99
|
)
|
|
12
|
|
|
135
|
|
|
—
|
|
|
48
|
|
|||||
Ending balance
|
$
|
(389
|
)
|
$
|
30
|
|
$
|
(1,322
|
)
|
$
|
(2
|
)
|
$
|
(1,683
|
)
|
|||||
Three Months Ended June 30, 2018
|
|
|
|
|
|
|||||||||||||||
Beginning balance
|
$ |
(248
|
) | $ |
3
|
$ |
(1,303
|
) | $ |
(3
|
) | $ |
(1,551
|
) | ||||||
Other comprehensive income before reclassifications: gains (losses)
|
(33
|
) |
(5
|
) |
—
|
1
|
(37
|
) | ||||||||||||
Amounts reclassified from AOCI: (gains) losses
(1)
|
33
|
—
|
17
|
—
|
50
|
|||||||||||||||
Net current period other comprehensive income (loss)
|
—
|
(5
|
) |
17
|
1
|
13
|
||||||||||||||
Ending balance
|
$ |
(248
|
) | $ |
(2
|
) | $ |
(1,286
|
) | $ |
(2
|
) | $ |
(1,538
|
) | |||||
Six Months Ended June 30, 2019
|
|
|
|
|
|
|||||||||||||||
Beginning balance
|
$
|
(235
|
)
|
$
|
2
|
|
$
|
(1,465
|
)
|
$
|
(2
|
)
|
$
|
(1,700
|
)
|
|||||
Other comprehensive income before reclassifications: gains (losses)
|
|
(102
|
)
|
|
29
|
|
|
113
|
|
|
—
|
|
|
40
|
|
|||||
Amounts reclassified from AOCI: (gains) losses
(1)
|
|
(52
|
)
|
|
(1
|
)
|
|
30
|
|
|
—
|
|
|
(23
|
)
|
|||||
Net current period other comprehensive income (loss)
|
|
(154
|
)
|
|
28
|
|
|
143
|
|
|
—
|
|
|
17
|
|
|||||
Ending balance
|
$
|
(389
|
)
|
$
|
30
|
|
$
|
(1,322
|
)
|
$
|
(2
|
)
|
$
|
(1,683
|
)
|
|||||
Six Months Ended June 30, 2018
|
|
|
|
|
|
|||||||||||||||
Beginning balance
|
$ |
(302
|
) | $ |
747
|
$ |
(1,101
|
) | $ |
(3
|
) | $ |
(659
|
) | ||||||
Other comprehensive income before reclassifications: gains (losses)
|
78
|
(18
|
) |
—
|
1
|
61
|
||||||||||||||
Amounts reclassified from AOCI: (gains) losses
(1)
|
41
|
1
|
42
|
—
|
84
|
|||||||||||||||
Net current period other comprehensive income (loss)
|
119
|
(17
|
) |
42
|
1
|
145
|
||||||||||||||
Cumulative-effect of changes in accounting principle
|
(64
|
) |
(732
|
) |
(227
|
) |
—
|
(1,023
|
) | |||||||||||
Less other comprehensive income attributable to noncontrolling interest
|
1
|
—
|
—
|
—
|
1
|
|||||||||||||||
Ending balance
|
$ |
(248
|
) | $ |
(2
|
) | $ |
(1,286
|
) | $ |
(2
|
) | $ |
(1,538
|
) | |||||
(1)
|
See table below for details about these reclassifications.
|
Details about AOCI components
|
Amounts
reclassified
from AOCI
|
|
Affected line item in the
Consolidated Statements of
Income
|
|||
(millions)
|
|
|
||||
Three Months Ended June 30, 2019
|
|
|
||||
Deferred (gains) and losses on derivatives-hedging activities:
|
|
|
||||
Commodity contracts
|
$
|
(38
|
)
|
Operating revenue
|
||
Interest rate contracts
|
|
13
|
|
Interest and related charges
|
||
Foreign currency contracts
|
|
(4
|
)
|
Other income
|
||
Total
|
|
(29
|
)
|
|
||
Tax
|
|
8
|
|
Income tax expense
|
||
Total, net of tax
|
$
|
(21
|
)
|
|
||
Unrealized (gains) and losses on investment securities:
|
|
|
|
|
||
Realized (gain) loss on sale of securities
|
$
|
(1
|
)
|
Other income
|
||
Total
|
|
(1
|
)
|
|
||
Tax
|
|
—
|
|
Income tax expense
|
||
Total, net of tax
|
$
|
(1
|
)
|
|
||
Unrecognized pension and other postretirement benefit costs:
|
|
|
|
|
||
Amortization of prior-service costs (credits)
|
$
|
(8
|
)
|
Other income
|
||
Amortization of actuarial losses
|
|
27
|
|
Other income
|
||
Total
|
|
19
|
|
|
||
Tax
|
|
3
|
|
Income tax expense
|
||
Total, net of tax
|
$
|
22
|
|
|
||
Three Months Ended June 30, 2018
|
|
|
||||
Deferred (gains) and losses on derivatives-hedging activities:
|
|
|
||||
Commodity contracts
|
$ |
16
|
Operating revenue
|
|||
Interest rate contracts
|
12
|
Interest and related charges
|
||||
Foreign currency contracts
|
16
|
Other income
|
||||
Total
|
44
|
|
||||
Tax
|
(11
|
) |
Income tax expense
|
|||
Total, net of tax
|
$ |
33
|
|
|||
Unrealized (gains) and losses on investment securities:
|
|
|
||||
Realized (gain) loss on sale of securities
|
$ |
1
|
Other income
|
|||
Total
|
1
|
|
||||
Tax
|
(1
|
) |
Income tax expense
|
|||
Total, net of tax
|
$ |
—
|
|
|||
Unrecognized pension and other postretirement benefit costs:
|
|
|
||||
Amortization of prior-service costs (credits)
|
$ |
(5
|
) |
Other income
|
||
Amortization of actuarial losses
|
29
|
Other income
|
||||
Total
|
24
|
|
||||
Tax
|
(7
|
) |
Income tax expense
|
|||
Total, net of tax
|
$ |
17
|
|
|||
Details about AOCI components
|
Amounts
reclassified
from AOCI |
|
Affected line item in the
Consolidated Statements of
Income
|
|||
(millions)
|
|
|
||||
Six Months Ended June 30, 2019
|
|
|
||||
Deferred (gains) and losses on derivatives-hedging activities:
|
|
|
||||
Commodity contracts
|
$
|
(92
|
)
|
Operating revenue
|
||
|
|
(3
|
)
|
Purchased gas
|
||
Interest rate contracts
|
|
23
|
|
Interest and related charges
|
||
Foreign currency contracts
|
|
2
|
|
Other income
|
||
Total
|
|
(70
|
)
|
|
||
Tax
|
|
18
|
|
Income tax expense
|
||
Total, net of tax
|
$
|
(52
|
)
|
|
||
Unrealized (gains) and losses on investment securities:
|
|
|
|
|
||
Realized (gain) loss on sale of securities
|
$
|
(1
|
)
|
Other income
|
||
Total
|
|
(1
|
)
|
|
||
Tax
|
|
—
|
|
Income tax expense
|
||
Total, net of tax
|
$
|
(1
|
)
|
|
||
Unrecognized pension and other postretirement benefit costs:
|
|
|
|
|
||
Amortization of prior-service costs (credits)
|
$
|
(13
|
)
|
Other income
|
||
Amortization of actuarial losses
|
|
54
|
|
Other income
|
||
Total
|
|
41
|
|
|
||
Tax
|
|
(11
|
)
|
Income tax expense
|
||
Total, net of tax
|
$
|
30
|
|
|
||
Six Months Ended June 30, 2018
|
|
|
||||
Deferred (gains) and losses on derivatives-hedging activities:
|
|
|
||||
Commodity contracts
|
$ |
28
|
Operating revenue
|
|||
|
2
|
Purchased gas
|
||||
|
(7
|
) |
Electric fuel and other energy-related purchases
|
|||
Interest rate contracts
|
24
|
Interest and related charges
|
||||
Foreign currency contracts
|
8
|
Other income
|
||||
Total
|
55
|
|
||||
Tax
|
(14
|
) |
Income tax expense
|
|||
Total, net of tax
|
$ |
41
|
|
|||
Unrealized (gains) and losses on investment securities:
|
|
|
||||
Realized (gain) loss on sale of securities
|
$ |
2
|
Other income
|
|||
Total
|
2
|
|
||||
Tax
|
(1
|
) |
Income tax expense
|
|||
Total, net of tax
|
$ |
1
|
|
|||
Unrecognized pension and other postretirement benefit costs:
|
|
|
||||
Amortization of prior-service costs (credits)
|
$ |
(11
|
) |
Other income
|
||
Amortization of actuarial losses
|
61
|
Other income
|
||||
Total
|
50
|
|
||||
Tax
|
(8
|
) |
Income tax expense
|
|||
Total, net of tax
|
$ |
42
|
|
|||
|
Deferred gains
and losses on
derivatives-
hedging
activities
|
|
Unrealized gains
and losses on
investment
securities
|
|
Total
|
|
||||||
(millions)
|
|
|
|
|||||||||
Three Months Ended June 30, 2019
|
|
|
|
|||||||||
Beginning balance
|
$
|
(20
|
)
|
$
|
3
|
|
$
|
(17
|
)
|
|||
Other comprehensive income before reclassifications: gains (losses)
|
|
(11
|
)
|
|
2
|
|
|
(9
|
)
|
|||
Amounts reclassified from AOCI: (gains) losses
(1)
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||
Net current period other comprehensive income (loss)
|
|
(10
|
)
|
|
1
|
|
|
(9
|
)
|
|||
Ending balance
|
$
|
(30
|
)
|
$
|
4
|
|
$
|
(26
|
)
|
|||
Three Months Ended June 30, 2018
|
|
|
|
|||||||||
Beginning balance
|
$ |
(10
|
) | $ |
1
|
$ |
(9
|
) | ||||
Other comprehensive income before reclassifications: gains (losses)
|
2
|
(2
|
) |
—
|
||||||||
Amounts reclassified from AOCI: (gains) losses
(1)
|
—
|
—
|
—
|
|||||||||
Net current period other comprehensive income (loss)
|
2
|
(2
|
) |
—
|
||||||||
Ending balance
|
$ |
(8
|
) | $ |
(1
|
) | $ |
(9
|
) | |||
Six Months Ended June 30, 2019
|
|
|
|
|||||||||
Beginning balance
|
$
|
(13
|
)
|
$
|
1
|
|
$
|
(12
|
)
|
|||
Other comprehensive income before reclassifications: gains (losses)
|
|
(18
|
)
|
|
4
|
|
|
(14
|
)
|
|||
Amounts reclassified from AOCI: (gains) losses
(1)
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||
Net current period other comprehensive income (loss)
|
|
(17
|
)
|
|
3
|
|
|
(14
|
)
|
|||
Ending balance
|
$
|
(30
|
)
|
$
|
4
|
|
$
|
(26
|
)
|
|||
Six Months Ended June 30, 2018
|
|
|
|
|||||||||
Beginning balance
|
$ |
(12
|
) | $ |
74
|
$ |
62
|
|||||
Other comprehensive income before reclassifications: gains (losses)
|
7
|
(2
|
) |
5
|
||||||||
Amounts reclassified from AOCI: (gains) losses
(1)
|
—
|
—
|
—
|
|||||||||
Net current period other comprehensive income (loss)
|
7
|
(2
|
) |
5
|
||||||||
Cumulative-effect of changes in accounting principle
|
(3
|
) |
(73
|
) |
(76
|
) | ||||||
Ending balance
|
$ |
(8
|
) | $ |
(1
|
) | $ |
(9
|
) | |||
(1)
|
Virginia Power’s reclassifications out of AOCI were immaterial for both the three and six months ended June 30, 2019 and 2018.
|
|
Deferred gains
and losses on
derivatives-
hedging
activities
|
|
Unrecognized
pension costs
|
|
Total
|
|
||||||
(millions)
|
|
|
|
|
|
|
||||||
Three Months Ended June 30, 2019
|
|
|
|
|||||||||
Beginning balance
|
$
|
(48
|
)
|
$
|
(143
|
)
|
$
|
(191
|
)
|
|||
Other comprehensive income before reclassifications: gains (losses)
|
|
(24
|
)
|
|
29
|
|
|
5
|
|
|||
Amounts reclassified from AOCI: (gains) losses
(1)
|
|
(2
|
)
|
|
2
|
|
|
—
|
|
|||
Net current period other comprehensive income (loss)
|
|
(26
|
)
|
|
31
|
|
|
5
|
|
|||
Ending balance
|
$
|
(74
|
)
|
$
|
(112
|
)
|
$
|
(186
|
)
|
|||
Three Months Ended June 30, 2018
|
|
|
|
|||||||||
Beginning balance
|
$ |
(18
|
) | $ |
(95
|
) | $ |
(113
|
) | |||
Other comprehensive income before reclassifications: gains (losses)
|
(19
|
) |
—
|
(19
|
) | |||||||
Amounts reclassified from AOCI: (gains) losses
(1)
|
13
|
1
|
14
|
|||||||||
Net current period other comprehensive income (loss)
|
(6
|
) |
1
|
(5
|
) | |||||||
Ending balance
|
$ |
(24
|
) | $ |
(94
|
) | $ |
(118
|
) | |||
Six Months Ended June 30, 2019
|
|
|
|
|||||||||
Beginning balance
|
$
|
(25
|
)
|
$
|
(144
|
)
|
$
|
(169
|
)
|
|||
Other comprehensive income before reclassifications: gains (losses)
|
|
(51
|
)
|
|
29
|
|
|
(22
|
)
|
|||
Amounts reclassified from AOCI: (gains) losses
(1)
|
|
1
|
|
|
3
|
|
|
4
|
|
|||
Net current period other comprehensive income (loss)
|
|
(50
|
)
|
|
32
|
|
|
(18
|
)
|
|||
Less other comprehensive income attributable to noncontrolling interest
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Ending balance
|
$
|
(74
|
)
|
$
|
(112
|
)
|
$
|
(186
|
)
|
|||
Six Months Ended June 30, 2018
|
|
|
|
|||||||||
Beginning balance
|
$ |
(23
|
) | $ |
(75
|
) | $ |
(98
|
) | |||
Other comprehensive income before reclassifications: gains (losses)
|
(6
|
) |
—
|
(6
|
) | |||||||
Amounts reclassified from AOCI: (gains) losses
(1)
|
11
|
2
|
13
|
|||||||||
Net current period other comprehensive income (loss)
|
5
|
2
|
7
|
|||||||||
Cumulative-effect of changes in accounting principle
|
(5
|
) |
(21
|
) |
(26
|
) | ||||||
Less other comprehensive income attributable to noncontrolling interest
|
1
|
|
1
|
|||||||||
Ending balance
|
$ |
(24
|
) | $ |
(94
|
) | $ |
(118
|
) | |||
(1)
|
See table below for details about these reclassifications.
|
|
Fair Value
(millions)
|
|
Valuation Techniques
|
Unobservable Input
|
|
Range
|
Weighted
Average
(1)
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Physical and financial forwards and futures:
|
|
|
|
|
|
|
|
|||||||||
Natural gas
(2)
|
$
|
76
|
|
Discounted cash flow
|
Market price (per Dth)
(3)
|
(2) - 6
|
(1
|
) | ||||||||
FTRs
|
|
7
|
|
Discounted cash flow
|
Market price (per MWh)
(3)
|
(1) - 4
|
1
|
|||||||||
Physical options:
|
|
|
|
|
|
|
|
|||||||||
Natural gas
|
|
1
|
|
Option model
|
Market price (per Dth)
(3)
|
2 - 12
|
4
|
|||||||||
|
|
|
|
|
Price volatility
(4)
|
2% - 34%
|
19
|
% | ||||||||
Total assets
|
$
|
84
|
|
|
|
|
|
|||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Financial forwards:
|
|
|
|
|
|
|
|
|||||||||
FTRs
|
$
|
3
|
|
Discounted cash flow
|
Market price (per MWh)
(3)
|
(4) - 4
|
—
|
|||||||||
Physical options:
|
|
|
|
|
|
|
|
|||||||||
Natural gas
|
|
6
|
|
Option model
|
Market price (per Dth)
(3)
|
1 - 8
|
3
|
|||||||||
|
|
|
|
|
Price volatility
(4)
|
2% - 71%
|
29
|
% | ||||||||
Total liabilities
|
$
|
9
|
|
|
|
|
|
|||||||||
(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)
|
|
|
|
|
|
|
|
|
||||||||
At June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives:
|
|
|
|
|
||||||||||||
Commodity
|
$
|
—
|
|
$
|
104
|
|
$
|
84
|
|
$
|
188
|
|
||||
Interest rate
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||
Foreign currency
|
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
||||
Investments
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S.
|
|
3,826
|
|
|
—
|
|
|
—
|
|
|
3,826
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt instruments
|
|
—
|
|
|
500
|
|
|
—
|
|
|
500
|
|
||||
Government securities
|
|
488
|
|
|
668
|
|
|
—
|
|
|
1,156
|
|
||||
Cash equivalents and other
|
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
||||
Total assets
|
$
|
4,333
|
|
$
|
1,293
|
|
$
|
84
|
|
$
|
5,710
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commodity
|
$
|
6
|
|
$
|
54
|
|
$
|
9
|
|
$
|
69
|
|
||||
Interest rate
|
|
—
|
|
|
557
|
|
|
—
|
|
|
557
|
|
||||
Total liabilities
|
$
|
6
|
|
$
|
611
|
|
$
|
9
|
|
$
|
626
|
|
||||
At 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 securities:
|
|
|
|
|
||||||||||||
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
|
||||||||
(1)
|
Includes investments held in the nuclear decommissioning and rabbi trusts. Excludes $210 million and $220 million of assets at June 30, 2019 and December 31, 2018, 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.
