State or other jurisdiction of incorporation or organization of the registrants: Virginia

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Dominion Energy, Inc. Yes☒ No ☐ Virginia Electric and Power Company Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).

Dominion Energy, Inc. Yes☒ No ☐ Virginia Electric and Power Company Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Dominion Energy, Inc. Yes ☐ No ☒ Virginia Electric and Power Company Yes ☐ No ☒

At ~~October 13, 2017,~~July 28, 2023, the latest practicable date for determination, Dominion Energy, Inc. had ~~643,529,769~~836,772,913 shares of common stock outstanding and Virginia Electric and Power Company had 274,723 shares of common stock outstanding. Dominion Energy, Inc. is the sole holder of Virginia Electric and Power Company’s common stock. ~~Dominion Energy, Inc. holds all of the membership interests of Dominion Energy Gas Holdings, LLC.~~

This combined Form 10-Q represents separate filings by Dominion Energy, Inc., and Virginia Electric and Power ~~Company and Dominion Energy Gas Holdings, LLC.~~Company. Information contained herein relating to an individual registrant is filed by that registrant on its own behalf. Virginia Electric and Power Company ~~and Dominion Energy Gas Holdings, LLC make~~makes no ~~representations~~representation as to the information relating to Dominion Energy, Inc.’s other operations.

VIRGINIA ELECTRIC AND POWER COMPANY ~~AND DOMINION ENERGY GAS HOLDINGS, LLC MEET~~MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q AND ~~ARE~~IS FILING THIS FORM 10-Q UNDER THE REDUCED DISCLOSURE FORMAT.

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

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

(1) Net of $(2) million and $(10) million tax for the three months ended June 30, 2023 and 2022, respectively, and net of $1 million and $(18) million tax for the six months ended June 30, 2023 and 2022, respectively.

(2) Net of $3 million and $9 million tax for the three months ended June 30, 2023 and 2022, respectively, and net of $(4) million and $28 million tax for the six months ended June 30, 2023 and 2022, respectively.

(3) Net of $— million and $2 million tax for the three months ended June 30, 2023 and 2022, respectively, and net of $— million and $(8) million tax for the six months ended June 30, 2023 and 2022, respectively.

(4) Net of $(2) million and $(3) million tax for the three months ended June 30, 2023 and 2022, respectively, and net of $(5) million and $(7) million tax for the six months ended June 30, 2023 and 2022, respectively.

(5) Net of $1 million and $(3) million tax for the three months ended June 30, 2023 and 2022, respectively, and net of $— million and $(4) million tax for the six months ended June 30, 2023 and 2022, respectively.

(6) Net of $4 million and $(6) million tax for the three months ended June 30, 2023 and 2022, respectively, and net of $8 million and $(12) million tax for the six months ended June 30, 2023 and 2022, respectively.

(7) Net of $— million and $— million tax for the three months ended June 30, 2023 and 2022, respectively, and net of $— million and $— million tax for the six months ended June 30, 2023 and 2022, respectively.

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

(1) Dominion Energy’s Consolidated Balance Sheet at December 31, 2022 has been derived from the audited Consolidated Balance Sheet at that date.

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

(1) Dominion Energy’s Consolidated Balance Sheet at December 31, 2022 has been derived from the audited Consolidated Balance Sheet at that date.

(3) 1.8 billion shares authorized; 837 million and 835 million shares outstanding at June 30, 2023 and December 31, 2022, respectively.

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

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

(millions)

Operating Revenue⁽¹⁾

$
2,154

$
2,211

$
5,732

$
5,877

Operating Expenses

Electric fuel and other energy-related purchases⁽¹⁾

549

516

1,414

1,527

Purchased (excess) electric capacity

21

(6
)

(8
)

107

Other operations and maintenance:

Affiliated suppliers

76

73

229

238

Other

297

370

897

1,041

Depreciation and amortization

288

270

854

765

Other taxes

��
76

74

233

218

Total operating expenses

1,307

1,297

3,619

3,896

Income from operations

847

914

2,113

1,981

Other income

13

13

57

47

Interest and related charges⁽¹⁾

128

118

373

345

Income before income tax expense

732

809

1,797

1,683

Income tax expense

273

306

664

637

Net Income

$
459

$
503

$
1,133

$
1,046

(1)

See Note 19 for amounts attributable to affiliates.

~~(1)~~

~~See Note 17 for amounts attributable to affiliates.~~

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

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED ~~BALANCE SHEETS~~STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
(millions)
Net income	$	332		$	47		$	685		$	404
Other comprehensive income (loss), net of taxes:
Net deferred gains (losses) on derivatives-hedging activities(1)		6			25			(3	)		44
Changes in unrealized net gains (losses) on investment securities(2)		(1	)		(3	)		3			(10	)
Amounts reclassified to net income:
Net derivative (gains) losses-hedging activities(3)		—			—			—			1
Net realized (gains) losses on investment securities(4)		—			—			—			(1	)
Total other comprehensive income (loss)		5			22			—			34
Comprehensive income	$	337		$	69		$	685		$	438

September 30, 2017

December 31, 2016⁽¹⁾

(millions)

ASSETS

Current Assets

Cash and cash equivalents

$
16

$
11

Customer receivables (less allowance for doubtful accounts of $9 and $10)

920

892

Other receivables (less allowance for doubtful accounts of $1 at both dates)

36

99

Affiliated receivables

1

112

Inventories (average cost method)

853

853

Other⁽²⁾

309

281

Total current assets

2,135

2,248

Investments

Nuclear decommissioning trust funds

2,292

2,106

Other

3

3

Total investments

2,295

2,109

Property, Plant and Equipment

Property, plant and equipment

41,813

40,030

Accumulated depreciation and amortization

(13,144
)

(12,436
)
Total property, plant and equipment, net

28,669

27,594

Deferred Charges and Other Assets

Regulatory assets

838

770

Pension and other postretirement benefit assets⁽²⁾

182

130

Other⁽²⁾

462

457

Total deferred charges and other assets

1,482

1,357

Total assets

$
34,581

$
33,308

(1)

Net of $(2) million and $(8) million tax for the three months ended June 30, 2023 and 2022, respectively, and net of $1 million and $(15) million tax for the six months ended June 30, 2023 and 2022, respectively.

~~(1)~~

~~Virginia Power’s Consolidated Balance Sheet at December 31, 2016 has been derived from the audited Consolidated Balance Sheet at that date.~~

(2)

Net of $1 million and $2 million tax for the three months ended June 30, 2023 and 2022, respectively, and net of $— million and $4 million tax for the six months ended June 30, 2023 and 2022, respectively.

~~(2)~~

~~See Note 17 for amounts attributable to affiliates.~~

(3)

Net of $— million and $— million tax for the three months ended June 30, 2023 and 2022, respectively, and net of $— million and $— million tax for the six months ended June 30, 2023 and 2022, respectively.

(4)

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

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED BALANCE ~~SHEETS—(Continued)~~SHEETS

(Unaudited)


	June 30, 2023			December 31, 2022(1)
(millions)
ASSETS
Current Assets
Cash and cash equivalents	$	19		$	22
Customer receivables (less allowance for doubtful accounts of $24 and $21)		1,693			1,578
Other receivables (less allowance for doubtful accounts of $1 and $2)		201			204
Affiliated receivables		72			7
Inventories (average cost method)		1,009			924
Margin deposit assets		32			310
Derivative assets(2)		61			765
Regulatory assets		627			1,140
Other		48			52
Total current assets		3,762			5,002
Investments
Nuclear decommissioning trust funds		3,508			3,202
Other		4			3
Total investments		3,512			3,205
Property, Plant and Equipment
Property, plant and equipment		57,554			54,697
Accumulated depreciation and amortization		(16,760	)		(16,218	)
Total property, plant and equipment, net		40,794			38,479
Deferred Charges and Other Assets
Regulatory assets		4,151			4,247
Other(2)		2,485			2,261
Total deferred charges and other assets		6,636			6,508
Total assets	$	54,704		$	53,194

September 30, 2017

December 31, 2016⁽¹⁾

(millions)

LIABILITIES AND SHAREHOLDER’S EQUITY

Current Liabilities

Securities due within one year

$
851

$
678

Short-term debt

320

65

Accounts payable

337

444

Payables to affiliates

167

109

Affiliated current borrowings

36

262

Accrued interest, payroll and taxes

307

239

Other⁽²⁾

536

725

Total current liabilities

2,554

2,522

Long-Term Debt

10,495

9,852

Deferred Credits and Other Liabilities

Deferred income taxes and investment tax credits

5,357

5,103

Asset retirement obligations

1,300

1,262

Regulatory liabilities

2,202

1,962

Other⁽²⁾

863

742

Total deferred credits and other liabilities

9,722

9,069

Total liabilities

22,771

21,443

Commitments and Contingencies (see Note 15)

Common Shareholder’s Equity

Common stock – no par⁽³⁾

5,738

5,738

Other paid-in capital

1,113

1,113

Retained earnings

4,904

4,968

Accumulated other comprehensive income

55

46

Total common shareholder’s equity

11,810

11,865

Total liabilities and shareholder’s equity

$
34,581

$
33,308

(1)

Virginia Power’s Consolidated Balance Sheet at December 31, 2022 has been derived from the audited Consolidated Balance Sheet at that date.

~~(1)~~

~~Virginia Power’s Consolidated Balance Sheet at December 31, 2016 has been derived from the audited Consolidated Balance Sheet at that date.~~

(2)

See Note 19 for amounts attributable to affiliates.

~~(2)~~

~~See Note 17 for amounts attributable to affiliates.~~

~~(3)~~

~~500,000 shares authorized; 274,723 shares outstanding at September 30, 2017 and December 31, 2016.~~

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

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED ~~STATEMENTS OF CASH FLOWS~~BALANCE SHEETS—(Continued)

(Unaudited)


	June 30, 2023		December 31, 2022(1)
(millions)
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Securities due within one year	$	379	$	1,164
Short-term debt		1,265		941
Accounts payable		540		600
Payables to affiliates		97		255
Affiliated current borrowings		2,330		2,024
Accrued interest, payroll and taxes		298		270
Regulatory liabilities		231		506
Derivative liabilities(2)		126		298
Other		1,103		1,176
Total current liabilities		6,369		7,234
Long-Term Debt
Long-term debt		16,050		14,916
Other		69		65
Total long-term debt		16,119		14,981
Deferred Credits and Other Liabilities
Deferred income taxes and investment tax credits		3,588		3,452
Regulatory liabilities		5,799		5,499
Other(2)		4,899		4,783
Total deferred credits and other liabilities		14,286		13,734
Total liabilities		36,774		35,949
Commitments and Contingencies (see Note 17)
Common Shareholder’s Equity
Common stock – no par(3)		5,738		5,738
Other paid-in capital		1,113		1,113
Retained earnings		11,070		10,385
Accumulated other comprehensive income		9		9
Total common shareholder’s equity		17,930		17,245
Total liabilities and shareholder’s equity	$	54,704	$	53,194

Nine Months Ended September 30,

2017

2016

(millions)

Operating Activities

Net income

$
1,133

$
1,046

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization (including nuclear fuel)

999

903

Deferred income taxes and investment tax credits

262

369

Proceeds from assignment of tower rental portfolio

91

—

Other adjustments

(28
)

(15
)
Changes in:

Accounts receivable

32

(99
)
Affiliated receivables and payables

159

306

Inventories

1

37

Prepayments

(3
)

15

Deferred fuel expenses, net

(48
)

79

Accounts payable

(33
)

4

Accrued interest, payroll and taxes

67

131

Other operating assets and liabilities

(162
)

8

Net cash provided by operating activities

2,470

2,784

Investing Activities

Plant construction and other property additions

(1,917
)

(1,835
)
Purchases of nuclear fuel

(133
)

(106
)
Proceeds from sales of securities

654

478

Purchases of securities

(681
)

(513
)
Other

(29
)

(11
)
Net cash used in investing activities

(2,106
)

(1,987
)
Financing Activities

Issuance (repayment) of short-term debt, net

255

(691
)
Repayment of affiliated current borrowings, net

(226
)

(376
)
Issuance of long-term debt

1,500

750

Repayment of long-term debt

(679
)

(476
)
Common dividend payments to parent

(1,199
)

—

Other

(10
)

(4
)
Net cash used in financing activities

(359
)

(797
)
Increase in cash and cash equivalents

5

—

Cash and cash equivalents at beginning of period

11

18

Cash and cash equivalents at end of period

$
16

$
18

Supplemental Cash Flow Information

Significant noncash investing activities:

Accrued capital expenditures

$
158

$
209

(1)

Virginia Power’s Consolidated Balance Sheet at December 31, 2022 has been derived from the audited Consolidated Balance Sheet at that date.

(2)

See Note 19 for amounts attributable to affiliates.

(3)

500,000 shares authorized; 274,723 shares outstanding at June 30, 2023 and December 31, 2022.

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

VIRGINIA ELECTRIC AND POWER COMPANY

~~DOMINION ENERGY GAS HOLDINGS, LLC~~

CONSOLIDATED STATEMENTS OF ~~INCOME~~COMMON SHAREHOLDER’S EQUITY

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

(millions)

Operating Revenue⁽¹⁾

$
401

$
382

$
1,313

$
1,181

Operating Expenses

Purchased gas⁽¹⁾

19

21

100

71

Other energy-related purchases

4

4

11

8

Other operations and maintenance:

Affiliated suppliers

20

20

65

63

Other

53

113

312

268

Depreciation and amortization

57

55

167

150

Other taxes

42

36

139

127

Total operating expenses

195

249

794

687

Income from operations

206

133

519

494

Earnings from equity method investee

4

5

15

14

Other income

6

2

16

8

Interest and related charges⁽¹⁾

25

23

72

68

Income from operations before income taxes

191

117

478

448

Income tax expense

74

34

176

162

Net Income

$
117

$
83

$
302

$
286

~~(1)~~

~~See Note 17 for amounts attributable to related parties.~~

QUARTER-TO-DATE


	Common Stock
	Shares		Amount		Other Paid-In Capital		Retained Earnings		AOCI			Total
(millions, except for shares)	(thousands)
March 31, 2022		275	$	5,738	$	1,113	$	9,526	$	(29	)	$	16,348
Net income								47					47
Other comprehensive income, net of tax										22			22
Other								1					1
June 30, 2022		275	$	5,738	$	1,113	$	9,574	$	(7	)	$	16,418

March 31, 2023		275	$	5,738	$	1,113	$	10,738	$	4		$	17,593
Net income								332					332
Other comprehensive income, net of tax										5			5
June 30, 2023		275	$	5,738	$	1,113	$	11,070	$	9		$	17,930

YEAR-TO-DATE


	Common Stock
	Shares		Amount		Other Paid-In Capital		Retained Earnings		AOCI			Total
(millions, except for shares)	(thousands)
December 31, 2021		275	$	5,738	$	1,113	$	9,170	$	(41	)	$	15,980
Net income								404					404
Other comprehensive income, net of tax										34			34
June 30, 2022		275	$	5,738	$	1,113	$	9,574	$	(7	)	$	16,418

December 31, 2022		275	$	5,738	$	1,113	$	10,385	$	9		$	17,245
Net income								685					685
Other comprehensive income, net of tax										—			—
June 30, 2023		275	$	5,738	$	1,113	$	11,070	$	9		$	17,930

The accompanying notes are an integral part of ~~Dominion Energy Gas'~~Virginia Power’s Consolidated Financial Statements.

~~DOMINION ENERGY GAS HOLDINGS, LLC~~

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED STATEMENTS OF ~~COMPREHENSIVE INCOME~~CASH FLOWS

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

(millions)

Net income

$
117

$
83

$
302

$
286

Other comprehensive income (loss), net of taxes:

Net deferred gains (losses) on derivatives-hedging
activities⁽¹⁾

1

9

3

(6
)
Amounts reclassified to net income:

Net derivative gains-hedging activities⁽²⁾

(4
)

(1
)

(5
)

(3
)
Net pension and other postretirement benefit costs⁽³⁾

1

1

3

2

Total other comprehensive income (loss)

(2
)

9

1

(7
)
Comprehensive income

$
115

$
92

$
303

$
279

~~(1)~~

Net of $(1) million and $(3) million tax for the three months ended September 30, 2017 and 2016, respectively, and net of $(2) million and $5 million tax for the nine months ended September 30, 2017 and 2016, respectively.

~~(2)~~

Net of $3 million and $2 million tax for the three months ended September 30, 2017 and 2016, respectively, and net of $3 million and $2 million tax for the nine months ended September 30, 2017 and 2016, respectively.

~~(3)~~

~~Net of $(1) million tax for both the three months ended September 30, 2017 and 2016, and net of $(2) million tax for both the nine months ended September 30, 2017 and 2016.~~


Six Months Ended June 30,	2023			2022
(millions)
Operating Activities
Net income	$	685		$	404
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including nuclear fuel)		961			937
Deferred income taxes and investment tax credits		107			147
Impairment of assets and other charges		44			400
Net (gains) losses on nuclear decommissioning trust funds and other investments		(45	)		75
Other adjustments		(5	)		(50	)
Changes in:
Accounts receivable		4			(302	)
Affiliated receivables and payables		(224	)		(27	)
Inventories		(88	)		22
Prepayments		(1	)		4
Deferred fuel expenses, net		386			(780	)
Accounts payable		(27	)		116
Accrued interest, payroll and taxes		27			42
Margin deposit assets and liabilities		278			(311	)
Net realized and unrealized changes related to derivative activities		472			84
Other operating assets and liabilities		(121	)		(72	)
Net cash provided by operating activities		2,453			689
Investing Activities
Plant construction and other property additions		(3,236	)		(1,996	)
Purchases of nuclear fuel		(100	)		(118	)
Acquisition of solar development projects		(12	)		(38	)
Proceeds from sales of securities		719			864
Purchases of securities		(824	)		(892	)
Other		55			(21	)
Net cash used in investing activities		(3,398	)		(2,201	)
Financing Activities
Issuance (repayment) of short-term debt, net		324			(20	)
Issuance (repayment) of affiliated current borrowings, net		306			(587	)
Issuance and remarketing of long-term debt		1,660			2,338
Repayment and repurchase of long-term debt		(1,308	)		(138	)
Other		(42	)		(49	)
Net cash provided by financing activities		940			1,544
Increase (decrease) in cash, restricted cash and equivalents		(5	)		32
Cash, restricted cash and equivalents at beginning of period		24			26
Cash, restricted cash and equivalents at end of period	$	19		$	58

See Note 2 for disclosure of supplemental cash flow information.

The accompanying notes are an integral part of ~~Dominion Energy Gas'~~Virginia Power’s Consolidated Financial Statements.

~~DOMINION ENERGY GAS HOLDINGS, LLC~~

~~CONSOLIDATED BALANCE SHEETS~~

~~(Unaudited)~~

September 30, 2017

December 31, 2016⁽¹⁾

(millions)

ASSETS

Current Assets

Cash and cash equivalents

$
13

$
23

Restricted cash

29

20

Customer receivables (less allowance for doubtful accounts of $1 at both dates)

190

281

Other receivables (less allowance for doubtful accounts of $1 at both dates)⁽²⁾

72

13

Affiliated receivables

17

17

Inventories

90

70

Other⁽²⁾

110

158

Total current assets

521

582

Investments

97

99

Property, Plant and Equipment

Property, plant and equipment

10,971

10,475

Accumulated depreciation and amortization

(2,978
)

(2,851
)
Total property, plant and equipment, net

7,993

7,624

Deferred Charges and Other Assets

Pension and other postretirement benefit assets⁽²⁾

1,714

1,557

Other⁽²⁾

1,303

1,280

Total deferred charges and other assets

3,017

2,837

Total assets

$
11,628

$
11,142

~~(1)~~

~~Dominion Energy Gas’ Consolidated Balance Sheet at December 31, 2016 has been derived from the audited Consolidated Balance Sheet at that date.~~

~~(2)~~

~~See Note 17 for amounts attributable to related parties.~~

~~The accompanying notes are an integral part of Dominion Energy Gas' Consolidated Financial Statements.~~

~~DOMINION ENERGY GAS HOLDINGS, LLC~~

~~CONSOLIDATED BALANCE SHEETS—(Continued)~~

~~(Unaudited)~~

September 30, 2017

December 31, 2016⁽¹⁾

(millions)

LIABILITIES AND EQUITY

Current Liabilities

Short-term debt

$
620

$
460

Accounts payable

161

221

Payables to affiliates

18

29

Affiliated current borrowings

34

118

Accrued interest, payroll and taxes

197

225

Other⁽²⁾

157

162

Total current liabilities

1,187

1,215

Long-Term Debt

3,564

3,528

Deferred Credits and Other Liabilities

Deferred income taxes and investment tax credits

2,622

2,438

Other⁽²⁾

429

425

Total deferred credits and other liabilities

3,051

2,863

Total liabilities

7,802

7,606

Commitments and Contingencies (see Note 15)

Equity

Membership interests

3,948

3,659

Accumulated other comprehensive loss

(122
)

(123
)
Total equity

3,826

3,536

Total liabilities and equity

$
11,628

$
11,142

~~(1)~~

~~Dominion Energy Gas’ Consolidated Balance Sheet at December 31, 2016 has been derived from the audited Consolidated Balance Sheet at that date.~~

~~(2)~~

~~See Note 17 for amounts attributable to related parties.~~

~~The accompanying notes are an integral part of Dominion Energy Gas' Consolidated Financial Statements.~~

~~DOMINION ENERGY GAS HOLDINGS, LLC~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(Unaudited)~~

Nine Months Ended September 30,

2017

2016

(millions)

Operating Activities

Net income

$
302

$
286

Adjustments to reconcile net income to net cash provided by operating activities:

Gains on the sales of assets and equity method investment in Iroquois

(61
)

(50
)
Depreciation and amortization

167

150

Deferred income taxes and investment tax credits

176

204

Other adjustments

(9
)

3

Changes in:

Accounts receivable

88

56

Affiliated receivables and payables

(11
)

91

Inventories

(20
)

(17
)
Deferred purchased gas costs, net

11

7

Prepayments

39

15

Accounts payable

(68
)

(76
)
Accrued interest, payroll and taxes

(28
)

(7
)
Pension and other postretirement benefits

(98
)

(97
)
Other operating assets and liabilities

(13
)

(62
)
Net cash provided by operating activities

475

503

Investing Activities

Plant construction and other property additions

(535
)

(610
)
Proceeds from sale of equity method investment in Iroquois

—

7

Proceeds from assignments of shale development rights

5

10

Other

(16
)

(10
)
Net cash used in investing activities

(546
)

(603
)
Financing Activities

Issuance (repayment) of short-term debt, net

160

(331
)
Issuance of long-term debt

—

680

Repayment of affiliated current borrowings, net

(84
)

(95
)
Distribution payments to parent

(15
)

(150
)
Other

—

(9
)
Net cash provided by financing activities

61

95

Decrease in cash and cash equivalents

(10
)

(5
)
Cash and cash equivalents at beginning of period

23

13

Cash and cash equivalents at end of period

$
13

$
8

Supplemental Cash Flow Information

Significant noncash investing activities:

Accrued capital expenditures

$
54

$
42

~~The accompanying notes are an integral part of Dominion Energy Gas' Consolidated Financial Statements.~~

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Nature of Operations

Dominion Energy, headquartered in Richmond, Virginia, is one of the nation’s largest producers and ~~transporters~~distributors of energy. Dominion Energy’s operations are conducted through various subsidiaries, including Virginia ~~Power~~Power. Dominion Energy’s operations also include DESC, regulated gas distribution operations primarily in the eastern and Rocky Mountain regions of the U.S., nonregulated electric generation and a noncontrolling interest in Cove Point. In July 2023, Dominion Energy ~~Gas. Virginia Power is a regulated public utility that generates, transmits and distributes electricity for sale~~entered into an agreement to sell its remaining 50% noncontrolling partnership interest in Virginia and northeastern North Carolina. Dominion Energy Gas is a holding company that conducts business activities through a regulated interstate natural gas transmission pipeline and underground storage system in the Northeast, mid-Atlantic and Midwest states, regulated gas transportation and distribution operations in Ohio, and gas gathering and processing activities primarily in West Virginia, Ohio and Pennsylvania.Cove Point to BHE. See Note 310 for ~~a description of operations acquired in the Dominion Energy Questar Combination.~~additional information.

Note 2. Significant Accounting Policies

As permitted by the rules and regulations of the SEC, the ~~Companies'~~Companies’ accompanying unaudited Consolidated Financial Statements contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with GAAP. These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes in the ~~Companies'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022.

In the ~~Companies'~~Companies’ opinion, the accompanying unaudited Consolidated Financial Statements contain all adjustments necessary to present fairly their financial position ~~as of September~~at June 30, ~~2017,~~2023, their results of operations and changes in equity for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016,~~2022 and their cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016 and Dominion Energy's changes in equity for the nine months ended September 30, 2017 and 2016.~~2022. Such adjustments are normal and recurring in nature unless otherwise noted.

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

The ~~Companies'~~Companies’ accompanying unaudited Consolidated Financial Statements include, after eliminating intercompany transactions and balances, their accounts, those of their respective majority-owned subsidiaries and non-wholly-owned entities in which they have a controlling financial interest. For certain partnership structures, income is allocated based on the liquidation value of the underlying contractual arrangements. At September 30, 2017, Dominion Energy owns the general partner, 50.9% of the common and subordinated units and 37.5% of the convertible preferred interests in Dominion Energy Midstream. The public’s ownership interest in Dominion Energy Midstream is reflected as noncontrolling interest in Dominion Energy’s Consolidated Financial Statements. Also, at September 30, 2017, Dominion Energy owns 50% of the units in and consolidates Four Brothers and Three Cedars. NRG's ownership interest in Four Brothers and Three Cedars, as well as Terra Nova Renewable Partners' 33% interest in certain Dominion Energy merchant solar projects, is reflected as noncontrolling interest in Dominion Energy’s Consolidated Financial Statements.

The results of operations for interim periods are not necessarily indicative of the results expected for the full year. Information for quarterly periods is affected by seasonal variations in sales, rate changes, electric fuel and other energy-related purchases, purchased gas expenses and other factors.

Certain amounts in the ~~Companies' 2016~~Companies’ 2022 Consolidated Financial Statements and Notes have been reclassified to conform to the ~~2017~~2023 presentation for comparative ~~purposes. The~~purposes; however, such reclassifications did not affect the Companies’ net income, total assets, liabilities, equity or cash flows.

Amounts disclosed for Dominion Energy are inclusive of Virginia Power, ~~and/or Dominion Energy Gas,~~ where applicable. ~~With the exception of the items described below, there~~There have been no significant changes from Note 2 to the Consolidated Financial Statements in the ~~Companies'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022, with the exception of the items described below.

Cash, Restricted Cash and Equivalents

~~Property, Plant~~Restricted Cash and ~~Equipment~~Equivalents

The following table provides a reconciliation of the total cash, restricted cash and equivalents reported within the Companies’ Consolidated Balance Sheets to the corresponding amounts reported within the Companies’ Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022:


	Cash, Restricted Cash and Equivalents at End of Period				Cash, Restricted Cash and Equivalents at Beginning of Period
	June 30, 2023		June 30, 2022		December 31, 2022		December 31, 2021
(millions)
Dominion Energy
Cash and cash equivalents(1)	$	137	$	273	$	153	$	283
Restricted cash and equivalents(2)		178		134		188		125
Cash, restricted cash and equivalents shown in the Consolidated Statements of Cash Flows	$	315	$	407	$	341	$	408
Virginia Power
Cash and cash equivalents	$	19	$	56	$	22	$	26
Restricted cash and equivalents(2)		—		2		2		—
Cash, restricted cash and equivalents shown in the Consolidated Statements of Cash Flows	$	19	$	58	$	24	$	26

(1)

At June 30, 2022, Dominion Energy had $1 million of cash and cash equivalents included in current assets held for sale, respectively. No amounts were included in current assets held for sale at June 30, 2023, December 31, 2022 and December 31, 2021.

(2)

Restricted cash and equivalents balances are presented within other current assets in the ~~first quarter~~Companies’ Consolidated Balance Sheets.

Supplemental Cash Flow Information

The following table provides supplemental disclosure of ~~2017, Virginia Power revised~~cash flow information related to Dominion Energy:


Six Months Ended June 30,	2023		2022
(millions)
Significant noncash investing and financing activities:(1)
Accrued capital expenditures	$	713	$	512
Leases(2)		279		57

(1)

See Note 10 for noncash investing activities related to the ~~depreciation rates for its assets to reflect the results~~acquisition of a ~~new depreciation study. This change resulted~~noncontrolling interest in ~~an increase in depreciation expense~~Dominion Privatization, Note 16 for noncash financing activities related to the remarketing of ~~$32~~Series A Preferred Stock and the issuance of common stock associated with the settlement of litigation and Note 17 for noncash financing activities related to the transfer of property associated with the settlement of litigation.

(2)

Includes $40 million ~~($20~~and $19 million ~~after-tax) for the nine months ended September~~of financing leases at June 30, ~~2017~~2023 and ~~is expected~~2022, respectively, and $239 million and $38 million of operating leases at June 30, 2023 and 2022, respectively.

The following table provides supplemental disclosure of cash flow information related to ~~increase annual depreciation by approximately $40~~Virginia Power:


Six Months Ended June 30,	2023		2022
(millions)
Significant noncash investing and financing activities:
Accrued capital expenditures	$	550	$	240
Leases(1)		242		47

(1)

Includes $36 million ~~($25~~and $14 million ~~after-tax). Additionally, Dominion Energy revised the depreciable lives for its merchant generation assets, excluding Millstone, which resulted in a decrease in depreciation expense~~ of ~~$19~~financing leases at June 30, 2023 and 2022, respectively, and $206 million ~~($12~~and $33 million ~~after-tax) for the nine months ended September~~of operating leases at June 30, ~~2017~~2023 and ~~is expected to decrease annual depreciation by approximately $26 million ($16 million after-tax).~~2022, respectively.

~~New Accounting Standards~~

In January 2017, the Financial Accounting Standards Board issued revised accounting guidance to clarify the definition of a business. The revised guidance affects the evaluation of whether a transaction should be accounted for as an acquisition or disposition of an asset or a business, which may impact goodwill and related financial statement disclosures. The Companies have adopted this guidance on a prospective basis effective October 1, 2017. The adoption of the pronouncement will result in additional transactions being accounted for as asset acquisitions or dispositions.

In March 2017, the Financial Accounting Standards Board issued revised accounting guidance for the presentation of net periodic pension and other postretirement benefit costs. The update requires that the service cost component of net periodic pension and other postretirement benefit costs be classified in the same line item as other compensation costs arising from services rendered by employees, while all other components of net periodic pension and other postretirement benefit costs would be classified outside of income from operations. In addition, only the service cost component will be eligible for capitalization during construction. The standard also recognized that in the event that a regulator continues to require capitalization of all net periodic benefit costs prospectively, the difference would result in recognition of a regulatory asset or liability. The guidance is effective for the Companies’ interim and annual reporting periods beginning January 1, 2018, with a retrospective adoption for income statement presentation and a prospective adoption for capitalization. The Companies are currently evaluating the impact the adoption of the standard will have on their consolidated financial statements and disclosures. The Companies are also evaluating industry issues that could potentially create a regulatory accounting difference in the event that any of our state commissions do not adopt the change in capitalization requirements for regulatory reporting.

Note 3. Acquisitions and Dispositions

~~Dominion Energy~~Disposition of Gas Transmission & Storage Operations

~~Acquisition of Dominion Energy Questar~~

In ~~September 2016,~~December 2021, Dominion Energy completed the Dominion Energy Questar Combination and Dominion Energy Questar became a wholly-owned subsidiary of Dominion Energy. Dominion Energy Questar, a Rockies-based integrated natural gas company, included Questar Gas, Wexpro Company and Dominion Energy Questar Pipeline at closing. Questar Gas has regulated gas distribution operations in Utah, southwestern Wyoming and southeastern Idaho. Wexpro Company develops and produces natural gas from reserves that are supplied to Questar Gas under a cost-of-service framework. Dominion Energy Questar Pipeline provides FERC-regulated interstate natural gas transportation and storage services in Utah, Wyoming and western Colorado. The Dominion Energy Questar Combination provides Dominion Energy with pipeline infrastructure that provides a principal source of gas supply to Western states. Dominion Energy Questar’s regulated businesses also provide further balance between Dominion Energy’s electric and gas operations.

~~In accordance with the terms~~sale of the ~~Dominion Energy Questar Combination, at closing, each share of issued and outstanding Dominion Energy Questar common stock was converted into the right~~Q-Pipe Group to ~~receive $25.00 per share in cash. The total consideration was $4.4 billion based on 175.5 million shares of Dominion Energy Questar outstanding at closing.~~

Dominion Energy financed the Dominion Energy Questar Combination through the: (1) August 2016 issuance of $1.4 billion of 2016 Equity Units, (2) August 2016 issuance of $1.3 billion of senior notes, (3) September 2016 borrowing of $1.2 billion under a term loan agreement and (4) $500 million of the proceeds from the April 2016 issuance of common stock. See Notes 17 and 19 to the Consolidated Financial Statements in the Companies' Annual Report on Form 10-K for the year ended December 31, 2016 for more information.

See Note 3 to the Consolidated Financial Statements in the Companies' Annual Report on Form 10-K for the year ended December 31, 2016 for more information on the Dominion Energy Questar Combination including purchase price allocation, regulatory matters and the contribution of Dominion Energy Questar Pipeline to Dominion Energy Midstream. During the third quarter of 2017, certain modifications were made to the valuation amounts for regulatory liabilities, current liabilities and deferred income taxes, resulting in a $6 million net increase to goodwill recorded in Dominion Energy’s Consolidated Balance Sheets. The modifications relate primarily to the finalization of Dominion Energy Questar’s 2016 tax return for the period January 1, 2016 through the Dominion Energy Questar Combination,Southwest Gas, as ~~well as certain regulatory adjustments.~~

~~Results of Operations and Pro Forma Information~~

The impact of the Dominion Energy Questar Combination on Dominion Energy’s operating revenue and net income attributable to Dominion Energy in the Consolidated Statements of Income for both the three and nine months ended September 30, 2016, was an increase of $23 million and $5 million, respectively.

Dominion Energy incurred transaction and transition costs, of which $14 million and $34 million was recorded in other operations and maintenance expense for the three and nine months ended September 30, 2017, respectively, in Dominion Energy’s Consolidated Statements of Income. Dominion Energy incurred transaction and transition costs, of which $40 million and $47 million was recorded in other operations and maintenance expense for the three and nine months ended September 30, 2016, respectively, and $13 million was recorded in interest and related charges for both the three and nine months ended September 30, 2016, in Dominion Energy’s Consolidated Statements of Income. These costs consist of the amortization of financing costs, the charitable contribution commitment describeddiscussed in Note 3 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016, employee-related expenses, professional fees and other miscellaneous costs.~~2022. In the first

~~The following unaudited pro forma financial information reflects the consolidated results~~22

quarter of ~~operations of~~2022, Dominion Energy assuming the Dominion Energy Questar Combination had taken place on January 1, 2015. The unaudited pro forma financial information has been presented for illustrative purposes only and is not necessarily indicativerecognized a gain of ~~the consolidated results~~$27 million ($20 million after-tax) in discontinued operations in its Consolidated Statements of ~~operations that would have been achieved or the future consolidated results~~Income associated with finalization of ~~operations~~working capital adjustments.

Sale of ~~the combined company.~~Kewaunee

Three Months
Ended September 30,
2016⁽¹⁾

Nine Months
Ended September 30,
2016⁽¹⁾

(millions, except EPS)

Operating Revenue

$
3,261

$
9,410

Net income attributable to Dominion Energy

732

1,835

Earnings Per Common Share – Basic

$
1.17

$
2.99

Earnings Per Common Share – Diluted

$
1.17

$
2.99

~~(1)~~

~~Amounts include adjustments for non-recurring costs directly related to the Dominion Energy Questar Combination.~~

~~Wholly-Owned Merchant Solar Projects~~

~~In January 2017, Dominion Energy entered into an agreement to acquire 100% of the equity interests of a solar project in North Carolina from Cypress Creek Renewables, LLC for cash consideration.~~ In May 2017, Dominion Energy closed on the acquisition for $154 million, all of which was allocated to property, plant and equipment. The facility commenced commercial operations in June 2017, at a cost of $160 million, including the initial acquisition cost, and generates approximately 79 MW.

In September 2016, Dominion Energy entered into an agreement to acquire 100% of the equity interests of a solar project in Virginia from Community Energy Solar, LLC for cash consideration. In February 2017, Dominion Energy closed on the acquisition for $29 million, all of which was allocated to property, plant and equipment. The project is expected to cost approximately $205 million once constructed, including the initial acquisition cost. The facility is expected to begin commercial operations during the fourth quarter of 2017 and to generate approximately 100 MW.

In August 2016, Dominion Energy entered into an agreement to acquire 100% of the equity interests of two solar projects in California from Solar Frontier Americas Holding LLC for cash consideration. In March 2017, Dominion Energy closed on the acquisition of one of the solar projects for $77 million, all of which was allocated to property, plant and equipment. The facility commenced commercial operations in June 2017, at a cost of $78 million, including the initial acquisition cost, and generates approximately 30 MW. In April 2017, Dominion Energy discontinued efforts on the acquisition of the additional 20 MW solar project from Solar Frontier Americas Holding LLC.

In May 2017, Dominion Energy entered into an agreement to acquire 100% of the equity interests of two solar projects in Virginia from Hecate Energy Virginia C&C LLC for cash consideration of $56 million. Dominion Energy completed the acquisition of one of the projects in June 2017 for $16 million and the facility commenced commercial operations in August 2017. The second acquisition was completed in September 2017 for $40 million with commencement of commercial operations expected to occur by the end of 2017. The projects are expected to cost approximately $60 million once constructed, including the initial acquisition costs, and to generate approximately 30 MW combined.

In June 2017, Dominion Energy entered into an agreement to acquire 100% of the equity interests of four solar projects in North Carolina from Strata Solar Development, LLC and Moorings Farm 2 Holdco, LLC for cash consideration of $40 million. Dominion Energy completed the acquisition of two of the projects in June 2017 for $20 million. The final two acquisitions were completed in October 2017 for $20 million. Commencement of commercial operations of all the projects is expected to occur by the end of 2017. The projects are expected to cost approximately $45 million once constructed, including the initial acquisition costs, and to generate approximately 19 MW combined.

Long-term power purchase, interconnection and operation and maintenance agreements have been executed for all of the projects described above. These projects are included in Power Generation. Dominion Energy has claimed or will claim federal investment tax credits on these solar projects.

~~Sale of Interest in Merchant Solar Projects~~

In September 2015, Dominion Energy signed an agreement to sell a noncontrolling interest (consisting of 33% of the equity interests) in all of its then currently wholly-owned merchant solar projects, 24 solar projects totaling approximately 425 MW, to SunEdison. In December 2015, the sale of interest in 15 of the solar projects closed for $184 million with the sale of interest in the remaining projects completed in January 2016 for $117 million. Upon closing, SunEdison sold its interest in these projects to Terra Nova Renewable Partners. Terra Nova Renewable Partners has a future option to buy all or a portion of Dominion Energy’s remaining 67% ownership in the projects upon the occurrence of certain events, none of which had occurred at September 30, 2017 nor are expected to occur in the remainder of 2017.

~~Sale of Certain Retail Energy Marketing Assets~~

~~In October 2017,~~2021, Dominion Energy entered into an agreement to sell certain assets associated with its nonregulated retail energy marketing operations for total consideration of $143 million, subject to customary approvals and certain adjustments. Pursuant to the agreement, Dominion Energy will enter into a commission agreement with the buyer upon the first closing under which the buyer will pay a commission in connection with the right to use Dominion Energy’s brand in marketing materials and other services over a ten-year term. Dominion Energy is expected to recognize a benefit in other operations and maintenance expense upon each phase of closing, approximately $78 million ($48 million after-tax) in the fourth quarter of 2017 and approximately $65 million ($40 million after-tax) in 2018.

~~Virginia Power~~

~~Acquisition of Solar Projects~~

In September 2017, Virginia Power entered into agreements to acquire two solar development projects in North Carolina. The first acquisition is expected to close prior to the project commencing commercial operations, which is expected by the end of 2018, and cost approximately $140 million once constructed, including the initial acquisition cost. The second acquisition is expected to close prior to the project commencing commercial operations, which is expected by the end of 2019, and cost approximately $140 million once constructed, including the initial acquisition cost. The projects are expected to generate approximately 155 MW combined. Virginia Power anticipates claiming federal investment tax credits on these solar projects.

~~Assignment of Tower Rental Portfolio~~

Virginia Power rents space on certain of its electric transmission towers to various wireless carriers for communications antennas and other equipment. In March 2017, Virginia Power sold its rental portfolio to Vertical Bridge Towers II, LLC for $91 million in cash. The proceeds are subject to Virginia Power's FERC-regulated tariff, under which it is required to return half100% of the proceeds to customers. Virginia Power recognized $2 million and $10 million in other income for the three and nine months ended September 30, 2017, respectively, with the remaining $36 million to be recognized ratably through 2023.

~~Dominion Energy Gas~~

~~Assignment of Shale Development Rights~~

In December 2013, Dominion Energy Gas closed an agreement with a natural gas producer to convey over time approximately 79,000 acres of Marcellus Shale development rights underneath one of its natural gas storage fields. The agreement provided for payments to Dominion Energy Gas, subject to customary adjustments, of up to approximately $200 million over a period of nine years, and an overriding royalty interest in gas produced from the acreage. In March 2015, Dominion Energy Gas and the natural gas producer closed on an amendment to the agreement, which included the immediate conveyance of approximately 9,000 acres of Marcellus Shale development rights and a two year extension of the term of the original agreement. In April 2016, Dominion Energy Gas and the natural gas producer closed on an amendment to the agreement, which included the immediate conveyance of a 32% partial interest in the remaining approximately 70,000 acres. This conveyance resulted in the recognition of $35 million ($21 million after-tax) of previously deferred revenue to other operations and maintenance expenseequity interests in Dominion Energy ~~Gas’ Consolidated Statements~~Kewaunee, Inc. to EnergySolutions, including the transfer of ~~Income. In August 2017,~~all decommissioning obligations associated with Kewaunee, which ceased operations in 2013. The sale closed in June 2022 following approval from the Wisconsin Commission in May 2022 and NRC approval of a requested license transfer in March 2022. The sale was treated as an asset sale for tax purposes and Dominion Energy ~~Gas~~retained the assets and obligations of the ~~natural gas producer signed an amendment~~pension and other postretirement employee benefit plans. EnergySolutions is subject to the ~~agreement, which included the finalization of contractual matters on previous conveyances, the conveyance of~~Wisconsin regulatory conditions agreed to by Dominion Energy ~~Gas’ remaining 68% interest in approximately 70,000 acres~~upon its acquisition of Kewaunee, including the return of any excess decommissioning funds to WPSC and WP&L customers following completion of all decommissioning activities.

In the ~~elimination~~second quarter of 2022, Dominion Energy ~~Gas’ overriding royalty interest~~recorded a loss of $649 million ($513 million after-tax), recorded in ~~gas produced from all acreage. Dominion Energy Gas will receive total consideration~~losses (gains) on sales of ~~$130 million, with $65 million to be received by the end of the fourth quarter 2017 and $65 million to be received by the end of the third quarter of 2018~~assets in ~~connection with the final conveyance. As~~

a result of this amendment in the third quarter of 2017, Dominion Energy Gas recognized a $56 million ($33 million after-tax) gain included in other operations and maintenance expense in Dominion Energy Gas’its Consolidated Statements of Income, ~~associated with~~primarily related to the ~~finalization~~difference between the nuclear decommissioning trust and AROs. Prior to its receipt, there had been uncertainty as to the timing of or ability to obtain approval from the ~~contractual matters on previous conveyances. Additionally,~~Wisconsin Commission. Prior to closing, Dominion Energy ~~Gas is expected to recognize an approximately $9~~withdrew $80 million ($5 million after-tax) gain in the fourth quarter of 2017 associated with the elimination of its overriding royalty interest and an approximately $65 million ($40 million after-tax) gain associated with the final conveyance of acreage.

In November 2014, Dominion Energy Gas closed on an agreement with a natural gas producer to convey over time approximately 24,000 acres of Marcellus Shale development rights underneath one of its natural gas storage fields. In connection with that agreement, in January 2016, Dominion Energy Gas conveyed approximately 2,000 acres of Marcellus Shale development rights and received proceeds of $5 million and an overriding royalty interest in gas produced from the ~~acreage. This transaction resulted in a $5 million ($3 million after-tax) gain, included in~~nuclear decommissioning trust to recover certain spent nuclear fuel and other operations and maintenance expense in Dominion Energy Gas’ Consolidated Statements of Income. In July 2016, in connection with the existing agreement, Dominion Energy Gas conveyed approximately 2,000 acres of Marcellus Shale development rights and received proceeds of $5 million and an overriding royalty interest in gas produced from the acreage. This transaction resulted in a $5 million ($3 million after-tax) gain, included in other operations and maintenance expense in Dominion Energy Gas’ Consolidated Statements of Income. In July 2017, in connection with the existing agreement, Dominion Energy Gas conveyed an additional approximately 2,000 acres of Marcellus Shale development rights and received proceeds of $5 million and an overriding royalty interest in gas produced from the acreage. This transaction resulted in a $5 million ($3 million after-tax) gain, included in other operations and maintenance expense in Dominion Energy Gas’ Consolidated Statements of Income. permitted costs.

Note 4. Operating Revenue

The Companies’ operating revenue consists of the following:


	Dominion Energy										Virginia Power
	Quarter-to-Date					Year-to-Date					Quarter-to-Date					Year-to-Date
Period Ended June 30,	2023		2022			2023		2022			2023		2022			2023		2022
(millions)
Regulated electric sales:
Residential	$	1,124	$	1,117		$	2,410	$	2,404		$	832	$	816		$	1,842	$	1,831
Commercial		1,147		1,089			2,217		1,987			917		874			1,783		1,591
Industrial		211		220			431		417			99		110			215		213
Government and other retail		232		297			476		569			213		281			442		539
Wholesale		36		68			80		115			22		31			51		63
Nonregulated electric sales		125		236			382		603			22		31			33		45
Regulated gas sales:
Residential		285		231			1,147		1,000
Commercial		117		106			431		379
Other		23		51			58		96
Nonregulated gas sales		6		4			7		5
Regulated gas transportation and storage		252		241			563		538
Other regulated revenues		68		73			130		119			62		80			136		131
Other nonregulated revenues(1)(2)		59		61			109		109			22		16			33		22
Total operating revenue from contracts with customers		3,685		3,794			8,441		8,341			2,189		2,239			4,535		4,435
Other revenues(1)(3)		109		(198	)		605		(466	)		62		(64	)		100		(93	)
Total operating revenue	$	3,794	$	3,596		$	9,046	$	7,875		$	2,251	$	2,175		$	4,635	$	4,342

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

(millions)

Dominion Energy

Electric sales:

Regulated

$
2,108

$
2,147

$
5,590

$
5,707

Nonregulated

380

399

1,114

1,123

Gas sales:

Regulated

97

46

696

137

Nonregulated

69

87

323

259

Gas transportation and storage

406

378

1,328

1,162

Other

119

75

325

263

Total operating revenue

$
3,179

$
3,132

$
9,376

$
8,651

Virginia Power

Regulated electric sales

$
2,108

$
2,147

$
5,590

$
5,707

Other

46

64

142

170

Total operating revenue

$
2,154

$
2,211

$
5,732

$
5,877

Dominion Energy Gas

Gas sales:

Regulated

$
12

$
28

$
59

$
69

Nonregulated

2

1

12

8

Gas transportation and storage

324

303

1,062

955

Other

63

50

180

149

Total operating revenue

$
401

$
382

$
1,313

$
1,181

(1)

See Note 19 for amounts attributable to affiliates.

(2)

Includes sales which are considered to be goods transferred at a point in time of $8 million and $14 million for the three months ended June 30, 2023 and 2022, respectively, and $16 million and $25 million for the six months ended June 30, 2023 and 2022, respectively, at Dominion Energy, primarily consisting of sales of commodities related to nonregulated extraction activities and other miscellaneous products. Additionally, sales of renewable energy credits were $24 million and $7 million for the three months ended June 30, 2023 and 2022, respectively, and $29 million and $11 million for the six months ended June 30, 2023 and 2022, respectively, at Dominion Energy and $19 million and less than $1 million for the three months ended June 30, 2023 and 2022, respectively, and $22 million and less than $1 million for the six months ended June 30, 2023 and 2022, respectively, at Virginia Power.

(3)

Includes alternative revenue of $57 million and $40 million for the three months ended June 30, 2023 and 2022, respectively, and $114 million and $70 million for the six months ended June 30, 2023 and 2022, respectively, at Dominion Energy and $50 million and $19 million for the three months ended June 30, 2023 and 2022, respectively, and $77 million and $27 million for the six months ended June 30, 2023 and 2022, respectively, at Virginia Power.

The table below discloses the aggregate amount of the transaction price allocated to fixed-price performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period and when Dominion Energy expects to recognize this revenue. These revenues relate to contracts containing fixed prices where Dominion Energy will earn the associated revenue over time as it stands ready to perform services provided. This disclosure does not include revenue related to performance obligations that are part of

a contract with original durations of one year or less. In addition, this disclosure does not include expected consideration related to performance obligations for which Dominion Energy elects to recognize revenue in the amount it has a right to invoice.


Revenue expected to be recognized on multi-year contracts in place at June 30, 2023	2023		2024		2025		2026		2027		Thereafter		Total
(millions)
Dominion Energy(1)	$	33	$	61	$	54	$	48	$	46	$	402	$	644

(1)

Includes no amounts for Virginia Power.

At June 30, 2023 and December 31, 2022, Dominion Energy’s contract liability balances were $133 million and $150 million, respectively, and are recorded in other current liabilities and other deferred credits and other liabilities in its Consolidated Balance Sheets. At June 30, 2023 and December 31, 2022, Virginia Power’s contract liability balances were $74 million and $39 million, respectively, and are recorded in other current liabilities and other deferred credits and other liabilities in its Consolidated Balance Sheets.

The Companies recognize revenue as they fulfill their obligations to provide service to their customers. During the six months ended June 30, 2023 and 2022, Dominion Energy recognized revenue of $146 million and $119 million, respectively, from the beginning contract liability balances. During the six months ended June 30, 2023 and 2022, Virginia Power recognized $39 million and $33 million, respectively, from the beginning contract liability balances.

Note 5. Income Taxes

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

	Dominion Energy						Virginia Power						Dominion Energy Gas
Nine Months Ended September 30,	2017			2016			2017			2016			2017			2016
																			Dominion Energy						Virginia Power
Six Months Ended June 30,																			2023			2022			2023			2022
U.S. statutory rate		35.0	%		35.0	%		35.0	%		35.0	%		35.0	%		35.0	%		21.0	%		21.0	%		21.0	%		21.0	%
Increases (reductions) resulting from:
Recognition of taxes - sale of subsidiary stock																				—			25.0
State taxes, net of federal benefit		2.9			3.7			3.7			3.9			2.7			0.8			3.3			7.9			4.6			4.4
Investment tax credits		(5.7	)		(10.4	)		(0.8	)		—			—			—			(2.6	)		(9.8	)		(0.3	)		(6.9	)
Production tax credits		(0.7	)		(0.8	)		(0.5	)		(0.5	)		—			—			(0.4	)		(1.1	)		(0.8	)		(1.0	)
State legislative change		—			(0.8	)		—			—			—			—
Reversal of excess deferred income taxes																				(2.6	)		(10.2	)		(2.3	)		(3.9	)
Changes in state deferred taxes associated with assets held for sale																				—			1.4
AFUDC - equity		(1.3	)		(0.7	)		(0.6	)		(0.6	)		(0.8	)		(0.1	)		(0.1	)		(1.3	)		(0.1	)		(1.0	)
Other, net		(2.6	)		(1.4	)		0.2			0.1			(0.1	)		0.5			(0.9	)		0.2			(0.5	)		0.6
Effective tax rate		27.6	%		24.6	%		37.0	%		37.9	%		36.8	%		36.2	%		17.7	%		33.1	%		21.6	%		13.2	%

~~The effective~~In the first quarter of 2022, Dominion Energy entered into an agreement to sell 100% of the equity interests in Hope in a stock sale for income tax ~~rates~~purposes. As of June 30, 2022, Dominion had established $90 million of deferred tax liabilities reflecting the excess of the financial reporting basis over the tax basis in ~~2017~~Hope’s stock. These deferred taxes reversed upon closing of the sale in August 2022 and became a component of current income tax expense on the sale. See Note 3 to the Consolidated Financial Statements in Dominion Energy's Annual Report on Form 10-K for the ~~Companies reflect the completion of audits by state tax authorities that resulted in the recognition of previously unrecognized tax benefits. At~~year ended December 31, ~~2016, Virginia Power’s unrecognized tax benefits included state refund claims~~2022 for ~~open tax years through 2011. Management believed settlement~~additional information regarding the sale of ~~the claims, including interest thereon, within the next twelve months was remote. In~~Hope.

As of June 2017, Virginia Power received and accepted a cash offer to settle the refund claims. As a result of the settlement, Virginia Power decreased its unrecognized tax benefits by $8 million, and recognized a $2 million tax benefit, which impacted its effective tax rate. Also in connection with this settlement, Virginia Power realized interest income of $11 million, which is reflected in other income in the Consolidated Statements of Income. Otherwise, at September 30, ~~2017,~~2023, there have been no material changes in the ~~Companies'~~Companies’ unrecognized tax benefits or possible changes that could reasonably be expected to occur during the next twelve months. See Note 5 to the Consolidated Financial Statements in the ~~Companies'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016~~2022, for a discussion of these unrecognized tax benefits.

Discontinued operations

Income tax expense reflected in discontinued operations is $3 million and $4 million for the six months ended June 30, 2023 and 2022, respectively.

The following table presents ~~Dominion Energy Gas’~~Virginia Power’s changes in AOCI ~~by component, net~~(net of ~~tax:~~

~~The following table presents Dominion Energy Gas'~~tax) and reclassifications out of AOCI by component:

Note 8. Fair Value Measurements

The ~~Companies'~~Companies’ fair value measurements are made in accordance with the policies discussed in Note 62 to the Consolidated Financial Statements in the ~~Companies'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022. See Note 9 in this report for ~~further~~additional information about the ~~Companies'~~Companies’ derivatives and hedge accounting activities.

The Companies enter into certain physical and financial forwards, futures ~~options~~ and ~~swaps,~~options, which are considered Level 3 as they have one or more inputs that are not observable and are significant to the valuation. The discounted cash flow method is used to value Level 3 physical and financial forwards ~~futures,~~ and ~~swaps~~futures contracts. An option model is used to value Level 3 physical ~~and financial~~ options. The discounted cash flow model for forwards ~~futures,~~ and ~~swaps~~futures calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return and credit spreads. The option model calculates mark-to-market valuations using variations of the Black-Scholes option model. The inputs into the models are the forward market prices, implied price volatilities, risk-free rate of return, the option expiration dates, the option strike prices, the original sales prices and volumes. For Level 3 fair value measurements, certain forward market prices and implied price volatilities are considered unobservable. The unobservable inputs are developed and substantiated using historical information, available market data, third-party data, and statistical analysis. Periodically, inputs to valuation models are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships, and changes in third-party pricing sources.

The following table presents ~~Dominion Energy's~~the Companies' quantitative information about Level 3 fair value measurements at ~~September~~June 30, ~~2017.~~2023. The range and weighted average are presented in dollars for market price inputs and percentages for price volatility.


				Dominion Energy				Virginia Power
	Valuation Techniques	Unobservable Input		Fair Value (millions)		Range	Weighted Average(1)	Fair Value (millions)		Range	Weighted Average(1)
Assets
Physical and financial forwards:
Electricity	Discounted cash flow	Market price (per MWh)	(3)	$	141	25-138	47		—	—	—
Physical options:
Natural gas(2)	Option model	Market price (per Dth)	(3)		15	1-8	4		15	1-8	4
		Price volatility	(4)			19%-72%	51%			19%-72%	51%
Total assets				$	156			$	15
Liabilities
Physical and financial forwards:
Natural gas(2)	Discounted cash flow	Market price (per Dth)	(3)	$	18	(2)-2	(1)	$	18	(2)-2	(1)
Electricity	Discounted cash flow	Market price (per MWh)	(3)		4	32-138	64		—	—	—
Total liabilities				$	22			$	18

Fair Value
(millions)

Valuation Techniques

Unobservable Input

Range

Weighted
Average⁽¹⁾

Assets

Physical and financial forwards and
futures:

Natural gas⁽²⁾

$
91

Discounted cash flow

Market price (per Dth)
⁽³⁾

(2) - 7

—

FTRs

19

Discounted cash flow

Market price (per MWh)
⁽³⁾

(3) - 7

1

Physical options:

Natural gas

2

Option model

Market price (per Dth)
⁽³⁾

2 - 7

4

Price volatility
⁽⁴⁾

24% - 46%

32
%
Electricity

42

Option model

Market price (per MWh)
⁽³⁾

21 - 50

34

Price volatility
⁽⁴⁾

0% - 78%

28
%
Total assets

$
154

Liabilities

Financial forwards:

FTRs

$
1

Discounted cash flow

Market price (per MWh)
⁽³⁾

(5) - 7

1

Total liabilities

$
1

(1)

Averages weighted by volume.

~~(1)~~

~~Averages weighted by volume.~~

(2)

Includes basis.

~~(2)~~

~~Includes basis.~~

(3)

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

~~(3)~~

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

(4)

Represents volatilities unrepresented in published markets.

~~(4)~~

~~Represents volatilities unrepresented in published markets.~~

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


Significant Unobservable Inputs	Position	Change to Input	Impact on Fair Value Measurement
Market price	Buy	Increase (decrease)	Gain (loss)
Market price	Sell	Increase (decrease)	Loss (gain)
Price volatility	Buy	Increase (decrease)	Gain (loss)
Price volatility	Sell	Increase (decrease)	Loss (gain)

Nonrecurring Fair Value Measurements

See Note 10 for information regarding nonrecurring fair value measurements associated with Dominion Energy’s noncontrolling ownership interest in Dominion Privatization.

In the first quarter of 2023, Dominion Energy recorded a charge of $91 million ($68 million after-tax) in impairment of assets and other charges in its Consolidated Statements of Income to adjust a corporate office building down to its estimated fair value, using a market approach, of $35 million. The valuation is considered a Level 3 fair value measurement as it is based on unobservable inputs due to limited comparable market activity. The corporate office building is reflected in the Corporate and Other segment and presented as held for sale in Dominion Energy’s Consolidated Balance Sheets at June 30, 2023.

In the second quarter of 2023, Dominion Energy recorded a charge of $15 million ($11 million after-tax) in impairment of assets and other charges in its Consolidated Statements of Income to adjust certain nonregulated solar assets down to their estimated fair value, using a market approach, of $22 million. The valuation is considered a Level 2 fair value measurement given that it is based on bids received. These assets are reflected in the Corporate and Other segment and presented as held for sale in Dominion Energy’s Consolidated Balance Sheets at June 30, 2023.

Recurring Fair Value Measurements

~~Dominion Energy~~

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


	Dominion Energy								Virginia Power
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
(millions)
June 30, 2023
Assets
Derivatives:
Commodity	$	1	$	194	$	156	$	351	$	1	$	73	$	15	$	89
Interest rate		—		904		—		904		—		135		—		135
Investments(1):
Equity securities:
U.S.		4,354		—		—		4,354		2,317		—		—		2,317
Fixed income:
Corporate debt instruments		—		539		—		539		—		323		—		323
Government securities		170		1,144		—		1,314		90		619		—		709
Cash equivalents and other		27		—		—		27		1		—		—		1
Total assets	$	4,552	$	2,781	$	156	$	7,489	$	2,409	$	1,150	$	15	$	3,574
Liabilities
Derivatives:
Commodity	$	—	$	332	$	22	$	354	$	—	$	150	$	18	$	168
Interest rate		—		381		—		381		—		11		—		11
Foreign currency exchange rate		—		59		—		59		—		59		—		59
Total liabilities	$	—	$	772	$	22	$	794	$	—	$	220	$	18	$	238
December 31, 2022
Assets
Derivatives:
Commodity	$	—	$	332	$	437	$	769	$	—	$	32	$	236	$	268
Interest rate		—		1,407		—		1,407		—		614		—		614
Investments(1):
Equity securities:
U.S.		3,810		—		—		3,810		2,028		—		—		2,028
Fixed income:
Corporate debt instruments		—		576		—		576		—		360		—		360
Government securities		161		1,059		—		1,220		90		542		—		632
Total assets	$	3,971	$	3,374	$	437	$	7,782	$	2,118	$	1,548	$	236	$	3,902
Liabilities
Derivatives:
Commodity	$	—	$	911	$	15	$	926	$	—	$	333	$	15	$	348
Interest rate		—		377		—		377		—		7		—		7
Foreign currency exchange rate		—		101		—		101		—		101		—		101
Total liabilities	$	—	$	1,389	$	15	$	1,404	$	—	$	441	$	15	$	456

Level 1

Level 2

Level 3

Total

(millions)

September 30, 2017

Assets

Derivatives:

Commodity

$
—

$
59

$
154

$
213

Interest rate

—

11

—

11

Foreign currency

—

25

—

25

Investments⁽¹⁾:

Equity securities:

U.S.

3,288

—

—

3,288

Fixed income:

Corporate debt instruments

—

452

—

452

Government securities

475

631

—

1,106

Cash equivalents and other

7

—

—

7

Total assets

$
3,770

$
1,178

$
154

$
5,102

Liabilities

Derivatives:

Commodity

$
—

$
41

$
1

$
42

Interest rate

—

72

—

72

Foreign currency

—

4

—

4

Total liabilities

$
—

$
117

$
1

$
118

December 31, 2016

Assets

Derivatives:

Commodity

$
—

$
115

$
147

$
262

Interest rate

—

17

—

17

Investments⁽¹⁾:

Equity securities:

U.S.

2,913

—

—

2,913

Fixed income:

Corporate debt instruments

—

487

—

487

Government securities

424

614

—

1,038

Cash equivalents and other

5

—

—

5

Total assets

$
3,342

$
1,233

$
147

$
4,722

Liabilities

Derivatives:

Commodity

$
—

$
88

$
8

$
96

Interest rate

—

53

—

53

Foreign currency

—

6

—

6

Total liabilities

$
—

$
147

$
8

$
155

(1)

Includes investments held in the nuclear decommissioning trusts and rabbi trusts. Excludes $375 million and $404 million of assets at Dominion Energy, inclusive of $152 million and $161 million at Virginia Power, at June 30, 2023 and December 31, 2022, 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.

~~(1)~~

Includes investments held in the nuclear decommissioning and rabbi trusts. Excludes $92 million and $89 million of assets at September 30, 2017 and December 31, 2016, respectively, measured at fair value using NAV (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.

The following table presents the net change in ~~Dominion Energy's~~the Companies' assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category:

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

(millions)

Beginning balance

$
152

$
124

$
139

$
95

Total realized and unrealized gains (losses):

Included in earnings

(11
)

(7
)

(36
)

(23
)
Included in other comprehensive income

—

—

—

2

Included in regulatory assets/liabilities

11

(37
)

34

(5
)
Settlements

1

9

13

27

Transfers out of Level 3

—

—

3

(7
)
Ending balance

$
153

$
89

$
153

$
89

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

$
1

$
—

$
1

$
—

~~The following table presents~~


	Dominion Energy												Virginia Power
	Quarter-to-Date						Year-to-Date						Quarter-to-Date						Year-to-Date
Period Ended June 30,	2023			2022			2023			2022			2023			2022			2023			2022
(millions)
Beginning balance	$	206		$	202		$	422		$	222		$	55		$	22		$	221		$	102
Total realized and unrealized gains (losses):
Included in earnings:
Operating revenue		2			—			2			—			—			—			—			—
Electric fuel and other energy- related purchases		(36	)		117			(87	)		165			(36	)		106			(88	)		151
Included in regulatory assets/ liabilities		(74	)		261			(290	)		241			(58	)		206			(224	)		126
Settlements		36			(117	)		71			(165	)		36			(106	)		72			(151	)
Purchases		—			17			16			17			—			17			16			17
Ending balance	$	134		$	480		$	134		$	480		$	(3	)	$	245		$	(3	)	$	245

Dominion ~~Energy’s classification~~Energy had $2 million of unrealized gains ~~and losses included in earnings in the Level 3 fair value category.~~

Operating Revenue

Electric Fuel and Other Energy - Related Purchases

Total

(millions)

Three Months Ended September 30, 2017

Total gains (losses) included in earnings

$
1

$
(12
)

$
(11
)
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

1

—

1

Three Months Ended September 30, 2016

Total gains (losses) included in earnings

$
—

$
(7
)

$
(7
)
Nine Months Ended September 30, 2017

Total gains (losses) included in earnings

$
1

$
(37
)

$
(36
)
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

1

—

1

Nine Months Ended September 30, 2016

Total gains (losses) included in earnings

$
—

$
(23
)

$
(23
)

~~Virginia Power~~

The following table presents Virginia Power's quantitative information about Level 3 fair value measurements at September 30, 2017. The range and weighted average are presented in dollars for market price inputs and percentages for price volatility.

Fair Value
(millions)

Valuation Techniques

Unobservable Input

Range

Weighted
Average⁽¹⁾

Assets

Physical and financial forwards and
futures:

Natural gas⁽²⁾

$
91

Discounted cash flow

Market price (per Dth)
⁽³⁾

(2) - 7

(1
)
FTRs

19

Discounted cash flow

Market price (per MWh)
⁽³⁾

(1) - 7

1

Physical options:

Natural gas

1

Option model

Market price (per Dth)
⁽³⁾

2 - 7

4

Price volatility
⁽⁴⁾

24% - 46%

32
%
Electricity

42

Option model

Market price (per MWh)
⁽³⁾

21 - 50

34

Price volatility
⁽⁴⁾

0% - 78%

28
%
Total assets

$
153

Liabilities

Financial forwards:

FTRs

$
1

Discounted cash flow

Market price (per MWh)
⁽³⁾

(5) - 7

1

Total liabilities

$
1

~~(1)~~

~~Averages weighted by volume.~~

~~(2)~~

~~Includes basis.~~

~~(3)~~

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

~~(4)~~

~~Represents volatilities unrepresented in published markets~~.

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

~~Significant Unobservable Inputs~~	~~Position~~	~~Change to Input~~	~~Impact on Fair~~ ~~Value Measurement~~
~~Market price~~	~~Buy~~	~~Increase (decrease)~~	~~Gain (loss)~~
~~Market price~~	~~Sell~~	~~Increase (decrease)~~	~~Loss (gain)~~
~~Price volatility~~	~~Buy~~	~~Increase (decrease)~~	~~Gain (loss)~~
~~Price volatility~~	~~Sell~~	~~Increase (decrease)~~	~~Loss (gain)~~

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

Level 1

Level 2

Level 3

Total

(millions)

September 30, 2017

Assets

Derivatives:

Commodity

$
—

$
15

$
153

$
168

Investments⁽¹⁾:

Equity securities:

U.S.

1,471

—

—

1,471

Fixed income:

Corporate debt instruments

—

234

—

234

Government securities

193

302

—

495

Total assets

$
1,664

$
551

$
153

$
2,368

Liabilities

Derivatives:

Commodity

$
—

$
5

$
1

$
6

Interest rate

—

55

—

55

Total liabilities

$
—

$
60

$
1

$
61

December 31, 2016

Assets

Derivatives:

Commodity

$
—

$
43

$
145

$
188

Interest rate

—

6

—

6

Investments⁽¹⁾:

Equity securities:

U.S.

1,302

—

—

1,302

Fixed income:

Corporate debt instruments

—

277

—

277

Government securities

136

291

—

427

Total assets

$
1,438

$
617

$
145

$
2,200

Liabilities

Derivatives:

Commodity

$
—

$
8

$
2

$
10

Interest rate

—

21

—

21

Total liabilities

$
—

$
29

$
2

$
31

~~(1)~~

Includes investments held in the nuclear decommissioning trusts. Excludes $29 million and $26 million of assets at September 30, 2017 and December 31, 2016, respectively, measured at fair value using NAV (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.

~~The following table presents the net change in Virginia Power’s assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category:~~

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

(millions)

Beginning balance

$
152

$
125

$
143

$
93

Total realized and unrealized gains (losses):

Included in earnings

(12
)

(7
)

(37
)

(24
)
Included in regulatory assets/liabilities

11

(37
)

34

(5
)
Settlements

1

7

12

24

Ending balance

$
152

$
88

$
152

$
88

~~The gains and losses~~ included in earnings in the Level 3 fair value category were classified in electric fuel and other energy-related purchases in Virginia Power's Consolidated Statements of Income for the three and nine months ended September 30, 2017 and 2016. There were no unrealized gains or losses included in earnings in the Level 3 fair value category relatingrelated to assets/liabilities still held at the reporting date for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016.~~

~~Dominion Energy Gas~~

The following table presents Dominion Energy Gas' assets and liabilities for derivatives that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions.

Level 1

Level 2

Level 3

Total

(millions)

September 30, 2017

Assets

Commodity

$
—

$
1

$
—

$
1

Foreign currency

—

25

—

25

Total assets

$
—

$
26

$
—

$
26

Liabilities

Commodity

$
—

$
6

$
—

$
6

Foreign currency

—

4

—

4

Total liabilities

$
—

$
10

$
—

$
10

December 31, 2016

Liabilities

Commodity

$
—

$
3

$
2

$
5

Foreign currency

—

6

—

6

Total liabilities

$
—

$
9

$
2

$
11

The following table presents the net change in Dominion Energy Gas' assets and liabilities for derivatives measured at fair value on a recurring basis and included in the Level 3 fair value category. There were no net changes in assets and liabilities for derivatives measured at fair value on a recurring basis and included in the Level 3 fair value category for the three months ended September 30, 2017 and 2016.

Nine Months Ended September 30,

2017

2016

(millions)

Beginning balance

$
(2
)

$
6

Total realized and unrealized gains (losses):

Included in other comprehensive income (loss)

(1
)

2

Transfers out of Level 3

3

(8
)
Ending balance

$
—

$
—

~~There were no~~ unrealized gains or losses ~~included in earnings in the Level 3 fair value category~~ for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 and 2016. There were~~ 2022. Virginia Power had no unrealized gains or losses ~~included in earnings in the Level 3 fair value category relating to assets/liabilities still held at the reporting date~~ for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016.~~June 30, 2022.

Fair Value of Financial Instruments

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

September 30, 2017

December 31, 2016

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⁾

$
28,317

$
30,639

$
26,587

$
28,273

Junior subordinated notes⁽³⁾

3,980

4,128

2,980

2,893

Remarketable subordinated notes⁽³⁾

1,377

1,421

2,373

2,418

Virginia Power

Long-term debt, including securities due within one year⁽³⁾

$
11,346

$
12,686

$
10,530

$
11,584

Dominion Energy Gas

Long-term debt⁽⁴⁾

$
3,564

$
3,705

$
3,528

$
3,603


	Dominion Energy				Virginia Power
	Carrying Amount		Estimated Fair Value(1)		Carrying Amount		Estimated Fair Value(1)
(millions)
June 30, 2023
Long-term debt(2)	$	41,887	$	38,876	$	16,399	$	14,909
Supplemental credit facility borrowings		450		450
Junior subordinated notes(2)		1,387		1,349
December 31, 2022
Long-term debt(2)	$	39,680	$	36,426	$	15,616	$	14,067
Supplemental credit facility borrowings		450		450
Junior subordinated notes(2)		1,387		1,340

(1)

Fair value is estimated using market prices, where available, and interest rates currently available for issuance of debt with similar terms and remaining maturities. All fair value measurements are classified as Level 2. The carrying amount of debt issuances with short-term maturities and variable rates refinanced at current market rates is a reasonable estimate of their fair value.

~~(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 current portions presented in securities due within one year and amounts which represent the unamortized debt issuance costs and discount or premium.

The ~~Companies'~~Companies’ accounting policies, objectives and strategies for using derivative instruments are discussed in Note 2 to the Consolidated Financial Statements in the ~~Companies'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022. See Note 8 in this report for ~~further~~additional information about fair value measurements and associated valuation methods for derivatives.

Derivative assets and liabilities are presented gross on the Companies' Consolidated Balance Sheets. Dominion Energy's derivative contracts include both over-the-counter transactions and those that are executed on an exchange or other trading platform (exchange contracts) and centrally cleared. Virginia Power's and Dominion Energy Gas' derivative contracts consist of over-the-counter transactions. Over-the-counter contracts are bilateral contracts that are transacted directly with a counterparty. Exchange contracts utilize a financial intermediary, exchange, or clearinghouse to enter, execute, or clear the transactions. Certain over-the-counter and exchange contracts contain contractual rights of setoff through master netting arrangements, derivative clearing agreements, and contract default provisions. In addition, the contracts are subject to conditional rights of setoff through counterparty nonperformance, insolvency, or other conditions.

In general, most over-the-counter transactions and all exchange contracts are subject to collateral requirements. Types of collateral for over-the-counter and exchange contracts include cash, letters of credit, and in some cases other forms of security, none of which are subject to restrictions. Cash collateral is used in the table below to offset derivative assets and liabilities. In February 2022, Dominion Energy entered into contracts representing offsetting positions to certain existing exchange contracts with collateral requirements as well as new over-the-counter transactions that are not subject to collateral requirements. These contracts resulted in positions which limit the risk of increased cash collateral requirements. Certain accounts receivable and accounts payable recognized on the ~~Companies'~~Companies’ Consolidated Balance Sheets, ~~as well as~~ letters of credit and other forms of ~~security,~~securities, as well as certain other long-term debt, all of which are not included in the tables below, are subject to offset under master netting or similar arrangements and would reduce the net exposure. See Note 18 for additional information regarding credit-related contingent features for the Companies’ derivative instruments.

The tables below present ~~Dominion Energy's~~the Companies' derivative asset and liability balances by type of financial instrument, ~~before~~if the gross amounts recognized in their Consolidated Balance Sheets were netted with derivative instruments and ~~after the effects~~cash collateral received or paid:


	Dominion Energy Gross Amounts Not Offset in the Consolidated Balance Sheet								Virginia Power 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)
June 30, 2023
Commodity contracts:
Over-the-counter	$	162	$	55	$	—	$	107	$	78	$	32	$	—	$	46
Exchange		55		55		—		—		10		10		—		—
Interest rate contracts:
Over-the-counter		904		214		—		690		135		2		—		133
Total derivatives, subject to a master netting or similar arrangement	$	1,121	$	324	$	—	$	797	$	223	$	44	$	—	$	179
December 31, 2022
Commodity contracts:
Over-the-counter	$	408	$	28	$	—	$	380	$	238	$	7	$	—	$	231
Exchange		160		159		—		1		—		—		—		—
Interest rate contracts:
Over-the-counter		1,407		248		—		1,159		614		38		—		576
Total derivatives, subject to a master netting or similar arrangement	$	1,975	$	435	$	—	$	1,540	$	852	$	45	$	—	$	807

(1)

Excludes derivative assets of ~~offsetting:~~

September 30, 2017

December 31, 2016

Gross
Amounts of Recognized
Assets

Gross
Amounts
Offset in the Consolidated Balance Sheet

Net Amounts of Assets
Presented in the Consolidated Balance Sheet

Gross
Amounts of Recognized
Assets

Gross
Amounts
Offset in the Consolidated
Balance Sheet

Net Amounts of
Assets
Presented in the Consolidated
Balance Sheet

(millions)

Commodity contracts:

Over-the-counter

$
186

$
—

$
186

$
211

$
—

$
211

Exchange

24

—

24

44

—

44

Interest rate contracts:

Over-the-counter

11

—

11

17

—

17

Foreign currency contracts:

Over-the-counter

25

—

25

—

—

—

Total derivatives, subject to a master netting or
similar arrangement

246

—

246

272

—

272

Total derivatives, not subject to a master netting or
similar arrangement

3

—

3

7

—

7

Total

$
249

$
—

$
249

$
279

$
—

$
279

$134 million and $201 million at Dominion Energy and $1 million and $30 million at Virginia Power at June 30, 2023 and December 31, 2022, respectively, which are not subject to master netting or other similar arrangements.

September 30, 2017

December 31, 2016

Gross Amounts Not Offset
in the Consolidated
Balance Sheet

Gross Amounts Not Offset
in the Consolidated
Balance Sheet

Net Amounts of
Assets Presented
in the
Consolidated
Balance Sheet

Financial
Instruments

Cash
Collateral
Received

Net
Amounts

Net Amounts of
Assets Presented
in the
Consolidated
Balance Sheet

Financial
Instruments

Cash
Collateral
Received

Net
Amounts

(millions)

Commodity contracts:

Over-the-counter

$
186

$
8

$
—

$
178

$
211

$
14

$
—

$
197

Exchange

24

21

—

3

44

44

—

—

Interest rate contracts:

Over-the-counter

11

6

—

5

17

9

—

8

Foreign currency contracts:

Over-the-counter

25

4

—

21

—

—

—

—

Total

$
246

$
39

$
—

$
207

$
272

$
67

$
—

$
205

September 30, 2017

December 31, 2016

Gross
Amounts of
Recognized
Liabilities

Gross
Amounts
Offset in the
Consolidated
Balance Sheet

Net Amounts of
Liabilities
Presented in the
Consolidated
Balance Sheet

Gross
Amounts of
Recognized
Liabilities

Gross
Amounts
Offset in the
Consolidated
Balance Sheet

Net Amounts of
Liabilities
Presented in the
Consolidated
Balance Sheet

(millions)

Commodity contracts:

Over-the-counter

$
19

$
—

$
19

$
23

$
—

$
23

Exchange

21

—

21

71

—

71

Interest rate contracts:

Over-the-counter

72

—

72

53

—

53

Foreign currency contracts:

Over-the-counter

4

—

4

6

—

6

Total derivatives, subject to a master netting or
similar arrangement

116

—

116

153

—

153

Total derivatives, not subject to a master netting or
similar arrangement

2

—

2

2

—

2

Total

$
118

$
—

$
118

$
155

$
—

$
155

September 30, 2017

December 31, 2016

Gross Amounts Not Offset
in the Consolidated
Balance Sheet

Gross Amounts Not Offset
in the Consolidated
Balance Sheet

Net Amounts of
Liabilities
Presented in the
Consolidated
Balance Sheet

Financial
Instruments

Cash
Collateral
Paid

Net
Amounts

Net Amounts of
Liabilities
Presented in the
Consolidated
Balance Sheet

Financial
Instruments

Cash
Collateral
Paid

Net
Amounts

(millions)

Commodity contracts:

Over-the-counter

$
19

$
8

$
—

$
11

$
23

$
14

$
—

$
9

Exchange

21

21

—

—

71

44

27

—

Interest rate contracts:

Over-the-counter

72

6

—

66

53

9

—

44

Foreign currency contracts:

Over-the-counter

4

4

—

—

6

—

—

6

Total

$
116

$
39

$
—

$
77

$
153

$
67

$
27

$
59


	Dominion Energy Gross Amounts Not Offset in the Consolidated Balance Sheet								Virginia Power 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)
June 30, 2023
Commodity contracts:
Over-the-counter	$	209	$	55	$	—	$	154	$	67	$	32	$	—	$	35
Exchange		145		55		90		—		23		10		13		—
Interest rate contracts:
Over-the-counter		381		214		1		166		11		2		—		9
Foreign currency exchange rate contracts:
Over-the-counter		59		—		—		59		59		—		—		59
Total derivatives, subject to a master netting or similar arrangement	$	794	$	324	$	91	$	379	$	160	$	44	$	13	$	103
December 31, 2022
Commodity contracts:
Over-the-counter	$	443	$	34	$	71	$	338	$	146	$	13	$	71	$	62
Exchange		483		159		324		—		176		—		176		—
Interest rate contracts:
Over-the-counter		377		210		1		166		7		—		—		7
Foreign currency exchange rate contracts:
Over-the-counter		101		32		—		69		101		32		—		69
Total derivatives, subject to a master netting or similar arrangement	$	1,404	$	435	$	396	$	573	$	430	$	45	$	247	$	138

(1)

Excludes derivative liabilities of $78 million and $26 million at Virginia Power at June 30, 2023 and December 31, 2022, respectively, which are not subject to master netting or similar arrangements. Dominion Energy did not have any derivative liabilities at June 30, 2023 and December 31, 2022 which were not subject to master netting or similar arrangements.

Volumes

The following table presents the volume of ~~Dominion Energy’s~~the Companies' derivative activity at ~~September~~June 30, ~~2017.~~2023. These volumes are based on open derivative positions and represent the combined absolute value of ~~its~~their long and short positions, except in the case of offsetting transactions, for which they represent the absolute value of the net volume of its long and short positions.


	Dominion Energy				Virginia Power
	Current		Noncurrent		Current		Noncurrent
Natural Gas (bcf):
Fixed price(1)		43		14		40		14
Basis(2)		157		375		138		372
Electricity (MWh in millions):
Fixed price		17		44		8		13
Oil (Gal in millions)		6		—		6		—
Interest rate(3) (in millions)	$	524	$	11,758	$	125	$	2,750
Foreign currency exchange rate(3) (in millions)
Danish Krone	1,004 kr.		3,468 kr.		1,004 kr.		3,468 kr.
Euro	€453		€2,131		€453		€2,131

Current

Noncurrent

Natural Gas (bcf):

Fixed price⁽¹⁾

62

17

Basis

165

612

Electricity (MWh):

Fixed price

6,749,288

902,069

FTRs

72,126,361

—

Liquids (Gal)⁽²⁾

36,940,288

—

Interest rate⁽³⁾

$
1,100,000,000

$
5,049,890,127

Foreign currency⁽³⁾⁽⁴⁾

$
—

$
280,000,000

(1)

Includes options at Dominion Energy.

~~(1)~~

~~Includes options.~~

(2)

Includes options.

~~(2)~~

~~Includes NGLs and oil.~~

(3)

Maturity is determined based on final settlement period.

~~(3)~~

~~Maturity is determined based on final settlement period.~~

~~(4)~~

~~Euro equivalent volumes are €250,000,000.~~

AOCI

~~Ineffectiveness and AOCI~~

For the three and nine months ended September 30, 2017 and 2016, gains or losses on hedging instruments determined to be ineffective and amounts excluded from the assessment of effectiveness were not material. Amounts excluded from the assessment of effectiveness include changes in the differences between spot prices and forward prices.

The following table presents selected information related to gains ~~(losses)~~and losses on cash flow hedges included in AOCI in ~~Dominion Energy’s~~the Companies' Consolidated Balance ~~Sheet~~Sheets at ~~September~~June 30, ~~2017:~~2023:

AOCI
After-Tax

Amounts Expected to be
Reclassified to Earnings
During the Next 12 Months
After-Tax

Maximum Term
(millions)

Commodities:

Gas

$
(1
)

$
(1
)

37 months
Electricity

7

7

15 months
Other

(4
)

(4
)

6 months
Interest rate

(260
)

(11
)

387 months
Foreign currency

4

(2
)

105 months
Total

$
(254
)

$
(11
)


	Dominion Energy							Virginia Power
	AOCI After-Tax			Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax			Maximum Term	AOCI After-Tax		Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax		Maximum Term
(millions)
Interest rate	$	(236	)	$	(33	)	390 months	$	13	$	—	390 months
Total	$	(236	)	$	(33	)		$	13	$	—

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

~~Fair Value and Gains and Losses on Derivative Instruments~~

~~The following table presents the fair values of Dominion Energy’s derivatives and where they are presented in its Consolidated Balance Sheets:~~

Fair Value –
Derivatives under
Hedge
Accounting

Fair Value –
Derivatives not under
Hedge
Accounting

Total Fair Value

(millions)

September 30, 2017

ASSETS

Current Assets

Commodity

$
19

$
83

$
102

Interest rate

9

—

9

Total current derivative assets⁽¹⁾

28

83

111

Noncurrent Assets

Commodity

1

110

111

Interest rate

2

—

2

Foreign currency

25

—

25

Total noncurrent derivative assets⁽²⁾

28

110

138

Total derivative assets

$
56

$
193

$
249

LIABILITIES

Current Liabilities

Commodity

$
15

$
25

$
40

Interest rate

21

—

21

Foreign currency

4

—

4

Total current derivative liabilities⁽³⁾

40

25

65

Noncurrent Liabilities

Commodity

—

2

2

Interest rate

51

—

51

Total noncurrent derivative liabilities⁽⁴⁾

51

2

53

Total derivative liabilities

$
91

$
27

$
118

December 31, 2016

ASSETS

Current Assets

Commodity

$
29

$
101

$
130

Interest rate

10

—

10

Total current derivative assets⁽¹⁾

39

101

140

Noncurrent Assets

Commodity

—

132

132

Interest rate

7

—

7

Total noncurrent derivative assets⁽²⁾

7

132

139

Total derivative assets

$
46

$
233

$
279

LIABILITIES

Current Liabilities

Commodity

$
51

$
41

$
92

Interest rate

33

—

33

Foreign currency

3

—

3

Total current derivative liabilities⁽³⁾

87

41

128

Noncurrent Liabilities

Commodity

1

3

4

Interest rate

20

—

20

Foreign currency

3

—

3

Total noncurrent derivative liabilities⁽⁴⁾

24

3

27

Total derivative liabilities

$
111

$
44

$
155

~~(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.~~

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

Derivatives in Cash Flow Hedging Relationships

Amount of Gain
(Loss) Recognized
in AOCI on
Derivatives (Effective
Portion)⁽¹⁾

Amount of Gain
(Loss) Reclassified
From AOCI to
Income

Increase
(Decrease) in
Derivatives
Subject to
Regulatory Treatment⁽²⁾

(millions)

Three Months Ended September 30, 2017

Derivative type and location of gains (losses):

Commodity:

Operating revenue

$
32

Electric fuel and other energy-related purchases

(1
)

Total commodity

$
8

$
31

$
—

Interest rate⁽³⁾

(4
)

(16
)

(26
)
Foreign currency⁽⁴⁾

12

10

—

Total

$
16

$
25

$
(26
)
Three Months Ended September 30, 2016

Derivative type and location of gains (losses):

Commodity:

Operating revenue

$
64

Purchased gas

(1
)

Electric fuel and other energy-related purchases

(1
)

Total commodity

$
7

$
62

$
—

Interest rate⁽³⁾

3

(10
)

(16
)
Foreign currency⁽⁴⁾

12

3

—

Total

$
22

$
55

$
(16
)
Nine Months Ended September 30, 2017

Derivative type and location of gains (losses):

Commodity:

Operating revenue

$
114

Electric fuel and other energy-related purchases

1

Total commodity

$
139

$
115

$
—

Interest rate⁽³⁾

(18
)

(39
)

(60
)
Foreign currency⁽⁴⁾

10

15

—

Total

$
131

$
91

$
(60
)
Nine Months Ended September 30, 2016

Derivative type and location of gains (losses):

Commodity:

Operating revenue

$
266

Purchased gas

(9
)

Electric fuel and other energy-related purchases

(8
)

Total commodity

$
193

$
249

$
—

Interest rate⁽³⁾

(107
)

(21
)

(258
)
Foreign currency⁽⁴⁾

4

1

—

Total

$
90

$
229

$
(258
)

~~(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.~~

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

Three Months Ended September 30,

Nine Months Ended September 30,

Derivatives Not Designated as Hedging Instruments

2017

2016

2017

2016

(millions)

Derivative type and location of gains (losses):

Commodity:

Operating revenue

$
7

$
25

$
22

$
19

Purchased gas

(6
)

(21
)

2

(14
)
Electric fuel and other energy-related purchases

(19
)

(12
)

(51
)

(43
)
Other operations and maintenance

1

—

(1
)

—

Total

$
(17
)

$
(8
)

$
(28
)

$
(38
)

~~(1)~~

Includes derivative activity amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Dominion Energy’s Consolidated Statements of Income.

~~Virginia Power~~

~~Balance Sheet Presentation~~

~~The tables below present Virginia Power's derivative asset and liability balances by type of financial instrument, before and after the effects of offsetting:~~

September 30, 2017

December 31, 2016

Gross Amounts Not Offset
in the Consolidated
Balance Sheet

Gross Amounts Not Offset
in the Consolidated
Balance Sheet

Net Amounts of
Assets Presented
in the
Consolidated
Balance Sheet

Financial
Instruments

Cash
Collateral
Received

Net
Amounts

Net Amounts of
Assets Presented
in the
Consolidated
Balance Sheet

Financial
Instruments

Cash
Collateral
Received

Net
Amounts

(millions)

Commodity contracts:

Over-the-counter

$
156

$
1

$
—

$
155

$
147

$
2

$
—

$
145

Interest rate contracts:

Over-the-counter

—

—

—

—

6

—

—

6

Total

$
156

$
1

$
—

$
155

$
153

$
2

$
—

$
151

September 30, 2017

December 31, 2016

Gross
Amounts of
Recognized
Liabilities

Gross
Amounts
Offset in the
Consolidated
Balance Sheet

Net Amounts of
Liabilities
Presented in the
Consolidated
Balance Sheet

Gross
Amounts of
Recognized
Liabilities

Gross
Amounts
Offset in the
Consolidated
Balance Sheet

Net Amounts of
Liabilities
Presented in the
Consolidated
Balance Sheet

(millions)

Commodity contracts:

Over-the-counter

$
1

$
—

$
1

$
2

$
—

$
2

Interest rate contracts:

Over-the-counter

55

—

55

21

—

21

Total derivatives, subject to a master netting or
similar arrangement

56

—

56

23

—

23

Total derivatives, not subject to a master netting or
similar arrangement

5

—

5

8

—

8

Total

$
61

$
—

$
61

$
31

$
—

$
31

September 30, 2017

December 31, 2016

Gross Amounts Not Offset
in the Consolidated
Balance Sheet

Gross Amounts Not Offset
in the Consolidated
Balance Sheet

Net Amounts of
Liabilities
Presented in the
Consolidated
Balance Sheet

Financial
Instruments

Cash
Collateral
Paid

Net
Amounts

Net Amounts of
Liabilities
Presented in the
Consolidated
Balance Sheet

Financial
Instruments

Cash
Collateral
Paid

Net
Amounts

(millions)

Commodity contracts:

Over-the-counter

$
1

$
1

$
—

$
—

$
2

$
2

$
—

$
—

Interest rate contracts:

Over-the-counter

55

—

—

55

21

—

—

21

Total

$
56

$
1

$
—

$
55

$
23

$
2

$
—

$
21

~~Volumes~~

The following table presents the volume of Virginia Power’s derivative activity at September 30, 2017. These volumes are based on open derivative positions and represent the combined absolute value of its long and short positions, except in the case of offsetting transactions, for which they represent the absolute value of the net volume of its long and short positions.

Current

Noncurrent

Natural Gas (bcf):

Fixed price⁽¹⁾

28

6

Basis

85

562

Electricity (MWh):

Fixed price⁽¹⁾

1,426,093

611,629

FTRs

68,673,158

—

Interest rate⁽²⁾

$
300,000,000

$
1,150,000,000

~~(1)~~

~~Includes options.~~

~~(2)~~

~~Maturity is determined based on final settlement period.~~

~~Ineffectiveness and AOCI~~

~~For the three and nine months ended September 30, 2017 and 2016, gains or losses on hedging instruments determined to be ineffective were not material.~~

~~The following table presents selected information related to losses on cash flow hedges included in AOCI in Virginia Power’s Consolidated Balance Sheet at September 30, 2017:~~

AOCI
After-Tax

Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax

Maximum Term
(millions)

Interest rate

$
(12
)

$
(1
)

387 months
Total

$
(12
)

$
(1
)

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

Fair Value and Gains and Losses on Derivative Instruments

The following table presents the fair values of ~~Virginia Power’s~~the Companies' derivatives and where they are presented in ~~its~~their Consolidated Balance Sheets:


	Dominion Energy						Virginia Power
	Fair Value – Derivatives under Hedge Accounting		Fair Value – Derivatives not under Hedge Accounting		Total Fair Value		Fair Value – Derivatives under Hedge Accounting		Fair Value – Derivatives not under Hedge Accounting		Total Fair Value
(millions)
At June 30, 2023
ASSETS
Current Assets
Commodity	$	—	$	129	$	129	$	—	$	43	$	43
Interest rate		18		113		131		18		—		18
Total current derivative assets		18		242		260		18		43		61
Noncurrent Assets
Commodity		—		222		222		—		46		46
Interest rate		117		656		773		117		—		117
Total noncurrent derivative assets(1)		117		878		995		117		46		163
Total derivative assets	$	135	$	1,120	$	1,255	$	135	$	89	$	224
LIABILITIES
Current Liabilities
Commodity	$	—	$	240	$	240	$	—	$	117	$	117
Interest rate		—		83		83		—		—		—
Foreign currency exchange rate		—		9		9		—		9		9
Total current derivative liabilities		—		332		332		—		126		126
Noncurrent Liabilities
Commodity		—		114		114		—		51		51
Interest rate		11		287		298		11		—		11
Foreign currency exchange rate		—		50		50		—		50		50
Total noncurrent derivative liabilities(2)		11		451		462		11		101		112
Total derivative liabilities	$	11	$	783	$	794	$	11	$	227	$	238
At December 31, 2022
ASSETS
Current Assets
Commodity	$	—	$	532	$	532	$	—	$	264	$	264
Interest rate		501		104		605		501		—		501
Total current derivative assets		501		636		1,137		501		264		765
Noncurrent Assets
Commodity		—		237		237		—		4		4
Interest rate		113		689		802		113		—		113
Total noncurrent derivative assets(1)		113		926		1,039		113		4		117
Total derivative assets	$	614	$	1,562	$	2,176	$	614	$	268	$	882
LIABILITIES
Current Liabilities
Commodity	$	—	$	700	$	700	$	—	$	290	$	290
Interest rate		—		70		70		—		—		—
Foreign currency exchange rate		—		8		8		—		8		8
Total current derivative liabilities		—		778		778		—		298		298
Noncurrent Liabilities
Commodity		—		226		226		—		58		58
Interest rate		7		300		307		7		—		7
Foreign currency exchange rate		—		93		93		—		93		93
Total noncurrent derivative liabilities(2)		7		619		626		7		151		158
Total derivative liabilities	$	7	$	1,397	$	1,404	$	7	$	449	$	456

(1)

Noncurrent derivative assets are presented in other deferred charges and other assets in the Companies’ Consolidated Balance Sheets.

(2)

Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in the Companies’ Consolidated Balance Sheets.

Fair Value –
Derivatives under
Hedge
Accounting

Fair Value –
Derivatives not under
Hedge
Accounting

Total Fair Value

(millions)

September 30, 2017

ASSETS

Current Assets

Commodity

$
—

$
61

$
61

Total current derivative assets⁽¹⁾

—

61

61

Noncurrent Assets

Commodity

—

107

107

Total noncurrent derivative assets⁽²⁾

—

107

107

Total derivative assets

$
—

$
168

$
168

LIABILITIES

Current Liabilities

Commodity

$
—

$
6

$
6

Interest rate

17

—

17

Total current derivative liabilities⁽³⁾

17

6

23

Noncurrent Liabilities

Interest rate

38

—

38

Total noncurrent derivatives liabilities ⁽⁴⁾

38

—

38

Total derivative liabilities

$
55

$
6

$
61

December 31, 2016

ASSETS

Current Assets

Commodity

$
—

$
60

$
60

Interest rate

6

—

6

Total current derivative assets⁽¹⁾

6

60

66

Noncurrent Assets

Commodity

—

128

128

Total noncurrent derivative assets⁽²⁾

—

128

128

Total derivative assets

$
6

$
188

$
194

LIABILITIES

Current Liabilities

Commodity

$
—

$
10

$
10

Interest rate

8

—

8

Total current derivative liabilities⁽³⁾

8

10

18

Noncurrent Liabilities

Interest rate

13

—

13

Total noncurrent derivative liabilities⁽⁴⁾

13

—

13

Total derivative liabilities

$
21

$
10

$
31

~~(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.~~

The following tables present the gains and losses on ~~Virginia Power's~~the Companies' derivatives, as well as where the associated activity is presented in ~~its~~their Consolidated Balance Sheets and Statements of ~~Income:~~Income.


	Dominion Energy									Virginia Power
Derivatives in cash flow hedging relationships	Amount of Gain (Loss) Recognized in AOCI on Derivatives(1)			Amount of Gain (Loss) Reclassified from AOCI to Income			Increase (Decrease) in Derivatives Subject to Regulatory Treatment(2)			Amount of Gain (Loss) Recognized in AOCI on Derivatives(1)			Amount of Gain (Loss) Reclassified from AOCI to Income			Increase (Decrease) in Derivatives Subject to Regulatory Treatment(2)
(millions)
Three Months Ended June 30, 2023
Derivative type and location of gains (losses):
Interest rate(3)	$	8		$	(10	)	$	88		$	8		$	—		$	88
Total	$	8		$	(10	)	$	88		$	8		$	—		$	88
Three Months Ended June 30, 2022
Derivative type and location of gains (losses):
Interest rate(3)	$	39			(14	)	$	354		$	33		$	—		$	353
Total	$	39		$	(14	)	$	354		$	33		$	—		$	353
Six Months Ended June 30, 2023
Derivative type and location of gains (losses):
Interest rate(3)	$	(4	)	$	(21	)	$	(32	)	$	(4	)	$	—		$	(32	)
Total	$	(4	)	$	(21	)	$	(32	)	$	(4	)	$	—		$	(32	)
Six Months Ended June 30, 2022
Derivative type and location of gains (losses):
Interest rate(3)	$	72		$	(28	)	$	633		$	59		$	(1	)	$	632
Total	$	72		$	(28	)	$	633		$	59		$	(1	)	$	632

Amounts deferred into AOCI have no associated effect in the Companies' Consolidated Statements of Income.

~~(1)~~

~~Amounts deferred into AOCI have no associated effect in Virginia Power’s Consolidated Statements of Income.~~

(2)

~~(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 the Companies' Consolidated Statement of Income are classified in interest and related charges.

~~(3)~~

~~Amounts recorded in Virginia Power’s Consolidated Statements of Income are classified in interest and related charges.~~

~~(1)~~

Includes derivative activity amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Virginia Power’s Consolidated Statements of Income.

~~(2)~~

~~Amounts recorded in Virginia Power's Consolidated Statements of Income are classified in electric fuel and other energy-related purchases.~~


	Amount of Gain (Loss) Recognized in Income on Derivatives(1)(2)
Derivatives not designated as hedging instruments	Dominion Energy												Virginia Power
	Quarter-to-Date						Year-to-Date						Quarter-to-Date						Year-to-Date
Period Ended June 30,	2023			2022			2023			2022			2023			2022			2023			2022
(millions)
Derivative type and location of gains (losses):
Commodity:
Operating revenue	$	26		$	(272	)	$	421		$	(602	)	$	10		$	(88	)	$	19		$	(129	)
Purchased gas		—			3			94			5
Electric fuel and other energy-related purchases		(73	)		137			(118	)		196			(73	)		125			(119	)		182
Operations and maintenance		2			—			2			—			2			—			2			—
Interest rate:
Interest and related charges		79			340			(23	)		536
Total	$	34		$	208		$	376		$	135		$	(61	)	$	37		$	(98	)	$	53

~~Dominion Energy Gas~~

~~Balance Sheet Presentation~~

~~The tables below present Dominion Energy Gas' derivative asset and liability balances by type of financial instrument, before and after the effects of offsetting.~~

(1)

September 30, 2017

December 31, 2016

Gross Amounts Not Offset
in the Consolidated
Balance Sheet

Gross Amounts Not Offset
in the Consolidated
Balance Sheet

Net Amounts of
Assets Presented
in the
Consolidated
Balance Sheet

Financial
Instruments

Cash
Collateral
Received

Net
Amounts

Net Amounts of
Assets Presented
in the
Consolidated
Balance Sheet

Financial
Instruments

Cash
Collateral
Received

Net
Amounts

(millions)

Commodity contracts:

Over-the-counter

$
1

$
—

$
—

$
1

$
—

$
—

$
—

$
—

Foreign currency contracts:

Over-the-counter

25

4

—

21

—

—

—

—

Total

$
26

$
4

$
—

$
22

$
—

$
—

$
—

$
—

September 30, 2017

December 31, 2016

Gross
Amounts of Recognized Liabilities

Gross
Amounts
Offset in the Consolidated Balance Sheet

Net Amounts of Liabilities Presented in the Consolidated Balance Sheet

Gross
Amounts of Recognized Liabilities

Gross
Amounts
Offset in the Consolidated Balance Sheet

Net Amounts of Liabilities
Presented in the
Consolidated
Balance Sheet

(millions)

Commodity contracts:

Over-the-counter

$
6

$
—

$
6

$
5

$
—

$
5

Foreign currency contracts:

Over-the-counter

4

—

4

6

—

6

Total derivatives, subject to a master netting or
similar arrangement

10

—

10

11

—

11

Total

$
10

$
—

$
10

$
11

$
—

$
11

September 30, 2017

December 31, 2016

Gross Amounts Not Offset
in the Consolidated
Balance Sheet

Gross Amounts Not Offset
in the Consolidated
Balance Sheet

Net Amounts of
Liabilities
Presented in the
Consolidated
Balance Sheet

Financial Instruments

Cash
Collateral
Paid

Net
Amounts

Net Amounts of
Liabilities
Presented in the
Consolidated
Balance Sheet

Financial Instruments

Cash
Collateral
Paid

Net
Amounts

(millions)

Commodity contracts

Over-the-counter

$
6

$
—

$
—

$
6

$
5

$
—

$
—

$
5

Foreign currency contracts:

Over-the-counter

4

4

—

—

6

—

—

6

Total

$
10

$
4

$
—

$
6

$
11

$
—

$
—

$
11

~~Volumes~~

~~The following table presents the volume of Dominion Energy Gas'~~Includes derivative activity ~~at September 30, 2017. These volumes are based on open derivative positions and represent the combined absolute value~~amortized out of ~~its long and short positions, except~~regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in the ~~case~~Companies' Consolidated Statements of ~~offsetting transactions, for which they represent the absolute value of the net volume of its long and short positions.~~

Current

Noncurrent

Natural Gas (bcf):

Fixed price

2

—

Basis

2

—

NGLs (Gal)

30,514,288

—

Foreign currency⁽¹⁾

$
—

$
280,000,000

Income.