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
53
|
|
$ |
120
|
$
|
64
|
|
$ |
150
|
||||||
Total realized and unrealized gains (losses):
|
|
|
|
|
|
|
|
|
||||||||
Included in earnings:
|
|
|
|
|
|
|
|
|
||||||||
Operating revenue
|
|
3
|
|
—
|
|
2
|
|
(1
|
) | |||||||
Purchased gas
|
|
1
|
|
—
|
|
1
|
|
—
|
||||||||
Electric fuel and other energy-related purchases
|
|
(3
|
)
|
(2
|
) |
|
(7
|
)
|
(19
|
) | ||||||
Included in other comprehensive income
|
|
—
|
|
—
|
|
—
|
|
1
|
||||||||
Included in regulatory assets/liabilities
|
|
18
|
|
11
|
|
25
|
|
(10
|
) | |||||||
Settlements
|
|
3
|
|
(10
|
) |
|
2
|
|
(3
|
) | ||||||
Purchases
|
|
—
|
|
—
|
|
(10
|
)
|
—
|
||||||||
Transfers out of Level 3
|
|
—
|
|
—
|
|
(2
|
)
|
1
|
||||||||
Ending balance
|
$
|
75
|
|
$ |
119
|
$
|
75
|
|
$ |
119
|
||||||
The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets/liabilities still held at the reporting date:
|
|
|
|
|
|
|
|
|
||||||||
Operating revenue
|
$
|
2
|
|
$ |
—
|
$
|
2
|
|
$ |
—
|
||||||
Purchased gas
|
|
1
|
|
—
|
|
1
|
|
—
|
||||||||
Total
|
$
|
3
|
|
$ |
—
|
$
|
3
|
|
$ |
—
|
||||||
|
Fair Value
(millions)
|
|
Valuation Techniques
|
Unobservable Input
|
|
Range
|
Weighted
Average
(1)
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Physical and financial forwards and futures:
|
|
|
|
|
|
|
|
|||||||||
Natural gas
(2)
|
$
|
74
|
|
Discounted cash flow
|
Market price (per Dth)
(3)
|
(2)
-
3
|
(1
|
) | ||||||||
FTRs
|
|
7
|
|
Discounted cash flow
|
Market price (per MWh)
(3)
|
(1) - 4
|
1
|
|||||||||
Total assets
|
$
|
81
|
|
|
|
|
|
|||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Financial forwards:
|
|
|
|
|
|
|
|
|||||||||
FTRs
|
$
|
3
|
|
Discounted cash flow
|
Market price (per MWh)
(3)
|
(4) - 4
|
—
|
|||||||||
Physical options:
|
|
|
|
|
|
|
|
|||||||||
Natural gas
|
|
1
|
|
Option model
|
Market price (per Dth)
(3)
|
1 - 7
|
3
|
|||||||||
|
|
|
|
|
Price volatility
(4)
|
20% - 71%
|
38
|
% | ||||||||
Total liabilities
|
$
|
4
|
|
|
|
|
|
|||||||||
(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)
|
|
|
|
|
|
|
|
|
||||||||
At June 30, 2019
|
|
|
|
|
||||||||||||
Assets
|
|
|
|
|
||||||||||||
Derivatives:
|
|
|
|
|
||||||||||||
Commodity
|
$
|
—
|
|
$
|
2
|
|
$
|
81
|
|
$
|
83
|
|
||||
Investments
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S.
|
|
1,753
|
|
|
—
|
|
|
—
|
|
|
1,753
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt instruments
|
|
—
|
|
|
257
|
|
|
—
|
|
|
257
|
|
||||
Government securities
|
|
205
|
|
|
313
|
|
|
—
|
|
|
518
|
|
||||
Total assets
|
$
|
1,958
|
|
$
|
572
|
|
$
|
81
|
|
$
|
2,611
|
|
||||
Liabilities
|
|
|
|
|
||||||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commodity
|
$
|
—
|
|
$
|
22
|
|
$
|
4
|
|
$
|
26
|
|
||||
Interest rate
|
|
—
|
|
|
332
|
|
|
—
|
|
|
332
|
|
||||
Total liabilities
|
$
|
—
|
|
$
|
354
|
|
$
|
4
|
|
$
|
358
|
|
||||
At 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 securities:
|
|
|
|
|
||||||||||||
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
|
||||||||
(1)
|
Includes investments held in the nuclear decommissioning trusts. Excludes $153 million and $160 million of assets at June 30, 2019 and December 31, 2018, 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.
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
||||||||||||
Beginning balance
|
$
|
59
|
|
$ |
117
|
$
|
60
|
|
$ |
147
|
||||||
Total realized and unrealized gains (losses):
|
|
|
|
|
|
|
|
|
||||||||
Included in earnings:
|
|
|
|
|
|
|
|
|
||||||||
Electric fuel and other energy-related purchases
|
|
(3
|
)
|
(2
|
) |
|
(7
|
)
|
(19
|
) | ||||||
Included in regulatory assets/liabilities
|
|
18
|
|
8
|
|
26
|
|
(11
|
) | |||||||
Settlements
|
|
3
|
|
(8
|
) |
|
(2
|
)
|
(2
|
) | ||||||
Ending balance
|
$
|
77
|
|
$ |
115
|
$
|
77
|
|
$ |
115
|
||||||
|
Six Months Ended
|
|||
|
June 30,
|
|||
|
2018
|
|||
(millions)
|
|
|||
Beginning balance
|
$ |
(2
|
) | |
Total realized and unrealized gains:
|
|
|||
Included in other comprehensive income
|
1
|
|||
Transfers out of Level 3
|
1
|
|||
Ending balance
|
$ |
—
|
||
|
June 30, 2019
|
December 31, 2018
|
||||||||||||||
|
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)
|
$
|
34,217
|
|
$
|
37,631
|
|
$ |
29,952
|
$ |
31,045
|
||||||
Credit facility borrowings
|
|
—
|
|
|
—
|
|
73
|
73
|
||||||||
Junior subordinated notes
(3)
|
|
4,795
|
|
|
4,898
|
|
3,430
|
3,358
|
||||||||
Remarketable subordinated notes
(3)
|
|
—
|
|
|
—
|
|
1,386
|
1,340
|
||||||||
Virginia Power
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt, including securities due within one year
(3)
|
$
|
11,293
|
|
$
|
12,840
|
|
$ |
11,671
|
$ |
12,400
|
||||||
Dominion Energy Gas
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt, including securities due within one year
(4)
|
$
|
7,481
|
|
$
|
7,693
|
|
$ |
7,770
|
$ |
7,803
|
||||||
Affiliated long-term debt
|
|
|
395
|
|
|
|
395
|
|
|
|
—
|
|
|
|
—
|
|
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 issues 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 June 30, 2019 and December 31, 2018, includes the valuation of certain fair value hedges associated with fixed rate debt of $2 million and $(20) 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.
|
|
|
|
June 30, 2019
|
|
|
|
|
December 31, 2018
|
|
|
||||||||||||||||||||||
|
|
|
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
|
$
|
103
|
|
$
|
5
|
|
$
|
—
|
|
$
|
98
|
|
$ |
175
|
$ |
12
|
$ |
—
|
$ |
163
|
||||||||||||
Exchange
|
|
82
|
|
|
24
|
|
|
—
|
|
|
58
|
|
68
|
68
|
—
|
—
|
||||||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Over-the-counter
|
|
7
|
|
|
3
|
|
|
—
|
|
|
4
|
|
18
|
1
|
—
|
17
|
||||||||||||||||
Foreign currency contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Over-the-counter
|
|
14
|
|
|
13
|
|
|
—
|
|
|
1
|
|
26
|
2
|
—
|
24
|
||||||||||||||||
Total derivatives, subject to a master netting or similar arrangement
|
$
|
206
|
|
$
|
45
|
|
$
|
—
|
|
$
|
161
|
|
$ |
287
|
$ |
83
|
$ |
—
|
$ |
204
|
||||||||||||
(1)
|
Excludes $
3
7
|
|
|
|
June 30, 2019
|
|
|
|
|
December 31, 2018
|
|
|
||||||||||||||||||||||
|
|
|
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
|
$
|
42
|
|
$
|
5
|
|
$
|
—
|
|
$
|
37
|
|
$ |
19
|
$ |
12
|
$ |
—
|
$ |
7
|
||||||||||||
Exchange
|
|
24
|
|
|
24
|
|
|
—
|
|
|
—
|
|
115
|
68
|
47
|
—
|
||||||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Over-the-counter
|
|
557
|
|
|
16
|
|
|
35
|
|
|
506
|
|
142
|
1
|
—
|
141
|
||||||||||||||||
Foreign currency contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Over-the-counter
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
2
|
2
|
—
|
—
|
||||||||||||||||
Total derivatives, subject to a master netting or similar arrangement
|
$
|
623
|
|
$
|
45
|
|
$
|
35
|
|
$
|
543
|
|
$ |
278
|
$ |
83
|
$ |
47
|
$ |
148
|
||||||||||||
(1)
|
Excludes $
3
million and $
1
million of derivative liabilities at June 30, 2019 and December 31, 2018, respectively, which are not subject to master netting or similar arrangements.
|
|
Current
|
|
Noncurrent
|
|
||||
Natural Gas (bcf):
|
|
|
|
|
||||
Fixed price
(1)
|
|
111
|
|
|
67
|
|
||
Basis
|
|
248
|
|
|
525
|
|
||
Electricity (MWh):
|
|
|
|
|
|
|
||
Fixed price
|
|
5,881,750
|
|
|
771,800
|
|
||
FTRs
|
|
104,772,623
|
|
|
—
|
|
||
NGLs (Gal)
|
|
18,648,000
|
|
|
—
|
|
||
Interest rate
(2)
|
$
|
1,150,000,000
|
|
$
|
5,394,066,073
|
|
||
Foreign currency
(2)(3)
|
$
|
—
|
|
$
|
280,000,000
|
|
(1)
|
Includes options.
|
(2)
|
Maturity is determined based on final settlement period.
|
(3)
|
Euro equivalent volumes are
€
250,000,000
.
|
|
AOCI
After-Tax
|
|
Amounts Expected to be
Reclassified to Earnings
During the Next 12 Months
After-Tax
|
|
Maximum Term
|
|
||||||
(millions)
|
|
|
|
|||||||||
Commodities:
|
|
|
|
|||||||||
Gas
|
$
|
(6
|
)
|
$
|
(6
|
)
|
|
40 months
|
|
|||
Electricity
|
|
38
|
|
|
32
|
|
|
18 months
|
|
|||
Other
|
|
1
|
|
|
1
|
|
|
9 months
|
|
|||
Interest rate
|
|
(429
|
)
|
|
(47
|
)
|
|
390 months
|
|
|||
Foreign currency
|
|
7
|
|
|
—
|
|
|
84 months
|
|
|||
Total
|
$
|
(389
|
)
|
$
|
(20
|
)
|
|
|
|
|||
|
Carrying Amount of the Hedged Asset
(Liability)
(1)
|
Cumulative Amount of Fair Value Hedging
Adjustments Included in the Carrying Amount
of the Hedged Assets (Liabilities)
(2)
|
||||||||||||||||||
|
June 30, 2019
|
|
December 31, 2018
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
$
|
(1,652
|
)
|
$ |
(1,631
|
) |
|
$
|
(2
|
)
|
$ |
20
|
(1)
|
Includes $(
895
) million and $(
892
) million related to discontinued hedging relationships at June 30, 2019 and December 31, 2018, respectively.
|
(2)
|
Includes $
5
million and $
8
million of hedging adjustments on discontinued hedging relationships at June 30, 2019 and December 31, 2018, respectively.
|
|
Fair Value –
Derivatives under
Hedge
Accounting
|
|
Fair Value –
Derivatives not under
Hedge
Accounting
|
|
Total Fair Value
|
|
||||||
(millions)
|
|
|
|
|||||||||
June 30, 2019
|
|
|
|
|||||||||
ASSETS
|
|
|
|
|||||||||
Current Assets
|
|
|
|
|||||||||
Commodity
|
$
|
43
|
|
$
|
70
|
|
$
|
113
|
|
|||
Total current derivative assets
(1)
|
|
43
|
|
|
70
|
|
|
113
|
|
|||
Noncurrent Assets
|
|
|
|
|||||||||
Commodity
|
|
10
|
|
|
65
|
|
|
75
|
|
|||
Interest rate
|
|
7
|
|
|
—
|
|
|
7
|
|
|||
Foreign currency
|
|
14
|
|
|
—
|
|
|
14
|
|
|||
Total noncurrent derivative assets
(2)
|
|
31
|
|
|
65
|
|
|
96
|
|
|||
Total derivative assets
|
$
|
74
|
|
$
|
135
|
|
$
|
209
|
|
|||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
$
|
10
|
|
$
|
48
|
|
$
|
58
|
|
|||
Interest rate
|
|
142
|
|
|
1
|
|
|
143
|
|
|||
Total current derivative liabilities
(3)
|
|
152
|
|
|
49
|
|
|
201
|
|
|||
Noncurrent Liabilities
|
|
|
|
|
|
|
|
|
|
|||
Commodity
|
|
2
|
|
|
9
|
|
|
11
|
|
|||
Interest rate
|
|
397
|
|
|
17
|
|
|
414
|
|
|||
Total noncurrent derivative liabilities
(4)
|
|
399
|
|
|
26
|
|
|
425
|
|
|||
Total derivative liabilities
|
$
|
551
|
|
$
|
75
|
|
$
|
626
|
|
|||
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
|
||||||
(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
(1)
|
|
Amount of Gain
(Loss) Reclassified
From AOCI to
Income
|
|
Increase
(Decrease) in
Derivatives
Subject to
Regulatory
Treatment
(2)
|
|
||||||
(millions)
|
|
|
|
|||||||||
Three Months Ended June 30, 2019
|
|
|
|
|||||||||
Derivative type and location of gains (losses):
|
|
|
|
|||||||||
Commodity:
|
|
|
|
|||||||||
Operating revenue
|
|
|
|
$
|
38
|
|
|
|
|
|||
Total commodity
|
$
|
35
|
|
$
|
38
|
|
$
|
—
|
|
|||
Interest rate
(3)
|
|
(142
|
)
|
|
(13
|
)
|
|
(131
|
)
|
|||
Foreign currency
(4)
|
|
2
|
|
|
4
|
|
|
—
|
|
|||
Total
|
$
|
(105
|
)
|
$
|
29
|
|
$
|
(131
|
)
|
|||
Three Months Ended June 30, 2018
|
|
|
|
|||||||||
Derivative type and location of gains (losses):
|
|
|
|
|||||||||
Commodity:
|
|
|
|
|||||||||
Operating revenue
|
|
$ |
(16
|
) |
|
|||||||
Total commodity
|
$ |
(39
|
) | $ |
(16
|
) | $ |
—
|
||||
Interest rate
(3)
|
9
|
(12
|
) |
25
|
||||||||
Foreign currency
(4)
|
(14
|
) |
(16
|
) |
—
|
|||||||
Total
|
$ |
(44
|
) | $ |
(44
|
) | $ |
25
|
||||
Six Months Ended June 30, 2019
|
|
|
|
|||||||||
Derivative type and location of gains (losses):
|
|
|
|
|||||||||
Commodity:
|
|
|
|
|||||||||
Operating revenue
|
|
|
|
$
|
92
|
|
|
|
|
|||
Purchased gas
|
|
|
|
|
3
|
|
|
|
|
|||
Total commodity
|
$
|
101
|
|
$
|
95
|
|
$
|
—
|
|
|||
Interest rate
(3)
|
|
(226
|
)
|
|
(23
|
)
|
|
(215
|
)
|
|||
Foreign currency
(4)
|
|
(9
|
)
|
|
(2
|
)
|
|
—
|
|
|||
Total
|
$
|
(134
|
)
|
$
|
70
|
|
$
|
(215
|
)
|
|||
Six Months Ended June 30, 2018
|
|
|
|
|||||||||
Derivative type and location of gains (losses):
|
|
|
|
|||||||||
Commodity:
|
|
|
|
|
|
|
|
|
|
|||
Operating revenue
|
|
$ |
(28
|
) |
|
|||||||
Purchased gas
|
|
(2
|
) |
|
||||||||
Electric fuel and other energy-related purchases
|
|
7
|
|
|||||||||
Total commodity
|
$ |
58
|
$ |
(23
|
) | $ |
—
|
|||||
Interest rate
(3)
|
47
|
(24
|
) |
93
|
||||||||
Foreign currency
(4)
|
(1
|
) |
(8
|
) |
—
|
|||||||
Total
|
$ |
104
|
$ |
(55
|
) | $ |
93
|
|||||
(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)
|
|||||||||||||||
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
||||||||||||
Derivative type and location of gains (losses):
|
|
|
|
|
||||||||||||
Commodity:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating revenue
|
$
|
27
|
|
$ |
(9
|
) |
$
|
30
|
|
$ |
(3
|
) | ||||
Purchased gas
|
|
(11
|
)
|
4
|
|
(8
|
)
|
4
|
||||||||
Electric fuel and other energy-related purchases
|
|
(3
|
)
|
(3
|
) |
|
(12
|
)
|
(16
|
) | ||||||
Total
|
$
|
13
|
|
$ |
(8
|
) |
$
|
10
|
|
$ |
(15
|
) | ||||
(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.
|
|
|
|
June 30, 2019
|
|
|
|
|
December 31, 2018
|
|
|
||||||||||||||||||||||
|
|
|
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
|
$
|
81
|
|
$
|
3
|
|
$
|
—
|
|
$
|
78
|
|
$ |
64
|
$ |
6
|
$ |
—
|
$ |
58
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Over-the-counter
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
3
|
—
|
—
|
3
|
||||||||||||||||
Total derivatives, subject to a master netting or similar arrangement
|
$
|
81
|
|
$
|
3
|
|
$
|
—
|
|
$
|
78
|
|
$ |
67
|
$ |
6
|
$ |
—
|
$ |
61
|
||||||||||||
(1)
|
Excludes $
2
million and $
26
million of derivative assets at June 30, 2019 and December 31, 2018, respectively, which are not subject to master netting or similar arrangements.
|
|
|
|
June 30, 2019
|
|
|
|
December 31, 2018
|
|
||||||||||||||||||||||||
|
|
|
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
|
$
|
3
|
|
$
|
3
|
|
$
|
—
|
|
$
|
—
|
|
$ |
6
|
$ |
6
|
$ |
—
|
$ |
—
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Over-the-counter
|
|
332
|
|
|
—
|
|
|
—
|
|
|
332
|
|
88
|
—
|
—
|
88
|
||||||||||||||||
Total derivatives, subject to a master netting or similar arrangement
|
$
|
335
|
|
$
|
3
|
|
$
|
—
|
|
$
|
332
|
|
$ |
94
|
$ |
6
|
$ |
—
|
$ |
88
|
||||||||||||
(1)
|
Excludes $
23
million and $
9
million of derivative liabilities at June 30, 2019 and December 31, 2018, respectively, which are not subject to master netting or similar arrangements.
|
|
Current
|
|
Noncurrent
|
|
||||
Natural Gas (bcf):
|
|
|
||||||
Fixed price
(1)
|
|
39
|
|
|
22
|
|
||
Basis
|
|
141
|
|
|
455
|
|
||
Electricity (MWh):
|
|
|
|
|
|
|
||
FTRs
|
|
104,772,623
|
|
|
—
|
|
||
Interest rate
(2)
|
$
|
850,000,000
|
|
$
|
1,200,000,000
|
|
(1)
|
Includes options.
|
(2)
|
Maturity is determined based on final settlement period.