~~(1)~~

~~Maturity is determined based on final settlement period. Euro equivalent volumes are €250,000,000.~~

~~Ineffectiveness and AOCI~~

~~For the three and nine months ended September 30, 2017 and 2016, gains or losses on hedging instruments determined to be ineffective were not material.~~

~~The following table presents selected information~~(2)

Excludes amounts related to ~~gains (losses) on cash flow hedges included in AOCI in Dominion Energy Gas' Consolidated Balance Sheet at September 30, 2017:~~

AOCI
After-Tax

Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax

Maximum Term
(millions)

Commodities:

NGLs

$
(4
)

$
(4
)

6 months
Interest rate

(26
)

(3
)

327 months
Foreign currency

4

(2
)

105 months
Total

$
(26
)

$
(9
)

rate derivatives that are deferred to plant under construction within property, plant and equipment and regulatory assets/liabilities that will begin to amortize once the CVOW Commercial Project is placed in service.

~~Fair Value and Gains and Losses on Derivative Instruments~~

~~The following tables present the fair values of Dominion Energy Gas' derivatives and where they are presented in its Consolidated Balance Sheets:~~36

Fair Value-Derivatives
Under Hedge
Accounting

Fair Value-Derivatives
Not Under Hedge
Accounting

Total Fair Value

(millions)

September 30, 2017

ASSETS

Current Assets

Commodity

$
—

$
1

$
1

Total current derivative assets⁽¹⁾

—

1

1

Noncurrent Assets

Foreign currency

25

—

25

Total noncurrent derivative assets⁽²⁾

25

—

25

Total derivative assets

$
25

$
1

$
26

LIABILITIES

Current Liabilities

Commodity

$
6

$
—

$
6

Foreign currency

4

—

4

Total current derivative liabilities⁽³⁾

10

—

10

Total derivative liabilities

$
10

$
—

$
10

December 31, 2016

LIABILITIES

Current Liabilities

Commodity

$
4

$
—

$
4

Foreign currency

3

—

3

Total current derivative liabilities⁽³⁾

7

—

7

Noncurrent Liabilities

Commodity

1

—

1

Foreign currency

3

—

3

Total noncurrent derivative liabilities⁽⁴⁾

4

—

4

Total derivative liabilities

$
11

$
—

$
11

~~(1)~~

~~Current derivative assets are presented in other current assets in Dominion Energy Gas’ Consolidated Balance Sheets.~~

~~(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.~~

The following table presents the gains and losses on Dominion Energy Gas' derivatives, as well as where the associated activity is presented in its Consolidated Balance Sheets and Statements of Income:

Derivatives in Cash Flow Hedging Relationships

Amount of Gain (Loss) Recognized in AOCI on
Derivatives (Effective Portion)⁽¹⁾

Amount of Gain
(Loss) Reclassified From AOCI
to Income

(millions)

Three Months Ended September 30, 2017

Derivative Type and Location of Gains (Losses):

Commodity:

Operating revenue

$
(2
)
Total commodity

$
(10
)

$
(2
)
Interest rate⁽²⁾

—

(1
)
Foreign currency⁽³⁾

12

10

Total

$
2

$
7

Three Months Ended September 30, 2016

Derivative Type and Location of Gains (Losses):

Commodity:

Operating revenue

$
1

Total commodity

$
—

$
1

Interest rate⁽²⁾

—

(1
)
Foreign currency⁽³⁾

12

3

Total

$
12

$
3

Nine Months Ended September 30, 2017

Derivative Type and Location of Gains (Losses):

Commodity:

Operating revenue

$
(4
)
Total commodity

$
(5
)

$
(4
)
Interest rate⁽²⁾

—

(3
)
Foreign currency⁽³⁾

10

15

Total

$
5

$
8

Nine Months Ended September 30, 2016

Derivative Type and Location of Gains (Losses):

Commodity:

Operating revenue

$
6

Total commodity

$
(7
)

$
6

Interest rate⁽²⁾

(8
)

(2
)
Foreign currency⁽³⁾

4

1

Total

$
(11
)

$
5

~~(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.~~

Amount of Gain (Loss) Recognized in Income on Derivatives

Three Months Ended September 30,

Nine Months Ended September 30,

Derivatives Not Designated as Hedging Instruments

2017

2016

2017

2016

(millions)

Derivative type and location of gains (losses):

Commodity:

Operating revenue

$
—

$
5

$
—

$
3

Total

$
—

$
5

$
—

$
3

Note 10. Investments

Dominion Energy

Equity and Debt Securities

Short-Term Deposit

In May 2022, Dominion Energy entered into an agreement with a financial institution and committed to make a short-term deposit of at least $1.6 billion but not more than $2.0 billion to be posted as collateral to secure its $1.6 billion redemption obligation of the Series A Preferred Stock as described in Note 16. In May 2022, Dominion Energy funded the short-term deposit in the amount of $2.0 billion, which earned interest income at an annual rate of 1.75% through its maturity in September 2022.

Rabbi Trust Securities

~~Marketable equity~~Equity and ~~debt~~fixed income securities and cash equivalents ~~held~~ in Dominion Energy’s rabbi trusts and classified as trading totaled ~~$109~~$113 million and ~~$104~~$111 million at ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively.

Decommissioning Trust Securities

~~Dominion Energy holds marketable~~The Companies hold equity and ~~debt~~fixed income securities ~~(classified as available-for-sale),~~and cash equivalents, and ~~cost method investments~~Dominion Energy also holds insurance contracts, in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. ~~Dominion Energy’s~~The Companies' decommissioning trust funds are summarized below:


	Dominion Energy												Virginia Power
	Amortized Cost		Total Unrealized Gains		Total Unrealized Losses				Allowance for Credit Losses		Fair Value		Amortized Cost		Total Unrealized Gains		Total Unrealized Losses				Allowance for Credit Losses		Fair Value
(millions)
June 30, 2023
Equity securities:(1)
U.S.	$	1,397	$	2,999	$	(22	)				$	4,374	$	872	$	1,562	$	(21	)				$	2,413
Fixed income securities:(2)
Corporate debt instruments		577		1		(47	)		$	—		531		356		1		(34	)		$	—		323
Government securities		1,332		5		(49	)			—		1,288		731		3		(25	)			—		709
Common/ collective trust funds		71		—		—				—		71		54		—		—				—		54
Insurance contracts		236		—		—						236
Cash equivalents and other(3)		53		—		—				—		53		9		—		—				—		9
Total	$	3,666	$	3,005	$	(118	)	(4)	$	—	$	6,553	$	2,022	$	1,566	$	(80	)	(4)	$	—	$	3,508
December 31, 2022
Equity securities:(1)
U.S.	$	1,378	$	2,501	$	(46	)				$	3,833	$	858	$	1,304	$	(35	)				$	2,127
Fixed income securities:(2)
Corporate debt instruments		640		1		(65	)		$	—		576		406		1		(47	)		$	—		360
Government securities		1,252		4		(70	)			—		1,186		664		2		(35	)			—		631
Common/ collective trust funds		98		—		—				—		98		61		—		—				—		61
Insurance contracts		221		—		—						221
Cash equivalents and other(3)		43		—		—				—		43		23		—		—				—		23
Total	$	3,632	$	2,506	$	(181	)	(4)	$	—	$	5,957	$	2,012	$	1,307	$	(117	)	(4)	$	—	$	3,202

(1)

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

(2)

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

(3)

Dominion Energy includes pending sales of securities of $24 million and $42 million at June 30, 2023 and December 31, 2022, respectively. Virginia Power includes pending sales of securities of $9 million and $24 million at June 30, 2023, and December 31, 2022, respectively.

(4)

Dominion Energy's fair value of securities in an unrealized loss position was $1.5 billion and $1.6 billion at June 30, 2023 and December 31, 2022, respectively. Virginia Power's fair value of securities in an unrealized loss position was $844 million and $946 million at June 30, 2023 and December 31, 2022, respectively.

The portion of unrealized gains and losses that relates to equity securities held within Dominion Energy and Virginia Power’s nuclear decommissioning trusts is summarized below:


	Dominion Energy										Virginia Power
	Quarter-to-Date					Year-to-Date					Quarter-to-Date					Year-to-Date
Period Ended June 30,	2023		2022			2023		2022			2023		2022			2023		2022
(millions)
Net gains (losses) recognized during the period	$	294	$	(712	)	$	520	$	(918	)	$	153	$	(361	)	$	269	$	(463	)
Less: Net (gains) losses recognized during the period on securities sold during the period		1		6			3		5			2		—			3		(4	)
Unrealized gains (losses) recognized during the period on securities still held at period end(1)	$	295	$	(706	)	$	523	$	(913	)	$	155	$	(361	)	$	272	$	(467	)

Amortized
Cost

Total
Unrealized
Gains⁽¹⁾

Total
Unrealized
Losses⁽¹⁾

Fair Value

(millions)

September 30, 2017

Marketable equity securities:

U.S.

$
1,562

$
1,664

$
—

$
3,226

Fixed income:

Corporate debt instruments

438

15

(1
)

452

Government securities

1,041

28

(4
)

1,065

Common/collective trust funds

66

—

—

66

Cost method investments

67

—

—

67

Cash equivalents and other⁽²⁾

5

—

—

5

Total

$
3,179

$
1,707

$
(5
)
⁽³⁾

$
4,881

December 31, 2016

Marketable equity securities:

U.S.

$
1,449

$
1,408

$
—

$
2,857

Fixed income:

Corporate debt instruments

478

13

(4
)

487

Government securities

978

22

(8
)

992

Common/collective trust funds

67

—

—

67

Cost method investments

69

—

—

69

Cash equivalents and other⁽²⁾

12

—

—

12

Total

$
3,053

$
1,443

$
(12
)
⁽³⁾

$
4,484

(1)

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

~~(1)~~

~~Included in AOCI and the nuclear decommissioning trust regulatory liability.~~

~~(2)~~

~~Includes net pending sales of securities of $4 million and $9 million at September 30, 2017 and December 31, 2016, respectively.~~

~~(3)~~

~~The fair value of securities in an unrealized loss position was $402 million and $576 million at September 30, 2017 and December 31, 2016, respectively.~~

The fair value of Dominion ~~Energy’s marketable debt~~Energy and Virginia Power’s fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds at ~~September~~June 30, ~~2017~~2023 by contractual maturity is as follows:


	Dominion Energy		Virginia Power
(millions)
Due in one year or less	$	91	$	59
Due after one year through five years		482		260
Due after five years through ten years		422		248
Due after ten years		895		519
Total	$	1,890	$	1,086

Amount

(millions)

Due in one year or less

$
183

Due after one year through five years

410

Due after five years through ten years

366

Due after ten years

624

Total

$
1,583

Presented below is selected information regarding Dominion ~~Energy’s marketable~~Energy and Virginia Power’s equity and ~~debt~~fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds.



	Dominion Energy								Virginia Power
	Quarter-to-Date				Year-to-Date				Quarter-to-Date				Year-to-Date
Period Ended June 30,	2023		2022		2023		2022		2023		2022		2023		2022
(millions)
Proceeds from sales	$	594	$	1,267	$	1,138	$	2,081	$	346	$	472	$	719	$	864
Realized gains(1)		22		75		43		115		8		10		25		26
Realized losses(1)		36		143		77		197		14		33		45		52

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

(millions)

Proceeds from sales

$
377

$
300

$
1,496

$
1,009

Realized gains⁽¹⁾

25

40

142

102

Realized losses⁽¹⁾

16

9

52

43

(1)

Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability.

~~(1)~~

~~Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability.~~

Equity Method Investments

Dominion Energy recorded ~~other-than-temporary impairment losses~~equity earnings on its investments ~~held in nuclear decommissioning trust funds as follows:~~

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

(millions)

Total other-than-temporary impairment losses⁽¹⁾

$
7

$
9

$
33

$
34

Losses recorded to the nuclear decommissioning trust
regulatory liability

(2
)

(4
)

(13
)

(15
)
Losses recognized in other comprehensive income
(before taxes)

(1
)

—

(2
)

(1
)
Net impairment losses recognized in earnings

$
4

$
5

$
18

$
18

~~(1)~~

~~Amounts include other-than-temporary impairment losses for debt securities of less than $1 million for both the three months ended September 2017 and 2016,~~of $170 million and $163 million for the six months ended June 30, 2023 and 2022, respectively, ~~and $2 million for both the nine months ended September 30, 2017 and 2016, respectively.~~

~~Virginia Power~~

Virginia Power holds marketable equity and debt securities (classified as available-for-sale), cash equivalents and cost method investments in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Virginia Power’s decommissioning trust funds are summarized below:

Amortized
Cost

Total Unrealized
Gains⁽¹⁾

Total Unrealized
Losses⁽¹⁾

Fair Value

(millions)

September 30, 2017

Marketable equity securities:

U.S.

$
729

$
741

$
—

$
1,470

Fixed income:

Corporate debt instruments

226

8

—

234

Government securities

483

13

(2
)

494

Common/collective trust funds

29

—

—

29

Cost method investments

67

—

—

67

Cash equivalents and other⁽²⁾

(2
)

—

—

(2
)
Total

$
1,532

$
762

$
(2
)
⁽³⁾
$
2,292

December 31, 2016

Marketable equity securities:

U.S.

$
677

$
624

$
—

$
1,301

Fixed income:

Corporate debt instruments

274

6

(4
)

276

Government securities

420

9

(2
)

427

Common/collective trust funds

26

—

—

26

Cost method investments

69

—

—

69

Cash equivalents and other⁽²⁾

7

—

—

7

Total

$
1,473

$
639

$
(6
)
⁽³⁾
$
2,106

~~(1)~~

~~Included in AOCI and the nuclear decommissioning trust regulatory liability.~~

~~(2)~~

~~Includes pending purchases of securities of $2 million and pending sales of securities of $7 million at September 30, 2017 and December 31, 2016, respectively.~~

~~(3)~~

~~The fair value of securities in an unrealized loss position was $165 million and $287 million at September 30, 2017 and December 31, 2016, respectively.~~

~~The fair value of Virginia Power’s marketable debt securities held in nuclear decommissioning trust funds at September 30, 2017 by contractual maturity is as follows:~~

Amount

(millions)

Due in one year or less

$
60

Due after one year through five years

192

Due after five years through ten years

189

Due after ten years

316

Total

$
757

~~Presented below is selected information regarding Virginia Power’s marketable equity and debt securities held in nuclear decommissioning trust funds.~~

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

(millions)

Proceeds from sales

$
156

$
131

$
654

$
478

Realized gains⁽¹⁾

9

18

64

48

Realized losses⁽¹⁾

6

4

24

21

~~(1)~~

~~Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability.~~

~~Other-than-temporary impairment losses on investments held in nuclear decommissioning trust funds recognized~~ in earnings ~~for Virginia Power were not material~~from equity method investees in its Consolidated Statements of Income. In addition, Dominion Energy recorded equity earnings of $17 million and equity losses of $4 million for the ~~three and nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016.~~

~~Equity Method Investments~~

~~Dominion Energy~~

~~Atlantic Coast Pipeline~~

~~In October 2016, Dominion Energy purchased an additional 3% membership interest~~2022, respectively, in discontinued operations related to its investment in Atlantic Coast ~~Pipeline from Duke for $14 million, which adjusted Dominion Energy’s and Duke’s membership interest to 48% and 47%, respectively.~~

Pipeline. Dominion Energy ~~contributed $84~~received distributions of $185 million and $286 million during the three and nine months ended September 30, 2017 and $74 million and $143 million during the three and nine months ended September 30, 2016, respectively, to Atlantic Coast Pipeline.

~~Dominion Energy Gas~~

~~Iroquois~~

~~Dominion Energy Gas' equity earnings totaled $15 million and $14~~$167 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016,~~2022, respectively. Dominion Energy ~~Gas received distributions from this investment~~made contributions of ~~$17~~$48 million and $90 million for ~~both~~ the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016.~~2022, respectively. At ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the net difference between the carrying amount of Dominion ~~Energy Gas' investment of $96 million~~Energy’s investments and ~~$98 million, respectively, exceeded~~ its share of underlying equity in net assets ~~by $8 million. The difference reflects~~was $221 million and $223 million, respectively. At June 30, 2023, these differences are primarily comprised of $9 million of equity method goodwill ~~and~~that is not being ~~amortized. In May 2016,~~ amortized and a $212 million basis difference from Dominion Energy’s

investment in Cove Point, which is being amortized over the useful lives of the underlying assets. At December 31, 2022, these differences are comprised of $9 million of equity method goodwill that is not being amortized, $215 million basis difference from Dominion Energy’s investment in Cove Point, which is being amortized over the useful lives of the underlying assets and a net $(1) million basis difference primarily attributable to capitalized interest.

Cove Point

Dominion Energy ~~Gas sold 0.65% of the non-controlling~~holds a 50% noncontrolling limited partnership interest in ~~Iroquois~~Cove Point which is accounted for as an equity method investment, as discussed in Note 9 to ~~TransCanada Corporation~~the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022.

Dominion Energy recorded distributions from Cove Point of $95 million and $85 million for the three months ended June 30, 2023 and 2022, respectively, and $178 million and $161 million for the six months ended June 30, 2023 and 2022, respectively.

In June 2023, Dominion Energy entered into an agreement with Cove Point for transportation and storage services [at market rates] for a 20-year period commencing in August 2023.

In July 2023, Dominion Energy entered into an agreement to sell its 50% noncontrolling limited partnership interest in Cove Point to BHE for cash consideration of $3.3 billion. In addition, Dominion Energy expects to receive proceeds from the settlement of related interest rate derivatives, which had a fair value of $218 million at June 30, 2023. DECP Holding's term loan secured by its noncontrolling interest in Cove Point, which had an outstanding balance of $2.3 billion at June 30, 2023, is required to be repaid in connection with closing. In addition, remaining after-tax proceeds associated with the transaction are required to be utilized to repay any outstanding borrowings under Dominion Energy’s two $600 million 364-day term loan facilities entered in July 2023. See Note 16 for additional information on these facilities. The sale will be treated as an asset sale for tax purposes and is expected to close by the end of 2023, contingent on clearance or approval under the Hart-Scott-Rodino Act and from the DOE, and other customary closing and regulatory conditions. The agreement is subject to termination by either party if not completed by the end of 2023, subject to a potential three-month extension for receipt of regulatory approvals, with a $150 million termination fee due to Dominion Energy under certain conditions. Dominion Energy expects to record a gain on the sale of its noncontrolling interest in Cove Point of approximately ~~$7 million, which resulted in a $5~~$650 million ($3415 million after-tax) upon closing.

Atlantic Coast Pipeline

A description of Dominion Energy’s investment in Atlantic Coast Pipeline, including events that led to the cancellation of the Atlantic Coast Pipeline Project in July 2020, is included in Note 9 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022.

At June 30, 2023 and December 31, 2022, Dominion Energy has recorded a liability of $52 million and $114 million, respectively, in other current liabilities in its Consolidated Balance Sheets as a result of its share of equity losses exceeding its investment which reflects Dominion Energy’s obligations on behalf of Atlantic Coast Pipeline related to its AROs.

Dominion Energy recorded $41 million of contributions to Atlantic Coast Pipeline during the six months ended June 30, 2023. Dominion Energy made no contributions to Atlantic Coast Pipeline during the six months ended June 30, 2022.

Dominion Energy expects to incur additional losses from Atlantic Coast Pipeline as it completes wind-down activities. While Dominion Energy is unable to precisely estimate the amounts to be incurred by Atlantic Coast Pipeline, the portion of such amounts attributable to Dominion Energy is not expected to be material to Dominion Energy’s results of operations, financial position or statement of cash flows.

Wrangler

A description of Dominion Energy’s investment in Wrangler (through March 2022) is included in Note 9 to the Consolidated Financial Statements in Dominion Energy’s Annual Report on Form 10-K for the year ended December 31, 2022.

In March 2022, Dominion Energy sold its remaining 15% noncontrolling partnership interest in Wrangler to Interstate Gas Supply, Inc. for cash consideration of $85 million. Dominion Energy recognized a gain of $11 million ($8 million after-tax), included in other income (expense), in its Consolidated Statements of Income for the six months ended June 30, 2022.

Dominion Privatization

Dominion Energy holds a 50% noncontrolling ownership interest in Dominion Privatization which is accounted for as an equity method investment, as discussed in Note 9 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022.

In March 2022, Dominion Energy ~~Gas’~~completed its initial contribution of privatization operations in South Carolina (excluding contracts held by DESC), Texas and Pennsylvania to Dominion Privatization for total consideration of $120 million, subject to customary closing adjustments, comprised of $60 million in cash proceeds and a 50% noncontrolling ownership interest in Dominion

Privatization with an initial fair value of $60 million, estimated using the market approach. This was considered a Level 2 fair value measurement given that it was based on the agreed-upon sales price. In the first quarter of 2022, Dominion Energy recorded a gain of $23 million ($16 million after-tax), presented in losses (gains) on sales of assets in its Consolidated ~~Statement~~Statements of Income.

At June 30, 2023, Dominion Energy and Virginia Power regulatory assets ~~represented past expenditures~~include $5.6 billion and $2.7 billion, respectively, on which they do not ~~currently~~expect to earn a ~~return.~~return during the applicable recovery period. With the exception of ~~the $215 million PJM transmission cost allocation matter,~~certain items discussed above, the majority of these expenditures are expected to be recovered within the next two ~~years.~~years.

Note ~~12.~~13. Regulatory Matters

Regulatory Matters Involving Potential Loss Contingencies

As a result of issues generated in the ordinary course of business, the Companies are involved in various regulatory matters. Certain regulatory matters may ultimately result in a loss; however, as such matters are in an initial procedural phase, involve uncertainty as to the outcome of pending reviews or orders, and/or involve significant factual issues that need to be resolved, it is not possible for the Companies to estimate a range of possible loss. For regulatory matters ~~for which~~that the Companies cannot estimate, ~~a range of possible loss,~~ a statement to this effect is made in the description of the matter. Other matters may have progressed sufficiently through the regulatory process such that the Companies are able to estimate a range of possible loss. For regulatory matters ~~for which~~that the Companies are able to reasonably estimate a range of possible losses, an estimated range of possible loss is provided, in excess of the accrued liability (if any) for such matters. Any estimated range is based on currently available information, involves elements of judgment and significant uncertainties and may not represent the Companies’ maximum possible loss exposure. The circumstances of such regulatory matters will change from time to time and actual results may vary significantly from the current estimate. For current matters not specifically reported below, management does not anticipate that the outcome from such matters would have a material effect on the Companies’ financial position, liquidity or results of operations.

~~FERC - Electric~~

Under the Federal Power Act, FERC regulates wholesale sales and transmission of electricity in interstate commerce by public utilities. Dominion Energy’s merchant generators sell electricity in the PJM, MISO, CAISO and ISO-NE wholesale markets, and to wholesale purchasers in the states of Virginia, North Carolina, Indiana, Connecticut, Tennessee, Georgia, California, South Carolina and Utah, under Dominion Energy’s market-based sales tariffs authorized by FERC or pursuant to FERC authority to sell as a qualified facility. Virginia Power purchases and, under its FERC market-based rate authority, sells electricity in the wholesale market. In addition, Virginia Power has FERC approval of a tariff to sell wholesale power at capped rates based on its embedded cost of generation. This cost-based sales tariff could be used to sell to loads within or outside Virginia Power’s service territory. Any such sales would be voluntary.

~~Rates~~

In April 2008, FERC granted an application for Virginia Power’s electric transmission operations to establish a forward-looking formula rate mechanism that updates transmission rates on an annual basis and approved an ROE of 11.4%, effective as of January 1, 2008. The formula rate is designed to recover the expected revenue requirement for each calendar year and is updated based on actual costs. The FERC-approved formula method, which is based on projected costs, allows Virginia Power to earn a current return on its growing investment in electric transmission infrastructure.

In March 2010, Old Dominion Electric Cooperative and North Carolina Electric Membership Corporation filed a complaint with FERC against Virginia Power claiming, among other issues, that the incremental costs of undergrounding certain transmission line projects were unjust, unreasonable and unduly discriminatory or preferential and should be excluded from Virginia Power’s transmission formula rate. A settlement of the other issues raised in the complaint was approved by FERC in May 2012.

In March 2014, FERC issued an order excluding from Virginia Power’s transmission rates for wholesale transmission customers located outside Virginia the incremental costs of undergrounding certain transmission line projects. FERC found it is not just and reasonable for non-Virginia wholesale transmission customers to be allocated the incremental costs of undergrounding the facilities because the projects are a direct result of Virginia legislation and Virginia Commission pilot programs intended to benefit the citizens of Virginia. The order is retroactively effective as of March 2010 and will cause the reallocation of the costs charged to wholesale transmission customers with loads outside Virginia to wholesale transmission customers with loads in Virginia. FERC determined that there was not sufficient evidence on the record to determine the magnitude of the underground increment and held a hearing to determine the appropriate amount of undergrounding cost to be allocated to each wholesale transmission customer in Virginia.

In October 2017, FERC issued an order determining the calculation of the incremental costs of undergrounding the transmission projects and affirming that the costs are to be recovered from the wholesale transmission customers with loads located in Virginia. FERC directed Virginia Power to rebill all wholesale transmission customers retroactively to March 2010 within 30 days of when the proceeding becomes final and no longer subject to rehearing. Parties have until November 2017 to seek rehearing. Virginia Power is evaluating the order, which is not expected to have a material effect on results of operations.

~~PJM Transmission Rates~~

In April 2007, FERC issued an order regarding its transmission rate design for the allocation of costs among PJM transmission customers, including Virginia Power, for transmission service provided by PJM. For new PJM-planned transmission facilities that operate at or above 500 kV, FERC established a PJM regional rate design where customers pay according to each customer’s share of the region’s load. For recovery of costs of existing facilities, FERC approved the existing methodology whereby a customer pays the cost of facilities located in the same zone as the customer. A number of parties appealed the order to the U.S. Court of Appeals for the Seventh Circuit.

In August 2009, the court issued its decision affirming the FERC order with regard to the existing facilities, but remanded to FERC the issue of the cost allocation associated with the new facilities 500 kV and above for further consideration by FERC. On remand, FERC reaffirmed its earlier decision to allocate the costs of new facilities 500 kV and above according to the customer’s share of the region’s load. A number of parties filed appeals of the order to the U.S. Court of Appeals for the Seventh Circuit. In June 2014, the court again remanded the cost allocation issue to FERC. In December 2014, FERC issued an order setting an evidentiary hearing and settlement proceeding regarding the cost allocation issue. The hearing only concerns the costs of new facilities approved by PJM prior to February 1, 2013. Transmission facilities approved after February 1, 2013 are allocated on a hybrid cost allocation method approved by FERC and not subject to any court review.

In June 2016, PJM, the PJM transmission owners and state commissions representing substantially all of the load in the PJM market submitted a settlement to FERC to resolve the outstanding issues regarding this matter. Under the terms of the settlement, Virginia Power would be required to pay in excess of $200 million to PJM over the next 10 years. Although the settlement agreement has not been accepted by FERC, and the settlement is opposed by a small group of parties to the proceeding, Virginia Power believes it is probable it will be required to make payment as an outcome of the settlement. Accordingly, as of September 30, 2017, Virginia Power has recorded a contingent liability of $223 million in other deferred credits and other liabilities, which is offset by a $215 million regulatory asset for the amount that will be recovered through retail rates in Virginia.

~~FERC – Gas~~

~~DETI~~

In July 2017, FERC audit staff communicated to DETI that it had substantially completed an audit of DETI’s compliance with the accounting and reporting requirements of FERC’s Uniform System of Accounts and provided a description of matters and preliminary recommendations that have the potential to result in adjustments which could be material to Dominion Energy and Dominion Energy Gas’ results of operations. DETI submitted its initial response to the audit staff in September 2017. In connection with one preliminary recommendation that management did not challenge, DETI recognized in the second quarter of 2017, a charge of $15 million ($9 million after-tax) recorded within other operations and maintenance expense in Dominion Energy’s and Dominion Energy Gas’ Consolidated Statements of Income to write-off the balance of a regulatory asset, originally established in 2008, that is no longer considered probable of recovery. Pending final resolution of the audit process and a determination by FERC, management is unable to estimate the potential impact of the other preliminary recommendations and no amounts have been recognized.

Other Regulatory Matters

Other than the following matters, there have been no significant developments regarding the pending regulatory matters disclosed in Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016~~2022.

Virginia Regulation - Key Legislation Affecting Operations

Virginia 2023 Legislation

In April 2023, legislation was enacted that amended several key provisions of the Regulation Act, as previously amended by the GTSA, and revised portions of the existing regulatory framework affecting Virginia Power’s operations. See Note 1213 to the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022, for additional information on the Regulation Act and GTSA.

The legislation resets the frequency of base rate reviews from a triennial period, as established under the GTSA, to a biennial period commencing with the 2023 Biennial Review. Such biennial reviews shall include the establishment of an authorized ROE to be utilized for base rates and riders, prospective base rates for the upcoming two-year period based on projected cost of service and a determination by the Virginia Commission as to Virginia Power’s base rate earned return for the most recently completed two-year period against the previously authorized ROE, including any potential credits to customers’ bills.

The legislation provides that the Virginia Commission will establish an authorized ROE of 9.70% for Virginia Power in the 2023 Biennial Review, reflecting the average authorized ROE of vertically integrated electric utilities by the applicable regulatory commissions in the peer group jurisdictions of Florida, Georgia, Texas, Tennessee, West Virginia, Kentucky and North Carolina. Subsequent to the 2023 Biennial Review, all provisions related to this peer group benchmarking expire and the Virginia Commission is authorized to utilize any methodology it deems to be consistent with the public interest to make future ROE determinations. In all future biennial reviews, if the Virginia Commission determines that Virginia Power’s existing base rates will, on a going-forward basis, produce revenues that are either in excess of or below its authorized rate of return, the Virginia Commission is authorized to reduce or increase such base rates, as applicable and necessary, to ensure that Virginia Power’s base rates are just and reasonable while still allowing Virginia Power to recover its costs and earn a fair rate of return. In addition, beginning with the biennial review to be filed in 2025, the Virginia Commission may, at its discretion, increase or decrease Virginia Power’s authorized ROE by up to 50 basis points based on factors that may include reliability, generating plant performance, customer service and operating efficiency, with the provisions applying to such adjustments to be determined in a future proceeding.

The legislation directs that if the Virginia Commission determines as part of the 2023 Biennial Review that Virginia Power has earned more than 70 basis points above its authorized ROE of 9.35% established in the 2021 Triennial Review that 85% of the amount of such earnings above this level be credited to customers’ bills. In future biennial reviews, beginning with the biennial review to be filed in 2025, 85% of any earnings determined by the Virginia Commission to be up to 150 basis points above Virginia Power’s authorized ROE shall be credited to customers’ bills as well as 100% of any earnings that are more than 150 basis points above Virginia Power’s authorized ROE. For the purposes of measuring any bill credits due to customers, associated income taxes are factored into the determination of such amounts. In addition, the legislation eliminates Virginia Power’s ability to utilize Virginia Commission-approved investment amounts in qualifying solar or wind generation facilities or electric distribution grid transformation projects as a CCRO to reduce or offset any earnings otherwise eligible for customer credits as previously permitted under the GTSA.

In addition to the biennial review mechanisms discussed above, the legislation also includes provisions related to other aspects of Virginia Power’s ratemaking framework.

•

Riders into base rates: Virginia Power is required to combine certain riders with an aggregate annual revenue requirement of at least $350 million with its base rates effective July 2023. After such riders are combined, they will be considered as part of base rates for the purposes of the biennial review proceedings. The inclusion of such riders cannot serve as the basis for an increase in base rates as part of the 2023 Biennial Review.

•

Rider consolidation: Upon determination by the Virginia Commission, certain riders, while remaining separate from base rates, may be consolidated for cost recovery and review purposes.

•

Capitalization ratio: The legislation establishes that Virginia Power is required to undertake reasonable efforts to maintain a common equity capitalization to total capitalization ratio through December 2024 of 52.10%.

•

Fuel cost securitization: Virginia Power is authorized, on or before July 2024, to petition the Virginia Commission for approval of a financing order for certain deferred fuel costs. Virginia Power is required to permit certain retail customers to opt out of any such deferred fuel cost securitization.

•

Electric generation plant retirements: The Virginia Commission shall provide to the Virginia General Assembly, on an annual basis, a report that includes information concerning the reliability impacts of generation unit additions and retirement determinations, along with the potential impact on the purchase of power from generation assets outside of the Virginia jurisdiction, the result of which could impact the depreciable lives of Virginia Power’s electric generation facilities in future periods.

In addition, in May 2023 legislation was enacted that amended certain portions of the VCEA to qualify generation produced by Virginia Power’s biomass electric generating stations as renewable energy and eliminate the mandated retirement of such facilities by the end of 2028.

Virginia Regulation - Recent Developments

2023 Biennial Review

In July 2023, Virginia Power filed its base rate case and accompanying schedules in support of the 2023 Biennial Review in accordance with legislation enacted in Virginia in April 2023 as discussed above. Virginia Power’s earnings test analysis, as filed, demonstrated it earned a combined ROE of 9.04% on its generation and distribution services for the test period, within 70 basis points of its authorized ROE of 9.35% established in the 2021 Triennial Review. Virginia Power did not request an increase in base rates for generation and distribution services and proposed that base rates remain at their existing level utilizing an ROE of 9.70% for the prospective test periods and a common equity capitalization to total capitalization ratio of 52.10%. Virginia Power noted that while its prospective test periods would result in a revenue deficiency, it did not request an increase to base rates given that the combination of certain riders with an aggregate annual revenue requirement of at least $350 million into base rates effective July 2023 cannot serve as the basis for an increase in base rates as part of the 2023 Biennial Review. The Virginia Commission will determine whether Virginia Power’s earnings for the test period, considered as a whole, were within 70 basis points above or below the authorized ROE of 9.35%. The Virginia Commission will also authorize an ROE of 9.70%, as directed by legislation enacted in Virginia in April 2023, for Virginia Power that will be applied to Virginia Power’s riders prospectively and that will also be utilized to measure base rate earnings for the 2025 Biennial Review. This matter is pending.

Virginia Fuel Expenses

In May 2023, Virginia Power filed its annual fuel factor filing with the Virginia Commission to recover an estimated $2.3 billion in Virginia jurisdictional projected fuel expense for the rate year beginning July 1, 2023 and a projected $1.3 billion under-recovered balance as of June 30, 2023. The projected under-recovered balance includes $578 million representing the remaining two years of under-recovered balance as of June 30, 2022 being collected over a three-year period in accordance with the Virginia Commission’s approval of Virginia Power’s 2022 annual fuel factor as described in Note 13 to the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022. Virginia Power proposed two alternatives to recover these under-collected fuel costs. The first option reflects recovery of the total $3.3 billion fuel cost requirement over the July 2023 through June 2024 fuel period and results in an increase in Virginia Power’s fuel revenues of $631 million when applied to projected kilowatt-hour sales for the period. The second option proposed by Virginia Power incorporates its anticipated July 2023 application to the Virginia Commission for approval of a financing order to securitize up to the projected $1.3 billion under-recovered balance as of June 30, 2023 as permitted under legislation enacted in Virginia in April 2023. Under this option, Virginia Power proposed implementation of the current period fuel factor rate only effective July 2023 on an interim basis, while suspending implementation of the prior-period fuel factor rate pending the Virginia Commission’s consideration of the securitization petition. If approved by the Virginia Commission, the securitization option results in a net decrease in Virginia Power’s fuel revenues for the rate year of approximately $541 million. In addition, Virginia Power has proposed to alter the order in which revenue from certain customers who elect to pay market-based rates would be allocated between base rates and fuel, which if approved would result in a reduction to fuel revenue of $13 million. In May 2023, the Virginia Commission ordered that, in accordance with Virginia Power’s second proposed option, only the current period fuel factor rate be implemented effective July 2023 on an interim basis. In accordance with legislation enacted in Virginia in April 2023 discussed above, in July 2023, Virginia Power filed an application with the Virginia Commission for approval of a financing order to securitize the projected $1.3 billion under-recovered fuel balance as of June 30, 2023 through the issuance of one or more tranches of bonds with tenors up to approximately ten years. These matters are pending.

Virginia Power Equity Application

In July 2023, Virginia Power requested approval from the Virginia Commission to issue and sell to Dominion Energy up to $3.25 billion of authorized but unissued shares of its common stock, no par value, through the end of 2023 in order to maintain a common equity capitalization to total capitalization ratio of 52.10% through December 2024 in accordance with legislation enacted in Virginia in April 2023 as discussed above. This matter is pending.

GTSA Filing

In March 2023, Virginia Power filed a petition with the Virginia Commission for approval of Phase III, covering 2024 through 2026, of its plan for electric distribution grid transformation projects as authorized by the GTSA. The plan includes 14 projects covering six components (i) AMI; (ii) customer information platform; (iii) grid improvement projects; (iv) physical and cyber security; (v) telecommunications infrastructure and (vi) customer education. For Phase III, the total proposed capital investment is $1.1 billion and the proposed operations and maintenance investment is $71 million. This matter is pending.

Renewable Generation Projects

In October 2022, Virginia Power filed a petition with the Virginia Commission for CPCNs to construct and operate eight utility-scale projects totaling approximately 474 MW of solar generation and 16 MW of energy storage as part of its efforts to meet the renewable generation development requirements under the VCEA. The projects, as of October 2022, are expected to cost approximately $1.2 billion in the aggregate, excluding financing costs, and be placed into service between 2024 through 2025. In April 2023, the Virginia Commission approved the petition.

Riders

Developments for significant riders associated with various Virginia Power projects are as follows:

Rider Name

Application Date

Approval Date

Rate Year
Beginning

Total Revenue
Requirement
(millions)

Increase (Decrease)
Over Previous Year
(millions)

Rider CCR

February 2023

Pending

December 2023

194

(37

)

Rider CE(1)

October 2022

April 2023

May 2023

Rider GT

August 2022

April 2023

June 2023

(42

)

Rider GT

August 2023

Pending

June 2024

145

131

Rider GV(2)

June 2023

Pending

April 2024

132

Rider GV(2)

June 2023

Pending

April 2025

135

Rider OSW

November 2022

July 2023

September 2023

271

192

Rider PPA

December 2022

July 2023

September 2023

(22

)

(17

)

Rider R

June 2021

March 2022

April 2023

(8)

)

Rider RGGI(3)

December 2022

July 2023

September 2023

356

N/A

Rider RPS

December 2022

July 2023

September 2023

(44

)

Rider S

June 2021

February 2022

April 2023

191

(8)

)

Rider SNA(4)

October 2022

June 2023

September 2023

(57

)

Rider T1(5)

May 2023

July 2023

September 2023

879

173

Rider U(6)

June 2022

February 2023

April 2023

(21

)

Rider US-3

August 2022

April 2023

June 2023

(10

)

Rider US-3

August 2023

Pending

June 2024

)

Rider US-4

August 2022

April 2023

June 2023

Rider US-4

August 2023

Pending

June 2024

)

Rider W(7)

June 2022

February 2023

April 2023

105

(8)

(16

)

(1)

Associated with solar generation and energy storage projects requested for approval in October 2022 and certain small-scale solar projects in addition to previously approved Rider CE projects.

(2)

The total revenue requirement requested is based on an estimated retirement of Greensville County in 2058, consistent with the current estimated useful life of the facility. Virginia Power also provided an alternative approach based on an estimated retirement of Greensville County in 2045, which if utilized would result in a revenue requirement of $144 million and $148 million for rate years beginning April 2024 and April 2025, respectively.

(3)

In December 2022, Virginia Power filed a petition to update and reinstate Rider RGGI to recover RGGI compliance costs incurred after July 2022 and those projected to occur through December 2023, with rate recovery from September 2023 through August 2024. For purposes of this proceeding, Virginia Power has assumed that Virginia will withdraw from RGGI on December 31, 2023, and accordingly did not project any RGGI compliance costs to be incurred after that date.

(4)

Virginia Power requested approval of cost recovery of approximately $1.2 billion through Rider SNA for the first phase of nuclear life extension program which includes investments through 2024. In April 2022, Virginia Power, the Virginia Commission staff and certain interested parties filed a proposed stipulation recommending that costs incurred after February 2022 associated with the first phase of the nuclear life extension program for North Anna be deferred and requested for recovery in a subsequent Rider SNA filing.

(5)

Consists of $510 million for the transmission component of Virginia Power's base rates and $369 million for Rider T1.

(6)

Consists of previously approved phases of Rider U.

(7)

In February 2023, the Virginia Commission also approved Virginia Power's requested revenue requirement for the rate year beginning April 2024. However, as Virginia Power provided notification in May 2023 to combine Rider W into base rates as discussed above, Rider W ceased to be separately collected effective July 2023.

(8)

In May 2023, Virginia Power filed a notification with the Virginia Commission to combine Riders R, S and W, which have an aggregate revenue requirement of $351 million, into base rates effective July 2023 in accordance with legislation enacted in Virginia in April 2023.

Electric Transmission Projects

Developments for significant Virginia Power electric transmission projects approved or applied for are as follows:

Description and Location
of Project

Application Date

Approval Date

Type of
Line

Miles of
Lines

Cost Estimate
(millions)

Partial rebuild of Bristers-Ox 115 kV line in
Fauquier and Prince William Counties, Virginia

August 2022

April 2023

230 kV

Construct new switching station, substations,
transmission lines and related projects in Lunenberg
and Mecklenburg Counties, Virginia

October 2022

June 2023

230 kV

230

Construct new switching station, substation,
transmission lines and related projects in Charlotte,
Halifax and Mecklenburg Counties, Virginia

October 2022

May 2023

230 kV

215

Construct new Mars and Wishing Star substations,
transmission lines and related projects in Loudoun
County, Virginia

October 2022

April 2023

500/230 kV

720

Construct new Altair switching station, transmission
lines and related projects in Loudoun County, Virginia

November 2022

June 2023

230 kV

Rebuild of Lines #2019 and #2007 in the City of
Virginia Beach, Virginia

February 2023

Pending

230 kV

Install transformer at Possum Point substation,
rebuild and construct transmission lines and
related projects in Prince William County, Virginia

March 2023

Pending

230 kV

Partial rebuild of Line #2011 in the Cities of
Manassas and Manassas Park, Virginia and
Prince William and Fairfax Counties, Virginia

March 2023

Pending

230 kV

Construct new transmission lines and convert Jeffress
switching station in Mecklenburg County, Virginia

May 2023

Pending

230 kV

135

Construct new transmission lines and expand White
Oak substation in Henrico County, Virginia

June 2023

Pending

230 kV

Virginia Regulation – Select Prior Year Events

The following items were disclosed in Note 13 to the Consolidated Financial Statements in the Companies’ ~~Quarterly Reports~~Annual Report on Form ~~10-Q~~10-K for the ~~quarters~~year ended ~~March~~December 31, ~~2017~~2022 and are included in this report as they had an impact to the Companies’ Consolidated Statements of Income for the three and/or six months ended June 30, ~~2017.~~2022.

Virginia ~~Regulation~~Fuel Expenses

~~Regulation Act Legislation~~

The Supreme Court of Virginia previously granted appeals to certain industrial customers of Appalachian Power Company that challenged the constitutionality of legislation enacted in 2015 keeping Appalachian Power Company’s base rates unchanged until at least 2020. This legislation also keeps Virginia Power’s base rates unchanged until at least 2022. In ~~September 2017, the Supreme Court of Virginia affirmed that the legislation is constitutional.~~

~~Rate Adjustment Clauses~~

~~Below is a discussion of significant riders associated with various~~May 2022, Virginia Power ~~projects:~~

~~Virginia Power previously~~ filed ~~an application~~its annual fuel factor filing with the Virginia Commission to recover ~~through Rider U costs for the first and second phases of a program to underground outage-prone overhead distribution lines. In September 2017, the~~an estimated $2.3 billion in Virginia ~~Commission approved a total $22 million annual revenue requirement effective October 1, 2017, using a 9.4% ROE, and a total capital investment of $40 million for second phase conversions.~~

The Virginia Commission previously approved Riders C1A and C2A in connection with cost recovery for DSM programs. In October 2017, Virginia Power requested approval to extend one existing energy efficiency program for five years with a new $25 million cost cap, and proposed a total $31 million revenue requirementjurisdictional projected fuel expense for the rate year beginning July 1, ~~2018,~~2022 and a projected $1.0 billion under-recovered balance as of June 30, 2022. In July 2022, Virginia Power, the Virginia Commission staff and another party filed a comprehensive settlement agreement, approved by the Virginia Commission in September 2022, which ~~represents~~provided for the collection of the requested under-recovered projected fuel expense over a ~~$3 million increase~~three-year period beginning July 1, 2022 and required that Virginia Power exclude from recovery through base rates one half of the related financing costs over the ~~previous year. This case is pending.~~three year period. In addition, the settlement agreement affirmed Virginia Power’s proposal regarding fuel cost recovery for market-based customers. As a result, Virginia Power recorded a $191 million ($142 million after-tax) charge in the second quarter of 2022 within impairment of assets and other charges in its Consolidated Statements of Income. See Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022 for additional information.

Rider RGGI

In May 2022, Virginia Power filed a petition with the Virginia Commission requesting suspension of Rider RGGI approved in August 2021. Virginia Power also requested that RGGI compliance costs incurred and unrecovered through July 2022 be recovered through existing base rates in effect during the period incurred. The Virginia Commission ~~previously~~ approved ~~Rider BW~~the request in ~~conjunction with Brunswick County.~~June 2022. In ~~October 2017,~~the second quarter of 2022, Virginia Power ~~proposed~~recorded a ~~$132~~charge of $180 million ~~revenue requirement~~($134 million after-tax) in impairment of assets and other charges for the amount deemed recovered through base rates through June 30, 2022, including the impact of certain non-jurisdictional customers which follow Virginia Power’s jurisdictional rate methodology. See Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ~~beginning September 1, 2018, which represents~~ended December 31, 2022 for additional information.

North Carolina Regulation

PSNC Rider D

Rider D allows PSNC to recover from customers all prudently incurred gas costs and the related portion of uncollectible expenses as well as losses on negotiated gas and transportation sales. In February 2023, PSNC submitted a ~~$5 million increase over the previous year. This case is pending.~~

~~The Virginia Commission previously approved Rider US-2 in conjunction~~filing with the ~~Scott Solar, Whitehouse,~~North Carolina Commission for a $56 million gas cost decrease with rates effective March 2023. The North Carolina Commission approved the filing in March 2023.

PSNC Customer Usage Tracker

PSNC utilizes a customer usage tracker, a decoupling mechanism, which allows it to adjust its base rates semi-annually for residential and ~~Woodland solar facilities.~~commercial customers based on average per customer consumption. In ~~October 2017, Virginia Power proposed~~March 2023, PSNC submitted a ~~$15~~filing with the North Carolina Commission for a $23 million ~~revenue requirement~~decrease relating to the customer usage tracker. The North Carolina Commission approved the filing in March 2023 with rates effective April 2023.

South Carolina Regulation

DSM Programs

DESC has approval for ~~the rate year beginning September 1, 2018,~~a DSM rider through which ~~represents a $5 million increase over the previous year. This case is pending.~~

~~Electric Transmission Projects~~

~~Virginia Power previously~~it recovers expenditures related to its DSM programs. In January 2023, DESC filed an application with the ~~Virginia~~South Carolina Commission seeking approval to recover $46 million of costs and net lost revenues associated with these programs, along with an incentive to invest in such programs. DESC requested that rates be effective with the first billing cycle of May 2023. In April 2023, the South Carolina Commission approved the request, effective with the first billing cycle of May 2023.

Cost of Fuel

DESC's retail electric rates include a cost of fuel component approved by the South Carolina Commission which may be adjusted periodically to reflect changes in the price of fuel purchased by DESC. In February 2023, DESC filed with the South Carolina Commission a proposal to increase the total fuel cost component of retail electric rates. DESC's proposed adjustment is designed to recover DESC's current base fuel costs, including its existing under-collected balance, over the 12-month period beginning with the first billing cycle of May 2023, along with a requested decrease to DESC's variable environmental and avoided capacity cost component. The net effect of the proposal is an annual increase of $176 million. In March 2023, DESC, the South Carolina Office of Regulatory Staff and another party of record filed a stipulation with the South Carolina Commission for approval to reduce the base fuel cost component reflecting a ~~CPCN~~subsequent decrease in current fuel prices, resulting in a net annual increase of $121 million. In April 2023, the South Carolina Commission voted to ~~rebuild and rearrange its Idylwood substation in Fairfax County, Virginia.~~ approve the stipulation, with rates effective May 2023.

Electric Transmission Project

In ~~September 2017, the Virginia Commission granted a CPCN for the project. The total estimated cost of the project is approximately $110 million.~~

~~Virginia Power previously~~March 2023, DESC filed an application with the ~~Virginia~~South Carolina Commission ~~for a CPCN~~requesting approval to construct and operate ~~in multiple Virginia counties an approximately 38-mile overhead~~ 19 miles of 230 kV transmission ~~line between~~lines, a substation and associated facilities in Jasper County, South Carolina estimated to cost approximately $55 million. In July 2023, the ~~Remington~~South Carolina Commission voted to approve the request.

Electric - Other

DESC utilizes a pension costs rider approved by the South Carolina Commission which is designed to allow recovery of projected pension costs, including under-collected balances or net of over-collected balances, as applicable. The rider is typically reviewed for adjustment every 12 months with any resulting increase or decrease going into effect beginning with the first billing cycle in May. In February 2023, DESC requested that the South Carolina Commission approve an adjustment to this rider to increase annual revenue by $24 million. In April 2023, the South Carolina Commission approved the request.

Natural Gas Base Rate Case

In March 2023, DESC filed its natural gas base rate case and ~~Gordonsville substations, along~~schedules with ~~associated facilities. In August 2017,~~ the ~~Virginia Commission granted~~South Carolina Commission. DESC proposed a ~~CPCN~~non-fuel, base rate increase of $19 million effective October 2023. The base rate increase was proposed to recover significant investment in distribution infrastructure for the ~~project.~~benefit of customers. The ~~total estimated cost~~proposed rates would provide for an ROE of 10.38% compared to the currently authorized ROE of 10.25%. In addition, DESC elected to continue applicability of the ~~project~~Natural Gas Rate Stabilization Act, which allows for the adjustment of natural gas base rates annually, to its future rates and charges. This matter is pending.

Ohio Regulation

PIR Program

In 2008, East Ohio began PIR, aimed at replacing approximately ~~$105 million.~~25% of its pipeline system. The Ohio Commission has approved East Ohio’s PIR program for capital investments through 2026 with 3% increases of annual capital expenditures per year.

In ~~November 2013, the Virginia Commission issued~~February 2023, East Ohio filed an order granting Virginia Power a CPCN to construct approximately 7 miles of new overhead 500 kV transmission line from the existing Surry switching station in Surry County to a new Skiffes Creek switching station in James City County, and approximately 20 miles of new 230 kV transmission line in James City County, York County, and the City of Newport News from the proposed new Skiffes Creek switching station to Virginia Power’s existing Whealton substation in the City of Hampton. As of July 2017, ~~Virginia Power has received all major required permits and approvals and is proceeding with construction of the project. In connection~~application with the receipt of the permit from the U.S. Army Corps of Engineers in July 2017, Virginia Power was required to make payments totaling approximately $90 million to fund improvements to historical and cultural resources near the project. Accordingly, in July 2017, Virginia Power recorded an increase to property, plant and equipment and a corresponding liability for these payment obligations. Through September 30, 2017, Virginia Power had made $70 million of such payments, with the remaining $20 million paid in October 2017. Also in July 2017, the National Parks Conservation Association filed a lawsuit in U.S. District Court for the D.C. Circuit seeking to set aside the permit granted by the U.S. Army Corps of Engineers for the project and requested a preliminary injunction against the permit. In August 2017, the National Trust for Historic Preservation and Preservation Virginia filed a similar lawsuit in U.S. District Court for the D.C. Circuit. In October 2017, the preliminary injunction requests were denied. These lawsuits are pending.