|
|
AOCI
After-Tax
|
|
Amounts Expected to be
Reclassified to Earnings
During the Next 12
Months
After-Tax
|
|
Maximum Term
|
|
||||||
(millions)
|
|
|
|
|||||||||
Interest rate
|
$
|
(30
|
)
|
$
|
(1
|
)
|
|
390
months
|
|
|||
Total
|
$
|
(30
|
)
|
$
|
(1
|
)
|
|
|
|
|||
(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
(1)
|
|
Amount of Gain
(Loss) Reclassified
From AOCI to
Income
|
|
Increase (Decrease)
in Derivatives Subject to Regulatory Treatment
(2)
|
|
||||||
(millions)
|
|
|
|
|||||||||
Three Months Ended June 30, 2019
|
|
|
|
|||||||||
Derivative type and location of gains (losses):
|
|
|
|
|||||||||
Interest rate
(3)
|
$
|
(15
|
)
|
$
|
(1
|
)
|
$
|
(133
|
)
|
|||
Total
|
$
|
(15
|
)
|
$
|
(1
|
)
|
$
|
(133
|
)
|
|||
Three Months Ended June 30, 2018
|
|
|
|
|||||||||
Derivative type and location of gains (losses):
|
|
|
|
|||||||||
Interest rate
(3)
|
$ |
2
|
$ |
—
|
$ |
25
|
||||||
Total
|
$ |
2
|
$ |
—
|
$ |
25
|
||||||
Six Months Ended June 30, 2019
|
|
|
|
|||||||||
Derivative type and location of gains (losses):
|
|
|
|
|||||||||
Interest rate
(3)
|
$
|
(24
|
)
|
$
|
(1
|
)
|
$
|
(218
|
)
|
|||
Total
|
$
|
(24
|
)
|
$
|
(1
|
)
|
$
|
(218
|
)
|
|||
Six Months Ended June 30, 2018
|
|
|
|
|||||||||
Derivative type and location of gains (losses):
|
|
|
|
|||||||||
Interest rate
(3)
|
$ |
9
|
$ |
—
|
$ |
93
|
||||||
Total
|
$ |
9
|
$ |
—
|
$ |
93
|
||||||
(1)
|
Amounts deferred into AOCI have no associated effect in Virginia Power’s Consolidated Statements of Income.
|
(2)
|
Represents net derivative activity deferred into and amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Virginia Power’s Consolidated Statements of Income.
|
(3)
|
Amounts recorded in Virginia Power’s Consolidated Statements of Income are classified in interest and related charges.
|
Derivatives not designated as hedging instruments
|
Amount of Gain (Loss) Recognized
in Income on Derivatives
(1)
|
|||||||||||||||
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
||||||||||||
Derivative type and location of gains (losses):
|
|
|
|
|
||||||||||||
Commodity
(2)
|
$
|
(3
|
)
|
$ |
(3
|
) |
$
|
(12
|
)
|
$ |
(3
|
) | ||||
Total
|
$
|
(3
|
)
|
$ |
(3
|
) |
$
|
(12
|
)
|
$ |
(3
|
) | ||||
(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.
|
|
|
June 30, 2019
|
|
|
December 31, 2018
|
|
||||||||||||||||||||||||||
|
|
|
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
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter
|
|
|
14
|
|
|
|
13
|
|
|
|
—
|
|
|
|
1
|
|
|
|
26
|
|
|
|
2
|
|
|
|
—
|
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total derivatives, subject to a master
or similar arrangement |
$
|
16
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
31
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
June 30, 2019
|
|
|
|
|
December 31, 2018
|
|
|
||||||||||||||||||||||
|
|
|
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
Instruments |
Cash
Collateral
Paid
|
Net
Amounts
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter
|
|
$
|
77
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
64
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-the-counter
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
|
|
2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total derivatives, subject to a master
or similar arrangement |
|
$
|
77
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
64
|
|
|
$
|
19
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
Noncurrent
|
|
||||
Natural Gas (bcf):
|
|
|
|
|
||||
Basis
|
|
1
|
|
|
—
|
|
||
NGLs (Gal)
|
|
18,648,000
|
|
|
—
|
|
||
Interest rate
(1)
|
$
|
300,000,000
|
|
$
|
1,000,000,000
|
|
||
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-Tax
|
|
Amounts Expected
to be Reclassified to Earnings During the Next 12 Months
After-
Tax
|
|
Maximum Term
|
|
||||||
(millions)
|
|
|
|
|||||||||
Commodities:
|
|
|
|
|
|
|
|
|
|
|||
NGLs
|
$
|
1
|
|
$
|
1
|
|
|
9 months
|
|
|||
Interest rate
|
|
(82
|
)
|
$
|
(7
|
)
|
|
306 months
|
|
|||
Foreign currency
|
|
7
|
|
|
—
|
|
|
84 months
|
|
|||
Total
|
$
|
(74
|
)
|
$
|
(6
|
)
|
|
|
|
|||
|
Fair Value-
Derivatives
Under Hedge
Accounting
|
|
|
|
Fair
Value-Derivatives
Not Under Hedge
Accounting
|
|
|
|
Total Fair Value
|
|
||||||||||
(millions)
|
|
|
|
|
|
|||||||||||||||
June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commodity
|
$
|
2
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
2
|
|
|||||
Total current derivative assets
(1)
|
|
2
|
|
|
|
|
|
—
|
|
|
|
|
|
2
|
|
|||||
Noncurrent Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency
|
|
14
|
|
|
|
|
|
—
|
|
|
|
|
|
14
|
|
|||||
Total noncurrent derivative assets
(2)
|
|
14
|
|
|
|
|
|
—
|
|
|
|
|
|
14
|
|
|||||
Total derivative assets
|
$
|
16
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
16
|
|
|||||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest rate
|
$
|
34
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
34
|
|
|||||
Total current derivative liabilities
(3)
|
|
34
|
|
|
|
|
|
—
|
|
|
|
|
|
34
|
|
|||||
Noncurrent Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest rate
|
|
43
|
|
|
|
|
|
—
|
|
|
|
|
|
43
|
|
|||||
Total noncurrent derivative liabilities
(4)
|
|
43
|
|
|
|
|
|
—
|
|
|
|
|
|
43
|
|
|||||
Total derivative liabilities
|
$
|
77
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
77
|
|
|||||
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
|
||||||||||||
(1)
|
Current derivative assets include $
2
million in other current assets at December 31, 2018, with the remainder recorded in current assets of discontinued operations in Dominion Energy Gas’ Consolidated Balance Sheets. All current derivative assets are included in current assets of discontinued operations of Dominion Energy Gas’ Consolidated Balance Sheets at June 30, 2019.
|
(2)
|
Noncurrent derivatives 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 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.
|
Derivatives in cash flow hedging relationships
|
Amount of Gain
(Loss) Recognized in AOCI on
Derivatives
(1)
|
|
Amount of Gain
(Loss) Reclassified From AOCI
to Income
|
|
||||
(millions)
|
|
|
||||||
Three Months Ended June 30, 2019
|
|
|
||||||
Derivative Type and Location of Gains (Losses):
|
|
|
||||||
Commodity:
|
|
|
||||||
Net
i
ncome from discontinued operations
|
|
|
|
$
|
—
|
|
||
Total commodity
|
$
|
3
|
|
$
|
—
|
|
||
Interest rate
(2)
|
|
(36
|
)
|
|
(2
|
)
|
||
Foreign currency
(3)
|
|
1
|
|
|
4
|
|
||
Total
|
$
|
(32
|
)
|
$
|
2
|
|
||
Three Months Ended June 30, 2018
|
|
|
|
|
|
|
||
Derivative Type and Location of Gains (Losses):
|
|
|
||||||
Commodity:
|
|
|
||||||
Net
i
ncome from discontinued operations
|
|
$ |
(2
|
) | ||||
Total commodity
|
$ |
(10
|
) | $ |
(2
|
) | ||
Interest rate
(2)
|
(3
|
) |
—
|
|||||
Foreign currency
(3)
|
(14
|
) |
(16
|
) | ||||
Total
|
$ |
(27
|
) | $ |
(18
|
) | ||
Six Months Ended June 30, 2019
|
|
|
||||||
Derivative Type and Location of Gains (Losses):
|
|
|
||||||
Commodity:
|
|
|
||||||
Net
i
ncome from discontinued operations
|
|
|
|
$
|
2
|
|
||
Total commodity
|
$
|
2
|
|
$
|
2
|
|
||
Interest rate
(2)
|
|
(60
|
)
|
|
(1
|
)
|
||
Foreign currency
(3)
|
|
(10
|
)
|
|
(2
|
)
|
||
Total
|
$
|
(68
|
)
|
$
|
(1
|
)
|
||
Six Months Ended June 30, 2018
|
|
|
|
|
|
|
||
Derivative Type and Location of Gains (Losses):
|
|
|
||||||
Commodity:
|
|
|
||||||
Net
i
ncome from discontinued operations
|
|
$ |
(5
|
) | ||||
Total commodity
|
$ |
(6
|
) | $ |
(5
|
) | ||
Interest rate
(2)
|
(1
|
) |
(2
|
) | ||||
Foreign currency
(3)
|
(1
|
) |
(8
|
) | ||||
Total
|
$ |
(8
|
) | $ |
(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.
|
|
Amortized
Cost
|
|
|
|
Total
Unrealized
Gains
|
|
|
|
Total
Unrealized
Losses
|
|
|
Fair
Value
|
|
|||||||||||||
(millions)
|
|
|
|
|
|
|
|
|||||||||||||||||||
June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Equity securities:
(1)
|
|
|
|
|
|
|
|
|||||||||||||||||||
U.S.
|
$
|
1,776
|
|
|
|
|
$
|
2,120
|
|
|
|
|
$
|
(21
|
)
|
|
$
|
3,875
|
|
|||||||
Fixed income securities:
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Corporate debt instruments
|
|
474
|
|
|
|
|
|
27
|
|
|
|
|
|
(1
|
)
|
|
|
500
|
|
|||||||
Government securities
|
|
1,073
|
|
|
|
|
|
41
|
|
|
|
|
|
(2
|
)
|
|
|
1,112
|
|
|||||||
Common/collective trust funds
|
|
63
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
63
|
|
|||||||
Insurance contracts
|
|
206
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
206
|
|
|||||||
Cash equivalents and other
(3)
|
|
11
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
11
|
|
|||||||
Total
|
$
|
3,603
|
|
|
|
|
$
|
2,188
|
|
|
|
|
$
|
(24
|
)
|
(4)
|
$
|
5,767
|
|
|||||||
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
|
4
|
|
—
|
|
—
|
|
4
|
|||||||||||||||||||
Total
|
$ |
3,348
|
|
$ |
1,662
|
|
$ |
(72
|
) |
(4)
|
$ |
4,938
|
||||||||||||||
(1)
|
Unrealized gains and losses on equity securities are included in other income and the nuclear decommissioning trust regulatory liability.
|
(2)
|
Unrealized gains and losses on fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability
|
(3)
|
Includes pending sales of securities of $
3
million at June 30, 2019
.
|
(4)
|
The fair value of securities in an unrealized loss position was $
208
million and $
833
million at June 30, 2019 and December 31, 2018, respectively.
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
||||||||||||
Net gains recognized during the period
|
$
|
156
|
|
$ |
89
|
$
|
570
|
|
$ |
24
|
||||||
Less: Net gains recognized during the period on securities sold during the period
|
|
(25
|
)
|
(16
|
) |
|
(44
|
)
|
(35
|
) | ||||||
Unrealized gains (losses) recognized during the period on securities still held at June 30, 2019 and 2018
(1)
|
$
|
131
|
|
$ |
73
|
$
|
526
|
|
$ |
(11
|
) | |||||
(1)
|
Included in other income and the nuclear decommissioning trust regulatory liability.
|
|
Amount
|
|
||
(millions)
|
|
|||
Due in one year or less
|
$
|
203
|
|
|
Due after one year through five years
|
|
397
|
|
|
Due after five years through ten years
|
|
387
|
|
|
Due after ten years
|
|
688
|
|
|
Total
|
$
|
1,675
|
|
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
|
|
|
|||||||||
Proceeds from sales
|
$
|
376
|
|
$ |
425
|
$
|
882
|
|
$ |
844
|
||||||
Realized gains
(1)
|
|
56
|
|
36
|
|
99
|
|
72
|
||||||||
Realized losses
(1)
|
|
27
|
|
23
|
|
50
|
|
42
|
(1)
|
Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability.
|
|
Amortized
Cost
|
|
Total
Unrealized
Gains |
|
Total
Unrealized
Losses
|
|
Fair
Value
|
|
||||||||
(millions)
|
|
|
|
|
||||||||||||
June 30, 2019
|
|
|
|
|
||||||||||||
Equity securities:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S.
|
$
|
888
|
|
$
|
981
|
|
$
|
(11
|
)
|
$
|
1,858
|
|
||||
Fixed income securities:
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt instruments
|
|
244
|
|
|
13
|
|
|
—
|
|
|
257
|
|
||||
Government securities
|
|
500
|
|
|
18
|
|
|
(1
|
)
|
|
517
|
|
||||
Common/collective trust funds
|
|
47
|
|
|
—
|
|
|
—
|
|
|
47
|
|
||||
Cash equivalents and other
(3)
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Total
|
$
|
1,682
|
|
$
|
1,012
|
|
$
|
(12
|
)
(4)
|
$
|
2,682
|
|
||||
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
|
|||||||
(1)
|
Unrealized gains and losses on equity securities are included in other income and the nuclear decommissioning trust regulatory liability.
|
(2)
|
Unrealized gains and losses on fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability
|
(3)
|
Includes pending sales of securities of $
3
million and $
6
million at June 30, 2019 and December 31, 2018, respectively.
|
(4)
|
The fair value of securities in an unrealized loss position was $
97
million and $
404
million at June 30, 2019 and December 31, 2018, respectively.
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
|
|
|
|
||||||||
Net gains recognized during the period
|
$
|
70
|
|
$ |
44
|
$
|
256
|
|
$ |
12
|
||||||
Less: Net gains recognized during the period on securities sold during the period
|
|
(7
|
)
|
(8
|
) |
|
(8
|
)
|
(23
|
) | ||||||
Unrealized gains (losses) recognized during the period on securities still held at June 30, 2019 and 2018
(1)
|
$
|
63
|
|
$ |
36
|
$
|
248
|
|
$ |
(11
|
) | |||||
(1)
|
Included in other income and the nuclear decommissioning trust regulatory liability.
|
|
Amount
|
|
||
(millions)
|
|
|
||
Due in one year or less
|
$
|
98
|
|
|
Due after one year through five years
|
|
154
|
|
|
Due after five years through ten years
|
|
212
|
|
|
Due after ten years
|
|
357
|
|
|
Total
|
$
|
821
|
|
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
|
|
|
|||||||||
Proceeds from sales
|
$
|
194
|
|
$ |
196
|
$
|
447
|
|
$ |
414
|
||||||
Realized gains
(1)
|
|
15
|
|
15
|
|
25
|
|
33
|
||||||||
Realized losses
(1)
|
|
3
|
|
7
|
|
12
|
|
12
|
(1)
|
Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability.
|
|
June 30, 2019
|
|
December 31, 2018
|
|||||
(millions)
|
|
|
||||||
Dominion Energy
|
|
|
||||||
Regulatory assets:
|
|
|
||||||
Deferred cost of fuel used in electric generation
(1)
|
$
|
124
|
|
$ |
174
|
|||
Deferred project costs and DSM programs for gas utilities
(2)
|
|
64
|
|
17
|
||||
Unrecovered gas costs
(3)
|
|
55
|
|
14
|
||||
Deferred rate adjustment clause costs for Virginia electric utility
(4)(5)
|
|
56
|
|
78
|
||||
Deferred nuclear refueling outage costs
(6)
|
|
56
|
|
69
|
||||
NND Project costs
(7)
|
|
138
|
|
—
|
||||
PJM transmission rates
(8)
|
|
69
|
|
45
|
||||
Other
|
|
183
|
|
99
|
||||
Regulatory assets-current
|
|
745
|
|
496
|
||||
Deferred cost of fuel used in electric generation
(1)
|
|
1
|
|
83
|
||||
Unrecognized pension and other postretirement benefit costs
(9)
|
|
1,360
|
|
1,497
|
||||
Deferred rate adjustment clause costs for Virginia electric utility
(4)(5)(10)
|
|
278
|
|
230
|
||||
Deferred project costs for gas utilities
(2)
|
|
451
|
|
335
|
||||
PJM transmission rates
(8)
|
|
169
|
|
192
|
||||
Interest rate hedges
(11)
|
|
706
|
|
184
|
||||
AROs and related funding
(12)
|
|
340
|
|
—
|
||||
Cost of reacquired debt
(13)(14)
|
|
203
|
|
3
|
||||
NND Project costs
(7)
|
|
2,572
|
|
—
|
||||
Ash pond and landfill closure costs
(15)
|
|
968
|
|
27
|
||||
Other
|
|
515
|
|
125
|
||||
Regulatory assets-noncurrent
|
|
7,563
|
|
2,676
|
||||
Total regulatory assets
|
$
|
8,308
|
|
$ |
3,172
|
|||
Regulatory liabilities:
|
|
|
|
|
||||
Provision for future cost of removal and AROs
(16)
|
$
|
117
|
|
$ |
117
|
|||
Reserve for refunds and rate credits to electric utility customers
(17)
|
|
136
|
|
71
|
||||
Cost-of-service
impact of 2017 Tax Reform Act
(18)
|
|
13
|
|
104
|
||||
Income taxes refundable through future rates
(19)
|
|
130
|
|
—
|
||||
Monetization of guarantee settlement
(20)
|
|
67
|
|
—
|
||||
Other
|
|
60
|
|
64
|
||||
Regulatory liabilities-current
|
|
523
|
|
356
|
||||
Income taxes refundable through future rates
(19)
|
|
4,937
|
|
4,071
|
||||
Provision for future cost of removal and AROs
(16)
|
|
2,229
|
|
1,409
|
||||
Nuclear decommissioning trust
(21)
|
|
1,314
|
|
1,070
|
||||
Monetization of guarantee settlement
(20)
|
|
1,003
|
|
—
|
||||
Reserve for refunds and rate credits to electric utility customers
(17)
|
|
813
|
|
—
|
||||
Overrecovered other postretirement benefit costs
(22)
|
|
139
|
|
120
|
||||
Other
|
|
373
|
|
170
|
||||
Regulatory liabilities-noncurrent
|
|
10,808
|
|
6,840
|
||||
Total regulatory liabilities
|
$
|
11,331
|
|
$ |
7,196
|
|||
(1)
|
Reflects deferred fuel expenses for the Virginia, North Carolina and South Carolina jurisdictions of Dominion Energy’s electric generation operations.
|
(2)
|
Primarily reflects amounts expected to be collected from or owed to gas customers in Dominion Energy’s service territories associated with current and prospective rider projects, including CEP, PIR, and pipeline integrity management. See Note 13 for more information.
|
(3)
|
Reflects unrecovered or overrecovered gas costs at regulated gas operations, which are recovered or refunded through filings with the applicable regulatory authority.
|
(4)
|
Reflects deferrals under Virginia Power’s 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. See Note 13 for more information.
|
(5)
|
As a result of actions from the Virginia Commission in the first quarter of 2019 regarding the ratemaking treatment of excess deferred taxes from the adoption of the 2017 Tax Reform Act for all existing rate adjustment clauses, Virginia Power recorded a $29 million ($22 million
after-tax)
charge in operating revenue in the Consolidated Statements of Income for amounts which are probable of being returned to customers.