~~North Carolina Regulation~~

~~In August 2017, Virginia Power submitted its annual filing to the North Carolina Utilities~~Ohio Commission requesting approval to adjust the ~~fuel component~~PIR recovery. The filing reflects gross plant investment for 2022 of $225 million, cumulative gross plant investment of $2.4 billion and a revenue requirement of $305 million. In April 2023, the Ohio Commission approved the request.

CEP Program

In 2011, East Ohio began CEP which enables East Ohio to defer depreciation expense, property tax expense and carrying costs at the debt rate of 6.5% on capital investments not covered by its ~~electric rates. Virginia Power proposed a total $15 million increase~~PIR program to expand, upgrade or replace its infrastructure and information technology systems as well as investments necessary to comply with the ~~fuel component~~Ohio Commission or other government regulations. In April 2022, certain parties filed an appeal with the Supreme Court of ~~its electric~~Ohio appealing the Ohio Commission’s December 2020 order establishing the CEP rider, including the rate of return utilized in determining the revenue requirement. This matter is pending.

In March 2023, East Ohio filed an application with the Ohio Commission requesting approval to adjust CEP cost recovery rates for ~~the rate year beginning January 1, 2018.~~2022 costs. The filing reflects gross plant investment for 2022 of $195 million, cumulative gross plant investment of $1.3 billion and a revenue requirement of $151 million. This ~~case~~matter is pending.

~~Ohio Regulation~~

UEX Rider

East Ohio has approval for a UEX ~~Rider~~rider through which it recovers the bad debt expense of most customers not participating in the PIPP Plus Program. The UEX ~~Rider~~rider is adjusted annually to achieve dollar for dollar recovery of East ~~Ohio’s~~Ohio's actual write-offs of uncollectible amounts. In ~~September 2017,~~July 2023, the Ohio Commission approved East ~~Ohio’s~~Ohio's application ~~requesting approval of~~to adjust its UEX ~~Rider~~rider to reflect ~~a refund~~an annual revenue requirement of ~~over-recovered~~$23 million to provide for recovery of an under-recovered accumulated bad debt expense of ~~approximately $12~~$9 million as of March 31, ~~2017,~~2023, and recovery of ~~prospective~~ net bad debt expense projected to total ~~approximately $22~~$14 million for the twelve-month period ~~from April 2017 to~~ending March ~~2018.~~2024.

Utah ~~and Wyoming~~ Regulation

Purchased Gas

In ~~October 2017,~~February 2023, Questar Gas ~~submitted filings~~filed an application with ~~both~~ the ~~Public Service~~Utah Commission ofseeking approval for a $92 million gas cost increase with rates effective March 2023. Subsequently in February 2023, the Utah ~~and the Wyoming Public Service~~ Commission ~~for an approximately $25~~approved a $164 million gas cost increase reflecting ~~forecasted increases~~additional undercollected gas costs incurred in ~~commodity and transportation costs. The Public Service Commission of Utah and~~January 2023.

Note 14. Leases

Other than the ~~Wyoming Public Service Commission both approved~~items discussed below, there have been no significant changes regarding the ~~filings~~Companies’ leases as described in ~~October 2017 with rates effective November 2017.~~

~~West Virginia Regulation~~

~~In October 2017,~~Note 15 to the ~~Public Service Commission of West Virginia approved Hope’s application for new PREP customer rates,~~Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ~~beginning November 1, 2017, that provide~~ended December 31, 2022.

Dominion Energy’s Consolidated Statements of Income include $6million and $11 million for ~~projected~~the three and six months ended June 30, 2023, respectively, and $7 million and $11 million for the three and six months ended June 30, 2022, respectively, of rental revenue included in operating revenue. Dominion Energy’s Consolidated Statements of $4Income include $2 million and $3 million for the three and six months ended June 30, 2023, respectively, and $8 million and $17 million for the three and six months ended June 30, 2022, respectively, of depreciation expense included in depreciation, depletion and amortization related to ~~capital investments of $21 million, $27 million and $31 million for 2016, 2017 and 2018, respectively.~~facilities subject to power purchase agreements under which Dominion Energy is the lessor.

~~FERC – Gas~~Offshore Wind Vessel Leasing Arrangement

~~DETI~~

In December ~~2014, DETI entered into~~2020, Dominion Energy signed an agreement (subsequently amended in December 2022 and May 2023) with a ~~precedent agreement with Atlantic Coast Pipeline for~~lessor to complete construction of and lease a Jones Act compliant offshore wind installation vessel. This vessel is designed to handle current turbine technologies as well as next generation turbines. The lessor is providing equity and has obtained financing commitments from debt investors, totaling $625 million, to fund the ~~Supply Header Project, a~~estimated project ~~to provide approximately 1,500,000 Dths per day of firm transportation service to various customers. This~~costs. The project is expected to be ~~placed into service~~completed in late ~~2019~~2024 or early 2025. Dominion Energy has been appointed to act as the construction agent for the lessor, during which time Dominion Energy will request cash draws from the lessor and ~~cost approximately $550~~debt investors to fund all project costs, which totaled $367 million ~~to $600 million to construct, excluding financing costs. In October 2017, DETI received FERC authorization to construct and operate~~as of June 30, 2023. If the project ~~facilities.~~is terminated under certain events of default, Dominion Energy could be required to pay up to 100% of the then funded amount.

~~In September 2017, DETI submitted its annual transportation cost rate adjustment to FERC requesting approval to recover $39 million. Also~~The initial lease term will commence once construction is substantially complete and the vessel is delivered and will mature in ~~September 2017, DETI submitted its annual electric power cost adjustment to FERC requesting approval to recover $6 million. In October 2017, FERC approved these adjustments.~~

~~Cove Point~~

In November ~~2016, pursuant~~2027. At the end of the initial lease term, Dominion Energy can (i) extend the term of the lease for an additional term, subject to the terms of a previous settlement, Cove Point filed a general rate case for its FERC-jurisdictional services, with 23 proposed rates to be effective January 1, 2017. Cove Point proposed an annual cost-of-service of approximately $140 million. In December 2016, FERC accepted a January 1, 2017 effective date for all proposed rates but five which were suspended to be effective June 1, 2017. In August 2017, Cove Point filed a proposed stipulation and settlement agreement with FERC, which was supported or not opposed by the active parties. Under the terms of the settlement agreement, Cove Point’s rates effective October 2017 would result in decreases to annual revenues and depreciation expense of approximately $18 million and $3 million, respectively, compared to the rates in effect through December 2016. In September 2017, the Presiding Administrative Law Judge certified the uncontested settlement to FERC. Cove Point is awaiting final FERC approval of the ~~settlement. This case~~participants, at current market terms, (ii) purchase the property for an amount equal to the outstanding

project costs or, (iii) subject to certain terms and conditions, sell the property on behalf of the lessor to a third party using commercially reasonable efforts to obtain the highest cash purchase price for the property. If the project is ~~pending.~~sold and the proceeds from the sale are insufficient to repay the investors for the outstanding project costs, Dominion Energy may be required to make a payment to the lessor for the difference between the outstanding project costs and sale proceeds. Dominion Energy is not considered the owner during construction for financial accounting purposes and, therefore, will not reflect the construction activity in its consolidated financial statements. Dominion Energy expects to recognize a right-of-use asset and a corresponding finance lease liability at the commencement of the lease term. Dominion Energy will be considered the owner of the leased property for tax purposes, and as a result, will be entitled to tax deductions for depreciation and interest expense.

Note ~~13.~~15. Variable Interest Entities

There have been no significant changes regarding the entities the Companies consider VIEs as described in Note 1516 to the Consolidated Financial Statements in the ~~Companies'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022.

~~Dominion Energy~~

Dominion Energy’s securities due within one year and long-term debt include $29 million and $356 million, respectively, of debt issued in 2016 by SBL Holdco, a VIE, net of issuance costs that is nonrecourse to Dominion Energy and is secured by SBL Holdco’s interest in certain merchant solar facilities.

Virginia Power

Virginia Power had long-term power and capacity contracts with three non-utility generators. Contracts with two of these non-utility generators expired during the third quarter of 2017 leaving a remaining aggregate summer generation capacity of approximately 218 MW. Virginia Power is not subject to any risk of loss from this remaining potential VIE other than its remaining purchase commitments which totaled $213 million as of September 30, 2017. Virginia Power paid $17 million and $37 million for electric capacity and $5 million and $11 million for electric energy to these entities for the three months ended September 30, 2017 and 2016, respectively. Virginia Power paid $73 million and $111 million for electric capacity and $20 million and $23 million for electric energy to these entities for the nine months ended September 30, 2017 and 2016, respectively.

~~Virginia Power and Dominion Energy Gas~~

~~Virginia Power and Dominion Energy Gas~~ purchased shared services from DES, an affiliated VIE, of ~~$83~~$113 million and ~~$31~~$96 million for the three months ended ~~September~~June 30, ~~2017, $80~~2023 and 2022, respectively and $226 million and ~~$31~~$194 million for the ~~three~~six months ended ~~September~~June 30, ~~2016, $251~~2023 and 2022, respectively. Virginia Power’s Consolidated Balance Sheets include amounts due to DES of $27 million and ~~$93~~$28 million ~~for the nine months ended September~~at June 30, ~~2017~~2023 and ~~$268 million and $95 million for the nine months ended September 30, 2016, respectively.~~December 31, 2022, respectively, recorded in payables to affiliates.

Note ~~14.~~16. Significant Financing Transactions

Credit Facilities and Short-term Debt

The Companies use short-term debt to fund working capital requirements and as a bridge to long-term debt financings. The levels of borrowing may vary significantly during the course of the year, depending upon the timing and amount of cash requirements not satisfied by cash from operations. In addition, Dominion Energy utilizes cash and letters of credit to fund collateral requirements. Collateral requirements are impacted by commodity prices, hedging levels, Dominion Energy’s credit ratings and the credit quality of its counterparties. Other than the items discussed below, there have been no significant changes regarding the Companies’ credit facilities and short-term debt as described in Note 17 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022.

Dominion Energy

Dominion Energy’s short-term financing is supported by its $6.0 billion joint revolving credit facility that provides for a discount in the pricing of certain annual fees and amounts borrowed by Dominion Energy under the facility if Dominion Energy achieves certain annual renewable electric generation and diversity and inclusion objectives.

At ~~September~~June 30, ~~2017,~~2023, Dominion Energy’s commercial paper and letters of credit outstanding, as well as its capacity available under the credit ~~facilities,~~facility, were as follows:


	Facility Limit		Outstanding Commercial Paper		Outstanding Letters of Credit		Facility Capacity Available
(millions)
Joint revolving credit facility(1)	$	6,000	$	4,172	$	16	$	1,812

Facility
Limit

Outstanding
Commercial
Paper

Outstanding
Letters of
Credit

Facility
Capacity
Available

(millions)

Joint revolving credit facility⁽¹⁾

$
5,000

$
3,060

$
—

$
1,940

Joint revolving credit facility⁽¹⁾

500

—

73

427

Total

$
5,500

$
3,060

$
73

$
2,367

(1)

This credit facility matures in June 2026, with the potential to be extended by the borrowers to June 2028, and can be used by the borrowers under the credit facility to support bank borrowings and the issuance of commercial paper, as well as to support up to a combined $2.0 billion of letters of credit.

~~(1)~~

~~These credit facilities mature in April 2020~~

DESC and ~~can be used by the Companies to support bank borrowings and the issuance of commercial paper, as well as to support up to a combined $2.0 billion of letters of credit.~~

Questar Gas’ short-term ~~financing is~~financings are supported through ~~its~~ access as ~~co-borrower~~co-borrowers to the ~~two~~ joint revolving credit ~~facilities~~facility discussed above with ~~Dominion Energy, Virginia Power~~the Companies. At June 30, 2023, the sub-limits for DESC and ~~Dominion Energy Gas. At September 30, 2017 the aggregate sub-limit for~~ Questar Gas ~~was $250 million.~~were $500 million and $250 million, respectively.

In March 2023, FERC granted DESC authority through March 2025 to issue short-term indebtedness (pursuant to Section 204 of the Federal Power Act) in amounts not to exceed $2.2 billion outstanding with maturity dates of one year or less. In addition, in March 2023, FERC granted GENCO authority through March 2025 to issue short-term indebtedness not to exceed $200 million outstanding with maturity dates of one year or less.

In addition to the credit ~~facilities~~facility mentioned above ~~SBL Holdco has $30 million~~and Virginia Power's letter of credit facilities mentioned below, Dominion Energy also has a credit facility which ~~have~~allows Dominion Energy to issue up to approximately $30 million in letters of credit and will mature in June 2024. At both June 30, 2023 and December 31, 2022, Dominion Energy had $25 million in letters of credit outstanding under this facility.

In March 2023, Dominion Energy entered into an agreement with a ~~stated maturity date~~financial institution which it expects to allow it to issue up to $100 million in letters of credit. At June 30, 2023, $58 million in letters of credit were issued and outstanding under this agreement.

Dominion Energy has an effective shelf registration statement with the SEC for the sale of up to $3.0 billion of variable denomination floating rate demand notes, called Dominion Energy Reliability InvestmentSM as disclosed in Note 17 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December ~~2017~~31, 2022. At June 30, 2023 and December 31, 2022, Dominion Energy’s Consolidated Balance Sheets include $403 million and $347 million, respectively, with ~~automatic one-year renewals through the maturity of the SBL Holdco~~respect to such notes presented within short-term debt. The proceeds are used for general corporate purposes and to repay debt.

In January 2023, Dominion Energy entered into a $2.5 billion 364-Day term loan ~~agreement~~facility which bears interest at a variable rate and will mature in ~~2023.~~January 2024 with the proceeds to be used to repay existing long-term debt and short-term debt upon maturity and for other general corporate purposes. Concurrently, Dominion ~~Solar Projects III, Inc. has $25~~Energy borrowed an initial $1.0 billion with the proceeds used to repay long-term debt. In February and March 2023, Dominion Energy borrowed $500 million ofand $1.0 billion, respectively, with the proceeds used for general corporate purposes and to repay long-term debt. At June 30, 2023, Dominion Energy's Consolidated Balance Sheet includes $2.5 billion with respect to such facility presented within securities due within one year. The maximum allowed total debt to total capital ratio under the facility is consistent with such allowed ratio under Dominion Energy’s joint revolving credit facility.

In July 2023, Dominion Energy entered into two $600 million 364-day term loan facilities which ~~have~~bear interest at a ~~stated~~variable rate and will mature in July 2024 with the proceeds to be used to repay existing long-term debt and/or short-term debt upon maturity ~~date~~and for other general corporate purposes. Subsequently in July 2023, Dominion Energy borrowed an initial $750 million in the aggregate under these facilities with the proceeds used to repay short-term debt and for general corporate purposes. Dominion Energy is permitted to make up to three additional borrowings under each agreement through November 2023, at which point any unused capacity will cease to be available to Dominion Energy. The agreements contain certain mandatory early repayment provisions, including that any after-tax proceeds in connection with a sale of ~~May 2018 with automatic one-year renewals through~~Dominion Energy’s noncontrolling interest in Cove Point, following the ~~maturity~~repayment of ~~the Dominion Solar Projects III, Inc.~~DECP Holding’s term loan ~~agreement~~secured by its noncontrolling interest in ~~2024. At September 30, 2017, no amounts were~~Cove Point, be applied to any outstanding borrowings under ~~either of these~~the facilities. The maximum allowed total debt to total capital ratio under the facilities is consistent with such allowed ratio under Dominion Energy’s joint revolving credit facility.

Virginia Power

Virginia Power’s short-term financing is supported through its access as co-borrower to ~~the two~~Dominion Energy’s $6.0 billion joint revolving credit ~~facilities. These~~facility. The credit ~~facilities~~facility can be used for working capital, as support for the combined commercial paper programs of the ~~Companies~~borrowers under the credit facility and for other general corporate purposes.

At ~~September~~June 30, ~~2017,~~2023, Virginia Power’s share of commercial paper and letters of credit outstanding under ~~its~~the joint revolving credit ~~facilities~~facility with Dominion Energy, Questar Gas and DESC was as follows:


	Facility Limit(1)		Outstanding Commercial Paper		Outstanding Letters of Credit
(millions)
Joint revolving credit facility(1)	$	6,000	$	1,265	$	10

(1)

The full amount of the facility is available to Virginia Power, less any amounts outstanding to co-borrowers Dominion Energy, Questar Gas and ~~Questar Gas were as follows:~~

Facility
Limit⁽¹⁾

Outstanding
Commercial
Paper

Outstanding
Letters of
Credit

(millions)

Joint revolving credit facility⁽¹⁾

$
5,000

$
320

$
—

Joint revolving credit facility⁽¹⁾

500

—

1

Total

$
5,500

$
320

$
1

~~(1)~~

DESC. The full amount of the facilities is available to Virginia Power, less any amounts outstanding to co-borrowers Dominion Energy, Dominion Energy Gas and Questar Gas. Sub-limits for Virginia Power are set within the facility limit but can be changed at the option of the Companies multiple times per year. In May 2017, the aggregate sub-limit for Virginia Power was decreased from $2.0 billion to $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. These credit facilities mature in April 2020 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.

~~In addition to the credit facility commitments mentioned above,~~ Virginia Power also has a $100 million credit facility with a maturity date of April 2020. At September 30, 2017, this facility supports $100 million of certain variable rate tax-exempt financings of Virginia Power.

~~Dominion Energy Gas~~

~~Dominion Energy Gas’ short-term financing~~ is supported by its access as co-borrower to the two joint revolving credit facilities. These credit facilities can be used for working capital, as support for the combined commercial paper programs of the Companies and for other general corporate purposes.

At September 30, 2017, Dominion Energy Gas' share of commercial paper and letters of credit outstanding under its joint credit facilities with Dominion Energy, Virginia Power and Questar Gas were as follows:

Facility
Limit⁽¹⁾

Outstanding
Commercial
Paper

Outstanding
Letters of
Credit

(millions)

Joint revolving credit facility⁽¹⁾

$
1,000

$
620

$
—

Joint revolving credit facility⁽¹⁾

500

—

—

Total

$
1,500

$
620

$
—

~~(1)~~

A maximum of a combined $1.5 billion of the facilities is available to Dominion Energy Gas, assuming adequate capacity is available after giving effect to uses by co-borrowers Dominion Energy, Virginia Power and Questar Gas. Sub-limits for Dominion Energy Gas are set within the facility limit but can be changed at the option of the Companies multiple times per year. In May 2017, the aggregate sub-limit for Dominion Energy Gas was increased from $500 million to $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. These credit facilities mature in April 2020 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.

~~Long-term Debt~~

~~In January 2017, Dominion Energy issued $400 million of 1.875% senior notes and $400 million of 2.75% senior notes that mature in 2019 and 2022, respectively.~~

In March 2017, Dominion Energy issued through private placement $300 million of 3.496% senior notes that mature in 2024. Also in March 2017, Dominion Energy issued an additional $100 million of its 3.90% senior notes that mature in 2025.

~~In March 2017, Virginia Power issued $750 million of 3.50% senior notes that mature in 2027.~~

In May 2017, Dominion Solar Projects III, Inc. borrowed $280 million under a term loan agreement that bears interest at a variable rate. The term loan amortizes over an 18-year period and matures in May 2024. The debt is nonrecourse to Dominion Energy and is secured by Dominion Solar Projects III, Inc.’s interest in certain solar facilities.

~~In June 2017, Dominion Energy issued through private placement $500 million of variable rate senior notes that mature in 2019.~~

In August 2017, Dominion Energy retired its $75 million variable rate Massachusetts Development Finance Agency Solid Waste Disposal Revenue Bonds, Series 2010B that would otherwise have matured in December 2041.

In September 2017, Virginia Power issued $550 million of 3.80% senior notes that mature in 2047. Also in September 2017, Virginia Power issued an additional $200 million of its 2.75% senior notes that mature in 2023.

In October 2017, Questar Gas entered into an agreement with certain investors to issue through private placements in November 2017, $100 million of 3.38% 15-year senior notes and, in April 2018, $50 million of 3.30% 12-year senior notes and $100 million of 3.97% 30-year senior notes.

~~Remarketable Subordinated Notes~~

~~In May 2017, Dominion Energy successfully remarketed the $1.0 billion 2014 Series A 1.50% RSNs due in 2020~~ pursuant to the terms of the ~~2014 Equity Units. In connection~~facility but can be changed at the option of the borrowers multiple times per year. At June 30, 2023, the sub-limit for Virginia Power was $1.75 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 June 2026, with the ~~remarketing,~~potential to be extended by the ~~interest rate on~~borrowers to June 2028. The credit facility can be

used to support bank borrowings and the ~~junior subordinated notes was reset~~issuance of commercial paper, as well as to ~~2.579%, payable on~~support up to $2.0 billion (or the sub-limit, whichever is less) of letters of credit.

In January 2023, Virginia Power entered into a ~~semi-annual basis~~letter of credit facility which allows Virginia Power to issue up to $125 million in letters of credit and matures in January 2026. At June 30, 2023, less than $1 million in letters of credit were issued and outstanding under this facility with no amounts drawn under the letters of credit.

In March 2023, Virginia Power entered into an agreement with a financial institution, which it expects to allow it to issue up to $200 million in letters of credit. At June 30, 2023, $60 million in letters of credit were issued and outstanding under this agreement.

Long-term Debt

Unless otherwise noted, the proceeds of long-term debt issuances were used for general corporate purposes and/or to repay short-term debt.

In March 2023, Dominion Energy ~~ceased~~borrowed $450 million under its Sustainability Revolving Credit Agreement, which, as described in Note 18 to ~~have~~ the ~~ability to redeem~~Consolidated Financial Statements in the ~~notes~~Companies’ Annual Report on Form 10-K for the year ended December 31, 2022, matures in 2024 and bears interest at ~~its option or defer interest payments.~~a variable rate with the proceeds used for general corporate purposes. In April 2023 Dominion Energy repaid $450 million borrowed for general corporate purposes. At ~~September~~both June 30, ~~2017, these securities are included in junior subordinated notes in~~2023 and December 31, 2022, Dominion Energy’s Consolidated Balance ~~Sheets. Dominion Energy did not receive any proceeds from the remarketing. Remarketing proceeds belonged~~Sheets include $450 million with respect to ~~the investors holding the related 2014 Equity Units~~this facility.

In March 2023, Virginia Power issued $750 million of 5.00% senior notes and ~~were temporarily used~~$750 million of 5.45% senior notes that mature in 2033 and 2053, respectively.

In June 2023, Virginia Power remarketed three series of tax-exempt bonds, with an aggregate outstanding principal of $160 million to ~~purchase~~new investors. All three bonds will bear interest at a coupon of 3.65% until October 2027, after which they will bear interest at a market rate to be determined at that time.

Derivative Restructuring

In August 2020, Virginia Power amended a portfolio of ~~treasury securities. Upon maturity~~interest rate swaps with a notional value of $900 million, extending the mandatory termination dates, as discussed in Note 18 to the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022. In March 2023, Virginia Power settled the remaining outstanding interest rate swaps which would have otherwise matured in December 2023, resulting in a $448 million reduction in securities due within one year.

Preferred Stock

Dominion Energy is authorized to issue up to 20 million shares of preferred stock, which may be designated into separate classes. At June 30, 2023 and December 31, 2022, Dominion Energy had issued and outstanding 1.8 million shares of preferred stock, 0.8 million and 1.0 million of which were designated as the Series B Preferred Stock and the Series C Preferred Stock, respectively.

Dominion Energy recorded dividends of $5 million ($2.917 per share) for the three months ended June 30, 2022 and $12 million ($7.292 per share) for the six months ended June 30, 2022, on the Series A Preferred Stock. In addition, Dominion Energy recorded interest expense of $2 million on the Series A Preferred Stock for the three and six months ended June 30, 2022, following the reclassification of these shares to a mandatorily redeemable liability effective June 2022. Dominion Energy recorded dividends of $9 million ($11.625 per share) for both the three months ended June 30, 2023 and 2022 and $18 million ($23.250 per share) for both the six months ended June 30, 2023 and 2022 on the Series B Preferred Stock. Dominion Energy recorded dividends of $11 million ($10.875 per share) for both the three months ended June 30, 2023 and 2022 and $22 million ($21.750 per share) for both the six months ended June 30, 2023 and 2022 on the Series C Preferred Stock.

There have been no significant changes to Dominion Energy’s Series B Preferred Stock and Series C Preferred Stock as described in Note 19 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022.

2019 Corporate Units

The 2019 Equity Units, initially issued in the form of 2019 Series A Corporate Units, are described in Note 19 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022.

Pursuant to the terms of the ~~portfolio,~~2019 Equity Units, Dominion Energy conducted a final remarketing of substantially all shares of Series A Preferred Stock in May 2022 which resulted in the ~~proceeds~~dividend rate for all shares of Series A Preferred Stock being reset to 1.75% for the

June 2022 through August 2022 dividend period and 6.75% effective September 2022. The conversion rate on the Series A Preferred Stock did not increase as a result of the remarketing. In May 2022, Dominion Energy received a commitment from a financial institution to purchase up to 1.6 million shares of the Series A Preferred Stock in the final remarketing. Accordingly, following the settlement of the successful remarketing and approval from its Board of Directors in June 2022, Dominion Energy became obligated to redeem all outstanding shares of Series A Preferred Stock in September 2022. As such, effective June 2022, the Series A Preferred Stock was considered to be mandatorily redeemable and was classified as a current liability. In addition, Dominion Energy made a short-term deposit at the financial institution as described further in Note 10. Proceeds from the final remarketing were ~~applied~~used on behalf of ~~investors on~~holders of 2019 Series A Corporate Units at the ~~related stock purchase contracts settlement date in July 2017~~time of the remarketing to pay the purchase price to Dominion Energy for the issuance of ~~12.5~~its common stock under the stock purchase contracts included in such corporate units in June 2022.

Issuance of Common Stock

Dominion Energy recorded, net of fees and commissions, $85 million from the issuance of 2 million shares of common stock for the six months ended June 30, 2023 and $91 million from the issuance of 1 million shares of common stock for the six months ended June 30, 2022, through various programs including Dominion Energy Direct® and employee savings plans as described in Note 20 to the Consolidated Financial Statements to the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022.

In May 2022, Dominion Energy issued 0.9 million shares of its common stock, ~~related~~valued at $72 million, to ~~Dominion Energy’s 2014 Equity Units.~~ partially satisfy DESC’s remaining obligation under a settlement agreement with the SCDOR discussed in Note 17.

~~Issuance of Common Stock~~

In June ~~2017,~~2022, Dominion Energy ~~filed an SEC shelf registration~~issued 0.4 million shares of its common stock, valued at $30 million, to partially satisfy its obligation under a settlement agreement for the ~~sale~~State Court Merger Case discussed in Note 17.

In June 2022, Dominion Energy issued 19.4 million shares to settle the stock purchase contract component of ~~debt~~the 2019 Equity Units and ~~equity securities including the ability to sell common stock through an at-the-market program. Also in June 2017,~~received proceeds of $1.6 billion.

At-the-Market Program

In August 2020, Dominion Energy entered into ~~three separate~~ sales agency agreements to effect sales under an at-the-market program as discussed in Note 20 to the Consolidated Financial Statements in the Companies’ Annual Report Form 10-K for the year ended December 31, 2022. Dominion Energy did not issue any shares or enter into any forward sale agreements under this program during the three and ~~pursuant~~six months ended June 30, 2023, prior to ~~which it may offer from time to time~~its expiration in June 2023.

Repurchase of Common Stock

In November 2020, the Board of Directors authorized the repurchase of up to ~~$500 million aggregate amount~~$1.0 billion of ~~its~~Dominion Energy’s common ~~stock. Sales~~stock in addition to the $3.0 billion repurchase program authorized in July 2020 and completed in December 2020 as discussed in Note 20 to the Consolidated Financial Statements in the Companies’ Annual Report Form 10-K for the year ended December 31, 2022.

Dominion Energy did not repurchase any shares of common stock ~~can be made~~during the six months ended June 30, 2023, except for shares tendered by ~~means of privately negotiated transactions, as transactions~~employees to satisfy tax withholding obligations on the New York Stock Exchange at market prices or in such other transactions as are agreed upon by Dominion Energy and the sales agents in conformance with applicable securities laws. No issuances have occurred under these agreements in 2017.

~~In July 2017, Dominion Energy issued 12.5 million shares under the related~~vested restricted stock, ~~purchase contracts entered into as part of Dominion Energy’s 2014 Equity Units.~~which do not count against its stock repurchase authorization.

Note ~~15.~~17. Commitments and Contingencies

As a result of issues generated in the ordinary course of business, the Companies are involved in legal proceedings before various courts and are periodically subject to governmental examinations (including by regulatory authorities), inquiries and investigations. Certain legal proceedings and governmental examinations involve demands for unspecified amounts of damages, are in an initial procedural phase, involve uncertainty as to the outcome of pending appeals or motions, or involve significant factual issues that need to be resolved, such that it is not possible for the Companies to estimate a range of possible loss. For such matters ~~for which~~that the Companies cannot estimate, ~~a range of possible loss,~~ a statement to this effect is made in the description of the matter. Other matters may have progressed sufficiently through the litigation or investigative processes such that the Companies are able to estimate a range of possible loss. For legal proceedings and governmental examinations ~~for which~~that the Companies are able to reasonably estimate a range of possible losses, an estimated range of possible loss is provided, in excess of the accrued liability (if any) for such matters. The Companies maintain various insurance programs, including general liability insurance coverage which provides coverage for personal injury or wrongful death cases. Any accrued liability is recorded on a gross basis with a receivable also recorded for any probable insurance recoveries. Estimated ranges of loss are inclusive of legal fees and net of any anticipated insurance recoveries. Any estimated range is based on currently available information and involves elements of judgment and significant uncertainties. Any estimated range of possible loss may not represent the ~~Companies'~~Companies’ maximum possible loss exposure. The circumstances of such legal proceedings and governmental examinations will change from time to time and actual results may vary significantly from the current estimate. For current

proceedings not specifically reported below, management does not anticipate that the liabilities, if any, arising from such proceedings would have a material effect on the Companies’ financial position, liquidity or results of ~~operations of the Companies.~~operations.

Environmental Matters

The Companies are subject to costs resulting from a number of federal, state and local laws and regulations designed to protect human health and the environment. These laws and regulations affect future planning and existing operations. They can result in increased capital, operating and other costs as a result of compliance, remediation, containment and monitoring obligations.

~~Air~~

~~CAA~~Air

The CAA, as amended, is a comprehensive program utilizing a broad range of regulatory tools to protect and preserve the ~~nation's~~nation’s air quality. At a minimum, states are required to establish regulatory programs to ~~address all~~meet applicable requirements of the CAA. However, states may choose to develop regulatory programs that are more restrictive. Many of the ~~Companies'~~Companies’ facilities are subject to the ~~CAA's~~CAA’s permitting and other requirements.

~~MATS~~Ozone Standards

~~In December 2011,~~The EPA published final non-attainment designations for the EPA issued MATS for coal- and oil-fired electric utility steam generating units. The rule establishes strict emission limits for mercury, particulate matter as a surrogate for toxic metals and hydrogen chloride as a surrogate for acid gases. The rule includes a limited use provision for oil-fired units with annual capacity factors under 8% that provides an exemption from emission limits, and allows compliance with operational work practice standards. Compliance was required by April 16,October 2015 ~~with certain limited exceptions. However,~~ozone standards in June 2014, the VDEQ granted a one-year MATS compliance extension for two coal-fired units at Yorktown power station to defer planned retirements and allow for continued operation of the units to address reliability concerns while necessary electric transmission upgrades are being completed. These coal units needed to continue operating through at least April 2017 due to delays in transmission upgrades needed to maintain electric reliability. Therefore, in October 2015, Virginia Power submitted a request to the EPA for an additional one year compliance extension under an EPA Administrative Order. The order was signed by the EPA in April 2016 allowing the Yorktown power station units to operate for up to one additional year, as2018 with states required ~~to maintain reliable power availability while transmission upgrades are being made. Virginia Power ceased operating the coal units at Yorktown power station in April 2017 as planned.~~

In June 2017, the U.S. DOE issued an order to PJM to direct Virginia Power to operate Yorktown power station’s Units 1 and 2 as needed to avoid reliability issues on the Virginia Peninsula. The order was effective for 90 days and can be reissued upon PJM’s request, if necessary, until required electricity transmission upgrades are completed approximately 23 months following the receipt in July 2017 of final permits and approvals for construction. In July 2017, the Sierra Club filed a petition for rehearing of the U.S. DOE order, which was denied by the U.S. DOE in September 2017. In August 2017, PJM filed a request for a 90-day renewal of the U.S. DOE order, which the U.S. DOE subsequently granted in September 2017. In October 2017, the Sierra Club filed a petition for rehearing of the U.S. DOE order granted in September 2017. This matter is pending.

In June 2015, the U.S. Supreme Court issued a decision holding that the EPA failed to take cost into account when the agency first decided to regulate the emissions from coal- and oil-fired plants, and remanded the MATS rule back to the U.S. Court of Appeals for the D.C. Circuit. However, the Supreme Court did not vacate or stay the effective date and implementation of the MATS rule. In November 2015, in response to the Supreme Court decision, the EPA proposed a supplemental finding that consideration of cost does not alter the agency’s previous conclusion that it is appropriate and necessary to regulate coal- and oil-fired electric utility steam generating units under Section 112 of the CAA. In December 2015, the U.S. Court of Appeals for the D.C. Circuit issued an order remanding the MATS rulemaking proceeding back to the EPA without setting aside judgment, noting that EPA had represented it was on track to issue a final finding regarding its consideration of cost. In April 2016, the EPA issued a final supplemental finding that consideration of costs does not alter its conclusion regarding appropriateness and necessity for the regulation. This regulation has been challenged in court. In April 2017, the EPA requested that the U.S. Court of Appeals for the D.C. Circuit delay oral arguments in the case to allow agency review of the rule. Since the MATS rule remains in effect and Dominion Energy is complying with the applicable requirements of the rule, Dominion Energy does not expect any adverse impacts to its operations at this time.

~~Ozone Standards~~

~~In October 2015, the EPA issued a final rule tightening the ozone standard from 75-ppb to 70-ppb. To comply with this standard, in April 2016 Virginia Power submitted the NO~~_X ~~Reasonable Available Control Technology analysis for Unit 5 at Possum Point power station. In December 2016, the VDEQ determined that NO~~_X ~~controls are required on Unit 5. Installation and operation of these NO~~_X ~~controls including an associated water treatment system will be required by mid-2019 with an expected cost in the range of $25 million to $35 million.~~

The statutory deadline for the EPA to complete attainment designations for a new standard was October 2017. While it is uncertain when the EPA will make final designations, states will have up to three years to develop plans to address the new standard. ~~Until~~Certain states in which the ~~states~~Companies operate have developed plans, and had such plans approved or partially approved by the EPA, which are not expected to have a material impact on the Companies’ results of operations or cash flows. In March 2023, the EPA issued a final rule specifying an interstate federal implementation plan to comply with certain aspects of planning for the 2015 ozone standards which is applicable in August 2023 for certain states, including Virginia. The interstate federal implementation plan imposes tighter NOX emissions limits during the ozone season and includes provisions for the use of allowances to cover such emissions. Until implementation plans for the 2015 ozone standards are fully developed and approved for all states in which the Companies operate, the Companies are unable to predict whether or to what extent the new rules will ultimately require additional controls. ~~However, if significant~~The expenditures ~~are~~ required to implement additional controls it could ~~adversely affect~~have a material impact on the Companies’ results of operations, ~~and~~financial condition and/or cash flows.

~~NSPS~~

ACE Rule

In August 2012, the EPA issued the first NSPS impacting new and modified facilities in the natural gas production and gathering sectors and made revisions to the NSPS for natural gas processing and transmission facilities. These rules establish equipment performance specifications and emissions standards for control of VOC emissions for natural gas production wells, tanks, pneumatic controllers, and compressors in the upstream sector. In June 2016, the EPA issued a final NSPS regulation, for the oil and natural gas sector, to regulate methane and VOC emissions from new and modified facilities in transmission and storage, gathering and boosting, production and processing facilities. All projects which commenced construction after September 2015 are required to comply with this regulation. In April 2017, the EPA issued a notice that it is reviewing and, if appropriate, will issue a rulemaking to suspend, revise or rescind the June 2016 final NSPS for certain oil and gas facilities. In June 2017,July 2019, the EPA published ~~notice of reconsideration and partial stay~~the final rule informally referred to as the ACE Rule, as a replacement for the Clean Power Plan. The ACE Rule regulated GHG emissions from existing coal-fired power plants pursuant to Section 111(d) of the ~~rule~~CAA and required states to develop plans by July 2022 establishing unit-specific performance standards for ~~90 days and proposed extending the stay for two years.~~existing coal-fired power plants. In ~~July 2017,~~January 2021, the U.S. Court of Appeals for the D.C. Circuit vacated the ~~90-day stay. Dominion Energy~~ACE Rule and ~~Dominion Energy Gas are implementing~~remanded it to the ~~final regulation. Dominion Energy~~EPA. This decision would take effect upon issuance of the court’s mandate. In March 2021, the court issued a partial mandate vacating and ~~Dominion Energy Gas are still evaluating whether potential impacts on results~~remanding all parts of ~~operations, financial condition and/or cash flows related to this matter will be material.~~

~~Climate Change Regulation~~

~~Carbon Regulations~~

the ACE Rule except for the portion of the ACE Rule that repealed the Clean Power Plan. In October ~~2013,~~2021, the U.S. Supreme Court ~~granted petitions filed by several industry groups, states, and the U.S. Chamber of Commerce seeking review~~agreed to hear a challenge of the U.S. Court of Appeals for the D.C. Circuit’s ~~June 2012~~ decision ~~upholding~~on the ~~EPA’s regulation of GHG emissions from stationary sources under the CAA’s permitting programs.~~ACE Rule. In June ~~2014,~~2022, the U.S. Supreme Court ~~ruled that~~reversed the D.C. Circuit’s decision on the ACE Rule and remanded the case back to the D.C. Circuit. In May 2023, the EPA ~~lacked~~proposed to repeal the ~~authority under~~ACE Rule as part of a package of proposed rules addressing CO2 emissions from new and existing fossil fuel-fired electric generating units. Until the ~~CAA~~EPA takes final action on this proposed rulemaking, the Companies cannot predict an impact to ~~require PSD~~ its operations, financial condition and/or Title V permits for stationary sources based solely on GHG emissions. However, the Court upheld the EPA’s ability to require BACT for GHG for sources that are otherwise subject to PSD or Title V permitting for conventional pollutants. cash flows.

Carbon Regulations

In August 2016, the EPA issued a draft rule proposing to reaffirm that a source’s obligation to obtain a PSD or Title V permit for GHGs is triggered only if such permitting requirements are first triggered by non-GHG, or conventional, pollutants that are regulated by the New Source Review program, and ~~to set~~exceed a significant emissions rate at of 75,000 tons per year of CO2 equivalent ~~emissions under which a source would not be required to apply BACT for its GHG~~ emissions. Until the EPA ultimately takes final action on this rulemaking, the Companies cannot predict the impact to their results of operations, financial ~~statements.~~condition and/or cash flows.

In ~~July 2011,~~December 2018, the EPA ~~signed a final~~proposed revised Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources. The proposed rule ~~deferring~~would amend the ~~need~~previous determination that the best system of emission reduction for ~~PSD~~newly constructed coal-fired steam generating units is no longer partial carbon capture and ~~Title V permitting~~storage. Instead, the proposed revised best system of emission reduction for CO₂ ~~emissions~~this source category is the most efficient demonstrated steam cycle (e.g., supercritical steam conditions for ~~biomass projects. This rule temporarily deferred~~large units and subcritical steam conditions for ~~a period of up~~small units) in combination with best operating practices. The proposed revision to ~~three years~~ the ~~consideration of CO~~₂ ~~emissions from biomass projects when determining whether a stationary source meets the PSD and Title V applicability thresholds, including those~~performance standards for the application of BACT. The deferral policy expired in July 2014. In July 2013, the U.S. Court of Appeals for the D.C. Circuit vacated this rule; however, a mandate making this decision effective has not been issued. Virginia Power converted three coal-fired steam generating ~~stations, Altavista, Hopewell and Southampton, to biomass during the CO~~₂ deferral period. It is unclear how the court's decision or the EPA's final policy regarding the treatment of specific feedstock will affect biomass sources that were permitted during the deferral period; however, the expenditures to comply with any new requirements could be material to Dominion Energy's and Virginia Power's financial statements.

~~Methane Emissions~~

~~In July 2015,~~units remains pending. Until the EPA ~~announced~~ultimately takes final action on this rulemaking, the ~~next generation of its voluntary Natural Gas STAR Program,~~Companies cannot predict the ~~Natural Gas STAR Methane Challenge Program. The program covers the entire natural gas sector from production~~impact to distribution, with more emphasis on transparency and increased reporting for both annual emissions and reductions achieved through implementation measures. In March 2016, East Ohio, Hope, DETI and Questar Gas (prior to the Dominion Energy Questar Combination) joined the EPA as founding partners in the new Methane Challenge program and submitted implementation plans in September 2016. DECG joined the EPA’s voluntary Natural Gas STAR Program in July 2016 and submitted an implementation plan in September 2016. Dominion Energy and Dominion Energy Gas do not expect the costs related to these programs to have a material impact on their results of operations, financial condition and/or cash flows.

Water

The CWA, as amended, is a comprehensive program requiring a broad range of regulatory tools including a permit program to authorize and regulate discharges to surface waters with strong enforcement mechanisms. The Companies must comply with applicable aspects of the CWA programs at their operating facilities.

Regulation 316(b)

In October 2014, the final regulations under Section 316(b) of the CWA that govern existing facilities and new units at existing facilities that employ a cooling water intake structure and that have flow levels exceeding a minimum threshold became effective. The rule establishes a national standard for impingement based on seven compliance options, but forgoes the creation of a single technology standard for entrainment. Instead, the EPA has delegated entrainment technology decisions to state regulators. State regulators are to make case-by-case entrainment technology determinations after an examination of five mandatory facility-specific factors, including a social cost-benefit test, and six optional facility-specific factors. The rule governs all electric generating stations with water withdrawals above two MGD, with a heightened entrainment analysis for those facilities over 125 MGD. Dominion Energy and Virginia Power currently have 1415 and 11nine facilities, respectively, that ~~may be~~are subject to the final regulations. Dominion Energy ~~anticipates~~is also working with the EPA and state regulatory agencies to assess the applicability of Section 316(b) to eight hydroelectric facilities, including three Virginia Power facilities. The Companies anticipate that ~~it will~~they may have to install impingement control technologies at ~~many~~certain of these stations that have once-through cooling systems. ~~Dominion Energy and Virginia Power~~The Companies are currently evaluating the need or potential for entrainment controls under the final rule as these decisions will be made on a case-by-case basis after a thorough review of detailed biological, ~~technology,~~technological, and cost ~~and~~ benefit studies. DESC is conducting studies and implementing plans as required by the rule to determine appropriate intake structure modifications at certain facilities to ensure compliance with this rule. While the impacts of this rule could be material to ~~Dominion Energy’s and Virginia Power’s~~the Companies’ results of operations, financial condition and/or cash flows, the existing regulatory ~~framework~~frameworks in South Carolina and Virginia ~~provides~~provide rate recovery mechanisms that could substantially mitigate any such impacts for ~~Virginia Power.~~the regulated electric utilities.

Effluent Limitations Guidelines

In September 2015, the EPA released a final rule to revise the Effluent Limitations Guidelines for the Steam Electric Power Generating Category. The final rule ~~establishes~~established updated standards for wastewater discharges that apply primarily at coal and oil steam generating stations. Affected facilities are required to convert from wet to dry or closed cycle coal ash management, improve existing wastewater treatment systems and/or install new wastewater treatment technologies in order to meet the new discharge limits. ~~Virginia Power has eight facilities that may be subject to additional wastewater treatment requirements associated with the final rule.~~ In April 2017, the EPA granted two separate petitions for reconsideration of the Effluent Limitations Guidelines final rule and stayed future compliance dates in the rule. Also in April 2017, the U.S. Court of Appeals for the Fifth Circuit granted the ~~U.S.’s~~EPA’s request for a stay of the pending consolidated litigation challenging the rule while the EPA addresses the petitions for reconsideration. In September 2017, the EPA signed a rule to postpone the earliest compliance dates offor certain waste streams regulations in the Effluent Limitations Guidelines final rule ~~for compliance with certain wastewater regulations~~ from November 2018 to November 2020; however, the latest date for compliance for these regulations ~~remains~~was December 2023. ~~The~~In October 2020, the EPA ~~is proposing~~released the final rule that extends the latest dates for compliance. Individual facilities’ compliance dates will vary based on circumstances and the determination by state regulators and may range from 2021 to ~~complete new rulemaking for these waste streams.~~2028. While the impacts of this rule could be material to ~~Dominion Energy’s and Virginia Power’s~~the Companies’ results of operations, financial condition and/or cash flows, the existing regulatory ~~framework~~frameworks in South Carolina and Virginia ~~provides~~provide rate recovery mechanisms that could substantially mitigate any such impacts for ~~Virginia Power.~~the regulated electric utilities.

~~Solid~~Waste Management and ~~Hazardous Waste~~Remediation

The operations of the Companies are subject to a variety of state and federal laws and regulations governing the management and disposal of solid and hazardous waste, and release of hazardous substances associated with current and/or historical operations. The CERCLA, as amended, ~~provides~~and similar state laws, may impose joint, several and strict liability for ~~immediate response and removal actions coordinated~~cleanup on potentially responsible parties who owned, operated or arranged for disposal at facilities affected by ~~the EPA in the event~~a release of ~~threatened~~hazardous substances. In addition, many states have created programs to incentivize voluntary remediation of sites where historical releases of hazardous substances ~~into the environment~~are identified and ~~authorizes the U.S. government either to clean up sites at which hazardous substances have created actual~~property owners or potential environmental hazards or to order persons responsible for the situation to do so. Under the CERCLA, as amended, generators and transporters of hazardous substances, as well as past and present owners and operators of contaminated sites, can be jointly, severally and strictly liable for the cost of cleanup. These potentially responsible parties ~~can be ordered~~decide to perform a cleanup, be sued for costs associated with an EPA-directed cleanup, voluntarily settle with the U.S. government concerning their liability for cleanup costs, or voluntarily begin a site investigation and site remediation under state oversight.initiate cleanups.

From time to time, ~~Dominion Energy, Virginia Power, or Dominion Energy Gas~~the Companies may be identified as a potentially responsible party toin connection with the alleged release of hazardous substances or wastes at a ~~Superfund~~ site. ~~The EPA (or a state) can either allow such a party to conduct~~Under applicable federal and ~~pay for a remedial investigation, feasibility study and remedial action or conduct~~state laws, the remedial investigation and action itself and then seek reimbursement from the potentially responsible parties. Each party can be held jointly, severally and strictly liable for the cleanup costs. These parties can also bring contribution actions against each other and seek reimbursement from their insurance companies. As a result, Dominion Energy, Virginia Power, or Dominion Energy Gas mayCompanies could be responsible for costs associated with the investigation or remediation of impacted sites, or subject to contribution claims by other responsible parties for their costs ~~of remedial investigation~~incurred at such sites. The Companies also may identify, evaluate and ~~actions~~remediate other potentially impacted sites under voluntary state programs. Remediation costs may be subject to reimbursement under the ~~Superfund law~~Companies’ insurance policies, rate recovery mechanisms, or ~~other laws or regulations regarding~~both. Except as described below, the ~~remediation of waste. The~~ Companies do not believe these matters will have a material effect on results of operations, financial condition and/or cash flows.

Dominion Energy has determined that it is associated with 19 former manufactured gas plant sites, ~~three~~including certain sites associated with Virginia Power. At 13 sites associated with Dominion Energy, remediation work has been substantially completed under federal or state oversight. Where required, the sites are following state-approved groundwater monitoring programs. Dominion Energy commenced remediation activities at one site in the second quarter of ~~which pertain to~~2022. In addition, Dominion Energy has proposed remediation plans for one site at Virginia Power and 12expects to commence remediation activities in 2023 depending on receipt of ~~which pertain to~~final permits and approvals. At June 30, 2023 and December 31, 2022, Dominion Energy ~~Gas. Studies conducted by other utilities~~had $46 million and $47 million, respectively, and Virginia Power had $25 million at ~~their former manufactured gas plant~~both periods, of reserves recorded. Dominion Energy is associated with 12 additional sites, ~~have indicated that those sites contain coal tar and other potentially harmful materials. None of the former sites~~including two associated with Virginia Power, which ~~the Companies~~ are ~~associated is~~not under investigation by any state or federal environmental ~~agency. At one~~agency nor the subject of the former sites, Dominion Energy is conducting a state-approved post closure groundwater monitoring program and an environmental land use restriction has been recorded. Another site has been accepted into a state-based voluntaryany current or proposed plans to perform remediation program. Virginia Power is currently evaluating the nature and extent of the contamination from this site as well as potential remedial options. Preliminary costs for options under evaluation for the site range from $1 million to $22 million.activities. Due to the uncertainty surrounding ~~the other~~such sites, the Companies are unable to make an estimate of the potential financial statement impacts.

~~See below for discussion on ash pond and landfill closure costs.~~

Other Legal Matters

The Companies are defendants in a number of lawsuits and claims involving unrelated incidents of property damage and personal injury. Due to the uncertainty surrounding these matters, the Companies are unable to make an estimate of the potential financial statement impacts; however, they could have a material impact on results of operations, financial condition and/or cash flows.

~~Appalachian Gateway~~SCANA Legal Proceedings

~~Pipeline Contractor Litigation~~

~~Following the completion~~The following describes certain legal proceedings involving Dominion Energy, SCANA or DESC relating primarily to events occurring before closing of the ~~Appalachian Gateway project~~SCANA Combination. In addition, certain legal matters which have been resolved are discussed in ~~2012, DETI received multiple change order requests and other claims for additional payments from a pipeline contractor~~Note 23 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the ~~project. In July 2013, DETI filed a complaint in U.S. District Court for the Eastern District~~year ended December 31, 2022. No reference to, or disclosure of, ~~Virginia for breach~~any proceeding, item or matter described below shall be construed as an admission or indication that such proceeding, item or matter is material. For certain of ~~contract as well as accounting~~these matters, and declaratory relief. The contractor filed a motion to dismiss, or in the alternative, a motion to transfer venue to Pennsylvania and/or West Virginia, where the pipelines were constructed. DETI filed an opposition to the contractor’s motion in August 2013. In November 2013, the court granted the contractor’s motion on the basis that DETI must first comply with the dispute resolution process. In July 2015, the contractor filed a complaint against DETI in U.S. District Court for the Western District of Pennsylvania. In August 2015, DETI filed a motion to dismiss, or in the alternative, a motion to transfer venue to Virginia. In March 2016, the Pennsylvania court granted the motion to dismiss and transferred the case to the U.S. District Court for the Eastern District of Virginia. In April 2016, the Virginia court issued an order staying the proceedings and ordering mediation. A mediation occurred in May 2016 but was unsuccessful. In July 2016, DETI filed a motion to dismiss. In March 2017, the court dismissed three of eight counts in the complaint. In May 2017, the contractor withdrew one of the counts in the complaint. This case is pending. DETI has accrued a liability of $6 million for this matter.unless otherwise noted therein, Dominion Energy ~~Gas cannot currently~~is unable to estimate ~~additional~~a reasonable range of possible loss and the related financial statement impacts, but for any such matter there could be a material impact to its results of operations, financial condition and/or cash flows.