|
(6)
|
Legislation enacted in Virginia in April 2014 requires Virginia Power to defer operation and maintenance costs incurred in connection with the refueling of any nuclear-powered generating plant. These deferred costs will be amortized over the refueling cycle, not to exceed 18 months.
|
(7)
|
Reflects expenditures by DESC associated with the NND Project, which pursuant to the SCANA Merger Approval Order, will be recovered from DESC electric service customers over a
20-year
period ending in 2039. See Note 3 for more information.
|
(8)
|
Reflects amounts to be recovered through retail rates in Virginia for payments Virginia Power will make to PJM over a ten-year period ending 2028 under the terms of a FERC settlement agreement in May 2018 resolving a PJM cost allocation matter.
|
(9)
|
Represents unrecognized pension and other postretirement employee benefit costs expected to be recovered or refunded through future rates generally over the expected remaining service period of plan participants by certain of Dominion Energy’s rate-regulated subsidiaries.
|
(10)
|
During the first quarter of 2019, Virginia Power recorded a charge of $17 million ($13 million
after-tax)
to
write-off
the balance of a regulatory asset for which it is no longer seeking recovery.
|
(11)
|
Reflects interest rate hedges recoverable from or refundable to customers. Certain of these instruments are settled and any related payments are being amortized into interest expense over the life of the related debt, which has a weighted-average useful life of approximately 26 years.
|
(12)
|
Represents deferred depreciation and accretion expense related to legal obligations associated with the future retirement of generation, transmission and distribution properties. The AROs primarily relate to DESC’s electric generating facilities, including V.C. Summer nuclear power station, and are expected to be recovered over the related property lives and periods of decommissioning which may range up to approximately 106 years.
|
(13)
|
Costs of the reacquisition of debt are deferred and amortized as interest expense over the
would-be
remaining life of the reacquired debt. The reacquired debt costs had a weighted-average life of approximately 30 years as of June 30, 2019.
|
(14)
|
In March 2019, DESC purchased certain of its first mortgage bonds having an aggregate purchase price of $1.2 billion, as discussed in Note 17. As a result of this transaction, Dominion Energy incurred costs, including
write-off
of unamortized discount, premium, and debt issuance costs, of $187 million.
|
(15)
|
Primarily reflects legislation enacted in Virginia in March 2019 which requires any CCR unit located at certain Virginia Power stations to be closed by removing the CCRs to an approved landfill or through recycling for beneficial reuse. Subject to approval by the Virginia Commission, amounts are expected to be collected over a period between 15 and 18 years commencing no earlier than 2021. See Note 18 for additional information.
|
(16)
|
Rates charged to customers by Dominion Energy’s regulated businesses include a provision for the cost of future activities to remove assets that are expected to be incurred at the time of retirement.
|
(17)
|
Reflects amounts previously collected from retail electric customers of DESC for the NND Project to be credited over an estimated 11-year period in connection with the SCANA Merger Approval Order and Virginia legislation enacted in March 2018 that required one-time rate credits of certain amounts to utility customers in Virginia. See Notes 3 and 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K, as updated in Current Report on Form 8-K, filed November 18, 2019, for the year ended December 31, 2018 and Note 3 in this report for more information.
|
(18)
|
Balance refundable to customers related to the decrease in revenue requirements for recovery of income taxes at the Companies’ regulated electric generation and electric and natural gas distribution operations. See Notes 3 and 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form
10-K
for the year ended December 31, 2018
,
and Note 13 in this report for more information.
as updated in
Current Report on Form 8-K, filed November 18, 2019,
|
(19)
|
Amounts recorded to pass the effect of reduced income taxes from the 2017 Tax Reform Act to customers in future periods, which will reverse at the weighted average tax rate that was used to build the reserves over the remaining book life of the property, net of amounts to be recovered through future rates to pay income taxes that become payable when rate revenue is provided to recover AFUDC equity.
|
(20)
|
Reflects amounts to be refunded to DESC electric service customers over a
20-year
period ending in 2039 associated with the monetization of a bankruptcy settlement agreement. See Note 3 for additional information.
|
(21)
|
Primarily reflects a regulatory liability representing amounts collected from Virginia jurisdictional customers and placed in external trusts (including income, losses and changes in fair value thereon, as applicable) for the future decommissioning of Dominion Energy’s utility nuclear generation stations, in excess of the related AROs.
|
(22)
|
Reflects a regulatory liability for the collection of postretirement benefit costs allowed in rates in excess of expense incurred.
|
|
June 30, 2019
|
|
December 31, 2018
|
|||||
(millions)
|
|
|
|
|
||||
Virginia Power
|
|
|
|
|
|
|
||
Regulatory assets:
|
|
|
||||||
Deferred cost of fuel used in electric generation
(1)
|
$
|
111
|
|
$ |
174
|
|||
Deferred rate adjustment clause costs
(2)(3)
|
|
56
|
|
78
|
||||
Deferred nuclear refueling outage costs
(4)
|
|
56
|
|
69
|
||||
PJM transmission rates
(5)
|
|
69
|
|
45
|
||||
Other
|
|
51
|
|
58
|
||||
Regulatory assets-current
(6)
|
|
343
|
|
424
|
||||
Deferred rate adjustment clause costs
(2)(3)(7)
|
|
278
|
|
230
|
||||
PJM transmission rates
(5)
|
|
169
|
|
192
|
||||
Interest rate hedges
(8)
|
|
367
|
|
151
|
||||
Deferred cost of fuel used in electric generation
(1)
|
|
1
|
|
83
|
||||
Ash pond and landfill closure costs
(9)
|
|
968
|
|
27
|
||||
Other
|
|
89
|
|
54
|
||||
Regulatory assets-noncurrent
|
|
1,872
|
|
737
|
||||
Total regulatory assets
|
$
|
2,215
|
|
$ |
1,161
|
|||
Regulatory liabilities:
|
|
|
|
|
||||
Provision for future cost of removal
(10)
|
$
|
92
|
|
$ |
92
|
|||
Cost-of-service
impact of 2017 Tax Reform Act
(11)
|
|
10
|
|
95
|
||||
Reserve for rate credits to electric utility customers
(12)
|
|
—
|
|
71
|
||||
Income taxes refundable through future rates
(13)
|
|
74
|
|
—
|
||||
Other
|
|
12
|
|
41
|
||||
Regulatory liabilities-current
|
|
188
|
|
299
|
||||
Income taxes refundable through future rates
(13)
|
|
2,413
|
|
2,579
|
||||
Nuclear decommissioning trust
(14)
|
|
1,314
|
|
1,070
|
||||
Provision for future cost of removal
(10)
|
|
969
|
|
940
|
||||
Other
|
|
116
|
|
58
|
||||
Regulatory liabilities-noncurrent
|
|
4,812
|
|
4,647
|
||||
Total regulatory liabilities
|
$
|
5,000
|
|
$ |
4,946
|
|||
(1)
|
Reflects deferred fuel expenses for the Virginia and North Carolina jurisdictions of Virginia Power’s generation operations.
|
(2)
|
Reflects deferrals under Virginia Power’s electric transmission FERC formula rate and the deferral of costs associated with certain current and prospective rider projects, net of income taxes refundable from the 2017 Tax Reform Act for Virginia Power. See Note 13 for more information.
|
(3)
|
As a result of actions from the Virginia Commission in the first quarter of 2019 regarding the ratemaking treatment of excess deferred taxes from the adoption of the 2017 Tax Reform Act for all existing rate adjustment clauses, Virginia Power recorded a $29 million ($22 million
after-tax)
charge in operating revenue in the Consolidated Statements of Income for amounts which are probable of being returned to customers.
|
(4)
|
Legislation enacted in Virginia in April 2014 requires Virginia Power to defer operation and maintenance costs incurred in connection with the refueling of any nuclear-powered generating plant. These deferred costs will be amortized over the refueling cycle, not to exceed 18 months.
|
(5)
|
Reflects amounts to be recovered through retail rates in Virginia for payments Virginia Power will make to PJM over a
ten-year
period ending 2028 under the terms of a FERC settlement agreement in May 2018 resolving a PJM cost allocation matter.
|
(6)
|
Current regulatory assets are presented in other current assets in Virginia Power’s Consolidated Balance Sheets.
|
(7)
|
During the first quarter of 2019, Virginia Power recorded a charge of $17 million ($13 million
after-tax)
to
write-off
the balance of a regulatory asset for which it is no longer seeking recovery.
|
(8)
|
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 22 years.
|
(9)
|
Primarily reflects legislation enacted in Virginia in March 2019 which requires any CCR unit located at certain Virginia Power stations to be closed by removing the CCR to an approved landfill or through recycling for beneficial reuse. Subject to approval by the Virginia Commission, amounts are expected to be collected over a period between 15 and 18 years commencing no earlier than 2021. See Note 18 for additional information.
|
(10)
|
Rates charged to customers by Virginia Power’s regulated businesses include a provision for the cost of future activities to remove assets that are expected to be incurred at the time of retirement.
|
(11)
|
Balance refundable to customers related to the decrease in revenue requirements for recovery of income taxes at regulated electric generation and distribution operations. See Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2018, as updated in Current Report on Form 8-K, filed November 18, 2019, and Note 13 in this report for more information.
|
(12)
|
Charge associated with Virginia legislation enacted in March 2018 that required one-time rate credits of certain amounts to utility customers. See Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2018, as updated in Current Report on Form 8-K, filed November 18, 2019, for more information.
|
(13)
|
Amounts recorded to pass the effect of reduced income taxes from the 2017 Tax Reform Act to customers in future periods, which will reverse at the weighted average tax rate that was used to build the reserves over the remaining book life of the property, net of amounts to be recovered through future rates to pay income taxes that become payable when rate revenue is provided to recover AFUDC equity.
|
(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.
|
|
June 30, 2019
|
|
December 31, 2018
|
|||||
(millions)
|
|
|
|
|
||||
Dominion Energy Gas
|
|
|
|
|
|
|
||
Regulatory assets:
|
|
|
|
|
||||
Unrecovered gas costs
(1)
|
$
|
1
|
|
$ |
1
|
|||
Other
|
|
8
|
|
7
|
||||
Regulatory assets-current
(2)
|
|
9
|
|
8
|
||||
Unrecognized pension and other postretirement benefit costs
(3)
|
|
4
|
|
15
|
||||
Interest rate hedges
(4)
|
|
32
|
|
33
|
||||
Other
|
|
7
|
|
4
|
||||
Regulatory assets-noncurrent
(5)
|
|
43
|
|
52
|
||||
Total regulatory assets
|
$
|
52
|
|
$ |
60
|
|||
Regulatory liabilities:
|
|
|
|
|
||||
Provision for future cost of removal and AROs
(6)
|
$
|
10
|
|
$ |
9
|
|||
Overrecovered gas costs
(1)
|
|
8
|
|
7
|
||||
Other
|
|
14
|
|
8
|
||||
Regulatory liabilities-current
(7)
|
|
32
|
|
24
|
||||
Income taxes refundable through future rates
(8)
|
|
568
|
|
530
|
||||
Provision for future cost of removal and AROs
(6)
|
|
110
|
|
113
|
||||
Overrecovered other postretirement benefit costs
(9)
|
|
118
|
|
106
|
||||
Other
|
|
14
|
|
16
|
||||
Regulatory liabilities-noncurrent
|
|
810
|
|
765
|
||||
Total regulatory liabilities
|
$
|
842
|
|
$ |
789
|
|||
(1)
|
Reflects unrecovered or overrecovered gas costs at regulated gas operations, which are recovered or refunded through filings with the applicable regulatory authority.
|
(2)
|
Current regulatory assets are presented in other current assets in Dominion Energy Gas’ Consolidated Balance Sheets.
|
(3)
|
Represents unrecognized pension and other postretirement employee benefit costs expected to be recovered or refunded through future rates generally over the expected remaining service period of plan participants by certain of Dominion Energy Gas’ rate-regulated subsidiaries.
|
(4)
|
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.
|
(5)
|
Noncurrent regulatory assets are presented in other deferred charges and other assets in Dominion Energy Gas’ Consolidated Balance Sheets.
|
(6)
|
Rates charged to customers by Dominion Energy Gas’ 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.
|
(7)
|
Current regulatory liabilities are presented in other current liabilities in Dominion Energy Gas’ Consolidated Balance Sheets.
|
(8)
|
Amounts recorded to pass the effect of reduced income taxes from the 2017 Tax Reform Act to customers in future periods, which will reverse at the weighted average tax rate that was used to build the reserves over the remaining book life of the property, net of amounts to be recovered through future rates to pay income taxes that become payable when rate revenue is provided to recover AFUDC equity.
|
(9)
|
Reflects a regulatory liability for the collection of postretirement benefit costs allowed in rates in excess of expense incurred.
|
Rider Name
|
Application Date
|
|
Approval Date
|
|
Rate Year Beginning
|
|
Total Revenue
Requirement (millions) |
|
Increase (Decrease) Over
Previous Year
(millions)
|
|
||||||||||
Rider BW
|
October 2018
|
July 2019
|
September 2019
|
$ |
119
|
$ |
3
|
|||||||||||||
Rider
US-2
|
October 2018
|
July 2019
|
September 2019
|
15
|
2
|
|||||||||||||||
Rider S
|
May 2019
|
Pending
|
April 2020
|
206
|
(9
|
) | ||||||||||||||
Rider GV
|
May 2019
|
Pending
|
April 2020
|
137
|
17
|
|||||||||||||||
Rider W
|
May 2019
|
Pending
|
April 2020
|
113
|
8
|
|||||||||||||||
Rider R
|
May 2019
|
Pending
|
April 2020
|
49
|
(8
|
) | ||||||||||||||
Rider B
|
May 2019
|
Pending
|
April 2020
|
32
|
(6
|
) | ||||||||||||||
Rider
US-3
|
July 2019
|
Pending
|
June 2020
|
31
|
21
|
Description and Location
of Project
|
Application
Date
|
|
Approval
Date
|
|
Type of
Line
|
|
Miles of
Lines
|
|
Cost Estimate
(millions)
|
|
||||||||||
Build a new substation and connect three existing transmission lines thereto in Fluvanna County, Virginia
|
October 2018
|
June 2019
|
230 kV
|
<1
|
$ |
30
|
||||||||||||||
Rebuild and operate between Suffolk and the Virginia/North Carolina state line
|
May 2019
|
Pending
|
230 kV
|
11
|
20
|
|
Amount
|
|
||
(millions)
|
|
|
||
Dominion Energy
|
|
|||
AROs at December 31, 2018
(1)
|
$ |
2,532
|
||
Obligations incurred during the period
(2)
|
|
2,395
|
|
|
Obligations settled during the period
|
|
(56
|
)
|
|
AROs acquired in the SCANA Combination
|
|
577
|
|
|
Revisions in estimated cash flows
(2)
|
|
(228
|
)
|
|
Accretion
|
|
83
|
|
|
AROs at June 30, 2019
(1)
|
$ |
5,303
|
||
Virginia Power
|
|
|
|
|
AROs at December 31, 2018
(3)
|
$ |
1,445
|
||
Obligations incurred during the period
(2)
|
|
2,394
|
|
|
Obligations settled during the period
|
|
(41
|
)
|
|
Revisions in estimated cash flows
(2)
|
|
(202
|
)
|
|
Accretion
|
|
55
|
|
|
AROs at June 30, 2019
(3)
|
$ |
3,651
|
||
Dominion Energy Gas
|
|
|
|
|
AROs at December 31, 2018
(4)
|
$ |
88
|
||
Obligations settled during the period
|
|
(2
|
)
|
|
Accretion
|
|
2
|
|
|
AROs at June 30, 2019
(4)
|
$ |
88
|
||
(1)
|
Includes $
282
million and $
319
million reported in other current liabilities at December 31, 2018 and June 30, 2019, respectively.
|
(2)
|
Primarily related to future ash pond and landfill closure costs at certain utility generation facilities. See Note 18 for further information.
|
(3)
|
Includes $
245
million and $
262
million reported in other current liabilities at December 31, 2018 and June 30, 2019, respectively.
|
(4)
|
Includes $
76
million and $
78
million reported in other deferred credits and other liabilities, with the remainder recorded in other current liabilities, at December 31, 2018 and June 30, 2019, respectively.
|
|
June 30, 2019
|
|
||
(millions)
|
|
|
||
Dominion Energy
|
|
|
|
|
Lease assets:
|
|
|||
Operating lease assets
|
$
|
468
|
|
|
Finance lease assets
(1)
|
|
87
|
|
|
Total lease assets
|
$
|
555
|
|
|
Lease liabilities:
|
|
|||
Operating lease liabilities
(2)
|
$
|
59
|
|
|
Finance lease liabilities
(3)
|
|
15
|
|
|
Total lease liabilities - current
|
|
74
|
|
|
Operating lease liabilities
|
|
404
|
|
|
Finance lease liabilities
(4)
|
|
72
|
|
|
Total lease liabilities - noncurrent
|
|
476
|
|
|
Total lease liabilities
|
$
|
550
|
|
|
Virginia Power
|
|
|
|
|
Operating lease assets
|
$
|
191
|
|
|
Finance lease assets
(1)
|
|
11
|
|
|
Total lease assets
|
$
|
202
|
|
|
Lease liabilities:
|
|
|||
Operating lease liabilities
(2)
|
$
|
31
|
|
|
Finance lease liabilities
(3)
|
|
2
|
|
|
Total lease liabilities - current
|
|
33
|
|
|
Operating lease liabilities
|
|
158
|
|
|
Finance lease liabilities
(4)
|
|
8
|
|
|
Total lease liabilities - noncurrent
|
|
166
|
|
|
Total lease liabilities
|
$
|
199
|
|
|
Dominion Energy Gas
|
|
|
|
|
Operating lease assets
|
$
|
39
|
|
|
Finance lease assets
(1)
|
|
3
|
|
|
Total lease assets
(5)
|
$
|
42
|
|
|
Lease liabilities:
|
|
|||
Operating lease liabilities
(2)
|
$
|
6
|
|
|
Finance lease liabilities
(3)
|
|
—
|
|
|
Total lease liabilities - current
|
|
6
|
|
|
Operating lease liabilities
|
|
32
|
|
|
Finance lease liabilities
(4)
|
|
3
|
|
|
Total lease liabilities - noncurrent
|
|
35
|
|
|
Total lease liabilities
(5)
|
$
|
41
|
|
|
(1)
|
Included in property, plant and equipment in the Companies’ Consolidated Balance Sheets, net of $
32
million, $
2
million and $
1
million of accumulated amortization at Dominion Energy, Virginia Power and Dominion Energy Gas, respectively, at June 30, 2019.
|
(2)
|
Included in other current liabilities in the Companies’ Consolidated Balance Sheets.
|
(3)
|
Included in securities due within one year in the Companies’ Consolidated Balance Sheets.
|
(4)
|
Included in long-term debt in the Companies’ Consolidated Balance Sheets.