~~Gas Producers Litigation~~

~~In connection with~~ For the ~~Appalachian Gateway project,~~matters for which Dominion Energy ~~Field Services, Inc. (formerly known~~is able to reasonably estimate a probable loss, Dominion Energy’s Consolidated Balance Sheets at June 30, 2023 and December 31, 2022 include reserves of $66 million and $94 million, respectively, included in other current liabilities, and insurance receivables of $72 million and $68 million, respectively, included within other receivables. These balances at June 30, 2023 and December 31, 2022 include $62 million and $68 million, respectively, of offsetting reserves and insurance receivables related to personal injury or wrongful death cases which are currently pending. During both the three and six months ended June 30, 2023 and 2022, charges included in Dominion Energy's Consolidated Statements of Income were inconsequential.

Governmental Proceedings and Investigations

In June 2018, DESC received a notice of proposed assessment of approximately $410 million, excluding interest, from the SCDOR following its audit of DESC’s sales and use tax returns for the periods September 1, 2008 through December 31, 2017. The proposed assessment, which includes 100% of the NND Project, is based on the SCDOR’s position that DESC’s sales and use tax exemption for the NND Project does not apply because the facility will not become operational. In December 2020, the parties reached an agreement in principle in the amount of $165 million to resolve this matter. In June 2021, the parties executed a settlement agreement which allows DESC to fund the settlement amount through a combination of cash, shares of Dominion Energy common stock or real estate with an initial payment of at least $43 million in shares of Dominion Energy common stock. In August 2021, Dominion Energy issued 0.6 million shares of its common stock to satisfy DESC’s obligation for the initial payment under the settlement agreement. In May 2022, Dominion Energy issued an additional 0.9 million shares of its common stock to partially satisfy DESC’s remaining obligation under the settlement agreement. In June 2022, DESC requested approval from the South Carolina Commission to transfer certain real estate with a total settlement value of $51 million to satisfy its remaining obligation under the settlement agreement. In July 2022, the South Carolina Commission voted to approve the request and issued its final order in August 2022. In September 2022, DESC transferred certain non-utility property with a fair value of $28 million to the SCDOR under the settlement agreement. In December 2022, DESC transferred additional utility property with a fair value of $3 million to the SCDOR. In October 2022, DESC filed for approval to transfer the remaining real estate with FERC which was received in November 2022. In March 2023, DESC transferred utility property with a fair value of $10 million to the SCDOR resulting in a gain of $9 million ($7 million after-tax), recorded in losses (gains) on sales of assets in Dominion Energy’s Consolidated Statements of Income for the six months ended June 30, 2023. In June 2023, DESC transferred the remaining utility property with a fair value of $11 million to the SCDOR resulting in a gain of $11 million ($8 million after-tax), recorded in losses (gains) on sales of assets in Dominion Energy's Consolidated Statements of Income for the three and six months ended June 30, 2023. In July 2023, DESC made a less than $1 million cash payment to the SCDOR to fully satisfy its remaining obligation, including applicable interest, under the settlement agreement.

Nuclear Operations

Nuclear Insurance

There have been no significant changes regarding the Companies’ nuclear insurance as ~~Dominion Field Services, Inc.)~~described in Note 23 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022.

Spent Nuclear Fuel

As discussed in Note 23 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022, the Companies entered into contracts with the DOE for ~~firm purchase rights with a group~~the disposal of ~~small gas producers. In June 2016, certain~~spent nuclear fuel under provisions of the ~~gas producers filed a complaint in the Circuit Court~~Nuclear Waste Policy Act of Marshall County, West Virginia against Dominion Energy, DETI and Dominion Energy Field Services, Inc., among other defendants, claiming that the contracts are unenforceable and seeking compensatory and punitive damages. In the third quarter of 2016, Dominion Energy and DETI, with the consent of the other defendants, removed the case to the U.S. District Court for the Northern District of West Virginia. In October 2016, the defendants filed a motion to dismiss and the plaintiffs filed a motion to remand. In February 2017, the U.S. District Court entered an order remanding the matter to the Circuit Court of Marshall County, West Virginia. In March 2017, Dominion Energy was voluntarily dismissed from the case; however, DETI and Dominion Energy Field Services, Inc. remain parties to the matter. In April 2017, the case was transferred to the Business Court Division of West Virginia. This case is pending. Dominion Energy and Dominion Energy Gas cannot currently estimate financial statement impacts, but there could be a material impact to their financial condition and/or cash flows.1982.

~~Ash Pond and Landfill Closure Costs~~

In September 2014, Virginia Power received a notice from the Southern Environmental Law Center on behalf of the Potomac Riverkeeper and Sierra Club alleging CWA violations at Possum Point power station. The notice alleges unpermitted discharges to surface water and groundwater from Possum Point power station’s historical and active ash storage facilities. A similar notice from the Southern Environmental Law Center on behalf of the Sierra Club was subsequently received related to Chesapeake power station. In December 2014, Virginia Power offered to close all of its coal ash ponds and landfills at Possum Point power station, Chesapeake and Bremo power stations as settlement of the potential litigation. The Southern Environmental Law Center declined the offer as presented in January 2015 and, in March 2015, filed a lawsuit related to its claims of the alleged CWA violations at Chesapeake power station. In March 2017, the U.S. District Court for the Eastern District of Virginia ruled that impacted groundwater associated with the on-site coal ash storage units was migrating to adjacent surface water, which constituted an unpermitted point source discharge in violation of the CWA. The court, however, rejected Sierra Club’s claims that Virginia Power had violated specific conditions of its water discharge permit. Finding no harm to the environment, the court further declined to impose civil penalties or require excavation of the ash from the site as Sierra Club had sought. On remedy, the court ordered the parties to submit within 30 days a remedial plan (or separate plans) incorporating certain prescribed sediment, water and aquatic life monitoring. The court also ordered Virginia Power to reopen its solid waste permit application for closure of the coal ash storage units at Chesapeake power station. In April 2017, Virginia Power submitted its remedial plan to the court, which included a timetable for submitting a revised solid waste permit application to the VDEQ. The revised application will include a proposed remedial alternative to address groundwater impacts associated with coal ash storage at Chesapeake power station. Sierra Club submitted a separate remedial plan to the court. In July 2017, the court issued a final order requiring Virginia Power to perform additional specific sediment, water and aquatic life monitoring at and around the

Chesapeake power station for a period of at least two years. The court further directed Virginia Power to apply for a solid waste permit from VDEQ that includes corrective measures to address on-site groundwater impacts. In July 2017, Virginia Power appealed the court’s July 2017 final order to the U.S. Court of Appeals for the Fourth Circuit. In August 2017, the Sierra Club filed a cross appeal. This case is pending.

In April 2015, the EPA’s final rule regulating the management of CCRs stored in impoundments (ash ponds) and landfills was published in the Federal Register. The final rule regulates CCR landfills, existing ash ponds that still receive and manage CCRs, and inactive ash ponds that do not receive, but still store CCRs. Virginia Power currently operates inactive ash ponds, existing ash ponds, and CCR landfills subject to the final rule at eight different facilities. The enactment of the final rule in April 2015 created a legal obligation for Virginia Power to retrofit or close all of its inactive and existing ash ponds over a certain period of time, as well as perform required monitoring, corrective action, and post-closure care activities as necessary. In April 2016, the EPA announced a partial settlement with certain environmental and industry organizations that had challenged the final CCR rule in the U.S. Court of Appeals for the D.C. Circuit. As part of the settlement, certain exemptions included in the final rule for inactive ponds that closed by April 2018 will be removed, resulting in inactive ponds ultimately being subject to the same requirements as existing ponds. In June 2016, the court issued an order approving the settlement, which requires the EPA to modify provisions in the final CCR rule concerning inactive ponds. In August 2016, the EPA issued a final rule, effective October 2016, extending certain compliance deadlines in the final CCR rule for inactive ponds. Virginia Power does not believe these changes will substantially impact its closure plans for inactive ponds.

In December 2016, the U.S. Congress passed and the President signed legislation that creates a framework for EPA- approved state CCR permit programs. Under this legislation, an approved state CCR permit program functions in lieu of the self-implementing Federal CCR rule. The legislation allows states more flexibility in developing permit programs to implement the environmental criteria in the CCR rule. In August 2017, the EPA issued interim guidance outlining the framework for state CCR program approval. The EPA has enforcement authority until state programs are approved. The EPA and states with approved programs both will have authority to enforce CCR requirements under their respective rules and programs. In September 2017, the EPA agreed to reconsider portions of the CCR rule in response to two petitions for reconsideration. Dominion Energy cannot forecast potential incremental impacts or costs related to existing coal ash sites in connection with future implementation of the 2016 CCR legislation and reconsideration of the CCR rule.

In April 2017, the Governor of Virginia signed legislation into law that places a moratorium on the VDEQ issuing solid waste permits for closure of ash ponds at Virginia Power’s Bremo, Chesapeake, Chesterfield and Possum Point power stations until May 2018. The law also requires Virginia Power to conduct an assessment of closure alternatives for the ash ponds at these four stations, to include an evaluation of excavation for recycling or off-site disposal, surface and groundwater conditions and safety. The assessments are due by December 1, 2017. Virginia Power has initiated a third-party evaluation of closure alternatives consistent with the legislation and is unable to estimate the potential financial statement impacts. The actual AROs related to the CCR rule may vary substantially from the estimates used to record the obligation.

~~Cove Point~~

Dominion Energy is constructing the Liquefaction Project at the Cove Point facility, which would enable the facility to liquefy domestically-produced natural gas and export it as LNG. In September 2014, FERC issued an order granting authorization for Cove Point to construct, modify and operate the Liquefaction Project. In October 2014, several parties filed a motion with FERC to stay the order and requested rehearing. In May 2015, FERC denied the requests for stay and rehearing.

Two parties have separately filed petitions for review of the FERC order in the U.S. Court of Appeals for the D.C. Circuit, which petitions were consolidated. Separately, one party requested a stay of the FERC order until the judicial proceedings are complete, which the court denied in June 2015. In July 2016, the court denied one party’s petition for review of the FERC order authorizing the Liquefaction Project. The court also issued a decision remanding the other party’s petition for review of the FERC order to FERC for further explanation of FERC’s decision that a previous transaction with an existing import shipper was not unduly discriminatory. In September 2017, FERC issued its order on remand from the U.S. Court of Appeals for the D.C. Circuit, and reaffirmed its ruling in its prior orders that Cove Point did not violate the prohibition against undue discrimination by agreeing to a capacity reduction and early contract termination with the existing import shipper.

In September 2013, the U.S. DOE granted Non-FTA Authorization approval for the export of up to 0.77 bcfe/day of natural gas to countries that do not have an FTA for trade in natural gas. In June 2016, a party filed a petition for review of this approval in the U.S. Court of Appeals for the D.C. Circuit. This case is pending.

In July 2017, Cove Point submitted an application for a temporary operating permit to the Maryland Department of the Environment, as required prior to the date of first production of LNG for commercial purposes of exporting LNG. In August 2017, Cove Point submitted an application to amend the CPCN issued by the Public Service Commission of Maryland in May 2014 to make necessary updates. These cases are pending.

~~FERC~~

FERC staff in the Office of Enforcement, Division of Investigations, is conducting a non-public investigation of Virginia Power's offers of combustion turbines generators into the PJM day-ahead markets from April 2010 through September 2014. FERC staff notified Virginia Power of its preliminary findings relating to Virginia Power's alleged violation of FERC's rules in connection with these activities. Virginia Power has provided its response to FERC staff's preliminary findings letter explaining why Virginia Power's conduct was lawful and refuting any allegation of wrongdoing. Virginia Power is cooperating fully with the investigation; however, it cannot currently predict whether or to what extent it may incur a material liability.

~~Greensville County~~

Virginia Power is constructing Greensville County and related transmission interconnection facilities. In August 2016, the Sierra Club filed an administrative appeal in the Circuit Court for the City of Richmond challenging certain provisions in Greensville County’s PSD air permit issued by the VDEQ in June 2016. In August 2017, the Circuit Court upheld the air permit, and no appeals were filed.

~~Nuclear Matters~~

In March 2011, a magnitude 9.0 earthquake and subsequent tsunami caused significant damage at the Fukushima Daiichi nuclear power station in northeast Japan. These events have resulted in significant nuclear safety reviews required by the NRC and industry groups such as the Institute of Nuclear Power Operations. Like other U.S. nuclear operators, Dominion Energy has been gathering supporting data and participating in industry initiatives focused on the ability to respond to and mitigate the consequences of design-basis and beyond-design-basis events at its stations.

In July 2011, an NRC task force provided initial recommendations based on its review of the Fukushima Daiichi accident and in October 2011 the NRC staff prioritized these recommendations into Tiers 1, 2 and 3, with the Tier 1 recommendations consisting of actions which the staff determined should be started without unnecessary delay. In December 2011, the NRC Commissioners approved the agency staff's prioritization and recommendations, and that same month an appropriations act directed the NRC to require reevaluation of external hazards (not limited to seismic and flooding hazards) as soon as possible.

Based on the prioritized recommendations, in March 2012, the NRC issued orders and information requests requiring specific reviews and actions to all operating reactors, construction permit holders and combined license holders based on the lessons learned from the Fukushima Daiichi event. The orders applicable to Dominion Energy requiring implementation of safety enhancements related to mitigation strategies to respond to extreme natural events resulting in the loss of power at plants, and enhancing spent fuel pool instrumentation have been implemented. The information requests issued by the NRC request each reactor to reevaluate the seismic and external flooding hazards at their site using present-day methods and information, conduct walkdowns of their facilities to ensure protection against the hazards in their current design basis, and to reevaluate their emergency communications systems and staffing levels. The walkdowns of each unit have been completed, audited by the NRC and found to be adequate. Reevaluation of the emergency communications systems and staffing levels was completed as part of the effort to comply with the orders. Reevaluation of the seismic and external flooding hazards is expected to continue through 2018. Dominion Energy and Virginia Power do not currently expect that compliance with the NRC's information requests will materially impact their financial position, results of operations or cash flows during the implementation period. The NRC staff is evaluating the implementation of the longer term Tier 2 and Tier 3 recommendations. Dominion Energy and Virginia Power do not expect material financial impacts related to compliance with Tier 2 and Tier 3 recommendations.

Guarantees, Surety Bonds and Letters of Credit

~~Dominion Energy~~

At ~~September~~June 30, ~~2017,~~2023, Dominion Energy had issued ~~$48 million of~~four guarantees ~~primarily~~related to ~~support~~Cove Point, an equity method ~~investees.~~investment, in support of terminal services, transportation and construction. Two of the Cove Point guarantees have a cumulative maximum exposure of $1.9 billion while the other two guarantees have no maximum limit. No ~~significant~~ amounts related to these guarantees have been recorded.

In ~~October 2017,~~addition, at June 30, 2023, Dominion Energy ~~entered into a guarantee agreement~~had issued an additional $20 million of guarantees, primarily to support a portion of Atlantic Coast Pipeline’s obligation under a $3.3 billion revolving credit facility, also entered in October 2017, with a stated maturity date of October 2021. Dominion Energy’s maximum potential loss exposure under the terms of the guarantee is limitedthird parties. No amounts related to 48% of the outstanding borrowings under the revolving credit facility, an equal percentage to Dominion Energy’s ownership in Atlantic Coast Pipeline. In October 2017, Dominion Energy recorded a liability of $30 million associated with this guarantee agreement. Through October 2017, Atlantic Coast Pipeline has borrowed $570 million against the revolving credit facility.these guarantees have been recorded.

Dominion Energy also enters into guarantee arrangements on behalf of its consolidated subsidiaries, primarily to facilitate their commercial transactions with third parties. If any of these subsidiaries fail to perform or pay under the contracts and the counterparties seek performance or payment, Dominion Energy would be obligated to satisfy such obligation. To the extent that a liability subject to a guarantee has been incurred by one of Dominion Energy’s consolidated subsidiaries, that liability is included in the Consolidated Financial Statements. Dominion Energy is not required to recognize liabilities for guarantees issued on behalf of its subsidiaries unless it becomes probable that it will have to perform under the guarantees. Terms of the guarantees typically end once obligations have been paid. Dominion Energy currently believes it is unlikely that it would be required to perform or otherwise incur any losses associated with guarantees of its subsidiaries’ obligations.

At ~~September~~June 30, ~~2017,~~2023, Dominion Energy had issued the following subsidiary guarantees:


	Maximum Exposure
(millions)
Commodity transactions(1)	$	2,861
Nuclear obligations(2)		245
Solar(3)		214
Other(4)		1,269
Total(5)(6)	$	4,589

Maximum
Exposure

(millions)

Commodity transactions⁽¹⁾

$
1,967

Nuclear obligations⁽²⁾

227

Cove Point⁽³⁾

1,900

Solar⁽⁴⁾

1,054

Other⁽⁵⁾

538

Total⁽⁶⁾

$
5,686

(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.

~~(1)~~

(2)

Guarantees primarily related to certain DGI subsidiaries regarding all aspects of running a nuclear facility.

~~(2)~~

~~Guarantees related to certain DGI subsidiaries regarding all aspects of running a nuclear facility.~~

(3)

Includes guarantees to facilitate the development of solar projects.

~~(3)~~

~~Guarantees related to Cove Point, in support of terminal services, transportation and construction.~~

(4)

Guarantees related to other miscellaneous contractual obligations such as leases, environmental obligations, construction projects and insurance programs. Also includes guarantees entered into by Dominion Energy RNG Holdings II, Inc. on behalf of a subsidiary to facilitate construction of renewable natural gas facilities. Due to the uncertainty of workers’ compensation claims, the parental guarantee has no stated limit.

~~(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)

Excludes Dominion Energy’s guarantee of an offshore wind installation vessel discussed in Note 14.

~~(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. Also included are guarantees related to certain DGI subsidiaries' obligations for equity capital contributions and energy generation associated with Fowler Ridge and NedPower. As of September 30, 2017, Dominion Energy's maximum remaining cumulative exposure under these equity funding agreements is $20 million through 2019 and its maximum annual future contributions could range from approximately $4 million to $19 million.

(6)

In July 2016, Dominion Energy signed an agreement with a lessor to construct and lease a new corporate office property in Richmond, Virginia. The lessor provided equity and obtained financing commitments from debt investors, totaling $365 million, which funded total project costs. The project became substantially complete in August 2019 at which point the facility was available for Dominion Energy’s use and the five-year lease term commenced. At the end of the initial lease term, Dominion Energy can (i) extend the term of the lease for an additional five years, subject to the approval of the participants, at current market terms, (ii) purchase the property for an amount equal to the project costs or, (iii) subject to certain terms and conditions, sell the property on behalf of the lessor to a third party using commercially reasonable efforts to obtain the highest cash purchase price for the property. If the project is sold and the proceeds from the sale are insufficient to repay the investors for the project costs, Dominion Energy may be required to make a payment to the lessor, up to 87% of project costs, for the difference between the project costs and sale proceeds. At June 30, 2023, no amounts have been recorded related to this guarantee.

~~(6)~~

Excludes Dominion Energy's guarantee for the construction of a new corporate office property as discussed in Note 22 to the Consolidated Financial Statements in the Companies' Annual Report on Form 10-K for the year ended December 31, 2016.

Additionally, at ~~September~~June 30, ~~2017,~~2023, Dominion Energy had purchased ~~$141~~$282 million of surety bonds, including ~~$63~~$198 million at Virginia Power, ~~and $24 million at Dominion Energy Gas,~~ and authorized the issuance of letters of credit by financial institutions of ~~$73~~$16 million to facilitate commercial transactions by

its subsidiaries with third parties. Under the terms of surety bonds, the Companies are obligated to indemnify the respective surety bond company for any amounts paid.

Note ~~16.~~18. Credit Risk

The ~~Companies'~~Companies’ accounting policies for credit risk are discussed in Note 2324 to the Consolidated Financial Statements in the ~~Companies'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016. During the second quarter of 2017, Virginia Power recorded a $16~~2022.

At June 30, 2023, Dominion Energy’s credit exposure totaled $208 million, ~~($10 million after-tax) charge~~primarily related to ~~a proposed settlement with a customer renting space on certain~~price risk management activities. Of this amount, investment grade counterparties, including those internally rated, represented 86%. No single counterparty, whether investment grade or non-investment grade, exceeded $47 million of exposure. At June 30, 2023, Virginia Power’s ~~electric distribution poles. This matter was settled during the third quarter of 2017.~~

~~At September 30, 2017, Dominion Energy's credit~~ exposure related to ~~energy marketing and price risk management activities~~wholesale customers totaled ~~$70~~$63 million. Of this amount, investment grade counterparties, including those internally rated, represented ~~49%~~75%. No single counterparty, whether investment grade or non-investment grade, exceeded $7$12 million of exposure. At September 30, 2017, Virginia Power's exposure related to sales to wholesale customers totaled $23 million. Of this amount, investment grade counterparties, including those internally rated, represented 52%. No single counterparty, whether investment grade or non-investment grade, exceeded $6 million of exposure.

Credit-Related Contingent Provisions

~~The majority~~Certain of Dominion ~~Energy's~~Energy and Virginia Power's derivative instruments contain credit-related contingent provisions. These provisions require Dominion Energy and Virginia Power to provide collateral upon the occurrence of specific events, primarily a credit rating downgrade. If the credit-related contingent features underlying these instruments that are in a liability position and not fully collateralized with cash were fully triggered, ~~as of September 30, 2017~~Dominion Energy and ~~December 31, 2016, Dominion Energy~~Virginia Power would have been required to post additional collateral to its counterparties of $6$89 million and $3$35 million, ~~respectively.~~respectively, as of June 30, 2023, and $140 million and $28 million, respectively, as of December 31, 2022. The collateral that would be required to be posted includes the impacts of any offsetting asset positions and any amounts already posted for derivatives, non-derivative contracts and derivatives elected under the normal purchases and normal sales exception, per contractual terms. Dominion Energy had ~~not~~ posted ~~any~~ collateral of $1 million at ~~September~~June 30, ~~2017 or~~2023, and both Dominion Energy and Virginia Power had posted $72 million at December 31, ~~2016~~2022, related to derivatives with credit-related contingent provisions that are in a liability position and not fully collateralized with cash. ~~The~~Virginia Power had no such collateral posted ~~includes any amounts paid related to non-derivative contracts~~at June 30, 2023. In addition, Dominion Energy and ~~derivatives elected under the normal purchases~~Virginia Power had both posted letters of credit as collateral with counterparties covering $4 million and ~~normal sales exception, per contractual terms.~~$20 million of fair value of derivative instruments in a liability position at June 30, 2023 and December 31, 2022, respectively. The aggregate fair value of all derivative instruments with ~~credit-related~~credit related contingent provisions that are in a liability position and not fully collateralized with cash ~~at both September~~for Dominion Energy and Virginia Power was $90 million and $35 million, respectively, as of June 30, ~~2017~~2023 and $212 million and $99 million, respectively, as of December 31, ~~2016 was $9 million,~~2022, which does not include the impact of any offsetting asset positions. ~~Credit-related contingent provisions for Virginia Power and Dominion Energy Gas were not material as of September 30, 2017 and December 31, 2016.~~

See Note 9 for ~~further~~additional information about derivative instruments.

Note ~~17.~~19. Related-Party Transactions

Dominion Energy’s transactions with equity method investments are described in Note 10. Virginia Power ~~and Dominion Energy Gas engage~~engages in related-party transactions primarily with other Dominion Energy subsidiaries (affiliates). Virginia ~~Power's and Dominion Energy Gas'~~Power’s receivable and payable balances with affiliates are settled based on contractual terms or on a monthly basis, depending on the nature of the underlying transactions. Virginia Power ~~and Dominion Energy Gas are~~is included in Dominion Energy's consolidated federal income tax return and, where applicable, combined income tax returns for Dominion Energy are filed in various states. ~~Dominion Energy's transactions with equity method investments are described in Note 10.~~ A discussion of Virginia Power's significant related-party transactions follows.

~~Virginia Power~~

~~Transactions with Affiliates~~

Virginia Power transacts with affiliates for certain quantities of natural gas and other commodities in the ordinary course of business. Virginia Power also enters into certain commodity derivative contracts with affiliates. Virginia Power uses these contracts, which are principally comprised of forward commodity ~~swaps,~~purchases, to manage commodity price risks associated with purchases of natural gas. At ~~September~~June 30, ~~2017,~~2023, Virginia Power’s derivative assets and liabilities with affiliates were ~~$13~~$1 million and $5$89 million, respectively. At December 31, ~~2016,~~2022, Virginia Power’s derivative assets and liabilities with affiliates were ~~$41~~$33 million and $8$31 million, respectively. See Note 9 for ~~more~~additional information.

Virginia Power participates in certain Dominion Energy benefit plans described in Note 2122 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022. At ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, amounts due to Dominion Energy associated with the Dominion Energy Pension Plan and included in other deferred credits and other liabilities in the Consolidated Balance Sheets were ~~$478~~$439 million and ~~$396~~$422 million, respectively. At ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, Virginia Power's amounts due from Dominion Energy associated with the Dominion Energy Retiree Health and Welfare ~~plan~~Plan and included in ~~pension~~other deferred charges and other ~~postretirement benefit~~ assets in the Consolidated Balance Sheets were ~~$182~~$550 million and ~~$130~~$518 million, respectively.

DES and other affiliates provide accounting, legal, finance and certain administrative and technical services and licenses to Virginia Power. In addition, Virginia Power provides certain services to affiliates, including charges for facilities and equipment usage.

The financial statements for all years presented include costs for certain general, administrative and corporate expenses assigned by DES to Virginia Power on the basis of direct and allocated methods in accordance with Virginia Power’s services agreements with DES. Where costs incurred cannot be determined by specific identification, the costs are allocated based on the proportional level of effort devoted by DES resources that is attributable to the entity, determined by reference to number of employees, salaries and wages and other similar measures for the relevant DES service. Management believes the assumptions and methodologies underlying the allocation of general corporate overhead expenses are reasonable.

Presented below are Virginia ~~Power's~~Power’s significant transactions with DES and other affiliates:



	Quarter-to-Date				Year-to-Date
Period Ended June 30,	2023		2022		2023		2022
(millions)
Commodity purchases from affiliates	$	103	$	291	$	317	$	584
Services provided by affiliates(1)		145		123		292		253
Services provided to affiliates		4		5		8		9

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

(millions)

Commodity purchases from affiliates

$
170

$
172

$
519

$
416

Services provided by affiliates⁽¹⁾

109

105

333

347

Services provided to affiliates

5

5

17

17

(1)

Includes capitalized expenditures of $46 million and $39 million for the three months ended June 30, 2023 and 2022, respectively, and $100 million and $78 million for the six months ended June 30, 2023 and 2022, respectively.

~~(1)~~

Includes capitalized expenditures of $33 million and $32 million for the three months ended September 30, 2017 and 2016, respectively, and $104 million and $109 million for the nine months ended September 30, 2017 and 2016, respectively.

Virginia Power has borrowed funds from Dominion Energy under short-term borrowing arrangements. There were ~~$36 million~~$2.3 billion and ~~$262 million~~$2.0 billion in short-term demand note borrowings from Dominion Energy as of ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively. Virginia Power had no outstanding borrowings, net of repayments, under the Dominion Energy money pool for its nonregulated subsidiaries as of ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016.~~2022. Interest charges related to Virginia ~~Power's~~Power’s borrowings from Dominion Energy were ~~immaterial~~$21 million and $45 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023, respectively, and ~~2016.~~inconsequential for the three and six months ended June 30, 2022.

There were no issuances of Virginia ~~Power's~~Power’s common stock to Dominion Energy for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016.~~2022.

~~Dominion Energy Gas~~

~~Transactions~~In January 2023, Virginia Power entered into a lease contract with ~~Related Parties~~

Dominion Energy Gas transacts with affiliates for certain quantities of natural gas and other commodities at market prices in the ordinary course of business. Additionally, Dominion Energy Gas provides transportation and storage services to affiliates. Dominion Energy Gas also enters into certain other contracts with affiliates, which are presented separately from contracts involving commodities or services. As of September 30, 2017 and December 31, 2016, all of Dominion Energy Gas' commodity derivatives were with affiliates. See Notes 7 and 9 for more information.

Dominion Energy Gas participates in certain Dominion Energy benefit plans as described in Note 18. At September 30, 2017 and December 31, 2016, amounts due from Dominion Energy associated with the Dominion Pension Plan included in noncurrent pension and other postretirement benefit assets in the Consolidated Balance Sheets were $725 million and $697 million, respectively. At September 30, 2017 and December 31, 2016, Dominion Energy Gas' amounts due from Dominion Energy associated with the Dominion Retiree Health and Welfare plan included in noncurrent pension and other postretirement benefit assets in the Consolidated Balance Sheets were $6 million and $2 million, respectively.

The financial statements for all years presented include costs for certain general, administrative and corporate expenses assigned by DES to Dominion Energy Gas on the basis of direct and allocated methods in accordance with Dominion Energy Gas’ services agreements with DES. Where costs incurred cannot be determined by specific identification, the costs are allocated based on the proportional level of effort devoted by DES resources that is attributable to thean affiliated entity ~~determined by reference to number of employees, salaries and wages and other similar measures~~ for the ~~relevant DES service. Management believes~~use of a Jones Act compliant offshore wind installation vessel currently under development with commencement of the ~~assumptions and methodologies underlying the allocation~~20-month lease term in August 2025 at a total cost of ~~general corporate overhead expenses are reasonable. The costs of these services follow:~~approximately $240 million plus ancillary services.

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

(millions)

Purchases of natural gas and transportation and
storage services from affiliates

$
2

$
2

$
4

$
7

Sales of natural gas and transportation and
storage services to affiliates

15

16

51

51

Services provided by related parties⁽¹⁾

36

36

106

108

Services provided to related parties⁽²⁾

37

34

113

94

~~(1)~~

Includes capitalized expenditures of $13 million for both the three months ended September 30, 2017 and 2016, respectively, and $33 million and $37 million for the nine months ended September 30, 2017 and 2016, respectively.

~~(2)~~

~~Amounts primarily attributable to Atlantic Coast Pipeline, a related-party VIE.~~

~~The following table presents affiliated and related-party activity reflected in Dominion Energy Gas' Consolidated Balance Sheets:~~

September 30, 2017

December 31, 2016

(millions)

Other receivables⁽¹⁾

$
13

$
10

Imbalances receivable from affiliates

—

2

Imbalances payable to affiliates⁽²⁾

1

4

Affiliated notes receivable⁽³⁾

21

18

~~(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.~~

~~(3)~~

~~Amounts are presented in other deferred charges and other assets in Dominion Energy Gas' Consolidated Balance Sheets.~~

Dominion Energy Gas' borrowings under the intercompany revolving credit agreement with Dominion Energy were $34 million and $118 million as of September 30, 2017 and December 31, 2016, respectively. Interest charges related to Dominion Energy Gas' total borrowings from Dominion Energy were immaterial for the three and nine months ended September 30, 2017 and 2016.

Note ~~18.~~20. Employee Benefit Plans

~~In the first quarter~~Net Periodic Benefit (Credit) Cost

The service cost component of 2016, the Companies announced an organizational design initiative that reduced their total workforces during 2016. The goal of the organizational design initiative was to streamline leadership structure and push decision making lower while also improving efficiency. During the nine months ended September 30, 2016, Dominion Energy recorded a $65 million ($40 million after-tax) charge, including $33 million ($20 million after-tax) at Virginia Power and $8 million ($5 million after-tax) at Dominion Energy Gas, primarily reflected in other operations and maintenance expense in their Consolidated Statements of Income due to severance pay and other costs related to the organizational design initiative. The terms of the severance under the organizational design initiative were consistent with the Companies’ existing severance plans.

~~Plan Amendment and Remeasurement~~

~~In the first quarter of 2017, Dominion Energy and Dominion Energy Gas remeasured an other postretirement~~net periodic benefit plan as a result of an amendment that changed post-65 retiree medical coverage for certain current and future Local 69 retirees effective July 1, 2017. The remeasurement resulted in a decrease in Dominion Energy's and Dominion Energy Gas' accumulated postretirement benefit obligation of $73 million and $61 million, respectively. As a result of regulatory accounting, the remeasurement will have an immaterial impact on net income for both Dominion Energy and Dominion Energy Gas. The discount rate used for the remeasurement was 4.30%. All other assumptions used were consistent with the measurement as of December 31, 2016.

During the nine months ended September 30, 2017, Dominion Energy recorded a $7 million ($4 million after-tax) charge, including $6 million ($4 million after-tax) at Dominion Energy Gas, as a result of additional payments associated with the new collective bargaining agreement, which(credit) cost is reflected in other operations and maintenance expense in ~~their~~Dominion Energy’s Consolidated Statements of Income.

The non-service cost components of net periodic benefit (credit) cost are reflected in other income (expense) in Dominion ~~Energy~~

Energy’s Consolidated Statements of Income. The components of Dominion ~~Energy's~~Energy’s provision for net periodic benefit cost (credit) ~~were~~are as follows:

Pension Benefits

Other Postretirement Benefits

2017

2016

2017

2016

(millions)

Three Months Ended September 30,

Service cost

$
35

$
30

$
7

$
7

Interest cost

86

79

15

16

Expected return on plan assets

(160
)

(141
)

(32
)

(28
)
Amortization of prior service credit

—

—

(13
)

(9
)
Amortization of net actuarial loss

40

29

3

2

Settlements

1

—

—

—

Net periodic benefit cost (credit)

$
2

$
(3
)

$
(20
)

$
(12
)
Nine Months Ended September 30,

Service cost

$
104

$
87

$
20

$
23

Interest cost

259

234

45

50

Expected return on plan assets

(480
)

(419
)

(95
)

(87
)
Amortization of prior service cost (credit)

1

1

(38
)

(23
)
Amortization of net actuarial loss

121

84

9

5

Settlements

2

—

—

—

Net periodic benefit cost (credit)

$
7

$
(13
)

$
(59
)

$
(32
)


	Pension Benefits												Other Postretirement Benefits
	Quarter-to-Date						Year-to-Date						Quarter-to-Date						Year-to-Date
Period Ended June 30,	2023			2022			2023			2022			2023			2022			2023			2022
(millions)
Service cost	$	24		$	35		$	48		$	71		$	4		$	5		$	7		$	11
Interest cost		110			84			221			167			16			12			31			23
Expected return on plan assets		(216	)		(223	)		(432	)		(446	)		(38	)		(48	)		(76	)		(96	)
Amortization of prior service cost (credit)		—			—			—			—			(9	)		(9	)		(18	)		(19	)
Amortization of net actuarial (gain) loss		—			40			—			80			(2	)		(1	)		(3	)		(1	)
Net periodic benefit (credit) cost	$	(82	)	$	(64	)	$	(163	)	$	(128	)	$	(29	)	$	(41	)	$	(59	)	$	(82	)

Employer Contributions

During the ~~nine~~three and six months ended ~~September~~June 30, ~~2017,~~2023, Dominion Energy made no contributions to its ~~defined benefit pension plans or other postretirement benefit plans, except for a $75 million contribution made in January 2017 to Dominion Energy Questar’s~~ qualified pension plan to satisfy a regulatory condition to closing of the Dominion Energy Questar Combination. Dominion Energy expects to contribute approximately $12 million to its other postretirement benefit plans through VEBAs during the remainder of 2017.

~~Dominion Energy Gas~~

Dominion Energy Gas participates in certain Dominion Energy benefit plans as described in Note 21 to the Consolidated Financial Statements in the Companies' Annual Report on Form 10-K for the year ended December 31, 2016. See Note 17 for more information.

~~The components of Dominion Energy Gas' provision for net periodic benefit credit for employees represented by collective bargaining units were as follows:~~

Pension Benefits

Other Postretirement Benefits

2017

2016

2017

2016

(millions)

Three Months Ended September 30,

Service cost

$
3

$
3

$
1

$
1

Interest cost

7

7

3

3

Expected return on plan assets

(34
)

(33
)

(7
)

(5
)
Amortization of prior service credit

—

—

(1
)

—

Amortization of net actuarial loss

4

3

1

—

Net periodic benefit credit

$
(20
)

$
(20
)

$
(3
)

$
(1
)
Nine Months Ended September 30,

Service cost

$
11

$
10

$
3

$
4

Interest cost

22

22

9

10

Expected return on plan assets

(105
)

(100
)

(19
)

(17
)
Amortization of prior service credit

—

—

(2
)

—

Amortization of net actuarial loss

12

10

2

1

Net periodic benefit credit

$
(60
)

$
(58
)

$
(7
)

$
(2
)

~~Employer Contributions~~

~~During the nine months ended September 30, 2017, Dominion Energy Gas made no contributions to its~~ defined benefit pension plans or other postretirement benefit plans. Dominion Energy ~~Gas expects~~is not required to ~~contribute approximately $12 million~~make any contributions to its qualified defined benefit

pension plans or to VEBAs associated with its other postretirement ~~benefit~~ plans ~~through VEBAs, for both employees represented by collective bargaining units and employees not represented by collective bargaining units, during~~in 2023. Dominion Energy considers voluntary contributions from time to time, either in the ~~remainder~~form of ~~2017.~~cash or equity securities.

Note ~~19.~~21. Operating Segments

The Companies are organized primarily on the basis of products and services sold in the U.S. In connection with its corporate rebranding, the Companies changed the names of their principal operating segments to Power Delivery, Power Generation and Gas Infrastructure from Dominion Virginia Power, Dominion Generation and Dominion Energy, respectively. A description of the operations included in the Companies’ primary operating segments is as follows:


Primary Operating Segment	Description of Operations	Dominion Energy	Virginia Power	~~Dominion Energy Gas~~
~~Power Delivery~~Dominion Energy Virginia	Regulated electric distribution	X	X
	Regulated electric transmission	X	X
~~Power Generation~~	Regulated electric generation fleet(1)	X	X
Gas Distribution	~~Merchant electric fleet~~Regulated gas distribution and storage(2)	X
~~Gas Infrastructure~~Dominion Energy South Carolina	~~Gas transmission and storage~~Regulated electric distribution	X		X
	~~Gas~~Regulated electric transmission	X
	Regulated electric generation fleet	X
	Regulated gas distribution and storage	X		X
Contracted Assets	~~Gas gathering and processing~~Nonregulated electric generation fleet(3)	X		X
	~~LNG import and storage~~Noncontrolling interest in Cove Point	X
	~~Nonregulated retail energy marketing~~	X

(1)

Includes Virginia Power’s non-jurisdictional solar generation operations.

(2)

Includes renewable natural gas operations as well as Wexpro’s natural gas development and production operations.

(3)

Includes solar generation facility development operations.

In addition to the operating segments above, the Companies also report a Corporate and Other segment.

Dominion Energy

The Corporate and Other Segment of Dominion Energy includes its corporate, service company and other functions (including unallocated debt) as well as its noncontrolling interest in Dominion Privatization and ~~the net impact of operations that are discontinued or sold.~~its noncontrolling interest in Wrangler (through March 2022). In addition, Corporate and Other includes specific items attributable to Dominion ~~Energy's~~Energy’s operating segments that are not included in profit measures evaluated by executive management in assessing the ~~segments'~~segments’ performance or in allocating ~~resources.~~resources, as well as the net impact of the gas transmission and storage operations, including its noncontrolling interest in Atlantic Coast Pipeline, reported as discontinued operations which are discussed in Notes 3 and 9 to the Consolidated Financial Statements in Dominion Energy’s Annual Report on Form 10-K for the year ended December 31, 2022.

In the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, Dominion Energy reported after-tax net income of $112 million in the Corporate and Other segment, including $279 million of after-tax net income for specific items with $364 million of after-tax net income attributable to its operating segments. In the six months ended June 30, 2022, Dominion Energy reported after-tax net expenses of ~~$17 million for specific items~~$1.5 billion in the Corporate and Other segment, including $1.4 billion of after-tax net expenses for specific items with ~~$1 million~~$1.5 billion of after-tax net expenses attributable to its operating segments. In the nine months ended September 30, 2016, Dominion Energy reported after-tax net expenses of $63 million for specific items in the Corporate and Other segment, with $22 million of these net expenses attributable to its operating segments.

The net ~~expense~~income for specific items attributable to Dominion ~~Energy's~~Energy’s operating segments in ~~2016~~2023 primarily related to the impact of the following ~~item:~~items:

•

A ~~$59~~$333 million ($36254 million after-tax) ~~charge~~gain related to ~~an organizational design initiative,~~economic hedging activities, attributable ~~to:~~

to Contracted Assets;

•

~~Power Delivery ($5~~A $281 million ~~after-tax);~~

~~Gas Infrastructure~~ ($~~12 million after-tax); and~~

~~Power Generation ($19 million after-tax).~~

~~A $29 million ($18~~208 million after-tax) ~~net~~ gain onrelated to investments ~~held~~ in nuclear decommissioning trust funds, attributable to:

•

Contracted Assets ($178 million after-tax); and

•

Dominion Energy Virginia ($30 million after-tax);

•

A $122 million ($91 million after-tax) charge for amortization of a regulatory asset established in connection with the settlement of the 2021 Triennial Review, attributable to Dominion ~~Generation~~

Energy Virginia;

•

A $36 million ($27 million after-tax) charge for the write-off of certain previously deferred amounts related to the cessation of certain riders effective July 2023, attributable to Dominion Energy Virginia; and

•

A $31 million ($23 million after-tax) benefit related to real estate transactions, including gains on the transfer of property to satisfy litigation associated with the NND Project, attributable to Dominion Energy South Carolina.

The net expenses for specific items attributable to Dominion Energy’s operating segments in 2022 primarily related to the impact of the following items:

•

A $649 million ($513 million after-tax) loss associated with the sale of Kewaunee, attributable to Contracted Assets;

•

A $579 million ($450 million after-tax) loss related to investments in nuclear decommissioning trust funds, attributable to:

•

Contracted Assets ($392 million after-tax); and

•

Dominion Energy Virginia ($58 million after-tax);

•

A $191 million ($142 million after-tax) charge in connection with a comprehensive settlement agreement for Virginia fuel expenses, attributable to Dominion Energy Virginia;

•

A $180 million ($134 million after-tax) charge for RGGI compliance costs deemed recovered through base rates, attributable to Dominion Energy Virginia;

•

A $126 million ($91 million after-tax) loss related to economic hedging activities, attributable to Contracted Assets;

•

A $94 million ($70 million after-tax) charge associated with storm damage and service restoration in Virginia Power’s service territory, attributable to Dominion Energy Virginia; and

•

A $42 million ($31 million after-tax) charge for dismantling costs associated with certain retired electric generation facilities, attributable to Dominion Energy Virginia.

The following table presents segment information pertaining to Dominion Energy’s operations:

Power
Delivery

Power
Generation

Gas
Infrastructure

Corporate
and Other

Adjustments/
Eliminations

Consolidated
Total

(millions)

Three Months Ended September 30, 2017

Total revenue from external customers

$
580

$
1,931

$
459

$
3

$
206

$
3,179

Intersegment revenue

4

3

204

150

(361
)

—

Total operating revenue

584

1,934

663

153

(155
)

3,179

Net income (loss) attributable to Dominion Energy

138

369

187

(29
)

—

665

Three Months Ended September 30, 2016

Total revenue from external customers

$
614

$
1,947

$
359

$
2

$
210

$
3,132

Intersegment revenue

6

2

205

144

(357
)

—

Total operating revenue

620

1,949

564

146

(147
)

3,132

Net income (loss) attributable to Dominion Energy

139

650

135

(234
)

—

690

Nine Months Ended September 30, 2017

Total revenue from external customers

$
1,664

$
5,091

$
1,949

$
12

$
660

$
9,376

Intersegment revenue

16

8

645

451

(1,120
)

—

Total operating revenue

1,680

5,099

2,594

463

(460
)

9,376

Net income (loss) attributable to Dominion Energy

390

870

613

(186
)

—

1,687

Nine Months Ended September 30, 2016

Total revenue from external customers

$
1,682

$
5,204

$
1,235

$
8

$
522

$
8,651

Intersegment revenue

17

7

507

469

(1,000
)

—

Total operating revenue

1,699

5,211

1,742

477

(478
)

8,651

Net income (loss) attributable to Dominion Energy

363

1,066

483

(246
)

—

1,666


	Dominion Energy Virginia			Gas Distribution		Dominion Energy South Carolina		Contracted Assets		Corporate and Other			Adjustments & Eliminations			Consolidated Total
(millions)
Three Months Ended June 30, 2023
Total revenue from external customers	$	2,254		$	626	$	771	$	127	$	16		$	—		$	3,794
Intersegment revenue		(1	)		—		2		5		245			(251	)		—
Total operating revenue		2,253			626		773		132		261			(251	)		3,794
Net income from discontinued operations		—			—		—		—		13			—			13
Net income attributable to Dominion Energy		391			103		68		11		26			—			599
Three Months Ended June 30, 2022
Total revenue from external customers	$	2,175		$	565	$	812	$	161	$	(117	)	$	—		$	3,596
Intersegment revenue		(3	)		—		3		6		225			(231	)		—
Total operating revenue		2,172			565		815		167		108			(231	)		3,596
Net loss from discontinued operations		—			—		—		—		(1	)		—			(1	)
Net income (loss) attributable to Dominion Energy		440			125		124		20		(1,162	)		—			(453	)
Six Months Ended June 30, 2023
Total revenue from external customers	$	4,643		$	1,993	$	1,615	$	435	$	360		$	—		$	9,046
Intersegment revenue		(2	)		1		3		8		495			(505	)		—
Total operating revenue		4,641			1,994		1,618		443		855			(505	)		9,046
Net income from discontinued operations		—			—		—		—		8			—			8
Net income attributable to Dominion Energy		777			381		159		167		112			—			1,596
Six Months Ended June 30, 2022
Total revenue from external customers	$	4,347		$	1,794	$	1,610	$	406	$	(282	)	$	—		$	7,875
Intersegment revenue		(6	)		1		4		10		462			(471	)		—
Total operating revenue		4,341			1,795		1,614		416		180			(471	)		7,875
Net income from discontinued operations		—			—		—		—		18			—			18
Net income (loss) attributable to Dominion Energy		958			419		233		121		(1,473	)		—			258

Intersegment sales and transfers for Dominion Energy are based on contractual arrangements and may result in intersegment profit or loss that is eliminated in ~~consolidation.~~consolidation, including amounts related to entities presented within discontinued operations.

Virginia Power

The Corporate and Other Segment of Virginia Power primarily includes specific items attributable to its ~~operating segments that are not included in profit measures evaluated by executive management in assessing the segments' performance or in allocating resources.~~

In the nine months ended September 30, 2017, Virginia Power reported after-tax net expenses of $7 million for specific items in the Corporate and Other segment, all of which was attributable to its operating segments. In the nine months ended September 30, 2016, Virginia Power reported an after-tax net expense of $18 million for specific items in the Corporate and Other segment, all of which was attributable to its operating segments.

~~The net expense for specific items attributable to Virginia Power's operating segments in 2017 primarily related to the impact of the following item which was attributable to Power Delivery:~~

~~A $16 million ($10 million after-tax) charge~~ ~~arising from a customer settlement.~~

~~The net expense for specific items attributable to Virginia Power’s operating segments in 2016 primarily related to the impact of the following item:~~

~~A $33 million ($20 million after-tax) charge related to an organizational design initiative, attributable to:~~

~~Power Delivery ($5 million after-tax); and~~

~~Power Generation ($15 million after-tax).~~

~~The following table presents segment information pertaining to Virginia Power’s operations:~~

Power
Delivery

Power
Generation

Corporate
and Other

Consolidated
Total

(millions)

Three Months Ended September 30, 2017

Operating revenue

$
580

$
1,574

$
—

$
2,154

Net income

137

314

8

459

Three Months Ended September 30, 2016

Operating revenue

$
617

$
1,594

$
—

$
2,211

Net income

140

359

4

503

Nine Months Ended September 30, 2017

Operating revenue

$
1,670

$
4,062

$
—

$
5,732

Net income

387

735

11

1,133

Nine Months Ended September 30, 2016

Operating revenue

$
1,686

$
4,191

$
—

$
5,877

Net income (loss)

362

699

(15
)

1,046

~~Dominion Energy Gas~~

~~The Corporate and Other Segment of Dominion Energy Gas~~ ~~primarily includes specific items attributable to Dominion Energy Gas'~~ operating segment that are not included in profit measures evaluated by executive management in assessing the ~~segment's~~segment’s performance or in allocating ~~resources and the effect of certain items recorded at Dominion Energy Gas as a result of Dominion Energy's basis in the net assets contributed.~~resources.

In the ~~nine~~six months ended ~~September~~June 30, ~~2017, Dominion Energy Gas~~2023, Virginia Power reported after-tax net expenses of $9$91 million ~~for specific items~~ in the Corporate and Other segment, including $87 million of after-tax net expenses for specific items all of which was attributable to its operating segment. In the ~~nine~~six months ended ~~September~~June 30, ~~2016, Dominion Energy Gas~~2022, Virginia Power reported an after-tax net ~~benefit~~expenses of $5$554 million ~~for specific items~~ in the Corporate and Other segment, ~~with~~including $547 million of after-tax net ~~expense~~expenses for specific items with $527 million of ~~$7 million~~after-tax net expenses attributable to its operating segment.

The net ~~expense~~expenses for specific items attributable to Virginia Power’s operating segment in ~~2017 was due~~2023 primarily related to ~~a $15~~the impact of the following item:

•

A $122 million ($991 million after-tax) charge ~~to write-off the balance~~for amortization of a regulatory asset ~~no longer considered probable~~established in connection with the settlement of ~~recovery.~~

the 2021 Triennial Review;

•

A $41 million ($30 million after-tax) gain related to investments in nuclear decommissioning trust funds; and

•

A $36 million ($27 million after-tax) charge for the write-off of certain previously deferred amounts related to the cessation of certain riders effective July 2023.

The net ~~expense~~expenses for specific items attributable to Virginia Power’s operating segment in ~~2016~~2022 primarily related to ~~an $8~~the impact of the following items:

•

A $191 million ($5142 million after-tax) charge in connection with a comprehensive settlement agreement for Virginia fuel expenses;

•

A $180 million ($134 million after-tax) charge for RGGI compliance costs deemed recovered through base rates;

•

A $122 million ($91 million after-tax) charge for amortization of a regulatory asset established in connection with the settlement of the 2021 Triennial Review;

•

A $94 million ($70 million after-tax) charge associated with storm damage and service restoration in its service territory;

•

A $78 million ($58 million after-tax) loss related to ~~an organizational design initiative.~~investments in nuclear decommissioning trust funds; and

•

A $42 million ($31 million after-tax) charge for dismantling costs associated with certain retired electric generation facilities.

The following table presents segment information pertaining to ~~Dominion Energy Gas'~~Virginia Power’s operations:


	Gas Infrastructure		Corporate and Other			Consolidated Total		Dominion Energy Virginia		Corporate and Other			Consolidated Total
(millions)
Three Months Ended September 30, 2017
Three Months Ended June 30, 2023
Operating revenue	$	401	$	—		$	401	$	2,251	$	—		$	2,251
Net income (loss)		121		(4	)		117		392		(60	)		332
Three Months Ended September 30, 2016
Operating revenue	$	382	$	—		$	382
Net income		77		6			83
Nine Months Ended September 30, 2017
Three Months Ended June 30, 2022
Operating revenue	$	1,313	$	—		$	1,313	$	2,170	$	5		$	2,175
Net income (loss)		318		(16	)		302		442		(395	)		47
Nine Months Ended September 30, 2016
Six Months Ended June 30, 2023
Operating revenue	$	1,181	$	—		$	1,181	$	4,635	$	—		$	4,635
Net income (loss)		288		(2	)		286		776		(91	)		685
Six Months Ended June 30, 2022
Operating revenue								$	4,335	$	7		$	4,342
Net income (loss)									958		(554	)		404

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MD&A discusses Dominion Energy’s results of operations and general financial condition and Virginia ~~Power's and Dominion Energy Gas'~~Power’s results of operations. MD&A should be read in conjunction with the Companies’ Consolidated Financial Statements. Virginia Power ~~and Dominion Energy Gas meet~~meets the conditions to file under the reduced disclosure format, and therefore ~~have~~has omitted certain sections of MD&A.

Contents of MD&A

MD&A consists of the following information:

•

Forward-Looking ~~Statements~~

Statements—Dominion Energy and Virginia Power

•

Accounting ~~Matters –~~ Matters—Dominion Energy

•

~~Dominion Energy~~

Results of ~~Operations~~

Operations—Dominion Energy and Virginia Power

•

Segment Results of ~~Operations~~

Operations—Dominion Energy

•

~~Virginia Power~~

Outlook—Dominion Energy

•

~~Results of Operations~~

~~Dominion Energy Gas~~

~~Results of Operations~~

Liquidity and Capital ~~Resources –~~ Resources—Dominion Energy

•

Future Issues and Other ~~Matters –~~ Matters—Dominion Energy

Forward-Looking Statements

This report contains statements concerning the ~~Companies'~~Companies’ expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In most cases, the reader can identify these forward-looking statements by such words as “anticipate,” “estimate,” “forecast,” “expect,” “believe,” “should,” “could,” “plan,” “may,” “continue,” “target” or other similar words.

The Companies make forward-looking statements with full knowledge that risks and uncertainties exist that may cause actual results to differ materially from predicted results. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Additionally, other factors may cause actual results to differ materially from those indicated in any forward-looking statement. These factors include but are not limited to:

•

Unusual weather conditions and their effect on energy sales to customers and energy commodity prices;

•

Extreme weather events and other natural disasters, including, but not limited to, hurricanes, high winds, severe storms, earthquakes, flooding, climate changes and changes in water temperatures and availability that can cause outages and property damage to facilities;

•

The impact of extraordinary external events, such as the current pandemic health event resulting from COVID-19, and their collateral consequences, including extended disruption of economic activity in our markets and global supply chains;

•

Federal, state and local legislative and regulatory developments, including changes in or interpretations of federal and state tax laws and regulations;

•

The direct and indirect impacts of implementing recommendations resulting from the business review announced in November 2022;

•

Risks of operating businesses in regulated industries that are subject to changing regulatory structures;

•

Changes to regulated electric rates collected by the Companies and regulated gas distribution, transportation and storage rates collected by Dominion Energy;

•

Changes in rules for RTOs and ISOs in which the Companies join and/or participate, including changes in rate designs, changes in FERC’s interpretation of market rules and new and evolving capacity models;

•

Risks associated with Virginia Power’s membership and participation in PJM, including risks related to obligations created by the default of other participants;

•

Risks associated with entities in which Dominion Energy shares ownership with third parties, including risks that result from lack of sole decision making authority, disputes that may arise between Dominion Energy and third party participants and difficulties in exiting these arrangements;

•

Changes in future levels of domestic and international natural gas production, supply or consumption;

•

Impacts to Dominion Energy’s noncontrolling interest in Cove Point from fluctuations in future volumes of LNG imports or exports from the U.S. and other countries worldwide or demand for, purchases of, and prices related to natural gas or LNG;

•

Timing and receipt of regulatory approvals necessary for planned construction or growth projects and compliance with conditions associated with such regulatory approvals;

•

The inability to complete planned construction, conversion or growth projects at all, or with the outcomes or within the terms and time frames initially anticipated, including as a result of increased public involvement, intervention or litigation in such projects;

•

Risks and uncertainties that may impact the Companies’ ability to develop and construct the CVOW Commercial Project within the currently proposed timeline, or at all, and consistent with current cost estimates along with the ability to recover such costs from customers;

•

Changes to federal, state and local environmental laws and regulations, including those related to climate change, the tightening of emission or discharge limits for GHGs and other substances, more extensive permitting requirements and the regulation of additional substances;

•

Cost of environmental strategy and compliance, including those costs related to climate change;

•

Changes in implementation and enforcement practices of regulators relating to environmental standards and litigation exposure for remedial activities;

•

Difficulty in anticipating mitigation requirements associated with environmental and other regulatory approvals or related appeals;

•

Unplanned outages at facilities in which the Companies have an ownership interest;

•

The impact of operational hazards, including adverse developments with respect to pipeline and plant safety or integrity, equipment loss, malfunction or failure, operator error and other catastrophic events;

•

Risks associated with the operation of nuclear facilities, including costs associated with the disposal of spent nuclear fuel, decommissioning, plant maintenance and changes in existing regulations governing such facilities;

•

•	~~Unplanned outages at facilities in which the Companies have an ownership interest;~~

Fluctuations in energy-related commodity prices and the effect these could have on Dominion Energy’s and Dominion Energy Gas' earnings and the Companies' liquidity position and the underlying value of their assets;

~~Counterparty credit and performance risk;~~

~~Global capital market conditions, including the availability of credit and the ability to obtain financing on reasonable terms;~~

~~Risks associated with Virginia Power’s membership and participation in PJM, including risks related to obligations created by the default of other participants;~~

~~Fluctuations in the value of investments held in nuclear decommissioning trusts by Dominion Energy and Virginia Power and in benefit plan trusts by Dominion Energy and Dominion Energy Gas;~~

~~Fluctuations in interest rates or foreign currency exchange rates;~~

Changes in ~~rating agency requirements or credit ratings~~operating, maintenance and ~~their effect on availability and cost of capital;~~

construction costs;

•

~~Changes in financial or regulatory accounting principles or policies imposed by governing bodies;~~

~~Employee workforce factors including collective bargaining agreements and labor negotiations with union employees;~~

~~Risks of operating businesses in regulated industries that are subject to changing regulatory structures;~~

Impacts of acquisitions, including the Dominion Energy Questar Combination, divestitures, transfers of assets to joint ventures or Dominion Energy Midstream, including the contribution of Dominion Energy Questar Pipeline to Dominion Energy Midstream, and retirements of assets based on asset portfolio reviews;

~~Receipt of approvals for, and timing of, closing dates for acquisitions and divestitures;~~

~~The timing and execution of Dominion Energy Midstream's growth strategy;~~

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 FERC's interpretation of market rules and new and evolving capacity models;

~~Political and economic conditions, including inflation and deflation;~~

Domestic terrorism and other threats to the ~~Companies'~~Companies’ physical and intangible assets, as well as threats to cybersecurity;

•

Additional competition in industries in which the Companies operate, including in electric markets in which Dominion Energy’s nonregulated generation facilities operate and potential competition from the development and deployment of alternative energy sources, such as self-generation and distributed generation technologies, and availability of market alternatives to large commercial and industrial customers;

•

Competition in the development, construction and ownership of certain electric transmission facilities in the Companies’ service territory in connection with Order 1000;

•

Changes in technology, particularly with respect to new, developing or alternative sources of generation and smart grid technologies;

•

Changes in demand for the ~~Companies'~~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'~~Energy’s pipeline ~~and processing systems,~~system, failure to maintain or replace customer contracts on favorable terms, changes in customer growth or usage patterns, including as a result of energy conservation programs, the availability of energy efficient devices and the use of distributed generation methods;

•

~~Additional competition in industries in which~~Receipt of approvals for, and timing of, closing dates for acquisitions and divestitures;

•

Impacts of acquisitions, divestitures, transfers of assets to joint ventures and retirements of assets based on asset portfolio reviews;

•

The expected timing and likelihood of the ~~Companies operate, including in electric markets in which~~completion of the proposed sale of Dominion Energy’s ~~merchant generation facilities operate and potential competition from~~noncontrolling interest in Cove Point, including the ~~development and deployment of alternative energy sources, such as self-generation and distributed generation technologies, and availability of market alternatives~~ability to ~~large commercial and industrial customers;~~

~~Competition in~~obtain the ~~development, construction and ownership of certain electric transmission facilities in Virginia Power's service territory in connection with FERC Order 1000;~~

~~Changes in technology, particularly with respect to new, developing or alternative sources of generation and smart grid technologies;~~

Changes to regulated electric rates collected by Virginia Power and regulated gas distribution, transportation and storage rates, including LNG storage, collected by Dominion Energy and Dominion Energy Gas;

~~Changes in operating, maintenance and construction costs;~~

~~Timing and receipt of~~requisite regulatory approvals ~~necessary for planned construction or growth projects~~ and ~~compliance with conditions associated with such regulatory approvals;~~

~~The inability to complete planned construction, conversion or growth projects at all, or with the outcomes or within~~ the terms and ~~time frames initially anticipated;~~

conditions of such approvals;

•

Adverse outcomes in litigation matters or regulatory proceedings, including matters acquired in the SCANA Combination;

•	~~Adverse outcomes in litigation matters or regulatory proceedings; and~~

•

Counterparty credit and performance risk;

•

~~The impact~~Fluctuations in the value of ~~operational hazards, including adverse developments with respect to pipeline~~investments held in nuclear decommissioning trusts by the Companies and ~~plant safety or integrity, equipment loss, malfunction or failure, operator error,~~in benefit plan trusts by Dominion Energy;

•

Fluctuations in energy-related commodity prices and ~~other catastrophic events.~~

the effect these could have on Dominion Energy’s earnings and the Companies’ liquidity position and the underlying value of their assets;

•

Fluctuations in interest rates;

•

The effectiveness to which existing economic hedging instruments mitigate fluctuations in currency exchange rates of the Euro and Danish Krone associated with certain fixed price contracts for the major offshore construction and equipment components of the CVOW Commercial Project;

•

Changes in rating agency requirements or credit ratings and their effect on availability and cost of capital;

•

Global capital market conditions, including the availability of credit and the ability to obtain financing on reasonable terms;

•

Political and economic conditions, including inflation and deflation;

•

Employee workforce factors including collective bargaining agreements and labor negotiations with union employees; and

•

Changes in financial or regulatory accounting principles or policies imposed by governing bodies.

Additionally, other risks that could cause actual results to differ from predicted results are set forth in Part I. Item 1A. Risk Factors in the ~~Companies'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022.

The ~~Companies'~~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 ~~September~~June 30, ~~2017,~~2023, there have been no significant changes with regard to the critical accounting policies and estimates disclosed in MD&A in the ~~Companies'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022. The policies disclosed included the accounting for regulated operations, AROs, income taxes, accounting for derivative contracts and ~~other~~financial instruments at fair value, use of estimates in goodwill ~~and~~impairment testing, use of estimates in long-lived asset and equity method investment impairment testing, held for sale classification and employee benefit plans.

~~Dominion Energy~~

Results of ~~Operations~~Operations—Dominion Energy

Presented below is a summary of Dominion Energy’s consolidated results:


	2023		2022			$ Change
(millions, except EPS)
Second Quarter
Net income (loss) attributable to Dominion Energy	$	599	$	(453	)	$	1,052
Diluted EPS		0.69		(0.58	)		1.27
Year-To-Date
Net income attributable to Dominion Energy	$	1,596	$	258		$	1,338
Diluted EPS		1.86		0.25			1.61

Overview

2017

2016

$ Change

(millions, except EPS)

Third Quarter

Net income attributable to Dominion Energy

$
665

$
690

$
(25
)
Diluted EPS

1.03

1.10

(0.07
)
Year-To-Date

Net income attributable to Dominion Energy

$
1,687

$
1,666

$
21

Diluted EPS

2.66

2.71

(0.05
)

~~Overview~~Second Quarter 2023 vs. 2022

~~Third Quarter 2017 vs. 2016~~

Net income attributable to Dominion Energy decreased 4%, primarily due to lower anticipated renewable energy investment tax credits, milder weather during 2017 in Dominion Energy’s electric utility service territory and a decrease in Cove Point import contracts. These decreases were partially offset by the Dominion Energy Questar Combination and an increase in gains from agreements to convey shale development rights underneath several natural gas storage fields.

~~Year-To-Date 2017 vs. 2016~~

Net income attributable to Dominion Energy increased ~~1%,~~$1.1 billion, primarily due to the absences of a loss associated with the sale of Kewaunee, a charge for RGGI compliance costs deemed recovered through base rates and a charge in connection with a comprehensive settlement agreement for Virginia fuel expenses. In addition, there was an increase in net investment earnings on nuclear decommissioning trust funds and increased unrealized gains on economic hedging activities. These increases were partially offset by a decrease in sales to electric utility customers attributable to weather.

Year-To-Date 2023 vs. 2022

Net income attributable to Dominion Energy ~~Questar Combination,~~increased $1.3 billion, primarily due to the absences of a loss associated with the sale of Kewaunee, a charge for RGGI compliance costs deemed recovered through base rates, a charge in connection with a comprehensive settlement agreement for Virginia fuel expenses and a charge to reflect the recognition of deferred taxes on the outside basis of Hope’s stock upon meeting the classification as held for sale. In addition, there was an ~~electric utility capacity benefit~~increase in net investment earnings on nuclear decommissioning trust funds, increased unrealized gains on economic hedging activities and ~~the absence of 2016 organizational design initiative~~a decrease in storm damage and service restoration costs. These increases were ~~substantially~~partially offset by ~~lower anticipated renewable energy investment tax credits, an increase in interest expense, milder weather in Dominion Energy’s electric utility service territory~~a charge associated with the impairment of a corporate office building and a decrease in ~~Cove Point import contracts.~~sales to electric utility customers attributable to weather.

Analysis of Consolidated Operations

Presented below are selected amounts related to Dominion Energy’s results of operations:


	Third Quarter								Year-To-Date								Second Quarter									Year-To-Date
	2017		2016			$ Change			2017			2016		$ Change			2023			2022			$ Change			2023			2022			$ Change
(millions)
Operating revenue	$	3,179	$	3,132		$	47		$	9,376		$	8,651	$	725		$	3,794		$	3,596		$	198		$	9,046		$	7,875		$	1,171
Electric fuel and other energy-related purchases		638		606			32			1,711			1,791		(80	)		939			730			209			1,961			1,408			553
Purchased (excess) electric capacity		21		(6	)		27			(8	)		107		(115	)
Purchased electric capacity																		15			16			(1	)		23			29			(6	)
Purchased gas		24		77			(53	)		441			252		189			227			202			25			991			847			144
Net revenue		2,496		2,455			41			7,232			6,501		731
Other operations and maintenance		649		765			(116	)		2,166			2,133		33			932			985			(53	)		1,853			2,039			(186	)
Depreciation, depletion and amortization		485		400			85			1,421			1,112		309			706			695			11			1,426			1,393			33
Other taxes		162		145			17			519			448		71			222			235			(13	)		497			488			9
Other income		73		63			10			249			189		60
Impairment of assets and other charges																		53			415			(362	)		151			405			(254	)
Losses (gains) on sales of assets																		(22	)		636			(658	)		(23	)		608			(631	)
Earnings from equity method investees																		90			83			7			170			163			7
Other income (expense)																		325			(287	)		612			609			(241	)		850
Interest and related charges		305		250			55			905			715		190			430			47			383			1,016			221			795
Income tax expense		272		230			42			683			561		122
Noncontrolling interests		31		38			(7	)		100			55		45
Income tax expense (benefit)																		121			(117	)		238			342			119			223
Net income (loss) from discontinued operations including noncontrolling interests																		13			(1	)		14			8			18			(10	)

An analysis of Dominion Energy’s results of operations follows:

~~Third~~Second Quarter ~~2017~~2023 vs. ~~2016~~2022

~~Net~~Operating revenue increased 2%6%, primarily reflecting:

•

A ~~$161~~$234 million increase in fuel-related revenue as a result of an increase in commodity costs associated with sales to electric utility retail customers ($206 million) and gas utility customers ($28 million);

•

A $182 million net increase associated with market prices affecting Millstone, including economic hedging impacts of net realized and unrealized gains on freestanding derivatives ($201 million); and

•

A $52 million increase in sales to electric utility retail customers associated with economic and other usage factors.

These increases were partially offset by:

•

A $91 million net decrease from electric utility customers who elect to pay market based or other negotiated rates, including settlements of economic hedges at Virginia Power;

•

An $89 million decrease in sales to electric utility retail customers, primarily due to a decrease in cooling degree days;

•

A $69 million decrease from unplanned outages ($60 million) and planned outages ($9 million) at Millstone; and

•

A $29 million decrease from the sale of Hope.

Electric fuel and other energy-related purchases increased 29%, primarily due to higher commodity costs for electric utilities ($206 million) and an increase in the use of purchased renewable energy credits at Virginia Power ($26 million), which are offset in operating revenue and do not impact net income.

Purchased gas increased 12%, primarily due to a net increase in commodity costs for gas utilities, which are offset in operating revenue and do not impact net income.

Other operations and maintenance decreased 5%, primarily due to a decrease in certain Virginia Power expenditures which are primarily recovered through state- and FERC-regulated rates and do not impact net income ($32 million), partially offset by an increase in outside services ($17 million).

Impairment of assets and other charges decreased 87%, primarily due to the absence of a charge in connection with a comprehensive settlement agreement for Virginia fuel expenses ($191 million), the absence of a charge for RGGI compliance costs deemed recovered through base rates ($180 million) and a net decrease in dismantling costs and other activities associated with certain retired electric generation facilities at Virginia Power ($38 million), partially offset by a charge for the write-off of certain previously

deferred amounts related to the cessation of certain riders effective July 2023 ($36 million) and an impairment charge of certain nonregulated solar assets ($15 million).

Gains on sales of assets increased $658 million, primarily due to the absence of a loss associated with the sale of Kewaunee.

Other income increased $612 million, primarily due to net investment gains in 2023 compared to net investment losses in 2022 on nuclear decommissioning trust funds.

Interest and related charges increased $383 million, primarily due to lower unrealized gains in 2023 compared to 2022 associated with freestanding derivatives ($239 million), higher interest rates on commercial paper and long-term debt ($60 million), increased commercial paper and long-term debt borrowings ($53 million) and higher interest rates on variable rate debt and cash flow interest rate swaps ($42 million).

Income tax expense increased $238 million, primarily due to higher pre-tax income ($309 million), partially offset by lower interim period allocation of investment tax credits ($20 million), excess deferred income tax amortization ($19 million) and decreased consolidated state deferred tax expense on pre-tax gains from nuclear decommissioning trusts and economic hedges ($18 million).

Year-To-Date 2023 vs. 2022

Operating revenue increased 15%, primarily reflecting:

•

A $755 million net increase associated with market prices affecting Millstone, including economic hedging impacts of net realized and unrealized gains on freestanding derivatives ($876 million);

•

A $714 million increase in fuel-related revenue as a result of an increase in commodity costs associated with sales to electric utility retail customers ($522 million) and gas utility customers ($192 million);

•

An $89 million increase in sales to electric utility retail customers associated with economic and other usage factors;

•

A $55 million increase to recover the costs and an authorized return, as applicable, associated with Virginia Power non-fuel riders;

•

A $32 million increase following the approved base rate case for Questar Gas;

•

A $31 million increase from gas utility capital cost riders; and

•

A $24 million increase in sales to electric utility retail customers associated with growth.

These increases were partially offset by:

•

A $206 million decrease in sales to electric utility retail customers, primarily due to a decrease in heating degree days during the ~~operations acquired~~heating season ($117 million) and a decrease in cooling degree days during the cooling season ($89 million);

•

A $128 million net decrease from electric utility customers who elect to pay market based or other negotiated rates, including settlements of economic hedges at Virginia Power;

•

A $95 million decrease from the sale of Hope; and

•

A $69 million decrease from unplanned outages ($60 million) and planned outages ($9 million) at Millstone.

Electric fuel and other energy-related purchases increased 39%, primarily due to higher commodity costs for electric utilities ($522 million) and an increase in the ~~Dominion Energy Questar Combination being included for all~~use of ~~2017;~~purchased renewable energy credits at Virginia Power ($54 million), which are offset in operating revenue and do not impact net income.

~~A $29 million increase~~Purchased gas increased 17%, primarily due to ~~additional generation output from merchant solar generating projects;~~a net increase in commodity costs for gas utilities ($192 million), which are offset in operating revenue and

~~A $16 million increase from regulated natural gas transmission growth projects placed into service;~~ do not impact net income, partially offset by a decrease from the sale of Hope ($37 million).

Other operations and maintenance decreased 9%, primarily due to a decrease in storm damage and restoration costs in Virginia Power’s service territory ($111 million) and a decrease in certain Virginia Power expenditures which are primarily recovered through state- and FERC-regulated rates and do not impact net income ($103 million), partially offset by an increase in outside services ($36 million).

Impairment of assets and other charges decreased 63%, primarily due to the absence of a charge in connection with a comprehensive settlement agreement for Virginia fuel expenses ($191 million), the absence of a charge for RGGI compliance costs deemed recovered through base rates ($180 million) and a net decrease in dismantling costs and other activities associated with certain

retired electric generation facilities at Virginia Power ($39 million), partially offset by the impairment of a corporate office building ($91 million), a charge for the write-off of certain previously deferred amounts related to the cessation of certain riders effective July 2023 ($36 million) and an impairment charge of certain nonregulated solar assets ($15 million).

Gains on sales of assets increased $631 million, primarily due to the absence of a loss associated with the sale of Kewaunee ($649 million) and a gain on the transfer of certain utility property in South Carolina ($20 million), partially offset by the absence of a gain on the contribution of certain privatization operations to Dominion Privatization ($23 million).

Other income increased $850 million, primarily due to net investment gains in 2023 compared to net investment losses in 2022 on nuclear decommissioning trust funds.

Interest and related charges increased $795 million, primarily due to unrealized losses in 2023 compared to unrealized gains in 2022 associated with freestanding derivatives ($517 million), higher interest rates on commercial paper and long-term debt ($107 million),

increased commercial paper and long-term debt borrowings ($98 million), higher interest rates on variable rate debt and cash flow interest rate swaps ($88 million) and lower premiums received on interest rate derivatives ($24 million).

Income tax expense increased $223 million, primarily due to higher pre-tax income ($388 million), partially offset by the absence of a charge to reflect the recognition of deferred taxes on the outside basis of Hope’s stock upon meeting the classification as held for sale ($90 million) and decreased consolidated state deferred tax expense on pre-tax gains from nuclear decommissioning trusts and economic hedges ($25 million).

Results of Operations—Virginia Power

Presented below is a summary of Virginia Power’s consolidated results:


	Second Quarter						Year-To-Date
	2023		2022		$ Change		2023		2022		$ Change
(millions)
Net income	$	332	$	47	$	285	$	685	$	404	$	281

Overview

Second Quarter 2023 vs. 2022

Net income increased $285 million, primarily due to the absences of a charge for RGGI compliance costs deemed recovered through base rates and a charge in connection with a comprehensive settlement agreement for Virginia fuel expenses as well as an increase in net investment earnings on nuclear decommissioning trust funds, partially offset by a decrease in sales to electric utility customers attributable to weather.

Year-To-Date 2023 vs. 2022

Net income increased 70%, primarily due to the absences of a charge for RGGI compliance costs deemed recovered through base rates and a charge in connection with a comprehensive settlement agreement for Virginia fuel expenses as well as an increase in net investment earnings on nuclear decommissioning trust funds and a decrease in storm damage and service restoration costs, partially offset by a decrease in sales to electric utility customers attributable to weather.

Analysis of Consolidated Operations

Presented below are selected amounts related to Virginia Power’s results of operations:


	Second Quarter								Year-To-Date
	2023		2022			$ Change			2023		2022			$ Change
(millions)
Operating revenue	$	2,251	$	2,175		$	76		$	4,635	$	4,342		$	293
Electric fuel and other energy-related purchases		706		533			173			1,505		1,049			456
Purchased electric capacity		10		11			(1	)		18		22			(4	)
Other operations and maintenance		443		478			(35	)		884		1,048			(164	)
Depreciation and amortization		432		425			7			879		854			25
Other taxes		67		83			(16	)		152		158			(6	)
Impairment of assets and other charges		38		409			(371	)		45		413			(368	)
Other income (expense)		48		(44	)		92			84		(40	)		124
Interest and related charges		182		145			37			363		293			70
Income tax expense		89		—			89			188		61			127

An analysis of Virginia Power’s results of operations follows:

Second Quarter 2023 vs. 2022

Operating revenue increased 3%, primarily reflecting:

•

A $169 million increase in fuel-related revenue as a result of a net increase in commodity costs associated with sales to electric utility retail customers; and

•

A ~~$76~~$54 million increase in sales to electric utility retail customers associated with economic and other usage factors.

These increases were partially offset by:

•

A $77 million net decrease from electric utility customers who elect to pay market based or other negotiated rates, including settlements of economic hedges; and

•

A $55 million decrease in sales to electric utility retail customers, primarily due to a decrease in cooling degree days.

Electric fuel and other energy-related purchases increased 32%, primarily due to higher commodity costs for electric utilities ($169 million) and an increase in the use of purchased renewable energy credits ($26 million), which are offset in operating revenue and do not impact net income.

Other operations and maintenance decreased 7%, primarily due to a decrease in certain expenditures which are primarily recovered through state- and FERC-regulated rates and do not impact net income ($32 million) and a decrease in bad debt expense ($10 million), partially offset by an increase in outside services ($13 million).

Other taxes decreased 19%, primarily due to lower property taxes.

Impairment of assets and other charges decreased 91%, primarily due to the absence of a charge in connection with a comprehensive settlement agreement for Virginia fuel expenses ($191 million), the absence of a charge for RGGI compliance costs deemed recovered through base rates ($180 million) and a net decrease in dismantling costs and other activities associated with certain retired electric generation facilities ($38 million), partially offset by a charge for the write-off of certain previously deferred amounts related to the cessation of certain riders effective July 2023 ($36 million).

Other income increased $92 million, primarily due to net investment gains in 2023 compared to net investment losses in 2022 on nuclear decommissioning trust funds.

Interest and related charges increased 26%, primarily due to increased commercial paper, long-term debt and intercompany borrowings with Dominion Energy ($39 million) and higher interest rates on commercial paper, long-term debt and intercompany borrowings with Dominion Energy ($11 million).

Income tax expense increased $89 million, primarily due to higher pre-tax income.

Year-To-Date 2023 vs. 2022

Operating revenue increased 7%, primarily reflecting:

•

A $418 million increase in fuel-related revenue as a result of a net increase in commodity costs associated with sales to electric utility retail customers;

•

A $89 million increase in sales to electric utility retail customers associated with economic and other usage factors;

•

A $55 million increase to recover the costs and an authorized return, as applicable, associated with non-fuel riders; and

•

A $12 million increase in sales to electric utility retail customers associated with growth.

These increases were partially offset by:

•

A $146 million decrease in sales to electric utility retail customers from a decrease in ~~cooling degree days;~~

~~A $41 million decrease from Cove Point import contracts;~~

A $24 million increase in electric capacity related expenses due to the annual PJM capacity performance market effective June 2017 ($68 million), partially offset by a benefit related to non-utility generators ($44 million); and

~~A $20 million decrease due to unfavorable pricing at merchant generation facilities.~~

~~Other operations and maintenance~~ ~~decreased 15%, primarily reflecting:~~

~~A $56 million increase in gains from agreements to convey shale development rights underneath several natural gas storage fields;~~

~~A $30 million decrease in certain electric transmission-related expenditures. These expenses are primarily recovered through state and FERC rates and do not impact net income;~~

~~A $26 million decrease in transaction and transition costs related to the Dominion Energy Questar Combination; and~~

~~A $21 million decrease due to the absence of costs related to 2016 labor contract renegotiations as well as costs resulting from a union workforce temporary work stoppage; partially offset by~~

~~A $45 million increase from the operations acquired in the Dominion Energy Questar Combination being included for all of 2017.~~

~~Depreciation, depletion and amortization~~ increased 21%, primarily due to the operations acquired in the Dominion Energy Questar Combination being included for all of 2017 ($47 million) and various growth projects being placed into service ($40 million).

~~Interest and related charges~~ ~~increased 22%, primarily due to higher long-term debt interest expense resulting from debt issuances in the fourth quarter of 2016 and the first nine months of 2017($41 million) and debt acquired in the Dominion Energy Questar Combination ($11 million).~~

~~Income tax expense~~ ~~increased 18%, primarily due to an increased effective tax rate, principally due to lower anticipated renewable energy investment tax credits.~~

~~Noncontrolling interests~~ decreased 18% primarily due to a decrease in earnings attributable to merchant solar partners ($22 million), partially offset by an increase in Dominion Energy Midstream earnings attributable to public unit holders ($15 million).

~~Year-To-Date 2017 vs. 2016~~

~~Net revenue~~ ~~increased 11%, primarily reflecting:~~

~~A $663 million increase from the operations acquired in the Dominion Energy Questar Combination being included for all of 2017;~~

A $119 million electric capacity benefit due to the annual PJM capacity performance market effective June 2016 ($123 million) and a benefit related to non-utility generators ($86 million), partially offset by the annual PJM capacity performance market effective June 2017 ($90 million);

~~A $74 million increase due to additional generation output from merchant solar generating projects;~~

~~A $57 million increase in sales to electric utility retail customers due to the effect of changes in customer usage and other factors;~~

~~A $49 million increase from regulated natural gas transmission growth projects placed into service; and~~

~~A $36 million increase from rate adjustment clauses associated with electric utility operations; partially offset by~~

~~A $109 million decrease due to unfavorable pricing at merchant generation facilities;~~

~~A $104 million decrease from Cove Point import contracts; and~~

~~A decrease in sales to electric utility retail customers from a reduction in~~ heating degree days during the heating season ~~of 2017~~ ($5291 million) and a decrease in cooling degree days during the cooling season ($55 million); and

•

A $105 million net decrease from electric utility customers who elect to pay market based or other negotiated rates, including settlements of ~~2017 ($53 million).~~

economic hedges.

Electric fuel and other energy-related purchases increased 43%, primarily due to higher commodity costs for electric utilities ($418 million) and an increase in the use of purchased renewable energy credits ($54 million), which are offset in operating revenue and do not impact net income.

Other operations and maintenance ~~increased 2%~~ decreased 16%, primarily ~~reflecting:~~

~~A $162 million increase from the operations acquired~~due to a decrease in ~~the Dominion Energy Questar Combination being included for all of 2017;~~storm damage and

~~A $35 million increase in salaries, wages~~ restoration costs ($111 million) and ~~benefits; partially offset by~~

~~An $88 million~~a decrease in certain ~~electric transmission-related expenditures. These expenses~~expenditures which are primarily recovered through ~~state~~state- and ~~FERC~~FERC-regulated rates and do not impact net ~~income;~~income ($103 million), partially offset by an increase in outside services ($29 million) and

~~The absence of organizational design initiative~~ an increase in salaries, wages and benefits and administrative costs ($6418 million).

~~Depreciation, depletion~~

Impairment of assets and ~~amortization~~ ~~increased 28%~~other charges decreased 89%, primarily due to the ~~operations acquired~~absence of a charge in connection with a comprehensive settlement agreement for Virginia fuel expenses ($191 million), the ~~Dominion Energy Questar Combination being included~~absence of a charge for ~~all of 2017~~RGGI compliance costs deemed recovered through base rates ($~~162~~180 million) and ~~various growth projects being placed into service~~a net decrease in dismantling costs and other activities associated with certain retired electric generation facilities ($~~120~~39 million), partially offset by a charge for the write-off of certain previously deferred amounts related to the cessation of certain riders effective July 2023 ($36 million).

Other ~~taxes~~income increased ~~16%,~~$124 million, primarily due to ~~the operations acquired~~net investment gains in ~~the Dominion Energy Questar Combination being included for all of 2017 ($35 million) and increased property taxes related~~2023 compared to ~~growth projects placed into service ($31 million).~~

~~Other income~~ ~~increased 32%, primarily reflecting:~~

~~A $26 million increase~~net investment losses in ~~earnings from equity method investments;~~

~~A $19 million increase in AFUDC associated with rate-regulated projects;~~

~~An $11 million increase in interest income associated with the settlement of state income tax refund claims; and~~

~~An $11 million increase in net realized gains (including investment income)~~2022 on nuclear decommissioning trust funds.

Interest and related charges increased ~~27%~~24%, primarily due to ~~higher~~increased commercial paper, long-term debt and intercompany borrowings with Dominion Energy ($72 million) and higher interest rates on commercial paper, long-term debt and intercompany borrowings with Dominion Energy ($22 million), partially offset by decreased interest expense ~~resulting from debt issuances in 2016 and the first nine months of 2017~~associated with rider deferrals ($~~148~~19 million) ~~and debt acquired in the Dominion Energy Questar Combination ($39 million)~~.

Income tax expense increased ~~22%,~~$127 million, primarily due to higher pre-tax income ($101 million) and ~~an increased effective tax rate, principally due to~~ lower ~~anticipated renewable energy~~ investment tax ~~credits.~~

~~Noncontrolling interests~~ ~~increased 82%, primarily due to an increase in Dominion Energy Midstream earnings attributable to public unitholders.~~credits ($31 million).

Segment Results of Operations

Segment results include the impact of intersegment revenues and expenses, which may result in intersegment profit and loss. In connection with its corporate rebranding in May 2017, Dominion Energy changed the names of its principal operating segments to Power Delivery, Power Generation and Gas Infrastructure from Dominion Virginia Power, Dominion Generation and Dominion Energy, respectively. Presented below is a summary of contributions by Dominion Energy’s operating segments to net income (loss) attributable to Dominion Energy:

Net Income attributable to
Dominion Energy

Diluted EPS

2017

2016

$ Change

2017

2016

$ Change

(millions, except EPS)

Third Quarter

Power Delivery

$
138

$
139

$
(1
)

$
0.21

$
0.22

$
(0.01
)
Power Generation

369

650

(281
)

0.57

1.04

(0.47
)
Gas Infrastructure

187

135

52

0.29

0.21

0.08

Primary operating segments

694

924

(230
)

1.07

1.47

(0.40
)
Corporate and Other

(29
)

(234
)

205

(0.04
)

(0.37
)

0.33

Consolidated

$
665

$
690

$
(25
)

$
1.03

$
1.10

$
(0.07
)
Year-To-Date

Power Delivery

$
390

$
363

$
27

$
0.62

$
0.59

$
0.03

Power Generation

870

1,066

(196
)

1.37

1.74

(0.37
)
Gas Infrastructure

613

483

130

0.97

0.78

0.19

Primary operating segments

1,873

1,912

(39
)

2.96

3.11

(0.15
)
Corporate and Other

(186
)

(246
)

60

(0.30
)

(0.40
)

0.10

Consolidated

$
1,687

$
1,666

$
21

$
2.66

$
2.71

$
(0.05
)


	Net Income (Loss) Attributable to Dominion Energy								EPS(1)
	2023		2022			$ Change			2023		2022			$ Change
(millions, except EPS)
Second Quarter
Dominion Energy Virginia	$	391	$	440		$	(49	)	$	0.47	$	0.54		$	(0.07	)
Gas Distribution		103		125			(22	)		0.12		0.15			(0.03	)
Dominion Energy South Carolina		68		124			(56	)		0.08		0.15			(0.07	)
Contracted Assets		11		20			(9	)		0.01		0.02			(0.01	)
Corporate and Other		26		(1,162	)		1,188			0.01		(1.44	)		1.45
Consolidated	$	599	$	(453	)	$	1,052		$	0.69	$	(0.58	)	$	1.27

Year-To-Date
Dominion Energy Virginia	$	777	$	958		$	(181	)	$	0.93	$	1.18		$	(0.25	)
Gas Distribution		381		419			(38	)		0.46		0.51			(0.05	)
Dominion Energy South Carolina		159		233			(74	)		0.19		0.29			(0.10	)
Contracted Assets		167		121			46			0.20		0.15			0.05
Corporate and Other		112		(1,473	)		1,585			0.08		(1.88	)		1.96
Consolidated	$	1,596	$	258		$	1,338		$	1.86	$	0.25		$	1.61

~~Power Delivery~~(1) Consolidated results are presented on a diluted EPS basis. The dilutive impacts, primarily consisting of potential shares which had not yet been issued, are included within the results of the Corporate and Other segment. EPS contributions for Dominion Energy’s operating segments are presented utilizing basic average shares outstanding for the period.

Dominion Energy Virginia

Presented below are selected operating statistics related to ~~Power Delivery’s~~Dominion Energy Virginia’s operations:

Third Quarter

Year-To-Date

2017

2016

% Change

2017

2016

% Change

Electricity delivered (million MWh)

23.0

24.1

(5
)%

63.2

64.2

(2
)%
Degree days (electric distribution service area):

Cooling

1,124

1,326

(15
)

1,698

1,755

(3
)
Heating

2

—

100

1,825

2,247

(19
)
Average electric distribution customer accounts
(thousands)⁽¹⁾

2,576

2,552

1

2,570

2,546

1

~~(1)~~

~~Period average.~~


	Second Quarter							Year-To-Date
	2023		2022		% Change			2023		2022		% Change
Electricity delivered (million MWh)		21.8		20.7		5	%		43.5		43.0		1	%
Electricity supplied (million MWh):
Utility		20.7		20.8		—			42.5		43.1		(1	)
Non-Jurisdictional		0.6		0.5		20			0.9		0.8		13
Degree days (electric distribution and utility service area):
Cooling		358		502		(29	)		361		513		(30	)
Heating		204		297		(31	)		1,675		2,192		(24	)
Average electric distribution customer accounts (thousands)		2,746		2,720		1			2,743		2,718		1

Presented below, on an after-tax basis, are the key factors impacting ~~Power Delivery’s~~Dominion Energy Virginia’s net income contribution:


	Third Quarter 2017 vs. 2016 Increase (Decrease)						Year-To-Date 2017 vs. 2016 Increase (Decrease)						Second Quarter 2023 vs. 2022 Increase (Decrease)						Year-To-Date 2023 vs. 2022 Increase (Decrease)
	Amount			EPS			Amount			EPS			Amount			EPS			Amount			EPS
(millions, except EPS)
Regulated electric sales:
Weather	$	(13	)	$	(0.02	)	$	(19	)	$	(0.03	)	$	(42	)	$	(0.05	)	$	(109	)	$	(0.13	)
Other		1			—			12			0.02
FERC transmission equity return		5			0.01			14			0.02
Storm damage and service restoration		3			—			17			0.03
Customer usage and other factors														42			0.05			75			0.09
Customer-elected rate impacts														(57	)		(0.07	)		(78	)		(0.10	)
Rider equity return														17			0.02			49			0.06
Storm damage and restoration costs														5			0.01			13			0.02
Depreciation and amortization														(6	)		(0.01	)		(12	)		(0.01	)
Renewable energy investment tax credits														4			—			(53	)		(0.07	)
Interest expense, net														(10	)		(0.01	)		(23	)		(0.03	)
Other		3			—			3			—			(2	)		—			(43	)		(0.06	)
Share dilution		—			—			—			(0.01	)		—			(0.01	)		—			(0.02	)
Change in net income contribution	$	(1	)	$	(0.01	)	$	27		$	0.03		$	(49	)	$	(0.07	)	$	(181	)	$	(0.25	)

~~Power Generation~~Gas Distribution

~~Presented below are selected operating statistics related to Power Generation’s operations:~~

Third Quarter

Year-To-Date

2017

2016

% Change

2017

2016

% Change

Electricity supplied (million MWh):

Utility

23.1

24.8

(7
)%

64.7

67.1

(4
)%
Merchant

7.9

7.9

—

22.7

21.2

7

Degree days (electric utility service area):

Cooling

1,124

1,326

(15
)

1,698

1,755

(3
)
Heating

2

—

100

1,825

2,247

(19
)

~~Presented below, on an after-tax basis, are the key factors impacting Power Generation’s net income contribution:~~

Third Quarter
2017 vs. 2016
Increase (Decrease)

Year-To-Date
2017 vs. 2016
Increase (Decrease)

Amount

EPS

Amount

EPS

(millions, except EPS)

Regulated electric sales:

Weather

$
(33
)

$
(0.05
)

$
(45
)

$
(0.07
)
Other

6

0.01

27

0.04

Electric capacity

(16
)

(0.03
)

70

0.11

Renewable energy investment tax credits⁽¹⁾

(242
)

(0.39
)

(187
)

(0.31
)
Merchant generation margin

6

0.01

(9
)

(0.02
)
Noncontrolling interests⁽²⁾

14

0.02

1

—

Depreciation and amortization

(12
)

(0.02
)

(38
)

(0.06
)
Other

(4
)

(0.01
)

(15
)

(0.02
)
Share dilution

—

(0.01
)

—

(0.04
)
Change in net income contribution

$
(281
)

$
(0.47
)

$
(196
)

$
(0.37
)

~~(1)~~

~~Tax credit is reflected in Power Generation segment once project is placed into service.~~

~~(2)~~

~~Represents noncontrolling interests related to merchant solar partnerships.~~

~~Gas Infrastructure~~

Presented below are selected operating statistics related to Gas ~~Infrastructure’s~~Distribution’s operations:


	Second Quarter							Year-To-Date
	2023		2022(1)		% Change			2023		2022(1)		% Change
Gas distribution throughput (bcf):
Sales		27		26		4	%		111		115		(3	%)
Transportation		193		217		(11	)		465		518		(10	)
Heating degree days (gas distribution service area):
North Carolina		189		189		—			1,377		1,772		(22	)
Ohio and West Virginia(1)		658		622		6			3,055		3,534		(14	)
Utah, Wyoming and Idaho		499		662		(25	)		3,154		3,140		—
Average gas distribution customer accounts (thousands):
Sales		1,899		1,971		(4	)		1,898		1,967		(4	)
Transportation		1,138		1,136		—			1,137		1,137		—

Third Quarter

Year-To-Date

2017

2016

% Change

2017

2016

% Change

Gas distribution throughput (bcf)⁽¹⁾:

Sales

10

2

400
%

85

18

372
%
Transportation

143

106

35

469

364

29

Heating degree days (gas distribution service area):

Eastern region

66

22

200

2,940

3,435

(14
)
Western region⁽¹⁾

131

39

236

3,024

39

7,654

Average gas distribution customer accounts
(thousands)⁽¹⁾⁽²⁾:

Sales

1,234

472

161

1,234

329

275

Transportation

1,082

1,069

1

1,089

1,072

2

Average retail energy marketing customer accounts
(thousands)⁽²⁾

1,463

1,377

6

1,447

1,368

6

(1)

Includes Hope in 2022.

~~(1)~~

~~Includes Dominion Energy Questar effective September 2016.~~

~~(2)~~

~~Period average.~~

Presented below, on an after-tax basis, are the key factors impacting Gas ~~Infrastructure’s~~Distribution’s net income contribution:


	Second Quarter 2023 vs. 2022 Increase (Decrease)						Year-To-Date 2023 vs. 2022 Increase (Decrease)
	Amount			EPS			Amount			EPS
(millions, except EPS)
Weather	$	—		$	—		$	(4	)	$	—
Customer usage and other factors		2			—			9			0.01
Base rate case impacts		9			0.01			25			0.03
Rider equity return		6			0.01			9			0.01
Wexpro cost saving sharing incentives		(7	)		(0.01	)		(4	)		—
Sale of Hope		(3	)		—			(22	)		(0.03	)
Depreciation and amortization		(6	)		(0.01	)		(11	)		(0.01	)
Interest expense, net		(13	)		(0.02	)		(25	)		(0.03	)
Other		(10	)		(0.01	)		(15	)		(0.02	)
Share dilution		—			—			—			(0.01	)
Change in net income contribution	$	(22	)	$	(0.03	)	$	(38	)	$	(0.05	)

Dominion Energy South Carolina

Presented below are selected operating statistics related to Dominion Energy South Carolina’s operations:


	Second Quarter							Year-To-Date
	2023		2022		% Change			2023		2022		% Change
Electricity delivered (million MWh)		5.2		5.9		(12	%)		10.2		11.1		(8	%)
Electricity supplied (million MWh)		5.5		6.2		(11	)		10.7		11.7		(9	)
Degree days (electric distribution service areas):
Cooling		113		253		(55	)		114		253		(55	)
Heating		25		33		(24	)		484		783		(38	)
Gas distribution throughput (bcf):
Sales		16		15		7			33		35		(6	)
Average distribution customer accounts (thousands):
Electric		789		776		2			786		774		2
Gas		441		425		4			439		424		4

Presented below, on an after-tax basis, are the key factors impacting Dominion Energy South Carolina’s net income contribution:


	Second Quarter 2023 vs. 2022 Increase (Decrease)						Year-To-Date 2023 vs. 2022 Increase (Decrease)
	Amount			EPS			Amount			EPS
(millions, except EPS)
Weather	$	(26	)	$	(0.03	)	$	(45	)	$	(0.06	)
Customer usage and other factors		3			—			10			0.01
Customer-elected rate impacts		(11	)		(0.01	)		(18	)		(0.02	)
Base rate case & Natural Gas Rate Stabilization Act impacts		1			—			6			0.01
Capital cost rider		(2	)		—			(4	)		—
Gains on sales of property		(12	)		(0.01	)		(12	)		(0.01	)
Depreciation and amortization		(4	)		—			(7	)		(0.01	)
Interest expense, net		(8	)		(0.01	)		(14	)		(0.02	)
Other		3			(0.01	)		10			0.01
Share dilution		—			—			—			(0.01	)
Change in net income contribution	$	(56	)	$	(0.07	)	$	(74	)	$	(0.10	)

Contracted Assets

Presented below are selected operating statistics related to Contracted Asset’s operations:


	Second Quarter							Year-To-Date
	2023		2022		% Change			2023		2022		% Change
Electricity supplied (million MWh)		2.4		3.4		(29	%)		7.0		8.0		(13	)	%

Presented below, on an after-tax basis, are the key factors impacting Contracted Asset’s net income contribution:


	Second Quarter 2023 vs. 2022 Increase (Decrease)						Year-To-Date 2023 vs. 2022 Increase (Decrease)
	Amount			EPS			Amount			EPS
(millions, except EPS)
Margin(1)	$	(11	)	$	(0.01	)	$	38		$	0.05
Planned outage costs(2)		3			—			6			0.01
Unplanned outage costs(2)		(3	)		—			(2	)		—
Depreciation and amortization		6			0.01			11			0.01
Interest expense, net		(2	)		—			(7	)		(0.01	)
Other		(2	)		(0.01	)		—			—
Share dilution		—			—			—			(0.01	)
Change in net income contribution	$	(9	)	$	(0.01	)	$	46		$	0.05

Third Quarter
2017 vs. 2016
Increase (Decrease)

Year-To-Date
2017 vs. 2016
Increase (Decrease)

Amount

EPS

Amount

EPS

(millions, except EPS)

Dominion Energy Questar Combination

$
34

$
0.05

$
184

$
0.30

Assignment of Marcellus acreage

33

0.05

7

0.01

Cove Point import contracts

(27
)

(0.04
)

(63
)

(0.10
)
Noncontrolling interests⁽¹⁾

(9
)

(0.01
)

(28
)

(0.04
)
Transportation and storage growth projects

7

0.01

23

0.04

Other

14

0.02

7

0.01

Share dilution

—

—

—

(0.03
)
Change in net income contribution

$
52

$
0.08

$
130

$
0.19

(1)

Includes earnings associated with a 50% noncontrolling interest in Cove Point.

~~(1)~~

~~Represents the portion of earnings attributable to Dominion Energy Midstream's public unitholders.~~

(2)

Excludes earnings impact from lower energy margins associated with a Millstone outage.

Corporate and Other

Presented below are the Corporate and Other segment’s after-tax results:


	Third Quarter									Year-To-Date									Second Quarter									Year-To-Date
	2017			2016			$ Change			2017			2016			$ Change			2023			2022			$ Change			2023			2022			$ Change
(millions, except EPS)
Specific items attributable to operating segments	$	—		$	4		$	(4	)	$	(1	)	$	(22	)	$	21		$	92		$	(1,254	)	$	1,346		$	364		$	(1,523	)	$	1,887
Specific items attributable to corporate operations		(7	)		(30	)		23			(16	)		(41	)		25
Specific items attributable to Corporate and Other segment																				39			143			(104	)		(85	)		123			(208	)
Total specific items		(7	)		(26	)		19			(17	)		(63	)		46			131			(1,111	)		1,242			279			(1,400	)		1,679
Other corporate operations:
Renewable energy investment tax credits		52			(143	)		195			79			(11	)		90
Interest expense, net		(85	)		(63	)		(22	)		(258	)		(191	)		(67	)		(133	)		(82	)		(51	)		(253	)		(161	)		(92	)
Other		11			(2	)		13			10			19			(9	)		28			31			(3	)		86			88			(2	)
Total other corporate operations		(22	)		(208	)		186			(169	)		(183	)		14			(105	)		(51	)		(54	)		(167	)		(73	)		(94	)
Total net expense	$	(29	)	$	(234	)	$	205		$	(186	)	$	(246	)	$	60
Total net income (expense)																			$	26		$	(1,162	)	$	1,188		$	112		$	(1,473	)	$	1,585
EPS impact	$	(0.04	)	$	(0.37	)	$	0.33		$	(0.30	)	$	(0.40	)	$	0.10		$	0.01		$	(1.44	)	$	1.45		$	0.08		$	(1.88	)	$	1.96

~~Total Specific Items~~

Corporate and Other includes specific items attributable to Dominion ~~Energy's~~Energy’s primary operating segments that are not included in profit measures evaluated by executive management in assessing ~~those~~the segments' performance or in allocating resources. See Note 1921 to the Consolidated Financial Statements in this report for discussion of these items in more detail. Corporate and ~~other~~Other also includes items attributable to the Corporate and Other segment.

~~Virginia Power~~

~~Results of Operations~~

~~Presented below is~~ For the three months ended June 30, 2023, this primarily included a ~~summary of Virginia Power’s consolidated results:~~

Third Quarter

Year-To-Date

2017

2016

$ Change

2017

2016

$ Change

(millions)

Net income

$
459

$
503

$
(44
)

$
1,133

$
1,046

$
87

~~Overview~~

~~Third Quarter 2017 vs. 2016~~

~~Net income decreased 9%,~~$36 million after-tax gain for derivative mark-to-market changes. For the six months ended June 30, 2023, this primarily ~~due to milder weather during 2017 and the annual PJM capacity performance market effective June 2017, partially offset by~~included a ~~benefit related to non-utility generators.~~

~~Year-To-Date 2017 vs. 2016~~

Net income increased 8%, primarily due to the PJM capacity performance market, a benefit related to non-utility generators, an increase in customer usage and other factors and the absence of organizational design initiative costs, partially offset by milder weather during 2017.