|
(5)
|
Excludes $
24
million of lease assets recorded in assets of discontinued operations and $
25
million of lease liabilities recorded in liabilities of discontinued operations.
|
|
Three Months Ended
June 30, 2019
|
|
Six Months Ended
June 30, 2019
|
|
||||
(millions)
|
|
|
|
|
||||
Dominion Energy
|
|
|
|
|
|
|
||
Finance lease cost:
|
|
|
||||||
Amortization
|
$
|
4
|
|
$
|
7
|
|
||
Interest
|
|
1
|
|
|
2
|
|
||
Operating lease cost
|
|
19
|
|
|
44
|
|
||
Short-term lease cost
|
|
7
|
|
|
13
|
|
||
Variable lease cost
|
|
1
|
|
|
3
|
|
||
Total lease cost
|
$
|
32
|
|
$
|
69
|
|
||
Virginia Power
|
|
|
|
|
|
|
||
Operating lease cost
|
$
|
11
|
|
$
|
21
|
|
||
Short-term lease cost
|
|
2
|
|
|
4
|
|
||
Variable lease cost
|
|
—
|
|
|
1
|
|
||
Total lease cost
|
$
|
13
|
|
$
|
26
|
|
||
Dominion Energy Gas
|
|
|
|
|
|
|
||
Operating lease cost
|
$
|
1
|
|
$
|
3
|
|
||
Short-term lease cost
|
|
2
|
|
|
3
|
|
||
Total lease cost
|
$
|
3
|
|
$
|
6
|
|
||
|
Six Months Ended
June 30, 2019
|
|
||
(millions)
|
|
|
||
Dominion Energy
|
|
|
|
|
Operating cash flows for finance leases
|
$
|
2
|
|
|
Operating cash flows for operating leases
|
|
61
|
|
|
Financing cash flows for finance leases
|
|
6
|
|
|
Virginia Power
|
|
|
|
|
Operating cash flows for operating leases
|
|
26
|
|
|
Dominion Energy Gas
|
|
|
|
|
Operating cash flows for operating leases
|
|
6
|
|
|
June 30, 2019
|
|
||
Dominion Energy
|
|
|
|
|
Weighted average remaining lease term - finance leases
|
|
7 years
|
|
|
Weighted average remaining lease term - operating leases
|
|
21 years
|
|
|
Weighted average discount rate - finance leases
|
|
4.68%
|
|
|
Weighted average discount rate - operating leases
|
|
4.61%
|
|
|
Virginia Power
|
|
|
|
|
Weighted average remaining lease term - finance leases
|
|
6 years
|
|
|
Weighted average remaining lease term - operating leases
|
|
17 years
|
|
|
Weighted average discount rate - finance leases
|
|
4.93%
|
|
|
Weighted average discount rate - operating leases
|
|
4.51%
|
|
|
Dominion Energy Gas
|
|
|
|
|
Weighted average remaining lease term - finance leases
|
|
6 years
|
|
|
Weighted average remaining lease term - operating leases
|
|
9 years
|
|
|
Weighted average discount rate - finance leases
|
|
4.85%
|
|
|
Weighted average discount rate - operating leases
|
|
4.43%
|
|
Maturity of Lease Liabilities
|
Dominion Energy
|
Virginia Power
|
Dominion Energy Gas
(1)
|
|||||||||||||||||||||
(millions)
|
Operating
|
Finance
|
Operating
|
Finance
|
Operating
|
Finance
|
||||||||||||||||||
2019
|
$ |
35
|
$ |
10
|
$ |
17
|
$ |
1
|
$ |
8
|
$ |
1
|
||||||||||||
2020
|
67
|
18
|
33
|
2
|
13
|
1
|
||||||||||||||||||
2021
|
59
|
16
|
29
|
2
|
11
|
1
|
||||||||||||||||||
2022
|
49
|
14
|
23
|
2
|
9
|
1
|
||||||||||||||||||
2023
|
39
|
11
|
18
|
2
|
6
|
1
|
||||||||||||||||||
After 2023
|
531
|
35
|
160
|
3
|
25
|
2
|
||||||||||||||||||
Total undiscounted lease payments
|
780
|
104
|
280
|
12
|
72
|
7
|
||||||||||||||||||
Present value adjustment
|
(317
|
) |
(17
|
) |
(91
|
) |
(2
|
) |
(13
|
) |
(1
|
) | ||||||||||||
Present value of lease liabilities
|
$ |
463
|
$ |
87
|
$ |
189
|
$ |
10
|
$ |
59
|
$ |
6
|
||||||||||||
(1)
|
Includes amounts reflected in discontinued operations.
|
|
Facility
Limit
|
|
Outstanding
Commercial
Paper
|
|
Outstanding
Letters of
Credit
|
|
Facility
Capacity
Available
|
|
||||||||
(millions)
|
|
|
|
|
|
|
|
|
||||||||
Joint revolving credit facility
(1)
|
$
|
6,000
|
|
$
|
2,526
|
|
$
|
91
|
|
$
|
3,383
|
|
(1)
|
This credit facility matures in March 2023 and can be used by the borrowers under the credit facility to support bank borrowings and the issuance of commercial paper, as well as to support up to a combined $2.0 billion of letters of credit.
|
|
Facility
Limit
(1)
|
|
Outstanding
Commercial
Paper
|
|
Outstanding
Letters of
Credit
|
|
||||||
(millions)
|
|
|
|
|
|
|
||||||
Joint revolving credit facility
(1)
|
$
|
6,000
|
|
$
|
1,300
|
|
$
|
6
|
|
(1)
|
The full amount of the facility is available to Virginia Power, less any amounts outstanding to
co-borrowers
Dominion Energy, Dominion Energy Gas, Questar Gas and DESC. The
sub-limit
for Virginia Power is set within the facility limit but can be changed at the option of the borrowers under the credit facility multiple times per year. At June 30, 2019, 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.
|
|
Facility
Limit
(1)
|
|
Outstanding
Commercial
Paper
|
|
Outstanding
Letters of
Credit
|
|
||||||
(millions)
|
|
|
|
|
|
|
||||||
Joint revolving credit facility
(1)
|
$
|
1,500
|
|
$
|
250
|
|
$
|
—
|
|
(1)
|
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, Questar Gas and DESC. The
sub-limit
for Dominion Energy Gas is set within the facility limit but can be changed at the option of the borrowers under the credit facility multiple times per year. At June 30, 2019, 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.
|
Issuance Date
|
Units Issued
|
Total Net
Proceeds
(1)
|
|
Total Preferred
Stock |
|
Cumulative
Dividend Rate |
|
Stock Purchase
Contract Annual Rate |
|
Stock Purchase
Contract Liability |
|
Stock Purchase
Contract Settlement Date |
||||||||||||
(millions except interest rates)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
6/14/2019
|
16
|
$ |
1,582
|
$ |
1,610
|
1.75
|
% |
5.5
|
% | $ |
250
|
6/1/2022
|
(1)
|
Issuance costs of $28 million were recorded as a reduction to preferred stock ($14 million) and common stock ($14 million) in the Consolidated Balance Sheets.
|
|
Maximum
Exposure
|
|
|||
(millions)
|
|
|
|||
Commodity transactions
(1)
|
$
|
2,393
|
|
||
Nuclear obligations
(2)
|
|
182
|
|
||
Cove Point
(3)
|
|
1,900
|
|
||
Solar
(4)
|
|
659
|
|
||
Other
(5)
|
|
404
|
|
||
Total
(6)
|
$
|
5,538
|
|
||
(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 workers’ compensation claims, the parental guarantee has no stated limit.
|
(6)
|
Excludes Dominion Energy’s guarantee for the construction of the new corporate office property discussed in Note 22 to the Consolidated Financial Statements in the Companies’ Annual Report on Form
10-K
for the year ended December 31, 2018
,
as updated in Curr
ent Report on Form 8-K, filed November 18, 2019.
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
|
|
|
|
||||||||
Commodity purchases from affiliates
|
$
|
119
|
|
$ |
139
|
$
|
391
|
|
$ |
537
|
||||||
Services provided by affiliates
(1)
|
|
161
|
|
112
|
|
280
|
|
232
|
||||||||
Services provided to affiliates
|
|
8
|
|
5
|
|
14
|
|
11
|
(1)
|
Includes capitalized expenditures of $34 million and $38 million for the three months ended June 30, 2019 and 2018, respectively, and $67 million and $75 million for the six months ended June 30, 2019 and 2018, respectively.
|
|
Three Months Ended
June 30, |
Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
|
|
|
|
||||||||
Sales of natural gas and transportation and storage services to affiliates
|
$
|
60
|
|
$ |
39
|
$
|
127
|
|
$ |
85
|
||||||
Services provided by related parties
(1)
|
|
59
|
|
44
|
|
104
|
|
87
|
||||||||
Services provided to related parties
(2)
|
|
45
|
|
73
|
|
90
|
|
132
|
(1)
|
Includes capitalized expenditures of $5 million and $6 million for the three months ended June 30, 2019 and 2018,
|
(2)
|
Includes amounts attributable to Atlantic Coast Pipeline, a related-party VIE.
|
|
June 30, 2019
|
|
December 31, 2018
|
|||||
(millions)
|
|
|
|
|
||||
Other receivables
(1)
|
$
|
10
|
|
$ |
13
|
|||
Imbalances receivable from affiliates
|
|
5
|
|
16
|
||||
Imbalances payable to affiliates
(2)
|
|
1
|
|
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.
|
|
Pension Benefits
|
Other Postretirement Benefits
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service cost
|
$
|
40
|
|
$ |
40
|
$
|
6
|
|
$ |
6
|
||||||
Interest cost
|
|
98
|
|
84
|
|
17
|
|
14
|
||||||||
Expected return on plan assets
|
|
(176
|
)
|
(168
|
) |
|
(35
|
)
|
(35
|
) | ||||||
Amortization of prior service cost (credit)
|
|
1
|
|
1
|
|
(13
|
)
|
(13
|
) | |||||||
Amortization of net actuarial loss
|
|
43
|
|
49
|
|
3
|
|
2
|
||||||||
Curtailment
(1)
|
|
71
|
|
—
|
|
42
|
|
—
|
||||||||
Net periodic benefit cost (credit)
|
$
|
77
|
|
$ |
6
|
$
|
20
|
|
$ |
(26
|
) | |||||
Six Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service cost
|
$
|
80
|
|
$ |
79
|
$
|
13
|
|
$ |
13
|
||||||
Interest cost
|
|
199
|
|
168
|
|
34
|
|
28
|
||||||||
Expected return on plan assets
|
|
(353
|
)
|
(333
|
) |
|
(68
|
)
|
(71
|
) | ||||||
Amortization of prior service cost (credit)
|
|
1
|
|
1
|
|
(26
|
)
|
(26
|
) | |||||||
Amortization of net actuarial loss
|
|
82
|
|
97
|
|
7
|
|
5
|
||||||||
Settlements and Curtailment
(1)
|
|
73
|
|
—
|
|
42
|
|
—
|
||||||||
Net periodic benefit cost (credit)
|
$
|
82
|
|
$ |
12
|
$
|
2
|
|
$ |
(51
|
) | |||||
(1)
|
Primarily related to a voluntary retirement program.
|
|
Pension Benefits
|
Other Postretirement Benefits
|
||||||||||||||
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||
(millions)
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended June 30,
|
|
|
|
|
||||||||||||
Service cost
|
$
|
4
|
|
$ |
5
|
$
|
1
|
|
$ |
1
|
||||||
Interest cost
|
|
8
|
|
7
|
|
2
|
|
2
|
||||||||
Expected return on plan assets
|
|
(39
|
)
|
(38
|
) |
|
(7
|
)
|
(6
|
) | ||||||
Amortization of prior service credit
|
|
—
|
|
—
|
|
(1
|
)
|
(1
|
) | |||||||
Amortization of net actuarial loss
|
|
5
|
|
5
|
|
1
|
|
1
|
||||||||
Curtailment
(1)
|
|
1
|
|
—
|
|
1
|
|
—
|
||||||||
Net periodic benefit credit
|
$
|
(21
|
)
|
$ |
(21
|
) |
$
|
(3
|
)
|
$ |
(3
|
) | ||||
Six Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service cost
|
$
|
8
|
|
$ |
9
|
$
|
2
|
|
$ |
2
|
||||||
Interest cost
|
|
16
|
|
14
|
|
5
|
|
5
|
||||||||
Expected return on plan assets
|
|
(78
|
)
|
(75
|
) |
|
(14
|
)
|
(14
|
) | ||||||
Amortization of prior service credit
|
|
—
|
|
—
|
|
(2
|
)
|
(2
|
) | |||||||
Amortization of net actuarial loss
|
|
10
|
|
10
|
|
2
|
|
2
|
||||||||
Curtailment
(1)
|
|
1
|
|
—
|
|
1
|
|
—
|
||||||||
Net periodic benefit credit
|
$
|
(43
|
)
|
$ |
(42
|
) |
$
|
(6
|
)
|
$ |
(7)
|
|||||
(1)
|
Related to a voluntary retirement program.
|
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
|
|
|
|
|
|
X
|
|
||||
|
Gas distribution and storage
|
|
X
|
|
|
|
|
|
|
|
||||
|
Gas gathering and processing
|
|
X
|
|
|
|
|
|
|
|
||||
|
LNG terminalling and storage
|
|
X
|
|
|
|
|
|
X
|
|
||||
|
Nonregulated retail energy marketing
|
|
X
|
|
|
|
|
|
|
|
||||
Southeast Energy
|
Regulated electric distribution
|
|
X
|
|
|
|
|
|
|
|
||||
|
Regulated electric transmission
|
|
X
|
|
|
|
|
|
|
|
||||
|
Regulated electric generation fleet
|
|
X
|
|
|
|
|
|
|
|
||||
|
Gas distribution and storage
|
|
X
|
|
|
|
|
|
|
|
||||
|
Nonregulated retail energy marketing
|
|
X
|
|
|
|
|
|
|
|
●
|
A $1.0 billion ($760 million
after-tax)
charge for refunds of amounts previously collected primarily from retail electric customers of DESC for the NND Project, attributable to Southeast Energy;
|
●
|
$548 million ($418 million
after-tax)
of merger and integration-related costs associated with the SCANA Combination, including a $425 million ($317 million
after-tax)
charge related to a voluntary retirement program, attributable to:
|
●
|
Power Delivery ($73 million
after-tax);
|
●
|
Power Generation ($109 million
after-tax);
|
●
|
Gas Infrastructure ($80 million
after-tax);
and
|
●
|
Southeast Energy ($156 million
after-tax);
|
●
|
A $369 million ($275 million
after-tax)
charge related to the early retirement of certain Virginia Power electric generation facilities, attributable to Power Generation;
|
●
|
$278 million ($209 million
after-tax)
of charges associated with litigation acquired in the SCANA Combination, attributable to Southeast Energy;
|
●
|
A $198 million tax charge for $264 million of income
tax-related
regulatory assets acquired in the SCANA Combination for which Dominion Energy committed to forgo recovery, attributable to Southeast Energy;
|
●
|
A $160 million ($119 million
after-tax)
charge related to Virginia Power’s planned early retirement of certain automated meter reading infrastructure, attributable to Power Delivery;
|
●
|
A $135 million ($100 million
after-tax)
charge related to Virginia Power’s contract termination with a
non-utility
generator, attributable to Power Generation; and
|
●
|
A $114 million ($86 million
after-tax)
charge for property, plant and equipment acquired in the SCANA Combination primarily for which Dominion Energy committed to forgo recovery, attributable to Southeast Energy; partially offset by
|
●
|
A $336 million ($251 million
after-tax)
net gain related to investments in nuclear decommissioning trust funds, attributable to Power Generation; and
|
●
|
A $113 million ($84 million
after-tax)
benefit from the revision of future ash pond and landfill closure costs as a result of Virginia legislation enacted in March 2019, attributable to Power Generation.
|
●
|
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 $122 million ($89 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.
|
|
Power
Delivery
|
|
Power
Generation
|
|
Gas
Infrastructure
|
|
Southeast
Energy
|
|
Corporate
and Other
|
|
Adjustments/
Eliminations
|
|
Consolidated
Total
|
|
||||||||||||||
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Three Months Ended
June
3
0
, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total revenue from external customers
|
$
|
585
|
|
$
|
1,598
|
|
$
|
881
|
|
$
|
915
|
|
$
|
(9
|
)
|
$
|
—
|
|
$
|
3,970
|
|
|||||||
Intersegment revenue
|
|
6
|
|
|
5
|
|
|
29
|
|
|
—
|
|
|
263
|
|
|
(303
|
)
|
|
—
|
|
|||||||
Total operating revenue
|
|
591
|
|
|
1,603
|
|
|
910
|
|
|
915
|
|
|
254
|
|
(303
|
)
|
|
3,970
|
|
||||||||
Net income (loss) attributable to Dominion Energy
|
|
156
|
|
|
250
|
|
|
247
|
|
|
82
|
|
|
(681
|
)
|
|
—
|
|
|
54
|
||||||||
Three Months Ended
June
3
0
, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total revenue from external customers
|
$ |
528
|
$ |
1,635
|
$ |
914
|
|
$ |
(3
|
) | $ |
14
|
$ |
3,088
|
||||||||||||||
Intersegment revenue
|
6
|
3
|
8
|
|
170
|
(187
|
) |
—
|
||||||||||||||||||||
Total operating revenue
|
534
|
1,638
|
922
|
|
167
|
(173
|
) |
3,088
|
||||||||||||||||||||
Net income (loss) attributable to Dominion Energy
|
145
|
276
|
249
|
|
(221
|
) |
—
|
449
|
||||||||||||||||||||
Six Months Ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total revenue from external customers
|
|
$
|
1,183
|
|
|
$
|
3,343
|
|
|
$
|
2,254
|
|
|
$
|
2,097
|
|
|
$
|
(1,049
|
)
|
|
$
|
—
|
|
|
$
|
7,828
|
|
Intersegment revenue
|
|
|
12
|
|
|
|
9
|
|
|
|
55
|
|
|
|
—
|
|
|
|
447
|
|
|
|
(523
|
)
|
|
|
—
|
|
Total operating revenue
|
|
|
1,195
|
|
|
|
3,352
|
|
|
|
2,309
|
|
|
|
2,097
|
|
|
|
(602
|
)
|
|
|
(523
|
)
|
|
|
7,828
|
|
Net income (loss) attributable to Dominion Energy
|
|
|
311
|
|
|
|
558
|
|
|
|
606
|
|
|
|
214
|
|
|
|
(2,315
|
)
|
|
|
—
|
|
|
|
(626
|
)
|
Six Months Ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total revenue from external customers
|
|
$
|
1,091
|
|
|
$
|
3,495
|
|
|
$
|
2,136
|
|
|
|
|
|
$
|
(210
|
)
|
|
$
|
42
|
|
|
$
|
6,554
|
|
|
Intersegment revenue
|
|
|
12
|
|
|
|
5
|
|
|
|
14
|
|
|
|
|
|
|
345
|
|
|
|
(376
|
)
|
|
|
—
|
|
|
Total operating revenue
|
|
|
1,103
|
|
|
|
3,500
|
|
|
|
2,150
|
|
|
|
|
|
|
135
|
|
|
|
(334
|
)
|
|
|
6,554
|
|
|
Net income (loss) attributable to Dominion Energy
|
|
|
301
|
|
|
|
624
|
|
|
|
576
|
|
|
|
|
|
|
(549
|
)
|
|
|
—
|
|
|
|
952
|
|
●
|
A $369 million ($275 million
after-tax)
charge related to the early retirement of certain electric generation facilities, attributable to Power Generation;
|
●
|
A $192 million ($143 million
after-tax)
charge related to a voluntary retirement program, attributable to:
|
●
|
Power Delivery ($71 million
after-tax);
and
|
●
|
Power Generation ($72 million
after-tax);
|
●
|
A $160 million ($119 million
after-tax)
charge related to the planned early retirement of certain automated meter reading infrastructure, attributable to Power Delivery;
|
●
|
A $135 million ($100 million
after-tax)
charge related to a contract termination with a
non-utility
generator, attributable to Power Generation; and
|
●
|
A $62 million ($46 million
after-tax)
charge related the abandonment of a project at an electric generating facility, attributable to Power Generation; partially offset by
|
●
|
A $113 million ($84 million
after-tax)
benefit from the revision of future ash pond and landfill closure costs as a result of Virginia legislation enacted in March 2019, attributable to Power Generation.