~~Analysis of Consolidated Operations~~

~~Presented below are selected amounts related to Virginia Power’s results of operations:~~

Third Quarter

Year-To-Date

2017

2016

$ Change

2017

2016

$ Change

(millions)

Operating revenue

$
2,154

$
2,211

$
(57
)

$
5,732

$
5,877

$
(145
)
Electric fuel and other energy-related purchases

549

516

33

1,414

1,527

(113
)
Purchased (excess) electric capacity

21

(6
)

27

(8
)

107

(115
)
Net revenue

1,584

1,701

(117
)

4,326

4,243

83

Other operations and maintenance

373

443

(70
)

1,126

1,279

(153
)
Depreciation and amortization

288

270

18

854

765

89

Other taxes

76

74

2

233

218

15

Other income

13

13

—

57

47

10

Interest and related charges

128

118

10

373

345

28

Income tax expense

273

306

(33
)

664

637

27

~~An analysis of Virginia Power’s results of operations follows:~~

~~Third Quarter 2017 vs. 2016~~

~~Net revenue~~ ~~decreased 7%, primarily reflecting:~~

~~A $76~~$68 million ~~decrease in sales to retail customers from a decrease in cooling degree days; and~~

~~Other operations and maintenance~~ ~~decreased 16%, primarily reflecting:~~

~~A $30 million decrease in certain electric transmission-related expenditures. These expenses are primarily recovered through state and FERC rates and do not impact net income;~~

~~An $11 million decrease due to the absence of 2016 union workforce contract renegotiations; and~~

~~A $9 million decrease in outside services due to the absence of certain utility projects.~~

~~Income tax expense~~ ~~decreased 11%, primarily due to lower pre-tax income.~~

~~Year-To-Date 2017 vs. 2016~~

~~Net revenue~~ ~~increased 2%, primarily reflecting:~~

~~An increase in sales to retail customers due to the effect of changes in customer usage and other factors ($57 million); and~~

~~An increase from rate adjustment clauses ($36 million); partially offset by~~

A decrease in sales to retail customers from a reduction in heating degree days during the heating season of 2017 ($52 million) and a decrease in cooling degree days during the cooling season of 2017 ($53 million).

~~Other operations and maintenance~~ ~~decreased 12%, primarily reflecting:~~

~~An $88 million decrease in certain electric transmission-related expenditures. These expenses are primarily recovered through state and FERC rates and do not impact net income;~~

~~The absence of organizational design initiative costs ($32 million); and~~

~~A $28 million decrease in storm damage and service restoration costs.~~

~~Depreciation and amortization~~ ~~increased 12%, primarily due to various growth projects being placed into service ($48 million) and revised depreciation rates ($32 million).~~

~~Other income~~ ~~increased 21%, primarily reflecting:~~

~~An $11 million increase in interest income~~after-tax charge associated with the ~~settlement~~impairment of ~~state~~a corporate office building.

For the three months ended June 30, 2022, other than the effects of required interim period provision for income ~~tax refund claims; and~~

~~A $10~~taxes, this primarily included a $188 million ~~increase from~~after-tax benefit for derivative mark-to-market changes. For the ~~assignment~~six months ended June 30, 2022, other than the effects of ~~Virginia Power’s electric transmission tower rental portfolio; partially offset by~~

~~A $16~~required interim period provision for income taxes, this primarily included a $240 million after-tax benefit for derivative mark-to-market changes, a $90 million charge to reflect the recognition of deferred taxes on the outside basis of Hope’s stock upon meeting the classification as held for sale and $18 million net income from discontinued operations, primarily associated with ~~a customer settlement.~~

~~Dominion Energy Gas~~the Q-Pipe Group.

~~Results~~

Outlook

As of ~~Operations~~

~~Presented below is a summary of Dominion Energy Gas' consolidated results:~~

Third Quarter

Year-To-Date

2017

2016

$ Change

2017

2016

$ Change

(millions)

Net income

$
117

$
83

$
34

$
302

$
286

$
16

~~Overview~~

~~Third Quarter 2017 vs. 2016~~

~~Net income increased 41%, primarily due to gains from agreements to convey shale development rights underneath several natural gas storage fields.~~

~~Year-To-Date 2017 vs. 2016~~

~~Net income increased 6%, primarily due to gas transportation and storage activities from growth projects placed into service.~~

~~Analysis of Consolidated Operations~~

~~Presented below are selected amounts related~~June 30, 2023, there have been no material changes to Dominion ~~Energy Gas' results of operations:~~Energy’s 2023 outlook as described in Item 7. MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022. As discussed in Future Issues and Other Matters, legislation enacted in Virginia in April 2023 is expected to decrease Dominion Energy’s 2023 net income for riders combined into base rates effective July 2023.

Third Quarter

Year-To-Date

2017

2016

$ Change

2017

2016

$ Change

(millions)

Operating revenue

$
401

$
382

$
19

$
1,313

$
1,181

$
132

Purchased gas

19

21

(2
)

100

71

29

Other energy-related purchases

4

4

—

11

8

3

Net revenue

378

357

21

1,202

1,102

100

Other operations and maintenance

73

133

(60
)

377

331

46

Depreciation and amortization

57

55

2

167

150

17

Other taxes

42

36

6

139

127

12

Earnings from equity method investee

4

5

(1
)

15

14

1

Other income

6

2

4

16

8

8

Interest and related charges

25

23

2

72

68

4

Income tax expense

74

34

40

176

162

14

~~An analysis of Dominion Energy Gas' results of operations follows:~~

~~Third Quarter 2017 vs. 2016~~

~~Net revenue~~ ~~increased 6%, primarily reflecting:~~

~~A $13 million increase from regulated natural gas transmission growth projects placed into service;~~

~~A $6 million increase in PIR program revenues; and~~

~~A $6 million increase in services performed for Atlantic Coast Pipeline.~~

~~Other operations and maintenance~~ ~~decreased 45%, primarily reflecting:~~

~~The increase in gains from agreements to convey shale development rights underneath several natural gas storage fields ($56 million); and~~

~~The absence of a union workforce temporary work stoppage ($8 million); partially offset by~~

~~A $5 million increase 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 17% primarily due to an increase in property taxes related to growth projects placed into service.~~

~~Income tax expense~~ ~~increased by $40 million due to higher pre-tax income ($28 million) and the absence of a 2016 settlement with a tax authority ($12 million).~~

~~Year-To-Date 2017 vs. 2016~~

~~Net revenue~~ ~~increased 9%, primarily reflecting:~~

~~A $38 million increase from regulated natural gas transmission growth projects placed into service;~~

~~A $22 million increase in services performed for Atlantic Coast Pipeline;~~

~~An $18 million increase in PIR program revenues; and~~

~~A $17 million increase in rate recovery for low income assistance programs associated with regulated natural gas distribution operations.~~

~~Other operations and maintenance~~ ~~increased 14%, primarily reflecting:~~

~~A $21 million increase in services performed for Atlantic Coast Pipeline. These expenses are billed to Atlantic Coast Pipeline and do not significantly impact net income;~~

A $17 million increase in bad debt expense at regulated natural gas distribution operations primarily related to low income assistance programs. These bad debt expenses are recovered through rates and do not impact net income;

~~A $15 million increase due to a charge to write-off the balance of a regulatory asset no longer considered probable of recovery; and~~

~~An $11 million increase in salaries, wages and benefits and general and administrative expenses; partially offset by~~

~~A $16 million increase in gains from agreements to convey shale development rights underneath several natural gas storage fields;~~

~~The absence of organizational design initiative costs ($10 million); and~~

~~The absence of a union workforce temporary work stoppage ($8 million).~~

~~Other income~~ increased by $8 million primarily due to an increase in AFUDC associated with rate-regulated projects ($12 million), partially offset by the absence of a gain on the 2016 sale of a portion of Dominion Energy Gas’ interest in Iroquois ($5 million).

Liquidity and Capital Resources

Dominion Energy depends on both ~~internal~~cash generated from operations and external sources of liquidity to provide working capital and as a bridge to long-term ~~debt~~ financings. ~~Short-term~~Dominion Energy’s material cash requirements ~~not met by cash provided by operations are generally satisfied~~include capital and investment expenditures, repaying short-term and long-term debt obligations and paying dividends on its common and preferred stock. This section should be read in conjunction with ~~proceeds from short-term borrowings. Long-term cash needs are met through issuances of debt and/or equity securities.~~

~~At September 30, 2017, Dominion Energy had $2.4 billion of unused capacity under its credit facilities. See Note 14 to the Consolidated Financial Statements for more information.~~

~~A summary of Dominion Energy’s cash flows is presented below:~~

2017

2016

(millions)

Cash and cash equivalents at January 1

$
261

$
607

Cash flows provided by (used in):

Operating activities

3,664

3,386

Investing activities

(4,873
)

(9,029
)
Financing activities

1,175

5,287

Net decrease in cash and cash equivalents

(34
)

(356
)
Cash and cash equivalents at September 30

$
227

$
251

~~Operating Cash Flows~~

~~Net cash provided by Dominion Energy’s operating activities increased $278 million, primarily due to the operations acquired~~Item 7. MD&A in the Dominion Energy Questar Combination being included for all of 2017, an electric utility capacity benefit, derivative activities and proceeds from the assignment of the electric transmission tower rental portfolio, partially offset by lower deferred fuel cost recoveries in the Virginia jurisdiction, milder weather in Dominion Energy’s electric utility service territory, higher interest expense, lower revenue from Cove Point’s import contracts and Dominion Energy’s contribution to Dominion Energy Questar’s pension plan.

~~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 Energy's 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'Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022.

~~Credit Risk~~

Analysis of Cash Flows

Presented below are selected amounts related to Dominion Energy’s ~~exposure~~cash flows:


	2023			2022
(millions)
Cash, restricted cash and equivalents at January 1	$	341		$	408
Cash flows provided by (used in):
Operating activities		3,194			1,361
Investing activities		(5,014	)		(5,148	)
Financing activities		1,794			3,786
Net increase (decrease) in cash, restricted cash and equivalents		(26	)		(1	)
Cash, restricted cash and equivalents at June 30	$	315		$	407

Operating Cash Flows

Net cash provided by Dominion Energy's operating activities increased $1.8 billion, primarily due to ~~potential concentrations~~higher deferred fuel and purchased gas cost recoveries ($1.3 billion), lower margin deposits ($602 million), a decrease in refund payments to Virginia electric customers associated with the settlement of ~~credit risk results primarily from its energy marketing~~the 2021 Triennial Review ($282 million), partially offset by an increase in interest payments driven by higher interest rates and price risk management activities. Presented below is a summary of Dominion Energy’s credit exposure as of September 30, 2017 for these activities. Gross credit exposure for each counterparty is calculated prior to the application of collateralborrowings ($300 million) and ~~represents outstanding receivables plus any unrealized on- or off-balance sheet exposure, taking into account contractual netting rights.~~changes in working capital ($147 million).

Gross Credit
Exposure

Credit
Collateral

Net Credit
Exposure

(millions)

Investment grade⁽¹⁾

$
26

$
—

$
26

Non-investment grade⁽²⁾

3

—

3

No external ratings:

Internally rated—investment grade⁽³⁾

8

—

8

Internally rated—non-investment grade⁽⁴⁾

33

—

33

Total

$
70

$
—

$
70

~~(1)~~

Designations as investment grade are based upon minimum credit ratings assigned by Moody’s Investors Service and Standard & Poor’s. The five largest counterparty exposures, combined, for this category represented approximately 32% of the total net credit exposure.

~~(2)~~

~~The five largest counterparty exposures, combined, for this category represented approximately 4% of the total net credit exposure.~~

~~(3)~~

~~The five largest counterparty exposures, combined, for this category represented approximately 11% of the total net credit exposure.~~

~~(4)~~

~~The five largest counterparty exposures, combined, for this category represented approximately 18% of the total net credit exposure.~~

Investing Cash Flows

Net cash used in Dominion Energy’s investing activities decreased ~~$4.2 billion,~~$134 million, primarily due to the absence of ~~the acquisition~~an issuance of ~~Dominion Energy Questar~~a short-term deposit ($2.0 billion) and ~~decreases~~lower acquisitions of solar development projects ($109 million), substantially offset by an increase in plant construction and other property additions ($1.6 billion), a decrease in proceeds from the sale of assets and equity method investments ($135 million) and the absence of withdrawals from Kewaunee's nuclear decommissioning trust ($80 million).

Financing Cash Flows

Net cash provided by Dominion Energy's financing activities decreased $2.0 billion primarily due to a $2.9 billion decrease due to net repayments of long-term debt in 2023 versus net issuances in 2022, the absence of the settlement of the stock purchase contract component of the 2019 Equity Units in 2022 ($1.6 billion) and a decrease in supplemental credit facility borrowings ($450 million), partially offset by ~~an increase in acquisitions~~the issuance of ~~solar development projects~~364-day term loan facility borrowings ($2.5 billion) and ~~increased investment in Atlantic Coast Pipeline.~~higher net issuances of short-term debt ($387 million).

~~Financing Cash Flows~~Credit Facilities and ~~Liquidity~~Short-Term Debt

~~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'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2022, Dominion Energy generally uses proceeds from short-term borrowings, including commercial paper, to satisfy short-term cash requirements not met through cash from operations. The levels of borrowing may vary significantly during the ~~ability~~course of the year, depending on the timing and amount of cash requirements not satisfied by cash from operations. There have been no significant changes to ~~borrow funds~~ Dominion Energy’s use of credit facilities and/or ~~issue securities~~short-term debt during the six months ended June 30, 2023.

Joint Revolving Credit Facility

Dominion Energy maintains a $6.0 billion joint revolving credit facility which provides for a discount in the pricing of certain annual fees and amounts borrowed by Dominion Energy under the ~~return demanded by investors are affected by~~facility if Dominion Energy achieves certain annual renewable electric generation and diversity and inclusion objectives. At June 30, 2023, Dominion Energy had $1.8 billion of unused capacity under its joint revolving credit ~~ratings. In addition,~~facility. See Note 16 to the ~~raising~~Consolidated Financial Statements in this report for the balances of ~~external capital is subject to certain regulatory requirements, including~~commercial paper and letters of credit outstanding.

Dominion Energy Reliability InvestmentSM Program

Dominion Energy has an effective shelf registration statement with the SEC for the sale of up to $3.0 billion of variable denomination floating rate demand notes, called Dominion Energy Reliability InvestmentSM. The registration limits the principal amount that may be outstanding at any one time to $1.0 billion. The notes are offered on a continuous basis and bear interest at a floating rate per annum determined by the Dominion Energy Reliability Investment Committee, or its designee, on a weekly basis. The notes have no stated maturity date, are non-transferable and may be redeemed in whole or in part by Dominion Energy or at the investor’s option at any time. At June 30, 2023, Dominion Energy’s Consolidated Balance Sheets include $403 million with respect to such notes presented within short-term debt. The proceeds are used for general corporate purposes and to repay debt.

Other Facilities

In addition to the primary sources of short-term liquidity discussed above, from time to time Dominion Energy enters into separate supplementary credit facilities or term loans as discussed in Note 16 to the Consolidated Financial Statements in this report.

In January 2023, Dominion Energy entered into a $2.5 billion 364-day term loan facility which bears interest at a variable rate and will mature in January 2024 with the proceeds to be used to repay existing long-term debt and short-term debt upon maturity and for other general corporate purposes. Concurrently, Dominion Energy borrowed an initial $1.0 billion with the proceeds used to repay long-term debt. In February and March 2023, Dominion Energy borrowed $500 million and $1.0 billion, respectively, with the proceeds used for general corporate purposes and to repay long-term debt.

In July 2023, Dominion Energy entered into two $600 million 364-day term loan facilities which bear interest at a variable rate and will mature in July 2024 with the proceeds to be used to repay existing long-term debt and/or short-term debt upon maturity and for other general corporate purposes. Subsequently in July 2023, Dominion Energy borrowed an initial $750 million in the aggregate under these facilities with the proceeds used to repay short-term debt and for general corporate purposes. Dominion Energy is permitted to make up to three additional borrowings under each agreement through November 2023, at which point any unused capacity will cease to be available to Dominion Energy. The agreements contain certain ~~issuances.~~mandatory early repayment provisions, including that any after-tax proceeds in connection with a sale of Dominion Energy’s noncontrolling interest in Cove Point, following the repayment of DECP Holding’s term loan secured by its noncontrolling interest in Cove Point, be applied to any outstanding borrowings under the facilities.

Long-Term Debt

Sustainability Revolving Credit Agreement

Dominion Energy maintains a $900 million Sustainability Revolving Credit Agreement which matures in 2024 and bears interest at a variable rate. The facility offers a reduced interest rate margin with respect to borrowed amounts allocated to certain environmental sustainability or social investment initiatives. In March 2023, Dominion Energy borrowed $450 million with the proceeds used for general corporate purposes. In April 2023, Dominion Energy repaid $450 million borrowed for general corporate purposes. At June 30, 2023, Dominion Energy had $450 million borrowed to support environmental sustainability and social investment initiatives.

Issuances and Borrowings of Long-Term Debt

During the six months ended June 30, 2023, Dominion Energy issued or borrowed the following long-term debt. Unless otherwise noted, the proceeds were used for the repayment of existing indebtedness and for general corporate purposes.

Month

Type

Public / Private

Entity

Principal

Rate

Stated Maturity

(millions)

March

Senior notes

Public

Virginia Power

750

5.000

2033

March

Senior notes

Public

Virginia Power

750

5.450

2053

Total issuances and borrowings

1,500

Dominion Energy currently meets the definition of a well-known seasoned issuer under SEC rules governing the registration, ~~communications~~communication 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 provided by~~As the comprehensive business review announced in November 2022 is still in progress, Dominion ~~Energy's financing activities decreased $4.1 billion, primarily due~~Energy is uncertain as to the ~~absence~~amount of long-term debt it anticipates issuing in 2023. Dominion Energy expects to issue long-term debt to satisfy cash needs for capital expenditures and maturing long-term debt to the extent such amounts are not satisfied from cash available from operations

following the payment of dividends and any borrowings made from unused capacity of Dominion Energy’s credit facilities discussed above. The raising of external capital is subject to certain regulatory requirements, including registration with the SEC for certain issuances.

Repayments, Repurchases and Redemptions of Long-Term Debt

Dominion Energy may from time to time reduce its outstanding debt and level of interest expense through redemption of debt ~~and common stock issuances utilized~~securities prior to ~~finance~~maturity or repurchases of debt securities in the ~~Dominion Energy Questar Combination.~~open market, in privately negotiated transactions, through tender offers or otherwise.

The following long-term debt was repaid, repurchased or redeemed during the six months ended June 30, 2023:

Month

Type

Entity

Principal (1)

Rate

Stated Maturity

(millions)

Debt scheduled to mature in 2023

Multiple

1,787

various

Early redemptions

None

Total repayments, repurchases and redemptions

1,787

(1)

Total amount redeemed prior to maturity includes remaining principal plus accrued interest.

See ~~Notes 3 and 14~~Note 18 to the Consolidated Financial Statements in ~~this report for further information regarding Dominion Energy's 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'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016, there~~2022 for additional information regarding scheduled maturities of Dominion Energy’s long-term debt, including related average interest rates.

As discussed in Note 10 to the Consolidated Financial Statements in this report, DECP Holding's term loan secured by its noncontrolling interest in Cove Point is required to be repaid in connection with closing of Dominion Energy's July 2023 agreement with BHE for the sale of its 50% noncontrolling limited partnership interest in Cove Point, which is expected to occur by the end of 2023.

Remarketing of Long-Term Debt

In June 2023, Virginia Power remarketed three series of tax-exempt bonds, with an aggregate outstanding principal of $160 million to new investors. All three bonds will bear interest at a ~~discussion on the use~~coupon of ~~capital markets by~~3.65% until October 2027, after which they will bear interest at a market rate to be determined at that time. Dominion Energy ~~as well as the impact of credit ratings on the accessibility and costs of using these markets.~~ does not expect to remarket any other long-term debt in 2023.

Credit Ratings

As ~~of September 30, 2017, there have been no changes in Dominion Energy's credit ratings.~~

~~Debt Covenants~~

~~In the~~ ~~Debt Covenants~~ ~~section of MD&A~~discussed in the ~~Companies'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016, there~~2022, Dominion Energy’s credit ratings affect its liquidity, cost of borrowing under credit facilities and collateral posting requirements under commodity contracts, as well as the rates at which it is able to offer debt securities. The credit ratings for Dominion Energy are affected by its financial profile, mix of regulated and nonregulated businesses and respective cash flows, changes in methodologies used by the ratings agencies and event risk, if applicable, such as major acquisitions or dispositions. A credit rating is not a ~~discussion~~recommendation to buy, sell or hold securities and should be evaluated independently of any other rating. In April 2023, Standard & Poor’s affirmed its credit ratings but revised its outlook for Dominion Energy from stable to negative. Dominion Energy cannot predict the potential impact the negative outlook at Standard & Poor’s could have on its liquidity, cost of borrowing under credit facilities and collateral posting requirements under commodity contracts, as well as the ~~various covenants present in the enabling agreements underlying Dominion Energy's debt. As of September 30, 2017, there~~rates at which it is able to offer debt securities. There have been no ~~material~~other changes to debt covenants, nor any events of default under Dominion Energy's debt covenants. Pursuant to a waiver received in April 2016 and in connection with the closing of the Dominion Energy Questar Combination, the 65% maximum debt to total capital ratio in Dominion Energy’s credit agreements was, with respect to Dominion Energy only, temporarily increased to 70% through the fiscal quarter ended June 30, 2017. Effective July 2017, the maximum debt to total capital ratio in Dominion Energy’s credit agreements was reset to 65%.

~~Future Cash Payments for Contractual Obligations and Planned Capital Expenditures~~

As of September 30, 2017, there have been no material changes outside the ordinary course of business to Dominion Energy's contractual obligations nor any material changes to planned capital expenditures as disclosed in MD&Aratings from those described in the ~~Companies'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022.

~~Use of Off-Balance Sheet Arrangements~~Financial Covenants

As ~~of September 30, 2017, there have been no material changes~~discussed in the ~~off-balance sheet arrangements disclosed in MD&A in the Companies'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022, Dominion Energy is subject to various covenants present in the enabling agreements underlying Dominion Energy’s debt. As of June 30, 2023, there have been no material changes to covenants, nor any events of default under Dominion Energy’s covenants.

~~Future Issues~~76

Common Stock, Preferred Stock and Other ~~Matters~~Equity Securities

~~The following~~In the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022, there is a 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 Energy’s existing equity financing programs, including an at-the-market program and Dominion Energy Direct®. During the six months ended June 30, 2023, Dominion Energy issued $85 million of stock through these programs. Dominion Energy's at-the-market program expired in June 2023. See Note 16 to the Consolidated Financial Statements in this report for additional information.

As the comprehensive business review announced in November 2022 is still in progress, Dominion Energy is uncertain as to the amount of common stock that ~~may impact future results~~it anticipates issuing in 2023. However, Dominion Energy anticipates raising similar amounts of ~~operations, financial condition and/~~capital through Dominion Energy Direct® in 2023 compared to 2022 and 2021. The raising of external capital is subject to certain regulatory requirements, including registration with the SEC for certain issuances.

As of June 30, 2023, there have been no material changes to the Board of Directors authorization to repurchase Dominion Energy stock, or ~~cash flows. This~~the remaining available capacity under this authorization, disclosed in the Repurchases of Equity Securities section ~~should be read in conjunction with~~ ~~Item 1. Business~~ ~~and~~ ~~Future Issues and Other Matters~~ inof MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016~~2022. Dominion Energy has not repurchased through June 30 and ~~Future Issues and Other Matters~~ ~~in MD&A~~does not plan to repurchase in the ~~Companies’ Quarterly Reports~~remainder of 2023 any shares of its common stock, except for shares tendered by employees to satisfy tax withholding obligations on ~~Form 10-Q for the quarters ended March 31, 2017 and~~vested restricted stock.

Capital Expenditures

As of June 30, ~~2017.~~

~~Environmental Matters~~

2023, there have been no material changes to 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 increasedEnergy’s expectation for planned capital ~~operating and other costs~~expenditures as ~~a result of compliance, remediation, containment and monitoring obligations. See Note 22 to the Consolidated Financial Statements~~disclosed in the ~~Companies'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2022.

Dividends

Dominion Energy believes that its operations provide a stable source of cash flow to contribute to planned levels of capital expenditures and maintain or grow the dividend on common shares. See Note 1516 to the Consolidated Financial Statements in ~~the Companies’ Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017, and in~~ this report for additional information ~~on various environmental matters.~~regarding Dominion Energy’s outstanding preferred stock and associated dividend rates.

~~Air~~Subsidiary Dividend Restrictions

~~In August 2015, the EPA issued final carbon standards for existing fossil fuel power plants. Known as the Clean Power Plan, the rule uses a set~~As of measures for reducing emissions from existing sources that includes efficiency improvements at coal plants, displacing coal-fired generation with increased utilization of natural gas combined cycle units and expanding renewable resources. The new rule requires states to impose standards of performance limits for existing fossil fuel-fired electric generating units or equivalent statewide intensity-based or mass-based CO₂ binding goals or limits. States are required to submit final plans identifying how they will comply with the rule by September 2018. The EPA also issued a proposed federal implementation plan and model trading rule that states can adopt or that would be put in place if, in responseJune 30, 2023, there have been no material changes to the ~~final guidelines, a state either does not submit a state plan or its plan is not approved by the EPA. The~~

~~final rule has been challenged~~subsidiary dividend restrictions disclosed in the ~~U.S. Court~~Dividends section of Appeals for the D.C. Circuit. In February 2016, the U.S. Supreme Court issued a stay of the Clean Power Plan until the disposition of the petitions challenging the rule now before the Court of Appeals, and, if such petitions are filedMD&A in the future, before the U.S. Supreme Court. In June 2016, the Governor of Virginia signed an executive order directing the Virginia Natural Resources Secretary to convene a workgroup charged with recommending concrete steps to reduce carbon pollution from power plants which could include reductions at levels similar to the Clean Power Plan as an option. In March 2017, the President issued an Executive Order directing the EPA to undertake a review of the Clean Power Plan that could result in significant revisions to, or rescinding of, the rule. In April 2017, the U.S. Court of Appeals for the D.C. Circuit issued an order suspending the cases challenging the Clean Power Plan for 60 days to allow the EPA time to determine whether to revise or rescind the rule. Also ~~in April 2017, the~~ EPA issued a notice withdrawing the proposed federal implementation plan and model trading rules. In June 2017, the Governor of Virginia issued a directive for development of state carbon regulations with a December 2017 deadline for submittal of draft rules to the Virginia State Air Pollution Control Board for approval to notice for public comment. In October 2017, the EPA issued a proposed rule to repeal the Clean Power Plan on the basis that the rule promulgated in 2015 exceeds the EPA’s authority under the CAA. The proposal does not include a replacement rule. The proposal also does not impact the EPA’s regulation of GHG emissions from stationary sources under the CAA permitting programs or the GHG performance standards for new sources, which remain in place. Given these developments and associated federal and state regulatory and legal uncertainties, Dominion Energy cannot predict the potential financial statement impacts but believes the potential expenditures to comply could be material.

~~State Actions~~

~~In August 2017, the Ozone Transport Commission released a draft model rule for control of NO~~_x 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. Several states in which Dominion Energy operates, including Pennsylvania, New York and Maryland, are moving ahead with state-specific climate change regulations, including methane. Dominion Energy cannot currently estimate the potential financial statements impacts on results of operations, financial condition and/or cash flows related to these matters.

~~Significant Power Delivery Project~~

In September 2017, Virginia Power filed an application with the Virginia Commission for a CPCN to rebuild and operate in Augusta County, Virginia approximately 18 miles of the existing 500 kV transmission line between the Dooms substation and the Valley substation, along with associated substation work, for a total estimated cost of approximately $65 million. This case is pending.

~~Significant Gas Infrastructure Projects~~

~~Eastern Market Access~~

In November 2016, Cove Point filed an application to request FERC authorization to construct the approximately $150 million Eastern Market Access Project. Construction on the project is expected to begin in the first quarter of 2018, and the project facilities are expected to be placed into service in late 2018.

~~Atlantic Coast Pipeline~~

In October 2017, Atlantic Coast Pipeline received the FERC order authorizing the construction and operation of an approximately 600-mile natural gas pipeline running from West Virginia through Virginia to North Carolina. The project remains subject to other pending federal and state approvals.

~~Other Matters~~

While management currently has no plans which may affect the carrying value of Millstone, based on potential future economic and other factors, including, but not limited to, market power prices, results of capacity auctions, legislative and regulatory solutions to ensure nuclear plants are fairly compensated for their carbon-free emissions, and the impact of final rules from the EPA and the efforts of states to implement those final rules; there is risk that Millstone may be evaluated for an early retirement date. Should management make any decision on a potential early retirement date, the precise date and the resulting financial statement impacts, which could be material to Dominion Energy, may be affected by a number of factors, including any potential regulatory or legislative solutions, results of any transmission system reliability study assessments, and decommissioning requirements, among other factors.

~~Legal Matters~~

~~See Notes 13 and 22 to the Consolidated Financial Statements and~~ ~~Item 3. Legal Proceedings~~ ~~in the Companies'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016, Notes 12~~2022.

Collateral and 15Credit Risk

As of June 30, 2023, there have been no material changes to the ~~Consolidated Financial Statements~~collateral requirements disclosed in the ~~Companies’ Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017~~Collateral and ~~June 30, 2017, and~~ ~~Item 1. Legal Proceedings~~ ~~in this report for additional information on various legal matters.~~

~~Regulatory Matters~~

~~See Note 13 to the Consolidated Financial Statements~~Credit Risk section of MD&A in the ~~Companies'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2022.

Dominion Energy’s exposure to potential concentrations of credit risk results primarily from its energy marketing and price risk management activities. Presented below is a summary of Dominion Energy’s credit exposure at June 30, 2023 for these activities. Gross credit exposure for each counterparty is calculated as outstanding receivables plus any unrealized on- or off-balance sheet exposure, taking into account contractual netting rights.


	Gross Credit Exposure		Credit Collateral		Net Credit Exposure
(millions)
Investment grade(1)	$	166	$	—	$	166
Non-investment grade(2)		2		—		2
No external ratings:
Internally rated—investment grade(3)		15		2		13
Internally rated—non-investment grade(4)		28		1		27
Total(5)	$	211	$	3	$	208

(1)

(2)

The five largest counterparty exposures, combined, for this category represented approximately 1% of the total net credit exposure.

(3)

The five largest counterparty exposures, combined, for this category represented approximately 6% of the total net credit exposure.

(4)

The five largest counterparty exposures, combined, for this category represented approximately 9% of the total net credit exposure.

(5)

Excludes long-term purchase power agreements entered to satisfy legislative or state regulatory commission requirements.

Fuel and Other Purchase Commitments

There have been no material changes outside of the ordinary course of business to Dominion Energy’s fuel and other purchase commitments included in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022.

Other Material Cash Requirements

As of June 30, 2023, there have been no material changes outside of the ordinary course of business to Dominion Energy’s other material cash requirements included in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022. Such obligations include:

•

Operating and finance lease obligations – See Note 14 to the Consolidated Financial Statements in this report;

•

Regulatory liabilities – See Note 12 to the Consolidated Financial Statements in this report;

•

AROs – See Note 14 to the Consolidated Financial Statements in the Companies’ ~~Quarterly Reports~~Annual Report on Form ~~10-Q~~10-K for the ~~quarters~~year ended ~~March~~December 31, ~~2017~~2022;

•

Employee benefit plan obligations – See Note 22 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022;

•

Charitable commitments – See Note 23 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022;

•

Off-balance sheet leasing arrangements – See Note 15 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022; and ~~June 30, 2017,~~

•

Guarantees – See Note 17 to the Consolidated Financial Statements in this report.

Future Issues and Other Matters

See Item 1. Business, Future Issues and Other Matters in MD&A and Notes 13 and 23 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022 and Notes 13 and 17 to the Consolidated Financial Statements in this report for additional information on various environmental, regulatory, ~~matters.~~legal and other matters that may impact future results of operations, financial condition and/or cash flows.

~~ITEM~~ 3.

Business Review

In November 2022, Dominion Energy announced the commencement of a business review of value-maximizing strategic business actions, alternatives to its current business mix and capital allocation and regulatory options which may assist customers to manage costs and provide greater predictability to its long-term, state-regulated utility value proposition. In April 2023, the legislative process in Virginia was substantially completed resulting in new legislation which will shift $350 million of annual revenue requirement for costs currently recovered through riders into base rates effective July 2023, eliminate the ability of Virginia Power to utilize CCROs and adjust the parameters for determining an authorized ROE and revenue sharing. In addition, new legislation allows Virginia Power to apply for the securitization of certain deferred fuel costs as well as seek approval for a noncontrolling equity financing partner for the CVOW Commercial Project. In July 2023, Dominion Energy entered an agreement to sell its 50% noncontrolling limited partner interest in Cove Point to BHE as discussed in Note 10 to the Consolidated Financial Statements in this report. As part of the on-going business review, Dominion Energy may consider additional divestiture of all or a portion of certain operations. While the ultimate impacts cannot be estimated until the review is completed, which is expected to occur in the third quarter of 2023, implementation of recommendations resulting from the business review could have a material impact on Dominion Energy's future results of operations, financial condition and/or cash flows.

Virginia Legislation

The 2023 General Assembly session in Virginia included several proposals, including those ultimately enacted into law, related to Virginia Power’s retail base rates and other cost recovery mechanisms. In April 2023, legislation was enacted that amended several key provisions of the Regulation Act, as previously amended by the GTSA. The new legislation will shift $350 million of annual revenue requirement for costs currently recovered under riders into base rates effective July 2023, eliminate the ability of Virginia Power to utilize CCROs and adjust the parameters for determining an authorized ROE and revenue sharing. In addition, this legislation reestablishes biennial base rate reviews, sets a target capitalization ratio and permits Virginia Power to apply for the securitization of certain deferred fuel costs. See Note 13 to the Consolidated Financial Statements for additional information. In March 2023, legislation was enacted that permits Virginia Power to seek approval for a noncontrolling equity financing partner for the CVOW Commercial Project. In addition, in May 2023 legislation was enacted that amended certain portions of the VCEA, which qualifies generation produced by Virginia Power’s biomass electric generating stations as renewable energy and eliminates the

mandated retirement by the end of 2028 of such facilities. While Dominion Energy is unable to estimate the ultimate financial statement impacts related to the newly enacted legislation, it expects there could be a material impact to its results of operations, financial condition and/or cash flows.

Future Environmental Regulations

In March 2023, the EPA released a proposed rule to further revise the Effluent Limitations Guidelines for the Steam Electric Power Generating Category, which apply primarily to wastewater discharges at coal and oil steam generating stations. Also in March 2023, the EPA released its first proposed rule to establish national drinking water standards for PFAS. Dominion Energy anticipates that the EPA will release additional rulemakings as part of an overall strategy to identify and mitigate PFAS exposure. In April 2023, the EPA released a proposal to tighten aspects of the Mercury and Air Toxics Standards, including the reduction of emissions limits for filterable particulate matter, and requiring the use of continuous emissions monitoring systems to demonstrate compliance. In May 2023, the EPA proposed a package of rules designed to reduce CO2 emissions from certain fossil fuel-fired electric generating units. The proposal sets standards of performance and emission guidelines for CO2 emissions from new gas-fired combustion turbines and modified coal-fired steam generating units. The proposed rulemaking package also proposes emission guidelines, including presumptive emission limits, for existing coal, oil and gas-fired steam generating units and certain gas-fired combustion turbines. Also in May 2023, the EPA released a proposed rule to regulate inactive surface impoundments located at retired generating stations that contained CCR and liquids after October 2015, and certain other inactive or previously closed surface impoundments, landfills or other areas that contain accumulations of CCR. Until the EPA ultimately takes final action on these rulemakings, Dominion Energy is unable to predict whether or to what extent the new rules will ultimately require additional controls. The expenditures required to implement additional controls could have a material impact on Dominion Energy’s financial condition and cash flows.

Federal Income Tax Laws

In April 2023, the IRS issued safe harbor guidance to taxpayers on the treatment of amounts paid to repair, maintain, replace, or improve natural gas distribution property, including whether expenditures should be deducted as repairs or capitalized and depreciated on tax returns. The guidance includes safe harbor tax accounting methods which a taxpayer may choose to elect and provides special transition rules and incentives that vary depending on which tax year is the year of change. Dominion Energy is evaluating this new guidance and cannot currently estimate the potential financial statement impacts, but there could be a material impact to its results of operations, financial condition and/or cash flows.

Offshore Wind Vessel Leasing Arrangement

In December 2020, Dominion Energy signed an agreement (subsequently amended in December 2022 and May 2023) with a lessor to complete construction of and lease a Jones Act compliant offshore wind installation vessel. This vessel is designed to handle current turbine technologies as well as next generation turbines. The lessor is providing equity and has obtained financing commitments from debt investors, totaling $625 million, to fund the estimated project costs. The project is expected to be completed in late 2024 or early 2025. The initial lease term will commence once construction is substantially complete and the vessel is delivered and will mature in November 2027. See Note 14 to the Consolidated Financial Statements in this report for additional information.

Southeast Energy Exchange Market

In July 2023, the U.S. Court of Appeals for the District of Columbia Circuit vacated certain of FERC’s previous orders authorizing the SEEM market, including the tariff amendments to provide transmission service for transactions in SEEM. Dominion Energy is evaluating this ruling and currently cannot estimate the potential financial statement impacts.

ITEM 3.

QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

The matters discussed in this Item may contain “forward-looking statements” as described in the introductory paragraphs under Part I,I., Item 2. MD&A in this report. The reader’s attention is directed to those paragraphs for discussion of various risks and uncertainties that may impact the Companies.

Market Risk Sensitive Instruments and Risk Management

The ~~Companies'~~Companies’ financial instruments, commodity contracts and related financial derivative instruments are exposed to potential losses due to adverse changes in commodity prices, interest rates, foreign currency exchange rates and equity ~~security~~securities prices as described below. Commodity price risk is present in ~~Dominion Energy's and Virginia Power's~~the Companies’ electric operations and Dominion ~~Energy's and Dominion Energy Gas'~~Energy’s natural gas procurement and marketing operations due to the exposure to market shifts in prices received and paid for electricity, natural gas and other commodities. The Companies use commodity derivative contracts to manage price risk exposures for these operations. Interest rate risk is generally related to their outstanding debt and future issuances of debt. In addition, the Companies are exposed to investment price risk through various portfolios of equity and debt securities. The Companies’ exposure to foreign currency exchange rate risk is related to certain fixed price contracts associated with the CVOW Commercial Project which it manages through foreign currency exchange rate derivatives. The contracts include services denominated in currencies other than the U.S. dollar for approximately €2.6 billion and 5.1 billion kr. In addition, certain of the fixed price contracts, approximately €0.7 billion, contain commodity indexing provisions linked to steel.

The following sensitivity analysis estimates the potential loss of future earnings or fair value from market risk sensitive instruments over a selected time period due to a 10% change in commodity prices, interest rates or ~~interest~~foreign currency exchange rates.

Commodity Price Risk

To manage price risk, ~~Dominion Energy and Virginia Power~~the Companies hold commodity-based derivative instruments held for non-trading purposes associated with purchases and sales of electricity, natural gas and other energy-related ~~products and Dominion Energy Gas holds commodity-based financial derivative instruments held for non-trading purposes associated with purchases and sales of natural gas and other energy-related~~ products.

The derivatives used to manage commodity price risk are executed within established policies and procedures and may include instruments such as futures, forwards, swaps, options and FTRs that are sensitive to changes in the related commodity prices. For sensitivity analysis purposes, the hypothetical change in market prices of commodity-based derivative instruments is determined based on models that consider the market prices of commodities in future periods, the volatility of the market prices in each period, as well as the time value factors of the derivative instruments. Prices and volatility are principally determined based on observable market prices.

A hypothetical 10% decrease in commodity prices would have resulted in a decrease in fair value of $28 million and $27 million of Dominion Energy's commodity-based derivative instruments as of September 30, 2017 and December 31, 2016, respectively.

A hypothetical 10% decrease in commodity prices would have resulted in a decrease in the fair value of $48 million and $62 million of Virginia Power's commodity-based derivative instruments as of September 30, 2017 and December 31, 2016, respectively.

A hypothetical 10% increase in commodity prices would have resulted in a decrease of $98 million and $52 million in the fair value of ~~$4 million of~~ Dominion ~~Energy Gas'~~Energy’s commodity-based derivative instruments as of ~~both September~~June 30, ~~2017~~2023 and December 31, ~~2016.~~2022, respectively.

A hypothetical 10% increase in commodity prices would have resulted in a decrease of $45 million and $25 million in the fair value of Virginia Power’s commodity-based derivative instruments as of June 30, 2023 and December 31, 2022, respectively.

The impact of a change in energy commodity prices on the Companies' commodity-based derivative instruments at a point in time is not necessarily representative of the results that will be realized when the contracts are ultimately settled. Net losses from commodity-based financial derivative instruments used for hedging purposes, to the extent realized, will generally be offset by recognition of the hedged transaction, such as revenue from physical sales of the commodity.

Interest Rate Risk

The Companies manage their interest rate risk exposure predominantly by maintaining a balance of fixed and variable rate debt. ~~They also enter into interest rate sensitive derivatives, including interest rate swaps and interest rate lock agreements.~~ For variable rate debt ~~and interest rate swaps designated under fair value hedging and~~ outstanding for ~~the Companies,~~Dominion Energy, a hypothetical 10% increase in market interest rates would ~~not have resulted~~result in a ~~material change~~$64 million and $37 million decrease in earnings at ~~September~~June 30, ~~2017~~2023 and December 31, 2022, respectively. For variable rate debt outstanding for Virginia Power, a hypothetical 10% increase in market interest rates would result in a $20 million and $14 million decrease in earnings at June 30, 2023 or December 31, ~~2016.~~2022, respectively.

The Companies also use interest rate derivatives, including forward-starting swaps, ~~as cash flow hedges of forecasted~~ interest ~~payments.~~rate swaps and interest rate lock agreements to manage interest rate risk. As of ~~September~~June 30, ~~2017,~~2023, Dominion Energy and Virginia Power had ~~$3.5~~$12.3 billion and ~~$1.5~~$2.9 billion, respectively, in aggregate notional amounts of these interest rate derivatives outstanding. A hypothetical 10% decrease in market interest rates would have resulted in a decrease of ~~$55~~$253 million and ~~$42~~$121 million, respectively, in the fair value of Dominion ~~Energy's~~Energy and Virginia ~~Power's~~Power’s interest rate derivatives at ~~September~~June 30, ~~2017.~~2023. As of December 31, ~~2016,~~2022, Dominion Energy and Virginia Power had ~~$2.9~~$12.7 billion and ~~$1.7~~$3.6 billion, respectively, in aggregate notional amounts of these interest rate derivatives outstanding. A hypothetical

10% decrease in market interest rates would have resulted in a decrease of ~~$58~~$274 million and ~~$45~~$156 million, respectively, in the fair value of Dominion ~~Energy's~~Energy and Virginia ~~Power's~~Power’s interest rate derivatives at December 31, ~~2016.~~2022.

Dominion Energy Gas holds foreign currency swaps for the purpose of hedging the foreign currency exchange risk associated with Euro denominated debt. As of September 30, 2017 and December 31, 2016, Dominion Energy and Dominion Energy Gas had $280 million (€250 million) in aggregate notional amounts of these foreign currency swaps outstanding. A hypothetical 10% decrease in market interest rates would have resulted in a $3 million and $5 million decrease in the fair value of Dominion Energy Gas' foreign currency swaps at September 30, 2017 and December 31, 2016, respectively.

The impact of a change in interest rates on the ~~Companies'~~Companies’ interest rate-based financial derivative instruments at a point in time is not necessarily representative of the results that will be realized when the contracts are ultimately settled. Net gains and/or losses from interest rate derivative instruments used for hedging purposes, to the extent realized, will generally be offset by recognition of the hedged transaction.

Foreign Currency Exchange Rate Risk

The Companies utilize foreign currency swaps to economically hedge the foreign currency exchange risk associated with fixed price contracts related to the CVOW Commercial Project denominated in foreign currencies. As of June 30, 2023 and December 31, 2022, Dominion Energy had €2.6 billion and €2.9 billion, respectively, in aggregate notional amounts of these foreign currency forward purchase agreements outstanding. A hypothetical 10% increase in exchange rates would have resulted in a decrease of $251 million and $284 million in the fair value of Dominion Energy’s foreign currency swaps at June 30, 2023 and December 31, 2022, respectively.

The impact of a change in exchange rates on the Companies’ foreign currency-based financial derivative instruments at a point in time is not necessarily representative of the results that will be realized when the contracts are ultimately settled. Net gains and/or losses from foreign exchange derivative instruments used for hedging purposes, to the extent realized, will generally be offset by recognition of the hedged transaction.

Investment Price Risk

~~Dominion Energy and Virginia Power~~The Companies are subject to investment price risk due to securities held as investments in nuclear decommissioning and rabbi trust funds that are managed by third-party investment managers. These trust funds primarily hold marketable securities that are reported in ~~Dominion Energy's and Virginia Power's~~the Companies’ Consolidated Balance Sheets at fair value.

Dominion Energy recognized net ~~realized~~investment gains (including investment income) on nuclear decommissioning and rabbi trust investments of ~~$137 million and $113~~$562 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023, and ~~2016, respectively,~~net investment losses (including investment income) on nuclear decommissioning and ~~$144~~rabbi trust investments of $981 million and $888 million for the six months ended June 30, 2022 and the year ended December 31, ~~2016.~~2022, respectively. Net realized gains and losses include gains and losses from the sale of investments as well as any other-than-temporary declines in fair value. Dominion Energy recorded in AOCI and regulatory liabilities, a net increase in unrealized gains on ~~these~~debt investments of ~~$271 million and $146~~$39 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023, and ~~2016, respectively,~~a net decrease in unrealized gains on debt investments of $191 million and ~~$183~~$196 million for six months ended June 30, 2022 and the year ended December 31, ~~2016.~~2022, respectively.

Virginia Power recognized net ~~realized~~investment gains (including investment income) on nuclear decommissioning trust investments of ~~$59 million and $51~~$283 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023, and ~~2016, respectively,~~net investment losses (including investment income) on nuclear decommissioning trust investments of $468 million and ~~$67~~$426 million for the six months ended June 30, 2022 and the year ended December 31, ~~2016.~~2022, respectively. Net realized gains and losses include gains and losses from the sale of investments as well as any other-than-temporary declines in fair value. Virginia Power recorded in AOCI and regulatory liabilities, a net increase in unrealized gains on ~~these~~debt investments of ~~$127 million and $77~~$24 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023, and ~~2016, respectively, and $93~~a net decrease in unrealized gains on debt investments of $106 million for both the six months ended June 30, 2022 and the year ended December 31, ~~2016.~~2022, respectively.

Dominion Energy sponsors pension and other postretirement employee benefit plans that hold investments in trusts to fund employee benefit payments. Virginia Power ~~and Dominion Energy Gas~~ employees participate in these plans. Differences between actual and expected returns on plan assets are accumulated and amortized during future periods. As such, any investment-related declines in these trusts will result in future increases in the net periodic cost recognized for employee benefit plans and will be included in the determination of the amount of cash to be contributed to the employee benefit plans.

ITEM 4. CONTROLS AND PROCEDURES

Senior management of ~~each of~~both Dominion Energy and Virginia Power, ~~and~~including Dominion Energy ~~Gas, including Dominion Energy’s,~~and Virginia Power’s ~~and Dominion Energy Gas'~~ CEO and CFO, evaluated the effectiveness of each ~~of their respective Company’s~~company’s disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation process, each of Dominion ~~Energy’s,~~Energy and Virginia Power’s ~~and Dominion Energy Gas'~~ CEO and CFO have concluded that each ~~of their respective Company’s~~company’s disclosure controls and procedures are effective.

~~There~~In the second quarter of 2023, Virginia Power transitioned to a new customer engagement and billing system. Throughout this system implementation, Dominion Energy and Virginia Power appropriately considered internal controls over financial reporting.

Other than with respect to this item, there were no changes ~~in Dominion Energy’s, Virginia Power’s, or Dominion Energy Gas' internal control over financial reporting~~ that occurred during the last fiscal quarter that ~~have~~ materially affected, or are reasonably likely to materially affect, ~~the Companies’~~Dominion Energy or Virginia Power’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Companies are ~~alleged~~parties to ~~be in violation~~various legal, environmental or in default under orders, statutes, rules or regulations relating to the environment, compliance plans imposed upon or agreed to by the Companies, or permits issued by various local, state and/or federal agencies for the construction or operation of facilities. Administrativeother regulatory proceedings, ~~may also be pending on these matters. In addition,~~including in the ordinary course of ~~business,~~business. SEC regulations require disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that the Companies ~~and their subsidiaries are involved in various legal~~reasonably believe will exceed a specified threshold. Pursuant to the SEC regulations, the Companies use a threshold of $1 million for such proceedings.

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

•

Notes 13 and 2223 to the Consolidated Financial Statements and Future Issues and Other Matters in MD&A in the ~~Companies'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016.~~

2022.

•

Notes 1213 and 1517 to the Consolidated Financial Statements and Future Issues and Other Matters in ~~the Companies’ Quarterly Reports on Form 10-Q for the quarter ended March 31, 2017.~~

~~Notes 12 and 15 to the Consolidated Financial Statements in the Companies’ Quarterly Reports on Form 10-Q for the quarter ended June 30, 2017.~~

~~Notes 12 and 15 to the Consolidated Financial Statements~~MD&A in this report.

ITEM 1A. RISK FACTORS

The ~~Companies'~~Companies’ businesses are influenced by many factors that are difficult to predict, involve uncertainties that may materially affect actual results and are often beyond the Companies’ control. A number of these risk factors have been identified in the ~~Companies'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2022, which should be taken into consideration when reviewing the information contained in this report. There have been no material changes with regard to the risk factors previously disclosed in the ~~Companies'~~Companies’ Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022. For other factors that may cause actual results to differ materially from those indicated in any forward-looking statement or projection contained in this report, see Forward-Looking Statements in MD&A in this report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Dominion Energy

~~ISSUER PURCHASES OF EQUITY SECURITIES~~Purchases of Equity Securities


Period	Total Number of Shares (or Units) Purchased(1)		Average Price Paid per Share (or Unit)(2)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares (or Units that May Yet Be Purchased under the Plans or Programs(3)
4/1/23 - 4/30/23		—	$	—		—	$ 0.92 billion
5/1/23 - 5/31/23		306		63.10		—	0.92 billion
6/1/23 - 6/30/23		1,366		49.02		—	0.92 billion
Total		1,672	$	51.60		—	$ 0.92 billion

Period

Total
Number of
Shares
(or Units)
Purchased⁽¹⁾

Average
Price Paid
per Share
(or Unit)⁽²⁾

Total Number
of Shares (or Units)
Purchased as Part
of Publicly
Announced Plans or
Programs

Maximum Number (or
Approximate Dollar
Value) of Shares (or Units)
that May Yet Be
Purchased under the Plans
or Programs⁽³⁾
7/1/17-7/31/17

—

$
—

—

19,629,059 shares/
$1.18 billion
8/1/17-8/31/17

217

77.30

—

19,629,059 shares/
$1.18 billion
9/1/17-9/30/17

5,932

79.50

—

19,629,059 shares/
$1.18 billion
Total

6,149

$
79.42

—

19,629,059 shares/
$1.18 billion
(1)

Represents shares of common stock that were tendered by employees to satisfy tax withholding obligations on vested restricted stock.

~~(1)~~

~~In August and September 2017, 217 shares and 5,932 shares, respectively, were tendered by employees to satisfy tax withholding obligations on vested restricted stock.~~

(2)

Represents the weighted-average price paid per share.

~~(2)~~

~~Represents the weighted-average price paid per share.~~

(3)

In November 2020, the Dominion Energy Board of Directors authorized the repurchase of up to $1.0 billion of shares of common stock. This repurchase program has no expiration date or price or volume targets and may be modified, suspended or terminated at any time. Shares may be purchased through open market or privately negotiated transactions or otherwise at the discretion of management subject to prevailing market conditions, applicable securities laws and other factors.

~~(3)~~

The remaining repurchase authorization is pursuant to repurchase authority granted by the Dominion Energy Board of Directors in February 2005, as modified in June 2007. The aggregate authorization granted by the Dominion Energy Board of Directors was 86 million shares (as adjusted to reflect a two-for-one stock split distributed in November 2007) not to exceed $4 billion.

ITEM 5. OTHER INFORMATION

During the last fiscal quarter, none of the Companies’ directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

ITEM 6. EXHIBITS


Exhibit Number	Description	Dominion Energy	Virginia Power	~~Dominion Energy Gas~~

~~3.1.a~~
3.1.a	Dominion Energy, Inc. Amended and Restated Articles of Incorporation, dated as ~~amended and restated, effective May 10, 2017~~of September 2, 2022 (Exhibit 3.1, Form 8-K filed ~~May 10, 2017,~~September 2, 2022, File No.1-8489).	X

3.1.b	Virginia Electric and Power Company Amended and Restated Articles of Incorporation, as in effect on October 30, 2014 (Exhibit 3.1.b, Form 10-Q filed November 3, 2014, File No. 1-2255).		X

~~3.1.c~~3.2.a	~~Articles of Organization of~~ Dominion Energy, ~~Gas Holdings, LLC (Exhibit 3.1, Form S-4 filed April 4, 2014, File No. 333-195066).~~			X

~~3.1.d~~	~~Articles of Amendment to the Articles of Organization of Dominion Energy Gas Holdings, LLC~~Inc. Bylaws, as amended and restated, effective May 10, 2023 (Exhibit 3.1, Form 8-K filed May ~~16, 2017,~~11, 2023, File No. ~~1-37591)~~1-8489).	X		X

~~3.2.a~~3.2.b	~~Dominion Energy, Inc. Amended and Restated Bylaws, effective May 10, 2017 (Exhibit 3.2, Form 8-K filed May 10, 2017, File No. 1-8489).~~	X

~~3.2.b~~	Virginia Electric and Power Company Amended and Restated Bylaws, effective June 1, 2009 (Exhibit 3.1, Form 8-K filed June 3, 2009, File No. 1-2255).		X

~~3.2.c~~4	~~Operating Agreement of Dominion Energy Gas Holdings, LLC, amended and restated as of May 12, 2017 (Exhibit 3.2, Form 8-K filed May 16, 2017, File No. 001-37591).~~			X

~~4.1~~	Dominion Energy, Inc., and Virginia Electric and Power Company ~~and Dominion Energy Gas Holdings, LLC~~ agree to furnish to the Securities and Exchange Commission upon request any other instrument with respect to long-term debt as to which the total amount of securities authorized does not exceed 10% of any of their total consolidated assets.	X	X	X

~~4.2~~10.1	Dominion Energy, Inc. Deferred Compensation Plan, effective July 1, 2021 (Exhibit 10.18, Form of Senior Indenture, dated June 1, 1998, between Virginia Electric and Power Company and The Bank of New York Mellon (as successor trustee to JP Morgan Chase Bank (formerly The Chase Manhattan Bank)), as Trustee (Exhibit 4(iii), Form S-3 Registration Statement10-K for the fiscal year ended December 31, 2020, filed February ~~27, 1998,~~25, 2021, File No. ~~333-47119);~~ 1-8489), as amended September 23, 2021 (Exhibit 10.1, Form ~~of Nineteenth Supplemental and Amending Indenture, dated November 1, 2008 (Exhibit 4.2, Form 8-K~~10-Q filed November 5, ~~2008,~~2021, File No. ~~1-2255)~~1-8489); , ~~Twenty-Fifth Supplemental Indenture, dated~~ as ~~of March 1, 2013 (Exhibit 4.3, Form 8-K filed March 14, 2013, File No. 1-2255)~~amended May 10, 2023 (filed herewith).	X	X

~~4.3~~31.a	Senior Indenture, dated as of September 1, 2017, between Virginia Electric and Power Company and U.S. Bank National Association, as Trustee (Exhibit 4.1, Form 8-K filed September 13, 2017, File No.000-55337); ~~First Supplemental Indenture, dated as of September 1, 2017 (Exhibit 4.2, Form 8-K filed September 13, 2017, File No.000-55337).~~	X	X

~~12.1~~	~~Ratio of earnings to fixed charges for Dominion Energy, Inc. (filed herewith).~~	X

~~12.2~~	~~Ratio of earnings to fixed charges for Virginia Electric and Power Company (filed herewith).~~		X

~~12.3~~	~~Ratio of earnings to fixed charges for Dominion Energy Gas Holdings, LLC (filed herewith).~~			X

~~31.a~~	Certification by Chief Executive Officer of Dominion Energy, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).	X

31.b	Certification by Chief Financial Officer of Dominion Energy, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).	X

31.c	Certification by Chief Executive Officer of Virginia Electric and Power Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).		X

31.d	Certification by Chief Financial Officer of Virginia Electric and Power Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).		X

~~Exhibit~~ ~~Number~~	~~Description~~	~~Dominion Energy~~	~~Virginia Power~~	~~Dominion Energy Gas~~

~~31.e~~32.a	~~Certification by Chief Executive Officer of Dominion Energy Gas Holdings, LLC pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).~~			X

~~31.f~~	~~Certification by Chief Financial Officer of Dominion Energy Gas Holdings, LLC pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).~~			X

~~32.a~~	Certification to the Securities and Exchange Commission by Chief Executive Officer and Chief Financial Officer of Dominion Energy, Inc. as required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).	X

32.b	Certification to the Securities and Exchange Commission by Chief Executive Officer and Chief Financial Officer of Virginia Electric and Power Company as required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).		X

~~32.c~~99	Certification to the Securities and Exchange Commission by Chief Executive Officer and Chief Financial Officer of Dominion Energy Gas Holdings, LLC as required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).			X

99	Condensed consolidated earnings statements (filed herewith).	X	X	X

101	The following financial statements from Dominion Energy, Inc.’s Quarterly Report on Form 10-Q for the quarter ended ~~September~~June 30, ~~2017,~~2023, filed on ~~November 1, 2017,~~August 4, 2023, formatted in ~~XBRL:~~iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income (iii) Consolidated Balance Sheets, ~~(iii)~~(iv) Consolidated Statements of Equity, ~~(iv) Consolidated Statements of Comprehensive Income,~~ (v) Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements. The following financial statements from Virginia Electric and Power Company’s Quarterly Report on Form 10-Q for the quarter ended ~~September~~June 30, ~~2017,~~2023, filed on ~~November 1, 2017,~~August 4, 2023, formatted in ~~XBRL:~~iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, ~~(iii)~~(iv) Consolidated Statements of Common Shareholder’s Equity (v) Consolidated Statements of Cash Flows, and ~~(iv)~~(vi) the Notes to Consolidated Financial Statements. ~~The following financial statements from Dominion Energy Gas Holdings, LLC’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, filed on November 1, 2017,~~	X	X

104	Cover Page Interactive Data File formatted in ~~XBRL: (i) Consolidated Statements of Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Cash Flows,~~iXBRL (Inline eXtensible Business Reporting Language) and ~~(v) the Notes to Consolidated Financial Statements.~~contained in Exhibit 101.	X	X
	X

SIGNATURE

~~SIGNATURE~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	DOMINION ENERGY, INC. Registrant

~~November 1, 2017~~August 4, 2023	/s/ Michele L. Cardiff
	Michele L. Cardiff Senior Vice President, Controller and Chief Accounting Officer

	VIRGINIA ELECTRIC AND POWER COMPANY Registrant

~~November 1, 2017~~August 4, 2023	/s/ Michele L. Cardiff
	Michele L. Cardiff Senior Vice President, Controller and Chief Accounting Officer

	~~DOMINION ENERGY GAS HOLDINGS, LLC~~ ~~Registrant~~

~~November 1, 2017~~	~~/s/ Michele L. Cardiff~~
	~~Michele L. Cardiff~~ ~~Vice President, Controller and~~ ~~Chief Accounting Officer~~

~~101~~


Commission File Number	Exact name of registrants as specified in their charters, address of principal executive offices and registrants’ telephone number	I.R.S. Employer Identification Number

001-08489	DOMINION ENERGY, INC. ~~Formerly Known As Dominion Resources, Inc.~~	54-1229715

000-55337	VIRGINIA ELECTRIC AND POWER COMPANY	54-0418825

~~001-37591~~	~~DOMINION ENERGY GAS HOLDINGS, LLC~~ ~~Formerly Known As Dominion Gas Holdings, LLC~~	~~46-3639580~~

	120 Tredegar Street Richmond, Virginia23219 ~~(804) 819-2000~~(804) 819-2284


Large accelerated filer	☒		Accelerated filer	☐	Emerging growth company	☐
Non-accelerated filer	☐	~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐
			~~Emerging growth company~~	☐


Large accelerated filer	☐		Accelerated filer	☐	Emerging growth company	☐
Non-accelerated filer	☒	~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐
			~~Emerging growth company~~	☐

~~Large accelerated filer~~	☐		~~Accelerated filer~~	☐
~~Non-accelerated filer~~	☒	~~(Do not check if a smaller reporting company)~~	~~Smaller reporting company~~	☐
			~~Emerging growth company~~	☐


		Page Number
	Glossary of Terms	3

	PART I. Financial Information

Item 1.	Financial Statements	78
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8063
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	9680
Item 4.	Controls and Procedures	9781

	PART II. Other Information

Item 1.	Legal Proceedings	9883
Item 1A.	Risk Factors	9883
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	9883
Item 6.5.	~~Exhibits~~Other Information	9983
Item 6.	Exhibits	84


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


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


Abbreviation or Acronym		Definition
~~2013 Equity Units~~2017 Tax Reform Act		~~Dominion Energy's 2013 Series A Equity Units~~An Act to Provide for Reconciliation Pursuant to Titles II and ~~2013 Series B Equity Units issued in June 2013~~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
~~2014~~2019 Equity Units		Dominion ~~Energy's 2014~~Energy’s 2019 Series A Equity Units issued in ~~July 2014~~June 2019, initially in the form of 2019 Series A Corporate Units, which consisted of a stock purchase contract and a 1/10 interest in a share of the Series A Preferred Stock
~~2016 Equity Units~~2021 Triennial Review		~~Dominion Energy's 2016 Series A Equity Units issued in August 2016~~Virginia Commission review of Virginia Power’s earned return on base rate generation and distribution services for the four successive 12-month test periods beginning January 1, 2017 and ending December 31, 2020
~~AFUDC~~2023 Biennial Review		Virginia Commission review of Virginia Power’s earned return on base rate generation and distribution services for the two successive 12-month test periods beginning January 1, 2021 and ending December 31, 2022 and prospective rate base setting for the succeeding annual periods beginning January 1, 2024 and ending December 31, 2025
2025 Biennial Review		Future Virginia Commission review of Virginia Power’s earned return on base rate generation and distribution services for the two successive 12-month test periods beginning January 1, 2023 and ending December 31, 2024 and prospective rate base setting for the succeeding annual periods beginning January 1, 2026 and ending December 31, 2027
ACE Rule		Affordable Clean Energy Rule
AFUDC		Allowance for funds used during construction
~~AOCI~~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 and Duke ~~and Southern Company Gas~~Energy
~~BACT~~Atlantic Coast Pipeline Project		~~Best available control technology~~A previously proposed approximately 600-mile natural gas pipeline running from West Virginia through Virginia to North Carolina which would have been owned by Dominion Energy and Duke Energy
bcf		Billion cubic feet
~~bcfe~~Bear Garden		~~Billion cubic feet equivalent~~
~~Brunswick County~~		A ~~1,376~~622 MW ~~combined cycle,~~combined-cycle, natural gas-fired power station in ~~Brunswick~~Buckingham County, Virginia
~~CAA~~BHE		~~Clean Air Act~~The legal entity, Berkshire Hathaway Energy Company, one or more of its consolidated subsidiaries (including Eastern Energy Gas Holdings, LLC, Northeast Midstream Partners, LP and Cove Point effective November 2020), or the entirety of Berkshire Hathaway Energy Company and its consolidated subsidiaries
~~CAISO~~CAA		~~California Independent System Operator~~Clean Air Act
CCR		Coal combustion residual
~~CEO~~CCRO		~~Chief Executive Officer~~Customer credit reinvestment offset
~~CERCLA~~CEO		Chief Executive Officer
CEP		Capital Expenditure Program, as established by House Bill 95, Ohio legislation enacted in 2011, deployed by East Ohio to recover certain costs associated with capital investment
CERCLA		Comprehensive Environmental Response, Compensation and Liability Act of 1980, also known as Superfund
CFO		Chief Financial Officer
CO2		Carbon dioxide
~~Companies~~Colonial Trail West		A 142 MW utility-scale solar power station located in Surry County, Virginia


Companies		Dominion Energy and Virginia Power, ~~and Dominion Energy Gas,~~ collectively
Contracted Assets		Contracted Assets operating segment
Cooling degree days		Units measuring the extent to which the average daily temperature is greater than 65 degrees Fahrenheit, or 75 degrees Fahrenheit in DESC’s service territory, calculated as the difference between 65 or 75 degrees, as applicable, and the average temperature for that day
Cove Point		~~Dominion Energy~~ Cove Point LNG, LP (formerly known as Dominion Energy Cove Point LNG, LP)
CPCN		Certificate of Public Convenience and Necessity
~~CWA~~CVOW Commercial Project		~~Clean Water Act~~A proposed 2.6 GW wind generation facility 27 miles off the coast of Virginia Beach, Virginia in federal waters adjacent to the CVOW Pilot Project and associated interconnection facilities in and around Virginia Beach, Virginia
~~DECG~~CVOW Pilot Project		~~Dominion Energy Carolina Gas Transmission, LLC (formerly known as Dominion Carolina Gas Transmission, LLC)~~A 12 MW wind generation facility 27 miles off the coast of Virginia Beach, Virginia in federal waters
~~DES~~CWA		Clean Water Act
DECP Holdings		The legal entity DECP Holdings, Inc., which holds Dominion ~~Energy~~Energy's noncontrolling interest in Cove Point
DEQPS		MountainWest Pipeline Services, Inc. (formerly known as Dominion ~~Resources~~Energy Questar Pipeline Services, Inc.)
~~DETI~~DES		Dominion Energy ~~Transmission,~~Services, Inc. ~~(formerly known as Dominion Transmission, Inc.)~~
~~DGI~~DESC		~~Dominion Generation, Inc. (formerly known as~~The legal entity, Dominion Energy South Carolina, Inc.), one or more of its consolidated entities or operating segment, or the entirety of Dominion Energy South Carolina, Inc. and its consolidated entities
~~DOE~~DGI		~~Department of Energy~~Dominion Generation, Inc.
~~Dominion Energy~~DOE		U.S. Department of Energy
Dominion Energy		The legal entity, Dominion Energy, Inc. ~~(formerly known as Dominion Resources, Inc.)~~, one or more of its consolidated subsidiaries (other than Virginia ~~Power and Dominion Energy Gas)~~Power) or operating segments, or the entirety of Dominion Energy, Inc. and its consolidated subsidiaries

~~Abbreviation or Acronym~~		~~Definition~~
Dominion Energy ~~Gas~~Direct®		A dividend reinvestment and open enrollment direct stock purchase plan
Dominion Energy Questar Pipeline		The legal entity, ~~Dominion Energy Gas Holdings,~~MountainWest Pipeline, LLC (formerly known as Dominion ~~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 (formerly known as Dominion Midstream Partners, LP), one or more of its consolidated subsidiaries, Cove Point Holdings, Iroquois GP Holding Company, LLC, DECG and Dominion Energy Questar Pipeline (beginning December 1, 2016) or operating segment, or the entirety of Dominion Energy Midstream Partners, LP and its consolidated subsidiaries
~~Dominion Energy Questar~~		The legal entity, Dominion Energy Questar Corporation (formerly known as Dominion Questar Corporation), one or more of its consolidated subsidiaries or operating segment, or the entirety of Dominion Energy Questar Corporation and its consolidated subsidiaries
~~Dominion Energy Questar Combination~~		~~Dominion Energy's acquisition of Dominion Energy Questar completed on September 16, 2016 pursuant to the terms of the agreement and plan of merger entered on January 31, 2016~~
~~Dominion Energy Questar Pipeline~~		~~Dominion Energy Questar Pipeline, LLC (formerly known as~~ Questar Pipeline, LLC), one or more of its consolidated subsidiaries (including its 50% noncontrolling interest in White River Hub, LLC), or the entirety of Dominion Energy Questar Pipeline, LLC and its consolidated subsidiaries
~~DSM~~Dominion Energy South Carolina		~~Demand-side management~~Dominion Energy South Carolina operating segment
~~Dth~~Dominion Energy Virginia		~~Dekatherm~~Dominion Energy Virginia operating segment
~~Duke~~Dominion Privatization		Dominion Utility Privatization, LLC, a joint venture between Dominion Energy and Patriot
DSM		Demand-side management
Dth		Dekatherm
Duke Energy		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~~EnergySolutions		Project to provide 294,000 Dths per day of firm transportation service to help meet demand for natural gas for Washington Gas Light Company, a local gas utility serving customers in D.C., Virginia and Maryland, and Mattawoman Energy,EnergySolutions, LLC ~~for its new electric generation facility to be built in Maryland~~
EPA		U.S. Environmental Protection Agency
EPS		Earnings per common share
FERC		Federal Energy Regulatory Commission
~~Four Brothers~~FTRs		~~Four Brothers Solar, LLC, a limited liability company owned by Dominion Energy and Four Brothers Holdings, LLC, a wholly-owned subsidiary of NRG effective November 2016~~Financial transmission rights


~~Fowler Ridge~~GAAP		~~A wind-turbine facility joint venture between Dominion Energy and BP Wind Energy North America Inc. in Benton County, Indiana~~
~~FTA~~		~~Free Trade Agreement~~
~~FTRs~~		~~Financial transmission rights~~
~~GAAP~~		U.S. generally accepted accounting principles
~~Gal~~Gas Distribution		~~Gallon~~Gas Distribution operating segment
~~Gas Infrastructure~~GENCO		~~Gas Infrastructure Group operating segment~~South Carolina Generating Company, Inc.
GHG		Greenhouse gas
~~Granite Mountain~~Greensville County		~~Granite Mountain Holdings, LLC, a limited liability company owned by Dominion Energy and Granite Mountain Renewables, LLC, a wholly-owned subsidiary of NRG effective November 2016~~
~~Greensville County~~		~~An approximately 1,588~~A 1,629 MW ~~combined cycle,~~combined-cycle, natural gas-fired power station ~~under construction~~ in Greensville County, Virginia
GTSA		Virginia Grid Transformation and Security Act of 2018
GW		Gigawatt
Heating degree days		Units measuring the extent to which the average daily temperature is less than 65 degrees Fahrenheit, or 60 degrees Fahrenheit in DESC’s service territory, calculated as the difference between 65 or 60 degrees, as applicable, and the average temperature for that day
Hope		Hope Gas, Inc.

~~Abbreviation or Acronym~~		~~Definition~~, doing business as Dominion Energy West Virginia through August 2022
~~Iron Springs~~ISO		~~Iron Springs Holdings, LLC, a limited liability company owned by Dominion Energy and Iron Springs Renewables, LLC, a wholly-owned subsidiary of NRG effective November 2016~~Independent system operator
~~Iroquois~~Jones Act		~~Iroquois Gas Transmission System, L.P.~~The Coastwise Merchandise Statute (commonly known as the Jones Act) 46 U.S.C. §55102 regulating U.S. maritime commerce
~~ISO-NE~~Kewaunee		~~Independent System Operator New England~~Kewaunee nuclear power station
kV		Kilovolt
~~Liquefaction Project~~LNG		ALiquefied natural gas ~~export/liquefaction facility currently under construction by Cove Point~~
~~LNG~~MD&A		~~Liquefied natural gas~~
~~Local 69~~		~~Local 69, Utility Workers Union of America, United Gas Workers~~
~~MATS~~		~~Utility Mercury and Air Toxics Standard Rule~~
~~MD&A~~		Management’s Discussion and Analysis of Financial Condition and Results of Operations
MGD		Million gallons aper day
Millstone		Millstone nuclear power station
~~MISO~~MW		~~Midcontinent Independent System Operator, Inc.~~Megawatt
MWMWh		Megawatt hour
~~MWh~~NAV		~~Megawatt hour~~Net asset value
~~NAV~~NND Project		~~Net asset value~~V.C. Summer Units 2 and 3 nuclear development project under which DESC and Santee Cooper undertook to construct two Westinghouse AP1000 Advanced Passive Safety nuclear units in Jenkinsville, South Carolina
~~NedPower~~North Anna		~~A wind-turbine facility joint venture between Dominion Energy and Shell Wind Energy, Inc. in Grant County, West Virginia~~North Anna nuclear power station
~~NGL~~North Carolina Commission		~~Natural gas liquid~~North Carolina Utilities Commission
NO_xX		Nitrogen oxide
NRC		U.S. Nuclear Regulatory Commission
~~NRG~~Ohio Commission		The legal entity, NRG Energy, Inc., one or more of its consolidated subsidiaries (including, effective November 2016, Four Brothers Holdings, LLC, Granite Mountain Renewables, LLC and Iron Springs Renewables, LLC) or operating segments, or the entirety of NRG Energy, Inc. and its consolidated subsidiaries
~~NSPS~~		~~New Source Performance Standards~~
~~Ohio Commission~~		Public Utilities Commission of Ohio
Order 1000		Order issued by FERC adopting requirements for electric transmission planning, cost allocation and development
~~PIPP~~ozone season		The period May 1st through September 30th, as determined on a federal level
Patriot		Patriot Utility Privatizations, LLC, a joint venture between Foundation Infrastructure Partners, LLC and John Hancock Life Insurance Company (U.S.A.) and affiliates
PFAS		Per- and polyfluorinated substances, a group of widely used chemicals that break down very slowly over time in the environment
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.~~LLC
~~Power Delivery~~PSD		~~Power Delivery Group operating segment~~Prevention of significant deterioration


PSNC		Public Service Company of North Carolina, Incorporated, doing business as Dominion Energy North Carolina
~~Power Generation~~Q-Pipe Group		~~Power Generation Group operating segment~~Collectively, Dominion Energy Questar Pipeline, DEQPS and MountainWest Energy Holding Company, LLC (formerly known as QPC Holding Company, LLC and its subsidiary MountainWest Southern Trails Pipeline Company (formerly known as Questar Southern Trails Pipeline Company))
~~ppb~~Questar Gas		~~Parts-per-billion~~Questar Gas Company, doing business as Dominion Energy Utah, Dominion Energy Wyoming and Dominion Energy Idaho
~~PREP~~Regulation Act		~~Pipeline Replacement~~Legislation effective July 1, 2007, that amended the Virginia Electric Utility Restructuring Act and ~~Expansion Program, a program of replacing, upgrading~~fuel factor statute, which legislation is also known as the Virginia Electric Utility Regulation Act, as amended in 2015, 2018 and ~~expanding natural gas utility infrastructure deployed by Hope~~2023
~~PSD~~RGGI		~~Prevention of Significant Deterioration~~Regional Greenhouse Gas Initiative
~~Questar Gas~~Rider CCR		~~Questar Gas Company~~
~~Rider BW~~		A rate adjustment clause associated with the recovery of costs related to ~~Brunswick County~~the removal of CCR at certain power stations
Rider UCE		A rate adjustment clause associated with the recovery of costs related to certain renewable generation, energy storage and related transmission facilities in Virginia as well as certain small-scale distributed generation projects and related transmission facilities
Rider D		A rate mechanism which allows PSNC to recover from customers all prudently incurred gas costs and the related portion of uncollectible expenses as well as losses on negotiated gas and transportation sales
Rider GT		A rate adjustment clause associated with the recovery of costs associated with electric distribution grid transformation projects that the Virginia Commission has approved as authorized by the GTSA
Rider GV		A rate adjustment clause associated with the recovery of costs related to Greensville County
Rider OSW		A rate adjustment clause associated with costs incurred to construct, own and operate the CVOW Commercial Project
Rider PPA		A rate adjustment clause associated with the recovery of costs associated with power purchase agreements for the energy, capacity, ancillary services and renewable energy credits owned by third parties
Rider R		A rate adjustment clause associated with the recovery of costs related to Bear Garden
Rider RGGI		A rate adjustment clause associated with the recovery of costs related to the purchase of allowances through the RGGI market-based trading program for CO2
Rider RPS		A rate adjustment clause associated with the recovery of costs related to the mandatory renewable portfolio standard program established by the VCEA
Rider S		A rate adjustment clause associated with the recovery of costs related to the Virginia City Hybrid Energy Center
Rider SNA		A rate adjustment clause associated with costs relating to the preparation of the applications for subsequent license renewal to the NRC to extend the operating licenses of Surry and North Anna and related projects
Rider T1		A rate adjustment clause to recover the difference between revenues produced from transmission rates included in base rates, and the new total revenue requirement developed annually for the rate years effective September 1
Rider U		A rate adjustment clause associated with the recovery of costs of new underground distribution facilities

~~Abbreviation or Acronym~~		~~Definition~~
Rider ~~US-2~~US-3		A rate adjustment clause associated with the recovery of costs related to ~~Woodland, Scott Solar~~Colonial Trail West and ~~Whitehouse~~Spring Grove 1
~~Riders C1A and C2A~~Rider US-4		~~Rate~~A rate adjustment ~~clauses~~clause associated with the recovery of costs related to ~~certain DSM programs approved in DSM cases~~Sadler Solar
~~ROE~~Rider W		~~Return on equity~~A rate adjustment clause associated with the recovery of costs related to Warren County
~~RSN~~ROE		~~Remarketable subordinated note~~Return on equity
~~SBL Holdco~~RTO		~~SBL Holdco, LLC, a wholly-owned subsidiary of DGI~~Regional transmission organization


~~Scott~~Sadler Solar		A 17100 MW utility-scale solar power station located in ~~Powhatan~~Greensville County, Virginia
~~SEC~~Santee Cooper		South Carolina Public Service Authority
SCANA		The legal entity, SCANA Corporation, one or more of its consolidated subsidiaries, or the entirety of SCANA Corporation and its consolidated subsidiaries
SCANA Combination		Dominion Energy’s acquisition of SCANA completed on January 1, 2019 pursuant to the terms of the agreement and plan of merger entered on January 2, 2018 between Dominion Energy and SCANA
SCANA Merger Approval Order		Final order issued by the South Carolina Commission on December 21, 2018 setting forth its approval of the SCANA Combination
SCDOR		South Carolina Department of Revenue
SEC		U.S. Securities and Exchange Commission
~~Standard & Poor’s~~SEEM		~~Standard & Poor’s Ratings Services, a division of McGraw Hill Financial, Inc.~~Southeast Energy Exchange Market
~~SunEdison~~Series A Preferred Stock		Dominion Energy’s Series A Cumulative Perpetual Convertible Preferred Stock, without par value, with a liquidation preference of $1,000 per share (previously designated the 1.75% Series A Cumulative Perpetual Convertible Preferred Stock)
Series B Preferred Stock		Dominion Energy’s 4.65% Series B Fixed-Rate Cumulative Redeemable Perpetual Preferred Stock, without par value, with a liquidation preference of $1,000 per share
Series C Preferred Stock		Dominion Energy’s 4.35% Series C Fixed-Rate Cumulative Redeemable Perpetual Preferred Stock, without par value, with a liquidation preference of $1,000 per share
South Carolina Commission		Public Service Commission of South Carolina
Southwest Gas		The legal entity, ~~SunEdison,~~Southwest Gas Holdings, Inc., one or more of its consolidated subsidiaries, ~~(including, through November 2016, Four Brothers Holdings, LLC, Granite Mountain Renewables, LLC and Iron Springs Renewables, LLC) or operating segments,~~ or the entirety of ~~SunEdison,~~Southwest Gas Holdings, Inc. and its consolidated subsidiaries
~~Terra Nova Renewable Partners~~Spring Grove 1		A ~~partnership comprised primarily of institutional investors advised by J.P. Morgan Asset Management-Global Real Assets~~98 MW utility-scale solar power station located in Surry County, Virginia
~~Three Cedars~~Standard & Poor’s		~~Granite Mountain and Iron Springs, collectively~~Standard & Poor’s Ratings Services, a division of S&P Global Inc.
~~UEX Rider~~Summer		V.C. Summer nuclear power station
Surry		Surry nuclear power station
UEX		Uncollectible Expense Rider deployed by East Ohio
~~VDEQ~~Utah Commission		~~Virginia Department of Environmental Quality~~Utah Public Service Commission
~~VEBA~~VCEA		~~Voluntary Employees' Beneficiary Association~~Virginia Clean Economy Act of March 2020
~~VIE~~VEBA		~~Variable interest entity~~Voluntary Employees’ Beneficiary Association
~~Virginia Commission~~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,~~segment, or the entirety of Virginia Electric and Power Company and its consolidated subsidiaries
~~VOC~~Warren County		~~Volatile organic compounds~~A 1,349 MW combined-cycle, natural gas-fired power station in Warren County, Virginia
~~Whitehouse~~Wexpro		~~A 20 MW utility-scale solar power station in Louisa County, Virginia~~The legal entity, Wexpro Company, one or more of its consolidated subsidiaries, or the entirety of Wexpro Company and its consolidated subsidiaries
~~Woodland~~Wisconsin Commission		~~A 19 MW utility-scale solar power station in Isle~~Public Service Commission of ~~Wight County, Virginia~~Wisconsin
WP&L		Wisconsin Power and Light Company, a subsidiary of Alliant Energy Corporation
WPSC		Wisconsin Public Service Corporation, a subsidiary of WEC Energy Group
Wrangler		Wrangler Retail Gas Holdings, LLC, a partnership between Dominion Energy (through March 2022) and Interstate Gas Supply, Inc.

	Three Months Ended September 30,					Nine Months Ended September 30,
	2017		2016			2017			2016
(millions, except per share amounts)
Operating Revenue	$	3,179	$	3,132		$	9,376		$	8,651
Operating Expenses
Electric fuel and other energy-related purchases		638		606			1,711			1,791
Purchased (excess) electric capacity		21		(6	)		(8	)		107
Purchased gas		24		77			441			252
Other operations and maintenance		649		765			2,166			2,133
Depreciation, depletion and amortization		485		400			1,421			1,112
Other taxes		162		145			519			448
Total operating expenses		1,979		1,987			6,250			5,843
Income from operations		1,200		1,145			3,126			2,808
Other income		73		63			249			189
Interest and related charges		305		250			905			715
Income from operations including noncontrolling interests before income tax expense		968		958			2,470			2,282
Income tax expense		272		230			683			561
Net Income Including Noncontrolling Interests		696		728			1,787			1,721
Noncontrolling Interests		31		38			100			55
Net Income Attributable to Dominion Energy	$	665	$	690		$	1,687		$	1,666
Earnings Per Common Share
Net income attributable to Dominion Energy - Basic	$	1.03	$	1.10		$	2.66		$	2.72
Net income attributable to Dominion Energy - Diluted		1.03		1.10			2.66			2.71
Dividends Declared Per Common Share	$	0.7700	$	0.7000		$	2.2800		$	2.1000


	September 30, 2017			December 31, 2016⁽¹⁾			June 30, 2023			December 31, 2022(1)
(millions)
ASSETS
Current Assets
Cash and cash equivalents	$	227		$	261		$	137		$	153
Customer receivables (less allowance for doubtful accounts of $16 and $18)		1,292			1,523
Other receivables (less allowance for doubtful accounts of $3 and $2)		212			183
Customer receivables (less allowance for doubtful accounts of $34 and $31)								2,496			2,952
Other receivables (less allowance for doubtful accounts of $3 at both dates)								399			405
Inventories		1,527			1,524			1,826			1,729
Derivative assets								260			1,137
Margin deposit assets								169			480
Regulatory assets		311			244			1,945			2,340
Other		425			513			628			607
Current assets held for sale								117			47
Total current assets		3,994			4,248			7,977			9,850
Investments
Nuclear decommissioning trust funds		4,881			4,484			6,553			5,957
Investment in equity method affiliates		1,895			1,561			3,006			3,012
Other		320			298			393			390
Total investments		7,096			6,343			9,952			9,359
Property, Plant and Equipment
Property, plant and equipment		73,610			69,556			95,088			91,202
Accumulated depreciation, depletion and amortization		(20,799	)		(19,592	)		(28,545	)		(27,742	)
Total property, plant and equipment, net		52,811			49,964			66,543			63,460
Deferred Charges and Other Assets
Goodwill		6,405			6,399			7,295			7,295
Regulatory assets		2,503			2,473			8,863			9,087
Other		2,582			2,183			5,434			5,192
Total deferred charges and other assets		11,490			11,055			21,592			21,574
Total assets	$	75,391		$	71,610		$	106,064		$	104,243

	Common Stock					Dominion Energy Shareholders						Total Common
	Shares		Amount			Retained Earnings			AOCI			Shareholders' Equity			Noncontrolling Interests			Total Equity
(millions)
December 31, 2015		596	$	6,680		$	6,458		$	(474	)	$	12,664		$	938		$	13,602
Net income including noncontrolling interests							1,666						1,666			55			1,721
Contributions from SunEdison to Four Brothers and Three Cedars													—			178			178
Sale of interest in merchant solar projects				22									22			117			139
Purchase of Dominion Energy Midstream common units				(3	)								(3	)		(14	)		(17	)
Issuance of common stock		31		2,079									2,079						2,079
Stock awards (net of change in unearned compensation)				10									10						10
Present value of stock purchase contract payments related to RSNs				(191	)								(191	)					(191	)
Dividends and distributions							(1,287	)					(1,287	)		(39	)		(1,326	)
Other comprehensive income, net of tax										3			3						3
Other				(5	)								(5	)		(1	)		(6	)
September 30, 2016		627	$	8,592		$	6,837		$	(471	)	$	14,958		$	1,234		$	16,192

December 31, 2016		628	$	8,550		$	6,854		$	(799	)	$	14,605		$	2,235		$	16,840
Net income including noncontrolling interests							1,687						1,687			100			1,787
Contributions from NRG to Four Brothers and Three Cedars													—			9			9
Issuance of common stock		16		1,232									1,232						1,232
Stock awards (net of change in unearned compensation)				17									17						17
Dividends and distributions							(1,435	)					(1,435	)		(123	)		(1,558	)
Other comprehensive income, net of tax										171			171						171
Other				(10	)		13		.				3		1				4
September 30, 2017		644	$	9,789		$	7,119		$	(628	)	$	16,280		$	2,222		$	18,502

	Three Months Ended September 30, 2016⁽¹⁾		Nine Months Ended September 30, 2016⁽¹⁾
(millions, except EPS)
Operating Revenue	$	3,261	$	9,410
Net income attributable to Dominion Energy		732		1,835
Earnings Per Common Share – Basic	$	1.17	$	2.99
Earnings Per Common Share – Diluted	$	1.17	$	2.99

	Deferred Gains and Losses on Derivatives-Hedging Activities			Unrealized Gains and Losses on Investment Securities			Unrecognized Pension and Other Postretirement Benefit Costs			Other Comprehensive Income (Loss) From Equity Method Investee			Total
(millions)
Three Months Ended September 30, 2017
Beginning balance	$	(250	)	$	630		$	(1,058	)	$	(4	)	$	(682	)
Other comprehensive income before reclassifications: gains		11			48			—			—			59
Amounts reclassified from AOCI⁽¹⁾: (gains) losses		(15	)		(4	)		14			—			(5	)
Net current-period other comprehensive income (loss)		(4	)		44			14			—			54
Ending balance	$	(254	)	$	674		$	(1,044	)	$	(4	)	$	(628	)
Three Months Ended September 30, 2016
Beginning balance	$	(241	)	$	535		$	(781	)	$	(6	)	$	(493	)
Other comprehensive income before reclassifications: gains		14			31			15			—			60
Amounts reclassified from AOCI⁽¹⁾: (gains) losses		(34	)		(13	)		9			—			(38	)
Net current-period other comprehensive income (loss)		(20	)		18			24			—			22
Ending balance	$	(261	)	$	553		$	(757	)	$	(6	)	$	(471	)
Nine Months Ended September 30, 2017
Beginning balance	$	(280	)	$	569		$	(1,082	)	$	(6	)	$	(799	)
Other comprehensive income before reclassifications: gains		82			141			—			2			225
Amounts reclassified from AOCI⁽¹⁾: (gains) losses		(56	)		(36	)		38			—			(54	)
Net current-period other comprehensive income		26			105			38			2			171
Ending balance	$	(254	)	$	674		$	(1,044	)	$	(4	)	$	(628	)
Nine Months Ended September 30, 2016
Beginning balance	$	(176	)	$	504		$	(797	)	$	(5	)	$	(474	)
Other comprehensive income before reclassifications: gains (losses)		56			72			15			(1	)		142
Amounts reclassified from AOCI⁽¹⁾: (gains) losses		(141	)		(23	)		25			—			(139	)
Net current-period other comprehensive income (loss)		(85	)		49			40			(1	)		3
Ending balance	$	(261	)	$	553		$	(757	)	$	(6	)	$	(471	)


	Total Derivative-Hedging Activities(1)(2)			Investment Securities(3)			Pension and other postretirement benefit costs(4)			Equity Method Investees(5)			Total
(millions)
Three Months Ended June 30, 2023
Beginning balance	$	(250	)	$	(26	)	$	(1,287	)	$	(2	)	$	(1,565	)
Other comprehensive income (loss) before reclassifications: gains (losses)		6			(1	)		—			—			5
Amounts reclassified from AOCI: (gains) losses
Interest and related charges		10			—			—			—			10
Other income (expense)		—			(3	)		(16	)		—			(19	)
Total		10			(3	)		(16	)		—			(9	)
Income tax expense (benefit)		(2	)		1			4			—			3
Total, net of tax		8			(2	)		(12	)		—			(6	)
Net current period other comprehensive income (loss)		14			(3	)		(12	)		—			(1	)
Ending balance	$	(236	)	$	(29	)	$	(1,299	)	$	(2	)	$	(1,566	)
Three Months Ended June 30, 2022
Beginning balance	$	(323	)	$	(22	)	$	(1,088	)	$	(3	)	$	(1,436	)
Other comprehensive income (loss) before reclassifications: gains (losses)		29			(27	)		2			—			4
Amounts reclassified from AOCI: (gains) losses
Interest and related charges		14			—			—			—			14
Other income (expense)		—			12			22			—			34
Total		14			12			22			—			48
Income tax expense (benefit)		(3	)		(3	)		(6	)		—			(12	)
Total, net of tax		11			9			16			—			36
Net current period other comprehensive income (loss)		40			(18	)		18			—			40
Ending balance	$	(283	)	$	(40	)	$	(1,070	)	$	(3	)	$	(1,396	)

Details About AOCI Components	Amounts Reclassified From AOCI			Affected Line Item in the Consolidated Statements of Income
(millions)
Three Months Ended September 30, 2017
Deferred (gains) and losses on derivatives-hedging activities:
Commodity contracts	$	(32	)	Operating revenue
		1		Electric fuel and other energy-related purchases
Interest rate contracts		16		Interest and related charges
Foreign currency contracts		(10	)	Other income
		(25	)
Tax		10		Income tax expense
	$	(15	)
Unrealized (gains) and losses on investment securities:
Realized (gain) loss on sale of securities	$	(10	)	Other income
Impairment		4		Other income
		(6	)
Tax		2		Income tax expense
	$	(4	)
Unrecognized pension and other postretirement benefit costs:
Prior service (credit) costs	$	(5	)	Other operations and maintenance
Actuarial (gains) losses		26		Other operations and maintenance
		21
Tax		(7	)	Income tax expense
	$	14
Three Months Ended September 30, 2016
Deferred (gains) and losses on derivatives-hedging activities:
Commodity contracts	$	(64	)	Operating revenue
		1		Purchased gas
		1		Electric fuel and other energy-related purchases
Interest rate contracts		10		Interest and related charges
Foreign currency contracts		(3	)	Other income
		(55	)
Tax		21		Income tax expense
	$	(34	)
Unrealized (gains) and losses on investment securities:
Realized (gain) loss on sale of securities	$	(25	)	Other income
Impairment		5		Other income
		(20	)
Tax		7		Income tax expense
	$	(13	)
Unrecognized pension and other postretirement benefit costs:
Prior service (credit) costs	$	(4	)	Other operations and maintenance
Actuarial (gains) losses		17		Other operations and maintenance
		13
Tax		(4	)	Income tax expense
	$	9
Nine Months Ended September 30, 2017
Deferred (gains) and losses on derivatives-hedging activities:
Commodity contracts	$	(114	)	Operating revenue
		(1	)	Electric fuel and other energy-related purchases
Interest rate contracts		39		Interest and related charges

	Fair Value (millions)		Valuation Techniques	Unobservable Input		Range	Weighted Average⁽¹⁾
Assets
Physical and financial forwards and futures:
Natural gas⁽²⁾	$	91	Discounted cash flow	Market price (per Dth)	⁽³⁾	(2) - 7		—
FTRs		19	Discounted cash flow	Market price (per MWh)	⁽³⁾	(3) - 7		1
Physical options:
Natural gas		2	Option model	Market price (per Dth)	⁽³⁾	2 - 7		4
				Price volatility	⁽⁴⁾	24% - 46%		32	%
Electricity		42	Option model	Market price (per MWh)	⁽³⁾	21 - 50		34
				Price volatility	⁽⁴⁾	0% - 78%		28	%
Total assets	$	154
Liabilities
Financial forwards:
FTRs	$	1	Discounted cash flow	Market price (per MWh)	⁽³⁾	(5) - 7		1
Total liabilities	$	1

	Operating Revenue		Electric Fuel and Other Energy - Related Purchases			Total
(millions)
Three Months Ended September 30, 2017
Total gains (losses) included in earnings	$	1	$	(12	)	$	(11	)
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		1		—			1
Three Months Ended September 30, 2016
Total gains (losses) included in earnings	$	—	$	(7	)	$	(7	)
Nine Months Ended September 30, 2017
Total gains (losses) included in earnings	$	1	$	(37	)	$	(36	)
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		1		—			1
Nine Months Ended September 30, 2016
Total gains (losses) included in earnings	$	—	$	(23	)	$	(23	)

	September 30, 2017						December 31, 2016
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Assets Presented in the Consolidated Balance Sheet		Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Assets Presented in the Consolidated Balance Sheet
(millions)
Commodity contracts:
Over-the-counter	$	186	$	—	$	186	$	211	$	—	$	211
Exchange		24		—		24		44		—		44
Interest rate contracts:
Over-the-counter		11		—		11		17		—		17
Foreign currency contracts:
Over-the-counter		25		—		25		—		—		—
Total derivatives, subject to a master netting or similar arrangement		246		—		246		272		—		272
Total derivatives, not subject to a master netting or similar arrangement		3		—		3		7		—		7
Total	$	249	$	—	$	249	$	279	$	—	$	279

			September 30, 2017									December 31, 2016
			Gross Amounts Not Offset in the Consolidated Balance Sheet									Gross Amounts Not Offset in the Consolidated Balance Sheet
	Net Amounts of Assets Presented in the Consolidated Balance Sheet			Financial Instruments		Cash Collateral Received		Net Amounts		Net Amounts of Assets Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amounts
(millions)
Commodity contracts:
Over-the-counter	$	186		$	8	$	—	$	178	$	211	$	14	$	—	$	197
Exchange		24			21		—		3		44		44		—		—
Interest rate contracts:
Over-the-counter		11			6		—		5		17		9		—		8
Foreign currency contracts:
Over-the-counter		25			4		—		21		—		—		—		—
Total	$	246		$	39	$	—	$	207	$	272	$	67	$	—	$	205

	September 30, 2017						December 31, 2016
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet
(millions)
Commodity contracts:
Over-the-counter	$	19	$	—	$	19	$	23	$	—	$	23
Exchange		21		—		21		71		—		71
Interest rate contracts:
Over-the-counter		72		—		72		53		—		53
Foreign currency contracts:
Over-the-counter		4		—		4		6		—		6
Total derivatives, subject to a master netting or similar arrangement		116		—		116		153		—		153
Total derivatives, not subject to a master netting or similar arrangement		2		—		2		2		—		2
Total	$	118	$	—	$	118	$	155	$	—	$	155

	AOCI After-Tax			Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax			Maximum Term
(millions)
Commodities:
Gas	$	(1	)	$	(1	)	37 months
Electricity		7			7		15 months
Other		(4	)		(4	)	6 months
Interest rate		(260	)		(11	)	387 months
Foreign currency		4			(2	)	105 months
Total	$	(254	)	$	(11	)

	Fair Value – Derivatives under Hedge Accounting		Fair Value – Derivatives not under Hedge Accounting		Total Fair Value
(millions)
September 30, 2017
ASSETS
Current Assets
Commodity	$	19	$	83	$	102
Interest rate		9		—		9
Total current derivative assets⁽¹⁾		28		83		111
Noncurrent Assets
Commodity		1		110		111
Interest rate		2		—		2
Foreign currency		25		—		25
Total noncurrent derivative assets⁽²⁾		28		110		138
Total derivative assets	$	56	$	193	$	249
LIABILITIES
Current Liabilities
Commodity	$	15	$	25	$	40
Interest rate		21		—		21
Foreign currency		4		—		4
Total current derivative liabilities⁽³⁾		40		25		65
Noncurrent Liabilities
Commodity		—		2		2
Interest rate		51		—		51
Total noncurrent derivative liabilities⁽⁴⁾		51		2		53
Total derivative liabilities	$	91	$	27	$	118
December 31, 2016
ASSETS
Current Assets
Commodity	$	29	$	101	$	130
Interest rate		10		—		10
Total current derivative assets⁽¹⁾		39		101		140
Noncurrent Assets
Commodity		—		132		132
Interest rate		7		—		7
Total noncurrent derivative assets⁽²⁾		7		132		139
Total derivative assets	$	46	$	233	$	279
LIABILITIES
Current Liabilities
Commodity	$	51	$	41	$	92
Interest rate		33		—		33
Foreign currency		3		—		3
Total current derivative liabilities⁽³⁾		87		41		128
Noncurrent Liabilities
Commodity		1		3		4
Interest rate		20		—		20
Foreign currency		3		—		3
Total noncurrent derivative liabilities⁽⁴⁾		24		3		27
Total derivative liabilities	$	111	$	44	$	155

Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion)⁽¹⁾			Amount of Gain (Loss) Reclassified From AOCI to Income			Increase (Decrease) in Derivatives Subject to Regulatory Treatment⁽²⁾
(millions)
Three Months Ended September 30, 2017
Derivative type and location of gains (losses):
Commodity:
Operating revenue				$	32
Electric fuel and other energy-related purchases					(1	)
Total commodity	$	8		$	31		$	—
Interest rate⁽³⁾		(4	)		(16	)		(26	)
Foreign currency⁽⁴⁾		12			10			—
Total	$	16		$	25		$	(26	)
Three Months Ended September 30, 2016
Derivative type and location of gains (losses):
Commodity:
Operating revenue				$	64
Purchased gas					(1	)
Electric fuel and other energy-related purchases					(1	)
Total commodity	$	7		$	62		$	—
Interest rate⁽³⁾		3			(10	)		(16	)
Foreign currency⁽⁴⁾		12			3			—
Total	$	22		$	55		$	(16	)
Nine Months Ended September 30, 2017
Derivative type and location of gains (losses):
Commodity:
Operating revenue				$	114
Electric fuel and other energy-related purchases					1
Total commodity	$	139		$	115		$	—
Interest rate⁽³⁾		(18	)		(39	)		(60	)
Foreign currency⁽⁴⁾		10			15			—
Total	$	131		$	91		$	(60	)
Nine Months Ended September 30, 2016
Derivative type and location of gains (losses):
Commodity:
Operating revenue				$	266
Purchased gas					(9	)
Electric fuel and other energy-related purchases					(8	)
Total commodity	$	193		$	249		$	—
Interest rate⁽³⁾		(107	)		(21	)		(258	)
Foreign currency⁽⁴⁾		4			1			—
Total	$	90		$	229		$	(258	)

	September 30, 2017						December 31, 2016
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Assets Presented in the Consolidated Balance Sheet		Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Assets Presented in the Consolidated Balance Sheet
(millions)
Commodity contracts:
Over-the-counter	$	156	$	—	$	156	$	147	$	—	$	147
Interest rate contracts:
Over-the-counter		—		—		—		6		—		6
Total derivatives, subject to a master netting or similar arrangement		156		—		156		153		—		153
Total derivatives, not subject to a master netting or similar arrangement		12		—		12		41		—		41
Total	$	168	$	—	$	168	$	194	$	—	$	194

	AOCI After-Tax			Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax			Maximum Term
(millions)
Interest rate	$	(12	)	$	(1	)	387 months
Total	$	(12	)	$	(1	)

Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion)⁽¹⁾			Amount of Gain (Loss) Reclassified From AOCI to Income			Increase (Decrease) in Derivatives Subject to Regulatory Treatment⁽²⁾
(millions)
Three Months Ended September 30, 2017
Derivative type and location of gains (losses):
Interest rate⁽³⁾	$	(3	)	$	—		$	(26	)
Total	$	(3	)	$	—		$	(26	)
Three Months Ended September 30, 2016
Derivative type and location of gains (losses):
Interest rate⁽³⁾	$	(2	)	$	—		$	(16	)
Total	$	(2	)	$	—		$	(16	)
Nine Months Ended September 30, 2017
Derivative type and location of gains (losses):
Interest rate⁽³⁾	$	(8	)	$	(1	)	$	(60	)
Total	$	(8	)	$	(1	)	$	(60	)
Nine Months Ended September 30, 2016
Derivative type and location of gains (losses):
Interest rate⁽³⁾	$	(26	)	$	(1	)	$	(258	)
Total	$	(26	)	$	(1	)	$	(258	)

	September 30, 2017						December 31, 2016
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet
(millions)
Commodity contracts:
Over-the-counter	$	6	$	—	$	6	$	5	$	—	$	5
Foreign currency contracts:
Over-the-counter		4		—		4		6		—		6
Total derivatives, subject to a master netting or similar arrangement		10		—		10		11		—		11
Total	$	10	$	—	$	10	$	11	$	—	$	11

	Fair Value-Derivatives Under Hedge Accounting		Fair Value-Derivatives Not Under Hedge Accounting		Total Fair Value
(millions)
September 30, 2017
ASSETS
Current Assets
Commodity	$	—	$	1	$	1
Total current derivative assets⁽¹⁾		—		1		1
Noncurrent Assets
Foreign currency		25		—		25
Total noncurrent derivative assets⁽²⁾		25		—		25
Total derivative assets	$	25	$	1	$	26
LIABILITIES
Current Liabilities
Commodity	$	6	$	—	$	6
Foreign currency		4		—		4
Total current derivative liabilities⁽³⁾		10		—		10
Total derivative liabilities	$	10	$	—	$	10
December 31, 2016
LIABILITIES
Current Liabilities
Commodity	$	4	$	—	$	4
Foreign currency		3		—		3
Total current derivative liabilities⁽³⁾		7		—		7
Noncurrent Liabilities
Commodity		1		—		1
Foreign currency		3		—		3
Total noncurrent derivative liabilities⁽⁴⁾		4		—		4
Total derivative liabilities	$	11	$	—	$	11