|
●
|
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.
|
|
Power
Delivery
|
|
Power
Generation
|
|
Corporate
and Other
|
|
Consolidated
Total
|
|
||||||||
(millions)
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating revenue
|
$
|
585
|
|
$
|
1,353
|
|
$
|
—
|
|
$
|
1,938
|
|
||||
Net income (loss)
|
|
156
|
|
|
237
|
|
|
(293
|
)
|
|
100
|
|
||||
Three Months Ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating revenue
|
$ |
528
|
$ |
1,301
|
$ |
—
|
$ |
1,829
|
||||||||
Net income (loss)
|
145
|
227
|
(33
|
) |
339
|
|||||||||||
Six Months Ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating revenue
|
$
|
1,183
|
|
$
|
2,749
|
|
$
|
(29
|
)
|
$
|
3,903
|
|
||||
Net income (loss)
|
|
310
|
|
|
441
|
|
|
(631
|
)
|
|
120
|
|
||||
Six Months Ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating revenue
|
$ |
1,091
|
$ |
2,701
|
$ |
(215
|
) | $ |
3,577
|
|||||||
Net income (loss)
|
299
|
449
|
(225
|
) |
523
|
|||||||||||
|
Gas
Infrastructure
|
|
Corporate and
Other
|
|
Consolidated
Total
|
|
||||||
(millions)
|
|
|
|
|
|
|
||||||
Three Months Ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|||
Operating revenue
|
$
|
530
|
|
$
|
—
|
|
$
|
530
|
|
|||
Net income from discontinued operations
|
|
—
|
|
|
26
|
|
|
26
|
|
|||
Net income attributable to Dominion Energy Gas
|
|
116
|
|
|
3
|
|
|
119
|
|
|||
Three Months Ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|||
Operating revenue
|
$ |
508
|
$ |
—
|
$ |
508
|
||||||
Net income from discontinued operations
|
—
|
45
|
$ |
45
|
||||||||
Net income (loss) attributable to Dominion Energy Gas
|
130
|
(47
|
) |
83
|
||||||||
Six Months Ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|||
Operating revenue
|
$
|
1,096
|
|
$
|
—
|
|
$
|
1,096
|
|
|||
Net income from discontinued operations
|
|
—
|
|
|
80
|
|
|
80
|
|
|||
Net income attributable to Dominion Energy Gas
|
|
254
|
|
|
55
|
|
|
309
|
|
|||
Six Months Ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|||
Operating revenue
|
$ |
898
|
$ |
—
|
$ |
898
|
||||||
Net income from discontinued operations
|
—
|
102
|
102
|
|||||||||
Net income attributable to Dominion Energy Gas
|
253
|
10
|
263
|
|||||||||
Exhibit 99.2
GLOSSARY OF TERMS
The following abbreviations or acronyms used in this Form 8-K are defined below:
Abbreviation or Acronym |
Definition |
|
2019 Equity Units |
Dominion Energys 2019 Series A Equity Units issued in June 2019, initially in the form of 2019 Series A Corporate Units, consisting of a stock purchase contract and a 1/10 interest in a share of the Series A Preferred Stock |
|
AFUDC |
Allowance for funds used during construction |
|
ARO |
Asset retirement obligation |
|
Atlantic Coast Pipeline |
Atlantic Coast Pipeline, LLC, a limited liability company owned by Dominion Energy, Duke and Southern Company Gas |
|
bcf |
Billion cubic feet |
|
Blue Racer |
Blue Racer Midstream, LLC, a joint venture between Caiman Energy II, LLC and FR BR Holdings, LLC effective December 2018 |
|
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, or 75 degrees Fahrenheit in DESCs service territory, calculated as the difference between 65 or 75 degrees, as applicable, and the average temperature for that day |
|
Cove Point |
Dominion Energy Cove Point LNG, LP |
|
DECG |
Dominion Energy Carolina Gas Transmission, LLC |
|
DESC |
The legal entity, Dominion Energy South Carolina, Inc. (formerly known as South Carolina Electric & Gas Company), one or more of its consolidated subsidiaries or operating segments, or the entirety of Dominion Energy South Carolina, Inc. and its consolidated subsidiaries |
|
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 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 GP Holding Company, LLC, Iroquois GP Holding Company, LLC, DECG and Dominion Energy Questar Pipeline, or the entirety of Dominion Energy Midstream Partners, LP and its consolidated subsidiaries |
|
Dominion Energy Questar Pipeline |
The legal entity, Dominion Energy Questar Pipeline, LLC, one or more of its consolidated subsidiaries, or the entirety of Dominion Energy Questar Pipeline, LLC and its consolidated subsidiaries |
|
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 |
|
EPS |
Earnings per share |
|
FERC |
Federal Energy Regulatory Commission |
1
Abbreviation or Acronym |
Definition |
|
Gas Infrastructure |
Gas Infrastructure Group operating segment |
|
GHG |
Greenhouse gas |
|
Heating degree days |
Units measuring the extent to which the average daily temperature is less than 65 degrees Fahrenheit, or 60 degrees Fahrenheit in DESCs service territory, calculated as the difference between 65 or 60 degrees, as applicable, and the average temperature for that day |
|
Iroquois |
Iroquois Gas Transmission System, L.P. |
|
Liquefaction Facility |
A natural gas export/liquefaction facility at Cove Point |
|
LNG |
Liquefied natural gas |
|
MD&A |
Managements Discussion and Analysis of Financial Condition and Results of Operations |
|
MWh |
Megawatt hour |
|
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 |
|
NOx |
Nitrogen oxide |
|
NYSE |
New York Stock Exchange |
|
Order 1000 |
Order issued by FERC adopting requirements for electric transmission planning, cost allocation and development |
|
PJM |
PJM Interconnection, L.L.C. |
|
Power Delivery |
Power Delivery Group operating segment |
|
Power Generation |
Power Generation Group operating segment |
|
Santee Cooper |
South Carolina Public Service Authority |
|
SCANA |
The legal entity, SCANA Corporation, one or more of its consolidated subsidiaries or the entirety of SCANA Corporation and its consolidated subsidiaries |
|
SCANA Combination |
Dominion Energys acquisition of SCANA completed on January 1, 2019 pursuant to the terms of the agreement and plan of merger entered on January 2, 2018 between Dominion Energy and SCANA |
|
SEC |
U.S. Securities and Exchange Commission |
|
Series A Preferred Stock |
Dominion Energys 1.75% Series A Cumulative Perpetual Convertible Preferred Stock, without par value, with a liquidation preference of $1,000 per share |
|
Southeast Energy |
Southeast Energy Group operating segment |
|
Standard & Poors |
Standard & Poors Ratings Services, a division of S&P Global Inc. |
|
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 |
|
Westinghouse |
Westinghouse Electric Company LLC |
2
ITEM 2. 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 Powers and Dominion Energy Gas results of operations. MD&A should be read in conjunction with the Companies Consolidated Financial Statements. 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:
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Forward-Looking Statements |
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Accounting Matters Dominion Energy |
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Dominion Energy |
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Results of Operations |
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Segment Results of Operations |
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Virginia Power |
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Results of Operations |
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Dominion Energy Gas |
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Results of Operations |
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Liquidity and Capital Resources Dominion Energy |
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Future Issues and Other Matters Dominion Energy |
Forward-Looking Statements
This report contains statements concerning the Companies expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In most cases, the reader can identify these forward-looking statements by such words as anticipate, estimate, forecast, expect, believe, should, could, plan, may, continue, target or other similar words.
The Companies make forward-looking statements with full knowledge that risks and uncertainties exist that may cause actual results to differ materially from predicted results. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Additionally, other factors may cause actual results to differ materially from those indicated in any forward-looking statement. These factors include but are not limited to:
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Unusual weather conditions and their effect on energy sales to customers and energy commodity prices; |
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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; |
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Federal, state and local legislative and regulatory developments, including changes in federal and state tax laws and regulations; |
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Risks of operating businesses in regulated industries that are subject to changing regulatory structures; |
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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; |
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Changes in rules for regional transmission organizations and independent system operators 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; |
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Risks associated with Virginia Powers membership and participation in PJM, including risks related to obligations created by the default of other participants; |
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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; |
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Changes in future levels of domestic and international natural gas production, supply or consumption; |
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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; |
3
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Timing and receipt of regulatory approvals necessary for planned construction or growth projects and compliance with conditions associated with such regulatory approvals; |
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The inability to complete planned construction, conversion or growth projects at all, or with the outcomes or within the terms and time frames initially anticipated, including as a result of increased public involvement, intervention or litigation in such projects; |
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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; |
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Cost of environmental compliance, including those costs related to climate change; |
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Changes in implementation and enforcement practices of regulators relating to environmental standards and litigation exposure for remedial activities; |
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Difficulty in anticipating mitigation requirements associated with environmental and other regulatory approvals or related appeals; |
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Unplanned outages at facilities in which the Companies have an ownership interest; |
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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; |
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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; |
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Changes in operating, maintenance and construction costs; |
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Domestic terrorism and other threats to the Companies physical and intangible assets, as well as threats to cybersecurity; |
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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; |
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Competition in the development, construction and ownership of certain electric transmission facilities in Dominion Energy and Virginia Powers service territory in connection with Order 1000; |
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Changes in technology, particularly with respect to new, developing or alternative sources of generation and smart grid technologies; |
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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; |
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Receipt of approvals for, and timing of, closing dates for acquisitions and divestitures; |
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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; |
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Adverse outcomes in litigation matters or regulatory proceedings, including matters acquired in the SCANA Combination; |
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Counterparty credit and performance risk; |
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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; |
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Fluctuations in energy-related commodity prices and the effect these could have on Dominion Energys and Dominion Energy Gas earnings and the Companies liquidity position and the underlying value of their assets; |
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Fluctuations in interest rates or foreign currency exchange rates; |
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Changes in rating agency requirements or credit ratings and their effect on availability and cost of capital; |
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Global capital market conditions, including the availability of credit and the ability to obtain financing on reasonable terms; |
4
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Political and economic conditions, including inflation and deflation; |
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Employee workforce factors including collective bargaining agreements and labor negotiations with union employees; and |
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Changes in financial or regulatory accounting principles or policies imposed by governing bodies. |
Additionally, other risks that could cause actual results to differ from predicted results are set forth in Item 1A. Risk Factors in the Companies Annual Report on Form 10-K for the year ended December 31, 2018, as updated in Current Report on Form 8-K, filed November 18, 2019.
The Companies forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. The Companies caution the reader not to place undue reliance on their forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, differ materially from actual results. The Companies undertake no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.
Accounting Matters
Critical Accounting Policies and Estimates
As of June 30, 2019, there have been no significant changes with regard to the critical accounting policies and estimates disclosed in MD&A in the Companies Annual Report on Form 10-K for the year ended December 31, 2018, as updated in Current Report on Form 8-K, filed November 18, 2019. The policies disclosed included the accounting for regulated operations, AROs, income taxes, derivative contracts and financial instruments at fair value, impairment testing of goodwill, long-lived assets and equity method investments and employee benefit plans.
Dominion Energy
Results of Operations
Presented below is a summary of Dominion Energys consolidated results:
2019 | 2018 | $ Change | ||||||||||
(millions, except EPS) | ||||||||||||
Second Quarter |
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Net income attributable to Dominion Energy |
$ | 54 | $ | 449 | $ | (395 | ) | |||||
Diluted EPS |
0.05 | 0.69 | (0.64 | ) | ||||||||
Year-To-Date |
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Net income (loss) attributable to Dominion Energy |
$ | (626 | ) | $ | 952 | $ | (1,578 | ) | ||||
Diluted EPS |
(0.78 | ) | 1.46 | (2.24 | ) |
Overview
Second Quarter 2019 vs. 2018
Net income attributable to Dominion Energy decreased 88%, primarily due to charges related to a voluntary retirement program, Virginia Powers contract termination with a non-utility generator, litigation acquired in the SCANA Combination and the abandonment of a project at a Virginia Power electric generating facility. These decreases were partially offset by the absence of charges for disallowance of FERC-regulated plant and future ash pond and landfill closure costs in connection with the enactment of Virginia legislation in April 2018 and the operations acquired in the SCANA Combination.
Year-To-Date 2019 vs. 2018
Net income attributable to Dominion Energy decreased $1.6 billion, primarily due to charges for refunds of amounts previously collected from retail electric customers of DESC for the NND Project, a voluntary retirement program, the planned early retirement of certain Virginia Power electric generation facilities and automated meter reading infrastructure, regulatory assets and property, plant and equipment acquired in the SCANA Combination for which Dominion Energy committed to forgo recovery, litigation acquired in the SCANA Combination and Virginia Powers contract termination with a non-utility generator. These decreases were partially offset by an increase in net investment earnings on nuclear decommissioning trust funds, the revision of future ash pond and landfill closure costs as a result of Virginia legislation enacted in March 2019, the absence of charges associated with Virginia legislation enacted in March 2018 and April 2018 and disallowance of FERC-regulated plant and the operations acquired in the SCANA Combination.
5
Analysis of Consolidated Operations
Presented below are selected amounts related to Dominion Energys results of operations:
Second Quarter | Year-To-Date | |||||||||||||||||||||||
2019 | 2018 | $ Change | 2019 | 2018 | $ Change | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
Operating revenue |
$ | 3,970 | $ | 3,088 | $ | 882 | $ | 7,828 | $ | 6,554 | $ | 1,274 | ||||||||||||
Electric fuel and other energy-related purchases |
718 | 623 | 95 | 1,509 | 1,367 | 142 | ||||||||||||||||||
Purchased electric capacity |
24 | 23 | 1 | 63 | 37 | 26 | ||||||||||||||||||
Purchased gas |
227 | 64 | 163 | 957 | 404 | 553 | ||||||||||||||||||
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Net revenue |
3,001 | 2,378 | 623 | 5,299 | 4,746 | 553 | ||||||||||||||||||
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Other operations and maintenance |
1,283 | 873 | 410 | 2,285 | 1,668 | 617 | ||||||||||||||||||
Depreciation, depletion and amortization |
661 | 463 | 198 | 1,312 | 961 | 351 | ||||||||||||||||||
Other taxes |
284 | 166 | 118 | 576 | 365 | 211 | ||||||||||||||||||
Impairment of assets and other charges |
312 | 134 | 178 | 1,147 | 135 | 1,012 | ||||||||||||||||||
Other income |
92 | 185 | (93 | ) | 480 | 285 | 195 | |||||||||||||||||
Interest and related charges |
452 | 361 | 91 | 921 | 675 | 246 | ||||||||||||||||||
Income tax expense |
43 | 88 | (45 | ) | 157 | 223 | (66 | ) | ||||||||||||||||
Noncontrolling interests |
4 | 29 | (25 | ) | 7 | 52 | (45 | ) |
An analysis of Dominion Energys results of operations follows:
Second Quarter 2019 vs. 2018
Net revenue increased 26%, primarily due to:
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A $547 million increase from operations acquired in the SCANA Combination; |
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An $88 million increase from Virginia Power rate adjustment clauses; and |
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A $52 million increase from the Liquefaction Facility, primarily reflecting the absence of credits associated with the start-up phase ($35 million) and operations being included for the full quarter of 2019 ($18 million). |
These increases were partially offset by:
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A $52 million decrease from the absence of certain merchant generation facilities sold in 2018; and |
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A $34 million decrease in services performed for Atlantic Coast Pipeline. |
Other operations and maintenance increased 47%, primarily reflecting:
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An increase in merger and integration-related costs associated with the SCANA Combination ($298 million), including a charge related to a voluntary retirement program ($288 million); |
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A $190 million increase from operations acquired in the SCANA Combination; and |
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A $42 million increase from additional planned outage days at certain generation facilities; partially offset by |
6
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The absence of an $81 million 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 $33 million decrease in services performed for Atlantic Coast Pipeline. These expenses are billed to Atlantic Coast Pipeline and do not significantly impact net income; and |
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A $24 million benefit associated with a revision of certain AROs. |
Depreciation, depletion and amortization increased 43%, primarily due to property, plant and equipment acquired in the SCANA Combination ($147 million), including amortization of NND Project costs ($35 million), an increase from various growth projects being placed into service ($38 million) and the absence of a benefit for the retroactive application of depreciation rates for regulated nuclear plants to comply with Virginia Commission requirements ($38 million).
Other taxes increased 71%, primarily due to the SCANA Combination ($80 million) and a charge related to a voluntary retirement program ($23 million).
Impairment of assets and other charges increased $178 million, primarily due to:
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A $135 million charge related to Virginia Powers contract termination with a non-utility generator; |
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A $100 million charge associated with litigation acquired in the SCANA Combination; and |
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A $62 million charge related to the abandonment of a project at a Virginia Power electric generating facility; partially offset by |
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The absence of a $134 million charge for disallowance of FERC-regulated plant. |
Other income decreased 50%, primarily due to a charge related to a voluntary retirement program ($112 million), partially offset by an increase in net investment earnings on nuclear decommissioning trust funds ($34 million).
Interest and related charges increased 25%, primarily due to debt acquired in the SCANA Combination net of debt redeemed in the first quarter of 2019 ($70 million) and higher long-term debt interest expense resulting from net debt issuances in 2018 ($10 million).
Income tax expense decreased 51%, primarily due to lower pre-tax income ($63 million), partially offset by the absence of a state legislative change ($18 million).
Noncontrolling interests decreased 86%, primarily due to the acquisition of the public interest in Dominion Energy Midstream in January 2019.
Year-To-Date 2019 vs. 2018
Net revenue increased 12%, primarily reflecting:
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A $246 million increase from the Liquefaction Facility, including terminalling services provided to the Export Customers ($190 million), the absence of credits associated with the start-up phase ($35 million) and regulated gas transportation contracts to serve the Export Customers ($23 million); |
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The absence of a $215 million charge associated with Virginia legislation enacted in March 2018 that required one-time rate credits of certain amounts to utility customers; |
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A $134 million increase from the SCANA Combination, due to operations acquired ($1.1 billion), partially offset by a $1.0 billion charge for refunds of amounts previously collected from retail electric customers of DESC for the NND Project; and |
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A $102 million increase from Virginia Power rate adjustment clauses. |
These increases were partially offset by:
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A $99 million decrease from the absence of certain merchant generation facilities sold in 2018; |
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A $49 million decrease in services performed for Atlantic Coast Pipeline; and |
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A $39 million decrease in sales to Virginia Power retail customers, primarily due to a decrease in heating degree days during the heating season. |
Other operations and maintenance increased 37%, primarily reflecting:
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An increase in merger and integration-related costs associated with the SCANA Combination ($409 million), including a charge related to a voluntary retirement program ($288 million); |
7
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A $374 million increase from operations acquired in the SCANA Combination; |
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The absence of gains related to agreements to convey shale development rights under natural gas storage fields ($50 million); |
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A $48 million increase from additional planned outage days at certain generation facilities; and |
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A $25 million increase in operating expenses from the commercial operations of the Liquefaction Facility and costs associated with regulated gas transportation contracts to serve the Export Customers. |
These increases were partially offset by:
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A $113 million benefit from the revision of future ash pond and landfill closure costs as a result of Virginia legislation enacted in March 2019; |
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The absence of an $81 million charge associated primarily with future ash pond and landfill closure costs in connection with the enactment of Virginia legislation in April 2018; and |
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A $48 million decrease 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 37%, primarily due to property, plant and equipment acquired in the SCANA Combination ($275 million), including amortization of NND Project costs ($58 million), an increase from various growth projects being placed into service ($93 million), including the Liquefaction Facility ($28 million), and the absence of a benefit for the retroactive application of depreciation rates for regulated nuclear plants to comply with Virginia Commission requirements ($31 million).
Other taxes increased 58%, primarily due to the SCANA Combination ($155 million) and a charge related to a voluntary retirement program ($23 million).
Impairment of assets and other charges increased $1.0 billion, primarily due to:
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A $368 million charge related to the early retirement of certain Virginia Power electric generation facilities; |
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Charges associated with litigation acquired in the SCANA Combination ($278 million); |
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A $160 million charge related to Virginia Powers planned early retirement of certain automated meter reading infrastructure; |
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A $135 million charge related to Virginia Powers contract termination with a non-utility generator; |
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A $105 million charge for property, plant and equipment acquired in the SCANA Combination for which Dominion Energy committed to forgo recovery; and |
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A $62 million charge related to the abandonment of a project at a Virginia Power electric generating facility; partially offset by |
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The absence of a $134 million charge for disallowance of FERC-regulated plant. |
Other income increased 68%, primarily reflecting an increase in net investment earnings on nuclear decommissioning trust funds ($334 million), partially offset by a charge related to a voluntary retirement program ($112 million).
Interest and related charges increased 36%, primarily due to debt acquired in the SCANA Combination net of debt redeemed in the first quarter of 2019 ($163 million), the absence of capitalization of interest expense associated with the Liquefaction Facility upon completion of construction ($46 million) and higher long-term debt interest expense resulting from net debt issuances in 2018 ($29 million).
Income tax expense decreased 30%, primarily due to lower pre-tax income ($283 million), partially offset by a charge for certain income tax-related regulatory assets acquired in the SCANA Combination for which Dominion Energy committed to forgo recovery ($198 million) and the absence of a state legislative change ($18 million).
Noncontrolling interests decreased 87%, primarily due to the acquisition of the public interest in Dominion Energy Midstream in January 2019.
8
Segment Results of Operations
Segment results include the impact of intersegment revenues and expenses, which may result in intersegment profit and loss. Presented below is a summary of contributions by Dominion Energys operating segments to net income (loss) attributable to Dominion Energy:
Net Income (Loss) attributable to Dominion Energy |
Diluted EPS | |||||||||||||||||||||||
2019 | 2018 | $ Change | 2019 | 2018 | $ Change | |||||||||||||||||||
(millions, except EPS) | ||||||||||||||||||||||||
Second Quarter |
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Power Delivery |
$ | 156 | $ | 145 | $ | 11 | $ | 0.20 | $ | 0.23 | $ | (0.03 | ) | |||||||||||
Power Generation |
250 | 276 | (26 | ) | 0.31 | 0.42 | (0.11 | ) | ||||||||||||||||
Gas Infrastructure |
247 | 249 | (2 | ) | 0.31 | 0.38 | (0.07 | ) | ||||||||||||||||
Southeast Energy |
82 | | 82 | 0.10 | | 0.10 | ||||||||||||||||||
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Primary operating segments |
735 | 670 | 65 | 0.92 | 1.03 | (0.11 | ) | |||||||||||||||||
Corporate and Other |
(681 | ) | (221 | ) | (460 | ) | (0.87 | ) | (0.34 | ) | (0.53 | ) | ||||||||||||
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Consolidated |
$ | 54 | $ | 449 | $ | (395 | ) | $ | 0.05 | $ | 0.69 | $ | (0.64 | ) | ||||||||||
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Year-To-Date |
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Power Delivery |
$ | 311 | $ | 301 | $ | 10 | $ | 0.39 | $ | 0.46 | $ | (0.07 | ) | |||||||||||
Power Generation |
558 | 624 | (66 | ) | 0.70 | 0.96 | (0.26 | ) | ||||||||||||||||
Gas Infrastructure |
606 | 576 | 30 | 0.76 | 0.88 | (0.12 | ) | |||||||||||||||||
Southeast Energy |
214 | | 214 | 0.27 | | 0.27 | ||||||||||||||||||
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Primary operating segments |
1,689 | 1,501 | 188 | 2.12 | 2.30 | (0.18 | ) | |||||||||||||||||
Corporate and Other |
(2,315 | ) | (549 | ) | (1,766 | ) | (2.90 | ) | (0.84 | ) | (2.06 | ) | ||||||||||||
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Consolidated |
$ | (626 | ) | $ | 952 | $ | (1,578 | ) | $ | (0.78 | ) | $ | 1.46 | $ | (2.24 | ) | ||||||||
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Power Delivery
Presented below are selected operating statistics related to Power Deliverys operations:
Second Quarter | Year-To-Date | |||||||||||||||||||||||
2019 | 2018 | % Change | 2019 | 2018 | % Change | |||||||||||||||||||
Electricity delivered (million MWh) |
20.6 | 20.9 | (1 | )% | 42.4 | 43.0 | (1 | )% | ||||||||||||||||
Degree days (electric distribution service area): |
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Cooling |
644 | 611 | 5 | 649 | 619 | 5 | ||||||||||||||||||
Heating |
150 | 284 | (47 | ) | 2,042 | 2,306 | (11 | ) | ||||||||||||||||
Average electric distribution customer accounts (thousands)(1) |
2,622 | 2,597 | 1 | 2,620 | 2,594 | 1 |
(1) |
Period average. |
Presented below, on an after-tax basis, are the key factors impacting Power Deliverys net income contribution:
Second Quarter 2019 vs. 2018 Increase (Decrease) |
Year-To-Date 2019 vs. 2018 Increase (Decrease) |
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Amount | EPS | Amount | EPS | |||||||||||||
(millions, except EPS) | ||||||||||||||||
Regulated electric sales: |
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Weather |
$ | (1 | ) | $ | | $ | (9 | ) | $ | (0.01 | ) | |||||
Other |
2 | | 5 | 0.01 | ||||||||||||
Rate adjustment clause equity return |
11 | 0.02 | 23 | 0.04 | ||||||||||||
Storm damage and service restoration |
(5 | ) | (0.01 | ) | (10 | ) | (0.02 | ) | ||||||||
Other |
4 | | 1 | | ||||||||||||
Share dilution |
| (0.04 | ) | | (0.09 | ) | ||||||||||
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Change in net income contribution |
$ | 11 | $ | (0.03 | ) | $ | 10 | $ | (0.07 | ) | ||||||
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9
Power Generation
Presented below are selected operating statistics related to Power Generations operations:
Second Quarter | Year-To-Date | |||||||||||||||||||||||
2019 | 2018 | % Change | 2019 | 2018 | % Change | |||||||||||||||||||
Electricity supplied (million MWh): |
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Utility |
20.9 | 20.8 | | % | 42.8 | 43.1 | (1 | )% | ||||||||||||||||
Merchant |
4.4 | 7.7 | (43) | 9.6 | 15.0 | (36 | ) | |||||||||||||||||
Degree days (electric utility service area): |
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Cooling |
644 | 611 | 5 | 649 | 619 | 5 | ||||||||||||||||||
Heating |
150 | 284 | (47) | 2,042 | 2,306 | (11 | ) |
Presented below, on an after-tax basis, are the key factors impacting Power Generations net income contribution:
Second Quarter 2019 vs. 2018 Increase (Decrease) |
Year-To-Date 2019 vs. 2018 Increase (Decrease) |
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Amount | EPS | Amount | EPS | |||||||||||||
(millions, except EPS) | ||||||||||||||||
Merchant generation margin |
$ | 7 | $ | 0.01 | $ | (3 | ) | $ | | |||||||
Regulated electric sales: |
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Weather |
(3 | ) | | (19 | ) | (0.03 | ) | |||||||||
Other |
(2 | ) | | (6 | ) | (0.01 | ) | |||||||||
Planned outage costs |
(30 | ) | (0.05 | ) | (35 | ) | (0.05 | ) | ||||||||
Electric capacity |
8 | 0.01 | (3 | ) | | |||||||||||
Sale of certain merchant generation facilities |
(19 | ) | (0.03 | ) | (33 | ) | (0.05 | ) | ||||||||
Renewable energy investment tax credits |
8 | 0.01 | 8 | 0.01 | ||||||||||||
Interest expense |
7 | 0.01 | 13 | 0.02 | ||||||||||||
Other |
(2 | ) | | 12 | 0.01 | |||||||||||
Share dilution |
| (0.07 | ) | | (0.16 | ) | ||||||||||
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Change in net income contribution |
$ | (26 | ) | $ | (0.11 | ) | $ | (66 | ) | $ | (0.26 | ) | ||||
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Gas Infrastructure
Presented below are selected operating statistics related to Gas Infrastructures operations:
Second Quarter | Year-To-Date | |||||||||||||||||||||||
2019 | 2018 | % Change | 2019 | 2018 | % Change | |||||||||||||||||||
Gas distribution throughput (bcf): |
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Sales |
19 | 19 | | % | 83 | 76 | 9 | % | ||||||||||||||||
Transportation |
147 | 158 | (7) | 370 | 372 | (1 | ) | |||||||||||||||||
Heating degree days (gas distribution service area): |
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Eastern region |
526 | 670 | (21) | 3,441 | 3,585 | (4 | ) | |||||||||||||||||
Western region |
634 | 405 | 57 | 3,204 | 2,500 | 28 | ||||||||||||||||||
Average gas distribution customer accounts (thousands)(1): |
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Sales |
1,267 | 1,250 | 1 | 1,267 | 1,254 | 1 | ||||||||||||||||||
Transportation |
1,116 | 1,105 | 1 | 1,112 | 1,100 | 1 | ||||||||||||||||||
Average retail energy marketing customer accounts (thousands)(1) |
375 | 862 | (56) | 373 | 862 | (57 | ) |
(1) |
Period average. |
10
Presented below, on an after-tax basis, are the key factors impacting Gas Infrastructures net income contribution:
Second Quarter 2019 vs. 2018 Increase (Decrease) |
Year-To-Date 2019 vs. 2018 Increase (Decrease) |
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Amount | EPS | Amount | EPS | |||||||||||||
(millions, except EPS) | ||||||||||||||||
Cove Point export contracts |
$ | 36 | $ | 0.06 | $ | 148 | $ | 0.23 | ||||||||
Noncontrolling interest(1) |
16 | 0.03 | 30 | 0.05 | ||||||||||||
Interest expense, net |
(14 | ) | (0.02 | ) | (64 | ) | (0.10 | ) | ||||||||
Assignment of shale development rights |
(4 | ) | (0.01 | ) | (36 | ) | (0.05 | ) | ||||||||
State legislative change |
(18 | ) | (0.03 | ) | (18 | ) | (0.03 | ) | ||||||||
Sale of Blue Racer |
(10 | ) | (0.02 | ) | (19 | ) | (0.03 | ) | ||||||||
Other |
(8 | ) | (0.01 | ) | (11 | ) | (0.02 | ) | ||||||||
Share dilution |
| (0.07 | ) | | (0.17 | ) | ||||||||||
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Change in net income contribution |
$ | (2 | ) | $ | (0.07 | ) | $ | 30 | $ | (0.12 | ) | |||||
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(1) |
Reflects the acquisition of the public interest in Dominion Energy Midstream in January 2019. |
Southeast Energy
Presented below are selected operating statistics related to Southeast Energys operations:
Second Quarter | Year-To-Date | |||||||
2019 |
2019 |
|||||||
Electricity delivered (million MWh) |
5.8 | 10.9 | ||||||
Electricity supplied (million MWh) |
6.2 | 11.4 | ||||||
Degree days (electric distribution service area): |
||||||||
Cooling |
268 | 268 | ||||||
Heating |
38 | 698 | ||||||
Average electric distribution customer accounts (thousands)(1) |
738 | 736 | ||||||
Gas distribution throughput (bcf): |
||||||||
Sales |
20 | 62 | ||||||
Transportation |
14 | 31 | ||||||
Heating degree days (gas distribution service area) |
50 | 808 | ||||||
Average gas distribution customer accounts (thousands)(1) |
964 | 963 | ||||||
Average retail energy marketing customer accounts (thousands)(1) |
415 | 419 |
(1) |
Period average. |
Presented below, on an after-tax basis, are the key factors impacting Southeast Energys net income contribution:
Second Quarter 2019 vs. 2018 Increase (Decrease) |
Year-To-Date 2019 vs. 2018 Increase (Decrease) |
|||||||||||||||
Amount | EPS | Amount | EPS | |||||||||||||
(millions, except EPS) | ||||||||||||||||
SCANA Combination |
$ | 82 | $ | 0.10 | $ | 214 | $ | 0.27 | ||||||||
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Change in net income contribution |
$ | 82 | $ | 0.10 | $ | 214 | $ | 0.27 | ||||||||
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11
Corporate and Other
Presented below are the Corporate and Other segments after-tax results:
Second Quarter | Year-To-Date | |||||||||||||||||||||||
2019 | 2018 | $ Change | 2019 | 2018 | $ Change | |||||||||||||||||||
(millions, except EPS) | ||||||||||||||||||||||||
Specific items attributable to operating segments |
$ | (500 | ) | $ | (92 | ) | $ | (408 | ) | $ | (1,875 | ) | $ | (310 | ) | $ | (1,565 | ) | ||||||
Specific items attributable to Corporate and Other segment |
(65 | ) | (19 | ) | (46 | ) | (243 | ) | (39 | ) | (204 | ) | ||||||||||||
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Total specific items |
(565 | ) | (111 | ) | (454 | ) | (2,118 | ) | (349 | ) | (1,769 | ) | ||||||||||||
Other corporate operations(1) |
(116 | ) | (110 | ) | (6 | ) | (197 | ) | (200 | ) | 3 | |||||||||||||
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Total net expense |
$ | (681 | ) | $ | (221 | ) | $ | (460 | ) | $ | (2,315 | ) | $ | (549 | ) | $ | (1,766 | ) | ||||||
EPS impact |
$ | (0.87 | ) | $ | (0.34 | ) | $ | (0.53 | ) | $ | (2.90 | ) | $ | (0.84 | ) | $ | (2.06 | ) | ||||||
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(1) |
Primarily consists of net interest expense. |
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 those segments performance or in allocating resources. See Note 22 to the Consolidated Financial Statements in this report for discussion of these items in more detail. Corporate and Other also includes items attributable to the Corporate and Other segment.
Virginia Power
Results of Operations
Presented below is a summary of Virginia Powers consolidated results:
Second Quarter | Year-To-Date | |||||||||||||||||||||||
2019 | 2018 | $ Change | 2019 | 2018 | $ Change | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
Net income |
$ | 100 | $ | 339 | $ | (239 | ) | $ | 120 | $ | 523 | $ | (403 | ) |
12
Overview
Second Quarter 2019 vs. 2018
Net income decreased 71%, primarily due to charges related to a voluntary retirement program, a contract termination with a non-utility generator and the abandonment of a project at an electric generating facility. These decreases were partially offset by the absence of a charge associated primarily with future ash pond and landfill closure costs in connection with the enactment of Virginia legislation in April 2018.
Year-To-Date 2019 vs. 2018
Net income decreased 77%, primarily due to charges associated with the planned early retirement of certain electric generation facilities and automated meter reading infrastructure, a voluntary retirement program, a contract termination with a non-utility generator and the abandonment of a project at an electric generating facility. These decreases were partially offset by the revision of future ash pond and landfill closure costs as a result of Virginia legislation enacted in March 2019 and the absence of charges associated with Virginia legislation enacted in March 2018 and April 2018.
Analysis of Consolidated Operations
Presented below are selected amounts related to Virginia Powers results of operations:
Second Quarter | Year-To-Date | |||||||||||||||||||||||
2019 | 2018 | $ Change | 2019 | 2018 | $ Change | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
Operating revenue |
$ | 1,938 | $ | 1,829 | $ | 109 | $ | 3,903 | $ | 3,577 | $ | 326 | ||||||||||||
Electric fuel and other energy-related purchases |
536 | 508 | 28 | 1,132 | 1,099 | 33 | ||||||||||||||||||
Purchased electric capacity |
13 | 23 | (10 | ) | 46 | 37 | 9 | |||||||||||||||||
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Net revenue |
1,389 | 1,298 | 91 | 2,725 | 2,441 | 284 | ||||||||||||||||||
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Other operations and maintenance |
565 | 439 | 126 | 844 | 838 | 6 | ||||||||||||||||||
Depreciation and amortization |
299 | 247 | 52 | 603 | 544 | 59 | ||||||||||||||||||
Other taxes |
90 | 79 | 11 | 175 | 162 | 13 | ||||||||||||||||||
Impairment of assets and other charges |
197 | | 197 | 743 | | 743 | ||||||||||||||||||
Other income |
16 | 21 | (5 | ) | 53 | 24 | 29 | |||||||||||||||||
Interest and related charges |
135 | 126 | 9 | 270 | 258 | 12 | ||||||||||||||||||
Income tax expense |
19 | 89 | (70 | ) | 23 | 140 | (117 | ) |
An analysis of Virginia Powers results of operations follows:
Second Quarter 2019 vs. 2018
Net revenue increased 12%, primarily reflecting:
● |
An $88 million increase from rate adjustment clauses; and |
● |
A $10 million decrease in electric capacity expense primarily related to a contract termination with a non-utility generator ($12 million) and the annual PJM capacity performance market effective June 2019 ($8 million), partially offset by the annual PJM capacity performance market effective June 2018 ($10 million). |
Other operations and maintenance increased 1%, primarily reflecting:
● |
A $186 million charge related to a voluntary retirement program; partially offset by |
● |
The absence of an $81 million charge associated primarily with future ash pond and landfill closure costs in connection with the enactment of Virginia legislation in April 2018. |
Depreciation and amortization increased 1%, primarily due to the absence of a benefit for the retroactive application of depreciation rates for regulated nuclear plants to comply with Virginia Commission requirements ($38 million) and various projects being placed into service ($25 million), partially offset by the absence of depreciation from certain electric generation facilities and automated meter reading infrastructure that were retired early ($11 million).
Impairment of assets and other charges increased $197 million, primarily reflecting:
● |
A $135 million charge related to a contract termination with a non-utility generator; and |
● |
A $62 million charge related to the abandonment of a project at an electric generating facility. |
13
Income tax expense decreased 79%, primarily due to lower pre-tax income.
Year-To-Date 2019 vs. 2018
Net revenue increased 12%, primarily reflecting:
● |
The absence of a $215 million charge associated with Virginia legislation enacted in March 2018 that required one-time rate credits of certain amounts to utility customers; and |
● |
A $102 million increase from rate adjustment clauses; partially offset by |
● |
A $9 million increase in net electric capacity expense primarily related to the annual PJM capacity performance market effective June 2018 ($26 million); partially offset by a contract termination with a non-utility generator ($12 million) and the annual PJM capacity performance market effective June 2019 ($8 million); and |
● |
A $39 million decrease in sales to retail customers, primarily due to a decrease in heating degree days during the heating season. |
Other operations and maintenance remained substantially unchanged, primarily reflecting:
● |
A $113 million benefit from the revision of future ash pond and landfill closure costs as a result of Virginia legislation enacted in March 2019; |
● |
The absence of an $81 million charge associated primarily with future ash pond and landfill closure costs in connection with the enactment of Virginia legislation in April 2018; and |
● |
A $15 million decrease in storm damage and service restoration costs, including the absence of Winter Storm Riley ($31 million); substantially offset by |
● |
A $186 million charge related to a voluntary retirement program. |
Depreciation and amortization increased 11%, primarily due to various projects being placed into service ($49 million) and the absence of a benefit for the retroactive application of depreciation rates for regulated nuclear plants to comply with Virginia Commission requirements ($31 million), partially offset by the absence of depreciation from certain electric generation facilities and automated meter reading infrastructure that were retired early ($18 million).
Impairment of assets and other charges increased $743 million, primarily reflecting:
● |
A $368 million charge related to the early retirement of certain electric generation facilities; |
● |
A $160 million charge related to the planned early retirement of certain automated meter reading infrastructure; |
● |
A $135 million charge related to contract termination with a non-utility generator; and |
● |
A $62 million charge related to the abandonment of a project at an electric generating facility. |
Other income increased $29 million, primarily reflecting an increase in net investment earnings on nuclear decommissioning trust funds.
Income tax expense decreased 84%, primarily due to lower pre-tax income.
Dominion Energy Gas
Results of Operations
Presented below is a summary of Dominion Energy Gas consolidated results:
Second Quarter | Year-To-Date | |||||||||||||||||||||||
2019 | 2018 | $ Change | 2019 | 2018 | $ Change | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
Net income attributable to Dominion Energy Gas |
$ | 119 | $ | 83 | $ | 36 | $ | 309 | $ | 263 | $ | 46 |
Overview
Second Quarter 2019 vs. 2018
14
Net income increased 43%, primarily due to the absence of a charge for disallowance of FERC-regulated plant, partially offset by a charge related to a voluntary retirement program.
Year-To-Date 2019 vs. 2018
Net income increased 17%, primarily due to the absence of a charge for disallowance of FERC-regulated plant and the commercial operations of the Liquefaction Facility, partially offset by a charge related to a voluntary retirement program and the absence of gains from agreements to convey shale development rights underneath several natural gas storage fields.
Analysis of Consolidated Operations
Presented below are selected amounts related to Dominion Energy Gas results of operations:
Second Quarter | Year-To-Date | |||||||||||||||||||||||
2019 | 2018 | $ Change | 2019 | 2018 | $ Change | |||||||||||||||||||
(millions) | ||||||||||||||||||||||||
Operating revenue |
$ | 530 | $ | 508 | $ | 22 | $ | 1,096 | $ | 898 | $ | 198 | ||||||||||||
Purchased (excess) gas |
(3 | ) | (6 | ) | 3 | 9 | 8 | 1 | ||||||||||||||||
Other energy-related purchases |
1 | 2 | (1 | ) | 1 | 2 | (1 | ) | ||||||||||||||||
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Net revenue |
532 | 512 | 20 | 1,086 | 888 | 198 | ||||||||||||||||||
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Other operations and maintenance |
210 | 189 | 21 | 386 | 354 | 32 | ||||||||||||||||||
Depreciation and amortization |
92 | 88 | 4 | 182 | 150 | 32 | ||||||||||||||||||
Other taxes |
38 | 25 | 13 | 78 | 52 | 26 | ||||||||||||||||||
Impairment of assets and other charges |
13 | 126 | (113 | ) | 13 | 126 | (113 | ) | ||||||||||||||||
Gains on sales of assets |
| (6 | ) | 6 | | (51 | ) | 51 | ||||||||||||||||
Earnings from equity method investees |
9 | 11 | (2 | ) | 22 | 31 | (9 | ) | ||||||||||||||||
Other income |
44 | 16 | 28 | 85 | 33 | 52 | ||||||||||||||||||
Interest and related charges |
86 | 46 | 40 | 173 | 50 | 123 | ||||||||||||||||||
Income tax expense (benefit) |
23 | (13 | ) | 36 | 66 | 31 | 35 | |||||||||||||||||
Net income from discontinued operations |
26 | 45 | (19 | ) | 80 | 102 | (22 | ) | ||||||||||||||||
Noncontrolling interests |
30 | 46 | (16 | ) | 66 | 79 | (13 | ) |
An analysis of Dominion Energy Gas results of operations follows:
Second Quarter 2019 vs. 2018
Net revenue increased 4%, primarily reflecting:
● |
A $52 million increase from the Liquefaction Facility, primarily reflecting the absence of credits associated with the start-up phase ($35 million) and operations being included for the full quarter of 2019 ($18 million); partially offset by |
● |
A $34 million decrease in services performed for Atlantic Coast Pipeline; and |
● |
A $4 million increase in net fuel costs. |
Other operations and maintenance increased 11%, primarily reflecting:
● |
A $39 million charge related to a voluntary retirement program; |
● |
A $7 million increase in salaries, wages and benefits and general administrative expenses; and |
● |
A $5 million increase in operating expenses from the commercial operations of the Liquefaction Facility and costs associated with regulated gas transportation contracts to serve the Export Customers; partially offset by |
● |
A $33 million decrease in services performed for Atlantic Coast Pipeline. These expenses are billed to Atlantic Coast Pipeline and do not significantly impact net income. |
Other taxes increased 52%, primarily due to due to the Liquefaction Facility being placed into service.
Impairment of assets and other charges decreased 90%, due to the absence of a charge for disallowance of FERC-regulated plant ($126 million), partially offset by the abandonment of the Sweden Valley project ($13 million).
15
Gains on sales of assets decreased $6 million, due to the absence of gains from agreements to convey shale development rights underneath several natural gas storage fields.
Other income increased $28 million, primarily due to interest income from Cove Points promissory notes receivable from Dominion Energy issued in 2018.
Interest and related charges increased 87%, primarily due to Cove Points term loan borrowings.
Income tax expense (benefit) increased $36 million, due to higher pre-tax income.
Noncontrolling interests decreased 35%, primarily due to the acquisition of the public interest in Dominion Energy Midstream in January 2019.
Year-To-Date 2019 vs. 2018
Net revenue increased 22%, primarily reflecting:
● |
A $246 million increase from the Liquefaction Facility, including terminalling services provided to the Export Customers ($190 million), the absence of credits associated with the start-up phase ($35 million) and regulated gas transportation contracts to serve the Export Customers ($23 million); partially offset by |
● |
A $49 million decrease in services performed for Atlantic Coast Pipeline; and |
● |
A $12 million increase in net fuel costs. |
Other operations and maintenance increased 9%, primarily reflecting:
● |
A $39 million charge related to a voluntary retirement program; |
● |
A $25 million increase in operating expenses from the commercial operations of the Liquefaction Facility and costs associated with regulated gas transportation contracts to serve the Export Customers; and |
● |
A $14 million increase in salaries, wages and benefits and general administrative expenses; partially offset by |
● |
A $48 million decrease in services performed for Atlantic Coast Pipeline. These expenses are billed to Atlantic Coast Pipeline and do not significantly impact net income. |
Depreciation and amortization increased by 21%, primarily due to the Liquefaction Facility being placed into service.
Other taxes increased by 50%, primarily due to the Liquefaction Facility being placed into service.
Impairment of assets and other charges decreased 90%, due to the absence of a charge for disallowance of FERC-regulated plant ($126 million), partially offset by the abandonment of the Sweden Valley project ($13 million).
Gains on sales of assets decreased $51 million, primarily due to the absence of gains from agreements to convey shale development rights underneath several natural gas storage fields.
Earnings from equity method investees decreased 29%, primarily due to lower earnings from unsubscribed capacity as a result of a decrease in heating degree days at Iroquois.
Other income increased $52 million, primarily due to interest income from Cove Points promissory notes receivable from Dominion Energy issued in 2018.
Interest and related charges increased $123 million, primarily due to Cove Points term loan borrowings ($68 million), the absence of capitalization of interest expense associated with the Liquefaction Facility upon completion of construction ($46 million) and higher interest expense due to affiliate borrowings ($11 million).
16
Income tax expense (benefit) increased $35 million, primarily due to higher pre-tax income.
Noncontrolling interests decreased 16%, primarily due to the acquisition of the public interest in Dominion Energy Midstream in January 2019.
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 June 30, 2019, Dominion Energy had $3.4 billion of unused capacity under its credit facility. See Note 17 to the Consolidated Financial Statements for more information.
A summary of Dominion Energys cash flows is presented below:
2019 | 2018 | |||||||
(millions) | ||||||||
Cash, restricted cash and equivalents at January 1 |
$ | 391 | $ | 185 | ||||
Cash flows provided by (used in): |
||||||||
Operating activities |
2,313 | 2,425 | ||||||
Investing activities |
(1,833 | ) | (2,236 | ) | ||||
Financing activities |
(311 | ) | (20 | ) | ||||
|
|
|
|
|||||
Net increase in cash, restricted cash and equivalents |
169 | 169 | ||||||
|
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|
|
|||||
Cash, restricted cash and equivalents at June 30 |
$ | 560 | $ | 354 | ||||
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|
|
Operating Cash Flows
Net cash provided by Dominion Energys operating activities decreased $112 million, primarily due to an increase in property tax payments, decreased customer deposits, increased interest, higher customer refunds, and a contract termination payment, partially offset by higher deferred fuel cost recoveries, the commencement of commercial operations of the Liquefaction Facility and operations acquired from the SCANA Combination.
17
Dominion Energy believes that its operations provide a stable source of cash flow to contribute to planned levels of capital expenditures and maintain or grow the dividend on common shares.
Dominion Energys operations are subject to risks and uncertainties that may negatively impact the timing or amounts of operating cash flows, which are discussed in Item 1A. Risk Factors in the Companies Annual Report on Form 10-K for the year ended December 31, 2018, as updated in Current Report on Form 8-K, filed November 18, 2019.
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 June 30, 2019 for these activities. Gross credit exposure for each counterparty is calculated prior to the application of collateral and represents outstanding receivables plus any unrealized on- or off-balance sheet exposure, taking into account contractual netting rights.
Gross Credit
Exposure |
Credit
Collateral |
Net Credit
Exposure |
||||||||||
(millions) | ||||||||||||
Investment grade(1) |
$ | 94 | $ | | $ | 94 | ||||||
Non-investment grade(2) |
1 | | 1 | |||||||||
No external ratings: |
||||||||||||
Internally ratedinvestment grade(3) |
65 | | 65 | |||||||||
Internally ratednon-investment grade(4) |
6 | | 6 | |||||||||
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|
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Total |
$ | 166 | $ | | $ | 166 | ||||||
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|
|
(1) |
Designations as investment grade are based upon minimum credit ratings assigned by Moodys Investors Service and Standard & Poors. The five largest counterparty exposures, combined, for this category represented approximately 33% of the total net credit exposure. |
(2) |
The five largest counterparty exposures, combined, for this category represented approximately less than 1% of the total net credit exposure. |
(3) |
The five largest counterparty exposures, combined, for this category represented approximately 38% of the total net credit exposure. |
(4) |
The five largest counterparty exposures, combined, for this category represented approximately 2% of the total net credit exposure. |
Investing Cash Flows
Net cash used in Dominion Energys investing activities decreased $403 million, primarily due to cash and restricted cash acquired in the SCANA Combination and proceeds from the sale of Blue Racer, partially offset by an increase in plant construction and other property additions.
Financing Cash Flows and Liquidity
Dominion Energy relies on capital markets as significant sources of funding for capital requirements not satisfied by cash provided by its operations. As discussed further in Credit Ratings and Debt Covenants in MD&A in the Companies Annual Report on Form 10-K for the year ended December 31, 2018, as updated in Current Report on Form 8-K, filed November 18, 2019, the 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, as amended. The rules provide for a streamlined shelf registration process to provide registrants with timely access to capital. This allows Dominion Energy to use automatic shelf registration statements to register any offering of securities, other than those for exchange offers or business combination transactions.
Net cash used by Dominion Energys financing activities increased $291 million, primarily due to net debt repayments in 2019 compared to net debt issuances in 2018, lower issuance of common stock and higher common dividend payments, partially offset by the issuance of the 2019 Equity Units.
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 June 30, 2019 was $21 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.
18
In January 2019, Dominion Energy acquired all outstanding partnership interests of Dominion Energy Midstream not owned by Dominion Energy through the issuance of 22.5 million common shares. See Note 17 to the Consolidated Financial Statements for additional information.
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.
In June 2019, Dominion Energy issued $1.6 billion of 2019 Equity Units, initially in the form of 2019 Series A Corporate Units. The Corporate Units are listed on the NYSE under the symbol DCUE. See Note 17 to the Consolidated Financial Statements for additional information.
See Note 17 to the Consolidated Financial Statements in this report for further information regarding Dominion Energys credit facilities, liquidity and significant financing transactions.
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. In the Credit Ratings section of MD&A in the Companies Annual Report on Form 10-K for the year ended December 31, 2018, as updated in Current Report on Form 8-K, filed November 18, 2019, there is a discussion on the use of capital markets by Dominion Energy as well as the impact of credit ratings on the accessibility and costs of using these markets. As of June 30, 2019, there have been no changes in Dominion Energys credit ratings.
Debt Covenants
In the Debt Covenants section of MD&A in the Companies Annual Report on Form 10-K for the year ended December 31, 2018, as updated in Current Report on Form 8-K, filed November 18, 2019, there is a discussion on the various covenants present in the enabling agreements underlying Dominion Energys debt. As of June 30, 2019, there have been no material changes to debt covenants, nor any events of default under Dominion Energys debt covenants.
Future Cash Payments for Contractual Obligations and Planned Capital Expenditures
As of June 30, 2019, there have been no material changes outside the ordinary course of business to Dominion Energys contractual obligations nor any material changes to planned capital expenditures as disclosed in MD&A in the Companies Annual Report on Form 10-K for the year ended December 31, 2018, as updated in Current Report on Form 8-K, filed November 18, 2019.
Use of Off-Balance Sheet Arrangements
As of June 30, 2019, there have been no material changes in the off-balance sheet arrangements disclosed in MD&A in the Companies Annual Report on Form 10-K for the year ended December 31, 2018, as updated in Current Report on Form 8-K, filed November 18, 2019.
Future Issues and Other Matters
The following discussion of future issues and other information includes current developments of previously disclosed matters and new issues arising during the period covered by, and subsequent to, the dates of Dominion Energys Consolidated Financial Statements that may impact future results of operations, financial condition and/or cash flows. This section should be read in conjunction with Item 1. Business and Future Issues and Other Matters in MD&A in the Companies Annual Report on Form 10-K for the year ended December 31, 2018, as updated in Current Report on Form 8-K, filed November 18, 2019, Future Issues and Other Matters in MD&A in the Companies Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, as updated in Current Report on Form 8-K, filed November 18, 2019, and Note 18 to the Consolidated Financial Statements in this report.
Environmental Matters
Dominion Energy is subject to costs resulting from a number of federal, state and local laws and regulations designed to protect human health and the environment. These laws and regulations affect future planning and existing operations. They can result in increased capital, operating and other costs as a result of compliance, remediation, containment and monitoring obligations. See Note 22 to the Consolidated Financial Statements in the Companies Annual Report on Form 10-K for the year ended December 31, 2018, as updated in Current Report on Form 8-K, filed November 18, 2019, Note 17 to the Consolidated Financial Statements in the Companies Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, as updated in Current Report on Form 8-K, filed November 18, 2019, and Note 18 in this report for additional information on various environmental matters.
19
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 May 2019, VDEQ issued a final rule establishing a state carbon regulation program. 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.
Legal Matters
See Notes 3, 13 and 22 to the Consolidated Financial Statements in the Companies Annual Report on Form 10-K for the year ended December 31, 2018, as updated in Current Report on Form 8-K, filed November 18, 2019, Notes 13 and 17 to the Consolidated Financial Statements and Item 1. Legal Proceedings in the Companies Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, as updated in Current Report on Form 8-K, filed November 18, 2019, and Notes 13 and 18 to the Consolidated Financial Statements in this report for additional information on various legal matters.
Regulatory Matters
See Notes 3 and 13 to the Consolidated Financial Statements in the Companies Annual Report on Form 10-K for the year ended December 31, 2018, as updated in Current Report on Form 8-K, filed November 18, 2019, Note 13 to the Consolidated Financial Statements in the Companies Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, as updated in Current Report on Form 8-K, filed November 18, 2019, and Note 13 to the Consolidated Financial Statements in this report for additional information on various regulatory matters.
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 resolution of the appeal to the Supreme Court of the U.S. filed in June 2019, 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. Atlantic Coast Pipeline is also evaluating possible legislative and administrative remedies. Project construction activities, schedules and costs are subject to uncertainty due to permitting and/or work delays (including due to judicial or regulatory action), abnormal weather and other conditions that could result in cost or schedule modifications in the future, a suspension of AFUDC for Atlantic Coast Pipeline and/or impairment charges potentially material to Dominion Energys cash flows, financial position and/or results of operations.
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